xt77wm13nj92 https://nyx.uky.edu/dips/xt77wm13nj92/data/mets.xml Lexington, Kentucky University of Kentucky 19671327 minutes English University of Kentucky Contact the Special Collections Research Center for information regarding rights and use of this collection. Minutes of the University of Kentucky Board of Trustees Minutes of the University of Kentucky Board of Trustees, 1967-13-nov27-ec. text Minutes of the University of Kentucky Board of Trustees, 1967-13-nov27-ec. 1967 2011 true xt77wm13nj92 section xt77wm13nj92 









       Minutes of the Special Called Meeting of the Executive Committee of the
Board of Trustees of the University of Kentucky, Monday, November 27, 1967


       The Executive Committee of the Board of Trustees of the University of
Kentucky met in special called session on Monday, November 27, 1967, at
10:00 a.m., Eastern Standard Time, in the Board Room of the Administration
Building on the campus for the purpose of reviewing and approving the University
of Kentucky's biennial budget request for 1968-70, and considering proposals
from prospective bidders on $31, 400, 000 Revenue Bond Anticipation Notes and to
authorize future issue of Series C and Series D Bonds for the Lexington campus
for academic facilities. Members of the Executive Committee present were
Dr. Ralph Angelucci, Chairman, Mr. Richard E. Cooper, Dr. Harry Denham
and Mr. Robert Hillenmeyer. Member Mr. Smith Broadbent was absent.
President John Oswald, Vice Presidents A. D. Albright, Robert F. Kerley,
Glenwood L. Creech, Robert L. Johnson and Lewis Cochran were also present,
as were Mr. C. W. Grafton, Bond Counsel, Mr. Thomas Dupree, Bond
Consultant, and representatives of the news niedia.


      A. Meeting Opened

      Dr. Angelucci called the meeting to order and, following roll call, a
quorum reporting present, declared the meeting officially open at 10:07 a. m.


       B. Purposes of Meeting

       Dr. Oswald indicated that there were two items of business to present to
the Executive Committee at this special called session--the first being the
presentation of the 1968-70 biennial budget request, and the second, the authori-
zation of future issue of Series C and D Bonds and the consideration of proposals
from prospective bidders on $31, 400, 000 Revenue Bond Anticipation Notes.

      At the meeting of the Board of Trustees on November 10, it was hoped
that the budget request would be finalized and ready for presentation at that time.
This was not the case, however, and the deadline for its submission to the Counc.il
on Public Higher Education having been extended to November 27, the Board
members authorized the Executive Committee to meet on November 27 to con-
sider the final budget request and to act upon it prior to forwarding it to the
Council. On November 20 the Executive Comrmittee met for the purpose of
considering bids on the Revenue Bond Anticipation Notes but it was deemed advisa-
ble to defer action on this matter until the bond market became more stabilized
following the devaluation of the British pound. For these two reasons, the Execu-
tive Committee was called into special session on November 27, 1967.




 







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      C. Budget Request for 1968-70 Biennium

      After copies of the printed biennial budget request of the University of
Kentucky for 1968-70 were distributed to those present, Dr. Oswald said he
would like to make his presentation in two parts--first, a stewardship report
on the progress that has been achieved with funds received over the past two
biennia, since a budget must be based upon translation of dollars into program,
and second, some general comments on the budget request.

       In making his stewardship report, Dr. Oswald commented first on
enrollment. During the past four years 5, 900 full-time equivalent students
were added to the Lexington campus with the greatest increase being at the
upper division and graduate student level. He attributed this not to any lack of
emphasis on lower division work on the main campus but rather to the strong
movement of the Community College System which is taking more and more
students as freshmen and sophomores. The Community College System showed
an increase of 3, 000 full-time equivalent students over the past two biennia.
Six new community colleges or community college-type institutions were added
during this period--Elizabethtown and Prestonsburg in 1964, Somerset,
Hopkinsville and the Lexington Technical Institute in 1965, and in January, 1968
the Jefferson Community College. Next year two new colleges will open- -
Maysville and Hazard. Paducah Junior College is scheduled to join the Com-
munity College System, making a total of fourteen.

