PublicComment–GerriSongerSeptember19,2017

REQUEST#1:Tobetterfacilitatethedemocraticprocess,I’mrequestingthattheplacementanddurationof“PublicComment”isspecificallystatedontheagenda._________________________________________________________________________REQUEST#2:I’mrequestingthatexpensereportsforBoardreimbursements,includingreceipts,arepostedandmadepublicallyavailableinatimelymannerpriortoTrusteeBoardmeetingsatwhichthey’retobeapproved._________________________________________________________________________

AGENDAITEMNO.9.1(May23,2017)–CONTRACTSANDGRANTSLOBBYISTSERVICES

CherylAxley,LLC,workingwithhercolleague,AlfredRonan.

TheexistingAgreementallowsforannualrenewals.Thebudgetedamountis$60,000.00.TheBoardofTrusteesapprovedaone(1)yearcontractextensionwithCherylAxley,LLCofMountProspect,Illinoisforlobbyistservicesinanottoexceedamountof$5,000.00permonth.

REQUEST#3:I’mrequestingthatmonthlyreportsarepostedandmadeavailabletothepublicidentifyinglobbyingactivitieswithexpensereports,includingreceipts.LobbyistreportsarerequiredbySpringfield,sotheyshouldalreadybeprepared._________________________________________________________________________

AGENDAITEMNO.9.2(May23,2017)–CONTRACTSANDGRANTSACCEPTANCEOFBAXTERINTERNATIONALINC.GIFTFORNAMINGRIGHTSFORBAXTERINNOVATIONLAB

TheCollegeofLakeCountyFoundationhasbeenawardedagiftintheamountof$175,000fromBaxterInternationalInc.forthetwenty-yearnamingrightsofRoomsT119-T121attheGrayslakeCampustobeknownastheBaxterInnovationLab.

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Thegiftwillbeusedforfacilityrenovation,furniture,equipment,staffingandconsumables.ThepaymentperiodisfromJune30,2017toJune30,2018andnoCLCmatchingfundsarerequired.

• “Gifts”and/or“Donations”doNOTcomewithstringsattached• Acontractfor20yearsofsignagedoesNOTconstituteagift• CLCshouldNOTprovideBaxter,aprivatecorporation,withannualstatusreportsfor5

years–statusreportsofanykindshouldbepostedelectronicallyontheCLCwebsiteandmadeavailabletothepublic.

• A$175,000giftdoesnotmakeBaxterashareholdernordoesitentitlethisprivatecorporationtoanysortofannualstatusreport.

SummaryofKeyBaxterInnovationLabGiftAgreementPoints:

• Giftof$175,000toCLCFoundation;$100,000paidby6/30/2017;$75,000paidby6/30/2018.

• GiftisrestrictedforuseforpreparationandoperationoftheFabLabtobecalledBaxterInnovationLab.

• CLCFoundationBoardExecutivecommitteeacceptedthegiftpendingreceiptofgiftauthorizationfromBaxter.CompletedMay5,2017.

• BaxterInternationalIncorporatedgrantsthegift.Completed.May8,2017.• CollegeofLakeCountyBoardofTrusteesapprovesthenamingrightsandauthorizes

theconstructionoftheFabLab.Pending5/23/2017.• CLCFoundationBoardapprovesandacceptstheGiftagreement.Pending5/25/2017.• ConstructionofFabLabisinspaceknownasT119,120,&121.• FabLabtobeknownasBaxterInnovationLab;nolessthan20yearsortheuseful

lifeoftheFabLab;CLCretainsrighttoterminatenamingrightsifadversecircumstancesarise.

• Allpartiesagreetojointpromotion.• AnnualstatusreportsfromCLCtoBaxterfor5years.

ItisrecommendedthattheBoardofTrusteesapproveacceptanceofthegiftagreementbetweenBaxterInternationalInc.,CollegeofLakeCounty,andtheCollegeofLakeCountyFoundationforTwenty-YearNamingRightsoftheBaxterInnovationLabfromBaxterInternationalInc.andauthorizebuildoutoftheRoomsT119-T121fortheBaxterInnovationLab.

