Lyme Academy asks town for $102,500 to help it stay open

Old Lyme — Lyme Academy College of Fine Arts officials asked the finance board Tuesday for a "special allocation" of $102,500 to sustain the school through the upcoming 2019-2020 academic year and give it time to create an affiliation with another college.

Without the allocation, officials say, the Academy may have to close for the year and possibly permanently.

The academy’s request for funding comes seven months after the University of New Haven announced it would disaffiliate with the academy at the end of the 2018-19 academic year, ceasing all degree-granting programs. The academy has been granting bachelor in fine arts degrees since 1996, but the two institutions affiliated in 2014 after the academy was having difficulty maintaining its enrollment and finances, according to a statement made by UNH president Steven Kaplan in August.

The academy typically receives $12,500 a year from the town’s operating budget to assist with capital expenses, according to Board of Finance Chairman Andrew Russell. On Tuesday, though, the school requested an additional $90,000 — something it has never done before. The town's proposed budget had eliminated any funding for the academy.  

Citing a number of financial difficulties, academy Board of Trustees Chairman Stephen Tagliatela, board secretary Brian Beglin and campus Dean Todd Jokl, explained to the finance board that the academy has been seeking to affiliate with a partner to keep the academy open over the long term.

“We must reinvent ourselves or close. We’ve concluded the campus is too big for a back-to-the-future Lyme Academy,” Beglin said.

Beglin said the academy board has “met with numerous colleges and academic institutions,” but has not, to date, “received a viable proposal.”

“We are continuing discussions and weighing additional approaches,” he said. “And there are currently four active possibilities in the works.”

Considering how late it is in the year, Beglin said it would not be possible to secure an affiliation for the 2019-2020 school year. The additional $90,000 would help the academy sustain itself while it seeks an affiliation for the following academic year.

Beglin estimated the academy's annual maintenance, utilities, security, insurance and debt costs for the campus at $610,000. He said that board members have contributed $135,000 to help offset the expenses. He said the board still has not yet contacted possible donors and was waiting to firm up a solid financing plan before doing so, calling it a “chicken and the egg” situation.

He said that while the academy’s endowment totals approximately $7 million, the majority of that is restricted to scholarships, faculty salaries and facilities' construction.

Beglin said it would be costly and time-consuming to tap into that endowment and would require court approval to reallocate endowment money earmarked for, say, scholarships, toward operating costs.

“We believe that with the town’s contribution, the board’s contribution, local fundraising and what we can free up from the endowment, we can at least give ourselves another 12 months to re-evaluate how to approach the campus,” Beglin said.

Helping the situation slightly, Beglin said, UNH has decided to extend its campus presence through the end of August to allow students time to receive additional credits over the summer. That means the university will continue to finance the academy through the end of August.

That will also allow the academy to also offer a summer middle school apprenticeship program and possibly allow it to explore an additional partnership with another arts academy “to extend our geographic reach,” Beglin said.

With two mortgages totaling $2.4 million, Beglin said, the academy owes at least $1.5 million to UNH after the university agreed to loan money to cover deficiencies in operating expenses since affiliating in 2014. The Academy also owes money spent toward capital improvements. Beglin did not specify how much.

“The university has consistently expressed a willingness to work with us," Beglin said. "If they feel that we have a viable business plan with a viable partner, they said they will not be serving their rights aggressively.”

UNH declined Thursday to elaborate on what Beglin meant by that statement, or how much exactly the academy owes the university, as well as other questions, stating that the university and the academy board were still in discussions.

Beglin, Tagliatela and Jokl all declined to answer follow-up questions from The Day after Tuesday’s meeting, stating they would speak next week when more information would be available. Beglin again declined to comment Thursday, while Jokl and Tagliatela could not be reached by phone or email.

Out of left field

Russell said the request, which came from "out of left field," was not granted at Tuesday’s meeting or discussed further among board members.

He said further information is needed from the academy board in order for the finance board to make  a decision. For example, he said the academy board did not say how the $90,000 would be spent and did not provide an operating budget for the upcoming fiscal year.

Board member David Kelsey said he would like to see the academy make a greater effort to tap into other financial sources before coming to the finance board.

“If the town is going to give you a big chunk of dough, we need to know you are trying to help yourselves as well,” he said. “It would be important for us to know that you aren’t just reaching out to the easiest pockets.”

The finance board is expected to finalize the town's budget by March 26. Russell said that if the academy board does not submit the needed additional information by then, the finance board will not grant the request.

The request comes as town officials are trying to fund nearly $2 million in capital spending requests while dealing with rising medical insurance costs. In light of these factors, Russell said, the finance board will need to decide whether funding the academy's request "is really a viable option.” 

“We have to determine the long-term viability of the academy being a part of the community and what is in the town’s best interest,” he said.

Up until this point, several town officials say they’ve been kept out of the loop as to how the academy has been planning to sustain itself. There has been confusion over what the academy board has been doing over the last seven months, whether UNH has significant say in the academy’s plans and which potential affiliates the academy board has been in discussion with.

First Selectwoman Bonnie Reemsnyder said up until Tuesday, the town had not received any documentation from the academy board and had “no idea what their plans were.”

“I’ve been left in the dark about what’s going on,” Reemsnyder said. “Of course we don’t want to see Lyme Academy go away, but it’s also a very big challenge they are facing.”

“I think that any time we support organizations we want to know that the money is going to a good cause, that the money is being wisely spent and that the organization is taking care of its responsibilities,” she said.

“There is a big question mark about this. It’s not to say that we don’t want to support Lyme Academy, but at the same time, that is more than we have funded any organization,” Reemsnyder said. “It’s a lot of money and our capital budget is already a challenge, our operating budget is already a challenge. And this is really a big hit.”

m.biekert@theday.com

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