Update on Wesley’s future could come soon

DOVER — An announcement about Wesley College’s future or at least a decision on its latest request for state funding could come within the next few weeks.

The college, which is facing serious financial difficulties, in November submitted a request for $3.2 million from the state’s Higher Education Economic Development Investment Fund. The group, which consists of the director of the Office of Management and Budget, the secretary of state, the co-chairs of the General Assembly’s Joint Legislative Committee on Capital Improvement and the controller general, previously awarded $2 million to the college in 2019. While Wesley was told it would not receive any more funding without first submitting a long-term strategic plan to Delaware officials, its financial state might necessitate a backtracking.

State decision-makers have expressed a hesitancy to commit too much to the school while also noting it plays a large role in the fabric of Kent County. Wesley takes up about 50 acres in the heart of Dover, employs more than 200 people and has about 1,000 students, OMB Director Mike Jackson said, comparing the situation to what the state might do to help a large business in its time of need.

“We have to keep our eye really on what the goal is, which is around economic development and job retention in Kent County,” he said Thursday. “The goal isn’t for the state to continually be reinvesting to have Wesley be a viable option.”

Sen. Dave Sokola, a Newark Democrat who sits on the committee, said Tuesday no meeting date has been set. Despite that, a potential announcement about Wesley’s future is believed to be on the horizon — either from the state in regard to funding or from the school about a possible merger with another institution.

Both Dover City Council and Levy Court passed resolutions earlier this month urging the state to financially support the college. Wesley President Bob Clark told Levy Court two weeks ago the discussion with another school is “moving from a letter of intent to a definitive agreement.”

As part of the state’s efforts to help the small private school, lawmakers last year expanded a fund created in 2018. The Higher Education Economic Development Investment Fund, which was initially intended primarily for the University of Delaware, Delaware State University and Delaware Technical Community College, received more money and new guidelines this year.

In addition to Wesley’s ask, UD, DSU, DelTech, Goldey-Beacom and the Delaware College of Art and Design have requests pending, Mr. Jackson said.

In its Nov. 26 application for $3.2 million, obtained through a Freedom of Information Act request, President Clark wrote the school has “made great progress in identifying a path forward for a potential merger by signing agreements with two financially strong institutions of higher learning.” A sentence following that line appears to name those institutions, but the information is redacted by the state.

A merger would prove especially beneficial in the fields of health care, education, science, technology, math and engineering, according to the application letter. The letter to state officials also notes the school has hired two consulting firms to help plot a course forward, including assistance in negotiations. The names of the firms are among the redacted items.

The companies are, according to the letter, set to provide recommendations to the respective institutions’ leadership by the end of January.

While part of the request was blacked out, the letter does note the sum would be used to “maintain enrollment/retention initiatives and ensure we retain the proper bank account balance so that we can continue to access federal aid money from the Department of Education to allow Wesley College to continue providing Delawareans educational opportunities that improve their lives and enhance the opportunities that they will serve” and “provide a bridge that affords Wesley College the time to complete a definitive agreement with the partner that will provide the best long term solution.”

The private school 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 Wesley 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.

Because Wesley is a private college, its finances are not easily accessible, and several emails obtained through a Freedom of Information Act request contained thorough redactions of financial data and other information.

The situation facing the college, which was founded in 1873, is far from unique: Many small private schools around the nation are facing crunches as enrollment dwindles and their funds run dry. According to Moody’s Investors Service, about a quarter of private higher education institutions were in the red in fiscal year 2017.

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.

Rumors about Wesley have swirled since at least early last year, 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 early in 2019, but they had stopped by June.

Wesley was given permission in the spring to move $1.375 million earmarked for it the prior year to renovate the former Dover Public Library. 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.