UD officials face questions on school’s public-private status

DOVER — The debate over whether the University of Delaware is public or private continues to simmer.

Less than a month after being bombarded with concerns about transparency and other issues, President Dennis Assanis faced more fierce questioning from lawmakers Tuesday. Appearing before a legislative budget committee for the second time in four weeks, top UD officials were forced to defend the university’s status as a quasi-public institution.

UD’s website calls it a “state-assisted yet privately governed” school, which the institution says has its roots in the institution’s charter. That term does not appear in the founding document itself, however.

The website also says, in what it calls a “preface” to the charter, the state in 1913 gave “to the University of Delaware a perpetual charter which contains no reserve power in the General Assembly to amend the charter thus granted.”

Pressed by lawmakers on the Joint Committee on Capital Improvement Tuesday, UD administrators cited that “perpetual” charter, arguing final authority for governance rests with the university’s board of trustees.

“We feel that the solution right now, it’s very elegant, it’s very clever,” general counsel Laure Bachich Ergin told the committee.

But several legislators took issue with her defense, with Sen. Bryan Townsend, a Newark Democrat, requesting Ms. Ergin send lawmakers a letter citing what specific statutes and court cases support the notion lawmakers cannot edit the charter, which is contained in Delaware code.

“That is a shocking statement,” he said. “I have not heard anyone” previously claim the legislature cannot edit a section of state law.

Sen. Dave Sokola, a Newark Democrat who co-chairs the Joint Committee on Capital Improvement, urged UD administrators to view added transparency as “more of an opportunity than a risk,” a chance for the institution to build more public trust and probably make a few more allies in state government.

Budget hearings like Tuesday’s were only opened about a decade ago, and citizens have become more knowledgeable and involved since, he said.

Ms. Ergin responded by giving a brief history of the charter and painting the university’s relationship with the state as a special one. UD is a non-public corporation that receives public support, thus placing it somewhere between a completely separate and independent entity and a state agency, administrators said.

“We are private serving a very critical function, a public function for the state of Delaware,” Ms. Ergin said.

When the state established the initial Freedom of Information Act in the mid-1970s, legislators worked with UD to reach a compromise acceptable to both sides, she noted.

Other institutions, such as Pennsylvania State University, have similar structures and arrangements with their states, President Assanis said. While UD could opt to become totally private, doing so, he said, would be a disservice to the state.

But though the public-private issue has lingered for decades, it might be coming to a head now.

According to Sen. Sokola, lawmakers plan to bring forth a bill that would open the university up to records requests to a greater degree. A similar measure that would have made subcommittee meetings of the board of trustees open to the public failed in the Senate in 2016, mostly on party lines.

Currently, only meetings of the full board of trustees are public.

UD also must disclose its use of state funds, although that accounts for only about 10 percent of its spending.

Increased requests for funding, partially due to the larger pool of revenue the state has available compared to a few years ago, have prompted some legislators to start taking a more critical look at UD. Concerns about campus sexual assault and drinking have also brought new focus on the institution, as well as efforts by a few advocates.

President Assanis and other administrators have irked lawmakers at times, both with asks for millions of dollars and with comments. In a budget hearing last month, for instance, the president defended the fact a majority of the undergraduate population comes from out of state by shifting the focus from UD.

“I’m not the one holding back the kids from Delaware to come into the university,” he said. “We need more production for babies and we need better qualified students who come out of their K through 12, because we don’t want to put them in a first-class environment and leave them to have mental health problems because they would fail. So, it’s a complex equation.”

The institution is also in a disagreement with Auditor Kathy McGuiness about whether she can review its books. State law says the auditor has the authority to examine the financial records for “every department, bureau, division, officer, board or commission of the State,” while the charter says Delaware “may” audit the university — but only state funds — and requires UD to publish an audit annually.

Members of the Joint Finance Committee said last month they planned to send a letter to the university requesting it allow the auditor to comb through its finances.

Sen. Sokola described President Assanis’ remark as a simple verbal gaffe but said legislators would be more willing to forgive such blunders if the school was less opaque.

“They’re good on paper; they’re good on words,” he said. “Some of us are a little impatient and think that maybe these are baby steps rather than more abrupt changes that are needed in 2020.”

He expects the FOIA proposal to find greater support than in years past, partly due to missteps like President Assanis’ comment last month, although Sen. Sokola would prefer to make the change as a mutual agreement rather than a “mandate.”

Most members of the university’s board of trustees must be approved by the Senate as well, and Sen. Sokola said he thinks some legislators will have tough questions about transparency the next time a nominee for the board is before the chamber.

So, what evidence supports the claims UD should be considered an arm of the state, and what backs the argument it’s an independent corporation that’s in a partnership with Delaware? Both sides have documentation they can point to.

In a 2017 letter to the speaker of the House, President Assanis and board of trustees Chairman John Cochran defended UD’s status, describing its independence as a hallmark of its success.

“The University’s origins as a private institution, its perpetual charter granted by the General Assembly that chose not to reserve a right to amend, and the reaffirmation of its independence over the last two Centuries confirm that the University is essentially private,” concludes the text.

A memo later that year sent from a legislative attorney to two lawmakers states something different, however.

“The University of Delaware charter is a statute,” it reads. “Under the Delaware Constitution, the General Assembly can revise statutes without the consent of those impacted by the changes.

“Charters for corporations and banks are also perpetual and the governing statutes for those entities are revised almost every legislative session. The General Assembly can also amend municipal charters or enact laws that impact municipalities with home rule without the consent of the municipalities.”

Furthermore, a 2015 memo sent by Ms. Ergin and several other attorneys, including general counsel for Delaware State University and the governor, says UD was not originally considered a corporation. (Delaware State has largely stayed out of the public-private issue, in part because administrators there view the school’s role differently.)

Perhaps most notably, in 1950, a Delaware judge ruled the university was a state agency and thus could not bar minorities from enrolling.

Other court cases have found differently, however, Ms. Ergin told the committee Tuesday.

As the state’s flagship higher education institution, UD has plenty of sway in Legislative Hall, but the tide might be shifting to a point where it has no choice but to accept a change or go to court with the state.