BIRMINGHAM, Ala. (WIAT) — Birmingham-Southern College is responding to a statement issued by Alabama State Treasurer Young Boozer II, saying that he “owes Alabamians the full and honest truth.”
Both parties’ statement follows BSC’s request to receive a loan through the Distressed Institutions of Higher Learning Revolving Loan Fund Act signed by Gov. Kay Ivey in June. Following Boozer’s decision to deny BSC a loan, the school filed a lawsuit that was dismissed last week.
“The Treasurer claims to have informed the College ‘months ago’ that it would not qualify for a loan under the Distressed Institutions of Higher Learning Revolving Loan Fund Act. That and many other assertions are simply not factually accurate.”Birmingham-Southern College
In the released statement on Monday, BSC outlined “key events, dates and interactions” pertaining to the lawsuit.
First, BSC addressed its loan qualifications. They said they qualified on all three accounts and stated their qualifications as follows:
- Has operated for more than 50 years in Alabama.
- Founded as Southern University in 1856, BSC has operated for 167 years.
- Has a significant impact on the community in which it is located.
- The College has an economic impact of $70.5 million per year in Jefferson County and $97.2 million statewide.
- BSC has educated a disproportionate share of physicians, dentists, lawyers, business and civic leaders, educators, and other professionals who live, work, serve, and pay taxes in every county in the state.
- BSC also serves as a partner to and anchor for the historic neighborhoods of Bush Hills and College Hills that surround the 192-acre campus.
- BSC caused the payment of $13.8 million in state and local taxes last year, so BSC would pay more than $40 million in such taxes over the next three years.
- Has assets sufficient to pledge as collateral.
- The College offered the State a first secured position in collateral that exceeds several times the amount of the proposed $30 million loan, including its 192-acre campus in west Birmingham and U.S. Treasury securities.
BSC also addressed Boozer’s claims that the school is a “terrible credit risk.” BSC said it does not dispute his claim; In fact, they said it was the moving force behind the loan legislation.
As for collateral position, BSC said that ServisFirst, the college’s primary lender, had agreed to restructure its loan to accommodate the state. BSC said it presented two proposals to the state – one on Sept. 26 and another on Oct. 12 – both of which were rejected by Boozer.
The proposals can be read in depth here.
Next in their statement, BSC addressed an article from al.com that was posted on Sunday, in which they said Boozer cited BSC’s bond rating as the reason for their loan denial. However, BSC said bonds had not previously been discussed.
Furthermore, BSC said that the Distressed Institutions of Higher Learning Revolving Loan Fund has no criterion based on the bond ratings of applicants.
In the final section of their Monday statement, BSC laid out the following as “actions and inactions” by Boozer in 2023:
- In July 2022, President Daniel Coleman meets with State Treasurer Young J. Boozer III to discuss possible ways the State can help BSC obtain bridge funding. The two meet again in February 2023, after BSC has exhausted efforts to obtain funding from the State’s American Rescue Plan Act allocation.
- In April 2023, BSC’s Board of Trustees receives assurance from legislative leaders that should the measure they are supporting pass, the College would be positioned to borrow the $30 million needed to keep it open while private funds are raised. Sen. Jabo Waggoner introduces SB278 to create a mechanism to loan BSC the needed funds. The bill is written with BSC’s situation in mind.
- In May 2023, the Senate passes SB278 and BSC begins sharing documents with the Treasurer. The House passes the Senate bill despite the Treasurer lobbying against it.
- On June 6, the Treasurer visits the BSC campus and expresses a desire to subordinate ServisFirst’s position with respect to existing debt.
- On June 16, Gov. Ivey signs the Distressed Institutions of Higher Learning Revolving Loan Program Act into law after adding Executive Amendments, which were accepted by the House and Senate.
- In July, the Treasurer tells President Coleman he is requesting an Attorney General’s opinion on the Act prior to formally launching the program. He indicates the College’s restructuring plan is what he needs for now.
- On July 14, a copy of the loan application is posted to the Treasurer’s website. When BSC inquires as to whether their application should be filed electronically or in hard copy form, the school is told the application was posted to the web inadvertently and it is taken down.
- On August 24, the Attorney General declines to issue an advisory opinion and The Treasurer announces he will accept applications. The new application is unchanged since the inadvertent posting more than a month earlier. BSC files their application the same day.
- On August 28, the Treasurer tells Coleman he “wish(es) we had gotten (the loan processed) in July.”
- On September 6, the Treasurer asks Coleman why BSC isn’t applying for the full $30 million originally contemplated when the Act was written and encourages him to apply for the full amount.
- On October 5, the Treasurer again raises the issue of BSC’s relationship with ServisFirst and says for the first time ever that he thinks ServisFirst should be the entity loaning money rather than the State. The statement is completely unexpected.
- On October 13, the Treasurer tells Coleman that he is not inclined to make the loan and states that ServisFirst should do so — this even though the only changes from the time The Treasurer said he wished the loan could have been finalized sooner are improvements in the collateral offered the State.
- On October 18, after receiving a letter from the Treasurer dated October 13 in which he denies the loan application, BSC is forced to file a lawsuit to protect its rights and compel The Treasurer to act in accordance with the intentions of the Legislature in passing the Act.
BSC alum, Hannah Burgess said she stands by BSC’s statements and the college’s belief that Boozer never intended to make the loan from the start.
“I think Birmingham Southern was very blindsided,” Burgess said. “We have one of, I would say, the best president leading us right now. He is very intellectual, and he is very faithful and he’s very honest and I think he is doing absolutely everything he can with the board as well to make sure that he gives it his all and does the best for the students.”