VTC Requests Another Loan As Financial Woes Continue
Vermont Technical College is requesting another $2.5 million loan from the state college system. The loan will go toward erasing an ongoing deficit at VTC.
Last year, state college trustees also loaned the college $2.5 million. At that time trustees believed a single loan would be enough to assist the college while a new business plan was implemented.
But according to documents released in advance of Thursday’s trustees meeting, VTC has not met enrollment projections and hasn’t been able to cut costs as much as anticipated. The college is requesting the supplemental loan for fiscal year 2015 which begins July 1.
State Colleges Chancellor Tim Donovan says trustees knew it would take several years to address the deficit.
“Whether it’s grow the college or restore the college to a stable level of enrollment you have to do that deliberatively,” says Donovan. “If you do that by simply cutting and not approaching it strategically, you do more harm than good. So the board knew a year ago that it was going to take several years to pull out of this and it’s bigger than they thought a year ago.”
Earlier this year, the trustees were told that the college was on track to record a significantly larger deficit than anticipated for the current fiscal year. According to the documents accompanying this week’s Board of Trustees meeting, based on the first three quarters of the 2014 fiscal year, the deficit will be $2.5 million, $1.5 million higher than anticipated.
“A couple of main factors contributed to this issue,” the documents state. “Whereas the business plan called for an in-state and out-of-state enrollment increase of 2 percent and 10 percent , the college saw an enrollment decline during FY2014. In addition, budget cuts that were included in the FY2014 budget were not realistic and/or not achievable.”
Trustees were told it’s likely the college will need another, smaller, loan for the fiscal year that begins July 1, 2015.
In March VTC President Philip Conroy was placed on administrative leave until his retirement in November.
Dan Smith, the Vermont State College system’s director of Community Relations and Public Policy is serving as acting president.