_________________________________________________________________________EMAILTOPROVOST(May24,2017)

DearDr.Haney,

I'mwritingtoshareafewthoughtsregardingtheconversationaboutnamingrightsasdiscussedattheCLCBoardofTrusteesmeetingthispastTuesday.

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MyquestiontoyouandtheBoard:IsBaxterREALLYacompanythat'sworthyofservingasa"rolemodel"forCLCstudents?Thecorporation'sbackgroundiscertainlyafarcryfromimmaculate.CLCdoesn'tneedcorporate"endorsements";itshouldbeabletostandonitsownmeritsasanexemplarofqualityhighereducationthat'sstillaffordable.Baxter'sreputationcouldnegativelyimpactCLC'sgoodstanding.ArethereanystringsattachedtoBaxter's$175,000donation,otherthannamingrights?Makingadonationisonething,namingrightsandotherpotentialperks[5yearsofstatusreports]areinappropriate.Conversationsaboutthecostofnamingrights,asdiscussedatthemeeting,however,areveryappropriate-marketingisexpensive,andBaxtercouldhavehouseholdnamerecognitioninLakeCountyforapittanceofwhat20yearsofsignagewouldcostinthefreemarket!TheissueofnamingrightsshouldbebroughtbackforavotebasedonalackofpertinentinformationregardingBaxter'squestionablebackground.CLCwouldbebetteroffidentifyingnoteworthy,inspirationalindividualstohonor,astraditionallydone,ratherthanglorifyingseedypharmaceuticalcorporations.Theexcusethat"othercommunitycollegesaredoingit"doesn'tmeanthatit'sagoodidea-rememberwhat'ssaidaboutthecliff.TheCLCBoardshouldlead,notfollow.BelowiswhatIresearchedaboutBaxterInternational-thisshouldhavebeendone,andinformationmade[publically]available,priortoavote.Sincerely,

GerriSonger------------------------------------------------------------------------------------------------------In1982,BaxteracquiredMedcom,Inc.,aNewYork-basedfirmfoundedbyRichardFuiszandhisbrother,thathadlargemarketsintheUnitedStatesandSaudiArabia.BaxterchiefexecutiveVernonLoucksfiredFuiszwhothenbroughtanti-boycottchargesagainstBaxtertotheU.S.CommerceDepartmentOfficeofAnti-BoycottCompliance(OAC).FuiszallegedthatBaxterhadsoldtheirprofitableAshdodfacilitytoTevaPharmaceuticalIndustriesin1988whilesimultaneouslynegotiatingtheconstructionofasimilarplantinSyriainpartnershipwiththeSyrianmilitaryinordertoberemovedfromtheArabLeagueblacklistin1989.In1993,Baxterpleadedguiltytoafelonyinrelationtoananti-boycottlawintheUnitedStates.In1991,Baxter'shomeinfusionsubsidiary,Caremark,"wasaccusedbythegovernmentofpayingdoctorstosteerpatientstoitsintravenousdrugservice."In1992CaremarkspunofffromBaxterInternational.Caremarkwasfined$160millionforthe"four-year-longfederalmail-fraudandkickback"schemeinwhichthe"home-infusionbusinessunitmadeweeklypaymentstoscoresofdoctorsthataveragedabout$75perpatientforreferringthosepatientstoitsservices.Somedoctorsearnedasmuchas$80,000ayearfromthekickbacks,accordingtogovernmentdocuments."In1996,thecompanyenteredintoafour-way,$640millionsettlementwith

