MINUTES OF THE BOARD OF TRUSTEES OF INDIANA UNIVERSITY
Indiana University East
June 3, 1978

The Trustees of Indiana University met in scheduled session at 10:40 a.m., Saturday, June 3, 1978, on the campus of Indiana University East. The meeting was called to order by Trustee Donald C. Danielson, President, with the invocation by Trustee Stoner. Other members of the Board present, in addition to Mr. Danielson and Mr. Stoner were: W. G. Bannon, J. M. Black, R. E. Gates, H. L. Gonso, C. P. Gutman, C. W. Long, and J. W. Wolfe. Members of the Administration present were: President J. W. Ryan; Vice Presidents T. M. Bonus, G. W. Irwin, Jr., R. M. O'Neil, W. G. Pinnell, and E. G. Williams; J. D. Mulholland, Treasurer; C. E. Harrell, Secretary to the Board; Regional Campuses chancellors: V. M. Bogle, Indiana University at Kokomo; E. W. Crooks, Indiana University Southeast; D. Orescanin, Indiana University Northwest; L. M. Wolfson, Indiana University at South Bend; Dean A. F. Schilt, Indiana University East; and Acting Chancellor F. T. Borkowski, Indiana University-Purdue University at Fort Wayne; also, J. T. Clapacs, A. P. Fraenkel, M. K. Hine, T. R. Jones, M. E. Klootwyk, D. W. Kramer, H. G. Ludlow, F. D. Rhome, C. T. Rich, T. C. Schreck, G. Taliaferro, C. K. Travis, J. E. Weigand, H. S. Wilcox, and A. R. York; also, B. M. Hall and V. L. Capshew, Recorders; J. L. Green and R. M. Petranoff, News Bureau; C. Nathan and J. H. Vaughan, Co-Secretaries, University Faculty Council; J. R. Wentworth, newly-appointed Faculty Representative for Indiana University to the Intercollegiate Conference of Faculty Representatives; M. Rhoda, Vice President, Student Senate, Indiana University East; B. Clarke, President, Student Association, Bloomington campus; also present, members of the Press.

GENERAL MATTERS

Trustee Matters

1.A.(1) Approval of minutes for meeting on May 5, 1978.

This item was deferred.

Remarks by President Ryan

1.B.(1) Nominations for appointment and reappointments to the Board of Visitors, School of Law, Bloomington.

President Ryan presented, and concurred in, the following recommendations from Dean S. J. Plager for membership on the Board of Visitors of the School of Law, Bloomington:

Upon motion duly made and seconded, the recommended appointments were approved as presented.

1.B.(2) Consideration of Fee Collection Policy.

(See item 1.C.(4), also.) President Ryan reviewed for the Board the most recent developments in the consideration of a change in the policy for the collection of student fees. He recalled that the administrative officers' review of the recommendations from the commissions which studied student life and interests indicated the need to address the current Fee Collection Policy, so as to deal with the widely recognized problem affecting the initiative to establish new organizations and to broaden opportunities for students' out-of-classroom experiences. He added that at their last meeting the Board was assured that recommendations with respect to the Fee Collection Policy would be presented in the hope that the problems would be reduced, if not eliminated. Dr. Ryan said that a draft of a recommended fee collection policy had been circulated to the Board and this recommendation would change the current policy - the one adopted in December, 1975 - in two basic ways; first was an explicit recommendation for the mandatory fee procedure for student activity funding for seven campuses, and second, in the area of voluntary fees, providing that voluntary fee assessment and the payment would be a part of the fee collection process associated with registration. Dr. Ryan suggested that discussion be deferred until the report was received from the Student Affairs Committee, which he knew had discussed this matter in their meeting earlier in the morning. The Board agreed to defer the discussion.

1.B.(3) Recommendation regarding Athletics Committee members' responsibilities.

President Ryan presented the recommendation to The Trustees to approve a change in the by-laws relating to the makeup of the University Athletics Committee. He said that this is not a change in the number of members, but is a request to designate one individual as Chairperson of the Athletics Committee and another as Faculty Representative to the "Big Ten." Both of these positions now are being held by one individual appointed by the President. The two recommended appointments also will be made by the President. Recommended also was the discontinuation of the position of Secretary to the Committee. President Ryan said that this proposal comes with the recommendation of the Athletics Committee itself and with the concurrence of the Faculty Council.

Dr. Ryan introduced Professor Jack Wentworth, who recently had been appointed as Faculty Representative to succeed Professor Dan Miller, and noted that Professor Wentworth was present to answer any questions. He added that Professor James Vaughan, Co-Secretary of the Faculty Council, was present and could answer questions regarding the Faculty Council's attitude.

Trustee Black asked if there was any special procedure contemplated for the selection of a secretary to the Committee and was informed by President Ryan that he knew of no special arrangement, but was confident that the Committee would indeed select a secretary.

Following a question, President Ryan reviewed for the Board the total makeup of the Athletics Committee, saying that there are six faculty members, each elected for a six-year term by the University Faculty Council, from a list of nominees amounting to two for each position. These nominees are presented to the Faculty Council by the President from a panel submitted to him by a nominating committee of the faculty. The Committee also contains two student members appointed by the President, with appointees coming from nominations received by the President from the Dean of Student Services Advisory Committee. The membership on the Committee is completed by three alumni members, each serving a three-year term, with one appointed each year by the President from nominees received from the Alumni Executive Council.

Following the discussion, the recommended change in the by-laws was approved unanimously as presented, upon motion duly made and seconded.

1.B.(4) Report regarding "Legionnaires Pneumonia."

Dr. Ryan spoke of the interest of the entire community, indeed the entire state, and to some extent the entire nation, regarding the situation surrounding the incidences of Legionnaires Pneumonia being associated with the Bloomington community, Indiana University, and probably the Indiana Memorial Union building. He said that he wanted The Trustees to know that all University personnel is taking the matter seriously and everyone is cooperating fully in every way possible in an attempt to discover all relevant information about the incidence of this illness and the factors related to it. Dr. Ryan said that the press conference about this matter was held very recently; namely, on the thirtieth of May, and already the combined forces of the Public Health units involved and the University have put surveys in the mail to nearly 1,000 people who stayed in the Indiana Memorial Union during the first part of May. Surveys have been mailed, also, to a control group of similar size from other establishments in the Bloomington area. Also, he said, blood samples have been taken from the Indiana Memorial Union Staff members and from a control group of similar size selected from elsewhere in the community, with the samples being sent to the Center for Disease Control in Atlanta. Dr. Ryan assured the Board that University officials are continuing to keep the public fully informed of what is being done and of any new developments, and he emphasized that the Board could expect the operation of the campus to go on with the University business and academic pursuits in no way interrupted, either by the pneumonia or by the University's very considerable attempts to deal with the study of it. Dr. Ryan said that the campus is peaceful, is quiet, and in fact, is beautiful, and there is no outward indication of any upset as a result of the CDC investigation. He was pleased to report that there is no alarm and no panic, but this does not mean that University officials are taking the matter lightly, or are in any way attempting to ignore the situation. Everyone is concerned, he said, but the concern is an intelligent and compassionate one. He emphasized that administrative affairs, the operation of classrooms, libraries, and laboratories would continue and that the University's policy would continue to be to keep the public as fully informed as possible, and to continue the University's cooperation with the CDC and the Indiana State Board of Health.

President Danielson thanked President Ryan for his summary of the situation and added that he wished to compliment the President and his staff for the way in which this entire situation had been handled. He emphasized that the openness and the voluntary dissemination of full information about a bad situation was more than commendable. Dr. Ryan in turn thanked Mr. Danielson for his expression and pointed out the exemplary performance of Vice President Bonus and those University people directly connected with public dissemination of information. He also emphasized that the attitude and actions of the staff members of the Indiana Memorial Union had been outstanding.

Student Matters

1.C.(1) Report from Student Affairs Committee.

Trustee Stoner reported excellent participation by students at the Student Affairs Committee meeting, where there was a discussion of certain problems on the Indiana University East campus, and some further discussion regarding the Fee Collection Policy. Trustee Stoner made special comment about the wide-spread participation in the determination of the proposed Fee Collection Policy in the studies by the Student Life Commissions on each of the campuses, with the resulting reports including sound recommendations. He emphasized that cooperation by students, faculty, and administrative officers in developing the proposed policy had been excellent.

Mr. Stoner said that one of the concerns expressed by students attending the meeting involved the limited number of upper level courses taught on the Richmond campus, with a related result that most students use Indiana University East only as an interim step before going to another institution to further their study. Students expressed their belief at the Committee meeting that a four-year program of study is needed at Indiana University East, following which Vice President Pinnell summarized the many considerations involved in the inauguration of a four-year program of studies, including the size of the student body, the resources required, and the necessary approvals from the Commission for Higher Education and the final and vital approval of financing by the General Assembly.

Following his remarks, Trustee Stoner introduced Mr. Mark Rhoda, Vice President of the Student Senate at Indiana University East.

1.C.(2) Remarks by Vice President, Student Senate, Indiana University East.

