Financial Update

This message is being sent on behalf of Provost Rogan Kersh and Executive Vice President Hof Milam.

Dear Wake Forest faculty and staff colleagues,

Thank you for your continued creativity and commitment in navigating the disruption and uncertainty caused by the COVID-19 pandemic. We echo President Hatch’s message of gratitude last week and join him in thanking you for all of your efforts and diligence in making this semester on campus possible.

Since the beginning of the pandemic, our priority has been to sustain our full academic mission and support the physical and financial wellbeing of the members of our community. With a new academic year successfully underway, we wanted to provide a financial update to the community. Our appreciation to so many of you who participated in our staff and faculty forums last week when we discussed some of the financial realities we are facing in these times.

In our May 5 update, we outlined the unprecedented, yet necessary, steps required to protect the financial health of our community. We anticipated significant revenue losses from numerous refunds and cancellations of programs in the spring and summer. To prepare for those financial deficits, we implemented a set of comprehensive actions to begin addressing our immediate budgetary concerns — including cancellation of travel; suspension of discretionary spending and capital projects; hiring pauses; and realignment of our workforce, including voluntary furloughs and payroll tax credits available through the CARES Act. These options allowed us to offset most of the revenue losses and COVID expenses through June 30, and we are grateful for your commitment and efforts that made it possible.

Preparations for Fiscal Year 2021

As we look ahead and attempt to forecast the upcoming fiscal year, the same degree of dedication we collectively devoted to the last several months will once again be required to preserve our fiscal stability moving forward.

We must anticipate continued diminished revenue streams, including the significant loss from decreased room and board revenue, athletics ticket sales, Graylyn and other commercial properties. Likewise, we face additional expenses, including our investments in peer-to-peer instruction, supporting technology to enable the transition to online teaching modalities, and COVID-related costs like increased support for our Student Health Service, testing for students, quarantine hotel space, personal protective equipment and our new faculty and staff health clinic, all of which is anticipated to amount to more than $25 million in incremental new costs.

Based on the current financial projections we shared in last week’s forums, we could experience budget shortfalls between $9 million and $50 million. This wide range reflects the significant number of variables that we must hold in tension simultaneously. We need to control costs where possible, balance spending related to our COVID-19 response, and continue the necessary work to sustain a successful semester on campus. Therefore, we will need to extend the actions we implemented in the spring and add strategies to off-set our new incremental costs and reduced revenue.

First, we will continue to sustain budgetary restrictions outlined in our April 8 update. We have halted previously planned salary increases; continued a University-wide hiring pause on administrative, faculty, staff and temporary positions; maintained cuts in compensation for senior leaders and coaches; and reduced each unit’s operating budget for travel and discretionary spending.

Second, we must look at the current needs of the University community and adjust resources to meet those pressing needs. In adapting to the pandemic, schools and units have been affected differently. Some responsibilities are easily transferable to remote work, other positions do not have that capability, and some roles have had to shift in scope. As we consider what we need to move forward in the coming months, we understand that we cannot respond as we have in the past. Given our widely varied circumstances across campus, we are instituting a tailored approach to cost-saving measures.

We have developed strategies that may be implemented in individual schools or units according to needs of that specific area. Each vice president and dean has been asked to analyze their area and make complex decisions, especially related to workforce planning, in order to sustain our commitment to our academic mission, support the physical and financial wellbeing of the members of our community, and maintain the fiscal health of the institution.

Strategies may include:

• Supplemental Workforce Opportunities
  For employees whose full workload has not been restored due to the modified academic and administrative support being provided on campus, we have created and continually update a list of COVID-19 opportunities (password included in original email or contact askhr@wfu.edu) – new positions that have been created on campus due to the pandemic. We are working with managers to identify employees who have not returned to full work status in order to match those employees with these critical new COVID-19 positions.
• Reduced Work Schedules
  Should an employee be unable to return to full-time status and not be in a position to take advantage of supplemental workload opportunities, we have created an opportunity that allows benefits-eligible employees to retain their health benefits through December 31 even as they reduce their work schedules and pay. Employees whose work has not been restored and have not been reassigned to a supplemental COVID-19 opportunity may have their hours and corresponding pay reduced as part of this program.
• Voluntary Incentivized Retirements
  Based on the financial situation of some units, voluntary incentivized retirement options might be available. This option may not be available within every school or unit. Employees interested in this option who have not previously signed a retirement or separation agreement with the University would be eligible for the program, if offered in their school or unit.

We are making these adjustments — both University-wide and unit-specific — in hopes that we can protect the financial health of the University until we are able to resume normal activities on campus. We know this is not an easy time for anyone, and we are sincerely grateful for your perseverance and trust. Thank you for all you have done for Wake Forest and all you will continue to do.

Sincerely,

Rogan Kersh
Provost

Hof Milam
Executive Vice President