Board of Trustees Meeting Minutes

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C E H T R A L M I CHI G A H V" I V K R 8 I T Y
BO A R D or T R U S TEE S
January 6, 1'J92
• • Central Mi chi gen University Board of Tru.t ...
Mt . Pl e.aant , Mi chi gan
January 6, 1992
Members pre.ent: Hr • . Marga ret Ann Rieck.c , Chair; Mr. Ronald L. Brown;
Hr. Roger L. Kess.ler; Or. Gordon H. Lambie; Hr . W. Sidney Smith; Hr . Robart P.
Young. Jr.; Or. Leonard E. Plachta, Interim President.
Member. absent: Mr . Martin H. Cholek!en ; Hr. Mitch.ll O. Kaheti.n.
Also attending : Hr . A. Kim Ellertaon, Tr easurer of the Board and Vice Pr.,ident
for Busin ••• and Finance; Dr . Robart G. Franke, Provo,t; Hr. Jame. L. Hill. Vice
President tor Student Affairs.
The meeting was called to order by Chair Riecker at 1:37 p .•.
Jerry Rupley from Hiller , canfield, and Keith Morgan t rom Nuveen. disculsed t he
pt"OpOsed refunding end defe.sence of II por tion ot t he General Revenue Bond.,
ser ies 1987 .aturing on and after October 1, 1998. • • It wa$ moved by Dr. Lambie. seconded by Mr . Smi t h, and carried, that the Board
.ave into closed •••• 10n to di,cu •• atrateqy connected with the negptiation ot
collective bar'9aining age_lite and to consult with our attorney eegarding
pending litigation.
The Board moved into closed Be •• ion at 2:04 p.m. and r.c • • •• d at 5: 14 p. ~.
The Board returned to open " •• 10n at 1 :01 p.m.
MI NUTES :
It was moved by Dr. Lambie , •• conded by Mr. Kells,ler , and car ded, that t he
minute. ot t he D&cember 13. 1991, meeting be approved.
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OPERATING BUDGET 1991-92: • It was moved by Mr. Kesse1er, seconded by Dr. Lambie, and carried, that the
following resolution be adopted.
WHEREAS. The University administration presented the 1991-92
operating budget to the Board of Trustees for approval at the July
1991 meeting; and
WHEREAS, The Soard conditionally approved the 1991-92 operating
budget as presented with the direction that the administration
would present to the Board in September a balanced budget plan;
,"d
WHEREAS. The administration has provided the Board with budget
updates at each Board meeting since July 1991. including a
comprehensive update at the December 12-13 1991. meeting; Now be
it therefore
RESOLVED. That the Board of Trustees approves the 1991-92 budget
as modified in the December 12, 1991. budget message and
authorizes the President or his designee to proceed with
implementation of budget and financial issues as outlined in that
document .
IlD'IKANCIMG - ISSUANCE or GENERAL RINElfUE BONOS; • It was moved by Mr. Snlith. seconded by Mr. Young. and carried. that the following
resolution authorizing the issuance of general revenue bonds and providing for
other matters relating thereto be adopted .
WHEREAS, The Central Michigan University Board of Trustees (the
"Soard") is a constitutional body corporate established pursuant to
Article VIII, Section 6 o f the Michigan Constitution of 1963 , as
8I!1ended. with general supervision of Central Michigan University
(the hUniversity") and the control and direction of all expenditures
from the university ' s funds; and
WHEREAS, the Board has previously issued its $44, 520 . 000 General
Revenue Bonds. Series 1981 (the "Series 1967 Bonds" ) under '!Ind
pursuent to a Trust Indenture (the "1961 I ndenture" ) dated as of
.January 1, 1968 between the Soard and Society Bank - Michi9sn
(fonnerly Citizens Trust) (the "1961 Bonds Trustee"), and its
$21,282 . 269.20 Gene ral Revenue Bonds, Series 1990 (the "Series 1990
Bonds " ) undeE" and pursuant to a Trust Indenture (the "1990
IndentuE"e") dated as of Hay 15. 1990 between the Soard and COmerica
Bank (formerly Comerica Bank - Detroit) (the "1990 Bonds Tr ustee" )
(the 1961 Indenture and the 1990 Indenture collectively called the
"Prior Indentures", and the outstandin9 bonds of the Series 1961
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Bonds and the Series 1990 Bonds being collectively called the
"OUtstanding Bonds"); and
WHEREAS, the Board, upon the r ecommendation of the officers of the
University has determined it is necessary and expedient to refund
all or '!I par t ion of the Series 1961 Bonds in order to achieve
interest coat savings (the portion of the Ser ies 1981 Bonds to be
