April 16, 2020: Financial Impact of COVID-19

From: Michael S. Roth
Date: Thursday, April 16, 2020 at 11:50 AM
Subject: Financial Impact of COVID-19

Dear Friends,

I write to you today with deep pride and gratitude for all you have accomplished these past tumultuous weeks. Students have shown patience and resilience in the face of unprecedented disruption. Faculty and our ITS department have worked tirelessly to create a robust digital experience at a moment’s notice. Staff have ably transitioned to remote working environments while juggling multiple priorities, doing so with great admiration for colleagues in Residence Life, Health Services, CAPS, dining services, facilities and public safety still working on campus in support of the approximately 250 undergraduate students unable to return home safely.

Unsurprisingly, this disruption has financial consequences. To date, we estimate the COVID-19 pandemic’s financial impact on the University to be in the region of $11-12 million for this fiscal year. This includes the cost of important measures like reimbursing students for prorated portions of their residential and comprehensive fees, emergency support for student travel to and from campus, funding lost wages for work study, and necessary investments in creating the best distance learning environment possible—all vital to the health and safety of our educational community. It does not account for the negative effects on other areas of the budget like fundraising, endowment returns and recruitment and yield.

Fortunately, our past fiscal responsibility and the generosity of parents, alumni and friends of the University, as well as our deliberate actions to this point, have positioned us to weather the pandemic’s initial impact. But because we don’t know how long it will last, we need now to prepare for the longer term by finding ways to offset lower revenue expectations without sacrificing the quality of our education. Please expect a more thorough update in May, when we will have a better sense of our financial picture for next fiscal year and how our Admission cohort is coming together.

In the meantime, I have asked all members of the President’s Cabinet to reduce expenditures by 10 percent for FY 2021. We will freeze compensation (including the annual increase that typically takes place July 1) and non-faculty hiring, and halt nonessential facilities projects. To provide additional flexibility and safety for faculty whose offices will move, we will pause the planned summer start of construction on the Public Affairs Center for a few months. For the coming year, I will reduce my salary by 25 percent; Senior Vice Presidents Nicole Stanton and Andy Tanaka and Chief Investment Officer Anne Martin are all taking meaningful salary reductions. Other members of the Cabinet have volunteered to contribute to the University’s Emergency Fund during this challenging time.

This is a difficult time requiring difficult decisions. It challenges us to be more thoughtful and creative in our work than ever before. We will have to scale back certain efforts, but I encourage us all to think hard about areas where we can redouble efforts and collaboration to produce especially powerful results. Together, we will rise to this challenge and emerge stronger from it.

Andy Tanaka and I will be hosting an all-staff community forum on April 21 at 10 am to provide additional information and answer any questions.


Michael S. Roth