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On Jan. 26 2009 former Brandeis University president Jehuda Reinharz sent a community-wide e-mail announcing that the university’s board of trustees had voted to close the campus’ Rose Art Museum and sell its collection.

The decision, which was met with uproar by the Brandeis and art communities, was made amid economic crisis and financial struggle in order to alleviate what was then a crippling $80 million budget deficit. Though the measure was only one part of a five-year plan for the university created in the fall of 2008 instituting numerous budget and academic cuts, the announcement indicated exactly how much the university was struggling to keep its financial footing.

Now, after two years of cuts, and halfway through the five-year emergency plan, Brandeis senior administrators said last week that the university is on track to full financial recovery, but the curriculum is slimmer, with cuts in the Anthropology and Chemistry PhD programs, the theatre program, and the termination of the Hebrew major and Yiddish minor as cuts. Though selling Rose Art is not completely off the table, legal battles, staff changes and exhibition alterations, The Rose remains open.

Two years ago, Brandeis tuition (fees not included) was $37,294. For the 2010-2011 school year tuition is $40,514. Since the beginning of the 2008-2009 school year, enrollment has risen by 200 students, and the university plans to add 200 more by 2014. The biggest challenge facing the university today is not balancing the budget, but repairing old buildings.

Brandeis had been preparing for economic challenge since the spring of 2008 when there were “strong competitive signs that we would be facing some greater challenge,” according to Fran Drolette, the university’s senior vice president for finance and chief financial officer.

The university instituted a hiring freeze and implemented two rounds of budget reductions in order to balance the budget for the 2009 fiscal year, which would begin on July 1 of that year.

In the fall Drolette’s staff saw a severe drop in the endowment return, which was at negative 20 percent.

“There were challenging factors coming out of the economic downturn that meant the reduction of the endowment could have reached 25 or even 30 percent,” Drolette said. “That would have, in short, meant we wouldn’t have been able to generate income. That was the condition at the time of the Rose.”

The university had to act fast. One week before Reinharz sent his e-mail announcement concerning the museum, steps were taken to cut the use of merit scholarship funds by students while they were studying abroad.

Then the Rose announcement came, and though three days later Reinharz would retract his statement, saying the museum would not close but the art would still be sold, the damage was irrevocable.

Brandeis, and its financial troubles, was catapulted into the media limelight, with national publications like the New York Times, National Public Radio and Reuters appearing on campus for student protests against the decision. The university payed $20,000 to public relations firm Rasky Baerlein Strategic Communications Inc. to handle the media storm.

Current university President Frederick Lawrence was dean of George Washington University’s Law School at the time, but remembers the events.

“The whole world knew what was going on,” he said. “Our problems were publicized more than other people’s problems.”

While the media was covering the Rose Art Museum and the economic strife that came with it, the university was taking more financial measures. In a Curriculum and Academic Restructuring Steering Committee administrators and faculties reexamined what it meant to be a liberal arts institution, and created a Justice Brandeis Semester program to give students summer study opportunities while drawing in university revenue. The housing process was consolidated in order to ensure every room was filled, again bringing in funds. A business major was created to draw more applicants to the university.

The university also cut staff positions and suspended contributions into the retirement funds of its 5,181 remaining employees. The measures helped the university balance its budget, and the school finished its financial year with a negative 17 percent reduction of its endowment.

Meanwhile, three benefactors to the Rose Art Museum sued the university to stop any sale of art, a legal battle that continues to today. The media continued to cover the story, and circulated rumors that the Rose Art Museum crisis could have been averted had it not been for university investments with ponzi-schemer Bernard Madoff, with whom big-time university donor Carl Shapiro had invested.

“We invested zero dollars in Madoff. We have sold zero pieces of art from the museum,” Lawrence said. “But in my travels I have spoken to lots of people who believe they know something about this university. Even though they are all just wrong, they could pass a polygraph test. That’s how much they believe this stuff.”

In September of 2009, Reinharz announced his intention to resign from the presidency. By January, the university was set to make more board of trustees-mandated budget cuts to help relieve what board member Meyer Koplow ’72 called a “$25 million ongoing budget shortfall in the typical year.” Though the Rose had re-opened with an exhibit from its permanent collection in October, Koplow told the faculty “some of the solution will come from realizing value ultimately from some of the art at the Rose.”

Unable to sell art because of the legal battle, the university instead decided to terminate or restructure 18 academic programs.

This year, the university has not made any budget cuts and the university ended the 2010 fiscal year with an endowment return of 13.8 percent. Halfway through it’s “reactionary five-year plan,” the university endowment today is “what it was pre-crash 2008,” Lawrence said.

Similarly the museum, though in legal limbo, is open and has restarted programs that were suspended back in January of 2009. Just last week a program allowing students to rent artwork for their dorm rooms started up again. This year the museum welcomed a new director of academic programs, a position that had been vacant for two years, and the university is searching for a museum director. The university is looking into rental options for the art, and while the discussion about art being sold is not off the table, it has been postponed.

But while the budget is balanced, Lawrence things “the endowment is not where we need it to be for all the things we want to do.”

Indeed, as a result of the financial crisis, the university has $170 million in deferred maintenance needs as the 54 buildings on campus more than 40 years of age begin to decay and deteriorate. The worst-off building, the Castle dormitory, would cost $10 million to renovate. Library renovations, also high on the list, would cost the same.

“We achieved a balanced budget without any assumption of the monetization of art,” Drolette said. “But I cant comment on whether there is a need to still discuss it … We still have to develop appropriate fiduciary plans to meet the needs of the university.”

“It’s important that we have an annual budget that is balanced, that is finance 101,” Drolette continued. “But it is not where we need it to be for all of the things we want to do. These are really schizophrenic times.”