The University of Colorado used money generated from last year's 9.3 percent tuition hike to reward many of its top administrators with raises, increasing Chancellor Phil DiStefano's salary by $49,000 to $389,000 and doling out tens of thousands of dollars in salary increases to other high-paid employees.
Now, with university administrators proposing an additional 15.7 percent tuition increase and a second round of raises, some CU regents say they were misled about what was presented to the board and to the public last year as a merit-based salary pool to reward faculty and staff with 3 percent raises.
"I can't support it this year," said Regent Sue Sharkey, R-Windsor. "Part of this is a fairness issue for me. We are asking families to pay more in tuition while tuition has been going up and incomes have not. Not only are people having pay freezes, in many cases salaries have decreased 10 to 20 percent. That's not something any of us want to see, but it's the reality of our economy."
In an interview, CU President Bruce Benson defended the raises, arguing the university's salaries are still far below those of peer universities. A chancellor's salary at a campus comparable to Boulder, for example, is $457,000, which is $68,000 more than what CU pays DiStefano.
"I've got to pay for good people," Benson said. "I want quality. You're not going to have quality if you don't have quality people working for you."
Last year's tuition increase netted the CU system roughly $36 million in extra revenue, with the regents agreeing last spring to set aside $11.8 million of that money for a compensation pool to reward top faculty, staff and administrators.
Minutes from the April meeting when the regents approved the salary fund show that it was described to the board as a "3 percent pool." CU officials on Friday explained that the 3 percent figure refers to the portion of the university's total compensation budget.
An e-mail that DiStefano sent to Boulder campus faculty and staff in October said that classified staff who were meeting or exceeding expectations would earn a one-time, 3 percent raise and that eligible faculty and professional exempt staff have received salary increases from an "overall 3 percent merit pool," which was allocated based on individual performance. Some of CU's top performers also earned more, for reasons that include extra duties or retention.
Earlier this month, CU officials presented an initial tuition proposal for the 2012-13 school year that includes a 15.7 percent increase for in-state students, which would translate to an extra $1,203 for students in the College of Arts and Sciences -- raising annual tuition to $8,875 next year.
Regents likely will vote on next year's tuition rates in March, and they'll be asked to once again approve a salary pool, this time for about $10.3 million to fund a second round of raises.
The Board of Regents viewed, in a private meeting, a report that detailed how last year's compensation pool was distributed. The Camera obtained the salary report under the Colorado Open Records Act.
The report shows that nine administrators were given merit raises exceeding $10,000. Separately, some other top administrators received promotions netting them salary increases, such as Jill Pollock, chief human resources officer, who received a $30,000 raise, increasing her salary to $240,000.
Regents say they were misled
Last spring, the CU Board of Regents narrowly approved a 9.3 percent tuition increase, and, afterwards, voted to set aside some of that extra tuition revenue to fund a salary pool.
Sharkey, who voted against the tuition hike, said she was compelled to vote in favor of the compensation pool after she heard that CU employees had pay freezes for three years, and their take-home pay decreased because, for example, their health care premiums had gone up.
"They were bringing home less money and it was creating a hardship on our employees -- primarily the lower-paid employees," Sharkey said. "Merit increases would have helped ease those hardships."
Sharkey said she was under the impression that employees were getting one-time bonuses as a way to reward top-notch faculty and staff, and to keep them from being lured away to jobs at other universities.
"We need to look at those quality employees who are experiencing hardships and working in lower-paid positions," Sharkey said. "That's where the focus needs to be."
But the disbursement of the raises was dictated by how CU employees are defined -- a stipulation that CU administrators said they thought they had articulated to regents during briefings about the salary pool.
"We had a communication breakdown where we perhaps understood what we were proposing and they had a different understanding," said Ken McConnellogue, spokesman for the CU system.
Classified staff members, who are part of the state personnel system, were only eligible for one-time bonuses, because their salaries are tied to state rules.
A total of 7,567 employees across the entire CU system were eligible for raises from the compensation pool: 5,130 were faculty members and 2,437 were professional staff members.
Fifty-one percent of eligible faculty received raises, compared to 71 percent of eligible professional staff members. Administrators fall in the professional staff positions, which are defined as jobs that provide leadership and management.
Raises for CU administrators were among the largest doled out.
The salary pool funded a $24,878 raise for Pam Shockley, chancellor of the Colorado Springs campus, and a $20,000 increase for Jerry Wartgow, chancellor of Denver campus. CU gave a $19,000 raise to Jeffrey Cox, the Boulder campus's associate vice chancellor for faculty affairs, who now earns $184,000, and a $15,424 increase for William Kaempfer, CU-Boulder's associate vice chancellor for budget and planning, who now earns $186,804.
Jim Geddes, R-Sedalia, was the lone regent voting against the compensation pool last year, saying he was concerned about the burden it would place on students and their families.
He also said he was misled about how the money was to be used.
"I had the impression the salary pool would be distributed on a merit basis to employees on a one-time, year-end bonus -- not be a base-building salary raise," he said.
Geddes said he will not vote for a second round of pay increases.
"Most, if not all, of the people who got raises are high-quality, deserving individuals," Geddes said. "I have great respect for their stature, expertise and their value to the university. However, I feel in this time of economic distress for our students and their families and the citizens of the state, we're more responsible as a state university to apply constraint and not choose to expend funds that aren't absolutely necessary to the critical education mandate we have."
