Glotzbach details steps to reduce costs

President Philip A. Glotzbach sent to the Skidmore community the following update on the College's budgetary planning on June 16, 2009:

As part of our ongoing commitment to keep the campus community apprised of budgetary planning and other matters, I write to make the information that Michael West and I presented at the May open meetings more broadly available.  Given the challenges ahead of us, I thought it would be beneficial to provide this written summary of steps the College is taking, as well as steps we are considering, to ensure that Skidmore continues to move forward in fulfilling our educational mission.

Because of its breadth and depth, the economic downturn continues to have a negative effect on our students and families, our charitable support, and income from our investments.  While the markets improved in April and May 2009, our endowment value is still down roughly 20% from May 2008, which is significantly below what we had expected it to be at this point in time.  Even after allocating nearly $3 million in additional funds for financial aid, we have not been able to meet all of the needs of our students and their families.  And despite the considerable efforts of the Advancement Office, receipts for the College's Annual Fund – which directly supports our operating budget – fell by 5% this year from $6.4 million to $6.1 million.

All of these trends have put tremendous pressure on our budget and have led us to take a number of steps to reduce costs.  These decisions have been informed by our commitment to maintain the integrity of the educational experience we offer our students while sustaining our commitment to need-based financial aid.  They were considered within the context of our Strategic Plan and are intended to minimize negative consequences for both the people and the sense of community that are at the heart of Skidmore.  As reported previously, here are some of the key features of the FY '10 budget that were approved by the Board of Trustees at its May meeting:

  • We will maintain current student enrollment levels at approximately 100 over the budgeted number of 2,280 – possibly through FY '14 – to support the operating budget.  This is a short-term decision, and we recognize that we still must answer the question of optimal enrollment size over the long term.
  • We have increased the financial-aid budget by nearly 10% or $3 million.
  • There will be no salary increases for FY'10.
  • We will continue the strategic hiring freeze and restrictions on overtime.
  • We have reduced most FY '10 services and supplies budgets by 10%; budgets directly supporting the delivery of academic curriculum have been reduced by 5%.
  • We will continue to reduce travel, entertainment, and related expenses and, where possible, limit or eliminate the use of consultants.
  • We have reduced the budget for capital expenditures, including funding for deferred maintenance.
  • We will continue to hold on all but a few carefully chosen strategic initiatives.

The members of Cabinet and I now have turned our attention again to the work we began this year of developing budget scenarios to stabilize the College's financial situation for FY '11 and beyond.  Our current models indicate that Skidmore will need to address major budget shortfalls in those out-years – as much as $8 million by FY '11.  We will continue to work with the IPPC and others as appropriate to ensure that we are able to recommend balanced budgets to the Board of Trustees. 

Actions currently being considered for FY '11 include the following:

  • No salary increase.

  • Additional reductions of 3% in services and supplies.

  • Additional reductions in personnel costs of $3.25 million. 

We expect to achieve some of the additional reductions in personnel costs through attrition; we also are investigating the feasibility of a voluntary retirement incentive program for some members of the faculty and staff.  It is clear, however, that non-voluntary reductions in force also will be necessary.  These decisions will be made thoughtfully and deliberately, and I expect that it will take us the better part of the coming year to complete and implement our planning.  Without a doubt, the consequences of these decisions will be felt by all of us.  The Cabinet and I will consult with IPPC over the summer and in the coming year, and I will keep you informed about process and time-lines as further decisions are made.

Let me conclude by renewing my call for all of us to engage fully in thinking of ways in which we can do our own jobs and, ultimately, achieve the College's highest strategic priorities more efficiently.  Such discussions either have already begun or will soon be under way in each division of the College.  It is important that everyone recognize that while we will be able to maintain the core of what we do, how we do it must and will change.  Certain activities will happen less frequently or not at all, and each of us will need to make adjustments in the way we carry out our day-to-day responsibilities.

Finally, I want to thank each of you once again for your continued support of these efforts.  I am heartened by the spirit in which our community has approached our budgetary planning and by the clear desire to develop strategic solutions that will position us to achieve even higher levels of excellence in the future.  I assure you that we will weather this economic downturn and continue to make Skidmore a better place at which to learn, live, and work.

Sincerely,

Philip A. Glotzbach
President

 




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