Repository: UIHistories Project: Board of Trustees Minutes - 1986 [PAGE 445]

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434

BOARD OF TRUSTEES

[November 14

pany ( I B C ) , a wholly owned subsidiary of Illinois Bell Telephone Co. ( I B T ) , is the most advantageous to the University. The system proposed consists of: customer premise equipment; a supporting distribution system to be installed on University premises; and a ten-year digital switching service agreement, with service to be provided by IBT. T h e system will be implemented through four contractual agreements: (1) an agreement with IBC to provide customer premise equipment, which consists of four SL-1 switching systems manufactured by Northern Telecommunications Inc., to be installed at the Peoria and Rockford campuses, Willard Airport, and the Illini Union, Urbana campus; 16,000 telephones (10,500 single-line and 5,500 multi-line) ; and two management control systems, at an estimated cost of $4.2 million; (2) an agreement with I B T to provide a distribution system, which consists of the installation of new building wiring and new cabling between buildings at an estimated cost of $10.5 million; (3) an agreement with IBT to provide ten years of digital switching service from its central offices and utilizing two DMS-100 systems manufactured by Northern Telecommunications Inc., at an estimated cost of $14.8 million; and (4) a service contract with IBC as project manager to act as overall coordinator for installation of the system. The ten-year digital switching service is subject to Illinois Commerce Commission approval of certain guarantees concerning services and rates. The total cost of the system described is estimated to be $29.5 million with payments due upon cutover and acceptance of the system by the University which are expected to take place in April 1987 ($19.5 million) and June 1986 ($10 million). To obtain financing for the project, a request for proposals for a ten-year lease-purchase agreement between the University and a lessor was issued on a public competitive basis. Based upon an evaluation of the responses received, the proposal from Bear, Stearns & Co. of New York is the most advantageous to the University. This financing plan requires 19 semiannual payments of approximately $2,236 million beginning October 1, 1987, for a total project and financing cost to the University estimated at $42.5 million over the period of the agreement. T h e payment required each fiscal year is less than the amount now expended by the University for its present, equivalent telecommunication services (local service). The lease-purchase agreement will contain a purchase option for the customer premise equipment as well as the distribution system, either of which can be exercised by the University during the term of the contract at a specified price, if the University wishes to acquire title before the end of the ten-year period. With the concurrence of the appropriate administrative officers, I request that the comptroller and the secretary be granted authority to execute the necessary documents as required: (1) to execute and assign, as needed, the four contracts to implement the IBC proposal as described to Bear, Stearns & Co.; and (2) to enter into a ten-year, lease-purchase agreement as described with Bear, Stearns & Co. for the leasing of the telecommunications system. It is expected that the execution of the contracts will be performed jointly by the University and the Department of Central Management Services which has statutory authority to approve the procurement ef telecommunications equipment and services for all agencies of the State. Funds will be included in the University's budget request for Fiscal Year 1987 to meet the ordinary and contingent expenses of the University for this project and will be included in the operating budget authorization request for each succeeding fiscal year. The lease-purchase agreement is subject to the availability of funds.

On motion of Mrs. Gravenhorst, authority was given as requested by the following vote: Aye, Mrs. Day, Mr. Forsyth, Mrs. Gravenhorst, Mr. Hahn, Mr. Howard, Mr. Logan, Mr. Madden, Mrs. Shepherd; no, none; absent, Miss Smith, Governor Thompson.