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KJ: Kim-Jenna
Ba: Barbara Stewart
Br: Brian Springer
date?
4 of 4 files
——begin barbara stewart file—–
Ba: Well, I started at Antioch as a budget manager, so I worked on it for ten years. “cause i worked on it then up through the time when i left. So that was ten years of budgets that i worked on. When i was initially there the college had to develop their own budget and present it to the university finance office, which was located right there in main building. The other campuses didn’t. I mean, they had somebody that developed their budgets too but they didn’t have a financial accounting-type department of their own at each of the campuses like they do now. So what happened was as the process for decentralization occurred they eliminated the payroll and HR university departments and they drastically reduced the finance operation at the central university.
KJ: what year are you talking about now?
Ba: This was probably in ’94. something like that. So when they did all that then the other campuses took on that other level of administrative cost.
KJ: right
Ba: so that increased all of their budgets, which put more pressure on how much money they needed to make to cover their operations. Of course, the same, similar thing occurred at the college, except we didn’t really add any positions. The same positions that were there were still there.
KJ: Wasn’t it that some of the positions at the college were taken away to the university level? And then had to be recreated at the college?
Ba: No. Not then. Most of the consolidated or the centralized services handled all the HR and all that kind of stuff. So that was in ’94 and then.
Br: So you’re talking about the process of centralization and this is like ’94…
Ba: ’94. DE-centralization. So the other campuses could have their own presidents, their own financial operations, their own accounts payable, you know…
KJ: that’s when provosts became presidents, right? Under Guskin.
Ba: Yes. But I think even at that time, i can remember sitting in some of the budget meetings and there being an awful lot of stress about how much the other campuses paid for the college to exist. Or that’s the way they viewed it, you know.
KJ: Right.
Ba: But aside from that, i think that was a turning point in a lot of ways because it really inflated the administrative costs at the other campuses, which has created other pressures that people don’t want to talk about now. Or they don’t seem to be talking about it, i don’t know if they want to or not. But in working with the budgets over those years, it was always very clear to me that there was a definite disconnect between the programs at the other campuses versus the college residential. I mean, i felt like every time i went to a meeting i was having to justify what our budget was because we had a residential campus that had a cafeteria, a big library, you know, all the kinds of things that you have to have for a residential campus. Plus, the size of our campus was huge. We had to take care of all that property as well as we could and all of those buildings. So, that was a struggle just to explain, you know, why is your maintenance bill so high. Because you guys only have one building and we have more than one building (laughs). That was a constant struggle. It was almost like it was built in to these kinds of meetings. So, I think later on, as stressors were occurring on the budgets, I know that it seemed like, bob and i discussed this and it was almost like we were the just the bad kids who couldn’t control their budget when we had so many built-in, fixed costs, even when we reduced expenses. I mean, when i left in 2002 or 2001
Br: Bob’s leaves around the 26th of October.
Ba: I think i stopped working there around the end of december. Because i started here in March.
KJ: There’s an interview with you in the record from december, i think, when you were stepping down.
Ba: So it was right there around the end of the year, beginning of the next year. So, when those changes occured, I mean when we reduced a huge function at the college, a huge administrative layer was stripped off of the college. It’s never been stripped off at any of the other campuses. I mean, there are
KJ: They still have their own CFO’s.
Ba: Yeah. They still have their own and they continue to have the same kinds of services that they got or built in those previous years. When they did the administrative reduction, they took out, well you’ve probably read all about this, they took out the finance area and the budget area and the human resources area and the technology area and all those kind of things.
KJ: IT, yeah.
Ba: Just little small, minor, (chuckles) minor things. But the enrollments were growing. They were turning around. I think we had, Michael Murphy was doing a great job in admissions. And all that was coming around. There seemed to be a lot of criticism about how students were being counted, but to
KJ: How was that?
Ba: to my knowledge… well, what we started to do was count unduplicated head count, which was a different way of counting how many students were paying tuition per term that they were either there at campus studying or off on co-op.
Br: Could you repeat that again, what was that term?
Ba: Unduplicated headcount.
Br: And how did you define that again?
Ba: We defined that as the number of students who were on campus studying or on co-ops by name and ID, you know. So we knew exactly who was here, who was transferring out, who was transferring in. Previously, we got kind of a round number about here’s the… well, they did it a couple of ways previously. One was, they took the total tuition revenue and divided by the tuition and that gave them an FTE.
KJ: Huh. Oh yeah.
Ba: So that’s how the university developed…
KJ: Much less precise, right?
Ba: Oh yeah, very much less precise. I mean, as far as dollars and cents go, it’s easily translatable, but it still doesn’t talk about how many real people are there. Which is what we had to consider because we had to feed them in the Caf, we had to haouse them, you know, all that. And then there were other ways that the registrar’s office counted students. which was, they would count the new, incoming students for each year and track those new students through to graduation.
KJ: Right.
Ba: That’s how they developed retention numbers and things like that. They did not include transfer students. It wasn’t as precise, because there may be other students coming and going during those times that weren’t counted. There wasn’t anything wrong with either of those methods, but i think our unduplicated headcount really gave us a better sense of how many students were there. but there was a lot of discussion about the way we were figuring that and how we could come up with our budget based on that. One of the things that occurred in that budget time when President Crowfoot was there, was there was a change in the way students were billed for their tuition they wanted to break down the tuition by term and say the total tuition was $24,000, i don’t know what it was at that time, i don’t remember, one study term would be $8000, another study term would be $8000 and a co-op term would be $8000.
KJ: That’s how we’re paying now.
Ba: Right. Well Adcil decided that Students shouldn’t have to pay for a co-op.
——-End “barbara stewart” file——-
——–Begin “barbara stewart 2 file——
Ba: Really, I mean, if you compared the 7.5 to the 9.5 that’s really a better comparison. Because this was that annomaly on that stupid pricing decision. This next year i was able to convince, of course bob already knew it, but we have to set what the tuition is and that’s what it is for the year and if people want to spread it out over 3 terms or 4 terms or 5 terms or 1, you know, paying the total amount was what you were required to do to get a year’s credit at Antioch College. Which was screwey, the other one was screwey. Yeah, this is when that happened.
