KEAN UNIVERSITY Response to Legislative Questionnaire pgs. 11‐14 Senior Public Institutions of Higher Education 12. Section 43 of P.L.2009, c.90 (C.18A:64‐85) allows a State college, county college, and Rowan University to enter into a public‐private partnership agreement, which allows the private entity to assume full financial and administrative responsibility for a project as long as the State or institution of higher education retains full ownership of the land upon which the project was completed. The law also allows a college to lease to a private entity the operation of a dormitory or other revenue‐producing facility to which the college holds the title, in exchange for up‐front or structured financing by the private entity for the construction of classrooms, laboratories, or other academic buildings. The private entity is then responsible for the management, operation, and maintenance of the facility, while the college continues to hold title to the facility. The private entity can receive some or all of the revenue generated by the facility. •
Questions:
Please provide a list of public-private partnership agreements that the
institutions have entered into pursuant to this law, including the name of the project, the
cost of the project, and the amount of revenue to be generated for the institution and the
private entity annually and throughout the length of the agreement. Has any agreement
been terminated before it reached its term? Have any agreements for payments-in-lieuof-taxes with respect to a project been concluded with any municipality in which the
projects are located? If so, please summarize the terms of the agreement.
Kean University has not yet executed any Public Private Partnership agreements. It has executed a
Memorandum of Understanding and is finalizing negotiations for such agreements for one new residence
hall project with University Student Living LLC. The project name is Kean University New Student
Housing Complex. The current project budget estimates total project costs to be $44,784,000. The
development budget, operating proforma and agreements are still being finalized.
No agreement has been terminated. No agreements for payments-in-lieu-of-taxes are contemplated or
applicable to the project.
13a. The public research universities, State colleges and universities, independent institutions, and county colleges were invited in 2013 to apply for approximately $1.3 billion in bond funds under the “Building Our Future Bond Act,” the “Higher Education Equipment Leasing Fund Act,” the “Higher Education Facilities Trust Fund Act,” the “Higher Education Technology Infrastructure Fund Act,” and the “Higher Education Capital Improvement Fund Act.” The Higher Education Capital Facilities Programs Solicitation for Grant Applications set forth a number of criteria for the review and selection of capital projects. On April 29, 2013, the Secretary of Higher Education transmitted a list of projects to the Legislature as required under the law. The list of projects to be funded under the “Higher Education Equipment Leasing Fund Act” and the “Higher Education Technology Infrastructure Fund Act” was submitted to the Joint Budget Oversight Committee in July 2013 for approval or disapproval, as provided under P.L.2012, c.42. Since the Legislature and Joint Budget Oversight Committee took no action to disapprove the projects, the projects were deemed approved by July 2013. •
Questions:
For each of the bond funds listed above, please provide an updated table
listing the approved projects, total cost, grants from the State, original start and
completion dates, and revised start and completion dates, if applicable. Please discuss if
there were any unexpected difficulties or problems in complying with reporting
requirements or accessing grant funds through the Office of the Secretary of Higher
Education. Were there any project timetable delays as a result of process or cash flow
issues?
KEAN UNIVERSITY Approved Projects 027‐02 East Campus OT Clinic and Classrooms 027‐03 Performing Arts Instructional Facility Expansion and Renovation 027‐01 North Avenue Multi‐
Purpose Academic Building 027‐04 Kean Highlands Environmental Sciences Education Center Total Cost Grants from NJ Original Start/ Revised Start June, 2013/ N/A Original End / Revised End January, 2014/ N/A Actual $2,247,243.63 GO ‐ $1,987,500 ELF ‐ $100,000 Actual $6,487,457.40 GO ‐ $3,150,000 HEFT ‐ $1,000,000 ELF ‐ $250,000 September, 2013/ December, 2013 September, 2014/ April, 2015 Estimated $48,000,000 GO ‐ $35,700,000 HETI ‐ $112,500 ELF ‐ $1,150,000 September, 2013/ N/A September, 2015/ May, 2016 Estimated $18,000,000 CIF ‐ $7,800,000 HEFT ‐ $1,500,00 HETI ‐ $125,000 ELF ‐ $937,500 TBD/ July, 2016 TBD/ September, 2017 Kean University did not experience any unexpected difficulties or problems in complying with the
reporting requirements or accessing the grant funds through the Office of the Secretary of Higher
Education. There were no project timetable delays as a result of process or cash flow issues.
•
Question:
What is the institution’s understanding of the process to follow if it
perceives that a project’s cost has changed to the extent that it may no longer be feasible
to continue without additional State funds?
Kean University is not aware of any available process to follow if it perceives that a project’s cost has
changed to the extent that it may no longer be feasible to continue without additional State funds.
