The Mast’s Editor-in-Chief dives headfirst into the PLU financial documents and leaves with more questions than answers.
I looked in to three years of Pacific Lutheran University’s financial statements, insurance statements and revenue reports and this is what I understand and what I’m completely confused about:
The Office of the President and PLU President Thomas Krise sent out an all-staff email this Tuesday announcing a pay increase for all PLU employees “across-the-board.”
The email, sent out to an undisclosed number of PLU employees, states that a one percent salary increase for all employees including hourly, non-salary and instructors paid on a course-by-course basis.
This got me thinking: our university sold KPLU earlier this year for $8 million and rumors were circulating about PLU going broke and that the incoming class might be the last one the university can maintain (that’s just rumors, of course). But, let’s say all of this is true. Where is this one percent increase coming from? And, how much money is a one percent increase on all-employee payments?
So, I did my best and looked into the last three years of PLU’s financials. As a journalism student. There’s a lot I didn’t understand but some I did. There’s also some I got help with. Here we go.
The salary increase that Krise’s letter is referring to will happen because the Board of Regents promised to keep “pay parity with peer institutions” meaning our professors and staff will be paid the same as other like-institutions (AKA University of Puget Sound). According to the PLU 2014-15 audit by a third-party auditing agency, the money it would take to raise everyone’s pay is at least $300,000. But that’s just my rough estimate.
As I continued to read through the budget, it looked like PLU was actually doing pretty well this year. We sold a little bit of land – about $800,000. However, that sale didn’t make up for the approximately $9.6 million of long-term debt that PLU picked up according to their 2014-15 990 tax document that can be found online.
In that same document, according to my accountant friend and former Lute, Allison McClure, you can see how much money PLU is trying to collect from people on page 19 of the 990. However, the money is less than last year. This means the university probably just wrote some of the older debts off. Or someone made a giant payment, less likely.
With that, it looks like KPLU rent costs PLU about $900,000 each year and PLU might have about $50 million of debt to the Washington State Government for a loan they took out. To me, the $900,000 each year for KPLU now seems pretty small. Even smaller when you think about the almost $2 million in donations they generate each year to stay afloat. This alone says to me that the sale of KPLU was about more than just PLU needing the money because in comparison, that $7 million it’s being sold for is chump change.
Krise’s email explained that nearly 90 percent of the university’s revenue comes from tuition and student expenses. The email then explains that professors and instructors should “continue to seek students who we know will thrive at PLU, and do all we can to ensure they have the academic support and personal attention required to persist,” in order to keep students at PLU.
Enrollment numbers don’t lie though. PLU is up compared to last year, but down overall. With that, the university has an 82 percent retention rate with a goal of reaching 84 percent. Our large amount of debt, our lack of enrollment and retention and our spending and selling of assets left me wondering: what the heck is going on and why aren’t we talking about it?
If anything, looking through our budget has led to more questions than answers. Each week we’re going to try and unfold one of these questions and figure out where tuition money is going and why. This article is just the first of The Mast’s standing commitment to try to find the answers behind PLU’s financial state and spending.
If you have any opinions or comments about PLU’s spending and financial state, please email them to The Mast at firstname.lastname@example.org and check in our next issue for some answers… hopefully. 🅼