SC State trustees standing by embattled president
S.C. State University trustees backed embattled president Thomas Elzey Thursday, a day after black state lawmakers called for his ouster from the financially troubled school.
Trustees chairman William Small said the board would “respect” its contract with Elzey, hired 20 months ago to turn around S.C. State.
“Just as president Elzey inherited many current problems of the university, the present board also inherited these problems,” Small said.
Most trustees joined the S.C. State board about the same time that Elzey arrived in Orangeburg from The Citadel in 2013.
Meanwhile, the state Senate passed a bill Thursday to allow S.C. State to cut its costs by furloughing staffers for up to 20 days. Separately, a bill was introduced in the S.C. House to allow a state board to take over the school, and dismiss its trustees and Elzey.
Statement from SC State trustees chairman William Small
SC State enrollment update
SC State University financial update (41 pages)
S.C. State’s financial woes date back to at least 2007, when school leaders started borrowing money from a community program to cover unpaid bills. The school borrowed $6.5 million over the next seven years.
That, along with declining state funding and a drop in revenues from falling enrollment, helped create a $14 million deficit by early 2014 that still troubles the state’s only historically black public college.
S.C. State owes $11.2 million in unpaid bills, S.C. House lawmakers said. To help with those bills, the school has received $7.5 million of $18 million in promised loans and extra funding from the state.
The Legislative Black Caucus issued a vote of no confidence in Elzey Wednesday, a day after a House budget panel voted to close the school for two years, and fire all its trustees, staff and faculty. The state would assume the school’s $87 million in debt, while S.C. State’s 2,985 students would get state scholarships to attend other colleges under the House plan.
Supporters of suspending operations at S.C. State say they are giving the Orangeburg school a chance to start over before vendors sue over unpaid bills.
House, Senate moves
The House bill introduced Thursday would remove S.C. State’s trustees and transfer their authority to the state Budget and Control Board, which would fire president Elzey. The takeover bill would keep the 119-year-old school open unlike the proposal to suspend operations, which would cost S.C. State its accreditation.
S.C. State’s accreditation, already on probation because of its finance and governance issues, is important because students cannot receive federal financial aid to go to unaccredited colleges.
Chairman Small said Thursday it was “premature” to talk about getting rid of current trustees.
The House bill is sponsored by state Reps. Kenny Bingham, a Lexington Republican who is upset that S.C. State continues to ask lawmakers for money, and Harold Mitchell, a Spartanburg Democrat who was among the black caucus members who voted Wednesday to oust Elzey.
Elzey and S.C. State’s trustees are under fire from some state lawmakers for failing to develop a recovery plan to address the school’s faltering enrollment and budget. For example, the school was expecting more than 3,600 students this year and built its budget on those numbers.
Elzey handed out an updated budget plan to trustees Thursday to adjust for the school’s 615-student shortfall in enrollment.
The school has cut $1.8 million from its budget for this year, dismissing some faculty and administrators, and reducing its athletics spending, according to a summary of the budget plan provided reporters.
The budget plan stops short of requesting the school’s board declare a financial emergency, which would allow the university to fire tenured professors, Elzey told reporters after the meeting.
Firing professors could harm the school’s accreditation, Elzey said. The school’s trustees also have expressed no interest in taking that step.
Elzey said he has presented “comprehensive” financial and strategic plans to trustees and legislators. The school also has plans to boost its enrollment and fund raising, he said.
Another cost-cutting move is making its way through the General Assembly.
The state Senate passed a bill Thursday that would allow S.C. State to make its employees take up to 20 days of unpaid furloughs by June 30. That proposal will head to House next week.
Elzey told a House budget panel last month that a seven-day furlough would save the school about $1 million.
Small said Thursday he does not expect the school would make employees take off 20 days, or four work weeks, without pay. He did not say how many days of furlough the school would require.
‘A lot of it has to do with image’
S.C. State continues to struggle paying its bills. Its deficit has grown by $1 million since the beginning of the year.
The school wants to renegotiate contracts with its existing food and maintenance vendors. It is unlikely any other companies would place bids to provide those services because of S.C. State’s overdue bills, according to documents shared with trustees Thursday.
The school owed $6 million combined to food-service vendor Sodexo and maintenance firm DTZ at the end of 2014, according to data obtained by The State.
More than 20 percent of the school’s bills were overdue by four months or more, according that data. One vendor, owed $2,222, has not been paid since 2006.
The school predicts it will have no cash on hand by June 30, the end of its fiscal year, according to documents shared with trustees.
S.C. State ran out of money last year and used some of a $6 million loan from the state, meant to pay off overdue bills, to cover its payroll and debt payments. S.C. State has requested lawmakers allocate $6 million to repay that loan, due June 30.
S.C. State also has received the first $1.5 million installment of a three-year, $12 million state infusion. That extra money was recommended by a panel of current and former college presidents and approved by a 10-member legislative committee last year.
None of that financial help is helping add students to S.C. State’s campus.
Spring enrollment is down 10 percent from the fall and 29 percent since 2010.
“A lot of it has to do with image,” Betty Boatwright, S.C. State’s vice president for enrollment management, told trustees. She cited media coverage of the school’s ongoing financial troubles.
While spring enrollment is down, the school’s projected revenues for this year have not been hurt because of an increase in out-of-state students. Those students pay more than twice as much tuition as in-state students.
This story was originally published February 12, 2015 at 6:35 PM with the headline "SC State trustees standing by embattled president."