April 17, 2020
I write to provide you with important information about our University’s continuing response to COVID-19. Before I do, though, I must once again express my deep appreciation for the work that you have done—and continue to do—in response to this pandemic.
Our faculty promptly transitioned the vast majority of our on-campus courses to remote learning. Our faculty demonstrate their creativity and agility—and their commitment to the success of our students.
Our students demonstrate their resilience and grit by continuing their education under very difficult circumstances. The determination of our students is an inspiration to all of us.
Our administrators and our staff demonstrate their dedication by performing their important duties while working remotely. I am grateful for their professional agility.
I am particularly grateful to the women and men whose critical responsibilities require that they continue to work on campus. Their service during this unprecedented crisis deserves our great respect and admiration.
As we anticipate the end of our initial response to this pandemic, we must continue to prepare for its ongoing impact on our operations and on our finances. The scope and duration of the pandemic is unknown. Indeed, the future is profoundly uncertain, so it is extraordinarily challenging to plan for every eventuality. I am confident, though, that we are developing comprehensive contingency plans to anticipate and prepare for various obstacles and outcomes, many of which are outside of our control.
Now that we have transitioned almost all Summer 2020 courses to online learning, Provost Susana Rivera-Mills has created a Fall contingency planning group, which will work with her and the academic deans to develop a set of recommendations for the academic enterprise. Those plans will include the possibility that we may begin the Fall semester with a continuation of remote learning for larger classes or some variation of hybrid learning. As they continue this planning process, they will ask for feedback and input from our faculty and our department chairs.
I have asked Sue Hodges Moore to lead a parallel contingency planning group. This group, which is comprised of representatives of every division of our University, will help us to identify, evaluate, and plan for the other obstacles and issues that may arise as we transition to more normal operations. Those operations include classrooms, labs, the library, information technology support, residence halls, dining halls, recreational facilities, and events such as conferences, concerts, shows, and athletics.
Paula Luff, our new vice president of enrollment planning and management, is working with her team to recruit another outstanding freshman class. They have already created an array of “virtual” tours and information sessions for high school seniors who have been admitted to the Fall 2020 class. They have also engaged the deans and the faculty in these creative engagement strategies, including initiatives to enhance Summer enrollment with the support of our colleagues in marketing and communications.
Ro-Anne Royer Engle is mobilizing a team of staff across multiple divisions to develop and implement a robust array of outreach initiatives to encourage our returning undergraduate students to register for classes for next academic year. Given how this current semester is ending, it will be very important for us to provide regular support and extra assistance to all of our students.
Alan Finn is leading the process to develop the operating budget for next fiscal year, which begins on July 1, 2020. Given the significant adverse impact that the pandemic is having on our economy and the extraordinary levels of uncertainty about enrollment, this process is going to be very difficult.
We are not alone in this respect. Every college and university in the country is facing similar and substantial financial stress. In fact, some institutions have been compelled to take drastic steps in order to avoid budget shortfalls in the current fiscal year.
In contrast, we are well positioned for these challenges. We are presently projecting a modest positive operating margin at the end of this fiscal year. In order to achieve a positive final result, though, it is vitally important that we sustain Summer enrollment and deliver those courses as efficiently as possible. We also have a solid credit rating and adequate financial reserves that will enable us to weather a temporary unexpected emergency. And we will receive some one-time financial support from the CARES Act, the federal stimulus law.
But preparing a balanced operating budget for next year will be quite challenging. Both of our major sources of revenue—tuition and state operating appropriations—are at risk because of the economic impact of the pandemic. Our tuition revenue may decline substantially because, notwithstanding the strategies that I described above, it is likely that our enrollment will decline. Some people are predicting that college enrollment in the United States may drop by more than 10% next year.
Our state appropriation is at risk because of the recent sharp decline in economic activity. To give you some context, in the wake of the Great Recession, our state appropriation was reduced by approximately 6%. If that were to happen next year, our state appropriation would be reduced by approximately $8 million.
Because of these major threats, I have provided every vice president with a range of budget reduction targets. I have asked the vice presidents to provide their preliminary budget planning scenarios to me by May 15.
On one end of the spectrum, the reduction targets are sufficiently reasonable that they can be fully implemented next year. On the other end of the spectrum, the reduction targets are so significant that they cannot reasonably and strategically be fully implemented next year; those reduction plans may need to be phased in over more than one fiscal year.
Given the magnitude of the challenge we are facing, it is inevitable that we will have to reduce or eliminate some services and some programs. And it is likely that we will have to reduce personnel in some divisions and colleges.
I have asked the vice presidents to engage their colleagues in this important task, and the provost will work closely with the academic deans and the department chairs. The budget office will soon provide some specific guidance to the vice presidents, but I am asking everyone who is involved in this process to be guided by the following principles:
- Student Success: We must maintain an unrelenting focus on our core mission—providing innovative academic programs, learning experiences, and support services to ensure that our students will succeed and that they will be prepared to have fulfilling careers and to lead meaningful lives.
- Affordability: We must maintain our commitment to innovation, creativity, agility, efficiency, and fiscal discipline so that our quality education is accessible to all of our students; this commitment is particularly important today, when many of our students and their families are facing their own unanticipated financial challenges.
- Excellence: Notwithstanding our financial constraints, we must maintain our commitment to excellence in our teaching, learning and support for our students.
More generally, we must continue to be guided by the goals and strategies articulated in our strategic plan, Destination 2040: Our Flight Path. In that regard, we will use our new incentive-based budget model as a tool to help us make data-informed decisions.
We must also find ways to invest resources—both human capital and financial capital—in our strategic plan, including the lifetime learning initiatives that are articulated in Goal Two. Those creative learning initiatives will enable us to expand and develop innovative and flexible educational experiences and help us to develop new sources of additional revenue.
We are already taking some proactive steps to prepare for a more austere budget:
- Hiring: For the time being, I will not approve any new searches for faculty or staff, unless I determine that the position is critical; I have also asked all of the vice presidents to pause previously-approved searches, unless the vice president determines that completing the search will not affect the vice president’s ability to develop a strategic budget reduction plan.
- Salary Increases: Because of the extraordinary and uncertain budget challenges that we are facing, there will not be an annual salary increase next year.
- Strategic Imperative Fund: I will not approve any proposal, unless I determine that the proposal meets one or more of the three guiding principles I articulated above; if other proposals have compelling merit, I will defer my final decision until the Fall, when I will have more information about our budget and our financial position.
I know that this information is difficult to receive. The past few weeks have been stressful for all of us, both professionally and personally. I appreciate that this information may increase your anxiety.
But I believe that you are entitled to understand the nature and extent of the challenges that we are facing and how we are preparing to overcome them. And I have come to know that, when we are faced with challenges, you rise to the occasion. I have learned that you confront each challenge with creativity and courage—and with a sense of shared sacrifice. I have confidence in our collective capacity to succeed, because I know your character and commitment.
I ask you to join me in developing and implementing our plans. Please share your ideas and insights. I also ask for some patience. These are unprecedented challenges. With your guidance, support, and encouragement, I am optimistic that our best days are yet to come.
Thank you for your enduring commitment to our students. And thank you for giving me the privilege to serve as the president of this exceptional university.