KJ: The 800,000 that’s here that was the 96-97
Ba: Yup.
KJ: And that is then reflected in the jump from
Ba: the whole thing dropped down here. so then the next year we changed it back up to, here’s what you pay for a year, however many payments you make doesn’t really matter, here’s what it costs for a year. So that brought that more in line. Yeah, so your net… yeah, that was significant growth, it really was. You can even follow the tuition discounts. Those were really not that bad. Holy Cow.
KJ: (laughs)
Ba: Holy Cow!
Br: yeah, isn’t that amazing?
Ba: That must have been the effect of the Noel Levitz (sp?) consulting advice.
KJ: What was that?
Ba: That we should give out more, really non-funded scholarships to students. There were like a bunch of presidential scholars, i don’t know what they named them, but they were really tuition waivers, in effect. They were unfunded scholarships, which is what reduces your net tuition fees. Man!
KJ: And that was in the works around the time that you left?
Ba: Yeah, we had already started doing that when i left. Here, so you can see it went up like a million bucks between 2000 and 2001.
KJ: I also heard that in general there was an instruction from the board to increase our giving to students or our discounts, i think. And to give out more financial aid to students and later we were scolded for it.
Ba: Yeah probably.
KJ: That might also reflect apart from the scholarships, but…
Ba: Oh yeah. Some of that may have, i don’t know if it had to do with what they thought the actual tuition was compared to.. well, who knows what they were comparing it to.
KJ: Why have we never gone down in tuition, in a way, because students sometimes bring up, why don’t we just have a lower tuition because sometimes people are put off by the fact that on paper we have to pay almost $40,000, but in the end, nobody pays more than 25 maybe.
Ba: Right, exactly. Well, part of the discussion around that has been, or the ones that i was involved in, is that there’s a point of view that if you discount your product, nobody’s gonna want it. If it’s that cheap, it’s gonna be, “oh is that a community college now?” or something. Not to diss community colleges, but that seemed to be the biggest reason that people did not want to discount the tuition, or reduce the actual tuition.
KJ: We’re still higher than Evergreen.
Ba: Yeah, that’s probably pretty high. They’d rather give it in something called “scholarships” which would reduce the student’s total outlay.
KJ: right. Was there ever research done on the incoming students, why they turned it down?
Ba: Yes
KJ: I know that a friend of mine worked in admissions and she said that she had a lot of students that were interested but when they saw how much they had to pay they immediately said, well, i just can’t afford it.
Ba: I think that when Michael Murphy was there they did a lot of tracking to go back to see why students didn’t go ahead and apply. they did a lot of research on that to try and track ’em. I can’t remember what the total outcomes on some of those were.
KJ: I had a question about instead of counting the subsidy under the endowment, here it went just as a plain subsidy, which to me looks like a psychological effect in that i’ve often heard trustees say that the college doesn’t pay overhead, but it gets the subsidies. And it wasn’t booked up until here…let me see. What they did was instead of putting it as a negative on the overhead line the pull it out of the overhead line and put it in the books as a straight subsidy, so every board meeting it would be presented as a subsidy instead of, you know, a negative in the overhead line.
Br: This figure gets moved from here to here. it becomes revenue.
KJ: Right. Why would they make the decision to book it like that when it has been done differently for years?
Ba: Because, i think that the reason that probably happened was, i know in all of these other discussions way back when, that the view from the other campuses and most particularly from the university offices itself as we got up through here was that the college needed to consider that real income. And it wasn’t just a reduction in our expenses. It shouldn’t be reflected in our expenses because they wanted to really zero in and see how much money was the college spending. Because if you look at where those were going you can see the level of expenditures is remaining relatively consistent all the way through here, til you get up to here and then it just looks like it’s going off the charts. And it hasn’t really changed that much. You can see that all of these real expenses for staffing or for whatever… how does it go from that to that?
KJ: I don’t know.
Br: This always stays consistent. I mean, there’s all this downsizing going on right?
Ba: Yeah.
Br: And this just doesn’t come down.
Ba: Look at this. Here’s where I left. There’s no way. We reduced all those positions
KJ: I know
Br: Yeah
Ba: Well see, that was when all this was moved over to the other offices. I’m sure Deb Carroway could probably give you…
KJ: Could that have been severance pay? No?
Ba: I wish I had got that much! (laughs)
KJ: How many people were budgeted out? 10? or more?
Ba: Let’s see… 1, 2, 3… at least 8 that I can remember. I’m not sure.
KJ: I think that 4 or 5 faculty members left and they had to get in adjuncts. But that shouldn’t… I mean, adjuncts are cheaper, right? So that shouldn’t make an increase there of $700,000.
Ba: See and then it dropped back down. It leveled off and then it’s back down again. And then it popped back up here. Those numbers probably relate to, perhaps some sabbaticals, but i don’t know why the college would be charged for all this. I don’t know. You know all i can do is speculate. I have no idea about that, what happened there.
KJ: Another thing that Laura Fathauer found when she was going through, i think it was ’06-’07. She looked at the projected budget for the year 06-07, oh no, it was actually 05-06 projected numbers 05-06 in, i think, gift income, what they were expecting to receive. And then she looked at the mid-year reports and then the end of the year reports and the projections were twice as high as they’d ever been at the beginning of the year or in the middle. Is that something that you encountered in your time there?
Ba: No. We had to maintain absolute, i mean, the gift income on this line really had to do with the annual fund alumni giving, mostly. I mean, we weren’t really allowed, i mean it wasn’t feasible for us to budget if we thought somebody was going to leave us half a million dollars in their will or something like that. You can’t predict that, so we didn’t even try to.
KJ: She was very surprised because in the beginning they projected 1.4, 1.5 which is kind of average. And then in the midyear report they did the same. And then in the end of year, it said that the projection had been 3 million, whereas it never had been. She was wondering where that could have come from. because it looked like we had missed the target by a mile.
Ba: Well if you look at when they put this lead gift number in here in 2000-2001, that was added because of fundraising efforts and i think the following year that may have been just subsumed up into this gift line and not split out. And then the same thing happens again in 03-04. But I don’t know why they would be separated or not separated.
