StallionsModelT wrote:Yeah I saw an article this weekend in the DMN about UNT having trouble with their lenders possibly putting a negative rating on them. In today's higher ed climate that is a big screw up.
they were basically counting some employees in "auxiliary" areas as state employees and paying for their benefits with state funds when those employees were not eligible for them to be paid that way.....started with the library may spread to housing and dining as well and perhaps other areas
they will most likely have to pay that money back and also in the future they will get less formula funding because those employees will no longer be falsely counted as state funding eligible
along with that the bond holders were concerned about a decrease in state funding for the upcoming 2 years, but the reality is the north Texas state system has been given 37 million MORE in state funding VS the previous budget so there was no decrease in state funding.....the Denton branch campus did have a slight decrease, but the bonds are system wide with all components of the system being responsible for 100% of them
the bond holders also had concerns about the instability in leadership with all 3 components of the system, Denton, Fort Worth and the dallas community college all having new presidents coming in and the Fort Worth one is only a temp and the did not like how the last permanent Denton president was fired or the Fort Worth president was fired
there are concerns about slower than anticipated growth as well which is a combination of the Denton campus growing much slower than in the recent past and the inability of the dallas community college campus to grow at all since opening (yet they keep spending more money there) and I would all but guarantee that the law school does not meet enrollment projections and if it does it will be with poor quality students and that puts accreditation and reputation at risk......not a good way to start admitting people with a pulse to meet enrollment needs to be the "low cost law alternative" so the law school will most likely be a drag on them as well
lastly they have spent heavily into reserves already and they have some dorms they want to build and even before the accounting irregularities came to light the BOR was already concerned with the bond rating dropping to AA- from AA and that was before the outlook was changed to negative which is what recently happened
so they were already concerned with a drop to AA- from AA, but the BOR was willing to accept that to get the dorms built and now they have the financial accounting issue and a negative outlook placed on their bonds so the are probably going to AA- no matter what once they start the dorm projects
and at AA- you can't go lower before institutional investors are no longer interested in those bonds because they are mostly all restricted to the highest quality which ends at AA- and so that pretty much puts a halt to construction projects and puts a crimp on the overall budget as they work to pay down those bonds and keep the AA- and to try and keep from slipping below AA- and to eventually get back to AA or better
and the "state funding" issue was not an issue for any other system in Texas as well so it is WELL beyond that issue which in reality was not even an issue because the system is ahead in state funding from the last budget cycle
so yes it is a major screw up and leadership should be fired starting with lee the idiot jackson, but it is north Texas state so onward and......well stagnant and losing ground to everyone else!