But it’s still likely that for the first time in decades, the finances for the private Catholic university will end up in the red for the 2021 fiscal year, which started on July 1, because of the strain brought on by the COVID-19 pandemic, said Andy Horner, executive vice president of business and administrative services. But the institution has maintained its credit ratings thus far, and it has a good financial outlook because of the investments it made prior to the pandemic, he said.
“I would say from an overall asset perspective, we continue to actively manage to ensure that from a cash flow and a long-term investment perspective, we have the assets we need in the long run to continue to sustain the institution, and to return it to being a thriving institution on the other side of the pandemic,” Horner said.
University officials declined to reveal the school’s overall operating budget for the new fiscal year, saying the information will be made public in August, after it’s been presented the board of trustees.
In an exclusive, wide ranging interview with the Dayton Daily News, President Eric Spina and Horner discussed the institution’s financial outlook, the admissions office’s dogged recruiting efforts, the decision to recall all furloughed employees, the ongoing efforts to improve diversity on campus and how the national conversation on race after the George Floyd killing could impact the university.
‘Painful’ cuts
Shortly after the coronavirus became a pandemic, the university, like many institutions across the country, was forced to trim its budget in an effort to keep UD viable. The school furloughed between 400-500 employees and delayed several projects, including the Montgomery County fairgrounds development, the university said in April.
The school implemented a hiring freeze, suspended work on nearly all capital projects, and stopped all “non-essential discretionary spending,” officials said at the time.
But after re-evaluating their finances the past several months, deploying some creative tactics to retain and attract students, university officials said they felt comfortable to recall the employees to support the students in the fall, Spina said.
“We indicated (in the Spring) that it was our hope that we could look forward to the fall and have a full academic year, and at this point, that is certainly where our focus is,” he said. “If we’re bringing students back to campus, we really need to make sure that we have faculty and staff aligned, and prepare to support them in their learning and research that we do.”
The university started recalling the employees at the beginning of July. They’ve been bringing faculty and staff back in phases, depending on their positions, to start preparing the campus for students to move in beginning on Aug. 8, Horner said. More employees will be recalled as the semester gets closer, he said, noting that the process should be complete by September.
In addition, all non-tenure tract faculty lecturers, clinical faculty and others have been given new contracts, he said.
Eileen Carr, a staffer in the College of Arts and Science who has worked for UD since 2005, was furloughed in April. She’s been recalled, however, her job is linked to UD’s chamber music performance series ―ArtsLIVE― so she won’t return to work until mid-October, unlike most of her colleagues, she said. Still, she is fortunate to be employed.
“Overall, I feel very grateful that I was furloughed, and not let go,” she said. “I feel this reflects UD’s deep commitment to the community of staff and faculty who work so hard to make this a great place for our students. I’m very hopeful that the sacrifices so many of us are making — now and in the uncertain months to come — help UD survive for many more years.”
Financial outlook
Although the deadly coronavirus pandemic has created some unprecedented challenges, UD officials said they are optimistic about the institution’s financial outlook because they are in a position of strength. They’ve been good financial stewards and made sound investments over the years that have helped sustain them as an institution during these tough economic times, Horner said.
In addition, major credit rating agencies S&P and Moody’s have signaled that they will not make any changes to the university’s ratings, he said. Even so, the university will closely monitor its spending and continue its belt-tightening measures, although they’ve had to spend millions of dollars to prepare the campus for the fall reopening.
In preparation for students and staff returning to campus, the university is planning to spend an estimated $15 million on personal protective equipment, technology, facilities, signage, testing and contact tracing. In addition, they received $5.2 million through the Federal CARES Act to offset some pandemic expenses, and officials will direct those funds to emergency grants to students and to prepare the campus for full operations, the university said.
“We’re committed to doing it, it’s the right thing to do, but it does create some unplanned expenses that, luckily as a relatively wealthy institution, we’ll be able to weather through some of those things,” Horner said. “But like everybody else, we can’t predict the future. And so a lot of what we’re doing is pretty conservative to ensure that we’re able to preserve our assets as much as possible.”
There will be a combination of in-person and virtual classes in the fall, according to the institution’s COVID-19 reopening plan, which was released in June.
