Barbara Danley’s Tenure:

The Irreverent, Close-Enough, Razzie Edition

1999 – Wild Wild West

• Barbara Danley begins her presidency at Antioch University McGregor.

2000 – Battlefield Earth

• Barbara Danley refuses the College’s offer of “collaboration.”

2001 – Freddy Got Fingered

• Former McGregor Board of Visitors chairman Bruce Bedford assists CFO Glenn Watts in blaming the College budget for the University financial problems of the year

2002 – Swept Away

• With the assistance of the Board’s Finance Committee, McGregor’s payments to the College are eliminated.
• The College’s IT department is eliminated; Barbara Danley becomes the Chief Technical Officer.
• The College’s CFO is eliminated; Glenn Watts takes over management of College’s budget.
• The University begins to dismantle the College’s Strategic Plan.
• The President of the Dayton Development Coalition (DDC) joins Barbara Danley’s Board of Visitors (the DDC’s goal is to transform Dayton into a model for support of the defense installations).

2003 – Gigli

• Toni Murdock leads cost-cutting team that dismantles remainder of College’s strategic plan

2004 – Catwoman

• Barbara Danley pushes for a separate building to house McGregor.
• Dan Young, later president of the non-profit that donated the land McGregor is built on, lobbies trustees to build the new building in Yellow Springs; later reports indicate Trustees never approved moving McGregor out of Yellow Springs.
• Barbara Danley joins Board of Trustees for Dayton Development coalition.

2005 – Dirty Love

• For McGregor construction, Antioch University partners with development company Miller-Valentine; president William Schneider was a former chairman to Bruce Bedford’s company Flagship Financial.
• McGregor starts capital campaign while the College’s capital campaign falters; donors to McGregor include trustees & regional partners
• In line with its grand tradition of co-optation, McGregor uses the concept of “educational village,” developed by the Yellow Springs community, for its new building and business park, regardless of the fact that the concept from community focused around the College. Members of the nonprofit Education Village Inc. that owns the land around McGregor include former CFO Glenn Watts, and Dan Young, currently a McGregor Board of Visitors member.

2006 – Basic Instinct 2

• In spite of issues and concerns, construction pushes forward on McGregor building;
• University signs contract with Miller-Valentine for the construction of the new building.

2007 – I Know Who Killed Me

• The University announces suspension of operations at the College.
• The University Leadership Council (ULC) develops outline to “reopen” the college without tenure.
• McGregor moves into new building.

2008 – Not Announced Yet, However, The Blaze Proposes Expelled: No Intelligence Allowed

• The ULC opposes Antioch College Continuation Corporation proposals; Barbara Danley was later quoted in the Yellow Springs News as saying, “We didn’t take sides; we were classy.”
• The University closes the buildings and suspends operations at McGregor’s parent and former home, the College.

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An investigation into statements by Antioch University officials during crucial times

or

What are they hoping we don’t find?

During the most famous downfall of an administration, senators at the Watergate hearings asked “What did the president know, and when did he know it?” In the case of the Antioch University Board of Trustees, the question should be amended to include – “Was the information reliable?” Many have questioned the actions and statements of the Antioch University administration during their public efforts to suspend operations at the College, and yet the Board seems to believe only the information provided to them by the current University administration. Many current documents and reports of the University are not available; however with the benefit of budget documents released last year at The Antioch Papers, we can see differences in statements from prior University officials during a key time in the College’s history: the expense cuts of 2001-02. We can also see that some Trustees at the time may have known that the reports approved by the Board contained information that was inaccurate and misleading-Trustees who are still on the Board today.

What follows is an examination into statements regarding what was called the “non-crisis” that year. There are differences in statements contained in multiple reports to the trustees over time, as well as differences in what was reported to the community vs. what was reported to the trustees. The purpose of this examination is not to question the wisdom nor the necessity of past decisions; rather, it is to look at how these decisions and the precipitating events were presented to the College community and to the Trustees.

In October 2002, University Vice-Chancellor and CFO Glenn Watts gave the year-end final financial statement to the board regarding the University budget for 2001-2002. In his narrative, Watts stated the source of the deficit experienced the prior year, losses on the endowment due partially to the stock market ‘crash’ following 9/11:

“On the one hand, 2001-02 produced the largest accrual deficit ever recorded by the University as a result of major declines in the US stock markets. On the other hand, if the investment losses in the endowment are excluded from operations, the financial performance of the University was considerably better in 2001-02 than it was in the preceding year. Paradoxically, the success that the College has had in increasing the size of the endowment has contributed to the appearance of poor financial performance for University operations. The role of the stock market in 2001-02 cannot be overemphasized.” – Glenn Watts, 10/2002, Budget Report to the Board (emphasis added)

