Editor’s note: The following is a transcript of a presentation given by Vice President for Administration and Finance Paul Dworkis at the March 26 Staff Forum, updating staff on the College’s most recent financial picture. It has been lightly edited for punctuation.
I am glad to see so many of you today, albeit by Zoom, and provide an update on the state of the College’s financial affairs.
By many accounts, with a little more than one quarter to go, the current fiscal year, 2020-2021, has been a successful year. We should be glad to hear that, perhaps relieved, possibly confused and unsure exactly what that means, at least to Emerson College.
That is not to say that it has not been an incredibly difficult and challenging year — it has. That is not to say that the sacrifices made by everyone have not been significant and difficult — they have. That is not to say that the efforts of so many people have been lost, overlooked, or taken for granted — I assure you, they have not.
Let me give you a glimpse of what success in the COVID era looks like. As you hear some of these, and certainly there are many other measures, I ask you to think about where we might be without these. Think about whether these are part of our new normal, or whether they represent an effort, heroic in many ways, to do our parts to help protect our future.
In 2020-2021, we:
- Safely opened our campus for both semesters, on-time and prepared for a full academic load
- Introduced an online-only curriculum and a flex/hybrid on-campus learning model
- Learned to use Zoom, for better or worse
- Navigated a work-from-home environment
- Recruited the largest incoming new first-time student class
- We engaged epidemiologists, studied the science, and began a well-thought-out testing regimen
- Had positivity rates as low as .001 percent in the Fall, and marginally higher in the Spring, right through the waves of the pandemic. And, we had no on-campus, in-classroom transmission of the virus and virtually no spread amongst our community members
- Did not reduce at all our financial aid support to students
- Did not increase fees to students to pay for COVID costs
- Met as many hardship demands as possible
- Successfully expanded our Winter term, safely and profitably
- Launched the newly rebranded Marlboro Institute [of Liberal Arts and] Interdisciplinary Studies, bringing in many valuable resources to Emerson College
Because this is a budget discussion, let me throw in some specific financial metrics — and remember this is all under the heading of “success”.
This year, we:
- Lost $30 million in revenue as compared to our fully budgeted levels
- Invested more than $5 million testing our students, faculty, staff, and vendors in one of the most comprehensive programs
- Successfully managed a comprehensive contact tracing program, a considerable consumer of resources, and navigated the quarantine and isolation requirements to keep community members safe
- Spent more than $4 million to expand our de-densified campus footprint by adding residential and academic room capacity at hotels adjacent to Emerson
- Incurred millions of dollars more in health and wellness, PPE, Plexiglass, accommodation, and retooling our campus
- Reduced our tuition rate increase, a good measure to address affordability and current economic conditions, with a perpetual recurring and compounding loss of revenue into the future (consider $3+ million, plus escalation, the consequence for each of the rate years 2020-2021 and 2021-2022, as compared to our prior long-term budgeting plans).
- Developed fundraising programs to meet the needs of the College, now and into the future, with a bona-fide expectation of soliciting current use funds.
This, believe it or not, is what success looks like. But you know, success doesn’t come easy or without sacrifice.
As you all know, this year we also:
- Suspended contributions to our retirement plans
- Did not give salary increases to more than 600 staff
- Retired more than a dozen staff members of our community through our voluntary retirement program
- Implemented and continue to maintain a hiring freeze, an obvious disruption to our operations
- Reduced executive compensation
- Managed in a fiscally prudent and responsible way to reduce expenses everywhere possible, reducing operating expenses by at least 10 percent for all departments — more for some centrally controlled and managed costs
- Encouraged restructuring of some operations and implemented others
- Suspended our capital projects and reduced our deferred maintenance expenditures, and
- Held an incredible amount of COVID-related planning and operational meetings.
But perhaps most importantly this fiscal year, despite the extreme financial losses and investment representing more than 15 percent of our overall budget, we:
- Did not cut our operations or our departments to the point of no return
- Did not handcuff our future by drawing excessively from our endowment
- Did not lose a day to furlough, and
- Did not lose a single employee to layoff. To that point, ask yourselves how many others in the business of teaching and learning, hoteling, dining, cleaning, recruiting, financing, maintaining, and the serving as custodians for community members can say that?