Mr. Mark Rhoda explained that he was speaking, instead of Miss Debbi Cross, who is the President of the Student Senate, but who was unable to be present. He said that he could speak for the students at Richmond in expressing their pleasure that the proposed fee policy continues a mandatory activity fee for the Richmond campus. He said that one of the great needs at Richmond is the facilities to develop a satisfactory recreational and extracurricular activities program for the students attending Indiana University East. At the present time, facilities, particularly for outdoor activities, are nonexistent and Indiana University East students are forced to use community facilities, those at the YMCA, Earlham College, etc. These other facilities are overcrowded and Indiana University East students certainly have no better than a second priority. Further, there is a psychological disadvantage in the use of such facilities, since the doing so mitigates against the identification by students of Indiana University East as their institution. This is particularly true, since many of the students commute to the campus and then commute elsewhere for recreation. Mr. Rhoda spoke of the constructive gains from extracurricular activities and pointed out that there is adequate land available and he and many other students hope that proper use of the land can be developed and in the future perhaps a building built for recreational activities.

1.C.(3) Remarks by President, Student Association, Bloomington campus.

Trustee Stoner called upon Mr. Brian Clarke, President of the Student Association on the Bloomington campus, who spoke about the accountability on the part of student groups who will receive funds from the application of the proposed voluntary Fee Collection Policy. He said that, in his opinion, there is no way in which the University can be regarded by the general public as completely separate from student groups and individuals making up the student population. He believes that the University cannot avoid answering for student group actions, whether it is in the State House, where students attempt to influence legislation, or on the campus, where they show controversial movies. Further, Mr. Clarke believes that, in all fairness, the University should accept its fair measure of responsibility for student actions and activities. It follows, he emphasized, that student groups should recognize this close relationship and should accept the responsibility to govern their activities accordingly.

Mr. Clarke noted that he and other student leaders had traveled throughout the state to talk personally with as many members of the Board as possible, and he is happy with the cooperation which is manifest and hopes that cooperation between students and Trustees, students and faculty, and students and administrators can continue, so that all will be able to work together in presenting the University programs and needs for quality education. He looks forward, he said, to the day when all student groups on campus can be completely accountable for their actions, and in doing so, can be responsible enough to gain substantial control over their funds and engage in activities of their own determination.

1.C.(4) Fee Collection Policy

(continuation of item 1.B.(2)). Trustee Stoner referred to the materials which had been received by The Trustees regarding the Fee Collection Policy and brought up several changes in the so-called final working draft which had been received. The changes were primarily for clarification and had been discussed and agreed upon by students and administrative officers during the meeting of the Student Affairs Committee. The changes are all incorporated in the text of the Fee Collection Policy recommended and involved, in most instances, a more precise spelling-out of the apparent intent of the proposed policy. He mentioned such matters as: (1) the fee collection would be during the registration process itself; (2) the restriction regarding eligibility of student groups did not apply to the Arbutus, the Indiana Daily Student, Indiana University Student Association, or InPIRG, since these four had participated in the previous voluntary fee collection procedure; (3) organizations being allowed a one-year grace period before the percentage requirement for future enrollments takes effect; and (4) organizations on the campus which have a membership or a dues fee relationship with national organizations will be allowed to pay the standard national dues required.

Following his summary, Trustee Stoner moved that the proposed Fee Collection Policy be adopted to become effective at registration for the fall semester, 1978-79, and that the President of the University be authorized to promulgate the procedures, regulations, and the interpretations necessary to implement the policy.

Trustee Gates asked if he were correct in the assumption that the mandatory activity fee applicable at the Indianapolis campus would apply to the University's program at Columbus. In order to clarify the matter, it was agreed that in the proper section of the policy that the inclusion of Columbus should be specified.

Trustee Long asked for further clarification of the so-called grandfather clause applicable to the four organizations mentioned, and Trustee Stoner, along with President Ryan, explained that the special clause was applicable to the four organizations for only the first year. In view of the fact that the proposed policy would become effective for the 1978-79 fall semester registration, time would not allow these four organizations to meet the normal requirement of 25% student approval by petition before the first semester, 1978-79.

Trustee Long also asked for a more precise definition of "standard dues and membership fees." It was explained that national associations in which there could be membership by campus organizations could not, of course, meet the requirement to be included under the voluntary Fee Collection Policy, but the local organization would be allowed to pay their standard dues and membership fees into the national organizations from funds collected by the voluntary fee process.

Trustee Black questioned whether there were ways other than obtaining less than 10% participation in which an organization could lose its right to participate. Vice President Pinnell replied that the policy spells out the conditions of eligibility for using the voluntary fee check-off, and organizations adhere to these conditions, or they are not eligible.

Following the discussion, Trustee Stoner's motion was approved unanimously, after which Trustee Stoner asked the Board to recognize that this policy was made possible by the excellent cooperation received from student leaders, faculty, and administrative officers, in working out the problems and producing the document shown in these minutes.

Trustee Danielson expressed his personal thanks to Trustee Stoner, The Trustees' Committee on Student Affairs, the students on all campuses, and the administrative officers who participated in the cooperative efforts to resolve a problem, the facets of which were many and complex.

The Fee Collection Policy, as approved to become effective the fall semester, 1978-79, is as follows:

INDIANA UNIVERSITY FEE COLLECTION POLICY

  1. Mandatory Fees

    Mandatory fees will be defined as those directly related to instructional, academic or institutionally created program. Programs or activities are eligible for mandatory fees only if fiscal, budgetary, operational procedures and policies are under the direct authority of a University administrator. The following list contains fees eligible for collection as mandatory fees:

    • academic credit hour fees
    • activity fee
      • Indianapolis (including Columbus)
      • Gary
      • South Bend
      • Southeast
      • Kokomo
      • East
      • Fort Wayne
    • allocated fees
      • Union Building Maintenance
      • Union Building Addition Bonds
      • Union Board Dedicated Fee
      • Building Facilities Fee Bonds
      • Athletic Facilities Addition Bonds
      • Hall of Music Bonds
      • Musical Arts Center Bonds
    • continuing education (non-credit)
    • overseas study
    • Geologic Field Station
    • DGTS associate degree programs
    • DGTS non-degree programs
    • Halls of Residence
      • application fee
      • pre-payment
      • room, board, telephone
      • activities fee
      • damage
      • family housing w/utilities
    • late enrollment
    • re-enrollment
      • per class
      • maximum
      • late program change
      • student teaching
      • applied music
      • music instrument rental
      • music practice room
      • laboratory fees
      • deposit fees
  2. Optional Fee - University directed activities

    Programs and activities not eligible for funding under mandatory fees or General Fund Monies, or those eligible but not seeking such funding, may be offered to each student for funding on an optional basis. Programs or activities would be eligible for optional funds only if fiscal, budgetary, operational procedures, and policies are under the direct authority of a University administrator. Collection will be at a time of registration. Only University-directed activities will be eligible, with the determination of "University-directed" made on a case-by-case basis upon proper application to the chief administrative officer of the campus, who will forward his recommendation to the President of the University, whose decision relative to this matter is final.

    Such activities include:

    • Student Health Service
      • prepayment plan
      • fee for service plan
    • Campus Bus System
    • Vehicle registration and parking decals
    • Athletic events
  3. Voluntary Fee - University-related activity

    • A. Student organizations, programs, or activities which are determined upon application to be Indiana University related, would be eligible for funding through voluntary fees collected as a part of the registration process. To be eligible an organization must meet the following criteria:

      1. The majority of the organization's members (subscribers or contributors) must be registered students.
      2. The organization must have educational value as attested to by an endorsement of an academic or administrative unit or the faculty governing body for the campus.
      3. Membership in the organization must be open to all enrolled students.
      4. All enrolled students must be eligible to participate in any programs or activities sponsored by the organization.
      5. The organization must have been active on the campus for one year prior to seeking participation in the system.
    • B. Further, to participate in the voluntary fee mechanism, the student organization must meet the following conditions:

      1. The organization must have an established student organization account.
      2. The organization must have a faculty or staff fiscal advisor.
      3. The organization must adhere to all procedures and regulations of the Student Organization Accounts Office and be subject to financial audit.
      4. The organization must pay in advance of the fee collection a service charge to the University to reimburse the University for all incremental costs of administering the collection of voluntary fees.
      5. The organization must submit proof of substantial student interest through a petition endorsing the voluntary fee signed by at least 25% of the total enrolled students during the semester in which the petition was circulated.
      6. The organization must collect a voluntary fee of $1.00 or more.
      7. The organization must maintain financial support from at least an average of 10% of the students enrolled during the two consecutive semesters of each academic year beginning with the third semester after acceptance.
    • C. Funds collected through this mechanism must be expended in accordance with the following restrictions:

      1. Not co-mingle the voluntary collected funds with funds from other sources or with funds for other organizations.
      2. Adhere to all applicable rules and regulations of the State Board of Accounts.
      3. Not use funds collected through the voluntary fee process for support of litigation against the University.
      4. Not use funds collected through the voluntary fee process for support of any political campaign or in behalf of any candidate for public office.
      5. Not use funds collected through the voluntary fee process for the purposes of attempting to influence legislation.
      6. Not use funds collected through the voluntary fee process for direct or indirect support of any organization not eligible for voluntary fee participation, with the exception of standard dues and membership fees.
      7. Not use funds collected through the voluntary fee process for support of sectarian religious activity.
    • D. Eligible organizations agreeing to the conditions and restrictions set forth in this policy may make application to the appropriate administrative office designated on each campus to work with student organizations. The chief administrative officer of each campus or the designee shall review each application to insure compliance with the terms of this policy.
  4. Ad hoc sales or promotional activities

    Indiana University student organizations have traditionally attempted to interest students in specific sales, memberships, or promotions by establishing tables or other facilities at the registration exits. Upon receipt of administrative approval through established mechanisms for each campus, such efforts would be continued under approximately the same procedures and guidelines now in effect.

