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Wednesday, Nov 26, 2014

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OHIO trustees approve debt strategy, review enrollment gains


The Ohio University Board of Trustees met in Dublin, Ohio, today and heard updates related to several ongoing initiatives, including a debt management strategy designed to reduce the University’s significant deferred maintenance backlog.  

During a joint meeting of the Academics and Resources Committees, Senior Associate Vice President for Finance and Administration Deborah Shaffer gave a presentation outlining the concept of a Central Bank funding model at OHIO. She explained that this model represents a different and more effective way of managing debt that will give the University more flexibility in addressing capital needs and create the strong financial framework necessary to avoid a large deferred maintenance backlog in the future.

The Central Bank model is built on the assumption that the University will issue an additional $250 million in debt – a strategy authorized by the Board at today’s meeting – in order to fund deferred maintenance projects. The issuance will likely be in the form of taxable Century Bonds, although the University is also authorized to issue debt with shorter maturities depending on market conditions.  

“The advantage of Century Bonds is that the principal will not be due until 2114,” said Vice President for Finance and Administration Stephen Golding. “This gives the University the opportunity to invest $7 million in a reserve fund, the earnings from which will be enough to cover the total debt amount by the time it is due. If the earnings exceed the minimum amount per year established by the University, as projections indicate they will, any additional money will then be available for internal loans.”

According to Golding, this model would allow OHIO to reduce the need to take out more external debt by instead using the Central Bank as a means to reinvest existing funds into University infrastructure.  

The Board also had the opportunity to review the Century Bond guiding principles, a final version of which will be presented to the Board for approval in October. This document will provide guidelines to manage the Central Bank model and to ensure the University remains on track to repay the outstanding debt by 2114.  

According to preliminary data reflecting the first day of classes, new student enrollments at OHIO continue to be very strong both overall and in the University’s targeted populations. Vice Provost for Enrollment Management Craig Cornell shared with the Academics Committee that overall enrollments at OHIO show a preliminary increase of approximately 353 students at the first day of class across the entire system, a 1 percent enrollment increase overall. Currently this puts OHIO on the trajectory of approximately 39,000 overall students.

Several enrollment records are anticipated to be broken in 2014 with the tally of the official census at the end of the second week of classes, including:

  • Overall Freshmen – an increase of approximately 150 students, putting OHIO at 4,394 students, a 3.5 percent increase over last year.
  • Multicultural – Up 46 students, an increase of 8.1 percent over last year. This category includes students who are Hispanic, American Indian, Asian American, African American, Hawaiian/Pacific Islander, or two or more races.
  • Students from Appalachian Counties – highest enrollment since 2007; up 70 students, an increase of 10.4 percent over last year.
  • Undergraduate Athens Enrollment – Up 323 students to 17,288, an increase of 1.9 percent over last year.
  • Graduate Student Enrollment – Up 265 students over last year to 4,334, an increase of 6.5 percent.
  • College of Medicine Enrollment – Up 87 students to 607, an increase of 16.7 percent over last year.

In other business, the Board approved:

  • A resolution to approve a new base salary for President Roderick J. McDavis of $465,000 and a new base salary for Deborah McDavis of $35,000 for fiscal year 2014-15. The Board also approved a bonus of $85,000 for the president.
  • A resolution to adopt an amendment to the president’s employment agreement in order to ensure the continuation of the deferred compensation benefits established in prior agreements. The amendment adds language that was inadvertently omitted from the 2012 employment agreement. This change reflects the intentions of the parties when the 2012 agreement was signed. It does not increase or decrease the president’s current compensation.
  • A resolution to adopt a program fee of $15 per credit hour effective Spring semester 2015 for the Teacher Leadership Endorsement program in the Patton College of Education. This is in addition to other fees applicable to off-campus graduate programs.
  • A resolution to establish a $300,000 quasi-endowment, the Psychology Teaching Research Support Fund, in order to allow the Department of Psychology to better fulfill its long-term academic objectives.
  • A resolution to approve the budget to cover consultant fees and other project expenses for the University’s Comprehensive Master Plan project.
  • A resolution to allow the University to undertake schematic design for the Boyd Dining Hall renovation; the Jefferson Hall renovation; the Lin Hall infrastructure upgrade; the Morton Hall lecture room upgrades; the Ping utility tunnel replacement project; and the South Green comprehensive site design.
  • A resolution to proceed with the following construction projects: Central Classroom anatomy lab; chiller two upgrade; Computer Service Center ground, first and third floor renovations; Ohio University Chillicothe Shoemaker Center Bridge improvements; South Green Drive extension budget amendment; Stocker Center sprinkler replacement budget amendment; Ping utility tunnel replacement; Utility Tunnel Project: Park Place tunnel repair budget amendment; Utility Tunnel Project: West Mulberry Street tunnel repair budget amendment.
  • A resolution to name the OHIO extension campus in northeast Ohio “Ohio University Cleveland,” and to name the HCOM medical program located there the “Ohio University Heritage College of Osteopathic Medicine Cleveland.”
  • A resolution to authorize a 0.017-acre permanent easement to the City of Athens in connection with the construction of a roundabout on West Union Street.
  • A resolution to appoint Deborah Russell to the Coordinating Council at the Ohio University Chillicothe campus.
  • A resolution to approve an amendment to the Board bylaws clarifying the procedure for giving public notice of the Board’s meetings.