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New president boosts Akron’s financial mood Scarborough’s reputation as astute financial mind already paying dividends at university By TIMOTHY MAGAW tmagaw@crain.com
Lately, University Hospitals has been acting less like a sidekick and more like a superhero. For years, UH usually played the role of Robin while other local institutions acted more like Batman, leading heroic efforts to develop new medical technologies, save lives and battle the villains that plague Northeast Ohio’s economy. Now, however, UH is starting to lead more of its own innovation adventures.The hospital system is spinning out more medical technology companies. It’s funding more big ideas. And it’s trying to get its 25,000 employees to think more like entrepreneurial superheroes. That huge staff includes a lot of medical brainpower — doctors and other employees who constantly run into the same problems. They’re the type of people who often dream up new medical devices, diagnostic tools and software products. If they’re properly harnessed, UH’s efforts could have a big impact on medical innovation in Northeast Ohio. SEE SUPERHERO PAGE 25
Scott Scarborough’s name doesn’t carry the same cache as Jim Tressel, the former Ohio State football coach who also vied for the top job at the University of Akron. But what he lacks in championship rings, Scarborough makes up for in impressive financial turnarounds — just what’s needed at the University of Akron. Overall, the financial picture for higher education is a challenging one, particularly for public colleges and universities. State support hasn’t kept up with increasing expenses and affordability concerns have prospective students reconsidering higher education altogether. At Akron, those problems are compounded because of the hefty amount of debt — about $382 million worth — the university still has on the books from a dramatic campus overhaul carried out under former president Luis Proenza, who stepped down in June after 15 years on the job. Scarborough, an accountant by training, has never been one to back down from a steep money problem. He engineered the financial turnaround at the University of Texas at Tyler, where he served as vice president for business affairs, by directing efforts that generated more than $4 million in savings over four years. He also took the university’s performing arts center from a $130,000 loss in 1999 to an estimated net income of $100,000 in 2001. At DePaul University, where he served as executive vice president for finance and administration, he improved the bottom line in the 2003-2004 operating budget by $11 million in six months. Scarborough’s reputation as an astute financial manager paid off this month when the university looked to Fitch Ratings and Moody’s Investors Service to give their books a once over before going to market to refinance about $28.8 million in debt — an effort expected to save the university about $2.1 million in interest. In its report, Moody’s made note of “the fresh perspective of the new president with a proven record of good fiscal management and the strategic focus on stabilizing enrollment and improving future financial performance.”
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GOVERNMENT
BETTER BUSINESS Cuyahoga County has recouped more money than anticipated with the sale of properties it no longer needs ■ Page 5
Entire contents © 2014 by Crain Communications Inc. Vol. 35, No. 30