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Bates College has already taken a financial hit of up to $2 million because of coronavirus and, despite heavy cost-cutting, more economic pain is likely, the Sun Journal reports.
President Clayton Spencer anticipates more to come as Bates officials factor in up to $1 million in lost revenue from summer rentals, while higher-than-anticipated financial aid expenses could require $6 million extra because many families are getting clobbered by the economic shutdown.
In response to the latest problems, Spencer said she is freezing salaries and hiring, suspending retirement account contributions, reevaluating capital projects and slicing her own pay by 20 percent. Bates has two committees studying the financial impact in more depth to determine how to handle the fall semester. They are due to issue recommendations in June. Furloughs are possible.
“By now, we have all come to understand that one of the only constants in the current situation is uncertainty,” Spencer said. “This is a defining reality as we turn our attention to planning for the fall semester.”
Spencer said Bates has spent about $4 million “to cover unexpected expenses, including refunds for room and board, travel assistance for our highest-need students and work-study supplements for aided students.”
But some of those costs have been offset by savings in other areas, including the dining hall and athletics. In addition, Spencer said, the college is getting about $950,000 in federal relief distributed to colleges and universities across the country, the Sun Journal reports.
All told, the net losses come to between $1.5 and $2 million, she said. That does not factor in the losses to the college’s endowment, which have been hefty given the decline in market value of many investments. It is likely to drain the Lewiston college of millions more in the months ahead, despite the school’s efforts to control costs — including pay and hiring freezes.
To try to preserve jobs and income, she said, the college is slicing the salary of senior staff through a 10 percent voluntary reduction through the end of the year. It is also freezing staff salaries through the 2021 fiscal year, except for increases associated with promotions.
Spencer said despite faculty contracts in February that promised salary increases, Bates is also asking to freeze faculty pay through 2021 as a matter of equity. The college is also suspending its contributions to retirement accounts, the Sun Journal reports.
Spencer said it is “our fervent hope” that students will be able to return as normal in the fall and “live and learn in a residential community” that is “the essence of our educational model.”
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