FY 2009-2010 Operating Budget

Dear Members of the Campus Community,

Early indications of undergraduate enrollment, revenue and expenditure trends suggest that the FY 2009-2010 operating budget is likely to remain balanced, but that some additional effort throughout the remainder of the year will be required. The Board of Trustees adopted a balanced operating budget of $96.7 million in January 2009. This budget represented a reduction from the FY 2009-2010 working budget of $100.3 million in acknowledgment of the global economic crisis and resultant recession in the United States. This budget was also formulated based on institutional priorities of enhancing academic excellence, identifying more efficient and effective operating practices, maintaining momentum on key strategic initiatives, protecting the excellence of the student experience, and keeping the College affordable for students.

Preliminary undergraduate enrollment totals are very close to the budgeted target of 2,395. Preliminary undergraduate financial aid awards, however, are $0.9 million higher than the budgeted target. In a typical year, this higher level of awards would be offset through normal attrition. Given the state's and nation's continuing economic challenges, it does not seem prudent to anticipate a typical year. We therefore expect and will plan for additional aid requests from returning students as well as from mid-year transfer students.

Other preliminary budget data indicate that higher than anticipated (99.6%) residence hall occupancy rates will result in an additional $1.1 million in room and board revenues. These additional revenues, along with anticipated revenues from the summer session and savings from the renewal of property and casualty insurance, will more than offset other changes in the operating budget leaving a small surplus of $0.2 million. Other changes in the operating budget that need to be offset by additional revenues or expense reductions include lowered revenue expectations from graduate programs, increased debt service costs, and a reduction in endowment spending.

I sincerely appreciate the difficult work members of our campus community engaged in last year to reduce expenditure levels and increase efficiencies. Since the small $0.2 million surplus noted above is not likely to be enough to offset the increase in demand for additional financial aid noted above or to offset other budgetary changes that could occur during the balance of the fiscal year, we will need to continue these efforts in the year ahead in order to ensure a balanced operating budget that continues to be shaped by institutional priorities, especially those focused on keeping Saint Mary's affordable for its students.

I intend to provide periodic operating budget updates throughout the fall semester as additional revenue and expense data become available. In the interim, please feel free to contact Assistant Controller/Budget Officer Susan Hooks or me if you have specific questions or concerns about the FY 2009-2010 operating budget.

Peter A. Michell
Vice President for Finance