Science Olympiad 2017

On Saturday SJC hosted its last Science Olympiad. Teams from 16 schools attended and the total number of teams was probably higher than 16 because some schools brought both high school and middle school teams.

I looked around for some interesting photo opportunities and did not find much. Hover craft sounded interesting. It was in the Hansen Recreation Center, but when I was there, the teams were doing the written part of the activity.

Students in a Chemistry Lab on the third floor of Science were doing a Forensic activity. They had to identify powders, hairs, and some other things.

A few middle school students were playing with Legos in the Core Building. The person in charge explained that most of the teams had completed the Write-It, Do-It activity and those remaining were finishing up.

The activity has two parts. In part one some students look at a model and explain in writing, without diagrams, how the model is constructed. Below is the model that they were describing.

 In the second part, their teammates must use their written descriptions to reconstruct the original object as best they can. Below are three of the attempts. None of them or any of the others were very close. The judges had a challenge in ranking the results from best to worst.

If the results of the Olympiad get posted, they will probably be available here.

Saint Joseph's College has hosted this regional Science Olympiad for at least two decades. I believe that the late Duvall Jones was the person who brought the event to campus. Duvall taught Biology and was an avid birdwatcher. In the early years the events were run mostly by faculty members and for a two or three years I was in charge of the astronomy event. I was happy when the science students took over most of the work in running and judging events, and that was many years ago.

Over the years I have written about a lot of events that have taken place at Saint Joseph's College--plays, musical performances, special events such as Homecoming and Little 500. SJC is the second most common tag that I have on posts. (Construction is first.) I plan to enjoy the next two months of events at SJC because I know that I will really miss the activity next year.

On Thursday the SJC basketball teams played their last games in the Field House. Both the men's and women's teams won their games. Over the years the basketball teams have had some very successful seasons (as well as some seasons that were not very successful.) Hanging in the Field House are banners of their appearances in the NCAA Division II tournament with special banners for the years in which they made the final eight. (Here is my post on the 2010 banner.)

I hope that the various artifacts and documents that tell the history of the College will be preserved.

Updates and meetings (pt 2)

The walls of the old Donnelly laundromat building are now down.

 The debris has not yet been removed.

 There is a machine on the site that grinds cement blocks into gravel-sized pieces.

 The slab of the Park View apartment building that was destroyed by fire was gone on Tuesday when I stopped by.

 The County Council met on Tuesday. There were four items on the agenda, three requests for additional appropriations and one for a transfer. The additional appropriations were for Local Emergency Planning, the Court, and the Sheriff's office. Judge Ahler wanted enough additional funds to pay his second court reporter the same as the first. (He had hired two court reporters to replace one that retired with about 30 years of experience--the job takes time to learn.) In January's meeting the Sheriff had requested a transfer of funds to order a new computer server and now he wanted additional appropriations to replace those funds, something that he had told the council he would be doing. (There was a technical reason he could not just request the additional appropriation the first time--the rules for county councils are complicated.)

A few interesting bits emerged from the discussion. The National Weather Service recently held training for storm spotters and about 60 people attended. Emergency management will be involved with disaster training at the KV High School in early April. Madison County was the victim of a cyber attack last year and the cost of that attack was about $200,000.

The Board made appointments to the Redevelopment Commission (which rarely meets) and the Alcohol Review Board (which usually meets every month in the Rensselaer City Hall). The Council would like to begin discussion of the local Income tax at the March meeting. Several Council members had toured the animal shelter and were impressed with how well it was organized.

The hotel that Fair Oaks will be building will be a Marriott. There was a question with no answer of when the travel center at the intersection of I-65 and SR-10 will be built. One of the hold ups has been that the developer could not find a sit-down restaurant interested in being part of the facility.

Earlier in the evening the Jasper County Historical Society met. Their presentation was on items in their fabric collection that are currently on display.

The clothing above is from the turn of the 19th century and that below is from the 1920s and 1930s.

 The presentation is available on Facebook. (Click here.)

