President Hill's letter on Vassar and the economy
September 2, 2009
Dear members of the Vassar Community,
As we begin the academic year, I want to welcome new members of our community, especially the Class of 2013, and welcome back those of you who have been away from campus. For those who were here this summer, I hope you have had a chance for some relaxation and renewal.
I would like to take this opportunity to update you on some important topics. The first is the extraordinary Class of 2013, our first-year students.
The Class of 2013
By every measure our first-year students are impressive both in their academic achievements and in their engagement in a great variety of activities and interests. The Vassar community will be enriched in countless ways by their presence and contributions.
Vassar’s newest class brings to campus a broad range of experiences and backgrounds, stemming in part from its unprecedented geographic, racial, ethnic, and socioeconomic diversity. Members of the Class of 2013 come from 46 states (plus the District of Columbia and Puerto Rico) and 34 foreign countries. I am also very pleased that our freshman class includes three graduates of Poughkeepsie High School.
One third of the members of the Class of 2013 are students of color, as compared to 28% last year. African-American, Asian-American, and Latino/a students are present in greater numbers in this class than any other class in the College’s history.
I note with great pride the role so many members of the Vassar community have played in the College’s progress toward making a Vassar education accessible to all qualified students. I want especially to thank the Admissions and Financial Aid offices, the Committee on Admissions and Financial Aid, the Committee on Inclusion and Excellence, and the Priorities and Planning Committee, as well as the Board of Trustees, for their support of this goal, and all of you who have, in a myriad of ways, embraced the idea that the College’s educational mission is strengthened by its ability to enroll some of the most talented students in the country, bringing with them a variety of backgrounds, experiences, and points of view. Our shared goal of expanding access to a Vassar education – particularly in these difficult economic times – is supported by our commitment to provide significant financial aid resources. This year, 60% of the incoming class is receiving financial aid from the College, as compared to 56% of last year’s entering class.
I know that many of you have had a chance to tour the newly-reopened Davison House. I hope that those of you who haven’t seen it will take the opportunity to do so. Originally completed in 1902, Davison has now received a comprehensive renovation employing sustainable design and achieving increased energy efficiency. The renovation, which also returned the exterior to its original appearance, has provided for 11 additional rooms on the fifth floor, through the addition of skylights. Importantly, students with disabilities now have access throughout the building. The lobby and parlor have been restored and study lounges added on each floor; the architects also reconfigured the lower level for informal student activities. Bathrooms were enlarged and modernized, and all mechanical and electrical systems replaced. The project, financed primarily by proceeds from the 2007 bond issue, retains Davison’s rich historic character and at the same time provides the most modern conveniences.
As we move into fall, we are making preparations for the anticipated H1N1 influenza (swine flu) pandemic. While this flu has generally been mild in nature, substantial numbers of cases are predicted. The College’s Swine Flu Task Force, chaired by Dean of the College Chris Roellke, has been meeting throughout the summer to plan for the likelihood of having cases on campus. The task force has identified a limited number of isolated spaces in which students who are ill can stay until they can travel home (for those within a reasonable distance of campus) or until they recover. Prevention is key; all members of the campus community should protect themselves from the spread of flu through frequent hand-washing, proper coughing and sneezing etiquette, and staying home, away from others, if you are ill.
A recent letter to the campus community from the task force noted that Vassar Health Service will again offer a general influenza vaccine this fall. In addition, a swine flu vaccine is expected to be available this fall to the most vulnerable groups. The task force will continue to monitor the situation nationally and internationally and will notify the campus of new developments.
Vassar’s Financial Planning
I’d also like to update you on our continuing efforts to restore the College’s financial equilibrium, a topic that was central to many of our discussions last year and will be again this year. As we consider our ongoing financial planning, there are some new indications of improvements in the economy. We are confirming the final figures, but it appears that, by the close of the 2008-2009 fiscal year, the investment loss in the market value of our endowment was just under 20% — a better result than the 30% loss on investments we had modeled as a potential worst-case scenario. In spite of this improvement, the College’s financial position remains out of balance, with operating expenses outpacing revenues, a backlog of capital renewal in certain key facilities, and an unsustainable use of the endowment to support the budget. The growth in our operating expenses over recent years – due to a larger workforce, the growing cost of benefits, and the greater financial need of our students and their families – has contributed to an unsustainable budget which can only be addressed through spending reductions and permanent structural change. With the decline in the endowment which we experienced last year, the use of the endowment to support the budget this year is approximately 7.5% of beginning market value, significantly higher than the sustainable rate of 4.5% to 5.5%.
