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Ad-hoc Committee Examines Finances

By Jeffrey Lott

An ad hoc committee composed of members of the College administration, faculty, staff, and Board of Managers has been charged with “developing and recommending budgetary plans to respond to the current economic crisis. These plans aim to ensure future financial sustainability and seek to protect the College’s mission, balancing the interests of present and future generations.”

The committee will work through the summer and fall to develop a contingency plan that will identify $15 million in annual budget reductions or increased revenues that may be required. In approving the 2009-2010 budget, the Board of Managers reduced the dollar amount of spending from the endowment but allowed a temporary increase in the endowment spending rate (spending as a percent of the endowment). The Board has mandated a return to at least 5 percent within five years. “Longer-term, a rate of 4.25 percent is what is estimated for support sustainable in perpetuity,” says Vice President for Finance and Treasurer Suzanne Welsh.

The 2009–2010 budget has been reduced to $107.1 million—7.1 percent less than the previous year—through reduction of department operating budgets and capital spending by more than $5 million. In addition, there will be no increase in salaries for faculty, staff, and students in 2009–2010. Assuming that salaries might have been increased by two percent, the freeze will result in a budget saving of nearly $1.2 million. All vacancies will be carefully evaluated and some vacant positions may not be filled, but no employee layoffs are included in the budget approved by the Board at its May 2 meeting.

On the revenue side, the College has increased its on-campus enrollment target for the upcoming academic year from 1,390 to 1,406 students, with an anticipated incoming class of 390, plus 27 transfer students. The Board reaffirmed its 2007 decision to give “loan-free” financial aid packages to all financially aided students. Tuition, room, board, and the student activities fee for full-pay students will be $49,600—a 3.76 percent increase, which is the lowest percentage increase in 10 years.

The Ad Hoc Financial Planning Group will make its recommendations in advance of the December meeting of the Board of Managers. “If the economy has improved and the endowment is headed in the right direction,” says Welsh, “we hope to be able to avoid some of the proposed cuts, but we’re acting to be ready for a worst case. In either case, our decisions will be predicated on preserving the core values of the institution.”

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