Interim budget, furlough policy, compensation-increase pause, student support
Dear Ohio State Community:
I have updates to share with you today on our COVID-19 response efforts at the university, but first I want to again address the extraordinarily difficult events of this past week, which I spoke to over the weekend.
We know our students, faculty, staff and community members are hurting, we are here to support them, and we are inspired by their commitment to this cause. Students who are feeling distress may contact the Office of Student Life Counseling and Consultation Service at any time at 614-292-5766 or ccs.osu.edu. Faculty and staff can contact the Employee Assistance Program. Additional resources are listed at the end of this email.
These are arduous and uncertain times. As we grapple with the events of the past week, we must address the immense challenges presented by the COVID-19 pandemic. We continue to engage in important transition efforts, critical financial decisions and contingency planning.
Like many other colleges and universities throughout the state and nation, no source of revenue on our campuses has gone unaffected by this pandemic. This has resulted in significant budgetary hurdles, revenue loss and financial uncertainty.
In FY2020, ending June 30, 2020, we estimate that we will experience a loss of $300 million in revenue sources across the university and Wexner Medical Center. This significant shortfall has been addressed through several actions, including: a hiring pause with exceptions for essential services and key faculty and research positions; a pause to some capital projects; a pause in off-cycle salary increases; a restriction on university travel; greater stringency around non-essential procurement and other operating expenditures; and the use of limited strategic cash reserves and the availability of federal stimulus funds via the CARES Act.
This week, we will present to the Board of Trustees for consideration an interim operating budget for the first two months of fiscal year 2021: July and August. Based on the continued uncertainty related to COVID-19, we will need to realize $58 million in cost savings in those first two months on our general campuses while the Wexner Medical Center is projecting needed cost savings of an additional $45 million for the same time period. Due to the uncertainty, we are unable at this time to present a budget for the full fiscal year or project additional needed cost savings beyond July and August.
Overall, we anticipate that the upcoming fiscal year will present further budgetary challenges due to COVID-19. We are planning for multiple scenarios while working to maintain and advance teaching, research and patient care. As shared, we have asked all colleges and support units to prepare a range of budget projection scenarios for FY21, including potential 5%, 10% and 20% reductions in spending. Individual units across the university are being given the flexibility to manage these budget reductions in a way that meets their goals and objectives.
As a reminder, the medical center is engaging in a separate and coordinated budgetary control and contingency planning initiative that addresses immediate patient-care needs during the pandemic as necessary health care services resume.
We deeply value each and every Ohio State employee, and we are committed to responding to these budgetary challenges in a thoughtful and measured way that continues to support a culture of talent and honors your contributions to our success. You have been instrumental in helping the university persevere during this pandemic, and we appreciate your continued efforts.
The current fiscal situation of course requires that we have the flexibility to respond and adjust in uncertain and evolving circumstances.
The Board of Trustees this week will consider passing a board rule that would allow for the creation of a furlough policy. An employee who is furloughed is temporarily placed on an unpaid leave of absence from work for a specified period of time but maintains their benefits. A furlough is not a layoff or a reduction in force. Furloughs are only used to balance temporary financial or operational shortfalls while preserving the size and strength of the workforce of the university or one of its individual units. Historically, the university has not had a furlough policy, and this action would allow the university to provide the general framework for employee furloughs.
To be clear, we are not planning to institute furloughs at the present time. However, given the fiscal uncertainty we are facing, we need to have the flexibility to institute further cost-saving measures if necessary.
Any furloughs in the future would be carefully and transparently considered and would be based on the budgetary circumstances and planning of individual units and the university as a whole. Under the proposed policy, the Board of Trustees would have to approve the implementation of a university-wide furlough plan.
Pause to annual merit and compensation increases
As part of a continued effort to proactively address financial challenges caused by COVID-19, we are implementing a pause in the annual merit compensation process for FY21. This will apply to all Ohio State faculty and staff. The temporary suspension of the annual merit compensation process for applicable employees is not an action that we take lightly.
Compensation for faculty promotion and tenure is not affected by this pause. The university also has implemented a pause for certain other types of increases. Pay decisions for students and graduate associates will be determined at the unit and college level. Other exemptions and further details are available on the Human Resources website.
We will continue to honor our commitment of increasing our employee minimum wage to $15 an hour.
The university state of emergency is extended through June 6, enabling Ohio State to utilize Disaster Leave (Policy 6.28).
As part of our phased approach to returning to on-campus operations, the Office of Research has developed the Research Recovery Plan for Staged Reopening in coordination with the faculty-led Research Recovery Committee, the university’s COVID-19 transition task force, the Ohio State Infectious Diseases Institute, and colleges and units across our campuses. The plan provides the current framework for reopening research and creative expression activities in laboratories, studios and research spaces through a staged approach. Additionally, the College of Dentistry has reopened limited operations for student training with safety protocols in place.
These join a limited number of academic, clinical and athletic functions that have resumed on-campus operations. We will announce a centralized operations plan for the autumn semester soon. At this time, all non-essential university employees who are not part of an exempted operation or function are to continue teleworking and remain off campus.
For more information, visit the COVID-19 transition task force webpage.
Together As Buckeyes emergency grants
To help address financial challenges caused by the COVID-19 pandemic, the university is proactively providing grants of up to $1,000 to undergraduate students from lower-income families. No applications are needed for these new grants; Ohio State is notifying qualifying students directly. The grants are being provided through the Together As Buckeyes emergency grants program.
Additionally, all eligible students – undergraduate, graduate or professional – may continue to apply for emergency grants through the broader Together As Buckeyes program. Students may use grants to help pay for living expenses or other unexpected financial challenges related to the disruption of campus operations due to the pandemic, including expenses such as food, housing, course materials, technology, health care and child care. Thus far, the Together as Buckeyes program has provided nearly $14 million in grants to Ohio State students. The program is primarily funded through the CARES Act.
To learn about eligibility requirements, visit the student financial aid webpage.
These are among the most challenging and disruptive times in our collective memory. Throughout all we have remained together as Buckeyes, and we will come through this stronger, more united and poised for an even brighter future. Your continued support makes it all possible. Thank you.
Michael V. Drake, MD