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haemophiliacs1999inrelationtobloodclottingconcentratesthatwereinfectedwithHIV.Underpressurefromshareholdersduetopoorperformanceandanunsuccessfulmerger,Louckswasforcedtoresign.BAXTERCONTROVERSIES1975HemofilHepatitisBOutbreakInAugust1975,Baxter/TravenolwithdrewaclottingfactorproductHemofilaftertheproductwasassociatedwithanoutbreakofhepatitisB.1983PrisonPlasmaCollectionBaxter,unknowntotheFDA,continuedtouseprisonplasmainfactorconcentrateproductionuntilOctober1983,despitehavingenteredintoanagreementwiththeFDA(11monthsearlier),thattheywouldnolongeruseUSprisonplasma,whichposedahigh-riskofvirustransmission.1996JapaneseHaemophiliacHIVLawsuitItwasannouncedinquarter1of1996thatBaxterhadagreedtosettlealawsuitinvolving200JapanesehaemophiliapatientswhohadbecomeinfectedwithHIVasaresultofusingcontaminatedhaemophiliaproductswhichwereunheated.TheJapanesecourtsorderedforeachvictimtoreceive$411,460by29Marchthatyear.2001AlthaneDisasterTheBaxterAlthanedisasterinautumn2001wasaseriesof56suddendeathsofrenalfailurepatientsinSpain,Croatia,Italy,Germany,Taiwan,ColombiaandtheUSA(mainlyNebraskaandTexas).AllhadreceivedhospitaltreatmentwithAlthanehemodialysisequipment,aproductrangemanufacturedbyBaxterInternational,USA.2008ChineseHeparinAdulterationIn2008,thequalityofbloodthinningproductsproducedbyBaxterwasbroughtintoquestionwhentheywerelinkedto19deathsintheUnitedStates.Uponinspection,oneoftherawingredientsusedbyBaxterwasfoundtobecontaminated–between5and20percent–withasubstancethatwassimilar,butnotidentical,totheingredientitself.Thecompanyinitiatedavoluntaryrecall,temporarilysuspendedthemanufactureofheparin,andlaunchedaninvestigation.InvestigationintothecontaminationhasfocusedonrawheparinproducedbyChangzhouScientificProteinLaboratories,aChina-basedbranchofScientificProteinLaboratories,basedinWaunakee,Wisconsin.Duetoproceduralerrors,ChangzhouSPL'sfacilitieswereneversubjectedtoinspectionbyUSFDAofficials,asrequiredbyFDAregulations.Inaddition,ChangzhouSPL'sproductswerealsonevercertifiedassafeforuseinpharmaceuticalproductsbyChineseFDAofficials,duetoChangzhouSPL'sregistrationasachemicalcompanyratherthanapharmaceuticalmanufacturer.ThoughBaxterwasfirsttorecallheparinbecauseofincreasedadversereactions,afterthecontaminantwasidentifiedandtestingprotocolsweresharedwithothermanufacturersglobally,overadozenothercompaniesinnearlyadozencountriesissuedrecalls,whichlinkedbacktocertainsupplypointsinChina.

