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SAGINAW VALLEY STATE UNIVERSITY
BOARD OF CONTROL
FEBRUARY 14, 2005
REGULAR FORMAL SESSION
INDEX OF ACTIONS
RES-1631 RESOLUTION TO APPROVE FACULTY TENURE,
JULY 1, 2005
APPROVED. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
RES-1632 RESOLUTION TO AUTHORIZE THE ISSUANCE
AND DELIVERY OF GENERAL REVENUE BONDS,
SERIES 2005 AND PROVIDING FOR OTHER
MATTERS RELATING THERETO
APPROVED. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
BM-1014 MOTION TO MOVE TO INFORMAL SESSION TO
DISCUSS COLLECTIVE BARGAINING ISSUES
APPROVED. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
BM-1015 MOTION TO ADJOURN
APPROVED. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
MINUTES
BOARD OF CONTROL
Regular Formal Session
February 14, 2005
Board of Control Room, Third Floor Wickes Hall
Present: Gamez
Gilbertson
Karu
Law
Sedrowski
Sims
Yantz
Absent: Braun
Cotter
Others
Present: S. Barbus
L. Beuthin
J. Boehm
J. Garant
M. Hedberg
H. Leaver
C. Looney
S. Locey
R. Maurovich
B. Mudd
J. Muladore
C. Ramet
K. Schindler
M. Shannon
J. Stanley
M. Straty
M. Thorns
R. Yien
Press (2)
I. CALL TO ORDER
Chairperson Sims called the meeting to order at 1:32 p.m., with Board members Gamez, Karu, Sedrowski, and Yantz present.
II. PROCEDURAL ITEMS
A. Approval of Agenda and Additions to and Deletions from Agenda
There were no additions to or deletions from the agenda.
The agenda was APPROVED as distributed.
B. Approval of Minutes of December 17, 2004 Regular Formal Session of the Board of Control
It was moved and supported that the minutes of the December 17, 2004 Regular Formal Session of the Board of Control be approved.
The minutes were unanimously APPROVED as written.
C. Recognition of the Official Representative of the Faculty Association
Professor Marcia Shannon, President of the Faculty Association, discussed the following trends which seem to be developing in higher education:
• There is an increased use of part-time faculty versus full-time faculty;
• Class sizes are slowly increasing;
• Universities are being treated more and more as though they were businesses;
• Universities are increasingly competing with private businesses which offer college level courses and with universities in other countries.
D. Communications and Requests to Appear Before the Board
Harry Leaver, Staff Member of the Month for January, and Joan Garant, Staff Member of the Month for February, were presented to the Board. (See Appendix One: Leaver, and Appendix Two: Garant)
(Trustee Law joined the meeting at 1:38 p.m.)
III. ACTION ITEMS
1. Resolution to Approve Faculty Tenure, July 1, 2005
RES-1631 It was moved and supported that the following resolution be adopted:
WHEREAS, Faculty tenure provides continuous employment of a faculty member for at least a basic two-semester appointment during each fiscal year; and
WHEREAS, Tenure status is achieved when a faculty member is recommended by the Professional Practices Committee and by the Administration for continuous appointment henceforth;
NOW, THEREFORE, BE IT RESOLVED, That the following faculty members be granted tenure, as provided by the terms of the SVSU-Faculty Association agreement, effective July 1, 2005:
Dr. Hasan Al-Halees Asst. Professor, Mathematical Sciences
Dr. Elson Boles Asst. Professor, Sociology
Dr. Elizabeth Hansen Assoc. Professor, Educational Leadership & Services
Dr. Gladys Hernandez Assoc. Professor, Modern Foreign Languages
Dr. Dorothy Millar Assoc. Professor, Teacher Education
Mr. Michael Mosher Asst. Professor, Art/Communication & Multimedia
Dr. Alexander Nalbach Asst. Professor, History
Dr. Amy Pierce Asst. Professor, Communication
Dr. C. Vincent Samarco Asst. Professor, English
Dr. Carrie Sorensen Professor, Teacher Education
Dr. Anne Tapp Asst. Professor, Teacher Education
Dr. Melissa Teed Asst. Professor, History
Dr. Robert S.P. Yien, Vice President for Academic Affairs, reviewed the process through which faculty members attain tenure.
The motion was APPROVED unanimously.
