Wesley discussing mergers with two institutions

DOVER — Wesley College, which has received several million dollars from the state this year due to ongoing financial issues, has two potential merger agreements with unspecified institutions in place.

According to the college’s Nov. 26 application for $3.2 million from the state’s Higher Education Economic Development Investment Fund, obtained through a Freedom of Information Act request, Wesley 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 from President Bob Clark.

“Because of confidentiality agreements we have signed, we are not at liberty to disclose the names of the institutions,” President Clark said in a statement when contacted Wednesday. “I can say, that discussions are moving forward in a positive manner. When the time is right we will disclose the name of our potential future partner, but now would not be appropriate and could potentially have a negative impact on our negotiations if the identity of the potential partner is prematurely released.”

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.

In that November letter, Wesley, which received $2 million from the Higher Education Economic Development Investment Fund within the past five months, asked for an additional $3.2 million.

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.”

When made last month, the additional ask irked state officials, who previously said the school would not see any funding beyond the $2 million without submitting a strategic plan to Delaware decision-makers.

Gov. John Carney reiterated that last week.

“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 was also 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.

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.

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 the 146-year-old institution 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.