Following years of bureaucratic and legal obstruction by the University of Iowa and the Iowa Board of Regents, in mid-December the Iowa State Auditor finally concluded his review of UI’s celebrated public-private utility partnership. (Excellent reporting and context here, from the Gazette’s indefatigable Vanessa Miller.) Because that partnership was a notable administrative act perpetrated by former illegitimate UI president J. Bruce Harreld, I began writing a post reviewing and commenting on the state audit, and whenever life stops dropping hammers I intended to finish that post to put a black bow on Harreld’s legacy.
Reminding me once again that I am endlessly naive, however, it was reported last week — again by Miller, here — that the University of Iowa recently lost yet another legal appeal in its long-running, manic pursuit of legal vengeance against a former construction contractor. I don’t know why the university persists in trying to win a case it has previously lost in every conceivable way, with judicial prejudice, buy okay. Someone in the UI Office of the General Counsel — which is about to come under new administrative management — would rather subject themselves and the school to semi-annual ritualistic embarrassment and abuse instead of accepting that loss.
Now, however, less than a week later — while I was still chuckling about last week’s news — yesterday Vanessa Miller reported that the University of Iowa is being sued in federal court by its utility partners. (Additional coverage by the Iowa Capital Dispatch, and by the Chronicle of Higher Education — subscription required.)
From the lede to Miller’s report:
Just three years into the University of Iowa’s landmark 50-year deal for the private operation of its utility system as a way to raise money for education, cracks are emerging in the $1.165 billion agreement, with the operator accusing the UI of “breaching its obligations.”
In a federal lawsuit filed Thursday, the UI Energy Collaborative outlined four main ways the UI was reneging: refusing to pay money it owes; rescinding approval to repair the utility system; refusing to file casualty insurance claims; and demanding payment for “unplanned” utility outages “even though the university’s representatives participated in the very meetings and discussions planning for those events.”
I obviously don’t know if there is any basis for this lawsuit, and none of the parties are going to open their books for independent analysis. What I can say with some confidence, however — having read the 1,800 page concession agreement — is that there are a number of outs in the contract which would effectively allow either party to blow up the partnership. Whether UI is intentionally failing to perform in order to trigger one or more of those provisions, or the energy consortium is filing suit for the same reason, it is beyond dispute that the economic environment in 2023 is wildly different from the context in which the deal was initially struck. Where modest long-term returns may have looked tantalizing during an unprecedented extended period of low inflation, the current inflationary context may have radically altered that calculus for one or both parties.
— Mark Barrett
Well, one of the more interesting questions is what the balance is on that approx $1B fund that was supposed to pay the Engie bills while showering admin and faculty with pocket money. That money is not managed by UI, btw, it’s managed by Marquette, a humdrum firm with a lot of young employees; it was even pokier and more humdrum till a few years ago, when its owners decided to big up and go hard for public funds like pensions and the like. UI’s Finance website does have a financial report for the Regents from end of year, but the Engie money doesn’t appear broken out unless you look at the boa-constrictor bulge in the first UI fund. In general, though, those funds are down, oh, quite a lot, and it’d be reasonable to think that that’s about an $850M fund at the moment. I don’t quite understand how Marquette lost so much in funds that were supposed to have tiny risk exposure, but somehow they’ve managed it.
Anyhoo. In other excitement, CLAS, which has stopped publishing a lot of year-over-year comparative numbers in its in-house propaganda, seems to have lost about 20% of its faculty over the last two years, and, as Vanessa also reported the other day, is having serious trouble holding on to staff, too, with about half seriously considering leaving in the last year, more if they’re not your standard white hetero Iowan. The same report was sent out to CLAS staff with banners snapping in the wind about how great CLAS staff think working at Iowa is. There’s also a steady stream of extremely cheery stuff about making life great for staff at Iowa and yet somehow nowhere in the talk is mention that most of the jobs no longer pay a living wage in Johnson County. Or that jobs outside the university pay multiples of what university jobs do. Money doesn’t seem to enter these conversations at all. More social clubs, though, that will probably fix things.
And now we get a most interesting set of directives about dealing with student mental health. There’s been a lot of buzz about mental health lately, and I wasn’t sure why, and this may be part of the answer. Admin are a little freaked by what happens when students go to faculty and say they’re suicidal and needing help: faculty start emailing around asking what they’re supposed to do, and they email the students’ sagas and personal info right along with it. Obviously bad news and and invitation to lawsuits. The way they’re planning on handling this, though, is to stop faculty and staff from trying to help anyone (in some ways sensible enough, they’re not qualified) and have them email all of this to the Dean of Students’ office.
