Opportunity abounds where need and accomplishment intersect.
Although short and simple, that statement describes the catalyst behind the proposed acquisition of Martin Methodist College Campus by the University of Tennessee System, which would create the first new undergraduate campus in the UT System in more than 50 years, and the fourth overall, in Pulaski, Tenn.
The University of Tennessee System Board of Trustees and the Martin Methodist College Board of Trustees are scheduled to consider, and most likely vote on, the proposed acquisition Dec. 9.
In advance of those votes, the Huron Consulting Group prepared a 93-page report of its analysis and due diligence of the proposed merger. The report can be viewed in full by visiting https://trustees.tennessee.edu/upcoming/ and clicking on “Materials.”
In short, Huron’s report shows the 19-county region surrounding Pulaski has specific needs that the University of Tennessee System has shown to be proficient in accomplishing. In short, Huron’s report shows the 19-county region surrounding Pulaski has specific needs that the University of Tennessee System has shown to be proficient in accomplishing. An in-dpeth look at the report follows, but some of the highlights include:
• There is no public four-year institution in the nearly 300-mile distance from Memphis to Chattanooga along the southern Tennessee border.
• More than 1,200 students from the 19-county region around Pulaski are enrolled at four schools in North Alabama, which also report significant transfers from Tennessee community colleges as well.
• Given the 150-year history of Martin Methodist and the effort to maintain the campus, Martin Methodist now represents a potential asset valued at $26.1 million for the UT system.
• Martin Methodist’s current and projected full-time equivalent enrollment is approximately 700 students, without the merger.
• In order to make the campus financially successful, the Huron analysis indicates that the UT System would need to attract an additional 150 students/year to generate sufficient operating cash flows for meeting liquidity requirements and contingencies.
• In other words, if UT could divert a little more than 10 percent of the 1,200 students now going to Alabama for college each year back to Pulaski, they would make the Martin Methodist campus financially viable.
The counties in the region considered to be the recruitment area for the Giles County UT campus are Bedford, Coffee, Davidson, Decatur, Franklin, Giles, Hardin, Hickman, Humphries, Lawrence, Lewis, Lincoln, Marshall, Moore, Maury, Perry, Rutherford, Wayne and Williamson.
“This proposal provides a geographically accessible opportunity for affordable post-secondary educational experiences,” Giles County Director of Schools Vickie Beard said. “Additionally, the merger allows for increased early post-secondary opportunities and enhanced career pathways for area high school students.”
While the Huron report does not make any recommendations concerning the upcoming votes by the boards of trustees, it does state that its purpose is to “capture the potential advantages and drawbacks and allow you, other UT System leaders, and the System Board, and other audiences to reach their own determination.”
In its initial summary the report states: “A UT campus in Giles County could complement the UT System as well as the entire Tennessee higher education landscape by expanding access to the southern middle region of Tennessee, through its potential to leverage other UT campuses to expand and evolve current academic offerings.”
Citing Tennessee’s Drive to 55 initiative that set a statewide goal of 55 percent of adults with a degree or credential by 2025, the Huron report notes growing postsecondary degree or credential attainment rates across the state approaching that goal, except for many of the rural counties in southern Middle Tennessee.
While many counties across the state are in the 30-to-40 percentile in their Drive to 55, and Williamson County is at 69 percent attainment, Giles, Lawrence, Lincoln and Marshall counties are all below 28 percent.
Additionally, the college-going rate of “traditional-age” students has declined over the past four years, specifically in counties that make up the 19-county southern Middle Tennessee region, according to the report.
“Of this 19-county region, fewer than one-third (six counties) saw an increase in college-going rate between 2015 and 2019; the remaining 13 counties all experienced declines,” the report states.
Why is it important to increase these kinds of educational opportunities to the southern Middle Tennessee area?
Pulaski Mayor Pat Ford said: “This merger is the spark that has been needed to create a dynamic and robust economic and educational footprint in southern Middle Tennessee. I can only begin to imagine the quality of life it will bring to our community. I wish I could bottle and distribute all the excitement and promise it offers.”
