Updates on Budget Decisions and Future Planning

October 11, 2024

Dear SLU faculty and staff,

Since our email to you in early September, our work to balance the FY25 budget has continued, alongside our efforts to identify operational efficiencies, advance strategic revenue opportunities, and reimagine the academic enterprise.

In recent weeks, we have also met with nearly 1,000 faculty and staff who attended meetings and town halls, in person or remotely. Thank you for your thoughtful questions and engagement. Your perspectives are essential to the work that will continue throughout the year.

We write today with a number of updates on efforts to reduce expenses for this fiscal year and going forward.

Background on the challenges we face

Detailed budget updates were shared with you in May, July and September. In brief, our fiscal trends over the past few years show that our endowment, enrollment and revenue have been strong and growing. However, our expenses are outpacing them. As we work to sustain and build on our strengths, we also need to bring our expenses back into alignment with our revenue over the next three years. 

Decisions made to balance the FY25 budget

As we stated in our September update, we will balance this year’s budget with the help of an increase in the endowment spend and by implementing an expense reduction of approximately 4% across all divisions. 

We shared with you in our recent message and town hall meetings that we were prioritizing the elimination of open positions as a way to close this budget gap and minimize the number of involuntary separations from current employees. 

We have since eliminated more than 130 vacant positions, which include approximately 30 vacant faculty positions and 100 unfilled staff positions. 

Unfortunately, we will also need to eliminate the positions of about 20 current staff as part of our efforts to achieve the required 4% reduction in operating expenses. These positions account for about 1% of our full-time staff, and 0.8% of total full-time employees. 

Executive leaders will have these difficult conversations with individual staff members soon. Their severance package will include salary continuation and benefits intended to support them as they transition out of the institution and to new employment. 

It is our intent to treat every individual impacted with the respect, compassion and dignity we owe to those who have served this University with such care and dedication. 

The decision to part with valued employees is a painful one. We worked in numerous ways to avoid taking this step. But, in the end, it was our only path to fulfilling the 4% expense reductions we must make to ensure the University’s continued financial health.

Planning for the longer term

If we are to emerge stronger from this challenging time for SLU and for all of higher education, we must think beyond our current year. We must continue to build longer-term, sustained efforts to align our University’s resources with the areas in which we can make the greatest contributions.

Three work groups have begun or will soon launch work intended to streamline administrative functions, bolster revenue-generating initiatives, and transform our academic structure. The outcomes of their work will positively impact our budget in FY25, FY26 and FY27 – beyond the 4% reductions we have implemented for this year.

• Work group 1 is analyzing a limited number of administrative functions, is chaired by Arts and Sciences Dean Donna LaVoie, Ph.D., and is composed of staff at all levels. They will formulate preliminary recommendations for review by the University cabinet. 
• Work group 2, chaired by School for Professional Studies Interim Dean Scott Duellman, Ph.D., is providing oversight and support for efforts to increase domestic and international enrollments in specific academic programs. 
• Work group 3 will be led by Provost Mike Lewis, Ph.D., and Faculty Senate President Chris Rollins, J.D. At the Faculty Senate meeting next week, they will share details about the organization and launch of this effort, which will seek faculty input and align with the processes outlined in University policy and the Faculty Manual. 

Further updates will be shared as their work continues. 

Supporting our community in a changing landscape

We have reduced our operating expenses by 4% for this fiscal year. We will need to make continued reductions, in expenses and likely in personnel, to balance our budget for FY26 and FY27. The work groups will inform the decisions that we make. Ultimately, we will become an organization with fewer faculty and staff. 

This means that many of our jobs will change. We will need to focus our efforts differently, shifting our work to support areas of highest priority. We will need to implement better processes and practices, and nurture the talent and potential of our faculty and staff. 

We will need to accompany and support one another through this time of change. Remember that, in addition to SLU leaders and your network of colleagues, the Employee Assistance Program (EAP) is a resource available to you.

Over the coming weeks and months, your leaders will work with you in making strategic and sustainable adjustments to the work that you do. Your input and engagement will be essential to these efforts.

The changes we are making, including those that are difficult and painful, are essential to ensure that our University remains fiscally strong and that we continue to serve our mission and our students well into the future.

Thank you for your commitment to SLU. We will keep you updated as this work continues. 
Sincerely, 

Fred P. Pestello, Ph.D., President

Mike Lewis, Ph.D., Provost

Mickey Luna, Vice President for Human Resources

David Heimburger, Vice President and Chief Financial Officer