2. Resolution to Authorize the Issuance and Delivery of General Revenue Bonds, Series 2005 and Providing for Other Matters Relating Thereto
RES-1632 It was moved and supported that the attached resolution be adopted:
WHEREAS, The Board of Control of Saginaw Valley State University (the “Board”) is a constitutional body corporate established pursuant to Article VIII, Section 6 of the Michigan Constitution of 1963, as amended, with general supervision of Saginaw Valley State University (the “University”) and the control and direction of all expenditures from the University’s funds; and
WHEREAS, The Board proposes to undertake the projects described on Exhibit A attached hereto and made a part hereof, together with other projects to be subsequently approved by the Board and designated to be financed, in whole or in part from the proceeds of the bonds authorized hereby (collectively, the “Project”); and
WHEREAS, Financing for the majority of the components of the Projects has been acquired, but some of the Projects have increased in size, scope or costs, resulting in requirements for the issuance of the bonds authorized hereby; and
WHEREAS, The Board has previously issued General Revenue Bonds in several series, and it may be appropriate and economic to refund all or any portion of the outstanding principal maturities of those General Revenue Bonds (the outstanding bonds, if any, to be refunded to be determined by an Authorized Officer (hereinafter defined) and to be herein called the “Bonds to be Refunded”); and
WHEREAS, In the exercise of its constitutional duties, and in order to prudently control and direct expenditures from the University’s funds, the Board determines it is necessary and desirable to authorize the issuance and delivery of the Board’s General Revenue Bonds, Series 2005 (the “Bonds”) in order to provide funds which, together with other available funds, will be used to pay all or a portion of the costs of the Project, to fund capitalized interest, if applicable, and to pay all or a portion of the costs of refunding the Bonds to be Refunded, and costs incidental to the issuance of the Bonds and the refunding, including insurance premiums, if appropriate; and
WHEREAS, A trust indenture (the “Trust Indenture”) must be entered into by and between the Board and a trustee (the “Trustee”), to be designated by an Authorized Officer (herein defined), pursuant to which the Bonds will be issued and secured; and
WHEREAS, It is necessary to authorize the Authorized Officers to determine to sell the bonds at competitive sale or to negotiate the sale of the Bonds with an underwriter or group of underwriters to be selected by an Authorized Officer (collectively, the “Underwriter”) and to enter into a bond purchase agreement (the “Bond Purchase Agreement”) and, if deemed appropriate, a Remarketing Agreement (the “Remarketing Agreement”) or a Broker Dealer Agreement (the “Broker Dealer Agreement”) with the Underwriter setting forth the terms and conditions upon which the Underwriter will agree to purchase the Bonds and the interest rates thereof and the purchase price therefore; and
WHEREAS, In order to be able to market the Bonds at the most opportune time, it is necessary for the Board to authorize the President and the Vice President for Administration and Business Affairs (each an “Authorized Officer”), or either of them, to negotiate, execute and deliver on behalf of the Board, any of the following as shall be necessary for the purposes of this Resolution: the Trust Indenture, the Bond Purchase Agreement, the Remarketing Agreement or Broker Dealer Agreement, and other related documents, to establish the specific terms of the Bonds and to accept the offer of the Underwriter or successful bidder to purchase the Bonds, all within the limitations set forth herein; and
WHEREAS, The Board has full power under its constitutional authority and supervision of the University, and control and direction of expenditures from the University funds, to acquire and construct the Project and to pay all or a portion of the costs of the acquisition, construction and installation of the Project, to refund the Bonds to be Refunded, to pay all or a portion of the costs of refunding by issuance of the Bonds, and to pledge General Revenues for payment of the Bonds:
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF CONTROL OF SAGINAW VALLEY STATE UNIVERSITY, AS FOLLOWS:
1. The Board hereby approves each component of the Project as set forth in Exhibit A attached hereto, and authorizes the Authorized Officers, or either of them to proceed with the Project and each component thereof. The Board may subsequently approve additional components of the Project and specify that such additional components shall be financed in whole or in part from the proceeds of the Bonds, upon which occurrence such components shall thereupon become components of the Project hereunder. Either Authorized Officer is authorized to determine the specific amount of the cost of each component of the Project to be financed from the proceeds of the Bonds. In addition, the Board authorizes the Authorized Officers, or either of them, to determine which, if any of the outstanding General Revenue Bonds of the Board shall be refunded, based on whether such refunding would produce interest costs savings, more favorable debt service schedules, or more flexible documentation, and to cause to be called for redemption such of those bonds as are appropriate and consistent with the foregoing objectives.
