MINUTES OF THE MEETING of the MICHIGAN STATE UNIVERSITY FINANCE COMMITTEE November 15, 1974 President Wharton called the Finance Committee meeting to order at 7:45 a.m. The following were present: Trustees Carrigan, Huff, Martin, Merriman, Radcliffe, Stack, Stevens, and Thompson; Trustees-elect John Bruff and Raymond W. Krolikowski; President Wharton, Executive Vice President and Secretary Breslin, Vice President Wilkinson, Provost Cantlon, Vice President Scott, Assistant to the President Ballard, Attorney Carr. Absent: No one. President Wharton welcomed Trustees-elect Bruff and Krolikowski. 1. Pacific Gas & Electric offered to holders of its stock on October 1, 1974 rights to purchase shares of common stock on a 1 for 11 basis. The University exercised these rights on October 21, 1974 by purchasing 1,601 shares at a total cost of $25,616. With the completion of this transaction, the University now holds 19,315 shares. RESOLVED that the above investment report be approved. Unanimously approved. Motion by Trustee Huff, seconded by Trustee Thompson. I Trustees-elect |Bruff and (Krolikowski 1 welcomed jPurchase of J Pacific Gas & JElec. stock ] approved 2. As previously reported to the Board of Trustees, the Michigan Council of State College j Presidents, through a Business Officers subcommittee, has been studying the possibility \ of creating-an insurance pool to provide property insurance coverage for the thirteen Michigan institutions. At their meeting on November 1, the Business Officers recom mend to the presidents that an insurance pool for this purpose not be formed immediately This recommendation will be considered by the presidents at their next regularly scheduled meeting. This decision will have an impact upon the property insurance coverage of Michigan State University, and it is recommended that the University now accept a proposal from the Mourer Insurance Agency which will result in increased coverage for the University at approximately the current cost. Currently 93% of the University buildings are insured at actual cash value, i.e., replacement cost less depreciation. If a loss would occur, in most cases the yield would be substantially less than the probable cost of replacement. For example, using i the actual cash value of Berkey Hall, it would yield a maximum payment to the University of $2,662,000, whereas the replacement cost is estimated at $5,722,000. | Plan for creatiai of insurance pool for Mich, institutions abandoned for .present; Property insur ance program to be placed on replacement cost] basis and contract extencfed| to Oct. 1, 1977 The Mourer Insurance Agency proposal would place all of our buildings on the replace ment cost value, which would result in buildings currently valued at approximately $312,034,000 to be covered at a replacement cost of approximately $493,400,000. The current $100,000 deductible would continue to be in effect, and contents coverage would be on actual cash value. In making this proposal, the present coverage would be amended and the insurance coverage would be extended to October 1, 1977. This is an extension of the current contract of two years, and would allow the University to become a part of the insurance pool if the Michigan institutions adopt a plan at a future date. RESOLVED that the University place its insurance program on the replacement cost basis and extend the present contract as recommended. Unanimously approved. Motion by Trustee Thompson, seconded by Trustee Stevens. 3. Following a meeting October 31, 1974 between representatives from the State of Michigan-Commonwealth Air Pollution Control Division - Bureau of Facilities, Commonwealth Associates, Inc., and Michigan State University to discuss a course of action for MSU to pursue on the Power Plant 65 Units 1 and 2 Precipitator Contract bids, Commonwealth Associates submitted the following recommendations: Assoc, recommen dations re Units 1 and 2 precipitators approved 1. An extension of the bids from Western Precipitation and Research Cottrell should be obtained if possible. 2. MSU should investigate the possibility of modifying the existing precipitators and utilizing chemical injection in the waste gases to bring Units 1 and 2 into compliance with State requirements when burning coal fuel. This would be done with the expectation of keeping the expenditure within the budget. This study could be performed by Commonwealth Associates at a cost of approximately $12,000 to $15,000 but not to exceed $20,000. 