Item #18 – for information only: Waterleaf purchases

Jean Kartje comes to the podium.

Jean Kartje: I’m happy to answer your questions.

Napolitano: Perishables does not require bidding, at the sole discretion of the purchaser or the head chef.

Jean Kartje: we have a general manager who works with the chef. There are other meat and poultry that they work with.

Napolitano: unless there’s a bidding process, one cannot be sure that it’s only based on quality.

Jean Kartje: we’ve asked them to go for an RFP. A bidding process would not work. They would not get vendors. An RFP would work. We worked with our culinary faculty and they agreed because they purchase as well.

McGuire: as someone who’s had a catering business for 14 years, I have to say, once you’re happy with somebody and then you’re surprised with what you’re paying.

Jean Kartje: Trust me. We are monitoring it.

Mazzochi: who’s the person who has the authority to make these purchase.

Jean Kartje: that would be Jean Pierre. In other programs, that would be the faculty.

Mazzochi: this is just the restaurant, not the culinary program. Is there anybody besides the general manager, Jean Pierre, who has the authority for these purchases?

Jean Kartje: Kris Fay, the Associate Dean. He reports to her.

Mazzochi: but nobody under him. Who else approves this?

Jean Kartje: Lynn Sapyta, listed all costs of goods sold.

Mazzochi: if I’m looking at the YTD, spent on food and wine at the Waterleaf. Who actually came up with that number?

Jean Kartje: the finance office.

Mazzochi: who in the financial office gave you this number?

Jean Kartje: my administrative assistant went there and pulled these numbers.

Item #16, change orders, for information only.

Bruce Schmiedl comes to the podium.

Mazzochi: where can we get more information? Are the contracts on the website?

Bruce Schmiedl: I don’t think so. They are saved in the departments.

Mazzochi: could they be on the website?

Bruce Schmiedl: they could.

Mazzochi: could the overall planning also be put on the website and matters regarding the HSC?

Collins: Joe Cassidy and continuing Education developed the plan for HSC.

Mazzochi: can we have all this on the website as a separate tab, for the HSC? These change orders, none of them have any aggregate value over 20% marks that would require approval. Have any of them exceeded the 3% error rate, as a whole?

Bruce Schmiedl: no, they have not. Errors on individual subcontracts, the college does not pay for that. We track across the entire project.

Mazzochi: are we withholding those from the architects or the engineers, the amounts are left to pay.

Bruce Schmiedl: there’s about $200,000 left.  We separate those errors and omissions in those 2 categories.

Mazzochi: We still have the opportunity to recoup these funds.

Bruce Schmiedl: we do.

McGuire: most of these change orders are about HSC. It’s supposed to be ready by August 1st. I want a tour of that building. And will there be a dedication ceremony scheduled? Can we schedule that?

Bruce Schmiedl: we can probably arrange a tour.

McGuire: are we planning a formal dedication?

Collins: absolutely, and the board will be invited, of course.

McGuire: as I emailed Dr Collins about financials and Dr. Jarman commented on that. HSC looks good. We’re getting memberships, classes, SLEA, and people who will take conceal and carry classes. I’m very excited about that.

Collins: the business plan for the HSC will be posted online.

Item #17: change orders for approval.

Bruce Schmiedl: [explains the change orders]

Napolitano: the project manager, who doesn’t work for COD

Bruce Schmiedl: he does.

Napolitano: he already approved the changes.

Bruce Schmiedl: the subcontractor has already agreed to the money.

Napolitano: I’d call that a lapse in judgement. It seems it’s happened in other departments at COD where decisions are made, and contracts are made without proper process.

Bruce Schmiedl: what I did in my dept is reinforce with my staff that no change order of any kind goes forward at least without my review on it. I’ve made it clear to staff, they are not to act on anything that does not have proper signatures and a project manager does not have that authority.

roll call: all yes

Vote on item #10: no discussion, all yes (minutes of previous meeting).

Vote on item #11: no discussion, Birt abstains, all others yes (minutes from previous meeting).

Vote on item #12: no discussion, Birt abstains, all others yes (minutes from previous meeting).

Vote on item #13: no discussion, all yes (minutes from previous meeting).

Vote on item #14: no discussion, all yes (minutes from previous meeting).

Vote on item #15: personnel action.

McGuire: could you share information about a new part-time hire?

Collins: Chris Roebling (??) is a temporary part time administrator, and he will work as a personal assistant to me, to help with the transition.

Birt: was there a job posting for that and could the chairman indicate her relationship? Did Roebling(?) work as the chairman’s campaign PR manager? And why is he not on the list?

Collins: Part time temporary admininstrators do not go to the board.

Birt: does the chairman have anything to add?

