At Tuesday’s Downtown Forum, St. Olaf College President David Anderson raised many interesting points. Perhaps not surprisingly, there were echoes of some of the statements made by business people at the recent Chamber Forum.
Anderson opened his presentation with comments about the current state of the economy, which he termed “difficult”. He noted the challenge of trying to plan during the last 18 to 20 months in an environment of unprecedented uncertainty.
St. Olaf College is atypical in its sources of operating income. 70% of every dollar of income comes from student tuition and fees; only 10% of income comes from the endowment – much less than other top-ranked liberal arts schools (the remainder comes from grants and gifts). This year 84% of students are getting some level of financial aid, costing a total of $38 million, and the tuition increase was the smallest since 1974.
Anderson noted that it was fortunate that the college completed their capital investment program during the good times, he said that if they had structured their new science building in phases as originally discussed, they would not have had the money to complete the project. The college is now shifting from capital investments to new programs; they will not be taking on any additional debt.
St. Olaf College in one of Northfield’s two largest employers, with over 800 employees and an annual budget of over $100 million. They pay $16 million in annual payroll taxes, $800,000 in municipal services (sewer, water, waste removal), $55 to 60 million in wages, and over $1 million in purchases and contracts with Northfield businesses. In addition to the $73,000 a year contribution to the City of Northfield for police and fire services, the college subsidizes Northfield Hospital operations with a below-market lease, and provides free college courses to Northfield High School students.
Anderson entertained a number of ideas about how the colleges and community could work more closely together, including marketing Northfield to the country and the world, supporting the NDDC-Chamber “Be Local-Buy Local” initiative, and working with the EDA to build connections with alums. He also expressed a willingness to collaborate on operating cost and capital investment issues, and suggested that such discussions should take place early in the process and be characterized by “candor and trust”.