Former President Daniel Mark Fogel
December 15 , 2009
To University Community
From: Daniel Mark Fogel, President
Re: Budget Update
As promised in November, I am writing to give you a more detailed update on the status of the University’s budget for this year (fiscal year 2010, hereafter FY ‘10) and on the process we intend to use to continue development of the budget for next year, FY ‘11. Although we are operating in a climate that requires us to be creative and strategic in the use of resources, the University is in a comparatively strong position. The following summary overview of the two fiscal years explains how matters stand and how we will proceed in the current year and why we believe that the challenges we must address for the following year are manageable and will allow us to continue to build academic distinction and the quality of the student experience at UVM.
FY 2010, The Current Year
As you may recall, in the approved FY ‘10 budget approved by the Board of Trustees last May we had already addressed about half of the FY ‘09 deficit, leaving a projected deficit for FY ’10 of $8.4 million. The Board authorized the use of one-time state funding and of reserves to close that budget gap this year. We are now projecting that the one-time state funds alone will be enough to achieve balance: we will not have to tap reserves.
As I reported in October, in addition to the gap recognized in the budget approved in May, we have committed to more financial aid this year than was budgeted because of the greater than anticipated need of many first-year and returning students. I am pleased to tell you that savings in budget lines not associated with instruction or student services have been identified to cover the resulting $2 to $3 million shortfall. To fund the deepening financial aid needs of students we are also putting in place a control process for deciding if and when to fill vacant staff positions; we are advising deans and vice presidents on this process in a separate communication.
FY 2011, The Coming Year
For the past two months, the Provost, the Vice President for Finance and Administration, and their staffs have worked to identify savings opportunities and potential revenue enhancements to address what remains of our deficit, which was projected when they began their analysis at $9.5 million for FY ‘11. This projected deficit would have been as much as $3 million more except that we are now seeing a positive return on investment of our operating cash (tuition dollars, indirect cost recovery, and other receipts), a revenue line that went negative during the financial turmoil of FY 2009. The good work of the budget team, with the help of deans and vice presidents, has resulted in reduction of the projected gap for FY ’11 to about 1.5% of the general fund budget, or $4.5 million, and this has been done without adversely affecting academics or services to students.
Our strategies for dealing with the remaining 1.5% gap are still evolving, and we want to engage the campus community in the process of identifying savings and revenue enhancements to close the budget gap. We are asking deans and vice presidents, together with their faculty and staff, to review revenues and expenses in all areas of operations and to propose additional gap-closing measures.
This budget development process will be led by Provost Knodell and Vice President Cate, who will meet with each dean and vice president and each of the campus governance groups to solicit ideas. The meetings will take place in January, after which the team will review first with me and then with BFI the input from the campus. The budget team and I will then develop an FY ’11 budget proposal that will be informed by all of these conversations and will be shared with the deans, the vice presidents, and the governance groups before a determination is made on the budget to be presented in April to BFI preparatory to final action by the Board in May.
An Invitation to Participate
In an effort to make this an efficient process, I am asking individuals who wish to contribute to budget deliberations to do so via their particular governance groups (Student Government Association, Graduate Student Senate, Staff Council, and Faculty Senate). These bodies can then provide the combined input of their members both in writing and by way of their conversations with Provost Knodell and Vice President Cate. I encourage everyone to think as creatively as possible as you contribute to this dialogue, and I look forward to good results from the process.
We are grateful for the efforts of all of the members of our very special academic community that have combined to put UVM in a budgetary position significantly stronger than that of the great majority of our peers, public and private. If not for you, I would not be as confident as I am today that we will address the manageable challenges before us while preserving and building the quality of our academic enterprise.
Please accept my warmest wishes for a happy, safe, and relaxing holiday season.
Last modified December 16 2009 10:54 AM