Also, Huron analyzed labor market trends for the region around Pulaski to determine areas of forecasted growth and opportunity. This analysis indicates that there is a projected need for educated workers in Tennessee, especially in high-growth areas such as business and professional services, education and nursing.
“I believe Martin Methodist College’s proposed merger with the University of Tennessee will be very good for our regional health care industry,” STRHS Pulaski CEO Jim Edmondson said. “The need for more healthcare professionals is nearly limitless. Expanding the number of disciplines being taught locally is of high importance but so is the expansion of existing programs like the nursing program. Expansion not only in numbers of students but also, disciplines that can be pursued within the nursing degree.”
The report goes on to note that no public four-year institutions are currently in the geographic area in and around Giles County or the 300 miles between Memphis and Chattanooga on Tennessee’s southern border. This, the report notes, limits the opportunities for students who desire to pursue their education to do so within the region.
University of the South is the nearest Tennessee four-year institution to the region, but is a private university with higher tuition. The nearest Tennessee public institution is Middle Tennessee State University (MTSU), approximately 75 miles from Pulaski.
North Alabama provides the closest public four-year institutions to the 19-county region with Athens State University, the University of Alabama at Hunstville, Alabama A&M and the University of North Alabama. These four schools offer in-state tuitions to many of the counties in southern Middle Tennessee and have tuition rates comparable to or lower than the $10,080 per year tuition projected to be offered at the proposed Giles County UT campus.
According to the report, more than 1,200 students from the 19-county region around Pulaski are enrolled at these Alabama schools, which also report significant transfers from Tennessee community colleges as well.
“Given the UT Promise scholarship program and the increase in enrollment that occurred with the establishment of Tennessee Reconnect and Tennessee Promise, a UT campus in Giles County has potential to similarly enhance enrollment and expand access to education in the southern middle region,” the report states. “A UT campus could create an opportunity to better serve the residents of southern middle Tennessee by providing an affordable option and a potential pathway for community college graduates seeking to obtain a bachelor’s degree.”
Statistics show that despite a decline in enrollment nationally and amongst some Tennessee public institutions, the University of Tennessee System has made enrollment gains from fall 2015 and fall 2019.
The UT System’s success combined with the workforce and educational needs in southern Middle Tennessee could position the proposed Giles County UT campus to provide education and training tailored to the region, and according to the report, leveraging the success of the UT System provides the potential for the proposed new campus to evolve MMC’s current academic portfolio, enhance student services and grow enrollment.
“We have the best state college system in the entire nation, and the addition of Martin Methodist College would not only strengthen the entire system but would also enhance the profile of our fine institution and our community,” District 70 State Representative Clay Doggett said of the proposed merger.
The Huron report ties the strength of the UT System noting that it could “leverage institutional knowledge at other UT System campuses, such as the nationally ranked Supply Chain Management program at UT Knoxville, or Agribusiness in partnership with UT Martin, to support and build the fledgling business program at this future UT campus.”
Adding these kinds of academic enhancements to what is already offered at Martin Methodist would be key in expanding enrollment, an important factor in the study for the success of the merger.
Reaching out to “non-traditional age” students and creating a pipeline for community college transfer students is another potential way to increase the student population at the Giles County campus by at least 150 students in the first few years following the merger.
Martin Methodist’s current and projected full-time equivalent enrollment is approximately 700 students without the merger, and student-faculty ratios (13:1) are reported as significantly lower than at a public state school like MTSU (17:1).
With MMC having peaked over the past decade at 1,043 students, and with lower student counts in classes, the Huron report states that this data suggests there is a capacity at the MMC campus to add at least 300 students within the current facilities.
Growing the student population at the Giles County campus could be done, the report notes, without taking away from other Tennessee public institutions.
Approximately two-thirds of MMC’s enrollment comes from Giles, Lawrence, Maury, Lincoln and Marshall counties, the report states. In particular, nearly half of MMC’s student come from Giles and Lawrence counties.
