April 30, 2010
BUDGET REVIEW COMMITTEE
2009-2010 ANNUAL REPORT
What a difference a year makes!
After expressing some frustration in our annual report a year ago regarding our level of participation in administration and Trustee deliberations on the severe financial challenges that were facing the university, we are delighted to report a dramatic turnaround in these interactions this year. Our representatives have stayed for all or almost all of every meeting of the Trustee Finance Committee, and we understand other Senate committees have had similar experiences with their counterpart Trustee committees. We deeply appreciate the confidence that Bill Campbell, Savio Tung, and other Trustee leaders and senior administrators of the University have expressed in a range of collaborations with Senate groups, and we pledge to retain it.
We have also maintained our regular regimen of meetings with senior administrators, including Senior Executive Vice President Robert Kasdin and Executive Vice Presidents Anne Sullivan (Finance), Jeff Scott (Student and Administrative Affairs), Lee Goldman (CUMC), Joseph Ienuso (Facilities), and Susan Feagin (University Development and Alumni Relations). In June, we met with Savio Tung, Chair of the Trustee Finance Committee, and in November, we held what has become an annual meeting with Narv Narvekar, president of the Columbia Investment Management Corporation.
To contend with a proliferation of issues requiring our attention, we have established several subcommittees—most of them joint initiatives with other Senate groups—to share the workload. Subcommittees are pursuing the main issues listed here.
1. Endowment Management.
We feel comfortable about the current condition and management of the Columbia endowment, an impression that was conveyed in our first meeting with Mr. Narvekar in December 2007, and has been underscored through two subsequent meetings, including the latest one, last November 12. We have also established a subcommittee on the endowment, to educate ourselves on some of the issues, and also to help make the expertise of our faculty available to Mr. Narvekar and his team on specific subjects that are of interest to him.
2. Columbia’s Faculty Rental Housing Operation.
We worked hard with the Housing Policy Committee all year in an effort to understand in detail the financial challenges involved in managing the university’s faculty rental housing operations and to develop strategic recommendations to restrain the rate of rental increases. We met a few times with David Greenberg, Vice President for Finance and Administration, Facilities, whom we thank for engaging in robust, fact-based, data-driven conversations. On April 23, we had a promising meeting with EVP for Facilities Joe Ienuso and Mr. Greenberg in which we outlined a set of goals and agreed on next steps. We will continue this collaboration over the summer and the fall, toward a goal of developing a joint proposal that if implemented will help maintain housing as a strategic resource in the recruitment and retention of Columbia faculty.
3. Tuition and Financial Aid.
Our new subcommittee on tuition and financial aid, has examined the ramifications of the perception that Columbia is one of the most expensive schools among its peers, as measured by undergraduate tuition and term bill levels, and by the rate of tuition and term bill increases in recent years. We uncovered that Columbia’s average net tuition, incorporating its average financial aid grant, places it somewhere in the middle of the Ivy pack, a fact that we feel is comforting and if possible should be publicized more. We provided a brief report of our findings to the Senate in October, and have explored some of their implications in meetings with Scott Norum, A&S Vice President for Budget and Administration, and Columbia College Dean Moody-Adams and her senior staff. Next year, we will continue to work on this issue, with a view to provide some input in the process of setting rate increases and updating financial aid policies.
4. Working Group on Benefits.
A year ago, we started a conversation regarding benefits and the fringe benefits pool. Stark increases in health premiums for 2010 led to a call at the December plenary for a report to the Senate on an array of benefits issues. Our committee’s discussion of these issues included EVP for Student and Administrative Services Jeff Scott, who oversees Human Resources (and hence Benefits), and who will provide staff support to a new Working Group on Benefits composed mostly of faculty associated with the Senate. The Working Group includes several members of Budget Review and will offer a preliminary report to the Senate in the fall.
5. University and School Budget Processes.
This year the committee continued to be involved in the budget preparation processes for the coming fiscal year. As we did last year, we met with EVP for Finance Anne Sullivan, as a full committee on November 12, and once more in a subcommittee last fall, to discuss budget parameters. We fully supported the decision to avoid a stringent percent reduction in endowment support to divisional budgets (e.g. last year’s 8 percent), in favor of a more moderate 5 percent reduction for the upcoming fiscal year.
As we did a year ago, we met with leaders of Columbia’s two largest academic units—Executive Vice President for Health and Biomedical Sciences Lee Goldman, and Vice President for Budget and Administration of Arts and Sciences Scott Norum. CUMC is now far into the budgetary reorganization that Lee Goldman instituted when he began three years ago, which includes providing the units with most of the revenue they generate but then charging them for cost of usage of resources such as space. CUMC’s financial health seems to have improved significantly.
Scott Norum updated the committee on continuing efforts to reduce an A&S budget deficit that remained sizable even after major cost-cutting and revenue-enhancing initiatives last year, mainly because of a smaller endowment payout and larger common costs.
In a couple of joint meetings with the Physical Development Committee, we discussed the expansion effort both long-term and short-term, the future in Manhattanville and the struggle to complete the Northwest Corner building. At a meeting with Robert Kasdin on December 4, we gained some understanding, from a financial perspective, of how Manhattanville will proceed, according to a long-range plan that seems sound to us.
We maintained our custom of informative and insightful annual meetings with Susan Feagin, EVP for University Development and Alumni Relations. At the time of our meeting a year ago, the economic downturn had already started to have a negative effect on Columbia’s fundraising effort. Columbia remains ahead of schedule in its $4 billion capital campaign.
For the Committee,
Soulaymane Kachani (NT, SEAS), Chair, and
Michael Adler (Ten., Bus.)
Sheena Iyengar (Ten., Bus.)
Dan Libby (Alumni)
Tim Lam (Stu., CC)
Ronald Mann (Ten., Law)
John Mutter (Ten., A&S/NS)
Sharyn O’Halloran (Ten., SIPA)
Lucius Riccio (NT, SIPA)
Rajat Roy (Stu., SEAS)
Daniel Savin (Research Off.)
Steven Spitalnik (Ten., P&S)