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October 26, 2009
Dear Students, Faculty and Staff:
As we reach the midpoint of the semester, the work of
our major planning committees -- CMP, ACRA, CAP -- is fully under way. I want to
update you on the context for their work, as well as the feedback from the fall Board
of Trustees meeting, as we take forward the financial and strategic planning we set
in motion last year.
The economy is in a somewhat different place than when
we closed out the last academic year but, as the board noted, there is little consensus
on whether the recent upturn in the investment markets necessarily indicates the
beginnings of a robust recovery. It is too soon to make any responsible predictions.
We have decided to implement approximately
$21 million of the $30 million budget reductions identified last year. Of this $21
million, $16 million has already been put into effect. We have invested one-time
funds to pay the remaining balance on the co-generation facility and other sustainability
projects, allowing the energy savings to be realized immediately in the budget. Those
actions, combined with the improving endowment value, bring the operating budget
into balance.
With the board’s support, we now have the opportunity
-- and the responsibility -- to carefully consider the levels of reductions not yet
implemented. For example, we are projecting the restoration of faculty and staff
salary increases in 2010-11. In addition, rather than the $3.7 million reduction
in faculty and academic support positions that was planned last year, we are modeling
a $2.6 million reduction. We are also looking at the possibility of budgeting those
reductions over a longer timeframe of seven years.
While these are fortunate choices to have, there is
much about which we need to remain cautious. We have seen an increase in students’ financial
need this year, a trend that is likely to continue or even grow, as aid awards based
on 2009 tax returns will reflect the employment and investment effects our economy
has experienced in the last year. We anticipate only a modest tuition increase in
these times. Despite very generous alumnae and friends, philanthropic support continues
to present challenges to Smith and nearly all nonprofits.
All of these considerations -- positive or negative
-- will inform the committees’ deliberations over the course of this year,
as well as my discussions with the board as we develop the budget that will be presented
for their approval in May. Despite a changeable economy, I am gratified by the widespread
support, on the board, among our alumnae, and across the campus, for developing a
defining initiative in global education. Such an initiative builds powerfully on
Smith’s history and resources and aligns with our investments in science and
engineering education. In our recent celebration of the opening of Ford Hall, I saw
not only the realization of a powerful vision, one at least a decade in the making,
but an ongoing manifestation of Smith’s commitment to preparing women to actively
engage in their communities and around the world.
Sincerely,
Carol T. Christ
 |
|
|
| Freeze 2009-10 salaries |
|
$3,868,000 |
|
|
|
| Reduce other administrative, student
and academic support |
|
3,301,000 |
|
|
|
| Adjust budget planning assumptions
(currency exchange rates, etc.) |
|
3,112,000 |
|
|
|
| Achieve savings from energy efficiency
projects |
|
2,674,000 |
|
|
|
| Increase student-to-faculty ratio |
|
2,600,000 |
|
|
|
| Reduce new initiative and one-time
funding |
|
1,404,000 |
|
|
|
| Reduce benefits costs |
|
1,228,000 |
|
|
|
| Control costs of study abroad programs |
|
1,053,000 |
|
|
|
| Reduce/eliminate inflationary allowances |
|
831,000 |
|
|
|
| Reduce building square footage |
|
650,000 |
|
|
|
| Reduce Libraries costs |
|
503,000 |
|
|
|
| Reduce Information Technology Services
costs |
|
292,000 |
|
|
|
| Reduce financial aid expense due to
2009-10 enrollment shift |
|
182,000 |
|
|
|
| Grand Total |
|
$21,698,000 |
|
|
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