E"efunded being called the "Refunded Bonds ~); and
WHEREAS, in the exercise of its constitutional dut ies, and in order
to control and direct prudently expenditures from the University's
funds, the Board determines it is necessary and des irable t o
authorize the issuance of Gene ral Revenue and RefUnding Bonds,
Secies 1992 (the "Series 1992 Bonds " ) in o rder to provide fundI
which. together with other available funds, will be used to pay the
costs necessary to refund the Refunded Bonds, to fund or provide fOE"
a debt service reserve fund or facility, if a ny is required for the
Series 1992 Bonds and to pay costs incidental to the refunding '!Ind
the issuance of the Series 1992 Bonds; and
WHEREAS, a trust indenture (the "Trust Indenture") must be entered
into by and between the Board and a trustee to be designated by the
Authorized Office r s (hereinafter defined) (the "Trustee" ), pursusnt
to which the Series 1992 Bonds will be issued and secured; and
WHEREAS, the Prior Indentures create certain conditions for the
issuance of General Revenue Bonds on a parity basis with the
OUtstand ing Bonds; and
WHEREAS, the Vice Pres ident for Business and Finance shall . on or
prior to the delive ry of the Series 1992 Bonds . certify t hat the
conditions for issuing the Series 1992 Bonds, secured on a parity
basis by General Revenues with the OUtstsndin9 Bonds have been met;
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WHEREAS, John Nuveen , Co. Incorporated and First of Michigan
Corporation (the "Underwriters") have been engaged to undertake
preliminary market analysis and to present to the Authorized
office r s a bond purchase ag reement (the "Bond Purchase Agreement")
setting forth the te~ and conditions upon which the Underwriters
will a9ree to purchase the Series 1992 Bonds and the interest rates
thereof and the purchase price therefor; snd
WHEREAS, in order to be able to market the Series 1992 Bonds at t he
most opportune time. it is necessary for the Board to author ize the
President and the Vice President for Business and Finance or either
of them ind ivIdually (the "Authodzed Officers") to negotiate,
execute and deliver on behalf of the Board the Trust Indenture, to
establish the specific terms of the Se ries 1992 Bonds and to a ccept
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the offer of the Unde""riten to purchase the Series 1992 Bonds. sll
within the limitations Bet forth herein, snd
WHEREAS, the refunding of the ReCunded Bonds will serve proper and
appropriate public purposes, and
WHEREAS. the Board has full power under its constitutional authority
for .upervi.ion of the univenity, and control and direction of
expenditures frOOl the University funds. to rsfund the Refunded
Bond., to pay the co.t of the refunding of the Refunded Bonds by
iaauance of the Series 1992 Bond., and to pledge General Revenue.
(a. hereinafter defined) (or payment of the Series 1992 Bond.,
NOW. THEREFORE. BE IT RESOLVED BY THE CENTRAL I"IICHlGAN UNIVERSITY
BOARD o r TRUSTEES, AS FOLLOWS:
1. The Board hereby authorize. the i.suance, execution .nd
delivery of the Serie. 1992 Bonds of the Board in one or
nIOre .erle., to be designated GI!.HERAL REVENUE AND
REFUNDING BONDS, SERIES 1992, (with appropriate additional
leries de.ignations) in the aggregate principal amount to
be established by the Authorized Officen, or either of
them, but not to exceed the amount necesssry to produce
proceedl of $40.000,000, to be dated as of the date
established by the Authorized efUcerl, or either of them,
to pay a portion of the coete of refundil19 the Refunded
Bonds, as shall be deten.ined by either of the Authorized
Officers, to fund or provide a debt service reserve fund
or facility if the Authorized Officers, or either of them,
determine that euch reserve fund or facility is necessary.
and to pay co.ts incidental to the issuance of the Series
1992 Bonds and to the refundil19 at the Refunded Bonde,
including the COlt ot bond insurance. if the Authorized
Officers, or either of them determine such insurance to be
appropriate. The Series 1992 Bonds shall be serial Serles
1992 Bonds or term Series 1992 Bonds. which l118y be subject
to redemption requirements, o r both, a. shali be estab­li.
hed by the Authorized Office rs, or either of the.. but
the fir.t BIIIturity .hall be I>Ot earlier than October I.