KJ: What I was interested in was, I talked to Laura, I talked to you and to Bob about especially this period with the lead gift line. This is after Glenn came in with his 98 points that were then reduced to 23 that
Ba: i don’t even remember those, but i was inundated with all kinds of stuff, so…
KJ: What I was wondering was, the story that Laura told, which is slightly different from Bob’s was that there was the lead gift line and that when Glenn came in with those points that ended up being 23 points that needed to be changed in the budget that added up to $900,000. That Glenn was the one telling the college that we can make it happen, we can bring you in those 900,000 through the lead gift line. Don’t worry about it. And then when it went to the board, the college was scolded for not having a balanced budget. Bob tells it differently, saying that it was Dan Kaplan actually and Krinsky who said don’t worry about it, just book whatever you need in for that year and we can get it to you. I was wondering whether the two stories…
Ba: I would say that Bob was in on a lot of those direct discussions more closely, so I’m sure that his recollection is accurate. I think what Laura was talking about is that when we were developing this budget, all of the sudden we had to take on the costs of development of the capital campaign. Which was like, now why all of the sudden do we have to have those expenses, because the university had been carrying them. So when they did that, I think that’s when they said, well, then we need to bump up the lead gift line or the gift line or whereever that was put in. and, we’ll just see what happens.
KJ: That’s on top of those 600,000? Because the 600,000 was what we got for our capital campaign expenses. But, then
Ba: On this lead gift line? Is that what you’re talking about?
KJ: Yeah
Ba: Then that’s probably the…
KJ: There was another 900,000 that came in after you had made up the budget with Bob then Glenn said there need to be changes made and came in with this laundry list of around 90 points and i think that you narrowed it down to 23 that you thought were good changes.
Ba: mm hmm
KJ: Which added up to another 900,000. do you remember that?
Ba: I remember there was an awful lot of changes going on. We developed that last budget. It was so contentious. We developed several, a plethora of budgets. I mean, it was lots of budgets that year. And, I know that we different meetings and had some meetings that involved different community members that were invited in for discussions about how we were going to balance the budget and at one point the university made a bunch of changes to our budget and gave it to me and said, here’s your new budget. And I was like, well, what did you change? So, i know that occurred and then there was some give and take before we finally got to the end product and then that’s when it went to the board and it’s like, you know who’s going to support this?
KJ: Can you remember how much extra you had to put in, because of those changes?
Ba: No, I really don’t. Because, there were so many other changes where you could see where all these rebate subsidies, subsidies from overhead, other inter-campus agreements. See this inter-campus agreement was more of a local inter-campus agreement.
KJ: What was that? That was between McGregor and the College?
Ba: Yeah, but this line for depreciation didn’t show up til 01-02.
KJ: Right
Ba: So that was something that we had to figure out.
KJ: Did Glenn ever promise that whatever extra needed to be put into the budget because of the changes that the university had made to the budget, that it would be funded by the university?
Ba: Uh, Glenn really didn’t make promises. Glenn never promised anything (laughs). And I don’t recall. Probably at that time we had been under so much pressure on some of these things and, you know, and people were losing their jobs and whole departments were disappearing and I was feeling kind of bad about some of that stuff anyway. But, whether that was going to come in through there or down through here, this was the number that needed to be covered. right here. Excess revenue over expenses. So we figured a half a million, maybe between the university and what they could cover and if, perchance, maybe some other gifts could come in. See, this was even after that lead gift line was dumped in for 600,000.
KJ: Right. So the 571,000 would be what came in extra after the university made changes to the budget. because it had been balanced, right?
Ba: Yeah.
KJ: So whatever changes they made added up to those almost 600,000, right?
Ba: mm hmm
KJ: And was there any discussion about how that was supposed to be covered when they came in with those changes? Or would they just take care of it?
Ba: Well, I’m trying to remember. I know, I think that when Jim Hall was hired, that was going to be his major function at the university level, to raise money. Fundraise, fundraise, fundraise.
KJ: So was the assumption that it would just be covered by fundraising from the university?
Ba: Yeah. Yeah. That’s how I remember.
KJ: Bob said that at one point Kaplan said put in whatever you need, we’re going to make it happen and then it went to the board and then in the end Glenn made another set of changes and it looked like the college budget was done by a high school student. That’s basically what bob said, would that happen often?
Ba: Oh yeah, there are lots of things that at the final board meeting, because we weren’t allowed to present our own budgets and the other campuses weren’t allowed to do that. That happened way back. I mean, we had to turn our budgets in to the university level and Glenn presented them to the board. So however Glenn wanted to present things, that’s how it got presented. And i wasn’t always at those meetings, because i could go to the ones in yellow springs, but I only travelled to, i think, maybe 2 other board meetings that were away from campus. I think one thing that really was discouraging was that i spent like over a year working with the unions to get a contract negotiated with them to reduce their healthcare costs to the college. Tried to find pretty close to the same level of coverage and all that and got absolutely no help from the university offices either on giving us information about what they were paying for now, what the rates were, could they shop around and get other rates if we did it, you know, differently? They wouldn’t even add it up. And I was told, well, they’re never going to agree to that, so why should we do all that work? Well, they did agree to it, and it saved the college hundreds of thousands of dollars, because they went from a fee for service health care plan to more of a provider option kind of thing, in network out of network. That’s the first change that had happened since they put their health plan into effect. Since like, in the 70s or 80s. So that was a huge huge change, but when Glenn presented that to the board, he said that the university was able to get the union contract and created all those savings on the healthcare coverages.
KJ: wow.
Ba: They wouldn’t even help us try to figure out how to do it! For like a year! And then he wanted to take credit for it at the board meeting.
KJ: would he often add things in between? when you and Bob had closed the books before it would go to the board, he had a couple of days ot look at it right? Would there often times be changes made? surprise changes?
Ba: Gosh, it’s been so long ago. I think there probably were changes. Whether they were to the gift line or whether they were to some of these subsidy lines, you know we didn’t always know how those were going to end up coming out, because they pretty much controlled what those subsidy dollars were supposed to be, even though we had supposedly signed agreements. I know that when we had discussions about how are we going to make this balance, what are we going to do, there were times when we talked with Glenn. You know, what if we do it this way? what if we do it that way? There was a lot of pressure at some point from the other campuses to reduce this tuition discount line, but you can see that it just kept getting bigger and bigger and bigger. Because they thought that that was where we were giving away too much money.
