MARTHA: Good afternoon, everybody. Welcome. Back last summer, we met with all of you to describe the financial crunch that we were facing as we dealt with the COVID pandemic. We promised you that we would carefully monitor our situation, and that we would report back to you before the end of the calendar year. And that's what we're here to do today. Provost Kotlikoff, Vice President Opperman, and Vice President Streeter will share with you the details of our budget performance and our projections for the rest of the fiscal year, which goes through July 1.
But I wanted to kick this off with some good news, because back last summer, we made a second promise as well, and that was that we would stop the reductions in either the retirement contribution or the salary, whichever applies to you, as soon as we possibly could-- that is, as soon as we could be confident that the other actions taken would allow us to achieve a balanced budget. And I am delighted to tell you that we reached that milestone, that our projections now show that by December 31, after the five months of benefits or salary reductions, we will have achieved sufficient savings, along with the other actions that we've taken, to feel reasonably confident of a balanced budget for the fiscal year.
So starting on January 1, we are going to again start providing full retirement benefits and full salaries. Now, please note that all the other cost containment steps-- the hiring freeze, the ban on discretionary spending, and so on-- those have to remain in place through the end of the fiscal year. But we will begin again providing full retirement benefits and full salaries.
I know that the benefit and salary reductions have been very difficult. Unfortunately, they were necessary, both to preserve jobs to the maximum extent possible and to ensure that our students had a meaningful and safe educational experience here. So I deeply appreciate your forbearance.
I'm so glad we can announce this positive change. Again, it will become effective January 1. And with that, I want to turn things over to Provost Kotlikoff.
MICHAEL KOTLIKOFF: Thanks, Martha. I'm just going to share my screen here. And Martha has told you the what, and I'm going to basically tell you the how and the why. If I can go back.
So I'm going to update you on where we were at the end of fiscal year '20 and then our projections going into what is our current fiscal year. And I want to begin with our budget priorities, how we're thinking about the most important actions to take. I'll summarize a little bit where we ended up in this spring, so the last fiscal year, and the impact of that on our budget, our assumptions and precautionary actions-- which you, of course, know about, but I'll just summarize briefly going into this fiscal year-- and where we are currently, our current forecast that's allowed us to take the action that Martha just described.
And so let me just say a few things first about our priorities. When we started these, both precautionary actions and building our testing program and our tracing programs, our priorities were to maintain the health and safety of our community, and to preserve jobs, as Martha has said. And we took budget actions that were necessary to be able to ensure that first priority.
Beyond that, we also, of course, wanted to preserve the educational quality of our programs for our students and of course, our research and scholarship that our faculty pursue. Then our priority was-- and we can now announce that we can alleviate the financial impact of the budget on our faculty and staff, all of the university employees, consistent with the first two priorities. And then finally, what we want to do, again, consistent with fiscal restraint, is continue to invest in our core mission. That's our clear goal is to not let this crisis make us take a step backwards in terms of where our priorities are and our strategic plans.
So just to summarize briefly what happened in FY20, we ended up in fairly good shape. We had deferred our capital expenditures and other expenditures like planned maintenance. We had, as you know, significant cost reductions through travel, through supplies, entertainment. All of those reductions had a strong philanthropy performance over the end of last year. And we put in place a hiring freeze.
All of that put us in good shape for the end of the fiscal year, despite the fact that we faced housing and dining rebates for our students that went home in the spring, the loss of revenue for our enterprise units such as the Statler Hotel or the Veterinary Hospital, the costs of shutdown and mounting our COVID testing programs, and all the technology investments that we made going into this, both for student learning and for faculty teaching that occurred in the spring. With all of that, we ended up in a positive place for fiscal year '20 and with some reserves in colleges to be able to put forward to the next fiscal year, which we knew would be the biggest challenge.
Then going into the July 1 fiscal year, of this fiscal year, our best-case scenario at that time was planning for $215 million challenge that we had to make up. And that comprised financial aid, decreased tuition revenue that I'll talk a little bit about that we had projected, the decrease in housing and dining revenue for the year, as many of our students would stay home, reduction in state appropriations, continuing losses in our sales and services, and then continuing expenses around COVID-19, and particularly in our testing and quarantine and isolation efforts.
So to address those challenges, as you know well, we first suspended retirement contributions and made salary reductions. That amounted to a savings, a projected savings, of about $43 million if it were carried out through the entire year. And you'll see that we will not need to carry that out through the entire year.