Finally, walkways have been installed at the high rate treatment plant on Lincoln Street.

Updates and meetings (pt 1)

Demolition continues on the old Donnelly building at the corner or College and Kannal. The property changed ownership on Feb 17. If you would like to know more about O'Reilly, the business that will build here, see this entry on Wikipedia.

 Below is a picture taken on Tuesday of the future convenience store for the Marathon gas station by the railroad tracks. Soon the exterior will be finished and there will be no apparent changes as construction continues inside.

 I mentioned a while back that the old Fashion Bug space in the Walmart Mall (what is the name of that mall?) was being subdivided. The smaller part, the northern end, is being chopped into offices.

 I am not sure what the plans are for the other part. I was not expecting any changes, but for over a week people have been working there.

Driving past Remington on Sunday, I noticed that a sign announcing coming construction of Sayler apartments. From the quick glance I got of the sign, it appeared to be similar to the one for the Elza Street apartments.

The Rensselaer Community Garden group had its organizational meeting on Monday night. The operation will be much the same as it was last year. The plots being rented are 20 feet by 20 feet and cost a mere $10. The location is next to the Extension/Surveyor's office on North McKinley (across the highway from the County jail). If you are interested in renting a plot, visit or phone the Extension office.

Last year four plots were cultivated for the food pantry. Over 1000 pounds of produce were given to the food pantry and there was more than they could use. Some of the surplus was given to the jail and some to the police department and in both places it was appreciated. (How did they know that over 1000 pounds were donated? They weighed the harvest before they donating it.) If anyone is interested in helping tend these charity plots as a service project, contact the extension office.

Gardening means spring is coming. I killed three mosquitos yesterday. Flocks of sandhill cranes have been flying overhead and some of the summer birds--robins and killdeers--are coming back. Days are noticeably getting long and the sun is higher in the sky. Some maples are ready to bloom.

In news about Saint Joseph's College, the Alumni Board joined the Student Association and the Faculty Assembly in passing a resolution of no confidence in top administrators and Board members. The resolution refers to one person as a former Vice President--I have not seen a notice of his resignation, but then there is not a lot of information coming from the top at SJC.

The college basketball season is coming to an end. On Thursday the Scharf Fieldhouse will host the last ever SJC basketball games. See the sidebar for information.

Every day there are colleges visiting SJC recruiting transfer students. On March 1 another Transfer Fair is scheduled with about 100 schools registered for the event. (It might be a good event for any area high school seniors or juniors who are doing college searches--if they can get out of school.)

A letter from the College to the Indiana Department of Workforce Development caused a bit of comment recently. It was giving notice of 37 job terminations that will take place on April 17. About half are for athletics with several in admissions, the library, and the development office. What caused comment was this sentence: "While we hope that this action is temporary in nature, unless the report provides a viable option, this action is expected to be permanent in nature." The idea that the College could restart after suspending operations was and is wishful thinking and probably included to keep some options open. The College has no way of paying the debt it has incurred. It stated that it had borrowed against any asset it could use as collateral and spent any part of the endowment it could. Unless some rich alumni make enormous donations, it seems to me that the campus and the adjoining farm lands are destined to soon be owned by Farm Credit.

(Previous reflections on the closing are here and here.)

Demolition

The demolition of the old Donnelly laundromat building began this morning. It may take a while to complete--the building is very well built.

 The site is the future home of an O'Reilly Auto Parts store.

Update: I heard and saw several flights sandhill cranes flying overhead today.

Pictures from south of the tracks

The burned Park View Apartment building is mostly gone. On Friday a large truck was being filled with debris.

 There is a lot less rubble than was there at the start of the week but still enough to fill another truck.

 The shell of the new Marathon station south of the tracks is going up very quickly. This was was it looked like on Wednesday afternoon.

On Friday the exterior was being wrapped.

The exterior of the Elza Street apartments is no longer undergoing changes. The windows and doors are installed. The work seems to be in the interior. However, there is new construction on Mattheson where the foundation of a new house was poured this week.

