Trustees Approve 2010-2011 Budget Assumptions
Dear Members of the Saint Mary's College Community,
Last week at its annual January meeting, the College Board of Trustees reviewed, discussed and adopted budget assumptions for the 2010-2011 fiscal year, recommended initially by our Budget Committee and Cabinet and which I endorsed. It was clear that the board deeply appreciated and valued the thorough, thoughtful and collaborative efforts of the College's Budget Committee in developing its recommendations. On several occasions, Board Chair Pete Kelly shared his appreciation for the many efforts by members of our College community to respond effectively to the economic challenges that are impacting all institutions of higher education.
The Board also received a presentation by Cabinet members that described the financial impact of the economic crisis on private higher education, the impact at Saint Mary's and our continued efforts to remain focused on our institutional priorities while responding most effectively to these challenging times. We are not alone; all institutions of higher education, public and private, are experiencing significant financial turbulence. For private institutions, revenues have been curtailed due to modest tuition increases, greater levels of financial need among students, falling endowments and related income and impacts on fund-raising programs. In this environment, all institutions have been forced to take steps to significantly curtail expenses.
The 2010-2011 budget assumptions developed by the College Budget Committee and adopted by the board include the following:
1. Stable undergraduate enrollment of 2,388 including 700 new undergraduate students (slightly higher than last fall).
2. An undergraduate tuition rate increase of 4.5 percent and a 3.3 percent room and board rate increase. These increases will likely leave our comprehensive rate (tuition, room and board) slightly lower than the private institutions with which we compete for students.
3. An increase in non-athletic financial aid of 16 percent and a new student discount rate of 37 percent (compared with 42 percent for last fall). The average new student discount rate among West Coast private institutions last fall was 45 percent. Given the current financial climate, it will be a continuing challenge to lower our discount rate.
4. Given the substantial increase in new student discount rate for the past two years, average net tuition revenue per undergraduate will decline by 2.3 per cent ($469) for 2010-2011.
5. A decrease in endowment income of 5.7 percent ($400,000) as a result of the reduction in the overall value in the endowment.
6. An increase in graduate and adult enrollment resulting in a modest net income increase in these programs of 5.7 percent ($300,000).
7. A reduction of 3.7 percent ($1.8 million) in the employee salary pool.
8. An increase of 2 percent ($200,000) in employee benefits to increase the College's portion of the pension contribution from 2 to 3 percent and to increase the health plan contribution by 1 percent.
9. A decrease of 2 percent ($300,000) in non-salary expenses.
10. An allocation of $300,000 for new strategic initiatives.
Recognizing that almost 80 percent of College expenses are committed to employee compensation, the Budget Committee and our board urged that we take the difficult steps now to bring these expenses in line with the new economic realities. Doing so provides the possibility of gradually restoring pension contributions and providing salary increases in the years ahead. I will be working with the Cabinet and others to develop the process for making these adjustments.
I am grateful for the efforts of the Budget Committee. The members have remained focused on the mission of the College while dealing with extremely difficult issues. I am also grateful for the continued efforts of our dedicated and talented faculty and staff members. The outlines of what some have called the "new normal" have become more evident. These economic realities require us to make some hard decisions. I am confident that our shared commitment to the students of Saint Mary's will provide direction and purpose as we move forward to a brighter future.
Finally, thank you to the many faculty members, students and staff members who participated in yesterday's President's Open House. In the face of some fairly inclement weather and competing events, prospective student attendance was similar to last year. VP Beseda reports that attendance at on-campus undergraduate recruitment events for this academic year is running 22 percent ahead of the previous year.
Brother Ronald Gallagher, FSC