Additional measures to sustain financial continuity
Dear faculty and staff:
Planning for UT Health San Antonio’s financial recovery from the significant losses as a result of the COVID-19 pandemic is a priority for the institution. The university is assessing four primary areas of opportunity to ensure financial strength and allow us to continue our life-saving missions. Those areas are prioritizing strategic investments; avoiding costs where possible; improving processes and gaining efficiencies; and enhancing revenue streams.
There are many measures that must be taken over the next two fiscal years. While difficult, they are necessary to deliver our missions while doing all we can to maintain our workforce, preserve jobs and benefits and, at the same time, limit the unprecedented revenue losses of approximately $65 million this fiscal year.
Cost avoidance measures that have already been put into place this fiscal year include:
- Deferring renovations to buildings and workspaces which will save an estimated $6.3 million;
- Implementing a flexible hiring freeze which is anticipated to save $10.7 million;
- Pausing on compensation increases and incentives which will save $8.3 million;
- Restricting travel and deferring other non-salary costs saving $10.2 million.
These cost-avoidance measures help offset the revenue shortfall; however, they are insufficient to cover financial losses that are expected to linger into Fiscal Year 2021 (9/1/20 to 8/31/21). In the aggregate, we must reduce organizational expenditures by another $10 to $15 million this fiscal year.
To accomplish this, the following measures are proceeding effective immediately:
- Ramp up the clinical practices to capacity using existing and new tools like video visits, phone visits, extended hours, etc., with appropriate precautions to ensure patient safety.
- Increase grant submissions for research. The next NIH deadline is June 5, 2020 and investigators are returning to campus to effectively compete for this funding.
- Reduce personal leave balances. UT Health San Antonio employees with two or more years of service as of June 1, 2020 are strongly encouraged to use at least five days of paid personal leave by July 15, 2020. If/when an employee’s personal leave balance is exhausted prior to taking the 5-day minimum amount, the employee can then use paid vacation leave. Please coordinate with your chair, director or manager to coordinate schedules to ensure this time is taken by July 15.
How does this help our financial situation? While this leave represents paid time off, the use of this leave is a reduction to our institutional expenses. From an accounting perspective, the value of unused leave hours represents a liability to the institution because it must be paid to employees when they separate from UT Health San Antonio. As these unused hours accumulate, the liability increases and causes a corresponding increase to expenses. The use of personal leave and vacation hours allows us to reduce both the associated leave liability and leave expense. Provisions for paid leave have been built into our budget; therefore, implementing the use of this leave improves our margin by reducing expenses. If all employees take 5 days of personal leave prior to July 15, 2020, the University will save over $8 million in expenses this fiscal year. The implementation of this leave plan will be monitored closely and actively to ensure all employees take the necessary personal leave to sufficiently reduce the liability to meet the desired financial target. Reducing this expense will be critical to potentially avoiding additional, more drastic measures including across-the-board pay reductions and reductions in force.
- Eliminate overtime except for when approved by Dean/VP and the Financial Council members based on critical need. Human Resources will be evaluating the use of overtime and will coordinate with impacted departments on effective and flexible ways to reduce this expense.
- Discontinue compensatory (“comp”) time usage and accumulations for exempt employees.
- Reduce/eliminate the use of temporary workers. Human Resources will be evaluating the use of temporary personnel and will coordinate with impacted departments on effective and flexible ways to reduce this expense.
- COVID-19 leave guidance will be adjusted to utilization of Sick Leave (related to illness), Personal Leave, and then Vacation Leave prior to granting Emergency Leave. New Emergency Leave requests will be capped to a maximum of 32 hours. Employees who are unable to work from home should make arrangements with their supervisor to return to campus. Special circumstances should be discussed with your HR Partner.
More detailed information for these measures, including a Q&A, can be found on the Mission Rx site. The Office of Human Resources and your HR Partner will provide additional resources and specific guidance related to the above cost reduction measures for leaders and managers. Questions can be submitted to AskHR@uthscsa.edu or the AskHR phone number at 210-567-UTHR (8847).
We continually and thoughtfully re-evaluate the pace of our financial recovery and will continue to adjust over the coming months. Our timely work with the Enterprise Design for Growth and Effectiveness (EDGE) is especially crucial to take advantage of the many ways, arguably easier and faster, that we can be more efficient and help avoid additional cost-cutting measures.
This is not easy work, but, as our organization has proven time and time again, we are committed to serving our community and making lives better. Thank you for your collaboration and efforts.
Senior Executive Vice President
and Chief Operating Officer