Our capital spending reductions, the fact that we had no SIP this year for individuals, reductions in support functions, our efforts to try and think broadly about being as efficient as possible across the institution, continued hiring freeze, pause on travel, discretionary spending of all kinds. We increased our endowment pay out after conversations with the campus. Martha made the decision to, and the Board approved an increase in our pay out to try and blunt this impact. And then we planned on use of reserves and other reductions and in shifting philanthropy to our financial aid needs.
Now, here's the four main budget assumptions that we started with and where we ended up. And green is better and red is worse. So we had assumed that we would have about 95% undergraduate enrollment this year, and we assumed 80% graduate enrollment.
It turns out due to your efforts, the efforts of a tremendous team of individuals who have ensured the safety of the campus, we've achieved 98% enrollment in our undergraduate programs and 99% in our graduate enrollment. Some of the graduate enrollment of course, is overseas, where people are online and taking courses remotely, but the overall impact on our tuition was not nearly what we thought.
Moreover, on financial aid, our actual costs were way below what we had estimated. There's a number of reasons for this. One of which is that our campus is about 70% occupied with individuals that are residential, and those people that are not residential, the financial aid costs are lowered.
In addition, we had assumed a 14% annual unemployment rate, and that was to be for the entire year. That was an average unemployment rate for the entire year. We've had a lower unemployment rate than that already, and hopefully, it will continue to decline for the year. But overall, this required much less financial aid than the big increase that we had predicted.
Now on the other side of the ledger, we had estimated $20 million in COVID expenses. We actually expended about $45 million. Much of that was caused by the regulations associated with quarantining individuals.
Of course, we acquired isolation and quarantine space. We needed to acquire enough to quarantine all those individuals that were coming from states that New York State had designated as requiring 14 days quarantine. So that was a very significant cost for us. And we had assumed a 10% allocation for the contract colleges from New York State. Turns out that that is likely to be 20% reduction, although it has not been finalized even today.
So I think this may be the first time the Provost has shown the entire campus a budget, but I thought I would. These are extraordinary times. And I thought I would show this budget.
The left column shows the 2021 preliminary budget, with the assumptions that I had mentioned, this $215 million loss. And to the right of that is where we think we are currently. And so again, the green is better, the red is worse. Tuition and fees, significantly better, sponsored programs, significantly better, our federal and state appropriations worse, because adding a 10% additional cut from the state, our educational activities and other sources, we are better than we've forecast in terms of that revenue.
Then personnel costs are higher, associated with a number of issues, but one of which is the benefits rate for the University. Our financial aid cost, you can see we had estimated $552. We now think that will be $481 million. Our general expenses have gone up, again associated with COVID costs.
So all in all, net is we would predict about a $29 million surplus if we are able to maintain our fiscal discipline, and we continued the reductions in retirement and salary. But the reductions starting from January to the end of the fiscal year-- that is about $25 million, which we can now afford to not continue. So our first priority here with the surplus is to return back to the faculty and staff the retirement contributions and the salary reductions that we felt necessary to make at the beginning of the fiscal year. And that will bring us about to break even for 2021, As we currently forecast, with continued fiscal discipline.
So a couple of important considerations and then I'll just summarize-- as I said, as Martha said, we need to continue the hiring freeze and constraints on discretionary spending. The budget that I just showed you presumes that we're able to continue that. So we don't want to get into a deficit situation.
These budgets that I'm showing you are the aggregate budget for the entire university. Of course, it's going to vary in individual colleges and departments. And we do have the capacity in the center to offset some of that.
So today, I met with the deans, Paul and I met with the deans, and talked about the impact on individual colleges and how we would try and blunt those to smooth this so that no one really suffers inequitably in this process. So the bottom line-- we're better off than we thought we would be at this point. And that's the result of your hard work, all of our hard work, in getting to this point.
I couldn't be prouder of the efforts and the success that the University has made over the first five months of this fiscal year. We need to retain our focus on fiscal discipline. As I said, we're going to try and make sure that we smooth this effect for the colleges.
We're planning now to restore, as of January 1, the CURP and salary reductions. That decision has been made and announced by Martha. And we will continue to make the investments that we need to make in Cornell to continue to strengthen the university. So with that, I will stop screen sharing, and I just maybe turn to Paul Streeter and Mary Opperman to see if you have any additional comments.
