By Stephen Neukam
As the effects of the coronavirus (COVID-19) on the university’s pocketbook become more clear, Rider has started to reveal the beginning phases of a financial response to the pandemic. However, a larger response that may have a far-reaching impact across the university has yet to be implemented.
Rider’s administration followed suit of many schools around the country, as university President Gregory Dell’Omo announced on April 27 that he would take a 25% salary reduction for six months, beginning May 1. His senior leadership team, which includes deans and his cabinet officers, will take a 10% salary reduction during the same period.
Further details, however, are more ominous. In written statements to The Rider News, both Dell’Omo and Chief Financial Officer Jim Hartman previewed briefly what might be necessary steps for the university to take.
Dell’Omo and Hartman both declined repeated interview requests and instead their written statements were issued through Vice President for University Marketing and Communication Kristine Brown.
While Rider has committed to paying staff through June 30, Hartman said, “We have a fiscal responsibility to evaluate all options necessary to strengthen Rider’s financial position, and are currently assessing cost-saving measures in July and August to address COVID-19 related costs and lost revenues this fiscal year into next year.”
The university has also instituted a general non-faculty hiring freeze, Dell’Omo announced.
COVID-19 has disrupted a university financial model which Hartman said was “fragile” before the pandemic and is now forcing the administration to make “difficult decisions to ensure a sustainable future.”
Rider has been faced with declining enrollments, continued net revenue decline and consistent budget deficits, which precipitated the bond credit rating business Moody’s to downgrade the university’s revenue bonds to junk status earlier this month.
COVID-19 is expected to exacerbate this problem. According to Dell’Omo, deposits for next year’s freshman class are “slightly behind” where they were last year, although he did not give a specific amount of deposits. The university has already anticipated that the cost of scholarships it will give in 2021 will be $85 million, up from $78 million this year. If enrollment in the freshman class dips due to the virus, it may cause additional damage to revenue.
The administration is projecting a $12 million deficit for the current fiscal year, with most of the increase attributable to room and board reimbursements, according to Brown.
Associate Professor in the Sociology and Criminology Department and Contract Administrator and Chief Grievance Officer for Rider’s American Association of University Professors Chapter Jeffery Halpern said that the room and board refunds are the biggest immediate challenge Rider will face.
“I don’t know exactly how much [the refund will be] but some of it will have to be absorbed by the school and I expect a large portion of it will be absorbed by the [food vendor] providers,” said Halpern.
Where Rider has strayed from some other universities in its response to the coronavirus is its decision to continue forward with capital projects. The university has made millions of dollars worth of investments into infrastructure on its Lawrenceville campus. Some of the projects, including ongoing work on Gill Chapel, Omega House and plans for a large extension to the Fine Arts Center, are crucial to the school’s plan to consolidate Westminster Choir College (WCC) from Princeton to Lawrenceville.
While the administration has said these projects will continue, the virus has thrown funding for the Fine Arts extension into question. According to Brown, the bond issue that was approved by the Board of Trustees in March, which was intended to fund much of the WCC transition and other projects, has been put on hold because of the virus. To fund the initial phase of the transition, the administration is attempting to redistribute some of the resources intended to finance the renovation and addition to the Science and Technology Center.
Hartman made clear in his written statement that this is a fluid situation, saying, “as this pandemic ebbs and flows on a daily basis, we will regularly assess their progress and make decisions accordingly.”
Halpern said that while it is important to grow the WCC program on the Lawrenceville campus, it would be irresponsible to risk the much-needed work on the Science and Technology Center to expedite the consolidation. Instead, he said the administration should consider putting a moratorium on the capital projects and utilize the Princeton campus for the fall semester.
“We have all the facilities in place on the Princeton campus,” said Halpern. “You could call a moratorium, say ‘we’re going to put it off for a year and see where we’re at.’”
The impact of COVID-19 will be softened a bit by the $3.64 million Rider will receive from the federal Coronavirus Aid, Relief and Economic Security Act. Hartman said a plan to utilize these funds is being finalized.
Rider revealed on April 28 its plan for room and board refunds and credits. Students who received scholarship aid for room and board from the university will not be eligible for the refund. The credit can be applied to future university costs or sent as a check in the mail or received through an eRefund account.
What the university plans to do for the fall semester has yet to be revealed. Halpern said that he wished there was more faculty involvement and input in the decisions going forward.
Professor of Organizational Behavior and Management Emeritus Gerald Klein said that Rider should make a decision soon about the fall semester and advised that the school should continue remote instruction.
“The university should probably prepare to operate online in the fall,” said Klein. “With the possibility of, if things develop well, that students could be brought back on campus at some point in the fall.”
As the effects of the virus play out, in his written statement to The Rider News Dell’Omo said he understands the situations everyone has been placed in are tough. However, he said the sacrifices made today are essential to returning to a normal routine.
“I am confident that we will return to our pre-pandemic lives at some point and all of the special qualities our students and employees love about Rider will be enjoyed again,” said Dell’Omo. “We will all have to adapt to a yet undefined “new normal,” but students can be assured when the time is right, Rider will be here, just as it has for the past 155 years, ready to provide the transformative in-and-out of classroom experiences we are all committed to.”
The deans of the Norm Brodsky College of Business, the College of Liberal Arts and Sciences and the College of Education and Human Services were contacted for comment for this article, but the university said the statements from Brown would serve as its response and the deans would not be answering interview questions.