Meeting of the Board of Regents | June 2008
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THE STATE EDUCATION DEPARTMENT / THE UNIVERSITY OF THE STATE OF NEW YORK / ALBANY, NY 12234 |
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TO: |
Higher Education Committee |
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FROM: |
Johanna Duncan-Poitier
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SUBJECT: |
Amendment of the Polytechnic University Charter – Background Information
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DATE: |
June 4, 2008 |
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STRATEGIC GOAL: |
Goals 2 and 4 |
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AUTHORIZATION(S): |
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SUMMARY
Issue for Discussion
Should the Board of Regents amend the charter of Polytechnic University, as requested, to effect an affiliation with New York University?
Reason(s) for Consideration
Required by State statute.
Proposed Handling
This matter will come before the Board of Regents at its June 2008 meeting, as one of the recommendations for charter actions, where it will be voted on and action taken. This document provides background information related to that petition.
Procedural History
The Board of Regents granted a provisional charter to Polytechnic University (Polytechnic) on August 8, 1889, under the name, Polytechnic Institute of Brooklyn. In June 1890, the Board made the charter absolute. The Board has amended the charter over time, including amendments in December 1960 to authorize a branch campus in Suffolk County, in December 1973 to change the name of the corporation to Polytechnic Institute of New York, in May 1975 to authorize a branch campus in Westchester County, in December 1977 to increase the number of trustees to 45, and, most recently, in October 1985 to change the corporate name to Polytechnic University.
Background Information
Polytechnic and New York University (NYU) have agreed to enter into an affiliation. Under the agreement, Polytechnic would remain a separate Regents-chartered corporation affiliated with NYU. The charter amendment would (1) change its name to Polytechnic Institute of New York University; (2) make it a membership corporation, with NYU the sole member; and (3) empower NYU to appoint its trustees and chief executive officer. The agreement contemplates NYU appointing about ten percent of Polytechnic’s trustees each year, which would give its appointees control of the Board after about five years. The agreement requires that Polytechnic’s Board continue for ten years to include one current Polytechnic trustee from three nominated members of the Board. The NYU Board of Trustees would elect two members of the Polytechnic board as trustees of NYU, including, if possible, one Polytechnic alumnus.
Under the agreement, Polytechnic will seek to meet indicators of its ability to consolidate with NYU and become NYU’s school of engineering and technology. Consolidation is seen as being sought in three to five years; however, the agreement sets no firm period. Until the Regents approve the consolidation of the two corporations, Polytechnic will retain full control over its own assets, including endowment, other funds, and intellectual property. Its tenured faculty will remain tenured. Its tenure-track faculty will continue on track for tenure. Polytechnic will modify its appointment and tenure policies to be consistent with those of NYU’s schools. Faculty governance will remain subject to Polytechnic’s policies.
NYU will assist Polytechnic to recruit students. Polytechnic expects that its student body will continue to reflect New York City’s racial/ethnic composition and to change, over time, as the City’s population changes. Student aid policies will remain those in effect in 2007-08. Graduates through the Class of 2011 may choose to receive a “Polytechnic University” diploma or one bearing the name, “Polytechnic Institute of New York University.”
Should NYU seek, prior to consolidation, to offer an engineering or technology program that Polytechnic does not offer, a provision gives Polytechnic a right of first refusal to offer the program. Should Polytechnic decline to offer the program, NYU could seek master plan amendment approval from the Regents to offer it.
Recommendation
Not applicable.
Timetable for Implementation
Not applicable.
Polytechnic
University and New York University
Background Information Related to Amendment of Polytechnic’s Charter
A. Institutional Information.
Polytechnic University, Brooklyn, received a provisional charter from the Board of Regents in August 1889 under the name, Polytechnic Institute of Brooklyn. In June 1890, the Board made the charter absolute. In December 1973, the Board amended the charter to change the institution’s name to Polytechnic Institute of New York, and in October 1985, to change its name to Polytechnic University. In the fall of 2007, it had 1,495 undergraduates and 1,822 graduate students. In addition to its main campus in Brooklyn, it has charter and master plan authority to operate branch campuses in Suffolk and Westchester counties.
