Why Should Delaware Care?
As the state’s flagship university, the University of Delaware’s financial health impacts residents statewide through tuition rates and state taxpayer support. Faculty at the school have questioned the administration’s plan for building as it contends with consecutive years of budget deficits.
As the University of Delaware prepares to construct its next facility with a record-breaking donation, faculty are raising questions about the financial impact of its hectic pace of building.
On March 17, UD announced a gift of $71.5 million from Robert Siegfried Jr., who founded the Wilmington-based accounting and advisory firm The Siegfried Group, and his wife, Kathleen.
The Siegfrieds’ gift is nearly three times larger than the prior record of $25 million that was given by Carol A. Ammon and Marie E. Pinizzotto to help establish a biopharmaceutical center on the university’s STAR Campus.
Their gift will, in part, help build Siegfried Hall, a learning space with modern classrooms, research and teaching labs, a student-run café and an auditorium, under UD’s Alfred Lerner College of Business and Economics.
But the announcement of the Siegfrieds’ donation and its project came just days after the university’s Faculty Senate shelved a resolution calling for a moratorium on such building until UD can offer a public five-year capital plan.
A strained relationship
The faculty of Delaware’s largest university have had a fractured relationship with its administration in recent years.
Facing a $250 million deficit in the wake of the 2020 pandemic, the university’s faculty union, the American Association of University Professors (AAUP), agreed to forgo negotiated pay increases for a year and push back bargaining on a new contract for two years.
In December 2023, after a year of back-and-forth bargaining, UD and its faculty agreed to a new three-year contract, but almost immediately the university began warning of another looming budget deficit stretching upward of $40 million.
That led UD to freeze professor’s travel to academic conferences, delay spending on university lab projects and cut academic support services as it sought to mitigate the deficit.
Last spring, a survey of more than 750 university professors found that virtually all believed the university was not transparent about its finances and that it did not prioritize academics when it came to budgeting. About a dozen professors submitted anonymous comments that said they wanted faculty to call for a vote of no confidence in UD President Dennis Assanis, who has led the university since 2016.
The cuts helped to shave the university’s deficit to about $3 million last academic year, but Assanis is once again projecting a deficit costing tens of millions and placing blame on rising health insurance costs along with inflation. That has outraged professors who question Assanis’ leadership and the annual discussion of a “poverty narrative.”
Rising investment in facilities
While UD has dealt with repeated years of financial strain, it has not slowed its aspirations in building state-of-the-art facilities to attract future students.
Before heading back to the negotiating table this fall, the AAUP commissioned an updated financial study of UD using what little information it had access to, including audited financial statements and submissions to a national database. While it receives public support, UD operates as a privately governed institution that does not publish detailed budget information.
That study, published in February, found that between 2018 and 2024 the university spent $923.1 million on capital projects, with 77% of funding coming from its operating budget versus donor gifts or state bond funding.
That operating budget funding was either borrowed, meaning UD incurred interest costs on a loan, or was accumulated from budget surpluses.
“One of the issues of concern associated with large amounts of capital spending is the potential increase in operations and maintenance cost. If new construction does not have the potential to increase enrollment or revenues from sponsored research, it can be a drain on university resources,” wrote the study’s author, Rudy Fichtenbaum, a professor of economics at Wright State University in Ohio who works with the AAUP nationally.
Last year, about 68% of interest payments made by the university were on so-called “auxiliary enterprises,” or facilities that don’t contribute to academics including dormitories, food service, parking and athletics.
In recent years, the university contributed $25 million to the building of the Whitney Athletic Center at its football field and millions more to build new dorms on its north and south campuses.
“That’s a lot of operating resources to be directed into building,” Persephone Braham, the president of the university’s AAUP chapter, told Spotlight Delaware. “That’s tuition, that’s fees, that’s research [facilities and administrative] funding, that is a contribution from the endowment draw down, and only an average of 9-10% is being funded by presidential fundraising.”
New projects on the horizon
UD has completed major additions to its football stadium, research-and-development work at STAR Campus and replacements of aging dormitories in recent years.
