The 2009-10 Budget and Related Matters
May 4, 2009
Dear Students, Faculty and Staff:
This weekend’s Board of Trustees meeting marked an important milestone in the budget planning we have undertaken as a community this year. I write to let you know of the decisions that have been reached as well as the work that will occupy us in the coming weeks and in the next academic year as we make the transition to operating within new budget parameters.
Having carefully reviewed and expressed confidence in the April 13 budget reduction plan, the board voted to approve an operating budget of $190.5 million and a capital budget of $25.9 million for 2009-10. This reflects a reduction of $10.4 million from original operating budget projections. As you know, we have planned for the potential of $30 million in reductions over two years, if necessitated by continued losses in endowment returns and other factors. At this point, it seems highly likely that at least $20 million of the proposed reductions will be inevitable and will need to be in effect by July 1, 2011.
One of the most difficult areas of our planning involved the reduction or elimination of positions. As part of its budget deliberations, the board approved an enhanced severance program for employees whose positions are being eliminated. The program includes at least 60 days’ notice and severance pay of at least 10 weeks’ base pay plus supplemental payments linked to length of service. Employees whose positions are eliminated will also be offered outplacement services and career counseling. Although many of the reductions will not take effect until later in 2009 or 2010, we plan to notify all affected employees by early June 2009 so as to offer as much time as possible for them to find new positions, whether at Smith or elsewhere.
Although it is difficult at this time to provide as many specifics as some of you might like, I want to offer what detail I can on the budget areas of greatest interest:
The budget framework laid out this year will continue to guide the Advisory Committee on Resource Allocation (ACRA) in its work in the coming years. The Committee on Mission and Priorities (CMP), meanwhile, will be engaged in taking forward the major strategic initiatives of The Smith Design for Learning, which have implications for the shape of the faculty and any faculty hiring we would do several years from now in strategic and essential areas. CMP is also the group that will advise me on facilities reduction, an important area of budget savings. Once the buildings are identified, we will need to make plans to relocate the functions and programs in them. Both ACRA and CMP have student, faculty and staff representation. As they take forward the work begun this year, we will continue to offer opportunities for community comment and discussion.
I have been asked by the board, and particularly the chair, Cornelia Mendenhall Small ’66, to convey thanks to the Smith community for the comprehensive and serious way in which the budget reduction process was undertaken. Many of our peer institutions have not yet begun to tackle the long-term financial decisions that lie in their future; our doing so enables us to focus on significant future development of the college. The board’s support for our plan is rooted in a number of key factors: that it protects Smith’s commitments to financial aid and the excellence and diversity of the student body; that it gives priority to energy savings and sustainability; and that, overall, it preserves the ability of the college to continue to deliver a superb education. Their confidence in Smith and its future was further underscored by a vote at this meeting to begin a fundraising campaign, effective July 1, 2009, with a working goal of $500 million, to ensure the excellence of the college for future generations.
As we approach the end of the semester, I wish each of you a wonderful summer and look forward to engaging with you on these important matters when we return in the fall.
Carol T. Christ