PAUL STREETER: Thank you, Mike. I don't. I think you covered it great. And congratulate to our community for the outstanding effort getting us to this point. Thank you.
MARY OPPERMAN: I'll just add my thanks. Both the senior leadership of the university-- their priorities have been consistent. That's a guiding light for all of us as we make our decisions. But as Mike said to all of you, this has been a really difficult stretch.
And we had to make some difficult early decisions. And yet despite those, the community pulled together and did what it needed to do to keep ourselves in a good, strong position and to keep one another safe. So my thanks to all of
MICHAEL KOTLIKOFF: So maybe I'll just start to respond to some of the questions. I see it says, will there be an opportunity for interim SIP increases or is that still postponed until next fiscal year? And it is, Ellen, postponed until next fiscal year.
We're now talking about SIPs for the coming year. That, of course, has to go through the Board of Trustees for approval. We're talking about tuition levels. But we will not be able to put in interim SIPs in this fiscal year.
Cathy Bartell asks, given the overall successful fall semester, do you anticipate allowing students who initially stayed home to select dorms in January? The answer to that is yes. And in fact, our registration for dorms is way up over the fall, and I attribute that, really, to the confidence that people have that we're able to manage transmission on campus.
Manfred asks, how much does the testing cost? The overall testing costs are probably in the order of $12 million to 12 to 15, I would say-- in that range, Manfred. There's a lot to that, but much of it is the personnel associated with doing the sampling, doing the testing, doing the reporting.
And we've just done a tremendous job, not just on that side, but also on contact tracing in the sense of getting people very quickly identified, getting individuals in the social network identified, quarantining those individuals, and then testing them once they're in quarantine. And that's just been a tremendous job mounted by a number of people including Gary Koretzky, who oversees that, also Cornell Health, and many others.
Eswar Prasad-- could you please clarify the assumptions about second semester teaching models that underlies the projection for the remainder of FY20/21? What happens if we need to revert to only online teaching with no students on campus? Maybe I've been talking a little bit. Maybe I'll let Paul answer that one.
PAUL STREETER: Sure, thanks, Mike. Our assumption is-- really, the financial assumption is about student enrollment. And we're expecting enrollment to be as strong in the spring as it was in the fall. And that really drives the assumption here.
The teaching model, I think continues to be a hybrid teaching model, as it has been this past fall. But enrollment is really what drives our budget assumptions. And we're expecting it to be as strong as it has been this past fall.
MICHAEL KOTLIKOFF: I see a question here about vaccine. Once there is a vaccine, will there be added costs not planned for? Will the University provide vaccines for the college community? Really, that's a difficult one to answer.
We are in conversation now with the state about the whole rollout of vaccinations, and point of delivery for vaccinations, and training individuals to try and roll out an efficient vaccination process. But I think it's just-- Kimberly, it's just too early to predict what costs would be, how they would be handled, whether the university would be a distribution center or Tompkins County Public Health. I know they've been designated as a POD, as a Point of Distribution. But it's early days for that.
Will work restrictions remain in effect this entire fiscal year? Mary?
MARY OPPERMAN: I'm not sure what "work restrictions" actually means. So maybe we can get some more information about that. But if that is about the hiring pause and about those who are on campus, perhaps that's what that refers to, is are we continuing to dedensify the campus by having people work remotely? And yes, our current plan is to continue that remote work as long as people can fully perform their jobs that way.
PAUL STREETER: And I do think there is an aspect of the question about travel restrictions as well. And those travel restrictions remain in place.
MARY OPPERMAN: Yes, they do. And in fact, we hope that you're giving strong consideration to those travel restrictions, not just for business travel, but for your own travel right now.
MICHAEL KOTLIKOFF: I see Doina Tumbar has asked, does the hiring freeze apply to medical staff and mental health staff? The students will need additional support in that domain as we move forward. And we have approved hiring in areas where it's essential for things like student health and other areas. So rest assured that, as I listed in those priorities, that's our first priority.
Curtis asked, was any consideration given to allowing hiring instead of reconstituting salaries and benefits? There's a lot of stress caused by people having to make up for these positions. I do understand that, Curtis, and as I say, we are approving hiring in specific areas where it's absolutely essential.
But we really have to maintain fiscal discipline. And I have to be honest that we did prioritize this return of CURP and salary reductions rather than expanding our workforce. Now, I will say that we've furloughed or laid off very, very, very few people through this entire process, something that I know we're all extremely proud of. I don't know if you want to comment on that, Mary.