With the stock market having such a major impact on the “financial performance” of the University for the year, it would make sense to see that reflected throughout the prior year in the budget reports to the board and the financial statements made to the campus. But just three months earlier, Watts’ year end projection presented to the board barely made mention of the losses on the endowment; his only statement on the stock market was “For the second year in a row, the stock market has struggled unsuccessfully to move ahead.” Watts stated that Antioch College was having budget problems, and these supposed College problems were the cause of the University’s deficit :

“Although the College will experience a deficit in 2001-02 that will likely put the entire University into negative numbers, the new president is pursuing a strategy to control costs while meeting critical needs.” – Glenn Watts, June 2002 Budget Report to the Board, Projected Year-End Statement 2001-2002 (emphasis added)

The message of “College budgetary problems” was the same message carried to the College by the Chancellor of the University in December 2001. Writing a letter to the community eleven weeks after the terrorist attack-related stock market plummet, Acting President Jim Hall wrote:

“Six weeks ago I reported to you the need for us to reassess the College’s planned budget for the current fiscal year to ensure that our expenditures remain in line with revenue. At the time, I reported to the Community a need to adjust our budgeted expenses by about 9%, or $1.8 million.” – Jim Hall, Letter to the Community,12/3/2001 (emphasis added)

One would assume that we could look to our Trustees for real information. But in 2001, the Yellow Springs News reported:

“According to Board of Trustees vice-chairman Bruce Bedford, the trustees mandated the budget cuts at their October meeting because of a significant gap between the college’s projected income and expenses in this year’s budget.” - Yellow Springs News, 12/6/2001 (emphasis added)

Bedford, Watts, and Hall had appeared at Adcil, community meeting, and other special events on multiple occasions following the departure of President Devine. In their presentations, the stock-market related losses were barely mentioned in passing, if at all. What was a hazy picture on campus during that time has become clear with the benefit of the now released budget documents. In a budget report in early 2003, Watts gave the rational for these changes; the expense of depreciation was previously balanced against unspent interest on the endowment, and since there were losses in the stock market that year, they decided to move depreciation into the operating budget of the units:

“Halfway through the 2001-02 fiscal year, the Board changed the way in which depreciation is handled. Prior to that time, depreciation was budgeted centrally with the expectation that gains on the endowment and required savings would be sufficient to cover the expense. Beginning in January of 2002, campuses and other units were required to budget depreciation as an operating expense. As a result, campuses have had to adjust their budgets collectively to absorb about $1.4 million of expense that previously had been carried centrally. By including depreciation within the operating budgets of the individual campuses and units, revenue is committed to cover these expenses.” – Glenn Watts, 2/2003, Budget Report to the Board (emphasis added)

In a College with a budget of $18 million, this was almost a 10% expense added mid-year to the college. Obviously this was a significant expense, yet the Trustees received assurances that the College would receive assistance to accommodate this budget change. In a revised budget largely written by Jim Hall, submitted to and approved by the board, he stated the assistance would come from eliminating overhead payments to the University, along with increasing the subsidy to the college:

“Depreciation is included in these totals. In FY2002 – FY2004, University overhead paid by Antioch College is waived as an offset to including depreciation in the College operations budget. Additional subsidy is provided to balance the complete depreciation cost ($ 1,450,000 in FY2002).” – Jim Hall, 12/2001, REVISIONS TO THE FINANCIAL PLAN FOR FY2002 (emphasis added)

While Glenn Watts paints a slightly different picture, he does state that overhead was eliminated to assist the College in ‘balancing’ its budget. Interestingly, Watt’s statement puts the blame back on the College’s budget by not specifically mentioning the cause of this imbalance, depreciation:

“The Task Force also recommended that the College be exempted from paying overhead during 2002-03 as a transitional device until the College is able to bring its future revenues and expenses into alignment. This indirect subsidy is worth about $800,000 to the College in 2002-03.” – Glenn Watts, 6/2002, Budget Report to the Board (emphasis added)

Examining at the statements, it does indeed appear that the Overhead “To the University” line was ‘zeroed’ out. In 2001-2002, the line item “overhead (…) to the university” showed an expense of $993,411; while in 2001-2002 it showed an expense of $0. However, the “Overhead” category previously included all of the financial agreements between the College, the University, and the other campus, including the revenue agreement with McGregor. The “Task Force” mentioned by Watts recommended the change regarding depreciation and also recommended simplification of the ‘overhead’ category. This category is shown as an ‘expense,’ so support coming to the campus is shown as a negative. The relevant section of the budget is shown in the table.

