Projected deficit concerning but manageable

By Thomas Regan

 

In this graph, the numbers displayed in black indicate the final, adjusted deficit, including use of restricted funds, during each fiscal year; numbers displayed in cranberry indicate projections.
In this graph, the numbers displayed in black indicate the final, adjusted deficit, including use of restricted funds, during each fiscal year; numbers displayed in cranberry indicate projections.

Rider is facing a $10 million projected deficit as of Sept. 1, according to the president’s presentation to faculty at Fall Convocation earlier this month.

President Gregory Dell’Omo said the Convocation was one of several meetings he had, since the end of the 2016 fiscal year, discussing the state of the current year’s budget.

“I reported, in these meetings, that as of June 2016 the early forecast [for fiscal year 2017] showed a potential $14.7 million deficit. I made it clear to my senior team that this was totally unacceptable,” Dell’Omo said in a written statement on Sept. 27. “Through a series of revenue enhancements and expense reductions that took place over the summer, that deficit projection was lowered to approximately $10 million as of Aug. 2016, which I also reported in my meetings with faculty and staff.”

Jeffrey Halpern, contract administrator for Rider’s chapter of the American Association of University Professors (AAUP), admits the university’s current financial state leaves much to be desired, but he questions the legitimacy of the forecasts.

“I don’t take these projections very seriously,” Halpern said. “The number of students enrolled is just one piece of the projections. The discount rate is another piece of the puzzle, and the projections can change dramatically based on those numbers, [among other factors].”

Despite the bleak outlook for Rider’s 2016-17 budget, Dell’Omo said he is confident the university will end up nowhere near a deficit of the magnitude of $10 million or greater.

“I want to restate what I have said before: the deficit figures I reported this summer were projected forecasts at that moment in time, and they will not be the final deficit figures we realize and report at the end of this fiscal year,” he said in a statement.

Dell’Omo pointed out the university’s projected deficit of $7.6 million in Fall 2015 was eventually cut down to a $3 million operating budget deficit.

The university, using one-time donor and grant funding restricted to specific purposes and not allowed for use on day-to-day expenses, lowered the final fiscal 2016 deficit to $1.8 million, according to university spokeswoman Kristine Brown. These restricted funds, university officials cautioned, are not necessarily available on a continuing basis.

Dell’Omo said the university must find ways to tighten the budget and draw in more revenue in order to combat the current unfavorable projection.

“Many factors are going to impact the financial status moving forward into this year, including (but not limited to) spring enrollments (fall enrollments for new freshmen came in slightly higher this year at 872 vs. 861 last year), new revenue enhancement opportunities, continued efforts in working with the AAUP to lower our costs of instruction, as well as other expense reductions. I will continue to update the university community on our progress,” Dell’Omo said in the written statement to The Rider News.

Halpern adds the growing percentage of discounts given to incoming students and the decrease in the number of students living on campus to the list of potential contributing factors to Rider’s financial state.

“I’m concerned that recruitment will continue to rely on attracting students with discounts by offering more scholarship money,” Halpern said. “There is a point where you aren’t charging enough to cover the costs.”

As the financial situation continues to develop, the campus community needs to address the issues as a team, Dell’Omo said.

“It is extremely important that the university community continues to work together to address the many challenges that Rider, and the higher education industry as a whole, is facing in today’s environment,” Dell’Omo said.

Although the administration and union officials announced they plan to meet and negotiate, Halpern said the date has yet to be set.

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