MARY OPPERMAN: Let me just add, I understand the question. It is difficult when you have open lines and you're trying to figure out how to get the work done. But from the standpoint of ongoing fiscal discipline, the pension and pay reductions are temporary by design. And so what we want to be really careful of is expanding our total labor costs in advance of putting those back, only to find that we've then grown our overall labor costs beyond what we have the capacity to handle going forward.
MICHAEL KOTLIKOFF: Thanks, Mary. I see this is an insider question. Will the fringe rate go back for colleges starting January? Paul, that must be a business officer.
PAUL STREETER: Yes, I can take that one, Mike. It is something we are actively looking at right now. So no decision exactly on how we're going to deal with that, but we are looking at that right now, and we'll get a decision out to the campus as soon as we have it.
MICHAEL KOTLIKOFF: Joshua Young-- despite the salary freeze, hiring freeze, and CURP benefit reductions, personnel costs have been higher than projected. What accounts for that? Are we on a permanent personnel reduction path? Paul, do you want to talk a little bit about the reason for the personnel increases?
PAUL STREETER: The personnel increase is really just adjusting our forecast. I don't have it right in front of me, but the percentage is very, very small. So it's $18 million on a base of about a million [INAUDIBLE]. So it's a small number, and it's really just fine-tuning our forecast, reflecting the fact, as Mike noted, we did have an increase in personnel costs associated with the testing operation, and some of our service operations, where we were anticipating actually wouldn't be operating as much capacity as they actually are. So it really is adjusting to what our current operational level is. And a more accurate forecast is going to be more complex. But it is a small adjustment in the scale of the total fixed personnel costs.
MICHAEL KOTLIKOFF: Larry Kwan asks about benefits. I think that has been answered, Larry. Paul Soloway-- what is the status of the Radical Collaboration faculty recruitment initiatives? I will say we are trying to continue to attract faculty during this period.
There are a number of recruitments ongoing from deans. We've lost a number of faculty, but primarily I think Cornell has distinguished itself in this response to the current crisis. And it is a place where we're seeing more interest and an attraction of faculty to come here. And it's an opportunity, I think, to capitalize that.
Now, I have to say that those costs are really future costs, mainly. The cost of recruiting faculty are more around start up. The replacement is basically a salary replacement, but those startup costs, they can be amortized over time. So we don't see that as a major expense in this fiscal year.
Laura Santacrose-- do you anticipate additional COVID-related costs for the spring semester if a significant cost was the quarantine isolation spaces. Great question, Laura. What I showed you was an estimate for the whole fiscal year, and we're hoping we can actually drive some of those costs down during the fiscal year. And we're also, coincidentally, looking now at increasing our testing capacity so we can provide some capacity beyond our own needs. And that's an ongoing discussion as well.
Let me just say one word about where we are-- I know we are in yellow, and I think we should talk about that. We did see an abrupt spike in cases within the student body. And of course, we've seen, as we've discussed over the last couple of weeks, as in our surrounding areas, the incidence of COVID-19 rises, we're seeing that in our staff, reflecting that infection, coming in, getting identified as part of the surveillance process.
And we're seeing those cases. I'm pleased to say that you'll see again today two cases, two new cases, one out of surveillance, I believe. So we're seeing it looks like-- one of the things that's distinguished our response to COVID-19 on campus is our ability to control transmission on campus.
The thing, of course, that one worries about is the exponential spread that occurs when one person is infected, affects another two, people and two infect four, and onward. We've been able to stop that. And it looks like this current outbreak so far is not leading to more expansion of cases. So it doesn't mean we're out of the woods, but I just want to reassure people that the mini spike that we've seen over the last few days does not seem to have continued.
Do you anticipate any changes to your projections based on Biden's win? It is possible. I guess the thing that's most likely there is these state cuts. One of the things that New York State has done is, I think, delay imposing those cuts because they are hoping for a federal program that provides support for the states.
Whether that would cause them to not impose those cuts or not is anybody's guess. And whether we'll get that through Congress is anybody's guess. But I would say, Anthony, that's probably the most likely area.
Given that, is there any increased concern about needing to change plans given the current rise in COVID cases across the country? Again, we've been able to maintain transmission. It's not as though we're immune at all to that surrounding infection rate.
