For the past several months, I have shared my concerns about several national crises that are converging at once upon the Monmouth University community – namely, the shifting student demographic crisis, the COVID-19 public health crisis, and the racial justice crisis. All along, it has been our top priority to ensure the health, safety, and general welfare of all the constituents entrusted to our care. While the cumulative effect of the demographic concern and the global pandemic on the University’s short- and long-term financial health is not yet fully known, we must turn our collective attention to the fiscal realities that these evolving crises are creating for higher education in general and Monmouth University in specific.
Fiscal Year 2020
From the outset of the pandemic, we promised to do our very best to get through Fiscal Year 2020 as safely as possible, and with as little disruption to employees’ livelihoods as possible. We instituted a limited furlough program with the goal of preserving salary and wages – as well as medical benefits, retirement contributions, and vacation day accruals – for those employees identified for the furlough. And, thanks to the Federal CARES Act stimulus package, additional payments were made available to all furloughed employees. This kept almost all employees whole on their incomes, while simultaneously saving money for the University. At the conclusion of the furlough periods, we brought all employees back to work. For all other employees, we committed to paying full wages and benefits, even for those employees whose work was nearly impossible to accomplish in a remote environment. To show our gratitude for our employees’ continued dedication to Monmouth, we provided five additional paid days off in May, June, and July. And, effective July 1, 2020, we offered a 2.75% salary increase to all full-time employees, with the exception of Cabinet members, who declined their individual increases this year. I am very proud of the institutional support that we have shown our valued employees.
Fiscal Year 2021
As the pandemic unfolded, we expressed real concerns about the likely adverse impact on summer and fall enrollments at Monmouth. Now that our fall enrollment numbers have been finalized, we have a better understanding of the negative impact to our operational budget. While we have successfully recruited the best class ever to Monmouth this fall – both in terms of academic preparedness and with regard to racial and ethnic diversity – our numbers are behind our budgeted targets in each of our enrollment categories: first-year, returning, transfer, and graduate students. In addition, we are experiencing steep revenue shortfalls in housing contracts, meal plans, ticket sales, and fundraising. Assuming we are able to continue operating with our modified reopening for the entire academic year, we confront a $15 million budget deficit. If any of our operating assumptions change (e.g., we have to pivot to remote instruction for an extended period of time and send all residential students home), then our deficit will worsen. This deficit is a stark reality of the current situation that we must now face.
As we make final adjustments to the Fiscal Year 2021 budget in preparation for the Board of Trustees meeting later this month, I wish to share with you the following important updates aimed at addressing the current fiscal imbalance.
- Freeze All Hiring. All open and new positions – academic and non-academic alike – are frozen for the remainder of the fiscal year. We will only complete searches that are currently underway, including the recently launched search for the Senior Vice President/Provost. Any other essential replacement positions that arise in the near term must be approved directly by me, after consultation with my direct reports. This freeze could yield $3 million in savings.
- Control Non-Essential Operating Expenses. After careful consideration, area vice presidents have identified nearly $5 million in non-salary expense reductions. Moving forward, all individual expenditures and purchases over the course of this academic year must be made carefully and judiciously. Please expect to hear more from your area vice president regarding specific plans on spending guidelines for your respective divisions.
- Eliminate Capital Funding Allocation in the Operating Budget. Eliminating the placeholder for capital projects will save the University operating budget approximately $3 million in funds. Any capital projects that emerge throughout the course of this academic year will either be funded through fundraising or capital reserves, or will simply not be funded this year.
- Reducing the Budget Contingency. Shrinking the budget contingency will cover nearly $2 million. This is a significant adjustment to make so early in the fiscal year by reducing our ability to respond to emergency expenses within the budget, but it is necessary to help shrink the gap.
- Offer Voluntary Separation Program. In an effort to reduce payroll expenses, we are developing a voluntary separation program that will be made available to most of the University’s full-time staff members. The program will feature severance payments correlated to length of service and will include ongoing employer medical insurance contributions during the severance period, vacation payouts, and limited tuition remission continuation. A separate message will be forthcoming that explains this added benefit in more detail, including general informational sessions and one-on-one discussions with our HR colleagues.
If we do all of this – and if our current operating plan does not change in any material way – then we can successfully manage this challenging fiscal year without significant additional austerity measures. The pandemic, however, remains a fluid situation and may require additional budgetary offsets at some future point. Additional measures could conceivably include furloughs, salary concessions, temporary reductions in retirement contributions, and layoffs. Please join me for my next open call – scheduled for this Friday, October 16 at noon – to discuss these plans further. If you have concerns in the interim, please feel free to reach out to me directly at firstname.lastname@example.org.
These are challenging times for our University community. We can navigate them successfully, if – and only if – we stick together. Thank you.
Dr. Patrick F. Leahy