April 13th, 2009
- Location: Sayles-Hill 251
- Time: 4:15 pm
- Present: Staff Members: Scott Bierman, Hudlin Wagner, Rob Oden, Stefanie Morrison, Fred Rogers; Faculty Members: Peter Balaam, Clara Hardy, Mark Kanazawa, Steve Kennedy, Mary Savina; Students: Ben Barclay, Charlotte Turovsky, Jonathan Fraser, Evan Rowe; Alumni Observer Lee Mauk; Trustee Observer Jim Johnson.
- Absent: Staff Member: Robbie Groth, Student: McKay Duer
- Guests: Associate Dean of the College Bev Nagel, Senior Associate Dean of Students Bruce Colwell, Director of Institutional Research and Assessment Jim Fergerson, Budget Analyst Patricia Langer, Director of the Wabash National Study Dr. Charles F. Blaich, Associate Director of Inquiries Kathleen Wise.
- Secretary: Aisling Quigley
Approval of Minutes
The minutes from the meeting of February 2, 2009 were approved unanimously.
President Oden began the meeting by extending his appreciation to the members and guests for their participation in College Council, warmly welcoming the new as well as the longstanding members of the Council. With the Board of Trustees Meeting occurring in the imminent future, President Oden explained the importance of devoting this College Council meeting to reviewing and discussing the budget. Firstly, however, the President introduced the Wabash Study visiting team.
Dr. Charles Blaich, director of the Wabash National Study, briefly explained the Study and the purpose of his team’s visit to Carleton’s Campus this week. Dr. Blaich explained that the study is specifically directed towards liberal arts institutions. It is a longitudinal study, consisting of surveys, tests, and campus visits. It does not participate in national comparisons of institutions based on survey results or tests. The goal of the study is not to solicit competitive rankings but rather to establish a sense of teaching practices, student experiences, and the impact of the results in looking across a range of institutions. This week’s visit comprises the first of the Wabash Study visits; one that will examine student interests and the Campus environment, and will report back to Carleton next year.
President Oden inquired more specifically about the nature of the study, and how far-reaching claims on behalf of Liberal Arts institutions with regard to critical thinking, civic engagement, etcetera, can be grounded without empirical studies? Dr. Blaich explained that experience can sometimes be narrow, and that the students who do not fare as well are often left unmentioned. The study aims to account for students whose experiences had previously gone unnoted, to look at variability within an institution and examine those who might not be benefitting as much from the institution as closely as those who are. Dr. Blaich described the extraordinary range that can exist at one institution, and the importance of this range in determining what makes a Good Wabash a Good Wabash. Director of Institutional Research Jim Fergerson noted that the Wabash Team will attempt to examine this range at Carleton by attending meetings with a wide spectrum of representatives across the College.
Professor Peter Balaam asked if the Wabash Study was exploring the nature of the institution or the nature of the individual person, or the individual professor, or student. Dr. Blaich clarified that the Wabash Study is examining patterns in student’s expectations, attitudes, and interests, and how these change in response to the actual college experience. Dean of the College Scott Bierman questioned the practicability of the information, and how the results of the Study can be converted into workable practices at the College. Dean Bierman added that will be challenging to know exactly how to correctly respond to the information acquired, and to prioritize issues correspondingly.
Professor Clara Hardy asked about the demographics of the Study, and whether 18-22-year-olds outside of college are being considered. Dr. Blaich explained that there is a wide range of institutions being studied, and only students affiliated with a college are currently participating. However, even within this group there is a variation within the places that make a difference within an institution. Dr. Blaich ended optimistically with the note that good teaching does indeed matter.
President Oden introduced the updates in the budget by explaining the two major changes between the present budget and the one previously reviewed by the Council. Firstly, the projection of the value of the endowment has been revised from being down by 20% to 30%. President Oden reminded the Council that because the College had established a remarkably sound financial foundation prior to the economic crisis, it is faring better than institutions that depend more substantially on their endowments. The second major change is in the projection for annual alumni fund gifts. President Oden noted that discussion is continuing to occur within committees, and that the best options, advice, trade-offs, and the future of Carleton are all being considered with tremendous seriousness.
