Eastern Gateway Will Get Funding to Wind Down

YOUNGSTOWN, Ohio – Eastern Gateway Community College will receive its full monthly state share of instruction distribution for this fiscal year.

“We have been assured we will receive our full SSI funding as long as we need it,” Executive Director Fred Ransier III said Wednesday at the EGCC Governance Authority meeting. “That has eliminated a lot of the risk factors that existed beforehand.”

That total amounts to about $23 million for the full fiscal year and will be distributed in monthly installments.

“What that really means is we can now begin to address some of the lingering obligations that go back probably to 2023, at some point in 2023 when the SSI was being reduced,” Ransier said.

Kimberly Murnieks, governance authority chairwoman and the director of the Ohio Office of Budget and Management, said the big picture is that between now and the end of the calendar year, the college will be able to proceed with the wind down with a positive cash flow because of the SSI subsidy.

She believes the college will be able to liquidate those lingering debts over the next three to four months.

“That changes the trajectory of where this is all going to add up,” the executive director said. 

However, it doesn’t take care of other claims.

The college is being sued in federal court by Student Resource Center, the private company with which it formerly contracted to run its free college program.

The Jefferson County Budget Commission also filed a complaint for declaratory judgment last month in Jefferson County Common Pleas Court against the college regarding a property tax levy. Also last month, Jefferson County commissioners filed a complaint for declaratory judgment against the college related to a building the county deeded to it for educational purposes. 

Payment is scheduled to go out this week to former employees for accumulated vacation and sick time. Total benefit payouts from June through November, including current staff, are estimated at $1.3 million.

Student appeals of grades and graduation achievements must also be resolved before the college may dissolve. Updates are required so accurate information is provided for colleges and universities where they may continue their education. It’s a time intensive process, Ransier told authority members.

“Every department is tied to the technology,” he said. “… High cost is involved.” The college is “not in the greatest negotiating position. Some of these need to be extended a year at a time even though we’re hoping we can short circuit that.”

He hopes that by February staff needs are done and student records are secured. The college will have to issue W2s for the 2024 tax season too.

“But by February, it’s my hope that the heavy lifting part will have been completed,” Ransier said. “That’s my good news story for this meeting.”

In his written report to authority members, Ransier said the college doesn’t have a final 2023 audit from the state.

“My impression has been that the auditors are undertaking a fraud investigation along side of the past years audits which probably contribute to the delays in having the audits completed and released,” he wrote.

The governance authority was appointed by Gov. Mike DeWine to oversee the closing and dissolution of Eastern Gateway. The governor also appointed Ransier as the conservator for 30 days, beginning Aug. 1. The authority then appointed Ransier executive director.

“We’re all doing this for the first time,” Ransier said.

Eastern Gateway is the first public higher learning institution in Ohio to dissolve. The college, based in Steubenville, also operated a campus in downtown Youngstown.

The college’s legal issues involve several attorneys acting as special counsel in addition to the education section of the state attorney general’s office. 

The governance authority has legal counsel. Another attorney works on U.S. Department of Justice and U.S. Department of Education matters related to Eastern Gateway. A U.S. Department of Justice investigation started in 2021, and in the winter of 2022, U.S. DOE began a program review of the college.

When some individual employees received civil investigative demands, they needed separate legal counsel.

Another law firm represents the college in the lawsuits filed by Student Resource Center and Jefferson County. Another attorney represents the college for bond issues, and still another handles real estate matters.

Pictured at top: Eastern Gateway Community College Governance Authority members Tom D’Anniballe and Greg White and Executive Director Fred Ransier III discuss winding down the college at a meeting Wednesday at the Youngstown campus.

Copyright 2024 The Business Journal, Youngstown, Ohio.