BOSTON – In a confidential letter, dated May 8, 2018, to His Eminence Archbishop Demetrios of America eleven members of the Board of Trustees including members of the Executive Committee as well of Hellenic College and Holy Cross Greek Orthodox School of Theology (HCHC), warned in a most official and final way that Hellenic College is threatened with elimination and the Theological School is in danger of losing its academic accreditation, while its future is doubtful. They have arrived at the point of stating that maybe they will not accept students for this coming September.
The members of the Board of Trustees in their letter-report which was obtained by The National Herald write to the Archbishop as Chairman of the Board “regarding the very serious state of the institution” they stated and they request the immediate removal of the School’s President Rev. Christopher Metropulos. They wrote that “as trustees of HCHC, we have become recipients of a special spiritual and legal duty. How we exercise this duty is not only something for which we must answer to the Commonwealth of Massachusetts but, much more importantly, something for which we must answer to God and to all the faithful members of the Greek Orthodox Archdiocese of America who love and depend on HCHC.
In addition, those of us who are members of the Executive Committee serve as representatives of all of the other trustees; they depend on and expect us to oversee the institution’s well-being, to report to them, and to communicate their insights and concerns to Your Eminence and the other corporate officers.”
The entire letter has as follows:
“CONFIDENTIAL
May 8, 2018
His Eminence Archbishop Demetrios, Geron of America
Chairman, Board of Trustees
Hellenic College Holy Cross
Your Eminence,
Christ is risen! Your blessing!
With respect and love for you, the Greek Orthodox Church in America and Hellenic College
Holy Cross, we offer the following report and proposal regarding the very serious state of the
institution.
- Introduction
As you reminded us at the meeting on April 24, 2018, the meaning of the word fiduciary derives
from the Latin term, fidere, meaning “to have faith.” As trustees of HCHC, we have become
recipients of a special spiritual and legal duty. How we exercise this duty is not only something
for which we must answer to the Commonwealth of Massachusetts but, much more
importantly, something for which we must answer to God and to all the faithful members
of the Greek Orthodox Archdiocese of America who love and depend on HCHC. In addition,
those of us who are members of the Executive Committee serve as representatives of all of the
other trustees; they depend on and expect us to oversee the institution’s well-being, to report to
them, and to communicate their insights and concerns to Your Eminence and the other corporate
officers.
For approximately 18 months, we have expressed to you repeatedly our very serious concerns
about the direction of HCHC under the leadership of Fr. President Christopher Metropulos. We
have communicated details about the institution’s spiritual, academic, financial, administrative,
and governance condition. Our intention throughout has been simple: to exercise faithfully our
responsibility as fiduciaries in the full sense of the term.
TNH/Theodore Kalmoukos)
On April 24, 2018, we participated in the special BOT meeting convened to hear and assess Fr.
Christopher’s proposed “recovery plan” in light of HCHC’s rapidly declining conditions, a plan
the full Board had unanimously tasked him to prepare at its January 19 meeting. Despite the fact
that Fr. Christopher did not send his “plan” to the Board in advance of the meeting because he
said he did not trust the Board to keep it confidential, we patiently listened to Fr. Christopher’s
remarks; we considered his points carefully; we asked respectful questions; and we, along with
seemingly all who attended, became convinced that what Fr. Christopher offered us was totally
insufficient. It was not a “recovery plan,” it was a set of ideas and suggestions without coherence, without supporting evidence, without contributions from the Deans and faculty, and without a systematic path forward. In short, at a time of crisis for the institution on a number of fronts, Fr.Christopher took three precious months to develop and present to the Board what he described himself as a set of “talking points,” a far cry from the “robust plan” the Board had asked him to prepare.
We have had serious concerns about Fr. Christopher’s abilities for many months; now, however,
we believe beyond doubt that tolerating his continuation as the President of HCHC would be a
betrayal of our spiritual and legal responsibilities as trustees.
In addition, we cannot, as fiduciaries, accept an incoming class at HCHC without a compelling
recovery plan and a President capable of executing it in collaboration with staff, faculty,
trustees, and other donors.
Before we delineate an alternative recovery plan, we would like to recap the key developments at
HCHC over the past 3 years.
- Key Developments During Fr. Christopher’s three years as President:
- Departures of Senior Management: all three Deans (Fr. Nicholas Belcher, Dean
Skedros, and Dean Katos), as well as the Vice President of Institutional Advancement (Kosta
Alexis) have either resigned abruptly or tendered their resignations effective June 30 of this year.
Rather than promptly informing the EC or the Board of these significant developments, Fr.
