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COVID-19 Resources

President Spina message to faculty and staff about furloughs and layoffs

 

Click here for information on current operations, including previous updates and messages to the University community.

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Click here for messages regarding the Path Forward, UD's work to implement safety measures for the fall.

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Tuesday, April 28, 2020 

 

 

Dear faculty and staff,  

I continue to offer my prayers that you, your families, and your loved ones are safe and managing as well as you can during these difficult times. I am most grateful for all of your work in the spirit of our Marianist founders to recognize and adapt to rapidly changing and often uncertain circumstances. 

The administrative leadership of the University — trustees, senior administrators, vice presidents, and deans — takes very seriously our collective charge to ensure the strength and long-term health of the University of Dayton and its special mission. The University’s future must be secured no matter what may come and how severe the impact of the pandemic. The open-ended, uncertain nature of the pandemic could result in a wide range of negative outcomes that I believe require us to be proactive. It does not appear that all colleges and universities are being as proactive and conservative in the same ways as UD at this time, but in all likelihood many will be taking similar actions in the coming weeks and months.  

While we are planning for and looking forward to welcoming students on campus this fall, there are a variety of possible scenarios that would affect the University's revenues and jeopardize our financial stability. It is necessary for us to take decisive action now, including painful decisions about furloughs and layoffs, so that the University can weather the months ahead — again, no matter the duration and financial impact of the pandemic. Delaying difficult decisions now will diminish significantly the University’s resilience for the coming year. 

I hope you have viewed my video message. In the interests of transparency, I want to describe in this communication the challenges we face, summarize our actions to date, and inform you of new actions we are now implementing. Let me assure you that all of the steps we are taking are necessary and will help to position the University to survive the depths of this pandemic and ultimately thrive when it is over — serving our extraordinary students, continuing to do high-impact research, and engaging deeply with the greater Dayton community. 

Impact of the pandemic on financial planning

The pandemic has already undermined our financial plans for this year, upended projections for next year, and created a significant threat to all of higher education. In addition to unanticipated costs this spring, we expect a significant decrease in revenue this summer, and face great uncertainty surrounding revenue for the coming academic year. 

In mid-March, when the potential impact of the pandemic on our finances began to emerge, we took immediate action to preserve the University's assets, including implementing a hiring freeze, ceasing work and deferring nearly all capital projects, and halting all non-essential discretionary spending. We also drew on our lines of credit to enhance the available cash on hand, understanding that future revenue is not guaranteed. We will continue to take the extraordinary step of relying upon this short term debt to supplement our available cash this summer and likely into the fall. In early April and through at least October, senior leaders took voluntary 20% pay reductions, and I have taken a 30% pay reduction. 

But we must do more. Given the lack of a vaccine, continued physical distancing, and the close contact of our students, faculty, and staff in residential facilities, classrooms, the chapel, and other campus gathering places, we are called to plan for a range of scenarios. 

While we are actively planning for students to return to campus this fall and will do whatever we reasonably can to achieve this, we must also plan for the very real possibility that public health officials and our own responsibility to care for the safety and well-being of our campus community would require us to delay in-person instruction and campus life. 

If this occurs, fall semester revenue from tuition, room, and board could be delayed and drastically diminished for several months or the entire semester. In addition to our existing load of fixed costs, our financial aid expenses will surely be higher no matter when or how students return to campus because so many of our families have been impacted financially by the pandemic and it is imperative that we make it possible for them to return. 

We have been asked whether we can use our endowment and/or our reserves to “tide us over” and avoid employment actions. A substantial portion of the endowment is donor- and board-restricted and cannot be used for general purposes. As we do not know when tuition, room, and board revenue will flow again, our unrestricted reserves, which are already diminished by the market decline, could well be necessary to support our fixed costs to keep the University open in the fall and beyond and therefore will only be employed after all other sources of cash have been exhausted.

As a matter of prudent financial management and care for the University’s educational mission, we must do everything we can to preserve the University's available cash, which makes it necessary to reduce the University’s payroll during the quieter summer months and continue to control expenses.