KJ: In tuition discounts?
Ba: In tuition discounts.
KJ: What year was it that they were thinking that?
Ba: Particularly the last year that I was there. 2000-2001, because we would have had to produce this one in the year that i was still there.
——–up to 25:32 in file barbara stewart 2———-
Ba: So this was probably the last budget i worked on, right here. Which was interesting because we kept hearing from the rumor mill and whatever that Bob and I didn’t know how to keep expenses under control and we didn’t know how to forecast revenues and we didn’t know how to do anything and it was our fault that we were having these deficits and then, looky here! I never did anything that bad! (laughs) It just kept getting worse after we left. I mean, it’s almost like it’s an intentional slide.
KJ: You think so?
Ba: Well, sure.
KJ: Because of the depreciation?
Ba: Well, depreciation is something that needed to be shown, because if we were fully funding depreciation, we’d be able to put 1.4 Million back into the buildings and plant.
Br: Would that be under plant maintenance or would that go into a capital budget?
Ba: I should go into a capital budget, yeah.
Br: So if we were to look at capital budgets, we should be able to see that number reappearing?
Ba: Sure. So, if you’re fully funding depreciation, then you would have cash to support this 1.4 million and then, probably the following year is when you’d have the capital expenditures. I think this is the year that we were allowed to borrow some money to make some capital improvements.
KJ: from the university?
Ba: Got the approval to borrow from the state bond deal. Which was kind of an arbitrary number. Glenn told us, well we could probably borrow 2 Million dollars. He would agree to that. We could have borrowed 10 million dollars and fixed everything up.
KJ: Yeah, McGregor could do that with their new building.
Ba: Yeah, but they wouldn’t let us borrow any more than 2 million dollars, so we weren’t able to really make any big progress on plant improvements. It helped some, but…
KJ: When you talk about the intentional slide, when do you think that started?
Ba: Oh, it started… I can remember, it may have been 94-95, 95-96. When I became, whatever the title was, the Dean or VP of Finance Administration, when i’d go to the CFO meetings, there was a lot of discussion there about what each campus was doing, but i do remember on board meeting in particular in yellow springs. It was my first board meeting I believe, that was when Crowfoot was president. The Finance, the Universtiy was getting after us for collections and why we weren’t collecting. You know, we’d charge students tuition, but if they weren’t paying, if they only paid half of it, then we’ve got a 50% collection problem.
KJ: right
Ba: And I can remember that discussion taking place at the finance committee of the board, but i hadn’t even seen the report that went to the board. So they were asking me about it and i said, I can’t really tell you because i haven’t seen the report. But when i did get the report and I was reviewing it, McGregor School collections were worse than ours. And whether that was unintentional or just something that they wanted to bring up about something the college needed to do a better job of, I’m not sure. But it seemed like, after that, every meeting with everybody from the university was a constant struggle to justify everything the college did. Everything. Financially. Why is your tuition like this? How come you’re giving away all these tuition discounts? Why are your salaries and benefits so high? Every nickel!
KJ: What brought that shift in the board? That they all of a sudden started becoming so hostile toward the college?
Ba: I think Al Guskin left. He was the main supporter for the college with the board. And when he retired and they split that job function, they created a chancellor and a college president, whenever that happened. I think that’s when Crowfoot came in, but i think that was one of the areas that really kept the focus on the college. And when that changed, it seemed like everything else changed. There wasn’t really a major cheerleader for the college, other than just the college. Everybody said they wanted to see the college succeed, but their actions didn’t support that.
KJ: Bob recalls one thing apart from putting depreciation in. He recalls that all the hours of the unionized staff, the vacation hours were then booked at one year. What year was that?
Ba: Yeah, I remember that and I think that happened this last year i was there also. They put that in and i think it may have had to do with the GAAP changes, the General Accepted Accounting Principles changes that all non-profits in the united states had to adhere to. When that change occurred, all non-profits were required to report possible liabilities. So, if all of the staff had built up 10,000 hours of sick leave time, but they’ve never taken it or vacation hours that they’ve never taken, you still had to show that on the books as a possibility that we would have that liability all in one year. Never gonna happen (laughs).
KJ: That was mandated from above? That it had to be as strictly accounted as we did, or
was there any discretion in how one would account that?
Ba: There is discretion in how you account for that. They took the most extreme approach.
KJ: Really?
Br: What would be a less extreme approach? How would you do it?
Ba: Probably a less extreme approach would be to look at the last three years and look at how much sick time or any leave time was actually spent during that year. And then you could gradually book it over a period of time, based on that average. You know, you’d have a problem if all of a sudden everybody cashed out.
Br: This FASB thing. Was it enacted in 94 or 95? It wasn’t like this was a new rule that occurred here. This had been…
Ba: There had been a final implementation stage that you had to hit at a certain date. Because usually with those accounting changes, they’re mandated by, you know the accounting gods. They say, here’s what we’re going to do and you’ve got 5 years to implement it, or something.
KJ: And we didn’t do anything in those 5 years leading up to it and then did it all at once?
Ba: Yeah. Either that, or we did it early. I think we did it early.
KJ: And that is the same year that depreciation came into the budget?
Ba: It was between those two years there, yeah.
KJ: Why would one book that all in one year?
Ba: How bad do you want the college to look? It’s like, from a very conservative financial standpoint, the board needs to see exactly what it’s costing to run this university. All Branches, all campuses, the college, whatever you want to call it. But the board also needs to understand what’s realistic, and that wasn’t put into it. Because, we’re not fully funding depreciation, so it shouldn’t even count. So what you have…
Br: What do you mean, we’re not fully funding depreciation?
Ba: Depreciation is just a paper expense. It’s not a real expense. You don’t write a check to First National Bank for 1.4 Million dollars to cover depreciation. All that is is to set up a self-funding fund from your revenues to say this is how much the buildings and your plant are depreciating. We should replace that. So, here’s the money that’s going to cover those replacements. Well, that doesn’t happen. It’s not real. I mean, if you have plenty of money, you can make that happen. I think that was their ultimate goal, but you know, it’s not happening. And since it’s not going to be fully funded, why show it as something…
KJ: As a negative you mean?
