Memo to Saint Michael's Community

TO:   The Saint Michael's College Community                  

FROM:  Nancy Rowden Brock, VP, Finance

DATE:  October 10, 2008

RE:  Saint Michael’s and the Current Economic Climate

Having joined the Saint Michael's College Community only recently, I would have preferred that my first opportunity to communicate with you would be in happier circumstances.  That said, it seemed appropriate to acknowledge the current economic situation and provide some perspective on our circumstances.

For several months we have heard more and more about what has become a severe and complex global economic downturn.  It is difficult to move through our days without hearing constant news and commentary about volatile markets, troubled banking systems, bailouts and lost savings.  To some of us (as scholars and students) this can be fascinating; to most of us it is confusing and sometimes frightening.

While none of us can predict what will happen, nor make promises about the future, I would like to comment on the state of the College’s finances. 

  • We currently have a solid cash position.  Our operating cash (from which payroll and other payments are made) is held in an account that is fully backed by Government securities held at the Federal Reserve Bank.  A smaller amount of cash is in the Common Fund and, although redemptions were unexpectedly curtailed two weeks ago, we have redeemed about 50% of our balance and anticipate full redemption.

  • We believe that we have cash sufficient to carry us through the remainder of this semester.  It is typical for tuition payments received in August and September to fund our fall and early winter cash needs; this year is no exception.

  • We have a backup credit line in place for unexpected cash needs.

  • Our bonds carry a fixed rate of interest, so interest rate volatility has not adversely affected our debt service.

  • The funding for the Pomerleau Alumni Center has been received from the donors and will be used as construction proceeds, so there is no risk that the College will need to provide funds from operations.

  • While our endowment has certainly declined in value in recent months, it is well-diversified and prudently managed. 

In short, our financial situation is sound and we are moving forward with care and confidence in our ability to manage through this challenging period.  We will endeavor to communicate with you about our financial circumstances as the coming weeks and months unfold.  In the meantime, if you have questions, I would be pleased to hear from you.