Hilltop Views

Letter to the Editor

Hilltop Views Logo

Hilltop Views Logo


Hang on for a minute...we're trying to find some more stories you might like.


Email This Story






March 26, 2018

To the Editors of Hilltop Views,

As the university’s chief financial officer, I am writing to correct a recent story published in your paper. In Volume 43, Issue 7, Matthew San Martin and Victoria Cavazos reported on Dr. Martin’s recent meeting in their story “UNIVERSITY STRUGGLES TO MAINTAIN FINANCIAL STABILITY AMIDST PLAN FOR NEW BUILDINGS”. This headline and several statements in the article are incorrect and misleading.

First and foremost, as Dr. Martin explained in his address, the university is responding to the current higher education environment to assure the university’s vibrancy and financial sustainability. Across the United States, institutions of higher education are reporting lower-than-expected enrollment, underperformance of net tuition revenue, and increasing operating costs. This is due, in part, to student demographic changes as well as students’ desire for affordability, lower student debt, better facilities, and better services. St. Edward’s University is proactively adjusting to current circumstances and will achieve an operating surplus this year (as it has in the last 18 years) as well as deliver a balanced FY19 budget to the Board of Trustees at its May meeting.

As the story reports, the university’s endowment recently reached a record high $110 million. However, the last sentence in the second paragraph introduces an error. It references the endowment achieving this milestone “after recently facing a recession due to increasing costs, missed enrollment goals, and a shrinking college bound high school population.” These pressures relate to the operating budget, not the endowment. Although $100M is a significant amount, the endowment provides only a fraction of the total student aid offered.

The primary revenue source for the university remains student tuition and fees. As such, the operating budget is impacted by changes to enrollment levels and necessarily includes a contingency against such changes. The contingency, along with other flexibility within the budget, is being utilized this year to assure achievement of the budgeted surplus. Moreover, this year’s enrollment impacts next year’s revenue requiring an adjustment to the expense base. For instance, the smaller freshman class rises to a smaller sophomore class resulting in lower tuition revenue in future. Adjusting the expense base necessitates lowering the payroll base as salaries represent the majority of total expense. This was achieved through offering retirement-eligible employees a voluntary transition package, several strategic restructurings, and a hiring frost. Not only does good financial management dictate a balance budget, the Board of Trustees requires the annual financial plan to include a balanced budget, and we will deliver one for next year.

Beyond the annual operating budget, Dr. Martin provided information on the next steps in the campus master plan. He explained that the strategies employed to fund previous capital construction projects may not be viable to fund future projects. Dr. Martin shared how the RCC fitness and wellness center is a strategic investment offering an appropriately-sized and equipped facility to serve current and potential students, faculty and staff. The article attributes an inaccurate quote on this project. The last sentence in the second to last paragraph states, “With this building we are going to be able to save money so that we have sufficient funds for the building which is an 8-million-dollar project.” Funding for the RCC fitness and wellness center is provided through prior years’ savings (surpluses) which is already accumulated and available. The building itself will not “save money,” and was never stated as such. In addition to accumulated surplus, the university is also seeking potential partners to help fund the project or perhaps to deliver programming in the space once its complete.

The primary message of Dr. Martin’s address was the financial stability of the university and confidence in our future. I hope this letter helps clarify those points.

Sincerely,

Kim Kvaal

Kim Kvaal

Vice President for Finance & Administration

Leave a Comment

If you want a picture to show with your comment, go get a gravatar.




Navigate Right
Navigate Left
  • Letter to the Editor

    Viewpoints

    Is freedom of speech a principle or privilege?

  • Letter to the Editor

    Viewpoints

    Dallas police shooting illustrates dangers of police brutality and victim blaming

  • Letter to the Editor

    Viewpoints

    Gentrification destroys family-owned businesses in favor of trendy tycoons

  • Letter to the Editor

    Viewpoints

    Professor poses challenge to “open up” classroom discussion

  • Letter to the Editor

    Viewpoints

    Citations against Serena Williams reveal sexist double standard in tennis

  • Letter to the Editor

    Viewpoints

    Same banks that contributed to 2008 stock market crash continue to go unchecked

  • Letter to the Editor

    Uncategorized

    #MeToo movement men show hypocrisy in recent scandal

  • Letter to the Editor

    Viewpoints

    Misguided Nike protests may do real harm to veterans

  • Letter to the Editor

    Viewpoints

    Strict drug regulations limit legitimate use

  • Letter to the Editor

    Viewpoints

    Finished Pavilions disappoint with thin walls, bad plumbing, and tiny closets

The Student News Site of St. Edward's University
Letter to the Editor