CHICAGO – The College of DuPage won an upgrade recognizing strides to overcome a leadership and governance scandal that put its accreditation at risk.
S&P Global Ratings this week raised its rating on the community college west of Chicago to AA-plus from AA. The outlook is stable for the district, formally known as Community College District No. 502.
The action follows Moody’s Investors Service decision last week to raise its outlook to positive from stable on the college’s Aa1 rating.
The rating reviews come ahead of a $32 million refunding deal.
“The raised rating reflects the college's continued positive financial operations and its successful implementation of a new governing structure, allowing it to emerge from probationary status,” S&P wrote.
The credit profile benefits from the region’s deep and diverse economy, with a sizable and affluent tax base, little reliance on delayed state aid, and a low-to-moderate debt burden with limited capital needs.
Pension pressures, as some of the expenses shift from the state to the college, temper the college's strengths, S&P added.
Legislation adopted last year creates a new Tier 3 optional hybrid retirement plan with universities and community colleges responsible for costs beginning in 2021.
The Higher Education Commission in November lifted the College of DuPage’s two-year probation over integrity and governance issues after a favorable review of implemented changes although the school must submit another report in May.
The college lost its top marks from both Moody’s and S&P Global Ratings in 2016 as a leadership and operations scandal unfolded. The college had been stung by county and federal probes of administrative spending, contracts related to a fundraising arm, credits tied to its law enforcement academy, and other financial and oversight matters.
At the same time, a public feud played out between some board of trustee members and the administration that led to the ouster of the school's president and finance team. The officials who were forced out filed wrongful termination lawsuits which have since been settled. The board member who led reform efforts and helped get allies elected to the board to win a majority also resigned leading to further upheaval and conflict.
The school saw a full-time enrollment drop of 10.3% to 14,633 last year compared to 2015. College officials contend the decrease was due to typical, countercyclical trends in enrollment, and unrelated to its probationary status and accreditation issues.
In-district tuition and fees remained flat at $135 per semester hour for fiscal years 2016, 2017, and 2018. This rate is below the state average.
Property taxes, tuition and fees, and state grants are the college's largest operating revenue generators and accounted for 46%, 42%, and 9% of general funds. The college reported a $116.4 million combined unrestricted fund balance for its education and O&M funds, equivalent to 74.6% of expenditures. Additional liquidity is provided by $8.45 million in the working cash fund and $11 million in the auxiliary fund.
“COD has maintained a very strong financial position, despite some turbulence in the last few years,” said College of DuPage President Ann Rondeau. “We are very pleased that Standard & Poor’s recognizes the excellent operations at the College and consider it a strong indicator that we are meeting our fiduciary obligations to our students and our taxpayers.”