Update on COVID-19 Financial Impacts
Dear Cooper Union Faculty & Staff,
When we met as a full faculty and staff via Zoom at the end of April, I outlined the negative financial impacts on colleges and universities everywhere created by the shutdown of campuses to prevent the spread of COVID-19. These include increased costs, lost revenue, reduced investment assets, and a potential decrease in enrollment. Since then, we have been actively working to close an initially projected $5.0 million budget gap (nearly $2.5 million from the operating budget and $2.5 million in endowment fundraising) while remaining steadfast in our commitment to a 0% increase in tuition next year and to the planned increase in average student scholarship levels, as defined in our long-term financial plan.
During that meeting, I also shared that many colleges and universities were responding to their similar or greater budget deficits by instituting immediate furloughs, job cuts, layoffs, pay cuts, and a reduction or complete suspension of retirement contributions. Early on in the crisis, we were able to mobilize quickly and apply for the federal Payroll Protection Program (PPP). We received that funding, which allowed us to cover salary payments through June 15, though we have yet to learn from the federal government whether the funds will convert to a grant or need to be repaid. We also enacted cost containment measures, including an administrative hiring freeze; administrative salary freeze; the elimination of overtime for all but essential employees; renegotiating vendor contracts; prohibiting all travel, entertainment, and discretionary spending; and pausing capital projects to focus only on emergency repairs, deferred maintenance, and grant-funded projects for FY21. Through these measures, we were able to reduce the budget gap by at least 10%.
I am recapping this information because, while we were able to retain our workforce through the end of the spring semester, our financial shortfalls, like other colleges and universities, have now required us to make more difficult decisions regarding cost containment in order to stay on track with our long-term financial plan. In recognition that we continue to operate amidst the economic consequences of the pandemic, we have carefully evaluated all staff positions in both academic and administrative areas to determine where the work volume is significantly reduced because of the continued closure of campus buildings.
As a result, we have determined that 38 full-time staff employees will be furloughed as of July 7. All furloughed employees have been given two weeks of notice before their furlough begins. As furloughed employees, these individuals, both union and non-union, will continue to participate in the health and benefits plan and are eligible to apply for up to 39 weeks of unemployment, along with the federal stimulus payments that are available through July 31. The furloughed employees’ positions are not being eliminated; nor is their work being reassigned. During the time that they are furloughed, impacted employees may be asked back to work part-time within the federal and state guidelines that protect unemployment and stimulus money that they may be entitled to while on furlough. In addition to the furloughs, the primary deans of each school and the Cabinet-level heads of all departments will be taking a temporary 10% salary reduction, also effective July 7. I will also be taking the 10% salary reduction and have additionally asked the Board of Trustees not to fund my supplemental retirement contributions for FY20 and FY21.
While we wish these measures weren’t necessary and have worked to prolong the inevitability of these decisions for as long as possible, with the PPP funding for salaries now exhausted, we have reached the point at which we feel these steps are necessary as part of the responsible financial stewardship of the institution.
Natalie Brooks is meeting with each individual who is being furloughed, along with their union representative, if applicable. If you have questions about how your department may be affected, please talk with your managers, deans or department leaders.
Because there is no way of predicting the trajectory of the virus, there is also no way of predicting with certainty when our campus can fully reopen or when each of these furloughed positions might be reinstated. As I shared in my email over the weekend, our fall semester will remain largely online with some in-person work and teaching/learning. This decision was made in order to free up space in our buildings for physically distanced student studio space and labs, to limit the spread of the virus, to accommodate the wide range of health risk profiles and family circumstances within our full community relating to COVID-19, for students to continue their Cooper Union education from anywhere without being disadvantaged if they can’t be in New York, and to maximize flexibility so that our approach can transition quickly and smoothly should resurgences of the virus occur.
Under this plan, we are evaluating the extent of in-person student experiences we can provide for the fall, following the safety and health guidelines in New York State, including maintaining social distancing, wearing PPE, testing, and contact tracing. We are evaluating every shop, lab, and studio looking for opportunities to reopen spaces where we can while meeting all of the safety and health standards set by the state, federal guidelines and CDC advisories. This assessment should be completed by the end of July and will dictate which employees will return on a case by case basis. We anticipate that some of the furloughed employees may return in August for preparation work that needs to happen for the fall semester. We will continue to share this information as we make these decisions.
These are difficult times, unlike any in our lifetimes. We wish to offer our support for all of our employees who are being furloughed at this time, and we thank them immensely for their contributions. I know I speak for all of us when I say how much we look forward to a time when we can all be back on Cooper Square together. Until then, we must continue to rely on each other and on each other’s compassion and creativity to weather this storm – and as I’ve said so many times before, there is no other community I’d rather be a part of as we do that.