Budget Update from the Scenario Planning Committee
Dear St. Thomas Faculty and Staff,
With September approaching, the Scenario Planning Steering Committee wanted to take this opportunity to provide an update on the St. Thomas Fiscal Year 2021 (FY21) budget projections. While many of the details are consistent with the information contained in our July 24 communication, the big picture outlook bears repeating.
We are pleased that, despite the pandemic, so many students have committed to studying at St. Thomas and, for many, to live on campus. With that said, we are still short of our projected budget in several key areas, and our current best-case scenario continues to project a $20 million loss for St. Thomas in FY21. This shortfall is the result of lower-than-budgeted enrollments, a decrease in room and board revenues, lost revenues from internal and external events, expenses for reopening and other budget adjustments. The mitigation plan begun in May – which included the painful decisions to furlough employees, decrease salaries and suspend retirement plan contributions among other cost savings measures – is intended to offset the $20 million that is our best-case scenario.
The $20 million current projected loss is based on what we know today and assumes no further enrollment loss or campus closures. The situation is changing every day, however, and we may need to make adjustments. Dialing back campus operations at any point through the fall semester or not being able to open in the spring would create additional losses. Further enrollment losses also could be possible, which is why we’ve consistently predicted our total FY21 loss to be in the $20 million to $60 million range. More details laying out budget assumptions and additional mitigation plans (should they be needed) can be found on OneStThomas here.
We acknowledge the uncertainty of not knowing the full financial magnitude of the COVID-19 impact on St. Thomas creates anxiety for all employees. We all would like to know when we can reinstate full salaries and restart retirement plan contributions. Because our financial results will be highly dependent on what happens this fall and what might happen in the spring, we anticipate reporting on final enrollment figures at the beginning of October and updating the mitigation plan in December, which would include a decision on whether we are forced to extend or can reinstate salaries/retirement plan contributions.
We plan to use some of our operating budget reserves and unrestricted endowment earnings to the extent feasible and consistent with our fiscal and stewardship responsibilities. Most of our endowment funds are legally designated for specific purposes and cannot be repurposed. Also, our reserves and endowment are invested in the financial markets and will be impacted by investment returns. Finally, some preservation of operating reserves and unrestricted endowment is required to maintain our credit ratings and positive accreditation reviews.
We are doing everything in our power to help students choose St. Thomas. Last spring, after the pivot to fully online teaching, the St. Thomas value proposition was powerfully visible. As people nationally question the value of an online education, St. Thomas demonstrated an ability to continue to deliver our “secret sauce,” which includes students growing through personal attention from faculty, as the attached testimonials bring to life.
The entire St. Thomas community is pulling together to do their part to support the university. While much is happening, just a few examples are below …
- From the faculty, who have prepared for classes with the uncertainty of not knowing which modality will be used from beginning to end and their staff colleagues who have supported these preparations,
- to staff in Academic Counseling and the ITS data teams, who have helped ensure that students are registered for the classes they need and can make progress on their degrees,
- to ITS and STELAR, who have equipped the classrooms with technology and supported faculty with online teaching,
- to Student Affairs, who has developed virtual Orientation and Welcome Days experiences for students to ensure they can make important connections,
- to the Center for Well-Being, who has prepared to care for our students who may be diagnosed with COVID-19,
- to University Advancement, who has worked to raise money for hardship scholarships,
- to Enrollment, MIC and the graduate schools, who have recruited our new undergraduate and graduate students,
- to Dining Services, Residence Life and our Facilities teams, who have tackled the Herculean task of ensuring that eating, living and meeting on campus is as safe as possible …
The One University effort has been nothing short of remarkable.
We are so proud of the response from this community to this crisis. The Scenario Planning Steering Committee offers its heartfelt gratitude for the dedication of everyone on campus working very long hours to keep us moving forward. This provides us with optimism to look ahead and see a strong, bright future for the University of St. Thomas.
We expect our next communication will be in early October when we have final fall registration numbers and can assess how the reopening of campus goes, but please feel free to reach out to anyone on the committee with individual questions you may have in the meantime.
Richard Plumb, EVP and Provost, committee co-chair
Mark Vangsgard, CFO, committee co-chair
Ed Clark, Chief Innovation Technology Officer
Al Cotrone, VP Enrollment
Abigail Crouse, Associate General Counsel
MayKao Hang, VP & Founding Dean, Morrison Family College of Health
Kevin Henderson, Professor, Opus College of Business
Nora Fitzpatrick, AVP, Financial Planning and Budgeting
Marty Johnston, Professor, College of Arts and Sciences
Karen Julian, Chief Data Officer
Karen Lange, VP Student Affairs
Kymm Martinez, VP Marketing, Insights and Communications
Amy McDonough, Chief of Staff to the President
Sandra Menssen, Associate Dean, School of Education
Erin Muckerheide, Interim AVP Human Resources
Wendy Wyatt, Vice Provost, Academic Affairs