       The colleges comprising the Medical Center in the past two biennia have
added some 400 full-time students. At the end of this year, the College of
Medicine will have graduated its fifth class and some of its first graduates,
having finished their internships and residencies, are now entering private
practice. The College of Dentistry will have graduated its first three classes
and the College of Nursing will have graduated its fifth class during these two
biennia. The College of Pharmacy moved from a separate status to become a
part of the Medical Center enabling total programming for the health sciences,
in which pharmacy plays a key role.

       A new School of Allied Health Professions has been added to the Medical
Center to provide personnel needed at the pre-doctor, pre-dentist levels. Such
programs as physical therapy, dental hygiene, medical technology, clinical
nutrition, public health have been added. The School of Allied Health Professions
works with the Community Colleges in providing several two-year associate
degree programs, including dental technology, radiation therapy, inhalation
therapy, and nursing. The Community College System has other two-year
programs in agricultural technology, forestry, professional secretaryship,
engineering, as well as nursing. These are all accomplishments in the growth
of the program supported by the funds over the past two biennia.



The Academic Plan, developed during the Centennial year and now in its




 







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second year of operation, is aimed at providing the best possible liberal arts
undergirding for all of the professional efforts, whether they be in engineering,
ii education, or in business. To provide a higher quality undergraduate program
in the College of Arts and Sciences, it has become necessary to form the kind of
organization which relates more closely to the specific areas of student interest.
The College has organized five new schools out of existing faculty--School of
Fine Arts, Thomas Hunt Morgan School of Biological Sciences, School of Com-
munications, School of Letters and Languages, School of Mathematical Sciences,
and two more are yet to be activated.

       At the graduate level, there has been a very decided growth of programs
as reflected in several ways. Prior to 1964 there were between 35 and 45 doctoral
degrees awarded each year. In 1965, this rose to 62, last year to 88, and this
year's projection is 115 to 125 doctoral degrees to be awarded at commencement
exercises. In this four-year period the output has trebled, which requires a
greater input in the form of additional faculty and of competitive salary schedules.
There has been a growth in new Ph. D. programs from 21 to 31 over this past four
years. Graduate student enrollment has gone from 1, 400 to nearly 2, 200. The
outside fellowships, not supported by State funds but which recognize our graduate
program as a growing and rapidly developing one in terms of both quantity and
quality, have gone from 67 in 1964 to 169 in the present year. These are programs
supported by National Aeronautics Space Administration, National Science
Foundation, National Defense Education Act, and other agencies. These are all
evidences of a growing graduate program.

       In the area of research, there has been a great deal of activity that indi-
cates growth. In 1964, the level of extramural grants was 3.4 million. This year,
it will be over 11 million dollars. This trebling of the extramural funds is a
recognition of the activity and the quality of the faculty. Faculty research publi-
cations have gone from 230 to 410 in the division of colleges alone, The
University has organized its research program by recognizing the need to bring
together qualified people from a variety of academic disciplines. One of the most
significant such efforts is seen in the launching of a very massive program of
research in tobacco and health which involves medical center and agricultural
scientists and chemists. In engineering and the physical sciences area there has
been organized an Institute of Theoretical and Applied Mechanics. An Institute to
Study Water Pollution has been organized, as well as a Center for Developmental
Change to work on both national and international programs in the development
area. Because of the University of Kentucky's success in Indonesia working in
agriculture programs, the office of AID has invited the University to participate in
the developing of a new agricultural experiment station in the very critical area of
northeast Thailand.

       In the area of extension, the Agricultural Extension Service in this past
four years has reorganized its effor-ts by dividing the State into 14 specific areas
and has organized what is known as the area extension program, grouping together




 







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counties with similar problems and providing trained specialists to help the area
achieve its maximum potential. This is in a period of transition now and is under
careful study to be sure that in the process the service is developed soundly and
effectively throughout the state.

       The College of Business and Economics has organized a developmental
services program for its extension service, and this past June, the University
reorganized its overall extension efforts within the institution, providing the
framework for an organization to bring to these areas of the state the expertise
not only from agriculture but from each of the colleges.

