An independent economist presented a report to professors Wednesday night evaluating Fairfield’s financial well-being.
The 34 page report by Dr. Rudy Fichtenbaum was obtained by The Mirror prior to the presentation, which occurred after press time.
In it, Fichtenbaum notes “the financial condition of Fairfield University has deteriorated slightly over the period 1999-2003,” but still concludes “Although the financial condition of the University has declined moderately … Fairfield University is in good financial condition.”
Vice President of Finance William Lucas took issue with parts of the report.
“My disagreement is in his conclusion that ‘the financial condition of Fairfield University has slightly deteriorated over the period 1999-2003’,” Lucas said.
Lucas added, “I believe that Fairfield is stronger financially as a result of prudent borrowing, fundraising and balanced budgets.”
Dr. Kathryn Nantz, a professor of economics and president of the Faculty Welfare Committee which commissioned the report, thought the report will help shed light on the university’s finances and management of finances.
“It is our hope that this report and presentation will provide the university community with information about the process that the board [of trustees] and administration follow when allocating the university’s resources,” Nantz said.
Nantz said she thinks Fairfield has good financial health, but noted that faculty are concerned about Fairfield’s use of its funds.
“Having worked with the administration on successful grant applications in recent years, I am confident that the university has adequate resources,” Nantz said. “The questions that I and other faculty have, for the most part, concern the use of these resources.”
In emphasizing the university’s financial health, Lucas cited reports by Moody’s Investor Services and Standard and Poor’s which reviewed similar documents that Fichtenbaum did.
“Both Moody’s and Standard and Poor’s rating services after reviewing the same documents believe Fairfield is stronger financially and have upgraded our ratings to A3 and A- respectively,” Lucas said.
Both reports praised the university’s improving student demand, successful fundraising, growing endowment and balanced budgets, but both also had cautionary points.
“Historically, the university’s debt burden has been relatively high, having reached eight percent in 2002,” said the Standard and Poor’s report. “While this is a somewhat elevated level, the university has been able to continue to generate operating surpluses.”
The Moody’s report also issued a cautionary note about Fairfield’s debt.
“While coverage of debt by financial resources is at the lower end of the range for A3 rated private institutions, we expect the university’s financial resource cushion to grow as the result of fundraising geared toward the endowment,” the Moody’s report stated.
Nantz compared Fichtenbaum’s report to one commissioned by faculty members 10 years ago.
“The FWC had a similar study done at the request of the Faculty Salary Committee about 10 years ago,” Nantz said. “We felt it was time to update it; the Faculty Salary Committee and the faculty members of the Budget Committee recommended that we have the report done.”
Additional coverage of Fichtenbaum’s report and his presentation to the faculty will appear in next week’s issue of The Mirror, as well as on www.fairfieldmirror.com.
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