Phillips Academy’s Board of Trustees will convene on March 16, outside of their three annual meetings, to discuss the endowment and to reconfigure the school’s budget after major budget cuts. Steve Carter, Chief Operating and Financial Operator, said, “There isn’t enough time in January and May to [discuss] a strategic plan to approach the budget. There also isn’t enough time to talk about the capital campaign.” Jeton said that the Trustees occasionally hold specially convened meetings to discuss certain topics in greater depth than the three annual meetings would normally allow. “The normal agenda for the three annual meetings is full and usually consists of similar or identical items from year to year. Thus, it is difficult to have a long discussion about one thing,” said Carter. Since the endowment has declined by 22 percent as of December 31, 2008, the Board of Trustees must readjust the school’s spending rate, or the rate at which the school uses the money from the endowment. The endowment makes up 43 percent of the school’s operating budget, according to Nancy Jeton, Special Assistant to the Head of School. “We even out fluctuations by determining the value [of the endowment] over a 13-quarter period and deriving a percentage,” said Jeton. Due to the recent major cuts in the campus renovation budget and physical renewal budget, the Board of Trustees must prioritize which budgets to reduce or protect. “We need to reconfigure the budget by looking at it and making it the right size. We need to consider what our priorities are. Things [within the budget] are [out of balance] because only certain parts of the budget have received cuts. Facilities [budgets have] taken all the reductions, but we can’t reduce those budgets forever.” said Carter. “The [Board of Trustees] will reestablish a financial equilibrium,” said Jeton. “We need some sort of approved direction for…where we’re headed for the next four, five or six years,” Carter said. He added that the Trustees will make no further budget cuts at the March 16 meeting. According to Carter, studies are currently being conducted on different opportunities for budget reductions. “We are looking at where possible savings or efficiencies [are],” said Carter, “We haven’t really taken action at the moment, because this is our research phase. By spring, we will be in our action phase.” During the March 16 meeting, the Board of Trustees will discuss the research conducted. The March 16 meeting will be divided into three sessions. The first session will be an orientation for meeting topics, the second session will be a discussion of budget reconfiguration and the third session will focus on the capital campaign. Discussions on the capital campaign will include its timing, size and priorities. Carter said, “We’re in good shape right now. I think we’re in pretty good shape with need-blind admission [as well]. We’ve made the cuts and reduced the budget, and we will rebalance the budget over the next year.”
