Repository: UIHistories Project: Board of Trustees Minutes - 1948 [PAGE 1058]

EXTRACTED TEXT FROM PAGE:

i 9 48]

UNIVERSITY OF ILLINOIS

I057

These figures are subject to check after detailed plans and specifications have been completed. The loan would not cover any movable equipment, such as furniture, kitchen equipment, and other household furnishings. On a $6,000,000 loan at 4^2%, straight line amortization in 20 years, the debt service for the first year would be $570,000, which sum would decrease each year, the decrease the second year being $13,500. The average annual debt service would be $441,750. Income from the projects is presently estimated at $92,000 a year. This would result in a deficiency of $478,000 during the first year, which would have to be made up from general funds of the University, thus necessitating an increase in the biennial budget of the University for 1040-1051 in an amount sufficient to cover this requirement. In addition, a special, nonrecurring appropriation would be required for movable equipment, estimated to cost $323,100. If the construction cost is less than $6,000,000, and more favorable loan conditions can be secured, the amount of debt service would be correspondingly decreased. Information concerning the projects has been presented to six other parties representing life insurance companies. Two have indicated that they are definitely not interested, two have made no reply, and two others are studying the projects but have given no final answer. To carry this forward the following steps are necessary: ( a ) Sites for all the projects must be selected, and if additional land is necessary it must be acquired. (b) Detailed plans and specifications must be completed and definite bids secured. (c) Approval in principle by the Board of Trustees of the plan of meeting the difference between the debt service on these projects and the net income from the projects (after allowing for operating expenses) from its general funds, and authorization of the inclusion of the necessary sum in the biennial budgets. (d) Approval by the Board of Trustees of the plan for financing and a request to the University of Illinois Foundation to file an application for the loan on these projects. (e) The University of Illinois Foundation Board of Directors will then have to approve the filing of such an application. (f) The whole matter is, of course, subject to the standard legal and financial requirements of the University, the Foundation, and of the two Boards. I have a few reservations concerning these tentative proposals: 1. W e should try again to get substantial appropriations for this type of construction on the Chicago campus. These halls do not yield a large income and are essentially State projects. 2. Following (1) we could then borrow a smaller sum than the total cost. 3. The proposed interest rate is high. 4. It may be harder to get the operating increase (nearly $1,000,000 the first biennium) than the capital sum of $6,000,000. The matter is brought to the Board for discussion. M r . Livingston took his place with the B o a r d d u r i n g the discussion of t h i s m a t t e r . Action was deferred. ADDITIONS TO ELECTRICAL C O N T R A C T FOR THE ELECTRICAL ENGINEERING BUILDING (3) The Director of the Physical Plant Department and the Comptroller recommend two additions in the amount of $5,557.30 and $2,603.61 respectively to the contract with the Leverenz Electric Company, contractors for electrical work on the Electrical Engineering Building. (a) The first addition will provide for the following changes requested by the Electrical Engineering Department: 1. The extension of wood block flooring now provided in Room 120 in the ground story to Rooms 126 and 127. This necessitates a change in conduit raceway