       All of this--the growth in graduate and undergraduate programs and the
expansion of research and service--relates back to faculty because these can only
be accomplished if a sufficient faculty and an able faculty is available. During
these two biennia, about 100 faculty each year have been-added. The most
desirable student-faculty ratios would generate 315 faculty per biennia as being
essential, so the University is behind insofar as the most desirable ratio for
attaining the best educational programs is concerned. Part of this budget request
for 1968-70 is to maintain our present ratios and to improve them somewhat.

       The quality of the faculty relates, of course, to the ability to be competi-
tive. The University salary level in these two biennia has risen from last
position among the II bench mark institutions which surround this state and which
have comparable missions to a median position, a more competitive position. The
addition of the TIAA funded retirement system for faculty and the appointment on
a ten-months' basis have been factors enabling recruitment of the ablest faculty.

       In the area of physical facilities, during these four years there have been
added some 963, 000 square feet, including a new Commerce Building, an addition
to the Engineering facilities, a new Education Building (named after Frank Dickey),
a new College of Law, the Agricultural Science Center, the new dormority complex
and, under construction now, the classroom-office building which will help meet
the non-science needs of the College of Arts and Sciences.

       Another very significant development in these four years has been the
movement of the University into the area of seeking private gifts. To assist in
obtaining extramural support, the Board of Trustees authorized the establishment
of a Development Council made up of some twenty persons, including trustees of
the University and other leading business executives, both alumni and non-alumni,
from Kentucky and other states. Since 1965 the University has received $3. 5
million in gift commitments with $2. 386 million received since the Development
Council was organized. The Council recommended the inauguration of the
University of Kentucky Fellows program for people who provide gifts over a
ten-year period of $10, 000 and more. Already there are thirty-two University of
Kentucky Fellows that have made commitments, some life-time, some deferred,
of over $2. 2 million. These funds are for the most part earmarked for specific




 







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programs of interest to the donors and provide for enrichment of existing
programs. This has been a most significant development.

       In concluding his stewardship report, Dr. Oswald said with the funds that
have been afforded to the University from the state and from its own sources,
keeping in mind that the University total budget is supported to the extent of
around 57 percent from state funds and 43 percent fr-om other funds (student fees,
gifts, grants, and many others), the University has accomplished much not only
in meeting the quantitative demands but in developing qualitative programs needed
for the economic development of the state.

       Dr. Oswald read the following statement from the transmittal letter ac-
-ompanying the budget document:

           'However, if these programs are to have a lasting impact, the
       momentum created during this period must be encouraged. The
       University must continue its pursuits of effective teaching, significant
       and revelant research, and meaningful public service. The biennial
       request which is herewith submitted is a financial expression of
       programs which are designed to meet those needs.

           "This request takes into consideration the continued growth of the
       student body of the University. The request is designed to provide for
       those students with sufficient faculty, space for classrooms and offices,
       equipment and operating expenses. The quality of the educational
       program provided to these students is of utmost importance; therefore,
       the University will be seeking the best qualified faculty and staff to
       accomplish these objectives.

           "As the University and the State m-iove through more complex and
       demanding times, the need for persons trained in the professions and
       the graduate programs becomes more acute. The University is
       striving to meet this need with provision for more students in these
       essential program areas. In this respect, as in many others, a strong
       University is essential to a strong growing State.

           "The University has grown rapidly over the past four years. The
       experience in recruiting faculty during this period has created an
       awareness of limitations on the number of faculty which can reasonably
       be added during a given period. The interval between the recruitment
       of a faculty member and the effective date of his appointment may run
       as much as a year or longer, and the interval between the approval of
       the 1968-70 budget for the University and the beginning of the school
       year will be a considerably shorter period. The request for the 1968-
       70 biennium is based upon this experience as well as upon assessment
       of available physical facilities to provide office and research space for




 







6



      new faculty. Thus, the requested faculty positions are less than the
      numbers required to bring the University to the student-faculty ratios
      adopted as an objective by the Council on Public Higher Education.
      The University has not lost sight of that objective and will continue to
      seek that end in future years. The faculty positions requested do cor-
      respond to the requirements for the predicted enrollment increase in
      students.

