Persevering in uncertain times
Ohio University President M. Duane Nellis shared the following message with faculty and staff on April 28, 2020.
As we move toward the end of this unprecedented spring semester, I want to thank you again for carrying our Bobcat community through this historic and life-altering time. Your willingness to remain flexible, your ingenuity in approaching remote course delivery, and your unwavering commitment to our students has been inspiring. You have demonstrated the sense of purpose as educators that has defined OHIO’s 216-year history and will ensure our future strength.
Our institution has been tested in ways none of us could have anticipated, affecting our students and their expectations, as well as our approach and priorities as scholars and researchers. The pandemic has also significantly altered our University operations and our financial position. We expect the impact on University revenues to grow significantly in the coming weeks and months. With this in mind, I write today to update you on the anticipated financial impacts of the pandemic, the principles that will guide us as we navigate uncharted territory, and the immediate actions we must take in response to ensure we emerge from this crisis as an institution focused on:
- access and inclusion;
- student success and transformation; and
- research, scholarship, and creative activity that supports and sustains vibrant communities.
Now, more than ever, we must embody the purpose and promise of public higher education.
We have proven over the last several weeks our ability to persevere in uncertain times. We will endure this next phase as well and, I believe, emerge evermore ready to meet the changing needs of our students with a continuous commitment to their success. But in doing so, we must face difficult, even painful, decisions in the days, weeks, and months ahead.
Our solutions will require new thinking. In some cases, they will change the way our University is structured. We must:
- Streamline administrative functions to reduce costs in areas that do not directly impact instruction and student support;
- Minimize layers of management where possible to focus on our academic mission;
- Rethink the organization of our colleges and departments with a focus on supporting collaboration and innovative curriculum while reducing costs;
- Streamline and re-focus academic support functions to ensure a continuous commitment to student success; and
- Strategically reduce our use of space while protecting the unique Ohio University student experience.
Anticipated Financial Impacts of the Pandemic
In the days following the arrival of COVID-19 in Ohio and our decision to move the remainder of our spring semester to remote and virtual instruction, we made a commitment to pause budget-related personnel actions that had been considered prior to the pandemic as we assessed our new reality. Every day, we receive more information about the breadth of revenue losses that this pandemic will bring to our University. It is evident that all of the University’s revenue sources will be impacted by this crisis.
Some of these losses have already been realized. As you know, we refunded prorated housing, dining and parking fees to students who were unable to return to our Athens campus after spring break, which represents slightly more than $18 million in lost revenue for the current year. We have also experienced losses in study abroad programming fees, revenue from summer camps, and, in athletics, we have experienced a reduction in NCAA revenue distribution as a result of the cancellation of winter and spring NCAA championships.
At the state level, while the distribution of cuts has not been finalized, Governor Mike DeWine has instructed his agency directors to identify budget cuts up to 20 percent that would affect the remainder of fiscal year 2020 (through June 30, 2020) as well as FY21. Universities have also been asked to plan for a 20 percent reduction in state share of instruction funding in this fiscal year and next. A 20 percent reduction would result in somewhat over an $8 million reversion in our state funding for the current fiscal year and a reduction of approximately $35 million in FY21.
In addition, although it is too early to quantify any potential enrollment-related revenue losses, national data is beginning to indicate that some students may be forced to change or delay college plans for economic reasons. Any revenue changes related to future enrollment would be in addition to the enrollment-related revenue shortfall that existed prior to the pandemic.
Despite the uncertain economic climate, we have seen our alumni and friends come together to support students impacted by the pandemic through our Bobcats Take Care initiative. We’ve raised more than $165,000 to date of immediately available grant funds, and we expect to continue fundraising efforts to support scholarships in the weeks and months ahead. Still, recessionary pressure is likely to put a strain on fundraising, and market performance has already impacted the value of the endowments that fund scholarships, research, programs, and more.
As we face these realities, federal funding to Ohio University through the CARES Act will provide some funding to offset our losses. However, it will fall far short of filling a growing gap. Ohio University will receive approximately $9.7 million that we will be able to apply to help with the institutional impacts we have detailed, as well as $9.7 million in emergency grant support that will be distributed directly to students in need across all of our campuses with COVID related impacts.
