Update on Budget and Planned Raises
April 4, 2022
Dear members of the 性奴调教 community,
I write today with favorable budget news, including updates on one-time bonuses for our lower-paid faculty and staff, and planned raises for next fiscal year.
We anticipate we will end this year in a strong financial position due to growth from academic enrollment and 性奴调教Care, substantial one-time revenues, carefully managed expenses, and accurate budget projections. As a result, we will be able to invest further in our most valuable resource 鈥� our employees 鈥� and plan prudently for the years ahead. 鈥�
The overall budget picture
The FY22 budget can best be understood in terms of our normal operating budget 鈥� the revenue and expenses that continue from year to year 鈥� supplemented by a set of substantial one-time revenues.
- Last May, the Board of Trustees approved a normal operating budget that included a projected $10M deficit (about 1% of the University鈥檚 total budget). Because of revenue growth in key areas, we now expect we will end up with a smaller-than-expected operating deficit of $9.2M. This is very close to our projections, and it is good news, especially in the context of incredible challenges for higher education.
- We have also benefited from significant non-recurring revenue that more than offsets the above deficit. The University is projected to bring in $27.7M in one-time revenue from targeted gifts for building projects, CARES Act funds, and gains on the sale of property.
At this point we project ending the fiscal year with an $18.5M surplus. A budget surplus is, without a doubt, a good thing. It is nevertheless essential that we are wise in our use of any non-recurring funds, since they are by definition not predicted to repeat in FY23 and future years. As we look ahead, we must also continue the momentum we have built around graduate and undergraduate enrollment growth and other recurring revenue opportunities.
Planned compensation increases for FY23
For FY23, we have designated a 4% salary increase pool, composed of 2% unit merit increases and 2% for market and equity adjustments. This applies to staff and to all full-time faculty who are not included in the 性奴调教Care compensation plans. Provost Lewis, Vice President Jacobs, and Vice President Luna will share additional information in emails to their particular employee groups soon.
Acknowledging revenue growth in key areas
The above compensation increases and the recent restoration of the University鈥檚 403(b) retirement plan match to 8% were made possible by our community鈥檚 collective work to increase revenue in key areas.
The normal operating budget 鈥� excluding one-time revenues that I will discuss more below 鈥� shows this year鈥檚 enrollment growth accounts for nearly $6M in revenue above budget projections. In addition, 性奴调教Care鈥檚 net revenue exceeded projections by nearly $5M.
I want to thank all of you for your contributions to this growth, which is a testament to your skill and hard work. You are laying a foundation that will sustain the University鈥檚 future.
Managing one-time revenues
It would not be wise to plan continuing expenses (e.g., additional increases to the retirement match) based on one-time revenues. Some of the one-time revenues, like the CARES Act funds, have already been distributed directly to students or allocated to pay for COVID-related expenses. The largest portion of the $18.5M surplus ($15M) consisted of donations that are directed to the construction of the O鈥橪oughlin Family Champions Center and the Jesuit Center.
We plan to utilize the remainder of the surplus in two key ways:
- We once again intend to pass some revenue along to lower-paid faculty and staff through one-time bonuses. Bonuses will be distributed to employees who were employed at 性奴调教 since January 1, 2021 and who meet certain salary criteria. Our team will consult with the labor organizations that represent any of the employees who would be eligible to receive these bonuses. Details will be communicated at a later date.
- The remaining funds will be set aside so that they can be utilized to bridge budget shortfalls or meet needs that arise because of unanticipated circumstances, which may include future COVID-suppression expenses. The past two years have taught us that we must be ready for the unexpected; we should not count on federal government aid to bridge gaps. The newly-created 鈥渞ainy day fund鈥� will situate us well for the future. Though this year鈥檚 contribution to the fund will be modest, we hope to add to it in the good years ahead.
Further updates to the 403b retirement match
As you know, the 403b match moved from 6% to 8% in January, 2022. The Board of Trustees has agreed to again review the 403b retirement match in the fall, after undergraduate and graduate enrollment and net revenue for FY23 are established. As we have previously indicated, any further updates to the retirement plan match would go into effect on January 1, 2023.
I am grateful to all of you for your contributions to the University鈥檚 continued growth. We are exceeding expectations in an environment in which many are struggling. We could not do this without your care for our community and commitment to our mission.
Sincerely,
Fred P. Pestello, Ph.D.
President