1.C.(5) Consideration of revisions of Statement of Student Rights and Responsibilities.

Consideration by the Board was requested of the following recommended revisions in the Statement of Student Rights and Responsibilities; the recommended change is underlined:

The obvious net effect of these changes would be to expedite the adjudication of disciplinary cases. At no point would a particular judicial agent be required to use this accelerated schedule, but the option would be available. Decisions regarding the application of these guidelines would require responsible administrative judgment to protect individual students.

Considerable concern has been expressed regarding the amount of time that occasionally passes before a judicial case is closed. It is believed that the proposed changes will provide the ability to adjudicate cases promptly in fairness to the greater community, while allowing the charged individual sufficient time to make necessary decisions and prepare response to an allegation.

Unanimously approved, on motion duly made and seconded.

New Degree Programs

1.D. Approval by the Board was requested of the recommendation from the Academic Program and Policy Committee and Administrative Committee for the following new degree programs:

These proposals are subject to approval by the Commission for Higher Education.

Trustee Long questioned the degree, Bachelor of Science in Actuarial Science at the Northwest campus. He said he understood that Ball State has a program in Actuarial Science, if not indeed, a state mission to offer this program. He voiced a concern over whether or not any additional program in this area was needed within the state, a concern over whether or not the Northwest campus is the best or only campus to offer the degree, if it is needed, and thought a thorough and more complete study of the need and proper location of the program should be made.

Chancellor Orescanin replied that he did not know the specifics of the program at Ball State, but that his faculty was encouraged always to look at emerging needs and ways in which to meet them in a fast-growing, fast-changing area, and in this specific instance, the Prudential Insurance Company is moving its national headquarters from Chicago into the area of the Northwest campus. A degree in Actuarial Science is nonexistent in the northwestern part of Indiana, and the particular program proposed utilizes the existing faculty in the Mathematics Department and the Department of Economics and Business. The program, as it was put together, was submitted to the Society of Actuaries for their review and reaction. Their response was that a program could not be accredited by them at this time, since obviously there are no graduates, but they did suggest a few changes, particularly in the sequence of courses.

President Ryan cautioned the Board that they should not read into the recommendation that the administrative officers believe that the only campus in the University that might be the location for such a program is the Northwest campus. He said that the Northwest campus is taking the initiative and in answer to specific questions as to whether or not they could offer the program, or there is a regional need that can be served by such a program, Dr. Ryan would answer in the affirmative.

Trustee Long again expressed his doubt over the allocation of resources for this degree at the Northwest campus, and questioned the demand within the state. Chancellor Orescanin estimated that the number of graduates in the program might reach 25, and added that no additional faculty would be required to offer the program; and indeed, the allocation of resources would total approximately $1,000, with this amount needed solely for library acquisitions. Trustee Wolfe said that he believes it is to the credit of the faculty at Northwest that they have come up with such a degree and they can meet the apparent need of the community without additional resources in any appreciable amount. Trustee Bannon expressed his conviction that northwestern Indiana has long been a poor cousin to the State of Indiana as a whole, and he voiced his hope that the University would recognize the value of more than a half-million people in that area of the state and by such program and initiative, as evidenced by the Northwest campus faculty, enable the area to play a more vital role in the years to come. Hopefully, in the future, the inhabitants of northwestern Indiana will no longer be called a poor cousin and will be recaptured from the State of Illinois.

Trustee Long said he continued to be uncertain and would like to see a study made of the total subject before voting on this particular recommendation.

Following a request by President Ryan, Vice President 0!Neil explained to the Board that when a proposal for a new degree is received by the central administrative committee on degrees, those from other parts of the University system tend to accept that questioning the need as set forth for the proposed degree will come from the Commission for Higher Education. This is clearly within their province, and degree proposals are examined carefully by the Commission, since there are some areas in which each of the institutions have more or less exclusive missions. In this specific case the committee on degree proposals was, and is, aware of the present activity at Ball State, but from what is known, the committee did not feel that this precluded the Northwest campus from proceeding at this time. Mr. O'Neil stated that the committee made no assessment of the possible interest on the part of other campuses within the Indiana University system.

President Ryan voiced his willingness to defer a decision on this degree, pending further investigation and assessment of the need and the proper campus to meet the need. Trustee Black objected to postponement, saying that he believes it would delay a needed program approximately a year; his objection was not minimized when it was learned that delay might not amount to a year, since further study could be made and the matter brought back to the Board in time for a decision by the Board and submission to the Commission for Higher Education at its meeting on September 30, 1978. Trustee Black added that he believes the need is present, that somebody had to start, the Northwest campus has done so, and perhaps this will stimulate the Bloomington faculty or other faculties to develop programs which will meet a demand which he believes will increase in the future.

Trustee Danielson reminded the Board that the motion before The Trustees was for approval of the five new degree programs as shown for this item on the agenda. A vote by show of hands was called for and resulted in the following: nay - Trustees Danielson, Gonso, Gutman, Long and Stoner; yea - Trustees Bannon, Black, Gates, and Wolfe.

It was moved next that the degree for the Northwest campus, which appeared on this agenda, be deleted from this list and that the four remaining degree recommendations be approved as presented, with the understanding that the degree in Actuarial Science recommended for the Northwest campus be resubmitted to the Board at its next regular meeting.

Unanimously approved, on motion duly made and seconded.

Staff Committee on evaluation of the presidency

1.E. President Danielson reminded the Board that the three committees - faculty, student, and alumni - on the evaluation of the presidency had been appointed, and reported that President Ryan had recommended to him that a committee made up of University staff be appointed, also. President Danielson has agreed with President Ryan’s recommendation and told the Board that the staff committee, in addition to the other three committees, will be announced very soon.

FISCAL, FINANCIAL, INVESTMENTS
AND SPECIAL PURCHASES MATTERS

Trustee Stoner presented the following recommendations and reports from the Committee on Fiscal, Financial, Investments, and Special Purchases Matters:

Fiscal, Financial, and Investments Matters

2.A.(1) External agency agreement - National Council of Teachers of English.

Approval of the Board was requested to enter into an external agency agreement with the National Council of Teachers of English to cover office expenses incident to editing, in the Department of English at Bloomington, of College English. (A copy of this detailed agreement is filed with the papers for this meeting.)

Unanimously approved, on motion duly made and seconded.

2.A.(2) Changes in penalties for late registration or presentation of dishonored checks -Bloomington campus.

Approval of the Board was requested to modify penalties for the Bloomington campus related to late registration or presentation of a check at enrollment which is dishonored. Currently, there is a $25 fee, which does not effectively prevent enrollments and payments late in the semester. The recommendation of the Bloomington campus administration was as follows, to become effective the fall semester, 1978-79:

Unanimously approved, on motion duly made and seconded.

2.A.(3) Contract with Purdue University in regard to buildings on the Fort Wayne campus.

Approval of the Board was requested to contract with Purdue University in regard to buildings on the Fort Wayne campus, as follows:

(Copies of the Amendment to Lease and Joint Use Agreement (Student Union Building) and the Lease of Indiana University’s share of Fort Wayne campus buildings are filed with the papers for this meeting.)

Unanimously approved, on motion duly made and seconded.

2.A.(4) Authorization to borrow from Trust and Asset Management Group of American Fletcher National Bank.

The Board, at its January 25, 1975 (item 2.A.(3) and December 9, 1977 (item 2.A. (1)) meetings, approved resolutions authorizing the Treasurer to arrange for and obtain interim financing on the following projects:

January 25, 1975 Resolution -
Associates Property purchase (South Bend) $3,500,000
December 9, 1977 Resolution -
Applied Music Building (Bloomington) 1,381,000
Power Plant Pollution Facilities (Bloomington) 340,000
Activities Building (Southeast) 2,200,000
Herron Art School purchase (Indianapolis) 875,000

The interim financing of the Associates property was finalized with the American Fletcher National Bank and Trust Company on February 6, 1975 in the amount of $3,500,000 through the Bank's corporate loan operations.

The University has a commitment from American Fletcher National Bank's Trust and Asset Management Group to provide the interim financing for the other four projects totaling $4,796,000 and in addition, switch the $3,500,000 Associates financing from the Bank's corporate loan operations to the Bank's Trust and Asset Management Group. Borrowing from the Bank's Trust and Asset Management Group rather than the Bank's corporate loan operations is estimated to result in lower interest costs of approximately one-fourth of one per cent.

Therefore, in accordance with the request of the Bank and bond counsel, Ice Miller Donadio and Ryan, it was requested that the Board approve the following resolutions which specifically authorize interim financing of the above mentioned projects to be administered through American Fletcher National Bank's Trust and Asset Management Group.