Hamilton: I don’t have an answer for you.

Birt: that he was your own PR campaign manager?

Ham: I don’t have an answer for you.

Motion passes.

Attorney: I think I might respectfully suggest a change to the amendment because it requires the authority of the signature. I think we need only the authority period.

Mazzochi: I’ll amend my motion to remove the word signatory.

Roll call: Wozniak, Birt, McGuire: no, all others yes. Motion passes.

Attorney: one more point: there was some discussion on the retainer of $100,000.  After discussion today with Trustee Wozniak, we looked at it and Alix Partners has agreed to reduce their retainer to $15,000. It shows good faith. This brings this in line with the retainer for Schiff Hardin. This retainer is coming before the board, but the difference is the other one did not.

Hamilton: We’re gonna do the second round of comments.

Wozniak: is there a cap or no?

Attorney: the cap is on the retainer.

McGuire: But total cost will be higher. We have no cap.

Attorney: Oh, it’ll go higher than that.

Bernstein: we have to have these positions filled. We were put in a difficult situation. The former VP of Finances puts us in this position. He should have pursued safety. You do that through diversification. When you put 30% of your funds in one investment, it’s not diversification. And in addition, the place where he put the 30% was not safe. If Alix Group can leave us with a set of sound policy, that alone will be worth that. The radio station, I asked the former financial officials, “did you do anything to look at procedures and protect the rest of the college?” but nothing was done, and that was a gross dereliction of duty. That’s all I have to say.

Roark (student trustee): The point of the new board is to correct mistakes in a respectful manner.

Birt: No further comment.

Napolitano: We’re in the process of reviewing a budget and I want to see the $5 tuition reduction and 5% property tax reduction. I want to see what Alix Group will do with that. The timeline could be affected.

Mazzochi: I am in favor of retaining them and if the members of this board had taken a fraction of the interest to what the administration had done, we would not be in this situation. They nitpick at Alix Partners when they should have been paying attention. If anyone asks for information, that information should be provided promptly, properly, and readily.

McGuire: We are financially healthy thanks to the administration. For 5 months, we were out of compliance. It’s not quite as bad as it seems. The money we lost, 6% of that had been returned already. If we are at a loss at the end, we have insurance. That’s the worst case scenario.

Hamilton: Motion to approve item 9,

Attorney reads the motion (to retain Alix Partners).

Moved and seconded.

Roll call: Wozniak, Birt, McGuire, no, all others yes. Motion passes.

Alix Partners presentation

No student trustee report.

President report: I don’t have a presentation. Thanks to retired professor David McGrath and English professor Jackie McGrath, former student and award winning author Bill Hillman has agreed to come and talk to us at the next meeting about his wonderful experience at COD. He will also be read as part of the COD Writers Read series on June 24th at 7pm in SSC 1200. Bill Hillman at COD Writers Read.

Item 9: retention of firm Alix Partners for financial services. Motion that the Board approve this.

Mazzochi: I’d like to amend the motion so the 2 people hired, Mr Dischner and Mr Beckman be given same signatory authority as previous signature holders.

No discussion.

Roll Call vote on the amendment: all yes except Birt, Wozniak, and McGuire

Hamilton: let’s go to the main motion. Moved and seconded.

Hamilton: I’d like everybody to make a comment on this motion. I will go through all the trustees. Starting with Joe Wozniak, do you have a comment:

Wozniak: the fees are way too high, that they want to have on retainer. I don’t think it should be the way to go because money is flying out the window.

Roark (student trustee): no comment

Bernstein: I think we are in a difficult position. We need to take this step. At the radio station, there were problems with the controls. I can assure you this is not the only area of the College that have these problems. We need this firm.

McGuire: I’m going to not support this motion for a number of reasons. When I had conversation with the chair on Tuesday, she indicated it could be from 3 to 6 months, it could be as much as a million dollars. I looked at the IMET, 12 million dollars were invested. I was on the BOT, we were thrilled to find an investment that had this return. That’s an issue that we exceeded our board policy. There was intimation that BOT was not informed but we were, including chair Hamilton and myself, and trustee Wozniak. We saw the money move. When these prop tax proceeds are sent to the taxing bodies, we got our tax receipts in June, and then in September. IMET was paying 34 basis points as opposed to 1 basis point in the money market mutual funds. We treat those like checkbooks. IMET is very much like that. Those monies were taken out of IMET. We saw it every single month. There was nothing hidden and none of us asked any questions. With all the FOIA requests, perhaps this investment was looked at like a checkbook. There’s a rush to judgment here. The investment policy we adopted for the first time. It was too restrictive. The new policy changed these limits. There was never an attempt to cover the policies. For these reasons, I’d like to review what happened with our comptroller and our CFO.