And we see that in Tompkins County, the cases going up in Tompkins County. We have been able to control that on campus through this tremendous work with Cayuga Medical, with Frank Krupa and Tompkins County Public Health. All of that has led to our being able to control this. And so we don't see that so far, although of course, the national situation is alarming. No one can look at that and not be alarmed.
Could you offer a rough estimate as to when the hiring freeze will end? Paul, do you want to take that one?
PAUL STREETER: Sure. we're planning for the hiring freeze to be in place through the remainder of this year, so through June 30. It's what the budget is based on and [INAUDIBLE]. Until the situation changes, we've got to hold it in place, but we are anticipating just through this fiscal year, which would be in June.
MICHAEL KOTLIKOFF: Mary, as COVID-19 vaccines get approved, when would you expect immunizations to be available for staff? Want to take that one?
MARY OPPERMAN: I can try, although as Mike said, it's very early days around the vaccines. So we will follow the national and state and local plans. And as soon as we have something, we'll be sure to tell you.
We want to continue our-- we've been very forward focused, and we followed our science. And we are going to continue to do that with the best interests of our entire community in the forefront of our mind. So as soon as we know things, we're going to share them with you. That's what we've been doing right now. Kind of early to know.
MICHAEL KOTLIKOFF: Eileen Grabosky says, do you have any idea when a decision will be made regarding allowing travel for FY22? We have some summer programs that involve flying people to campus and we're trying to plan accordingly. So this is something that's actively under discussion, but I have to say what we are trying to do is put that decision off to the latest day possible for those decisions. I understand that this has an impact on a lot of programs and planning, but please understand, our best chance of being able to support travel and to mount these programs would be to decide later. If we had to decide now, we'd say no.
And our best opportunity will be if there is a significant vaccination of our broad population in late spring, early summer, which is our best estimates now-- are that the first wave will be first responders, prioritized individuals, as it should be. And then we'll get into the broader population later in the spring and early summer. So that's the hope. I do think we'll have to make this call sometime after the first of the year, but I don't anticipate it much before that.
With a growing number of new COVID cases in the US, is there a concern that a national shutdown is on the horizon? How would that impact our financial future? I do think that is unlikely, [? Jeje. ?] Everything that I've heard in terms of public policy responses to the current crisis falls short of a national shutdown.
Of course, if there is a national shutdown, many of these assumptions will be affected by the fact that we will need to adjust to that reality. I do go back to Paul's response, which is, much of our assumptions relate to enrollment. And the fact that students have to go online will not impact, that much, our overall financial position.
Chelsea Carr-- in the budget current forecasts, both revenue and expenses, are there any categories that feel less solid in terms of forecasting than others? Paul?
PAUL STREETER: I would comment that probably the personnel costs is the largest single element of our budget in it's one, as folks know, we're very decentralized university. So getting our arms around that is a challenge, and feeling confident in that, I would say. That's probably the one that gives me the most concern as to whether we have it right and our ability to control it.
The enrollment numbers on the revenue side feel strong. And all indication is that they will remain strong. So I would probably point to the personnel costs and just our ability to control that for the whole year as being the one that feels like the most uncertain to me.
MICHAEL KOTLIKOFF: Mary, do you want to take the next two? Are we able to address salary changes for staff that have been promoted and/or taken on additional duties during the salary freeze?
MARY OPPERMAN: We can take a look at select requests, but I just want to go back to what Paul just said-- a large majority of our costs are associated with our talent, our staff and our faculty talent. And our goal is to try to manage costs as best we can through the end of the year so that we can then reassess. So we have a process to look at compelling reasons to make midyear changes, but frankly, we really discourage that unless there is a good and compelling reason. What we'd like to try to do is get ourselves through this year, and then take a look at where we stand financially, and go from there.
MICHAEL KOTLIKOFF: And Mary, Cornell's retirement contribution, which we lost from April to January, will it be replaced or will it just increase to normal levels in January? Is there a possibility of parking rebate or credit? Many of us have been paying parking all these months without using it. I wasn't willing to let my handicap permit go. Thanks-- I'm so grateful to all of you for delineating intelligent priorities and following through to keep Cornell and the Ithaca community safe. Thank you, Barbara.
MARY OPPERMAN: Thanks, Barbara. So no, we won't be going back to rebate or credit. That would basically put us back into the situation we've been trying to get ourselves out of. So it will be go forward at the regular rate starting in January.
