Friday, December 12, 2008
A message from President H. Ray Hoops
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December 12, 2008 To members of the University of Southern Indiana Community: Many of our community are justifiably asking about the effects, if any, of the current economic environment on the University. The purpose of this letter is to share with you what we know at this time and outline a course of action that will position the University well for the future. First, let me assure you that the University of Southern Indiana enters these difficult economic times in very sound fiscal condition. Our long-standing culture of frugality and prudence, which has allowed the University to maintain our valued position as the most affordable state university in Indiana, will serve us well as we approach what is sure to be a challenging period. As one might reasonably expect in the current environment, and as you have no doubt seen in your own portfolios, the USI Foundation has experienced investment losses over the last year. Last November, the Foundation was valued at $71.7 million. The assets of the Foundation are currently valued at $53.3 million. The Foundation, built with the generous support of thousands of our friends, supports both scholarships and faculty development initiatives, such as attendance and delivery of papers at scholarly meetings. Unlike many universities, we have never drawn on Foundation investment income for more general support of the University, so this reduction in asset value will not have an effect on the overall operations of the University in any direct way. However, we have seen the need to freeze the drawdown of investment income for scholarship support and faculty development. The University has developed and implemented plans to fully fund all scholarship commitments, and largely fund much of our faculty development activities, using non-Foundation resources. This will enable us to continue to make the awards required to attract the high-quality students who have traditionally been supported with these scholarships. These steps will hasten the recovery of the Foundation’s asset value when the economy recovers. We recently received word that the State of Indiana will reduce the University’s current year operating appropriation of $40,387,429, by one percent, or $403,874. Our expected $560,962 Repair and Replacement appropriation, which we use to keep our physical plant in good condition, will not be received. These current year reductions are fully manageable in the context of our $128 million operating budget. Indeed, we have an obligation, in accepting the state’s generous support of our University, to also share in the burden of facing our partner’s demonstrable challenges. It is important to take this reduction as a signal that there may be greater challenges for all of us in both the balance of this fiscal year and the coming legislative biennium. Therefore, I urge that we sharply focus on the frugality and prudence that is part of our ethos, and that we will need to surmount this difficult period. Sincerely, H. Ray Hoops President |
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