Updated: Mar 10, 2020
At a hearing in which University of Delaware officials made a new request for funds – this time it was $10 million to cover deferred building maintenance – lawmakers brought up a familiar topic: Is the university public or private?
It’s a question that’s been debated for so long, it has become something of a joke, said Laure Bachich Ergin, vice president and general counsel for the university.
“People ask, are we public or private? We say, ‘Yes we are,’” Ergin joked to the Capital Improvement Committee on Tuesday morning. “We are a private corporation. But we’re not like other private organizations. We have lots of characteristics that make us sound like a public institution.”
UD points to its charter as evidence that it is a “privately governed, state-assisted” university. While the university must share information directly related to the expenditure of public funds, all other financial information is considered private. Because of this, taxpayers are largely kept in the dark about the school’s finances and business practices.
Formed by the General Assembly as a private corporation in 1891, Delaware State University follows the same parameters.
But UD’s charter creates a murkier legal situation when it comes to its public or private status.
Several Delaware court cases have taken opposite stances on the matter, Ergin said.
The charter was drafted collaboratively between the General Assembly and the university, she said. In the past, the Legislature would renew the charter about every 20 years. But in the early 1900s, the state gave the charter perpetual existence, giving the university ongoing permission to operate independently.
In 1976, the newly written state freedom of information law established that while UD is not a state agency, it must still be held accountable for the spending of public dollars and hold open board meetings.
“[The charter] was given to us years ago by the General Assembly,” Ergin said. “There is no ability to change that without our consent. Our predecessors came up with the charter 100 years ago. The charter ended up strengthening the university’s independence.”
Should the state want to change the university’s charter, UD would also need to agree to the changes, Ergin said.
“That is a shocking statement,” Sen. Bryan Townsend, D-Newark, said. “I have not heard anyone in eight years say anything like that at all about Delaware code.”
But unlike other parts of Delaware code, UD’s charter is an agreement, rather than a law, Ergin said.
“It is not something that’s like other sections of the code. It sits in the code, but it is an agreement between the university and the state,” she said. “That’s one of the reasons why there is confusion as to the status.”
This year, the university requested $128 million in operating funds, in line with the governor’s recommended budget. As the state’s largest university, UD consistently receives the bulk of state higher education funding.
Those taxpayer dollars account for about 10% of the university’s annual operating budget.
Are there other corporations in which shareholders aren't entitled to know anything about a company’s financial dealings, beyond their sliver of the company?
Ergin could only offer that the university must always comply with its charter.
“We’re unique. We’re special,” she said.
In the past, Rep. John Kowalko, D-Newark, has attempted to open UD’s full financial books to public review. But his legislation has never made it past committee hearings.
“Surely, we could just be a private university, but that would take us in a different direction that would not necessarily benefit Delawareans the way I want to,” UD President Dennis Assanis said. “I hope people appreciate our increased transparency. We can do more; we can always do more.”
Natalia Alamdari covers education for The News Journal. You can reach her at (302) 324-2312 or email@example.com.