RESOLUTION

WHEREAS, The Trustees of Indiana University have heretofore determined that a necessity exists to acquire a Student Union Building on its campus in the City of South Bend, Indiana, which determination is hereby reaffirmed ("South Bend Student Union Facilities"); and

WHEREAS, this Board of Trustees finds that the total estimated cost of acquiring such South Bend Student Union Facilities is in the amount of Three Million Five Hundred Thousand Dollars ($3,500,000), and that in order to provide interim funds for such South Bend Student Union Facilities, prior to the issuance of permanent bonds, it is necessary to borrow an amount not exceeding Three Million Five Hundred Thousand Dollars ($3,500,000) and issue its note or notes therefor; and

WHEREAS, a Loan Agreement with American Fletcher National Bank and Trust Company providing for the issuance of such note or notes has been prepared and submitted to this Board; now therefore,

BE IT RESOLVED by The Trustees of Indiana University as follows:

RESOLUTION

WHEREAS, The Trustees of Indiana University has heretofore determined, which determination is hereby reaffirmed, that a necessity exists to acquire, erect, construct, equip and furnish certain facilities on certain of its campuses in the State of Indiana as follows:

  1. Construction of Applied Music Building (Bloomington Campus);
  2. Construction of Power Plant Pollution Facilities - Phase II (Bloomington Campus);
  3. Construction Activities Building (Southeast Campus);
  4. Purchase of Herron Art School property (Indianapolis Campus)

said facilities being hereinafter referred to collectively as "Academic Facilities"; and

WHEREAS, The Board of Trustees finds that the total estimated cost of such Academic Facilities is in the amount not less than Four Million Seven Hundred Ninety-six Thousand Dollars ($4,796,000), and that in order to provide interim funds for such Academic Facilities during construction, prior to the issuance of permanent bonds, it is necessary to borrow an amount not exceeding Four Million Seven Hundred Ninety-six Thousand Dollars ($4,796,000) and issue its note or notes therefor; and

WHEREAS, a Loan Agreement with American Fletcher National Bank and Trust Company providing for the issuance of such note or notes has been prepared and submitted to this Board; now therefore,

BE IT RESOLVED by The Trustees of Indiana as follows:

Upon motion duly made and seconded, the resolutions were approved as presented. Trustee Stoner abstained from voting.

2.A.(5) Report of Investment Committee.

At the invitation of Trustee Stoner, Mr. J. D. Mulholland, Treasurer of the University, read the following recommendations from the Investment Committee of the University.

Special Purchases

2.B. The following report of special purchases appeared in the agenda in compliance with policies approved by the Board of Trustees which require reporting of transactions of $5,000 or more, if only one bid is received, or if the lowest price offer is not acceptable. Documentation is on file in the Office of Director of Purchases and Stores.

CONSTRUCTION MATTERS

Trustee Long presented the following recommendations from the Committee on Construction Matters:

Awards of Contracts Matters

3.A.(1) Fire detection, alarm and sprinkler system - Lilly Library, Bloomington campus.

Approval of the Board was requested for an award of contract to the low bidder. Culligan Corporation, Indianapolis, Indiana, in the amount of $142,420, for installation of a fire detection, alarm, and sprinkler system in Lilly Library on the Bloomington campus. Bids were received from three contractors.

This project is part of the Lilly Library loss prevention plan recommended by the insurance carrier. At the April 8, 1978 meeting, item 3.A.(1), the Board approved the installation of a sprinkler system in two vaults. This project completes the installation of a sprinkler system throughout the entire building.

The estimated construction cost was $200,000. Funds are available from 1977-79 Capital Appropriations for Repair and Rehabilitation - Indiana University Bloomington.

Unanimously approved, on motion duly made and seconded.

3.A.(2) Reroofing of five halls - Graduate Residence Center, Bloomington campus.

Approval of the Board was requested for an award of contract to the low bidder, B&L Sheet Metal and Roofing Co., Inc., Bloomington, Indiana, in the amount of $230,589, for reroofing five areas in the Graduate Residence Center on the Bloomington campus. Bids were received from three contractors.

This project will complete the entire reroofing of the Graduate Residence Center. Installed in 1961, this roofing has had numerous leaks occur over the past two winters, and the complete reroofing is necessary. At the December 9, 1977 meeting, item 3.A.(1), the Board approved an award of contract for reroofing Aley Hall.

The estimated construction cost was $230,000. Funds are available from account 92-430-51 Halls Operating Building Repairs.

Unanimously approved, on motion duly made and seconded.

3.A.(3) Golf Course Clubhouse, Bloomington.

This item was deleted.

3.A.(4) Air conditioning system - Computer Room, Administrative Services Building, Bloomington.

Approval of the Board was requested for an award of contract to the low bidder, Peine Engineering Co., Indianapolis, Indiana, in the amount of $112,364, for installation of additional air conditioning and humidification system in the Administrative Services Building on the Bloomington campus. Bids were received from five contractors.

The present air conditioning system within the building is inadequate. Additional computer equipment has been added to the building, causing a critical situation in terms of temperature and humidity control.Approval of the Board was requested for an award of contract to the low bidder, Peine Engineering Co., Indianapolis, Indiana, in the amount of $112,364, for installation of additional air conditioning and humidification system in the Administrative Services Building on the Bloomington campus. Bids were received from five contractors.

The estimated construction cost was $150,000. Funding is available from 1977-79 Capital Appropriations for Repair and Rehabilitation - Indiana University Bloomington.

Unanimously approved, on motion duly made and seconded.

3.A.(5) Parking area - Bright Street to Blackford Street, Indianapolis.

Approval of the Board was requested for an award of contract to the low bidder, Calumet Asphalt, Indianapolis, Indiana, in the amount of $107,439, for construction of a paved parking area between Bright Street and Blackford Street on the Indianapolis campus. Bids were received from five contractors,

When the project for the construction of the Business/SPEA Building begins, some student parking area will be lost. Construction of this lot will partially offset that loss.

The estimated project cost was $132,000. Funding is available in account 60-950-00 Parking Operations IUPUI.

Unanimously approved, on motion duly made and seconded.

3.A.(6) Lighting of parking area - Bright Street to Blackford, Indianapolis.

Approval of the Board was requested for an award of contract to the low bidder, Commonwealth Electric, Indianapolis, Indiana, in the amount of $25,357, for lighting the parking area to be located between Bright Street and Blackford Street on the Indianapolis campus. Bids were received from two contractors.

The estimated construction cost was $21,200. Funding is available in account 60-950-00 Parking Operations IUPUI.

Unanimously approved, on motion duly made and seconded.

3.A.(7) Periodontics Clinic - Dental School, IUPUI.

Approval of the Board was requested for an award of contract to the low bidder, Surina-Buzek Construction Co., Inc., Indianapolis, Indiana, in the amount of $240,995, for the renovation of the Periodontics Clinic within the School of Dentistry on the Indianapolis campus. Bids were received from five contractors.

This project will provide for thirty stations designed in a modern sit-down patient/student/ hygienist practice mode, as well as support facilities. The area previously provided eighteen treatment stations in a patient/student manner only.

The estimated construction cost was $320,000. Funding will be from 1977-79 Capital Appropriations for Repair and Rehabilitation IUPUI.

Unanimously approved, on motion duly made and seconded.

3.A.(8) Computer Center - University Hospital, IUPUI.

Approval of the Board is requested for an award of contract to the low bidder, R. M. Walker Construction, Inc., Indianapolis, Indiana, as follows:

Base bid $283,747
Alternate 2-A (Uninterrupted power source) + 77,000
$360,747

This contract is for the development of a computer center within University Hospital on the Indianapolis campus.

Bids were received from nine contractors. The estimated construction cost was $350,000. Funds are available from Hospital Operating Account.

Unanimously approved, on motion duly made and seconded.

3.A.(9) Library - Indiana University Northwest.

Approval of the Board was requested for contract awards to the three low bidders for the construction of the new Library on the Northwest campus. Award recommendations were as follows:

General Construction - Superior Construction, Gary, Indiana

Base bid $4,349,000
Alternate G-2 + $26,000
Alternate G-3 + 62,000
Alternate G-4 + 25,000
Alternate G-5 + 47,000
Alternate G-7 + 6,200
Alternate G-15 + 11,000
Alternate G-16 + 10,000
Alternate G-17 + 6,000
Alternate G-21 + 50,000
Contract award $4,492,000

Mechanical Construction-Arctic Engineering Company, East Chicago, Indiana

Base bid $1,287,000
Alternate M-5 + 13,255
Alternate M-10 + 32,687
Contract award $1,332,942

Electrical Construction - Hyre Electric Company, Highland, Indiana

Base bid $ 489,000
Alternate E-5 + 737
Alternate E-7 + 781
Alternate E-8 + 23,750
Alternate E-11 + 932
Alternate E-13 + 11,000
Alternate E-14 + 18,929
Contract award $ 523,129
TOTAL CONTRACT AWARDS $6,348,271

Bids were received from eight general contractors, seven mechanical contractors, and six electrical contractors.

The estimated construction cost was $6,400,000. Funding for this project will be from 1965 bonding authority as authorized by the Acts of 1977.

Unanimously approved, on motion duly made and seconded.

3.A.(10) Additional fuel oil storage facilities - South Bend campus.

Approval of the Board was requested for an award of contract to the low bidder, Slutsky-Peltz Plumbing and Heating Company, South Bend, Indiana, in the amount of $13,000 for the installation of additional fuel oil storage facilities for the South Bend campus. Bids were received from six contractors.

