Prez@Catawba - Update from President Brien Lewis

President's Report to the Campus

Dear Catawba Community,
I am pleased to provide you with this report on recent activities and progress at Catawba College. As always, if you have any questions, suggestions, or concerns, please do not hesitate to contact me or Amy Williams to obtain additional information.

SACS-COC

SACS-COC (The Southern Association for Colleges and Schools - Commission on Colleges) is on everyone's minds since 2013-14 was our "Year of Record" leading up to the site visit next February. A huge amount of work has gone into preparing the written report and evidentiary materials, along with the development of the Quality Enhancement Project (QEP), which will be focused on Career Awareness.

Our written report has been submitted for review by the offsite team and we are waiting to hear from them on any follow-up we must undertake before the end of the calendar year. Preparations are already underway for the site visit. Thank you in advance for your help and huge thanks to Barry Sang, Tim Kennedy and many others who did so much to get us to this stage!

Budget and Financial Updates

Overall, the College's financial picture has improved substantially in the past couple of years thanks to enrollment growth, sound fiscal management, and budgetary restraint. Here are some key aspects of this:

- Budget Deficit (including depreciation):Reduced from over $2.5 million to zero.

- Debt: Reduced from $24.7 million to $21.5 million.

- Unrestricted Gifts: Reduced reliance on the "unrestricted gifts" line in the budget from $3.65 million in 2011-12 to $1.2 million this year. Our ultimate goal needs to be to reduce this line to zero both because of anticipated changes in accounting rules and so we can be asking for gifts to move us forward, not just to balance the budget!

As I have reported to you in the past, SACS-COC wants to see a "truly" balanced budget that includes depreciation and our Trustees also appropriately see achieving this as a key indicator of our financial health. In June the Trustees approved a balanced budget based on level enrollment. The Trustees also approved at that time a clear and specific set of priorities for the use of any additional annualized revenues generated through enrollment growth. Thanks to enrollment and residential growth we have been able to meet the top three priorities established by the Trustees:

(1) First $300,000: Reduce "gift line" to $1.2 million (as noted above);
(2) Next $150,000: Restore budget cuts;
(3) Next $67,500: 1% across the board salary increase for full time employees. This will be effective November 1.

Comprehensive Campaign

With our Strategic Plan and Campus Master Plan endorsed by the Board of Trustees and giving us a "roadmap to the future", we have now officially launched a major fundraising drive to help fulfill those plans. We have already received several significant gifts and pledges in support of the campaign. Some of these have already been publicized and there are more that we will be announcing in detail in the near future. To date the campaign has received over $29.7 million in gifts and commitments - a wonderful demonstration of support for Catawba! At their meeting during Homecoming, the Trustees endorsed the campaign goal of $60 million as recommended by the Campaign Steering Committee. We are grateful for the leadership of the Steering Committee, including Honorary Co-Chairs Ralph Ketner and Fred Stanback, as well as Co-Chairs Junie Michael and Tom Smith.

Tuition and Fees for 2015-16

At their meeting last weekend, Trustees approved a 5% tuition increase for 2015-16. Details will be available soon on our website and will also be communicated directly to students and families. As has been discussed by the Cabinet from the earliest considerations of tuition for next year, we will take steps to adjust institutional aid to address students' financial needs. We recognize that this increase is above the Higher Education Price Index (HEPI) that we have used in the last two years to set tuition rates and that financial aid needs to be adjusted accordingly to address that impact on students and their families in a way that takes into account individuals' circumstances. We have not adjusted institutional aid in the recent past when tuition has increased but we will do so now.

The Trustees also endorsed a plan for targeted uses for additional revenues generated from tuition and fees to take effect with the new fiscal year on June 1, 2015. This allocation of resources is intended to address (though certainly not fully resolve) longstanding issues related to competitive compensation for college employees and budget reductions over the past several years. Funds from these additional revenues will be used to:

1. Provide salary increases to full time employees to address results of the recent comprehensive Salary Study. In general: a) Those below their benchmark (the vast majority of employees) will in most cases receive an increase of 4%; b)Those at or above their benchmark (a handful of employees) will be reviewed on a merit basis;

2. Program and Facilities Improvements, including staffing and operating budgets; and

3. Technology Improvements, including upgrades to classrooms and computer labs.

In a similar approach to the one we used this year, Trustees will be asked to review a preliminary budget at their February meeting and to consider designating use of any additional revenues generated by enrollment growth in fall 2015. The top 3 priorities to be recommended for these resources are:

1. First $200,000: Reduce "gift line" to $1 million;
2. Next $67,500: Restore retirement match from 50% to 75% effective 11/1/15;
3. Next $200,000: Restore operating budget cuts.

