BRIDGEPORT — The University of Bridgeport spent $8.3 million more than it made in the 2018-19 fiscal year and burned through $8.7 million of its modest endowment, according to a fiscal filing by the university recently made public.
The federal Internal Revenue Service documents released late last month shows that UB ended the fiscal year in June 2019 with a $25.2 million endowment. Two years prior, its endowment was at $37 million, its highest level in decades.
The 2018-19 fiscal year was the first and only full year of former UB President Laura Trombley’s tenure. She left in April, having served 18 months.
Just before her departure, Trombley sent an email to the university community on March 30 saying the university anticipated an operating deficit in the 2019-20 fiscal year of approximately $12.5 million. The filing for that year has not yet been released.
If the expected losses held true, it likely would have cut the university’s $25 million endowment in half.
At the time, Trombley said the loss came despite efforts to renegotiate vendor contracts, reduce the campus footprint and close buildings.
Due to the coronavirus pandemic, UB laid off 33 employees and furloughed 93 others, according to Trombley. Other staff took pay cuts.
“To accomplish our goal of a non-deficit budget by the end of the academic year 2021, we will continue to decrease costs and grow revenues,” Trombley wrote in the March email.
Three days later, Trombley was introduced as the new president of Southwestern University in Georgetown, Texas.
Acting UB President Stephen Healey, who was provost during Trombley’s tenure, said Friday he was willing to speak about the IRS form, but then reneged to prepare for a Board of Trustees meeting, he said. On Monday, he said he, along with UB’s chief financial officer Yuet Lee, would talk about the federal filing when he had more time.
Trombley did not respond to requests to comment on this story, nor did UB Board of Trustees Chairman Robert Berchem.
In June, UB signed a memorandum of understanding with three other higher education institutions to essentially absorb the 97-year-old institution’s programs and property.
Those deals are still being negotiated, and on Monday, Sacred Heart University announced it was backing out of the planned partnership.
Goodwin University President Mark Scheinberg, whose institution is expected to take control of the lion’s share of the seaside campus and its offerings, had told members of the Bridgeport City Council last week in a Zoom meeting that he expected the deal would happen by the end of this calendar year.
On Friday, Scheinberg said there is little he is allowed to say about UB finances because of a signed non-disclosure agreement.
“What you are seeing (in 2018-19) is pretty much in line with the same story,” Scheinberg said. “They were deteriorating during that entire time.”
In announcing the decision to withdraw from the deal, SHU President John Petillo cited UB’s finances as one of the reasons.
“The enrollment projections, and the corresponding financial projections, provided to us by UB’s principal lender and its consulting firm when the letter of intent was signed, did not materialize,” Petillo said in a memo to the Sacred Heart community.
The IRS filing
UB’s disclosed financial documents for 2018-19 show it took in $138.6 million in revenue, compared with $147.3 million in the last year of Neil Salonen’s presidency.
Expenses were down too, but not nearly enough to make ends meet. When that fiscal year ended, UB had spent just over $147 million, some $6.7 million less than the year before.
Investments also dropped nearly $9 million to $20.8 million, according to the financial documents.
Susan Williams, a vice president for finance at UB for nine years before leaving the university in August 2018, said UB’s 2018-19 financial condition is not a surprise.
“I knew it was coming,” Williams said. “I warned people. It’s hard to warn people about something you see in the future and they don’t and it hasn’t happened yet.”
Salonen had been in charge at UB for 18 years, slowly building up an institution that nearly went bankrupt in the early 1990s. It was bailed out with help from the controversial Unification Church, to which Salonen belonged.
By the time Salonen retired in June 2018, he was widely hailed as a community ally and UB had weaned itself from church support.
A year into Trombely’s presidency, UB’s Board of Trustees made an official pronouncement that the ties with the Unification Church as a benefactor had been severed. It did so when it was engaged with talks to absorb Marlboro College, a tiny Vermont liberal arts college with a $35 million endowment. That deal fell through.
Salonen, in an interview on Friday, said UB’s financial condition the year after he left does not surprise him.
“Maybe a little bit,” he quickly conceded.
Salonen said he knew the dip in international students, triggered by the Trump administration’s January 2017 travel ban, would hurt UB’s bottom line, but he also said it was a challenge that could have and should have been met.
“It is hard but you can do it,” Salonen said, adding he would have developed a plan to balance the budget even if it meant cutting staff and programs. He said he did it several times during his tenure.
“What they inherited was something done very well,” Salonen said. “There was a tremor in the force with the international students. That was real but that was the challenge, not anything else.”
Under Trombley, the focus was on domestic students and on liberal arts, her strong suits.
Trombley replaced staff and invested in things like a campus bowling alley. She moved commencement back to campus under a tent, instead of at the Webster Bank Arena at Harbor Yard.
Moving commencement was supposed to save money, but instead cost more, according to multiple sources.
When Trombley was hired, Berchem and others declined to say how much she would be paid.
Her pay, according to the IRS filing, was $297,412 for the six months she was in office during the calendar year, since she started in July 2018.
The average salary for college presidents at private doctoral institutions, as reported by the Chronicle of Higher Education that year, was about $290,000.