Dartmouth College finances waylaid by virus; school still eyeing layoffs

  • Giorgio Alberti, of West Lebanon, shows a friend on his smartphone the Hopkins Center and the Hood Museum of Art in Hanover on Tuesday. Alberti is a lecturer in French and Italian at Dartmouth College. The campus is closed due to the COVID-19 pandemic, and administrators say they will decide next month whether to bring students back in the fall. vally news — Jennifer Hauck

  • Usually bustling with students on a warm spring day, the Dartmouth College campus sat mostly empty on Tuesday. valley news — Jennifer Hauck

  • Many buildings on the Dartmouth College campus remain closed due to the coronavirus pandemic on Tuesday, May 5, 2020 in Hanover, N.H. (Valley News - Jennifer Hauck) Copyright Valley News. May not be reprinted or used online without permission. Send requests to permission@vnews.com. Jennifer Hauck

  • Helble

  • Mills

  • Wagner

Valley News
Published: 5/7/2020 6:06:47 PM
Modified: 5/7/2020 6:06:36 PM

HANOVER — Dartmouth College officials declined Wednesday to rule out layoffs and furloughs for some of its 3,900 employees, including non-tenured faculty, as the institution faces millions of dollars in projected losses over its spring and summer terms.

Layoffs are a “part of a tool kit” that administrators need access to, but are seen as a last resort to stabilize the college’s financial situation past June 30, Executive Vice President Rick Mills said during a meeting with editors and reporters at the Valley News, the Monitor’s sister paper.

“They are a tool that we deploy later and with more reluctance than most of these other tools that we’re talking about,” he said during the meeting, which was held via teleconferencing software. “But there are no current plans, and a lot of that will depend on what the data shows us about our ability to resume normal operations or quasi-normal operations and how soon that would happen.”

Dartmouth announced in March the closing of its Hanover campus and cancellation of in-person classes for its spring term to protect students and employees from COVID-19.

Students and professors transitioned to online learning, and in April, the college said classrooms and dormitories would remain closed through the summer.

The closing could result in a roughly $76 million drop in revenue for the spring term, or about 7% of the school’s $1.1 billion fiscal year operating budget.

About $53 million of those losses come from operations — such as tuition, room and board fees, and other revenue, according to Michael Wagner, the school’s chief financial officer.

He said the remaining $23 million can be attributed to investment losses outside the endowment portfolio.

The school also expects an additional $10 million in losses for the summer term, when only the sophomore class is typically on campus.

Wagner did not provide financial projections for the fall term, saying those will depend on whether the college plans to bring students back to campus.

Administrators will decide by June 29 whether some or all students would return for the fall term.

“We really need the next seven weeks to think through all the different options,” Provost Joseph Helble said, adding that working groups are trying to determine the number of students Dartmouth can “comfortably accommodate and house on campus” within social distancing guidelines.

Once the college has that figure, it can decide when and in what order students can return, he said.

To help make up for the financial losses, the college is tapping a $50 million reserve fund established by college President Phil Hanlon in 2013 and intended to see the school through shortfalls, according to Wagner.

Dartmouth also instituted a staff hiring freeze, suspended merit pay increases for a year, and reduced spending on consultants, travel and other expenses.

Officials have previously said that Dartmouth’s roughly $5.7 billion endowment cannot be used to offset the losses. That’s because much of the money is restricted in its use by donors.

Helble, in an April “community conversation” also defended preserving the endowment for future generations.

“If those decisions had not been made to preserve the endowment, even in past moments of financial crisis, we would have fewer students, we would have fewer jobs, we would have less financial aid available, we would have fewer faculty,” he said.

Aside from layoffs, the college also could consider offering early retirements as a way to contain costs, although Mills cast doubt on whether such a program would be worthwhile.

“Past early retirement programs, depending on who you talk to, have had varied success in who you lose and whether you end up actually accomplishing savings,” he said.

Meanwhile, several of the school’s capital projects are either on hold or delayed because of the pandemic.

The Dartmouth Green Energy Project — a $200 million effort to switch from steam heat to a hot-water heating system and to replace the 121-year-old oil-burning power plant in downtown Hanover — likely will take two to three years longer than expected, Mills said.

The college had hoped to obtain half of its energy from renewable sources by 2025 and 100% by 2050.

And the school’s $200 million expansion project on the west side of campus has seen some progress slowed because of travel restrictions in Vermont, he added.

The college, which is a major property owner throughout the Upper Valley, also is attempting to prop up the Hanover business district by agreeing to forgive April and May base rents to its commercial tenants.

Officials have said the move amounts to $100,000 per month in waived rent.

Mills said the college cares about downtown’s vibrancy for its staff and students.

“We’re also practical landlords and it doesn’t do too much good to force your tenants out of business by insisting that they pay in a time they can’t be open,” he added.

Officials defended the college’s decision to continue charging full tuition, which amounts to $57,796 for students who do not receive financial aid.

That amount, they said, does not fully cover the cost of faculty and “front-line staff.”

Dartmouth has given refunds of spring and summer room and board fees, which total more than $16,000 for an academic year.

Helble acknowledged that the college experience is different, but said students are still receiving a complete education.

“You’re getting the same access to the same faculty, the same content, the same people you engage in and experience, and tuition isn’t covering the cost of providing that,” he said.

While the projected financial losses are difficult, Dartmouth is better off than some colleges and universities, Mills said.

For instance, the Vermont State Colleges last month floated a plan to lay off 500 employees and close two campuses — along with Vermont Technical College’s Randolph campus — after projections showed a $10 million deficit this fiscal year and as much as $12 million next year.

Those plans were ultimately dropped after being denounced by state leaders and alumni. But Vermont, and other college systems, continue to report revenue shortfalls from the pandemic.

“We’re facing some pretty profound challenges. At the same time, we’re acutely aware of where we sit in the world of higher education,” Mills said. “We are not an institution that is questioning whether we will be able to open in the fall.”

Tim Camerato can be reached at tcamerato@vnews.com or 603-727-3223.
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