AIB weighed finances, legacy in University of Iowa merger

IOWA CITY - In deciding whether to give their 20-acre campus valued at $21.5 million to the University of Iowa and end a 94-year run as a private institution, AIB College of Business executives considered the school's financial standing, its future viability and its legacy.

A document made public this week shows leaders and trustees with the Des Moines-based college also weighed the potential impact on its 1,000-plus students, 180 employees and decades worth of alumni, but eventually decided to explore a merger with UI.

'It is inevitable that colleges will disappear in the next 5 to 10 years,” according to notes from a special AIB board of trustees meeting Jan. 14 that WHO-TV in Des Moines made public this week. 'This is an excellent (opportunity) to go out in glory, on our terms, before it becomes a crisis.”

AIB President Nancy Williams and UI President Sally Mason announced the merger Monday, but offered few details. Mason said officials aim to complete the merger by June 2016, possibly admitting students to a UI-Des Moines campus this fall.

But the presidents said they couldn't answer most questions about the impact on students, faculty and staff.

That uncertainty prompted a swift response across the Des Moines campus - including criticism from student athletes, coaches and supporters who learned through the documents revealed this week of AIB's plans to 'phase out” sports.

'For most of us, it would make sense to transfer to another school that has athletics, if athletics are dropped here,” said AIB sophomore Brennan Flores, 20, recruited from Ohio to play baseball.

AIB students protested Thursday and Friday, but officials have yet to provide more clarity. AIB spokeswoman Jane Schorer Meisner said an announcement on the future of athletics is forthcoming and the school is working 'frantically” to find answers to other questions.

UI officials said they're forming 10 working groups to address transition issues on student registration, financial aid, housing and academic programming. But it remains unknown whether AIB faculty will become UI employees, how student credits will transfer and what will become of the campus facilities, some of which require upgrades.

Notes from the recent AIB trustees meeting indicate school leadership had the same questions as students and faculty but felt a sense of urgency from UI to announce the deal without the details.

'They're anxious for us to sign the (memorandum of understanding),” one trustee said, according to the notes.

A copy of that memorandum released Friday to The Gazette shows the agreement is not binding until it receives final approval from the AIB trustees and the Board of Regents. It does, however, prohibit discussions with any other party about the proposal.

‘Ripping a bandage off'

During the special meeting, trustees referred to a change in how the regents want to finance Iowa's public universities. The proposed funding model ties a majority of state appropriations to resident enrollment, meaning UI would lose $12.9 million in the first year unless it enrolls more Iowans.

'Iowa has to get more in-state students, and we have 800 of them,” one AIB trustee said, according to the notes.

Trustees acknowledged that UI wants those students sooner than later.

'It's like ripping a bandage off the sore,” according to the document. 'If they could have it by August, they would like it. How willing are they to finish our kids?”

President Williams said Monday the decision to merge was not financially motivated, but trustees during their special meeting mentioned 'operational losses,” mounting expenses, increasing competition and concerns about recruiting.

'The last time we met was to have a three-year plan to go forward and right the ship,” one said, according to the notes. 'What happened? Are financials so bad?”

Some asked why AIB wasn't trying to sell its assets, rather than give them away. But board members discussed the desire to maintain an educational focus for the campus. They also addressed the hurdle of obtaining regents' approval.

'A gift allows Sally to get it through the regents,” according to the notes.

Although trustees acknowledged the deal means the 'end of AIB,” they unanimously agreed to go ahead. Some called it the 'best news of AIB in the last five years” and a 'phenomenal deal.”

The group acknowledged the regents still might not approve it. Regents President Bruce Rastetter attended Monday's announcement and praised the merger, but Regent Larry McKibben told The Gazette he has questions and it's 'a long ways from being a done deal.”

‘heartbreaking'

When discussing the future for AIB faculty and staff, some have asked about the qualifications and requirements for UI professors and instructors. Mason said Monday that UI needs AIB faculty but didn't discuss details.

Dianne Leonard, AIB's faculty assembly president, told The Gazette the merger is exciting and she believes the AIB employees have a lot to offer UI. But she acknowledged the many unknowns.

'Change can be challenging,” she said. 'But with change comes opportunity.”

Still, AIB senior Mallory Henry, 22, called the situation 'heartbreaking.”

'I love this school to death,” said Henry, who transferred to AIB more than a year ago and plans to graduate this spring.

With graduation imminent, Henry said, she's concerned about the merger's impact on her degree.

'I'm about to try and find a job, and now they said AIB no longer exists,” she said. 'What does that do to me? Does my application go to the bottom of the pile? We're going to have to explain what happened to our school, and we shouldn't have to do that.”

Brian Roberts, 20, is in his final year at AIB and said the merger could help him - if he decides to continue his education and if UI offers graduate and professional programs on the campus.

'As of right now, all the students have no idea what they're going to offer,” he said.

Des Moines Area Community College President Rob Denson told The Gazette he has talked with UI officials about the merger and feels it will bolster an already-existing partnership.

'We have been talking with the UI for a year about them wanting to become more active in Des Moines,” Denson said. He acknowledged questions remain.

'But the UI has indicated to me … they don't intend to go into direct competition with us and they want to work with us,” he said. 'I'm taking them at face value and seeing how things evolve.”