December 1, 2003

Faculty Council hears FY05 budget news

By Michael Terrazas

Opening the Nov. 18 Faculty Council meeting was a presentation on efforts to make good on the University’s Environmental Mission Statement, passed by the University Senate in spring 2001 and signed into policy by former President Bill Chace.

Peggy Barlett, chair of the Ad Hoc Committee for Environmental Stewardship; John Wegner, campus environmental officer; and Sheila Tefft, a member of the Ad Hoc Committee, talked about the development of the mission statement, the range of activitites it has helped foster, and plans for the future.

Barlett said the ad hoc committee’s work has broken down into three areas: connection to place (woods walks, ivy pulls, etc.); information and policy (workshops, energy conservation projects, etc.) and curriculum and faculty development (the Piedmont Project, for example, encourages faculty to incorporate environmental themes into their courses).

Wegner talked about the creation of his position in Facilities Management on May 1 and how his task so far has concentrated on four areas: helping create a strategy for sustainability on campus; helping develop a comprehensive Lullwater management plan; participating in a review of the Campus Master Plan; and working with a task force to reduce energy consumption.

Several council members lauded the efforts of the ad hoc committee and other groups, and expressed the desire for Emory to capitalize on its reputation as an environmental leader, citing the University’s success in green building programs, alternative transportation, recycling and other areas.

Next, Charlotte Johnson, senior vice provost for administration, delivered the first presentation on the 2004–05 budget. Johnson used booklets to help explain the overview for the current budget, the financial model assumptions for FY05, analyses of faculty and staff salaries, and out-year financial projections.

Emory’s Educational and General Budget is projected to grow by 4.9 percent to nearly $462 million in FY05. Using current income projections, the budget will run a deficit of roughly $1 million to $2 million depending on the size of the salary pool; Johnson presented three models with salary pool increases of 2 percent, 2.5 percent and 3 percent that resulted in deficits of $967,566, $1.5 million and $2.04 million, respectively.

Though forecasts for endowment income look somewhat brighter than in recent years, Johnson said, the University—and certain schools, in particular—may be negatively affected by a phenomenon known as "underwater endowments." This occurs when a particular endowment’s market value has fallen below its contribution value; in such a situation, she said, the University is allowed to spend only natural income from the endowment, not any of its appreciation.

Mike Mandl, executive vice president for finance and administration, said he would return at a later council meeting with a more detailed explanation of endowment income and performance, and the concept of the underwater endowment.

The meeting closed with comments from President Jim Wagner, who said "the good news about the budget is we are not bound by assumptions," meaning the University has opportunities to increase revenue (augmenting gifts and grants, for instance) and reduce spending. Wagner also said the provost search advisory committeee is scheduled to begin holding interviews in mid-December.

If you have a question or comment for Faculty Council, e-mail Chair John Snarey at