Faculty Council Meeting: UNC could see a revenue loss of $300 million

UNC's Faculty Council met virtually on Friday to discuss updates regarding COVID-19, UNC’s budget and the spring semester outlook.

Chairperson of the faculty Mimi Chapman began the meeting by remembering the lives of two UNC faculty members who passed away in recent months: Randall Kenan and Jenny Tone-Pah-Hote.

Chancellor Kevin Guskiewicz then presented Ada Adimora, a professor of medicine and public health and national leader in HIV prevention and care, with the Thomas Jefferson Award. He also recognized the recipients of the Hettleman Prize: Professors Mohit Bansal, Andrea Bohlman, Angela Smith and William Sturkey.

COVID-19 Update

Provost Bob Blouin provided a COVID-19 update in which he discussed de-densification efforts, testing plans and changes to UNC’s COVID-19 dashboard.

Blouin said UNC’s top priority of reducing student density on-campus has been achieved, with less than 1,500 students now living in residence halls.

UNC’s COVID-19 test positivity rate has also decreased and aligns with that of the Orange County Health Department, with around 5 percent to 7 percent positive, Blouin said.

He said students still living on-campus are encouraged to get tested for COVID-19 weekly and emphasized the importance of those in the UNC community getting a flu vaccine.

As of Friday, Blouin said only one student remained in campus quarantine and one student remained in campus isolation, and they would be vacating soon. He said UNC’s COVID-19 dashboard will now only report tests administered by UNC in its positivity rating metric.

“If a large number of students have their tests done off campus and they reveal that they are positive, it is not against a backdrop of those tests that were performed at the same time that may have been negative,” Blouin said. “Upon the advice of our public health experts, we have gone more in line with their recommendations and what other institutions have been doing.”

UNC budget update

Nathan Knuffman, interim vice chancellor for finance and operations, and Becci Menghini, vice chancellor for human resources and equal opportunity and compliance, gave the faculty committee an overview of UNC’s budget forecast.

Knuffman said COVID-19 has exacerbated the structural pressure on the University’s budget with an estimated $54 million in revenue losses this fall to many auxiliary units, such as housing, dining, parking and Campus Health, as well as losses in patient services and athletics.

With these impacts, structural issues and potential spring 2021 losses, he said UNC could see a financial loss of $300 million this fiscal year — about 8 percent of current revenues.

Knuffman said the financial impacts of COVID-19 are concentrated on UNC’s auxiliaries and patient services, but tuition revenue has not been impacted and state appropriations have not been reduced.

“The fund source location and nature of these impacts will inform how management actions take shape moving forward,” Knuffman said.

Menghini said some tools that are available to solve a budget deficit, like temporary base adjustments, furloughs and fund source swaps, can help in the short term but do not provide long-term recurring help.

Furloughs have only taken place in athletics and at the Morehead Planetarium, and the University would only be allowed to do broad-based furloughs across all employee types if enrollment drops dramatically or state appropriations decline, she said.

“Should we determine that personnel actions are needed, we will most certainly work to distribute the effort such that those with higher earnings assume a larger share of the burden,” Menghini said.

Spring 2021 outlook

Chancellor Kevin Guskiewicz said that, to aid with planning for spring 2021, the University is creating a Campus and Community Advisory Committee, which will include students, faculty, staff and Chapel Hill community members. This group will provide perspectives and recommendations based on feedback they receive from their various constituencies, he said.

“I’m optimistic that we’re going to get to a good place as we plan for the spring semester,” Guskiewicz said. “I’m committed to hearing the voices of our campus community, that diverse group that we’re going to work with, to help get us there.” 

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