Monday is Presidents Day and the Rensselaer School students have the day off because they did not need it to make up a snow day. We have had a very mild winter.

The discount rate and items about the closing

On Thursday (2/16/2017) Saint Joseph's College hosted an admissions fair for their students. Seventy four schools were listed as attending They filled the ballroom and spilled over into the hallway around the ballroom. The picture below shows about half of the ballroom.

This week I met three people recruiting students who were former faculty members at the College and had a nice chat with each.

Most of the Indiana Colleges were at the fair. DePauw and Notre Dame were among the exceptions. There were also many schools from Illinois, Michigan, Ohio, and Missouri. The University of the Ozarks came from Arkansas and the University of Houston-Victoria came all the way from Texas. I asked the lady at the UHV booth why a student would consider her school. She said that its tuition was low and that SJC students might enjoy the warmer weather.

In other news about the closing, the Alumni Board is trying to raise $20 million by April 1 to keep the school open. Donations will not be kept unless enough money is raised to be successful. Details are on the Involved for Life website.

There is a petition for the state Attorney General to investigate the Board and administration for fraud. Personally I think this is a terrible idea and nothing good can come of it. It reflects the anger stage of grieving. As the saying goes, never attribute to malice that which is adequately explained by stupidity.

(The rest of this post is about the economics of the discount rate, so if economics traumatizes you, you might want to stop here and go to your safe space.)

In the discussions about the suspension of activities at Saint Joseph's College, there has been frequent mention of the discount rate. The College says that its discount rate is about 65%, which means that on average students pay only about 35% of the listed tuition of $31,000. In some of its financial reports the College lists as revenue what it would get as tuition if there was not discount rate and then as an expense the scholarships that it gives.

As an economist this way of treating the matter seems odd. Colleges seen as businesses have a lot in common with airlines, hotels, and cruise ships. They all have large fixed costs, that is, costs that do not depend on the number of consumers, and low marginal costs, that is, the additional cost of adding one more customer. As a result of this cost structure, all these industries find it useful and in many cases necessary to charge different customers different prices.

The easiest way to explain this situation is with a very simple numerical example. Suppose that it will cost a business $100 to offer a product and that the cost does not depend on how many customers (within some range) use the product. Perhaps, to make the example a little more concrete, the product is flying people from Jasper County International Airport to Lafayette. Suppose there are two people who want the service and each are willing to pay $60 for it. In this case any price between $50 and $60 will work to make the business profitable. At a price of $55, for example, the air taxi will collect $110, yielding a profit of $10 and both persons will find that they benefit from buying the product.

However, suppose that one person is willing to pay $80 and a second person is willing to pay no more than $40. The total potential value of the flight remains the same at $120 ($80 + $40), but there is no single price that will yield a profit. Any price above $40 and below $80 will result in one passenger and a loss. To get the second passenger the price must drop to or below $40, but at that price the revenue is still below the cost of the flight.

However, there is a way to solve that problem by charging the two people different prices. If the airline could charge the first person $75 and the second person $35, the total revenue would be $110. The flight would be profitable and both customers would benefit from the flight. The problem, of course, is to figure out a way to charge the higher price to the person who values the flight more and the lower price to the person who values the service less. If this cannot be done, the plane will not fly and everyone will be worse off.

Hotels, cruise ships, airlines, and colleges have found ways to sort people into groups by how much they are willing to pay. The sorting is often crude but even crude sorting can be worthwhile.

What colleges should be trying to do with their scholarship programs is giving aid in just the amount needed to get the student to enroll in the college. Many, many years ago I tried to explain this idea to the director of financial aid. He was insulted at the very thought that scholarships were part of a pricing strategy. At the time there was little interaction between the admissions department and the financial aid department--I wonder how many more students the College could have had it if had known what it was doing. After spending a lot of money on various consultants, the College eventually got the two departments working together.

