The former finance chief of UMass Boston repeatedly warned Chancellor J. Keith Motley of an impending financial crisis on campus, according to memos she sent him in 2012, 2014, and 2016 that show concerns about the school were more frequent and urgent than previously disclosed.
Ellen O’Connor, the longtime vice chancellor for administration and finance who departed in January, told the chancellor the campus was over-extended, struggling with unforeseen construction costs, and would need to change its spending habits in order to avoid a deficit, the memos show.
“We are running out of money,” O’Connor wrote to Motley in 2014, according to a copy of a memo obtained by the Globe.
On June 11, 2014, O’Connor warned the chancellor that the campus was pursuing too many goals at the same time. To correct the problems, the campus needed “specific, detailed, measurable numerics and a system to monitor actual performance against the plan,” she wrote.
“There is no room for bad news, and we are so tight in this forecast that there are no reserves to absorb any bad news,” the memo said. “This is not a solid game plan.”
It is unclear who else at the University of Massachusetts Boston, besides Motley, was aware of the concerns raised by O’Connor and other finance officials. However, a 2012 memo indicates that the UMass central office was alerted to the problems.
O’Connor’s repeated warnings followed a stern caution issued in 2011 that the Globe explored on Sunday. That report, commissioned to chart the university’s future, advised that its ambitious expansion plans would require extreme financial care.
The campus this year finds itself in a situation much like O’Connor warned about, with a deficit estimated at up to $30 million by the end of the fiscal year in July.
As a result, the campus is in the process of making a series of cuts. Administrators have laid off adjunct faculty, reduced the number of course offerings, and canceled database subscriptions in the library, among other measures.
Motley, who has been chancellor since 2007, established a special committee on budgeting in the fall of 2015, according to a memo he sent to the campus in November 2016 to announce a round of budget cuts that included a hiring freeze, a five-day furlough for employees who earned $100,000 or more, and a reduction in the WUMB radio station subsidy.
The committee was tasked with advising the chancellor on annual and multi-annual budget plans and improving the budget process.
After 13 years on the job, O’Connor departed in late January, according to an announcement Motley sent to the campus on Jan. 30 that ended with the line “We are all in her debt.”
Campus officials have not given a reason for her departure, but, according to three UMass trustees, she was fired.
Attempts to reach O’Connor for comment for this story were unsuccessful.
In a statement Wednesday, a campus spokesman said the campus continually reevaluates its financial position.
“We are constantly in the process of examining fiscal scenarios and these memos capture two examples of that activity,” wrote DeWayne Lehman, director of communications. “Our focus at the moment is on returning the campus to a sound financial footing, and we are confident that we will be able to achieve that goal in the near future.”
The 2012 memo that O’Connor sent to Motley indicates that she sent her warning after she had met with the central office’s finance director, who issued stern guidelines for how the campus should proceed.
At the time, the five-campus UMass system was overseen by President Robert L. Caret. He was replaced by Martin T. Meehan in 2015.
The 2012 memo focuses heavily on the construction of the Integrated Science Complex, which was underway at that time and running $30 million over its original budget of $155 million.
The central UMass office asked UMass Boston to establish a more structured process for estimating the cost of capital projects, O’Connor wrote. In response, she noted that even though the science center went through a full feasibility study by the state entity overseeing it, it ended up over budget.
Two weeks before she wrote the 2012 memo, O’Connor had written to the state officials overseeing the project to say UMass would contribute $9 million to cover overages, even though the project was supposed to be paid for by the state.
O’Connor explained her thinking in the memo to Motley. “Better to spend the money and build the building we want,” she wrote.
Still, it appears that in 2012, O’Connor believed the financial problems could be corrected without the campus running into the red. She told the chancellor that with “reasonable, consistent tuition/fee increases, operating deficits can be avoided.”
In January 2016, O’Connor sent another memo to the chancellor, this time telling him action had to be taken immediately because the campus was in deficit.
The day before, the UMass board of trustees had met with representatives from all five campuses to seek more information about the financial challenges facing each one, she told the chancellor.
“It appears the board has little appetite to look to revenue to solve structural deficits,” she wrote. “There is an almost singular focus on operating margin, and there is no support for operating deficits.”
UMass Boston’s finance troubles were worse than the other campuses’, O’Connor wrote, and she said cuts and tuition increases would be the primary way to address them.
The campus needed to generate $7.5 million to $9.5 million for fiscal year 2016, which at that point was halfway over, and at least $11.8 million for fiscal 2017, which began in July 2016.
To start, she suggested increasing class sizes, reducing financial support to master’s students, and streamlining the student billing practices.
O’Connor apologized in her memo for delivering bad news in the same week the campus celebrated the opening of its first new academic building, University Hall.
“The magnitude of the financial challenges ahead warrants immediate action,” she wrote.