September 29, 2016

Webster University fiscal year 2015 budget approved

Webster University’s Board of Trustees approved next year’s (Fiscal Year 15) budget. The university sought to cut next year’s budget down $2.6 million from last year’s (Fiscal Year 14) budget.

President Elizabeth Stroble and Provost Julian Schuster emailed a letter to faculty and staff on Monday, April 28 describing the FY15 budget and the changes that were made. 

The letter that listed budget realities and adjustments the university plans to make as it moves into FY15, which begins June 1. It also touched on university commitments, expansion/construction plans and planned partnerships for further study abroad opportunities. 

One of the budget realities was to identify non-faculty positions that are not needed. The letter stated after the university identifies those positions, Webster will “implement changes” within those positions. The university was not available to comment in time for publication on what those changes could look like or how much money Webster hopes to save from that step.

One of the university’s listed commitments was to offer a three percent salary pool for full-time faculty and full-time and part-time staff. (That would mean faculty and staff could see up to a three-percent pay raise.)

The letter also said the university will seek to create student study-abroad locations in Indonesia, Greece and Georgia. At the same time, Webster will start construction on the substation and parking garage. It will also start plans for the interdisciplinary sciences building.

Another reality was to continue to adjust early retiree medical benefits. Webster saved about $4 million by changing its early retirement benefits plan for the FY14 budget. At a faculty meeting in February, Gunderson said the law required the university to set aside money for that program, which Schuster said not many used.

The university also plans to reduce advertising spending. Instead, the university will “depend more on outreach from colleges and schools.” In 2012-2013, Webster spent $7,170,381 on advertising, according to the 990 documents from that year.

Schuster told faculty in February the FY15 budget process would look different.

“Our business model, as it operates currently, needs to change,” Schuster said at the faculty meeting.

When it forms a budget, the university first sets tuition rates, then makes enrollment projections. From those two elements, it forms a budget and allocates the funds.

At a February Faculty Assembly meeting, Chief Financial Officer Greg Gunderson said the university set revenue targets last year based on what it expected new programs to achieve, which resulted in budgeting for a revenue growth in FY14. Then the university set aside half of that budgeted revenue growth, which left Webster budgeting between a 2 and 2.5 percent growth in FY14.

For FY15, the university placed a cap on its enrollment projections at the actual enrollment numbers for FY14 for planning purposes. Gunderson said at the February faculty meeting that Webster’s intention for its FY15 budget was to reset the base of the budget to fit within existing revenue.

“Clearly that budget (FY15) will be a smaller budget than this fiscal year’s budget because we’re reassessing our enrollment projections in light of national enrollment trends for graduate students, and we want to be more conservative,” Gunderson said in an interview with The Journal on Feb. 4.

Webster University expects to end the school year with a balanced budget after it predicted a shortfall for FY14. The university came up $13.9 million short while balancing its budget for FY14, which ends May 31. Webster’s total budget for FY14 was $221.4 million.

Student tuition dollars make up 95 percent of Webster’s revenue. While undergraduate enrollment was up this past year, graduate enrollment declined. Of the 95 percent, graduate students are responsible for about 75 percent, while undergraduate students make up the remaining 25 percent.

That decline in graduate enrollment contributed to Webster’s current shortfall projection.

Webster’s enrollment drop reflects:

 

  • Drop in St. Louis campus graduate enrollment
  • Drop in MBA, need for updates in the program
  • Drop in counseling, needs move to accreditation
  • Federal sequesters impacted military enrollment

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