Viewed as a pricing strategy, financial aid is not an expense. Rather the revenue is the tuition that the college actually collects so there is no need to deduct aid as an expense. Different students are charged different prices for college education because they are willing and able to pay different amounts. A question that the situation of Saint Joseph's College raises is was there a way to charge prices that would have made the institution viable but the College never found it, or was the demand for their product such that no winning pricing strategy was possible.

Here are some links to videos that explain or illustrate price discrimination, the term that economists use for charging different prices to different people. The first is an explanation of the sort you find in an economics textbook and uses pricing of drugs as its example.
http://www.mruniversity.com/courses/principles-economics-microeconomics/price-discrimination-examples-airlines-arbitrage

The second is a continuation of the first. It ends with an explanation of how colleges can sort potential students by willingness to pay.
http://www.mruniversity.com/courses/principles-economics-microeconomics/price-discrimination-social-welfare

There are two videos linked on this page that illustrate pricing strategies for several products.
http://ingrimayne.com/econ/Monopoly/videos15mi.htm

The second video on this page is a bit of British humor in which the seller tries to figure out how much the customer will pay and then asks for that amount.
http://ingrimayne.com/econ//TheFirm/videos09i.htm.

Commissioners meeting Feb 13 2017

The Commissioners meeting on Monday lasted almost three hours. The highlight came early with an unexpected appearance by Judge Potter while the Wabash Valley representatives were making their presentation, a presentation that was very similar to that given at the County Council meeting last month.

Judge Potter stopped in to tell the Commissioners that two tiles had fallen off the roof of the Court House. When he was asked if he had any questions about Wabash Valley, he was amazingly blunt in saying that the judicial system and law enforcement did not have a good relationship with Wabash Valley, that they avoided using them when there were other options. He said that Wabash Valley was understaffed and it could take weeks or months to get an appointment. The people from Wabash Valley acknowledged that they were understaffed but said that it was hard to recruit therapists to the community.

Wabash Valley gets about $200,000 from the County and the Commissioners approved the expenditure.

Almost all Commissioners meetings talk a bit about the Frost Law, but this one had more than the usual discussion. A citizen who is a trucker but was speaking as a private citizen said that he thought the law as presently enforced was unfair. He noted that some heavy trucks could use the roads but others that were identical in size and weight could not. He suggested that a permitting system be established, that the county class some roads as primary and others a secondary with different frost-law requirements, and that the law take into account weight per axle. He even volunteered to help in formulating these changes.

Later in the meeting the Sheriff was asked about these suggestions. He thought the permits would be a good idea. It would allow for flexibility and would also be a way to designate truck routes. The goal of the county is to have trucks use county roads as little as possible during the time when the frost law is in effect. By designating routes the trucks would be required to use state highways, which are built to withstand the effects of the frost thawing, for as much of the route as possible even if it meant that the truck traveled a few extra miles. Also, many other counties both in Indiana and in other states have permits so the County would have their experience to use in drawing up a system.

When the Commissioners instituted the Frost Law last year they knew that they would have to make changes as experience revealed problems. I suspect that by next year the Frost Law will have a permit system built into it.

There were many other items on the agenda. A couple citizens wanted the County to vacate right-of-ways for alleys or roads that had never been developed. The Commissioners pointed them to the proper procedures needed to do what they wanted. (Notification of neighbors and a public meeting are needed before any action by the Commissioners.) The Commissioners discussed with NITCO what they would like in future requests to install cable. The Commissioners prefer installation be done by boring. Trenching is acceptable but they do not like plowing. (I am not sure what the difference is between trenching and plowing.) They also want installers to record what other utilities or tiles they encounter and give those records to the County. (The County does not know about many of the private tiles that are installed.)

The Sheriff gave a short report. He said that in 2016 the jail had an average census of 80 and during the year 84,000 meals were served. Bids were opened for repair of the northern annex. The only completed bid was from Hamstra for $22,750.

NIPSCO reported on an extensive project to provide natural gas to about 170 customers in the Georgetown subdivision. It will be a three-month project and will use an outside contractor.

