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Bloomington Herald-Times

April 18, 2011

Cost benchmarking study identifies savings, efficiencies in IU operations
By Mike Leonard
April 16, 2011

Indiana University could realize as much as $24 million in savings by implementing recommendations to come out of its recent cost benchmarking initiative.

It also could gain an intangible amount in increased efficiencies identified by the study, the board of trustees learned Friday.

Vice President and Chief Financial Officer Neil Theobald told the trustees the study was launched last fall to address a "long-time mismatch between our resources and our goals." He said IU operates with the least revenue per student in the Big Ten but that the institution's expectations are far greater than being the 11th out of 11.

The broad-based study required hundreds of hours of data collection, analysis and interviews. IU brought in two consulting firms to help with the project: the Hackett Group, a global leader in cost benchmarking consulting, and Accenture, a management consulting firm.

The report was not just designed to identify cost savings and problems. It also identified or validated areas of high efficiency. "You have the lowest cost payroll function we've seen," said Mark Howard of Accenture. He credited the low cost to the highly automated system IU has implemented that has been exceptionally effective with financial transactions.

The payroll function could be further improved, he noted, if IU can reduce its "error" rate -- the term the company uses to describe how many times an employee's time sheet is "touched" to add or correct data.

Kathleen McNeely, associate vice president for financial management services and benchmarking project leader, attributed the error rate to the implementation of an electronic work time-keeping system three years ago.

"This has been somewhat of a cultural shock for non-exempt staff to come in and clock in or clock out," she said. "People were used to just getting up and leaving. So a big part of this is just missed punches -- going to lunch and forgetting to clock in or clock out."

Student services could realize $21 million in savings if changes recommended by the study are implemented, the study said. Those services include the offices of the bursar, registrar, financial aid and admissions. Essentially, Accenture's Howard said, the university needs to follow through with plans formed six years ago with the implementation of new student services software.

The plan would consolidate the student and parent contact with student services through a "one-stop shopping" intake office, ideally located in the Indiana Memorial Union. The office might not be able handle every request, but it would centralize operations so customers wouldn't be confused as to whether they need to make an appointment with admissions or the registrar, for example.

"Back shop operations" likely would be moved to the Poplars building, which already is an office complex. The personnel move would free up other offices and help the university in its goal to "repurpose" core campus buildings back to academic rather than office functions.

Howard said IU's marketing and communications functions were "off the charts" in terms of number of employees and apparent duplication of activities. He said IU schools, departments and offices maintain 225 websites per every $1 million spent while industry peers operate one site per $1 million.

He said IU has 23 internal public relations offices, while its peer groups maintain two or three. The Accenture consultant noted, however, that the comparisons are against industry and not higher education peers, but the findings still should be instructive.

President Michael A. McRobbie said Kelley School of Business Dean Dan Smith has extensive experience in marketing strategic plans and will lead an effort to consolidate IU's functions and create efficiencies. "He makes the point forcefully that marketing, if done well, can generate many times the resources put into it," McRobbie said.

IU to require employees to pick up more health costs
Board of trustees approves benefits restructuring plan
By Mike Leonard
April 16, 2011, last update: 4/16 @ 12:02 am

Indiana University employees will bear a greater share of increasing health care costs in the future under a restructuring plan approved by the board of trustees Friday.

IU will continue to increase its contribution to health care costs and will add $10.6 million, or 6 percent, to the current budget for 2011-12.

But the university will also change its philosophy for covering health care costs next year. It currently pays 80 percent of costs and expects employees to pay the other 20 percent through premiums and co-pays. The split will go to 75/25 for calendar year 2012, under a proposal to the trustees presented by Vice President and Chief Financial Officer Neil Theobald and Dan Rives, associate vice president of human services.

"There are two ways to go in the face of increasing costs. We could cut plan coverage or shift more cost to employees," Theobald said. He said that in interviews with university chancellors, they were unanimous in their support for good or "robust" health plan options and that employees can decide for themselves which plan they can best afford.

