November 23, 2015
Dear Faculty, Staff, and Students,
One of the working goals we have established for Trinity College is to reach financial equilibrium. This means developing an overall operating budget in which our expenses do not exceed our revenues, year after year, and we have sufficient monies for our priorities, such as financial aid to support access, strengthening of our academic programs, maintenance of our beautiful but aging facilities, and monies for new strategic initiatives such as the Bantam Network. For the last several years, the College has needed to take special draws on our endowment in order to balance the budget, which is not sustainable. The work of creating a sustainable budget for the future will require time and our collective effort. I am writing to you today to outline how we will achieve a balanced operating budget in the current fiscal year (FY 2016). And as we begin developing the FY 2017 budget, which starts July 1, 2016, I will ask for your thoughts and ideas on ways we can increase revenues to Trinity and reduce expenses in the future to achieve a balanced operating budget without a special draw from the endowment. Most importantly, we seek to increase revenues and reduce expenses in a manner that is consistent with our values and priorities. I’d like to emphasize that the “increase revenues” portion of this equation is just as important as identifying ways to save money. Trinity’s budget must not only be balanced, it must be structured so the College can thrive in the future.
The Current Fiscal Year
For the current fiscal year that began on July 1, 2015, we are projecting an operating budget shortfall of approximately $5.25 million, due partly to decreased revenue from tuition and fees and modified expectations of current-use fundraising support for scholarships. The decrease in net tuition and fees for FY 2016 is the result of a smaller entering class than was included in our original budget assumption. For more than 15 years, our budget projections for the number of students in the entering class have been increasing. The entering class projection for FY 2016, in retrospect, was too high. Our first priority is to admit high-caliber students who want to be at Trinity, and the Class of 2019, like the other classes here, meets that high standard. In the future, we need to underscore our quality standards for admission and build a budget to support that enrollment model; tuition revenues cannot drive quality at Trinity.
To close the projected budget deficit for FY 2016, the current fiscal year, managers throughout the College undertook a series of difficult budget discussions. How can we close a multi-million dollar revenue gap in a given fiscal year that has already started? Division heads identified potential adjustments to their own expenditures and to expense areas across division lines that together comprise a four percent net reduction to the overall College operating budget. In identifying potential adjustments, our principles included making no special draws on the endowment, preserving already planned and approved faculty hiring, and reducing expenses strategically across divisions. Our goal throughout these discussions included making cuts that had the least impact on the College’s working goals: building campus community, ensuring academic excellence, and fostering institutional pride.
Expense Reductions in the Current Fiscal Year
What follows is an overview of the expense adjustments that will bring this year’s operating budget into balance. While these modifications allow for the least disruption to the College during this academic year, this does not mean their effects will go unnoticed. Highlights of these adjustments include the following:
- We will reduce this year’s contributions to our reserve funds, including the general reserve fund (the College’s “rainy day” fund); the strategic initiative fund (for one-time capital projects); and the minor and academic capital fund (for classroom equipment and technology and major equipment replacement).
- Vacant staff positions will be reviewed by members of the senior administration and may be filled or delayed depending on how the responsibilities align with Trinity’s working goals.
- As announced last summer, we have suspended for this year the equity adjustments for faculty and staff salaries, although standard salary increases took effect July 1.
- We will scale back special events strategically to limit food and production costs. We will defer the January luncheon for faculty and staff for the time being and will scale back lunch and dinner meetings.
- We will reduce printing costs wherever possible, relying on digital communications. While the offices of Admissions, Communications, and Advancement will be particular contributors to these savings, we expect the entire College to participate in reducing printing, with the added benefit of improving environmental sustainability.
- We will further extend the replacement cycle for IT equipment, such as servers and desktop and laptop computers. College-issued laptop and desktop computers will now be replaced every five years, an addition of one year.
- We will reduce expenses in categories such as consultants and vendor fees.
- We will seek to increase revenue from our Study Away, undergraduate transfer pool, and Graduate Studies programs.
Planning for Next Fiscal Year: Please Submit Your Ideas
Members of the administration and members of the multi-constituency Planning and Budget Council (PBC) are already beginning to plan for FY 2017, which starts July 1, 2016, and we currently project a budget that is out of balance if we do not make changes. Many of the budget savings described above for FY 2016 cannot be repeated in FY 2017. For example, we cannot continue to reduce contributions to our reserves, we cannot extend replacement of IT equipment indefinitely, and many of the positions that we delay will need to be filled next year. So we have important work ahead of us to identify new sources of revenue and areas to cut expenses to balance our operating budget without a special draw from the endowment.
I welcome your ideas and invite you to provide your feedback here:
https://trinity.az1.qualtrics.com/SE/?SID=SV_bJmmh112dz0RvrD [survey concluded on Friday, December 4]. Once we have aggregated your ideas, I will report back to you and continue to keep you apprised as we proceed with planning for next fiscal year. I continue to be optimistic that as a community we have the collective will and capacity to bring our institution into long-term sustainable financial equilibrium, while maintaining our values and priorities. With sustainable financial health, we will continue to offer transformative learning experiences ’neath the elms for generations to come.
President and Trinity College Professor of Neuroscience