The Board of Trustees heard planning assumptions for the College's $109 million 1997-98 operating budget at its meeting last week. Included in the assumptions were a $1.35 million increase in financial aid and a four percent increase in the tuition.
The Board did not resolve the assumption for the endowment payout rate.
These assumptions will act as flexible guidelines in the upcoming budget process. A preliminary budget will be presented to the Board at its March meeting.
Vice President of Finance Andy Evans said that it is important to keep these guidelines flexible. He said they are subject to many variables such as the status of the College's incoming class and the performance of College's investments.
Evans said that one thing that is not subject to change is that Oberlin will have a balanced budget. Evans also said that the work the College did last year to eliminate its structural deficit has made this year's budgeting process much easier and more flexible.
According to these assumptions, a little under a quarter of the budget, $23.8 million, would be spent on financial aid. According to Chairman of the Board Bill Perlick, the increase will go to improve the grant portion of financial aid packages. Perlick said he thought the increase was significant and important.
Other assumptions heard by the Board were for the tuition and faculty salary increases. Under the current assumptions the 1997-98 tuition would increase four percent to $22,282. Last year's increase of 3.5 percent was the smallest in years.
The assumptions presented a seven percent increase in the salary pool for faculty. The increase would be divided between an across-the-board increase and individual merit and departmental raises, according to Perlick. Last year's increase for faculty salaries was also seven percent.
The issue that received the most attention at the meeting, however, was the payout rate. The payout rate is the percentage of the College's endowment that the school spends each year. Last year's payout was five percent, a whole percentage point above a long-term goal. One percentage point represents approximately $3 million dollars.
The Board discussed the rate, but according to Perlick, an assumption was not resolved. They asked Evans to reform the formula that determines the payout rate.
The Board also approved a draft form of the 1996-97 financial report. The report was behind schedule because the College is using a new accounting system that incorporates depreciation in the accounts.
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