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2009AvianFluContaminationInearly2009,samplesofviralmaterialsuppliedbyBaxterInternationaltoaseriesofEuropeanlaboratorieswerefoundtobecontaminatedwithliveAvianfluvirus(InfluenzaAvirussubtypeH5N1).Samplesofthelessharmfulseasonalfluvirus(subtypeH3N2)werefoundtobemixedwiththedeadlyH5N1strainafteravaccinemadefromthematerialkilledtestanimalsinalabintheCzechRepublic.ThoughtheseriousconsequenceswereavoidedbythelabintheCzechRepublic,Baxterthenclaimedthefailedcontrolsoverthedistributionoftheviruswere'stringent'andtherewas'littlechance'ofthelethalvirusharminghumans.2009DrugCostInflationOnJuly2,2009,KentuckyAttorneyGeneralJackConwayannouncedasettlementbetweenthestateandBaxterHealthcareCorporation,asubsidiaryofBaxterInternational,worth$2million.ThecompanyhadbeeninflatingthecostoftheintravenousdrugssoldtoKentuckyMedicaid,attimesasmuchas1300%.2010HepatitisCInfectionsIn2010,ajuryinLasVegas,Nevada,orderedBaxterandTevaPharmaceuticalstopay$144milliontopatientswhohadbeeninfectedwithhepatitisCafterdoctorswronglyreuseddirtymedicalsuppliestoadministerpropofoltopatients.Thejurygrantedtheaward,althoughthelabelforpropofolclearlystatesthatitisforsingle-patientuseonlyandthatasepticproceduresshouldbeusedatalltimes.Pera2009indemnityagreementbetweenTeva(themanufacturer)andBaxter(actingasadistributoronbehalfofTeva),thelitigationandrelatedsettlementsweredefendedandpaidbyTeva.2010InfusionPumpRecallIn2010,BaxterwasorderedbytheFDAtorecallalloftheirColleagueinfusionpumpsfromthemarketdueto87recallsanddeathsassociatedwiththepump.2008–2010TaxDodgingInDecember2011,thenon-partisanorganizationPublicCampaigncriticizedBaxterforspending$10.45milliononlobbyingandnotpayinganytaxesduring2008–2010,insteadgetting$66millionintaxrebates,despitemakingaprofitof$926million.REQUEST#4:I’mrequestingtheissueofnamingrightsastheypertaintoBaxterInternationalbebroughtbacktotheBoardofTrusteesforavote,andthatthisagreementbeterminateddueto“adversecircumstances”.TheBoardshouldexerciseduediligencebythoroughlyinvestingthebackgroundofthiscompanyandbypresentingthisinformationandallowingforpubliccommentpriortoavote._________________________________________________________________________

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RESPONSE(May25,2017):

Ms.Songer,Thankyoufortakingthetimetoshareyourthoughtsonthisissue.RichRichHaney

_________________________________________________________________________ISSUES:ACCUMULATIONOFDEBTANDDIRECTIONEDUCATIONALPROGRAMMINGhttps://www.youtube.com/watch?v=cdyy42I75AU(18:38)StaffReportpresentedbyGaryGrace,ExecutiveDirectorandDeanofUCLC(UniversityCenter-http://www.ucenter.org).

“Weareatacrossroadsrightnow,andifweareunabletosecureatleastamilliondollars,it’sclearthatwedon’thaveadequatereservestolastuntilfiscalyear2019.Wewoulddissolveatsomepointduringthatfiscalyear.…Wewouldliketoestablishasetofoperatingprinciples.Wereallywanttobeabletocometogetheranddeterminewhat’sinthebestinterestoftheCollegeofLakeCounty,what’sinthebestinteresttosustainingaUniversityCenter,andwe’rehopingthatwecanworkonsomeplanningduringthenext12monthsthatwouldaddresstheissueofownershiponceandforallofthebuildingbecausethat’sagreatconcerntothecollege,butit’salsoagreatconcerntousbecausewehavealwaysfeltthatwhatourjobistoprovideaserviceandaresponsetothemarketplace,butweunderstandthatthebuildingandtheequipmentthat’samassedoverthelast15yearswillreverttothecollege,andwedon’twantthattoslipawaytosomebodyelseorwebelieveit’sourresponsibilitytomakeithappen.”

QUESTION:“…addresstheissueofownershiponceandforallofthebuilding…weunderstandthatthebuildingandtheequipmentthat’samassedoverthelast15yearswillreverttothecollege,andwedon’twantthattoslipawaytosomebodyelse…”• Whoisthis“somebodyelse”?Who“else”couldownershipoftheUniversityCenterand

itsequipmentgotoandwhy?

Movingforwardonmulti-milliondollarconstructionprojectsatthistimeandundercurrenteconomicconditionsisnotfiscallyresponsible(seedatabelow).Construction,atthispointintime,shouldconsistexclusivelyofessentialmaintenanceprojects.

