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PHILIPPI - Gov. Jim Justice called Thursday afternoon for a scheduled emergency meeting regarding Alderson Broaddus University’s finances to be delayed.
The state Higher Education Policy Commission had set the emergency meeting for 10 a.m. this morning via Zoom videoconference.
"I'm calling on the HEPC to delay this emergency meeting because no one wants to see this university close if there's a way to avoid it," Justice said in his Thursday afternoon statement. "It may very well be inevitable, but we're going to try really hard to find a pathway.
"I'm going to meet with the HEPC, AB leadership and legislative leadership to make sure we exhaust every single avenue we can before drastic action is taken," Justice said. "It's simply too important, not only for this prestigious university and its alumni, but also for the entire community of Philippi and Barbour County."
The HEPC had been informed that utilities at Alderson Broaddus University may be terminated on Monday.
A termination notice was sent to AB from the City of Philippi for AB's water, sewer, garbage and electric service. Alderson Broaddus has an outstanding utilities balance of $775,598.70 with the city, officials said.
At 4 p.m. Thursday afternoon, an AB press statement was released saying the university and the City of Philippi had reached "a joint agreement to settle the outstanding balance and strengthen their relationship. The agreement includes a comprehensive plan to address the current balance proactively, ensuring financial stability for both parties.
"The collaboration between AB and the city of Philippi highlights their commitment to open communication and mutual understanding," the release states. "As part of the agreement, AB has agreed to kick-start the resolution process by presenting a check for $67,000 on Monday, July 31. Following the initial payment, AB and the City of Philippi have devised a structured plan to make regular payments toward resolving the remaining balance and considering future charges."
On July 13, the West Virginia Higher Education Policy Commission voted to provisionally reauthorize Alderson Broaddus University through June 30, 2024 -- with requirements that AB meet certain criteria by appointed deadlines.
"We continue to have concerns about the financial viability of this institution. However, we would like to give the new leadership team time to possibly turn the ship around," the commission's resolution released July 13 stated.
In June, AB's Board of Trustees Chairperson Rebecca A. Hooman resigned, after writing an online letter detailing the school's financial difficulties.
She has been replaced by James E. Gavin, who worked most recently with the West Virginia Department of Transportation, Division of Highways.
In Hooman's online letter, she wrote that when Rick Creehan became AB's President in 2011, he was informed the school had $4 million more in debt than he had known.
"This was not due to any financial malfeasance, just to the inadequacy in the business office," she wrote.
"To avoid closure at that time, the board voted to borrow the bulk of the endowment, basically $14 million," Hooman wrote. "... In addition, to house the larger student population and provide a stadium for the multiple sports teams, a municipal bond in the amount of $37 million was issued in 2013, at over 7% interest. The rate was not quoted until near the end of the process, and the Board felt pressure to move forward to have housing and a sports stadium ready for the following fall as enrollment was already growing quickly."
Hooman continued, "Given the continued unbalanced budget, AB defaulted on the Municipal Bond in early 2015 and began working to find a buyer for it over that summer and fall. In October 2015, AB signed a standstill agreement with the Bondholders to stop further action by them to seek payments or seize the campus.
"AB began working with USDA in 2016 to apply for a USDA rural development loan to buy out the bond and fund the Optometry school. In 2017, USDA declined full funding of this request but suggested we re-apply for funding just to buy out the bond, which we did in 2018," she wrote.
"Later that year, the 30-year loan was approved, and the bondholders accepted a buyout of $27 million using the proceeds of the loan in that amount approved by USDA, with an interest rate of just over 3%."
Hooman wrote that, "in the Spring of 2022, the Board voted to make an additional borrowing from the Endowment of $540,000 per the Endowment Use Policy developed in 2012. The Board was unaware until late Fall 2022 that donors had not been notified of this action. At both times of borrowing from the endowment, the only other option was to close the school."
Alderson Broaddus College was formed in 1932 and the institution was named a university in 2013.
The state Higher Education Policy Commission had set the emergency meeting for 10 a.m. this morning via Zoom videoconference.
"I'm calling on the HEPC to delay this emergency meeting because no one wants to see this university close if there's a way to avoid it," Justice said in his Thursday afternoon statement. "It may very well be inevitable, but we're going to try really hard to find a pathway.
"I'm going to meet with the HEPC, AB leadership and legislative leadership to make sure we exhaust every single avenue we can before drastic action is taken," Justice said. "It's simply too important, not only for this prestigious university and its alumni, but also for the entire community of Philippi and Barbour County."
The HEPC had been informed that utilities at Alderson Broaddus University may be terminated on Monday.
A termination notice was sent to AB from the City of Philippi for AB's water, sewer, garbage and electric service. Alderson Broaddus has an outstanding utilities balance of $775,598.70 with the city, officials said.
On July 13, the West Virginia Higher Education Policy Commission voted to provisionally reauthorize Alderson Broaddus University through June 30, 2024 -- with requirements that AB meet certain criteria by appointed deadlines.
"We continue to have concerns about the financial viability of this institution. However, we would like to give the new leadership team time to possibly turn the ship around," the commission's resolution released July 13 stated.
In June, AB's Board of Trustees Chairperson Rebecca A. Hooman resigned, after writing an online letter detailing the school's financial difficulties.
She has been replaced by James E. Gavin, who worked most recently with the West Virginia Department of Transportation, Division of Highways.
In Hooman's online letter, she wrote that when Rick Creehan became AB's President in 2011, he was informed the school had $4 million more in debt than he had known.
"This was not due to any financial malfeasance, just to the inadequacy in the business office," she wrote.
"To avoid closure at that time, the board voted to borrow the bulk of the endowment, basically $14 million," Hooman wrote. "... In addition, to house the larger student population and provide a stadium for the multiple sports teams, a municipal bond in the amount of $37 million was issued in 2013, at over 7% interest. The rate was not quoted until near the end of the process, and the Board felt pressure to move forward to have housing and a sports stadium ready for the following fall as enrollment was already growing quickly."
Hooman continued, "Given the continued unbalanced budget, AB defaulted on the Municipal Bond in early 2015 and began working to find a buyer for it over that summer and fall. In October 2015, AB signed a standstill agreement with the Bondholders to stop further action by them to seek payments or seize the campus.
"AB began working with USDA in 2016 to apply for a USDA rural development loan to buy out the bond and fund the Optometry school. In 2017, USDA declined full funding of this request but suggested we re-apply for funding just to buy out the bond, which we did in 2018," she wrote.
"Later that year, the 30-year loan was approved, and the bondholders accepted a buyout of $27 million using the proceeds of the loan in that amount approved by USDA, with an interest rate of just over 3%."
Hooman wrote that, "in the Spring of 2022, the Board voted to make an additional borrowing from the Endowment of $540,000 per the Endowment Use Policy developed in 2012. The Board was unaware until late Fall 2022 that donors had not been notified of this action. At both times of borrowing from the endowment, the only other option was to close the school."
Alderson Broaddus College was formed in 1932 and the institution was named a university in 2013.