Repository: UIHistories Project: Board of Trustees Minutes - 1978 [PAGE 171]

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BOARD O F TRUSTEES

[December 15

The present agreement (that approved by the Board of Trustees in January 1976) between the Board of Trustees of the University of Illinois and the Levis Faculty Center Sponsors, Inc., provides an adequate and appropriate framework within which Sponsors can execute the undertakings outlined above. No further actions of the Board of Trustees are required. The University will continue to provide appropriate levels of building services to the Levis Faculty Center as it has since the center opened, including utilities, building and grounds maintenance, and custodial and related services. Continued involvement in the Levis Faculty Center is not consistent with Macke's more recently developed corporate goals because the center does not provide the opportunities for financial remuneration desired by Macke. Macke's future involvement with operations like the faculty center is likely to be solely on a management fee basis rather than a profit or loss basis as provided for in the current agreement between Macke and Sponsors. Macke's operating experience was not unlike that of the earlier experiences of Sponsors in operating center services. Their earlier searches for an appropriate manager and experiments with various levels and kinds of services took them through a period of operating losses. Their more recent experience over the last two months, however, has been good, having been brought about through a change in on-site management, a better quality of service, and elimination of unprofitable services, stemming from a clearer understanding of client interests and needs. The advantage of the plan the Sponsors' Board of Directors is now prepared to implement is that it will not be necessary for Sponsors, through its manager, to explore now-known unsuccessful service approaches which in the past have been costly. The quality of the new management and the quality of services provided have already attracted a higher level of participation from within the academic community. The volume of business now being experienced and the staffing levels needed to support it are, under present management, such that the Sponsors' members' dues level recently established by Sponsors should be adequate to cover the level of current and anticipated losses. However, as is the case with most businesses, there are risks, and future events cannot be fully anticipated. To the extent that losses begin to be experienced beyond the level now anticipated, measures will be taken to prevent such losses from being shifted to either the University or the University of Illinois Foundation. If the losses rise to a level above that which Sponsors' members are willing to cover through further dues increases, operations will be terminated before Sponsors' working capital falls below that needed to cover its operating liabilities. Any purchases of goods and services from the University by Sponsors will be paid for on a current basis so that debts to the University cannot accumulate.

This report was received for record. "Statement of General Principles" and Propositions Regarding Development of Guidelines for Financial Management of Revenue-Generating Enterprises, Activities, and Services

(9) Discussions have been held this fall with the Legislative Audit Commission of the state of Illinois, the Auditor General of the state, and representatives of all senior public higher education systems in Illinois. Primarily the discussions have dealt with differing interpretations of existing state statutes relating to the financial management of revenue-generating enterprises, activities, and services of institutions of higher education.