Update: Cost-Saving Initiatives

Dear Colleagues,

In last week’s recorded President’s Forum, Vice President Roig and I provided an update on the University’s financial status as well as plans we presented to the Board of Trustees this past weekend to help address the current budget gap resulting from the COVID-19 pandemic. As explained, the anticipated financial impact for fiscal year 2021 could reach $45 million or even higher.

The Senior Leadership Team explored many cost-reduction options with the Board of Trustees, including layoffs, furloughs and pay cuts for employees. Other peer institutions have implemented these more dramatic actions. As we have indicated previously, our desire is to preserve as many jobs with health benefits as possible. We believe the actions we are taking, while significant, represent better options than layoffs and pay cuts at this time.

With Board of Trustee support, we are now ready to move ahead immediately with the following cost-saving initiatives to address the current financial needs of the institution:

• Voluntary Separation Programs – The university will offer two voluntary separation incentive programs—one for tenured faculty and one for eligible staff and administrators. These programs will consider applications submitted by eligible employees who are interested in transitioning from employment into retirement or for other personal or professional reasons. These programs will offer long-term savings for the institution while limiting the negative impact to our continuing workforce.
• Temporary Suspension of Vacation Accruals and Required Vacation Usage – In order to reduce the financial liability required at the end of the fiscal year, staff and administrator vacation accruals will be suspended throughout the rest of the fiscal year beginning in October and employees will be required to use at least 75 percent of their current accrued vacation time before June 30, 2021. This will provide an estimated $4.5 million in savings that represent the financial equivalent of up to a 10 percent reduction in our staff/administrator workforce, approximately three weeks of furloughs, or up to a 10 percent reduction in pay for employees. By making these temporary changes to vacation, employees have more flexibility in scheduling their time and maintain continuity of pay.
• Temporary Suspension of 403(b) Retirement Contribution - Beginning in November, the current 6 percent retirement contribution will be suspended through June 30, 2021. This will result in approximately $6 million in savings.

The Board of Trustees has made a commitment to return to funding 403b contributions, up to the 6 percent we originally planned at the beginning of the academic year, if our financial position turns out better than we are currently forecasting.

We recognize these sacrifices are challenging for everyone impacted by these decisions, but we chose these strategies over more difficult options. If the financial situation stabilizes or improves, we hope these changes will suffice to address the forecasted budget gap for this fiscal year. We will, of course, need to reassess as the year continues. It is important to remember that these measures are to address our current financial situation and that no decisions have been made for the next academic year. We will have a much better picture of what next fall will look like when we reach the spring of 2021.

The Provost’s Office and the Department of Human Resources will send out additional communications shortly with more detail regarding these changes.

It is through our collective efforts and sacrifices that we will emerge from this current volatile environment and see brighter days in the future. The Board of Trustees wants the university community to know that they appreciate and applaud all that you are doing to help us get through these challenging times. I remain optimistic about our future and truly believe if we make good financial decisions now we will emerge stronger than before as we continue to focus on delivering an exceptional academic experience for our remarkable students.

Please know that you and your families will remain in my prayers for good health and safety during this most challenging time.

Peace,

James T. Harris III, D.Ed.
President