Dear Villanova Faculty and Staff:
In October, I shared with you the measures Villanova was taking as we sought to deal with the challenges brought forth by the turbulence in the economy (a copy of that message can be found here). I am proud of the way our community has worked together since then to adapt to these difficult times while continuing to deliver an exceptional educational experience to our students.
As the economy continues to worsen and unemployment rises in every sector, I want to take this opportunity to assure you that Villanova remains on firm financial footing. I have mentioned in the past that our long-standing commitment to fiscal prudence and conservative budgeting have positioned us to weather downturns in the economy. However, the prolonged nature of the current economic instability requires that we constantly reassess how we are using and protecting our resources. The prospects of an uncertain future dictate that we must take measures today to be prepared for any challenges we may face tomorrow. Therefore, I want to share with you a series of actions which are meant to provide the University with financial flexibility moving forward:
The prolonged uncertainty in the economy requires that these steps be taken to preserve our financial stability. These measures are meant to be temporary and I promise to keep you updated on how the University continues to adapt to changing circumstances in the economy.
A series of questions and answers appear below. They have been formulated to provide additional information about the steps introduced in this message.
Villanova has faced periods of economic uncertainty more than a few times since opening in 1842. Each time, the University emerged stronger and more committed to its Augustinian ideals. I ask that as we move forward, we renew our commitment to working efficiently and collaboratively while sharing talents, ideas and resources. As we face this latest challenge together, our sense of community is our greatest asset and we can find strength in each other.
Thank you for your enduring commitment to Villanova and its mission.
Is there a problem with the University’s finances?
No. As mentioned in the October message, the University’s prudent, conservative budget practices have resulted in ample cash reserves to satisfy financial obligations such as payroll, accounts payable, debt service and capital projects such as the School of Law building. However, the economy has continued to worsen, unemployment has increased and a primary concern of the University remains the associated impact on families of our students. Accordingly, the University is taking these measures to preserve its resources in the face of this economic uncertainty.
Is there a guarantee that there will be no layoffs?
While we cannot know for sure what the future will bring, the University is committed to doing all it can to avoid layoffs and retain the faculty and staff. It is important to note that Villanova is on firm financial footing and continues to move forward. The measures outlined in this message are intended to help us preserve financial flexibility during these challenging economic times.
Are the measures being taken permanent? What about the second year of the compensation review? Will salary increases resume next year?
The instability in the economy will play a large role in determining how long these measures will be in place. These measures are being taken as a proactive strategy to adapt to the continued economic uncertainty. The University will continue to monitor its finances and maintain financial discipline, which requires that faculty and staff salaries will remain at current levels through May 2010. In addition, the second year of the compensation review is currently included in the FY 2010 budget, but we must continue to observe the economic conditions before deciding a timeframe for implementation. The economy – and its impact upon the University and the families of its students – will determine if we are able to resume salary increases in June 2010, but we cannot provide any definite assurances at this point.
How will the one-time salary supplement apply to part-time employees?
Part-time employees working more than 20 hours per week will receive a pro-rated share of the supplement based upon their weekly schedule. More details will be forthcoming from the Department of Human Resources.
What exactly is a hiring freeze? During the hiring freeze, what will the process be for making exceptions to fill certain key positions?
By implementing a hiring freeze, Villanova University will not post new faculty or staff positions and will not fill vacant positions. In the event that exceptions to the hiring freeze are made, Cabinet members will recommend to the President key positions which merit consideration. After consulting with the Cabinet as necessary, the President will make the decision whether to move forward with filling the position.
How will these measures affect the Campus Master Plan and the Strategic Plan?
Both plans are designed to provide long-term guidance to the University and include flexibility for implementation to accommodate circumstances such as the uncertainty in the economy. While the development of these plans will continue, we will move forward carefully so as not to jeopardize our commitment to financial discipline and balanced budgets.
How much has the University’s endowment declined in value? How does that decline affect the operating budget?
The market value of the endowment was $253 million as of December 31, 2008. This represents a decline of approximately 25% over the prior six months. The University’s operating budget is supported by an endowment spending policy which serves to level the impact of both positive and negative market conditions and portfolio performance. The amount of budgetary support from the endowment will increase for FY 2010 and then may decline depending on the duration of the economic downturn and its impact upon our investments.
Who should I contact if I have questions?
Contact your Dean, the President's Cabinet member who leads your area, or the Department of Human Resources.