Two documents displayed at the Mar. 28 Faculty Senate meeting are helping shed a different light on Butler University’s tuition increase for the next academic year.

The documents provide a list of 25 schools Butler most often competes with for potential students, or the most common cross-applicant schools.

One compares tuition and monetary costs of attending those universities versus those for attending Butler while the other looks at how many students Butler wins from and loses to those 25 schools during the application process.

Bruce Arick, vice president for finance, presented the documents at the meeting.

Arick said this information is compiled to help assess how Butler officials should adjust tuition each school year.

Looking at the books

According to one document, each Butler student is paying $33,138 in tuition and fees for the 2012-13 school year. When that figure is compared to the tuition statistics from Butler’s 25 most common cross-application schools, Butler’s tuition ranks ninth highest.

“We feel pretty comfortable there,” Arick said. “We’re not trying to proactively move up or move down (the list).

“If we were to move down, would that be a bad thing? No, not necessarily.”

Of the 10 schools Butler has the most cross-applications with, only three—DePauw University, University of Dayton and Marquette University—have higher tuition than Buter this academic year.

Dayton’s and Marquette’s 2012-13 tuitions, however, are within just a few hundred dollars of Butler’s—and it has been that way for several years.

Arick said this statistic is merely a coincidence.

“We don’t work with those two schools to plan (tuition increases),” Arick said. “We don’t know what they’re going to with their tuition increases until they actually announce them.”

But Arick also said Butler officials use cross-application information to better understand which schools they’re competing against for students and how Butler compares to those universities price-wise.

“We overlay (the documents) to say, ‘Okay, we kind of know who our top 25 are and how we’re competing. How are we price-wise with these schools, from the sticker price?’” Arick said. “Between the two (documents) is really a pretty good approach for us to consider what we should do tuition-wise for the upcoming year to compete with the schools we compete for students with.”

Tuition based on class size

Arick said another major factor under consideration each year is if Butler is meeting its target class. He described not meeting a target class as “a big red flag for schools and their pricing strategy.”

Butler’s target for this year was 1,000, which was surpassed by 111 students. Since Butler has been hitting its target freshman classes consistently in recent years, officials have been able to raise tuition.

That may not be the case at other schools, Arick said.

“Interestingly enough, if you look at some of the schools that have announced very low price increases or zero (increase)—and I would not put Purdue in that category—it would not surprise me if you found they’re not hitting their enrollment targets,” Arick said. “It’s a significant variable, especially at private schools.”

Many of Butler’s top 25 cross-application schools have steadily raised tuition year after year since the 2007-08 school year. In fact, of Butler’s top 10 cross-application schools, only Miami University of Ohio has had any sort of tuition freeze in that timeframe.

Butler’s main competitors in that top 10 have been Indiana University and Purdue University.

Competing against the freeze

Indiana has maintained the top spot in number of cross-applications with Butler since 2004. Purdue has held the second spot on that list since 2004.

Butler and Indiana shared 1,387 applicants in 2012. Of that number, 19 percent ended up enrolling at Butler, 28 percent at Indiana and 53 percent at a third school.

Butler wins over a few more students when it comes to competing with Purdue, gaining 21 percent of the cross-applicants between the schools.

One reason some students, specifically in-state ones, choose Indiana or Purdue over Butler is lower tuition.

“If you were to look purely at cost, especially if you look only at the sticker price, there’s no comparison,” said Tom Weede, vice president for enrollment management. “What we try to do is make sure we talk about more than just cost and the value that comes out of a Butler education.”

Weede said Butler’s ability to offer students more financial aid is one way in which it attracts some cross-applicants. He said the school is putting $54 million toward financial aid for the 2013-14 school year.

More for the money

For out-of-state students, Arick said Indiana’s and Purdue’s tuition prices are far more comparable to Butler’s.

For example, in the 2009-10 academic year, Indiana’s in-state tuition was $8,613. However, out-of-state tuition was set at $26,160, a figure that didn’t leave such a wide gap in tuition between Indiana and Butler.

“We love going head to head with Purdue and IU on out-of-state students,” Arick said. “The price point is not as big of a variable for those students.”