New York University, Manhattan, was incorporated by Chapter 176 of the Laws of 1831, under the name, University of the City of New York. In March 1886, the Board of Regents amended the legislative charter to change the institution’s name to New York University. In the fall of 2007, NYU had 21,327 undergraduates and 20,456 graduate and first-professional degree students. In addition to its main campus in Manhattan, it has charter and master plan authority to operate a branch campus in Rockland County.
1973 Merger of NYU’s Engineering School into Polytechnic. Following several years of operating deficits at both NYU and Polytechnic, which the Legislature covered in part with emergency operating aid, a 1971 study by the Department was the basis for Chapter 463 of the Laws of 1972. Chapter 463 authorized the City University Construction Fund to purchase NYU’s University Heights campus, in the Bronx, to be the campus of Bronx Community College, which was operating in temporary facilities, and appropriated $13 million in first‑instance funds as a down payment.
Chapter 463 also required the “merger” of NYU’s School of Engineering and Science, which was located at the University Heights campus, into Polytechnic. It did so to reduce NYU’s operating expenses and to reduce competition among engineering schools in the City by one school. The merger was to be accomplished by July 1, 1973.
NYU and Polytechnic concluded a merger agreement on March 21, 1973. The merger was effective on June 29, 1973. On September 21, 1973, the Board of Regents amended Polytechnic’s charter to change its name to Polytechnic Institute of New York and to authorize it to operate throughout New York City and in Westchester County. No amendment of the NYU charter was needed.
Chapter 463 required both NYU and Polytechnic to adopt and submit for approval of the Board of Regents and the Governor a five‑year financial plan resulting in a balanced budget beginning in 1974‑75 “without extraordinary state subsidies.” Each balanced budget was to be achieved “by retrenchment and stringent financial control and by increasing revenues from expanded enrollment and other means.” In fact, the annual operating budgets of both institutions were reviewed and approved by the Department and the Division of the Budget through 1977‑78.
Agreement between Polytechnic and NYU. In the spring of 2008, Polytechnic and NYU agreed to enter into an affiliation between the two institutions. Under the agreement, Polytechnic would remain a separate Regents-chartered corporation affiliated with NYU. However, under the agreement, Polytechnic will seek to meet School Indicators of its ability eventually to consolidate with NYU and become NYU’s school of engineering and technology. Consolidation is seen as being sought in three to five years; however, the agreement sets no firm period.
Polytechnic and NYU have identified the following benefits to the two institutions:
For Polytechnic
- Strengthen its ability to recruit and retain young men and women with interest in science, technology, engineering, and mathematics from the culturally rich and ethnically diverse student population of New York, the nation and around the world.
- Better prepare science, engineering and technology students, both undergraduate and graduate, to compete in the global economy as scientific, technology, and engineering practitioners, inventors and entrepreneurs.
- Enhance Polytechnic’s ability to attract and retain leading faculty who will educate and engage Polytechnic’s students.
- As part of a major research university, provide access for Polytechnic’s students to a much broader range of academic and research programs, including opportunities to study at NYU’s global locations.
- Expand Poly’s role in applied science, technology and engineering research by joining with the substantial mathematical, science, and medical research programs at NYU.
- Share resources for operational efficiency and improvement.
For NYU
- Re-establish technology and engineering as strategically important disciplines within a comprehensive research university.
- Offer new opportunities for NYU students to enroll in applied science, technology, and engineering programs and courses, to better prepare them to compete in the 21st century global economy.
- Continue to support and increase NYU’s commitment to student diversity.
- Facilitate collaborative research and technology commercialization in such areas as urban sciences, medical science and health care delivery, and information technology.
- Infuse the inventive, innovative and entrepreneurial character of Polytechnic’s vision and heritage into the sciences, and liberal arts, and professional schools of NYU.
B. Curricula.
Engineering Programs. Should NYU seek to offer, prior to consolidation, an engineering or technology program that Polytechnic does not offer, an exclusivity provision gives Polytechnic a right of first refusal to offer the program. Should Polytechnic decline to offer the program, NYU then could seek master plan amendment approval. The Department has determined that nothing in Chapter 463 of the Laws of 1972 would prevent the Board of Regents from approving a master plan amendment to authorize NYU to offer a program in the discipline area of Engineering.
