With the revelation of Webster’s fourth consecutive shortfall, it is more important now than ever…
Faculty and administration work together to solve financial problems
“We, the Faculty Senate, fear that Webster’s finances are deteriorating so rapidly that, unless substantial changes are made soon, Webster’s future is in jeopardy.”
Much has changed since the Faculty Senate wrote a letter to the board of trustees last April.
The Faculty Senate wrote the letter due to their fear of Webster’s rapidly deteriorating finances, according to the letter.
Webster’s financial situation improved since the writing of the letter in a sense that the university paid more attention to cost management, Provost Schuster said.
Fiscal year (FY) 2019’s operating expenses decreased from June 1 to Dec. 31, 2018. Director of Public Relations Patrick Giblin said the operating expenses decreased by $7.1 million.
Schuster said administration formed implementation teams that dealt with cost management, operational efficiency and finding new revenues.
The university improved efficiency eliminating classes with small enrollment and lowering the amount of unsubscribed sections, Schuster said. Administration also optimized course offerings to fit students’ demands, Schuster said.
Finance Professor Elizabeth Risik signed the letter along with 16 other Faculty Senate members. Risik worried about Webster’s cash flow.
Cash flow is the money a business earns and receives verses the money spent to run the business.
“From the outside looking in, I do worry about the cash flow situation of the university and some of the investments that have been made more recently,” Risik said. “I don’t know that, operationally, we were able to sustain building a science building.”
Webster had a negative cash flow for FY 2018 of $24.4 million, according to Webster’s consolidated statement of cash flows. Negative cash flow is unsustainable in the long run, the letter wrote, when combined with operating deficits.
An institution faces operating deficits when it spends more than it brings in.
Webster faced its third consecutive year of operating deficits at the time the Faculty Senate wrote the letter. Consolidated financial statements released a month after the letter was sent reveal that Webster is now in its fourth consecutive year of operating deficits.
The senate expressed its fear in the letter that FY 2018’s operating deficit would far exceed the budgeted $6 million operating deficit.
The financial statements show an operating deficit of $18.7 million for FY 2018. This is the largest to date. FY 2017’s operating deficit was $14 million.
Provost Schuster said the operating deficits are due to Webster’s enrollment decline.
Full-time graduate and undergraduate fall enrollment decreased by more than 8,000 students from 2009 to 2018 (taken from Webster archives via the office of institutional effectiveness’ online report).
Although many colleges have seen enrollment decline nationwide, Webster’s nearby competitors have seen an increase.
From fall 2009 to fall 2016, Webster’s full-time equivalent (FTE) student enrollment declined by 28.3 percent, the letter wrote.
The senate received enrollment information from the federal Integrated Postsecondary Educational Data System (IPEDS).
Maryville University’s FTE student enrollment increased by 67.5 percent during the same time period. Lindenwood University increased by 4.3 percent and Park University by 18.4 percent, according to the IPEDS.
However, none have the same worldwide presence as Webster, Schuster said.
The letter urged for more collaboration with administrators and faculty to chart a new course for Webster.
Risik said Webster President Beth Stroble and Schuster have become more engaged with the senate since they sent the letter. They both frequently attend Faculty Senate meetings, Risik said.
Schuster said the destiny of Webster hinges upon active participation between all parts of the university.
“It’s not ‘well, we collaborate because we have to’” Schuster said. “We collaborate boards because we want to, because this is the only way we see that the higher education as an industry will prosper in the times to come.”
Faculty Senate President Gary Renz said he felt like Schuster and Stroble were more open to work with the senate after the letter.
“The theme of the letter was that faculty and administration are all in this together,” Renz said.
Faculty Senate member Billy Lynch said that administration and the senate both agree that students are the top priority. Lynch will replace Gary Renz as Faculty Senate president within the next year.
“I think the thing that holds us together is we agree on the objectives for the university and putting students first,” Lynch said.