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Faculty Budget Committee projects $11M gap past 2014
by Miranda Neubauer
Senior Writer
News | 3/3/09
Posted online at 7:03 AM EST on 3/3/09
The University's academic restructuring plans are projected to close $18 million of the University's $25 million yearly deficit, but the institution will still face a sustained $11 million gap starting in 2014 because spending its $84 million in reserves over the next two years will decrease the earnings from the endowment, according to a presentation by the Faculty Budget Committee last Thursday.
The Faculty Budget Committee, composed of Prof. Peter Conrad (SOC), Prof. Carol Osler (IBS) and Prof. Gina Turrigano (BIOL), among others, presented the data to the faculty and administrators at a special faculty meeting last Thursday.
The Committee received the information for the presentation through many discussions with Executive Vice President and Chief Operating Officer Peter French, Conrad said in a March 2 interview with the Justice. "But this is our interpretation of the data; this is not necessarily [French's] interpretation," Conrad said.
French did not respond to repeated requests for comment. Vice President for Budget and Planning Frances Drolette and University Provost Marty Krauss referred all questioning to Conrad.
The University projects that the academic restructuring plans will provide $6 million in revenue by increasing enrollment over four years. One-time expense reductions this year would cut total expenses by $6 million, the projected decrease in faculty over five years would save $5 million and cuts to the graduate school would save $1 million, according to the proposal. Those plans would cut $18 million from the $25 million deficit and leave a $7 million gap.
The University uses 5 percent of its endowment for operations, according to the presentation. "The plan is as we are restructuring, we will spend our reserves," Osler stated at the meeting, adding that the reserves are also part of the endowment. With that $84 million missing, the University will no longer receive $4 million, or 5 percent of those reserves, Conrad said Monday. Conrad explained that the University placed $84 million in reserves in bonds that don't gain interest when the stock market began to fall.
The Faculty Budget Committee, composed of Prof. Peter Conrad (SOC), Prof. Carol Osler (IBS) and Prof. Gina Turrigano (BIOL), among others, presented the data to the faculty and administrators at a special faculty meeting last Thursday.
The Committee received the information for the presentation through many discussions with Executive Vice President and Chief Operating Officer Peter French, Conrad said in a March 2 interview with the Justice. "But this is our interpretation of the data; this is not necessarily [French's] interpretation," Conrad said.
French did not respond to repeated requests for comment. Vice President for Budget and Planning Frances Drolette and University Provost Marty Krauss referred all questioning to Conrad.
The University projects that the academic restructuring plans will provide $6 million in revenue by increasing enrollment over four years. One-time expense reductions this year would cut total expenses by $6 million, the projected decrease in faculty over five years would save $5 million and cuts to the graduate school would save $1 million, according to the proposal. Those plans would cut $18 million from the $25 million deficit and leave a $7 million gap.
The University uses 5 percent of its endowment for operations, according to the presentation. "The plan is as we are restructuring, we will spend our reserves," Osler stated at the meeting, adding that the reserves are also part of the endowment. With that $84 million missing, the University will no longer receive $4 million, or 5 percent of those reserves, Conrad said Monday. Conrad explained that the University placed $84 million in reserves in bonds that don't gain interest when the stock market began to fall.
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