And in terms of the transportation, what I can say is they've been extremely flexible with their opportunities and options that they give. Please remember that we have employees directly associated with our parking. I know that that's also difficult. Many of you have had to make the same-- have had to make choices about what to do. But the parking and transportation group has really done a yeoman's job of trying to give everyone options that they can use, while still trying as best they can to keep everyone gainfully employed.
MICHAEL KOTLIKOFF: So a couple of questions around the virus. With the amount of minus-80 freezers on campus, is Cornell looking forward to being involved with vaccine distribution efforts that will be upcoming? That's a great point, Josh.
I'm sure we'll have discussions with the Tompkins County Health Department and others around a point of distribution when that comes. And you make a great point. We have freezer capacity, and these vaccines, of course, have to be maintained at very cold temperatures.
Ben Davis says, what are we anticipating for costs in bringing students back to campus for the spring? You mentioned higher quarantine costs for the fall. Do we think that spring will be greater or equal to the fall?
Ben, we think it'll be less. And the reason is that a number of us advocated with the Governor's Office around something other than a rigid 14-day quarantine from states identified as having high prevalence. And what they've instituted is a process by which you can effectively test out.
So you test three days before you arrive in New York State. You quarantine for four days, you test on the fourth day. And if you're negative both those tests, you can be released.
Now, we're going to implement something that's a little bit more rigorous, which is you test before you depart, three days before you depart. We will test you the day that you arrive, as soon as you arrive. You'll go into quarantine, and we'll test you down again on day four.
If those three tests are negative, you go right into the surveillance program, and you're tested another three days or four days later. So with that, we save 10 days of hotel space, and food costs, and all of that, for our on-campus individuals. And we think it's a more rational and safer-- actually a safer program. So we're quite pleased with New York State's flexibility in this regard.
Brenda Rodriguez, any COVID testing cost reimbursements available through government programs? It does not look like yet, Brenda. It is a great point because we don't have a federal plan that compensates people for surveillance testing, which is what we do.
We have of course, insurance for people that are tested, if they have symptoms. But for us, there is no program in place. It is possible that the new administration will put in place a testing program. There has been discussions about that, but we really don't know any more than that yet.
Assuming the data indicates that they're safe and effective, will Cornell be mandating vaccines? It's a very interesting question, Jim. We haven't really talked about that yet. Of course you know that we've mandated flu vaccines. My guess is that we would make access to campus contingent on vaccination, but Mary, do you want to weigh in on that as well?
MARY OPPERMAN: Yes. It is a great question and we have strongly encouraged the staff and faculty side, everyone, whether you're on campus or not, to get your flu vaccine. But I have to agree that we're not there yet in terms of a final decision. But being on campus once the vaccine is available, if we can't figure out who has the vaccine, it will make our safety programs even more complex, so more to come. But if it becomes part of our safety measures, then we'll need a way to make sure that it's consistently applied.
MICHAEL KOTLIKOFF: When we first went remote, I heard some discussion that there would be cost savings from staff not being on campus. Did you save the money expected? Paul?
PAUL STREETER: Yeah, it's a great question. I do think so. Really hard to put a number on it, but it's pretty obvious from looking at our operating expenses that we've saved on just general office supplies, on food costs, those times we had food in meetings. Those normal operating activities have certainly been scaled back. And we can see those savings occurring in our budget. So yes, there have been savings. Hard to put a big number on it, but there clearly have been savings. That's obvious.
MICHAEL KOTLIKOFF: And you want to take the next one, Paul? What does this all mean for the university's planned capital projects?
PAUL STREETER: Sure. It certainly has delayed a number of projects in the maintenance realm. It is deferred. You can't get away from the maintenance priorities, those things that are really critical we're still going to have to do. It's pushed off a year for much of the activity.
The highest priority work is being attended to by our folks in Facilities. But there are some projects we've put off that we'll have to come back to. The bigger long-term capital projects are overall priorities.
We've had a 10-year capital plan and those priorities largely remained the same. And they just might be delayed in terms of implementation. And certainly, the use of debt as a funding source is constrained in this environment, and that will affect, again, the timing of it. So the capital budget is being [INAUDIBLE].
MICHAEL KOTLIKOFF: Carl Frank asks, are the cell phone apps that New York State announced to indicate that when one has in Bluetooth range of a person tested positive of value for us? Do you have a position on this at this time? So thanks, Carl. We did evaluate this. This was evaluated by the committee overseeing contact tracing.
