Fondren Library Town Meeting Budget FY2010 University Environment

Status of FY 2009 Swept salary savings from hiring freeze Released hiring freeze at end of January Monitoring “underwater endowments” 1% reduction in S&E

FY 2010 Planning Annual growth in endowment distribution will be 1.5% (tentative) Likely to announce tuition increase below 5.5% that we announced for 2008-09 Asking schools and divisions to cut 5% from A1 and A2 budgets (~$13M) Calculated from FY 2009 starting budget Payraises for benefits eligible employees ranging from half a percent to 2.5% on a sliding scale based on annualized salaries below $60,000. More than half of Rice employees will receive a modest increase.

Why are reductions necessary? Estimate endowment market value will be down 20-25% this year (before spending) Endowment distributions support 45% of total revenues (63% of core budget revenues) Endowment spending policy calls for spending between 4.5% and 5.5% of trailing three-year market value of the endowment and not exceeding a ceiling of 6.5% Need to slow growth in endowment distribution to 1.5% to stay within ceiling

Assumptions for Stress Testing of Endowment Spending Optimistic Base Pessimistic Case Annual Endowment Return: FY 2009 -15.0% -20.0% -25.0% FY 2010 9.5% 9.5% 5.0% FY 2011 and beyond 9.5% 9.5% 9.5% Annual Base Spending Increase* 1.5% 1.5% 1.5% New gifts of $25 million are added to endowment each year. *NOTE: Original planning figure was 4.0% annual increase in endowment spending

Cost Saving Suggestions Submitted on Web People Issues Don’t pay for cell phones Increase years required to vest for benefits Lower mileage reimbursement rate Charge recreation center fees to visiting faculty Four-day workweek or telecommuting Service Issues Shuttle service Use of Paper Require double-sided copying More automation of forms Eliminate hard copy directory and other publications Encourage direct deposit for pay and no paper stub Other Eliminate food at meetings “Rent parties” Turn the Lights Off

Situation at Other Schools Princeton: 5% reduction Stanford: 15% reduction in next year Brown: $16.5M reduction over two years Cornell: 15% reduction Carnegie Mellon: 5-10% cut by FY 2012

Timetable Budgets Due the End of February Discussions in March Update Discussion With Board of Trustees in March Decisions in April Budget Submitted to Board in May

Fondren Library Environment University requested a 5% cut in A1 funds for FY 2010 across all divisions The library’s target amount to meet the required reduction is $845,000 Very difficult decisions—library managers were consulted on the process

Process Looked at all library fund categories: supplies and expenses, student assistants, equipment (including materials budget), vacant positions, salaries and fringe benefits (26% overhead of salary budget) Worked with a materials cut of 5% ($508,000)--with inflation the cut will be more severe. Some of the materials budget cuts will be off-set by endowed funds, but deep cancellations will be necessary. Worked on cutting non-salary items at a significantly higher percentage rate

Detail on Reductions Cut supplies and expenses 18% Cut student assistants 24% (will use fine money to pay circulation students) Cut one category of information technology 7% and one category 18% Could not meet the required reduction ($845,000) without considering salary lines

Reduction Details Continued Gave back 3 open salary lines Needed to give back additional position lines Very difficult decisions— Cross Training (one service point on nights and weekends) Two positions may be filled—one shelving position and the GIS/Data Center assistant

Moving Forward Based on what we know, all the cuts for FY2010 are done. We need to work hard to support the library’s mission and our V2C goals We must be vigilant about cost savings, while maintaining morale If you have ideas for saving money, please talk to your supervisor—every little bit helps! Questions?? Not an organization of low performers