Ba: Yeah!
KJ: So it’s basically an extra negative in paper money that eventually, you don’t have it, you don’t use it…
Ba: Right.
Br: You don’t have it, you don’t use it. It’s not there. It doesn’t exist. It’s nothing.
Br: So we should just go online to look at the FASB implementation guidelines and we could see. That seems like a critical part of your argument to load it all on one year as a opposed to more realistic…
Ba: Yeah, it’s nuts!
KJ: Why book it to the college in the first place? When whatever comes into the college goes straight into the books of the university, but we are funding depreciation for buildings that are not even ours anymore. we’re not even a legal entity, the college.
Ba: Right.
KJ: How is that logical?
Ba: I don’t know. Because my bone of contention was, like ok, if you’re going to put the depreciation expense on us, then we want to see all the money from the endowment and see our own gains, which we’re not because the only thing they’re putting here is revenue from the gains on the endowment. The paper change on depreciation is the same as the gains on the endowment. The endowment, the funds that were invested were invested at 10 Million dollars. They’re now worth 20 million dollars, if we sell them. We haven’t sold them, so we really don’t have those gains. We’re earning interest on some of that, so that’s what they’re showing here and they cap us at like a 5 percent usage.
KJ: What line are you in now?
Ba: We’re in endowment income.
KJ: 01-02, yeah.
Ba: So they couldn’t give us too much of that money. So, i mean, this is paper expense always have the paper endowment gains to offset it. If that’s is false, then this is false.
Br: I think the endowment gain last year was 4 million dollars.
Ba: Yeah!
Br: They had 12 percent growth.
Ba: Yeah, but they haven’t sold all those stocks, so it’s not real. Any more than this depreciation is real.
Br: But you know, it could be real. that might really make that feel a little bit better.
Ba: Exactly. But that was our argument. Bob and I talked until we were blue in the face, Look, if you’re going to do this, then show that.
Br: And what was the response?
Ba: No.
KJ: But why didn’t anybody think that was logical? I mean, here are people that are running million dollar firms. How didn’t anybody see that twist?
Ba: We weren’t allowed to present those arguments
KJ: At all?
Ba: to the finance committee, or to anybody. I mean, Bob would talk to the finance committee and then when bob got done, Glenn would present everything to the full board. Finance committee would say, well there’s this and there’s that and this might be and that could be, but there wasn’t any real strong voice for the college listening to all of that. And I’m not being critical of any of the board members, because I’m sure that they’re all there because of the college, in essence. But they were pretty much going along with whatever Glenn presented and how glenn wanted to do it. They had so much confidence in what Glenn was doing, that they really didn’t question it. I don’t remember a budget ever changing after Glenn presented it to the board. The board never changed the budget. They never came back and said, we don’t like this, change it.
KJ: We had a 4 million dollar gain out of endowment, but because we can’t book it, we just had to get 5 million in restricted Drey money out of our endowment to put in our operating budget because we don’t have the money.
Ba: Right.
KJ: And it’s just gonna decrease our revenue in the future.
Ba: Yeah. It’s stupid. This is how i present our financials for this operation: We have, for our, what month is this? This is august, which is 11 months out of our 12 month cycle. We have a 50 million dollar budget. Total expenses, expenses for capital improvements, so our net profit or loss before depreciation is $750,000. And then we show depreciation, so we’ve got a net loss. which means nothing. It means nothing! (laughs)
KJ: Right, but this looks far less drastic than if you present it…
Ba: This way, yeah. So, this is how we do it.
KJ: Is this a normal way to do it? How is it done at other schools? Do you know?
Ba: That’s really pretty easy. You could go…
KJ: go to OSU and look in… yeah, i was thinking about doing that
Br: Or look at the GLCA schools.
KJ: So, do you think, I don’t know how many board meetings you’ve been to, but do you think in general that board members just didn’t have the time to look it through, or they’re not as informed as the budget committee and they just went along with what other people said?
Ba: I think what real structure would help that would be if the board members… see, there was like a college oversight committee of the board or whatever. If those people had come to the college campus while we were doing all these budget machinations and heard all of the discussion and the whys and the wherefores and how are we going to do this and if you had a half a dozen people really paying attention to it in that length of time, giving it that much time, the board would have understood it a lot better. Rather than going to the finance committee where you’ve got people that are working for the IRS or banks or investment firms or whatever. Well, yeah, they’re financial minds, but they wouldn’t necessarily understand the whys and the wherefores and how it’s different to support a residential college than the other campuses. And they also didn’t have the time to review the paperwork. I mean, each president puts together like a two page narrative. You can’t do much in a two page narrative. I mean, any finance committee person would tell you, there just isn’t enough there.
KJ: Do you think the fact that we were booking all those union hours and the depreciation in the most drastic way in one year, was that done purposefully? to book it in one year, to make the college look bad? Or was it just very SNAFU, stupid thinking, or…
Ba: No, it wasn’t stupid thinking, it was very intentional. The motive behind that, I cannot say. All I know is, that from the day I started working with the university folks and the CFO’s from the other campuses, we had to justify everything we did. It was like, we were the ones that were bringing down the university. (laughs)
KJ: Were we?
Ba: No! (laughs)
KJ: I have to ask, I’m a reporter!
Ba: No, and I think that, you know, those were very unpleasant meetings.
KJ: How were we in comparison to the other campuses? When we’re put n the corner all the time as the bad child in the class, how were the other campuses doing? Was it really just the accounting practices that were making us look bad?
Ba: No, there was always a lot of scrutiny over how much, because we had to give out salary schedules that listed every person at every campus and how much they made. That was always highly scrutinized at some of those meetings and they wanted to know how come this person’s making this much, at our campus this person makes that much. I was like, well, you know, you’ve got one building. Yeah, but we have more students. And i’m like, yeah, but they’re only there for an hour. So, it was apples and oranges and they kept trying to make it all the same. And it’s not the same. And I’m sure that a lot of folks that listen to the college talk and there’s a lot of whining, “but we’re special and you’ve got to treat us differently.” Well, it’s because we were different.
Br: Well, I think it’s also fundamental to understand the donative model versus a retail unit of sale model.
