2020 Budget and Workforce Planning Report
The following report was sent in an email to the campus community on Tuesday, May 21, 2019.
Dear Members of the Middlebury Community,
We are writing to follow up on President Patton’s email earlier today.
We are pleased to say that the approved institutional budget for fiscal year 2020 projects a surplus for the first time since 2012. This is due to an approximately $4 million increase in revenues over this year (as projected) and a nearly $3.8 million reduction in total expenses.
A budget of Middlebury’s scope and size has many components. Our funds come from student fees, gifts, and a draw on the endowment. Some of the funds can be used to support overall operations, while some gifts and endowment funds can be used only for specific purposes. Thus, there is no simple formula for creating a budget, or for reducing costs. And certain costs are beyond our control, and often increase every year. Over the last few years, since Middlebury set out on The Road to a Sustainable Future, we have had significant success reducing non-compensation operating costs in many areas. We also have, through attrition, reduced our staffing numbers by about 100.
And this year we set out to better align our resources to our strategic needs while also reducing compensation costs through a Faculty Incentive Retirement Plan at the College and an Incentive Separation Plan for all staff and faculty at the Institute. We can now report the results of those plans.
- Twenty-four College faculty, of the 117 who were eligible, elected to participate in the retirement plan. The annual savings in collective compensation (including benefits) for those 24 faculty members is $4.6 million. While we anticipate that we will fill a comparable number of new positions over time, the annual savings will nonetheless be significant.
- Thirty-five staff members accepted incentive separation offers, out of the 77 who were eligible to receive them. Collectively, that equals an annual savings in compensation (including benefits) of $3.6 million. While the number of individuals who accepted the offer was slightly lower than we had hoped, the dollar savings were close to the goal. The total savings for staff exceeded $6.1 million with the vacant positions offset by new positions and promotions contemplated in the future state.
- To date, 10 Institute faculty have elected to participate in the Incentive Separation Plan, which will contribute substantially to the Institute’s net annual faculty compensation savings target of $1.4 million. Vice President for Academic Affairs and Dean of the Institute Jeff Dayton-Johnson will be working with colleagues on programmatic adaptations to reach the compensation reduction goal, and will communicate with all faculty at the Institute later this week regarding next steps.
As President Patton said in her message, we are pleased that Middlebury was able to achieve its highest-level goal—a balanced FY20 budget—without having to resort to layoffs.
Next year’s budget takes into account all of the workforce plans developed by the vice presidents of the various offices and departments. Although not every new position could be funded immediately, many are included in this budget and we expect that others will be added in future years. All of the vice presidents are committed to managing within their budgets, and they will work with their departments to ensure that their workforce plans can be put into place as fully as possible while at the same time maintaining fiscal discipline.
We want to end by reiterating that workforce planning was never meant to be a quick-fix or a one-time project. It was designed to be a new way of thinking about and prioritizing the work we do in support of our educational mission. We should be engaged in a continuous search for better and more efficient ways of working. Innovation is at the core of Middlebury’s culture, and we need to create financial and human capacity to support those ambitions. We and all members of the senior administration look forward to working with key managers through the Leadership Alliance to maintain this focus.
Thank you for everything you do for Middlebury.
Executive Vice President for Finance and Administration
Executive Vice President and Provost
Vice President for Human Resources and Chief Risk Officer