Citing budget shortfalls, Mudd plans to furlough employees if students cannot return to campus

Harvey Mudd plans to furlough some staff members if students do not return to campus in the fall. (Chloe Ortiz • The Student Life)

Harvey Mudd College is planning to furlough some staff members if students are unable to return to campus in the fall, Assistant Vice President for Human Resources Dana Nagenagast and the President’s Cabinet told HMC staff via email Aug. 3.

HMC is the sole undergraduate Claremont College still planning to bring students back in the fall for a hybrid semester, pending county and state approval. The remaining 5Cs will hold all classes online and close campus, citing July’s rise of coronavirus cases in Los Angeles County.

Mudd is waiting for the state of California to issue guidance that will inform the college if it will be able to open for the fall. Last week, the Los Angeles County Department of Public Health released guidelines for the reopening of institutions of higher education, but that county guidance is subject to change depending on state guidelines. 

“We expect to know any day whether we will be in a position to welcome students back to campus this fall,” the August 3 email said. Out of the 812 HMC students enrolled for the semester, 540 plan to live on campus, Mudd President Maria Klawe said in a July 16 email. 

“Regrettably, the revenue gap is so significant that the college has come to the conclusion that if students are not allowed to return to campus, the hours of certain staff must be reduced and that other staff will be furloughed.” — August 3 email from the President’s cabinet

If students are not allowed to return, Mudd anticipates a budget shortfall of $12.3 million, or about 25 percent of the college’s annual operating budget. The college “cannot meet this shortfall with operating budget cuts alone, since approximately 63 percent of the budget consists of salaries and benefits,” Nagengast said. 

Mudd will furlough a portion of its staff and reduce the hours of others to combat the shortfall, administrators said. 

“Regrettably, the revenue gap is so significant that the college has come to the conclusion that if students are not allowed to return to campus, the hours of certain staff must be reduced and that other staff will be furloughed,” the President’s cabinet said in the email.

HMC has already frozen hiring and is now asking employees willing to volunteer to be furloughed or to have hours reduced to contact Nagengast by Aug. 7. Nagengast said that some employees have already “indicated that they may be willing to consider volunteering for a furlough.”

Though HMC is seeking volunteers to be furloughed, “the college reserves the right to decide, based on its operational and staffing needs, whose hours will be reduced, schedules to be worked, and who will be furloughed; and will do so irrespective of whether someone volunteers or not.” 

Additionally, an employee who volunteers may still have their hours further reduced, or be permanently laid off.

Even with a potential 25 percent reduction in non-salary expenses if students do not return, and Coronavirus Aid, Relief and Economic Security Act (CARES Act) funding, the President’s cabinet said HMC may also cease its 12 percent retirement contribution to employees’ retirement plans, as well as reduce salary and furlough staff.

Employees who are fully furloughed will not be provided with typical benefits, the email said. Their unpaid furloughs will likely last for the entire fall semester. 

Mudd will provide those employees with financial support so that they can keep participating in some of the college’s group health insurance plans — like medical, dental and vision. Fully furloughed employees may also be eligible for unemployment insurance benefits, depending on state criteria.

Employees with reduced working hours will retain their current health benefits if they work at least 20 hours per week, the email said. These partially-furloughed employees may be eligible for unemployment insurance benefits, depending on the state. 

HMC is not planning to have mandatory faculty furloughs.

Moving fall instruction online has already had financial consequences for other 5Cs. Pomona College, Scripps College, Pitzer College and Claremont McKenna College decided in July to go completely online for the upcoming fall semester, leaving HMC the sole undergraduate Claremont College still planning to bring students back to campus in the fall.

Since Scripps will not be receiving revenue from room and board in the fall, it is also facing budget cuts. Like HMC, Scripps has put a hiring freeze in place. While Scripps has not yet laid off or furloughed employees, president Lara Tiedens has not ruled out that course of action, according to an interview with Inside Higher Ed.

Meanwhile, Scripps introduced a Voluntary Separation Incentive Program in June that included a financial incentive for staff to voluntarily terminate their employment with the college, effective July 31, as reported by The Scripps Voice. Employees who did so would be paid half of their annual salary over the next year. Employees were eligible for the program if the sum of their age and the number of years they had worked at the college was greater than or equal to 70.

While Pomona projects a budget shortfall between $21 million to $35 million, depending on the number of students who enroll for the fall semester, the college is not currently anticipating furloughs and will try to avoid furloughs, according to a FAQ on Pomona’s website. Pomona plans to use reserves, reduce the budgets of departments and offices, and defer maintenance and renovation of buildings.

Similarly, Pitzer may face “a significant budget shortfall as a result of reduced revenue,” according to a FAQ on the college’s website. The college may potentially use savings to cover the gap, and “will make every effort to avoid furloughing or laying off anyone.”

CMC will be imposing “responsible limits on hiring, salaries, and spending,” in addition to “targeted budget cuts and other mitigation efforts,” according to the CMC Returns website.

A surge of COVID-19 cases in California during the month of July has left the state with a total of more than 522,000 cases as of Aug. 4. More than 193,000 of those cases are from Los Angeles County. Starting at the end of July, however, there has been cautious optimism about the spike in cases leveling off.

A Harvey Mudd spokesperson did not immediately respond when requested for comment.

This article was last updated August 6, 2020 at 3:09 p.m.

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