The total all of the lines that appear in the overhead category shows the college was receiving a budgeted $535 thousand in support at the end of the 2000-01 fiscal year. After the “simplification” recommended by the ad-hoc finance committee, the College received a flat rate $600 thousand in budgeted support. This was only an increase of $65 thousand over the prior year. This could hardly be called an ‘offset’ to the new $1.4 million depreciation operating expense. Without the real offset of the overhead, depreciation was simply an added $1.4 million expense, and sure enough, the June 2002 budget report showed a projected deficit of $1.4 million with no explanation about the cause. Six months later in October 2002, Watts finally reports the real reason the College’s budget showed a deficit:

“When the 2001-02 budget was approved by the Board of Trustees, it was understood that this change in the way depreciation is budgeted would have a significant impact on the College. For that reason, the budgeted deficit was considerably larger than had been permitted in previous years.” – Glenn Watts, 10/2002, Budget Report to the Board (emphasis added)

From the statements above, it is clear that the reports presented to the Board contained contradictory and misleading information, yet they were approved by the Board. The expected defense would be that these reports are so large, these details could hardly expect to be noticed. However, these changes were not management decisions that were presented to the Board; they were recommendations from an ad-hoc finance group formed of many of the trustees themselves, what Watts called the “Task Force”. Its real name was the Financial Stabilization committee, and this ad-hoc group was started by Board of Trustees in June 2001 and included CFO Glen Watts. Minutes from June and July 2001 show its aim was to “restructure budgeting practices,” eliminate “yellow springs functional redundancies,” and achieve a “mandated headcount reduction of 10 people.” It is implausible that the ad hoc committee did not know the details of the budgetary changes they themselves were recommending. Yet reports the reports referenced above that contained misleading and inaccurate information were allowed to be approved by the Board, and it seems that the Board made decisions with drastic consequences based on the information contained in these reports.

Under section 7.2 of the Trustees “Standard of Care”, Trustees are allowed to rely on reports and financial statements presented from select individuals: other Trustees, and members and officers of the corporation including the Chancellor, the campus presidents and the CFO. If a trustee has knowledge that reliance on these reports and financial statements is unwarranted, then a trustee is said to not be acting in good faith. It would appear that members of the ad hoc Financial Stabilization committee had knowledge that the information contained in the reports presented to the Board was inaccurate, but let those reports be accepted by the board. Many of the Trustees who were active on this ad hoc Financial Stabilization group in 2001 are now familiar names: Current Board Chair, Art Zucker, Glenn Watts, Jack Mersalis, and Bruce Bedford.

Two years prior to the Watergate hearings, whistle-blowers released a confidential report to the press popularly called The Pentagon Papers, a top-secret United States government study about the history of the Government’s internal planning concerning Vietnam. The report showed that the government deliberately misled the public regarding aspects of the Vietnam war. In early 2008 The Antioch Papers, a website set up in the spirit of the Pentagon Papers, was served a take-down notice from Antioch University lawyers.

With the University’s efforts to clamp down on the flow of information and free speech, in contradiction to the traditions held by the College, it raises the question: what are they hoping we don’t find?

- Laura Fathauer

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How Antioch University is cozying-up with developers amidst regional military base realignment

By Laura Fathauer

While the country talks of recession, the Dayton region is preparing for a growth of high-paying, high-tech jobs. Along with this is a growth of construction and infrastructure development, some of which can already be seen around Wright Patterson Air Force Base and the Mall at Fairfield Commons.

Many of the jobs gained will need to be filled locally, and area organizations and educational institutions are already creating cooperative educational efforts to address these workforce needs. Almost all of this growth is related to the missions and contractors that will be moving on or near the base. It seems that nothing in the region is untouched by the results of the US Military’s 2005 Base Realignment and Closure process.

Including, quite possibly, a small liberal arts institution in Yellow Springs Ohio, called Antioch College.

Antioch College is renowned for its leftist liberal slant. The college produces educators, researchers, social workers, scientists, musicians, and yes, even a few activists. Antioch College’s location in the picturesque left-leaning town of Yellow Springs is a good fit for the 153 year old school-the town has had weekly protest of the War in Iraq since its start, come sun or snowstorm. With the college’s historic dedication to civil rights activism and critical thinking, it seems implausible that Antioch College would spawn an institution that would grow to have ties to the Dayton region’s efforts to retain and attract military interests and military contractors to the region. Yet that is what has happened.

The college has struggled financially since the seventies when its endowment was mostly spent on the expansion of Antioch. Almost 40 programs, centers, and organizations were connected to Antioch University at its peak; by 1990 only five remained, including the college. In the mid-90’s the college developed a weekend and a masters program to supplement the revenue stream of the college. These programs later spun off into a fully-formed campus of their own in Yellow Springs, Antioch University McGregor, one of the five current adult learner/graduate programs in the Antioch University system.

Antioch University McGregor started to distance itself from the college almost immediately after it was spun off. In 1996 the Antioch University Board of Trustees fired the college president, and the college faculty were angered at the Trustees’ failure to consult with the college prior to this action. The college faculty debated a vote of no confidence in the Trustees, and the Antioch McGregor administration at the time felt this action was perceived negatively in the Miami Valley. The idealogical separation widened over time and eventually became a physical separation when Antioch McGregor relocated their campus to the opposite side of Yellow Springs.