Christopher remained silent, only acknowledging the developments when asked about them in
the presence of the full Board. As of June 30, 2018, HCHC will not have a senior management
team.
- Enrollment: Fr. Christopher has failed in his efforts to increase enrollment.
HCHC enrollment has dropped 25% from 185 students in Sept ’15, to 182 students in Sept ’16,
to 166 students in Sept ’17, to an expected 140 in Sept ’18.
- Finances: The table set forth on Attachment I hereto shows HCHC’s summary
financial results and a few key financial metrics for the fiscal years ending June 30, 2016, 2017
and 2018 (projected). The overall financial trend is alarming and is not sustainable. Over the
three year period shown on Attachment I, HCHC has incurred or will incur cash deficits ranging
from $2.2 -$3.1 million per year. Over the past 36 months, we have been averaging a monthly
cash deficit of ~$190,000, and HCHC is now unable to make payroll without further endowment
borrowing. During Fr. Christopher’s presidency, we have borrowed a total of ~$6.7 million from
our unrestricted endowment funds (pooled accounts), and as of April 30, 2018, HCHC only had
~$1.1 million of such unrestricted pooled account funds remaining, as compared to a projected
cash deficit through the calendar year ending December 31, 2018 of $2.6 million. Absent a
significant cash infusion, HCHC will run out of money before the end of the current fiscal year
(June 30).
Realistic projections for the next two fiscal years are equally dire. The table set forth on
Attachment II hereto sets forth HCHC’s projected “baseline” financial performance for the fiscal
year’s ending June 30, 2019 and 2020.
As is evident from these figures, which project cash deficits over the next two fiscal
years ranging from ~$3.7-$3.9 million per year, HCHC’s financial situation has reached
crisis levels. In order to fund operations for the balance of this fiscal year (which will
require ~$1,050,000) and achieve a balanced budget for the next two fiscal years, which is
essential in order to justify admitting the next incoming class, HCHC will require ~$8.7
million of incremental funds through either additional revenues or reduced costs.
- Accreditation: NEASC, one of our two accrediting bodies, issued us a formal
“Notice of Concern” in March 2017, stating that we are “in danger of not meeting the
Commission’s standard on Institutional Resources.” One year after this warning, in April 2018,
NEASC voted to continue HCHC’s “Notice of Concern” and will be coming to campus this Fall
for a site visit. Given the continued decline of our finances and enrollment and numerous
governance issues, the probability that we will be placed on probation or even lose our
accreditation outright is high.
- Fundraising: With the exception of donations & pledges for the failed student-
center proposal, fundraising has been generally flat. Fr. Christopher travels continuously, but
without a methodical development plan, without accountability to the board, and without
communicating the purpose of his absences from campus to senior management or trustees.
With the departure of Kosta Alexis, who indicated that he left due to a lack of Presidential
“leadership and vision,” the school is left without a professional development officer at a time
when the need for such skill set could not be more critical. Since Mr. Alexis’ departure in 2017,
Fr. Christopher has made no effort to search for a replacement.
- Facilities: Responsibility for Facilities and Grounds has been neglected since the
departure of James Karloutsos in 2015. Jacobs Engineering conducted a study of our campus in
2015, which ascertained that there are currently ~$10.5 M in facilities deficiencies, including
several ADA violations. The President received and reviewed the report, but no action has been
taken.
- Strategic Planning: No work has been done on Strategic Planning under Fr.
Christopher’s leadership, despite this being a vital component of accreditation evaluation and a
valuable planning tool.
- Unsustainable Academic Programs: Some of the undergraduate programs have
been running at unsustainable levels and a proposal to close some programs (Elementary
Education, Management & Leadership) have been dismissed by Fr. Christopher.
- Oversized Faculty: Nothing has been done to adjust the size of the faculty in
light of declining enrollments, even though the 2 academic deans have made recommendations
and provided a plan to the President. Currently, HCHC has 22 full-time faculty for only 164
students. This overall ratio is nearly three times higher than the ratio at comparable institutions,
and the ratio comparisons are even worse for some specific programs.
- Governance: Between December 2016 and today, 10 Executive Committee
Meetings have been canceled. The Oct. 2017 EC meeting was scheduled with only 4 days’
notice. Thus, over the course of 20 months (Nov 2016-May 2018) a total of only 5 EC meetings
have been held. According to our bylaws there should have been 16 meetings. In addition, 14
months after the repose of Christine Karavites, we still have no BOT Corporate Secretary.
Minutes have not been kept consistently and, at times, have been kept irresponsibly, as was
evidenced by the need for substantial corrections and edits to the January 19, 2018 meeting
minutes.
