Updated: June 2, 2017
- The Faculty Council Welfare Committee met with President Michael Miller and trustee Lowell Noteboom last week to discuss their grave concerns about cuts to salary and benefits. The Faculty Welfare Committee proposed wage reductions for all faculty and staff of no more than 3.75% and a retirement match of no less than 2.5% and that changes not result in more cuts to personnel. The trustees met and reconsidered their decision on payroll. Trustees agreed to raise $200,000 to reduce faculty and staff reductions from 7.5% to 4.5%.
- Two trustees stepped forward to sponsor men’s and women’s cross country and to reinstate Coach Peter Macky and cross country as an intercollegiate sport. Coach Macky has agreed to return. The trustees pledged $29,000 to cover expenses. This sponsorship will be in addition to their annual giving. The trustees will monitor the College’s financial progress this next year in determining how the next year of cross country will be funded. Craig and John made this decision for reasons of recruitment, retention, and strong student and faculty support for the sport.
- Two trustees stepped forward to sponsor men’s and women’s golf as an intercollegiate sport. These trustees have donated $25,400 to fund golf for the next year. As with cross country, the trustees will monitor the financial progress the next year and assess their commitment to a second year of sponsorship. Craig and Jim decided to fund golf for student recruitment and retention.
- We will be honoring the existing five fall registrations of students in the EcoLeague exchange program. Going forward, we intend to continue our membership within the EcoLeague while we assess ways to improve the exchange imbalance that has made the program unexpectedly costly. The EcoLeague costs are about $34,000 for the fall semester, which includes a $6,000 membership fee and $28,000 tuition expenses for five students studying at our partner institutions with just one student studying here. We agreed to honor those registered this fall and have not made commitments beyond that.
May 24, 2017
Dear Northland College Community & Friends:
I’m writing today with the news that our Board of Trustees has unanimously directed the College to adjust our operations for the next academic year by significantly reducing expenses, increasing revenues, and reducing our reliance on the repeated generosity of a few individuals who have provided vital gifts to the College. I support these immediate moves to substantially reduce our vulnerability to the unexpected and to help secure what I believe is a bright future for our College. These actions will close the projected budget shortfall for the coming fiscal year, starting July 1, 2017.
The Board and I understand that many of these steps require very difficult decisions. The principles of our actions are to minimize any negative impact on our students’ experiences, instruction and scholarship, to maximize the operating efficiency of the College and to protect as many people as possible.
Below are the steps we will take, the context for them, and an affirmation of our future.
We have already taken steps that provide $1.1 million in annual savings. These include:
- Renegotiating food service, security, insurance, and facilities services contracts.
- Changing meal service for the May Term to a brunch/dinner format.
- Continuing to capture the savings from the faculty retirement incentive plan that has been in effect these past two years.
- Enacting a 10 percent pay cut for all vice presidents and a 12.5 percent pay cut to the president.
- Reviewing vacant positions for consolidation opportunities, while maximizing vacancy savings and protecting current personnel.
After consultation with a number of people at Northland and on the Board, and with the advice of the two financial consultants hired by the Board to review all facets of our finances, I have made these decisions in compliance with the short timeline directed by the Board and representing approximately $2.4 million in additional annual savings:
- We are eliminating 6 staff positions as of June 2. Our colleagues directly affected by this decision have been informed, and we will do whatever we can to assist in their transition.
- Effective July 1, the full-time equivalent hours of an additional 9 positions will be reduced.
- Effective July 1, all staff and faculty pay will be reduced by 7.5 percent. Our goal is to reinstate pay levels upon achieving revenue growth and a stable financial position.
- Effective July 1, the College will stop matching employee retirement contributions. Again, our goal is to reinstate contributions upon achieving revenue growth and a stable financial position.
- Effective July 1, employee contributions to health insurance will be increased.
- We are working with budget managers to reduce the 2017-18 non-personnel operating budget by approximately 6.5 percent. The percentage reduction within individual budgets may vary to achieve the 6.5 percent reduction in the overall operating budget. Some budget managers have already identified reductions toward this initiative.
- Effective immediately, WRNC radio station will close permanently.
- Men’s and women’s golf and men’s and women’s cross country will be eliminated as an intercollegiate sport. Both programs will continue as club sports.
- Summer programs will shift to group programming at Forest Lodge. Individual high school and adult campus programs will be paused after this summer.
- The College will retain tuition and save on dues by discontinuing its affiliation with EcoLeague.
- Our five centers will achieve financial self-sufficiency by an appropriate combination of cost reductions and conservative estimates of revenue.
These steps will reduce overall operating expenses by approximately 16 percent and allow us to operate without relying on extraordinary fundraising and financing. These cuts will impact every aspect of our College and require us to work together at every level to minimize the impact on our mission.
Beginning in May 2018, courses taken in our May Term will incur an enrollment fee based on course credits. A credit load of 1-2 credits will be charged a $300 enrollment fee and a credit load of 3-5 credits will be charged a $600 enrollment fee. Exemptions will include teaching and research assistantships, student teaching continuation, and international travel. This change will ensure that May Term continues to be a distinctive and sustainable experience at Northland College.
Changes of this magnitude deserve to be explained in their context. While difficult, we are acting from our desire to be cautious in an uncertain world and from our optimism about our future.
Across the country, colleges such as ours are challenged to adapt to changing needs of students, demographic shifts, heightened competition, the perceived cost—and value—of a higher education, alternative curriculum delivery methods, slow economic growth, and more. Some colleges have embraced the new landscape and made changes similar to those we are implementing; some have gone further. Others have not and continue to struggle; we do not want to join that cohort.
In recent years, we have closed the gap between expenses and revenues through a combination of refinancing, extending the College’s lines of credit, and by appealing to the generosity of a relatively small group of funders. Those tactics are not infinite. That reality, in conjunction with the overall uncertain environment, requires us to re-examine and re-prioritize our entire operating structure so we can reliably achieve net profit after many years of net loss. By becoming more financially self-reliant, the College will be in a better position to weather unforeseen events in the future and to seize upon the many opportunities before us.
As for our optimism, there are reasons for it everywhere. Our enrollment is growing; next fall, one of our largest freshman classes in two decades will arrive. We added distinctiveness to our mission by opening and expanding centers for experiential learning and research, and signing a long-term operating agreement with the US Forest Service at Forest Lodge. We secured $1 million to create a new graduate program. Generous gifts have helped build a new fitness center, stadium, food center, and the addition of women’s hockey and men’s and women’s lacrosse teams. These investments are raising the profile of Northland College among prospective students and their families.
In advance of that meeting, let me close by thanking you for everything you do for our students, in pursuit of new knowledge, and in support of strengthening the Northland College community. As we enter our 125th anniversary, we are focused on continuing another 125 years. It is with great pride and excitement for our future that I am able to count myself a part of this remarkable institution.
Michael A. Miller