“It looks a lot like these harder times will be around for a while,” College President Nancy Dye said at Tuesday’s College Faculty meeting. Dye was speaking about the College’s current financial troubles, and expressed little optimism that brighter days were ahead any time soon. Instead, Dye laid out the specifics of the College’s money troubles, and in broad strokes went over the belt-tightening measures that will be necessary over the next several years.
In what will probably prove the most controversial cost-saving measure, Dye announced that all of the College’s intern positions will be discontinued. Occupied by recent college graduates from Oberlin and other colleges, the positions have grown in number over the last several years and make up nearly the whole staff of the Multicultural Resource Center, except Associate Dean and MRC Director Rachel Beverly.
Dye did say that once the intern positions were terminated, the College would take a look at the work formerly done from those posts and re-hire based on demonstrated needs.
Dye said that the College expects to be in deficit for the next three or even four years. Accordingly, Dye said, the goal is to cut $2 million from next year’s budget and an additional $2 million from the following year’s budget. The major reasons for the deficits are a combination of slowed growth in endowment dividends and spiraling health care costs. The current health care system provides 100 percent coverage of costs, which according to Dye is unique among colleges and universities, and rare even in business.
“It’s my goal that we continue to see to it that we provide high quality health care coverage, but it is not going to remain at 100 percent,” Dye said. Speaking of the health care issue, she said, “It is the only financial problem I have ever faced at Oberlin that I feel is a threat to the institution.”
The endowment returns, which expanded from $22 million annually four years ago to $34 million annually this year, are expected to remain at $34 million for the next three years. Over that previous four-year period, the College hired 10 new faculty, significantly increased faculty salaries and expanded student financial aid. But it was apparent to all in King 306 Tuesday that the party is over.
Health care costs for the last four or five years have hovered around $5 million, with 10 percent annual increases figured into the following year’s budget. Last year, with about $5.5 million budgeted for health care costs, the bill came in at $7.2 million. This year, just over $6 million were figured for health care costs (since the bill for the previous year came in following the formulation of the budget for this year), and halfway through the fiscal year costs are already at $4.5 million, and are expected to come in at around $9.4 million by the end of the year. The intern positions, which had salaries of $20,000 a year, were also drains in terms of their health care costs, which exceeded $5,000 annually for each position. Another cost-saving measure the College will employ will be the maximization of dorm-bed occupancy. In addition to filling every bed currently in use in the dorms, Dye said that there would be 30 beds added, but that “not everybody is going to be happy with how we fill those extra 30 beds.” Several of the houses currently in the professor pool will be used as student housing next year. Dye also mentioned that the move toward more students in dorms — including the 90 students to be housed in Firelands when it opens the year after next — was a long-overdue move that would help foster better College-town relations. “The town has made it very very clear to us that we are contributing to the decline in residential housing,” Dye said.
Other cost-saving measures include closing Talcott for dining except at lunch; $100,000 in cuts from the Athletics Department budget, including cancellation of one team’s series against California’s Pomona College; $250,000 in budget cuts from the library and computing center; and a general College-wide belt-tightening. The hiring freeze, which Dye said has been “a little bit lifted,” will remain as such, with essential new hires being made but a generally conservative stance toward new employees.