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Elkins college takes no-borrowing approach

Editor’s note: This is one of a series of in-depth stories taking look at the state of higher education in North Central West Virginia.

ELKINS, W.Va. — Higher education is big business, and as with any big business, there are many paths one can take toward fiscal stability and success.

At Davis & Elkins College, officials are embarking on the road less traveled – one that does not involve borrowing funds to forge ahead.

BUDGET CUTS

Instead, President G.T. “Buck” Smith is reducing the college’s annual budget from $15.675 million to $14.111 million for the most current fiscal year, which began July 1. The reduction will result in $1.5 million in savings, Smith explained.

The college already is ahead of that pace, after the end of the first quarter, he noted.

“We are $67,000 on the plus side in achieving this with a quarter of the year gone, so we are doing slightly better than we are projected to do,” Smith said.

If the college stays on this path, that will net another $260,000-plus beyond the $1.5 million in projected savings.

AHEAD OF THE CURVE

This is good news for D&E, as another area institution of higher learning is facing a much different fate.

Alderson Broaddus University’s financial woes made headlines several times last week, culminating with a bank official’s disclosure Friday that ABU is in default of more than $34 million in Series A bonds. This also impacts more than $2.5 million in Series B bonds and nearly $700,000 in Series C bonds, all of which were taken out in 2012, explained Jeffrey Goff, president of BC Bank of Philippi.

Where ABU has taken the route of borrowing to build or sustain operations, D&E, under Smith’s leadership, has gone the opposite direction. The goal is to raise funds for projects first and then act, he said.

At its most recent Board of Trustees meeting, Smith said D&E’s leadership emphasized that fiscally conservative approach. It led to the following provision.

“We will not enter into any long-term debt going forward without at least 75 percent approval by not just those present but of all the eligible voters on the board,” Smith said. “It really is putting us in a straightjacket, but we really are not interested in doing things by borrowing money.”

FUNDING CHALLENGE

However, that doesn’t mean the college is treading water or that improvements are on the back burner. Nearly two weeks ago, D&E made history when it announced a $25 million funding challenge for the college, the cornerstone of the school’s 10-year, $100-million Secure the Future campaign.

The $25 million from Trustee James S. McDonnell III and the McDonnell family foundations is the single-largest donation the private, liberal arts college has received in its 111-year history. D&E has until June 30, 2018, to raise the matching portion of the $25 million.

At the time of the announcement, Smith said $10 million would be available for use outright, with the remaining $15 million match-portion to be raised in increments by the 2018 deadline for the $100-million campaign. The $100 million is the total of gifts to be received during the 10-year period from 2008-2018, with McDonnell’s portion going entirely to the college’s endowment. Prior to the funding announcement, the endowment totaled around $36 million.

FUTURE STABILITY

That is quite an undertaking for any president, especially one just coming on board, something the trustees have acknowledged, Smith said. He and his wife, Joni, first assumed leadership of the college from 2008-2013. After a two-year hiatus during which he served as president emeritus of the college, the Board once again sought Smith’s assistance.

Smith, who never has taken a salary during his years with the college, said he agreed to return to D&E as of July 1, to once again bring it through a time of transition. Initially, he said he and Joni only committed to helping while a search for a new president was underway.

The McDonnell funding challenge changed that perspective, he said.

“It has roused a concern among the leadership on the board as to how realistic is it that you go and find a successor president who doesn’t know the college, isn’t known by the college, has no history with us, doesn’t know the constituency. The donors don’t know them, and giving is essentially based upon relationships, rather than just because you have a need and, I’ve got money that we are going to put those two together,” Smith explained.

“So Joni and I have added to what we had said: that we will stay until they find the right person or until this challenge is met, whichever happens first,” he elaborated.

“The likelihood of that, though, is limited, so that then means we will stay until we have met this challenge.”

That is a significant commitment by Smith, who said he turns 80 this month. Joni Smith is 81, but Buck Smith said age merely is a number.

“(U.S.) Sen. (Henry Gassaway) Davis was 80 when he founded the college and when he ran for vice president, too. And health care wasn’t then in 1904 what it is today,” Smith said with a chuckle.

“If life were certain and we knew how things were going to go or work out, then where would be the fun in it? You need the adventure, the discovery. You take certain risks, but you don’t take undue risks,” he continued.

RESTRUCTURING

Smith indicated he isn’t afraid to act. He pulls ahead as necessary. That included making some changes around campus. Some of those recent changes included a reduction in staffing, resulting in the elimination of some part-time assistant coaching positions within the athletic department.

