Some Inconvenient Truths
August 15, 2017
Edward D. Kleinbard wrote in the New York Times on August 9, 2017 that when “the money coming in is systematically less than the money being disbursed, that’s what it means to run a deficit.” (Edward D. Kleinbard, “The Debt Ceiling Crisis is Real” New York Times). This leads us to ask whether or not Rider University systematically has taken in less money than it has disbursed.
In February 2017, Moody’s had the following to say about Rider’s finances:
“Moody's Investors Service has affirmed the Baa2 rating on Rider University's (NJ) $41 million of outstanding rated debt. The outlook is stable.” Moody’s also said, “The Baa2 rating is supported by Rider's mid-sized scale of operations ($153 million revenue in FY 2016), low debt burden, and consistently positive operating cash flow.” (Emphasis added)
As to the future, Moody’s had this to say:
“The stable outlook reflects our expectation that the university will produce operating cash flow in the 6-8% range in the near term with continued adequate debt service coverage.” Thus Moody’s predicts we will have healthy cash flows.
Can this be correct? Are we not, as we have been told by the administration, facing a fiscal crisis in which our income “is systematically less than the money being disbursed?”
Moody’s clearly does not believe we are going to have an operating cash deficit, nor does this year’s Actual Cash Activities Report for July 2016- June 2017 as provided by Rider's finance department indicate such a crisis. In the 2017 fiscal year (July 1, 2016-June 30, 2017), Rider had actual cash inflows of $200,159,607. In that same time period, Rider had actual cash outflows (exclusive of Investment Transfers which is simply the movement of monies from one Rider account to another) of $164,092,365. Thus, the University had net positive cash activity of $38,201,868, exclusive of investment transfers. While actual cash activity is not identical to operating cash flows, with such strong cash activity the external audit will almost certainly show positive operating cash flows consistent with Moody’s prediction.
At the same time as we have been told that the University faces a very serious financial crisis, we also have been told that faculty compensation is out of step with local institutions and is unsustainable. However, an objective analysis of the data available leads to a different conclusion.
College Full Associate Assistant
Monmouth $174,000 $138,800 $97,100
Stockton $173,600 $132,100 $102,100
Ramapo $172,000 $134,300 $114,900
St. Joseph's $163,400 $129,500 $115,200
Montclair $156,100 $126,900 $101,700
Rider $152,300 $132,500 $107,500
(Data from 2016-17 AAUP Compensation Survey)
As you can see from the above chart outlining average total compensation by rank, Rider full-time faculty earnings (salary and benefits) are not out of step with those at other local institutions.Based on this analysis, we ranked seventh out of seven for full professors, fourth out of seven for associate professors, and third out of seven for assistant professors.
The administration’s initial proposal would cut benefits on average by $13,000 and rank minima by $10,000. How would we compare then? How then will we be able to retain and recruit the high quality, full-time faculty that have been a hallmark of Rider University in recent decades? How will this help the University attract and retain new students?
At the same time we also have been told that our adjunct faculty earns significantly more money than is typical. The AAUP’s national survey of adjunct per section pay found that the median for private independent master’s granting institutions (Rider’s category) was $5,242 and the average was $6,654. Our typical compensation per course ranges from $4,435 for adjunct instructors to $5,645 for adjunct full Professors The administration’s proposal would drop that rate to $4,000 per section regardless of rank and do away with job security and benefits for priority adjunct faculty. How will Rider compare then? How then will we be able to retain and recruit the high quality adjunct faculty that have been a hallmark of Rider in recent decades? How will this help the University attract and retain new students?
Given the information concerning Rider’s financial status, and current faculty earnings, the administration’s present demand for $9.25 million in concessions (down from their original demand of $10.1 million) seems out of touch with reality.
August 15, 2017
Edward D. Kleinbard wrote in the New York Times on August 9, 2017 that when “the money coming in is systematically less than the money being disbursed, that’s what it means to run a deficit.” (Edward D. Kleinbard, “The Debt Ceiling Crisis is Real” New York Times). This leads us to ask whether or not Rider University systematically has taken in less money than it has disbursed.
In February 2017, Moody’s had the following to say about Rider’s finances:
“Moody's Investors Service has affirmed the Baa2 rating on Rider University's (NJ) $41 million of outstanding rated debt. The outlook is stable.” Moody’s also said, “The Baa2 rating is supported by Rider's mid-sized scale of operations ($153 million revenue in FY 2016), low debt burden, and consistently positive operating cash flow.” (Emphasis added)
As to the future, Moody’s had this to say:
“The stable outlook reflects our expectation that the university will produce operating cash flow in the 6-8% range in the near term with continued adequate debt service coverage.” Thus Moody’s predicts we will have healthy cash flows.
Can this be correct? Are we not, as we have been told by the administration, facing a fiscal crisis in which our income “is systematically less than the money being disbursed?”
Moody’s clearly does not believe we are going to have an operating cash deficit, nor does this year’s Actual Cash Activities Report for July 2016- June 2017 as provided by Rider's finance department indicate such a crisis. In the 2017 fiscal year (July 1, 2016-June 30, 2017), Rider had actual cash inflows of $200,159,607. In that same time period, Rider had actual cash outflows (exclusive of Investment Transfers which is simply the movement of monies from one Rider account to another) of $164,092,365. Thus, the University had net positive cash activity of $38,201,868, exclusive of investment transfers. While actual cash activity is not identical to operating cash flows, with such strong cash activity the external audit will almost certainly show positive operating cash flows consistent with Moody’s prediction.
At the same time as we have been told that the University faces a very serious financial crisis, we also have been told that faculty compensation is out of step with local institutions and is unsustainable. However, an objective analysis of the data available leads to a different conclusion.
College Full Associate Assistant
Monmouth $174,000 $138,800 $97,100
Stockton $173,600 $132,100 $102,100
Ramapo $172,000 $134,300 $114,900
St. Joseph's $163,400 $129,500 $115,200
Montclair $156,100 $126,900 $101,700
Rider $152,300 $132,500 $107,500
(Data from 2016-17 AAUP Compensation Survey)
As you can see from the above chart outlining average total compensation by rank, Rider full-time faculty earnings (salary and benefits) are not out of step with those at other local institutions.Based on this analysis, we ranked seventh out of seven for full professors, fourth out of seven for associate professors, and third out of seven for assistant professors.
The administration’s initial proposal would cut benefits on average by $13,000 and rank minima by $10,000. How would we compare then? How then will we be able to retain and recruit the high quality, full-time faculty that have been a hallmark of Rider University in recent decades? How will this help the University attract and retain new students?
At the same time we also have been told that our adjunct faculty earns significantly more money than is typical. The AAUP’s national survey of adjunct per section pay found that the median for private independent master’s granting institutions (Rider’s category) was $5,242 and the average was $6,654. Our typical compensation per course ranges from $4,435 for adjunct instructors to $5,645 for adjunct full Professors The administration’s proposal would drop that rate to $4,000 per section regardless of rank and do away with job security and benefits for priority adjunct faculty. How will Rider compare then? How then will we be able to retain and recruit the high quality adjunct faculty that have been a hallmark of Rider in recent decades? How will this help the University attract and retain new students?
Given the information concerning Rider’s financial status, and current faculty earnings, the administration’s present demand for $9.25 million in concessions (down from their original demand of $10.1 million) seems out of touch with reality.
