In his first semester at Bowdoin in 1990, President Robert Edwards wrote a memorandum to the school's financial planning committee detailing the status of budget.
"Very simply, Bowdoin is spending at a higher level than its revenues will support," he wrote.
As a result, Edwards, his administrative team and the College's overseers undertook the process of balancing the budget. This process had wide-ranging impacts: Bowdoin briefly abandoned its commitment to need-blind admissions, cuts were made to athletics and student life programs, and reductions and revisions were made to staff and faculty positions.
As Bowdoin confronts similar?though not identical?challenges during the current economic downturn, findings from how the College dealt with previous periods of economic turbulence may shed light on strategies Bowdoin could consider in the coming months.
'In the red'
In fiscal years 1988-1989, 1989-1990, and 1990-1991, the College ran budget deficits of $1.9 million, $3.1 million, and $2.4 million, respectively.
Bowdoin was facing rising costs, especially for employee health care, coupled with slow rates of donations, according to archival Orient reports. Budget oversight was not particularly stringent, and administrators of various programs were able to use funds not specifically allocated to them. Additionally, the College also was paying off $15 million in debt for the construction of Farley Field House and Hatch Science Library.
Inaugurated in October of 1990, Edwards confronted Bowdoin's financial problems head on. Within one year of his inauguration, he had two committees to aid him, made up of faculty, students and staff. Edwards also created a strategic planning task force to "do what is necessary to identify the priorities of the institution, to propose measures to rebalance programs, and to suggest strategies to generate income and contain expenditures so as to reflect those priorities."
Edwards also named another body?the financial planning committee?specifically charged with balancing the budget by 1993-1994.
According to former Vice President for Finance and Administration and Treasurer Kent John Chabotar, the financial planning committee would create the first draft of the budget every year, which his office would evaluate, then pass it on to the governing boards. Once these committees were in place, the College began the process of making cuts and revising policies.
"It was very painful?everything was scrutinized," said Senior Vice President for Planning and Development and Secretary of the College Bill Torrey, who was director of development and vice president for development and College relations during this period.
"We looked at every single thing we were spending, and said, 'Can we do without it?' and that's not unlike what we're doing today," Torrey continued. "[Edwards and President Barry Mills] both thought it was important for the community to be well-informed."
Chabotar said that ultimately, Bowdoin was forced to reduce its work force by 70 positions. Several of these employees were simply laid off. Major cuts included positions in the safety and security department, including the Director, as well as 24-hour staffing in Dudley Coe Health Center.
However, most of the cutbacks were implemented by offering employees early retirement, which occurred in two different cycles. In 1992, the first year of the program, employees ages 55 and older with 15 years of service at the College could retire early and receive six months of salary. In 1993, the second year, employees that met the same standard received six months of pay, as well as an extra week of pay for every year spent at the College up to 26 weeks.
According to Chabotar, some of these employees were simply not replaced. However, even the positions that were replaced resulted in significant savings, since most of the individuals that took early retirement had been at the College for a long time and were making larger salaries than their replacements.
While early retirement was an effective strategy, Chabotar said, it was not without risks.
"One of the dangers of early retirement is you can't control who goes, but it's also one of the more humane ways to reduce the staff because nobody gets fired," he said.
Another area of the College affected was the admissions policy. According to an Orient article in fall 1992, 40 students in 1991 and 26 in 1992 were not accepted to Bowdoin due to a lack of financial aid?a break from the College's previous commitment to need-blind admissions.
According to Chabotar, the key when making cutbacks is identifying "the untouchables?the stuff that can't be reduced a lot for Bowdoin to stay Bowdoin."
As Mills has created a committee to grapple with the challenges posed by the current recession, Chabotar added, that body "has to be clear on the extent to which their recommendations and priorities protect the product?and remember that every college in the country is going through this."