As the COVID-19 crisis continues to affect businesses across the nation, St. Olaf finds itself among hundreds of other colleges and universities forced to restructure their finances for the remainder of the current academic year.
The College has returned $7.2 million in room and board refund credits to students who have shifted off campus since St. Olaf moved to remote learning following the extended spring break in late March. According to Chief Financial Officer (CFO) Jan Hanson, this $7.2 million represents lost revenue for the College.
St. Olaf has worked to offset this loss through considerable cost savings and generating other sources of revenue.
“The College is experiencing a reduction in expenditures due to sheltering in place, working remotely and the absence of students and staff on campus,” Hanson wrote in an email to the Messenger. “This reduction in expenditures will result in budget savings across the campus.”
One source of this reduction is utility cost for campus buildings, which currently sit unoccupied and unused. Hanson said that the College is seeing savings of between 20 and 30 percent on utility costs alone.
Another source of savings is fewer costs incurred by departments or organizations across campus, such as travel costs, of which there were none in April due to the ongoing statewide lockdown.
The College received a little more than $1 million from the federal Coronavirus Aid, Relief and Economic Security (CARES) Act, signed into law by President Trump on March 27, Hanson said. This was the first wave of the act, and the College hopes to receive more funding from the second phase that it will use to offset revenue losses.
Funding provided from the first phase will be distributed to students in the form of financial aid grants as mandated by U.S. Department of Education guidelines, information provided to students in an email from Hanson on May 5.
In terms of broader restructuring, the College has paused a number of capital improvement projects to preserve cash, including the recently announced Ole Avenue housing project. According to Hanson, only those projects that have health and safety implications or those whose materials have already been purchased will be completed.
“We’re looking at all our operations and identifying options in which to preserve cash should we need it later to offset unknown revenue losses or unanticipated expenditures,” Hanson wrote.
St. Olaf’s Student Government Association (SGA) has joined the College in restructuring its finances. According to SGA CFO George Bongart ’20, SGA’s budget has been fully reallocated to better represent the current situation.
“With large, expensive events like the spring concert cancelled, we knew that we would have excess money at the end of the year,” Bongart wrote in an email to the Messenger.
SGA created two larger budgets, one designated for programming and the other for funding, out of funds previously allocated for individual branches. Seven SGA branches were divided into these two categories, with Student Organizations Committee (SOC), Diversity Initiatives Support Committee (DISC) and Volunteer Network (VN) operating from the funding budget, and Student Activities Committee (SAC), After Dark Committee (ADC), Political Awareness Committee (PAC) and Music Entertainment Committee (MEC) using the programming budget.
Also opting to provide more money for certain special accounts, such as the Pause Surplus and Capital Improvements, SGA donated a significant amount of its remaining funds to St. Olaf to help the College meet its basic financial needs.
“As students, it is our duty to give back to the amazing faculty and staff that have supported us through our time at Olaf,” Bongart wrote in the email. “We have worked with the administration to figure out their needs and do the best we can to help.”
The College plans to use these donated funds to aid in offsetting considerable revenue losses.
“And I must give special recognition to the SGA leadership for their donation of remaining unused SGA funds back to the College to help defray costs,” Hanson wrote.