Henderson State University will offer employees a voluntary retirement incentive beginning this month, a standard higher-education cost-cutting measure as leaders continue efforts to pull the university into a better financial position.
The university remains behind on its bills, relying on vendors to let invoices go as long as 90 days past-due.
Officials don't have a figure on how much may be saved because of the incentive, which is available through Feb. 26.
To be eligible, an employee must -- as of Dec. 31 -- be at least 55 years old and have had at least 10 years of continuous full-time employment at the university. The incentive is 25% of the employee's annual base salary, plus 0.5% of the employee's base salary for each year of continuous full-time employment at HSU. The employee can continue medical, vision and dental insurance coverage if they aren't Medicare-eligible.
Without much discussion, trustees approved offering the incentive during their meeting Thursday, which was likely the last meeting ever of HSU trustees.
The university will merge into the Arkansas State University System early next year, and Arkansas lawmakers must dissolve the board and add two new seats to the ASU board of trustees. Gov. Asa Hutchinson would appoint the new trustees.
In the past two years, trustees have overseen the university during times of depleting reserves and other financial problems, and often have been partly blamed for letting the financial situation happen. Trustees voted more than a year ago to merge into the ASU System to help resolve the problems and stabilize the university.
Vice President for Finance and Administration Rita Fleming said Thursday that HSU had 42 days of cash on hand at the end of fiscal 2020, June 30. That compares with seven days the year before and 15 days the year before that.
The university hasn't had to use the $3 million line of credit that trustees approved last December, and Fleming said the school doesn't want to use it.
Simply accessing it would cost about $30,000 in fees, she said.
"I can pay several bills with $30,000," she said.
Currently, the university is trying to maintain a reserve fund that would cover each month's payroll and debt service, Fleming said. Officials use incoming revenue from student accounts to pay bills.
"I wish you'd been here five years ago," board chairman Johnny Hudson told Fleming. Hudson has been a trustee for more than a decade.
The university's cash flow is positive, though it still maintains a deficit in its financial position because of $5 million in depreciation of assets, Fleming said.
Additionally, the university isn't sending new student debts to collections during the novel coronavirus pandemic, and trustees agreed Thursday to delay some efforts to curb student account debts through enrollment restrictions.