Expecting a $10 million hit to the 2021 fiscal year budget and an enrollment decline because of coronavirus, St. Mary’s University will lay off 24 staff members and furlough 57 employees for one to two months this summer.
The university will also implement campus-wide pay cuts beginning June 1 for employees making more than $52,500 annually. St. Mary’s will also suspend its matching contribution to employee retirement funds for one year.
“The University is moving to position itself — not out of concern for survival, but in a sincere effort to move beyond the COVID-19 pandemic — to continue delivering a quality education grounded in our mission of sending purposeful young men and women into our communities to serve and lead,” a university statement said.
The private university’s human resources department will work with furloughed and laid-off employees to find other employment and apply for unemployment benefits.
“Positions were eliminated to reduce staffing redundancies,” university spokeswoman Jennifer Lloyd wrote via email Saturday morning. “Guiding these decisions was the goal of increasing efficiency across the university.”
Furloughs will impact positions with “substantially reduced activity and workload over the summer months as the University has temporarily moved classes and activities online,” Lloyd wrote.
Pay cuts will take affect June 1. University President Thomas Mengler will take a 15 percent salary reduction and donate 10 percent of his salary back to the university for scholarship aid to DACA students.
President Emeritus Charles Cotrell will reduce his salary by 20 percent. Those paid more than $122,000 annually will have their pay cut by 10 percent. The 10 percent cut also applies to all members of the university Executive and Leadership Councils, regardless of their salary levels.
Those making between $72,000 and $122,000 will see a pay cut of 6 percent. Those making between $52,500 and $72,000 will see a pay cut of 4 percent. Anyone making less than $52,500 will not see a compensation reduction.
In an email to St. Mary’s employees, Mengler expanded on a few other money-saving changes the university plans to implement. There will be no annual merit-based salary adjustments for any employees, the hiring of temporary employees will be frozen except to complete essential maintenance, and the university’s non-personnel budget will be reduced by 8 percent, the majority of which will be achieved by restricting all university-funded travel.
Mengler also explained why the university does not borrow funds from the school’s endowment or borrow money from other sources.
“With regard to the endowment, one answer is that a substantial majority is restricted by donor intent and the Board of Trustees, primarily for student financial aid,” Mengler wrote.
The second reason is the unpredictability of the pandemic’s duration, Mengler wrote.
“Our plans, as you know, are to reopen the campus in the fall, but the pandemic and government and public health officials’ directives may mandate or encourage restrictions that affect these plans at some point in the coming academic year,” he wrote. “In these circumstances, we will have these other two options in reserve, ready to deploy if necessary.”
The university remains financially sound, a statement said, and the cuts announced Friday are meant to help the university overcome the projected impact of COVID-19 on school finances. St. Mary’s leadership decreased the coming fiscal year’s budget by $10 million, guided by a desire to sustain the quality of the student experience, maintain the school’s long-term financial strength and sustainability, preserve as many faculty and staff positions, and minimize the impact on the lowest-paid employees.
Many higher education institutions are likely to face a similar reality: an urgent need to reduce expenditures in the wake of murky enrollment projections and economic downturn.
In late April, Mengler told the Rivard Report of the unprecedented nature of the current situation.
“Certainly not in our lives has higher education experienced this,” he said. “Financial recessions don’t carry with it the lockdowns and social distancing and masks that we are now being asked to wear in public. Nothing like this has ever happened.”