Ba: uh huh. yeah.
Br: and people who have experiences at a university that’s a residential place, they’re going to have valuable experiences at a higher rate than they are at a commuter campus. and that’s not to devalue that,
ba: right
Br: But those valuable experiences then turn, especially over a hundred and fifty years then turn into donative resources
Ba: yeah
Br. which offset those residential costs if they can be activated in the right manner.
Ba: yeah. there were some other things that happened, and bob could probably tell you more about this, i don’t know. it was happening as i was leaving and, you know, some of the the way they split up, when they created development positions at each of the other campuses and then they kind of segmented some of our large donors so that, i mean you can’t tell a donor where to give money, but you can certainly say, well, so and so, they’re getting this much money, we’d like you to focus your money on what this campus is doing. so, i think that was kind of a dumb thing to do.
Br: when you talk about this one year booking of these things that could have been booked slower and the impact of that, basically it starts the slide of the college. if you look in terms of the enrollment numbers, they start going down here as that accounting comes in and it leads now to exigency. do you think that they were comfortable with exigency as a possible result of the actions that were taking place in this early stage?
Ba: I think there had to have been some other discussions about what’s going to happen when the college finally cannot support itself, what are we gonna do? I think those discussions started way back there in 2000, 2001.
Br: Did you work at all with Bruce Bedford?
Ba: I’d just really rather not talk about him. I don’t have anything to say that would be helpful about Mr. Bedford.
KJ Do you think it is the structure that does not allow the college to be part of the university or is it really the people in charge or in lead positions not wanting the college to flourish or do you think that our structure just really does not allow it?
Ba: I think there’s probably a little bit of both, because i think that what was happening was that each of the campuses really wanted to have a larger presence in the higher ed world or whatever. you know, they didn’t want to be thought of as just a branch campus, like Ohio State or Miami University has branch campuses in limon (sp?), and so on. but, everybody knows that those are branch campuses of THE university. I don’t think they wanted to be thought of as just a branch campus of Antioch College. That Antioch College was Antioch University. They wanted to have a greater role in that perception because they felt like at some of the higher level positions like presidencies at the different ones, it gave them more stature within their own regional associations. I believe they also thought it helped them with their own fundraising, which is probably true. So i think there’s just that struggle that everybody wanted to have their own organization and they reluctantly belonged to the rest of them, it seemed like at times. And reluctantly supported what the college was doing by way of these kinds of transfers down here of subsidies or rebates or whatever you want to call them. In most small liberal arts colleges, you could probably do a story just on this, most small liberal arts colleges in the united states that are still alive and well that have little or no endowment have developed other programs, adult programs to generate more revenue to help support the residential campus, because a residential campus for undergraduates, if it doesn’t have an endowment, you have to have some other revenue streams. it just doesn’t work. And that notion slipped away, way back before i was ever there. It wasn’t a matter of until they changed the administrative layers at the other campuses, they kept it to a minimum. But then they wanted to grow and have their own administrative functions, which added a lot of expense to those campuses which in effect reduced the amount of funds that was able to come back to the college.
KJ: Do you think it was just the financial opposition against the college, or…
Ba: Oh no, i think there some philosophical differences in lots of areas, but i think there somehow came in some kind of a corporate mentality that we need to rn this like a business. Which, of course, everybody understood that. But you also have to run it like an educational institution because that’s what it is. That’s the specific model that you’re trying to follow, and to try and force other models onto a residential college campus, it doesn’t work. And I think philosophically, at some point, people seemed to have a notion that, “well, if we can do it in new england or if we can do it in seattle, then you ought to be able to do it in Yellow Springs. Well, that’s your problem?”
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And I’m like, well we’ve got these pesky students that cost a lot of money and you gotta watch them all the time! (laughs)
Br: Do you think the Mumia commencement speech played into the philosophical differences and the need to separate from the college?
Ba: Well, I was one of those, as far as i was concerned, it was really just another controversial experiment in social justice or whatever you want to call it, but it’s like, this is a learning experience. This is what this place does. And whether or not, I know there was a lot of opposition from the Board of Trustees for some of that, there was a lot of opposition from the other campuses, some people would not come to the commencement excercise because of it, but there again, you could probably find an incident like that every other year that could have turned people, you know, if they were going to turn. If you didn’t know anything about Antioch College, you’d have been surprised that something like that happened.
KJ: When the whole SOPP thing went down in 93-94, which is around the time that guskin left, do you think that would have, since it got a lot of media attention to antioch and the name antioch all of a sudden. As a person affiliated with the other campuses, do you think that that was an association that the other campuses might not have wanted anymore.
Ba: well, i think that’s a possibility. I think a lot of the things that came into play there were things that the other campuses wanted to be disassociated with. Because they wanted to be targeting more adult business or professionals who wanted to go back to school who wanted to go back to school and pursue their degree or other degrees and things like that. And I think they felt sometimes that it was a distraction.
KJ: But they never said anyting out loud? You never heard reports back from the board that something like this was…
Ba: well, yeah, i heard all that. But i didn’t pay any attention to it. (laughs)
KJ: But it was discussed at the higher levels,
Ba: Oh yeah. yeah.
KJ: what impact on the other…
Ba: sure. The odd thing to me about that was the, and i usually just laughed about it, but i thought, you know, there are these campuses that are saying we don’t want to be associated with Antioch College that does this or that. I thought, you wouldn’t even exist. Nobody would even come to your campus if Antioch wasn’t in part of the name. So, you know, that’s just laughable. They want all of the recognition from the history of Antioch College for the things that they think are good, but some of the other changes that have occurred over a period of time, they wanted to be disassociated with. I don’t think you can have it both ways. Of course, you are just couching this in terms that this is just my opinion. And you know what opinions are? But that’s just exactly what I think. And I’ve probably said so on many occasions to a lot of people, so i think that they’ll believe this story when they read it (laughs).
Br: I remember getting this email from Chris and I think a lot of people got it forwarded to them when the Glenn plan went into effect. There was an email from you that just said, “who made Glenn king?” That was it. And then everything changed from that email forward.
Ba: yeah, it was really ridiculous.
KJ: So it was really waiting for Bob to step out of the office? Because it happened like three weeks after, right? So it was kind of taking advantage of that in-between period, or?
