University of Michigan-Dearborn leaders have been working with University of Michigan officials and health professionals to closely monitor the spread of COVID-19 over the past several months. 

Our goals are to deliver on our mission while protecting health and safety by minimizing the potential spread of the disease, both within our community and in the broader society. 

Use this page to get more information and answers regarding university finances.

What is creating financial uncertainty for the university?

University of Michigan-Dearborn leaders are examining how the COVID-19 pandemic will affect the long and short-term financial planning for the university, taking into account several factors. Revenue uncertainties include how long we believe the pandemic will last, student enrollment behavior and potential budget shortfalls from the state.

17 percent of University of Michigan-Dearborn comes from tuition, while summer enrollment numbers have remained consistent, and slightly up, with previous years, we are still in the early stages of understanding what our student population will look like this fall.

The situation continues to evolve, and the pandemic may require the university to make more difficult decisions in the future. The health and safety of our students and employees remain paramount in our planning and decision making. The financial decisions being made will help University of Michigan-Dearborn continue to fulfill its mission to our campus community and southeast Michigan during this uncertain time. 

 

How are decisions about preserving financial resources being made?

The University of Michigan is an institution that has stood the test of time for more than 200 years. While it will not be easy, U-M will overcome this pandemic and uphold our public mission and the promise we have made to those we serve.

The principles underlying these decisions were developed in conjunction with the executive team and key senior leaders to align with U-M’s core values to guide decision-making:

  • Deliver the mission of the University of Michigan. We take pride in the work we are doing to enhance society and recognize the many communities who rely on us.
  • Value, protect and support our people. We will seek and implement the best guidance possible for the health and safety of our students and employees. We will also prioritize students’ academic progress and financial aid and strive to minimize adverse impacts on regular employees. The success and well-being of all members of our community are crucial to education, research and patient care at U-M, now and into the future.
  • Preserve the University of Michigan’s long-term excellence. We are responsible not just for the university’s success today, but for its future. Together, we continue to demonstrate the importance of academic excellence, including the inseparable values of diversity, equity and inclusion. No crisis can change this fundamental truth. We will have to work and think differently to uphold these values.
  • Communicate effectively and thoughtfully with our community. We will continue to share information with as much transparency and as quickly as we can on our COVID-19 website and in communications with individual units.
What measures has University of Michigan-Dearborn taken to preserve funds?

University of Michigan-Dearborn leadership has put into place the following fiscal year 2020 measures to mitigate financial risk during the remainder of this fiscal year:

  • Freezing of all reserve funds in the colleges and units for exigent senior leadership discretionary deployment.
  • Reassignment of staff to facilitate highest priority campus needs and to support pay continuity.
  • Stoppage of all non-essential projects unrelated to health, life and safety.
  • Reducing spend on utilities, general supplies, vendor services and other non-critical expenses.

These measures will stay in place through the fiscal year 2021 (FY21). The leadership team is updating our budget plan for next year with the clear understanding that the pandemic might last into the summer months of 2021 and beyond.

 

How will the 2021 budget be affected by the pandemic?

In addition to the budget-saving initiatives outlined by President Schlissel in April, the following FY2021 measures are being considered for our campus to help mitigate financial risk: 

  • Require colleges and units to allocate one percent of their budgets for redistribution (or keeping as an insurance reserve), as determined by senior leadership.
  • Voluntary salary reductions for senior leadership. I have volunteered to reduce my salary by 10 percent, all of the senior officers and others on the UM-Dearborn leadership team have also volunteered to join me and reduce their salaries by five percent. This reduction is effective May 1 through the end of the calendar year. 
  • Review all existing projects (capital and non-capital) and deferred maintenance plans to conserve and otherwise deploy resources effectively. No new capital projects will be initiated.
  • Review our non-compensation contracts with a view for reductions, including third party leases and consultancies.
  • Review non-mission critical programs and centers on the Dearborn campus.  
  • Continue developing a robust strategic enrollment management plan to maximize enrollment.
  • Update our preliminary FY21 budget, for submission to the Regents, with the following measures:
    • Implementing pricing and financial aid strategies to better support enrollment and student success. 
    • Developing scenarios for enrollment financial impacts over the next three weeks during registration.
    • Carefully assessing the application of CARES award to support continued operations and student enrollment and success.
What are considered non-essential expenditures?

