Anticipating $30 million budget shortfall, Pomona considers furloughing staff

Pomona officials said they would decide whether to furlough staff by Sept. 1. (TSL file photo).

Pomona College may furlough employees due to an anticipated budget shortfall of $30 million to $35 million resulting from the college’s decision to go online for the fall semester, according to the college’s newly released coronavirus furloughs FAQ

A final decision will be made by Sept. 1, and furloughed employees will receive notice at least 30 days in advance, the FAQ said.

This announcement comes after Harvey Mudd College, the only 5C planning to reopen campus this fall, announced to staff Aug. 3 that it plans to furlough employees if students cannot return in the fall. Additionally, Scripps College introduced a Voluntary Separation Incentive Program in June, providing financial incentive for staff to voluntarily terminate their employment with the college.

Pomona’s July pivot to online-only instruction means that students will not be paying room and board to live on campus — “one of the largest financial impacts of this ongoing crisis” for Pomona, according to the FAQ. With salaries and benefits making up the largest share of Pomona’s annual budget, the college believes it “may now be at that point” of furloughing a portion of staff.

If the college initiates furloughs, employees who perform functions that are no longer needed, and employees who cannot work on campus or remotely will be fully furloughed, while employees who perform functions that are curtailed may have hours reduced. Staff who do not receive a furlough notice would still be expected to report for work. 

Furloughs could be effective as early as Oct. 1, and furloughed employees will be paid through the end of September. After that, fully furloughed employees will be paid for accrued vacation and personal time, according to the FAQ. 

The college expects furloughs to last through Dec. 31, in the case that it can welcome students back to campus in the spring. At that time, the college will determine if extending furloughs is necessary, the FAQ said. 

Pomona said that if students do not return for the spring semester, the college’s financial strain may increase and possibly “compel [the college] to continue furloughs,” according to the FAQ.

On the other hand, if Pomona decides to bring students back in the spring, furloughed employees may be asked to return to work early for reopening preparations.

The college said it will cover furloughed employees’ health insurance, including the employee contribution, through Dec. 31. Additionally, furloughed employees will retain their sick time for use when they return to work.

Pomona believes that furloughed staff will be eligible for unemployment benefits, but that decision is ultimately up to California’s Employment Development Department.

In spring, Pomona cut non-personnel budgets, froze hiring and salaries, drew on reserves and paused construction projects to mitigate the financial impact of the pandemic.

Employees were aware of the possibility of furloughs, having been told this spring that furloughs may be necessary depending on the pandemic’s financial impact on the college, the FAQ said.

Pomona is “fully utilizing” its endowment within “internal guidelines and legal boundaries,” according to the FAQ, but has announced that its “mission cannot include a promise to provide uninterrupted employment to all in perpetuity.” The college said that it has “an obligation to prioritize [its] academic mission.

During the pandemic, the college has used its endowment “to pay all faculty and staff,” support students financially, provide employee benefits and support faculty in transitioning to online instruction.

However, “the purpose of the endowment is to support the college today, tomorrow and in perpetuity; spending more from the endowment now will hurt its value, especially at a time when the markets are so volatile, which will impact our budgets down the road,” the FAQ said.

While Pomona had considered faculty and staff salary cuts across the board, the college ultimately decided that “the idea of reducing pay for faculty and staff who are working while paying others not to work is unfair,” according to the FAQ. Some Pomona faculty members have expressed the desire to see higher-paid employees receive salary cuts before lower-paid employees have their pay cut or are furloughed.

Pomona President G. Gabrielle Starr and members of executive staff — vice presidents who report directly to Starr — will take pay cuts for as long as furloughs last.

The college may still be open to alternatives. “Vice presidents can consider job sharing arrangements whereby staff are partially furloughed, but decisions must be based on the needs of the college,” the FAQ said. Pomona is also tentatively looking into an early retirement program.

Pomona hopes to bring furloughed employees back in the near future.

“We value all our employees and appreciate your hard work and dedication to Pomona, and we want to make sure that we can bring people back to work as fast as we can,” the FAQ stated. 

Last week, Harvey Mudd College, the only 5C planning a hybrid mode of instruction in the fall, announced plans to furlough employees if it cannot bring students back to campus. HMC froze hiring earlier this year.

Like Pomona, Scripps College, Pitzer College and Claremont McKenna College will all be online in the fall.

Scripps also faces budget cuts and has frozen hiring. However, in Scripps’ July 8 decision to go online, Scripps president Lara Tiedens said that the college will prioritize preserving jobs in the fall. While Scripps has not yet laid off or furloughed employees, Tiedens acknowledged that furloughs and layoffs are possible, in an interview with Inside Higher Ed.

Scripps’ Voluntary Separation Incentive Program introduced in June provides financial incentive for staff to terminate their employment, effective July 31, as reported by The Scripps Voice. Employees in the program would be paid half their annual salary over the next year. Eligible employees were those who met the condition of the sum of their age and the number of years they had worked at Scripps being at least 70.

Similarly, Pitzer faces a “significant loss in revenue” due to its move online, according to a FAQ on the college’s website. The “tuition dependent” college may potentially use savings to cover its budget shortfall, and “will make every effort to avoid furloughing or laying off anyone.”

CMC will impose “responsible limits on hiring, salaries, and spending,” as well as “targeted budget cuts and other mitigation efforts,” according to the CMC Returns website.

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