[Alumni-chat] Antioch College Financial Key Points. 2001-2004

[alanbenard (alanbenard at pobox.com)]

http://lists.antiochians.org/pipermail/saveantioch_lists.antiochians.org/attachments/20070824/29c15525/attachment.pdf

/Compiled by Laura Fathauer /

*Budget cuts at the College directed by the Board:  *
•	2001-2002 Financial Stabilization subcommittee of the Board of Trustees  
•	Budget Stabilization Task Force from the University Leadership Council 

* The Board has directly made decisions regarding finances and operations at the College *


•	*In 2001-2002, the Board established the Ad Hoc Financial Stabilization sub-committee.  *
	This Committee, working with the University CFO, made decisions that included: preventing the re-hiring of Admissions vacancies and the Director of Development vacancy, consolidation of administrative services including the loss of the College CFO position, and a restructuring of University budgetary practices. These changes were already decided by the time the on-campus College community heard of the need for budgetary cuts. Overall campus reaction was negative; at issue was the top-down decision making that ignored College traditions and faculty participation in budgetary decisions; also at issue was the long-term affects this plan would have on the College. While the Board listened to the concerns of the College community, they still proceeded with their plan. 


•	*In 2003-2004, the Board handed a mandate to the council of the University presidents to determine budget cuts at the College. *
	The Board mandated that the University Leadership Council (ULC, a committee of the University campus presidents, Chancellor, and College President) come up with recommendations to deal with the projected deficit at the College. ULC established the Budget Stabilization Task Force, led by Toni Murdock. While this round of cuts had some participation by College personnel, these budget cuts were not reviewed by nor approved by Adcil. 


*Impact on the College *

•	*Budget cuts in FY04 affected resources and personnel available to implement the Renewal Curriculum *
	The ULC led budget cuts of that year included:  Co-op stipends being cut, hiring freeze implemented on vacant tenure-track positions and open or soon-to-be open staff positions, Director of Multicultural Affairs search cancelled, 5 support staff positions eliminated, and 1 financial aid position eliminated. Overall the combined hiring freeze/reduction in staff resulted in 15 fewer staff in FY 05, which included an overall reduction in admissions by 3 positions. Visiting faculty were required to teach some of the Learning Communities in the first year of the Renewal curriculum; their departure meant those courses could not be taught again. Also of concern was the lack of resources available to continue the traditional curriculum for returning students. 

•	*Board and University budgeting and administrative practices since 2001 run counter to the College's tradition of shared governance and standard AAUP practices *
	The budget cuts decided upon by the Board in 01-02 and ULC in 04-05 were implemented at the College with only superficial participation from Adcil or the College faculty. Adcil was not consulted at all when the ULC developed their plan in FY04. With the Renewal Commission, while faculty had a later role in the implementation of the curriculum, they were not included in the original decision to change the College's academic program. 

•	*Campus Reaction *
	In early 2002, the College community united in response to the top-down decision making of the Financial Stabilization plan of the Board. Adcil and Comcil joined and voted to send seven community members to the Board of Trustees meeting in February, with funding provided by Community Government. In 2004, students were affected even more by the cuts implemented by the ULC Budget Stabilization; the cut in co-op stipends affected students’ ability to choose co-ops that were under-funded, international, or had a lengthy delay in the first pay. Students also felt that the suspension of the search for a Director of Multicultural Affairs reflected a lack of institutional commitment to diversity, and occurred at a time when issues of diversity ware already at the forefront of student life. 


*The State of the College’s Finances *

•	*The University has set and managed the College’s budget since 2002 *
	The College lost its CFO with the consolidation portion of the 01-02 Financial Stabilization plan. The University has fully been in charge of College budgeting since then.  In February 2004, reaction to the current budget deficit and the determination of budget cuts by ULC prompted the faculty to organize an emergency faculty meeting. The faculty determined their #1 priority was hiring a College CFO, and #2 was assessing the effects of consolidation. Even President Straumanis stated, “We have felt that consolidation of all business services did not give the kind and degree of attention to the college budget that it needs.” 

•	*A clear picture of the true financial state of the College has been unavailable since 2001-2002 *
	Since 2001, the University CFO has been responsible for providing College financial and budgetary information. Prior to 2001, depreciation was offset by gains in the endowment. Starting in FY 03, the endowment posted positive gains; however since the Financial Stabilization plan of the Board in 2001, specific information regarding the gains on the endowment has not been made available. Endowment performance is now kept entirely separate from operating performance, and the College does not directly benefit from gains posted on the Endowment.  	
Since Financial Stabilization, the College is allowed an annual "approved deficit." In some years the College went over the “approved deficit,” comments seem to indicate that the additional “deficit” was managed by only partially funding depreciation. Without knowing the exact amounts of gains posted by the University, we do not know how much of a "deficit" the College actually runs.  

•	*2000/2001: The University ran a $1.5 million deficit. *
	Sources of the College portion of the deficit include: on the expense side, a rapid rise in the cost of fuel, and on the revenue side, falling short of Lead Gifts by $350,000 (due in part to the loss of the lead development officer at the college).  The poor performance of the stock market, reflected in a 2% return rate on the Endowment, may have contributed to the University portion of the deficit, as the University booked depreciation at least partially against gains on the endowment. However, from 1998-2000, the College had a balanced accrual budget. 	 

•	*2001/2002: In October, 1.4 million dollars in new expenses is added to the College's budget by the BoT. *
	Following the deficit of FY01, the Board adjusted their internal reports to show the depreciation at each campus within the financial statements of each campus, instead of at the University level. In October 01, this change was implemented in actual University budgetary practices. This shifted depreciation from being a "paper" cost to being a fully funded expense (in other words, real revenue had to be generated to fund depreciation). At the College, this meant that $1.4 million in new expenses were added to the operating budget, representing a mid-year 10% increase in expenditures. Depreciation has remained budgeted as a fully-funded expense since FY02; however it was only partially funded in years the College ran an “unapproved deficit” 

•	*2001/2002: Almost a million dollars in revenue is removed from the College's budget *
	Early on in budgeting for 2001-2002, the College had a "Lead Gift" line in its budget initially set at $600k reflected funding for the Capital Campaign, with the source being Board and other contributions. The University CFO increased this revenue line by $959k in Spring 01, in conjunction with University requested changes that increased expenses by the same amount. A few months later, this revenue line was identified as a 'risk' to the University. In the Board's Financial Stabilization, this revenue line was removed and Capital Campaign costs were budgeted separately; however the loss of this line still represented a loss of almost $1 million in revenue to the College's budget. This loss of $1 million revenue occurred in the same FY as the increase of expenses by $1.5 due to fully-funding depreciation. 

•	*2001/2002: The University ended FY 01-02 with $2.9 million in Deficits, caused primarily by the losses of the endowment on the stock market.  *
	Between June 01 and June 02, the Endowment had a -4.35% return rate.  	 

•	*2003/2004: Deficits at the College were attributed to a Board-approved plan to increase student aid *
	In February 2002, the Board approved a financial aid plan to fund 100% of student aid need, instead of the College’s average of  ~80% of need. The costs of the plan were included in the presentation, and approved by the Board as well. In 2004, both University CFO Glen Watts and President Joan Straumanis linked the budget deficits that year to the 2002 financial aid plan that the Board approved. 

•	*Since 2001, Tuition revenue has declined commensurate with Enrollment declines.  *
	In FY02, Net tuition revenue was $9,586,000. Enrollment was 719 FTE. In FY 07, projected net tuition is $5,936,000. Enrollment was 510 FTE.