CLC’sMasterPlanincludesavarietyofotherupgradesandimprovements,including:• Additionofa$4.8Mgeothermalsystem,whichwillprovideheatingandcoolingtothe

entirecampus• Anearly$25Mrenovationtothecampus’MainLobbyincludesextensiveremodeling

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andtheadditionofanewcafé• FurtherrenovationswillmodernizeexistingHVACandsprinklersystems,createa

centralizedstudentservicescenter,andupdateclassroomsOtherimprovementsinclude:• Anew53,000-square-footbuildingatWaukegancampus• Morethan19,700squarefeetofexistingspacewillundergorenovationstoexpand

educationalofferingsandenhanceservicesandprogramsatWaukegancampus• A$1.67MchemistrylabexpansionatCLCSouthlakeCampusinVernonHills

Currently,therearethreeactiveCDBprojects.ThefirstisaDataCenterprojectthatwasapproximately$2.0Mandwasawardedin2011.CompletionofthisprojectwasprojectedtobeJune30th.ThelargestandmorecomplicatedprojectistheScienceBuilding.Theprojectsufferedfrommanydelays.Thedelayofthisprojectledtodelaysinotherprojectsthatwerecontingentonitscompletion.PotentialoptionswillbecomplicatedandcontingentontheCDB,legalimplications,andcostincreases.

Newscienceandengineeringbuildingonthesouthendofthecampus($25M)–abrandnew,three-story,41,900-square-footGrayslakebuildingistobepaidforinpartbyusing$17.5millioninstatedollars,withtheremaining$7.5millionpickedupbyCLC..ThisisthefirstinaseriesofmajorupgradestakingplacethroughoutCLC'svariouscampuses,totaling$163M.

Newprojectmanagersandchangestothecontractors'scopeofworkledtominordelays.Thechangeordershaveaddeduptoabout$644,000,lessthanthecontingencybuiltintothecontract.

OncetheworkonthesciencebuildingandnewlyrenamedCwingiscomplete,thewingadjoiningthesciencebuildingwillalsoberenovated.ThethirdprojectistheCDBLakeshoreCampusexpansionthatiscurrentlybeingfundedbyCLCthroughanIGAwithCDB.TheBoardapprovedutilizingcollegefundstorestarttheprojectduringtheSeptember2016BoardofTrusteesmeeting.

LakeshorecampusinWaukegan—anotherprojectputonholdduetothestatebudgettroubles—isalsomovingforwardonceagain,withLegatArchitectspreparingtheschematicdesignsfor$47.7Minimprovements.

Theplanistobuildanewsix-storybuildingalongGeneseeStreet,MadisonStreetandSheridanRoad;connectthenewandexistingbuildingstoeachotherandanexistingSheridanRoadparkinggarage;anddevelopanoutdoorspaceforstudents.

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Thedesignphaseisexpectedtolastaboutayeartobefollowedbyabouttwoyearsofconstruction.

http://www.chicagotribune.com/suburbs/lake-county-news-sun/news/ct-lns-college-of-lake-county-construction-st-0207-20170208-story.html

QUESTIONS:• Wasaneedsand/orinterestassessmenttakentosupportthelegitimacyofmoving

forwardonprogrammingandconstruction?Ifso,isthisreportonlineandavailabletothepublic?

• WhydidCLCdecidetomakesubstantialinvestmentsinscienceandengineering?Since39%oftheLakeCountypopulationisbluecollarand47.6%hasanassociatedegree,orless,targetingthetradesandsmallbusinessadministrationmaybemoreappropriate.

• Isthereinformationavailabletothepublicshowingthepercentageofstudentswho

enterCLC’sscienceandengineeringprogramsthatearnassociate’sdegreesversusthosemovingonto4-yr.programsintheseareas?Whatistheemploymentrateofthesestudents(2-yr.vs.4-yr.certification/degree)ineachprogram?

• Whatinformationisavailablefromtheprivatehealthcareservicesectortosupport

theneedforgrowthinhumanresourcesandtosupportexpandingservicesandlocaleducationalprogramminginLakeCounty?Ifdatahasbeengenerated,whatmethodwasusedtodeterminereliabilityandlegitimacyofinformation?