2. The Board hereby authorizes the issuance, execution and delivery of the Bonds in one or more series to be designated GENERAL REVENUE BONDS, SERIES 2005 with appropriate additional or alternative series designations, if any, in the aggregate principal amount to be established by an Authorized Officer, but not to exceed the amount necessary to produce proceeds of $8,500,000, plus the amount necessary to accomplish the refunding of the Bonds to be Refunded, to be dated as of the date or dates established by an Authorized Officer, for the purpose of providing funds which, together with other available funds, will be used to pay all or a portion of the costs of the Project, all or a portion of the costs of refunding the Bonds to be Refunded, and the costs related to the issuance of the Bonds and the refunding, including capitalized interest for such period as an Authorized Officer may deem appropriate and bond insurance premiums, if appropriate. The Bonds shall be serial Bonds or term Bonds, which may be subject to redemption requirements, or both, as shall be established by an Authorized Officer, but the first maturity shall be no earlier than July 1, 2005 and the last maturity shall be no later than December 31, 2035. The Bonds may bear no interest or may bear interest at stated fixed rates for the respective maturities thereof as shall be established by an Authorized Officer, but the highest yield (computed using the stated coupon and the stated original offering price) for any maturity shall not exceed 6.5% per annum, and the Bonds may be issued in whole or in part as capital appreciation bonds, which for their term or any part thereof bear no interest but appreciate in principal amount over time at compounded rates (not in excess of 6.5% per annum) to be determined by an Authorized Officer. Alternatively, all or part of the Bonds may bear interest at a variable rate of interest for all or a portion of their term, and the variable rate of interest shall not exceed the lesser of the maximum rate permitted by law or the maximum rate, if any, to be specified in the Trust Indenture. In addition, all or part of the Bonds may be issued in related series, one of which bears interest at a variable rate and one of which bears interest at a residual rate determined by subtracting the variable rate from the fixed rate paid by the Board, but the combined rate on such Bonds, taking the two related series together, which shall be determined by an Authorized Officer, shall not exceed 6.5% per annum. The Bonds may be subject to redemption or call for purchase prior to maturity at the times and prices and in the manner as shall be established by an Authorized Officer, but no redemption premium shall exceed 3% of the principal amount being redeemed. Interest on the Bonds shall be payable at such times as shall be specified by an Authorized Officer. The Bonds shall be issued in fully registered form in denominations, shall be payable as to principal and interest in the manner, shall be subject to transfer and exchange, and shall be executed and authenticated, all as shall be provided in the Trust Indenture. As shall be determined by an Authorized Officer, the Bonds shall be sold by competitive sale following publication of a notice of sale in the form approved by an Authorized Officer, or by negotiation with the Underwriter to be selected by an Authorized Officer pursuant to the Bond Purchase Agreement. If the Bonds are sold by negotiation, the purchase price shall be established by an Authorized Officer (but the Underwriter’s discount, exclusive of original issue discount, shall not exceed 1.5% of the principal amount thereof) plus accrued interest, if any, from the dated date of the Bonds to the date of delivery thereof.
In connection with the issuance of the Bonds, or in connection with the conversion of the Bonds from one interest rate mode to another, or in relation to all or any portion of any other series of the Board’s General Revenue Bonds (the “Other Bonds”), either of the Authorized Officers may, on behalf of and as the act of the Board, enter into an interest rate swap, cap forward starting swap, option, swaption or similar agreement or agreements (collectively, the “Swap Agreement”) with a counter-party or counter-parties to be selected by the Authorized Officer. Such Swap Agreement shall provide for payments between the Board and the counter-party related to interest on all or a portion of the Bonds or the Other Bonds, or to indexed or market established rates. If the Swap Agreement is entered into in connection with the Bonds, the expected effective interest rates on the Bonds, taking into account the effect of the Swap Agreement, shall be within the limitations set forth herein. Any Swap Agreement in the form of an option, swaption or forward starting swap, may, if the Bonds to which such agreement relates are not ultimately issued, be required to be terminated, with a possibility of a resulting termination payment due by the University.
