Goshen College adjusts personnel to balance budget for 2010-11 in challenging economic climate

GOSHEN, Ind. – To achieve long-term goals and strengthen its mission, Goshen College is making necessary decisions to address a larger than normal budget challenge for 2010-11 and into the future.

"The recession has been far worse than could have been imagined and that's causing pain in many communities and at many universities and colleges, and we have not been immune," said President Jim Brenneman. "The college remains committed first to our students and our vision for an intercultural, international, innovative and integrated learning community."

To be responsible and good stewards of resources, Goshen College has had a commitment to balancing its budget every year. After a process of finding cost savings in all non-personnel related areas over a couple of years and freezing all salaries since June 2009, "at this time – though it is difficult and painful – we need to make adjustments to our personnel levels because our projected expenses are higher than our revenue," said Vice President for Finance Jim Histand.

As part of a first phase in addressing a deficit in the 2010-11 budget, $1.1 million will be saved by eliminating 15 full-time and 14 part-time administrator and staff positions, as well as through a variety of other consolidations and reductions of hours of positions.

There are 225 total full and part-time administrators and staff employed at Goshen College (in addition, there are 110 full and part-time teaching faculty). The personnel adjustments will affect most administrative offices in some way. Histand said, "These reductions will have impacts across the campus, and possibly for the wider community. For example, we expect the number of events on campus will be reduced." The college has a planned total budget of $33.9 million for 2010-11, compared to $35 million in 2009-10, and does not have a freeze on hiring.

"We are thankful to each of these colleagues who have contributed a great deal to our campus during their years of service," said Histand. "They have all done good work and none of the positions were eliminated due to job performance issues. Rather, decisions were guided by the need to reduce our budget, resulting in a re-prioritization of services and programs according to the college's mission and current and future financial health."

The college is providing resources for persons whose jobs are being eliminated or reduced. In addition to providing adequate notice to individuals about the position reductions and eliminations, Goshen College will provide severance pay to those whose jobs were eliminated and assistance in seeking other employment, including letters of reference, information from the Human Resources Department regarding job openings at the college and assistance from the college's Career Services Office.

Salaries of all employees will remain flat for the 2010-2011 academic year and the college's contribution to retirement accounts will be reduced. As well, the President's Council will be taking additional voluntary salary reductions.

"The factors contributing to our need to make these changes at this time are multiple. Some of the factors are expected, some unexpected. Some are short-term impacts and some are longer-term structural issues which have led to this budget imbalance," said Histand.

Short-term factors all relate to the overall economic recession, including the college's decision to increase student financial aid in response to higher need by students and their families. The college has budgeted $8.4 million for 2010-11 financial aid from the operating budget, compared with $6.9 million spent in 2008-09. "We continue to be committed to ensuring that Goshen College remains affordable for our students," said Histand, noting that the amount of financial aid the college gives per student has grown faster than tuition increases.

As well, like most other colleges and universities, the college's endowment decreased in value from $125.3 million in June 2008 to $85.4 million in June 2009 as a result of the drop in the stock market, causing a decline in the endowment payout. As of March 2010, the value of the endowment stood at approximately $104 million. And though student retention continues to be excellent overall, it was lower than anticipated based on prior years.

The long-term factors relate to the college being considerably larger in terms of physical campus and staffing than colleges with similar enrollments. The college's enrollment did not grow as projected over the past two decades and its staffing is consistent with an institution of more than 1,200 students, though closer to 900 full-time students are enrolled. In addition, the college's commitments to fiscal responsibility include maintaining quality facilities and timely repayment of construction bonds.

"These are painful adjustments, but the college is coming at this from a position of financial strength, which could decline over time if changes aren't made. Instead we desire and plan to maintain and increase our financial strength," said Histand. "In some ways, this strength has allowed us to delay these difficult decisions."

To determine the needed changes for the 2010-11 budget, the college's President's Council conducted a comprehensive, systematic review of operations – including staffing levels, services, organizational structures and cost savings – over the past few months.

"Teaching and learning are central to our student-focused mission. So the criteria for budget reductions was based on the need to retain the quality education we provide and maximize efficiency," said President Brenneman. "This strategic refocusing of our budget emphasizes what is core to the educational experience we offer."

As part of a second phase of the college's budget realignment, leadership has begun the process of restructuring/prioritizing academic programs for the 2011-2012 school year. "We anticipate this process will result in a likely reduction in teaching faculty positions," said Vice President for Academic Affairs Anita Stalter,"but also possible enhancements to distinctive programs." The campus will be informed of any changes by early November 2010.

In addition to these strategic reductions of expenses, the college is continuing to work at increasing revenue by recruiting more students who will succeed at Goshen College. An additional counselor position has been added in the Admission Office to improve outreach to key prospective students. The fall 2009 first-year enrollment of 238 students was the largest for the college in 27 years, though because of the economy, there was also considerable more financial aid need in the class. The college is not expecting the fall 2010 class enrollment to exceed last fall's, said Vice President for Enrollment Management Lynn Jackson.

Support by donors to the college continues to be strong. The college's Development Office has also persevered through the recession and anticipates 2009-2010 giving to the unrestricted Goshen College Fund — which supports the college's operating budget — to match or exceed the college's three-year average, according to Vice President for Institutional Advancement Jim Caskey.

President Brenneman said, "With God's help, we are optimistic that the best of what Goshen College is and has been will remain firmly in place for students. And regardless of variations in budget levels, we will continue to provide a transformative Christ-centered liberal arts education."

Editors: For more information about this release or to arrange an interview, contact Goshen College News Bureau Director Jodi H. Beyeler at (574) 535-7572 or jodihb@goshen.edu.

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Goshen College, established in 1894, is a residential Christian liberal arts college rooted in the Anabaptist-Mennonite tradition. The college's Christ-centered core values – passionate learning, global citizenship, compassionate peacemaking and servant-leadership – prepare students as leaders for the church and world. Recognized for its unique Study-Service Term program, Goshen has earned citations of excellence in Barron's Best Buys in Education, "Colleges of Distinction," "Making a Difference College Guide" and U.S. News & World Report's "America's Best Colleges" edition, which named Goshen a "least debt college." Visit www.goshen.edu.