Facing revenue shortfalls since moving to remote instruction and many students left town, Kansas State University is furloughing an estimated 349 employees according to a Saturday release.
The university estimates it will take a $35 million hit due to COVID-19 prompted actions, which includes about $8 million in Housing and Dining fee refunds. With revenues significantly decreased, KSU officials have elected to furlough employees of auxiliary operations effective May 16 with the goal of bringing the hundreds of workers back on payroll August 1.
The estimated cost reductions as a result of the furloughs is $2 million.
“Early in the pandemic we made two key decisions. The first was to maintain employment levels during this time of limited operations, and the second was to issue refunds to students for housing and dining,” writes Thomas Lane, vice president for student life.
“While these decisions were right for the time, we are no longer able to maintain employment levels given the reduction in revenues. We understand the duress this will cause for our employees, and move forward with a spirit of empathy and compassion.”
Multiple different campus units will be impacted including Housing and Dining Services (207 staff members furloughed, nine-month employees will not be offered Summer employment), Recreational Services (20 staff members furloughed), the Center for Child Development (37 staff members furloughed, 3 remaining on payroll), Lafene Health Center (impacts 48 employees) and the K-State Student Union (37 furloughed).
KMAN spoke with KSU President Richard Myers and Provost Charles Taber about the decision.
Pres. Myers:
“If you looked at our release this morning the units that were listed there, Housing and Dining, Child Development Center, Lafene Health, the rec. center, the student union — they all depend on revenue for their operating costs. And the operating costs, of course, a large portion of that, a major portion of that is our people. And that revenue pretty much dried up right after spring break when we ask students not to come back to campus and we followed state guidelines on what could be open, what should be closed and distancing and all those sorts of things. So that led to this decision. We’ve delayed it as long as possible, but now it’s really cutting into some other financial obligations that all come under the vice president for student life. So there’s some financial obligations they have that they have to cover and they can’t, they can’t go into deficit.
“So that’s why the decision, and that’s why it’s now, and I can’t tell you how painful it is because these individuals that had been furloughed mean a lot to our university. A lot of them are student-facing and they’re award-winning — Housing and Dining get all kinds of awards all the time. But Child Development, the rec., all those organizations get kudos from lots of outside organizations and from our students. So these are individuals and people that are really critical to our mission here at K-State and it makes it extremely difficult, but it was essentially, it’s unavoidable at this point.”
Provost Taber:
“And one of those financial obligations that is particularly difficult for the student life area right now is the need to refund the Housing and Dining plans for students — which was absolutely the right thing to do, but it put them in a particularly difficult financial position.”
Pres. Myers:
“It’s around $8 million for Housing and Dining — slightly less, maybe at this point, but around $8 million. I mean, obviously totally unexpected, but it was also the right thing to do. Students aren’t getting the services, they have a right to a refund. If they can’t use the dining facilities, if they aren’t staying in the residence halls then it was the right thing to do.”
Do you see the possibility of future furloughs or cuts in other areas of the university to mitigate costs amid downswinging revenues?
Pres. Myers:
“We’ve developed budget scenarios that look at different levels of state funding and different levels of enrollment and we go through three basic scenarios. The college deans and the vice presidents, all the units are looking at their budget and how that might be impacted. So, I think we’ll see in the coming weeks more decisions on how to reduce costs and some of that most likely will include people. Overall, 92 percent of our costs at the university are people, so when you want to cut costs that’s where you have to look. But we’re going to leave it up, for the most part, we’re going to let the unit leaders figure out their plans under these scenarios and then come back and tell us here’s what I’d have to do at each of these levels. Now, of course, we don’t know in our in our budget scenarios what state funding is going to be for fiscal year ’21 and we don’t know what enrollment is going to do for sure.
“We think we had a pretty good picture going, pre-COVID, into 2021. Enrollment was looking, from where it’s been the last couple of years, was looking pretty good. What impact the virus and this pandemic will have on enrollment this fall, we’re not sure. We think it’ll have some impact. So we’re planning around some impact. If it’s better than that, hallelujah, we’ll be able to put the resources to good use. But if it’s not, we better plan for it being different.”
Provost Taber:
“One other budget action that we’ve taken that I’m really proud of is the voluntary salary reduction that our highest university leadership has taken. Vice presidents and deans have all taken a 10 percent salary cut as part of our response to this. And again, all voluntary, and it’s just — I’m so proud of our leadership.”
Pres. Myers:
“As Chuck said, it was voluntary, people quickly decided to be part of that. We have all the deans, all the vice presidents, everybody is in — and the Athletic Department is all in as well. Our two highest paid coaches — men’s basketball [and]Bruce Weber and Coach Klieman and football — took more than a 10 percent cut. They did that in the spirit of we’re all in this together on this campus and that everybody’s got to share the sacrifice.
“My understanding is both coach Klieman and coach Weber [took cuts]around 13 percent.”
Is the university in the position to be able to provide furloughed employees support, or is that not on the books right now given your financial situation?
Pres. Myers:
“It’s a little bit of both. Human Capital Services [has]been working essentially around the clock to make sure that those that are going to be furloughed that they understand what, their rights are under unemployment, both state and federal. And in fact, if the employee wants them to, they can help submit for those claims. And then for the first 30 days all their benefits remained the same, they do not change in terms of health care — which is probably the most important one. After 30 days, the furloughed employees are then responsible — if they want –for paying their share and the employee share of their healthcare premium for our state healthcare plan.
“And we would like to help with that, but we do not know if we can do it. It will be a stretch for us to do, that’s millions of dollars, but we’re at least looking at it to see if there’s anything we can do to ease that burden.”
