College reallocates $17 million

by Jacob Chalif | 5/1/18 2:35am

The College will follow through on its 2016 pledge to reallocate $17 million from non-academic divisions to academic departments, according to executive vice president Rick Mills. These funds — along with $3 million that College President Phil Hanlon committed to raise through philanthropic efforts — will be reallocated for three functions: increasing faculty compensation, general building renewal and the renovation of Dana Hall, Mills said in a joint interview with chief financial officer Mike Wagner. The budget reductions began this fiscal year, and the process is expected to last four years.

The College has a goal for each year of the reallocation process. In the 2018 fiscal year, the College’s goal was to achieve 25 percent of the overall $17 million reduction. The non-academic divisions of the College were able to achieve about 30 percent of the total goal, according to Wagner.

The goal for FY19 was to achieve 67 percent of the reduction, but budget submissions for FY19 will come in just shy of that target at 62 percent, Wagner said.

Wagner said that non-academic divisions have not had to lay off any staff yet.

“They’ve all looked at reallocating responsibilities across their staff and trying to close vacant positions rather than having to terminate people within divisions,” he said.

However, Mills noted that he expects layoffs in the future.

“Yes, there would be layoffs,” he said. “But there would [also] be new positions created and new hires and, in some cases, people would move from one position to another.”

College spokesperson Diana Lawrence wrote in an email statement that the reallocation has been going well so far.

“The process has been successful because of the hard work of managers and staff as they seek opportunities to reduce costs without compromising priorities,” she wrote.

Both Mills and Wagner said that they expect that the last two years of budget reductions will be more difficult and will involve tougher choices than the first two years.

Currently, divisions are able to look at how they can make their organization more efficient, Mills said.

“[The first two years] were easy cuts [that didn’t change] how you did your work,” he said. “You might redistribute and eliminate a vacant position, but you’re not rethinking how you do your work. Some of the later year stuff [will involve] rethinking what we’re doing and how do we do it in a way that would be more efficient and cost-effective.”

According to Wagner, the next two years of reallocations will involve fundamentally reforming the College’s administrative structure.

“[The next two years are] going to be hard,” he said. “For instance, we are looking at using technology in some different ways that could allow us to implement a piece of software that we have to pay for once, but it could save us a position because we won’t need someone to do what that software will do,” Wagner said. “So, using technology, continuing to look at reallocations, simplifying business processes. Those are the themes that people are looking at.”

Each non-academic division has been tasked with achieving a certain portion of the total $17 million budget reduction, according to Wagner.

The Office of the President, which oversees the College’s athletic departments, among various other organizations, is responsible for reducing its budget by $2 million. The executive vice president, who oversees the budgets of campus services and Safety and Security, among other offices, has been tasked with reducing his areas’ budgets by $7.5 million. The Office of the Provost, whose budget includes the Hood Museum, the Hopkins Center for the Arts, the College’s libraries, the Office for Student Life and various other offices, is reducing its budget by $7 million. The Advancement Division, which oversees alumni relations, is reducing its budget by $500,000.

In an email statement, interim vice president for campus services Steve Moore wrote that campus services has reduced its budget by $4.6 million through FY19. He added that no student services or programs were affected by these reductions.

Representatives for the Center for Student Life and the Office of the Provost declined to comment. Representatives for the College library were not available for comment by press time.

Lawrence wrote that the number of full-time employees in the President’s office has decreased from 11.5 to 6.5 in the past two years. She added that the Provost’s division has decreased from 768 full-time and 112 part-time positions in 2016 to 752 full-time and 95 part-time positions in 2017.

It is not clear if these employee reductions are a direct result of the budget reallocation.

The College’s efforts to increase faculty compensation follow the emergence of faculty compensation gaps between Dartmouth and its peer institutions. In 2016, the College paid its professors an average of approximately $187,000, less than every other Ivy League institution except for Brown University and Cornell University. Harvard University — the Ivy League institution that compensated its faculty most generously — paid its professors an average of approximately $221,000 in 2016.

According to Wagner, $5.5 million of the reallocated funds will be used to increase faculty compensation and $2 million will be used to improve benefits. The funds will accumulate gradually over the course of the four year period of funding reallocation, which makes it difficult to approximate how much salaries will rise in each of the four years. Dean of the faculty of arts and sciences Elizabeth Smith will be responsible for distributing the funds among faculty members, according to Mills.

Chair of the Committee on the Faculty and history professor Udi Greenberg said that he supports the spirit of the reallocations.

“Ultimately, this is an academic institution and, as such, its highest priority should be the well-being of students … and guaranteeing that students get the best education they can,” Greenberg said. “In order to achieve that, you have to have faculty that are well-compensated because they will go elsewhere. That is the reality if you want to keep top-notch scholars and top-notch teachers in an area with a very high cost of living.”

Greenberg said that the goal of the reallocation is not to increase Dartmouth’s faculty compensation to the level of its peer schools. Rather, the College is trying to prevent the gaps between it and other schools from growing, he noted.

“What we’re talking about are raises that … are ultimately an average of one percent or so,” Greenberg said. “These are not massive. We’re not talking about people getting 20 percent raises.”

Other funds from the reallocation will go towards renovating Dana Hall, according to Wagner. The College is currently financing that renovation with debt, and $3 million from the budget reallocations will help pay off that debt, he said.

After this budget reallocation, Mills said that he hopes the College’s administration will be more efficient.

“As the endowment grows over time … I think [new funds] could go back into the administrative departments that were part of this reallocation,” Mills said. “But I don’t think it would go back in to do what we were doing before and restore it just like it used to be. More likely, it would accomplish some new objective through that unit.”