June Community Update Regarding College Finances (6/5/20)

Dear Pomona College Faculty and Staff,

This unprecedented spring semester is now complete, and we appreciate all of your efforts to provide a superior education for our students as we transitioned, temporarily, to online instruction. Your dedication to Pomona’s mission and your flexibility are extraordinary as we work our way through the challenges of the pandemic.

In May, Pomona’s Board of Trustees approved a “placeholder” budget for the 2020-21 fiscal year that begins July 1. This placeholder budget assumes the coming academic year will occur as normal, but reflects adjustments related to the coronavirus (COVID-19) crisis, including increases in financial aid, revenue losses due to canceled summer programs, a likely decline in annual giving and reduced interest income, among other things. Taken together, these impacts result in a $5.2 million shortfall in our $173.5 million operating budget.

To mitigate this shortfall and to prepare ourselves for a period of uncertainty ahead, we will need to be vigilant in controlling costs, which means that all of us will have to make some sacrifices over the coming fiscal year.

The placeholder budget includes the following initial actions:

  • Freezing pay for faculty and staff: We are planning to freeze the pay for faculty and staff for the year. We will be honoring promotions. We have already announced a freeze in pay for vice presidents and the president. Should we need deeper cuts, VPs and the president will be first in line for reduction.

    We recognize that the freeze in pay will contribute to hardships for some in our community. We will do our best going forward to support our community as best we can, and look forward to being able to return to regular raises that recognize the extraordinary contributions of those who work at Pomona.
  • Reducing certain discretionary expenses by 25%: We are asking all departments and offices to limit spending to only the most critical needs. While department chairs and managers will have some flexibility in how to ultimately absorb budget reductions, as part of this action we intend to freeze college-funded domestic and international travel consistent with existing travel restrictions, hold down engagements with outside consultants, and limit catering, event services and meals.
  • Pausing new hiring: We will be pausing new faculty and staff hiring beginning with the fiscal year. Of course, there may be critical positions that we need to fill, especially if those positions relate to our continued response to the pandemic. Any exceptions to the hiring pause will need to be approved by the appropriate member of the executive staff, the chief operating officer/treasurer and the president.
  • Limiting the use of overtime and outside employment services: We are asking departments and offices to limit the use of overtime hours and the use of temporary services to carry out only the most essential services related to the COVID-19 response effort.
  • Redirecting of funding for capital projects: Typically, we transfer projected budget surpluses to fund future capital projects. For FY 2021, we plan to use these funds instead to help finance COVID-19 related cost increases, including financial aid.
  • Delaying construction of a new athletics center:  We are delaying construction of the new Rains center by up to one year in part to preserve cash we may need to respond to the crisis and to limit activity on campus while we ready the campus for a future re-opening.

These are our immediate actions; once our plans for the fall semester become clear, we will amend the FY 2021 budget to reflect our new reality. We have been reviewing different scenarios for the fall and each carries significant financial implications, with shortfalls ranging between 4.5% and 20% of the budget. These are significant amounts even for a well-resourced institution. While we are making near-term reductions to meet known shortfalls, we may need to take further budgetary actions if our financial challenges grow.

Many in our community have asked whether we plan to furlough staff at some point in the future. If we are entirely online for the fall semester, or if Los Angeles County does not approve in-person instruction, we will need to consider furloughing staff whose jobs have stopped or have been dramatically curtailed. We are currently planning to return students to campus in the fall and believe furloughs will therefore be unlikely. But given the uncertainties we face; we will assess the situation at the beginning of each month, and we will provide at least 30 days’ notice of any such personnel actions.

We know these are challenging times for all, and we deeply appreciate how our community has come together in this crisis. We are committed to keeping you informed regarding College finances and other matters as the College’s response to the pandemic unfolds in the weeks and months ahead.

 

Sincerely,

G. Gabrielle Starr, president
Robert Gaines, vice president for academic affairs and dean of the college
Robert Goldberg, vice president, COO and treasurer