Rensselaer Polytechnic Institute is facing debts and liabilities of nearly $1 billion, and has seen a sharp decline in its overall net assets over the past 13 years, according to an analysis of the school’s tax returns by the the student newspaper, The Polytechnic.
In 2000, the university, located in Troy, had assets totaling $929.7 million, the paper reported. But by the end of the 2012-2013 fiscal year, the total had dropped by 55 percent, to just $414.8 million drop. In addition, the university ended nine of the last 13 years with an operational deficit, including $18.1 million at the end of 2013, the paper reported.
The Polytechnic report assigned much of the blame to R.P.I.’s decision to build the Experimental Media and Performing Arts Center (EMPAC), for which it issued $160 million in bonds to help cover construction costs. Those costs ended up being much higher than originally projected, the newspaper reported.
“[EMPAC] was originally announced on July 5, 2001, with a planned construction cost of $50 million and an expected opening date in Fall 2003. However, by the time ground was broken on the project in September of 2003, the revised construction cost became $141 million, and EMPAC was expected to be ready for opening in 2006,” the paper reported. “Neither of these plans were achieved, with EMPAC finally holding its grand opening in October 2008, with a reported cost that exceeded $200 million.”
The announcement of the school’s plan to help finance EMPAC via bonds also caused Moody’s Investors Service to downgrade R.P.I.’s credit rating from A1 to A2; its rating today is an A3, with a “negative outlook.”
Clearly, this is what happens when you skimp on higher administration costs!
Brond defended R.P.I.’s performance under the guidance of its president, Shirley Ann Jackson, who was hired in 1999. Jackson has led the school in its implementation of her Rensselaer Plan, which has been the guideline for $1.25 billion in investment over the past 15 years, according to Jackson’s profile on the university’s website.
Jackson was paid $7.1 million in 2012, more than any other college president in the nation, and continues to be paid at that level.
Perhaps they should consider hiring Charlie Weis to coach the hockey team; not his primary sport, sure, but he’d be a comparative bargain.