1992 and the last maturity shall be I>Ot later than
October I, 2022. The Series 1992 Bond. may bear 1>0
intere.t or interest at stated rate. for the respective
I118turitiel thereof as shall be established by the
Authorized Officers, or either of them, but the highest
rate of intereat for any _turity ahall I>Ot exceed 1 .5'
per annu., and the Serie. 1992 Bonda lIIIIIy be issued in
whole or in part as capitai appreciation bonds, which for
their term or any part thereof bear no intere.t but
appreciate i n princi pal amount over t ime at compounded
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rates (not in excess of 7.5\ per annum) to be detenained
by t he Authorized Office r . or either of them. The Serie.
1992 Bonds may be .ubject to redemption prior to maturity
et the tJ..ea .nd price and in the IIIIIInner as shall be
established by the Authorized Officers or either of th ...
The maximum annual principal and interest require.ent. on
the Series 1992 Bonds shall not exceed $3,325,000.
Interest on the Series 1992 Bonds shall be payable at the
timea as shall be specified by the Authorized Officers or
either of them. The Series 1992 Bonds .hall be issued in
fully registered form in deno-lnation., .hall be payable
as to principal and intere.t In the _nner. shall be
.ubject to transfer and exchal1ge. and shall be executed
and authenticated. all as ahall be provided in the Trust
Indenture. The Series 1992 Bonds lIIIIIy be originally issued
in whole or in part in book entry only form. The Serie.
1992 Bonds shall be .old to the Underwriters pursuant to
the Bond Purchaae Agree.ent for a price to be establi.hed
by the Autl'lorized Officers or either of them (but the
Underwriter' . discount, exclu.ive of original issue
diacount, shall not exceed 2\ of the pr inc ipal MIOUnt
thsreof) plul accrued interest, if any. fraQ the dated
date of the Series 1992 Bonda to the date of delivery
thereof.
2. The Saries 1992 Bonds shall be liaited and I>Ot general
obligationa of the Board payable fr<;& and secured, on a
parity bads with the OUtstending Bond •• by a first lien
on the General Revenues (as shall be defined generally in
the Trust Indenture to mean .11 feea . deposit • • charges.
receipts and income fro. all or any part of the student.
or the Univer.ity , whether activity f.... tuition,
in.tructional r .... tuition .un::harge., general f_.,
health fees or other special purpoee fees, all gro ..
i ncome, revenue. and receipt. from the operation.
ownership and control of the houaing and auxiliary .ystem
of the Univer.lty, .uch investment income and proceed. of
bonds or other obligation. al the Trult Indenture shall
specify; and all unrestricted grant.s, g1ft., donation. and
pledge. and receipts theref ro.; but excluding appropria p
tions f«*l the State legi.lature, the Energy Fea, any
deposits or contracts required by law to be held in eacrow
and any additional amount. excluded therefrom in the
future as permitted by the Trust Indenture).
ElIcept as provided in the Trust Indenture no recourse
.hall be had for the payment of the principal llDJUnt of or
interest or premium on the Series 1992 Bonds or any claim
based thereon against the State of "ichigan, the Board or
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any officer or agent thereof, as individuab, either
directly or 1ndirectly, nor .hall the Serie. 1992 Bonds
and interest with respect thereto become a lien on or be
secured by any property, rea1, personal or mixed of the
State of Michigan or the Board, other than the General
Revenue. and the II(>neys f~ tu. to tble on deposit in
all or part of the funds established by the Trust
Indenture.
Any pledge of General Revenues, debt service reserves, and
other funds specified in the Trust Indenture, if any.
shall be valid and binding from the date of the issuance
and delivery of the Series 1992 Bonds, and all moneys or
properties subject thereto which are thereafter received
ahall illlnediately be subject to the lien of the pledge
without phylical delivery or further act. The lien of
said pledge shall be vaUd and bindinq <'Igainst all parties
(other than the holders of any other bonds. note. or debt
obligations .ecured by e parity tirst Uen on General
Revenues) having a claim in tort, contract or otherviae
againat the Boa rd, irre.pective of whether auch partiea
have notice of the lien.
J, The right ia reserved to is.ue additional bonda, notes or
other obligations payable frOlll and aecured on a parity
baaia with the Ser ies 1992 Bonds and the Outstanding Bonds
from the General Revenues, upon compliance with the terms
and conditions aa shall be set forth in the Trusl
Indenture.
