Youngstown State receives news of $1.9 million surplus
The surplus is tied to increased enrollment among Valley high school grads.
By ANGIE SCHMITT
VINDICATOR STAFF WRITER
YOUNGSTOWN — A leading credit rating agency has issued Youngstown State University a relatively strong bill of financial health.
Moody’s Investment Service has awarded the university an A2 bond rating, listing it as upper-medium-grade investment.
The announcement comes as the university is preparing to borrow about $15 million to finance its new Williamson College of Business Administration, said Gene Grilli, vice president for finance and administration.
The university received the identical designation from Moody’s during its last assessment in 2004. The latest report, however, indicates the university is prepared to take on the additional debt, Grilli said.
Despite the Youngstown area’s declining population and a highly competitive statewide higher education market, Moody’s report noted that revenues are up at the largely commuter school. Analysts credited enrollment increases for the school’s stable outlook.
Trustees are debating the fate of a $1.9 million surplus, as the result of a 3 percent enrollment increase this year. The university has ascribed the growth to increasing enrollment among Mahoning Valley high school graduates.
Moody’s noted the university also has benefited from increased state support. The state — which provides about 28 percent of the university’s support — has agreed to increase its contribution 5.5 percent in 2008 and 9.8 percent in 2009. The arrangement requires the university to freeze tuition levels.
YSU is projecting stable undergraduate and graduate in-state tuition rates. On Thursday, trustees approved a proposal to increase student housing and parking violation fees. No further fee increases are expected.
Moody’s speculated the creation of a community college in the area could jeopardize the university’s competitive advantage. YSU, however, scored points, in the report, for its commitment to cooperate with state officials on the issue.
Meanwhile, trustees have tabled a proposal to distribute the $1.9-million surplus among the university police department, student workers and academic departments.
Finance officials have recommended $80,000 be used to resolve budgetary shortfalls at the police department.
An additional $250,000 is earmarked to bring student salaries in line with minimum-wage increases.
In addition, faculty members have come out in support of a portion of a proposal that would boost academic operating expenses about 4 percent, at a cost of $909,000.
Further discussion on the surplus will take place at a Dec. 12 committee meeting.