To: The St. Lawrence Community
From: William L. Fox, President
Date: September 19, 2018
Subject: Strategic Budgeting Update
Dear Laurentian friends,
As we begin another year, St. Lawrence finds itself operating from a position of reliable strength. A few weeks ago, we welcomed one of the largest and most diverse first-year classes in recent memory. Next month, we will publicly launch what will be the most ambitious fundraising campaign in our 162-year history. Having raised in gifts and pledges more than $135 million in less than three years, I am inspired by the generosity of so many Laurentians.
We have also spent considerable time during the past two years on meaningful campus discussions focused on aligning our core purpose with the actual resources available, a process we have called strategic budgeting. While the term may seem new to some of you, it is the essential thinking about how revenues and expenses require equilibrium. Many of you will remember that in my “post-board message” to the community last fall, I shared that in future years, our operating budget will need to generate $10-$12 million in additional net cash to ensure the sufficient funding of the University’s operations, its debt obligations, and its annual capital maintenance and repair needs, using the full funding of depreciation as a target.
I am pleased to report that we are making significant progress toward reversing the trend of our expenses growing faster than our revenues. As described above, our commitment in University Advancement has yielded outstanding results, positioning us for a successful comprehensive campaign. We have new leadership in Admissions and Financial Aid, which is focused on optimizing net student revenue while maintaining student quality and diversity.
Recognizing that we cannot reverse the trend with revenues alone, we have also focused on expenses. The most significant reduction came from the elimination, through early retirement and normal attrition, of 21 positions across campus. All told, we generated approximately $3 million in additional cash in the FY 19 budget, through a combination of expense reductions and cost avoidance. In future years, we must now generate $7-$9 million in additional net cash. These positive results, as well as the effort and innovation required to make them possible, deserve recognition and appreciation. But as an institution, we cannot afford to stand still. All of our competitive peers are facing the same pressures and challenges. We must continue our work, therefore, with diligence, intensity, and perseverance.
Consequently, in consultation with the Faculty Council, I have asked the Strategic Budgeting Coordinating Committee made up of Faculty Council and Senior Staff members to resume its work begun last semester. Collaborating with various campus committees in our shared governance structure, they must continue to examine cost assumptions and revenue opportunities. A complete list is available on the Strategic Budgeting Coordinating Committee’s Sakai site (https://sakai.stlawu.edu/) and appearing below are updates from a few of the high-impact items from last semester.
- Senior Staff has accepted the recommendation of an ad hoc Retention Task Force to appoint a permanent student retention team.
- The Campus Committee on Sustainability and Carbon Neutrality, in collaboration with Facilities Operations staff, has started project prioritization to begin to implement cost-saving energy solutions as soon as possible.
- Dean of Academic Affairs Karl Schonberg is leading a small working group of faculty members and staff to pilot a summer program for high school aged students in July 2019 that would help to generate revenue and interest for future enrollment.
- The Admissions and Financial Aid Committee began looking at optimizing net student revenue while maintaining student quality and diversity and how the athletic program supports that goal.
- We are completing a third-party review of our dining services with a focus on opportunities to achieve a lower cost per meal average while maintaining the highest quality. The results of this review will be shared more broadly with the campus community in the coming months.
- The Academic Affairs Committee will continue to study and analyze our policies and procedures for hiring visiting professors to replace tenured and tenure-track faculty on sabbatical or in administrative rotations.
- The Committee on International and Intercultural Studies will also resume their discussions on how we can continue to offer wide opportunity for eligible students while controlling cost growth.
In addition to these specific initiatives, we must continue to find budget savings in each division and in every part of the university’s operations whenever possible, and bring fresh ideas to the Strategic Budgeting Coordinating Committee toward the shared goal of achieving financial equilibrium. I have also asked our new Vice President for Finance and Administration, Steve Hietsch, to provide the community with updates after each board meeting this year. Expect to see a communication about the first of these campus-wide update meetings in late October or early November.
Let me remind our community, the strategic budgeting process will be an endeavor that takes several years. There is no magic formula, and we will need to balance revenue growth, expense avoidance, strategic innovation, energy conservation, and institutional considerations in organization and structure as we move forward. We know that our future must have a sustainable financial framework and we must work together to make that future a reality. After many years of overseeing budgets, I remain highly confident that St. Lawrence possesses more than enough to be successful in the terms I have outlined – sufficient in creative talent and wisdom, the necessary will-to-do, and the drive of competitive energy.