4. The Authorized Officera, and either of them, are hereby
authorized and directed. in the name and on behalf of the
Board, and aa ita corporate act and deed, to aelect the
Trust .. , and to negotiata. execute and deliver tha Trust
Indanture. The Truat Indenture lMy contain auch covenants
on behalf of the Board and terTl'la aa such officers de ..
appropriate, includi ng. but not limited to . covenants with
respect to the establishment of Gene ral Revenuc" at leveb
expresaed a. a percent<'lge of debt .ervice on th. Series
1992 Bonds or all General Revenue Bonds, and with respect
to the issuance of additional bonds, notes or other
obligationa payable from and secured by General Revenuea .
In addition, the Authorized Officer a, and either of them,
a re hereby authorized, empowered and directed to
negotiate, if necessary and expedient (or the issuance of
the series 1992 Bonds, for acquisition of bond insurance
and a letter of credit, surety bond or othe r c r edit
facility i n lieu o f funding a debt service reaerve fund
with cash, and to execute and deliver a re~raement
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agreement or other documenu or inatruments required to
provide for repav--nt of the providers of aueh insurance
or credit (acility. such repayment to be secured by and
payable {~ General Revenues.
S. The Authorized OfUc;;ers, and either of theJII, are hereby
authorized and directed, in the name and on behalf of the
Board and as ita corporate act and deed, to negotiate,
execute and deliver the Bond Purchase Agreement with the
Underwriters aetting forth the tenns of the Seriea 1992
Bonas end the IIIle thereof, all within the luI.! tations set
forth herein.
6. The Authorized Officers, and either of th8BI, are hereby
authorized , elllPOwered and directed, in the nama and on
behal! of the Soard, ana liS its corporate act and deed, to
execute lhe Series 1992 Sonas by placing his or their
faest.Ule or manual aignature or signatures thereon, and
to deliver the Series 1992 Bonds to the Underwriters in
exchange {or the purchase price thereof, as provided in
the Bond Purchaae Agreement.
7. The Authorized Officer, or either of them, are hereby
authorized to cause the preparation of a PrelJ.ainary
Offi~ial Stat ... nt snd an Offi~ial St.ta-ent with respect
to the Series 1992 Bonds, and to execute and deliver the
Official Statement. The Unde ...... rit.rs are authorized to
circulate and u.e. in accordance with applicable law, the
Preli~inary Official Statement and the Official Stat ... nt
in connection with the ofrering, .arketing and aale of the
Seriea 1992 Bonds.
8. The President. the Vice Pr.aident for Buainess and
Finance, the Secretary and any other appropriate officer
of the Board or the University are hereby authorized to
perform all acta and deeds and to execute ana deliv.r all
instruments and documents, including an Escrow DepOsit
Agre8lllent with the 1987 Bonds Trustee or other escrow
<'Igent, for and on behalf of the Board required by this
resolution, the Trust Indenture, or the Bond Purchase
Agreement, or necessary, expedient and proper in
connection with the issuance , sale and deUvery of the
Serie. 1992 Bonda, aa contemplated hereby. Any reference
to an officer of the Board or the University herein ahall
include any Int.riln or acting officer appOinted by the
Board.
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,. All reaolutions or parts
proceedings of the Boa 'i of reSOlutione or other
.... are h ereby repealre d' n cf onflict h erew I th be and the
Inso dr as such conflict .~jlt •.
TRAPFrc glHTRoL ORDER:
It was _ed by Hr. 8m! th
reeolution be adopted. ,eeconded by Mr. Brown, and carried,
that the follOWing
BE IT RESOLYED
adopted. ' That the f 11 I
o ow ng trafflc control
Traffic COntrol Order 91-9
order is
That in Parking Lot 61 f1
of the space. shall be e~~!~~d~c~P~d spaces are created. ""'0
north, being the first two s e 111 the furthest row to the
Counting to the west. Thr spaces starting from the ealt and
furthest tow to the sout ~e spaces ate established
at the east and cOunting hto~~:gw~:~.first three spacel .t~:t~~
~ny vehicle in violation of this
An Ordinance to Gov. ,- ._, order shall be in v' I
p de ~" " COntrol Parki 10 aUon of
e strlanl at Central Michi,._ " i ng, Traffic, '-d " un versity." ..
~ AC'l'rY r'I'Y:
The Board received an i
nVestment activity
rePOrt for Hov~r 1991 .
