To Our Faculty and Staff:
As we approach the beginning of university’s fiscal year next month, we want to update you regarding steps Case Western Reserve is taking to address the significant budget impacts of the COVID-19 pandemic.
Between additional expenses and revenue losses, the university’s spring transition to remote operations cost approximately $20 million. And while specific savings—for example, on travel—helped reduce the amount, this year Case Western Reserve will report its first budget deficit since 2007.
Unfortunately, Fiscal Year 2021 (FY 21) could be even more challenging. The dramatic economic effects of COVID-19 mean that some will have to postpone plans to pursue degrees, while others may choose less expensive degree options. Uncertainties about immigration and the possibility of a COVID-19 surge only heighten the university’s budget concerns, while necessary investments to reduce infection risks are increasing our institutional costs.
As a result, the university could face Fiscal Year 2021 losses between $60 and $70 million and, depending on pandemic-related developments, even more.
Even before the transition to remote operations, we began assessing potential financial effects of the pandemic; after it, those efforts accelerated significantly. Throughout the process, we have discussed our challenges and potential solutions with faculty—with Senate leadership and more broadly—as well as staff leaders.
As initial steps, deans and other university leaders began working to reduce expenses as much as possible for this fiscal year. They also have been working to finalize FY 21 budgets that are at least 10 percent lower than this year’s expenses.
In addition, as president and provost, we each have taken 20 percent salary cuts for the next fiscal year, while deans and other university leaders have volunteered to reduce their compensation by 10 percent.
Unfortunately, those steps alone will not be sufficient to achieve the savings needed. We also have to take steps that directly affect individuals financially.
Measures Affecting Compensation and Retirement Contributions
In April, the university instituted a salary freeze that begins this July 1 and continues through June 30, 2021. This measure applies to merit increases, bonuses, and promotional raises—with two exceptions. Faculty receiving tenure and/or promotion to a higher academic rank during FY 21 will receive traditional compensation increases.
In addition, as you may be aware, the university initiated a hiring freeze in April, which will continue until university leaders determine financial circumstances allow less restrictive measures. Supervisors may appeal for exceptions, but they largely are granted only in those instances where the positions contribute directly to health, safety or revenue. Grant-funded positions are exempt from this provision.
Finally, for FY 2021 the university will suspend its contributions to Retirement Plan A, which affects faculty and administrative employees in salary grades 18 and higher). The university will continue its contributions to retirement plans B and C.
Measures Affecting Work Schedules
As the return-to-work process continues, some faculty and staff have expressed concern regarding balancing family and work responsibilities. While Ohio permitted most day care providers to open starting May 31, for example, health safety requirements often translated to lower child capacities.
With regard to faculty, the Office of the Provost is working with school deans regarding potential options for faculty to choose to reduce their work commitments (and commensurate compensation) to allow time to address family care needs or other personal concerns. Those conversations are ongoing, and additional details will be shared as soon as they are finalized.
The items listed below apply only to staff. Additional details on each can be found in this document on the Human Resources website.
The university is providing staff the choice of a Convenience Leave. With supervisor approval, a staff member may take up to 12 weeks of unpaid leave while continuing to receive benefits and maintaining the position upon return.
Alternatively, an employee can request Reduced Work Hours for a specified period of time. If the supervisor approves, this option preserves the staff member’s position and benefits.
Supervisors also have options to lower expenses, in particular during times of decreased demand for services. They may furlough staff for a specified time without permanently eliminating positions. Furloughs may last for as little as a few days up to a maximum of six months, but staff retain their benefits throughout the furlough.
We regret the need to consider any of these choices, much less execute them. We also must acknowledge that worsening economic conditions and/or a second COVID-19 surge could require more severe measures, such as layoffs. Recently, we all have seen more promising developments involving potential COVID-19 treatments and even a possible vaccine. Until more definitive information is available, however, we must proceed with caution.
As always, we will provide more information as it becomes available.
Barbara R. Snyder
Ben Vinson III
Provost and Executive Vice President