The University of Michigan has suspended all non-essential expenditures across all three campuses and Michigan Medicine. New financial commitments are to be avoided. Examples of expenses that should be minimized or eliminated include, but are not limited to, the following:

  • Consulting.
  • Travel (All international travel and all domestic air travel is currently restricted per previous university guidelines).
  • Hosting, food and beverages.
  • Conferences.
  • Professional development.
  • Events (holiday; employee recognition).
  • Outside marketing and advertising.
  • Outside printing.
  • Subscriptions.
  • Prizes, gifts and awards.
  • Event tickets.
  • Supplies (all categories, including office, computer, etc.).
  • Computer equipment.
  • Furniture.
  • Remodeling.
  • Major equipment purchases also are suspended unless deemed essential to university operations or research activity and the impact to the university’s cash flow is considered.

There will be a regular review of expenditures in these types of categories by the university’s executive officers. In all categories, there may be needed exceptions for expenditures that are critical to the university mission and that can be approved by university’s executive officers. This includes computer equipment needed for remote activity that is considered critical.

Research projects that are fully funded by federal sponsors can continue their normal operations and spending. Those directing these funds are asked to ensure that uses align as much as possible with urgent and mission-critical expenditures. Researchers are encouraged to continue pursuing external support for their work.

 

Are there more details on the hiring freeze?

All hiring is frozen with the possible exception of staff or faculty in roles considered critical and those fully funded by federal grants. Units may still hire student employees as appropriate. The university will honor its outstanding offers extended to staff or faculty. This freeze includes temporary staff positions across the university. In addition, some temporary staff positions will not be continued.

Faculty hiring freeze: This guidance applies to all faculty hiring (tenure track, research and clinical). Those already in the process may proceed. A dean may seek an exception from the provost to hire if it is deemed essential to the mission. These exceptions will be rare and should be based on the need to deliver the university’s core mission.

Staff hiring freeze: This applies for staff positions in non-critical roles for all three campuses and Michigan Medicine, and strengthens previous university guidance. Staff positions funded by federal grants may proceed.

What about temporary employees?

The hiring freeze includes temporary staff positions. Student positions may be filled as appropriate. During this pandemic, the university is striving to protect regular employees’ jobs as much as possible. To address financial pressures, some temporary staff positions outside of mission critical activities will not be continued.

How will the salary freeze work?

There will be no increases to base salaries effective immediately and through the end of the upcoming budget year. This will include merit increases that would typically occur on Sept. 1 and reclassifications, with exception of those related to faculty and staff promotions that have already been approved, are part of the faculty tenure and promotion process, and are contractual adjustments prescribed by collective bargaining agreements.

There will be no increases to base salary in the FY2021 budget, with the exception of promotions described above. Bargained for employees will receive increases consistent with their contracts. For faculty, exceptions for promotions include those associated with in-process and scheduled promotions of tenure track, research track and clinical faculty to associate or full professor. For staff, exceptions for promotions include promotions that are already in the works or those that are part of a planned “ladder” based on time in position. Any exceptions to this policy will be rare and must be approved by an executive officer.

Will university leaders reduce their salaries?

Chancellor Grasso has volunteered to reduce his salary by ten percent, all of the senior officers and others on the UM-Dearborn leadership team have also volunteered to reduce their salaries by five percent. This reduction is effective May 1 through the end of the calendar year.

How will temporary staff furloughs and temporary reduction in hours work?

Due to the COVID-19 pandemic, U-M is offering two voluntary programs for staff:

  • A temporary furlough program for staff in non-critical operations.
  • A temporary reduction in hours.

In each case, employees would be able to return to their regular positions and hours at the end of the approved period (including any mutually agreed upon extensions). Staff with regular, non-temporary appointments in Ann Arbor, Dearborn, Flint and Michigan Medicine are eligible.

Anyone with questions is encouraged to contact the Office of Human Resources at 313-593-5190 or email HumanResourcesDearborn@umich.edu

 

What are the requirements and benefits of the temporary furlough program?

Furloughs are temporary leaves that do not lead to termination. Staff members are still U-M employees while on furlough and they return to their position on a pre-arranged date. Furloughs can be offered by a unit to employees or furloughs can be requested by individual employees. In both cases, participation is voluntary, and the unit must approve it. Units determine whether to approve requests and areas performing critical operations can opt out of the program.