The estimated construction cost was $11,700. Funding is available from 1977-79 Capital Appropriations for Repair and Rehabilitation.

Unanimously approved, on motion duly made and seconded.

3.A.(11) Humidification and sound control - Northside Hall, South Bend campus.

At the April 8, 1978 meeting, item 3.A.(8), the Board approved an award of contract to the low bidder for humidification and sound control modifications at Northside Hall on the South Bend campus.

The low bidder has not been able to provide a performance bond and therefore has not fulfilled that stipulation of the contract award. It was recommended to the Board that an award of contract be made to the second low bidder, United Heating and Plumbing, Inc., South Bend, Indiana, in the amount of $55,370.

Unanimously approved, on motion duly made and seconded.

3.A.(12) Parking lot and road - Indiana University Southeast.

Approval of the Board was requested for awards of contracts to the low bidders for the construction of a parking lot and road on the Southeast campus, as follows:

General Construction -

Wehr Constructors, Inc.,
Louisville, Kentucky
$86,700
Electrical Construction -

Metzger Electric, Inc.,
Clarksville, Indiana
25,805
Total contract awards $112,505

This was the only bid received for the general construction; two bids were received for the electrical work. The estimated construction cost was $77,000 for the general construction and $21,000 for the electrical.

Funding will be from Indiana University Southeast parking fund.

Unanimously approved, on motion duly made and seconded.

New Projects

3.B.(1) Pediatric Cardiac Catherization Lab, Riley Hospital.

Approval of the Board was requested to proceed with the planning of a Pediatric Cardiac Catherization Facility within Riley Hospital on the Indianapolis campus. Total project cost was estimated at $1,156,000. Funding will be as follows:

$ 380,000 James Whitcomb Riley Memorial Association
776,000 Hospital Operating Funds
$1,156,000

The scope of work will include the construction of a modern cardio-vascular diagnostic facility on the first floor adjacent to Radiology.

The architectural firm, Boyd Sobieray Associates, Inc., Indianapolis, Indiana, was recommended as architect for this project.

Appropriate State approvals will be requested.

Unanimously approved, on motion duly made and seconded.

3.B.(2) Michigan Garage West, Indianapolis.

Approval of the Board was requested for the employment of Edward L. Barnes, New York, New York, and Carl Walker and Associates, Kalamazoo, Michigan, for planning and design of Michigan Garage West on the Indianapolis campus. Contracts will be executed between Indiana University and each firm. Edward L. Barnes will be responsible for schematic design and Carl Walker and Associates will develop working drawings, bid documents and supervise construction. It is the intent of Carl Walker and Associates to employ Geupel Architects/Engineers of Indianapolis, Indiana, as a consultant.

Estimated construction costs will be developed in the early planning stages of this project.

This garage will service both Indiana University and the State Board of Health needs.

Appropriate State approvals will be requested.

Unanimously approved, on motion duly made and seconded.

3.B.(3) Michigan Garage East, Indianapolis.

Approval of the Board was requested for the employment of Edward L. Barnes, New York, New York, for the planning and design of Michigan Garage East on the Indianapolis campus. The Edward L. Barnes firm will employ Carl Walker and Associates, Kalamazoo, Michigan, and Reid, Quebe, Allison and Wilcox, Indianapolis, as consultants,

This garage is tentatively planned with a mound concept, and initial capacity will be approximately 500 vehicles.

Estimated construction costs will be developed during the early planning stages. Appropriate State approvals will be requested.

Unanimously approved, on motion duly made and seconded.

3.B.(4) Michigan Garage South, Indianapolis.

Approval of the Board was requested for the employment of Edward L. Barnes, New York, New York, for the planning and design of Michigan Garage South on the Indianapolis campus. The Edward L. Barnes firm will employ Carl Walker and Associates, Kalamazoo, Michigan, and Reid, Quebe, Allison and Wilcox, Indianapolis, Indiana, as consultants.

This garage is tentatively planned with a mound concept and initial capacity will be approximately 1,100 vehicles.

Estimated construction costs will be developed during the early planning stages.

Appropriate State approvals will be requested.

Unanimously approved, on motion duly made and seconded.

3.B.(5) Academic Classroom/Office Building II, Indianapolis.

Approval of the Board was requested to proceed with the planning for Academic Classroom/Office Building II on the Indianapolis campus. It was requested further that the architectural firm, Edward L. Barnes, New York, New York, be retained as supervising architect and the architectural firm, James Associates, Indianapolis, Indiana, be commissioned as architect of record.

An allotment of $233,522 has been requested and has been approved by the State of Indiana Commission for Higher Education.

As presently conceived, the project will consist of a building approximately 165,000 gross square feet and will provide facilities for the Schools of Education, Physical Education, and Social Work.

Unanimously approved, on motion duly made and seconded.

3.B.(6) Construction of housing - IUPUI.

This item was deleted.

PERSONNEL MATTERS

4.A. VICE PRESIDENT PINNELL

ACTION ITEMS

REPORT ITEMS

4.B. VICE PRESIDENT O’NEIL

ACTION ITEMS

REPORT ITEMS

4.C. VICE PRESIDENT IRWIN

ACTION ITEMS

REPORT ITEMS

4.D. DEAN SCHILT (Indiana University East)

ACTION ITEMS

REPORT ITEMS

4.E. ACTING CHANCELLOR BORKOWSKI (Indiana University-Purdue University at Fort Wayne)

ACTION ITEMS

REPORT ITEMS

4.F. CHANCELLOR BOGLE (Indiana University at Kokomo)

ACTION ITEMS

REPORT ITEMS

4.G. CHANCELLOR ORESCANIN (Indiana University Northwest)

ACTION ITEMS

REPORT ITEMS

4.H. CHANCELLOR WOLFSON (Indiana University at South Bend)

ACTION ITEMS

REPORT ITEMS

4.I. CHANCELLOR CROOKS (Indiana University Southeast)

ACTION ITEMS

On motion duly made and seconded, the above personnel items were unanimously approved.

4.J. REPORT OF DEATHS

The following deaths were reported:

  1. Lois C. Perkins, Associate Professor of Anatomy, School of Medicine, Indianapolis, died April 11, 1978.
  2. Roland J. Stanger, Professor of Law, Bloomington, died April 12, 1978.
  3. Alice Nelson, Executive Director Emeritus, Halls of Residence, Bloomington, died May 10, 1978.
  4. Joseph A. Batchelor, Associate Professor Emeritus of Economics, Bloomington, died May 24, 1978.
  5. Diether Thimme, Professor of Fine Arts, Bloomington, died May 25, 1978.

REAL ESTATE AND LEGAL MATTERS

Trustee Gonso presented the following recommendations from the Committee on Real Estate and Legal Matters:

Real Estate Matters

REPORTS AND EXHIBITS

Reports

Exhibits

Adjournment

Prior to adjournment, President Danielson, noting that the meeting was the last of the fiscal year, commended President Ryan, the central administrative officers, the chancellors, and the entire supporting staff for the excellent cooperation they had evidenced during the past year. He said that he was especially pleased over the improvement in the earlier mailing of material to the Board with so few additions to the agenda immediately before the meeting. Further, the advance material is supportive, with accurate detail included, and presents a complete picture of the matters to be considered by the Board. He admitted that perfection has not yet been reached, but said that great strides had been made; he wanted to express on behalf of the Board appreciation to the officers and those who work with them.

President Danielson also took the opportunity to express his gratitude to the Board, saying that during his 18 years on the Board he never had seen a Board work any harder or spend more hours than the current Board had during the last year. He noted that real challenges had been presented and no one on the Board had shirked or complained about the time required to serve adequately on the committees and to function adequately as a member of the Board. He made special reference to the superb leadership received from Trustee Stoner as Chairman of the Student Affairs Committee and Trustee Long as Chairman of the Faculty Relations Committee and the Architectural Committee. Mr. Danielson said that without this leadership of both, he did not believe the year would have been as effective and productive as it had been.

President Danielson concluded, with an overtone of humor, that he had been about to emphasize the harmonious voting of the Board, but was forced to modify his remarks because of the tie vote which had occurred previously during the meeting, with his being required to break the tie. He added that he was forced to admit, in all honesty, that he had been wanting to vote for quite sometime.

There was unanimous appreciation of Mr. Danielson’s remarks and the sincerity with which they were made.

Trustee Danielson next reminded the Board of the special meeting on June 17 for the presentation and consideration of the University's operating budgets for the coming fiscal year, 1978-79, and Mr. Harrell pointed out that the meeting would be held in the Indiana Memorial Union on the Bloomington campus, instead of on the Indianapolis campus. It will begin at 10:30 a.m. Mr. Danielson also reminded those in attendance that the retreat meeting will be held on August 1, 2, and 3, with the scheduled Board meeting on the morning of August 4. He called to the specific attention of the Secretary of the Board the fact that last year he and President Ryan had agreed on what he believes to be a great practice; namely, to invite all former living Trustees and their spouses and widows of deceased Trustees to this annual retreat meeting as guests of the Board. Secretary Harrell responded that those on the guest list would be informed of the dates at once, along with their invitation to attend, and promised that the activities would compare most favorably with that of the successful retreat meeting last year.

