From the President's Desk
Update on COVID-19 Financial Measures
Dear Acadia Colleagues,
I hope you all had an opportunity to relax over Father's Day weekend, officially welcome summer, and enjoy the beautiful weather. The warmer temperatures and extra hours of daylight are welcome after the challenging winter and spring we've had. These natural occurrences, immune to the pandemic and the upheaval it has wrought, surely bring a smile to our faces.
I am writing today to provide some important updates and share some thoughts about where we are in our COVID-19 response and the financial impacts it is having on our university.
I know that these past few weeks have been increasingly stressful as we have announced our preferred intentions for the Fall and, at the same time, consider the financial impacts of the pandemic. I want to thank each and every one of you for all the work you are doing as we prepare to re-open the campus and offer our academic programs in the Fall.
Progress towards welcoming students back to campus
Last week saw some important decisions made that are critical to our desire to welcome students back to campus in September. Last Monday, I participated in a meeting with Dr. Robert Strang in which he indicated that the campus re-opening principles developed collaboratively by Nova Scotia's universities, including those for residences and having students return to campus, are acceptable and that universities could continue to develop their detailed institutional plans using the general principles as a framework.
Also, Acadia's Senate, building upon the previous week's approval of a delay to the start of classes to September 21, endorsed the plan for the Fall Term as recommended by the COVID-19 Planning Task Force. And, last Friday our Board of Governors unanimously approved the plan to proceed with the blended model for a mixed in-person and online approach to teaching and learning to start in September.
These important decisions have paved the way for us to proceed in a manner that incorporates the most rigorous application of public health guidelines and directives.
Getting to this point has required an enormous amount of hard work by faculty, staff, and students spanning the length and breadth of the university. For that, there are scarcely words strong enough to thank you on behalf of our community.
I am proud of our collective response to the pandemic and feel fortunate to work with such highly dedicated and passionate colleagues. There is a lot more work to be done, of course, and the risks of COVID-19 have not disappeared and are front and centre of our concern as we plan to welcome students back to campus. More guidance and resource information from the Task Force will be coming your way soon in the form of protocol documents to enable you to continue planning, and a suite of employee and student materials will be in place before the end of this month.
A difficult budget reflecting the times
On Friday, the Board also approved a revised budget for 2020-21, which was based upon the balanced budget that we had prepared to present to the Board in April and updated to include the financial impacts, both actual and projected, of the pandemic.
After completing another balanced budget for 2019-20, the steep drop in revenue in the first quarter of this fiscal year, and the anticipation of reduced enrolments and declining income throughout the rest of the year, have forced us back into a deficit position.
The budget approved by the Board includes a projected deficit of $6.8 million based upon our current enrolment forecasts using the blended model of course delivery in the Fall, but also including assumptions about reductions in domestic and international student enrolment.
Potential financial mitigation measures could reduce the deficit to $1.9 million, but achieving those levels of cost savings cannot be done without agreement from employee bargaining units. Also, we presented scenarios with more severe enrolment and revenue reductions. We will report back to the Board with increased frequency as we come to understand the full impact the pandemic has had on fiscal matters.
The budget will be revisited within 90 days to assess where we are at that time. In the meantime, we have intensified financial controls and monitoring efforts to mitigate some of the financial impacts of the pandemic.
Initial financial mitigation
In my very first communication after we shut down the campus back in March, I stated that we would get through this together. That statement is very true today as we all pull together to ensure that our students will continue to receive the kind of educational experience that they expect from Acadia. Our strongest likelihood of coming successfully through this crisis is to ensure that we have the best possible enrolment of students in September, despite the significant challenges facing us.
In Nova Scotia and across the country, we see many universities and colleges cutting costs and laying off employees. Elsewhere around the world, we see even greater levels of cuts in universities than we have seen in Canada thus far.
As I stated in my message of May 11, at Acadia, we are working hard to minimize the impacts upon our community. As we go forward, we want to ensure that any actions we take in response are temporary and designed to see us get through the worst, and come out of it in a position to rebound in the post-COVID environment, whatever that may be.
We have been seeking the perspectives of our employee groups as we explore the range of options open to us, and, understandably, this situation is creating angst and concern within our community. I am acutely aware that during past financial cutbacks at Acadia, some employee groups were hit harder than others in terms of compensation reductions, and I appreciate that today some are more vulnerable than others to even small reductions in compensation.