And they felt on balance that it was not useful for us, given what we are doing. And I should say that we are testing so frequently, and we're doing this adaptive testing that I described earlier, that we test not just the people that have been identified as formal contacts by the Department of Health, but anyone that's likely to be associated, anyone taking a class in the same building, in the same classroom, people in the same dorm. And so that diminishes the value of this. And the feeling was that we just didn't have the capacity and that the game would be limited.
Chris Dunn asks, might there be any changes to COVID testing protocols during the winter break or in spring semester or don't mess with success? Well, I will say we are seeing new tests come out. And there is a possibility we will have these point-of-care tests that are inexpensive antigen tests.
And that's one thing all of us are watching very carefully right now. A number of companies-- you may have seen Abbott has a BinaxNOW test that has been brought up for the next two or three months by the government. But there are some issues with some of those tests in terms of sensitivity and false positives. But all of these things, I think, are valuable in fighting this pandemic. So stay tuned for that, Chris.
Is there a timeline for when ending the hiring freeze or limited financial promotions across the community can occur, from Andrew Salamida. Mary or Paul, you want to take this?
MARY OPPERMAN: Yes. So our plan is to take a look near the end of the year, but it is our intention to keep both in place through the end of the fiscal year. It's part of the financial calculus that Paul and Mike did is to retain those savings. But we'll look at it before the end of the year so that we can tell you what the plan going forward into the summer will be.
MICHAEL KOTLIKOFF: Will the recent election have any anticipated impact upon federal funds for higher education and research for FY22? I think I said that a little bit in terms of the state, the funds for states impacts, certainly, on our cuts. I don't anticipate that, in another pandemic package from the Congress, that there will be significant higher education support although the CARES Act was helpful for our students. So perhaps that's true, but it's just so early to say, Michael.
Matthew Knight, I'm concerned about the continued hiring freeze. We have four open FTEs and our department is barely able to keep up. My concern is that even when we go ahead with hiring, it will be six to 12 months more to fill spots. Mary, do you want to take that?
MARY OPPERMAN: Matthew, I understand your concern and we should have a conversation about that. It is difficult. We have quite a number of openings in our division as well. And we've had to make some really difficult choices.
So happy to talk to you offline about options you may have. We do understand that there are some places that are really feeling the pinch of those open jobs. So happy to talk to you more about it.
MICHAEL KOTLIKOFF: And another hiring freeze question that was pretty much just answered, Lucy Pola-- I believe that there was a change to the draw on the endowment this fall. Will this be changing back? Great question, Lucy.
There was an increased draw associated with our anticipation of COVID expenses. And we may recall that the first conversations about the CURP reduction were at a 10% level, and then we reduced that CURP reduction to an 8% level because we increased the endowment drawn. The argument was made by a number of faculty and staff that we should balance this, not just on faculty and staff, but also on the endowment. That was the argument that was made.
We will not be changing it for the year. We set that endowment draw for the entire year. And as I said, our first priority was to relieve the faculty.
A lower priority, but a longer term priority, will be the endowment. We will go back to minimizing the draw to the extent that we can in next fiscal year. And what that does really is help us in the future. It ensures the strength of the university or the institution in the long term.
Can you provide examples of essential areas of campus that is allowed to hire again? From Andrew Salamida. Mary?
MARY OPPERMAN: Yeah. So a good example was when we needed to create staffing for the testing program. We really couldn't do it. We tried to do it by redeploying people.
We needed to add more. So the testing program is central to our ability to stay open, which is central to the financial well-being of the University. So that's an example.
And I do understand there's a lot of questions in here about the hiring freeze and the salary freeze. That's part of the reason why the Provost showed you just how razor thin our budget is. And so the response is understandable, especially for those of us who are working with depleted staff resources.
But we made a commitment that we're following through on, which was a commitment to our current staff. And the more that we add to that labor base before we understand what our ongoing challenges might be, the less secure our long-term financial future is. So we know that this is difficult.
I'm happy to talk with you and so is my team, any of you, about contouring how you get your work done or maybe having to make difficult decisions about setting some work aside in the short term to try to figure out how to balance resources with work. But we really appreciate. We know that in some places this is tough. We really appreciate what you're doing to try to help us make it through this year without more negative consequences. So thank you.
MICHAEL KOTLIKOFF: Joshua LaPenna-- will Cornell conform with New York State travel restrictions? Currently Cornell is at 14 days quarantine. Josh, we are complying with the new New York State travel restrictions. So you can, if you travel out, return in this way.
