Meeting of the Board of Regents | May 2009

THE STATE EDUCATION DEPARTMENT / THE UNIVERSITY OF THE STATE OF NEW YORK / ALBANY, NY 12234

 

TO:
FROM:	Johanna Duncan-Poitier
SUBJECT:	Jamestown Business College: Consent to Transfer of Authority to Confer Degrees
DATE:	May 5, 2009
STRATEGIC GOAL:	Goals 2 and 4
AUTHORIZATION(S):

 

SUMMARY

 

Issue for Decision

 

Should the Board of Regents consent to transfer authority to award degrees to a prospective new owner of Jamestown Business College?

 

Reason for Consideration

             

              Required by State Regulation.

 

Proposed Handling

 

This question will come before the Higher Education Committee at its May 2009 meeting, where it will be voted on and action taken.  It will then come before the full Board at its May 2009 meeting for final action.

 

Procedural History

 

The current owner of Jamestown Business College, Tyler Swanson, proposes to sell the College to David Conklin, former Vice President/Academic Dean and current President of the College.  In May 2008, Mr. Swanson and Mr. Conklin notified the Department of the impending sale.  In June 2008, Mr. Conklin submitted an Application by a Prospective Owner of a Proprietary College for Authority to Award Degrees.  To assess the College’s compliance with the various laws, rules and regulations governing degree-granting institutions and to verify the information provided by the prospective owner in his application, the Department conducted a review of the application and a follow-up review of the College’s B.B.A. program in Management which was registered by the Department in August 2007.

 

Background Information

 

Jamestown Business College is a proprietary college founded in 1886 and located in Jamestown, Chautauqua County.  The Board of Regents first authorized Jamestown to award the Associate in Occupational Studies (A.O.S.) degree in 1971.  In 1997, Jamestown received authorization to award the Associate in Applied Science (A.A.S) degree. In July 2007, the Board of Regents authorized the College to offer the Bachelor of Business Administration (B.B.A.) degree.

 

The Middle States Association of Colleges and Schools, Commission on Higher Education, has accredited Jamestown since 2001.  In 2006, the Commission reaffirmed the College’s accreditation for a period of ten years.

 

Recommendation

 

Based on a review of the documentation received and a follow-up review of the College, the Department has determined that David Conklin satisfies the Regents criteria for a transfer of degree conferring authority at Jamestown Business College.  Accordingly, it is recommended that the Board of Regents consent to transfer to the College’s new owner authority to award Associate in Occupational Studies (A.O.S.), Associate in Applied Science (A.A.S.), and Bachelor of Business Administration (B.B.A.) degrees on students successfully completing registered programs.

 

Timetable for Implementation

 

If the Board of Regents consents to transfer authority to award degrees to the prospective new owner of Jamestown Business College, the authorization will take effect immediately.

Information in Support of Recommendation

 

PROSPECTIVE OWNER

 

David Conklin, the prospective owner, is the President of Jamestown Business College.  The plans for transition began two years ago, when the former president, Tyler Swanson, approached Mr. Conklin about purchasing the College.  Since then, Mr. Swanson and Mr. Conklin have worked together to create a seamless transition to new ownership.

 

Regulatory Provisions

 

The purchase of a proprietary college does not automatically include a transfer of degree-conferring powers.  Pursuant to §224 of the Education Law, the consent of the Board of Regents is required before a proprietary college, operating under a new owner, can award degrees – either temporarily or without term.  Section 3.58 of the Regents Rules includes the standards, requirements, and procedures the Department shall use in determining whether to recommend to the Board that it consent to the transfer of authority to the new owner of a proprietary college.

 

In April 2007, a peer review team visited Jamestown Business College in order to assess its readiness to offer its first baccalaureate degree program.  In July 2007, based on that review, the Board of Regents authorized the College to offer the B.B.A. degree.  To verify the information provided by the prospective owner in the Application by a Prospective Owner of a Proprietary College for Authority to Award Degrees, the Department conducted financial reviews of the College and the prospective owner, a review of the Sale Contract, and a review by external peer reviewers of syllabi, sample student work, and other supporting materials.

 

Standard (a): Evidence confirming the prospective owner’s capacity to operate the institution in compliance with the Education Law, program registration standards set forth in Part 52 of this Title, other Rules of the Board of Regents and Regulations of the Commissioner of Education, other State statutes and regulations, and Federal statutes and regulations, relevant to the operation of degree-granting institutions.

 

David Conklin received a B.S. in Education degree from SUNY Buffalo and a M.S. in Interdisciplinary Studies degree from the State University College at Fredonia.  He began as an instructor at the College in 1983.  He currently serves as President, after serving as Dean and Vice President/Academic Dean.

 

Mr. Conklin stated in his application that he intends to maintain ownership of Jamestown Business College on a long-term basis.

 

Based on Mr. Conklin’s academic training and longstanding service to the College, he has the knowledge and capacity to operate the institution in compliance with the laws, rules and regulations governing degree-granting institutions.

 

Standard (b): Evidence confirming that the prospective owner has sufficient financial resources to ensure satisfactory conduct of degree programs and achievement of the institution’s stated educational goals.

 

              A financial review of the prospective owner indicates that he is receiving adequate funding to purchase the College through a Sale Contract in which he is borrowing the funds from the current owner of the College and Community Bank, N.A.