BasedonLakeCountyComprehensiveAnnualFinancialReports,trendsfrom2006to2015DONOTsupporttheneedforexpansiontoHealthCareServicesinLakeCounty.Thereare308fewerHealthandServicesFTE,294feweroutpatientcounselingcases,8,564feweroutpatientcounselingsessions,765fewerimmunizationsandvaccinesgiven,9,437fewerpublichealthnursing/familycasemgmt.visits,and238fewerworkforcetrainingservicesregistrations.Yet,thereare46,297moreprimaryambulatorycarepatientvisits,3moreprimaryhealthclinics,and$194moreFoodServiceInspections/Education.

• Whyisserviceincreasingwhenneeddoesn’tseemtobefollowingthesametrend?Thisdoesn’tappeartobeadata-basedapproach.

• Maintainingqualityfull-timefacultyseemstohavetakenabackseattofacilityexpansion.College-levelFTEsaredownby1,447employees,2012to2016inlieuofadjunctstaff.Dobenefitsoutweighcost?WhatdataisavailabletosupportdecisiontoemployadjunctstaffoverFTEs?

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CLCFINANCIALSRevenue/Expenses:FY2016(p54)&FY2006(p66)$67.01MincreaseinTotalOperatingExpensesfrom2003-2016(likelyfromretirementcontributionsdespite1,447reductioninFTEs)$74.33MincreaseinTotalRevenuefrom2003-2016(mostfromlocalpropertytaxesandtuition)

TotalOperatingRevenue

(*Tuitionandfees,auxiliaryenterprises,otheroperations)

*Aremoniesgeneratedfrombondsincludedasrevenue?

NetNonoperatingRevenues

(*Localpropertytaxes,personalpropertyreplacementtax,stateappropriations,federalgrantsand*contracts,localgrantsand*contracts,investmentincome)

TotalRevenue

*Arepensioncontributionsincludedincostofinstruction?TotalOperating

Expenses(*Instruction,academicsupport,studentservices,publicservice,institutionalsupport,operationsandmaintenanceofplant,financialaid,depreciation,auxiliaryenterprises)

20162015201420132012201120102009200820072006200520042003

35.21335.18835.49236.19735.30335.94835.04333.45331.42528.13925.58023.52321.99120.839

117.293121.177119.836118.432104.85099.69891.82578.90372.90268.96363.81561.39079.62657.336

152.506156.365155.328154.629140.153135.646126.868112.356104.32797.10289.39584.913101.61778.175

146.271143.187145.846144.084131.442121.746120.180108.874100.99694.32485.77483.923101.76979.259

NOTE:Overthedurationofthepast13years,revenuehasnearlydoubled,ashaveexpenses.

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FY2016FINANCIALREPORT(p29)FutureDebtServicePayments(2017-2036)generalobligationbonds:TotaltobepaidthroughFY2036:TotalPrincipal:$69.265MTotalInterest:$20.128MTotal:$89.393MFY2006FINANCIALREPORT(p32)FutureDebtServicePayments(2007-2018)generalobligationbonds:TotaltobepaidthroughFY2018:TotalPrincipal:$17.155MTotalInterest:$3.525MTotal:$20.680MDebtPaymentsInfiscalyear2015,theCollegerefunded$2.8Minbondprincipaltoreduceinterestcosts.FY2016FINANCIALREPORT(p59):TotalOutstandingDebt:2016:$70.990M2015:$76.469M2014:$81.719M2013:$22.598M2012:$23.892M2011:$9.525M2010:$11.327M2009:$13.513M2008:$15.567M2007:$17.333M$54MincreaseinTotalOutstandingDebt2007-2016FY2006FINANCIALREPORT(p71):TotalOutstandingDebt:2006:$17.155M2005:$19.010M2004:$16.570M2003:$19.175M2002:$18.320M2001:$20.980M2000:$23.340M1999:$22.295M1998:$24.325M1997:$18.415M$1MdecreaseinTotalOutstandingDebt1997-2006

