Westminster College's campus in Mesa, Arizona, was intended to be a financial booster for the main campus in Fulton, but the venture failed to live up to expectations and closed before it could become its own financial drain on the home school - after just one year of operation.
The city of Mesa had sent out an invitation for the campus, and the campus' start-up funds were covered through $10 million of alumni fundraising - so the effort did not put a direct financial strain on the college, according to a joint report by the Fulton Sun and Westminster's "The Columns" newspaper in April 2014.
Then-Westminster President Barney Forsythe announced April 22, 2014, that the Mesa campus would close. Only 23 students were enrolled at the start of the first, fall 2013 semester, when Westminster had needed about 65 students to generate sufficient tuition to be sustainable.
The low enrollment created a $300,000 deficit, and while supplemental financial support from the Board of Trustees narrowed the gap to $2,000, that assistance wasn't planned for the following year.
"The financial model in Mesa, where we were dependent on three-fifths of the operating budget on gifts and two-fifths in tuition, was not a financially sustainable model," Forsythe said.
An enrollment officer at the Mesa campus said the college had never committed the resources it needed to in order to attract the students it needed.
Though the creation of the Mesa campus apparently did not cost Westminster College much financially, the school was still paying at least tens of thousands of dollars for its closure for years after, according to annual audits.
When Westminster entered a five-year lease with the city of Mesa in 2013 - the campus building was owned by the city - the agreement through July 31, 2018, carried with it extension and cancellation provisions, subject to penalties.
According to the audits, Westminster chose to terminate the lease in 2014, and "as such, the college shall pay the city the full rent due through the proposed termination date, plus rent for the 12 consecutive months following the termination, plus two-thirds of the rent due for the balance of the term thereafter."
The available audits show a schedule of future lease termination payments for the end of each fiscal year.
The 2016 audit shows such a payment of $61,683 for 2017 and another of $20,561 for 2018.
The sum of $82,244 was reported as part of accounts payable and accrued expenses as of June 30, 2016, in the accompanying financial statements in the audit. The 2017 audit shows a future lease termination payment of $25,701 for 2018.
See also:
Westminster emerging from financial stumble
Court case disclosed how Fulton college improperly diverted millions of dollars of endowment