Leaders at the Vermont State Colleges sounded their first optimistic note in nearly two months on Monday, saying state and federal help could allow the college system to end the current fiscal year in the black.
The last month has been an extraordinarily turbulent time for the colleges. In the pandemic’s financial fallout, then-chancellor Jeb Spaulding in mid-April recommended the board shutter three campuses to keep the system, which had been financially precarious well before the coronavirus came to Vermont, afloat. Spaulding’s proposal proved politically radioactive, and the chancellor quickly withdrew it before resigning his post.
Former VSC general counsel Sophie Zdatny, who took over for Spaulding on an interim basis, told trustees that a meeting late last week with legislative leaders had gone well.
“I’m cautiously optimistic that we will be getting assistance from the state to help us weather the immediate storm that we’re confronting,” she told the system’s board of trustees Monday in a meeting held via webconference.
Steve Wisloski, the system’s chief financial officer, said officials in the chancellor’s office believed that many of the colleges’ coronavirus-related expenses – including more than $5 million that was returned to students for room and board refunds – could qualify for reimbursement under Vermont’s $1.25 billion federal relief package.
If lawmakers ultimately include anywhere between $7 million to $8 million for the colleges in the upcoming budget adjustment, which should be finalized in the coming month, Wisloski said the system could close out the fiscal year, which ends June 30, with a balanced budget “or maybe slightly better.”
“And that is a far better story than I ever would have expected even a week ago. And certainly not a month and a half ago,” Wisloski said.
Officials in the chancellor’s office have previously estimated they will need at least $25 million, in addition to their regular annual appropriation from the state to avoid financial catastrophe. But while top lawmakers have said they are committed to keeping all of the system’s campuses open next year while the colleges explore larger reforms, they have also said they wanted an independent set of eyes on the system’s books.
State Treasurer Beth Pearce has been tasked with assessing the system’s needs now and for the upcoming fiscal year. And the state’s Joint Fiscal Office, which performs financial analyses for the Legislature, has also hired James Page, the former chancellor of the University of Maine system, to produce an assessment of the VSCS’s short-term budgetary needs.
Before Page left the Maine colleges in 2019, he oversaw an overhaul during his seven-year tenure that cut the troubled system’s deficits and stabilized enrollment, according to the local press.
VSC trustee Chair Church Hindes said that when lawmakers first told him they wanted an independent third party’s assessment, he had told them he wanted someone with expertise in higher education finance and, ideally, an understanding of the challenges facing smaller, rural schools.
“Jim Page is all over that,” Hindes said. “That is precisely who he is.”
A contract signed with Page on Friday agrees to pay the consultant up to $17,500, including expenses, to identify financing gaps in the system for the current and upcoming academic year.
The turn-around time for Page will be short. His contract ends June 30, and Wisloski told board members he expected the consultant’s report could come within the first weeks of June.
The board on Monday also tasked its executive subcommittee with coming up with a search process for finding a longer-term interim successor for Spaulding. Zdatny’s immediate successor is expected to serve for about a year. VSC officials have suggested the chancellor’s position might ultimately be eliminated altogether in a wider restructuring of the system.
Work, meanwhile, has begun on coming up with ideas for that larger reform. Task forces have been formed at both Northern Vermont University, which would have been closed outright under Spaulding’s proposal, and Vermont Technical College, which would have lost its main campus in Randolph.
Grace Elletson contributed reporting.
