Ohio Wesleyan University will make sweeping cuts totaling $10 million annually to avoid major deficits next fiscal year, president Rock Jones announced May 18.
The cuts include the elimination of 44 nonteaching positions, the reduction of regular retirement contributions from 10% to 8.7%, and elimination of the university's 1.5% matching contributions.
OWU already had predicted a $7.5 million deficit for next school year and was reviewing ways to cut costs even before the COVID-19 coronavirus pandemic. Construction debt accounted for some of deficit, but the university also faced "a shrinking population of prospective students, increasing competition and families less able to afford the rising cost of higher education," Jones said in an email to employees May 18.
"Despite increasing tuition every year, our revenue per student was declining," he said.
Then, COVID-19 made the school's financial situation even worse, boosting the projected operating deficit to as high as $12 million for the 2020-21 academic year.
"These are difficult actions. Painful, yes, but necessary," Jones said in his email, calling May 18 his most difficult day in his 12 years at Ohio Wesleyan. "Nevertheless, I cannot shy away from decisions necessary to preserve the mission of Ohio Wesleyan for the generations that follow us."
In addition to staff reductions and changes to retirement contributions, the university plans to:
* Discontinue supplemental funding for OWU's Early Childhood Center, Perkins Observatory and Richard M. Ross Art Museum, requiring all to create self-sustaining budgets.
* Offer an early retirement program for faculty. Details were not immediately available.
* Eliminate the varsity rowing program and reduce other expenses in the athletics program.
* Cancel alumni events through the end of 2020.
* Cease publication of OWU Magazine.
* Return to a fee-based Student Health Center with insurance billings.
* Eliminate OWU's fundraising Phonathon program.
* Reduce the nonacademic travel budget by $150,000 and eliminate the university's cellphone allowance.
* Eliminate faculty and staff events such as the welcome-back picnic in August, holiday party in December, staff recognition lunch in January and Quarter Century Club in April.
OWU's board of trustees approved the changes earlier in May. The decisions came after "several months of exhaustive research, intense analysis and heartfelt discussion and debate among the trustees, faculty and staff," board chairman John Milligan said in a written statement.
"As trustees, we must cherish the history of Ohio Wesleyan, we understand the present operations and programs of the University, and most important, we try to rise high to envision the future and work with the University leadership to chart the best path forward," Milligan said. "As we know, this is a dynamic world, and Ohio Wesleyan must be a dynamic and evolving institution, in good times and in bad."
Jones cautioned that the announced cuts are not a complete list and said other university leaders would share actions that will impact employees and their individual departments.
He also said the university will look for new revenue opportunities.
"While these actions focus almost exclusively on reductions, it is equally paramount that we identify areas where investments will create new opportunities for revenue and new sources of strength for our beloved university," he said.
"I feel confident that this team has the spirit, the creativity and the talent to carry Ohio Wesleyan through these challenges and forward to a better future."