Repository: UIHistories Project: Board of Trustees Minutes - 1954 [PAGE 781]

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778

BOARD OF TRUSTEES

[July 25

Comment: It is believed that the C.A.B. will consider all facts relating to the situation. No requested renewal has been turned down by the C.A.B. on such grounds in the past. 7. Ozark alleges that over $600,000 of "local funds" were put into this airport. Comment: The facts are that the investment of $2,436,000 in the University of Illinois Airport was supplied: $1,555,000 from federal grant, $821,000 by state appropriation, and $59,000 from income from flight-training, government contracts, and private rentals. University officers have made a careful study of the additional costs resulting from the use of the Airport by Ozark. These include ( a ) snow removal, (b) additional grass mowing, (c) additional maintenance of runways, ramps, etc., ( d ) runway inspection service, and ( e ) night lighting. On a minimum basis of calculation these amount to about $6,600 per year, or $550 per month. In this estimate no account is taken of amortization of facilities, general administrative overhead, and general services to the company and the public served by it. Unless the University is reimbursed for these costs, the excess of cost over reimbursement received would be charged against the University general income, and therefore against all the taxpayers of the state of Illinois. Such a charge is not justified unless it is based on the value of service to the University. There is such value and consequently it is proposed that in recognition of this general service there be a reduction of approximately 10 per cent from the foregoing charges. It is therefore proposed that the University offer to renew the contract on the basis of $40 per schedule per month, which on the basis of the present twelve schedules wouid mean a total reimbursement of the University of $480 per month, or $5,760 per year. I recommend approval of these proposals, that the Director of the Institute of Aviation and the Comptroller be authorized to negotiate a contract substantially in accord therewith and based on the principle of recovery of out-of-pocket costs on a no-overhead, nonprofit basis, and that the Comptroller and the Secretary of the Board be authorized to execute the contract when agreement has been reached along these lines.

On motion of Mr. Herrick, renewal of this contract was authorized with provision for full reimbursement of the University for expenses incurred.

A G R E E M E N T WITH NAVY FOR R E S E A R C H C O N T R A C T W O R K I N G CAPITAL (38) An agreement is being negotiated by the University with the Department of the Navy which will expedite reimbursement to the University of expenditures incurred on Navy cost reimbursement research and development contracts. Upon execution of this agreement, $300,000 will be deposited with the First National Bank of Chicago, in an account to be called the "University of Illinois Navy Special Pool Bank Account." These funds will be used to reimburse the University, immediately at the close of each month, for actual expenditures during such month, greatly reducing the period of such reimbursement, which, under present procedures, requires several months. It is understood that the special account will be reimbursed by the normal payments to the University, prepared in accordance with the established billing procedures now in effect, which require the audit of all disbursements before payment. This account will be drawn against by the University Business Office, by check payable to the University and signed by the Comptroller of the University and the Director, Office of Naval Research, in Chicago. Such check will then be deposited in the regular C. W . Weldon, Treasurer of the University of Illinois, account. The special account will thus operate on a revolving basis. The liability which the University will assume under this arrangement is to insure that funds will be withdrawn from the special account only for the purposes specified in the contract. Steps have been taken to set up similar arrangements on certain Army and Air Force research contracts, which, if completed, will greatly relieve the working capital requirements resulting from the operation of cost type research contracts. The Comptroller requests authorization to conclude these arrangements.