Weede said Butler’s admissions office works hard to help potential students and their parents look beyond the hit their pocketbooks could take if they choose Butler.

Weede said he thinks Butler’s on-campus environment is something that draws many students who also apply to schools like Indiana or Purdue.

“One of the things I think is great about Butler is people like being here,” Weede said. “The classes are smaller, and the relationships with faculty members are more personal.”

State of the economy

Arick and Weede said Butler officials have to contend with the economy when considering tuition increases.

Arick said he believes the days of Butler raising tuition by more than 4 percent from year to year are limited.

“We can’t ignore general economic conditions that our students and families are subject to,” Arick said. “It’s a balance we have to maintain.”

Weede said he always remembers a discussion he had with a guidance counselor while working in Carroll College’s admissions office when thinking about tuition increases.

“He had a daughter enrolled in the school, and he said this with love: ‘I think you people sit around and say it’s only 4 percent. For me, it’s $1,000,’” Weede said. “I’ve tried to never lose sight of that.”

Butler University is undergoing a revenue and expenses review by an independently-hired consultant.

Michael Leardi is working alongside Bruce Arick, vice president of finance and administration, and Provost Kathryn Morris while collecting the university’s financial data to create a cost of education model.

The work group conducting the review will also include Doug Spaniol, vice-chair of Faculty Senate; Brynnar Swenson, assistant English professor; and Anne Kelly, assistant accounting professor, along with other staff members throughout the university.

Leardi spoke with Faculty Senate at Tuesday’s meeting to share his model and hear some thoughts and answer any questions the faculty had.

“I really try to focus on the growth-contribution margin,” Leardi said, “things that the academic areas and other administrative areas really have some level of control over.”

Leardi said in his presentation that he will summarize revenues and expenses for each major and subject that students take.

Arick also answered questions on topics Leardi was not familiar with regarding the campus.

“We’re sitting at the foothills of a vision for growth,” Arick said. “We need to find out where we want to grow.”

Vivian Deno, associate history professor, inquired whether his review would look into how much the university pays some of its professors and other members of staff.

“I want to make sure this doesn’t become some sort of unfortunate affair in regards to the surveillance become some sort of unfortunate affair in regards to the surveillance of the faculty,” Deno said.

Kathryn Morris, provost and vice president for academic affairs, discussed Butler University’s academic mission at yesterday’s Faculty Senate meeting.
Morris and Bruce Arick, vice president of finance and administration, have been developing a plan that will provide a total review of the university and its financial state.
The report, titled “Cost of Education Model,” will be conducted by Michael Leardi, who will work independently.
“It takes the academic mission and places it at the financial centerpiece for the model,” Morris said. “The six colleges will be the focus, then everything else in the university will be the overhead.”
Morris said the review process should begin in February and will be finished in a time estimate ranging from six months to two years.

After beating out more than 100 applicants, La Veda Howell was appointed as the new executive director of human resources and will begin work at Butler University, Dec. 17.

Howell was one of three finalists.

“La Veda just displayed some wonderful leadership characteristics,” said Bill O’Donnell, College of Business graduate program director.

O’Donnell said Howell is perfectly capable of standing up to educate, explain and help people understand why human resources makes certain decisions.

“I think after a short period of time, very few people on this campus will have any doubts as to what HR can do for them as far as a resource,” O’Donnell said.

Howell’s duties will include managing compliance and government work, compensation and benefits, and helping the vice presidents and deans hire the faculty.

Bruce Arick, vice president of finance and administration, said he saw strength in Howell’s interactive skills.

“Human resources is one of those areas where you need to be able to interact with folks,” Arick said. “Not just lead, but interact.”

Howell spent 12 years in the private sector, working for Brightpoint Inc. in many different director positions. She also worked for a year and a half at Ivy Tech as executive director of human resources.

Arick said he hopes Howell can bring her for-profit background and experience at Ivy Tech to Butler’s human resources.

Howell said she is most excited about finding ways to create new opportunities.

Howell also said she’s focused on acting as chief diversity officer in her new role.

“That diversity would be that area I am most excited to come to Butler and be a part of because my background is heavily entrenched in that area of diversity,” Howell said.

Howell chose Butler because of the university’s values.

