ATHENS, Ohio — The Ohio University Board of Trustees has been nationally recognized for its innovative efforts to manage long-term financial issues, including the creation of the OHIO Guarantee and a mechanism for funding deferred maintenance needs.
The Association of Governing Boards of Universities and Colleges (AGB) will bestow the 2017 John W. Nason Award for Board Leadership at its national conference in San Francisco April 22-24. AGB representatives will also attend a future Board of Trustees meeting to present the award.
Ohio University Board of Trustees Chairwoman Janetta King said the Board of Trustees is always looking for ways to minimize costs for students while maintaining the University’s high academic standards.
“Our goal is to ensure that college remains affordable and accessible for our students without compromising quality and student success. The OHIO Guarantee helps us deliver on that commitment to our students and their families,” Chairwoman King said. “We continue to look for innovative ways to stretch our resources as much as possible to provide a transformative education to each and every one of our students.”
Three of Ohio University’s initiatives were part of the honor:
The OHIO Guarantee
Ohio University set the standard for the state by creating a four-year price guarantee to Athens Campus students. Under the Guarantee, which started with freshmen who enrolled in the 2015-16 academic year, incoming freshmen have costs for tuition, room and meal plan, and fees locked at the same level for four years.
The stability provided by this approach provides an implicit financial incentive for students to complete their degrees on schedule. It has helped enhance retention rates and proven to be a competitive advantage in maintaining high interest in attending the University. It also ensured that financial aid would maintain its value throughout the four-year term.
OU was the first in the state to implement such a Guarantee. Today, many other peer institutions in Ohio have adopted the model, and, in the summer of 2017, the Ohio General Assembly provided incentives for all state institutions to pursue their own tuition guarantee programs.
Ohio University Innovation Strategy
The Ohio University Innovation Strategy was started four years ago to address the need for faculty and staff to work across disciplinary boundaries to address complex issues in higher education. The initiative focuses on University-wide endeavors in research, scholarship and creative activity, as well as yielding innovative solutions to teaching and institutional operations. Six areas of concentration were identified and a round of grants totaling $4.5 million was created. Four teams received $1 million each, with the rest distributed as seed money to 12 more teams. Among the accomplishments was the expansion of the Heritage College of Osteopathic Medicine, which has campuses in Cleveland and Dublin along with Athens. Instruction is delivered through real-time video conferencing simultaneously to all three campuses, resulting in a dramatic increase in the number of primary physicians, which are in short supply in Ohio. This placed OHIO in position to be a transformative state-wide institution.
Ohio University has a rich, 213-year-old history of supporting excellence in higher education. That means it also has a large number of buildings and required infrastructure that were built in the early to mid-20th century, if not before. The relatively high average age of its facilities, coupled with the changing expectations and needs of incoming students, faculty researchers, programs, and staff left Ohio University with a mounting backlog of deferred maintenance, renovation demands on facilities and infrastructure, and little capital money readily available to address them.
In 2014, OU’s Board of Trustees issued a taxable $250 million Century Bond and used the revenue to create a Central Bank managed by the University treasury. While Century Bonds have been used before, OU was the first to create a Central Bank focused on using revenues to fund deferred maintenance. The principal on the bond, payable in 2114, will be paid from the earnings accumulated on a stand-alone $7 million reserve set aside from University working capital. Based on conservative forecasts, the Century Bond funds will generate $1.4 billion that can be reinvested over the next 100 years in University infrastructure and facilities.
With the Central Bank strategy implemented, the Board commissioned a campus-wide review of facilities and infrastructure needs over the next several decades. The result was a Comprehensive Master Plan that informs the Board’s prioritization of deferred maintenance needs and strategic growth opportunities for years into the future. Individual colleges, departments and planning units can borrow from the Central bank to complete building renovations and restoration and repay the loans with interest from operating funds at a market rate.
The University’s energy facilities needs were also addressed. Two aging coal-fired boilers were shut down, and today only natural gas heats the University, achieving an important milestone in the University’s Climate Action Plan and cutting the University’s carbon footprint in half.
The Board’s efforts, healthy relationships with the University’s president and executive staff and valuing of shared governance have encouraged creativity and initiative among the executive staff; they have also built a lasting sense of partnership and accountability. The results have put Ohio University in a stronger position financially and set the University up for a future of successfully filling its primary mission of creating a transformative educational experience for thousands of current and future students.