CRIPPO ~rs SOfOLARsHIP:
f t was moved by Mr arown
resolUtion be ado~ted. ,seconded by Hr. Young, and carried, h
t I'll the follOWing
BE IT RESOLVED, That the John
ie cOllverted to an endow., P. and Doris L Crip S
st t Centrnlis sChol' . Po cholat'Ship
1'1 ement approved July 1990 will be deleted a,rshlP and that the
Bullet!n; Be it Curther ram the Univers ity
RESOLVED, That the Collowin
in Lhe University 8ulleUn~ statement is apprOved '0'
, printing
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Ccippo •.• continued
John P. and Dor Is L. Crippo Endowed Centralls ScholarShip
Through a bequest, Dods L. Koulton Crippo estabUshed an end0w9d
Centra lis Scholarship to recoqniz.e cuhtending academic performance at
Central Michigan Univerlity. John and Doris Crippo were great believerl
in higher education. They were very interested in and had e~cel1ent
rapport with students, feculty, stafC, and alumni.
It was /!'lOved by Or. Lambie . seconded by Hr. Brown, and carried , that the
following resolution be adopted.
BE IT RESOLVEO, that t he former department o f recreation and park
administration is renamed the Depar~nt o f Recreation, Psrks, and
Leisure service. Ad.ini.tration.
PERSONNEL RECOIIKEKOATIOHS:
It was aIOved by Or. Lambie, seconded by Hr. Kesseler, and carried, that the
personnel recommendations appearing on pagel 1-6 of thy January 1992 agenda be
approved.
PRESI~ENT'S REPORT:
Or. Plachta. completing his tirst day as
address the unlverlity camunity on the
opportun ity to s hare personal viewpoints.
PUBLIC CDOIEH'l':
president, announced that he would
15th of January; thie will be an
The following persons addressed the Board o f Trustees: James LoInbard and Rod
Kirk.
IIf'l"ERDt PRESIDnft' :
At the December meeting o f the Board of Trustees, Chair Riecker Itsted that
corr espondence relating to the appointment of Leonard E. Plechta as int.rim
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president would appear in the minutes upon receipt of a response to the Board's
December 13 letter. The correspondence appear. a. part o f these minutes.
Dr. Leonard E. Plachta
1435 Highland Street
Ht. Pleasant. HI 48858
Dear Dr. Plachta:
December 13, 1991
On behalf of the Board of Trustees, I wish to confirm your appoln~nt a.
Interu. President of central Hichigan University . This lette r will outline the
.alary and terms of your appointment .
You wi 11 serve as President at the pleasure of the Board. you will receive
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an annual salary of $100.000, beginning January 5, 1992. You will receive the
benefits afforded to Senior Officers of the Univer sity. except that you will be
furnished a full-dzed automobile frorn the University motor pool and all
maintenance, including gasoline. repairs. insurance, etc .• will be paid by the
University for business and personal mileage. You wil l be liable for taxes on •
peraonal use of the automobile. however.
You will be required to live In the Pre.ident's residence on Forest Lane
after President Jakubauskas has moved out. Tha University will provide utilities
and upkeep. including one buaine •• telephone. You will be expected to maintain
a personal telephone line for which you will be responsible. Haid and yard ca re
wIll be provided in accordance with existing University policies and procedures.
Catering and special events of a business nature at the home will be paid by the
University. You will be expected to furnish the private sections of the home.
The public . or entertainment areas, of the President's residence will be
furnished by the University . subject to Board approval. Public area. w111
include the large living and dining areas. study, kitchen. deck, downstairs
"recreation room" and such other areas as may be agreed to by the Board of
Trustees in the future.
full moving expenses frOll! YOllr current residence to the President's
residence will be paId by the UniversIty. Clubs and other memberships that ara
pertinent to your position will also be paid by CMU.
If thIs package is agreeable to you, please acknowledge your agreement in
writing to me at the Board of Trustees office.
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Inter~ President continued
The Board looks forward to working with you.
Sincerely.
Hargaret ~nn Riecker, Chair
Central Hichigan University Board of Tru,t .. ,
cc: Board of Trustees
Russell L. Herron, Secretary to the Board of Trustee.
December 19, 1991
Hs. Margaret Ann Riecker, Chair
Cent ra l Hichigan University Board of Trustees
Board of Trustees Office
80vee Univer sity Center
camp""
Dear Hs . Riecker:
I am pleased to accept the appoint-ent as Interim President of Central Kichigan
Unive rsity and agree to the leCP8 of the package as outlined in your latter of
December 13, 1991.
J look forward to the challenge. of this position and appreciate tha confidence
that the Soard of Trustees has placed In me .
J"
c : Russell L. Herron
Sincerely.
Leonard E. Plachta
em
Secretary to the BOard of Trustee •
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• • The ~etlog adjourned at 1:19 p.m.
Rus;;:l L. Herron
Secretary to the Board of Trustees •
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