To: Alumni, Parents and Friends
From: Kenneth P. Ruscio
When Washington and Lee's Board of Trustees met in Lexington last month, economic issues were at the fore of our discussions, and I want to continue to inform you about the University's situation.
As I have indicated in past communications, I am convinced that Washington and Lee's financial status remains better than most of our peers. At the same time, we must acknowledge that we are in new territory in terms of the economic outlook.
Careful planning by the trustees, beginning in 2001, is allowing us to avoid some of actions that other colleges are being forced to take--for instance, layoffs, cancellation of courses or even majors, suspension of some student services, etc. The trustees' decision to create reserve funds, and their adoption of a formal policy to designate the purpose and targeted amounts of these three funds (capital, operating and trustee reserve), are allowing us to negotiate these unsettling economic times.
In 2009-10, we will suspend the planned allocations to those reserves. This permits us to counter somewhat, though not entirely, the projected $10 million revenue shortfall for 2009-10. This shortfall is due to the decline in the market value of the endowment (an 18.5 percent decline through January), a drop in the level of private support and the lower short-term interest rates.
The fiscal discipline of the past allows us to adopt tuition increases that are below the projections in our long-range planning (4 percent for undergraduates and 5 percent for law students) and to scale back increases in room and board, while increasing the student financial aid budget by 18 percent over the projections. Our pool for faculty and staff salary increases will be 2.9 percent, as we continue to bring these salaries up to competitive levels with our peer institutions to meet objectives of the strategic plan.
Our admissions picture appears strong, but we will not know how things play out for several weeks. We have had a strong Early Decision response, with 237 students accepted under the Early Decision I and II programs. Applications overall are comparable to a year ago, when the University broke records with slightly fewer than 6,400 applications.
Even as we make these adjustments, all departments are implementing reductions in their operating budgets of approximately 5 percent to such items as travel, entertainment, printing and publications, library acquisitions, postage and subscriptions. We will not add new positions unless they are externally funded, and we have delayed all internally funded capital projects unless they are necessary for meeting commitments for faculty hires, critical equipment repair and replacement, and safety.
On Feb. 26, Vice President of Finance Steve McAllister and I conducted two town hall meetings with members of the University community to give them the same kind of details that I am sharing with you here. In addition to these meetings, we have established this Web site with materials related to the economy.
What we are facing is unprecedented, but I am confident that, through careful planning in the past and with the continued support of the University community, we will be successful not only in meeting the goals of our strategic plan but also in protecting our core mission.