In the afternoon the Drainage Board met. It did not have the agenda posted outside the room and I have never been able to find their agenda on the Internet so I had a hard time following the discussion. They heard the drainage plans for another robotic dairy--I think it was for the Herrema Dairy, which was approved last year by the BZA. Construction will begin very soon and milking should begin in July. The time from start to milk is only five months.

The Christmas tree that I have enjoyed photographing as it underwent changing decorations to match the season has been removed from the second floor of the Court House. According to a lady in the auditors office, it was deteriorating. New on the second floor is one of the bicentennial torches, shown below with a reflection of Jasper the Bison, also on display on the second floor.

Indiana has many interesting Court Houses. The blog post here has pictures of them.

24th regional high school art show

The 24th Annual High School Art Show is on display in the Core Building at Saint Joseph's College. If there is a 25th next year, it probably will be at a different location. The number of works seems considerably smaller this year than last, though it may be that some of the schools have not yet gotten their contributions to the show.

KV had some portraits and this one was striking for its size and resemblance to many political portraits from the Obama years.

 I liked this picture. I think it was also from KV.

From South Newton came several batiks.

 A student from Rensselaer drew this strange picture.

 The same student did the picture that is featured on the posters for this year's exhibit.

 There were several paper sculptures from Tri-County. The one below is of a unicorn.

 There were several alphabet-art pictures from South Newton. I thought this one very clever.

The show will be on display until March 5, the date of the reception for the show.

City Council 2-13-2017

The City Council meeting on Monday evening started a minute or two late because the Board of Public Works meeting that preceded it was unusually long. These meetings generally last ten minutes and much of their agenda is approving pay requests to contractors. I think the reason this one went long was the design-build item for renovating the old fire house. The Board agreed to the proposal that was before it to hire a contractor.

The big item on the Council agenda was awarding bids for the City's electric substation on Bunkum Road. However, this item was pulled because whoever was evaluating the bids that had been opened at the last meeting wanted more time to check some things. The rest of the agenda was routine. The gas tracker for February will be a nine cent decrease per hundred cubic feet. (January had seen a big increase.) The mayor made some appointments to various committees and the Council made a couple, and then elected George Cover as its president. (I think the position allows him to chair the council in the absence of the mayor.) The Council approved a request from the police department to trade in their service weapons for new weapons. The accepted bid was not the low bid but the Police Chief said that some services the bidder (which was the gun manufacturer) offered made the higher bid the better deal. The value of the trade reduced the cost by more than 50%.

There were a number of interesting updates. INDOT is doing a phase II check for contamination on their old site in the northeast part of town. The mayor said that this is a good thing because it ties INDOT to the property in case a future cleanup is mandated. Construction on the rebuilding of the Washington Street bridge will begin on September 17. Changing the intersection by Mount Calvary Cemetery has been pushed back to 2018. The Mayor said that he was blindsided by the closing of Saint Joseph'c College. He noted that it will reduce City utility revenue by about $1 million a year. (The College relies on City gas, electric, and sewage.) A question was asked if this might impact the purchase of the well. It should not. The City has a signed purchase agreement for $66,000 and the lender (Farm Credit) has allowed a mortgage release--pretty much everything at SJC seems to be collateral for its $27 million in debt.

Demolition of the Park View Apartment building that burned last summer began late last week and should be completed by the end of this week.

The gas utility announced that its annual open house will be on April 28.

Testing of some of the systems at the high rate treatment plant began this week. On Monday three pumps were set into place. The project is now 86% complete and it should be on-line in mid March.

Finally and unrelated to the Council meeting, walls have begun to rise on what apparently will be the new building for the Marathon station on Vine Street.

