President Hill releases fourth statement on the economy

On March 27, 2009, President Catharine Bond Hill released her fourth statement on the economy and its effect on Vassar this year. Below is the full text of her e-mail. Check back at miscellanynews.com for analysis of her statement:

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Dear members of the Vassar community,

  I write to address Vassar's evolving response to the global  
financial crisis.  Looking back on emails I sent in October, November,  
and December, I am struck by the acceleration of economic challenges  
that have a direct impact on Vassar's budget—reduced endowment  
resources, greater need among Vassar students' families, and financial  
uncertainty facing many generous alumnae/i and friends.  These  
conditions lend further urgency to our efforts to keep Vassar strong  
now and in the future.  We have met the challenge of crafting a budget  
for 2009/10, which the Board of Trustees endorsed at the end of  
February.  I know many of you were involved in helping to develop this  
budget, and I thank you for your hard work and cooperation in  
implementing this budget plan. We now face the steeper challenge of  
further restructuring the College's expenditures over the next two  
years to reach sustainable levels.

Given the fact that compensation represents two-thirds of the overall  
expense budget, the main focus of our planning to reach a sustainable  
level of draw on our diminished endowment must be a reduction in the  
size of our workforce.  The trustees have placed their confidence in  
the faculty and administrative leadership to develop responsible plans  
over the next months to reduce overall employment at the college by  
10-15%, with reductions in the 2010/11 and 2011/12 budgets.

This work will build on the steps we have already taken to reduce  
employment by 3% for 2009/10.  To achieve that reduction, we have  
taken the following steps.  We have not filled 18.5 administration and  
staff positions as they became vacant in various departments over the  
course of the year. We have suspended searches for three tenure-track  
faculty positions, and we have reduced the number of courses that will  
be taught next year by visiting, adjunct, and emeriti faculty, with a  
resulting decrease in the overall size of the faculty of 16 full-time  
equivalents.  We have surveyed all student employment to eliminate  
positions in 2009/10 that are less essential, while maintaining the  
level of employment we need for our work-study students.  We have  
offered a new retirement incentive for which 65 staff members are  
eligible, in addition to a previously negotiated retirement incentive  
for SEIU members, for which 29 service employees are eligible. We are  
also facilitating restructuring in some areas by offering targeted  
retirement incentives or offers of phased retirement to some  
administrators. The various incentive programs aim to generate  
turnover in positions that can be left vacant and thereby minimize  
involuntary severance, but we have also notified a small number of  
employees that their positions will be eliminated as of July 1.

                           Details of the 2009/10 budget

The Board has approved an operating budget for 2009/10 of $153.3  
million, which is $600,000 lower than the 2008/09 budget. It includes  
the following:

•        Salaries of administrators earning over $50,000 a year and faculty  
in the associate and full professor ranks will not increase in  
2009/10. Administrators earning $50,000 or less, assistant professors,  
and continuing contingent faculty earning less than $10,000 per course  
will receive small raises.

•        The College will honor all union contracts for staff and service  
employees, including increases ranging from 2.85% to 3.25% for  
2009/10.  However, overtime and casual/seasonal
employment budgets will be controlled as much as possible.

•        Employment at the College will decrease by approximately 3% in  
2009/10, as described above.

•        Non-compensation expense budgets have been reduced wherever  
possible, through the efforts of managers across the college. Many  
departments' operating budgets have been reduced by 10% or more.

•        Plans for capital expenditures in all areas have been reduced –  
technology purchases, equipment and furniture replacement, and  
facility renewal.  Major capital projects on campus will decline  
markedly, with the completion of Davison in the fall (funded by debt  
the College took on in 2007) and limited plans for new projects  
starting later this spring.  We will proceed with the long-planned  
renovation of Wimpfheimer Nursery School, funded by a generous gift  
from a loyal alumna, and a few other grant-funded projects. Other work  
on campus in the coming year will be limited to urgent repairs and  
renovations needed to keep our buildings safe and functional.

•        The comprehensive student charges will increase by 4.5% to $51,470,  
with a majority of Vassar students receiving grants, campus employment  
and loans to defray part of that cost.  This is the lowest percentage  
increase in nine years.

•        The budget includes a significant increase in the allowance for  
financial aid. The increase recognizes that we have continuing  
students whose families may require additional assistance in order to  
complete their degrees.  It also recognizes that need may be higher in  
the class we will admit this spring.  The budget plan holds to our  
commitment to making a Vassar education available to talented students  
from all socio-economic backgrounds.  It also takes into account our  
obligation to meet the demonstrated need of all Vassar students once  
they enroll.

•        Support from the College's endowment is limited to no more than  
$51,650,000, an increase of about 2% over the approved allowance for  
2008/09.  With an investment loss of 20.8% in the six months ending  
December 31, 2008 and an anticipated loss by the end of the fiscal  
year of 30%, this level of support from the endowment is  
unsustainable.  Clearly we must reduce our reliance on the endowment  
for operating costs as quickly as possible.

•        The budget assumes an increase in the Annual Fund, reflecting our  
hope that Vassar alumnae/i and friends of the College will give  
whatever support they can to help the college through this difficult  
period.

The current financial realities require us to respond swiftly but  
thoughtfully. We will need to work together in new ways and in a  
spirit of understanding and cooperation to bring the college  
successfully through this difficult period. In our response to these  
circumstances we have an opportunity to deepen our commitment to  
serving the best interests of our students and thereby to strengthen  
the institution.  I thank you all for your support in helping the  
college meet this challenge.

Catharine Hill
President