Dear Carleton faculty and staff,
Following the conclusion of our May Board of Trustee meetings, I want, yet again, to convey to all the current state of the coming year’s budget and what this means for all of us.
I am pleased to say that the Revised Budget for 2009-2010 which College Council recommended to the Board, following the Budget Committee’s recommendation to College Council, was approved by our Trustees this weekend. While this budget includes many difficult choices, it is in the end a balance between the uncertainties of the economic situation and the strategic imperatives of the College. The Board was particularly impressed and pleased with the extent of campus involvement and commitment, even though the time frame has been so short and the choices so difficult. The details of the budget, which we have described to you in recent communications, are available on the Carleton website. The revised budget of $113,096,000 compares to the $115,754,000 budget approved in February and is in the context of an ongoing five year forecast that is substantially lower than previous estimates.
The following are the key aspects of the changes in the budget for the coming year, all of which resulted from consultation with a number of the College’s standing committees (including, for example, the Benefits Committee, the Faculty Compensation Committee, and, of course, the Budget Committee):
- The College’s contribution to the TIAA-CREF retirement plan will be reduced from 12% to 10%; adjustments to the retirement plan are described in more detail in the document, "Carleton TIAA Contribution Reduction Details," available on this website. (pdf, campus login required)
- Carleton will be ending its participation in the Emeriti Retirement Health Solutions Program as of December 31, 2009.
- Except for faculty and staff members receiving promotions, no salary changes are planned for Fiscal Year (FY) 2010 for any of us (faculty, staff, administration)
- Faculty Professional Development Accounts (PDAs) will be temporarily reduced to $1,500 from $2,000 annually
- All faculty, staff, and administration members will be required to take a one week loss of pay, intended to occur in December. More details will be forthcoming after seeking additional input on the best way to handle this in each department of the College;
- We will need to reduce the overall workforce of the College by approximately 30 FTE, which includes some 10 FTE positions that are already vacant. We hope to make all necessary reductions in staff through a Voluntary Separation Incentive Program. Staff members who participate in the voluntary program will receive a lump-sum severance package equal to eight weeks of pay plus one week of pay for each year of service at Carleton (up to a maximum of 20 additional weeks of pay, i.e., a maximum of 28 weeks of pay). Following the consideration period for the Voluntary Separation Incentive Program, Administrative Council will review the responses and determine whether the FTE reduction objectives have been fully met through this program. Whether actions are needed beyond the Voluntary Separation Incentive Program will not be known until mid to late summer. A description of this program is also available in the document, "Carleton Staff Voluntary Separation Incentives Program Details," available on this website. (pdf, campus login required)
- Additional measures beyond FY2010 include plans for half the faculty to return to a 6-course teaching load in FY2011 and FY2012 and further reductions in deferred maintenance.
All of these budget reductions are in addition to those we have announced earlier, chiefly reductions in all departments’ operating budgets, salary increases, travel and entertainment budgets, and in our deferred maintenance budget. Though we will need to gauge, as always, the state of financial markets and the economy in the months and years ahead, our current long-range budget models call for the resumption of salary increases for faculty, staff, and administration beginning in FY 2012. At this time, and on the recommendation of the Benefits Committee, we are not making any changes to our dependents’ college tuition assistance plan.
The revised budget recommended to and approved by the Board of Trustees was necessary because of this winter’s continued decline in financial markets and the continuing general economic recession. Thus, while the original budget, approved by the Trustees at their February Board meeting assumed a 20 percent decline in Carleton’s endowment and a 10 percent decline in this year’s Alumni Annual Fund, our revised budget needed to address the more likely scenario of a 30 percent endowment decline and an 18 percent decline in AAF gifts. The FY2009 budget includes far fewer reductions because our endowment spending for this year has not been affected, since the budget for the current year was established over a year ago and was based on endowment values in 2007. Should financial conditions change significantly for the better, and there are some small indications that this could be the case, we will consult again with the appropriate committees on any possible changes to the reductions planned today and then announce any of these changes during the coming Fall Term. However, for now, we must all plan on moving forward with the budget as approved.
In order that everyone has an opportunity to learn more about the budget for the coming year and our longer budget models, we have scheduled several meetings to this end. There will be an open meeting for all interested faculty and staff from 1–1:45 p.m. on Monday, May 18, in the Concert Hall; following brief introductory remarks from me and from Dean of the College and Chair of the Budget Committee Scott Bierman, Vice President and Treasurer Fred Rogers will once again review the changes to our evolving budget during this very demanding year and the projections for the coming several years. There will be an opportunity to take questions from faculty and staff and time for responses in person or a mechanism for additional responses in writing. In addition, a similar presentation and another opportunity for questions will occur for members of The Monthly Meeting (TMM) at their May 19 session and for all staff at the May 26 Quarterly Meeting. The Human Resources Office is also scheduling several opportunities for individual information and counseling sessions. Students will receive more information about these plans through presentations at an upcoming CSA meeting.
As you know, we have worked consistently over recent years to make our budget process at once more consultative and more transparent, and this message, the many meetings of our Budget Committee and other standing committees, and the meetings ahead are to this same end. Let me close by repeating what I wrote in my recent letter to the Carletonian: that we all owe a very deep debt of gratitude to the Budget Committee and to many of our other standing committees for their diligent and engaged work through recent months. I thank them and all of you for all you are doing to ensure the continuation of a liberal arts education of the highest order.
President Robert A. Oden Jr.