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April 24, 2020

A Message from Lehman College President Daniel Lemons

Dear Lehman Colleagues:

You may have learned that Chancellor Félix Matos Rodríguez sent a memo to all CUNY college presidents this week. In that memo, he outlined CUNY's developing response to the approved New York State budget, as well as the growing state and city revenue shortfalls due to COVID-19. Everyone knows that the entire nation is in an economic free fall at the moment. What we don't know is whether we are attached to a bungee cord and poised for a rapid return to "normal," or whether we will have to laboriously climb back to where we were before COVID-19 hit.

At the beginning of the budget season, New York State faced a $6 billion shortfall due to Medicaid costs. CUNY asked the state for an additional $136 million beyond fiscal year 2019-2020, or FY20, to cover the new Collective Bargaining Agreement (CBA), other mandatory costs, and new programmatic initiatives. We also pushed hard for funding to reduce or eliminate the TAP gap.

We are in a different world now, and the "flat" budget that became law on April 3rd added only $50 million for increased fringe benefit costs in the new CBA and other labor agreements. Coming as it did in the middle of the COVID-19 pandemic, the budget that passed seemed better than we feared. But the budget bill included three dates, April 30, June 30 and December 31, when the state budget director can unilaterally modify the budget, based on actual state revenues. 

The state budget director had recently projected an eight percent reduction in FY21 revenue, but this morning the Governor projected a $13.3 billion revenue drop, which is 14 percent. These are estimates based on the current situation, and do not assume a federal stimulus package that would include payments to states. Governor Cuomo has requested at least $10 billion.

The CUNY Budget Framework

So how does this alter our financial planning at CUNY? While there will be a good deal of unanimity in the way all the CUNY colleges plan for FY21, each college also has its own financial situation that will impact the decisions it is able to make.

Two weeks ago, Chancellor Matos Rodríguez established a Fiscal Scenarios Group to create the most realistic estimates about how the CUNY budget could be impacted by the state's finances. Then, after he spoke with the college presidents, he issued the memo I referred to above. In it, he laid out four immediate actions:

  • CUNY is implementing a freeze on all personnel actions, including all hires and discretionary salary increases. Some exceptions that will be considered include health and safety positions and faculty searches in which an offer has already been made. Such cases will need to be presented to a CUNY Vacancy Review Committee that will be created in the coming days;
  • Per state and city regulations, the University must pause all active campus construction projects, with the exception of those that are COVID-19 related;
  • For the remainder of the fiscal year, colleges should refrain from any new one-time or recurring expenditures, with the exception of those that are related to COVID-19 or distance learning instruction; and,
  • Campuses should not be entering into any new long-term contractual obligations (new or renewals) until further notice and should consult with the Chief Financial Officer's Office for any exceptional situations.

The Lehman Budget Framework

While we work within the CUNY budgeting framework, Lehman is in a unique financial position among the colleges. Due to long-standing financial prudence and recently strong enrollment growth, we had built a substantial fund balance coming into the current fiscal year. For a more in-depth background you can refer to my financial overview last September.

In that communication I explained why even our very healthy fund balance would only keep us in the black for three more years. That projection has changed subsequent to the new CBA. Even without the COVID-19 crisis, we would be dealing with rising mandatory costs which have not been fully funded by the state.

The current fund balance of approximately $12 million does provide some of the cushion now that it was meant to, and gives us more latitude than we would have without it. However, any multi-year financial commitments made now will have to be carefully considered, knowing that we will face a budget shortfall sooner than we had previously projected, possibly as soon as next year. We need to avoid a scenario that sets us up for painful choices next year.

The Federal CARES Act allocated approximately $13.5 million for Lehman College. Half of that is going directly to students according to a set of need-based criteria developed at the CUNY central office. The other half will come to the campus to reimburse the College for COVID-19-related expenses. Those funds will help with, but will not likely cover all of, the costs we have had and will continue to have. In other words, they will not likely help with the overall budget challenge we are facing.

What Specifically Does This Mean Now?

  • There is a hiring freeze in effect. This includes offers already made, which always have a financial contingency clause. We will have our own campus process for evaluating all hiring that is in process, to determine if we are still able to complete them. If we find that we are, we will submit those to the CUNY Vacancy Review Committee for approval.

