Budget Committee

Committee Members 2010-2011

Lou Chitkushev (MET), Chair

Robert Hudson (SSW)
Shulamit Kahn (SMG)
Laurence Kotlikoff (CAS)
Phillip Stone (MED)

Recommendation of the FAFC Budget Committee: Responsible Investments

Annual Report 2009-2010

The Budget Committee was asked to investigate the cost of parking on the MED and CRC campus.  The Committee Chair met with Gary Nicksa, Vice President of Operations.  The minutes of meetings are below.

Summary of 04.15.2010 meeting with Gary Nicksa

Respectfully submitted,

Lou Chitkushev

Chair

Annual Report 2008-2009

Boston University was one of the first schools to respond to the Global Financial Crisis as early as September 2008. Since then a majority of our peers has responded with a mixture of hiring freezes, capital project delays and outright cuts. Budgetary impacts of the recession on BU include decreases in endowment and income distribution, credit worthiness because of declining net assets, continuing students, freshman undergraduates and new graduate students; increases in need-based financial aid and expenses driven by inflation. Although total undergraduate applications to BU are down 0.6%, International applications are at 4217, up 11%.

The 2009 budget has been affected by the unexpected shortfall of 127 in student enrollment on the Charles River Campus in the Fall of 2008 resulting in a decrease in total tuition. This includes 70 fewer Freshman than the goal of 4200. The decrease in Freshman class size will impact budgets for the next four years. Partially offsetting this shortfall was the decrease in required student aid. Presently around 29% of each tuition dollar is recycled as tuition assistance. However, the administration has established a new reserve fund for students requiring aid, because of effects from the economy on their ability to pay.

Assumptions for the FY 2010 budget include 4100 Freshman, down from a target of 4200 and increased financial aid to help enrolled students stay at BU. Diversification of college endowments, in general, has not protected them recently from significant losses, due to broad declines in most asset classes. Only around 3% of the budget total is derived from the endowment. There was a brief discussion of changing the investment strategy of the Endowment funds to reduce their volatility. The next meeting of the Budget Committee is scheduled for 5/13/09.

Respectfully submitted,
Philip Stone
Chair