By Bob Allen
A historically black Baptist college in the news of late for financial woes has secured a $30 million funding agreement aimed at restoring fiscal health at the institution with ties to the Cooperative Baptist Fellowship.
A U.S. Department of Education-guaranteed bond issue through the Historically Black Colleges & Universities Capital Loan Financing Program will allow Arkansas Baptist College to pay off short-term debt, reduce debt-service costs and build cash reserves, according to a front-page story in Arkansas Business.
The good news follows 18 months of fiscal travail marked by lawsuits, inability to meet payroll and calls for President Fitz Hill to resign. Hill, credited with saving the school on the brink of closing when he arrived in 2006, termed “the fact we are still around is a miracle of God.”
Ray Higgins, coordinator of the Cooperative Baptist Fellowship of Arkansas, called the funding agreement “a great step for Arkansas Baptist College.”
CBF Arkansas entered into partnership with Arkansas Baptist College in 2007 when the state CBF affiliate voted to move its offices into a restored 19th-century home on the college campus, one of several buildings renovated as part of Hill’s effort not only to revitalize the campus but a surrounding neighborhood long regarded as one of the highest crime areas of Little Rock, Ark.
Arkansas CBF has worked alongside the college community in various construction projects, literacy training, advocacy for prison reform and modeling healthy race relationships through an Arkansas movement of the New Baptist Covenant, a long-term effort to unite Baptists in the United States cross racial and other barriers spearheaded by former President Jimmy Carter.
The school is also affiliated with the Consolidated Missionary Baptist State Convention of Arkansas.
Hill, former head football coach at San Jose State University, took over Arkansas Baptist College when it enrolled about 128 students and was $2 million in debt with facilities badly in need of repair. Under his leadership, enrollment grew to more than 1,000 and revenues surpassed $20 million by 2013.
According to the Arkansas Business story, that rapid growth exposed deficiencies in management of financial resources and federal reporting requirements, compounded by problems with automating the school’s financial-aid system to comply with Department of Education requirements.
Those problems caused delays in the release of federal funds — the school’s most important source of revenue — interrupting cash flow in ways that left students wondering when they were going to get their money, debts going unpaid and faculty and staff unsure when they would get their next paycheck.
The college recently hired a new chief financial officer and executive director of financial aid and scholarships. A banker quoted in the Arkansas Business story said the Department of Education would not have guaranteed the 30-year loan to Arkansas Baptist College unless they were confident the school is on the right financial track.
“The mission was great, but at the end of the day, they had to be financially viable, and they are,” said Pete Yuan, president of the Arkansas region of IberiaBank, which provided $10.5 million to finance on-campus construction at Arkansas Baptist.
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