“I choose Butler from the perspective of looking at what Butler stands for,” Howell said. “Their mission, their vision and their values line up with mine, and you can’t say that for every institution.”

Howell said she already has goals planned for when she arrives.

She said she hopes to build relationships and to incorporate the strategic vision in the human resources department.

The search for Butler University’s new executive director of human resources is drawing to a close.

Search Committee Chair Bill O’Donnell said he is very confident the new director of HR will be named before the end of the semester.

“It’s very visible that all the candidates we are considering bring great experience and different perspectives to this role,” O’Donnell said. “They have all proven themselves to be very skilled communicators and any of them would be very successful in the position.”

The position has been vacant most of the semester after Jonathan Small stepped down.

The specific duties of this job include the recruiting, hiring, training and development of Butler employees; the arrangements of pay packages and benefits; and oversight of Title IX requirements and legal work.

The director of HR works under Bruce Arick, vice president of finance and administration.

Arick said he hopes to see the position filled by a strong leader with good social interaction skills and a vast knowledge of policies and procedures.

“This person will be very relational on campus,” Arick said. “HR touches all employees, so I want there to be a high comfort level between them and the staff and faculty.”

O’Donnell said the best way to describe the role of the director of HR is “the chief people officer.”

The person fulfilling this role will serve as a direct line between President Jim Danko and staff and faculty, O’Donnell said.

O’Donnell said changes described in the Strategic Plan make the position especially important.

“We need someone to be able to sit down with President Danko and explain how faculty and staff will react to these changes,” O’Donnell said. “When it comes to change, the absolute worst thing you can do is just drop it on people.”

Arick said students will also benefit from the filled position.

“This person will be physically visible to students’. However, there will also be a sort of ripple effect that will affect them specifically,” Arick said. “With a strong, well-trained and well-developed staff, students will be able to have a better experience on campus as well.”

Arick said he wants to have the chosen candidate in office as soon as possible.

“I would love to have the chosen candidate in the job by the end of the calendar year,” Arick said. “I think it’s safe to say that, at the least, we’ll start out second semester with a new director of HR.”

O’Donnell and the search committee plan, on conducting their final interviews soon.

Butler University’s endowment totaled $150 million as of August 2012, but President Jim Danko’s strategic vision wants to increase it to $750 million by 2025.

In order to achieve this goal, Butler’s endowment would need to grow by more than $4 million per month, on average, from September 2012 to 2025.

During Butler’s last fiscal year—Danko’s first year in office—the endowment lost $15 million.

Danko did not respond to The Collegian’s request for comment.

Ben Hunter, chief of staff, said Butler is in the process of developing a plan and assessing how the endowment will grow more than $600 million in 12 years.

“We’re holding forums,” Hunter said. “It’s one of those stretch goals, as the president has said before, but it’s one that is something that we have to have out there for people to understand—that the endowment is important for the health of this institution.”

Growing Butler’s endowment will be critical to achieving Danko’s goals, Michele Miller, executive director of constituent services, said in an email.

Hunter said educating people about Butler’s endowment will be essential to growing it.

“It’s educating folks (about) what the endowment does for the institution and how folks can participate, contribute and be life-long givers to the university,” Hunter said.

The endowment grew $5 million from May 31, 2012, to Aug. 31, 2012, the last period surveyed.

Bruce Arick, vice president of finance and administration, said the endowment will continue to grow mostly from new gifts but also from having a net gain in the return on Butler’s invested endowment.

“The economy impacts the general condition of the endowment,” Arick said. “We’re trying to balance risk with trying to optimize return.”

Arick said Butler’s endowment is invested in a diversified portfolio with more than half of Butler’s investment in domestic and international equities or stocks.

Every Dec. 31, administrators survey the last 12 quarters and determine what can be spent during Butler’s next fiscal year, Arick said.

In order to keep from losing money on investments or cutting into the endowments, Arick said Butler can spend 5.4 percent of its endowment this fiscal year.

“Anything that we’re spending now is benefiting the students in some way,” Arick said. “Aid is probably the most direct way in which students are benefiting.”

$2.4 million of the $51.8 million financial aid budget is expected to come from the endowment this year.