During the temporary furlough period, the staff member:

  • Does no work for the unit and receives no pay.
  • Remains a university employee.
  • Is eligible to file for unemployment compensation.
  • Does receive continued university benefits.
  • Does continue to receive the university contribution toward their benefit plans (health, dental, long-term disability, life), and the university also will pay the monthly employee contribution for health insurance.
  • Retains accrued vacation and sick time (additional time will not accrue).

Anyone with questions is encouraged to contact the Office of Human Resources at 313-593-5190 or email HumanResourcesDearborn@umich.edu

Additional terms for temporary furloughs or reduction of hours

  • Unemployment: A claim for state unemployment compensation will not be contested by the university unless the employee was offered and declined redeployment to another position. Eligibility for and the amount of unemployment benefits are determined by the state of Michigan. (The current maximum state weekly benefit is $362 and may include an additional weekly supplement of $600 from the Federal CARES Act through July 25, 2020.)
  • Benefits: Upon return from furlough, the accrued employee contribution portions of the dental, life, LTD, legal and vision premiums for the period of absence would be deducted from pay. The employee portion of the health care premium is waived for the period of absence and will not need to be paid upon return. There will be no university contributions to the retirement savings plan during the period of furlough.
  • Job security: The unit will hold a position for the employee to return to at the end of the approved period, including any extensions. If business circumstances change to such an extent to indicate a Reduction-in-Force is warranted, the relevant policy/contract language would apply.
  • Paid time off: The employee’s regular available paid time off balances will be maintained. Emergency COVID-PTO banks will no longer be available to those who take a furlough. The federal Emergency Paid Sick Leave Act (EPSLA) paid time off bank will remain available until program expiration on December 31, 2020.
  • Early recall: If university operations require early recall from voluntary furlough or reduction in hours, a minimum of one-week notice will be provided.
What is happening with campus construction projects?

Construction has been restarted on the ELB project. All other university construction projects are currently being evaluated to determine, if and when they will move forward. 

 

Why can’t the university use its endowment to fully address financial gaps?

Like many personal investments, the university endowment has suffered large but uncertain losses. U-M’s endowment continues to be a needed resource for funding student scholarships on our three campuses and costs that ensure success of programs across the university. It provides essential support to ensure the university delivers on our longstanding commitment as a public university to keep quality education affordable, and hundreds of units rely on the stability it provides through ongoing funding streams.

Over the past 20 years, the university’s long-term investment strategy and spending policies have generated nearly $4.7 billion in endowment distributions to support vital U-M operations.

The university’s endowment is essential to sustaining academic excellence because it provides a guaranteed, never-ending source of income to support student scholarships, professorships, innovative programs, learning opportunities and life-saving research. Donors who contribute to the endowment do so because they want to support the university and positively impact U-M students and academic programs 25, 50 or 100 years from now.

Much of our endowment is dedicated to funds that can be used only for a specific purpose. The university is committed to honoring these agreements with our donors and to maintaining the endowment’s ability to support scholarships, programs and the stability of the university.

 

How will the university approach reopening campus to students and employees?

The health and safety of our students and employees continues to drive our decision making. Our campus is located in Wayne County, the epicenter of the outbreak in Michigan and one of the most affected regions in the nation. When public health parameters indicate an appropriate abatement of infection, in coordination with President Schlissel, university leadership will initiate a reopening of campus. Minimizing risk, we will begin with employees who can return safely within prescribed guidelines. 

The situation is constantly evolving, and university leadership continues to monitor the pandemic. We will keep you updated as the state provides guidance for lifting the stay at home orders.

Has the university’s tuition reimbursement program been suspended?

Effective immediately, we will halt approvals of new requests for support for non-University of Michigan programs that have not yet begun. We will also pause support for those in existing programs until routine tuition support can resume. Units may consider exceptions on a case-by-case basis, for employees that have started a non-University of Michigan program, by applying the following guidelines. Circumstances can include employees that are:

  • Near the end of their program of study (in the final term of completion)
  • In need of a required course as part of their program of study that is only offered on an intermittent basis and would prevent making further progress toward degree by more than one semester
  • Taking a course critical to support their promotion or maintaining job-related licensure or certification within current function

Reimbursement for approved courses that are underway may continue.

Ongoing or newly enrolled students in a University of Michigan degree program will continue to receive support as outlined in the Tuition Support Program SPG with funding provided centrally on the UM-Dearborn campus. The university will periodically review this guidance in conjunction with our ongoing cost-containment measures.

If you have any questions regarding the tuition support program, please contact the HR Consultant assigned to your area for additional assistance.

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