How they got here
At the start of the coronavirus pandemic, there were many uncertainties, but the university worked to maintain a full payroll, including retaining some hourly employees, Horner said. However, when Gov. Mike DeWine ordered all colleges to shut down for the remainder of the semester, and it became clear that it would be a long process, they cut back on all non-essential personnel expenses.
The leadership then started looking at every position, based on job function, particularly during the summer when no students would be on campus, and started furloughing the employees, Horner said.
Their intentions all along in terms of balancing the institution’s mission and the UD community is to sustain the university. But the school also has a responsibility to the employees and faculty to maintain employment as much as possible, he said. So the goal throughout the summer was to recall as many employees as possible when there was a clearer revenue picture based on the number of new and returning students, he said.
When it became apparent that students were interested in a UD degree and they wanted to be on campus, the leadership made the decision to bring back the furloughed employees.
“That’s a commitment we’re making to our employees and our faculty and our community, and really showing faith in the institution,” Horner said. “And so two or three weeks ago, we privately made these decisions and have begun communicating them, and now are pleased to be able to have this conversation.”
UD seems to have made the proper adjustments to put itself in position to recall the employees and bring students back to campus, said C. Todd Jones, president and general counsel of the Association of Independent Colleges and Universities of Ohio. This is a trend they’ve seen across all AICUO campuses, he said.
As college enrollment has declined across the state the past decade ― UD has been the exception ― institutions have been aligning their faculty size with the student population, Jones said. So it makes sense that UD would recall all of its furloughed employees, given the strong fall enrollment, he said.
Strong demand for a UD education
Horner estimates the number of freshmen they’re expecting to have on campus could be close to 2,200, based on registration and requests for housing. However, he warns that as the semester gets closer and the number of the COVID-19 cases continue to rise across the nation, some new and returning students could changed their minds about coming to campus.
At the start of the fall semester in August 2019, the university welcomed 11,300 total students across its undergraduate, graduate, law and doctoral programs. That total included 2,050 first-year students, which was 150 fewer than the previous year.
Spina and Horner attribute the strong fall 2020 enrollment numbers to the admissions office quickly overcoming obstacles that the pandemic put in place. Mid-March is “prime time for closing the deal with prospective students,” Spina said. However, those who had been accepted to the university but hadn’t committed weren’t able to make their final visits to campus because of the pandemic. So the university staff, including student ambassadors, used virtual tools such as Zoom to engage the students and keep their interests, he said.
Spina is pleased with the quantity and quality of the students, saying, “There’s a demand for a University of Dayton education, and it’s quite strong.”
Preparing students for a complex, multicultural world
The recruiting efforts helped attract a record number of students from socioeconomic, racial and ethnic diverse backgrounds. About 19% of the incoming freshman class comes from underrepresented racial and ethnic groups, the university said. At least 20% of the class is eligible for the Federal Pell Grant, which is typically awarded to undergraduate students with lower household incomes. In comparison, 16% of the 2019 incoming class came from underrepresented racial and ethnic groups, and 18% qualified for the Pell Grant, officials said.
Long before the pandemic and calls for racial justice in the aftermath of George Floyd’s death, the university has been working to increase social, economic and racial diversity on campus, Spina said. Those are partially key indicators of quality as students prepare for a complex multicultural world, he said.
In the past five years, it’s stepped up its efforts to recruit students from different backgrounds, Spina said. They’ve created partnerships with high schools and community organizations in some key cities, they’ve been creative in how they engage and attract students, and they’ve offered more scholarships and financial aid, he said.
Additionally, in January the university released its first-ever strategic plan for diversity and inclusion, and has taken many other steps. So as the national debate on racial equity continues, the institution is prepared, and is coming from a position of strength, the president said. UD is not where it wants to be, he said, but they’re striving to get better every day.
The most important thing, Spina said, is that the university has shown a willingness to tackle the issues and listen to students and staff of color.
“I think we have a good plan,” he said. “I know conversations we’ve had with prospective students of color, we put these issues on the table and say, ‘look, we’re striving, we’re making progress, and when you come here, the thing that I want you to know is that this is your university, and I want you to act as if it’s your university.' So we’ve really been very direct about it, and I think that’s been helpful to let people know that it’s genuine and authentic, and not being done for some other reason.”
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