Dear Campus Community,
Anyone walking across our beautiful campus is struck by how quiet it is. What is not visible is the increased activity behind the scenes as we work to educate our students online while adapting to the serious challenges created by the COVID-19 pandemic.
Across the country, many families and individuals are facing personal financial challenges which will have an impact on future enrollment at all universities – particularly at a private university like ours, heavily dependent on tuition income for operational expenses. Due to these financial stressors, the American Council on Education (ACE) recently predicted an estimated 15% drop in undergraduate fall enrollment and a 25% decrease in international students – especially within graduate programs. SMU also must plan for the unpredictable progression of the pandemic, along with related government-mandated restrictions on how we teach, work and assemble. Nevertheless, we intend to be prepared for a thoroughly researched, health-guided opening of the SMU campus for the fall semester, should this be possible.
In our current fiscal year, we have identified a budget gap of more than $13 million, which includes the $7.7 million we are refunding or crediting to our students for interrupted spring semester charges for housing, dining and parking. We plan to deal with these current fiscal-year impacts through expense reductions directly related to services we are no longer offering, budget reserves, and hopefully some federal CARES funding.
The financial issues are likely to become more serious as we move toward FY 21. We are modelling several enrollment scenarios for the fall semester that assume in-person classes, online classes only, and a hybrid model including both. Each scenario comes with factors that cannot be fully quantified, but we will need to be prepared for more lost revenue at a time when we also have a significant increase in demand for need-based student financial aid. Obviously, these dramatic changes will call for difficult financial decisions.
Effective immediately, SMU will impose a hiring delay through at least December 2020 on open faculty and staff positions funded by unrestricted dollars, and will reduce expenses through attrition by not filling positions that become vacant during this period. SMU also will delay implementation of most new or increased budget items for the 2021 fiscal year that begins June 1.
Nevertheless, since it was approved in January, the University intends to support the 2% pool of funds used for increases in base salaries. These continuing and one-time raises for faculty and staff for FY 21 will still be awarded beginning June 1 for staff and August 1 for faculty. However, our deans, University vice presidents, the athletic director and I will not at this time receive any compensation adjustments for the next fiscal year.
To further meet financial challenges for the FY 21 budget, additional reductions will occur in:
- Supply, expense and travel budgets;
- Center and institute budgets;
- Operating expenses for SMU Professional and Online Education.
If on-campus instruction, housing and public events are not permitted this fall, as a last resort, we also may need to consider furloughs of current operational and athletics staff and faculty. University reserves will be used for temporary relief, as possible, during this period of increased financial pressure, but as I am sure you understand, such one-time funds cannot fill recurring budget gaps with no definable end in sight.
We face difficult choices, but as I wrote earlier this month, our goal is to preserve, to the extent possible, the faculty and staff positions within our SMU community until we can return to full campus operations. Of course, we have to recognize that no institution, including SMU, can predict today the impact of this crisis on its future enrollments and resulting budget implications.
First and foremost, SMU must continue to protect the health and safety of the campus community. As we look to reopen the campus, I have asked Peter K. Moore, provost and vice president for Academic Affairs, ad interim, and K.C. Mmeje, vice president for Student Affairs, to co-chair an oversight group, the SMU President’s Task Force for Healthy Opening Fall 2020. This group will develop a plan based on established protocols for a safe reopening of SMU in the fall, should that be possible. Sub-groups will be formed as well to facilitate a smooth transition to reopening. We’ll share more about this initiative later.
The positive, can-do spirit reflected in our faculty and staff will help us endure – and ultimately prevail – through these tough times. Thank you for the talent and dedication you bring to your work, much of which is now being accomplished from dining-room tables and home offices, with children and household demands competing for your attention. And here on our too-quiet campus, I salute those of you who are coming in to do the essential work to support online instruction and the tasks that keep us operating.
Please remember to take care of yourselves, both physically and emotionally. What we do as a University is important for the future of humanity. The work you do is valued, and our students depend on us to help them achieve their dreams – perhaps now more than ever, as they navigate this challenging time. We are grateful to have this opportunity at SMU in Dallas to work through this together.
I will share more information with you after the May 8 Board of Trustees meeting.
R. Gerald Turner