Balance sheet is strong’ despite cut of $250K

by Kelsey Knutson

Ken Birkenholtz, vice president of business and finance, told The Simpsonian on Monday that the college made a $250,000 cut to balance the preliminary budget before sending it to the Board of Trustees in May.

Despite that cut, he is confident that there is no need to worry.

“Our balance sheet is very strong,” Birkenholtz said.

According to Birkenholtz, the cuts came from multiple areas. He said it’s a matter of shifting costs around and becoming “more efficient” in certain areas. The college trims from different lines, which eventually add up, Birkenholtz said.

The official amount of money that the college will be working with for the upcoming year will remain unknown until the fall. The number of first-year students and returning students who enroll as well as other factors all contribute to the amount of money the college has to work with.

Even though $250,000 is a lot of money it is only about one percent of Simpson’s entire operating budget, which is around $35 million, according it Steve Griffith, vice president and dean for academic affairs. Griffith said while it is somewhat difficult to balance the three major variables of higher education –cost, accessibility and quality – Simpson is committed to doing just that.

Students and faculty should not expect to feel a major, direct impact from the cuts either.

“We don’t anticipate [to lay] off any faculty,” Griffith said. “We don’t expect to cancel any classes for next year.”

Examples of areas that will have cuts in funding will include travel and natural gas expenses, according to Birkenholtz.

With that, President John Byrd said that Simpson is also “looking for places to be more efficient.”

“Geothermal buildings, motion detector lights and other things have saved us hundreds of thousands of dollars,” Byrd said.

Following 2008 when the country felt the tight pinch of the struggling American economy, Simpson’s endowment also took a hit. According to the Form 990, which shows revenues and expenses for non-profits such as Simpson, for fiscal year 2009 the endowment fund dropped from $80,660,171 to $58,316,085 the next year.

However, Byrd said that thanks to conservative spending and a low debt load, Simpson is actually in good financial standing.

“Simpson has a long history of a balanced budget,” Byrd said. “We know there are challenges in the next five years, but I’m very excited that we’re so well-positioned and conservative. We’ve not cut a position, we’ve actively moved to fill positions and [we’ll] come through this period very strong.”

Griffith said that Simpson wants to remain accessible to many students while also offering a high quality of education. With increasing quality usually comes an increase in cost, however, finding a balance between those variables will ensure the accessibility of Simpson.

“The question we ask is ‘How do we make changes without losing the Simpson experience?'” Griffith said. “We’re in much better shape than other [colleges].”

From here Byrd will form a committee to address the issues of reconstructing the college’s revenue model, Griffith said. The committee will look at different areas and programs and see what is generating revenue.

“At the end of the day we want to protect academic programs and need to deliver high-quality programs,” Byrd said. “Being this conservative has helped us and we’re really well-positioned. We’ve moved ahead in a very normal fashion.”

The Board of Trustees will approve the final budget at the October meeting.