13b. Section 25 of P.L.2012, c.41, the “Building Our Future Bond Act,” requires the Secretary of Higher Education to submit to the State Treasurer and the New Jersey Commission on Capital Budget and Planning with the secretary’s annual budget request a plan for the expenditure of funds from the “Building Our Future Bond Fund” for the upcoming fiscal year. The act requires the plan to include the following information: “a performance evaluation of the expenditures made from the fund to date; a description of programs planned during the upcoming fiscal year; a copy of the regulations in force governing the operation of programs that are financed, in part or in whole, by funds from the “Building Our Future Fund”; and an estimate of expenditures for the upcoming fiscal year.” •
Questions:
Was each institution required to submit a project expenditure plan for FY
2017, along with project progress/expenditure reports, to the Secretary of Higher
Education or any other department? If so, when was the information requested and
submitted? If any report was prepared by the institution, either for internal use or
submission to the secretary, please provide a copy.
The last project progress/expenditure report was submitted in May, 2015. The next report is due May 31,
2016. A copy of the May, 2015 submission is attached to this report (Attachment A).
13c. On November 16, 2015, the Secretary of Higher Education announced a second round of funding totaling $180 million from the 2012 “Building Our Future Bond Act” ($34.3 million) and the “Higher Education Capital Improvement Fund Act,” ($146.0 million). Applications for this second round of funding were due by January 15, 2016. •
Questions:
How many grant applications has each institution submitted to the
Secretary of Higher Education for the second funding round? What is the dollar amount
of each application submitted and the total dollar amount of all the applications
submitted by each institution? What criteria has each institution used in prioritizing its
projects?
Kean University submitted three applications for second round of funding for $4,000,000; $7,000,000
and $19,000,000 for a total request of $30,000,000. Kean University prioritized those projects that would
increase academic capacity, support the University Mission and are in line with the goals and objectives
identified in the University Strategic Plan.
14. In recent years, there has been growing concern among legislators and the public regarding the steady rise in tuition that leads to higher student loan debt and a decrease in the accessibility of higher education. • Questions: Please provide the total amount of tuition grants, scholarships, and loans awarded to students and the total number of students who received the financial aid broken down into State‐funded, federally‐funded, and university‐funded assistance for the last three academic years and projected for FY 2016‐2017. Please provide the sources of university‐
funded aid for these years. Please see the attached chart. (Attachment B)
• Question: Has university‐funded tuition aid as a percentage of total tuition aid increased over this period? Yes. From 2013-2014 to 2016-2017 (projected), the percentage of university-funded tuition aid to total
tuition aid increased by .5%, while the percentage of grants/loans to total tuition aid decreased by .5%.
• Question: Please explain any strategy the institution is implementing in order to limit tuition and student fee increases. The Kean University Board of Trustees and the University administration has worked diligently in recent
years on a combination of new initiatives, cost-saving measures and strategic investments all designed to
keep annual tuition increases at the lowest rate possible and, under the 4% mark, since 2011. Kean today
is one of the most affordable, comprehensive universities in New Jersey. Specifically, the University
undertook a campus-wide review of all operations, expenditures and investments to identify all areas that
can operate more efficiently and effectively. In recent years, this initiative has generated significant
savings for the University, while further enhancing its ability to focus on providing its students—many of
whom are the first in their families to attend college—with access to a world-class education and worldclass learning opportunities. On the revenue generating side, the University created an Office of
Conference and Events several years ago with a mission of raising revenue for the University through
rentals and conferencing with external clients at non-peak University hours. This department has
generated in excess of $1 million in new revenue for the University since its creation. The Kean
University Foundation led a strategic investment in the development of a campus restaurant that to date
has generated in excess of $240,000 in new scholarship funds for Kean students. Discount tuitions
programs have been instituted for students who enroll in courses on Fridays and weekends (traditionally
low enrollment periods) and other incentive-based programming has been developed.
The Kean University Foundation also has been working diligently to grow its endowment. Foundation
Scholarships, which are awarded to all eligible and highly qualified applicants, have steadily increased
due to growth in established private scholarships as well as an increase in the endowment yield. KUF
Scholarships grew almost 30% since 2013-2014. The increase in Freshman Merit Scholarships shows that
Kean is attracting an academically strong student body. The merit scholarships increased over 75% over
the past three years. Additionally, federal grants show a 6.3% growth over the last 4 years, state grants
6.8% and federal loans 2.2%.
Kean University adopted Vision 2020, a strategic plan through the year 2020. Under the direction of
President Dawood Farahi, the plan developed and launched several market-driven degree programs in the
areas of global business, computer science, allied health, and architecture. Enrollment in these programs
met initial enrollment goals and continues to attract an increasing number of students each academic year.
15. A 2015 report from The Chronicle of Higher Education analyzed the extent to which student fees and other institutional resources supplemented the income of athletic departments of Division I colleges from 2010 through 2014. The report found that Rutgers University spent over $170 million in the five‐
year period to underwrite intercollegiate sports, more than any other college in the country. In addition, the report stated that the athletic department of the New Jersey Institute of Technology received 90.6% of its 2014 funding from general student fees and other institutional support, also more than any other college in the country. •
Questions:
For each academic year starting with the 2009-2010 academic year, please
provide the following financial statistics for the institution: a) the operating expenses of
the institution’s athletic department; b) the sources of the athletic department’s revenues,
delineating income generated by the athletic department, donations, income from
general student fees, and financial support from the host institution; and c) the
percentage of total athletic department operating expenditures that was paid for out of
general student fees and financial support from the host institution. Please explain the
strategy the institution deploys, if any, to reduce, if not eliminate, the subsidization of
annual athletic department costs by general student fees and institutional resources.