- Communication and Collaboration with Trustees: Repeatedly, trustees have
been left out of communications, misinformed about vital institutional data, and sidelined from
the governance process, compromising our ability to fulfill our entrusted roles. For example: (a)
the NEASC “notice of concern” issued in March 2017 was not shared with the BOT until 2
months after it was received; (2) for the entire Fall semester 2017, Fr. Christopher did not bother
to communicate declining enrollment numbers to the BOT; and (3) Dean Skedros submitted his
letter of resignation to Fr. Christopher in October 2017, requesting to end his term as Dean a year
early; yet, at the December 2017 EC meeting, the President denied that Dean Skedros had done
so and he never communicated this critical information to the Academic Affairs Committee.
III. Essential Prerequisites for a Successful Recovery Plan
- New Presidential Leadership Immediately Following Graduation
- Financial Resources- financial exigency, Archdiocesan funds & new commitments
- Emergency Special BOT Meeting Following Graduation
Given the advanced state of the crisis within which HCHC now finds itself, the uphill
demographic changes (“the fundamental problem is too many institutions chasing too few
students”1), and the competitive and assessment landscape of higher education today, Hellenic
College’s demise is much more probable than its recovery, and Holy Cross is in grave risk of
losing accreditation. The examples of small colleges and seminaries that have closed or merged
with other institutions are abundant. We do not say this out of a lack of faith or hope; we say it as
a reality that must be taken seriously, especially as the Board considers whether or not to accept
an incoming class in the Fall of 2018.
Small colleges that defy this trend today are those that “have found a strong niche”2 and that
have a President who inspires and collaborates with senior management and with trustees. As a
hard-working and faithful priest of the Church, Fr. Christopher has our respect; as our
brother in Christ, he and his family have our love and prayers. However, in light of our
experience over the past three years, we have withdrawn our confidence in him as HCHC’s
President. In our judgment, even if the “recovery plan” he presented on April 24th had been a
compelling plan, he is not capable of leading the HCHC community through such a complex and
inescapably collaborative endeavor.
1 “Strength in Numbers: Strategies for collaborating in a new era for higher education:
http://parthenon.ey.com/po/en/perspectives/strength-in-numbers–higher-education-collaboration
2 S. Reynolds in ibid.
We need a leader who will work with us—not ignore us; who will solicit and listen to our
expertise—not sideline and patronize us; and who will bring out the best in the students, staff,
faculty, trustees, alumni, and benefactors of this sacred school.
The foregoing sets the context for what we believe to be the essential prerequisites to a
successful recovery plan for HCHC. These prerequisites, which are set forth below, constitute
the immediate and decisive actions that we believe must be taken in order to set the stage for the
recovery of HCHC and enable the Board to justify acceptance of an incoming class for the 2018-
2019 school year.
Prerequisite #1 (New Presidential Leadership): HCHC needs a new leader immediately.
Fr. Christopher needs to submit his letter of resignation to Your Eminence and the Board or be
removed, in either case effective immediately following graduation (May 20, 2018).
Prerequisite #2 (Near Term Financial Resources): Anchored by (i) a commitment from
the Archdiocese to get current on its financial commitment over the next 2 years (1.75M arrears
+ 1.0M budgeted for current year), (ii) identified cost savings resulting from financial exigency
and other cost saving measures, and (iii) financial commitments in support of the HCHC
Recovery Plan, HCHC must have a credible and realistic balanced budget that will carry the
school through June 30, 2020. The Finance Committee, Interim President and administration
should jointly and promptly determine whether such a budget can be developed.
Prerequisite #3 (Emergency Special BOT Meeting): The BOT needs to have an
emergency Special Meeting immediately after graduation to:
- Appoint an interim President, from Your Eminence’s recommended candidates,
who will serve a minimum 12-18 months (hiring terms to include appropriate incentives,
evaluative criteria, and a review process).
- Appoint a new Corporate Secretary from Your Eminence’s recommended
candidates.
- Honor Vice-Chair Dr. Lelon and discuss rotating in a new Vice-Chair to leading
the Recovery Plan.
- Set BOT and EC meeting schedule for the near term and for the fiscal year
July1 ,2018 through June 30, 2019.
- Set up a meeting with NEASC to update them on changes / HCHC Recovery Plan.
- Begin implementation of the “HCHC Recovery Plan” under the leadership of the
interim President (see outline below).
