HSU trustees OK beginning merger with ASU System

Move aims to strengthen finances; school’s name, mascot to stay same

FILE — Henderson State University is shown in this 2019 file photo.

ARKADELPHIA -- Henderson State University will become the newest member of the Arkansas State University System, a move intended to shore up the university's short-term and long-term finances while providing more collaborative opportunities.

Henderson State trustees unanimously approved starting the merger Thursday afternoon.

The university's name won't change, and neither will its mascot, the Reddie. When all is said and done, the university will remain "The School With a Heart."

"I'm really pleased that Henderson is going to maintain its unique identity," acting President Elaine Kneebone said, and a "more stable environment" of a university system.

The vote preserves the 44-year-old name of the school originally founded in 1890 as a private Methodist college.

The merger is intended to help Henderson State, Arkansas' only public liberal arts university, emerge from recent financial struggles and eventually help the university share resources and risk across the larger system.

Once completed, the merger will give the ASU System its second four-year university and its third new institution since 2015. Mid-South Community College merged into the system in 2015, and College of the Ouachitas is in the process of merging with the system now.

It also gives the system a bigger footprint outside the northeast quadrant of the state and just down the road from College of the Ouachitas, Henderson State's biggest feeder institution. The merger of those two nearby schools into the same institution presents opportunities for both of them, said ASU System President Chuck Welch, a former Henderson State president.

Henderson State had a $4.9 million deficit last fiscal year and accepted a $6 million advance from the state that must be paid back next year. That covered the deficit and could be more than what the university needs, depending on the current fiscal year.

To straighten out its budget and explore "opportunities for shared resources and services for cost avoidance and savings potential," the university hired the Arkansas State University System for just more than $50,000 in July.

Julie Bates, executive vice president and chief financial officer of the ASU System, told trustees Thursday that the budget shortfall for this fiscal year could be $1.5 million, without additional budget cuts. But the system did not recommend any cuts. Bates said she would have a clearer picture of the shortfall later.

Last month, trustees cut more than $3 million from this year's budget, largely by lowering pay for 300 faculty and staff members, about three-quarters of the university's employees. The pay cuts are effective next semester.

Shortfalls have been compounded by concerns that the university has been alienating prospective students because of financial-aid software -- which Henderson State is the only school in the nation to use, beginning last year -- that leaders say was so buggy that only 10% of students had been notified of their financial-aid packages a week before classes began this fall.

The university is accepting proposals for new software. Trustee Eddie Arnold urged student affairs representatives to assure area high schools that this would not be a problem in the future.

"They're very upset with what's happened here," Arnold said.

"We've taken a very big hit on favorability right now," he added.

Despite those issues, the university had a higher enrollment this fall than last fall, in contrast with several other public universities in Arkansas. It reported 4,054 students this fall.


The school's trustees and the system's trustees will need to agree on a contract outlining the merger. A draft contract will be reviewed by attorneys before a later vote.

After that vote, the university and the system would begin the merger.

The Arkansas Legislature also must change parts of Arkansas Code related to Henderson State to accommodate the merger.

Ultimately, the Higher Learning Commission, which accredits Henderson State and all of the ASU System schools, would have to approve the merger. Henderson State's accreditation would remain independent of the other Arkansas State schools.

In the video question-and-answer session, Welch estimated a year to a year and a half before Henderson State would officially become a member of the system.

Welch favors adding two more seats to the five-member ASU System board of trustees specifically for Henderson State. Those trustees would be appointed by the governor. The governor also would appoint members of a board of visitors. The Arkansas Legislature would have to approve changes to the boards.

But whether Henderson State's name would change was the biggest concern the university and the system faced from university stakeholders, leaders said.

"Students want to know, 'What will my diploma read?'" Kneebone said. "I was really touched by that."

The ASU System ultimately left the school's name up to its trustees.

Trustee Bruce Moore made a motion Thursday to start the merger with the stipulation that the name would stay. Trustee Ross Whipple asked that the mascot and motto stay the same, too. The amended motion passed unanimously, once questions about attorney review of the merger contract were settled.

The university can maintain its own foundation as well.

Last month, trustees approved beginning discussions on merging with the ASU System. That was intended to gather feedback across the campus.

The university and system hosted a community event Monday to answer questions, which Henderson State spokeswoman Tina Hall said was attended by a couple of hundred people. Later that day, they hosted a Facebook Live question-and-answer event intended for alumni and others who could not attend the earlier meeting.

"I've heard a lot of positive feedback," Moore said before making his motion.

On a quiet Thursday afternoon on campus, decorated with fake spiderwebs and ghosts and tombstones, students said they weren't terribly concerned with the merger but were aware of it.

"I just hope they raise the faculty's wages," said Devin Colin Alanis, a 19-year-old marketing major. "They shouldn't punish the professors for one person's mistakes."

Most of the university's $4.9 million shortfall last year came from $4 million in unpaid student accounts, a large increase from previous years and considered exceptionally high for an institution of Henderson State's size.

The university's vice president for finance and administration at the time, Brett Powell, left the university soon after it learned of the shortfall to take another job. President Glen Jones Jr. resigned not long after, in July.

A Section on 10/25/2019