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Merge or Fold
The coming academic year is likely to be the last one in which Sierra Nevada College will operate as a freestanding institution.
The board of the college -- the only private liberal arts institution in Nevada -- is in negotiations with several universities about absorbing the institution in some form. John W. Altman, chairman of the board, said in an interview Saturday that the institutions all have outstanding reputations and that the mix included nonprofit and for-profit institutions.
Sierra Nevada, founded in 1969, is known for its close sense of community, a liberal arts education combined with an environmental studies emphasis, and a scenic campus close to the shore of Lake Tahoe. But it is also a college with a small endowment (currently $4 million) and only about 300 students. Altman said it became clear recently that the college needed to become part of another institution.
"We had been pursuing a schizophrenic strategy of trying to be a stand-alone liberal arts college committed to the environmental, sustainability and the arts -- and also to be looking for a great partnership," Altman said. A drop in student enrollment projected for this fall was the final blow, he said, and made it clear that the college could not sustain itself.
The budget for the 2006-7 academic year was prepared based on an assumption of 340 students, but there will only be 85 new students and 185 returning students.
Faculty members learned of plans to have the college become part of another institution last week when the president, Paul Ranslow, and the vice president of academic affairs, Mary Peterson, both announced their resignations, citing the board's plans. They could not be reached for comment. Altman praised both of them as "very talented people who made great contributions to the college" and who were leaving because the college's new managers are likely to see the positions as redundant or want to put new people in place.
Altman, a retired executive who has taught entrepreneurship at several universities, most recently the University of California at Berkeley, said that he believed Sierra Nevada would need an enrollment of at least 600 students and/or an endowment of $100 million to survive by itself -- and neither of those conditions are likely. The college's campus is worth about $100 million, he said, and its location and reputation have already attracted potential suitors. While he declined to provide details on the potential partners, he said that they were "significant brand names." He said he hoped to have a formal proposal from one of the would-be partners ready for the board by next month.
While the eventual agreement may be called a merger, Altman made no attempt to sugarcoat what is happening. "I'm not naïve," he said. "When you join with a major brand, you lose some of your autonomy." Sierra Nevada doesn't have any money, and its potential partners have lots of money, so the "golden rule" comes into play, he said: "He who has the gold makes the rules."
At the same time, Altman said that the board was pushing potential partners for terms that would maintain the college's mission and campus as much as possible, provide fair treatment for employees who lose their jobs, and provide continuity for students -- either through continuing programs or placing students elsewhere. Sierra Nevada does not have tenure so faculty members have limited job security.
While the changes are likely to be significant, Altman said that there could be a great payoff: "the richness of preserving a great liberal arts tradition."
Ben Solomon, who was an administrator at the college from 1970 and president from 1980 to 1994, said that he saw the college grow from 25 students to more than 500, but that it needed 1,000. "There is so much going for this campus, which is as in harmony with the environment as any place is," he said, but money has been a problem. Solomon was back as acting president from 2003-5 after the brief presidency of James L. Ash Jr., who quit after he was arrested for drug trafficking. While the drug charges didn't involve the college, "it certainly didn't help us," Solomon said.
Solomon said that although he had great hopes for the college as an independent institution, he thought it was "wonderful that the college might be more stable" with a partnership.
Chuck Levitan, who has taught environmental science, ecology and physics at the college for 20 years, said that most faculty members don't know much about what is going on "except that the school is going through a change of mission and a change of ownership." He added that "we don't have any idea who the potential partners are."
He said that his and other faculty contracts stipulate that unless professors are notified that they won't be rehired before the last 120 days of an academic year, they are automatically rehired for the next year. So he said he hopes this means that professors have some security for at least the academic year that is starting. "People are anxious right now," he said.
The conclusion that the college needs a partner to survive is "probably right," Levitan said. "We don't have much of an endowment so we are missing a whole revenue stream," he said.
Altman said that he hoped the actions taking place in the next few weeks reassured both students and faculty members. "The institution will be here in 100 years," he said. "But it will have a partner."
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