In his annual budget letter, sent to the Faculty on Feb. 4, Dean of the Faculty Jeremy R. Knowles reported that the College's finances should "evince only mild concern," in contrast to the tone of "deep alarm" that characterized the letter five years ago.

Although the Faculty of Arts and Sciences (FAS) completed the last fiscal year with a deficit of just over $1 million, members of the Faculty Council said yesterday they were not concerned and praised Knowles for controlling costs effectively.

"The budget is balanced to one quarter of 1 percent and that's a very small number," said Mallinckrodt Professor of Applied Physics William Paul.

However, council members said they are apprehensive about several issues, including the rising cost of tuition, cutbacks in the University's custodial and security staff, the low number of tenure appointments to junior faculty, lagging funding for the University's libraries and the growing cost of information technology.

Tuition

Student tuition for the 1997 fiscal year is expected to rise by 4.9 percent, according to the letter.

The percentage tuition increase has dropped each of the past five years, but still exceeds the growth rate of median family income in the U.S.

"Even a reasonably short extrapolation brings one to tuition rates that would be unsustainable," Knowles wrote.

Tuition, which is the largest single source of income in the Faculty's budget, "cannot continue to rise even at the lower rates of the recent past," he warned.

Council members said the University is focusing on raising funds from other sources and controlling expenditures in order to curb tuition hikes.

"[The tuition increase] would be more serious if Harvard didn't have an extremely meritocratic financial aid system, but it does," said Theda Skocpol, professor of government and sociology. "It is committed to making it possible for people to come here regardless of family income."

Staff Cutbacks

Another issue of concern cited by members of the council was Harvard's treatment of its wage-employees. According to the letter, the present costs of custodial and security services to the University are "substantially above market."

"We must reshape the way these services are provided so as to bring the costs more into line with those outside, while being careful to treat our existing employees respectfully," Knowles wrote.

According to the letter, custodians employed by the University have recently ratified a new three-year contract, under which a significant number of custodians took voluntary severance packages.

Employees who did not ratify the contract may continue in their present positions but their rate of pay increase will be slowed, according to the letter.

"I would like to see us be as reasonable as we can in not undercutting the incomes of the least-paid employees of the University," Skocpol said. "It's very much to our advantage to have a cooperative relationship with our employees' unions. I feel worried about some of the things I hear."

Other members of the council said they do not believe the University is mistreating its wage-employees.

"I think Harvard treats its staff very well," Paul said. "It has a very good relationship with its staff, especially unionized staff, and it is improving. They are treating them fairly. The thing to do is not to increase the numbers."

Tenure

According to the letter, the Faculty made more internal tenure appointments during the last five years than in the previous half decade.

In 1995-96, 30 percent of tenure offers were made to Harvard's own junior faculty, a percentage Knowles called "an unusually high proportion."

Some members of the Council praised the increasing trend of tenuring junior faculty from within the University's ranks.

"These are the highest figures in the 10 years I've been here," said Peter K. Bol, professor of Chinese history. "It's an appropriate level. I think it's a very good sign that departments are hiring the kinds of people that are getting promoted internally."

While Skocpol also commended the increase in internal tenure appointments, she warned that the University's tenure policy is driving away talented junior faculty.

"One of the saddest things about Harvard is that associate professors who are extraordinary as scholars and teachers are asked to leave here because they are decided to be not as good as somebody else who may be much more senior," Skocpol said.

Information Costs

According to the letter, the Faculty's goal of raising $965 million in the University capital campaign is slightly ahead of schedule, but only 22 percent of the Library's $78 million goal has been raised, a shortfall that is an important concern, Knowles wrote.

Council members said they also are worried about the lag, since the libraries are crucial to faculty and student research.

According to Bol, donors may be less inclined to give money to the library campaign because air conditioning to preserve books, for example, is not a glamorous target for their donations.

In the letter, Knowles also cited the high cost of wiring the entire University to the Internet. Calling the new technology "unavoidable," council members said they agree with the letter that access to e-mail and the World Wide Web is a necessity in today's high-tech environment