IU currently offers four distinct health plans with premiums ranging from $3.50 to $116.93 per month.

Officials anticipate that premiums will increase in 2012. "We don't know what the rates will be," Theobald said, explaining that it's too early in the year to project 2012 costs.

As an illustration, Theobald said that with the most popular and expensive health plan, the PPO Blue Access plan, the monthly premium ranges from $16.52 per month for employee-only coverage to $116.93 per month for family coverage. Beginning in 2012, and assuming a 10 percent increase in the Blue Access premium rate, the monthly cost would range from $83.06 for employee-only coverage to $221.67 for family coverage.

When the university does calculate actual dollar amounts, it will begin by spreading two-thirds of cost increases across all salary ranges. It will then distribute the remaining third among employees with a base salary of $50,000 or greater.

That will mean that employees making less than $50,000 will see less increase. IU also will contribute more money to employees making $28,143 or less, should costs increase dramatically.

Rives said the university's health care plans for lower-compensated employees is "very competitive" with peer institutions. He said IU's plans for employees who make around $50,000 are comparable to peer institutions and a little better than the University of Michigan and Ohio State University as salary levels increase. "We have to recruit and maintain employees," he told the trustees.

Trustees Bill Strong and Tom Reilly pressed the IU administrators to push for more cost sharing with employees in the future. "Who bears the risk for increasing health care costs?" Strong asked. "I'm in the camp that the employee needs to bear more risk because they're the ones who consume that service ... Each of us has to have more skin in the game."

Reilly reiterated his desire to see the university move from the higher-cost PPO Blue Access Plan with "first-dollar" benefits to plans with higher co-pays.

Theobald said that would not help to promote the university's Healthy Lifestyles Initiative. "The goal is rather than have very low premiums and then get hit hard with a high charge to go to the doctor, we want them to go to the doctor first. Through higher premiums, they'll catch a condition early (because they have either first-dollar benefits or a very low co-pay) and not cost as much in the long run," he said.

IU trustees approve building project for new residence hall and apartment complex
By Mike Leonard
April 15, 2011, last update: 4/15 @ 2:08 pm

A new residence hall complex and a new apartment complex will be built by Indiana University under a plan approved by the board of trustees' Facilities Committee Thursday.

The trustees' committee also approved renovating its Range Road Warehouse to house Food Services and IU Printing Services -- two operations that will be moved from their current Showers Complex location in downtown Bloomington.

Leonard on Twitter: Follow him and his updates on IU

In a lengthy facilities report, the board also discussed future renovations to the Old Crescent area of the Bloomington campus on the first of two days of meetings at Alumni Hall in the Indiana Memorial Union. Official approval of the facilities projects will likely occur at today's business meeting of the trustees.

The proposed residence hall and apartment complex are located close to each other in an area envisioned for student housing by former President Herman B Wells nearly 75 years ago, said Tom Morrison, vice president for capital projects and facilities. The apartment complex will be the most visible to the public and be located on Third Street east of Forest Quadrangle between Union Street and Rose Avenue.

Designs for both complexes have not yet been completed, but both will likely resemble the new Union Street Center opened at 10th and Union streets last fall, Morrison said. He said the architectural design of the Third and Union apartment complex will take on special significance because it will help create the gateway appearance the university is seeking. A new Jacobs School of Music Faculty Studio Building, now under construction at Third and Jordan, also will be a component of the southeastern campus gateway concept.

The apartment complex will require the demolition of four university-owned houses. The complex will include 106 units and 122 beds and will be "fast-tracked," according to Morrison, with the goal of opening in the fall of 2012.

The residence hall complex at the northwest corner of Rose and Jones avenues will include space for 450 beds. It will be designed to include 64 percent double occupancy bedrooms with group bathrooms for eight students; 32 percent single occupancy, semi-suite bedrooms with baths for two students and 4 percent single rooms with baths.

Trustee MaryEllen Bishop asked how the new facilities compete with the private sector and whether the university might be overbuilding. Pat Connor, executive director of Residential Programs and Services, said, "We could have sold out two or three Union Street Complexes" and told the trustees that students say Union Street is "a good deal" compared with private apartment complexes.