           "This request is based upon the premise that a budget is basically
      a financial expression of the educational programs; and, as such,
      represents a unified statement of those programs. The University
      has indicated that support which it can reasonably provide on its own,
      and that part which is fairly an obligation of the Connornwealth. "i

      In commenting on the budget request generally, Dr. Oswald said it antici-
pates an 11 percent increase in students over the next-biennium--approxinmately
5.5 percent per year, or a growth at Lexington of 1, 405 students. It projects a
21 percent increase in Community College enrollments over the next biennium or
approximately 10 percent, 10. 5 percent each year. It requests 123 new faculty
positions over the biennium for the Division of Colleges on the Lexington campus
and 48 new positions in the Medical Center. This is 101 less than the number
generated by the Council on Public Higher Education formula. The request is
based on an assessment of facilities available and the limited time for recruitment,
not on what is the most desirable from the standpoint of formula. It also involves
the request for 123 new positions in the Community Colleges over the next
biennium to maintain and strengthen the present colleges and staff the new colleges.

       Salary increases requested will permit the University to maintain the
median competitive position already achieved with the Ilbench mark institutions.

       New programs included are a School of Natural Resources, which would
have as its first unit a four-year forestry program; undergraduate and graduate
programs in the area of social work; the admission of the Paducah Junior College-
into the Community College System; the development of a master's program in
Nursing; programs in occupational therapy and in medical-record librarianship;
the strengthening of the research programs of the Agricultural Experiment Station;
upgrading of the library program; money for rising costs, for keeping salaries as
competitive as possible and for maintenance of the physical plant.

       Dr. Oswald said he had tried to put the budget presentation in the per-
spective of the use of monies received over the past four years and the progress
which has been made. In spite of certain limitations, he expressed the feeling
that the state of the University as far as progress made from funds received was
good.



He concluded his presentation by saying he would be pleased to answer any




 







7



questions members of the Board or press might wish to ask. Dr. Denham com-
plimented him on the excellent report of te progress which the University has made
during the past four years and Dr. Angelu-cci suggested that consideration should be
given to the preparation of a stewardship report each year, so that the people of the
Commonwealth might be kept better informed not only of how their tax money is
being used but of the new programs which are being developed, the impact of which
may not be felt for three or four years.

       Since there were no futher questions, or comments, Dr._Albright was asked
to comment specifically on the various parts of the budget document. He compli-
mented Dr. Don-Clapp and Mr. Ed Carter for their able assistance in the preparation
of the document and said that in the preparation of a budget request there were two
focal points to be considered-- the quantitative requirements that must be accommo-
dated and the qualitative goals to be met through the provision of resources.

       Before outlining the various steps used in arriving at the money needed to
satisfy both the quantitative and qualitative requirements, Dr. Albright commented
that according to all indices available, the University of Kentucky has the best
student body in its history. The undergraduate student body is significantly above
the national average of 50 major universities in the country and there has been a
corresponding improvement in the student body at the graduate level.

       Under the budget format established by the Council on Public Higher Edu-
cation, the first step in the budget preparation is the determination of full-time
equivalent students. With those numbers as a base, the next step is to determine
how many faculty are required in relationship to this full-time student body using
an established formula. The third step is to determine what the objective is with
reference to competition. In order to maintain its present median position with
the 11 bench mark institutions, the University must increase salaries 7. 4 percent
in the first year of the biennium and 6 percent in the second year. To achieve a
more competitive position with sister institutions an increase in excess of 7
percent would be required in the second year of the biennium. The percentage
increase (5 percent) requested for current expenses is arrived at through the
application of two general premises: (1) increasing costs of materials; and (2)
additional monetary amounts required as a result of additions to faculty and staff.
Increases for equipment and replacement are based on a justification of program
requirements.

       After completing these steps and obtaining the necessary information, it
is relatively simple to take the current year base, make the necessary calculations
and arrive at the amount of increase to be requested. Although this base is
important and is not ignored, the University for the past several years has not
started its budget construction at that point but rather has gone to what is referred
to as program budgeting. Each unit of the University is asked to submit for con-
sideration the kind of program it proposes to pursue, develop, or maintain; how
it proposes to reach those objectives; and how it proposes to assess progress at




 






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the end of a year, two years, and continuing. Therefore, the important base in
the University's budget is not the figure, it is the program.