Siegfried Hall is just one of a handful of planned major projects on the horizon.
In January, the first news regarding Biden Hall, a future addition to the Biden School of Public Policy and Administration, was made when $20 million for its construction was proposed for the state bond bill. Assanis has said Biden Hall has been under consideration since 2018 but there is no timeline or estimated total project cost for construction yet.
“However, this demonstration of state support for the project will greatly help us in our efforts to continue to raise the necessary funds through philanthropy,” he told state legislators at a budget hearing last month.
Meanwhile, UD is also partnering with the National Institute for Innovation in Manufacturing Biopharmaceuticals (NIIMBL) to build a new $150 million test-bed facility at the STAR Campus. That project has received nearly half of its necessary funding through federal and state sources, but how the remainder would be funded has yet to be disclosed.
Finally, as UD prepares to move up to the highest level of athletic competition this fall with a jump to Conference USA, there have long been private plans to make further additions to Delaware Stadium. The university aims to enclose the north end of Delaware Stadium attached to a massive indoor practice structure with locker rooms and offices for several teams, according to a report from the News Journal.
That project could cost $100 million or more as the price of construction has risen in recent years.
In a statement to Spotlight Delaware from the university, Assanis said, “As far as capital planning, we actively assess needs and opportunities with a focus on the UD student and campus experience. Long-term capital planning has enabled us to keep an eye on the horizon of sources of funding — whether through philanthropy, grants, federal and state allocations, auxiliary revenue, allocated reserves or debt funding — as well as a disciplined process. Projects under consideration are reviewed regularly by the Board of Trustees based on criteria that include mission alignment, demonstrated need, and enabled revenue generation, among other areas.”
Faculty Senate discusses moratorium
Concerns around the university’s funding strategy, the uncertainty around federal grant support and news of new building projects led the Faculty Senate – an elected body of faculty leaders – to draft a resolution calling for a moratorium on planning and construction of new buildings and significant renovations until the administration offered a five-year capital plan.
The resolution, which was presented at the Faculty Senate’s March 3 meeting, also opined that any future facility project should be fully funded with outside funding unless university leaders could show that a replacement project would be cheaper than funding deferred maintenance, which has ballooned at the historic university campus to total more than $1 billion.
While Faculty Senate Budget Chair Matt Robinson told his colleagues that the resolution was “rooted more in caution than in alarm,” he also noted that virtually all of the warning signs issued by the bond rating agency Moody’s to the university in its 2025 report were around its capital spending.
Robinson also said that faculty have been frustrated by the lack of transparency around UD’s long-term planning, particularly around its capital projects. He added that faculty often find out about projects through reports in the media.
“I think I know more about Penn State’s capital budget planning than I do ours, based about what they have on their website,” he said.
Notably, while supportive of the need for robust conversation, both Joseph Trainor and Oliver Yao, deans of the university’s public policy and business colleges, did not support pausing the funding of planning phases for future projects. Each has a major project in the works, with Yao’s college hosting Siegfried Hall and Trainor’s Biden School of Public Policy and Administration planning for Biden Hall.
“The inclusion of planning in this, really, to me, is problematic … it’s a really high bar, and I think would stifle the long-term development of the university in favor of the short terms,” Trainor said.
It was a message echoed by Assanis, who told the faculty that UD receives much less state government support than major neighboring public universities like Penn State University and the University of Maryland. He highlighted the rebuilding of the McKinly Lab building, which was gutted by a fire in 2017 and its replacement, Building X, wasn’t completed until this year.
He noted that halting fundraising efforts for future capital projects could significantly delay their completions at a time of heightened competition by neighboring institutions. Assanis promised the faculty that leaders would get more transparency into UD’s budgeting and capital projects.
“If you don’t have all your finances in order, and if the operating margin of the university is not in the plus range, then our bond rating will go down and you can forget about a building,” he said. “I can guarantee you that what you’re worried about, the trustees are worried about more.”
In the end, the Faculty Senate agreed to table the resolution and have its committees review budget material with administrative leaders.
Less than two weeks later, Assanis announced the Siegfried Hall project.