Dear Colleagues,
While we were not able to do so in person, last week we marked an important milestone in the lives of our students—their graduation. The end of the spring semester is a special moment each year when we can pause and reflect on the positive impact we have on the lives of our students and that they will have on the world.
Even as we celebrate our newly minted alumni, the challenges WMU and higher education face continue unabated. As indicated in my last communication, due to the COVID-19 public health and economic crisis, the University has already incurred losses of about $45 million this fiscal year and is projecting another shortfall of between $45 million and $85 million in 2020-21. This would be equivalent to a deficit of up to 20% of our general fund budget.
To counter these losses, we implemented a hiring freeze through the end of the spring semester, banned travel, froze or canceled planned construction projects worth millions, and were encouraging that all discretionary spending be suspended. Even with these measures, the magnitude of the financial impact of the COVID-19 crisis is such that few areas will be left untouched as some very difficult, unavoidable decisions are made.
With compensation accounting for nearly 70 percent of our expenses, we will not be able to avoid impacting WMU employees. An initial step to help solve the shortfall was announced last week: I, along with every vice president, the General Counsel, Chief of Staff and Secretary to the Board, and Director of Intercollegiate Athletics, will take a 10% pay cut for at least the upcoming fiscal year. The pay of associate and assistant vice presidents, vice provosts, associate provosts and deans will also be reduced by 5%. We are also extending the current hiring freeze through June 30, 2021.
Unfortunately, we must take a number of additional actions that will be felt throughout the institution if we are to address the 2020-21 fiscal shortfall. Though necessary, none of these measures is desirable or easy. Please know we have given these changes a great deal of analysis and serious consideration.
We will implement a 2.25% pay reduction for all benefits-eligible, non-bargaining staff. This pay reduction will be in effect for at least the upcoming fiscal year, which begins July 1, 2020, and ends June 30, 2021. We will also meet with our bargaining units in the near future to discuss measures that are appropriate for collective bargaining.
The Stay Home Executive Orders, transition to distance education for the spring semester, and the need to provide the summer I session at a distance have all had significant impacts on University operations. We had no option but to close our fitness centers, our performance venue and our conferencing facilities. All of these actions have dramatically reduced or eliminated our use of facilities and related services. Most of these facilities are funded through student fees for services that cannot be offered in the current environment. As a result, they have little to no revenue, and the University cannot afford to continue to pay employees under these circumstances.
For this reason, we have met with the leadership of our AFSCME union and notified them of our intent to layoff approximately 240 of its members. We do not know if or when these employees may be recalled to come back to work. It will depend on the ongoing restrictions that limit the impacted services and our overall budget situation. However, it is unlikely that this portion of our workforce will return to the current level in the near future.
These employees have served our students and institution well, allowing us to advance the common good. We understand the weight of these unavoidable decisions that none of us ever wanted to make. We are sharing this information with you because it affects the entire campus community.
We will continue to keep you informed about additional personnel decisions as information becomes available.
Thank you for everything you are doing on behalf of our students in the face of tremendous challenge.
Edward Montgomery
President