The divide that grew between the two campuses is clear in how 9/11 and the War on Iraq affected the campuses. In the weeks following the 9/11 attacks, college students engaged in a number of activities focused on promoting peace. Students organized a “Convergence for Peace” rally in Yellow Springs, and a few did street performance theater at Dayton Mall. The students who went to the mall wore shrouds resembling burkas to promote cultural understanding, and carried signs, stating “Our grief is not a cry for war.” According to an article in the Dayton Daily News, the students “were spat on.” In early 2003, after the start of the Iraq War, college students again demonstrated for peace at an area mall- this time the mall across from Wright Patterson Air Force Base. Those demonstrators had eggs thrown at them.

Antioch McGregor, in contrast, publicizes their military connections. In a press piece regarding their programs, Antioch McGregor states “The tragic attacks on September 11th signified the need to make national security a top priority and to change the way it is approached. Individuals have dedicated time, changed careers and made sacrifices to ensure the nation is well prepared to prevent future attacks.” Antioch McGregor highlights an alumnus of their Conflict Resolution M.A. program who works at nearby Wright-Patterson Air Force Base. The alumnus developed an evacuation and regrouping plan for the pentagon post 9/11, and worked on security plans for the base. According to the release, the graduate “brought her liberal arts education experience to a conservative career and effectively organized and instructed training sessions for proactive defense techniques.” This release from Antioch McGregor was published in a newsletter from the Greater Dayton IT Alliance, an advocacy and development group that shares offices with an organization called the Dayton Development Coalition.

THE DAYTON DEVELOPMENT COALITION

In 1994, private sector interests created an organization that would become the Dayton Development Coalition (DDC), “a private non-profit organization to lead regional economic development.” Its mission is to support “job creation and prosperity for the citizens of Dayton.” A year prior to the creation of the organization, the US military went through its third round of the US’s Base Realignment and Closure process. More commonly known as BRAC, the military’s process started in 1988 under the United States Federal Government. BRAC’s purpose was to close excess military installations and realign assets in order to save money and achieve maximum efficiency, in line with Congressional and Department of Defense (DoD) objectives. It is unknown if the creation of the DDC predecessor in 1994 was a direct result of the third round of BRAC in 1993. But in 2002 after congress announced the fifth round of BRAC would occur in 2005, the DDC started planning for the process. The coalition established the Wright-Patt 2010 commission, a group of “volunteer community leaders and elected officials.” The DDC’s intent was that the Wright-Patterson Air Force Base (Wright-Patt) would not only have zero job losses in the 2005 BRAC, but that it would gain jobs as well. This commission also planned to look out for the interests of the Springfield Air National Guard base.

The WP2010 Commission was a “pretty closed effort” until after the initial 2005 BRAC closure and realignment recommendation list was released, according to a statement on the DDC’s website. Along with saving military “missions” and the associated jobs from leaving Wright-Patt, the WP2010 commission also wanted to establish the base as “a receiver site for work moved from other bases.” In prior BRAC rounds, recommendations to move missions to Wright-Patt were overturned with criticisms that Dayton lacked the workforce and contractor infrastructure. From its start, the WP2010 commission intended to counter those criticisms prior to and during the 2005 BRAC round. In the initial 2005 BRAC recommendation list, both Wright-Patt and the Springfield base were slated for “realignment”, which meant jobs would be cut or transferred to other bases. Upon receiving this list, the WP2010 commission and the DDC kicked into full gear by organizing a “regional effort” to lobby the BRAC commission on behalf of Wright-Patt and the Dayton region. During the process, the commission would also have to take up the cause of saving the Air Force Institute of Technology, a graduate program located on the base at Wright-Patt.

By most measures, their efforts were a resounding success. The Dayton Daily News declared “A Big Win for Wright Pat” (sic) after the BRAC Commission voted on its final revised recommendations. There were no losses at the Air Force Institute of Technology nor at the Springfield base. Losses at Wright-Patt and in Kettering were more then offset by the jobs saved and gained at WPAFB. In September, 2007, the Dayton Business Journal stated that BRAC will bring 5000 jobs, $1 billion in contracts to the region, along with an additional 700 IT jobs from Boston recruited following BRAC. The estimate for construction costs to prepare Wright-Patt for realignment was budgeted at $335 million. Increasing the jobs in the region has a secondary benefit as well; in 2003 local military and civilian retirees received $633 million in disbursements. As the “baby boomers” age, this economic impact will also grow; a 2003 estimate was that 67% of the civilian workforce employed by the military would be of retirement age by 2007.

