NMJC board sets up $50 million ‘savings account’
Dorothy N. Fowler/For the News-Sun
The New Mexico Junior College has set aside $50 million to help secure the school’s financial future.
The NMJC Board of Trustees established the Educational Success Endowment Fund during its regular meeting Thursday. College legal counsel, Scotty Holloman and vice-president for finance, Josh Morgan, presented the proposal for the endowment to the board.
Holloman said, although the fund will be called an endowment, he thinks of it more “as a savings account” for the college. He emphasized the college will maintain control over the funds. Money will be transferred from one fund to another.
Friday afternoon Morgan said the $50 million will come from what are called unrestricted funds — money not otherwise earmarked for specific projects — into the restricted endowment.
“All we’re really doing today is taking (current) investment capital that’s not in capital projects and putting that in the endowment fund,” Morgan told the board. “What we hope for in maybe 30 years, the $50 million has turned into $300 million and can perpetuate itself … and eventually the college can live without state funding, if that is ever needed. That would be the ideal circumstance.”
In a resolution setting up the endowment, it was noted as a response to the “cyclical nature” of the oil and gas industry, one of the major revenue drivers for the college. That means operational revenue for the college can fluctuate “significantly” as the industry experiences “extreme periods of booms and busts.
“The Board has determined sound financial policy warrants the establishment of an endowment fund to stabilize the revenues available to NMJC in all phases of the oil and gas production cycle … to provide an alternative source of revenues to support the operations of NMJC that is independent from the cyclical nature of oil and gas production,” the resolution reads.
“I think this is something that’s very conservation as to what can be put in there and would not have a (negative) impact on the operation of the school,” he said.
Holloman said the idea of an endowment fund has been discussed for several years, but nothing has been done about establishing it until now. This proposal is similar to recent actions by the Lea County Board of Commissioners establishing a so-called “permanent fund” for the county, he said.
“This just seems to be the right time,” Holloman said. “We have been prodded by several departments of the State of New Mexico that we need to consider doing this.
“Establishing the fund is the ‘first step,'” Holloman said. Details of the management of the fund will be worked out in the future.
“If this is done right, this can have a generational impact,” Holloman said. “It would last long past our lives and that’s really what we’re trying to do here.
“I think (the board) has taken maybe one of the most important votes ever taken by this board. I’m serious — this road could have generational impact.”
In other business:
• The board reorganized in response to the recent resignation of board president Pat Chappelle. Travis Glenn was elected president and Hector Baeza was elected secretary. Both men said they were honored to be chosen for their new positions and pledged to do their best for the good of the college and the community.
The board also approved a process for filling the District 2 position, which includes most but not all of Lovington. People interested in filling the position until the November election must file a letter of interest in the NMJC president’s office before June 5. The letters will be reviewed by a committee of the board and then interviews will be held by the board. Announcement of the appointee will be made at the June board meeting.
• The board approved a recommendation by administration that a West Texas Tuition Rate be applied to Texans living within approximately 300 miles of the NMJC. Currently, NMJC’s standard out-of-state tuition rate is $75 per credit hour. Under the new policy, students residing in the eligible Texas counties will qualify for the out-of-district tuition rate of $60 per credit hour, the same rate paid by New Mexico students outside Lea County. The purpose of the reduced tuition rate is to allow NMJC to continue serving nearby Texas communities while remaining in compliance with state regulations.
• The board also approved naming the New Industrial Training Center for Steve McCleery, who served the college for 35 years, 18 of them as president and three more as president/president emeritus.