Hunter said one thing administrators are evaluating is how a growing endowment could change or lessen the cost of tuition.

Aside from financial aid, the endowment is also spent on things with no restrictions, such as Butler’s budget and investments.

Other endowment gifts have various restrictions, such as paying the salary of an endowed chair of a department, or money for a new building on campus.

Arick said endowment gifts are not given regularly like other gifts, but there is some spike in giving during December—when people try to take advantage of taxes—and at the end of Butler’s fiscal year in May.

Eli Lilly and Company and its affiliated foundations is one group that has given to Butler regularly.

David Marbaugh, Eli Lilly’s communications director of corporate responsibility, said the company provides Butler a yearly $75,000 grant for diversity and matches Lilly employees’ charitable contributions to Butler dollar-for-dollar.

Danko’s strategic vision operates from the “presumption of yes,” the idea that Butler will seek and reward creativity and innovation, but finding enough donors to say yes may not be easy.

Butler University officials used money from two funds to make up for a $2.28 million deficit in this year’s projected budget.

$1.145 million from last year’s surplus will be used in part to cover the deficit. The remaining $1.135 million will come from a contingency fund, a sort of cushion for the university budget.

Several contributing factors—including an error in calculating financial aid, a record-size freshman class, a change in the physician assistant program, the Atlantic 10 conference change and multiple capital expenditures—resulted in the deficit.

President Jim Danko and Bruce Arick, vice president of finance, explained the situation to some of the 36 faculty senators on Tuesday.

Danko explained that while the deficit is not something they were expecting, it is a “manageable challenge.”

The university’s total operating budget is more than $180 million, so the money used from the surplus makes up roughly 0.6 percent of that budget.

“A million dollars is a lot for anyone,” Arick said. “We just have to keep in mind that it’s not even one percent of the total budget.”

The university’s largest budget line items cost the university more than $2.5 million.

tuition revenue

The university lost more than $740,000 to unexpected costs with tuition, financial aid and final enrollment numbers.

A “confusion” between the university and its consultant, Hardwick Day, resulted in a loss of $455,000 because there was a discrepancy on what funds can be covered by financial aid.

Each year, the university has to estimate how many students it should budget for the coming year.

“We have to make assumptions based on history,” Arick said. “We’re never going to nail it.”

Sometimes the university will bring in more than expected and will end up with a tuition revenue. Other times the university overestimates the number of students who enroll.

Danko said that Butler offers more money than other universities to attract more students each year.

“We put more money on the street to make sure we get a quality freshman class,” Danko said.

The differences between

estimates and the actual enrollment contribute in part to the remaining deficit in the tuition revenue category.

EXTRA FRESHMEN BRING IN EXTRA COSTS

Though a record-size freshman class did bring the room revenue up to $375,000 and the capacity up to 98 percent, it also increased costs for the university.

The larger freshman class cost the university an additional $345,000 in operating expenses.

The costs include additional instructional support, student services, residence halls operations, information resources and extra housekeeping and supply costs.

PA PROGRAM ADDS COSTS

Over the summer, the physician assistant program proposed increasing its number of student openings from 50 to 60.

This increase required a new non-tenure faculty member, whose salary and benefits will cost the university an additional $105,000.

Arick said he estimates that the university will bring in an additional $300,000 next year from this venture alone.

ATLANTIC 10 SWITCH

The university expects to see an increase in ticket, concession and sponsorship sales because of the switch to the A-10. The estimated increases would not balance out the added costs of travel this year.

Arick estimated that the athletic operating expenses would increase to $800,000, leaving the university with a nearly $600,000 price tag for the conference switch.

The athletics department has decided to pick up the $300,000 membership for joining the A-10.

Butler will pay $400,000 over the next four years through 2016-17.

CAPITAL EXPENDITURES

Unexpected costs in capital improvements added up to a $795,000 price tag for the university.

The university paid $150,000 in improvements for the freshman class, including the purchase of extra residence hall furniture, classroom chairs and Atherton soft space.

When university officials decided to fix the entrance to Jordan Hall, they were hit with a $480,000 estimation. What started out as a cosmetic fix to the academic building is now a project that could fix the physical integrity of the structure.