Vice President Fred Rogers commenced his presentation of the budget updates, illuminating the Council on the present state of financial planning in April 2009. He reiterated that the endowment is now predicted to be down by 30% on June 30, 2009, and that this fact will not only influence the income for next year but for every year to follow. The budget discussion approved for the Fiscal Year of 2010 was based on the data accrued as of December, 2008, and that is now outdated. The budget discussion now encompasses three columns: the original, the budget, and the revised budget column. Endowment spending was originally at 4%, was then revised to 0, and further revised to a loss of 7.8%. The Annual Fund was originally at 5%, was then revised to a loss of 10.10%, and currently stands at a loss of 18%.
Vice President Rogers explained that the investment return scenarios are extremely difficult to predict because of confounding factors. Predictions are currently founded on the “best guess”, or the best informed and presently most pessimistic view that the financial situation will probably still worsen and will recover very slowly. In discussing the Endowment Payout, it was predicted that it would take four years to return to the original payout of $30 million/year. Now, with the Endowment down 30%, it will more likely take 10 years to get back to the $30 million/year goal. This stark difference in recovery time necessitates serious rethinking of the shape of decline and the entire budget process. Vice President Rogers likened this struggle to chasing a moving target. It is a constant challenge to determine the next move and the potential for over or under- reacting.
Vice President Rogers discussed R3, Reduction, Reorganization, and Restructuring. Thus far 37 of the ideas presented through R3 have been implemented or are in process and have contributed to saving $461,000. 43 ideas are still being evaluated. In response to the financial climate, the work of task forces and staffing levels are under review, and possible revenue enhancements- both for today and for the next ten years- are being considered. Additionally, it is vitally important to prioritize institutional strategy at this juncture in the College’s history.
Four task forces have already been created in response to these issues. These are the Enrollment, Bookstore, Wellness Center Review, and Campus Speakers Task Forces. Trustee Task Forces are also examining how to reduce costs and raise revenues. Actions that have been successfully implemented at this stage include: 5% budget reductions, zero raises in salaries or budgets, eliminating the printed catalog, enforcing a bi-weekly rather than daily trash removal from offices, and examining and possibly eliminating rather than immediately filling staff vacancies.
In pursuit of the $5 million reduction goal for FY 2012, salaries and budgets will experience a freeze until at least FY 2011, implementation of the five-course load may be postponed, a one-week furlough may be put in place, benefit costs to college may be reduced, and there may be a reduction in staffing at the college. Fall 2009 will welcome 520 freshmen and 20 transfers to Carleton, and by Fall 2010 that number is predicted to decrease to 510 freshmen. At the moment, the College is not considering any cuts in financial aid, and will continue the need-aware policy up to 15%.
The Trustee Task Force is continuing to meet on a bi-weekly basis, and College Council, the Budget Committee, the Board of Trustees, and the Administrative Council Budget Retreat are all discussing the budget. Intense conversations continue to delve into budget issues and prioritizing issues, discussion, and how to come to some sort of consensus on this topic.
Dean Bierman expressed considerable appreciation for both Vice President Rogers’ and Budget Analyst Patricia Langer’s work in creating this informative presentation. As Vice President Rogers mentioned, accumulating the $5 million by FY 2012 will be a great challenge. Dean Bierman acknowledged that Carleton has always managed to do more with less, but this is a time of particular difficulty. The confounding variables need to be taken very seriously, and new ideas are extremely welcome. Dean Bierman noted that it will be impossible to come up with $5 million without getting into budget compensation.
President Oden explained that the process has followed a very deliberate timeline, and that these predictions could not have been made in January because it was impossible to know whether the climate would recover between then and now. All institutions are dealing with the issue of compensation during this crisis. For every 1% decrease in the employment package, $375,000 is saved. Although this may seem perverse as it is the worst time in investment history to reduce the contribution to retirement investments, it is necessary. By the April 27 meeting, it will be necessary to look at the budget and make real decisions as a part of exercising fully our financial responsibility.