On the way to Limelight

Several people have asked me if those who have retired from Saint Joseph's College will have their pensions affected by the closing. The answer is "No." The retirement plan that SJC has is the same that Purdue and Indiana University and almost every other college in the United States has: TIAA-CREF. It is a defined contribution plan. Each person has an account and the college has no control over money that is put into that account. Most professors teach at more than one college or university during their teaching careers and TIAA-CREF lets them move without disruption to their pensions. The plan is a 403(b) which is almost the same thing as a 401(k) but is available to nonprofit organizations rather than for-profit organizations.

On the way to check out the Limelight for Special Creations exhibit at the Carnegie Center, I noticed that there was a crane on the worksite of the high water treatment plant. It was getting ready to lift the large metal thingie and place it into the large concrete structure.

 As I was watching the assistant street superintendent came by and said that they had planned to do the lift yesterday but getting the top metal piece attached to the bottom metal piece had taken longer than they expected. I waited a bit and then decided to go to the Carnegie Center to take pictures there. I should have had more patience because when I got back the lift was almost completed. I missed the photo that I wanted to take.

 The metal piece was still not completely in place. The workers were making adjustments below. Eventually the piece was lowered so the I-beams were resting on the concrete.

 The annual Limelight on Special Creations opened on Friday and will run until March 10. Half the gallery contains works from Cooperative School Services and half from CDC Resources. Some of the art on the Cooperative School Services side of the exhibit resemble pieces in the art exhibit from the various schools that are in the Core Building lobby because the art teachers are the same.

 There was a nice portrait of Elsa from the movie Frozen.

In addition to drawings and paintings, the CDC Resources side of the exhibit had photographs that were previously on display in the library.

On the left is a picture of the statue of General Milroy. This week as I was wandering the Internet I discovered that a small town in Minnesota located about 30 miles from where I spent most of my boyhood is named after General Milroy. I do not why--the biography of Milroy on Wikipedia does not mention a Minnesota connection.

Some other news from Rensselaer

The closing of SJC is dominating the local news, as it should. It is a huge story. My Saturday post has had over 4000 page views and now ranks as the fourth most popular post on this blog since it began over eight years ago.

However, there are other things happening around town. The Park Board met on Monday night and despite a short agenda, had a rather long meeting. It agreed to cap utility charges for the soccer club at $2000. If the use of utilities is less, the club will pay less. It agreed to plant a couple trees in Hal Gray Park, one of which replaces a memorial tree that died. The Board discussed how to remove the old playground equipment just north of Staddon Field.

The discussion mentioned that the Board would like to start re-roofing picnic shelters and someone mentioned that the Zorich Shelter in Brookside Park was named after George Zorich, an insurance salesman who had played football for the Chicago Bears. I was intrigued so on Wednesday I went to the Library to find his obituary. (I got to use their brand new microfilm reader--it was installed this week.) Zorich was born in Wakefield Michigan and played college football for Northwestern University where he was a second team all-Big-Ten selection in 1941. He served in the military from 1942 to 1944 and then played for the Chicago Bears for two years. He married a local Rensselaer girl, Jacqueline Dean, in 1947. He sold insurance with the Dean-Zorich insurance agency during his life in Rensselaer. He served on the Park Board and promoted and developed summer athletic programs, which is the reason his name is on a picnic shelter. He died at the early age of 48 in 1967. He is buried in Weston Cemetery. (I also found his obituary on-line here.)

(He had a son named Chis but he is not the Chris Zorich who was a more recent Chicago Bears player.)

The Park Board meetings are two meetings in one, as explained three years ago in an early post on these meetings. There followed a long discussion of whether the Park Corporation meetings should be closed to the public and only Park Board meetings should be open. I think most of the members thought that closed meetings would be a bad idea. (I am usually the only member of the public who attends--though on Monday there was one other person who decided to check out their meeting.)

Someone mentioned that Rensselaer Main Street would like to have a walking path in Milroy Park. It would connect to the bowstring bridge. A short discussion of other things mentioned that the house at the Clark Street (SR 114) entrance to Brookside Park would soon be torn down. It is now owned by the City. A mention of the old State Highway property had someone suggest that it would make a good dog park if it comes into City ownership. The State was willing to give the lot to the City if the City did the demolition, but now that the State has done the demolition, the State would like the City to pay.