ANTIOCH CONNECTIONS

In 2003, Antioch McGregor wanted to expand their presence in the Dayton Region. In planning its future in the region, the school undoubtedly worked closely with its Board of Visitors, made up mostly of area businesspeople and two Antioch University trustees. Joining the Board of Visitors that year was Ronald Wine, the President of the DDC. An Antioch McGregor press statement indicated that Mr. Wine was a “welcomed addition to the board at a time when Antioch University McGregor is planning for increased exposure locally and regionally.” Ron Wine was also on the WP 2010 commission, which was in its second year of preparation for BRAC. The President of McGregor, Barbara Gelman-Danley, would later reciprocate by joining the Board of Directors of the DDC in 2005, a position she continues to hold today.

If the only connection is that a campus president is on the board of a regional development organization, it could be set aside as a coincidence. But the connections between the region’s most powerful development and defense lobbying coalition and Antioch University are deeper and go back even further than 9/11. Consider:

• In the mid-nineties, early in Antioch McGregor’s history, Bruce Bedford joined the McGregor Board of Visitors and would become its Chair. Bruce Bedford then later moved up to the Antioch University Board of Trustees, of which he is still a member and treasurer. Bruce Bedford was the president and co-founder of investment group Flagship Resources Inc., a company spun of of the Mead corporation located in Dayton.
• When Flagship Resources was acquired by The John Nuveen Co in 1998, Bruce Bedford managed the consolidation and became responsible for overseeing the combined funds. Joining Bedford in the transfer from Flagship to Nuveen was William Schneider, the chairman of Miller-Valentine Partners Ltd, a real estate investment company. Today, Miller-Valentine Partners Ltd. operates as the Miller-Valentine Group, a design/construction/development company.
• William Schneider was a trustee member of DDC from at least 2002-2005, and is also a past chair of the trustees; according to some reports he has also held the position of Director of DDC.
• Ron Wine was Director of DDC during the years William Schneider was a Trustee and Chair of the DDC. During this time, Ron Wine joined Antioch McGregor’s Board of Visitors.
• The Miller-Valentine Group is responsible for the construction of the new McGregor building, and is managing the development of the Education Village, the business park where Antioch McGregor is now located
• Glenn Watts, former Vice-Chancellor and CFO of Antioch University, retired from Antioch just prior to the construction of the new McGregor building. Glenn Watts was one of the founding Board members of the Yellow Springs organization called Community Resources, and became the secretary of Community Resources after retirement, a position he still holds. Community Resources owns the land for the Education Village, and donated 10 acres of the Education Village to Antioch University McGregor for their new building.

Both Watts and the Miller-Valentine Group have expressed their desires to market to the defense contractors and other organizations that BRAC is bringing to the region. “If BRAC comes to the area, I would like to see them come to Yellow Springs,” stated Watts in an interview with the Yellow Springs News in January 2008. In an interview with Gerry Smith, current Vice-President for Miller-Valentine Reality, the Dayton Business Journal reports that Miller-Valentine will also be marketing the Yellow Springs park to the businesses brought in with BRAC. From the DBJ article: “While some companies may choose to locate in the hustle and bustle of Beavercreek, others will choose the laid-back atmosphere of Yellow Springs, Smith said. ‘Not everyone wants to fight the congestion of the Fairfield Mall,’ he added.”

Connections Map

REGIONAL TRANSFORMATION

The same year that Gelman-Danley joined the DDC Board of Directors, in 2005, the DDC started developing the ‘regional’ part of their vision. It initially formed a committee of eight regional representatives: one business leader and one elected official from each of the Greene, Montgomery, Clark, and Miami counties. After BRAC, DDC continued this regional ‘marketing’ in efforts to recruit contractors and other business associated with the missions that are moving to Wright-Patt. The signing of BRAC into law didn’t halt the Wright-Patt planning by the DDC; recently the DDC has announced a revision to its WP2010 commission, the Wright-Patt 2020 Initiative. With this initiative, the DDC wants to capitalize on the BRAC gains by recruiting jobs and business to take advantage of the research and development at and around WPAFB.
This integration of the Dayton region with Wright-Patt is not a coincidence; the DDC is championing this vision as the future for the region, and even as a model for defense installations around the country. From the DDC’s current website:

Our approach to supporting our defense installations begins with two key factors: first, that all sectors of our community – academic, business and government – are unified in our efforts to work with and support our installations. Second, we have developed an overall regional plan for economic development that integrates the interests and missions of the DoD into our own strategies and plans. Local support for our installations is successful because we understand the goals and strategies of the DoD at large. We believe local support serves as the foundation for the DoD’s ultimate success in achieving its goals – and we believe the Dayton Region’s model, as illustrated above, can serve as a national model for Military Transformation and Jointness as we commit resources to our local installations across the gamut of support and infrastructure needs they may have.

ANTIOCH’S FUTURE?

