Financial Sustainability

Beginning in the fall of 2015, following the realization that our institution’s operating deficit had grown to an unsustainable level in the fiscal year that had just ended, Middlebury’s senior administration, with the strong urging of the Board of Trustees, began to engage the community in a discussion of how we could create a credible plan to close that deficit in the coming years. We started with a series of open meetings in Middlebury and Monterey and followed that up the next spring with numerous smaller meetings. During these meetings, then provost Susan Baldridge and then vice president for finance Patrick Norton outlined the causes of the deficit and a number of steps Middlebury might take to close it.

In the fall of 2016, in a second series of town hall meetings, the administration put forward a plan called “The Road to a Sustainable Future”—a five-year plan to balance the budget by FY 2021. The plan listed specific steps the institution would make, including cuts to operating expenses, caps on hiring of faculty and staff, changes to the retirement plan for new hires, debt refinancing, tuition increases, and limiting the growth of financial aid.

These measures worked, and our financial results in FY 2017 and FY 2018 show lower deficits than projected in the plan. Based on this, early in 2018, the senior administration and the Board of Trustees made the decision to accelerate the timetable to balance our budget. We now are committed to doing this in FY 2020—one year earlier than originally planned.

To do this, Middlebury must address its largest area of expense: staff and faculty compensation. Combined, faculty and staff compensation—including benefits—accounts for about 68 percent of Middlebury’s total operational costs, or more than $170 million. If we are to balance our budget, we must reduce compensation expenses even as we work to fulfill the core educational mission of the institution.

In June of 2018, Middlebury announced that it would introduce a Staff Incentive Separation Plan in conjunction with its ongoing workforce planning initiative. The goal of this approach—workforce planning followed by elective, incentive separation packages—is to realize a saving of $8 million in staff compensation expenses by the start of FY 2020.

A similar effort is underway at the Middlebury Institute, where the academic administration and faculty are discussing a decrease in the number of faculty in particular program areas.

Also in June of 2018, the academic administration of Middlebury announced that it would introduce a Faculty Incentive Retirement Program specifically for faculty at Middlebury College.

These efforts—workforce planning and implementation of the incentive separation and retirement programs—will be a major focus of our work this academic year. Middlebury’s long-term health and vitality depend on it. Bold ambition has been a hallmark of this institution since its founders took the bold step of establishing the school in 1800. Middlebury’s greatest strengths are rooted in its ambitions to remain dynamically curious and forward looking. Middlebury would not be Middlebury if we didn’t think boldly.

To do this, to continue to innovate and adapt to the educational, social, and economic challenges of the 21st century, it is incumbent upon us to manage our operations with the same care as we do our core academic mission.

Office of Finance

 

The Office of Finance supports financial management across Middlebury’s schools and programs. It oversees the institution’s annual budget-setting process, short- and long-term financial forecasts, payroll, investments, debt, and cash management. In addition, the office manages business services, and the institution's business information systems.

Alberto Citarella is the Associate Vice President for Finance and Assistant Treasurer. 

If you are a student or parent with a question about student billing, financial aid, or student health insurance, please contact the Office of Student Financial Services at (802) 443-5158 or sfs@middlebury.edu