- The HCHC Recovery Plan
The recovery plan should begin in earnest on May 21, 2018, immediately following graduation
weekend. We believe that immediate and decisive action with respect to the Essential
Prerequisites outlined above gives HCHC its only viable chance of overcoming the
daunting challenges that it currently faces. Without the Essential Prerequisites, any recovery
plan, including the plan outlined herein, will not be successful. Assuming that the Essential
Prerequisites have been acted upon, below is a preliminary summary of the key elements of the
Recovery Plan, starting with a tentative financial resource plan. The exact details of the plan will
continue to be developed and refined in conjunction with the Interim President and the
administration:
- Financial Overview: While the financial challenges facing the school are
significant (see Attachment II), we believe that the gap can potentially be filled through a
combination of (i) increased Archdiocesan funding (i.e., the Archdiocese gets current on its
financial commitment over the next 2 years by funding the current receivable balance of $1.75
million, in addition to providing the $1 million per annum as presumed in the baseline
projections on Attachment II), (ii) cost savings resulting from a declaration of financial exigency
and other measures, and (iii) incremental financial commitments and fundraising in support of
the HCHC Recovery Plan. The table below sets forth a potentially achievable path towards a
balanced budget result for HCHC over the next two fiscal years. As indicated above, we believe
the Finance Committee, Interim President and administration should meet immediately
following graduation to jointly and promptly refine this analysis and determine whether the
projected budget gaps can realistically be closed.
Supporting our recovery
FY18 FY19 FY20 Total
Recovery plan campaign 400,000 800,000 600,000 1,800,000
Other Gifts 250,000 250,000 500,000
BOT ongoing 250,000 250,000 500,000
Fundraising events 500,000 500,000 1,000,000
Repurpose Student Center donations 750,000 750,000
Additional endowment borrowing 600,000 400,000 1,000,000
Financial exigency savings 600,000 600,000 1,200,000
Financial exigency costs ( 300,000) (300,000)
Other cost savings 300,000 300,000 600,000
Repayment of Archdiocesan
Receivable Balance (as of 6/30/2018) 850,000 900,000 1,750,000
Total 1,000,000 4 ,400,000 3,400,000 8,800,000
- Declare Financial Exigency:
* increases options for closing academic programs (no “teach out” required)
* frees us to restructure faculty contracts / tenure status
- Institutional Advancement – Phase I:
* We believe that the taking of action with respect to the Essential Prerequisites
and adoption of a credible Recovery Plan will position HCHC to raise significant levels
of incremental funds from donors that do not want to see the school fail.
His Eminence Archbishop Demetrios, Geron of America CONFIDENTIAL
May 8, 2018
Page 7
* On a voluntary basis and without solicitation, trustees with knowledge of
HCHC’s current situation have volunteered to contribute a total of $400,000 contingent
on adoption of a viable recovery plan that includes the essential prerequisites referenced
above. We believe that decisive action on the Essential Prerequisites and adoption of the
proposed recovery plan will draw substantial additional support from donors who are
currently not willing to support HCHC under Fr. Christopher’s leadership.
* Begin search for new head of Institutional Advancement to fill position vacated
byKosta Alexis.
- Immediate Cost reductions (in addition to financial exigency savings):
* Consider moving to 4-day work week for most staff
* Additional personnel changes
- Academic Affairs Steps:
* Identify and appoint interim deans to begin after current deans’ contracts end
(June 30, 2018)
* Review / streamline existing programs in Hellenic; preserve only 2 or 3
undergraduate majors that align fully with HCHC’s mission / Orthodox identity.
* If a program is eliminated, we are obligated to provide each student who
matriculated in that program with either a “teach out plan,” whereby we provide the
remaining required courses for completing the degree over the next 1-3 years and/or a
transfer plan, whereby we arrange for affected students to complete their degree at
another undergraduate institution. If we declare financial exigency, we are only obligated
to arrange “transfer plans.”
* Offer severance packages to tenured faculty
* Reduce full-time faculty by at least 50%, offering half and part-time positions as
needed to cover core requirements. Move from 2 faculties to 1 faculty, with 1 Academic
Dean.
* Change contracts and expectations for full-time faculty who stay (consider
elimination/significant reduction of tenure, increased teaching load, mandatory hours on
campus for full-time faculty, freeze on sabbaticals & conference travel, etc.).
- New Student Life Initiatives:
* Name a campus Chaplain, ideally from within, and refocus on cultivating a
healthy and prayerful Orthodox ethos on campus.
His Eminence Archbishop Demetrios, Geron of America CONFIDENTIAL
May 8, 2018
Page 8
* Consider various initiatives to enrich student experiences and promote cohesion
(such as launching a new and significant philanthropy project, increasing the role of
OVM, developing a Philoxenia House promotional video, conducting student fundraisers
for missions, ethics bowl, etc.).
