Decatur reflects on time as OU's money maven

Ohio University's departing top financial officer said Monday he was pleasantly surprised when the prestigious Rhode Island School of Design approached him with a job offer, to become the school's new executive vice president.

"œIt wasn't on my radar screen," said Bill Decatur, who is stepping down as OU's senior vice president for finance and administration to take the job at RISD in Providence. "œBut as I looked into it, I quite frankly became intrigued, and excited."

RISD is a private art school with about 2,200 students, according to its Web site.

Decatur, who join OU in March 2006, has presided over its finances during probably the worst financial crisis most living Americans have ever seen. When it hit, he had already been taking steps to firm up the university's financial stability.

An Athens NEWS profile of him in July 2007, for example, noted that before he arrived, "the phrase 'Senate Bill 6 ratios' was rarely, if ever, heard in a (Board of Trustees) meeting "“ though the financial grading system the term refers to has been in state law for a decade. Nor was there much obvious concern being expressed about OU's supposedly 'weak' balance sheet, or the need to limit its borrowing."

During his tenure, Decatur has had to deal with dwindling state subsidy, soaring health-care costs, and finding ways to pay for OU's "Vision Ohio" plan for its academic future.

Asked to cite the most significant change he made in his three-and-a-half years here, Decatur said he and colleagues have "certainly helped increase the understanding and awareness of our financial strengths, weaknesses and opportunities... I would say it was (increasing) the whole understanding of the university's balance sheet."

Other changes Decatur has recommended include revising how individual departments handle carry-over funds in their budgets. Till now, OU had allowed department heads to allot any overage to their next year's budget. While this is an incentive to be thrifty, Decatur said, "not too many places allow 100 percent carry-forward."

What resulted from this policy, he said, is that the total carry-forward on paper for all departments "added up to a number that was greater than what we had in the fund balance."

A freeze has now been put in place on use of carry-forward money, allowing departments to keep it, but leaving the possibility open that the administration may not allow all of it to be spent.

Part of OU's strategic plan is to emphasize "areas of excellence" "“ departments and majors that are especially high quality and productive, whether that productivity is in terms of research, enrollment, or attraction of outside funds. Decatur acknowledged that "the flip side of the centers of excellence" is that if some programs are less productive, they "certainly become candidates for downsizing." He also admitted that "that's not going to be easy... (but) I believe, and many others, that we have to go down that road."

ON THE EVER-POPULAR QUESTION of enrollment, Decatur noted that OU has been consciously expanding enrollment to bring in more revenue, but said administrators and trustees know they have to be practice "smart growth."

"Obviously if we just start growing and growing and growing, that represents additional sections of English and other core curriculum courses," and other extra burdens on the faculty, he said.

Though OU has been raising room-and-board rates, ostensibly to help pay for badly needed renovation or replacement of its aging dormitory system, Decatur has said he doesn't believe that revenue source can ever cover the entire cost, and OU can't take on enough new debt to cover the rest. So how to fix this knotty problem?

"Best-case scenario is, we are able to find a way to use the private sector and private capital... to replace a significant portion of our residence halls," he said.

He noted that OU recently sent out a request for information (RFI) to private developers, testing the waters to see what kinds of public-private partnerships they might consider.

"Can we do it in such a way that we don't have the debt on our books?" he wondered. "Because we don't have the debt capacity to do it ourselves." What such an arrangement might look like, and how much involvement OU would have in the new housing, remains to be seen, he said.

"These are all the questions we've got to figure out," he said, acknowledging that in any future arrangement with a private developer to build student housing, OU would probably need to maintain an "arm's-length" relationship with the project.

"This is something for you to watch closely in the next six to 12 months," Decatur added.

Whatever happens on the housing front, he said, OU seems almost certain to maintain its "parietal rule," requiring non-commuting students to live in on-campus housing the first two years.

"That's been shown to be very important in student retention and student success," he explained.

The recent financial meltdown hit OU like every other investor. Decatur insisted that when it hit, "the university was not invested in things that I thought exposed the university to excessive risk." He said he believes the OU Foundation has a sensible investment strategy, and has recently moved a little more toward liquidity. "We are being more conservative with (our cash)," he said.

AS HE HEADS OFF TO Rhode Island, what is the darkest financial cloud on OU's horizon?

"That one's actually pretty easy," Decatur said. "That's the state budget." He noted that federal stimulus money "was used essentially to balance the state budget for this biennium," and that state officials know the tap won't stay open forever. In the next budget, he said, higher education may face even larger cuts than it has seen to this point.

For OU this may mean continuing to hike enrollment to generate more revenue to cover falling state subsidy. "The heart of the challenge" for OU, Decatur said, is, "how do we manage that, and still make sure that we're affordable?"