Less than a week before its accreditation appeals hearing, Augusta and Georgia community leaders came together Tuesday to show support for Paine College. Some are now working on ways to help the college obtain a $1.5 million loan or line of credit that could further bolster its argument that it has reversed its financial woes.
Calling themselves the Augusta Committee to Help Paine College, about 30 business and community leaders got a candid synopsis of Paine’s financial troubles and what has happened under Dr. Samuel Sullivan, the president of Paine, and a new board of trustees to dig itself out. The meeting’s hosts were Augusta businessman Nick Evans and William S. Morris III, the publisher of The Augusta Chronicle and chairman of Morris Communications.
It included other prominent business leaders, such as E.G. Meybohm, Jim Hull, Nick Evans, James Kendrick and Robert Osborne. Augusta Mayor Hardie Davis and former Mayor Deke Copenhaver were in attendance, along with a representative from U.S. Rep. Rick Allen and Augusta University President Brooks Keel.
In his opening remarks, Morris said the meeting was called to talk about the good things now happening at Paine.
“Things are better now – much better,” Morris said.
U.S. Sen. Johnny Isakson called in on his way back to Washington to offer his support for Paine and its leaders.
“It’s a great historically black college and university in the United States of America and one that we want to keep and one that we treasure,” Isakson said. “Your help will be greatly appreciated.”
Morris said he and Evans have been meeting with Paine officials to find a way to help the school.
“We, like all of you, are very concerned about this college and we are very much in support of trying to find a way to help get it turned around and get it on a good, long-term solid footing,” he said.
Paine is facing a hearing Monday before an appeals committee after the Southern Association of Colleges and Schools Commission on Colleges voted in June to remove Paine from its membership after the college failed to meet three financial standards after two years on probation. Morris pointed out that its problems are purely financial.
“Paine has good academics,” he said. “Nowhere in this process has the academic record and structure and competence of this school been questioned.”
Paine ran into a number of financial issues, including a decision by the U.S. Department of Education to raise credit requirements for the Parent PLUS loan program, which hit Paine and other HBCUs especially hard, said Michael Thurmond, the chairman-elect of Paine’s board. Between 2011 and 2013, that cost those colleges $166 million, and at Paine loans declined 73 percent, from $1,547,161 to $422,909, a loss of more than $1.1 million, he said.
“That hurt Paine College,” Thurmond said
During that same period, the college embarked on an ultimately disastrous football program that cost it $1 million a year and some construction. By the time Sullivan took over as acting president, “he inherited a $10 million budget shortfall,” Thurmond said. “That was his welcoming gift.”
What followed were budget cuts and belt-tightening, including layoffs of faculty and staff members this year and a pay cut of 10 percent, Sullivan said. The school went from a negative total net assets of $2.4 million in its fiscal year 2014 to a positive $2.4 million in net assets in fiscal 2016 and ended that year with a positive net balance $634,000, according to financial information the college shared with the group.
Paine just finished its most successful fundraising year ever, with $4.2 million in fiscal 2016, Thurmond said. Though Tuesday’s meeting was meant to be informational, Evans broached the idea of having Augusta business leaders help Paine secure a $1.5 million loan or line of credit, which Thurmond said would help improve its assets-to-liabilities ratio, before Monday’s meeting.
Thurmond said he realized that part of what Paine’s new leaders need to do is re-establish trust within the business community that it is worth investing in, and he assured them it was.
“The death spiral has stopped,” Thurmond said. “It is no longer good money after bad.”
Evans said that was exactly what it would take to gather more community support, “that we’ve got to be convinced that it is not good money after bad and that it can go forward.” He pronounced himself convinced.
“I’m ready to write that check because I believe,” Evans said to applause. “We do need support, and we do need this community to step up. We need black, white, everybody to step up because this school is important to our community.”
Among those who attended the Augusta Committee to Help Paine College meeting Tuesday at the Augusta Marriott at the Convention Center:
• William S. Morris III, publisher of The Augusta Chronicle and chairman of Morris Communications Co.
• Jim Hull, managing principal at Hull Property Group
• Shell Knox Berry, president and CEO, Community Foundation of the CSRA
• Former Augusta Mayor Deke Copenhaver
• Kelly O’Neal, representing U.S. Rep. Rick Allen
• Augusta Mayor Hardie Davis
• Russell Keen, chief of staff for Augusta University President Brooks Keel
• Jim Davis. CEO of University Hospital
• David Hudson, Hull Barrett PC
• The Rev. Larry Fryer
• James Kendrick, president of Augusta Blueprint
• E.G. Meybohm, president, Meybohm Realtors
• Turner Simkins, Horse Creek Trust, Newfire Media
• Robert Osborne, executive vice president of Georgia Bank & Trust
• Lawyer Wright McLeod
• Bill Stewart, general manager, WJBF
• Dr. Phillip Thomas
• Samuel Sullivan, president of Paine College
• Michael Thurmond, chairman-elect of Paine board of trustees
• Louise Rice, taine Trustee
• Charles Larke, Paine trustee
• Sunya Young, Paine vice president of Institutional Advancement
• Nick Evans, ECP Benefits LLC
• Will Morris, president and CEO of Morris Communications
• Derek May, president of Morris Publishing Group
• Paul Simon, president of Augusta Riverfront LLC