Trustees Approve $3.7M Budget Cut

Phillips Academy’s Board of Trustees convened for its annual spring meeting on May 1 and 2 to finalize budgets and respond to endowment losses. The Trustees approved a $84.7 million budget, a $3.7 million budget cut from the anticipated budget for fiscal year 2010, as proposed by the Senior Administrative Council and other Andover faculty members. The administrators and faculty members made their proposal based on a recommendation from the Board of Trustees to reduce the school’s operating budget by $6 million, or 7.5 percent, by fiscal year 2011. The Trustees advised a 7.5 percent decrease in the budget after Andover’s endowment declined by 22 percent between July 1 and December 31, 2008. Next year’s budget for fiscal year 2010 is down from last year’s budget of $87.9 million. Barbara Chase, Head of School, and her team “reacted quickly and appropriately to the board’s request to reduce spending,” said Trustee Peter Currie ’74, Chair of the Finance Committee, in a press release from the Office of Communication. Staff salaries will be frozen and the salaries of highly compensated individuals will be reduced by five percent, said Steve Carter, Chief Financial Officer. Carter said that, in addition to the salary freeze, the school has trimmed down on the budget for overtime compensation and downsized the amount of summer work in an effort to become “more efficient.” The school will reduce budgets most in renewal projects, such as renovations and new supplies. “We trimmed a lot of [secondary] budgets,” said Carter. “[The school’s facilities] are in pretty good shape,” he continued. “We can afford to take a break [from large scale renovations].” After the Addison Gallery construction is complete, the school will reassess its financial situation and renewal projects, said Carter. In order to meet the Trustees’ recommended budget cut of $6 million by fiscal year 2011, the school must still make $2.3 million in cutbacks. “We’re still going through the belt-tightening stage,” said Carter. “It will take next year and the year after before we get to where we need to be.” Carter also said that the budget will need to be rebalanced after the cutbacks are implemented. “We have to take the money that came out of the facilities renewal budget and rebalance it into the rest of the budget,” he said. After this process is completed, he said, the school can begin to refund the facilities budget. Carter said that during the meetings, it was reported that the market was up in April. “If we can sustain this momentum, we can get to the [end of the fiscal year] with a decent finish,” said Carter. In their spring meeting, the Trustees also met with the newly formed Campaign Steering Committee, a leadership group for the capital campaign, “Campaign for Andover.” The Campaign Steering Committee and the Board of Trustees discussed the scope and marketing strategies for the capital campaign in a difficult economy. “Timing was one of the biggest changes in the campaign strategy,” said Nancy Jeton, Special Assistant to the Head of School. “It is going to take longer to raise the money than originally expected.” “There is also a greater emphasis on current-use gifts,” she continued. Current-use gifts are counted as revenue and are placed directly into the operating budget. The campaign organizers have also used technology to increase awareness in fundraising efforts. “We can use technology more to keep up with [alumni],” said Jeton. “It is also less expensive and faster than the traditional glossy publications we normally do.” Jeton said that the emphasis the school is placing on campaign pledges, as well as the larger significance of one-time, current-use gifts, often encourages alumni who would not typically donate to do so. “It is typical to think of one-time gifts as ones like David Paresky’s gift,” said Jeton, “but every gift counts.” “The very factors that are making it difficult for people to give are making it difficult for Andover not to ask,” said Trustee Sid Knafel ’48 in the press release. The capital campaign’s fundraising goal is set at $300 million. To date, the campaign has raised $173 million. The goal was “within a certain range which balanced school needs with what can be raised in this economy,” said Jeton. “The big picture,” she continued, “is raising more money to meet the goals of the Strategic Plan of 2004.” The campaign will move into its public phase this November, after being in its silent nucleus phase since June 2005. “There will be a series of events [after the launch of the campaign’s public phase]…which give us a chance to tell alumni about the contemporary state of the school,” said Jeton. The Steering Committee was briefed on the current state of the school, including this year’s admissions, strategic goals, financial aid and operating budget. This spring marked the first time the Campaign Steering Committee has met. They plan to meet with the Trustees one or two times per year in the future. The Board of Trustees also discussed benefits for faculty, staff and teaching fellows. The meetings, however, did not affect the current faculty pay scale. The Trustees, in the midst of their discussions about budget cuts and the capital campaign, also made time to appreciate Andover faculty and fellow Trustees. Retiring faculty members Herb Morton, Registrar, Edwin Quattlebaum, Instructor in History and Social Science and Ruth Quattlebaum, School Archivist and Instructor in Art, were honored for their years of instruction and hard work at Andover. Trustees Al Blum ’62 and Peter Hetzler ’72, both of whom are retiring from the Board this year, were honored as well. The Board also elected five new Trustees. Susan Urie-Donahue ’73 was elected to replace the retiring Peter Hetzler ’72, and Mary-Ann Somers ’82 was elected to take the place of Al Blum ’62. Gary Lee ’74, Chien Lee ’71, and Tammy Snyder-Murphy ’83 were also chosen to fill additional vacancies.