Brown Calls for Balance to Survive Recession

Click on the video above to watch the president’s town meeting.

Emphasizing the need for balance and a commitment to the quality of a BU education, President Robert A. Brown held a town meeting for faculty and staff yesterday to address the University’s budgeting efforts for the coming fiscal year. Click here to read his speech.

The meeting followed a letter to faculty and staff last week in which Brown revealed that BU’s plan to increase the University’s financial aid reserves has left a $10 million budget gap for fiscal year 2010, which begins on July 1. In the letter, Brown said that the University’s top priority was to make a BU education affordable for students and their families and to maintain the quality and breadth of its academic programs.

At yesterday’s meeting in the George Sherman Union’s Metcalf Hall, he reiterated the importance of providing more financial aid given an increased demand among both current and incoming students.

“Since September, we have been working to position BU for the financial challenges we are going to face that may worsen in the coming year,” Brown said. “Many of our concerns, unfortunately, have materialized.”

The University has received 630 requests for midyear financial aid reviews and has seen a 15 percent increase in financial aid requests for the incoming class. Only 4 percent of the financial aid reserves is provided by BU’s endowment; the rest comes from the operations budget.

Brown also outlined the cost-cutting measures noted in his letter, which include the current hiring freeze, a reassessment of capital expenditures, and the reorganization of seven service areas: communications and Web-based publications, financial and administrative services, research administration, alumni relations, event coordination, the PC cluster, and desktop service and information technology. Working groups are reviewing the seven service areas to highlight redundancies, and they expect to recommend reorganizations to the president’s office by March 1.

The president said that there is “no doubt that some positions will be eliminated in the reorganization,” but that “BU will navigate the recession and emerge a stronger institution when it’s over.”

He also welcomed organizational suggestions, which should be submitted to president@bu.edu, and took questions from the audience.

Faculty and staff in attendance had mixed reactions to the meeting. Several declined to be interviewed, saying that they feared for their jobs, but others said they were encouraged by the administration’s effort at transparency.

“I feel a little bit more assured that the University is going to keep us as informed as they can and that the decisions have been well thought out,” said Paul Hughes, the Residence Life area director for Warren Towers.

Others said they planned to respond to Brown’s call for input from across the University.

“We need to be more aggressive about voicing our specific concerns, because this is a very large university and the higher-level administrators are not aware of cost-reduction opportunities in the smaller corners of campus that could help reduce the need for layoffs,” said Susan Cleaver, director of fiscal affairs in the dean of students office. “I’d like to see more of a collaborative effort to increase efficiencies without eliminating jobs.”

Excerpts from the question-and-answer session are below.

Is there any indication of how large the incoming class will be?
Brown said that the application rate “is very healthy” and that approximately 38,000 students have applied. The admissions office expects to meet last year’s applicant rate; however, the number of students requesting financial aid has increased 15 percent.

Is there a plan to reach out to alumni to boost resources?
Brown declined to provide any figures, but said there is “very good news” for alumni giving for the first half of the fiscal year. However, donors would not be asked to give “to plug a budget gap,” he said. “You ask them to support the core mission of the University.”

Will there be a tuition increase?
“We are very sensitive that there are freezes and layoffs going on around the country,” Brown said, leading to a “more moderate tuition increase than you have seen in the last several decades.”

Will the names of members of the working groups be announced?
Brown does not plan to announce the names to prevent “lobbying” for departments and institutes.

Has there been any discussion of early retirement options or a reduced workweek?
There is “nothing concrete” determined about early retirement, Brown said. A reduced workweek is not an option, he said, because it is not sustainable over a number of years.

Will there be cuts in public safety at the Medical Campus?
Joseph Mercurio, the University’s executive vice president, said that public safety at the Medical Campus is shared by BU and Boston Medical Center. He said that from the University’s perspective, public safety will be exempt from both the hiring freeze and any other budgetary restrictions.

Are there projections for expected job loss numbers?
Not at this time.

Will there be cuts to employee benefits? In what areas?
“We’ll be continuing to look at benefits,” Brown said, to minimize the impact on employees. “We are not looking at large changes in the proportion of health-care costs.”

Will there be faculty layoffs?
No. Brown said that faculty quality was critical to the core academic mission of the University.

What percentage of the overall budget does the $10 million comprise?
On the Charles River Campus, excluding external research funding, $10 million is 1.5 percent. The Medical Campus has a $1 million gap, and that is approximately 1 percent of the operating budget, excluding external research funding.

Are there efforts to secure financial aid for international students?
Brown said that at some point, financial aid for international students will have to be considered, but that this may not be the right time.

Will there be funding for graduate students?
Graduate student funding will be at the discretion of individual schools and colleges.

Is it necessary to increase tuition?
“It’s a balance between giving a lower number for everyone versus having financial aid for students who have need,” Brown said.

Has an enrollment increase been considered?
No. Brown said the University cannot adequately serve more students.

Jessica Ullian can be reached at jullian@bu.edu. Chris Berdik can be reached at cberdik@bu.edu.