College announces first round of cuts

Author: Kelly Janis

After months of deliberations by the Budget Oversight Committee, College President Ronald D. Liebowitz publicly announced the first set of a series of cost-cutting measures aimed at reducing expenditures by $20 million over the next several years to counter a mounting budget deficit.

The College's endowment - upon which it relies to support 24 to 25 percent of its budget - has fallen to $684 million from a high of $936 million in June 2007, due largely to a decline in donor gifts amid the global financial crisis.

"Our wealth is at 2004 levels, but we're operating in a 2009 cost structure," said Chief Financial Officer Patrick Norton during an open meeting at which he, Liebowitz and Acting Provost Spears elaborated on the cuts and fielded suggestions, questions, praise and criticism from a packed audience in the McCullough Social Space.

Emphasizing the manner in which the losses will compound, Liebowitz urged swift action.

"The sooner we remove the budget deficit, the better," he said.

When it was approved in 2006, the Strategic Plan projected a series of 4.9 percent annual increases in the comprehensive fee, which would bring the figure to approximately $51,621 for the coming year. In light of the current fiscal climate, however, Liebowitz said that when the Board of Trustees deliberates on the increase next week, it may be reluctant to adhere to that model for fear that it would impose too heavy a burden on many families already expected to require additional financial aid.

Regardless, the financial aid budget will be cut by approximately $150,000, mostly by increasing the summer and academic-year work expectations for incoming domestic students, whose full demonstrated need will still be met.

"I don't think you can put a price tag on being need-blind," Liebowitz said, estimating that fewer than 30 colleges and universities in the nation truly abide by such a policy. "To go off need-blind would be to pay a huge price in the eyes of future applicants, especially if we seek socioeconomic and regional diversity."

Dean of Admissions Bob Clagett agreed.

"It's a luxury that we don't have to go to Student Financial Services and ask them - in the way that happens at thousands and thousands of other colleges - how much admitting a particular student is going to cost us," he said. "We can admit the most qualified applicants in the pool."

Less aid will be available to international students, however, and their financial need will be taken into consideration during admissions. Liebowitz estimated that this will result in seven to eight percent of the class of 2013 being comprised of international students, rather than the typical average of 10 to 11 percent. He expects that, despite this, the College will still reach its goal of a student body compromised of 10 percent international students.

The College will also eliminate the MiddView program for the class of 2013, dispensing with overnight camping trips in favor of a less expensive model that "takes advantage of resources closer to campus."

While Liebowitz said MiddView is a "big loss" in terms of the "small group bonding experiences" it offers, "incoming students haven't experienced it, so they aren't going to miss it."

Also under scrutiny are auxiliary operations such as 51 Main, the Snow Bowl, Ralph Myhre golf course, Juice Bar and Grille.

"They don't make money for the College," Liebowitz said. "They don't even break even."

In an effort to mitigate this, the College has closed Rehearsals Café, and plans to reduce the discounts offered to employees and other "friends of the College" at the Snow Bowl and golf course. Moreover, beginning this week, the Grille and Juice Bar will delay opening until 11:30 a.m. on weekdays and 5 p.m. on the weekend.

While the College is striving to preserve its academic quality, the Educational Affairs Committee is currently evaluating how to scale back the cost of Winter Term. Although this is mostly likely to occur at first by minimizing the number of visiting professors, Liebowitz expressed wider misgivings about the model at large.

"Many students claim they applied to Middlebury because of it," Liebowitz said. "Cynics say it's a great time to ski."

He said the faculty debates the merits of Winter Term every few years, typically culminating in a very close vote.

"Most of the people who support it are those who have never taught it," Liebowitz said. "At least from an energy and cost perspective, it would be easier to go to two semesters of 14 weeks."

While there are currently no official discussions to this effect underway, Liebowitz said the possibility is not off the table.

"We might get there," he said. "If the economy keeps going down, I wouldn't be surprised if this comes up."

Visiting Winter Term professors are not the only employees whose jobs are on the line. If the College is unable to cut staff 10 percent by attrition, it may implement an involuntary reduction of the work force, particularly in dining services.

Spears said the College was making every effort to avoid layoffs, and was willing to explore "creative" strategies such as "lending staff members to various entities in town" while the College continued to pay their salaries.

Among the questions which generated the most discussion at the meeting was whether members of the College community would be informed when areas with which they are affiliated had been evaluated and "passed," or whether "this feeling of being on the chopping block" would "persist indefinitely."

"We're looking at everything," Norton said. "We still are. We've made a lot of progress, but we still have a long way to go."

Norton said he and his colleagues were striving to operate as transparently as possible.

Doug Perkins, Administrative Operations Manager at the College's Museum of Art, took issue with this assertion. He said employees at Rehearsals Café were blindsided by the news that the operation would close during a dining services meeting held the day before the decision took effect.

"The people who were affected were never really considered, never really questioned as to how it might impact them," Perkins said. "The transparency just wasn't there."

He asked whether staff members should constantly wonder whether their jobs will exist the next day.

Liebowitz became visibly agitated in response.

"First of all, Doug, transparency doesn't mean putting everything up to a vote," he said. "That is not transparency. Transparency means being open about the process. As I said before, the goal here is to make changes as fast as possible to preserve jobs. All right? The bottom line is, the quicker we move to make our recommendations a reality and save budget dollars, the less we have to do down the road."

Liebowitz said Rehearsals Cafe is "not a new issue."

"Rehearsals has been losing money for years," he said. "We've been talking about closing Rehearsals for years. To act surprised that this might be on the block when we're looking to cut $20 million is something disingenuous, at least in my view."

Liebowitz reiterated his stance that transparency cannot be equated with voting.

"That way, we'll never reach $20 million," he said. "Never. So I appreciate the issue of the staff not knowing where they were going. Perhaps they should have been talked to before the meeting with dining. But transparency doesn't mean answering to the folks in the CFA about how this is going to affect their programs and whether or not we should do it."

Liebowitz said the best way for students to be helpful is to "lower their expectations."

"Their expectation is to have everything they've ever had and more," he said. "That's ambitious, but not realistic."

Liebowitz
said he recently received an e-mail from a parent who resented the idea that her child would not have the same "Middlebury experience" as students who attended the College five years ago.

He reminded her that the College and the economy at large are much different than they were even a short time ago - and that the changes are far from over. The budget will see an estimated $2.5 million in additional cuts before the end of the fiscal year.

"Where's the bottom?" Norton asked. "January was a brutal month in the markets, and February isn't starting out much better."

"Even if the economy turns around," Liebowitz said, "it will take time to rebuild what we've lost."