He also said the overall housing plan is to keep the number of beds on campus about the same as it is now with about 11,000 beds housing roughly 7,000 freshmen and 4,000 upperclassmen. "Our goal is to improve what we have and keep our total numbers the same," Connor said.

The cost of the proposed residence hall complex is estimated at $38 million, to be paid through RPS operating funds, cash reserves and auxiliary revenue bonds. The apartment complex will cost an estimated $16 million and also be paid through RPS resources.

The Range Road Warehouse renovation will cost an estimated $2.3 million.

In other facilities business, the board discussed its 5-10-year plan to renovate and "repurpose" the Old Crescent buildings that form the core of the campus. Over the years, many of the buildings have been "chopped up," in Morrison's description, and converted to offices. IU plans to turn the buildings back into academic buildings, classrooms, lecture halls and academic offices.

Franklin Hall will be the first of the buildings to be renovated after University Information Technology Services moves to its new location in the soon-to-be-completed Cyberinfrastructure Building at 10th Street and the Ind. 45/46 Bypass.

The trustees also discussed eventually moving several student service offices to the Indiana Memorial Union.

Academic Directions

A comprehensive "New Academic Directions" report was presented to the board by Executive Vice President and Provost Karen Hanson and Charles Bantz, chancellor of Indiana University Purdue University Indianapolis. It included references to initiatives, possible consolidations, potential interdisciplinary cooperation and a variety of topics pertaining to the future academic direction of the university.

Late in the day, the 95-page report was posted in PDF form on the website. It is listed under "Featured Initiatives" and titled "Investing in Excellence: The Importance of Strategy and Flexibility."

Bill Cook made this a much better place
April 17, 2011, last update: 4/18 @ 9:23 am

If we were to adapt "It's A Wonderful Life," Bloomington and southern Indiana residents would get a glimpse of what would be different if Bill and Gayle Cook had not made Bloomington their home.

There would be no YMCA on the south side of Bloomington or plans for a new Y on the northwest side.

There would be no Fountain Square Mall shoring up the south side of the Monroe County Courthouse Square, no parking garage at Fourth and Walnut serving customers and businesses, and little or no vibrancy in downtown.

There would be no Bloomington/Monroe County Convention Center and thus no downtown Courtyard hotel.

The vacant Showers Furniture Factory would not have been turned into City Hall and could well be in disrepair.

The former RCA plant site would sit empty instead of housing Cook Pharmica.

Thousands of residents of Monroe and Owen counties would not have jobs in businesses operated by Cook.
Indiana University would be short millions of dollars in gifts -- and the educational heft those gifts support.

The grand old hotels of French Lick and West Baden would be closed or nearly so, no casino would have been built between the two, and the economy of Orange County would be in the tank.

Ivy Tech Community College would not have a center for entrepreneurship or some specific programs established at the request of Cook companies.

The site of the Monroe County History Center would likely be a parking lot instead of a facility honoring the community's past. Numerous historic structures would have fallen to the wrecking ball.

The Volunteers in Medicine Clinic would not exist. Area residents would not be served by Bloomington Hospital's heart catheterization laboratory.

Students and faculty would not have a world-class digital library at the IU Jacobs School of Music. Bloomington's downtown would not be decorated by 280,000 lovely lights around Christmas.

There's more. But let's stop here and agree that without Bill Cook's vision, courage, and commitment to Bloomington and southern Indiana, this would be a much different place with fewer opportunities for all.
Beyond our provincial view, Cook's medical innovations save lives every day -- and have for decades. They improve the quality of life, quite literally, for patients every day. They give people with serious medical problems hope.

The world is much richer for the life of Bill Cook, who died Friday at age 80. One big challenge ahead is how Bloomington and Monroe County are going to honor him with a lasting tribute. Bill Cook's memory must be enshrined respectfully and appropriately for all he has done -- and will continue to do well past his death -- for the community he chose to call home. Let's think of something meaningful.