President Ryan expressed his appreciation to Dean Schilt and his staff for the seminar they presented on Thursday afternoon. He added that he was confident the Board would join in with him in commending Dean Schilt and all his staff for this excellent presentation and also in an expression of appreciation for their warm hospitality and diligent efforts in making the entire meeting so pleasant and productive.

The Trustees adjourned at 1:05 p.m., to meet again on call of the Secretary on Saturday, June 17, 1978, at the Bloomington campus.

C. E. Harrell, Secretary
THE TRUSTEES OF INDIANA UNIVERSITY

APPENDIX

AGREEMENT

THIS AGREEMENT, dated the 26th day of June, 1978, by and between THE TRUSTEES OF INDIANA UNIVERSITY, a statutory body corporate organized under the laws of the State of Indiana (hereinafter referred to as the "University"), and AMERICAN FLETCHER NATIONAL BANK AND TRUST COMPANY, as fiduciary for various accounts administered by its Trust & Asset Management Group (including but not limited to, trust estate, guardianships, conservatorship and agencies), and not individually (hereinafter referred to as "AFNB").

WITNESSETH:

WHEREAS, the University has advised AFNB that it anticipates that it will require Three Million Five Hundred Thousand Dollars ($3,500,000) to be used by the University to finance the cost of acquiring a Student Union Building on its South Bend Campus, in the City of South Bend, Indiana, including certain equipment and furnishings therein; (said facilities being hereinafter referred to as "South Bend Student Union Facilities") and

WHEREAS, the University has obtained specific authority from the State Budget Committee, State Budget Agency and the Governor to issue bonds pursuant to Indiana Code 20-12-7 to fund the acquisition of such South Bend Student Union Facilities; and

WHEREAS, AFNB, as fiduciary, and not individually is willing to make a loan for the foregoing purposes in increments of not less than $1,000 from such fiduciary accounts as it may, from time to time select, all subject to the following terms, provisions and conditions:

NOW, THEREFORE,

  1. Representations and Warranties. The University represents:

    • (a) The University has full power and authority under and by virtue of the laws of the State of Indiana, more particularly under the provisions of Indiana Code 20-12-7 and the acts amendatory thereof and supplemental thereto ("Act") to acquire the South Bend Student Union Facilities at and in connection with Indiana University, and to finance the cost thereof with loan proceeds evidenced by its promissory note or notes executed and delivered pursuant to the terms and conditions hereof.
    • (b) The principal amount of its promissory note or notes evidencing the indebtedness incurred hereunder, together with other indebtedness incurred pursuant to the Act, will not exceed the aggregate principal amount of bonds, as defined in such Act, which may be issued by the Board.
    • (c) The University has, by resolution duly adopted, authorized the loan provided for herein, the proceeds of which will be used to finance the cost of acquiring the South Bend Student Union Facilities.
    • (d) The University has, by resolution duly adopted, authorized its officers to execute and deliver to AFNB this Agreement and its promissory note or notes in the form annexed hereto.
    • (e) The financing provided for in this Agreement has been approved by the State Budget Committee, the Budget Agency and the Governor of the State of Indiana.
    • (f) The principal amount of the loan provided for in this Agreement which will be used in financing the cost of acquiring the South Bend Student Union Facilities will not exceed the total estimated cost of acquisition thereof, including incidental expenses and financing costs.
    • (g) The University has determined that there is a need for the South Bend Student Union Facilities.
  2. The Loans. Amounts loaned hereunder to the University by AFNB not to exceed Three Million Five Hundred Thousand Dollars ($3,500,000) shall be evidenced by a note referred to herein as the "note") substantially in the form attached hereto and marked "Exhibit A." All borrowings, payments and settlements made under this arrangement shall be made at the principal office of AFNB. The note shall be dated as of the date of its issue and shall bear interest on the principal amount outstanding each day at the end of the day. (All borrowings will commence to bear interest on the day they are advanced and will bear interest through the day preceding the day of repayment). The interest on such note shall be at a rate equal to 62.5% of the rate quoted on each business day of each week by such prime issuer of direct placed commercial paper as may be agreed upon by and between AFNB and the University, which rate shall be equal to the highest simple interest rate paid by such prime issuer on all maturities up to and including one hundred eighty (180) days. If such quoted rate is a discount rate, it will be converted to its "interest follows equivalent" on a three hundred sixty (360) day basis.

    Whenever there is a change in the interest rate on the note, AFNB's representative will telephone the University's representative and inform him of the new rate and of its effective date, effective on the date of notification. The University will receive written confirmation from AFNB of such changes in the interest rate and of the effective date of such changes.

  3. Change in Loan Amount. A duly authorized representative of AFNB, designated by AFNB in writing, will from time to time before 10:00 a.m. of the day an amount is to be lent pursuant hereto, notify the University's designated representative by telephone or otherwise of the total amount to be lent to the University, and, on receiving verbal approval from the University's representative, AFNB's representative will enter such amount on the University's note as the "Balance Owing." However, if any increase or decrease is in excess of $500,000, notice will be given to the University at least one business day prior to such increase or decrease.

    The University will mail written confirmation of adjustments in the principal amount of the note to the AFNB on the same day that the University's representative gives its verbal approval. The entries made on the note by the AFNB's representative shall constitute conclusive evidence (except to the extent that error can be demonstrated) of the principal amount of the note outstanding at any time when the AFNB shall have received written confirmation of such entries from the University's authorized representative.

    In the event the AFNB's notification to the University results in an increase in the total amount to be lent to the University hereunder, the AFNB shall credit the amount of said increase to the University's account with the AFNB. In the event such verbal notification to the University results in a decrease in the total amount to be lent to the University, such notification shall constitute a demand for payment of the amount of such decrease. The AFNB will charge the amount of any decrease to the University's account with the AFNB (to the extent funds are available in such account) such payment to be applied in reduction of the total outstanding and unpaid principal amount of the University's note. After any such payment by the University, the AFNB shall enter the new reduced principal balance on the University's note. The University's written confirmation of the amount of any increase or decrease in the "Balance Owing" on the University's note will also contain a confirmation of the University's authorization to credit or charge the University's account with the AFNB as the case may be.

  4. Payment of Interest. As of the last business day of each month, the University's representative will check with the AFNB's representative as to the amount of interest due through the next to the last business day of that month, and the University's representative will confirm to the AFNB's representative the amount of such interest and instruct the AFNB to charge the amount of such interest to the University's account with the AFNB. Such interest shall be charged to the University's account for each calendar month on the last business day of the month or as soon as possible thereafter.
  5. Payment of Principal. It is understood and agreed that the AFNB shall have the right at any time to demand payment of all or any part of the principal amount then outstanding on the note then held by the AFNB, together with interest to date of payment, subject to the notification described under the procedure dealing with increases or decreases in the amount of the loan. The University shall have the right at any time, upon advice to the AFNB by letter or telephone, to pay all or any part of the principal amount then outstanding on the note then held by the AFNB, together with interest to the date of payment, notwithstanding that the AFNB has not theretofore demanded such payment in accordance with the foregoing and with the note.
  6. Source of Payment. The University will on or before June 25, 1979 issue permanent bonds pursuant to the Act, the proceeds of which will be used to retire in full the indebtedness evidenced by the note or notes. The note or notes issued pursuant to this Agreement shall be payable solely from any one or more of the following sources:

    1. From the proceeds of the note or notes issued pursuant to this Agreement;
    2. From the proceeds of the permanent bonds issued to pay the cost of acquisition of the South Bend Student Union Facilities; or
    3. From other short-term obligations issued to provide interim financing for such South Bend Student Union Facilities.

    If the principal and interest on such note or notes or any part thereof remains unpaid at maturity, (on June 25, 1979 or demand as the case may be) such principal and interest shall be additionally payable from the net income of the South Bend Student Union Facilities, as provided in the Act, and to that extent the payee shall have a security interest in and lien upon such net income which is hereby pledged for this purpose.

    If the note or notes issued pursuant to this Agreement mature (on June 25, 1979 or By reason of demand) prior to the issuance of permanent bonds, the University will issue, sell and deliver other short-term obligations in an amount to pay with other funds available therefor the principal and interest on such note or notes.

    The failure of the University to issue permanent bonds by June 25, 1979 shall in no way relieve the University of its obligations to issue such bonds. In no event shall the note or notes become an indebtedness of or liability against the State of Indiana.

  7. Total Indebtedness. The Trustees of Indiana University covenants that it will not issue notes or other short-term obligations to provide interim financing for the purpose hereinabove described in an aggregate amount outstanding at any one time exceeding Three Million Five Hundred Thousand Dollars ($3,500,000), but all such notes and other short-term obligations issued within such amount for the purpose hereinabove described shall be of equal priority and the University covenants that if it issues permanent bonds in an amount less than such outstanding notes and other short-term obligations, it will apply the proceeds thereof pro rata to the payment of principal and interest on all such notes and other short-term obligations outstanding. To the extent of its pro rata share of the proceeds of bonds which may be issued from time to time each such note and other short-term obligations shall no longer be deemed to be outstanding.
  8. Application of Proceeds. The University covenants and agrees that the proceeds of the note or notes shall be applied to the payment of the cost of the acquisition of the South Bend Student Union Facilities including the reimbursements of the University for any amounts advanced for such purpose.
  9. Exchange of Notes. Upon the AFNB’s request, the University shall issue and deliver to the AFNB, without charge, a new note in exchange for the one then held by the AFNB in a principal amount equal to the then outstanding principal balance of the note surrendered in exchange.