As I reported last year, the College’s trustees, who bear the fiduciary responsibility for Vassar’s future, have asked the College’s leadership to develop responsible plans to reduce the use of the endowment to sustainable levels over the next three to five years. We have worked to meet this challenge and have enacted responsible reductions in spending throughout the College. Funds budgeted for capital projects were scaled back to support only those projects essential for health and safety reasons and projects funded through earmarked donations and the 2007 bond issue. Discretionary office budgets were cut by approximately 10%. We curtailed overtime and surveyed all student employment to eliminate positions that are less essential. We are adopting new strategies, used on other campuses as well, to deliver the College’s custodial services and dining services. We have been vigilant in reducing energy costs and obtaining the benefits of more sustainable practices. And we made some changes to the size of the workforce.
By necessity, one of the main elements in our ongoing planning to reach a sustainable level of draw on our diminished endowment is to achieve a reasonable reduction in the compensation budget. There are three reasons for this. First, compensation represents more than two-thirds of our annual operating expenses, by far the largest expense in our budget. Secondly, when we compare our staffing levels to those of other leading liberal arts colleges, it is clear that Vassar’s levels exceed those of other institutions of our size in some areas. And, finally, we believe that we can make the necessary reductions in some areas of our workforce without seriously compromising the quality of the education we offer.
We need to reduce overall employment at the College by 10-15% over the coming years, and efforts to date have moved us substantially toward that goal. For the 2009/10 academic year we reduced administrative and staff positions by 25 FTE (Full-Time Equivalent) through not filling about 18 positions that became vacant in various departments and a limited number of layoffs. We suspended searches for three tenure-track faculty positions, and we reduced the number of courses that will be taught in 2009/10 by visiting, adjunct, and emeriti faculty, with a resulting decrease in the overall size of the faculty of 16 FTE. We gave small salary increases only to those administrators and faculty at the lower end of the salary scale and to those unionized employees whose contracts called for increases.
The College has offered retirement incentives to encourage voluntary departures to a number of its employees, including staff, faculty, and administrators, with eligibility based on a combination of age and years of service. To date, a total of 44 administrators and staff have indicated their intention to retire, with most of those retirements effective in January of 2010. As of now, a total of 5 faculty have indicated their intention to retire during the 2010/11 academic year. AGAFR (the Advisory Group on the Allocation of Faculty Resources) will incorporate information about faculty retirements into its planning for overall reductions in the faculty salary budget.
Ultimately, we must reach a level of employment at the College that is consistent with a sustainable budget and the current financial realities. Our goal of a workforce reduction of 10-15% requires the College to employ approximately 60 fewer administrators and staff employees by July, 2010. The retirement incentive for non-faculty employees has contributed about 35 positions to this reduction, since close to 80% of the vacated positions will not be filled. We will, therefore, need to continue to reduce our workforce. Our senior officers, working with governance and special committees and members of their staffs, have been doing the planning over the spring and the summer that will allow us to reach this goal. Our intent is to finish implementing our planning and communicate about needed workforce reductions later this fall. As was the case last year, faculty meetings, administrative forums, and meetings with staff and with students will provide opportunities to discuss plans and changes.
Additional Future Planning
In February I asked the Benefits Committee, made up of faculty and administrators, to explore whether we could maintain compensation levels comparable to our peers if we make changes in benefits. As the committee works towards a set of recommendations, it is consulting with the Faculty Compensation Committee and other relevant committees. There will be opportunities for public discussion before I bring any recommendations to the Board of Trustees. The College remains committed to compensating faculty, administrators, and staff fairly and competitively. The outstanding people who work here are one of Vassar’s greatest strengths, and we recognize the importance of maintaining working conditions and compensation that preserve that strength.
I will continue to update you on the progress of our planning and the College’s financial health. Information about the College’s finances and financial planning is also now available on a website at http://economy.vassar.edu. I encourage you to visit the site and to provide us with your questions, input and suggestions.
The education we provide at Vassar enriches and empowers our students and inspires each of us who is entrusted to serve the College and its mission. We can take considerable pride in the way the Vassar community has risen to meet the challenges presented by today’s unprecedented financial pressures, while continuing every day to provide our students with this remarkable educational experience. I believe that the analysis, planning, and careful changes we are undertaking this year will help to ensure that Vassar students, now and in the future, receive a superb education.
I look forward to greeting all of you in person during the next several weeks.
Posted by Office of Communications Wednesday, September 2, 2009