“It’s an expensive fix,” Danko said. “But it’s going to be beautiful when it’s done.”

Other capital expenditures include parking garage consulting, the hot water system in Atherton, a recital hall ceiling, a chilled water leak and other projects.

MOVING FORWARD

While there are funds to cover this year’s deficit, Danko said everyone needs to take precautions with budgets.

There was discussion about whether the 2.5 percent raise pool would be released to faculty members this year as planned.

The salary raises that are due will still go on after considering the timing of the events.

“It’s manageable, but it’s going to make some things tough,” Danko said.

It is not yet clear how this could impact next year’s budget, but Danko said there is still plenty of time to see what will happen between now and then.

“I couldn’t possibly tell you what the implications are at the moment,” Danko said.

Butler University’s core curriculum no longer faces a budget gap as the 2012-13 school year gets underway.

The core curriculum faced a budget shortfall of $400,000 last April.

“Funding for the core was never in jeopardy,” said Ben Hunter, chief of staff and executive director of public safety. “The core will always be funded.”

Hunter said numbers in the spring were preliminary before the resources for the budget were allocated.

The necessary funding for the core was found before beginning the new school year, said Bruce Arick, vice president of finance and administration.

The gap was closed with $350,000 to $375,000 from the university’s contingency fund, Arick said.

The contingency fund is a sum of money in the university’s budget that has not been committed to any specific program or area.

“(The contingency fund) is money that we have if something happens that was unforeseen that we can dip into,” he said.

Arick said he likes to start the year with at least $1 million in the contingency fund.

The university was able to fund the core during the planning stages of the budget before the 2012-13 school year, Arick said. It was able to start the year with the million dollars still in the fund.

Arick said these budget gaps are not unusual.

“As we go through the year planning process, the information becomes more specific about enrollment and what colleges it will affect,” Arick said.

Arick said when budget gaps arise, the deans and faculty are the first to become aware of it. If further attention is needed, those budget issues are taken to the provost and then to her advisory committee, which is made up of the deans.

Finally, it is taken to the president’s cabinet for review and approval, if it is determined university-level funding is needed.

Getting approval for the core curriculum funding is what Interim Provost Kathryn Morris did.

“It’s my responsibility to advocate for resources to make sure we have what we need to deliver the core curriculum to our students,” Morris said.

Figuring out what resources the core needs starts with looking at which faculty members are teaching which classes already. Then they look to see how many students will be coming in. Finally, best estimates are made about what additions the core needs, Morris said.

Morris said most first-year students have at least one other core course in addition to their first-year seminars.

“Things are going well,” Morris said. “We’ve got the resources to support the need.”

As far as next year’s core resources, Arick said budget gaps appear annually but not always in the same spot.

“It is certainly a possibility it could be in the core,” he said.

The planning process for the 2013-14 budget will start in the spring.

