The Strategic Resource Allocation Project (SRAP) is ongoing, with the questionnaires surveying St. Olaf College’s operations submitted and preliminary recommendations for budget changes expected in the next few months. Questionnaires were sent to academic departments and non-instructional budget managers in November asking them to summarize their operations and contributions to the College’s mission. Their responses are being analyzed and follow-up interviews are being conducted by the Instructional and Non-Instructional Review Groups who will issue preliminary budget recommendations. These recommendations will be submitted to the Steering Committee, the group tasked with overseeing the process and making the final budget recommendations to President David Anderson ’74.
The St. Olaf administration undertook SRAP to address its worsening financial situation. Costs are rising much faster than revenue, and current trends predict future budget shortfalls. To avert fiscal troubles, SRAP aims to recommend budget changes that increase revenue, decrease costs, make productive investments and reapportion resources as needed.
The Steering Committee hopes to increase opportunities for student feedback which can be incorporated into final budget recommendations. An informal event is scheduled for March 15 at 5:30 p.m. in Valhalla to solicit student feedback and provide information on SRAP and how it will impact students.
The event is slated to include a dinner conversation, large-group discussion, Q & A and an activity giving students an opportunity to signal their priorities to the Steering Committee. Students will each have a virtual budget which they can apportion among the College’s various programs and financial obligations.
“The activity that we have mocked up is pretty much a very minimalized version of what we have to do as a Steering Committee,” Maren Weaver ’18, SGA representative on the Steering Committee, said. “This is basically just to see where students’ priorities lie and where they would choose to allocate resources.”
The activity will also give students an opportunity to better understand opaque aspects of the budgeting process.
“There’s also things in there that students might not even be aware that they have to keep in mind, things like interest and depreciation expenses take up 11 percent of the budget and I think people are like ‘We can do something about it.’ No, we can’t, that’s a fixed cost that they can’t change,” Weaver said.
Some cost-cutting and revenue-growing measures have already been approved.
St. Olaf recently announced it will be transitioning its bookstore operations to Barnes & Noble on March 22, a move that will raise $150,000 per year. The College also anticipates revenue growth from changes in its partnership with Bon Appetit.
“Their management staff have come to us and put $125,000 on the table,” Chief Financial Officer Janet Hanson, said. “They also offered several options for using the $125,000 that we’re exploring. As part of that conversation, they also announced that they would be reducing catering prices by 5 percent starting Feb. 8. This equates to roughly $35,000 per year. Bon Appetit has identified an additional $160,000 in revenue as part of the SRAP process.”
The College also renegotiated the lease under which it rents 60 acres of property to Northfield Hospitals and Clinics.
“The hospital’s plan to expand their campus to include a senior housing project triggered an opportunity to renegotiate land lease rates for the 12 acres on which this project will be developed,” Hanson said. “This renegotiation has resulted in a market value rate that will generate an additional $72,000 in annual rental payments.”
However, these changes alone will not meet the benchmarks set by the Steering Committee. According to Hanson, the College hopes to raise between $5 and $8 million from SRAP. $5 million would allow SRAP to meet its goals of committing $3 million to capital improvements and $2 million to contingency funds, while $8 million would allow for new investments and pay raises.