Loyola University plans to impose its fifth round of layoffs in as many years, along with other cost-cutting measures, as the New Orleans school continues to struggle with a protracted slide in revenue.
In an interview Thursday, university officials declined to give specifics about the number of jobs to be eliminated, but they said their priority is to spare members of the faculty.
The cuts "will be largely in places that provide services outside the classroom — support services, overhead expenses, reductions in insurance, those kinds of things,” said Paul Pastorek, a former board chairman who was recently named Loyola's chief operating officer.
The school's board is scheduled to vote on a $120 million annual budget on Friday, and the planned cuts are aimed at avoiding the need to dip any further into the university's endowment, which officials have had to draw on over the past few years. Right now, the endowment stands at about $230 million.
"We still have a very strong endowment, and that provides a buffer," Pastorek said. "But the board has made it clear to us that we must have a balanced budget without relying on the endowment for our operations."
Officials did not say how much revenue has declined over the last year. But available tax forms show the school took in $153 million in 2015 and spent $176 million.
With classes having just wrapped up this spring, enrollment data for the upcoming school year won't be available for another few months.
Pastorek and Loyola interim provost Maria Calzada said the school has achieved a healthy retention rate among this year's 800-member freshman class, which could bode well for tuition revenue.
The rocky budget picture emerged in 2013 after the school enrolled 200 fewer students than expected, leading to a deficit of $25 million. The Catholic school's president, the Rev. Kevin Wildes, attributed the problem in part to a national decrease in the number of high school graduates.
Wildes cut staff, reduced the university’s contribution to its employees’ retirement funds and drew money from the endowment to balance the budget.
The university hired a consulting firm last year to craft a new recovery plan with the help of faculty, staff and students.
Meanwhile, a freshman class a third larger than the prior year enrolled in August, and the university said last year it was on track to have a surplus by 2019, signaling a brighter financial picture.
Yet layoffs will still be necessary this year, though how many people will be let go has yet to be determined.
The university has also again curbed some portion of its retirement contribution, having cut its 8 percent match to 4 percent in 2015 and reinstating the cut two years later. Pastorek did not specify how retirement funds have been cut this time.
Pastorek said the budget situation will not threaten the school's accreditation from the Southern Association of Colleges and Schools, which requires sound financial management.
“We are fully accredited, and we will be fully accredited for another 100 years,” he said.
The association did ask Loyola to provide updates on its financial health after the problems began, he acknowledged, but he characterized those discussions as positive. The organization is not due to re-examine Loyola’s accreditation until 2026.
Meanwhille, Calzada pointed to Loyola’s successes. “Two years ago, the retention rate was about 77 percent,” she said. "We expect that retention will be 84 percent this August."
Officials said that's due in part to Loyola’s financial commitment to its first-year students, such as a $1.25 million renovation of its Student Success Center, a facility in which students meet with academic coaches weekly.
The school’s business, biophysics, music industry studies and other programs remain popular or have experienced growth, Calzada said.
The board has also whittled down an initial pool of candidates to replace Wildes, who will retire next month, to two lay candidates. A final decision is expected soon. Loyola has not revealed the names of the finalists.
Asked if administrators were worried that news of more cuts would put a dent in faculty morale — a survey commissioned in October revealed that more than two-thirds of Loyola's faculty thought about leaving their jobs in one recent year — Pastorek said a fund has been set aside to acknowledge professors "that have gone above and beyond" over the course of the year, and that more incentives are coming.
Calzada, the former dean of the College of Arts and Sciences who in April replaced interim provost David Borofsky, said she intends to meet with faculty to discuss the hard tasks ahead.
"The No. 1 thing is to get this university on a solid financial footing, and once that is communicated, it will go a long way,” she said.