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TotalOutstandingDebthasincreasedfrom$17Min2007to$71Min2016(+$54M).QUESTION:• Isitfiscallyresponsibletocarry$71MTotalOutstandingDebt,nearly4timesthat

whichhasbeencarriedhistorically(basedoninformationavailableonline)?CLCcan’trelyonpropertytaxes,norcanitrelyontheStateforfunding.TheStateofIllinoisprovidesthelargestsourceofpensioncontributions(approx.95%)throughStateappropriationsfromtheCommonSchoolFund.UnlesstheState’sdebt(seebelow)isrefinancedand/oradditionalrevenuecollected,it’slikelytheStatewillfindwaystoaccesslocalrevenuesources.Forexample,movingallfuturefundingofeducationtothelocallevel,whichhasalreadyhappenedinRiverForest(District90).Also,tuitionatCLChasdeclined.EnrollmentattheLakeshorecampus,forinstance,hasdecreased37%overthelastfiveyearstojustover1,000students.NOTE:$23.653Mininterestisscheduledforpayment.Thesearefundsthatshouldgotowardstudents,programs,andeducators–notbanks.

STATELEVEL

TheStatecontinuestospendmorethanitgeneratesinrevenue,whileincreasingdebt.AsofFY2016,theStatecollected$68B,spent$73B,andincreaseditsdebtto$147B.

InFY2015,Illinoisbroughtin$71Brevenue,spent$75Bonexpenses,andcarried$141Bintotaldebt.Lastyear,FY2016,TotalRevenuewas$68B,TotalExpenseswere$73B,andthestateincreaseditsdebtto$147BTotalDebt($1.5BInterestCosts).

Revenuedecreasedby$3B.Expensesweredownby$2B,buttherewasstilla$5Bshortfallresultingfromadecreaseinrevenue(reducedindividualandcorporateincometaxrates).TheStateraisedincometaxratesforFY2017toslightlybelowthatusedinFY2015,soitwilllikelycollectjustunder$71B,whiledebthascontinuedtoincrease.Themajorityofdebtispensiondebt,whichisfinancedinwhatlookslikeaballoonmortgage.Totalpensiondebtwentup$7B($109Bin2015to$116Bin2016).Also,theState'sbondratingsmaybedowngraded;therefore,interestratesarelikelytoincrease.

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Statefundinglawprovidesfora50-yearfundingplanthatincludesa15-yearphase-inperiod.Thisisn’tsustainable!Therewasa$7Bincreasefrom2015to2016.Atthisrate,we’dbelookingatanadditional$203Boverthecurrent$116BbyFY2045(probablymorebasedontheinclineoftheslope)!

LOCALLEVEL

Togiveyouanideaofwhatthislookslikeatthelocallevel,myDistrict's(D214)pensioncontributionshaveincreasedfrom$9Min2002to$57MasofFY2016.District211isinthesameboat($10MinFY2002,$57MinFY2016).There’saprivatizationagendaoutthereandbankruptingourschoolsleavesthemripeforprivatizerpickings.

$109B$116B

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REQUEST#5:I’mrequestingtheBoardonlyapproveconstructionconsistingexclusivelyofessentialmaintenanceprojects,andthattheBoardprioritizesrepaymentofdebtandthehiringofFTEsoveradjunctstaffuntilapointintimethatinvestinginfacilityexpansionisfinanciallyresponsibleandfeasible._________________________________________________________________________

PURCHASINGBIDDABLEITEMS

ISSUE:BIDDINGPROCESS(In-Sourced,Out-Sourced,Private,Public)NEED:1. Standardsforcalculatingcostestimatesandjustifyinginsourcingoroutsourcing

decisions2. Datarelatedtonegotiatedservicecontractbillingrates3. Publishedgovernmentinformationaboutnumberofactualcontractoremployees