Kean University is a member of the NCAA Division III where academics are the primary focus for our
student-athletes, and the campus-wide use of our recreational facilities for intramural sports, health and
well-being and academic purposes is emphasized. We place special importance on the impact of athletics
on the participants rather than on the spectators, and place greater emphasis on the success of our internal
constituencies (e.g., students, alumni, institutional personnel) than on the general public and its
entertainment needs. Annually, more than 700 students participate in competitive athletic programs;
another estimated 15,600 student visits to the University’s recreational and health & wellness facilities
are recorded annually.
The student-athletes at Kean come to college for an education, and they play for the love of the game. Our
student-athletes compete not because they receive a financial reward or even in the hopes of being
featured in the media, but because they are driven to excel. Without million-dollar coaches and multimillion dollar revenues, the challenge and commitment to do their best is personal. At the same time,
student-athletes at Division III institutions share many characteristics with the much more visible
scholarship athletes at Division I and II schools: they work just as hard in practice and compete just as
intensely; they strive to win, and through competition, they learn lessons about discipline, leadership and
teamwork.
Currently the Department of Athletics and Recreation is funded by a per-semester student athletic and
recreation fee, in addition to support from overall University funds. The individual sport teams
themselves also fund raise to supplement the overall department budget. This student and recreation fee
supports all areas of the 13 NCAA Division III intercollegiate teams offered by the University, as well as
recreational and intramural programming. In addition, the fee covers the expenses and personnel cost
associated with operating and maintaining 3 fitness centers and 3 gymnasiums on campus.
The athletic and recreation fee for the 2015-16 academic year is $135.00 per semester per full time
student. That fee has not changed for a decade; it is the same fee as the 2005-06 fiscal year. Working
under those parameters the department of athletics and recreation has stressed fiscal responsibility despite
surging costs in essential areas such as buses for team travel, athletic health insurance and union
negotiated salary increases.
The essential factor necessary for the future success of the athletics and recreation department is to secure
additional funding to supplement our current funding model whereby athletics and recreation is supported
by student fees and general revenue. The University is in the process of implementing new programs to
do just that.
First, Kean has constructed tremendous athletic facilities that attract tens-of-thousands of visitors each
year. These facilities currently are devoid of corporate sponsorship. Alumni Stadium’s video scoreboard
is prime marketing real estate that was designed with four corporate advertising panels that are currently
under monetized. Moreover, with the video section of the board we can offer these corporate sponsors the
added opportunity to run commercials or public service spots to entice them to partner with the
University. Harwood Arena also has two video boards’ that have a lot of advertising potential with all the
high profile and televised events we host each year. All of these areas are now a major focus of the
Athletics and Marketing departments at Kean, as well as the Kean University Foundation, with the goal of
generating significant, recurring revenue starting in the next fiscal year.
See the attached chart for requested data (Attachment C).
16. On March 22, 2016, the Wall Street Journal published an article entitled “Colleges Brace for Overtime Overhaul” that noted that institutions of higher education across the nation were anticipating rising personnel cost from the pending adoption by the federal government of revised overtime‐pay rules. The proposed rules would increase the threshold below which overtime compensation would be mandatory for salaried employees from $23,660 to $50,440. In response to the proposed rule changes, colleges and universities reportedly considered cutting student services, degree offerings, and labor‐intensive research. •
Questions:
Has the institution considered the impact of the proposed federal
overtime-pay rule changes on its operations? All other things being equal, by what
amount would the institution’s operating expenses increase if the proposed overtime
compensation rule changes were in effect? All other things being equal, by what amount
would tuition have to increase to cover the increased personnel cost? How many
employees and student-employees would be affected? What personnel management and
service delivery practices would the institution change to minimize the cost impact of the
proposed rule changes?
Based on preliminary research, the chart below provides an estimate of how operating expenses would increase under the proposed rule changes which primarily affect an estimated 43 employees. 17. Several pieces of legislation have been proposed that would raise the Statewide minimum wage from $8.38 per hour to $15 per hour. If enacted, this increase could affect many staff of the institutions of higher education, including student‐employees. •
Questions:
Has the institution considered the impact of a $15 minimum wage on its
operations? All other things being equal, by what amount would the institution’s
operating expenses increase if a Statewide $15 minimum wage were in effect? All other
things being equal, by what amount would tuition have to increase to cover the larger
personnel cost? How many employees and student-employees would receive an increase
in their compensation? What personnel management and service delivery practices
would the institution change to minimize the cost impact of the higher minimum wage?
Based on preliminary research, the chart below provides an estimate of how operating expenses would increase under the proposed rule changes which primarily affect student workers.