Repository: UIHistories Project: Board of Trustees Minutes - 1958 [PAGE 275]

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2.72

BOARD OF TRUSTEES

[February 14

scholarships authorized by the Board in 1949. T h e r e is a higher number of potential students among arriving refugees which justifies the provision of fifteen scholarships. I recommend approval.

On motion of Mr. Swain, the Board authorized the award of fifteen four-year scholarships, as recommended above.

DEFAULT ON CONTRACT BY B. AND E. PLUMBING A N D HEATING (20) Edward M. Brumit, an individual doing business as the B. and E. Plumbing and Heating, Champaign, Illinois, has encountered financial difficulties. He was awarded contracts for Division I I I plumbing and heating work on the Band Building and for Division I I plumbing work on Men's Residence Halls Addition N o . 3 and No. 4, Champaign, Illinois. By Notice of Assignment under date of November 20, 1956, the Commercial Bank of Champaign, Champaign, Illinois, informed the University that it held assignments from Mr. Brumit of funds that might become due and owing to him on these contracts and which assignments were given as security for loans made to him by the Bank. By letter dated November 30, 1956, the surety on the bonds covering these contracts, the Aetna Casualty and Surety Company, informed the University that it held assignments of all remaining funds on these contracts, which assignments were given in connection with Mr. Brumit's applications for the bonds and requested that no further payments be made in connection with these contracts except to the bonding company or with its written consent. Notices were also received by the University from unpaid suppliers and materialmen and from the federal government for unpaid taxes. T h e University, in reliance upon the contractual provision prohibiting assignment of any monies due or to become due under the contract without its previous consent, did not recognize either assignment but payments were withheld pursuant to the contractual provision which provides in part: "The Architect may withold or, on account of subsequently discovered evidence, nullify the whole or a part of any certificate to such extent as the Architect may deem to be necessary to protect the Owner from loss on account of: 2. Claims against Contractor a n d / o r Owner filed by any person or persons, including Owner, or reasonable evidence indicating probable filing of such claims. 3. Failure of the Contractor to make payments properly to subcontractors or for material or labor. 4. A reasonable doubt that the Contract can be completed for the balance then unpaid." T h e Surety, through an arrangement with the Commercial Bank of Champaign, continued to finance these projects until January 11, 1957, when it informed the Contractor and University that it was not going to continue to do so. Since Mr. Brumit appeared to be unable to secure financing, a request was made that the Aetna Casualty and Surety Company take such action as may be necessary in order to keep the work in progress and an offer made on behalf of the University whereby funds would be released for payments made directly to laborers and materialmen. Due to the nearness of completion of the Men's Residence Halls project, and the importance to the University that this work not be delayed, the Surety consented to funds being released for payments for material and labor used upon it. An agreement was made whereby the President of the Commercial Bank of Champaign makes direct payment to laborers and materialmen with the consent of Mr. Brumit and upon the approval of the University's superintendent on the job site and upon such payment being made the University then makes payment in reimbursement for such costs. It is hoped that Mr. Brumit will be able to complete the work on this project under this arrangement. The Surety did not consent to such payments being made on the Band Building project but continued its financing arrangements with regard to it. On J a n u a r y 29, 1957, the Surety informed the Contractor, the Bank, and the University that it would not continue such financing after February 8, 1957. The