    The AFNB shall also have the right at any time to exchange the University's note then held by the AFNB for the University's separate demand notes payable to the AFNB's order as fiduciary for the various accounts administered by the AFNB's Trust & Asset Management Group which have advanced funds such account to be in a principal amount equal to the then outstanding loans by such account to the University, and the University shall immediately issue and deliver such separate demand notes to the AFNB, without charge, in exchange for the note. Such separate notes shall bear interest at the same rate or rates as the note in the same manner as though the note had not been exchanged.

  10. Transfer of Notes. It is further understood and agreed that the AFNB shall not sell, pledge, assign, nor otherwise transfer any promissory note held by it pursuant to this agreement without first having notified the University at least ten CIO) days prior to the intended date of such sale, pledge, assignment, or transfer, of the AFNB's intention to do so.
  11. Authorized Representatives. The Treasurer of Indiana University pursuant to authorization of the Board of Trustees of the University has designated any one of the following individuals, as the University's representative, to receive notification of increases or decreases in the principal amount of the note, to give verbal approval thereof in person or by telephone, to sign written confirmations thereof, to authorize you to credit or charge the University's account with the AFNB as the case may be, upon increase or decrease in the principal amount of the loan, to verify the amount of interest due on the note from time to time, and to authorize the AFNB to charge the University's account for the amount of such interest. A specimen of the signature of each of these individuals appears following his or her name. The AFNB may rely upon the signatures and verbal authorizations of these individuals until notified, in writing, to the contrary.

    Name Specimen Signatures
    J. D. Mulholland (J. D. Mulholland)
    R. E. Burton (R. E. Burton)
    M. E. Klootwyk (M. E. Klootwyk)
    R. I. Stout (R. I. Stout)

    AFNB hereby designates any one of the following individuals:

    Name Specimen Signatures
    Louise Kennedy (Louise Kennedy)
    Phyllis Moor (Phyllis Moor)
    Hugh E. Gibson (Hugh E. Gibson)
    John A. Smith (John A. Smith)

    or any other individual or individuals who may be designated in writing by AFNB's Chief Trust Officer, to enter on the note the total amount loaned by AFNB from time to time, and to notify the University of changes in interest rates.

  12. Addresses for Notice. Written confirmations of verbal approval shall be made to the appropriate representative at the following address:

    If to AFNB:


    		 American Fletcher National Bank and Trust Company
    Trust & Asset Management Group 101 Monument Circle
    Indianapolis, Indiana 46277
    If to University:


    		 The Trustees of Indiana University
    J. D. Mulholland, Treasurer Bryan Hall 201
    Bloomington, Indiana 47401
  13. Condition Precedent. Prior to the initial loan hereunder, the AFNB shall have received from Ice Miller Donadio & Ryan, Indianapolis, Indiana, their favorable written opinion to the effect that:

    • (a) This Agreement has been duly authorized, executed and delivered and constitutes the legal, valid and binding agreement of the University enforceable in accordance with its terms;
    • (b) The note or notes have been duly authorized, and when executed and delivered to evidence loans made hereunder, will constitute the legal, valid and binding obligations of the University, enforceable in accordance with their terms;
    • (c) The loans provided for in this Agreement have been authorized by resolutions duly adopted by the University;
    • (d) The note or notes are exempt from the public sale requirements provided for in Chapter 349 of the Acts of the Indiana General Assembly for the year 1959; and
    • (e) The principal and interest of the note or notes is exempt under existing laws, regulations and rulings from the intangible tax, gross income tax and all other taxes in the State of Indiana, except the state inheritance tax and under existing federal statutes, decisions, regulations and rulings, the interest thereon is exempt from federal income tax.
  14. Amendments. This Agreement may be amended only by an agreement in writing executed by the University and the AFNB.
  15. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together constitute one and the same instrument.

IN WITNESS WHEREOF, the University and the AFNB have executed this Loan Agreement the day and year first above written.

THE TRUSTEES OF INDIANA UNIVERSITY

By (J. D. Mulholland)
Treasurer of Indiana University

Approved:

(John W. Ryan)
President of Indiana University

AMERICAN FLETCEER NATIONAL BANK AND TRUST COMPANY,
as Fiduciary for Various Accounts,
and Not Individually

By (Larry K. Pitts)
Larry K. Pitts, Chief Trust Officer

AGREEMENT

THIS AGREEMENT, dated the 26th day of June, 1978, by and between THE TRUSTEES OF INDIANA UNIVERSITY, a statutory body corporate organized under the laws of the State of Indiana (hereinafter referred to as the "University"), and AMERICAN FLETCHER NATIONAL BANK AND TRUST COMPANY, as fiduciary for various accounts administered by its Trust & Asset Management Group (including but not limited to, trust estate, guardianships, conserva-torship and agencies), and not individually (hereinafter referred to as "AFNB").

WITNESSETH:

WHEREAS, the University has advised AFNB that it anticipates that it will require Four Million Seven Hundred Ninety-six Thousand Dollars ($4,796,000) to be used by the University to finance the cost of acquiring, constructing and equipping certain facilities for the University as follows:

  1. Construction of Applied Music Building (Bloomington Campus);
  2. Construction of Power Plant Pollution Facilities - Phase II (Bloomington Campus);
  3. Construction of Activities Building (Southeast Campus);
  4. Purchase of Herron Art School property (Indianapolis Campus); said facilities being hereinafter referred to collectively as "Academic Facilities"; and

WHEREAS, the University has obtained specific authority from the State Budget Committee, State Budget Agency and the Governor to issue bonds pursuant to Indiana Code 20-12-6 to fund the acquisition, construction and equipment of such Academic Facilities; and

WHEREAS, AFNB, as fiduciary, and not individually is willing to make a loan for the foregoing purposes in increments of not less than $1,000 from such fiduciary accounts as it may, from time to time select, all subject to the following terms, provisions and conditions:

NOW, THEREFORE,

  1. Representations and Warranties. The University represents:

    • (a) The University has full power and authority under and by virtue of the laws of the State of Indiana, more particularly under the provisions of Indiana Code 20-12-6 and the acts amendatory thereof and supplemental thereto ("Act"), to acquire, erect, furnish, and operate the Academic Facilities at and in connection with Indiana University, and to finance the cost thereof with loan proceeds evidenced by its promissory note or notes executed and delivered pursuant to the terms and conditions hereof.
    • (b) The principal amount of its promissory note or notes evidencing the indebtedness incurred hereunder, together with other indebtedness incurred pursuant to the Act, will not exceed the aggregate principal amount of bonds, as defined in such Act, which may be issued by the Board.
    • (c) The University has, by resolution duly adopted, authorized the loan provided for herein, the proceeds of which will be used to finance the cost of acquiring, constructing and equipping the Academic Facilities.
    • (d) The University has, by resolution duly adopted, authorized its officers to execute and deliver to AFNB this Agreement and its promissory note or notes in the form annexed hereto.
    • (e) The financing provided for in this Agreement has been approved by the State Budget Committee, the Budget Agency and the Governor of the State of Indiana.
    • (f) The principal amount of the loan provided for in this Agreement which will be used in financing the cost of acquiring, constructing and equipping the Academic Facilities will not exceed the total estimated cost of construction thereof, including incidental expenses and financing costs.
    • (g) The University has determined that there is a need for the Academic Facilities.
  2. The Loans. Amounts loaned hereunder to the University by AFNB not to exceed Four Million Seven Hundred Ninety-six Thousand Dollars ($4,796,000) shall be evidenced by a note (referred to herein as the "note") substantially in the form attached hereto and marked "Exhibit A." All borrowings, payments and settlements made under this arrangement shall be made at the principal office of AFNB. The note shall be dated as of the date of its issue and shall bear interest on the principal amount outstanding each day at the end of the day. CA11 borrowings will commence to bear interest on the day they are advanced and will bear interest through the day preceding the day of repayment). The interest on such note shall be at a rate equal to 62.5% of the rate quoted on each business day of each week by such prime issuer of direct placed commercial paper as may be agreed upon by and between AFNB and the University, which rate shall be equal to the highest simple interest rate paid by such prime issuer on all maturities up to and including one hundred eighty (180) days. If such quoted rate is a discount rate, it will be converted to its "interest follows equivalent" on a three hundred sixty (360) day basis.

    Whenever there is a change in the interest rate on the note, AFNB's representative will telephone the University's representative and inform him of the new rate and of its effective date, effective on the date of notification. The University will receive written confirmation from AFNB of such changes in the interest rate and of the effective date of such changes.

  3. Change in Loan Amount. A duly authorized representative of AFNB, designated by AFNB in writing, will from time to time before 10:00 a.m. of the day an amount is to be lent pursuant hereto, notify the University's designated representative by telephone or otherwise of the total amount to be lent to the University, and, on receiving verbal approval from the University's representative, AFNB's representative will enter such amount on the University's note as the "Balance Owing." However, if any increase or decrease is in excess of $500,000, notice will be given to the University at least one business day prior to such increase or decrease.