New actions to reduce payroll during summer 

To help achieve a reduction in payroll expenses, this week we notified 446 people that they will be furloughed, and notified an additional 60 people that their positions are being eliminated. This is approximately 18 percent of our total full-time workforce and 23 percent of our full-time staff. A furlough is an unpaid leave of absence during which employees retain University benefits. All units of the University are affected by the furloughs and layoffs, and the loss of our colleagues and friends will touch us all, in many different ways.

In making decisions about which positions were affected, it was necessary that I consider the expected reduced summer workload, with virtually no students or events on campus, and the need to preserve resources for the fall and beyond. These decisions do not reflect upon the abilities or performance of these colleagues, but are based on the University's immediate operational and financial needs as we navigate this challenging summer.  

These furloughs and position eliminations are especially painful to those directly affected and, as I have done in the video, I want to address those members of the UD family: 

I am truly, deeply, and personally sorry that these actions could not be avoided. You put your hearts and souls into this university and our students. We appreciate your hard work, your dedication, and your care. As the absence of our students has been heartbreaking, your absence will be even more so. These decisions were painful because each and every one of you is important to me, and to the University as a whole. I express my deep regret and sorrow that these actions are necessary. 

Other steps we are taking to reduce payroll expenses include eliminating merit increases for faculty and staff for the 2020-21 academic year (a very small number of increases related to already-announced promotions and other mandated increases will still occur), and pausing all university contributions to employee retirement accounts from May 25 until Oct. 1. 

It is widely known that, while this pandemic is indiscriminate in its threat to individuals, its impact on the health and economic welfare of underrepresented populations and those from lower socioeconomic backgrounds is disproportionately high. While we have taken care — and will continue to take care — to minimize that disproportionate impact at UD, the underlying disparities emphasize the ongoing importance of making progress on our diversity, equity, and inclusion strategic plan and dismantling the root causes of these disparities on our campus and beyond.

We have tried to find ways to ease uncertainty and financially assist some of those who are most vulnerable. We continued to pay through the end of April a significant number of employees who had little or no work when we shifted to remote learning in March. The University will pay employee health insurance premiums for all furloughed staff during the duration of their furloughs. Laid-off employees will be eligible for two semesters of tuition remission for dependent children either currently enrolled at the University, or who will start classes in the fall. More information about these benefits can be found in the FAQs for furloughed and laid-off employees. 

Each affected employee has received information on filing for unemployment and CARES Act benefits, continuation of health care coverage, and other items. Human Resources and other offices will continue to offer support to our friends and colleagues.

While we hope to bring back furloughed employees as soon as possible, much depends on how the pandemic and public health requirements will affect when the fall semester begins, projected tuition revenue, and what financial aid is ultimately needed by our students.

Looking ahead

In the past month, senior leadership has been in close consultation and has discussed  —  and will continue to discuss — the University's financial situation, our strategy, and a range of scenarios with trustees, deans, vice presidents, unit leaders, and faculty representatives including the Executive Committee of the Academic Senate (ECAS) and the Educational Leadership Council (ELC). Currently, a group of administrators, faculty, and staff are developing scenarios for how the fall semester might be conducted once expectations and protocols are set by state and local leaders and public health officials.  University leaders continue to be engaged with these officials and with leaders of other universities to inform future decisions.

Please understand that plans for the coming year depend upon many external factors that are not within our control. As the fall picture becomes clearer, we will continue to communicate and be as transparent as possible with our furloughed staff and the full campus community, including virtual town halls 11:30 a.m.-1 p.m. Wednesday, May 6, and Thursday, May 7.   

Our Marianist founders were inspired by Mary when the French revolution turned their world upside down, and they walked in faith believing in a new day and new life. May Mary be with all of us on our uncharted path, helping us build on the solidarity we have experienced these past weeks, and finding ways to contribute to the common good as we continue our journey of faith.

Please keep the affected employees particularly close in your prayers, beseech Mary to watch over them, and check in on them from time to time. Continue to take care and stay safe and healthy.

Sincerely,
Eric F. Spina
President