Message from the President
February 5, 2009
Dear Members of the Holy Cross Community,
The Holy Cross Board of Trustees recently met, and I am writing today to update the College Community on important matters related to the current economic crisis.
As I wrote to you last fall, Holy Cross is currently in a solid financial position. This is thanks not only to our strong balance sheet and prudent budgeting practices and controls, but also to you. I’m grateful for the discipline and dedication you exhibit every day, and for the sacrifices you make in the face of current economic constraints.
However, we are not immune from the turmoil affecting so many areas of our lives. As you are well aware, there is no way to tell how long the current crisis will last or how deep it will be.
Last year at this time, our budget planning process assumed that we would have a baseline 7% return on our endowment. As at every college and university in the country, our endowment is now down sharply—as much as 28% over the last year. Because of built-in controls on our endowment spending, we do not expect to see the full force of the impact on our budget until 2011. Nonetheless, the downturn has affected our current operations, and we must make some immediate changes here on campus.
Holy Cross is committed to meeting full demonstrated financial need for our students and the Board of Trustees affirmed that commitment. In anticipation of decreasing levels of endowment support, increasing financial aid requests, our commitment to maintaining competitive compensation and benefits, as well as other financial contingencies, we have made significant budget reallocations for the 2010 fiscal year. As a result, we had to close an unanticipated budget gap of approximately $3 million for fiscal 2010, and must be prepared for additional—and perhaps more severe—cuts in the years ahead.
Fortunately, the College has not had to lay off any faculty, staff or administrators; nor have we needed to institute an across-the-board hiring freeze. However, I am asking that when a job vacancy occurs, the affected department explore all alternatives to filling the position, including redistributing responsibilities or outright deferment wherever possible. I have instructed Human Resources to require justifications be submitted for every position that becomes open; and we will carefully review all proposals for replacement hires. Our hope is that we can garner savings through natural attrition as much as possible. The salary pool for raises will not be as large as in recent years, but we will carry through on market adjustments begun this year.
While current construction projects, including the renovation of Haberlin Hall, will continue, as will our ongoing commitment to ensure the upkeep and maintenance of existing facilities, all other planned major capital projects have been postponed. We have also postponed a planned debt issue, the proceeds of which would have been used primarily to finance a new residence hall.
All divisions have submitted proposed budget cuts for their operations. These cuts range from reductions in operating expenses such as subscriptions, travel and professional development, to consolidation of some services, to moving some publications to Web-only distribution. I have asked Michael Lochhead, vice president of administration and finance, to communicate the details of the overall budget cuts to the College Community and provide further guidance on ways in which the College can find additional savings. In addition to his e-mail, you will also hear directly from your divisional vice president or department head about how the cuts will affect your day-to-day work.
Thank you for all you do for Holy Cross every day. I am grateful to be part of a community that places such a high value on maintaining the quality of our work, being faithful to our mission, and achieving these goals through cooperation and collaboration—especially when faced with challenges. Going forward, budget cuts and staffing implications will mean everyone will be asked to take on more responsibilities, to develop creative solutions to getting work done, and to make sacrifices. These times present us all with an important opportunity to rethink how we do things.
Another hallmark of this community is that we value input from all our members. I have asked Bill Conley, director of administrative services, to establish a working group to solicit feedback on cost savings, allocation of resources, and other operational suggestions. Bill will be sending more information on this initiative.
Finally, I remain committed to communicating to the College Community about these issues. To that end, I will be announcing shortly “town meetings,” where senior administrators and I will be available to discuss the College’s financial situation and our response, and to address any questions and concerns you may have.
For more detailed information on financial conditions at the College, please visit the President's Office Web site, where I regularly post updates.
Holy Cross has been through many other challenging times in its 165-year history. While we all must make adjustments in the days and months ahead, I am confident that our community can weather the current challenges—and, at the same time, preserve the quality Holy Cross is known for, while keeping the College affordable and accessible for qualified students from every background.
Michael C. McFarland, S.J.
President