Predicting a slow recovery for the endowment, the Corporation focused this weekend's meeting on long-term plans to reduce the University's budget by about $90 million over the next five years, and revised ambitious plans for two major capital projects so they could begin even during a period of economic recession.
The University's highest governing body deepened budget cuts recommended by President Ruth Simmons both for this year and for future fiscal years but attempted to maintain academic priorities and a commitment to financial aid. It said two high-priority projects - a Medical Education Building and a brain sciences building, would likely be addressed through renovations of existing buildings instead.
It also granted final approval for two other projects, the renovation of Faunce House and a new Creative Arts Center, to begin this summer.
"This is the first meeting I remember since I've been at Brown where so much has been debated and changed," Simmons said in an interview Sunday.
In an e-mail to the Brown community in January, Simmons set a framework for sustaining the University's financial situation that included freezing most salaries, postponing the expansion of the Graduate School and proposing to reduce next year's budget by $4.5 million and cutting roughly $60 million in planned budget increases by 2014.
But the Corporation decided to take more drastic measures to preserve the health of the University's endowment and financial stability, moving to increase budget cuts for the 2010 fiscal year from $4.5 million to $6 million, and aiming to cut as much as $90 million from the projected budget for 2014.
Simmons also announced for the first time in an e-mail to the Brown community on Saturday that the University plans to cut some current administrative and staff employees' jobs to help reduce the budget.
"Targeted position eliminations will be enacted in the coming months to help achieve this goal," Simmons wrote. "While some will come from existing vacancies made permanent, some administrative and staff positions will unfortunately have to be eliminated."
The meeting was "enormously engaged and in some respects sobering," said Chancellor Thomas Tisch '76, Brown's highest officer and the Corporation's leader.
"There was an attempt to strike an appropriate balance between the uncertainty and the challenges of the financial market and the economic market on one hand and the importance of moving Brown forward consistent with the goals of the Plan for Academic Enrichment," he added.
Slow growth predicted
Administrators had previously planned for no significant change in the endowment's value this year and then an immediate return to growth of about 10 percent per year, said Beppie Huidekoper, executive vice president for finance and administration, but the Corporation decided that planning on a "rebound at that pace" would be overly optimistic.
As a result, the projected budget for fiscal year 2014 - excluding the Division of Biology and Medicine and auxiliary departments which receive no endowment funding - will be about $610 million, down from the $695 million originally projected, a number that factored in ambitious growth prescribed by Simmons' wide-ranging Plan for Academic Enrichment, Huidekoper said.
A large portion of the cuts will be realized by eliminating salary increases for most faculty and staff for the coming years, Huidekoper said.
The projected Bio-Med budget will have to be reduced by about $10 million, though it is less dependent on endowment income than the general budget and much smaller to begin with, Huidekoper said.
In the short term, administrators are still debating how to cut the additional $1.5 million from next year's budget, though Huidekoper said students can expect to see reductions in campus services, resulting in part from vacancies that will continue to go unfilled.
"Since I went into the meeting with the recommendation of $4.5 (million), I had a pretty good idea of what that would be, but this is a completely new figure," Simmons said. "We have to go back and begin to sort out how to make that happen."
"It's going to be hard, no doubt about that," she added.
The Corporation also decided to increase undergraduate tuition by 3 percent next year, to $38,048. That represents the smallest annual increase in 45 years, according to a University press release. Tuition increased last year by 3.9 percent.
The overall undergraduate charge, including standard room and board and health fees, will increase 2.9 percent, to $49,128.
"Obviously, it means less revenue and we'll be able to do fewer things," Simmons said, but "our goal was to minimize as much as possible the effect on families."
Still, the University faces increased spending in some areas, including financial aid, meaning total budget expenditures, despite cuts, will increase by 0.9 percent.
The University plans to maintain its financial aid policy, which the Corporation expanded at its meeting last February, Simmons wrote in her e-mail Saturday, adding that the financial aid budget will increase 10.9 percent.
Capital planning developments
The Corporation also allocated between $3 and 4 million in capital funding for the construction of a science resource center in the Sciences Library, Huidekoper said.
Other increases in spending include new faculty positions based on searches already underway and increased funding for the UPass program, through which Brown subsidizes RIPTA travel for University affiliates, and for SAFEride in anticipation of rising expenses for both services.
"The areas that we're growing are the areas that we've committed to growing," Huidekoper said.
In addition to budget issues, the Corporation discussed the deferral of capital projects. (See "Brain science, Med School buildings will be renovations," page 1.)
The so-called "Mind Brain Behavior" building a largebrain sciences project originally planned for the site of the Urban Environmental Lab on Angell Street, may no longer be a new construction project. Instead, the University is considering renovating a building on campus, Huidekoper said. The planned Medical Education Building will also be a renovated structure, according to Simmons' e-mail.
The construction of the Creative Arts Center and the Stephen Robert '62 Campus Center in Faunce House will begin this summer. Designs for a new swim center will also be drafted immediately.
"We're not stopping," Simmons said. "Part of the effort is to really announce that we're still here, we're still doing things."
"The future is still uncertain, and we could say, let's defer it and maybe things will be better in a year," she said. But, she added, "If you're going to be guided by what the students need, we can't wait for another one-to-five years for things to return."
In other business this weekend, the Corporation formally accepted gifts to the University totaling just over $35 million. The gifts include a $14.75 million bequest for the new swim center, a $10 million gift for the re-configured brain sciences building, a $5 million gift for the Faunce renovations and a $2 million gift for undergraduate scholarships.