I stopped by the lot a few days ago. The lot was clear except for a couple piles of metal. I noticed that near the middle of the lot were the remnants of support beams for a rather large structure that probably was a garage or shed. I do not recall any building at that location.

I also saw a monitoring well, which suggests at some point someone was concerned about the possibility of chemical contamination of the soil.

On the topic of demolition, I saw City workers painting pavement by the old laundromat building north of Pizza Hut. I asked them what was happening and they told me that the building would be demolished soon. I reminded them that people had said the same thing in October, but they assured me that soon Rensselaer would have a fourth auto parts store.

Another building needing demolition is the Park View Apartments. Nothing has been done with it. A few blocks west at the intersection of Vine and Weston a house burned last week. It had new siding and was undergoing renovation. The Rensselaer Republican had a story about it the day after the fire.

We will have a few days of snow and cold before milder temperatures return.

More on the closing

Sorting through a box of old papers yesterday, I found an old Christmas card. It comes from before my time at SJC and I no longer remember where I got it. It shows a scene that no longer exists and is perhaps a good way to start a post on the big changes happening now.

Every nonprofit organization in the US must file a Form 990 with the IRS and these forms are available to the public. Most of them can be found on the Internet. A quick search shows that three are available for Saint Joseph's College, reporting on years 2012, 2013, and 2014. The forms are 50+ pages, but many of those pages have no information. A quick snapshot of the finances can be found on the first page, which has data for the current and previous year.

In 2011 SJC had a surplus of $1,132,563. It was the last good year. The deficits for the next three years were $1,101,705 in 2012, $2,539,238 in 2013, and $2,496,119 in 2014.  We know from other sources that years 2015 and 2016 also had big deficits. 

At the end of 2014 SJC reported assets of more than $134 million and liabilities of almost $35 million, so net assets were just a bit under $100 million. That makes it sound as if the institution was in very good financial shape. However, digging deeper into the form to page 24 we see $84 million of the assets is from the value of land (and presumably most of that is the Waugh lands that SJC cannot sell). The value of buildings and equipment (mostly the campus) is almost $22 million. The buildings are valued at cost less depreciation and that value is probably much more than market value (what it could be sold for).

The College had two informational meetings on Monday, one in the afternoon for faculty and staff and the other in the evening for students. The evening session was webcast on Facebook and lasted three hours. It was my first experience with a live webcast. There was a steady stream of comments with it and they came with such speed that it was hard to read them all. In addition someone produced an 11,000 word summary of the two meetings as a form of minutes.

The main speaker at both events was the board chairman. He stated that the reason for the cessation of activities at the end of the semester is that the College is running out of money. The College has been financing deficits by selling assets and borrowing. It no longer has collateral against which to borrow and it has almost exhausted the financial assets that it can sell. The College has tried to raise more money from donors but could not get amounts needed to fill the gap. He stated that his goal and the goal of much of the Board had been to keep the Saint Joe's experience the same as what he and other alumni had experienced and in that they had had a soft heart. He noted that the so-called discount rate was about 65%. That means that although the listed tuition is $31K (or $32K with fees), the average amount of tuition per student was about $11K. (From the point of view of economics the whole discussion of discount rates obscures what is actually happening in the pricing of college. Maybe I will pick up on the topic in some future post.) In the student meeting, one student objected to his mention of the discount rate, saying that it suggested that he was blaming the students for the problem.

The College will be downsizing in the next few months and how and when it will do this was of great concern to the staff. Some of that downsizing will begin almost immediately but almost everyone will be out of a job in May. There is some money left in endowment that perhaps can be released to pay severance but whether that can be done has to be determined by the Indiana Attorney General. Someone asked why the College did not let the alumni know that it desperately needed money and I thought the answer to that was poor. I would have replied that when an institution announces that it has serious financial problems, lots of bad things can happen. In the case of a college, it becomes very difficult to attract students.