Ba: what now?
KJ: well, to put in the depreciation and the drain the pipes.
Ba: Oh no, I think all that was already well underway. I mean, those discussions had occurred and I think that maybe some of that, and Bob can tell you this much better than I because, we certainly didn’t discuss this in detail, but I’m sure that pushed him to the point where he did step out. It’s like he’d fought as long as he could fight a lot of these things and on a personal level, i think he felt like he wasn’t, maybe couldn’t be as effective, if it was just that much of a constant struggle. I don’t know that that’s the case, because i thought he was very effective. So, I don’t think it was a let’s wait til Bob goes out and then we’ll slip all this stuff through, no. I think those discussions had been going on and it was part of what we were fighting against. And after a while we just couldn’t fight it any more.
KJ: How predictable were the negative effects that would have come from the changes that he implemented?
Ba: Very predictable. Very predictable. How can you add almost 2 million dollars to an expense budget and not predict what’s going to happen?
KJ: Was it necessary to cut in the summer programs and the cuts that were made in the drain the pipes?
Ba: You know, the expenses–the fixed costs of a residential campus are so great, that even cutting them 10 percent wasn’t going to be enough. I mean, you can cut yourself by 10 percent, you can cut your benefits by 10 percent, you can make people pay more on their own benefits, i mean, you can do lots of things, but paying the utilities? I wonder what the gas bill was last year! Oh my. I bet it was a doozy. See, that’s the other thing. I don’t see utilities split out separately here on these budgets. You say, why is your business operation and your plant expenses so high? well, you know, the cost of natural gas went through the roof.
Br: Well, this budget. this actually used to be a 2 page budget and I retrofitted all the budgets to fit this budget. In 04, they started making this the only budget that they got and most of the lines that are blank weren’t even there. these zeros weren’t even present.
Ba: Right, Yeah.
Br: So anyway, it became a lot less information. Even, there was already a lot less information. It became more sparse.
Ba: Yeah. And that was not for ease of reading. It’s not because people don’t understand what utilities are versus what cutting the grass is. I’m sorry, I’m not trying to be flippant, but I can’t help it. I went over this so many damn times! (laughs)
KJ: brings back memories?
Ba: yeah, sure does.
KJ: You knew that your position was going to be cut anyway, right?
Ba: Well, yeah, i mean one of the first major conversations we had the person you mentioned earlier, because the board had said, let’s help. let’s see what we could do. Yeah, so the very first conversation i had with folks was like, what can we do to reduce expenses? I says, like, well, you can eliminate my position. I don’t need to be here. The way the budget’s being run, the way it’s being enacted, the way it’s being pressed upon us, I can’t change how many buildings we have to take care of. I can’t change how many faculty we have. There are other ways to do this and you can eliminate several positions. I mean, they’re not student services, they’re not academic positions. So, if you’re going to save those, and keep this campus running, then you can eliminate some of these other administrative costs. so, that’s what they did.
KJ But this was already in anticipation of putting in depreciation that they tried to make as many cuts in general?
Ba: One was not related to the other.
KJ: You were given an order to cut like, a certain amount, a percent from this year and looking for 03, by that time to have cut 15 percent? Is that correct?
Ba: Yeah, probably something like that.
KJ: So this is just draconian…
Ba: Draconian measures.
KJ: So depreciation, is it a set percentage? I know that we, in money, pay the most because we have the most buildings, but was it always around 7 percent for every campus?
Ba: It’s based on, accounting-wise, it’s a cost basis. If you buy something for a hundred dollars and you’re going to depreciate it over ten years, usually it just uses a straight line method. So every year, 10 dollars comes off of that.
KJ: right.
Ba: So that’s how that gets charged back. It just depends on the year that something is purchased, how much it costs to replace it in some ways enters into it, but usually it’s just on the cost basis. You know, the 1.4 1.5 Million, I’d really have to see what some of that stuff was because, you know, North Hall’s been depreciated over and over. Those buildings are so old, there can’t be depreciation on those buildings. It would have to be on equipment or technology improvements or desks and chairs…
KJ: But it seems like the same thing all over again. I know that at one point it was like 1.58 instead of 1.48 and then the next year it was 1.48 again. Could that have to do with the fact that we lost one building that we burned down? We burnt down Norment last year. Is that something that could, all of a sudden bring down depreciation 100,000 dollars?
Ba: Norment? (laughs)
KJ: We burned it down. We let the fire department burn it down last year.
Ba: I knew it was gone. I drove by there and I was like, Oh! Norment’s gone!
KJ: Because i was wondering. It was always around like 1.48 and then one year it was 1.58 and then it goes back again.
Ba: well, see if we spent some capital money back there when we borrowed that 2 million dollars and we put in new wiring that cost half a million dollars or whatever, that’s gonna end in five years. So that’s fully depreciated, so your depreciation expense is gonna drop. So it just depends on when things happened.
KJ: But we don’t really purchase that much. How can it then be that depreciation never goes down?
Ba: Well, that’s a good question!
KJ: I wish i could get your smile on tape!
Ba: It’s a very good question. I think you should ask somebody that.
KJ: Who would I ask that?
Ba: You can get the depreciation schedules from the University office. They have to keep track of assets.
Br: I have the 990 forms that are kept for the depreciation of the university.
Ba: It doesn’t give you very much detail, does it.
Br: Not a whole lot.
Ba: Because, I know that we had schedules that showed the remodel of this part at the student union and the remodel of this work that was done at McGregor hall or, you know, it’s got those kinds of things and gives you a timeline of when they’re going to fully depreciate. they’ve got that. You can get that pretty easily.
Br: I don’t mean to go off on a tangent on depreciation, but if the whole assets of the college are like 85 million dollars, physical assets, let’s say.
Ba: mmhmm
Br: And if you pay 10 percent. So, you’d have to pay that entire amount back over twenty years in order to fulfill the accounting needs and then at that point your depreciation would then be zero. let’s say you hadn’t bought anything or improved anything.
Ba: Right. Right.
Br: So they just start doing this in 94 and at some point they’re accounting for depreciation. There must be a point where that clock starts, right?