Patricia Langer emphasized the fluctuating nature of the financial climate. Vice President Rogers expressed a measure of concern about increasing the comprehensive fee by 4.5% next year, and by 5% in two years. This concern represents just a portion of larger questions considering contributions and long-term predictions. Student Evan Rowe asked about the capital campaign with specific reference to the status of the major donors. President Oden acknowledged that, although some gifts have been deferred, the campaign is mostly sticking to the timeline. The campaign is currently at $224 million, with the goal of achieving $300 million by June 2010. It is again a challenge to make concrete predictions based on the past few weeks, during which there were some signs of optimism in gift-giving. It is expected that there will continue to be a slowdown in the amount of time it takes for donors to fulfill their commitment.
Professor Clara Hardy sought clarification in the financial plan’s prediction of reducing the overall headcount at the College. Professor Hardy wanted to know exactly what would trigger faculty reductions, and at what point that would occur. Vice President Rogers explained that the first step in examining budget reductions is to analyze budgets and eliminate expense, thus determining the exact workload and how it can be managed by staff accordingly. With the closing of River City Books, seven part-time staff has been affected by budget reductions. The threshold, or trigger, has already been reached, so cuts will be inevitable.
Dean Bierman addressed the issue of faculty cutbacks with particular reference to the 6-course load. Carleton is one of the few top schools that still have the 6-course load, and the decision was made to add faculty to most efficiently and effectively implement a 5-course load. Contracts have been signed and faculty already hired for the 2009-2010 academic year, so the 5-course load will be implemented for that year. One possibility for implementing the load will be to place half of the senior faculty with the five course load, and leave the other half with the 6-course load, thus reducing the number of visiting faculty by alternating the half of the faculty who are on the 5-course load every other year. By implementing this sort of scheme, the College would save $500,000 annually.
Professor Mark Kanazawa emphasized the importance of shared sacrifice during this economic downturn, and approaching the ugly budget with a strong sense of equitableness. In order to encourage a sense of shared community during this process, it will be important to communicate the budget to all facets of the College. Student Charlotte Turovsky asked about the felt repercussions that will be experienced on a daily basis. Professor Savina responded that the purpose of the R3 is to find aspects of the budget that will not be felt strongly, or terribly, and to find things that would be relatively unnoticed. For example, the elimination of the $30,000 a year printed College catalog will not be significant to the daily existence of the Carleton student.
Ad Hoc Task Force on College Governance
Evan Rowe presented the Resolution for an Ad-Hoc Task Force on College Governance, prefacing discussion by noting that this issue had been previously subsumed by budget discussion. The purpose of the Task Force would be to allocate, efficiently, the bureaucracy of the College and provide meaningful resources for communication between students and these offices. Professor Savina expressed some of the challenges encountered by such a Task Force, and the issues that have been emerging thus far.
Firstly, a coherent list of committees could not be located until the end of 2008, and this list wasn’t adequately thorough in providing committee membership information or current mission statements. In that respect, the list requires significant housekeeping. At this moment in time when resources are relatively limited, Professor Savina articulated a measure of doubt in the College’s ability to currently staff a Task Force like this right now.
Student Jon Fraser mentioned that, in discussions with staff at the Academic Support Center, he gathered that there would be support for a comprehensive list, or even a visual overview on how the college is governed. Professor Savina noted that such a list is already available for faculty and that it could be modified for student usage. Dean Bierman agreed with Professor Savina in that the College is at absolute capacity right now in terms of having the ability to staff this Task Force. The College is, however, expressly interested in efficiency and clarity, and making a concerted effort to support conversation.
Due to time constraints, a motion was presented to postpone the conversation until the next meeting, on April 27. The decision to postpone discussion of an Ad Hoc Task Force on College Governance was approved unanimously by voice vote.
The meeting adjourned at 5:30 pm.
Aisling Quigley ‘09
College Council Secretary