Williams College has announced a budget of $205 million for the 2010-11 fiscal year, following a meeting of the Board of Trustees that took place April 9 to April 11. The budget provides for increasing financial aid costs as well as a salary increase for all employees (see “Faculty, staff to receive 2% raise”), while funds for other departments have undergone cuts across the board.
According to Provost Bill Lenhart, the $205 million figure accounts for the total operating budget, but does not include the costs of the retirement incentive program, which will depend on how many faculty and staff members ultimately choose to utilize the program.
The $205 million operating budget is similar to the amount spent last year. “Last year’s budgeted expenditure level (pre-financial crisis) was originally higher, approximately $216 million,” Lenhart said. “Over the course of last year we were able to reduce spending in a number of ways, including early implementation of some of the cost-saving measures that were identified for adoption as part of this year’s budget. This helped the College to move from the $216 million budgeted figure to the $205 million actual spending level.”
Last year, the $205 million budget called for spending approximately 6 percent of the endowment. The administration has been cognizant that keeping the endowment avail rate close to 5 percent is considered sustainable. President Falk noted the trustees kept this goal in mind when discussing the budget. “We won’t know the precise numbers because we don’t yet know how the endowment will perform between now and July 1, but our projection is that we will be reasonably close to that number,” Falk said.
While the overall budget figure is not drastically different from last year’s, Lenhart emphasized that this is due to striking a balance between the budgets that have been cut and those that needed to grow, particularly financial aid. The financial aid budget, along with the 2 percent salary increase for employees, accounted for approximately $4 million of spending increase. “Offsetting these increases are decreases in managers’ budgets spending, as well as increases in tuition, fees, room and board,” Lenhart said. Managers’ budgets are made up of non-compensation spending on department or administrative office operations, such as food, speaker fees and utilities fees.
Lenhart noted the importance of taking into account the cumulative effects of cuts in managers’ budgets, which decreased again for the upcoming year after being cut last year as well. Managers’ budgets decreased by an average of 15 percent from last year to this year, as some departments were asked to cut more than others.
According to Dean of the Faculty Bill Wagner, who oversees budgets for academic departments, the graduate programs, athletics, the performing arts and faculty support, non-compensation expenditures was reduced by 6.3 percent compared to the current fiscal year.
The total budget for the Dean of the Faculty’s office for the fiscal year 2010-11 will be $9.1 million, Wagner said. He noted that reductions for individual departments, programs and other budget areas varied between 6 and 10 percent, adding that this year’s budgets were already cut by 12.7 percent from the previous year.
“Developing budgets that substantially reduce expenditures and their subsequent growth is a process that requires thoughtful planning and difficult tradeoffs,” Lenhart said of the process, which, due to the financial crisis, has drawn more attention than in the past. “In addition to heightened attention from groups normally involved, especially senior staff and the Committee on Priorities and Resources, other efforts were made to provide input into the decisions being made, such as a group of faculty in key governance positions who were assembled to advise the dean of the faculty in the setting of that office’s rather large and complex budget,” he added.
Lenhart reaffirmed that the College’s budgeting method continues to be to “protect our ability to support our highest-priority activities.” He cited the Health Center as a department that has been cut less than average over the two-year period of budget shrinkage.
Reflecting on the budget approval process, Lenhart expressed satisfaction with the outcome. “Ultimately, through a great deal of thoughtful work across the College, we were able to assemble a budget that met the ambitious targets agreed to with our board [of trustees] while protecting our ability to offer our students an outstanding education,” he said.
Falk agreed with Lenhart’s statement, emphasizing the community nature of the budget decisions. “I have been very impressed by how leaders of units across the College have looked creatively for ways to operate more efficiently, to do more with less so that we could live within our resources while remaining faithful to our priorities,” he said. “Some of the cuts have been painful, but by the same token we’ve also looked for changes that both save money and allow us to do things better. The College is in excellent shape, and will continue to provide the superior education and rich and diverse student experience that is our hallmark.”
According to Greg Avis ’80, chairman of the Board of Trustees, Falk showed strong leadership throughout the recent Board meeting. “He’d been on the job just a little over a week, and it was a fantastic meeting,” Avis said. “There can be a danger of being either too active or too passive, but Adam struck a wonderful balance between the two.”