Last minute changes took millions more from University of Iowa

IOWA CITY - About two weeks before publicly releasing details about how new enrollment- and performance-based funding metrics could affect Iowa's three universities, the Board of Regents Office first shared that information with officials at each institution.

The numbers showed that, if the model were implemented over one year, the University of Iowa's portion of state allocations would drop by $41.9 million - less than the $47.8 million first projected when the Board of Regents first adopted the new model in June.

Twelve days later, when details about the new performance-based funding model were made public as part of the board's appropriations request to the state, the projected loss to UI was back near where it started - at $46.5 million.

Emails obtained and reviewed by The Gazette indicate that change occurred after outcry from University of Northern Iowa and Iowa State University officials sparked a behind-the-scenes debate that led to revisions in how enrollment will be counted, and thus dollars will be distributed.

'It appears this was just an exercise to reallocate appropriations to benefit Iowa State and UNI while damaging the University of Iowa,” said Sen. Joe Bolkcom, D-Iowa City. 'And we're going to have a debate about it.”

As adopted, the Board of Regents's new performance-based funding model ties 60 percent of state dollars to resident enrollment. That benefits ISU and UNI, which have a greater proportion of students from Iowa.

The new metrics are set to roll out over three years - meaning UI couldn't lose more than $12.9 million per year. And the Board of Regents have asked the legislature to provide an additional $12.9 million for the 2016 budget year to prevent UI from losing any money this first year.

But, Bolkcom said, he believes the model in the long-term could 'damage the state's public universities in a way the public will not be supportive of.”

'It will cause irreversible damage,” he said.

Regent Bob Downer, after learning about the behind-the-scenes change that increased the potential loss to the UI, said it appears there's an attempt to 'back into overall numbers rather than to look at what the aggregate of the individual numbers would actually yield.”

'And the total should not be what we are aspiring to reach,” Downer said, adding that he thinks the board should have taken more time in developing new funding metrics.

'This reinforces the point I have tried to make, unsuccessfully, throughout this process that we are just rushing to judgment for no valid reason whatsoever,” he said. 'To rush headlong into recommending a new model to the governor and the legislature when there are all these questions does not make sense.”

‘Frankly unfair'

After weeks of fine-tuning the new funding metrics to make sure they compare 'apples to apples” regarding enrollment, student access, degree production, and research dollars at the three universities, the Board of Regents Office on Aug. 27 sent the results to officials at each institution.

That document indicated resident students - including undergraduates, master's, doctoral and professional students - will be counted using the full-time equivalent calculation used for the board's annual enrollment reports. That definition for years has calculated enrollments by converting credit hours to an equivalent number of full-time students - 15 credit hours for undergraduates and nine for graduate and professional students.

Due to the high number of graduate and professional students at the UI, including many who take more than nine credit hours, that definition benefited the Hawkeyes. And officials at UNI and ISU took note and voiced their concerns.

'How can a change of $6M that basically affect UNI not be something that is sent out to the Presidents of the three institutions???” UNI President William Ruud wrote in an email to Board of Regents Executive Director Robert Donley at about 9 p.m. on Aug. 27 - four hours after the board sent out its definitions. 'I am very concerned, please advise.”

The next day, Ruud outlined his concerns in an email to Donley, arguing for professional students to be counted by heads, not credit hours.

'That makes a difference of over $2 million for us,” he said.

He said the UI and ISU haven't been using the credit hours definition.

'Now (the UI) wants to use it,” Ruud said. 'This ups their professional student count by over 25 percent.”

ISU President Steven Leath sent an email agreeing.

'I do want to be assured that all graduate and professional students that have nine or more hours are only counted once,” he said.

Leath went on to question how the definitions bolstered the number of UI doctoral and professional students by 500.

'This alone takes $1.8 million away from us and even more from UNI,” Leath wrote.

In the days and hours before that document was released, emails already were circulating around how to calculate enrollment. Ruud on the morning of Aug. 27 sent an email to Donley related to the 'over counting of Professional students at 9 credit hours.”

'This is a significant loss of dollars and frankly unfair,” Ruud wrote.

Donley responded by asking Ruud to 'hold this discussion via phone. Not email.”

Each university had two representatives involved in discussions around defining the funding metrics. David Biedenbach, ISU representative and assistant vice president of financial planning and budgets, in an email sent Aug. 26 said ISU doesn't want to use nine credit hours to define a professional student and instead suggested using total head count or 15 credit hours per professional student.

On Sept. 5 - following days of behind-the-scenes debate - the Board of Regents Office released a new set of definitions that did just that. It changed the way full-time enrollment is calculated, counting undergraduates based on a minimum of 12 credit hours, master's and doctoral students based on a minimum of nine credit hours, and using a minimum of 15 hours for professional students.

Those changes bumped up the amount of money the UI would lose in appropriations, if the model was rolled out over one year, from $41.9 million to $46.5 million. It also increased the amount of state appropriations UNI would get from about $19 million to $23.7 million.

Under the new definitions, ISU saw a slight drop, from $22.95 million to $22.8 million. And both figures are below original projections first issued in June.

Those numbers showed ISU getting an extra $23.8 million, if the metrics were rolled out in one year.

In response to the Sept. 5 numbers, ISU Associate Vice President Miles Lackey sent an email calling the new definitions 'strange.” He said they are inconsistent with the numbers used to model the new metrics in June, they are inconsistent with the way any regent institution reports enrollment, and they do not conform with a national standard.

Leath forwarded those concerns to Board President Bruce Rastetter and President Pro-tem Katie Mulholland saying, 'The new metrics are very strange and do not seem consistent with each other or our mission.”

Rastetter replied, 'I would move on.”

'Certainly the old way $ were distributed didn't match anything and no one liked last weeks model,” Rastetter wrote.

‘Not a simple process'

When asked about the deliberations that prompted a change in how enrollment will be calculated, Board of Regents spokeswoman Sheila Koppin said it was 'not a simple process.”

'The Board Office and the universities had extensive discussions to finalize specific definitions for the metrics,” she wrote in an email to The Gazette.

Scott Ketelsen, a spokesman for UNI, told The Gazette on Friday that UNI approves of the definitions for the funding formula and believes nine credit hours is too low a threshold for professional students.

In the Board of Regents fall 2014 enrollment report scheduled for discussion at its upcoming meeting in Iowa City next week, the long-standing way of calculating professional students based on nine credit hours has been changed to 15 credit hours.