Palomar Projects $7 Million Shortfall this year...

Updated: Jun 21, 2019

... and other reasons why the Governing Board should have voted *NO* on rushing to pursue student housing at this time.

Trustees should have voted *NO* because of the college's fragile financial status. With a projected deficit of nearly $7 million, the ending fund balance will be depleted by 35% in a single year. The college simply lacks the capital and institutional capacity to insure the viability of an endeavor as large, complex, and risky as student housing.

Former Vice President, Ron Perez attempted to find solutions to mitigate the impending budget shortfall, but his attempts were thwarted.

Perez first sought to implement a Financial Recovery Plan, which identified specific action steps to stabilize Palomar's budget. The plan was written a year ago, with a revised draft presented to Blake in January. The front page of the plan asserts that President Blake presented it to trustees on January 26th. But that did not happen. Six months later, Blake has still not released the report nor has she provided it to the board.

In addition to not receiving the Financial Recovery Plan, trustees were also never informed that Ron Perez asked for outside assistance from the Fiscal Crisis and Management Assistance Team (FCMAT). The FCMAT team was tasked with identifying the "college's specific risk rating for fiscal insolvency." Two and a half weeks after Perez publicly announced FCMAT's coming visit to Palomar, he was directed to have no further communication with members of the campus community. Shortly after Ron's departure, the FCMAT visit was cancelled.

The board should also have considered the possible risks inherent in developing in untested markets along with President Blake's poor track record of implementing new endeavors.

Student housing is nonexistent in southern California community colleges. Most of the community colleges that offer student housing are in remote, rural areas in northern California. Even though South Orange College is currently building student housing, its success has yet to be determined.

Any responsible public entity considering entering into a new market should have insisted that a reliable market analysis be done by an independent agency. Instead, the feasibility study was performed by Scion, a company that has a vested interest in the outcome of their own analysis.

To be fair, the trustees were never given a choice about who would conduct the feasibility study. Blake entered into the agreement with Scion without any discussion or prior approval by the board.

By keeping the Scion decision off of the board agenda, Blake prevented any information from coming forward that might have sidelined the project. Would hearing stories of Scion's failed student housing projects have caused trustees to pause before voting to proceed? Would further scrutiny of Scion's business practices, such as the fact that Scion has an *F* rating with the Better Business Bureau, have changed anybody's mind?

Blake's poor track record of failed endeavors should be considered before rushing into yet another catastrophe. Time and again, Blake presents her ideas as innovative, with wonderful opportunities, and virtually failsafe. Her insistence on rushing decisions without sufficient research, consultation, and vetting has led to expensive errors. For example, the hurried decision to open both the North and South Centers at the same time was presented as a panacea to our enrollment woes. The college anticipated a 7% growth in enrollment last year, but instead Palomar's general fund is now supporting the operations of two new centers without any significant increase in enrollment.

For all of the reasons above, I urged the Board on Tuesday night to vote *no* on moving forward with the student housing concept. After making the speech, Trustee Deerfield asked that the student housing item be removed from the consent agenda for further discussion and consideration. Board President, Evilsizer, broke from established board protocol by insisting that Deerfield's request be put in a formal motion. The other trustees present -- Evilsizer, Halcon, and Hensch -- refused to second Deerfield's motion, disallowing the item to be discussed and voted on separate from the rest of the consent agenda items.

Text of Speech to Governing Board:

More Detail and Documented Evidence of Statements Made

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