Now, we are saying to people, don't travel. Or if you do not have to travel, don't travel. Our safest operational mode is with people staying in place, given the explosion of cases surrounding us.
And I will say that several weeks back, we were at zero, zero, zero, zero, zero, day after day, an unbelievably low incidence. We had essentially wiped out SARS COV2 in our community, the virus in our community. We're now seeing it come back in.
Most of those cases that are coming back in are associated with travel. So I would just urge everyone to be as circumspect as possible, as careful as possible around this. I understand the holidays are coming up. I understand everybody is frustrated with this and wants to see their loved ones, but please remember-- this is our biggest current risk.
And Frank Krupa, who is Director of Tompkins County Public Health, said to several of us a couple of weeks ago that when this started, people felt that Cornell would be a risk to the community, and that Cornell would bring students back, would risk the community's health. But right now, I have to tell you, you've done such a good job that the community is the risk to Cornell. And the reality is, the more we spread out and come back, the more risk we impose upon ourselves. So please be circumspect.
Rachel, you mentioned that very few people were furloughed or laid off? Do you have the actual numbers on that or that percentage of the faculty and staff? Mary, can you?
MARY OPPERMAN: Yeah, so the furloughs we had, just a little bit over 100, maybe about 125, 130. Those are almost all back. And in terms of permanent layoffs, none associated directly with the pandemic.
But as those of you have heard me on other forums know, we regularly have programs end. The funding runs out. And those result in positions being ended.
So I'm always reluctant to say that we have no layoffs. But we have been able to manage the COVID impacts to furloughs. And like I said, almost all of those are back.
MICHAEL KOTLIKOFF: I will say one correction that I know of, Mary, is the campus-to-campus bus, which is pandemic related. And those drivers were laid off. And we hope when the bus service starts up again, to be able to--
MARY OPPERMAN: That they'll come back, yes. Thank you, Mike. Yeah.
MICHAEL KOTLIKOFF: Eveline Ferretti-- is it yet possible to project what the university could conceivably start planning for graduation and/or reunion events in spring 2021? Or too early still? Mary, go.
MARY OPPERMAN: We are planning, but it is too early to know which of our plans we'll be putting into place. That's the honest truth. So we have lots of plans, lots of creative plans going, but more to come.
MICHAEL KOTLIKOFF: Another question about furloughs-- I just want to make it clear that furloughs were short-term furloughs where individuals got benefits, and then were hired back. In many cases, as you know, because of the federal programs, those benefits were actually higher than their salaries. So I just want to make it clear that we did a-- I'm so proud of what Mary and her team and the entire university did for maintaining jobs. And that was a major priority, and one of the things that we all sacrificed to try and achieve.
One more question, then-- how much budget relief was achieved through VRI? I'm sorry, you have to tell me what-- Paul, do you know what VRI is?
MARY OPPERMAN: Voluntary Retirement Incentive.
MICHAEL KOTLIKOFF: Oh, got it.
PAUL STREETER: Mary, do you have the numbers on the Voluntary Retirement Incentive? I'm not confident that I do.
MARY OPPERMAN: I'm sorry, it's a great question. I just don't have them in hand. And remember that the savings, the ongoing savings, occurs after the cost of the VRI has made its way through the system, which hasn't happened yet.
MICHAEL KOTLIKOFF: So there are lots more questions and we'll record these questions. I'm sorry we can't answer them all now. I'd just like to end on behalf of Martha, university leadership, Paul, Mary, to thank everybody for their efforts over this semester. It has been an extraordinary achievement.
And the achievement goes to the people in Cornell Health, the people in the Statler, the dining service workers, feeding people, feeding our students, our resident advisors in the dorms, our students who have complied beyond anyone's preconception of what could be achieved, and so many, many more people, and not least of all the faculty, who have stepped up and changed their courses, or come in and taught residentially. I've heard from so many faculty about how pleased they've been about how the semester has gone. So I just want to convey to all of you our thanks.
And I'm just really happy that we can make this announcement before the holidays, and go back somewhat closer to normal in terms of retirement and salary. So thank you all. Have a great afternoon.
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Senior administrators present an update on the operating budget featuring results from FY20 and projections for FY21. Panelists: Mike Kotlikoff, Provost; Mary Opperman, Vice President and Chief Human Resources Officer; and Paul Streeter, Vice President for Budget and Planning.