Smith said these positions paid $16,000 annually, included an opportunity to share housing with four other assistant coaches at a total cost of $500 per month (or $125 per person) and free meals in the dining hall. The package was extensive and worth about $25,000 a year, which would equate to $50,000 if full time annually.

“I thought there has to be a better way,” Smith said.

The cuts all were to out-of-season assistant coaching positions for a total of five reductions in force. Most had just been hired this summer, and in one case, with the assistant swimming coach position, was an expansion. In the case of swimming, there were fewer members on the teams this year, but staffing was increased to include a new assistant coach. It just didn’t make sense, Smith said.

Recently, during the college’s inaugural Day of Giving, “The first gift to the college was a gift from that (head) swimming coach,” Smith said.

“She cares that much. She didn’t go here to school. She’s only been here for one year as the coach. She cares enough about the place. She wasn’t angry about losing an assistant coach. She wanted to help, and that’s the way this place is made up of people like that who really love it and care about it,” he continued.

Such selflessness provides hope and inspiration in tough times, Smith said.

He outlined the plan for additional cost savings. Some positions have been eliminated, while others have been absorbed by qualified individuals on staff, which stood at approximately 214 people before the reductions, he noted. One of the full-time positions that will not be replaced is that of dean of students, also a position that recently had been filled this summer.

Smith said some senior staffers are taking temporary pay reductions, instances of double pay were eliminated, and some contracts were reduced in length, such as from 12 months to only nine.

The total savings Smith said he hopes to see from the reductions is $689,032 in payroll and/or compensation. Of that, $284,363 in cuts remain, and four more full-time positions still will be phased out.

With all cuts, Smith said student needs will be first and foremost. He said nothing that directly impacts them or the quality of their education will be part of the reductions.

“The cardinal rule was, I was not making reductions where students would be affected,” Smith said.

LOOKING AHEAD

There are approximately 800 students currently enrolled for the fall semester. Of that, nearly 30 percent attend thanks to the Highland Scholar program. Currently, that program offers $76,000 in tuition assistance for a four-year residential student or $64,000 for a commuting student over the same four years for graduating high school seniors in the following seven counties: Barbour, Randolph, Pendleton, Pocahontas, Tucker, Upshur and Webster. Students must have a minimum GPA of 2.5 to qualify, and the program was recently expanded to students in all 55 counties, at slightly lesser award amounts.

“West Virginians are bootstrap people who aren’t afraid of hard work. They don’t want a handout, they want a hand up,” Smith said of the scholarship program, indicating it is a way for the college to give back to the community.

He said he is counting on a seasoned management team to help keep students at the forefront of everything the college does. Among the key members of that team are Sandy Neel, director of admission and counsel to the president. She supervises the admission and financial planning aspects of the college.

Joining D&E, effective today, is her husband Wallace “Wally” Neel, who is volunteering as the college’s new executive vice president and provost.

Like Buck and Joni Smith, this husband-and-wife duo echoed that students come first.

“We are trying to enrich that opportunity that we have established here,” said Sandy Neel, who moved from an interim position to her current role in July.

“We hope to continue that,” said Wally Neel, who will occupy the office adjacent to Smith’s in Halliehurst.

Smith said he appreciates the assistance, especially during this critical time for the college.

“Wally had told me some weeks ago he would be glad to lend a hand in any way possible. With the major attention I now need to spend in helping meet the McDonnell Challenge, I asked if he would be willing to oversee some of the college’s daily operations on my behalf. His response: ‘Whatever you need?'”

The key to D&E’s future is to deliver, Smith said.

“(It’s) not to overstate what we claim or what we say we are or what we are doing,” Smith said, noting the future always is uncertain.

“Rather than looking to our past and saying, ‘Ah we are going to continue on the same path of debt and poor finances and poor enrollment or whatever,’ or looking to the left and right and seeing what everybody else is doing and then saying from all that that’s how we are going to try to muddle through, we are trying to lay out what it is that we are best positioned to do, what do we do well, is it needed and how can we do it better, and let’s put that out there,” Smith emphasized.

“There are no guarantees what the next three to five years will be, but when a Jim McDonnell, who watches you closely for 24 years, says this is worthy of my more serious investment because I believe in this place and its direction and its leadership and where it is going and others join in that it’s kind of like leapfrog in that one thing leads to another.”

Leapfrog can go one of two ways – forward or back – Smith said.

Rather than taking the college on a path of regression, Smith said he is leading it forward, a mission he has stated more than once is his “life’s greatest work.”

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