Less than two months before M. Christopher Brown II abruptly resigned as president of Kentucky State University on July 20, the school’s Board of Regents awarded him a new four-year employment contract, extending his roughly $425,000-a-year position through June 30, 2025, according to documents obtained by the Herald-Leader.
It’s not clear why the KSU Board of Regents gave Brown a new contract on June 3. His previous employment contract — signed in 2018 — was scheduled to continue for one more year, through July 19, 2022.
In January, however, the board handed Brown a $43,200 bonus following a positive review of his job performance by consultant Charlie Nelms of the Association of Governing Boards of Universities and Colleges. Nelms gave Brown high marks for improving KSU’s academics, finances and professional reputation.
“It is my unequivocal view that Dr. Brown is providing effective leadership as the eighteenth president of Kentucky State University,” Nelms wrote. “He exudes an unparalleled level of energy, enthusiasm and commitment to student success. Support for President Brown’s leadership is ubiquitous.”
Seven months later, Brown departed amid a flurry of lawsuits alleging wrongdoing by himself and other school officials and an impending audit of the school’s finances.
Hours after Brown resigned, Gov. Andy Beshear issued an executive order instructing KSU to submit to state oversight through the Kentucky Council on Postsecondary Education, including an investigation of its financial health and recommendations about its management and goals.
KSU officials in Frankfort did not respond to questions Monday about Brown’s employment contracts and pay.
“I’d have to look at that contract,” said Elaine Farris, who signed Brown’s contracts as chairwoman of the Board of Regents. “I don’t know what’s in there. I wouldn’t want to misconstrue anything.”
In an interview last month with HBCU Connect, Brown attributed his downfall to a divided Board of Regents that became uneasy with his strong personality, a $50 million dorm construction project he was leading and a cash-flow crunch that raised concerns about KSU’s liquidity.
“This is not about malfeasance, this is not about litigation, this is not about missing money. It’s about a cash-flow question — and let me say, to be honest and fair, that’s a very real question. There’s a cash-flow question,” Brown said.
There were two large bills recently that aggravated KSU’s bottom line, one related to repaying a line of credit and the other to covering capital construction costs dating back to 2009, Brown said. (Documents obtained by the Herald-Leader appear to show that KSU repaid a $5 million line of credit to Fifth Third Bank on July 9, and it paid $621,868 a week earlier to Banc of America Public Capital Corp.)
“So you get these bills that come due, you have two options: You can pay them or not pay them,” he said. “If you don’t pay them, then you default. If you pay them, you diminish the cash flow. So if you look at the snapshot for the month of July and the incoming month of August, does the institution have a cash flow problem? Yes, absolutely.”
Whatever the Board of Regents’ feelings about Brown in July, bonus pay was a regular part of his overall benefits package for years, according to documents the Herald-Leader received from KSU through the Open Records Act.
During the previous three years, from 2018 to 2020, Brown collected more than $1.22 million from KSU in salary, housing and vehicle allowances and annual merit bonuses based on meeting certain performance goals, such as student retention and improving the school’s fiscal condition. He also was paid at least two retention bonuses for staying on the job through May of 2018 and 2020.
When KSU hired Brown in 2017, it initially required him to live at Hillcrest, the official presidential residence on campus. Two years later, with little comment, the Board of Regents voided that requirement and since has paid Brown nearly $150,000 in housing allowance to subsidize his expenses for living elsewhere.
After Brown resigned last month, the Board of Regents unanimously voted to cancel the remainder of his contract. Under the terms of his contract, had KSU fired Brown instead, it could have been forced to pay him additional sums on his way out the door.
KSU is an historically Black college in the state capital. Its budget this fiscal year is $49.9 million. Of that, $27.1 million comes from the state’s General Fund and $16.3 million comes from tuition and fees from its student body of about 2,200, according to KSU budget documents.
In July, KSU and KeyBanc Capital Markets issued $49.19 million in “certificates of participation,” a form of private financing that gives investors a chance to buy shares in the lease revenue from a 400-bed dorm and dining hall project that is expected to be built on campus by CRM Companies of Lexington.
As part of this process, from May through July, KSU’s financial books were reviewed by bankers and ratings agencies, according to internal email obtained by the Herald-Leader. The school’s chief financial officer, Douglas Allen, resigned in June after a four-year stint to take a job elsewhere.
This story was originally published August 03, 2021 6:00 AM.
