VI president presents plans to stabilize the college

BRISTOL, Va. – Reducing expenses and debt, while improving fundraising, will be central to stabilizing the financial future of Virginia Intermont College, its president said Monday.

Almost a week after the Southern Association of Colleges and Schools Commission on Colleges issued a one-year warning to VI over its finances, President Clorisa Phillips outlined her plans to address those concerns in an exclusive interview with the Bristol Herald Courier. The Atlanta-based accrediting agency flagged VI for insufficient ‘financial resources’ and lacking ‘financial stability’ – the same issues it raised in June when issuing its initial warning.

“It took years for VI to get into trouble, so it takes a long time to recover and you do it one step at a time,” Phillips said. “It takes a lot of due diligence to get back to a stable situation. What VI had in the past was a bit of a yo-yo; there would be one kind-of-good year then not. We’ve got to have sustained good years. And that takes a long time.”

Between 2007 and 2009, the commission placed VI on probation – a more serious sanction - because of a financial crisis that nearly shuttered the private, liberal arts school. This latest sanction was issued during the commission’s regular 10-year review of VI’s accreditation – which imposes extensive standards for all phases of institutional operation.

Schools can operate without accreditation, but must be fully accredited to receive federal student financial aid money.

The only planned cut is the school’s criminal justice program, which will be phased out over the next three years due to low enrollment, Phillips said. At that time, it will mean the loss of one faculty member and several adjunct instructors.

No other layoffs are planned.

At the same time, VI is adding new academic programs, including expanding its math curriculum, while reinstating women’s soccer and launching a co-ed cycling team.

“We spent this summer going after the operating expense side. VI had reduced some of the cost by laying off personnel [in 2010]. Unfortunately it was across the board, not in strategic ways. But we really went after operational expenses,” Phillips said. “We have reduced the annual budget by $140,000 and we’ll keep doing it. It’s hard, tedious work but that’s one of the things we’ve got to keep doing.”

During the past year, college officials were able to balance their operating budget – alleviating a $2 million shortfall from fiscal 2009-10.

“SACS was really impressed with what we’ve done in the past year. To go from a $2 million budget deficit to a surplus of $101,000 is huge. But they want to see sustained, steady progress,” Phillips said.

The commission will send VI a letter outlining more specific concerns, but it hadn’t arrived Monday. The school will undergo another review in fall 2012 and must submit detailed reports of steps to correct problems. The commission’s board of trustees will review VI’s case next December.

While SACS won’t set a financial benchmark for VI to attain, Phillips said she and school’s chief financial officer plan to meet soon with SACS officials to get a better idea of what they want to see.

Long-term debt, much of it borrowed to meet past expenses, provides a greater challenge.

“I inherited a large debt to finance the operations of the school – which is not the way I think about debt. You take on debt to build a building, but this was operational debt and the interest rates were high. We’ve made a little progress there but we’ve got to make a lot more,” Phillips said.

VI has retired one loan, but still carries two more totaling about $2 million, Phillips said.

“The debt plays into that because we need to get out of debt. SACS said we need to reduce external debt. We’ve got a lot of unrestricted money going towards debt payments and interest payments,” Phillips said. “The bankers are saying, here’s a reasonable goal and then we’ll refinance at a lower rate - if you can show progress toward that goal. If we can make enough progress on those, the banks will refinance.”

Addressing the commission’s concerns – and getting VI on solid ground - also will involve increasing enrollment above the current level of about 550 and more intense fundraising efforts, Phillips said, especially among alumni.

During the past year, college officials set a goal of raising $1.5 million in unrestricted funds, Phillips said. They raised more than $1.3 million in unrestricted gifts and more than $350,000 in temporarily restricted gifts. Only about 5 percent of that came from alumni.

“The most popular schools in the country – those with the greatest alumni support – have giving rates of more than 50 percent. VI’s giving rate was under 10 percent,” Phillips said. “We have been working to build up our alumni relations office and to strengthen our marketing office. We have a great story to tell but we haven’t done enough to tell it.”

Adding staff to those offices and identifying better ways to connect with graduates are key components to making improvements, the president said.

“We’re proud that we’re making progress and doing it the hard way,” Phillips said. “We’ve had a proud heritage. We need to take pride in that again, tell our story and do that consistently and regularly because that’s what every other college is doing.”

dmcgee@bristolnews.com

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