Economic Update

December 12, 2008

Dear Students, Faculty and Staff,

I write to provide an update on the University’s response to the continuing global economic turmoil. As indicated in my recent update to campus about the November Board meeting, this situation was the subject of considerable discussion during the meeting. In the weeks since then, I have discussed this issue in continuing conversations with the Board leadership, the Senior Staff, and well-informed friends of the University. It is my determination that the University would be wise to put in place contingency plans in the event that worsening national and global fiscal problems begin to have a serious impact on Bucknell.

The Board and the administration are committed to protecting the strength of the University as the current economic problems unfold. As we put contingency plans in place, we will do so with particular attention to the two priorities established by the Board for the University’s special attention during this global fiscal crisis, namely

  1. Protecting the academic core and residential learning experience, and
  2. Fulfilling Bucknell’s commitment to access through financial aid resources that support the ability of current students to complete their Bucknell education and enable the University to enroll a strong and vibrant Class of 2013.

As I communicated on October 15, the University is monitoring the economic situation closely. No institution is immune from the problems in the economy, and global and national economic conditions continue to deteriorate. With that in mind, following consultation with the Board leadership and the Senior Staff, I have taken the following new steps:

  1. I have asked Provost Mick Smyer and Vice President for Finance and Administration Dave Surgala to work with me to develop contingency plans in consultation with the Senior Staff, the University Council, the Committee on Planning and Budget, and the Committee on Staff Planning. These plans will prepare for a series of scenarios for our current fiscal year that economic conditions may necessitate, including no budgetary changes, a small reduction in budgets, and significant budget reductions. Similar budgetary scenarios will be brought to bear as we plan for the next fiscal year.
  2. The contingency plans for this fiscal year will be presented for discussion at the Board’s annual two-day retreat on the final weekend of January. These plans will allow the University to respond effectively and continue making strategic investments in the priorities of The Plan for Bucknell should today’s financial turmoil require reallocations or reductions in budgets.
  3. I have asked Vice President for Enrollment Management and Dean of Admissions Kurt Thiede, Vice President for Development Sam Lundquist, and Chief Investment Officer Chris Brown to provide the Senior Staff and me with weekly updates on several areas that are especially sensitive to economic changes and that have considerable impact on Bucknell’s budgetary position, namely
    1. our enrollment applications and yield trends,
    2. our endowment’s value, and
    3. our fundraising efforts.
  4. With this email, I am asking that all departments make certain that they adhere to their approved fiscal 2008-09 budgets.
  5. I have asked Vice President Surgala to confer with the head of each administrative and academic area to review their current fiscal year budgets for any appropriate cost-savings.

We are also continuing with the steps referenced in my October email, which are as follows:

  1. We are thoroughly reviewing our financial aid program to adapt to the impact of the economic turmoil on our current and future students. Bucknell strives to award as much financial aid as possible to our students with demonstrated financial need. I would direct you to the FAQs we have prepared on this subject for more details.
  2. The Senior Staff, notably the President, Provost, and Chief Financial Officer, are vetting all personnel and spending requests not already approved until we become convinced that the economic situation has steadied. Except for approved faculty searches, the same review will occur of current vacant positions and discretionary expenses and, where strategically possible, such spending will be reduced.
  3. We are analyzing the impact of the economy’s downturn on our peer and aspirant institutions and the steps that they are taking to address their fiscal conditions. As noted in my October email, for the reasons noted then, the recent economic turmoil has not impacted Bucknell as seriously as it has many of our peers and competitors. But we also must be prepared should the global economic decline necessitate additional budgetary actions. Besides steps that Bucknell has already taken, some of our peers and competitor institutions have instituted personnel reductions and operation expense cuts, implemented faculty and staff hiring freezes, and delayed capital projects. At this point, we do not believe these steps are necessary, although our contingency planning will include a variety of budget-management measurements beyond those that we have already instituted.

We will continue to monitor the economy and the financial markets and consult with the Committee on Planning and Budget, the Board of Trustees and our financial advisers as necessary, and I will keep you informed.

The University has the advantage in these difficult times of a history of thoughtful and judicious management of its resources. The planning efforts being undertaken will continue that practice and ensure that should the economic situation require it, Bucknell will be well positioned to respond with care and focus.

Sincerely,

Brian C. Mitchell
President