MINUTES OF THE MEETING
of the
BOARD OF TRUSTEES
November 22, 1963
Mr. Breslin reported on the action taken by
the Michigan Legislature with reference to the authorization
for the construction of the new dormitory at Oakland University.
After discussion, on motion by Mr. Huff, seconded
by Dr. Smith, it was unanimously voted to acquiesce
in the action of the State Legislature, insofar as setting
up a reserve fund equal to 2% of the cost of self-liquidating
projects is concerned, to be eventually used for the cost
of facilities to provide public utilities but that these funds
will be retained in the custody of the University in segregated
accounts or funds.
It has been determined that if we are to elect
to comply with existing state legislation covering exemption
from fees for the children of deceased veterans, it is estimated
that this could involve a total of 241 students and that $324
per student could involve a waiving of fees in the amount
of $87,084 per year.
On motion by Mr. Stevens, seconded by Mr. Merriman,
it was voted to approve the inclusion of the children
of deceased or permanently disabled war veterans under the
terms of the State legislation with the proviso that each
student must be able to qualify on the basis of need in the
same manner as required of other scholarship students receiving
University fund scholarships. This is to be effective January
1, 1964 for MSU and at the beginning of the next semester
at Oakland University.
Chancellor Varner presented a discussion of
some of the problems facing Oakland University in connection
with dormitories. Mr. May presented the following statement:
I. Legislative Authority
Oakland has legislative authority to build
a 500-unit dormitory at the cost of $2,000,000.
It proposes to immediately build a unit containing
rooms for 200 students. Mr. Varner has submitted a project
budget requiring about $825,000 or $4,125 per student housed.
While the building does not appear elaborate,
the cost of $4,125 per student for room only appears on
the high side. There is approximately 5 to 10% more space
in each of the student rooms. It was noted in the models
that there is more built-in casework, doors in closets,
etc. than we use in East Lansing. The type of materials
has not been reviewed since we have been advised that plans
and specifications have been completed and are ready for
delivery to contractors on November 21, 1963
II. Need for Additional Dormitory Space
The need for additional dormitory space seems
well justified. Presently, Oakland has 3 dormitory units
providing rooms for about 96 students each. Two of the units
which were in use in the 1962-63 school year had very good
occupancy.
III. Financial Operating Results
The financial plan presented was originally
based on the financial experience of operating 2 dormitories
in the 1962-63 year. The net revenue from the 2 units (192)
amounts to $35,708. But it should be noted that a considerable
amount of expense normally encountered in the operation
of a dormitory was not charged against project income. For
example, in the first year of operation, repairs and equipment
replacement were nil; no charge was made for management
expense; rent for rooms assigned to student resident assistants
was paid from the Dean of Students' general fund budget.
IV. Dormitory Operating Policy
Mr. Varner has agreed that Oakland should
include the same cost elements in operating its dormitories
as are used in East Lansing. At my request Mr. Foster prepared
a budget which should cover most of the expenses of operating
the (p.149) proposed dormitory. It
does not include any charge for ground maintenance, and
perhaps the budget for personal services is a little low.
The budget is shown below.
| |
Personal Services |
$8,100 |
| |
Administrative Salaries |
2,000 |
| |
Telephone and Postage |
1,000 |
| |
Utilities |
10,000 |
| |
Linen Service |
3,200 |
| |
Repairs and Maintenance |
2,000 |
| |
Major Repairs |
6,000 |
| |
Supplies |
3,000 |
| |
Other |
400 |
| |
Insurance |
600 |
| |
Pension and Workmen's Compensation |
300 |
| |
|
$36,600 |
V. Debt Service
This project will necessarily require long-term
financing. Because Mr. Varner had first indicated that the
Pontiac State Bank would provide the funds, I have not investigated
the market or brought Mr. Cress into the financing. It would
be my guess that 30-year bonds will carry an interest rate
of about 3 ¾ %. If we assume the 3 ¾ % rate
for 30-year bonds and borrow $825,000, an annual debt cost
of $46,275 will be incurred.
VI. Dormitory Charges
Using the budget shown above of $36,600 and
allowing $46,275 for debt service, we will need revenue
of $82,875 for this project without any excess coverage
which all lenders require.
Mr. Varner has suggested that in calculating
revenue, we plan on a 90% occupancy in the fall and spring
semesters and a 75% occupancy in the third semester. He
has also suggested that dormitory rates be increased from
$145 per semester to $160. My calculations, as shown below,
indicate that $165 would be required to refinance the project
with a minimum of debt coverage.
| |
Fall (200 x 90%) |
180 |
|
| |
Spring (200 x 90%) |
180 |
|
| |
Summer (200 x 75%) |
150 |
|
| |
|
510 x 165 = |
$84,150 |
VII. Conclusion
My biggest reservation relates to the occupancy projection
for the summer session. To meet debt commitments on the
Housing & Home Finance Agency loan on the first 2 dormitories
requires full summer use. Whether there will be enough summer
semester students to operate the dormitory at 75% occupancy
is questionable.
If the Board is willing to take this risk, I believe we
should proceed with the project.
On motion by Mr. Huff, seconded by Dr. Smith, it was
voted to authorize proceeding with the dormitory project
as outlined by Mr. May.
The following actions are recommended by the Departmental
Chairmen and Divisional Deans in accordance with the tenure
rules:
a. Associate Professors who have served their probationary
terms and acquire tenure with this reappointment, effective
August 15, 1964:
| |
Harvey Burdick |
Psychology |
b. Assistant Professors who have served their probationary
terms and acquire tenure with this reappointment, effective
August 15, 1964:
| |
Maurice F. Brown |
English |
| |
Donald C. Hildum |
Psychology |
c. Second probationary appointment as Assistant Professors
for three years from August 15, 1964:
| |
Sol Schwartz |
Psychology |
| |
Damie Stillman |
Art (p.150) |
d. Second probationary appointment as Instructors for a period
of two years from August 15, 1964:
| |
John L. Beardman |
Art |
| |
James L. Cooper |
History |
| |
Thomas M. Jenkins |
Mathematics |
| |
Genevieve C. Prevost |
Modern Foreign Languages |
The following individuals are not recommended for reappointment
and thereby terminate employment on August 14, 1964:
| |
Norman Roseman |
Teacher Education |
| |
Nat Simons, Jr. |
Economics |
Change in status of Charles 0. Hucker, Chairman and Professor
of History, from a 10-month basis at $14,100 per year to a
12-month basis at a salary of $17,625 per year, effective
January 1, 1964.
Change in status of David C. Beardslee, Chairman and Associate
Professor of Psychology, from a 10-month basis at a salary
of $10,300 to a 12-month basis at a salary of $12,875 per
year, effective January 1, 1964.
Personnel action:
Reclassify Manager, Food Services, AP-II position to Manager,
Food Services, AP-IV
Reclassify Purchasing Agent AP-III to Purchasing Agent AP-V
Gifts for the scholarship fund:
$300 from Fred W. Sanders of Detroit
$50 from The Wyman Furniture Company of Pontiac
$1,000 from the Rotary Club of Southfield
$50 from Smith Silo Company of Oxford
$100 from Aloysius F. Power of Detroit
$510 from the Pontiac State Bank
$2,450 from the General Motors Corporation of Detroit
$350 from the Business and Professional Women's Club of Royal
Oak
Gifts and Grants:
Grant of $180 from John F. Ivory Storage Company, Inc., of
Detroit to be used under the direction of Chancellor Varner
and credited to the Discretionary Gift Account, 31-1162.
No meeting of the Board of Trustees in December, 1963.(p/151)