The Yale Corporation this weekend discussed the possibility of cutting back construction on campus in future years in light of the plunging financial markets, although the board did not take any action on the matter.
The members of the University’s highest governing body, who convened in Jackson, Wyo., for their annual retreat, had not met in person since approving Yale’s residential college expansion in June. And while the meeting was devoted to strategic planning, the topic of the financial crisis was unavoidable, University President Richard Levin said.
The minutes of Corporation meetings are kept sealed for 50 years, but in keeping with tradition, the president shed light on this weekend’s proceedings in a telephone interview Monday shortly after returning to New Haven.
“Everybody’s concerned about the economic picture, but I think people are more concerned about the country than about Yale, frankly,” Levin said. “We have a lot of confidence in our Investments Office and their ability to minimize any damage that might occur economy-wide.”
Nevertheless, Corporation members reviewed “pessimistic scenarios” about how Yale would cope if its $22.9 billion endowment fell, say, 10 or 15 percent. The first step — as Corporation Senior Fellow Roland Betts ’68 told the News in late September — would be to partly curtail Yale’s ambitious construction efforts, which include at least $2.6 billion in new construction and renovations over the next four years.
In doing so, Yale would be able to appreciate significant savings to its operating budget, to which the endowment contributes more than any other revenue source, by saving on interest costs that would otherwise be accrued and the facilities maintenance costs associated with the new or renovated buildings, Levin said.
But the president emphasized — as Betts did in the earlier interview — that cutbacks to Yale’s operating budgets, such as job cuts or cuts to academic departments, are not even being discussed. And the prospect of postponing construction is not particularly close to happening, either.
“We’re not there yet, and I hope we don’t have to get there,” Levin said. “These markets are so volatile that we don’t want to make major decisions unless we’re convinced there’s going to be a downturn of considerable duration. … Obviously it’s not been a great time for anybody, but we’re not at the point where we think we have to make any budget adjustments for that reason.”
Corporation members also heard updates from Yale’s officers on its ongoing digitization efforts and the capital projects planned on campus over the next five years. They participated in an “envisioning exercise,” as Levin described it, in which board members were asked to give presentations on how they saw the world changing in their fields of expertise — such as politics, business, technology or science — over the next 20 years.
Then the Corporation discussed what it all meant for Yale.
“In some ways, it ratifies the direction we’re already headed in,” Levin said. “Digitization and internationalization seem like inevitable directions.”
While there may not have been any whitewater rafting or cross-country skiing for them, the Corporation members did enjoy a dinner at Betts’ home and also gathered as a group to watch the vice-presidential debate Thursday night between Sen. Joseph Biden of Delaware and Gov. Sarah Palin of Alaska.
Then, just as they later deliberated over potential choices for dean of Yale College, the members of the Corporation scrutinized the candidates.
“Rather than listen to the commentators afterward, we had our own internal discussion,” Levin said with a chuckle. “When you have people like [senior PBS correspondent] Margaret Warner and [international affairs author and commentator] Fareed Zakaria in your group, you don’t need the ones on TV.”