Proposed bills could limit University employee severance pay

By Lily Mashayek

The bill, signed by Governor Bruce Rauner, limits community college employee terms to four years and increases the visibility of employee contracts to the public, requiring them to be informed of any changes to an employee contract.

The Breuder Bill, which was named after College of DuPage’s former president Robert Breuder, aims to lessen the air of controversy that has recently surrounded a number of college and university employees and their severance packages. The bill was sponsored by the Illinois Senate’s Subcommittee on Public Higher Education Executive Compensation, said Illinois state senator and subcommittee Chairman Bill CunninghamCC, who co-sponsored the bill.

Some of the controversies include former College of DuPage president Robert Breuder’s misuse of college funding, former University of Illinois at Chicago chancellor Paula Allen-Meares’s longevity payout and former Illinois State University president Timothy Flanagan’sCC misdemeanor charge.

The committee also put out a report in May that looked at compensation issues and administrative costs in Illinois compared to other states and found that there are increasing administrative costs across the nation, Cunningham said.

“I’ve seen how much tuition costs have increased over the years, and one reason is increased administration costs — which have gone up over 30 percent over the last 10 years,” Cunningham said. “This is one of a number of ways to get some of those costs under control.”

The bill currently only applies to community colleges, but there is talk of amending the bill further to include four-year institutions, including the University. Some pending reform bills, Senate Bills 2155 through 2159 and 2174, look to require public notice of contracts and to make severance packages stricter by banning non-salary compensation.

There are currently some laws in place that regulate four-year universities, but none deal with employee contracts or severance packages, Cunningham said.

“Senate Bill 2159 would essentially take the Breuder Bill and apply it to state universities,” Cunningham said.

The pending reform bills are expected to reach the general floor early next year, he said.

However, presidential compensation and presidential contract lawyer Raymond D. CottonCC, who has worked with over 350 institutions across the country, doesn’t think there is a need for such reform laws.

“The governor should have vetoed this bill.It shows distrust in trustees, and puts institutions at a comparative disadvantage,” Cotton said. “I don’t see any substantial good coming out of this legislature.”

When you look at the big picture, severance payments to university executives make up a very small portion of the schools’s budgets and have zero affect on tuition, Cotton said.

“State legislators, in general, know very very little about complexities of running a large university,” Cotton said. “The exceptions are those people who were higher-level administrators who then elected to run for public office.”

Cunningham said enforcing severance caps wouldn’t necessarily directly correlate to decreasing tuition costs, but they are an “effort to curtail administration costs going forward.”

While the University has taken a neutral position regarding the bills, it is “currently in communication with the sponsors of the bill and the legislators in order to provide them information as they request it,” said Tom HardyCC, University spokesman.

Hardy said President Timothy Killeen is already taking action to limit administrative costs, regardless of legislation.

“President Killeen has said that he wants to put an end to these retention compensation packages, and set an example by asking the Board (of Trustees) to rescind his own package,” Hardy said.

The board committee on Governance, Personnel and Ethics unanimously agreed to forward Killeen’s request to waive his retention bonus Thursday. If approved, Killeen would defer a five-year $225,000 bonus. The board will vote on the request at the Nov. 12 meeting.

Cunningham acknowledged Killeen’s effort to reduce administrative costs.

“The recent moves by President Killeen stand as a great example for other university and college administrators throughout the state,” Cunningham said.

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