Any or all of the Bonds may be made subject to tender for purchase at the option of the holder thereof. The obligation of the Board to purchase any Bonds subject to tender options may be made payable from available cash reserves of the University, subject to such limitations as may be specified in the Trust Indenture, or may be made payable from a letter of credit, line of credit or other liquidity device (the “Liquidity Device”), all as shall be determined by an Authorized Officer and provided for in the Trust Indenture. Any reimbursement obligation for draws under the Liquidity Device shall be a limited and not a general obligation of the Board, payable from and secured by a pledge of General Revenues. Either Authorized Officer is authorized to execute and deliver, for and on behalf of the Board, any agreements or instruments necessary to obtain, maintain, renew or replace, and provide for repayments under, any Liquidity Device deemed by such officer to be required for the purposes of this Resolution. Purchase obligations shall not be considered as “principal and interest requirements” hereunder. In the alternative, any or all of the Bonds may be subject to rights on behalf of the holders thereof to tender their Bonds for purchase by the market through a dutch auction procedure, subject to a specified maximum interest rate not in excess of the lesser of the maximum rate specified by law or the rate specified in the Trust Indenture.
3. The Bonds, and the obligations of the Board under the Swap Agreement and the Liquidity Device, if any or all is or are entered into as provided herein, shall be limited and not general obligations of the Board payable from and secured by a lien on General Revenues (as shall be defined in the Trust Indenture to include generally all or a portion of the following: student tuition and other fees before allowances for scholarships, housing and auxiliary revenues before allowances for scholarships, unrestricted gifts and grants, unrestricted investment income, unrestricted receipts from the sales and service of educational activities, and other miscellaneous revenues, all subject to certain reductions, limitations and exceptions) and moneys, securities or other investments from time to time on deposit in certain funds created pursuant to the Trust Indenture or agreements entered into in connection with the Swap Agreement or Liquidity Device. Except as otherwise determined by an Authorized Officer, as provided below, the lien shall be on a parity basis with the liens on General Revenues securing previously issued outstanding bonds and notes of the Board.
No recourse shall be had for the payment of the principal amount of or interest or premium on the Bonds, the Swap Agreement or the Liquidity Device, or any claim based thereon, against the State of Michigan, or any member or agent of the Board (including, without limitation, any officer or employee of the University), as individuals, either directly or indirectly, nor, except as provided in the Trust Indenture, Swap Agreement or Liquidity Device, or agreements related thereto, against the Board, nor shall the Bonds and interest with respect thereto, or the Swap Agreement or Liquidity Device become a lien on or be secured by any property, real, personal or mixed of the State of Michigan or the Board, other than General Revenues and the moneys, securities or other investments from time to time on deposit in certain funds established as pledged pursuant to the Trust Indenture or agreements related to the Swap Agreement or Liquidity Device.
Notwithstanding anything herein to the contrary, any obligations of the Board under the Swap Agreement or any agreement with respect to the Liquidity Device may, if determined appropriate by an Authorized Officer, be payable and secured on a subordinated basis to the Bonds and other General Revenue obligations of the Board.
4. The right is reserved to issue additional bonds, notes or other obligations payable from and secured on a parity basis with the Bonds from the General Revenues, upon compliance with the terms and conditions as shall be set forth in the Trust Indenture.
5. The Authorized Officers, or either of them, are hereby authorized and directed, in the name and on behalf of the Board, and as its corporate act and deed, to select the Trustee and, if the Bonds are to be sold on a negotiated basis, the Underwriter, and to negotiate, execute and deliver the Trust Indenture in such form as shall be not inconsistent herewith, and the Bond Purchase Agreement and Remarketing Agreement or Broker Dealer Agreement, if necessary, in the form as an Authorized Officer may approve, which approval shall be conclusively evidenced by the execution of the Trust Indenture, the Bond Purchase Agreement, the Remarketing Agreement or Broker Dealer Agreement, respectively, all within the limitations set forth herein.
6. An Authorized Officer, or either of them, are hereby authorized, empowered and directed, in the name and on behalf of the Board, and as its corporate act and deed, to execute the Bonds by placing his or their manual or facsimile signature or signatures thereon, and to deliver the Bonds to the Underwriter upon payment of the purchase price therefor, determined pursuant to Section 2 hereof.
7. The Authorized Officers are hereby authorized to cause the preparation of a Preliminary Official Statement and an Official Statement, and to deem such documents “final” in accordance with law. The Underwriter or successful bidder is authorized to circulate and use, in accordance with applicable law, the Preliminary Official Statement and the Official Statement in connection with the offering, marketing and sale of the Bonds.