Ba: mm hmm
Br: And i guess since they’ve never done it, I guess that they would say we have to buy a a whole new campus. a whole new physical body in 20 years, is that what they’re saying?
Ba: Yeah. What happened here was that the accounting requirements said you have to account for all your assets, all your depreciation. You have to show it, so figure out what everything costs. I mean, deb carroway could probably remember this a little bit better because we had to develop these fixed asset schedules based on what we had and part of where they started was to get an assessment of, you know we already had X number of dollars on the books for assets. We had to back into that number because it had been kept accounted for to a certain degree, but at some point they had to make some adjustments. So exactly where that asset schedule starts and stops, i don’t know. But you could find that out pretty easily. But see, even on our gap for this non-profit that i work for right now, government entity or whatever you want to call us, over here on the total line. See where total revenues are? those are our total expenses.
KJ: 5.582 Million
Ba: excess revenue over expenses and then housing assistance payments and then depreciation. So, i mean, when my board looks at this line, they’re like, oh, we’re in pretty good shape. What happens on our end of it is that we get capital grants from the federal government that really would be what you would consider if you could get a capital grant to repay this 1.4 million dollars that you’ve depreciated.
KJ: that would make sense
Ba: That would be where the funding would come from to cover that. And that’s what we get. We have a column here that says capital grants. This really just shows what we’ve spent, but on this depreciation line of a 1.36 million, our capital grant for this year was 1.3 million dollars. So that would cover everything that needed to be replaced, you know, if you did it one for one like that.
KJ: What I found interesting in this year’s budget. It’s actually for the first time in 2 years that a budget was even presented to Adcil. That hasn’t happened in 2 years.
Ba: I don’t doubt that.
KJ: And it showed that the depreciation is still in there, of course, around 1.48 million, what we have every year. and it says an expense over revenue of 3 million. And Toni asked the alumni association to provide 2 million in cash for this year’s operating. But if out of the expense over revenue, 1.5 million is depreciation, that means instead, in terms of cash deficit, if the alumni board brings in 2 million, there’s actually 500,000 that we’re not spending. Whereas we’re a closing college.
Ba: Yeah
KJ: Where would that end up? straight to the university?
Ba: Yeah!
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KJ: what do you think is the solution for the college’s problems?
Ba: I think one thing that could be done is that the board reduces the administrative functions at the other campuses to reduce the stress on their revenues. I think that there needs to be some kind of a reasonable, rational and substantial investment in the Antioch College/Antioch goodwill name that the other campuses use and have been using for twenty years or whatever, because all of that goes back to the college. And I think that those programs should be treated as an extension of Antioch College, that Antioch College started and should derive income from. They’ve not been deriving the kind of income that is being made out there. They got a really bad record deal. I don’t mean record record, I’m just comparing it to the old Motown record contracts. They made nothing. The artists made nothing. Well, Antioch College is the artist and I think that the funds that come in should help support this college and the plant that goes along with it. I think that would go a long way to ease some of the difficulties at the college. Again, that’s going backwards with the other campuses and it’s going to be difficult, but nobody seemed to have a problem with making the college go backwards. You know, if it’s one organization, you can’t just dump all of the fixes on one aspect, because if the college were truly getting the revenues from those programs that they should… I mean, if the college were Microsoft, things would be a little different. They’d be getting all the money, and then they’d divvy it back out. So I think there’s a lot to be said for changing some of the ways things are done at the other campuses. I think it’s foolish to think that Antioch College is going to fade away and the McGregor school is going to be here forever. That’s ridiculous! McGregor school was born out of Antioch College and should just be another program of the college. I think if one’s going to subsume the other, the college should remain standing, but there again, that’s just my opinion. And I really do like the programs at the McGregor School, don’t get me wrong, I’m not criticizing the programs. They have good faculty and good programs and I got my Masters there and I’m really glad I did. But there are things that can change.
KJ: Do you think that the subsidies that the college college gets, that the brand makes up for that?
Ba: No. the college doesn’t get enough in subsidies to make up for the benefit that the other campuses have derived. When I was taking classes at the McGregor School, probably 96 percent of the people that were in my cohort didn’t know the difference between Antioch College and the McGregor School. I mean, the McGregor program was a program. You know, people thought they were going to Antioch Antioch (laughs) which around here, that means Antioch College. I’m sure some folks may disagree with that, but…
KJ: How do you feel about separation?
Ba: If the College separates from the other campuses, what are the other campuses going to call themselves? Where are they going to buy their name?
KJ: Well, they have it. they’re the university, we’re the college and we’re not a legal entity yet, so if we separate, either we have to make some sort of weird legal transition or otherwise we’d have to go on under a different name.
Ba: mm hmm.
KJ: Do you think the university can stand on its own? Do you think the college can stand on its own?
Ba: I think the University could stand on its own. They don’t have any physical plant, they don’t anywhere. Other than one building or two. The kind of expenses that the other campuses have, i think could be easily supported by their tuition. The college, if it had a concentrated level of very high giving and developed an endowment that would support a small liberal arts college, yeah I think it could stand alone.
KJ: Even without the name?
Ba: No, I couldn’t agree with… what other name would you have?
KJ: I don’t know, Horace Mann School? It’s just entirely hypothetical.
Ba: No. And just tell me this? Why would the University want to hang on to “Antioch”?
KJ: Probably the brand?
Ba: Exactly! So why should they get it? The college ought to keep it. Let them come up with another Horace Mann School or something. If their tuition is driven by their programs, it shouldn’t matter what they’re called, because that’s what they always say.
KJ: It’s the same that they could say for the college. I’m mean we created the brand, but…
Ba: No, the college. Yes! That’s the difference. First come, first served.
Br: Glenn registered the trademark “Antioch College” for the university to own.
Ba: Did the board approve that? or was that just something he did?
Br: I don’t know.
KJ: We have to go into the minutes. What minutes would that be in?
Br: He did it in ninety…. Let’s see, it expires next year. He did it in 98. It expires in 2008.
Ba: Wow. Well, somebody better be jumping on that.
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KJ: It should be called a what?
Ba: It should be called a residual payment, it could be called a royalty, it could be called whatever makes sense for the value and the benefit that the campuses and the university get from the Antioch College name, that’s what it ought to be called. It’s not a subsidy.
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