In 2002 Antioch University was dealing with financial problems related to the 9/11 stock market crash, like many other educational organizations. With the university suffering from weak leadership, the Board of Trustees temporarily gave Bruce Bedford (then chair of the finance committee of the board) the powers of the University Chancellor, and Bedford and Vice-Chancellor Watts led an effort that consolidated power to the University Administration. The actions at this time also had two other results unrelated to the financial problems: the college’s strategic plan was abandoned; and the power of the university’s policy committee, the University Leadership Council (ULC), was increased. (Mcgregor president Barbara Gelman-Danley is one of 7 ULC members, which consists of the five campus presidents, the university chancellor, and the university CFO.)

Antioch McGregor’s Groundbreaking

Seven years after the 2005 BRAC was announced, the Antioch University Board of Trustees voted to close Antioch College, and Antioch McGregor is moving into a new building constructed by the Miller-Valentine Group. Under the ULC’s plan, the college was to be closed from 2008 to 2012, the same years that BRAC realignment is legislated to occur. The ULC’s vision for the future of the College was this: “a developer might emerge with the concept of developing a new urban village on the Antioch College site;” “This is a vision to create a lifelong learning center where graduates and professionals can come to enhance their careers and lives. This will require non-profit private partnerships and might include the following: increased density of the current campus and opening up remaining areas to build affordable faculty and retiree housing.” The June 2007 Yellow Springs Chamber of Commerce minutes report that in Toni Murdock’s presentation to the Chamber (the current Antioch University Chancellor), she stated that the University had already been in contact with development companies that have done this type of work.

The current director of the DDC is apparently on board-J.P. Nauseef, who was COO under Ron Wine in 2003, views Antioch McGregor as the way to carry on Antioch’s legacy in the region, according to an article in the Dayton Business Journal. It comes as no surprise that Antioch McGregor is hosting an event coordinated by the DDC on March 14th, aimed at briefing Greene County business leaders on the preparations for BRAC. The economic development associated with BRAC will have great impact on the region and on Yellow Springs.

But at what price?

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The Trustees have three full-board meetings each year, in October, February, and June. The October board meeting is traditionally in Yellow Springs, and the two other meetings rotate between the other campuses of Antioch University. The Board meeting runs from Thursday morning to Saturday noon.

Prior to the Board of Trustees meeting, the Antioch University Chancellor, Vice Chancellors, and the presidents of the campuses meet on their own in the same location. This group of Antioch University administrative officials is called the University Leadership Committee, or the ULC. The ULC was established during the “de-centralization” of Antioch University, which created the non-revenue-generating central administration separated from the revenue-generating educational campuses. In the years immediately following decentralization the University was a loose association of the campuses, and the intent of the ULC was to only recommend university-wide policies and procedures to the Board of Trustees for the Trustees’ approval. In recent years as the University’s central administration grew in power, so too did the ULC, and it has transformed from solely a policy-recommending committee to one that sets and approves policy and procedures. In early 2007 the ULC, under the leadership of the Chancellor, created and approved a vision for Antioch College and a plan for its reopening in 2012.

There are currently about nine committees of the Board of Trustees, and at any given time one or two ad-hoc committees or subcommittees. A detailed list and descriptions of the committees follows the end of this article. These committees are the Executive, Finance, Trusteeship, Development, Communications, Academic Affairs, Investment, Physical Facilities, and Compensation.

The Board or one of the committees creates ad-hoc committees or sub-committees as short-term groups to either address specific issues that don’t fall into the regular committee structure, or to highly focus and work on a specific issue in a short period of time. For example in 2001 the Finance Committee created a Financial Stabilization project as a reaction to the projected deficit of 2000-01; this work group was formally established as an ad-hoc subcommittee of the Finance Committee in the Fall of 01. This is the sub-committee whose recommends included putting depreciation into the operating budget of the College and consolidating administrative functions in Yellow Springs; such recommendations would normally be administrative decisions of the University and didn’t fall under the normal charge of any of the regular committees of the Board. The meetings for the Board of Trustees traditionally begin and end with the full board gathering, with the middle part of the meetings the time when the committees of the Board meet. As a single member of the Board may be on multiple committees, the committee meetings generally happen in two rounds, with some of the committees meeting first, then musical chairs as the Trustees rearrange themselves so some of the other committees may meet.

Thursday officially starts with an open full-board session after a closed session of the Executive Committee early in the morning. The Board meeting usually opens with comments or a report from the Board Chair then moves on to the Chancellor’s report. Often times this will also be the day that the campus presidents present their University-approved reports. The Board will break into committees Thursday afternoon and Friday, with occasional full-board or other sessions scattered throughout. The committees review old business and discuss new business, and many prepare their own committee report.

Saturday is a short day, but is normally the day that full-Board decisions are made and resolutions are passed. It usually starts with a short Executive Committee session, then proceeds as a full Board session until the formal close of the meeting. Resolutions are presented and voted upon, sometimes in closed session. The committees also present their reports back to the full Board. After the formal close of the meeting, the Executive Committee of the Board has one final meeting.