“On the other hand, less than one percent of University of Tennessee at Martin and University of Tennessee at Chattanooga’s enrollment comes from Giles and Lawrence,” it continues. “Indeed, MTSU stated in a recent interview with the Knoxville News Sentinel that approximately 1,500 of its nearly 22,000 student body are from MMC’s region, or about 7 percent of the total, acknowledging that the two institutions do not overlap significantly in their geographic reach.”
Part of the Huron analysis was to also identify potential risks with the merger.
The first risk identified in the study is that enrollment numbers may not reach expected levels. A main question is how much of MMC’s current enrollment is based on its Methodist mission, and what effect changing to a secular campus would have on enrollment. The report notes that it is possible that this could slow the rate of enrollment growth, which the study stresses is important for the financial viability of the acquisition.
Also a consideration for enrollment levels, according to the report, is the previous probationary status of MMC’s nursing program, which could create capacity constraints or concerns over quality and accreditation that could limit the UT campus’ ability to scale a program considered important to enrollment numbers. The report notes that MMC officials have said they don’t regard nursing accreditation as a relevant concern going forward due to the significantly restored successful outcomes since the probation.
Enrollment concerns can also be reduced by lower tuition and through expanding access to “non-traditional age” students, community college graduates and dual high school/college enrollees, the report states.
Another risk noted is changes in the economy and/or technical disruptions that could shift the labor market outlook for the region.
“There may be unforeseen and unforeseeable economic shocks, analogous to the recent COVID-19 pandemic, that arise. Such events may materially impact labor forecasts. Similarly, developments in technology may accelerate and alter the forecasts presented in this report. Several industries central to this analysis, such as business, nursing, and education, however, are more resilient to market shocks. The need for skilled professionals in these areas would likely remain stronger, and therefore the need for the education to acquire these skills would also persist.”
The report also identifies two potential risks related to financial concerns.
Enrollment growth again is listed as a concern, with the report noting that MMC, like many other small private institutions across the country, has seen a decline in enrollment, leading to decreased tuition, fees and other revenues.
A second financial concern noted in the report are annual cash flow deficits that MMC has experienced in three of the past four years.
“Growing enrollments and other growth opportunities could reduce the deficit in the future, but an upfront investment will be necessary to support the university over the first few years,” the report states.
That annual investment from the UT System, according to projections in the report, could be as high as $2.45 million even after a projected annual $4.7 million state appropriation.
Cash flow issues, the report recognizes, are the result of declining enrollment numbers and other factors including capital expenditures such as the purchase of property. As for assets, MMC has net assets of $26.1 million, which would be taken over by the UT System if the acquisition is approved.
Some conclusions noted in the report include:
• “The UT System has the opportunity to provide a quality, affordable education to prospective students in the southern middle region of Tennessee with the acquisition of this campus in Giles County, an area that lacks a public, four-year institution on Tennessee’s side of the border.”
• “There are also potential risks to this acquisition, which are primarily financial in nature and are related to how successful the institution would be in scaling enrollment, especially among traditional college-age students.”
• “To achieve success at the UT campus in Giles County, enrollments (currently at 671 full-time equivalent students) will need to grow. The financial modeling indicates a breakeven point with an additional 100 students; however, the analysis indicates that the UT System should instead target an additional 150 students to generate sufficient operating cash flows for meeting liquidity requirements and contingencies.”
The UT System Board of Trustees is a public board whose meetings are open to the public. The board is scheduled to meet at 2:30 CST on Dec. 9. Following continued guidance by the U.S. Centers for Disease Control and Prevention (CDC) regarding COVID-19 and in compliance with the Tennessee Pledge and local guidelines, the meeting will be held virtually with all board members participating electronically or by telephone.
Interested individuals are encouraged to watch the meeting online. The meeting will be webcast live and archived for later viewing; a link to the webcast will be available at tennessee.edu.
The agenda for the meeting and relevant materials can be viewed at: https://trustees.tennessee.edu/upcoming/.
Results of the vote will be reported on PulaskiCitizen.com and in the Pulaski Citizen as soon as they are available.