The first major renovation of Hinkle Fieldhouse since the early-1990s is progressing as expected, school officials said.
“Overall, I think it has gone well,” Richard Michal, executive director of facilities, said. “It has been challenging, but we knew it would be getting into it.”
Michal said he views the renovation as two distinct projects: exterior renovation and interior renovation.
Work on the exterior, which has occurred through the summer, is made easily apparent to observers due to scaffolding blanketing the building.
One of the major aspects of the exterior renovation involves Hinkle’s windows.
Michal said the project will replace all the glass and glazing and restore the windows’ original steel frames.
“A lot of the glass is original from 1928,” Michal said. “What we’re hoping to accomplish is to put in a type of glass that won’t require us to have blinds all the time.”
An added complication of the window work lies in the panes, which all need to be custom-cut.
Bruce Arick, Vice President for Finance, said each window has individual panes because there were no standards when Hinkle was built.
The second aspect of the exterior work is the tuckpointing of Hinkle’s bricks and limestone.
This process requires workers to grind away at the old mortar that sits between pieces of brick and limestone so they can spread new mortar.
“There were some of those 103-degree days where (workers) were up on the scaffolding with grinders and, God bless them, they were under the heat,” athletic director Barry Collier said.
Arick and Michal both said the external renovations could not have come at a better time, as some of Hinkle’s exterior had begun to break apart.
In summer 2009, structural issues with the building’s brick façade caused some bricks to fall through the roof of the West Gym. This damage necessitated emergency repairs in fall 2009 and summer 2010.
While the scope of the internal renovations is not set in stone, Collier said he has several plans to improve the athletic and academic experiences of all Butler student-athletes.
The list of potential improvements includes the construction of a student-athlete academic success center, a sports medicine and training room, a new weight room and updated locker rooms.
“We’re talking about the body, mind and spirit of each person being supported in a way that allows them to be positive about their possibilities,” Collier said.
Michal said the infrastructure of Hinkle, which includes telecommunication, power, electricity and water, will also be looked at during the renovation process.
While some plans are still being nailed down, a grant attained by the university in April 2011 keeps the project from changing too much.
The Save America’s Treasures grant, which is administered by the U.S. National Park Service, provides Butler with $700,000 for renovations and comes with strict reporting requirements, Michal said.
Michal said every decision- from paint color to the glass used in the glazing of windows- has to be run by the National Park Service for approval.
The grant will help to offset the cost of almost half of the exterior work, which should cost the university approximately $1.7 million, Arick said.
The amount of money raised by Butler in its ongoing private and soon-to-be-starting public campaign will help determine the final cost of the internal renovations.
“The generosity of our donors allows us to sustain the building and make improvements that otherwise wouldn’t be possible,” Collier said.
Another important factor in the renovations has been the potential for them to hinder Butler’s athletic teams.
Dust, dirt and building materials are visible throughout the fieldhouse, especially in the upper level.
Michal also said that while work on the building’s north, east and south windows is either complete or close to complete, he is concerned about the high windows in the west and the scaffolding occupying some spectator seating.
Volleyball coach Sharon Clark’s team has had to practice in the West Gym until recently. Work is being done on the other side of the gym’s south wall, and drilling can be heard during team workouts.
“It’s been a difficult transition for us this preseason,” Clark said. “Trying to keep (our equipment) and the floor clean has been a big issue.”
Despite this, Clark acknowledged that she felt the renovations were necessary.
“The end result is absolutely better for our current and future student-athletes,” she said.

Students should use patience while they navigate around the several construction projects on campus.

Photo by Rafael Porto

There are many construction sites around campus, and students should understand that these upgrades are necessary and beneficial.

These developing areas are a good sign that Butler is putting our tuition dollars to good use, especially after raising the tuition for students last year.

Many students, especially those who drive, have likely noticed the construction by Clowes Memorial Hall.

The exterior of the $15 million Schrott Center  project is nearly complete.

It is scheduled to be completed in the spring of 2013 vice president for finance and administration Bruce Arick said.

Another project on campus nearing completion is the second phase of the Atherton Union renovation.

There will be a temporary wall standing in the dining hall until mid-September  Arick said.

A larger student population, coupled with this temporary wall, will increase congestion in the dining hall.

With the integration of the new unlimited meal plan system, the traffic should be less than expected because students have the ability to eat at more times throughout the day.

Another building students should expect having to find detours around is  Jordan Hall, which is undergoing renovations on its exterior.

The northeast entrance, currently barricaded by fencing and equipment, will be out of commission for most of the fall semester.

This is due to safety issues, Arick said.

Hinkle Fieldhouse has also become a labyrinth in the midst of its recent renovations.

Workers are tuck-pointing bricks and replacing windows, Arick said.

Many of the entrances are not accessible because of safety issues, and scaffolding has been built in front of or around the doors.

The maze of scaffolding and sequence of locked doors make it difficult to find a way into the building.

This is the first of a few phases of renovations to be done to Hinkle, and talks of making renovations to the interior of Hinkle are underway.

“There is a lot they want to improve but not take away from the nature of Hinkle,” Arick said .

Basketball purists can now relax.

Butler students tend to complain a lot, even about the smallest of things.

The slight hurdles of detours, blocked entrances and construction are no exception.

As students groan about the longer or colder walk in the winter months, they should just think about how great all the renovations will look.

Don’t throw a fit of rage.

Don’t complain about how a particular project inconveniences you.

Instead, consider how  all these renovations benefit every student in the long run.