3. If the investigation of the modification of the existing precipitators does not result in a decision to follow this course of action, and if there are indications of the bid prices of precipitators staying level or coming down, then the new precipitators should be rebid. This rebld would specify an efficiency to meet Federal emission standards and would be for roof mounted installation. (It has become apparent from the bids previously taken and evaluated, that a roof mounted installation would be the least costly). continued.... . Finance Committee Minutes, continued November 15, 1974 Precipitator Bids, cont. J3* Power Plant 65 - Precipitator Contract Bids, cont, 3. continued | While This rebid will not bring the project cost within budget, it is expected that the cost would be somewhat lower than previously estimated with the September 20th bids. Commonwealth sees the possiblity of nearly one million dollars saving by accepting an efficiency lower than originally specified. Motion was made by Trustee Huff, seconded by Trustee Carrigan, to follow the above course of action. Unanimously carried. Univ.authorized £. to order furnish ings for Greater Detroit Mgt. Ed. Center Vice President Wilkinson reported that in a meeting to review the financial status of the Greater Detroit Management Education Center Foundation project, Mr. Edward Ledermann, President of the Foundation, advised that due to the present economic climate the Foundation could not guarantee the $135,000 needed to purchase furniture and food services equipment. It is the intent of the Foundation to make every effort to raise the $135,000 ($25,000 to $35,000 of which is already on deposit with the University), but in order to meet the April 1, 1975 opening date, they have requested that the University order these furnishings. It was Vice President Wilkinson1s recommendation that the University assist the Foundation in the ordering of the furnishings with the understanding that the Foundation Board would make every effort to raise funds in order to cover this expenditure. The amount involved would be carried in an account as a deficit until the Foundation pays it. On motion by Trustee Huff, seconded by Trustee Carrigan, the above recommendation was unanimously approved. Porter Realty 5. i Co. to assist in acquisition of Box property if Exec. V.P.Breslin and Attorney Carr unable to negotiate purchase For a long time the Board has shown considerable interest in the purchase of the Harry Box farm. Certain officers of the University have from time to time discussed this matter with Mrs. Harry Box. However, to date their efforts have been unsuccessful. It is now recommended that if the Trustees are still interested in purchasing the Box property, they employ the services of the Porter Realty Co., Lansing, at a cost of $37.50 per hour plus 20% office overhead to assist in this acquisition. Motion was made by Trustee Stevens, seconded by Trustee Huff to approve the above recommendation. During the discussion it was recommended that the motion be amended to include a provision that Executive Vice President Breslin and Attorney Carr make one more call on Mrs. Box in an effort to arrange for the purchase of her property by the University. If they are not successful, the Porter Realty Co. will be employed under the terms shown above to assist the University in the acquisition of the Box property. Motion as amended unanimously approved. Adj ourned. MINUTES OF THE MEETING of the MICHIGAN STATE UNIVERSITY BOARD OF TRUSTEES November 15, 1974 Present: Trustees Carrigan, Huff, Martin, Merriman, Radcliffe, Stack, Stevens, and Thompson; Trustees-elect John Bruff and Raymond W. Krolikowski; President Wharton, Executive Vice President and Secretary Breslin, Vice President Wilkinson, Provost Cantlon, Vice Presidents Muelder, Nonnamaker, Perrin, and Scott, Assistant to the President Ballard, Attorney Carr. Absent: No one. The Board convened in the Board Room at 10:21 a.m. fTrustees-elect Bruff and Krolikowski were welcomed by President Wharton. 1. Motion was made by Trustee Merriman, seconded by Trustee Thompson, to approve the agenda. Unanimously carried. |2. On motion by Trustee Martin, seconded by Trustee Radcliffe, it was unanimously voted to approve the minutes of the October 18, 1974 meeting. 3. Motion was made by Trustee Merriman, seconded by Trustee Thompson, to approve the Finance Committee actions. Unanimously carried. • L A. PERSONNEL CHANGES November 15, 1974 1 —— •••; •- - —- • • . ' " . " ' ! : '' Resignations jResignations >V3 1. Nancy B. Burton, Extension. Home Economist, Baraga and Houghton-Keweenaw counties, effective October31, 1974 to resume advanced education, 2. Stephen W. Schar, Specialist, Resource Development and Urban Planning and Landscape Architecture, effective November 6, 1974 to accept employment elsewhere,, j I j 3. Lois H. Humnhrpv. Associate Professor Vamii^r v.nnin