It is no surprise that there are at least 12 schools that will reach out to attract the freshmen, sophomore, and juniors. For them it is an cheap way to add students. If you watch Shark Tank, you often hear about customer acquisition costs--the cost of getting a new customer. There are substantial student acquisition costs, and getting transfer students from SJC will be cheaper than attracting additional freshmen.

In both meetings there was emphasis that SJC would rise again in a new and financially stable form. I do not know if the Board really believes this but many of the faculty do not. It is much more difficult to start a new college than the continue an old one, and if the administration and Board were not able to make the old one work financially, how can they be expected to plan a new one that will? Perhaps they are thinking of going more on-line, but they have no experience with that and the time to do that was fifteen or twenty years ago. When Virginia Intermount went out of business a few years ago, a Chinese group bought the campus. Perhaps the Board is thinking that some kind of arrangement can be reached with a foreign group. 

A question that was never asked is how the College can pay off its external debt. The College seems to have about $30 million in secured mortgages and notes payable to unrelated third parties. Any plans for a new Saint Joseph's College to rise again will need to figure out how the existing debt will be resolved.

Experience is the best teacher. I suspect that the lessons that students will learn from events this semester (and I am not sure what those lessons will be) will endure long after what they learn from books is forgotten.

Reflections on the closing

Unless you live far from Rensselaer and do not follow any social media, you probably have heard that the Board of Trustees of Saint Joseph's College has decided to suspend operations at the close the school year. In the words of their press release, "[T]he Saint Joseph’s College Board of Trustees voted to suspend all academic activities located on our Rensselaer campus. This will be effective following May 2017 graduation. The College will retain the Bachelor of Science degree in Nursing program in Lafayette, and potentially other programs as long as they are delivered at a location other than the Rensselaer campus."

Naturally students, employees, and alumni are upset and concerned. One alumna staged a one-woman protest on Saturday in front of Halleck Center.

To help students SJC will arrange "teach-out" agreements with other colleges to allow students to easily transfer. Marian College in Indianapolis is already seeking to enroll SJC students.  (I followed a link earlier but cannot find it now.) I suspect students will find it easier to make the transition than some of the faculty and staff. Ability to move from job to job declines as one gets older.

For some perspective on what is involved in closing a college, see this article. The article explains some of what the Board must have been considering in deciding how to present the shut down.

The enrollment statistics for SJC undoubtedly had a lot to do with the decision to close. For the second semester there were 904 students enrolled. 265 of those were seniors, and the senior class was by far the largest, more than twice as large as the junior class at 123. I have not heard any information about how recruiting for the freshman class was going, but if it was another small class as this year's class was, the College would have seen a large drop in enrollment.  The trend in undergraduate enrollment for the past four years has been a decline, from 1060 in the second semester of 2013 (which was the highest since at least 2007) to 988 to 946 to 890. (There were also 14 graduate students, which is why the number is not 904.) With a very large senior class leaving, the forecast for next year was probably low 800s or high 700s for the second semester.

The letter from the Higher Learning Commission explaining why the College was being put on probation noted: "Operational losses increased from $1.2 million in FY 2015 to a projected loss of slightly under $4 million for FY 2016; the College anticipates there will be a deficit in operating losses for the next five years ranging from $3,833,314 in FY 2018 to $4,440,328 in FY 2019 to $4,220,905 in FY 2021."

At this point an interesting question is what will happen to the campus. The buildings were designed for use as a residential college and there are few other uses that can be made of them without major changes. Dividing up the campus and selling the buildings separately would be very difficult because all are heated from the central power plant and all get their water from the SJC water system. Time will tell.

Finally, for those caught in the transition, it is useful to realize that sometimes in life what seems to be a major misfortune turns out in the long run to be something that is in fact very good. Some of the people will find new paths in life that will lead to good things that they otherwise would not have found. (And alternatively, sometimes what seem be be great good fortune ends up being something we wish had never happened.)