8. The President, the Vice President for Administration and Business Affairs, the Secretary and any other appropriate officer of the Board or the University are hereby authorized to perform all acts and deeds and to execute and deliver all instruments and documents for and on behalf of the University required by this resolution, the Trust Indenture or the Bond Purchase Agreement, as necessary, expedient and proper in connection with the issuance, sale and delivery, and ongoing administration, of the Bonds, the Trust Indenture, the Swap Agreement, the Liquidity Device or the Bond Purchase Agreement, as contemplated hereby.
9. Either Authorized Officer is authorized and directed to execute and deliver, for and on behalf of the Board, a continuing disclosure undertaking with respect to the Bonds, in the form such officer deems appropriate.
10. The Vice President for Administration and Business Affairs is hereby authorized and delegated the power to issue a declaration of intent to reimburse the University from Bond proceeds for any expenditures with respect to any component of the Project incurred prior to the issuance of the Bonds, all in accordance with I.R.S. Regulation 1.103-18.
11. All resolutions or parts of resolutions or other proceedings of the Board in conflict herewith are hereby repealed insofar as such conflict exists.
EXHIBIT A
PROJECT DESCRIPTION
I. Pioneer Hall Renovation and Expansion
This academic facility, constructed in 1978, will be renovated
and expanded in size to accommodate the needs of the
University’s mechanical and electrical engineering programs.
The total project cost is $16 million, of which $12 million is
expected to be funded by the State of Michigan. $4,000,000
II. Living Center South Addition
Addition of wing to student housing unit which increases capacity
of the facility from 242 beds to 323 beds. 3,500,000
Total $7,500,000*
* Estimated cost set forth above is exclusive of capitalized interest and bond issuance expense.
James G. Muladore, Vice President for Administration & Business Affairs, told the Board that the University has an opportunity, based on current market conditions, to refinance approximately $28 to $30 million of debt, which should result in savings of approximately $1.7 million in debt service between now and 2029. Resolution 1632 would authorize that refinancing, as well as the borrowing of funds for the expansion of Living Center South and the renovation and expansion of Pioneer Hall.
President Gilbertson stated that refinancing existing debt is clearly a good idea, considering current economic conditions. He noted that the Board had not formally approved the two projects: this is only a means of locking in financing opportunities in the event the Board decides to go forward with them.
Trustee Karu asked whether there was any penalty for refunding.
Mr. Muladore replied that there wasn’t.
The motion was APPROVED unanimously.
IV. INFORMATION AND DISCUSSION ITEMS
3. Winter Semester 2005 Enrollment Report
Chris J. Looney, Assistant Vice President for Student Services and Enrollment Management/Registrar, reviewed the attached Winter Semester 2005 Enrollment Report. (See Appendix Three: Enrollments.) He noted that the total headcount for Winter Semester 2005 was 9,161 – up 164 students over Winter 2004, for an increase of 1.82%. This is the first time in SVSU’s history that winter semester enrollments have exceeded 9,000.
4. Review and Discussion of Strategic Planning Document – Pre-Approval Draft
President Gilbertson and the Board discussed the pre-approval draft of the revised strategic planning document. Chairperson Sims suggested that an Executive Summary of the document be prepared to accompany it.
The final version of the strategic planning document will be brought to the Board for approval at its March Regular Formal Session.
V. REMARKS BY THE PRESIDENT
President Gilbertson updated the Board on the status of the State budget process.
VI. OTHER ITEMS FOR CONSIDERATION OR ACTION
5. Motion to Move to Informal Session to Discuss Collective Bargaining Issues
BM-1014 It was moved and supported that the Board move to Informal Session to discuss collective bargaining issues
The motion was APPROVED unanimously.
The Board moved to Informal Session at 2:45 p.m. and reconvened in Regular Formal Session at 3:29 p.m. with Trustees Gamez, Karu, Law, Sedrowski, Sims, and Yantz in attendance. Also present were President Gilbertson and Jo Stanley.
President Gilbertson discussed possible honorary degree recipients at the May, 2005 commencement.
VII. ADJOURNMENT
6. Motion to Adjourn
BM- 1015 It was moved and supported that the meeting be adjourned.
The motion was APPROVED unanimously.
The meeting was adjourned at 3:37 p.m.
Respectfully submitted:
___________________________
Linda L. Sims
Chair
___________________________
D. Brian Law
Secretary
___________________________
Jo A. Stanley
Recording Secretary
Secretary to the Board of Control
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