The University of Montevallo is working to fix a budget shortfall after running a multimillion-dollar deficit for years.

They say that an $8 million deficit at the Alabama college is not due to mismanagement, but is the result of an expensive capital campaign and some unforeseen market changes.

Administrators have canceled underperforming majors, laid off staff and increased tuition for the first time in seven years.

“In a span of the last 10 years, the university’s done about $81 million worth of capital improvements,” DeAnna Smith, chief financial officer, told AL.com. She served from 2008 to 2016, left to pursue a doctorate degree, then returned in January.

Smith said much of the capital improvements at the small public college south of Birmingham “were absolutely needed.”

The board of trustees approved $5 million in February 2022 for an underground electrical and high voltage project, a system that runs the campus’ entire power grid. Smith said it is still in progress.

AL.com reviewed board minutes from 2020 through 2025. During this time, Montevallo never failed any independent audits and, within a few months of the hiring of CFO Susan Hayes, had balanced budgets. Board chair Todd Strange noted in August 2020 that the budget hadn’t been balanced in five years.

There’s no indication of any panic or handwringing about the numbers, even though U.S. Department of Education financial reports show a deficit of $12 million for the 2021-22 fiscal year.

However, the university foundation saw a 10% decrease in investments in 2020 due to the COVID-19 pandemic. The foundation’s balance dropped from $56.4 million in early 2022 to $49.5 million in early 2023. On top of that, Montevallo’s COVID Higher Education Emergency Relief Fund ended in 2022.

Despite these challenges, the board approved 3% salary increases for faculty and staff in August 2023 and added new athletic teams.

At the August 2023 meeting, Hayes reported to the board an increase in revenues and expenses.

“We are expecting a slight increase in housing and tuition fees,” Hayes said. “With the markets getting better our investments were able to see a sizable gain for our investment return this year and that should continue into next year.”

In November 2024, then president John Stewart told the board that the “primary goal this year will be rebuilding cash reserves after ambitious building projects and investing in the campus.” At this board meeting, Stewart’s contract was renewed. Stewart would later step down on May 5.

The positive financial outlook in these comments does not correspond with the available Department of Education’s financial reports. AL.com has requested operating budgets for the last five years.

Smith said Stewart “was very humble with our campus.”

“He took the time to meet with all faculty, with all staff. He has certainly shared his apologies for the situation that we’re in. I think he’s handled it as best as could be. He’s been very upfront and said it happened on my watch.”

Smith said 29 staff members were laid off this year and, so far, two academic programs were terminated: the education of Deaf and hard of hearing and world languages.

In November 2022, the board approved $3.4 million for two apartment complexes. Both have been renovated, according to Smith, and are at capacity. A new nursing program has garnered attention since its announcement in May 2024.

With increasing demand in Montevallo’s nursing program and rent from two new off-campus apartment complexes, Smith expects revenue to increase and a balanced budget for the 2025-2026 fiscal year.

Terry Roberson has been named interim president of the college.