holdingspecificoccupationalpositionsunderanygivencontract4. UniversaljobclassificationsystemSystemmustbeinplacetodeterminehowmuchmoneyissavedorwastedbyoutsourcing,insourcing,orretainingservicesprovidedbypublicversusprivatesectorcontractors.Thissystemshouldcomparecontractorbillingratesandfullcostratherthanemployeecompensationrates(totalcostofjobvs.FTE).Mustrequirerealpublicsectoralternativeproposalratherthanusingnotation‘publicsectorcomparator’-profitviabilityForprojectsinwhichonlyprivatesectorcontractorsareavailable,auniversalsystemofcostbreakdownandcomparisonneedstobeinplaceandmadeavailabletothepublic.REQUEST#6:I’mrequestingbidcomparisons(minimum3)withsummariesandexplanationsincludinginformationpertainingtonumberofemployees,employeepay,costofproduct(s)/service(s),retainedprofitbycompany,andetc.arepostedandmadepublicallyavailablethree(3)weekspriortovoteforapprovalatBoardofTrusteemeetings._________________________________________________________________________

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ISSUE:VOTINGPOLICYREQUEST#7:I’mrequestingaTrusteevotingpolicythatstatesvotingwillNOTtakeplacethesamedaynewitemsarediscussed.Votingshouldbescheduledaminimumofone(1)BoardmeetingAFTERBoarddiscussiontakesplaceregardingagendaitemstoallowforfollow-upreview,publiccomment,anddiligentanddueconsideration._________________________________________________________________________

AGENDAITEMNO.7.2(June27,2017)–FINANCIALFY17BUDGETTRANSFERS

REQUEST#8:I’mrequestingthattheBoardcitethestatute(s)authorizingtheTreasurertomakeBudgetTransfersasrecommendedontheJune27,2017MonthlyFinancialReport. BudgettransfersapprovedintheJune27thboardmeetingaren’tclearintermsofthefundsforwhichtheyare,orshouldbe,appropriated.

(110 ILCS 805/7-15) (from Ch. 122, par. 107-15) Sec. 7-15. The board may at any regular meeting on or after July 1 in any year, by a vote of 2/3 of all its members, authorize the making of transfers within any fund under its jurisdiction of sums of money appropriated for one object or purpose to another object or purpose, which action shall be entered in its proceedings; but no appropriation for any purpose may be reduced below an amount sufficient to cover all obligations incurred or to be incurred against the appropriation for that purpose.

Can"transferswithinanyfund"bereadbroadlytomakeatransfertoanotherfundforadifferentobjectorpurpose?Thereisnorelevantcaselawonthisortherelated(almostidentical)passageintheschoolcode.UndertheILSchoolCodesection105ILCS5/17-2A,"Interfundtransfers,"therearestrictrequirementsforone-timetransfersbetweenfunds.ThissectiondoesnotexistinthePublicCommunityCollegeAct,whichindicatesthatsimilarinterfundtransfersarenotavailable.

InterfundTransferscanbemadebetweenEducationalFund,OperationsandMaintenanceFund,andTransportationFundsolelyforthepurposeofmeetingone-time,non-recurringexpenses.

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ThetransferfromOperationsandMaintenanceFund(Restricted)toOperatingFundsontheJune27agendaisalsoproblematic.

07.4ResolutionAuthorizingTransferofFundsfromtheOperationsandMaintenanceFund(Restricted)totheOperatingFunds(p.29-31)

TheBoardisnotauthorizedtodoaone-timetransferbetweenthosefunds,butcaninsteaddoaloanbetweenthefunds.Thereisadifferentstandardfortransferfromthe"workingcashfund"tootherfunds,butthisdoesn'tappeartobefundyourworkingfrom.TheBoardcaninsteadloanmoneyfromonefundtotheother,butmustrepaytheloanwithinoneyear:

(110 ILCS 805/3-34) (from Ch. 122, par. 103-34) Sec. 3-34. To authorize the treasurer to make interfund loans from any fund to any other fund maintained by the board and to make the necessary transfers therefor, but each such loan must be repaid and retransferred to the proper fund within one year.

IftheBoardbelievestheyareauthorizedtomakesuchatransfer,pleasecitethestatutethatauthorizesit.