Fairmont and Pierpont Reaffirm University’s financial strength and stability—correct inaccurate statements by state legislator
Fairmont State University and Pierpont Community & Technical College have each worked tirelessly to carry out their missions and serve their students, employees and all of North Central West Virginia.
Less than a year ago, Fairmont State and Pierpont signed an Agreement detailing the total separation of the two institutions. Since that time Fairmont State has met all requirements of that separation. As the University moved forward, they renegotiated their Bond agreements to ensure continued financial stability and strength of the institution. Outwardly, entrance signs to the campus were uncovered and repainted, campus branding programs expanded, and with the space available after Pierpont departments vacated campus, the University reimagined many of these spaces to better serve their students. With the University moving fully towards its new future as a separate institution, all eyes were set ahead, and not behind.
The natural question is then, why is reunification once again an option for the two institutions? Over the course of several months, Pierpont’s Board has grown concerned about the continued financial viability of the institution. It, therefore, approached Fairmont State's Board and asked it to join in reimagining a shared vision in order to ensure that students, programs, and businesses in North Central West Virginia will continue to have the opportunities available to them that Pierpont provides.
During a press conference in Charleston on Feb. 9 and through multiple social media posts, WV State Senator (D-Mon 13) Bob Beach has repeatedly made inaccurate accusations against Fairmont State University including a 12-point request to the state auditor regarding University funding and a call for a full forensics audit.
In a tweet, WV Auditor JB McCuskey responded,” The @WVAuditor has spent 5 years working with @FairmontState to reform and modernize their financial processes. They are a leader in automation and efficiency and transparency. We review their invoices routinely and work with their staff. There have been zero red flags.”
Each year, the University, as part of the WV Higher Education Policy Commission Fund, is required to complete an audit via an independent accounting firm. Those findings are then presented before the Board of Governors during the December full Board meeting. Fairmont State University concluded the fiscal year with significant increases in its net position for the fourth consecutive year and received an unmodified opinion on its audit. According to WVHEPC’s December 10 board meeting agenda, Fairmont State’s Composite Financial Index currently stands at 5.07, excluding its Foundation’s resources, which ranks the highest among four-year higher education institutions throughout the state of West Virginia. At the same meeting, WVHEPC reported Fairmont State had 270 days cash on hand as of June 30, 2021, also the highest among four-year WV higher education institutions. During the December 9 meeting of the WVCTCS, Pierpont was reported to have 127 days of cash on hand and a Composite Financial Indicator of -2.96. As of this report, Pierpont had the lowest financial scores of two-year colleges in the state.
On April 1, 2021, Fairmont State and Pierpont entered into a final separation agreement that laid out obligations of each institution. It addressed the manner in which Pierpont would continue to support debt service payments for bonds in which its revenues had been pledged from 2002 through 2032, when the debt is extinguished. The agreement calls for Pierpont’s portion of the debt service to be provided through a payment of $1.3M in FY22 and $1.5M from FY23-FY32.
This final separation agreement also laid out the exit plan for Pierpont from Fairmont State’s locust avenue campus and National Aerospace Education Center in Bridgeport, WV, to be completed by June 30, 2022. To cover the cost of Pierpont’s continued occupancy and operation of spaces on those two campuses for fiscal year 2022, Pierpont will pay $650,000 for FY22. Pierpont has benefited from streamlined services and buying power provided by Fairmont State through annual agreements for over 15 years. The amount paid by Pierpont for FY22 is the lowest amount they have contributed towards spaces and services they utilized since the agreements began back in 2005.
In regard to Fairmont State’s state appropriations have remained among the lowest per in-state FTE of all state institutions. In Fall 2018, Governor Justice appointment a Blue Ribbon Commission on Four-Year Higher Education, charged to create a funding formula to equitably distribute funding to four-year higher education institutions. The legislature adopted the recalibration formula and distributed additional appropriation support to all four-year state institutions. Fairmont State received a $3M increase in its appropriations, but still remained one of the lowest funded in the state. In FY22, the legislature provided $3M in support of the final separation. Fairmont State received $500,000 of the total while Pierpont received $2.5M. Fairmont State has not received an increase in its base appropriations for the purpose of separation.
Beach also has raised questions regarding The Blanche Kinney Endowment. This endowment remains in good standing and under the stewardship of the Fairmont State Foundation, who ensures adherence to the donor agreement.
In addition to its strong financial health, the University has introduced more than 15 new academic programs, minors and concentrations over the last several years, including at the bachelor’s and master’s levels.
Should the legislature decide to introduce and enact legislation into law and reunify the two institutions, the legislation would provide for a transition period to submit a change of control application to the Higher Learning Commission (HLC) for approval of the unification by the HLC board.
In addition, an advisory group including constituents from both institutions will be formed to oversee this integration and work to make it as seamless as possible. If legislation is adopted, Pierpont will become Pierpont College of Community & Technical Education. This new college within Fairmont State will be led by a dean similar to Fairmont State’s other five colleges. In addition, the Fairmont State Board of Governors will add three new members, including a member of Pierpont’s faculty and its board, as well as a member with business experience and the employment of graduates trained in community and technical education.
An integration of two institutions will not happen overnight. Please be assured that no plans for immediate reduction of jobs or programs are in place. The advisory committee’s goal will be to study all aspects of the two institutions and make prudent decisions that will benefit students, the people of North Central West Virginia, and its industries.
Both organizations stand ready to work alongside the legislature to answer any questions they may have regarding the future of both institutions.
ADDITIONAL RESOURCES
· December 6, 2018—Fairmont State University achieves excellence in financial position
· July 22, 2019—Fairmont State ends fiscal year financially strong—looks forward to FY20
· October 17, 2019—Fairmont State University posts largest financial position increase in over ten years
· December 5, 2019—Fairmont State continues excellence in financial position
· December 10, 2020—Fairmont State continues excellence in financial position for three consecutive years
· May 13, 2021—Fairmont State University to Expand Student Program Offerings
· WVHEPC 2021 Financial Statements
