26. Simple Solutions For Mills College Financial Situation

Hung Liu's Jiu Jin Shan (Old Gold Mountain) at the Mills College Art Museum

BREAKING: the Judge has postponed the hearing that was scheduled for today by one week, to September 9. The Temporary Restraining Order is extended as well; no vote on Northeastern is possible.

Faculty have voted in support of the Northeastern ~~merger~~ ~~acquisition~~ ~~absorption~~ alliance. We showed you in our last post the ridiculously skewed poll, and their claim that they would only use it if 60% of faculty voted. Well, 81 voted; their web site lists 173 faculty, so that's 46%. The majority did not want to participate in this phoney poll. Hey, honesty is not this administration's strong suit.

Mills College NFT Bake Sale

Some enterprising alums have launched a Bake Sale with a modern twist to raise funds for the preservation of Mills as a private, independent women's college:

https://twitter.com/MillsNft/status/1433260365786206216?s=20
- MillsNft

Purchase the Fortune Cookies at OpenSea using Metamask which accepts credit cards.

The Fortune Cookie theme is in honor of Mills College professor Hung Liu who is famous for using them in her art and "embodies the Mills College spirit of cultural expression".

The accompanying white paper describes How NFTs Can Help Save Mills College (And Other Asset-Rich, Cash Poor Institutions)

Will the Board even pause to consider a simple idea that quickly and easily fixes their financial problems, now and for many decades into the future, without any need for permission from the Attorney General? Or will we hear the now-familiar refrain "we've tried everything, there's no way anyone else's ideas could possibly work". No question mark because it's a rhetorical question, we all know the answer already.

Hung Liu's "Fortune Cookie", a temporary work installed outside the San Jose Museum of Art, 1995

Guest Post - Dani Aidan Stone

Dani has given us permission to share the following excellent analysis which he recently sent to faculty. TL;DR: there is no crisis. This backs up statements by the Plaintiffs, who have had access to the information given to Trustees:

Source: Plaintiff's Declarations

"Important Re: Faculty Vote"

Among the many gifts I received from Mills was an education in critical thinking and reading critically.

I'm an alum (American Studies, '00), a former employee (Admission, '04-'06), and a neighbor (Laurel District, 2012-ongoing). My partner, who I met at Mills, majored in French and Francophone Studies, went on to get an MFA in English and Creative Writing, and worked in the Library for nine years.

So I'm very invested in what's happening there.

Of course, as current staff and faculty, you might be even more invested.

Please, let me pay back some of that education by briefly sharing what I've recently learned.

I have spent months reading Mills' 990s; annual audits; accreditation documents; articles analyzing every attempt at financial stabilization; the FSP itself; President Hillman's April 2021 Town Hall Financial Snapshot; and anything else that might let me understand Mills' financial crisis.

The only conclusion I can draw is this:

There is no crisis.

Yes: Mills has run at a deficit, most years, for decades.

But the question isn't whether it has a balanced budget. It's whether the College is in such "dire financial circumstances" that if it does not agree to an as-yet-unspecified deal with Northeastern University, it will "close altogether."

I'll try to keep it short:

Mills' own publicly available tax returns and audits do not show any evidence of that. They show deficits, yes, but they also show bills getting paid, repairs made, and the endowment growing thru 2019.
(Albeit more slowly than it should, because some of that growth has made up for most of the deficits. (Source: the NACUBO-TIAA Study of Endowments.) Speaking of which….)
Those same audits also directly contradict important statements from the administration. Like that they can't use the endowment, because too much of it is donor-restricted.
In 2020, "the Trustees… authorized borrowings of a maximum of $15 million from the donor restricted endowment."
But they were able to make up the budget's deficits without using it.
Which also means that the unspecified shortfall Mills describes, the one so big they will run out of cash, is not carried over from last year. (Source: FY2020 Audit)
In another contradiction: the 2016 audit stated that the Trustees tasked Hillman with fixing the operating deficits, because "Mills’ investments and endowments, among other things, provided the necessary financial resources to meet its obligations for the foreseeable future, and…. the current climate of higher education warranted change."
Hillman did declare a "financial emergency" to do that. As she stated, that was a procedure in the college’s bylaws, and not “a sign that we are about to close, or that we don’t have a viable future.”
Now they're implying that Mills did NOT have those resources then, and still doesn't.
According to Trustee Eric Roberts, half the decline in enrollment was due to the shutdown… which is now over. (Source: Declaration of Eric Roberts.)
The other half was due to the tuition reset and drastic changes to Admission. (Source: press release about the report of higher education financial expert Dr. Stephen Falconi.)
According to Hillman's financial slideshow from the April town hall (page 122 in the link here), she claims enrollment has declined since 2010. But her own chart shows the decline started in 2015 - and that there was a more dramatic drop after her changes.
It also shows that enrollment has declined by 40% since 2010, and then states, "Lost revenue from 40% decline in enrollment: ~$15M annually."
But Mills didn't lose $15M annually. Enrollment stayed at 2010 levels for five years. It dropped 10% in 2015, and another 5% in 2017.
In 2018, when Hillman's changes began kicking in, it dropped 5% more. That year, we lost, presumably, $7.5M from a 20% decline in enrollment compared to 2015. In 2019, it dropped to 27% below 2015 enrollment. And for 2020, of course, it dropped over 10% more. (Source: Indexed Exhibits, Exhibit 25 to Declaration of Dr. Elizabeth L. Hillman, page 122.)
Bad. But not $150M-over-a-decade bad. It's fixable. In fact, the letter that renewed Mills' accreditation last year ordered the College to rethink the FSP, and focus on expanding its online offerings. (Source: February 26, 2020 Commission Action Letter.)
That's one of the main parts of the FSP that hasn't been accomplished yet: "Enroll 200 students in fully online programs by AY24, and identify and develop a second fully online graduate program for a Fall 2021 start date. Triple the number of online and hybrid courses for undergraduates by AY21." (Source: MillsNext Bridge Strategic Plan.)
In short: I can find no evidence, through June 2020, that Mills has been running out of money and cannot pay its bills or meet its debts.
I suspect that Eric Roberts is telling the truth when he says that Mills "is rapidly running out of cash" and COULD run out by November. (Source: Supplemental Declaration of Eric Roberts.)
It's the careful, precise truth: it does not mention the endowment, investments, the $5M alums have raised so far, or any of the College's other assets.
The cash and cash equivalents are less than ⅕ of the annual budget in any given year. Even when you include accounts receivable, contributions receivable, government grants, and the portion of the endowment available for operations. (Source: Audited Financial Statements, FY 16-20.)
I'm sure he's right: "Without the immediate financial support that the proposed alliance with Northeastern would provide," (or as he says, another source, like another institution… or fundraising, or the endowment, or grants, etc), "the College would run out of cash and be unable to pay its debts, including its bank loans." It sure is a good thing that Mills, like all colleges, does not rely on cash alone. (Source: Supplemental Declaration of Eric Roberts.)
We'd better look at those bank loans.
The College's loans are $2M to the AAMC, due in 2 years, and $5M to First Republic Bank, due next spring. That's from a 4-year annual credit line that they've successfully paid off every spring for the past three years. (Source: FY2020 Audit.)
Hillman's slideshow notes that the current line of credit expires in March 2022, and claims that obtaining new lines of credit is difficult because of operating losses. It doesn't mention that the Trustees had already planned to negotiate a new line of credit with the bank, in March 2022, or that Mills has a decades-long relationship with First Republic Bank. (Sources: Indexed Exhibits, page 128; FY2020 Audit.)
The College also has about $25M in bonds, with excellent terms. It's been successfully making its payments on those for years too. (Source: FY2020 Audit.)
That's it. Those are all the College's debts.
I can only see two possibilities. Either there is no crisis… or else there is a HUGE crisis, a $200M+ crisis, that is so recent it will only show up on future tax filings and audits.… and that no one in the administration is willing to tell us about.

Please, fight this administration. There doesn't seem to be much future for our faculty in a Northeastern deal anyway.

Thanks for your time.

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26. Simple Solutions For Mills College Financial Situation

Mills College NFT Bake Sale

Guest Post - Dani Aidan Stone

"Important Re: Faculty Vote"

DISCLAIMER

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