University of Vermont Faculty and Staff: Just as COVID-19 has had a significant negative impact on economic and financial conditions around the globe, so too has UVM been affected. Although UVM’s finances are sound, the University has borne major unanticipated costs such as public and student safety related costs, refunds to students, and technology purchases to support online learning, as well as a host of revenue losses. In an effort to partially offset these negative effects on the current year budget, the administration has imposed a hiring freeze on all positions (including temporary service), cancelled a planned bond issuance that would have increased our debt level and incurred additional debt service costs, and is renegotiating contracts and scrutinizing all requests for independent contractors and additional payments.
The outlook for the coming year (FY 21) is uncertain and we are taking a number of precautions as we update our budget projections, including changing the budget development schedule. Typically, we present a new fiscal year budget to the Board at its May meeting. Recognizing that we will have additional information about the entering class after the May 1st deposit deadline, which will reduce some of the current uncertainty, the Board of Trustees has adopted an interim three-month budget. The interim budget will extend through September 30th, thus allowing us more time to plan the full-year budget than our typical May approval date would have allowed.
It is important to note that UVM was confronting budget challenges before COVID-19, including the declining college-bound population in Vermont and in the entire northeast region coupled with our high tuition. The impact of the virus has simply exacerbated these challenges. Our planned tuition freeze will help in our recruitment and retention of outstanding students, but we must do more. Thus, the budget actions we must take have to provide relief over the long-term, not just through the current crisis. Our guiding principles for developing the budget for FY 21 and subsequent years will include:
- Educational Quality –ensure that our academic programs are of the highest quality;
- Affordability and Access – keep tuition and fees as low as possible;
- Cost Constraint – adopt a zero-based budget attitude and question every expense;
- Operational and Organizational Efficiency – find efficiencies and synergies across colleges, schools, and administrative units;
- Revenue Enhancement – be creative and think well beyond the bounds of our current environment to grow and diversify our revenue to keep tuition as low as possible.
You will be hearing more details from your Dean or Vice President about these mission-critical efforts to deal with both the short and long-term budget challenges that are confronting us. If we all work together, UVM will be even better able to serve all of our students, our state, and the world we live in over the decades to come.
Patricia A. Prelock, Provost and Senior Vice President
Richard Cate, Vice President for Finance