Northwestern Michigan College's odd flirtation with a $1 million life insurance policy for its president is a prime example of why taxpayers need to scrutinize the school's financial dealings.
NMC President Tim Nelson apparently suggested the $1 million policy as an enhanced perk during his recent contract talks. It's a preposterous request, out of whack with any other state community college; but this is NMC, where college trustees frequently act like agents for school officials, as opposed to being stewards for taxpayers and students, their real constituents.
Nelson already boasts an extremely generous salary at more than $164,000 for 2008, as well as excellent benefits that make it worth far more. His compensation package not only is the envy of state college presidents at schools of similar size and budget, he's also better paid than top administrators at several larger schools.
Part of his current package includes a $500,000 life insurance policy, already the gold standard among state community college presidents. Nelson's beneficiary splits that amount with NMC upon his death, according to the deal. The new proposal would have doubled the amount payable to both beneficiary and NMC.
Nelson and NMC trustees are fully aware that taxpayers' generosity isn't boundless, particularly in this economy, when so many are struggling so mightily. And over the years NMC officials learned that Nelson's salary bumps and the murkiness with which they've been calculated have attracted this newspaper's attention.
So it certainly appears the life insurance idea was a backdoor effort to add oomph to Nelson's compensation package while feigning a frugal stance on his salary.
Problematic, though, were Nelson's recent health struggles. He had prostate cancer surgery in 2006; doubling his life policy would have cost NMC an extra $8,350 per year over the next five years, and another $3,350 per year for 15 years thereafter.
That's not chicken feed, especially since the current $500,000 life plan already rates as a high-end perk.
NMC's presidential compensation committee included the $1 million policy in a contract draft, but officials began some serious backpedaling late last month, after the Record-Eagle started asking questions, including polling other community colleges about presidential compensation.
Nelson himself suddenly pulled the plug, he said, because he didn't realize the $1 million policy would cost so much.
That's a bit hard to swallow, considering Nelson's cancer history and the fact that his pre-NMC employment was as a college finance executive.
Regardless, it's no time to ladle such gravy. Students face escalating tuition and scarce employment opportunities. Most taxpayers aren't in great shape, either. Perhaps Nelson and certain NMC trustees could benefit from a remedial course in economics -- and current events.
