Administration plans initial round of up to $26 million in budget cuts

President+M.+Lee+Pelton+and+Chief+Financial+Officer+Paul+Dworkis+announced+a+10+percent+reduction+to+executive+leadership+salaries+amongst+other+financial+cuts+to+help+mitigate+the+college%27s+projected+losses+related+to+COVID-19%2C+in+a+virtual+faculty+forum+on+Thursday.

Photo: The Berkeley Beacon Archive

President M. Lee Pelton and Chief Financial Officer Paul Dworkis announced a 10 percent reduction to executive leadership salaries amongst other financial cuts to help mitigate the college's projected losses related to COVID-19, in a virtual faculty forum on Thursday.

By Domenic Conte, Managing Editor

Administrators introduced a series of cuts to executive leadership salaries and other expenditures totaling at least $26 million at a faculty forum Thursday, in an effort to mitigate the college’s impending financial losses for fiscal year 2020-2021. 

The college plans to suspend salary increases and retirement contributions for a year, reduce its temporary workforce and administrative operating costs, and drastically cut down building maintenance, travel, and meal expenses, Vice President of Administration and Finances Paul Dworkis said in the meeting. The move comes as many institutions of higher education face financial hurdles due to the economic impact of COVID-19 and the uncertainty of the fall semester. 

Executive leadership—members of administration in the President’s Council—will receive a minimum 10 percent reduction to their salaries. Dworkis said all of the cuts, in the best case scenario, will save the college approximately $26 million.

“We’ve been guided by acting in a humane and fiscally responsible way, trying to distribute reductions as responsibly as possible, and avoiding cuts that would damage the institution and long term health, or the academic mission,” Dworkis said at the meeting.

Cuts may also include reductions in technology equipment and printing, a voluntary incentive retirement plan, and a suspension to faculty development funds, Dworkis said. In addition, the college will postpone hiring, position replacement, and promotions for the year. The college is also working on a fundraising strategy.

The newly announced mitigation efforts come days after President M. Lee Pelton told faculty in an open letter that the college projects between $33 and $76 million in COVID-19 related losses in the 2020-21 fiscal year, contingent on student enrollment. He stressed that a loss of $33 million would be the best case scenario.  Emerson made just over $246 million in the 2019 fiscal year, according to tax forms.

Emerson lost approximately $7 million in the spring as the pandemic forced students off campus and into remote learning, Pelton said in the letter. The college has already received just under $1.4 million via the CARES Act, which was used to help mitigate the losses.

Both Pelton and Dworkis noted that additional revenue-saving actions may be added early in the fall semester if the college finds itself in what Pelton described as “something other than the best case scenario.” 

“This set of actions is the initial attempt to address the majority, but not necessarily all of what is expected to be the financial consequence of our return to campus plan,” Dworkis said. 

Administrators emphasized the actions were made with the intent of being “as least disruptive as possible,” and that the college deliberately avoided layoffs and furloughs that Dworkis said other institutions are discussing. 

“We’ve tried to protect positions in this perspective and not just go quickly to actions that many other institutions have talked about,” Dworkis said. “While retirement planning is significant, it’s important to fully recognize that it falls into the less-disruptive. We needed to look at ways we can achieve the significance of something between 33 million and 75 million dollars. We can’t — we’re not — going to get there without some difficult actions.” 

Faculty Assembly Chair Heather May led the forum and communicated questions submitted by faculty before the meeting through a form. Some of the submitted questions pushed back against the college’s mitigation efforts. One questioned the college’s decision to cut into retirement savings.

 “How can the College, in good faith, ask faculty to give up matching retirement, after looking at all of the associate vice presidents hired over the past several years?” the question stated. 

Emerson has thirteen vice presidents and a provost, with a student body of roughly 4,500. Boston University has 6 vice presidents, and Harvard University has eleven. BU has a student population of over 32,000, while Harvard has over 22,000 students and an endowment that exceeds Emerson’s by over $40 billion.

Pelton said executive leadership and administration are taking on a large burden along with the rest of the staff and faculty.

“All of [executive leadership] are going to have to cut 10 percent of our budget, on top of a million dollars in travel and expenses,” Pelton said. “So that’s a $5 million dollar cut. It is going to be very painful to programs and to people. What I don’t want to do is get into a kind of tit for tat conversation.” 

Senior Writer-in-Residence Richard Hoffman suggested selling college property for additional revenue, which Pelton said is being considered, but that the decision falls on the Board of Trustees and not the administration. 

The forum also included updates on the college’s plan for contact tracing and further insight into how elevators may be utilized in the fall.

Chief Human Resources Officer Shari Stier said that while the College is looking into applications for contact tracing, they are heavily leaning towards a manual tracing process. If someone tests positive, Stier said the plan is to call the individual and obtain a list from them of people who they believe they may have contaminated. That list would include people who the infected person spent over 15 minutes with in a six foot radius. Anyone on the list would then be contacted and given instruction on further protocol.

Associate Dean of Campus Life Erik Muurisepp said every elevator will have signs outside as well as in the vestibule that denotes a recommended capacity. 

“The Walker elevators may result in one or two people,” Muurisepp said. “When you start considering proper face coverings, you could potentially do up to two or three.” 

Provost and Vice President of Academic Affairs Michaele Whelan also included a more defined timeline for when class space and scheduling may be finalized this summer, targeting the third week of July. 

Pelton said the college’s planned safety measures and procedures will eventually be compiled in a reopening “playbook” he aims to make available to the public. He also repeatedly expressed an interest in attending another faculty forum next week that specifically focuses on testing.

“I need your patience,” Pelton said. “That’s what I need. And understand that there are a lot of unresolved answers and even some unknown questions, and that we’re doing our best to answer those.”