These are extremely difficult realities, but it is important for us all to understand the severity of what we face because it will take collaboration and open dialogue to meet the challenges of the year ahead. We are not alone in this. Countless universities across the state and the country are facing similar hardships, some far worse and even more imminent than our own, and we can and will leverage knowledge from across our campuses, Ohio’s other public institutions, and the broader higher education landscape as we navigate our best path forward.
Principles for Moving Forward
In times like this, we look to our core principles to guide our urgent decision-making. Prior to the pandemic, we established and communicated principles that would guide our budget decisions. While those principles still hold true, we must also add new considerations.
We must now, more than ever, prioritize the health and safety of our students, faculty, staff, and communities. While we hope to deliver a face-to-face educational experience in the fall, we must also recognize that a return to business-as-usual is not likely in the short term. Our planning must allow for the flexibility of course delivery and limited density on our campuses for as long as it is necessary.
We must also endeavor to support our impacted employees. When we paused personnel actions in March, we did so in consideration of how the pandemic might change our budget planning assumptions and approach, and with the goal of supporting our employees during a time of severe disruption. We all hoped that disruption might be brief and that the impacts might only be temporary. That, unfortunately, is not the case.
In addition to prioritizing health and safety and supporting employees, we will continue to hold fast to principles we had previously defined:
- To act with the best interests of Ohio University’s core mission of teaching, research and creative activity, and service foremost in our thinking and aligned to our Fearlessly First Strategic Framework.
- To protect and prioritize student success, academic quality, and scholarly excellence.
- To embrace accountability, shared governance, and shared responsibility.
- To ensure data informed decision-making.
- To communicate with one another about the decisions we make to ensure we have identified and addressed potential cross-unit impacts including consideration of all campuses and locations.
- To eradicate internal competition and duplication of courses, programs, and services.
- To streamline programs and course offerings with a focus on clear pathways to completion, with higher impact for students.
- To take necessary near-term action in the context of longer-term institutional strategy.
It has never been more important that our decision-making process should be informed by a vision for our long-term future. As the spring semester comes to a close, eyes and minds are focused on the fall 2020 term. But, the decisions we make must also look far beyond fall 2020. They must consider the institution we want to be in years to come, and they must recognize that the impact of this global pandemic will carry far beyond this calendar year.
Immediate and phased response
Ultimately, we now know that we must act swiftly in response to these realities, even as they continue to evolve. Effective immediately, we will take the following steps:
- Implementation of a hiring freeze with only critical positions being approved by a hiring review committee. Critical positions should be filled by restructuring existing positions, resulting in overall salary savings.
- Suspension of employee recognition awards.
- Suspension of incumbent reviews with exceptions only for reviews that are part of a structural reorganization where increases are offset by substantial reductions in personnel costs.
- Review of all in-progress Capital Projects and a suspension of new Capital Projects.
In addition, we are asking leaders to limit all operational spending to essential purchases or services for the remainder of FY20. We expect to release guidance for reductions to operational spending for FY21 in the coming weeks.
Recognizing the sacrifices ahead, Provost Sayrs and I have each agreed to voluntarily reduce our University base salaries by 15 percent (equivalent of a 39-day furlough) for FY21. In addition, we will also forego access to any performance bonus this year.
These are important first steps that will provide limited short-term savings. But, speaking with candor and in fairness to our University community, they will fall far short of filling the anticipated gap. Unavoidably, this global crisis will force permanent changes in communities worldwide, including here at Ohio University. It will touch every area of the University, and it will have a difficult and direct impact on us all.
Our administration is working tirelessly with input from leadership across the institution, including our faculty, administrative, classified, student and graduate student senates, to evaluate a variety of solutions to ensure sustained financial health, to mitigate the impact on employees to the extent possible, and to emerge out of this crisis positioned for future success.
Ideas have already surfaced from across the institution, and we welcome those and will continue to engage with leadership of the five senates as we finalize next steps in the days ahead.
Our promise to you is that we will do all we can to help and support employees impacted by decisions we make, and that we will remain committed to protecting our academic strength and the unmatched experience that we have delivered to students for centuries. It is for our students, both current and future, that we must persevere in the face of change, holding on to that sense of purpose that defines and unites us all as members of the Ohio University community.
M. Duane Nellis