April 15 Financial and Operational Planning Related to COVID-19

The COVID-19 global pandemic presents immediate, near-term and longer term challenges for higher education and our broader society. There remains a high degree of uncertainty surrounding enrollment patterns, public health restrictions, and the magnitude and duration of resulting impacts on Puget Sound. We are grateful to you for your heroic efforts to meet the challenges before us.

It is essential that we continue to work together to plan and be prepared for a range of possible operating and financial scenarios for next year and beyond. 

Fiscal Year 2020 – The Immediate
As discussed during the April 1 faculty meeting town hall for staff and faculty, we currently estimate that revenues will be $10 to $11 million short of budget this year for reasons that include lower enrollment levels and greater financial aid for students this past fall, as well as coronavirus-related prorated room and board credits issued this spring and loss of certain program revenues. We are working diligently to secure expense savings to balance the operating budget for this fiscal year and to reduce costs for next year, including: 

• We have reduced facilities maintenance, halted capital projects, deferred equipment purchases, and temporarily shifted some staff responsibilities.
• We have suspended discretionary spending and will realize other savings from reductions in travel, events, utilities and other items.
• We have taken steps to receive funding available to higher education institutions from the Education Stabilization Fund established by the federal CARES Act.
• Most significantly, and given enrollment and operational uncertainties next year and beyond,
  • we have suspended searches for 25 vacant staff positions (the majority of which are likely to remain suspended into next year), and
  • we also are now suspending most in-process searches for visiting assistant professors. Provost Behling will communicate directly with search chairs to inform them of the status of their search.

We continue to assess additional actions necessary prior to the end of the fiscal year on June 30 to achieve a balanced budget, and know that one of the most pressing areas of concern is whether the university will be able to continue to pay staff members past May 15 in the event they are unable to work due to our extended modified operations.

Information about the continuation of pay for staff members unable to work for the period May 16 – June 30, 2020 will be announced by May 1. The decision will be informed by input from Staff Senate, Faculty Senate, LEAD members and trustees, all of whom have been invited to provide feedback regarding principles to guide decision making on this and other budget-related issues.

Our goal is to do everything we can to support and retain our talented staff and faculty members in alignment with our resources, and we are exploring all options. To this end, the president, provost, and vice presidents have communicated to our Board of Trustees leadership their willingness to take temporary reductions in their own compensation as one of several strategies that may be needed to reduce expenses. 

Fiscal Year 2021 – The Near Term and Beyond
To advance our dual-track planning for either a return to normal operations or the necessity for remote learning and working that extends into fiscal year 2021, we will consult with faculty, staff and student leadership and form two important working groups in the coming weeks.

Operational Planning Group
This group will be charged to examine and make recommendations to best prepare us to excel under different scenarios, including:

1. If within public health parameters, how can we return to being a residential learning community with modified practices in our residential and academic spaces to ensure appropriate social distancing, isolation of any confirmed COVID-19 cases, and flexibility to align with potential ebbs and flows of outbreaks and public health restrictions?
2. If necessary to begin the fall remotely (or otherwise return/continue remote operations for a period of time), what is needed to ensure the best possible learning experience for our students? What have we learned about remote learning this spring? What is working for students, faculty and staff, and where do we need to enhance the experience to best support their success?

Budget Adjustment Group
Consistent with our guiding principles, this group will be charged to offer input and feedback to President Crawford and Cabinet on a range of potential avenues for adjusting the fiscal year 2021 budget (with implications for subsequent years) based on COVID-19 realities and financial constraints. A number of options are before us and difficult decisions will need to be made. We will address our challenges in creative and mutually supportive ways, informed by guiding principles and values and aligned with the mission of the university and its long-term stability. This work will inform but not replace the work of the Budget Task Force in the fall of 2020 to form a budget recommendation for fiscal year 2022.

Immediate Next Steps

• We will consider input received by April 17 from the Faculty Senate, Staff Senate, and LEAD group regarding principles to guide the important decisions ahead.
• We will follow up and continue to consult with leadership of the Faculty Senate and Staff Senate regarding key decisions related to the remainder of fiscal year 2020.
• We will draft official charges for the two working groups described above and will consult with leadership of the Faculty Senate and Staff Senate on the formation and launching of these important consultative groups.

We have learned a great deal about our community and our extraordinary resiliency in the face of uncertainty. Together we have adapted thoughtfully and quickly to changing circumstances in support of our students this spring, and will continue to make timely and thoughtful adjustments to how we collectively serve our mission within the operating and financial constraints presented by this public health crisis.