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January 18, 2013
Colleagues:
As we highlighted at Spring Convocation on January 10, the times
for higher
education are dynamic and challenging. Our students and their
families continueto face economic uncertainties, and many are
concerned about their ownpersonal fiscal cliffs. Now is the time to
stretch our expectations and ourselvesso that we build stature,
strength and flexibility for the future.
As a result, we cannot overemphasize the importance of teamwork
to growrevenue in ways that match our needed investments in the
quality of ourprograms and operations.
Without the strength that comes from growing enrollments,
generous gifts, andan entrepreneurial spirit, we will not
accomplish the bold and ambitious missionof transforming our
students for individual excellence and global citizenship.
During Spring Convocation we discussed the trends in our
enrollments, notingthat in too many cases the growth has been
stagnant and in some cases trendingdownward. We also discussed that
we have stretched to make neededinvestments in facilities, people,
programs, services and technology. Yet ourrevenues have not
stretched to match and we have an opportunity to
self-correctmid-year.
As promised, here is an update on our budget situation at the
half-way mark of
the academic year and where things stand today.
Budget Process
Websters budget is projected based upon enrollment targets to
achieve thegrowth necessary for a thriving university, as described
by the 2015 StretchGoals.
When these growth targets are not achieved, revenues fall short
of the fundsnecessary to match the needed investments we have made
in people, facilities,
programs, services and operations.
That requires targeted mid-year reductions to ensure effective
stewardship offunds. This in coordination with proactive strategy
development will help uscounter the gap between projected and
actual enrollment numbers.
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FY 13 Budget Realities
If current trends continue, we are projecting revenue that is
$12.2 million belowour revenue goal for the fiscal year. Even
considering our budget contingency of$3.6 million, we still have a
significant shortfall. This shortfall is projected to
generate an operating margin $2.7 million below our required 5%
operatingmargin. To ensure that we meet this 5% operating margin,
we will makestrategically targeted reductions based upon these
factors:
Material size: Targeted areas for reduction are large enough
that savingsachieved are significant. Ease of implementation: Where
possible, targeted areas are easy to manageand control and savings
are aligned with areas of strategic importance. Protect the
mission: It is essential to continue to provide high
qualityacademic programs and services to students.
The leadership of Academic Affairs and Vice President/CFO
GregGunderson will collaborate to review target reductions, examine
exceptions andrecommend implementation of the needed reductions to
Provost, Senior VicePresident and COO Julian Schuster.
FY13 Planned Reductions (through June 30, 2013) include:
5% general expense budget reduction for all budget lines except
non-discretionary expenses (salary lines and utilities) Restricted
hiring. While some key positions will be replaced, all other
open
positions will held open through June Hold travel and
entertainment expenses. If current spending continues, wewill
exceed this budget line by 12%. All non-essential travel should be
heldthrough June Cap new classroom furniture spending at $150K Cap
deferred maintenance spending at $140K Cap new site setup spending
at $250K
Proactive Strategy Development
We are taking proactive steps to grow our revenue, focusing on
improved
interactions with current and prospective students.
Rolling out the new Webster.edu launched last fall Improving
data-driven capabilities with new Datatel enrollment system
Implementing new brand marketing campaign Enhancing our HR strategy
with a focus on positions and activities aimed atrecruiting
prospective students
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Engaging faculty and staff to develop ideas and recommendations
for someof our most pressing issues, including enrollment, through
the Working Groups
We were delighted that over 300 people volunteered to
participate in the WorkingGroups. The Working Group Chairs will
report out on their recommendations in
an April Town Hall meeting. Colleagues, we each play a role in
managing ouravailable funds effectively and stretching ourselves to
gain future strength thatbenefits our students and our institution.
If you have other ideas or suggestionson how we might contain costs
or grow revenue, please go to:http://blogs.webster.edu/townhall/
and enter in the password: gorloktownhall.Thank you for your
continued dedication and support of our great work atWebster.
All the best,
Beth StroblePresident, Webster University
Julian SchusterProvost, Webster University
