March 13, 2009
I have come to the conclusion that this economic downturn we are experiencing has yet to "bottom out." Typically, you would expect to see the stock markets reach their lows and begin to invite new buyers into the market as your first signal that a recovery is underway. Even at that point it can take a substantial period of time before employment improves and firms and families begin to act with confidence that tomorrow will be better than today. The fact that we are still seeing investors leaving the stock markets indicates to me that our economic quagmire may be around a while. I hope I'm wrong.
LeTourneau University is financially strong and to stay that way we must invest in our new strategic vision and the many opportunities we have while also reducing our expenses to better weather this economic storm. Here's the communication I sent to campus this week:
We are nearing the completion of our 2009-10 fiscal year operating budget. It is no ordinary budget but then these are extraordinary times. We are experiencing a deterioration of our global economy that is significant, widespread, and unpredictable. Because the families of current and future students will be impacted, it is a time for responsible stewardship which includes preparation for the possibility of smaller enrollments.
At the same time, it is an extraordinary opportunity to experience God. He loves us too much to leave us to put our trust in worldly treasure. In workplaces around the world today people are more open to reconsider priorities, including the importance of putting their hope in heavenly treasure. Our university vision to place LeTourneau graduates in these workplaces is more urgent than ever before!
LeTourneau University is in sound financial condition. We can face the challenges of this economic recession from a position of strength not weakness. In my December update to you, I described the approach we would take: prudent reduction of our operating expenses; additional financial aid for students with the most need; investment in our strategic vision including new programs like Air Traffic Control and Civil Engineering; and steadfast confidence in the promise of Matthew 6:33. We will submit a balanced budget to the Trustees in April. The prospect of smaller enrollments in both the traditional and working adult programs requires us to make significant reductions in our operating expenses. Since faculty and staff are the largest part of our operating budget, we cannot move forward without addressing the size of our payroll.
Even though the budget is not yet complete, here’s what you can expect:
There will be no overall cost-of-living salary increase in the budget. As we have done in the past, faculty who have been promoted in rank will receive a salary adjustment. I am committed to returning us to a budget in which we can recognize your outstanding performance with salary increases but it is not possible at this time. Notification of faculty contracts will occur very soon and no later than March 15. As there is no change in salaries, staff will not receive salary notification letters as in past years.
There will be restructuring of functions across campus including the elimination of positions. There is opportunity in these extraordinary times. We can focus on our vision of “every workplace in every nation as our mission field” and increase our capabilities for future growth. We can become more efficient and effective in how we operate. As a result, you can expect to see some jobs redefined and other positions eliminated in both the traditional and nontraditional programs in Longview and at our other educational centers across Texas. All faculty with tenure will receive new contracts for next year. However, the number of non-tenured faculty positions will be reduced. The size of our administration and staff will also be reduced. These changes will be announced by the appropriate administrators by March 15 and will align resources with our strategic vision and position the university to weather the continuing changes in the economy.
There will be the need for extraordinary flexibility from all of us. Think back only 12 months ago: the economic conditions and our concerns were very different. One characteristic of these extraordinary times is unprecedented volatility and this makes creating a budget that will extend to June 2010 a very challenging task. I ask you to remain flexible and willing to adapt as we make necessary changes. Even after our budget is submitted to the Trustees in April, we will continue to modify operations as needed to accomplish our mission. I see no consensus from economists on what will happen in our world markets over the next 12 months. I cannot promise that the budget reductions we have identified will be sufficient. I can promise that we will remain committed to our students and faithful in what God has called us to do.
Am I discouraged? Absolutely not. The world needs our graduates of ingenuity and Christ-like character today more than ever. The unique strengths of LeTourneau University offer opportunities to add new programs and grow enrollment. With all the change around us, nothing has changed in God’s Great Commission to us. Without hesitation, I know that He who started this good work at LeTourneau University will be faithful to complete it.