President Teresa Amott unveiled plans Wednesday to cut retirement benefits for all faculty and staff through June 2014.
The decision was one of several stopgaps Knox officials outlined at an open forum on handling the college’s financial woes, which largely stem from overspending the endowment and the 2008 economic downturn.
Treasurer Tom Axtell said that temporarily cutting the retirement funds — a contribution that averaged about 6 percent of an employee’s salary — will save approximately $150,000 this year and $500,000 in total.
“As a labor economist, this isn’t something I take lightly. But we have to find additional cost savings. That’s the reality of it,” Amott said.
Knox began the year with a $3.6 million deficit, on the condition that the budget be balanced by the end of the fiscal year.
The Board of Trustees approved a $1.7 million draw from the endowment — the equivalent of Knox’s savings account — while school officials managed $750,000 worth of cuts.
Still, that leaves nearly $1.2 million in budget cuts before June 30.
Salary freezes, unpaid furlough days and staff cuts are all being considered, Amott said.
“We didn’t think it would be possible to cut [$3.6] million without doing real harm to our students and with our bonds to the community,” Amott said. “We can’t raise tuition more than we already have, and we’re not willing to cut financial aid, so we have to find expense reductions the best we can.”
Library Director Jeff Douglas asked about an email Amott sent members of the Knox community on Monday that posed the possibility of further staff reductions.
“I need to know if there’s a chance that the two positions we’ve lost [at the library] might come back to us. If so, we’ll do one thing. And if not, we’ll do something else,” he said.
Amott acknowledged his concerns, but said she did not yet know: school officials will not meet with the Board again until February, and they are still grappling with a surprisingly high number of fall dropouts.
“I just hope that as we talk in the future about the compromising the student experience, well, let’s just recognize that it’s already started,” Douglas said.
Amott and Axtell presented a 10-year plan they say would give Knox a $5.5 million surplus. It relies on increasing the enrollment by 60 students each year through 2016 and raising the endowment $10 million each of the following six years.
“There’s a short-term period we have in which to endure some pain. But if we make investments now, we will start to see revenue growth three to four years from now,” Amott said.
Some faculty members expressed skepticism toward the model, which showed continued financial decline the next two years before beginning a turn around.
“There’s something driving the projections forward here, but I’m unsure what it is,” Assistant Professor of Political Science Daniel Beers said.
Amott cited a healing economy, slight tuition increases and a jump in enrollment. Among her plans to achieve that goal: full-tuition scholarships, a revamped website and hiring an internship coordinator.
And by Amott’s calculations, the athletic department could also accommodate at least 100 more student-athletes, who she said statistically are less likely to leave Knox.
“Knox College, for over 175 years, has been chronically poor, under-endowed, resource-deprived — whatever term you want to use,” Dean of the College Larry Breitborde said. “But I think this is a model that provides a path out.”
In October, Amott mentioned interest in purchasing St. Mary’s Square Living Center, 239 S. Cherry St., which could provide as many as 250 additional beds. She said negotiations were still in the “early stages.”
But on Wednesday, the message from Knox officials was clear: increasing enrollment — perhaps to more than 1,600 students — is key.
“There’s no other way for a tuition-dependent institution to solve this kind of problem. It works, and it’s our only hope,” Amott said.