Estimated Financial Impactof COVID-19 for the UW System

InstitutionsSpecial Board of Regents Meeting May 7, 2020

Sean P. Nelson, Vice President for Finance

2

COVID-19 Systemwide Response CoordinationGroup Members Frequency

Senior Leadership President Cross, UWSA Senior Staff, Chancellors 3-5 times per week

State Emergency Operations Center UWSA, Governor’s Office, State Agencies Daily

UWSA Emergency Operations Center and “Plan Ahead” Team

UWSA, UW Institutions, Public Health Affiliates 2-3 times per week

Federal Outreach and Response UWSA, UW Institutions Periodically

Finance Response Team UWSA, UW Institutions Periodically

Emergency Operations Centers All 13 UW Institutions Periodically

CBOs, Controllers, Budget Officers, Provosts, Student Affairs Officers, Facility Directors, Public Information Officers, Legislative Liaisons, Chief Human Resource Officers, General Counsel, Governance

UWSA, UW Institutions Periodically

Ongoing activities since early to mid-March

3

Key COVID-19 Decisions To Date

UWSA Emergency Operations Center (EOC) Activated on 1/22/20

January/February March April

4

Key COVID-19 Decisions To Date

UWSA Emergency Operations Center (EOC) Activated on 1/22/20

January/February March

Governor Evers issues “Safer at Home” Order on 3/24/20

Federal CARES Act Funding signed on 3/27/20

April

Systemwide Decision on No In-person Commencement

Systemwide Decision on Pro-rated Refunds for Housing and Dining

Transition to Alternative Delivery of Instruction and Remote Workforce

5

Key COVID-19 Decisions To Date

UWSA Emergency Operations Center (EOC) Activated on 1/22/20

January/February March

Governor Evers issues “Safer at Home” Order on 3/24/20

Federal CARES Act Funding signed on 3/27/20

April

Systemwide Decision on No In-person Commencement

Systemwide Decision on Pro-rated Refunds for Housing and Dining

Transition to Alternative Delivery of Instruction and Remote Workforce

Furlough Guidelines established for UW System

Board of Regents Approve Interim Policy Delegation

Department of Administration requirement of FY20 5% lapse

6

Financial Impact of COVID-19 for the University of Wisconsin System

7

Estimated Financial Loss for the UW System through Summer Semester Data collected through May 1, 2020

Net Amount of Refunds for Housing and Dining for the UW System for the Spring Semester: ≈ $62.3M

8

Estimated Financial Loss for the UW System through Summer Semester Data collected through May 1, 2020

Approximately $156M in revenue loss from housing, dining, and other campus-related revenue sources through the summer semester An estimated $94M at UW-Madison, or

approximately 60%

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Estimated Financial Loss for the UW System through Summer Semester Data collected through May 1, 2020

UW Institutions incurred out-of-pocket expenses for additional technology, income continuation for students, travel abroad repatriation, deep cleaning of facilities, PPE, overtime, online test proctoring, etc.

10

Estimated Financial Loss for the UW System through Summer Semester Data collected through May 1, 2020

This lapse in funding for the UW System in FY20 represents 65% of the total reduction for the state, or $45.8M of the $70M total cut for all state agencies

11

Estimated Financial Loss for the UW System through Summer Semester Data collected through May 1, 2020

Approximately $212.3M in revenue loss and additional expenses for the UW System through the summer semester

12

A Closer Look at Revenue Loss (excluding UW-Madison)

Housing32%

Dining13%Parking

9%

Other12%

State Reduction29%

Other includes: Summer Tuition, Camps/Clinics/Conferences,

Grants, Research, Athletics, etc.

Estimated Revenue Loss through Summer 2020: $95.7M

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A Closer Look at Revenue Loss: UW-Madison Estimated loss for UW-Madison through Summer 2020: $118M

19%

24%15%

10%

8%

9%

8%5%

Parking

Other Auxiliary*

Endowment/Gifts

State Appropriation

Dining

Research

Housing

Athletics

Summer Classes

Additional Expenses

* Other Auxiliary includes Memorial Union and Conference Services

14%

6%

CARES Act Funding for Higher Education

Education Stabilization

Appropriation

[$30.75 billion]

Governor’s Education Relief Fund

[$2.95 billion]

Both Higher Education and K-12

Higher Education Emergency Relief

Fund

[$14.24 billion]

Elementary & Secondary Education

Emergency Relief Fund

[$13.5 billion]

Emergency Grants to Students

$47M

Direct Aid to Institutions

$48.7M

The $2 Trillion Coronavirus

Aid, Relief, & Economic

Security (CARES) Act signed

on March 27, 2020

The UW System will receive a total

of $95.7M in Federal Funding

15

Estimated Financial Loss for the UW System through Summer Semester Data collected through May 1, 2020

An estimated $163.6M exposure to the UW System through the Summer Semester before expense reductions and cost savings

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Estimated Financial Loss for the UW System through Summer Semester Data collected through May 1, 2020

Hiring Controls, Furloughs, Layoffs, and other salary savings

Travel

Utilities

Renegotiated Contracts

Spending Freeze

Reduced Costs for Summer Programs, Special Events, Cancellations

Debt Refinancing (through Department of Administration)

Deferral of Capital Projects Financed with Cash, or Shift to Borrowing

Estimated Expense Reductions and Cost Savings: ≈ $65M

17

Estimated Financial Loss for the UW System through Summer Semester Data collected through May 1, 2020

Estimated Net Financial Loss for the UW System through the Summer Semester: $98.6M

18

Estimated Financial Loss for the UW System through Summer Semester Data collected through May 1, 2020

All UW institutions remain open “Plan Ahead” Team assembled with membership across disciplines,

including public health affiliates, to plan for scenarios for students on campus and the delivery of Fall instruction

UWSA and Institutions are being vigilant and proactive in monitoring cash flow and available reserves

Awaiting Information from State on FY21 revenue outlook

FY21 Annual Budget will be presented to the Board of Regents on June 4th. Additional information will also be shared regarding FY20

Looking Ahead