Owens Community College has been placed on fiscal watch by the Ohio Board of Regents, a designation officials expected as enrollment dropped drastically over the last several years.
The board of regents notified Owens on Tuesday of the fiscal watch designation. Owens officials announced the news today after issuing a warning in November that they expected to receive the designation.
“To us, financial watch is an early warning system, something that tells us you need to put a plan in place and move that formula from where we’re at right now and do better. And, I anticipate that. I’m very optimistic,” said Owens President Mike Bower.
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Central State University in Wilberforce, Ohio also was put on a fiscal watch, said a board of regents spokesman. The two notifications represent the first time a state university or college has received the designation denoting serious financial problems, though the state in 1997 assisted Central State with budget problems, according to the Office of Budget Management.
Owens must adopt a financial recovery plan within 90 days and submit it to the board of regents. College officials have already begun that work, which will include an analysis of Owens’ financial difficulty and its causes, a description of ways the college will reverse the problem, and a three-year financial forecast.
The college landed in fiscal watch because of financial composite scores it received that measure levels of reserves, net-income, and viability, or expendable net assets divided by debt.
Scores can range from 0 to 5. Institutions that score 1.75 or less for two consecutive years are placed on fiscal watch by the board of regents. Owens’ composite score was 1.1 in 2013, and dropped to 1.0 in 2014.
Colleges and universities must reach a 2.4 composite score to be removed from fiscal watch.
Mr. Bower said Owens will strive to meet that mark within three years.
If the college remains in fiscal watch for three years without seeing its finances improve, the state can appoint a conservator to take control.
Owens officials pointed to declining enrollment as a major contributor to financial problems.
The college’s enrollment has plummeted from a high of 23,606 students in the fall of 2009, when many students sought education and training amid the recession and received government incentives to go to school. Its spring headcount, released in January, numbered 11,719 students.
Owens already implemented some cost-cutting measures, including pay cuts to nonunionized employees, voluntary furloughs, and not filling vacant positions.
In January, Owens said it would issue layoff notices to an estimated 20 union and nonunion employees.
Nothing is off the table, including further cuts and tuition increases, as Owens responds to the fiscal watch designation.
“We’re taking a look at everything…; we are entering into negotiations with our organized employees,” said Steve Robinson, vice president of academic affairs. “We are looking at all areas…, to move the needle on those ratios.”
Owens also will look to increase revenue by boosting enrollment and student retention, furthering its programs aimed at providing credits to high school students, and developing its workforce training offerings.
Contact Vanessa McCray at: vmccray@theblade.com or 419-724-6065, or on Twitter @vanmccray.
First Published April 22, 2015, 7:01 p.m.
