By Jonathan Smith, Editor in Chief
The university realized a $21 million increase in net worth for the 2003-04 school year-the largest increase in net worth since 2000-said Phil Schubert, vice president of finance.
Strong, yearlong investment gains in a market that had suffered for all investors the previous two years allowed the endowment to grow to $168 million, the highest it has ever been.
Schubert said only 5 percent of the endowment is available for operating costs-costs required for the everyday operation of the university, such as salaries and health care costs. Most of the earnings in net worth are tied into investments in the endowment and are inaccessible for use with the operating budget. Because of that and a culmination of rising operating costs during the past couple years, the university had a $1.5 million operating budget deficit for ’03-04.
“Our projections from where we would end the year from an operating standpoint this last year ended up better than where we expected,” Schubert said, because at one point during the year officials estimated that deficit could grow as high as $3 million.
Realizing the budget deficits would only continue to grow and peak at about $5 million in two years if nothing was done, the university organized 13 strategic teams last year to analyze most all facets of the university to look for cost-cutting strategies.
After implementing most of the teams’ suggestions, Schubert said the university now has a balanced budget.
Among the strategies proposed by the strategic teams include several cuts in faculty and staff positions as well as an early retirement plan that enticed more than 40 faculty to retire-cuts now beginning to be felt by the colleges.
“Just like everywhere else on campus, we feel the pinch in terms of our own faculty and staff,” said Monty Lynn, acting dean of the College of Business Administration.
Lynn said COBA was down one faculty member and operating on half the staff in the dean’s office from last year. To offset the loss in faculty, Lynn said some class sizes have been slightly increased.
Dr. Colleen Durrington, dean of the College of Arts and Sciences, said it lost 11 of 165 full-time faculty members from last year. She said the college has offset this by hiring more part-time, adjunct professors and by offering some classes less or with fewer sections.
None of the deans thinks students will see effects of the cuts in their quality of education or level of service.
Looking back over the past year, Schubert said the university is in much better shape now to have some flexibility to provide support to certain areas that might have been cut too thin originally.
“We are in a much better position to deal with the financial realities of the market we’re in,” Schubert said. “We’ve made some difficult decisions and implemented some very tough plans relating to the pressure we felt was on the horizon. That pressure would still be there … had we not chosen to execute the plans that we have.”