Legislators should have been consulted on University Center changes, committee says

Some South Dakota lawmakers aren't happy they were excluded from discussions about changing the University Center in Sioux Falls to a new college under the University of South Dakota. 

Legislators on the Government Operations and Audit Committee said on Wednesday that they didn't know any changes were in the works for the University Center until it was announced earlier this month — despite discussions beginning in October between USD, South Dakota State University and Dakota State University.

"I'm displeased with the fact that this was never brought up," said Sen. Justin Cronin, R-Gettysburg. "I don't believe we have the facts and figures to not have pause and questions on this."

The financial structure of the University Center is being changed in a memorandum of understanding between the three universities. While the programs offered at the University Center aren't expected to change, USD President Sheila Gestring said the University Center will be renamed "The Community College for Sioux Falls, a branch of USD."

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The details of the changes weren't finalized until after the legislative session, and the University Center does not use any state dollars, Gestring explained. It's also a done deal after the Board of Regents approved the changes earlier this month, she added.

Cronin said that lawmakers should have been involved in discussions because the state doesn't have any community colleges, and they may have to make changes to accommodate it. 

Gestring said they're not creating a new community college from an accreditation point of view, but rather filling a gap in the Sioux Falls education landscape. The changed University Center will become a college of USD similar to the university's College of Arts and Sciences. Its associate's degrees address the skills needs of Sioux Falls businesses, she said.

"It's within an umbrella piece of the organization, and we intend to serve the Sioux Falls community in that community college-like desire, in quotation marks, that was expressed a couple of years ago," Gestring said.

The purpose is to re-balance the University Center's financial makeup to ensure all three universities see net positive gains from participating with the center, Gestring said. The reduction in costs at the University Center will be realized through efficiencies by consolidating courses, and using more graduate students and adjuncts, she said. They'll then reduce staffing at the University Center through attrition.

The University Center is fully supported by student tuition rather than the state supporting it with funding, but the tuition cost is one of the "major challenges" at the University Center because community colleges are typically less expensive than four-year colleges in other states, Gestring said. She said they're planning to find community support to begin to lower tuition costs.

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Cronin questioned whether the state, at the end of the day, will be supporting the University Center through funding budgeted for USD. If it's a financially self-supporting operation, it needs its own budget to allow legislators to verify that its truly self supporting, he said.

"My question is, you haven't been self-supportive at the University Center, I believe you haven't, I believe all the universities back filled ... can you tell us definitively and prove to us that you have not taken any state dollars from any of the other universities to support the center in Sioux falls?" Cronin asked. 

Gestring said she can begin reporting the University Center's finances to legislators annually. However, it's a $3 million operation and can't independently pay staff because it doesn't grant degrees, which causes "a lot of financial complexities" if USD were required to split its expenses from the larger USD budget.

Sen. Susan Wismer, D-Britton, pointed out that the University Center's financial report was provided to the committee in June 2018, and the committee reviewed it then.

"We were all realizing that the numbers weren't looking right and that something had to happen quick, and they're telling us how they are addressing the issues that were identified a year ago and explained," Wismer said. "Those committee members (there a year ago) were apprised of that situation and knew that a solution had to happen."