       With this background, Dr. Alb ight then called attention to the summary of
income and expenditure based on the format established by the Council on Public
Higher Education. Under this format, the University's request for 1968-69 would
be $88, 274, 400 and for 1969-. 70, $98, 870, 900; however, under program budgeting
the actual request of the institution for the biennium is $86, 772, 900 for 1968-69
and $97, 356, 600 for 1969-70. There are several reasons for the difference in the
request and the format- -generated amount. Simply stated, they are (1) the
University does not have adequate housing to accommodate the number of faculty
that would be generated under the format; and (2) the interval between the legislative
session, when the budget request is acted upon, and the first of July does not allow
adequate time for recruiting the numbers generated by the format.

       In discussing income estimates for the biennium, Dr. Albright pointed out
that the first step in arriving at the amount of state appropriat76dinoney to be
requested is the determinatio:n of income to be realized from other sources. This
amounted to $3, 949, 800 for 1968-69 and $3, 169, 800 for 1969-70, leaving
$5, 536, 700 in 1968-69 and $7, 413, 900 in 1969-70 to be requested from state ap-
propriations. He noted that the primary increases in the University's income would
be realized from student fees, federal appropriations, gifts and grants, and hospital
income. He emphasized that the increased amount anticipated from student fees
resulted from increases in enrollment and not from any projected increase in fees.

       In estimating expenditures by function and location the greatest increases
were anticipated in the areas of instruction, organized research, extension and
public service, and the hospital. Dr. Albright explained these increases are
based on preliminary discussions relative to the quantitative and qualitative needs
of the institution if it is to maintain its present programs and to develop the new
programs mentioned earlier by Dr. Oswald; however, he felt the anticipated
increases included. for staff benefits and general administration should be explained
in greater detail. In the area of staff benefits, the increase results from two
primary causes: (1) the projected increases in social security benefits, and (2)
the increase in the University's share in retirement benefits resulting from the
increased size of the faculty and higher rates of pay. The increase in General Ad-
ministration expenditures of $400, 000 is to cover the cost of maintenance and
operation of the new classroomr-office building when it is completed.

       Dr. Albright called attention to supporting and graphic information contained
in the budget document and concluded his presentation with a brief mention of the
proposed budgets for the affiliated corporations of the University which appear at
the end of the document.

       Dr. Angelucci thanked DT. Albright for his most helpful presentation,
complimented him and his staff on the clarity of the document and asked members
of the press if they wished to ask any questions. There being no questions, Dr.
Angelucci reminded those presenttthat the Board of Trustees had delegated to the




 






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Executive Committee the specific responsibility for reviewing and approving the
budget request of the University of Kentucky for the 1968-70 biennium prior to
its submission to the Council on Public Higher Education. He noted that copies
of the budget had been in the hands of the members of the Executive Committee for
several days prior to the meeting and, therefore, they had each had an opportunity
to study it in detail.

       Mr. Hillenmeyer made the following motion: that the Executive Committee,
acting with specific delegation from the Board of Trustees, approve the 1968-70
Biennial Budget Request of the University of Kentucky, for transmission to the
Council on Public Higher Education for its consideration and recommendations and
further transmission to the Governor through the Department of Finance. The
motion was seconded by Dr. Denham, concurred in by Mr. Cooper and so ordered
by Dr. Angelucci.


       D. Meeting Recessed

       The chairman noted that the time was 11:15 o'clock and that the designatd
time for the submission of proposals from prospective bidders for the $31,400,000
Revenue Bond Anticipation Notes was not until 11:30 a.m. He, therefore, called
for a motion to recess until 11:30 o'clock, which was duly made, seconded and
carried.