That’s right, feel suicidal, tell a prof, have it broadcast at the Dean’s office.
The wonders don’t stop there, because some rando at DOS will then send it on to a crack team of not-mental-health-professionals to figure out what to do with you and your case. The only names I’ve been able to get so far are a DEI employee who is not a mental health professional and an assoc dean who is not a mental health professional.
Why this is supposed to be better liabilitywise I absolutely cannot tell you, given that those are people who can have considerable influence over your entire academic career, and there’s no obvious reason why they should be poring over your mental health tribulations. Especially given recent reports of other unversities’ ejecting students who express having had suicidal ideation or take a trip to the mental hospital because they don’t want the risk of more suicides on campus.
One of the things that’s occurred to me over the last few weeks is that while we’ve seen considerable brain drain over the last couple of decades, and apparently a torrent recently — maybe it had something to do with a university telling employees to go suck in facefuls of potentially lethal or crippling virus so it could get back to being a residental university, or maybe it had something to do with the likelihood that this state’s become a particularly bad place to be a woman or know women one cares about — anyway, this brain drain and running-away of employees: part of the problem you get with who’s left is that, overwhelmingly, they seem willing to go along with pretty much anything uncritically or without protest. I mean I have trouble imagining that this is where a young Kathy Tachau would stake her claim.
I’m not sure of the exact date, but sometime after the Iowa Supreme Court ruled in April of 2021 that the Iowa State Auditor was entitled to all facts and information about the University of Iowa’s public-private energy partnership, the university revamped and added to the information on the UI P3 website. Included in the new info was a web page which tracks the annual distributions and market value of the P3 endowment, along with the same numbers for the most-recent quarter. (You can see an earlier snapshot of the page here, dating back to August of 2022, which is when that page was probably first published and indexed.)
From the arc of the totals in the last column (‘Ending Market Value’), I think you’re right when you say “those funds are down, oh, quite a lot…” I don’t know if they have fallen off to $850M, but between headwinds in the equities markets and inflation decreasing the purchasing power of those dollars, it’s not hard to imagine that the temptation to borrow a billion dollars to gamble in the markets may have been a bad idea. (I’m guessing that when the bright lights at Tippie ran endless simulations about the viability of the UI P3 they didn’t include either a pandemic or inflationary spike on the scale we’ve seen over the past two years.)
As for CLAS, I always took it as a given that the regents would try to slowly dismantle that college after prior frontal assaults triggered significant resistance. The political powers in Iowa — in both parties — really only want the University of Iowa to function as training for white-collar jobs, so the pool of workers is large enough to keep payroll costs down while supplying companies and corporations with in-state/local talent. (It’s wild to me that the state’s minimum wage is still $7.25. If this keeps up much longer people will be fighting for field work.)
The work flow you describe about student mental health issues is a nightmare, but overall I’m glad for any attention that anyone gives to the students. So much so that I’m not even against turning the Iowa House into a mental health center. (UI has lagged behind its Big Ten peers for so long it should be a crime.)
On the ‘quality of life’ climate in Iowa, I think the big tell recently was the failed search for a new VP for Medical Affairs and dean of the College of Medicine. When you announce four fully qualified finalists for the position, then your first choice begs off and you don’t make an offer to the others, there is something seriously wrong with your ability to attract top-flight talent. And now of course they’re going back at it, only with a much smaller search committee sporting a proportionately greater number of fixers. (Any time you see Mark Braun on a search committee, the odds are the end result has already been determined.)
Oh, almost forgot. There’s a line item called “tuition replacement” in some of those financial statements for the Regents, and they come in at about $15M. Any idea?
I have a vague memory that the term ‘tuition replacement’ has been used over the past few years in both a narrow technical term by the Iowa Board of Regents, and in an unrelated and broader public-relations context by members of the state legislature. In the context you’re referring to I think it’s the former, and relates to money required to meet bond payments without dipping into tuition revenue to cover those costs. (See here and here.)
As ever the shell games that are routinely perpetrated in the board’s budget, and in the much larger and infinitely more complex budgets at the state universities, make it impossible for anyone on the outside to truly know what pile of money is being spent on which cost.