December 1989: Volume 1, Number 1
“A Lawyer Makes a Difference,” by Kevin Cassidy of the Salary Committee
As everyone is now aware, the administration has finally discarded its treasured myth that we do not really have a legal contract but only an “agreement.” Our contract will now be recognized by the administration as legally binding and enforceable. This didn’t happen merely because we respectfully requested it. It came as a result of our hiring legal counsel, specifically Alan Neigher of Westport, whose specialty is contract law and who represents a variety of clients working in the non-profit sector.
Mr. Neigher researched the legal nature of the annual salary contract, the individual salary letter each of us receives, and the Faculty Handbook, and provided us with documentation to support our case. All of this made it obvious to the administration that we were serious about pursuing this issue and were prepared to take whatever legal action might be necessary. Suddenly, after years of rhetoric about mere “discussions” leading to an “agreement,” the administration decided the faculty was really right about the contract!
Mr. Neigher also insisted at the outset on the crucial importance of having a faculty fund permitting us to have available all the professional help we might need. He and Mark Blum of the national AAUP have been especially helpful since the beginning in assisting us to develop a general strategy toward the administration. Their knowledge and experience have made a real difference.
“Fairfield University Pronounced in Excellent Financial Health: Expert Will Address Faculty and Administration on January 26th” [by Mariann Regan]
In a project funded jointly by the national AAUP and the Faculty Welfare Committee, our faculty is beginning to learn the realities of Fairfield University’s financial situation. On December 15th, Dr. Richard E. Weber presented his analysis of the University’s finances to the Salary Committee and the officers of the Faculty Welfare Committee. Dr. Weber, a Professor of Economics and Finance at Monmouth College, New Jersey, has analyzed the financial situations of 50 colleges and universities in his capacity as economic consultant for the AAUP.
Is our university just breaking even? Hardly. Dr. Weber told the group that Fairfield University is enjoying robust financial health and is “living well within its means,” with a number of financial indicators showing “very healthy growth.” He reached his detailed conclusions from the University’s audited financial statements of the past five years, along with other financial information forwarded to him by the Faculty Welfare Committee. Dr. Weber explained that although the facts from the Operating Budget might suggest to the uninitiated that the University is straining to make ends meet, with only a small operating surplus each year (only $650 thousand in 1988-89, for example), a more complete examination of the finances shows a very different picture of a university with considerable resources.
According to Dr. Weber, Fairfield is typical of many universities throughout the United States in leading its faculty to believe that money is tight at present, has been tight over the recent past, and will continue tight in the immediate future. But faculty members must take care not to be misled, Dr. Weber urges. They should learn whether their universities are allocating large amounts of discretionary resources without their direct knowledge.
With a deeper understanding of the finances of their college, faculty members can help their administration make the managerial decisions necessary to further the missions of higher education…. Enhanced understanding leads to greater faculty solidarity, especially in collective-bargaining situations. Increased faculty support in turn makes it possible for negotiators to achieve a more equitable and hopefully more effective distribution of resources. (Weber, “The Best Place to Hide a Grain of Sand is on the Beach: Fund Accounting and Total Assets,” Academe: Bulletin of the AAUP, November-December 1989)
Dr. Weber’s written report to the Faculty Welfare Committee is substantial and complex: 25 pages of analysis and 20 more pages of tables and charts. To help us understand it, he instructed the group about the intricacies of fund accounting—a subject not well understood, he said, by many administrators or trustees, or indeed by many professional accountants…. Here are a few sample indicators of Fairfield University’s financial health, according to Dr. Weber’s report:
(1)The cumulative gain in the University’s Fund Balances (Net Total Assets) from 1985 to 1989 was $38 million, making a total of $73 million. (Fund Balances have virtually doubled over the past five years.)
(2) The percentage of Net Financial Resource Inflows to total FRI—the Fund Accounting equivalent of “profit”—has averaged 14%
over the past five years. (Dr. Weber says the University is off his scale in this measurement: all the other private colleges he has
analyzed are in the 4% to 10% range.)
For further explanations and revelations, all are invited to hear Dr. Weber speak. He will address all interested faculty and administrators—and he will take questions and challenges—on Friday, January 26th, at 3:30 pm in the Nursing Auditorium.