CU officials said they provided consistent briefings for the regents about the salary pool leading up to the vote last spring. The raises were distributed last fall, and went into effect at the end of October.
'Phil is a hell of a chancellor'
Benson, CU's president, defended the raises and said he supports a second round this year.
He pointed out that CU's administrative costs, which include salaries, are 44 percent below those at peer universities and that CU ranks low in its tuition and fee rates when compared with peer public universities in the Pac-12.
Benson, a self-made oil tycoon, is earning $359,100 at CU and passed up his raise this year. The median salary of presidents at public universities registered at $436,000 in 2010, according to the Chronicle of Higher Education.
DiStefano's14 percent raise last fall was the largest dollar-wise, and Benson said the chancellor deserved it. DiStefano, who has worked for the university for nearly four decades, was promoted by Benson to chancellor in May 2009.
"We're in a market," Benson said. "There's free market competition. Is Phil going to quit? No. There's a fairness issue here. When I hired him, I talked him into taking a low wage. I think it's time we get him somewhere near where the average is. Phil is a hell of chancellor."
Benson also pointed out that DiStefano is 65, and, when making salary decisions, he considers how long employees will be working.
"They have to build up for their retirement," he said.
Speaking on behalf of DiStefano, Boulder campus spokesman Bronson Hilliard noted that chancellor is the campus's lead fundraiser for the university's $1.5 billion "Creating Futures" campaign, and last year the campus exceeded its goal of $42 million by $4.9 million.
Hilliard also pointed out that federally sponsored research has increased by more than $100 million during the past five years to $359 million in 2011 under DiStefano's leadership, who formerly served as an interim chancellor and provost.
DiStefano also led the campus into the Pac-12 and is the architect of CU's long-term planning document, Flagship 2030, Hilliard said.
"He's really led a renaissance on this campus," Hilliard said.
CU Regent Joe Neguse, D-Boulder, said there's no dispute that the majority of CU employees' salaries are below those of their peers at universities across the country. But, he said, those rewards should be given when the university has the funds to do so.
"Times are tough right now, and in a time of great economic uncertainty, I don't think it's appropriate to give large salary increases," he said. "At the end of the day, I'm deeply troubled that students are being asked to pay more while salaries are going up."
He said that he's more skeptical of supporting a second round of raises this year.
"When voting for the salary pool last year, I had believed and hoped the increases would be marginal, merit-based increases distributed appropriately," he said. "I don't believe that was the case."
Yet Regent Steve Bosley, R-Longmont, who voted to approve last year's merit-based salary pool, noted that employees hadn't been given raises for nearly three years. He also said that CU only opened up the compensation fund after it hit budget targets, including enrollment.
Bosley added that the quality of CU is dependent upon its employees.
"We're below the market and we have to try to keep people here," he said. "If we lost people we'd have to replace them at a higher price."
Students wary of next tuition hike
CU student Leslie Fowler steamed coffee drinks during a morning rush at Baby Doe's bakery in the student center one day last week -- a part-time job that's among the strategies she has in place to keep from sliding into even deeper student-loan debt.
She also earns a merit-based scholarship from the College of Arts and Sciences and lives at home with her parents, commuting an hour each way to campus.
"It's cheaper to drive a Prius to campus from Fort Collins than to live in Boulder," said Fowler, a classics major.
Still, in her sophomore year, Fowler said she's already accumulated $10,000 in student-loan debt. She's wary of another round of tuition increases.
"I'll have to take out extra student loans to keep up," she said. "I wouldn't expect administrators to be taking raises at this time."
CU has raised tuition between 8.8 percent and 9.3 percent each of the last four years. The first proposal presented to the board earlier this month would effectively raise tuition by 15.7 percent by changing the way students are charged for tuition.
Currently, full-time students pay for 11.25 credit hours a semester at $341 apiece -- yet they can take up to 18 credits, or sometimes even more with campus approval. Campus officials have suggested that next school year, full-time students be charged for 12.5 credit hours, and that the cost of a credit hour increase 4 percent to $355 to account for inflation. By 2014-15, CU plans to charge full-time students for 15 credit hours per semester.
But finance officials on the Boulder campus -- at the request of some regents who have balked at the administration's plans -- are drawing up alternative tuition proposals, including one that would feature a locked rate for in-state students.
Carole Smith, a studio arts major, already is $80,000 in debt and said a double-digit tuition increase would trigger her to transfer to another college elsewhere in the state where tuition is lower.
Kyle Larkin said he's irked that administrators are getting raises while tuition continues to go up, and that his family is struggling to pay the cost of a CU education.
The integrated physiology major said financial stress over tuition has affected his performance in school, causing him to be on academic probation.
CU junior Andrea Randolph, a chemical and biological engineering student, said she's responsible for paying two-thirds of her education, and her family is funding the remainder.
Randolph said she takes out loans and works up to 30 hours a week, splitting her time between a pizza joint and a bank. She said she's worried that a double-digit tuition increase will force her to take on extra hours at work and she'll scale back the number of credits she can take, tacking more time on to her undergraduate career.
Tuition in the College of Engineering and Applied Science is higher; a 15.7 percent rate increase would shake out to an extra $1,674, raising the total to $12,340.
Randolph said she supports modest raises for faculty members and commends Benson for turning down his own pay increase. She finds fault in the state for its lack of higher education funding, with Colorado colleges among the most poorly funded in the nation.
But she said she doesn't think her extra tuition dollars should fund hefty raises for administrators.
"We're hurting," Randolph said. "They should feel it, too."