Wesley College seeks more state funding

DOVER — In June lawmakers expanded a fund that provides money for higher education institutions, enabling private colleges to access it.

The addition, which opens the $20 million fund to “projects and efforts that will help create or retain a significant number of high quality, full-time jobs and/or continue to provide access to higher education opportunities for in-state residents,” was made with an eye on Wesley College.

The small private school in Dover has been facing financial difficulties, as previously reported by the State News. In August, legislators and a cadre of key state officials agreed to grant Wesley $2 million from the Higher Education Economic Development Investment Fund, just shy of the $2.2 million it asked for.

The school received the first half in the summer, with the second million being transferred a month ago to help it meet “federal requirements to leverage Pell Grant resources for Delaware students and to retain jobs until such time as the bulk of the tuition payments are received upon the start of the Fall 2019 academic semester,” reads a letter from the state approving the sum.

Though budget officials made clear no further award would be made without a long-term plan from the college, Wesley recently submitted a request for $3.2 million more — without providing a path forward.

And as long as that is lacking, any funding request is almost certain to be denied.

Gov. John Carney said he supports giving the college more money but only as long as it is willing to produce such a plan.

“We don’t want to just be a bridge to an uncertain future, and that’s going to be difficult to sort out,” he said. “This is not unlike what small liberal arts colleges across the country are facing.

“I look at it more, as I said a minute ago, as an educational workforce development and an economic development issue. It’s a central part of central Dover in terms of the real estate that they have there as well as all the Delaware students that they’re educating.

“But again, we don’t want to throw good money after bad, and that’s why we’ve said from the beginning that the plan is necessary.”

Wesley College did not respond to a request for comment by deadline Monday.

In addition to the $2 million it has been allocated, Wesley was given permission this spring to move $1.375 million earmarked for it the prior year to renovate the former Dover Public Library. Due to financial troubles, the college sought and received the freedom to spend that money on operational purposes, although it must use the same sum on the South State Street property, which it purchased from the city in 2016 for $1, at some point.

Sen. Dave Sokola, a Newark Democrat who co-chairs the Joint Committee on Capital Improvement and is one of five individuals on the Higher Education Economic Development Investment Committee, in a statement indicated Wesley will face serious trouble getting more money without a long-term plan.

“We all know Wesley College is struggling financially. As a state senator, my main concern is ensuring Delaware students currently enrolled at the school can continue to receive federal financial assistance while administrators develop a plan for the school’s future,” he said.

“When the Higher Education Economic Development Investment Committee agreed to provide $2 million in state funds to the school in August, we were very clear that any additional awards were contingent on Wesley College outlining a plan for providing sustainable access to higher education opportunities beyond the current fiscal year. I look forward to discussing in detail how those funds were used and how this new request will lead to a sustainable and stable future for Wesley College and its students.”

Several other institutions in Delaware also have applied for funding.

College administrators and supporters have been talking to state officials since at least March in an effort to plot a course for the 146-year-old institution.

In a March 29 email sent to several state officials, as well as a few private financial consultants, Office of Management and Budget Director Mike Jackson proposed hiring an outside firm to analyze Wesley’s spending and expenses and map out a “financial planning model with base line for current financial profile and evaluate various alternatives to assess financial impact of changes to enrollment, operating and capital budgets.”

It’s unclear if that review, which would have been paid for the by the state, has been completed.

Issues outlined
Wesley has been placed on a list of colleges and universities maintained by the U.S. Department of Education to track institutions facing various issues, although the Dover school is on the list specifically for finances. The designation means the Federal Student Aid office has greater oversight than with schools not on the list.

While the list contains multiple levels based on the seriousness of the problems, Wesley is at level one, the less serious of the two.

According to Internal Revenue Service documents filed with GuideStar, which maintains a database of nonprofit tax forms, Wesley reported total revenue of about $48.3 million and expenses of $49 million for 2016, with approximately $25.3 million in net assets.

The prior year, its revenue came to nearly $50.8 million, while its costs were a little more than $51.2 million, according to the IRS forms. It had approximate revenue of $49.5 million in 2014, with expenses of about $49.2 million.

Information for more recent years was not available.

Per Wesley’s website, its undergraduate enrollment was 1,228 in the fall of 2018, down 219 from the year before and 372 from five years prior.

Of those 1,228 students, 1,125 were full-time.

Because Wesley is a private college, its finances are not easily accessible, and several emails sent to state budget officials contained thorough redactions of financial data when obtained through a Freedom of Information Act request.

Rumors about Wesley have swirled for months, as evidenced by two March emails from the college’s president. On March 14, in a message to faculty, President Clark shot down “uninformed & untrue” speculation about Wesley being bought out.

He sent another email to college personnel almost two weeks later reiterating “there is no plan, or talk of anyone buying Wesley out, nor are there plans to close.”

Although not mentioned by the president then, among the most persistent rumors is that Wesley is being bought out by or entering into some type of agreement with the University of Delaware. According to UD spokeswoman Andrea Boyle Tippett, there were conversations between the institution and Wesley earlier this year, but they have since stopped.

In both March emails, President Clark acknowledged Wesley is facing general problems.

“We do have many challenges, and that is not anything new, but we also have many dedicated folks working tirelessly to find solutions — both in the near- and long-term,” he wrote in the second correspondence.

Evidently, at least some Wesley pupils were aware of the speculation in the spring: An April article in the Whetstone, the student newspaper, detailed questions and fears about the school’s financial situation. According to the story, rumors started around the end of 2018.

Although Wesley is not public, officials have noted it makes up a key part of the local economy, arguing its collapse would have a large negative impact on Dover, Kent County and all of Delaware.

“It does occupy 19 buildings and 50 acres of land, but more importantly, approximately a thousand students that are attending the college,” Mr. Jackson, the head of OMB, said in August. “Almost half of those are Delaware residents.”

Sen. Colin Bonini, a Dover Republican and Wesley alumnus, made a similar point in June.

“If this wasn’t Wesley College, if this were a business, we’d still be talking about 200 employees, $100 million in economic impact,” he said.

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