Dartmouth has established channels for asking questions about regulatory compliance, seeking guidance about College policies or procedures, or reporting suspected violations of law, policy, or business ethics. Reports may be made anonymously.
We welcome your comments: finance.administration@dartmouth.edu We'll respond to your message as quickly as we can.
Letter from Provost Barry Scherr and EVP Adam Keller
Summary-- Employee Open Forum on the College Budget on Thursday, Dec. 11, 2008
Dear Colleagues,
Yesterday we held our second all-campus Employee Open Forum to provide an update on the financial situation facing the College. We also announced a voluntary retirement incentive for staff employees eligible to retire with benefits from the College. This memo is intended to provide a summary of the presentation and issues raised at the open forum.
As President Jim Wright announced in November, Dartmouth, like other colleges and universities, is facing long-lasting effects from the worldwide financial crisis. The value of our endowment - which funds more than one-third of the College's operating budget - dropped by $262 million last quarter (ending Sept. 30), and has dropped further in the past two months. President Wright has asked us to lead a process that addresses a potential shortfall in the annual operating budget of $40 million. The process is intended to find multiple approaches to solve the budget gap, while doing the most possible to preserve the tremendous progress that Dartmouth has made to strengthen the learning experience and intellectual climate.
Dartmouth is in a relatively strong position because of its human capital - the generosity of our alumni/ae and friends, our academic excellence due to the quality of our faculty and students, and the talents of our staff who do so much to enhance the environment for learning. To have gotten to this point, we have asked a lot of ourselves and we have made good use of our assets. Now, in order to preserve our strengths when the financial resources are diminished, we have to make difficult decisions regarding programs and compensation.
More than 420 faculty and staff joined us in Alumni Hall Thursday for a review of the process to bring expenses in line with declining revenues. We opened the floor for questions, and heard concerns about the timetable as well as the status of construction projects.
As we discussed, the budget reconciliation process has three primary components. First, we will begin to review contingency plans prepared by deans and vice presidents to understand the potential impact of significant reductions to the budget. While these are largely focused on expense reductions, we have also identified potential new or expanded sources of revenue to help address the budget shortfall. The deans, vice presidents and the president will review these potential plans over the next few weeks and again when school resumes after the holidays. The faculty Committee on Priorities and the Student Budget Advisory Committee will have an opportunity to provide input about potential programmatic reductions. Discussion of these contingency plans will be an iterative process extending into January.
Second, we will review decisions about new construction projects, major renovations and compensation plans. While many of the capital decisions have been made, the compensation issues are still being discussed. Plans to be incorporated into budget projects will be made on a tentative basis in January, although those will be reviewed before being finalized. The remaining decisions about how to progress with certain capital projects will also be made in January.
The third aspect of reconciling the budget is to identify tasks that cross departments and divisions, singling out those that should be critically reviewed to determine if we can make them more efficient or scale them back in order to reduce operating costs. While we are currently focused on the near-term budget problems, we want to expand our horizon so that we can address longer-term issues which will make the College run better and free resources to be reallocated toward priorities. Many of the suggestions received from employees have identified services that cross departments. We have also conducted some brainstorming to be sure that we have a relatively complete set of ideas. We will try to prioritize those ideas to identify those that are most feasible to change and have the greatest potential for saving costs and/or improving services.
We must pay attention to the very human element that is involved. We value our people and want to pay particular attention to the anxiety over the process. Given that more than half of the College budget provides salary and benefits for Dartmouth employees, we know that compensation will be part of the solution. That means that annual salary increases will not be what they have been in recent years and the number of employees at the College will need to be reduced in the coming months.
At the previous forum, we discussed the freeze on external hiring and the potential opportunity that offers to existing employees. We have now announced an incentive plan for employees eligible to retire from Dartmouth. This voluntary plan provides an opportunity for employees to retire from the College between January and August 2009. As an incentive, the College will provide an additional six months of salary/wages following the last day of work.
With this offer being made to employees over age 55 with ten years of service at Dartmouth, we anticipate that a number of retirements which will open up positions on campus. This may provide opportunities for existing employees as well as reduce compensation dollars in future year budgets if the positions are not refilled. We are asking staff who choose this retirement incentive plan to notify us of their intent by January 16, 2009. The short time frame will allow us to review how we can reorganize tasks and services in each affected department around positions that will be sustained in the future. We intend to continue to make the budget reconciliation process participatory. We again invite you to share suggestions with your team leaders and with us. We want to thank you for the hundreds of ideas you have already shared - including early retirement, the slowing of building projects, more modest holiday parties, and other suggestions - many of which we already have acted upon. Your suggestions appear on our budget website: http://www.dartmouth.edu/~finance/communications/finance_and_budget.html.
We are committed to communicating with you throughout this process. We appreciate your support and assistance, and further suggestions at http://www.dartmouth.edu/~finance/forum.html. We must work closely to manage our resources wisely to keep Dartmouth moving forward as a special place for all who learn and work here.
Sincerely,
Barry Scherr and Adam Keller