    The University will mail written confirmation of adjustments in the principal amount of the note to the AFNB on the same day that the University's representative gives its verbal approval. The entries made on the note by the AFNB's representative shall constitute conclusive evidence (except to the extent that error can be demonstrated) of the principal amount of the note outstanding at any time when the AFNB shall have received written confirmation of such entries from the University's authorized representative.

    In the event the AFNB's notification to the University results in an increase in the total amount to be lent to the University hereunder, the AFNB shall credit the amount of said increase to the University's account with the AFNB. In the event such verbal notification to the University results in a decrease in the total amount to be lent to the University, such notification shall constitute a demand for payment of the amount of such decrease. The AFNB will charge the amount of any decrease to the University's account with the AFNB (to the extent funds are available in such account) such payment to be applied in reduction of the total outstanding and unpaid principal amount of the University's note. After any such payment by the University, the AFNB shall enter the new reduced principal balance on the University's note. The University's written confirmation of the amount of any increase or decrease in the "Balance Owing" on the University's note will also contain a confirmation of the University's authorization to credit or charge the University's account with the AFNB as the case may be.

  4. Payment of Interest. As of the last business day of each month, the University's representative will check with the AFNB's representative as to the amount of interest due through the next to the last business day of that month, and the University's representative will confirm to the AFNB's representative the amount of such interest and instruct the AFNB to charge the amount of such interest to the University's account with the AFNB. Such interest shall be charged to the University's account for each calendar month on the last business day of the month or as soon as possible thereafter.
  5. Payment of Principal. It is understood and agreed that the AFNB shall have the right at any time to demand payment of all or any part of the principal amount then outstanding on the note then held by the AFNB, together with interest to date of payment, subject to the notification described under the procedure dealing with increases or decreases in the amount of the loan. The University shall have the right at any time, upon advice to the AFNB by letter or telephone, to pay all or any part of the principal amount then outstanding on the note then held by the AFNB, together with interest to the date of payment, notwithstanding that the AFNB has not theretofore demanded such payment in accordance with the foregoing and with the note.
  6. Source of Payment. The University will on or before June 25, 1980 issue permanent bonds pursuant to the Act, the proceeds of which will be used to retire in full the indebtedness evidenced by the note or notes. The note or notes issued pursuant to this Agreement shall be payable solely from any one or more of the following sources:

    1. From the proceeds of the note or notes issued pursuant to this Agreement;
    2. From the proceeds of the permanent bonds issued to pay the cost of construction of the Academic Facilities; or
    3. From other short-term obligations issued to provide interim financing for such Academic Facilities.

    If the principal and interest on such note or notes or any part thereof remains unpaid at maturity, (on June 25, 1980 or demand as the case may be) such principal and interest, subject to the prior lien and claim of the Trust Indenture dated as of July 1, 1968, between the Trustees of Indiana University and The Indiana National Bank of Indianapolis (now "The Indiana National Bank"), shall be additionally payable from the University's building facilities fund, as provided in the Act, and to that extent and subject to such prior lien and claim the payee shall have a security interest in and lien upon the building facilities fees now or hereafter deposited in the building facilities fund which are hereby pledged for this purpose, all on a parity with other notes and short-term obligations issued by the University as hereinafter provided in Section 7.

    If the note or notes issued pursuant to this Agreement mature (on June 25, 1980 or by reason of demand) prior to the issuance of permanent bonds, the University will issue, sell and deliver other short-term obligations in an amount to pay with other funds available therefor the principal and interest on such note or notes.

    The failure of the University to issue permanent bonds by June 25, 1980 shall in no way relieve the University of its obligations to issue such bonds. In no event shall the note or notes become an indebtedness of or liability against the State of Indiana.

  7. Total Indebtedness. The Trustees of Indiana University covenants that it will not issue notes or other short-term obligations to provide interim financing for the purpose hereinabove described in an aggregate amount outstanding at any one time exceeding Four Million Seven Hundred Ninety-six Thousand Dollars ($4,796,000), but all such notes and other short-term obligations issued within such amount for the purpose hereinabove described shall be of equal priority and the University covenants that if it issues permanent bonds in an amount less than such, outstanding notes and other short-term obligations, it will apply the proceeds thereof pro rata to the payment of principal and interest on all such notes and other short-term obligations outstanding. To the extent of its pro rata share of the proceeds of bonds which may be issued from time to time each such note and other short-term obligations shall no longer be deemed to be outstanding.
  8. Application of Proceeds. The University covenants and agrees that the proceeds of the note or notes shall be applied to the payment of the cost of the academic facilities including the reimbursements of the University for any amounts advanced for such purpose. The amount expended for each facility shall not exceed an amount as follows:

    1. Applied Music Building (Bloomington Campus) - $1,381,000;
    2. Power Plant Pollution Facilities - Phase II (Bloomington Campus) - $340,000;
    3. Herron Art School property purchase (Indianapolis Campus) - $875,000;
    4. Activities Building (Southeast Campus) - $2,200,000.
  9. Exchange of Notes. Upon the AFNB’s request, the University shall issue and deliver to the AFNB, without charge, a new note in exchange for the one then held by the AFNB in a principal amount equal to the then outstanding principal balance of the note surrended in exchange.

    The AFNB shall have the right at any time to exchange the University's note then held by the AFNB for the University's separate demand notes payable to the AFNB's order as fiduciary for the various accounts administered by the AFNB's Trust & Asset Management Group which have advanced funds represented by the note (the separate note for each such account to be in a principal amount equal to the then outstanding loans by such account to the University), and the University shall immediately issue and deliver such separate demand notes to the AFNB, without charge, in exchange for the note. Such separate notes shall bear interest at the same rate or rates as the note in the same manner as though the note had not been exchanged.

  10. Transfer of Notes. It is further understood and agreed that the AFNB shall not sell, pledge, assign, nor otherwise transfer any promissory note held by it pursuant to this agreement without first having notified the University at least ten (10) days prior to the intended date of such sale, pledge, assignment, or transfer, of the AFNB's intention to do so.
  11. Authorized Representatives. The Treasurer of Indiana University pursuant to authorization of the Board of Trustees of the University has designated any one of the following individuals, as the University's representative, to receive notification of increases or decreases in the principal amount of the note, to give verbal approval thereof in person or by telephone, to sign written confirmations thereof, to authorize you to credit or charge the University's account with the AFNB as the case may be, upon increase or decrease in the principal amount of the loan, to verify the amount of interest due on the note from time to time, and to authorize the AFNB to charge the University's account for for the amount of such interest. A specimen of the signature of each of these individuals appears following his or her name. The AFNB may rely upon the signatures and verbal authorizations of these individuals until notified, in writing, to the contrary.

    Name Specimen Signatures
    J. D. Mulholland (J. D. Mulholland)
    R. E. Burton (R. E. Burton)
    M. E. Klootwyk (M. E. Klootwyk)
    R. I. Stout (R. I. Stout)

    AFNB hereby designates any one of the following individuals:

    Name Specimen Signatures
    Louise Kennedy (Louise Kennedy)
    Phyllis Moor (Phyllis Moor)
    Hugh E. Gibson (Hugh E. Gibson)
    John A. Smith (John A. Smith)

    or any other individual or individuals who may be designated in writing by AFNBfs Chief Trust Officer, to enter on the note the total amount loaned by AFNB from time to time, and to notify the University of changes in interest rates.

  12. Addresses for Notice. Written confirmations of verbal approval shall be made to the appropriate representative at the following address:
    If to AFNB:


    		 American Fletcher National Bank and Trust Company
    Trust & Asset Management Group 101 Monument Circle
    Indianapolis, Indiana 46277
    If to University:


    		 The Trustees of Indiana University
    J. D. Mulholland, Treasurer Bryan Hall 210
    Bloomington, Indiana 47401
  13. Condition Precedent. Prior to the initial loan hereunder, the AFNB shall have received from Ice Miller Donadio & Ryan, Indianapolis, Indiana, their favorable written opinion to the effect that:

    • (a) this Agreement has been duly authorized, executed and delivered and constitutes the legal, valid and binding agreement of the University enforceable in accordance with its terms;
    • (b) the note or notes have been duly authorized, and when executed and delivered to evidence loans made hereunder, will constitute the legal, valid and binding obligations of the University, enforceable in accordance with their terms;
    • (c) the loans provided for in this Agreement have been authorized by resolutions duly adopted by the University;
    • (d) the note or notes are exempt from the public sale requirements provided for in Chapter 349 of the Acts of the Indiana General Assembly for the year 1959; and
    • (e) the principal and interest of the note or notes is exempt under existing laws, regulations and rulings from the intangible tax, gross income tax and all other taxes in the State of Indiana, except the state inheritance tax and under existing federal statutes, decisions, regulations and rulings, the interest thereon is exempt from federal income tax.
  14. Amendments. This Agreement may be amended only by an agreement in writing executed by the University and the AFNB.
  15. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together constitute one and the same instrument.

IN WITNESS WHEREOF, the University and the AFNB have executed this Loan Agreement the day and year first above written.

THE TRUSTEES OF INDIANA UNIVERSITY

By (J. D. Mulholland)
Treasurer of Indiana University

Approved:

(John W. Ryan)
President of Indiana University

AMERICAN FLETCEER NATIONAL BANK AND TRUST COMPANY,
as Fiduciary for Various Accounts,
and Not Individually

By (Larry K. Pitts)
Larry K. Pitts, Chief Trust Officer