* Offer a menu of global Orthodox immersion experiences ranging from 5 or 6
days to a full semester abroad.
* Further promote Health & Well-being of all students, staff, and faculty
- Admissions / Enrollment / Incentives:
* New comprehensive admission strategy with incentives for Director
* Increase discount rate temporarily to increase on campus enrollments.
* Announce a set number of top tier scholarships, providing outstanding
prospective students with 75-100% tuition awards.
* Increase Summer school offerings with optional on-campus housing and market
to Orthodox students enrolled elsewhere. “Spend 3 weeks on campus taking an intensive
course, connecting with God and fellow Orthodox from around the country.” This could
be like CrossRoad 2.0.
- Institutional Advancement Phase II:
* Fundraising tour; new head of Institutional Advancement, interim President
(where feasible), Helen Carlos, others; Events in each Metropolis if possible to promote
the new vision for HCHC, increase visibility, recruit students, build alumni relationships
and local communities of HCHC supporters.
- Additional Funding Sources and Revenue Streams:
* Property and facilities rental / use
* Possible property sale
* Continuing education courses in online and intensive formats for clergy, etc.
* Summer school initiatives / intensives
CONFIDENTIAL
Attachment I
Historical Results and Selected Metrics
Historical Results and Selected Metrics: The table below shows HCHC’s summary financial
results (cash basis) and a few key financial metrics for the fiscal years ending June 30, 2016,
2017 and 2018 (projected):
Projected FY
Category FY Ending 6/30/16 FY Ending 6/30/17 Ending 6/30/18
Net Tuition, R&B & Fees 4,493,790 4,822,298 4,465,017
Archdiocese Grant 1,500,000 1,250,000 0
Other Grants & Contributions 1,057,153 2,076,897 1,670,000
Other Operating Revenue 774,615 672,705 619,983
Regular Operating Endowment Releases 2,570,082 2,050,687 1,800,000
Total Operating Revenue 10,395,640 10,872,587 8,555,000
Salary and Benefits 7,530,758 7,849,285 7,156,000
Operating Expenses 5,000,860 4,919,172 4,214,840
Interest and Principal 284,059 313,947 327,000
Total Operating Expenses (includes principal and interest
payments) 12,815,677 13,082,404 11,697,840
Net Cash Surplus (Deficit) (2,420,037) (2,209,817) (3,142,840)
Endowment Borrowings 1,258,367 2,523,722 3,192,000
Adjusted Net Cash Surplus (Deficit) (1,161,670) 313,905 49,160
Key Assumptions/Metrics
Enrollment 182 167 170
Faculty Size (full time eqiv) 22 22 22
Student/Faculty Ratio 8.3 7.6 7.7
Archdiocesan receivable 0 250,000 1,750,000
Tuition Discount Rate 51% 44% 41%
CONFIDENTIAL
Attachment II
Projected Results and Selected Metrics
Historical Results and Selected Metrics: The table below sets forth HCHC’s projected “baseline”
financial performance (cash basis) for the fiscal year’s ending June 30, 2019 and 2020. The key
assumptions used for this forecast, which are grounded in the reality experienced by HCHC over
the last three fiscal years, are as follows:
Enrollment- Assumed to be 140 students for FY ending 6/30/19, increasing by 10
students to 150 for the FY ending 6/30/20; discount rate consistent with FY18.
Archdiocesan contribution- $1,000,000 per annum
Other contribution/donation levels- modeled to be slightly down year over year from
nearly $1.7 million to ~$1.6 million in FY19to reflect impact of departure of IA head and
current donor reluctance to support HCHC
Other revenue and expense categories- no changes
Projected FY Projected FY
Category Ending 6/30/19 Ending 6/30/20
Net Tuition, R&B & Fees 3,677,071 3,939,719
Archdiocese Grant 1,000,000 1,000,000
Other Grants & Contributions 1,600,000 1,700,000
Other Operating Revenue 585,000 400,000
Regular Operating Endowment Releases 1,500,000 1,500,000
Total Operating Revenue 8,362,071 8,539,719
Salary and Benefits 7,186,433 7,186,433
Operating Expenses 4,500,000 4,500,000
Interest and Principal 583,000 607,000
Total Operating Expenses (including principal and interest) 12,269,433 12,293,433
Net Cash Surplus (Deficit) (3,907,362) (3,753,714)
Key Assumptions/Metrics
Enrollment 140 150
Faculty Size (full time eqiv) 22 22
Student/Faculty Ratio 6.4 6.8
Assumed Tuition Discount Rate 41% 41%.”
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