Bill Cook's contributions celebrated at Indiana Landmarks event
By Mike Leonard
April 17, 2011, last update: 4/17 @ 1:51 am

Steve Ferguson said Bill Cook worked on virtually every detail of every project he ever took on, but when the work was finished, he also insisted that it was time for a party.

Saturday was meant to be one of those parties. It was a date chosen to celebrate the spectacular renovation of the old Central Avenue United Methodist Church, an Indianapolis landmark that Cook donated $10 million to artfully restore and save from the wrecking ball.

The celebrated Bloomington businessman and philanthropist died on Friday, just a day before the long-anticipated celebration. But as Indiana Landmarks President Marsh Davis said in opening the program, Cook liked things loud, as demonstrated by his love for drum corps performances and his underwriting of the hit musical, "Blast!"

So instead of a moment of silence, Davis said, "Let's hear some noise!"

The audience in the packed former sanctuary rose to its feet and cheered, applauded and yelled, bringing tears to some eyes. And the event went on as planned -- "as Bill would want it," many said, and speakers and audience members marveled at the beautifully restored building and the role it will play in revitalizing the once grand neighborhood on the near-northside of the Indianapolis downtown.

But it was impossible for anyone to ignore the sometimes disconcerting mixture of sadness and celebration of Cook's extraordinary life.

Musician John Mellencamp took time out of his North American tour to fly in and perform two songs on acoustic guitar. "You start out doing something for one reason and you wind up doing it for another," he said, praising Cook's generosity, humor and friendship.

Former Indiana University basketball stars Scott May and Mike Woodson sat side-by-side in one of the cushioned pews. Each called Cook a friend and mentor.

"Great guy, great man, great friend," May said. "Bill was the kind of guy who would maybe not give you the answer to a problem you were having, but he'd give you a number of ideas how to solve the problem. And he'd never ask for anything in return."

Woodson, most recently the coach of the NBA's Atlanta Hawks, turned misty-eyed when he reflected on his interactions with former IU coach Bob Knight, Cook and Ferguson, chairman of the board for Cook Group Inc. "They all had a major impact on my life," he said. "My thoughts and prayers will always be with Bill and Gayle and their family."

Woodson said he talked on the phone with Cook a couple times a week.

Former Indiana Lt. Gov. John Mutz sipped a drink during the reception portion of the event and talked about his long history with Cook. "I knew him before he became the successful, creative visionary he became," Mutz said. Cook and Mutz belonged to the same fraternity at Northwestern University. "We had a lot of fun together," he smiled.

He told several stories, including one about the businessman's "eccentric" obsession with order and cleanliness. He recalled the time when Cook got so frustrated with fraternity brother Bill Sterner's messiness he threw the young man's clothes, books and typewriter out the window.

He said Cook was known for hard work and determination, but "it would not have been in anyone's mind that he would become as phenomenally successful as he became," Mutz said. "When you talk about a Horatio Alger story, he really fits the model."

Indiana Sen. Richard Lugar, who was baptized as a child in the newly restored church, said it was a typical Cook project -- generous and community-minded.

Former Indiana first lady Judy O'Bannon, widow of Frank O'Bannon, was a classmate of Lugar's in high school and another church patron. She said Cook deflected praise over the church restoration with typical modesty. "'I don't do anything. The building does it,'" she said, quoting Cook. "He picked quality buildings and let them do their magic."

The former church, also called the Old Centrum, will now become the Indiana Landmarks Center, home to the group that creates partnerships around the state to preserve and restore historic structures.

Ferguson, interviewed outside of his formal remarks, recalled joining the Cook companies at a time in his life when he'd already formed a career, and then being told by Bill Cook to learn how to do every job in the medical-device-making business. "Some of that stuff -- I'm all thumbs," he said with a grin.

He related the task to Cook's attention to detail. "You can't imagine how observant the guy was. He saw everything," Ferguson said.

In his formal remarks to the audience, Ferguson called Cook "a man of great vision. He could see how things could be while other people were looking at how things are."