 

The review indicated the following:

 

• The prospective purchaser’s credit report indicated debt in outstanding real estate, revolving accounts, and installment accounts.   The reports show a very good credit score.

 

• The purchaser’s joint personal tax returns indicate income increasing between 2005 and 2007.

 

The review of the Sale Contract and supporting materials indicated the following:

 

• The Sale Contract indicates the seller will receive $3 million in cash and $3.5 million in a promissory note for a ten year duration from the purchaser.  If tuition revenue rises above $3.8 million, the excess of tuition revenue above $3.8 million will generate an annual payment to the seller equal to 20 percent of this excess.  The total revenue in 2007 was $2.6 million and in 2006 it was $2.9 million.

 

• The purchase price of the institution is $6.5 million.  The seller will loan $2.055 million to the purchaser (in addition to the original $3.5 million in a promissory note) to support the purchase of the institution.  The balance of the purchase price ($945,000) will be funded by Community Bank, N.A.

 

• This is a stock purchase.  The debt incurred is personal to the new owner and will not affect the College’s federal composite score.

 

Based on this review, the new owner will have adequate revenue and profit to continue the operation of the College and pay incurred debt.

 

Standard (c): Evidence of the prospective owner’s experience operating an educational institution or other business or enterprise in an effective manner which demonstrates the prospective owner’s capacity to operate a degree-granting institution.

 

              The prospective owner has served as Dean and Vice President/Academic Dean.  In these positions, he has participated in the operations from the ground level.  The transition to President and Owner of the College has progressed over a two-year period, in which the prospective owner worked closely with the current owner to ensure a smooth transition.

 

Standard (d): Evidence that postsecondary education institutions that the prospective owner operates in New York State or elsewhere, if any, are in compliance with Federal and state statutes and regulations and accreditation requirements relevant to the operation of such institutions.

 

The prospective owner has not owned other postsecondary education institutions in New York State or elsewhere.

 

Standard (e): Evidence that the prospective owner has not engaged in fraudulent or deceptive practices.

 

The Department’s review revealed no evidence of fraudulent or deceptive practices by the prospective owner.

 

NEW OWNER’S PLAN FOR OPERATION

 

The prospective owner plans no major changes to Jamestown Business College. He intends to keep the College’s current operational structure in place, using the same mission, curricula, accrediting body, faculty, evaluation systems, and educational programs.  He is committed to the continued and full participation of faculty in the governance of the College.

 

According to the application, he intends to increase enrollment modestly over the next five years, by four percent per year.  Over the past 5 years, the College’s enrollment has remained steady.  In 2008, the College’s enrollment was 263 students.

 

The proposed owner plans to continue to operate the College in its current location in Jamestown. The College has no branches, extension sites, or inter-institutional programs. 

 

Since 1992, the College has leased all of its space and facilities from the same landlord.  In 2008, it renegotiated the lease until 2022.  The classrooms, computers and computer laboratories, and faculty offices are sufficient in number, well designed and well maintained. 

 

The curricular objectives and student expectations are stated in the catalog, printed materials, and online.  The prospective owner intends to maintain the current catalog, online materials and policies.

 

JAMESTOWN BUSINESS COLLEGE

 

Jamestown Business College, Chautauqua County, is a proprietary college founded in 1886.  The other college located in Jamestown is Jamestown Community College (JCC).  JCC offers programs in liberal arts, careers, and business, leading to a certificate, Associate in Arts (A.A.), Associate in Applied Science (A.A.S.) and Associate in Science (A.S.) degrees.  In Fall 2005, JCC’s enrollment was 3,657 students.  The nearest college outside of Jamestown is State University College at Fredonia, approximately 30 miles away. 

 

Jamestown Business College offers programs in Accounting, Business Administration, and Administrative Assistant leading to Associate in Applied Science (A.A.S.) degrees.  The B.B.A. program in Business Administration is an upper-division program accepting students who have earned an A.A.S. degree in Business Administration from Jamestown Business College.

 

The B.B.A. program in Business Administration started in the winter of 2007.  Enrollment in the program has steadily increased from an entering class of 14 to the current enrollment of 26.

 

Jamestown employs seven full-time and eight part-time faculty.  All are appropriately qualified and credentialed for the offered programs. 

 

The retention rate for first-time, full-time students entering associate degree programs in 2006 is 52 percent.  The three year graduation rate for first-time, full-time students entering associate degree programs in 2004 is 43 percent.  Since the B.B.A. program enrolled its first students in the winter of 2007, there are no graduation data yet.

 

The College is located in a residential neighborhood close to the business district.  The College occupies three buildings that are connected by a corridor.  They house classrooms, two computer laboratories, a student lounge and study areas, and faculty and administration offices.  The classrooms, computers and computer laboratories, and faculty offices are sufficient in number, well designed and well maintained.  Classrooms are suitable for lectures, seminars, group discussions and projects, and technology-related activities. 

 

The College has a contractual partnership with the local community library located a short distance from campus.  The collections, periodicals, electronic databases, and reference services are sufficient to support the demands of the College’s curriculum.  The Library has assigned one librarian as a liaison to the College. 

 

Tuition and fees for 2008-09 for full-time students are approximately $12,800.  Tuition and fees for part-time students are approximately $6,400 per year.  At this time, there are no plans to increase tuition charges.