As recently as January some Trustees have stated that the only times committees work in ‘closed’ session are when they deal with personnel issues, however this policy is not reflected in the Board’s past practices. As early as 2001, the Finance Committee and other Board Ad-Hoc committees established a pattern of operating in closed session. Throughout this decade, operating in closed session has become the norm for the Finance Committee, rather than the exception.

In the last year or more, while Antioch College was almost entirely unaware of the gravity of the financial problems the Board reports it was dealing with, several committees meet “as the whole board” instead of just the designated committee membership to deal with the institutional issues. These committees include ‘critical’ visioning and planning committees, including the finance and development committees.

In the critical Board meetings leading up to the Trustee’s vote to accept the University’s proposal to close the college, the Trustees met as a whole for almost the entire meeting. A good portion of these meetings were under the guise of the Finance Committee (chaired by the Treasurer of the Board Bruce Bedford). Since the Finance Committee now normally operates in closed session, this had the effect of closing large parts of critical Board meetings.

During critical meetings, the Board has delayed any news of major resolutions until they formally release a press statement; this occurred with the closure announcement in June 07 and also with the Agreement in Principle following last October’s board meeting. For this weekend, we can expect critical sessions of the Board will happen behind closed doors, most likely with the entire Board present. My belief is that the Saturday session will be entirely in closed session, and that we will only know the results of this meeting when a press statement is distributed.

According to the most recent set of bylaws available, the board committees are as follows:

Executive: responsible for “the general control, management and regulation of all matters pertaining to the Corporation” during the intervals between the meetings of the Board of Trustees.

Compensation: annually reviews with the Chancellor the performance and compensation of the officers of the corporation and shall reports any recommendations for adjusting their compensation.

Physical Facilities: reviews all proposed acquisitions, dispositions, and capital improvements to the physical assets of the University and proposed facility leases.

Finance: Reviews and recommend items relating to the budget, finances, financial decisions, and accounting reports. Reviews and recommends changes to the financial control and accounting systems of the university.

Development: considers matters relating to the development of the University and recommends policies and programs concerning constituent and community relations and all fundraising activities for annual support and capital development.

Investment: reviews the investment performance of endowment and other investment funds; makes recommendations related to the same.

Communications:reviews the exchange of information between the university’s multiple constituencies; recommends for approval any public relations and marketing campaigns on behalf of the University.

Trusteeship: identifies and recommends potential new trustees.

Academic Affairs: studies and appraises the quality of the academic program, formulates enrollment goals and recommends adoption of appropriate policies or directives, reviews & recommends new programs and also faculty tenure.

- Laura Fathauer

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• Highs and lows in the size of the entering class;
• Retention highs and lows;
• Two or three years of balanced accrual budgets, along with five years of a deficit budget;
• The college had enough cash for operations, and five years later was forced to close its doors.

With a basic understanding of how each of these issues interacts with the others, it is unsurprising that each one of these events at their ‘highpoint’ occur very closely with the ‘highpoint’ of the other events listed.

Ultimately the College requires money to run and the situation we find ourselves in now, is largely caused by financial problems. With that in mind, we’ll start with a brief outline of the major events and financial decisions over this period:

1996-2000

The Strategic Plan of Antioch College was developed by extensive consultation with the community. Rising enrollment due to measures derived from the Strategic Plan contributed to the College having a balanced budget in FY99 and FY00. However, the margins in these budgets were still thin.

2000-2001

The Board approved a build-up in admissions to increase enrollment. Meanwhile, skyrocketing fuel prices raised the expense of running the physical plant of the College. These two expenses pushed the College back into a minor deficit.

September 2001

The stock market crashes (after 9/11).

October 2001

Depreciation, a required accounting expense, is divided up among the University’s internal units, based on the resources the respective campuses used. This one-time decision shifted a yearly $1.4 million expense, half of the overall University deprecation expense, from the University-wide budget to the College budget. (This was previously budgeted as a “University-wide” expense since, according to University Budget Reports from that time period, “the University is one corporation, and all of the assets are held by the University.” As revenue was generated locally at the campuses, not in the central University, the University used other sources, such as increases in the value of investments, – including the endowment- to offset the accounting expense of depreciation. When these investments lost value following the stock market crash, the University had no revenue source to offset the expense of depreciation.)

February 2002

As part of University-wide financial cuts mandated by the Board, intended to make room in the College budget to accommodate depreciation and other revenue, an expense-reduction plan was developed. As part of this plan, vacant positions could not be filled, some faculty were given early retirement, and cuts affected Admissions’ budget and staffing.
It is important to note that this was a 3-year plan; The College would ‘work towards’ getting out of deficit budgeting, and not have a balanced budget until 03-04. (We will call this plan the 02SP for short, i.e. the 2002 Stabilization Plan).

