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As Kentucky Community and Technical College System faces cuts and tuition hikes, President Michael McCall receives significant perks and a post-career payday.

Lawmakers Decry Community College President's Payout Following KyCIR Report

McDaniel speaking on floor of state Senate with blue suitcoat, red tie, looking up. Small microphone.
Bud Kraft
LRC Public Information
State Senate Appropriations and Revenue Chair Chris McDaniel, of Ryland Heights.

State Sen. Christian McDaniel read from a Kentucky Center for Investigative Reporting article on the Senate floor Thursday and called for an investigation of the compensation of all former Kentucky college presidents.

McDaniel said the investigative report about a secret $348,000 payment to a retired community college president in Northern Kentucky begs broader scrutiny of state universities and colleges and their affiliated nonprofit foundations.

“I want to know about the foundations, I want to know about the state-level compensation, I want to know about all of it,” said McDaniel, R-Taylor Mill, “because the fact of the matter is while these folks come down here and complain to us about tough times and lack of funding, they’re lining their own pockets at the expense of the students, and it’s time for it to stop.”

McDaniel was referring to the pleas of Kentucky’s public universities and community college system to insulate higher education from 9 percent annual spending cuts proposed by Gov. Matt Bevin. That battle is currently being fought in the General Assembly.

The KyCIR report disclosed that G. Edward Hughes, who retired as president of Gateway Community & Technical College last September, received a $348,000 “incentive” plan from the college’s non-profit foundation in 2014. The plan calls for him to begin receiving $34,800 annual payments over 10 years, starting this July 1. (Read " Amid Education Cuts, Retired Community College President Gets Hefty Financial Gift From Foundation")

The plan said Hughes was paid in recognition of his service to Gateway. Foundation Chairman Jim Parsons said it was also meant to serve as an incentive for Hughes to stay on the job. He retired 15 months later. Hughes did not respond to requests for comment.

( Read the full document)

Jeff Groob, president of Gateway’s governing board of directors, said he was not aware of the incentive plan. He and others were critical of it given the college’s declining enrollment and high federal student loan default rate. He said the money would have been better spent on financial aid to students.

The Gateway Foundation is the independent, charitable arm of Gateway Community & Technical College, one of 16 Kentucky community colleges. The foundation’s mission is to “raise funds and awareness for Gateway.”

Senate President Robert Stivers also expressed frustration Thursday with higher education spending in Kentucky, in particular on “golden parachutes” for outgoing officials.

“That is wrong. That is totally wrong,” he said on the Senate floor. “There is a misplaced perspective when we start hearing numbers like this.”

Stivers, too, questioned the role of college foundations, asking if they raised money for education or for severance packages.

Ken Paul, vice chairman of the Gateway board of directors, concurred with McDaniel’s call for an investigation. He said Kentucky’s community college foundations don’t report to the Kentucky Community & Technical College System or to the schools’ boards of directors.

“I’d like to see in the contract for the new president of Gateway that any additional compensation beyond that set by KCTCS would have to be approved by the local board,” Paul said.

Marcia Roth, chairwoman of the KCTCS Board of Regents, said she had not heard McDaniel’s remarks and could not comment on his call for an investigation. But she called Hughes’ incentive payment “unique.”

“No such agreements exist between our 15 other current or past college presidents and their respective college foundations,” Roth said by e-mail. “This unfortunate situation at one KCTCS college and its foundation should not detract from the essential philanthropic support provided by our college foundations for our students, programs and facilities.”

In his remarks to the Senate, McDaniel cited other examples of what he considered to excessively paid outgoing university presidents. He named former University of Kentucky President Lee Todd, former Northern Kentucky University President James Votruba and former KCTCS President Michael McCall, who received a $324,000 sendoff from the KCTCS board when he retired in January 2015 .

McDaniel said he has asked the legislature’s Program Review and Investigations Committee to conduct the investigation of compensation.

Nonprofit foundations tied to Kentucky’s public colleges and universities also have been at the center of controversy lately. In Louisville last year, revelations of the University of Louisville Foundation’s payment of $4.2 million in deferred compensation to President James Ramsey and former Provost Shirley Willihnganz led some U of L trustees to complain of being kept in the dark.

Reporter James McNair can be reached at jmcnair@kycir.org and (502) 814.6543.