April 27, 2020

Dear University of Oregon community,

The COVID-19 crisis strikes at the heart of the University of Oregon’s mission. As a great residential university, we are grounded in the foundational notion that, by bringing people together in this amazing and special campus setting, we provide a world-class, transformative educational experience. That education takes place in our classrooms, labs, libraries, and studios. But it also takes place in serendipitous encounters in dining facilities, on our beautiful lawns, in our residence halls, and at our sporting events. In these various, unique settings our students learn what it means to be human in a society full of diverse people and perspectives. As we turn our attention to the fall and our long-term future we must always keep this mission in mind.

Let me begin by observing that our community’s immediate response to the COVID-19 crisis was inspiring. We placed community health and safety and student success at the forefront. We mobilized remote education and physical distancing strategies quickly and efficiently. I want to sincerely thank all of you—faculty, staff, administrators, GEs, and students—who are working tirelessly to keep our community strong and deliver on our mission of teaching, discovery, and service during this extraordinarily difficult time. It has truly been awe-inspiring and humbling.

Now we must turn our attention to the future, to think about the next school year and beyond. I want to let you all know that we fully intend and are currently planning to be open for in-person, on-campus instruction this fall. Given the realities of the COVID-19 crisis and the fact that there are numerous variables outside of our control, it is unlikely that our fall quarter will look just like last fall. But I am committed to doing everything in my power to enable us to return to the type of residential university that is so special for all of us.

Our fall plans will comply with Governor Kate Brown’s emerging strategy to reopen Oregon and will be informed by guidance from the Oregon Health Authority and Lane County Public Health. Our planning will also continue to put student, faculty, and staff health and safety at the forefront. I have asked André Le Duc, AVP and chief resilience officer, to engage our Incident Management Team—more than 150 staff, faculty, and administrators working across disciplines—to help plan and facilitate the actions that must happen across campus to prepare for fall operations. André and his team will continue to coordinate with local, state, and national leaders as well as his counterparts at other West Coast public universities. We will explore a variety of methods to safeguard our community, including reducing density in offices, residence halls, and dining facilities; intensive cleaning of all facilities; and testing and contact tracing for students and employees.

Provost Patrick Phillips has already begun actively working to plan how we will deliver educational programs. He will be collaborating with deans and other academic leaders to ensure the university continues to deliver the high-quality educational experience our students expect. This group may consider alterations to class schedules, reducing the size of some larger classes, changing room assignments to allow for social distancing, and an expansion of high-quality online classes, among other adaptations. As you can understand, there are a lot of factors to consider, and it will take time to iron out details. We appreciate your patience and we will provide the community with additional information as soon as we are able.

From the outset I indicated that maintaining our economic viability was going to be a strong consideration in our planning. Our university has been a leading research and teaching institution for nearly 150 years. I am committed to doing everything I can to set us up for another 150 years of even greater achievement. I also take very seriously that we are a primary source of economic sustenance for more than 5,000 employees and their families and one of the principal drivers of the Eugene-Springfield economy. We can only do this if we make sure we are on a firm economic footing.

The UO is tuition-dependent; this is no secret. For us to be successful over the next few years, we need to get as close to our admissions targets for the class of 2024 and retain as many existing students as possible. Some media reports estimate that universities nationwide will experience a 15 percent decline in enrollment as a result of the COVID-19 crisis. If that were to happen to us it would be very challenging. Prior to the spread of COVID-19, we were way ahead of last year in our enrollment projections. That advantage has diminished despite the heroic efforts of Roger Thompson and his enrollment management staff. We will not know for sure where we stand until the fall quarter begins, although we will get better information as the spring and summer progress. I am asking each of you to do what you can and rally around the objective of attracting next year’s class and retaining our current undergraduate and graduate population.

Our second biggest source of economic concern is the state budget. While I wish we received more assistance from the state during normal times, even that amount is at risk as a result of what is very likely to be a recession tied to COVID-19. As all of you know, Oregon’s revenue system is tremendously volatile, and the unprecedented economic shutdown from COVID-19 will have a negative impact on the state budget. During the last recession, we received cuts that amounted to 45 percent of our state support. This year we finally got our state allocation back to the nominal level of 2008, but it appears that will be a fleeting achievement. The question is not whether we will be cut, it is when and by how much. Indeed, we have just been instructed by the HECC to start planning for the possibility of an initial 17 percent cut to our state appropriation next year. While we will not know with certainty the exact size of next year’s cut until the legislature meets, this direction gives us some sense of the likely magnitude.

As we look at the potential challenges posed by enrollment and state funding, the UO is starting from a position where, certainly compared to our peer public universities, the levers we can pull to manage hits to our budget are limited. For a variety of reasons (low state support, high-cost mandatory benefits programs, and a recent drop in international enrollment) our reserves are lower than other peer institutions across the country. We also do not think we can look to tuition increases to address major shortfalls the way we did following the last recession. Our nonresident students already pay market tuition, and the incomes of Oregon residents make paying more in tuition very difficult, particularly in a period of mass unemployment. A third revenue source would be our endowment, but those accounts are almost all restricted and their value has fallen as a result of the stock market decline. A fourth option would be to cut personnel costs, since almost 80 percent of our Education and General (E&G) budget is composed of salaries and benefits. This would be quite difficult since we operate at staffing ratios that are much lower than our peer schools and most salaries are set by collective bargaining agreements. There are no easy solutions.

All of this points to the fact that we need to develop more operational and financial flexibility to deal with shocks to our budget. Last week Provost Phillips and Vice President Jamie Moffitt circulated a proposal for a progressive pay reduction (PPR) program that I realize may have surprised some of you. For that, I apologize. The proposed pay reductions would be temporary and only triggered by a financial crisis tied to enrollment drops and/or state budget cuts, and only made after appropriate consultation and negotiations with our employee groups. I want to emphasize that the PPR is intended to begin a conversation with our employees and representative employees groups—and we made it very clear to our unions and the OA Council that we are open to suggestions, modifications, and alternatives that would achieve the same goal of providing time for the campus to develop a long-term strategy in response to significant revenue losses. The reality is that we will need to do something to adjust expenses if enrollment declines significantly and/or we receive state budget cuts. Again, we are open to suggestions and collaborative approaches designed to solve the problem.

Finally, we are beginning discussions about how this crisis will reshape the university in the coming years. One possibility, shared by other universities throughout the nation, is that we may have to operate on a permanently reduced budget. Another is that the era of pandemics will continue to threaten the way in which we operate. We are now gathering data and ideas to help us think about these and other “what ifs.” Everything will be on the table.

I wrote this to convey the seriousness of our challenge, not to scare anyone. We are in an unprecedented period—both at the UO and at all universities—where we cannot adhere to an attitude of business as usual. People are dying, businesses are going bankrupt, and workers have lost their jobs. The UO is not immune from the challenges that are coming, and to bury our heads in the sand is irresponsible. We must come together to solve near-term problems associated with delivering an on-campus experience this fall and to think innovatively and creatively about ways to ensure the university’s continued success now and in the future.

I believe with all of my heart that we have the capacity to make the changes necessary for the University of Oregon to flourish. The vast majority of our community—faculty, staff, students, administrators, alumni, and trustees—love our institution and recognize what a special place it is. Provost Phillips and I appreciate your patience, understanding, hard work, and wisdom. Together, we will get through this and come out the other side stronger and more resilient.

Sincerely,

Michael H. Schill
President and Professor of Law