February 2002

The Board received and approved an Admissions proposal to increase enrollment at the College. Only one of the two parts of the plan was implemented –meeting 100% of student need. The build up in admissions (in retrospect possibly the more important part of the proposal) was not fully implemented due to the cuts mandated by the 02SP.

Fall 2002

In the 2nd fiscal year of planned deficit budgeting, the University had its 10-year accreditation review. While the accreditation team did not have any issues with the academic program of the College, they were concerned about the financial state of the University and the shortage of resources. A 2-year follow-up ‘inspection’ was planned for 2004.

February 2003

The College’s 150th anniversary prompted the Board and the President to create the Renewal Commission.

November 2003

During the Renewal Commission, the Chancellor of the University decided that incremental changes at the College would be insufficient to put the College back on stable footing. It is very likely this decision came with the anticipation of another round of expense cuts at the College, and kept in mind the accreditation ‘revisit’ scheduled for the next year.

January 2004

A decrease in revenue leads to another expense cutting plan, which is led by Toni Murdock of the ULC. The loss in revenue is attributed to the Board approved admissions plan to meet 100% of need; the plan actually reduced available tuition revenue at the College. (We’ll call it 04SP, i.e. ‘04 Stabilization Plan)

June 2004

The Renewal Commission’s plan, heavily dependent on gifts to sustain the College through the ‘rebuilding,’ is approved. Again there was very little margin to accommodate ‘extraordinary’ events.

June 2005

Entering student class hits low of 60 students.

June 2007

Board announces decision to suspend operations at the College

October 2007

Alumni Board presents business plan for sustainable operations at the College.

One definition of Strategic Planning is, “an organization’s process of defining its strategy, or direction, and making decisions on allocating its resources to pursue this strategy, including its capital and people.” Using the loose concept of ‘strategic’ decision-making, we can start to classify some of the decisions as ‘strategic’ and some of the decisions as ‘non-strategic,’ (and do so without prejudice). Obviously, the 1997 Strategic Plan can be classified as a strategic decision, but what say of other major decisions?
One of the first things that jumps out is the 2002 Depreciation decision. This decision during this particular year was based in response to a problem caused by a single event: the stock market crash. This decision was made without knowing the effects on the resources and the program and was a short-term decision made on a sudden problem. With regards to the College program, this can easily be classified as a non-strategic decision.
What this case also highlights are the initial problems these decisions are intended to solve. The 2002 depreciation decision was done to (partially) solve a one-time, “extra”-ordinary problem, which meant that this wasn’t a “chronic” problem.
By contrast, the Strategic Plan had as a goal resolving two chronic revenue problems at the College– an enrollment shortfall, and a small endowment. The Renewal Commission identified three perceived chronic problems: a campus culture, a poorly maintained physical plant, and a revenue problem based on enrollment shortfall; however it only initially attempted to resolve the first two of these issues, believing that the third problem would, after 5 years of deficit spending, be resolved.
Looking at the 2002 stabilization plan (02SP), we can see that the source of the problem was a 1-time, external, cause. Thus this expense reduction plan was not in response to chronic budgeting problems at the College, nor at the time was there projected to be a long-term revenue shortfall that required such an expense reduction. Likewise with the 04SP, the source problem was a Board approved increase in student aid, and the 04SP dealt with this unexpected shortage in revenue by again cutting expenses. In fact, most all the decisions made between 2001 and 2004 all had lasting effects, mostly negative.
The final period to examine is the time between the last two major decisions made– the 2004 Renewal Plan and the 2007 Closure. Using a loose description of Catastrophe Theory; any major catastrophe is a series of smaller failures. Between 2004 and 2007, it was not a single event that destabilized College budgeting. Rather, it was a confluence of events–some predictable, yet unanticipated– that threatened the stability promised by the Renewal Plan. The previous years of expense cuts reduced Admissions resources to recruit for the new plan. In addition, the top-down, secretive development of the curriculum meant that the College community at large, not just Admissions, had little knowledge about the direction of their school. In the 2002 Admissions Plan, one of the Admissions metrics for Antioch’s success was converting prospective students who visited campus into applicants. For almost a year and a half these “prospies” visiting campus very likely received the same insufficient amount of information about the future of the program, as did “prospies” who didn’t visit the campus. Absent concrete information about the future shape of the College program, new student enrollments to the College dropped from 186 in Fall 2003 to 60 in Fall 2005.
There is one decision we haven’t examined yet: the one that has not been made. The Board will be deciding to rescind the suspension of operations and approve the Alumni Board’s plan. The Alumni Board’s model has acknowledged the chronic problems of the small endowment and the alienation of the Alumni. The Alumni Board’s goal is to get the College on solid footing with an endowment and improved capital resources by increasing Alumni and other giving. The Alumni Board’s model has provisions for continuing operations during this rebuilding. It has been 10 years since the board has been presented with a plan that has directly identified the true, chronic problems, along with a way to resolve them.

- Laura Fathauer

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