The economic crisis that has gripped the nation in recent weeks will affect Rutgers’ financial picture, and the university is acting to protect the interests of students, as well as its own investments and expenditures.

Executive Vice President Philip Furmanski has notified deans and vice presidents across the university about the need for contingency plans in the event of a possible mid-year budget cut. Senior Vice President for Finance and Administration Bruce Fehn is closely reviewing Rutgers’ commercial paper program, which is used to provide low-cost interim financing for approved capital construction projects as well as to temporarily refund outstanding debt obligations. The commercial paper market has shrunk during recent weeks.

“Working closely with our financial consultants, we are monitoring events in the financial world carefully and have made prudent and conservative decisions to weather the current crisis,” said Rutgers President Richard L. McCormick at a meeting of the Board of Governors on October 13 in Camden. “We manage our debt carefully, and we have the cash we need to pay our bills and to meet our current obligations.”

McCormick emphasized that the university placed a priority on fulfilling scholarship and financial aid commitments to Rutgers students, noting that retention could become an issue if families suffer dramatic shifts in income and investments or have difficulty obtaining private loans.

In addition, the president stressed Rutgers’ role in energizing the state and national economy, in the form of faculty expertise in areas such as energy, transportation, and health care, as well as preparing students to enter the workforce and the global economy.

The president said the university would examine all facilities construction projects, including those that are under way and others that are on the drawing board. In particular, McCormick said that the university leadership will develop and examine options to proceed with the expansion of Rutgers Stadium, but at a reduced overall cost. The expansion is self-supporting, and the debt is to be repaid through ticket sales and other proceeds.

“This is only prudent, given the new realities we face,” McCormick said. “But make no mistake about it: Rutgers remains committed to having an outstandingly successful football program.”

Furmanski has asked heads of all units to provide a list of actions, in priority order, that they would take in case a mid-year budget reduction becomes reality by November 7. “In the case of academic units, this will take place through a process of engagement with their faculty,” Furmanski said. He also asked deans and department heads to delay or defer all nonessential spending.

In addition to a challenging credit market, Fehn said that Rutgers’ endowment fund has experienced a decline in market value. “This decline will undoubtedly reduce the amount of income available to support operations under the university’s endowment spending policy,” he said.

Although the economic downturn threatens fundraising efforts across the country, McCormick said that the need for the Rutgers Foundation’s capital campaign “is more urgent than ever.”

“For some of our potential benefactors, this may actually be the moment that they can make the greatest difference for Rutgers,” McCormick said.