Birt: I’ll be brief. Some of the things that would have been helpful is if the board had considered 2 or 3 firms. I heard through the grapevine that the attorney and Collins had consulted with others. I would have loved more than one firm and less than 24 hours. I have concerns about the cost. Is the contract we saw in the board packet really the contract? So, I don’t even have the actual contract that the college is going to be signing. I am not in favor of the motion.

Napolitano: we heard that IMET and the Illinois fund were essentially the same. They are not. When there is a speed limit, it’s not for you to say it should be higher or I’m going to drive faster because that’s what I thought it should be. If the policy for investment was too constraining, the proper procedure would be to go to the Board. I don’t like the idea of money flying out the window. We need to close the window.

Mazzochi: we have a situation here where we have a treasurer and comptroller on leave by the president. To ensure that the school functions effectively, we need to retain this firm. Dr Collins did in fact interview multiple individuals. Board members had the opportunity to talk to Dr Collins if you had questions about his methodology. We have given you and the public background information on the firm he has selected. He’s asked us to approve this before incurring any expenses. This is the proper course of action and procedural process he should be following. And I appreciate that you did that Dr Collins. Had the previous board done its job, we would not be in this situation today. It’s wrong of you to raise issues of money. The cost we have to incur on Alix Partners is a cost that is on the prior board. It’s your fault that we have to do this and fix your mess. Because of this failure, it’s unfortunate that this bill is going to be put on the taxpayer but we have to stop violating board policy and the public trust. And ensure that people are going to implement these procedures and are going to do it properly. I thank Dr Collins for finding someone who he thinks is going to do that work.

Trustee Birt, you were invited to talk to Dr Collins about this and you declined.

Birt: that did not happen.

Hamilton: we’re going to let board vice chairman finish; we’ll have the presentation, and then, we’ll go around again.

Mazzochi: ultimately, I want to hear what Alix Partners has to say and I want to hear that someone is going be responsible.

While I relish the challenge of sustaining the case that wine is a perishable food (item 19), I have bigger fish to fry. While it did require attendees to stay beyond midnight, the extensive discussion of the consent agenda last month proved a welcome diversion from past practice, where millions of dollars of spending would be approved sans questions, sans discussion, sans anything.

Case in point, Item 07.B.2)a) Firearms for Homeland Security Training Center. Change orders regarding the construction of said Training Center were also discussed.

Which brings me to my main concern: Why Homeland Training Center (aka Homeland 2) at all? At the April 2013 Board meeting, mention is made of Phases 2 and 3 of the Homeland Security Training Institute and I quote, “Given the size and scope of this initiative, these next phases are not currently anticipated to be located on the College’s campus.” I have to ask, what changed?

In the July 2013 minutes it is noted that Trustee Savage requested a business plan for Phase 2. It is not recorded anywhere if such plan was produced. It is unclear if such plan even exists. Entering the search term “business plan” into the COD website returns nothing material. If a multimillion dollar venture is under consideration using public funds, should not some kind of justification (business plan) be available for public review?

Lo and behold, come October 2013, contracts for architect and project management are approved and the Homeland train has left the station. No question, no discussion, no nothing. In six months it went from off-campus to all-guns blazing on campus. But why is it going at all? What relevance to the education of District 502’s residents (COD is a community college) does it have?

While the Waterleaf has recently come under intense scrutiny, a connection to the culinary program can be made. Modest changes could make that connection stronger; what many have argued for these past years. I fail to see how the same justification can be made for Homeland 2. To wit, more than 30 sections of Criminal Justice classes are scheduled for fall 2015 – perhaps 1,000 students. How many of them have cause to use the shooting range? Exactly, none.

The aforementioned firearms PO includes 8 weapons supposedly for a Concealed Carry class. How many sections of this class at 8 a shot are required to pay the mortgage? How many police forces, none of which has any money, will need to rent it out?

I have no data but my intuition tells me that the community is considerably more interested in eating things than shooting things. Will the taxpayers be on the hook to pay for this monument to hubris and delusion? Will this rectangular box on the west campus be another costly byproduct of the arrogance of mismanagement?

Good evening. I’m Glenn Hansen, President of the College of DuPage Faculty Association and Faculty Senate.

It was a little child who said, “But the emperor has nothing at all on!”  It seems the analogy never grows tired. Hans Christian Andersen’s The Emperor’s New Clothes continues to be the appropriate story to remember as we deal with the last 7 years.

Narcissism has been the fabric of the Emperor’s gowns. Arrogance has been the previous administration and Board’s greatest sin.