Degrees. Polytechnic awards the degrees of Bachelor of Science (B.S.), Master of Business Administration (M.B.A.), Master of Engineering (M.E.), Master of Science (M.S.), and Doctor of Philosophy (Ph.D.). It offers undergraduate and graduate programs in the discipline areas of the Biological Sciences, Business, Engineering, the Humanities, the Physical Sciences, and the Social Sciences. In 2005-06, it awarded 302 undergraduate, 449 master’s and 25 doctoral degrees, for a total of 776 degrees. The 776 degrees were distributed as follows:
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Engineering |
45.4% |
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Computer and Information Sciences |
26.5% |
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Business, Management, and Marketing |
20.9% |
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Liberal Arts and Sciences |
1.3% |
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All Other Disciplines |
5.9% |
Source: NYSED, Higher Education Data System, 2008.
NYU’s charter authorizes it to award all degrees available for use in New York State. It offers undergraduate and graduate programs in the discipline areas of Architecture, the Biological Sciences, Business, Education, the Fine Arts, the Health Professions, the Humanities, Interdisciplinary Studies, the Physical Sciences, and the Social Sciences. In 2005-06, NYU awarded 5,671 undergraduate, 5,600 master’s 906 first-professional, and 449 doctoral degrees, for a total of 12,626 degrees. The 12,626 degrees were distributed as follows:
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Business, Management, and Marketing |
18.5% |
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Visual and Performing Arts |
13.2% |
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Humanities and Natural Sciences |
9.2% |
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Health Professions and Clinical Sciences |
8.1% |
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Social Sciences |
7.8% |
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Law |
7.5% |
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Public Administration and Social Services |
6.2% |
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Communication and Journalism |
5.7% |
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Education |
4.9% |
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Computer and Information Sciences |
1.5% |
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Architecture and Related Disciplines |
0.1% |
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All Other Disciplines |
17.4% |
Source: NYSED, Higher Education Data System, 2008.
Persistence and Graduation Rates. At Polytechnic, 80 percent of the 2004 entering class persisted to the following year. At NYU, 93 percent did so. The table below shows the rate at which full-time students entering Polytechnic and NYU earned baccalaureate degrees from their institution within six years of entry.
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Year |
Polytechnic |
NYU |
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1999 |
53.3% |
64.1% |
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2000 |
56.9% |
74.0% |
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2001 |
51.5% |
75.4% |
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2002 |
49.3% |
77.6% |
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2003 |
54.5% |
78.6% |
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2004 |
42.9% |
80.0% |
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2005 |
45.3% |
82.8% |
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2006 |
50.0% |
84.4% |
Source: NYSED, Higher Education Data System, 2008.
Over the period, on average, about half of each Polytechnic entering class of full-time students earned baccalaureate degrees within six years. At NYU, more than three-quarters did so.
Statewide, 61.5 percent of all full-time students earned baccalaureate degrees in 2005 from the same institution they entered no more than six years earlier. For 2006, the proportion was 62.5 percent.
Polytechnic offers remedial courses. NYU does not.
C. Students.
Enrollments. Over the past ten years, Polytechnic has had the following enrollments.
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Year |
Undergraduate |
Graduate |
Total |
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Full-Time |
Part-Time |
Full-Time |
Part-Time |
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1998 |
1,561 |
148 |
197 |
1,275 |
3,181 |
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1999 |
1,647 |
160 |
510 |
951 |
3,268 |
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2000 |
1,641 |
134 |
497 |
787 |
3,059 |
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2001 |
1,582 |
129 |
533 |
809 |
3,053 |
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2002 |
1,578 |
107 |
564 |
783 |
3,032 |
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2003 |
1,488 |
71 |
542 |
745 |
2,846 |
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2004 |
1,471 |
72 |
560 |
716 |
2,819 |
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2005 |
1,451 |
68 |
638 |
644 |
2,801 |
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2006 |
1,403 |
77 |
836 |
603 |
2,919 |
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2007 |
1,430 |
65 |
1,098 |
724 |
3,317 |
Source: NYSED, Higher Education Data System, 2008.