    I believe that our own campus process is the most important, because we do not want to make any hires now that jeopardize our financial position. The pain that could cause would be much worse than the pain of not being able to make a hire now.

    There has been a rush this week to submit paperwork for hires to Human Resources. All of these personnel actions will be held at HR until we have reached the point of planning where we are confident we know which hires we can follow through with. If you are part of the hiring process, please be sure to inform candidates of the process, which will probably take a few weeks or more to complete.
  • We have passed the deadline for submitting a requisition in this fiscal year, and all Other Than Personal Service (OTPS) accounts have been swept into the College's pool account. With a few exceptions for mandatory costs, only expenses related to COVID-19 and distance education will be encumbered for the remainder of this fiscal year.
  • We will not enter into new long-term contracts other than those absolutely required for purposes of compliance or safety.
  • Some campus construction projects will be allowed to proceed, but beginning new ones will depend upon state, city and CUNY approval.
  • We do not have a budget reduction target at the outset. There are variables that make this impossible at the moment. On April 30, the state budget director will announce his first revenue and budget revision. That will be a strong indication of what lies ahead.
What Will Happen Next?

At Lehman, we began a budget planning process two weeks ago. This week, I established a Cabinet Budget Planning Working Group, consisting of Provost and Senior Vice President Peter Nwosu, Vice President Rene Rotolo, Vice President Dawn Ewing-Morgan, Budget Director Bethania Ortega, and Chief of Staff Gladys Maldoon. This group is meeting multiple times each week and reports at the weekly Cabinet meetings. Its task is to pilot strategies and conversations for the Cabinet, which then are taken up by the Provost's and Dean's Council, the Senate Budget and Long-Range Planning Committee, and the wider campus community.

This coming week we will:

  • Establish the values and guidelines for our budget discussions and decision-making;
  • Establish a timeline for our budget process;
  • Revise our current base budget and worst-case budget scenarios, probably
  • Set up the process for making decisions;
  • Present the current budget scenarios and discuss budget saving ideas with the Senate Budget and Long-Range Planning Committee;
  • Learn on April 30 what the State budget director does with the currently-approved State budget.

In the following weeks we will:

  • Identify places where costs can be reduced in the coming year;
  • Identify where opportunities exist to bolster revenue through maintaining enrollment and other actions;
  • Move ahead with the work already begun on developing the 2020-2025 Strategic Plan;
  • Complete a draft FY21 budget that projects out three years – this will be presented to the College community;
  • Communicate frequently about progress.

We will sustain ourselves through the current budget situation, and emerge with strength afterward, to the degree that we plan early and well, and then execute our plans effectively. We will strive for maximum transparency as we proceed so all members of the campus community are well-informed about what is being considered, and the decisions being made. We will continue to work within an environment of strong and healthy shared governance.

Good News on Fundraising

We have been acutely aware of the extremely difficult circumstances of many students and part-time staff. Among faculty and staff, we have launched a  Lehman Cares campaign to raise money to help. It has been amazingly successful, raising over $40,000 in just a few weeks. Simultaneously, we have also launched a $1 million Campaign for Lehman College, for the food bank, micro-grants, scholarships, emergencies and general operating funds for the coming year. This week we received word of a grant of $150,000 in direct student aid as a part of this campaign, which has raised over $300,000 so far. We have also reached out to our elected officials and local and regional organizations for support of our students and staff.

Obviously, we are entering an extremely challenging period of time. In my 30 years in CUNY, having experienced three major financial downturns, this is without a doubt the worst because of the risk the COVID-19 pandemic presents to our safety and health. Yet, I have complete confidence in our leadership team at Lehman, from the senior administration to the department chairs and unit directors. I also have confidence in our faculty and staff and their strong commitment to our mission and the students we serve.

I am confident that we will find our way from now to the post COVID-19 and post-financial downturn future, and that path will take us to a place of strength. Through this we have to stay together as a leading CUNY college community and be "CUNY Strong," "Lehman Strong", and "New York Tough."


Daniel Lemons

Previous messages from President Lemons can be found here.