I will continue to keep the campus advised of any developments as we must do everything possible to maintain a balanced budget so that we can meet these targets in the coming year.

Strategic Plan and Annual Plan

Each year's Annual Plan sets forth specific action items which are intended to be accomplished within an academic year in furtherance of longer term goals and objectives. The mid-year progress reports will soon be getting prepared for review at the Cabinet's full day meetings in mid-December. As always, feedback and suggestions are encouraged and welcomed.

Campus Master Plan

Thanks to a generous gift, the first project we will seek to undertake will be creating a plaza/terrace area immediately behind the Admin building. Some preliminary design concepts from different architects have been shared with the Cabinet and the Campus Master Plan Steering Committee. Let me know if you would like to see them - feedback and ideas are appreciated so that we can come up with a final design that will serve the campus well.

Thank you, Tom Smith!

The Board of Trustees is losing one of its most dedicated members. Tom Smith has decided to retire from the Board after many years of dedicated service including several years as Chair. A deeply dedicated alumnus and a generous friend of the College, Mr. Smith has made it clear he will continue to support and encourage us in many ways. Thank you, Tom!

In honor of his outstanding leadership and continued service, Mr. Smith has been accorded Trustee Emeritus status by action of the Board.

Major Capital Projects Funding Process

The Board of Trustees approved a procedure for funding of major capital projects to be implemented as a protection of College's assets when capital or restricted projects are funded from external sources. In the future, projects in excess of $10,000 will need to be fully funded prior to the commencement of the venture. Fully funded is defined for purposes of this procedure as the College being in receipt of the actual funds needed to complete the project or signed commitment letters/Deeds of Gifts from foundations and/or donors committing the resources needed to complete the project. Absolute monitoring of the project's commitments by the manager in charge will be required and anticipated cost overruns will be reported to the President immediately. Before continuing, additional funding will need to be secured. By taking this step, the Board is proactively ensuring that we will not continue to add to the College's debt without securing funding sources to address that debt directly.

Just Over The Horizon...

Quick notes on things you will hear and see more about soon:

- Catawba Foundation: The newly established "Catawba Foundation, Inc." was created to operate exclusively for the benefit and purposes of Catawba College. A Board of Directors has been appointed by the College’s Board of Trustees and a Memorandum of Understanding is being finalized that will define the relationship between the College and the Foundation.

- RN to BSN Program: A key aspect of the Strategic Plan involves developing new programs and opportunities in health sciences. The first step in that direction is the creation of an RN to BSN program. We are nearing the conclusion of the search for a Director who will design the curriculum and other program components.

- Solar and Water Project: The Board of Trustees has also endorsed undertaking a substantial solar project that will include installations of Photovoltaic panels and needed re-roofing on several building on campus as well as replacement of many water fixtures. Projections indicate that we would save 11% on energy and 26% on water costs.

The cost of the project is approximately $5.2 million - a significant portion of which we would need to undertake anyway as there are needs to replace roofs on several of our older buildings. The financial savings (in addition to the energy reductions) are projected at approximately $10 million to $11.9 million. We are very grateful to announce that significant portions of the entire project are being funded by generous donations. Other portions are being funded by investors who are able to realize significant tax credits for solar energy and who would, once the tax credits expire in a few years, donate the systems to the College. We believe it will be the largest such undertaking by any higher education institution in the State of North Carolina.

In Conclusion

I know once again that there are many, many more items that are worthy of reporting to you that I am likely overlooking in the interest of keeping this report as concise as possible. Please check the website regularly to keep up with the latest news and opportunities available on campus. As always, thank you for all you do for the College.

Yours at Catawba,

Brien Lewis

@CatawbaPrez

CATAWBA COLLEGE
2300 West Innes Street
Salisbury, NC 28144
1-800-CATAWBA