Over the same period, NYU reported the following enrollments:
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Year |
Undergraduate |
First-Professional |
Graduate |
Total |
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Full-Time |
Part-Time |
Full-Time |
Part-Time |
Full-Time |
Part-Time |
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1998 |
15,346 |
2,327 |
3,233 |
65 |
6,958 |
8,790 |
36,719 |
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1999 |
16,098 |
2,336 |
3,242 |
59 |
7,961 |
9,740 |
39,436 |
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2000 |
16,500 |
2,128 |
3,315 |
55 |
6,844 |
8,308 |
37,150 |
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2001 |
16,962 |
2,066 |
3,264 |
78 |
6,899 |
7,865 |
37,134 |
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2002 |
17,475 |
2,015 |
3,236 |
63 |
7,333 |
7,974 |
38,096 |
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2003 |
17,718 |
1,788 |
3,325 |
9 |
7.582 |
7,766 |
38,188 |
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2004 |
18,525 |
1,687 |
3,307 |
5 |
7,971 |
7,913 |
39,408 |
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2005 |
18,981 |
1,585 |
3,383 |
8 |
7,793 |
8,254 |
40,004 |
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2006 |
19,482 |
1,483 |
3,421 |
7 |
8,178 |
8,178 |
40,870 |
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2007 |
19,914 |
1,413 |
3,434 |
9 |
8,500 |
8,513 |
41,783 |
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Source: NYSED, Higher Education Data System, 2008.
Between the fall of 1999 and the fall of 2005, Polytechnic’s enrollment declined by 14.3 percent, from 3,268 students to 2,801. Enrollment recovered beginning in 2006, however, and the fall of 2007 saw Polytechnic’s highest enrollment in ten years, 3,317 students. This growth was the result of a significant increase in graduate students combined with a modest growth in undergraduates. Over the ten year period, NYU’s enrollment grew by 13.8 percent.
At Polytechnic undergraduates made up almost 55 percent of all students, on average, during the ten-year period. At NYU, they made up about 50 percent. However, with the increase in Polytechnic’s graduate enrollments in 2006 and 2007, undergraduates had declined to only 45 percent of all students in 2007. At both institutions, more than 70 percent of the students were full time, on average, over the ten-year period.
Admission. Polytechnic’s 2007 catalog describes undergraduate admission as highly competitive. Applicants are expected to be high school graduates who have four years of English, four years of science (including chemistry and, preferably, physics), and four years of mathematics (through calculus). SAT I scores are required. Newly admitted students are required to take two placement examinations unless they have scores of four or higher on AP mathematics and English or high SAT II scores.
NYU describes itself as “highly selective” in admission to undergraduate study. It says that it seeks entering classes that are geographically, socially, ethnically, and economically diverse as well as academically talented. The most important factor in admission is the applicant’s overall academic record viewed in the context of the strength of the program. However, NYU does not use a numerical cut off score for either grade point average or SAT score. Motivation, leadership skills, and community or extracurricular accomplishments also are important.
Between 1999 and 2007, on average, Polytechnic accepted over 70 percent of applicants for admission as first-time undergraduates. For the fall of 2007, the proportion was 72.7 percent. Over the same period, NYU accepted one-third of applicants for admission as first-time undergraduates, on average. For the fall of 2007, the acceptance rate was 34.3 percent.
Both Polytechnic and NYU participate in the Higher Education Opportunity Program (HEOP).
Full-Time, First-Time Students. The number of first-time full-time students enrolling at each institution is shown below.
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Year |
Polytechnic |
NYU |
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1998 |
422 |
3,415 |
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1999 |
463 |
3,581 |
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2000 |
422 |
3,783 |
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2001 |
449 |
3,901 |
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2002 |
411 |
3,911 |
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2003 |
397 |
4,203 |
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2004 |
351 |
4,580 |
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2005 |
324 |
4,650 |
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2006 |
402 |
4,707 |
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2007 |
349 |
4,890 |
Source: NYSED, Higher Education Data
System, 2008.
