Dear Siena Community,
The unimaginable circumstances provoked by the COVID-19 pandemic have critically strained the College’s financial position. We must immediately and aggressively mitigate the damages by adopting short-term austerity measures. The Cabinet and the Board of Trustees considered many options, but in no scenario could we possibly accommodate staffing levels at 100 percent as long as the campus remains closed. It is with a heavy heart that I am compelled to share the news: temporary furloughs are now fiscally unavoidable.
Over the next 48 hours, supervisors will speak individually with 75 employees who will be furloughed beginning May 1. Many, but not all, of these employees simply cannot perform their primary tasks while students remain off campus. Those furloughed will retain their Siena benefits for as long as permitted by the carrier, and the College intends to reinstate their employment as soon as the crisis subsides, whenever that may be.
Additionally, the College will suspend its 10 percent contribution to the TIAA retirement plan for all eligible employees through December 31, 2020, at which point the benefit will be reconsidered. An amendment to the Faculty Handbook to this effect was approved yesterday by a majority vote of the faculty. The suspension will begin on May 1 and will save the College approximately $2.4 million.
These measures have nothing to do with job performance or the higher education marketplace, and everything to do with the evolving global emergency. Because our students did not return to campus following spring recess, the College will lose $8.7 million in revenue through pro-rated reimbursement of room and board. We also need to plan for a possible decline in fall enrollment due to changes in the financial circumstances for so many families and the unpredictability of the pandemic. The strength of our endowment has also been weakened by havoc in the financial markets. In an effort to mitigate these losses, the capital budget allocation has been reduced by $3 million and a freeze on non-faculty hiring and non-essential procurements has been implemented. We are also taking advantage of stimulus relief and other legislation in the CARES Act while aggressively seeking and applying for additional federal and state aid.
We will survive this unprecedented storm, but realistically, we cannot do so unscathed. Decisive cost-saving measures must be taken now to ensure the College’s financial viability in the future. Enhanced unemployment benefits included in the federal stimulus package will, in many cases, fully compensate the individuals who will temporarily lose wages. That may be a small consolation, but it was an important consideration in reaching this decision.
Siena is not in a unique position. Every college and university, public or private, large or small, in this country will be impacted financially. The grim reality is that some institutions will be left fighting for their survival. Rest assured, contingency planning now will allow Siena to persevere, survive, and eventually thrive again.
In greater detail, here are some of the financial realities presented by this crisis:
Refunds and Credits for Unused Dining and Housing
The College will return approximately $8.7 million to students in dining and housing refunds and credits. Though academic instruction continued, nearly uninterrupted, the room and board generated through residential students accounts for about 36 percent of the College’s annual revenue.
Impact on Benefits
As stated above, the College will temporarily suspend its contribution to the TIAA retirement plan for all eligible employees through the end of the calendar year. As you know, a benefits review committee was formed last fall and has been asked to evaluate the College’s total benefits package. In partnership with the Siena College Research Institute, the committee held focus groups and sent a survey to the entire campus community. The adjustment to the retirement contribution will be revisited when the benefits review committee delivers its findings and recommendations to the Cabinet.
Endowment and Cash Impact
The College endowment contributes nearly seven percent of our operational spending. Due to market volatility and barring a sustained market rally, the unrestricted portion of our endowment may lose as much as 10 percent of its valuation. The downturn in the market also impacts the finances of our top donors, and it is reasonable to expect that our Development team will have a harder time securing gifts to the College in the near-term.
Many colleges, including Siena, have pushed their deposit deadline for incoming first-year students back by one month to June 1. An extra 30 days will provide high school seniors more time to choose a college in this abnormal recruitment cycle. Our enrollment team has taken a highly individualized approach to recruiting next year’s freshman class, and many offices are joining together to engage with current Siena students, but our success won’t be known for some time. Colleges can expect, with so many families suddenly encountering financial hardships, that fall enrollment will be down across the board.
A Recovery Task Force, led by president-elect Chris Gibson ’86, Ph.D., has been convening for several weeks to measure the full financial impact to the College and to plan for various contingencies related to the fall semester. Presently, Siena intends to welcome students back to campus in September for the fall 2020 term. The Task Force is analyzing and identifying the actions necessary to provide the safe and effective delivery of the Education for a Lifetime in compliance with federal and state guidelines. We will make every effort to complete two semesters of on-campus instruction, but need to plan prudently. We will be engaging Siena faculty, administration, and staff to ensure we are prepared for all contingencies including potential changes to overall and residential enrollment, flexible and varied modes of instruction, and modifications of the academic calendar.
Returning and newly enrolled students will receive timely updates detailing actions the College is taking in preparation for the return to campus and the fall semester. Our comprehensive planning will result in a stronger, more agile Siena College better positioned to realize our strategic vision.
Every member of our community will be directly or indirectly impacted by this pandemic, and the College’s recovery will depend on the will and the sacrifices of all of us. Dr. Gibson has voluntarily requested that his presidential salary be reduced by 25 percent, beginning his first day, July 1, through the end of the calendar year. It is a noble gesture of leading by example, and Dr. Gibson indicated that he would ask for a deeper and/or extended cut to his salary should the crisis worsen.
Our Siena Friars have also volunteered to shoulder more of the burden than we could reasonably ask. Recognizing the shared sacrifices required, they will forego their salaries through the end of the calendar year in demonstration of their commitment to the Franciscan tradition and Catholic identity of Siena. This benevolent contribution to the College is in addition to the $1 million they gifted in February that was used to fully fund campus-wide pay increases.
Less than one month ago, the disruption presented by the pandemic shook our community like an earthquake. With little time to react and no margin for error, we transitioned all courses to our distance learning model, served the varying needs of our students in imaginative ways, established department-wide remote work processes, and accomplished it all against almost impossible deadlines. We have managed this crisis with poised determination and inspiring ingenuity. Now we must manage the aftershocks.
Our community will not be whole as long as our workforce is fractured. The temporary reduction in staff may be a necessity, but there is no comfort in that fact. Instead, let’s seek out the comfort in our relationship with one another. Living our values is easy when times are good; the true test comes in times of difficulty.
Our unshakable faith will continue to be the source of our strength. Over these last few weeks, I know that our perseverance has been a model for others to follow. We have served our students admirably with patience and empathy. I’m asking for your patience and empathy now, more than ever. We are a community of Saints, and we will emerge from this crisis stronger than ever.