I understand how difficult it is to plan and prepare for September while at the same time planning and preparing for dealing with the current and projected financial fallout of the pandemic. Yet, we have to take on these tasks at the same time, and we can't push decisions off to tomorrow that need to be made today.
I want to assure you all we are seeking every possible avenue to secure additional funding for Acadia, including a formal request to the provincial government in concert with the other Nova Scotia universities. At this time, we have no agreement or indication of what the provincial government may be able to provide. Until we have a formal response from the government, we cannot put any reliance upon additional funding coming to our rescue. I will keep you informed when we get any news on that front.
With salaries being the largest component of Acadia's budget, we have been and continue to be in discussions with unions and employee groups regarding possible salary savings. While those discussions continue, I am announcing several initial decisions at this time to help us reduce costs in the short term until we get a better understanding of the financial impacts that we could very well be facing later in the summer as our enrolment numbers start to firm up. These decisions include:
- Senior administration (President, Vice-Presidents and Associate Vice-Presidents) and members of the Strategic Leadership Council (this includes Deans, Executive Directors, and Directors) will have their salaries frozen and will not receive any cost of living adjustments (COLA) for at least the first six months of the 2020-21 academic year. This decision will be revisited at the end of the calendar year, depending on what our financial situation looks like at that time.
- AUPAT and other non-unionized employees will not receive COLA increases on July 1. Still, progress through the ranks (PTR) increases will be paid for all AUPAT and non-unionized staff where applicable (note that PTR does not apply to senior administrative staff). The COLA decision will be revisited by September when we will have a clearer picture of the longer-term impacts of the pandemic on enrolments and revenues. Also, we will continue discussions with employee groups and bargaining units to seek ways to reduce compensation expenses further. Holding back on COLA is a cost-avoidance measure at a time when we are trying to avoid decisions that would have longer-lasting impacts, and it is my sincere hope that we will be able to award COLA later. For those affected by this decision, I am truly sorry because it is not a reflection on the great value I place on your work, service and contribution to Acadia. On PTR, we recognize that while the cost of living has been reduced in some areas by the economic impacts of the pandemic, everyone is still working very hard, and you deserve to be paid PTR, which has been earned through performance and length of service.
- A freeze on all travel expenditures that is not required by collective agreements and contracts or is funded externally. Any exceptions to this will require approval from the President's Executive Council. As we return to more normal activities with the re-opening of the province, we will review the travel freeze so that reasonable essential travel can resume in moderation.
- A freeze on all non-essential hiring effective July 1, 2020. Approval for what is deemed essential hiring will be through the President's Executive Council, with a focus on positions needed for the delivery of our academic programs and services for the Fall Term, those deemed necessary to meet the requirements of our campus re-opening protocols, and those that are funded externally.
- Continuation of the 10% cut in all non-salary budgets that has been in place during the interim budget measures since April 1; however, we will be approving necessary additional expenditures that are focused on the delivery of our academic programs and services for the Fall Term, including support for online course delivery.
Except for maintaining the PTR, I understand that these decisions are not welcome news. Still, they are symptomatic of the serious financial reality the university is facing, and in fact, indicate what could be a very much worse financial situation later in the year if our enrolments turn out to be badly affected by the pandemic. As the university's difficult financial reality comes more closely into focus in the coming weeks and months, additional measures may be required.
Discussing potential mitigation efforts with representatives of the AUFA and SEIU bargaining units, AUPAT, and other non-unionized employees will be continued as we navigate this difficult and trying situation.
Again, I want to thank you for all the work you are doing to help Acadia get through this emergency. It is worth repeating that the best financial mitigation against the impacts of the pandemic is to ensure that we have the best possible enrolment of students in September, and I know that you are all working towards that end, and I can't thank you enough.
I ask for your continued patience and understanding as we move through this period of uncertainty together, and I hope that these temporary measures will only be required for the shortest time possible.
I will provide further updates regularly and as we get new information on the developing situation.
Dr. Peter Ricketts
President and Vice-Chancellor
Office of the President & Vice-Chancellor
15 University Avenue
Wolfville, NS B4P 2R6