Repository: UIHistories Project: Board of Trustees Minutes - 1956 [PAGE 1031]

EXTRACTED TEXT FROM PAGE:

1028

BOARD OF TRUSTEES

[April 25

Subsequent to the receipt of bids, the Physical Plant Department negotiated with the lowest bidders for the general work and for the kitchen and cafeteria equipment installations on proposed changes in the general construction and equipment installations to reduce the cost of the building. The contractors' quotations of credits for these changes are still subject to checking by the architects. Hence, the Physical Plant Department recommends, the Comptroller concurring therein, that the contracts be awarded in accordance with the base bids and alternate bids received, as presented above, but with the understanding that change orders will be issued to reduce the cost by approximately $100,000. T h e budget for this project is now $2,890,000 of which $320,000 is for equipment and the balance is for construction. T o finance this project a revenue bond issue in the amount of $3,100,000 is recommended. This will provide a surplus of $210,000, and if it is not needed bonds of this amount will be retired when construction is completed. The Federal Housing and Home Finance Agency has tentatively approved a loan for the building construction. T h e equipment bonds will be sold through investment bankers. It is possible to finance this total cost by extending the amortization period of the loan to forty years, assuming that the bonds which finance the cost of construction ($2,780,000) can be sold to the federal government under the College Housing Loan P r o g r a m at an interest rate of 2$i per cent. Experience with the federal agency in securing final approval for the sale of bonds to finance the additions to the Men's Residence Halls indicates that it will not be possible to secure early final approval of the sale of bonds to finance the addition to the W o m e n ' s Residence Halls. T h e original application for a loan for this addition was submitted September 9, I95S- Preliminary approval was given by the federal government on December 9, 1955, and the final application was submitted by the University on February 7, 1956. On April 20 this application was still in the regional office, but it was reported that it would be forwarded to the central office in Washington very shortly. The construction bids expire on May 19, and final action must be taken by the Board of Trustees prior to that date. In a conversation, the Director of the College Housing Loan P r o g r a m in Washington indicated that final approval can probably be given by the Washington office prior to this date. However, even if such approval is so received, it is doubtful that the details of printing the bonds, reaching agreement on the resolution to be adopted by the Board, and other details can be completed and money received from the sale of the bonds prior to the time that first payments will be due to contractors. In order to complete the first half of the project by September 1, 1957, it is important that the contracts for construction be awarded as early as possible. There is available in reserves of auxiliary enterprises approximately $500,000 which is unpledged and can be used temporarily to finance a portion of the construction of the addition to Lincoln Avenue Residence. T o enable contractors to proceed promptly with construction, it is recommended that: 1. The Board of Trustees authorize the issuance by the Comptroller and the Secretary of letters of intent to those contractors who are recommended for the award of a contract, such letters of intent to authorize the contractors to proceed with their work with the understanding that the total liability to be incurred under this authorization will not exceed $500,000, and to be approved by the Legal Counsel before they are issued. 2. Payments to contractors be made from auxiliary enterprises reserve funds prior to the receipt of proceeds of the bond sale with the understanding that such funds will be returned to the auxiliary enterprises reserve from those proceeds when received. 3. Contracts be awarded, as above recommended, when a loan agreement has been executed with the federal government. In view of the need for initiating construction on this project, the Director of the Physical Plant and the Comptroller recommend this procedure. I concur.

Mr. Livingston moved that the foregoing recommendations be approved and that the Comptroller and Secretary of the Board be author-