Financially distressed New Jersey City University must find a “fiscally sound” university to partner with by the end of March 2025, the state agency that oversees higher education said a four-page transition plan.
The succinct report from the Office of the Secretary of Higher Education (OSHE) sets a timeline for the Jersey City school that announced it financial emergency two years ago to meet recommendations by the state-appointed fiscal monitor Henry Amoroso.
The plan establishes a road map for the 100-year-old institution to free itself of the state oversight that was prompted by the school’s massive operating deficit and questionable oversight by the university’s board of trustees.
Amoroso was appointed by the state in August as a condition of receiving $10 million in state aid in the 2024 state budget.
“The transition plan outlines the process for the withdrawal of the state monitor, drawing heavily upon the recommendations presented by Mr. Amoroso, the trusted expert in these circumstances,” Secretary Brian Bridges says in the plan submitted in April.
“The secretary must determine that all of the numbered requirements of the transition plan below have been successfully satisfied before the secretary will authorize the withdrawal of the state monitor.”
NJCU’s board of trustees “will immediately pursue and promptly complete” an assessment to identify a partnership with a fiscally sound New Jersey public institution “with which to merge/partner/affiliate.”
The plan requires a selection to be made and begin to set terms and conditions with another university by or before March 31, 2025 ― eight and a half months from now.
Interim President Andres Acebo told The Jersey Journal the university and the board will review proposals to hire a consulting firm to study a strategic partnership by Monday, July 15.
“The university, through a public request for proposals, has solicited consultant engagements,” Acebo said.
At the same time, OSHE wants the university to eliminate at least $30 million of its $287 million long-term debt. The earliest deadline required an updated and amended property monetization plan by July 1 to “accelerate the collection of significant revenue … for application to both debt reduction and capital investments.”
NJCU spokesman Ira Thor said Friday that the property monetization deadline was met. Although “confidential,” the university “anticipates” an update at the next regularly scheduled meeting of the new school year in September.
The university must hire a grant writer to apply and manage grants by September 2024 based on the plan. It is unclear if the school will face repercussions for not meeting any of the deadlines.
The transition plan is in response to a 27-page monitoring report — released in March with recommendations that the school needed a partner, new dedicated board members and a plan to address capital infrastructure — by Amoroso after six months of scouring the school’s finances.
On Monday, the board will vote to adopt a $146.2 million budget for 2025, with a nearly $3 million surplus.
Bad real estate investments, an ill-timed decision to beef up sports programming, the COVID-19 pandemic and a dip in enrollment were a “perfect storm” for the school’s financial emergency, which was announced when it was revealed NJCU had a $22.7 million operating deficit.
The university established austerity measures, including cutting its academic portfolio by 33%, to stabilize its operation cost and received additional state aid in the last two years. The state’s 2025 budget provided $7 million in stabilization aid, a $3.5 million increase in outcome-based allocation and $300,000 toward deferred maintenance.
The school’s spending plan will designate $13.8 million in capital infrastructure to renovate or remodel its aged buildings and replace boilers and chillers. It will also be the first year the school sets aside $2 million to cover student books as part of their tuition, which will see a 3.5% increase.
The university has $51 million in critical maintenance needs that officials say have been neglected since the late 1960s. It has been working to address those needs with the help of government and energy company grants.
The increase in outcome-based allocation and inflow of potential grant funding could result in changes to the spending plan.
“The legislatively enhanced outcomes-based allocation will allow the university to significantly reinvest in student success initiatives as outlined in the university’s new academic master plan and strategic enrollment plan,” Acebo said. “The $13 million is the conservatively estimated fiscal year 2025 capital spend on our institutional deferred maintenance campaign.”