Doug Smith provided the leading edge of this story for us earlier -- that UCA in the go-go Lu Hardin years was spending beyond its means and was forced into cuts in scholarships recently to begin righting the ship.
Today, Arkansas Business brings news from a special UCA Board of Trustees meeting. The story provides more -- and staggering -- detail on the depth of the money problem at the campus. The college had an unapproved line of credit -- a line of credit for which it never received required state approval. Its reserves are a negative $5 million. It wants approval of its existing $6 million line of credit from the state, plus a $3.6 million advance on coming state money. UCA is, like so many homeowners in the U.S., underwater financially.
The $1 million buyout of Lu Hardin's contract looks more improvident by the day. The need for a new board of trustees at UCA also seems more evident by the minute. At a minimum, a top aide, Barbara Anderson, who cooperated in UCA subterfuge about the line of credit, should join those who've departed the school.
(Side note: Wonder where UCA would have been without the 500 grand Sen. Gilbert Baker got the state to pump into UCA coffers in the 2007 session? No wonder he was extended so many favors by the university in the good old days. Wonder if the senator knew about his campus' cash-strapped status. He is a higher education bigwig in the legislature, don't you know.)
PS -- I can't now pinpoint the date, but the rumor of a UCA credit line -- a strained one -- has circulated in the higher education community for months. We inquired at UCA about that rumor at one point some months back and were assured that the rumor was untrue. The schools' credit line was described as an inconsequential amount used strictly for cash flow purposes. Now we know the truth.
Lu Hardin rolled the dice on marketing his way to prosperity with an expanding student body lured by flashy ads and overly generous scholarship offers. He crapped out. Who pays the markers?
NOTED: Arkansas Business has updated its article and corrected a few points in the original article. Trustee Rush Harding defends Hardin's buyout. He says it isn't a contributing factor in the school's money woes. I don't buy his math, at least in a practical sense. Money raised for Hardin's buyout is money that can't be raised for another purpose. The point, however, isn't the impact, but the wisdom of paying a financial reward to the architect of insolvency. Unaddressed, too, is trustees' culpability.
UPDATE: I've exchanged notes with Hardin on this. He says that it was an error, he sees after the fact, that state approval wasn't gained for the line of credit, but said he'd never encountered such a request in six years as director of the state Higher Ed Department. He said, too, that he considered the line of credit that was publicly approved was routine.
"Yes, my position is that this is in the ordinary course of business. After fourteen years in the Senate -- many on Joint Budget Committee -- and six years as director of Higher Ed, it is my opinion that UCA has handled the funding of nearly 13,000 students, with state funding for only 10,000, very well."