“[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.”
According to the newspaper, R.P.I.’s financial downturn can be attributed directly to “six consecutive years of operational deficits, the issuance of nearly $500 million in tax-exempt bonds to cover costs on new campus constructions, and a steep decrease in the yearly revenue made up by grants and donations coming into Rensselaer.”
The paper’s report found that, according to its tax documents, the university’s income from grants and donations has averaged just $38.2 million for the last three years.
“We have balanced the operating budget, every year, for the past 15 years, and made strategic investments that have enhanced the university and which have resulted in a tripling of applications,” David Brond, R.P.I.'s vice president of strategic communications and external relations, told the paper.
Brond touted the hiring of 320 faculty members during the same period and boasted that the school survived two economic downturns, the tech bubble burst and the 2008 recession.
In separate statements provided to Capital, Brond characterized the newspaper’s comparison of R.P.I.’s finances to those of Lehigh University, the Rochester Institute of Technology and Worcester Polytechnic Institute as unfair due to those schools’ lack of defined benefit retirement plans.
“During this time frame, both unrestricted and total net assets of Rensselaer have been adversely affected by the necessity to continue to fund a legacy defined benefit retirement plan, established in 1944, and to honor Rensselaer’s commitment to our retirees and the remaining participants in the plan, which was closed to new employees in 1993,” Brond said. “Exclusive of the impact of the defined benefit retirement plan, both unrestricted and total net assets would have been higher by $266 million respectively through fiscal year 2013.”
Brond also said the school has “balanced the operating budget, every year, for the past 15 years,” though he did not dispute the deficits or total liabilities cited by the student paper. He said that due to a 2010 change in reporting methods, the school’s tax returns do not show that since 2001, RPI’s revenue from grants, donations and research increased from $89 million to $134 million in fiscal year 2013.
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.
The Polytechnic’s full report can be read here: http://bit.ly/1GopYmE