Polytechnic’s entering class declined by 17.3 percent between the fall of 1998 and the fall of 2007, from 422 to 349. NYU’s entering class grew by 43.2 percent over the same period, from 3,415 to 4,890.
In 2006, New York State residents made up 77.9 percent of Polytechnic’s full-time first-time students, with 10.8 percent coming from other states and 11.3 percent from abroad. At NYU 28.1 percent of the full-time, first-time students were New York State residents; 65.4 percent came from other states; only 6.5 percent came from outside the U.S. The agreement calls on NYU to assist Polytechnic to recruit students. Polytechnic expects that its student body will continue to reflect New York City’s racial/ethnic composition and to change, over time, as the City’s population changes. It anticipates enrollment growth as a result of the affiliation, including growth in students from outside the City, so shifts in the percentage shares may take place.
At both Polytechnic and NYU, decisions on admission to graduate study are decentralized by school.
Student aid policies will remain those in effect in 2007-08.
Graduating students through the Class of 2011 may choose to receive a “Polytechnic University” diploma or one bearing the name, “Polytechnic Institute of New York University.”
D. Faculty.
In 2005-06, Polytechnic had 130 full-time faculty and 163 part-time faculty. NYU had 3,202 full-time faculty and 2,738 part-time faculty. At Polytechnic, 44 percent of the faculty was fulltime; at NYU, the proportion was 54 percent. The FTE student/faculty ratio at Polytechnic was 11.2:1. At NYU, it was 7.4:1.
Polytechnic’s tenured faculty will remain tenured. Its tenure-track faculty will continue on track for tenure. Polytechnic will modify its appointment and tenure policies to be consistent with those of NYU’s schools. (There is no overall NYU tenure policy).
E. Governance and Administration.
As of April 1, 2008, the Polytechnic Board of Trustees had 36 members although the charter authorizes up to 45 trustees. The amendment would make Polytechnic a membership corporation, with NYU the sole member, and empower NYU to appoint its trustees and chief executive officer. The agreement contemplates NYU appointing about ten percent of Polytechnic’s trustees each year, which would give its appointees control of the Board after about five years. It requires that the Polytechnic Board continue for ten years to include one current Polytechnic trustee from three nominated members. The NYU Board of Trustees would elect two members of the Polytechnic board as trustees of NYU, including, if possible, one Polytechnic alumnus.
Polytechnic’s faculty governance will remain subject to Polytechnic’s policies and procedures.
F. Resources.
Until the Regents consolidate the two corporations, Polytechnic will retain full control over its own assets, including endowment, other funds, and intellectual property.
Financial Condition. From 2005 to 2006, Polytechnic’s unrestricted net assets decreased by $1.7 million on $8.7 million in total revenue. FY 2006 expenditures exceeded revenues by two percent. FY 2007 saw Polytechnic’s net assets grew by 369,000 on $99.9 million in revenue. The net income ratio was less than one tenth of one percent. That year, Polytechnic increased its long-term debt by $20 million, from $91 million to $111 million. It had a cash and short-term investment balance that year of $11.7 million.
From 2005 to 2006, NYU increased its unrestricted net assets by $181 million, or seven percent, on $2.6 billion in total revenues. FY 2007 saw its assets grow by $888 million, or 26 percent, on $3.5 billion in revenue. It had a cash and short-term investment balance that year of $1.2 billion.
Polytechnic’s federal composite score was 1.2 in FY 2004, 2.1 in 2005, 1.6 in 2006, and 2.4 in 2007. The 2006 score was near the bottom of the “financially healthy” range; the 2007 score is interpreted as “financially healthy.” NYU’s federal composite score was 3.0 in 2004, 2005, 2006, and 2007, which is interpreted as “financially healthy.” While both institutions were financially healthy in FY 2007, NYU was a much healthier institution, fiscally, than Polytechnic, which restructured its long-term debt and reclassified $10.4 million of permanently restricted assets in recent years in order to remain financially viable.
NYU will make a loan to Polytechnic over a five-year period. Polytechnic would pay only interest until either it sells air rights equal in value to the principal or consolidation occurs.