1. Fondren Library Town Meeting Budget FY2010
University Environment

2. 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

3. 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
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.

4. 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

5. Assumptions for Stress Testing of Endowment Spending
Optimistic Base Pessimistic Case
Annual Endowment Return:
FY % % -25.0%
FY % % %
FY 2011 and beyond % % %
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

6. 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

7. 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

8. 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

9. 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

10. 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

11. 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

12. 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

15. 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