This year the College trimmed $3.2 million from next year's operating budget, partly by cutting about 40 positions, in order to eliminate what administrators have called a structural deficit.
The staff cuts have come through more than 20 layoffs. The rest of the eliminations came through attrition.
Layoffs, President Nancy Dye said, are the way to bring expenditures and revenue in line without hiking tuition, freezing salaries or raising the endowment payout rate too much.
Dye announced that the College would begin a deficit reduction program in December. By the early March meeting of the Board of Trustees, the $3.2 million in cuts were nearly complete.
During those three months, planning was a bit frantic, with a series of forums held with students to gain input about what students care about in terms of the budgeting process. The faculty and staff newspaper, the Observer published weekly instead of biweekly for most of the semester to keep faculty aware of changes in the budget.
The General Faculty (GF) meeting at which Dye announced the cuts was the best attended in years. Faculty sat in the aisles during that meeting.
Vice President for Finance Andrew Evans decided the college needed to trim the budget based partly on the results of long-term financial studies completed in the past year by trustee and faculty committees.
The problem both studies pointed to was that the College's expenditures are growing at a faster rate than revenues. In economic terms, that does not constitute a deficit because Oberlin has assets - such as property and the art collection - that are not being eaten into as the gap between spending and income widens.
But the gap has been widening consistently for several years, as President Nancy Dye outlined at a Dec. 5 GF meeting.
Dye said that of all the College's major expenditures and revenues, the one that is most flexible and could have a large impact on the structural deficit is the salary pool.
She said that, on the revenue side, the College would have trouble getting substantially more money from the tuition, endowment or annual giving without hurting the financial future of the College.
To close the budget gap, the administration is also raising the endowment payout rate from the current 4.4 percent to 5 percent, nearly one percentage point above the College's long-term payout rate goal.
The tuition increase is 4 percent, the lowest increment in at least 30 years. The cost of tuition, room and board for next year will be approximately $27,750.
Likewise, she said, staff salaries, the financial aid budget and other expenditures on programs and maintenance cannot be easily trimmed.
The faculty salary pool is increasing by 7 percent. Two years ago, faculty salaries were frozen in order to balance the budget.
The financial aid budget, which is the fastest rising cost the College faces, will be $800,000 larger next year than it was this year. Most of the new financial aid money is going to decrease the self-help portion of financial aid packages.
In February, Dye held a forum for all College employees, which filled Finney Chapel. There, she explained the cuts much as she had to the faculty two months earlier.
Also in February, division deans announced the target savings from cuts to their departments. The College of Arts and Sciences had $300,000 of trimming to do. The Division of Student Life and Services had $600,000 - or around 10 percent of the divisional budget - to trim. The Conservatory had to save slightly more than $100,000.
Other savings are coming through reductions to the number of temporary non-student workers hired and through a change in the way the College does bookkeeping for a retirement plan.
The retirement plan change was the one item that the Board of Trustees wanted more information about at its March meeting. The Board is set to vote on a final budget at its June meeting.
As of early May, Dye said that it appeared no more positions would be cut to accommodate the savings goal.
Several positions in the Division of Student Life and Services were cut May 3, in a move that took employees in Residential Life and Services and in the Student Union, the two departments taking the brunt of the cuts by surprise.
Two administrative assistants jobs were cut in both departments, but the people who filled them will all stay with the College in other capacities.
Dye said she is pleased with how the reduction process turned out. "By and large it worked extremely well," Dye said. "I know of no place that has managed to do something like this as quickly."
Area Amount Changes in the accounting practices for post-retirement health benefits $400,000 Temporary (non-student) employees 430,000 Library and Computing Center 150,000 Admissions and Financial Aid administration 150,000 The College of Arts and Science 330,000 The Conservatory of Music 125,000 Controller's Office 60,000 Offices of Development and Communications 120,000 Operations Division 300,000 Division of Student Life and Services 600,000 Restructuring financial administration 230,000 Total $2.9 million
Copyright © 1996, The Oberlin Review.
Volume 124, Number 25; May 24, 1996
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