The University may soon be soliciting student opinion to find ways to reduce annual costs. The Board of Trustees will meet this weekend for the second time this semester. In a series of private meetings, the Board will discuss how to reduce the University’s reliance on its endowment.
In addition, trustees will begin to develop a broad plan to celebrate the University’s 175th Anniversary next year.
According to President Doug Bennet, two plans will be considered to determine how the University is to reduce the annual draw from its endowment from 7.4 percent to 5.5 percent. The reduction, amounting to a $7 million cutback in current spending, could be implemented right away or over a five-year period.
“The 5.5 figure is particularly high,” said Bennet. “It’s the top of our authorized limit.”
He said that the Board had given the Administration permission in prior years to exceed the authorized percentage draw, but in the last meeting asked the Administration to reduce the annual endowment draw to 5.5 percent.
“The real beneficiaries will be freshmen twenty years from now,” said Bennet, adding that the reduction in the draw on the endowment will allow the University to be competitive against its peer schools in the long-term. He said that the Administration will be setting up a website soon to solicit student input for redundant and unnecessary expenses that could be cut.
“We’re just now at this stage of figuring out what the trajectory is,” Bennet said.
WSA President Jesse Watson, who will be attending the Board meeting, said that the WSA favors the five-year plan.
“We’re going to be strongly advocating the long-term proposal for reduction of endowment draw over the short-term proposal, which we think will cause lasting damage,” said Watson.
Once the trustees reach a consensus over the time frame, the Administration will begin to look for specific steps to cut spending to meet to reduction in endowment draw, according to Bennet.
Watson said that he has received no information about what specifically might be cut.
“They must have considered what they’re going to be cutting, but it’s the trustees’ responsibility to make the cuts,” he said. “These are staff cuts within the Administration so those are quite sensitive.”
Bennet said that the reduction would not have a visible impact if the five-year trajectory for spending reduction is accepted by the Board, but that the one-year reduction may mean salary freezes.
“While you can do one-year adjustments…I don’t think we have to do that right now,” Bennet said. He said that Trinity is currently reducing its endowment draw in one year.
According to Bennet, the five-year plan will decrease University expenses through attrition (not rehiring in positions that employees leave) and reducing the $7-million major maintenance budget.
Watson said that the WSA will be “alert” to any proposed staff reductions, which he said he expects to be made known during the meeting. In addition, Watson said other “general minor cuts” to the University budget will also be proposed.
Bennet said that the Board will likely adopt the five-year plan because immediate reductions are typically only called for when the Board believes the Administration has lost control of the budget.
Bennet said that he also expects that increases in the University’s fundraising ability should offset some of the budget cuts necessary to reduce the endowment draw. The Annual Fund, which has currently raised under $7 million, aims to raise $11.8 million by the end of the year, according to its website. Bennet said that the senior gift this year will also play an important role in alleviating the effects of the reduction in the endowment draw.
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