Being a successful businessman is not demonstrated by winning at the board game of Monopoly with the collection of $200 every time you pass “Go” or building hotels on Park Place. You are not running a successful business when you build an obscene fund surplus on an underspent budget with a guaranteed revenue stream of ever increasing tuition and tax dollars. We are a non-profit school that must be managed with the common sense of financial responsibility, not a board game.

How many times did “they” brag about their financial prowess and berated us with the attitude that we, the employees and community, didn’t understand the complexities of money management, college operations, business, and the economy. “They” squeezed the budget, the students, the employees, and the taxpayers for every penny that could be extracted and then acted like a king and his court.

At this moment, we need to know who knew about this most recently revealed fiasco, what did they know, and when did they know it.

This college needs a real whistle blower policy that protects reporters of potential wrongs along with people who will unquestioningly protect the right and responsibility of the employees to speak up. In a column Adam Andrzejewski wrote, he called for a period of amnesty for testimony to the Board. I’m sure many people would endorse the idea of inviting all employees and former employees to come forward and speak while offered the appropriate assurances of confidentiality and protection.

To those who have enjoyed the life of excess, I say: edit your résumé and get out of town! We want our college back for the students and the community. There is no place at the NEW College of DuPage for anyone who has been part of the self-indulgence culture, or enabled the pandemic of disrespect for employees, or possess the weak ethics that have existed in Breuder’s kingdom.

Thank you.

The BOT is back in session.

Roll call: all present.

Public comments:

Kirk Allen: this is a quote I’d like to read, “we appreciate your interest in this matter, the BOT has taken up this issue.” This is a quote from Res Publica, authorized by Erin Birt, My comment is to trustee Birt. The firm was hired after this comment. How is this appropriate that a PR firm was hired before the Board knew about it. “Our financial house is in order”. Boy, you were hoodwinked. What you’re seeing here is reform. It’s ugly, it’s painful, it’s slow. Thank you for the good work. Erin Birt, I would encourage you to resign.

John Kraft: I would encourage the Board to change the comments section. Comments are a right, not a privilege.

Glenn Hansen‘s comments.

Richard Jarman‘s comments.

Laura Reigle: For those of you who are not looking at me right now, this is disrespectful. Why people sitting on this board did not catch the change in name from Datatel to Ellucian. It’s because you’re not looking at the invoices. You ignored people for how many years? You made statements that you didn’t know what was going on. It is your responsibility to know what is going on. If I have more knowledge than you, it’s a disgrace. I should be able to come to any of you and you would have more knowledge than I do. Those of you who do not question what is going on. You are bobble heads and we do not need bobble heads. You need to resign, This is how it happened. Leave your posts.

Byron Miller: my name is Byron Miller, I live in Glendale. I only voted for one of the new trustees.  I had really hoped that with the new Board, we’d have serious discussions. I have been on a lot of boards. Therefore I expected serious discussions. Then, I read the minutes that some of the old trustees rejected Roberts’ Rules of order, which tells me you have no interest in running this board effectively. People who do that should leave and let other people run the Board.

Beth Kane: with all the news coverage, nothing has been said about when the search for the new president will begin. Is there a timeline, can you share it with us tonight, and will you inform us when that happens?

Roger Kempa: My 1st question is about something I got in the mail. I could not find anything to back up that COD is the fastest growing college. This is spin. The board at that time misinformed the public. There is no reference as to where it came from. Things are bad enough, but when misinformation is put out there and firms are retained to push that. If something could be done, that’d be great. I’ve been looking at investments. As of April, the College had only one investment, the Northern Trust (???), that fund was the first one purchased, as of July of 09, 10, there was no fund. Now there are 56 million dollars there. There was also (???). They paid 2000 dollars for their fees, fees that they earned from the College.

Julia Beckman: Thank you for allowing me to speak at this point (I signed up for the second public comments). I’m taking a different perspective. I respect all the members of the board who gave their time, including the past ones, who had nothing but good intentions. For the people on leave, it would be inappropriate for Mr Glaser and Ms Sapyta to speak at this point, But I hope the investigation will be fair. There are strong professionals, otherwise they would not have been hired by the college.

Mark Misiorowski: Good evening, I’m a Lisle resident. Over the past months, Chicago Tribune reporters have reported about what has been going on at COD. Now the financial investment in iMET. I want to thank the senior management team to handle the Valenta situation. I encourage the board to collaborate with the risk management team on insurance on the iMET matter. Carefully review the language in the Fidelity bonds guarantee. Are you first party or third party? Pursue these matters as zealously as you can.

When the first Chicago Tribune article came out, it was inconsequential. When the 2nd and 3rd and 4th articles came out, from a predicate and causation perspective, it jumped to meritorious. You are heading in the right direction. The taxpayers thank you.