Now, take a moment to reflect what anything short of that success would have felt like. Had we lost $40 million or $50 million, or even worse, the higher end of our projections — $75 million to $100 million — it would have meant far lower enrollment; far lower campus residency; shuttering of programs; devastating reductions of salary, benefits and operating expenses, and, undoubtedly, many [fewer] employees. But that didn’t happen, and it’s in large part to an Emerson-wide effort to be out front on these issues, planning and acting responsibly and appropriately.
This, and more, is what success looks like.
I also want to acknowledge the many gains, important goals and initiatives, upgrades to our campus, and so much more that is encapsulated in your day-to-day work. There are, and will continue to be, remarkable achievements made by staff on a large and small scale. With everything from the completion of a major upgrade to the Banner system, to round-the-clock support for our academic mission, to delivering a safe and healthy campus of more than 1.4 million square feet, to small things like virtual gifts and audio cued elevators, the Staff Forum represents a body of Emersonians who accomplished great things this year.
I’m sure there are many questions, particularly about our future and the year ahead, so let me say a few words about that.
First, with benefits being such an important consideration for all of us, we would like to gather employee feedback regarding our current benefit offerings and potential benefit additions and changes. In the next few weeks, all benefits-eligible staff will receive an invitation to participate in an employee benefits survey via email. We would truly appreciate your participation.
While we, and the country, are hopeful that with vaccines being delivered and administered at record pace, much uncertainty clouds the air. Realistically, we find ourselves at a somewhat similar crossroad, more educated and prepared, but potentially still facing another economic conundrum. The $30 million loss scenario is possibly at the other end of the tunnel ahead.
Even under good conditions, we are staring down uncertainty, economic hardship and distress, the need to remain austere, nimble and responsive. As we did last year, we are taking the necessary planning steps to address the conditions that we may be presented with. Of course, Enrollment Management is working on a strong pipeline to assure another terrific incoming class while working with returning students to keep and retain our existing classes at high level. There are strong early signs, a testament to the team and the strong Emerson brand, but there is a long way to go. The same for graduate and international programs.
Of course, our results are highly dependent upon our residency levels and all the necessary planning is being done to make for a safe campus in the Fall while achieving as high a density level as possible. And we continue to evaluate our testing requirements and all the other considerations for a positive student experience, accommodating any social distancing guidelines in accordance with health official guidelines. The [Institutional Advancement] team continues to work aggressively on fundraising initiatives that would help support student and College needs, and we will continue to look for every opportunity to secure government support through the components of stimulus bills.
While it’s too soon to say what the Fall will look like, we continue to study the remote work environment and the utilization of campus spaces to support the academic, artistic, and community needs. There is a subcommittee looking at what the “new normal” looks like on the other side of the pandemic. The COVID teams are studying how we might return to campus in the Fall if classes are in person. We’ve already made a commitment that a majority of our community will remain remote through the summer. We are committed to giving advance notice, at least two to four weeks, ahead of any change in direction or a more robust plan to return to campus. The team is incredibly diligent and thoughtful, and will respect the best practices of health and safety guidance.
No doubt, this past year has been difficult for all of us to manage through. While today, I cannot make a firm commitment about salary and benefits — particularly retirement contributions — I would say again that we will manage responsibly and humanely, as we did last year. Avoiding layoffs and furloughs are a high priority, we will be vigilant on expense management, we will be judicious in any new spending, and we will look to get through the consequences of what COVID may have in store to keep the College strong for the year ahead.
I know that strength is embodied in every one of you, as well as our faculty and students. We are going to do everything to finish this year strong, putting us in a better position to avoid some of the reductions we experienced last year. Given that it is only late March, there are positive signs, but we are still months out from knowing what will be. I wish I could be more certain at this point.
I’m glad to turn this back to Shari, who is coordinating questions from any of you.