Date: Thu, 13 Nov 2008 15:51:13 EST
From: Provost Barry Scherr, Vice President Adam Keller
Subject: Dartmouth's Budget Planning Process
Dear Members of the Dartmouth Community:
As President James Wright has informed you, Dartmouth, like most colleges and universities, is facing long-lasting effects from the worldwide financial crisis. It is prudent that we begin to deal with the budgetary impact of this situation, and this message outlines the process that we intend to follow in the coming weeks. There will be further communication with the Dartmouth community as we learn more during the process.
We are committed to working with you through this challenging period to assure that Dartmouth will continue to be a strong and vibrant intellectual institution, as well as accessible to the most promising students of all backgrounds.
October was a particularly volatile month for the financial markets. While the Dartmouth endowment performed much better than the stock indices, its value continued to fall. As a result, we have revised projections about future income from our endowment, on which we rely for more than a third of our operating revenue.
President Wright has asked us to outline the approach we are taking to reduce
expenses in the College. Our target is to reduce expenses up to ten percent, or
$40 million over the next two fiscal years. Each of the professional schools
will also be taking any necessary measures to ensure that their budgets are in
We plan to take the following actions in order to achieve a balanced budget
through cost reductions that can be sustained into the future:
* Effective immediately, we will freeze external hiring of staff from outside
the current pool of Dartmouth employees. This will provide opportunities for
existing staff to transfer into open positions that need to be filled.
Exceptions may be made by the provost, the executive vice president and the
professional school deans under extraordinary circumstances.
* For this current fiscal year (ending June 30, 2009), we seek to reduce
spending by five percent through reductions in every aspect of discretionary
* We have asked the vice presidents and deans to recommend changes in each of
their areas that will achieve substantive cost savings in FY 2010 and 2011.
These changes may include the elimination or reorganization of programs, or
reductions in service levels. We have asked divisions and departments to
develop contingency plans to reduce their budgets in those years by five
percent, ten percent and fifteen percent below what is currently projected.
This broad range of options is important in order to allow us to make
programmatic adjustments on a strategic basis, as opposed to less
well-articulated reductions. In addition, multiple options offer us flexibility
if the economic impact on Dartmouth changes dramatically.
* The dean of the faculty and the deans of the professional schools, in
conjunction with the provost, will evaluate current plans for filling faculty
positions and adjust them to reflect new financial circumstances. This will be
done in the context of available funding and the clearly articulated long-term
goal of maintaining a competitive faculty with the resources to support
academic and creative endeavors.
* We will evaluate the implementation plans for all new programmatic
initiatives and capital projects and adjust them to reflect the new financial
- We propose to complete projects where construction is sufficiently under way
to make a slowdown impractical: the Class of 1978 Life Sciences Complex, the
Tuck School Living and Learning Complex and the Michael J. 1979 and Cynthia
Ginn 1980 Biondi Ballpark.
- We will delay some projects for two to six weeks in order to conduct further
analysis to assess the feasibility of moving forward: the Visual Arts Center,
the renovation of the West Stands at Memorial Field and Buchanan Hall.
- We will complete planning already under way for projects which would then
require additional financial resources before proceeding to the next phase:
Class of 1953 Commons and the C. Everett Koop Medical Science Complex.
- We will defer projects where we recognize that sufficient funding is clearly
not in place: the replacement of Thayer dining hall and the parking lot on
As a result of the comprehensive review of programs, we anticipate that there
will be programmatic reductions and changes in operations and service levels.
As a result, we expect that there will be fewer staff employees at Dartmouth in
the coming years. Before implementing any changes, we will consider the impact
on people and services, and we are committed to supporting those affected
through any transition period.
We will begin formulating ideas to reduce the budget as soon as possible
through a consultative process involving faculty, staff and students. In
particular, we will engage the Faculty Committee on Priorities and the Student
Budget Advisory Committee to provide input to the College Budget Committee. We
have put in place opportunities to offer suggestions through email, the
Dartmouth website and physical boxes on campus (for details, go to
http://www.dartmouth.edu/~finance). We hope that staff at all levels of the
organization will work together in their divisions to provide input. We believe
that many of the best ideas for improving efficiencies and practices will come
from those engaged in our day-to-day work. Please do not hesitate to share your
In previous years we have tried to have the final budget for the next fiscal
year in place by early May. Despite the need for frequent consultations
between the Budget Committee and the various departments, we will attempt to
expedite that process and finalize plans over the next three months. During
that time we are committed to communicating clearly about the financial
environment and our progress and plans.
We understand that this is a difficult financial period for Dartmouth and for
many of those in our community. Hard decisions lie ahead. We will need to use
our resources wisely and creatively in order to keep us moving forward and
preserve the very distinctive characteristics of Dartmouth that make it a
special place to learn and work.
Thank you very much for your support and assistance in addressing these
Executive Vice President,
Finance and Administration