Budget is a team effort; goals set for the future

October 29th, 2009

John Carroll University merged the town-hall style presentations of the finance division and enrollment division of the University. This year, Brian Williams, vice president for enrollment, and Richard Mausser, vice president for finance, presented information from their respective departments together.

The goal was to signal how interdependent JCU’s projected operating budget is on enrollment because, as Mausser pointed out, JCU is primarily a tuition-driven institution.

The downturn in the economy continues to affect the budget of the University, which is currently projecting a $1.75 million dollar deficit for the 2009-2010 fiscal year. However, the 2008-2009 fiscal projection estimated a $3 million deficit and the actual numbers showed a $300,000 surplus at the end of that fiscal year.

JCU’s operating budget is funded primarily through tuition. When the economy crashed, Williams said the office of admissions lowered their goal of incoming freshman in the class of 2013 to 720 students, but only 661 arrived on campus this fall.

That discrepancy in projected students to actual students is the cause of the deficit; in May of this year, Mausser presented a balanced budget to the Board of Directors that assumed an incoming freshman class of 720 students.

Williams and Mausser both discussed the tension of how to best project an accurate and balanced budget: should the University cut costs or raise tuition to cover the shortfall in projected revenues?

If tuition is raised, especially in a bad economic climate, it can push students toward lower-priced public colleges and universities, according to Williams. Cuyahoga Community College’s enrollment, for example, is up 40% this year.

Also, according to Mausser, the University cut about $4.0 million in expenses last year, and worries about the impact on students of further cuts.

The faculty, staff and administration will be having conversations with the Rev. Robert Niehoff, president of JCU, next week to get their input on the best way to move forward.

Despite all of this, Mausser stressed that the University’s balance sheet is strong because JCU’s investment assets exceed debt obligations at a ratio of about 233 percent—a ratio that is up from 187 percent in 2004.

The University’s endowment also took a severe hit of about $70 million in the last fiscal year, but has since rebounded. “We are still strong institutionally despite that loss in our endowment,” Mausser said.

Before the markets crashed, the endowment was at about $180 million—that dropped to a low of $110 million but is currently back up to about $146 million.

JCU instituted a cost-savings plan last spring, which among other things, included a new medical plan for the faculty which saved about $800,000; furloughs for administrators which saved about $750,000 and a reduction in part-time faculty.

However, enrollment is now below 3,000; JCU’s enrollment peaked at about 3,500 undergraduate students in 2001.

The goal, as stated by both Mausser and Williams, is to find a way to increase the incoming freshman classes. The Rev. Niehoff suggested, in a separate and exclusive interview with The Carroll News, that one way to do that might be to expand recruiting more strategically into the northeast Boston-Washington High School corridor.

As aforementioned, conversations will continue between staff and faculty and the Rev. Niehoff on how to best do that, but at last weeks meeting, among different ideas that were floated, were to decrease the size of the University and try to find a way to expand JCU’s academic programs that will attract more working-adults to take professional classes.