       E. Meeting Reconvened

       The hour of 11:30 a.m. having arrived, after recess, all members of the
Executive Committee present at the commencement of the meeting being again
present, the Chairman explained that it was in order for the Executive Committee
to consider and take action upon the matter of authorizing $4, 393, 000 Consolidated
Educational Buildings Revenue Bonds, Series C, and $29, 250, 000 Consolidated
Educational Buildings Revenue Bonds, Series D, of the Board of Trustees and also
certain Revenue Bond Anticipation Notes for the purpose of providing interim funds
for construction purposes until such time as said Bonds are issued. In this con-
nection, the Chairman reminded the members of the Executive Committee that at
a meeting held on January 20, 1967, the Board of Trustees adopted an extensive
resolution authorizing the undertaking and financing of a substantial building
program comprising buildings and appurtenant facilities for educational purposes
which, when completed, will be parts of the Board's Consolidated Educational
Buildings Project as established by a certain Resolution which the Board adopted
on September 20, 1960, and pursuant to which the Board has heretofore issued
its $8, 000, 000 Consolidated Educational Buildings Revenue Bonds, Series A, and
its $7, 500, 000 Consolidated Educational Buildings Revenue Bonds, Series B. He
reminded the Committee that the various projects comprising the building program
referred to were described and identified in certain Schedules which were attached
to the Resolution of January 20, 1967, that these Schedules have been revised and
amended by the Board from time to time, and that those projects to be undertaken




 






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and financed at this time were made final in revised Schedules which were approved
by the Board of Trustees at its meeting of November 10, 1967.

       The Chairnian also reminded the members of the Executive Committee that
in the Resolution which the Board adopted on January 20, 1967, it was foreseen that
action might become necessary and proper at a time when the full Board of
Trustees was not scheduled to meet and possibly could not be conveniently called in
special session, with the result that all necessary powers to act were specifically
delegated to and vested in the Executive Committee, including the power and
authority to authorized the proposed Revenue Bonds, Series C and Series D, and to
authorize and issue Revenue Bond Anticipation Notes according to authority of
Section 56. 513 of the Kentucky Revised Statutes.

       After this introduction and explanation, the Chairman invited Robert F.
Kerley, Vice President for Business Affairs and Treasurer of the University, to
take the floor and explain recent developments and the proceedings to be considered
by the Executive Committee at this time.

       Mr. Kerley then explained that the University has entered into a Loan
Agreement with the United States Department of Health, Education and Welfare
("HEW") under which HEW is committee to lend to the Board $4, 393, 000 to be
applied to the costs of the new classroom, faculty and administration office building
for the College of Arts and Sciences, presently under construction adjacent to the
Administration Building, with necessary equipment, utilities and site improvements,
the loan to bear interest at the rate of 3% per annum. HEW is willing to purchase
and receive as evidence of said loan $4, 393, 000 principal amount of the Board's
Consolidated Educational Buildings Revenue Bonds. Series C. However, according
to standing policies and practices, HEW is unwilling to purchase such Bonds until
the building in question is approximately 80% complete, and it is not anticipated
that this degree of completion will be reached until the Fall of 1968. Meanwhile
the building is under construction and other projects which have been designated by
the Board of Trustees for construction and financing are either under way or ready
to be placed under contracts, with the result that it is necessary to obtain interim
funds for the payment of construction costs at this time. In contemplation of this
sort of difficult timing situation, the General Assembly of the Commonwealth at its
Regular Session of 1966, adopted certain legislation which now appears as Section
56. 513 of the Kentucky Revised Statutes, authorizing the issuance (with the approval
of the State Property and Buildings Commission) of Revenue Bond Anticipation Notes
which will be short term obligations which will not constitute indebtedness of the
Board, the University, or the Commonwealth, but will be payable as to both
principal and interest either from the proceeds of the Revenue Bonds, when issued,
or from renewal notes of the same character, or from sources of revenue which
are related to the Consolidated Educational Buildings Project. He reported that in
consultation with the Commissioner of Finance of Kentucky and the Fiscal Agents
employed to advise the Board and the University in connection with this financing,
it had been determined that the aggregate costs would require issuance not only of
the $4, 393, 000 Consolidated Educational Buildings Revenue Bonds, Series C, but




 






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also of $29, 250, 000 of Consolidated Educational Buildings Revenue Bonds, Series D.
In order to make the interim financing possible under the legislation referred to,
it is necessary that the Executive Committee, acting for the Board, first authorize
the Revenue Bonds, Series C and Series D, and thereafter authorize and provide
for the issuance of the Revenue Bond Anticipation Notes. After reviewing cash
requirements, and in consultation with the Commissioner of Finance and the Fiscal
Agents, it had been determined that Revenue- Bond Anticipation Notes should be
offered for sale in the principal amount of $31, 400, 000, all to mature on December
13, 1968, and to bear such rate or rates of interest as may be determined by the
Executive Committee upon receipt and