How will furloughs at Lafene impact the recently announced testing services for faculty, staff and students?
Pres. Myers:
“I’ll make a blanket statement that no services, no Lafene services will be decremented in terms of the health care of our faculty, staff and students. You know, they’re used to serving a population of around 30,000, 25,000 with students, faculty and staff. And without the students here that population is dramatically decreased. So in terms of mental health counseling, all the things they do for walk in today, all the things they’re doing around COVID-19, that will not change at all. And they can bring the staff back very quickly if the patient population and their customer base goes up. So this is a way to save a little money.
“I would anticipate as we get towards Fall, I’m anticipating face-to-face classes this fall, they’ll be full up pretty quickly.”
Provost Taber:
“In all the decisions that we’re making, we’re following a set of five principles that we established early on that sort of define who we are as a land grant university. And some of those principles really come into play when we think about how we make these decisions and how they would impact the community. So, for example, the first principle is to protect our communities — both the K-State community of students, faculty and staff and the communities that are around us, the communities that host us. And other principles are about maintaining our basic mission. And so we’re not going to take decisions that will reduce our ability to serve our mission.
On whether the Child Development Center is opening or will open.
Pres. Myers:
“It was shut down quickly and Dr. Lane, that’s one of his areas and he’s looking at how we can open that up again. There are child development, childcare and child development centers, in the community that has remained open and safely so. So he’s looking at that and seeing if the need is there and what they can do. So that’s an ongoing study right now.”
There was early talk about re-opening the center for the children of medical providers, has there been any progress on that?
Pres. Myers:
“In working with medical providers here in the Manhattan community, they looked at other alternatives and the other alternatives are sufficient to provide for the childcare needs of our medical providers. As I understand it, that’s what was reported back to me because I was initially kind of in the middle of that to see what we could do and then I left it to the folks that really know to work that out.
“But right now I understand that other facilities in the community can handle their needs.”
Provost Taber:
“That’s my understanding as well.”
On the feasibility of an August 1 return date for furloughed employees:
Pres. Myers:
“We’re going to follow the governor’s guidelines that she put out a couple of days ago that take effect I guess Monday. And we’re going to follow the county guidelines that will be based on what the governor put out. And let me just say,the collaboration between the county officials and university officials and city officials has been exquisite and something the community can be really proud of. We’ve worked, I think, really well together to try to help work our way through this. But a lot of it’s going to depend on how the governor and the county’s plan plays out. And if we get to the middle of June as the plan would call for and our cases are still going down, if we’ve got better testing, if we’ve got better contact tracing and those sorts of things, then yes, we expect to be face-to-face this fall.
“It may not be a straight path to that particular situation and there’s a lot of things that it depends on.”
Provost Taber:
“Because of the uncertainty around what’s going to happen in our communities, how well the various phased plans for return at the state and county levels will play out, we are scenario planning. We’re figuring out what we should do flexibly in response to any possible outcome that could come our way.
“But our most basic and default scenario is that we’ll be back in the Fall and so the August 1st date is what we need to do to bring these critical employees, these award-winning, critical employees, back to serve our students for the Fall. So we expect to be back in the Fall. We expect that it will not be exactly like other Falls — we’ll have to probably limit class sizes, we’ll have to social distance, reduce density, but we’re going to follow our principles about protecting our communities and serving our mission. It’s possible that we’ll have flexible delivery of services or of education in the Fall, including some courses online, some courses face-to-face. We’re working on developing a list of what are the labs, courses, experiences, studios, the things that really must be face-to-face and where can we be more flexible? And so we’re going to build a flexible plan that can respond to all the different possible scenarios.”
Are you able to say if the return of furloughed employees will occur on a step process, or will they all be reinstated at once?
Pres. Myers:
“I’d say that’s probably to be determined, but you know, again, I have to see how the state, how the county is handling the virus, how people are respecting the governor’s and this county’s orders. That will dictate, I think to a large degree, how this will play out. I’ll just say, what Chuck just outlined, it’s easy to talk about it [but]it’s hard to execute it. And we’re relying on faculty and staff to develop this flexibility. It’s a tall order. I think we’re all impressed with how quickly our faculty went from in person to distance slash online learning. We’re asking them to be even more flexible as to how they transfer knowledge as we go into the Fall. My hat’s off to our faculty, they’ve been very innovative. They’ve really tried to accommodate our students’ needs. It put a lot of stress on the system, on the people — faculty, staff and students — and the response has been, I think, extraordinary and my hat’s off to them.
“And now we’re going to ask for even more. And I think they’re up for it, but it’s not without its stress, that’s for sure.”
On Tuition going into Fall:
Pres. Myers:
“We’re not going to ask the Board of Regents to consider a percentage increase. We could justify it pretty easily, but we’ve decided that with the economic impact, the financial impact on families and students, that it would be the wrong thing to do. So we’re going to hold it flat and we think that’s consistent with our principals, with our land grant mission, with providing access to the students.”
Provost Taber:
“And that’s true for graduate students, that’s true for the professional students in the College of Vet Med. and it’s true across all of our campuses, that we’re holding tuition flat.”
Pres. Myers:
“It is difficult. It means giving up millions in revenue, but to do the right thing. And this is not the time to try to increase the cost of attendance. Maybe that’s next year or maybe it’s, we don’t know, but our thought is to try to continue to provide access to higher education. There are a lot of populations across our state, across the region, the nation for that matter, that may have more financial difficulties than others and we want to make sure that especially those populations have a chance for a college education. And that’s our goal.”
Originally posted at https://1350kman.com/k-state-to-furlough-349-employees-mid-may/
Comments