BACKGROUND ON THE VOLUNTARY SEVERANCE PROGRAM

The voluntary severance program was offered to faculty and staff members who were both over 55 years of age and had served at least 10 continuous years at the university.

The Board of Trustees set monetary caps for each category of eligible applicants: $4,642,200 for tenured faculty; $180,600 for extraordinary faculty; and $1,414,00 for full time staff.

An email sent to faculty and staff on Oct. 18, 2013 stated that participating tenured faculty members would receive a lump sum payment equal to 1.5 times their base salary. Non-tenured faculty and staff members would receive lump sum payments equal to 1 time their regular salary, the email said.

The informational package for the severance program sent to eligible faculty and staff members stated that once the monetary caps were reached, no further participants would be accepted, no matter if they elected into the program during the election period.

Faculty members accepted into the program were given the option to sever employment on either Jan. 2, 2014 or Aug. 1, 2014. Depending on the date of the severance, health coverage would last until Jan. 31, 2014 and Aug. 31, 2014 respectively.

The informational package also stated that participants would be eligible for Retiree Life Insurance, along with “retention of your Loyola email address, library privileges, bookstore discount, use of sports complex, complimentary parking permit, and tuition remission (excluding dependents, unless ordinary Faculty with Emeritus status).” Dental and vision coverage was also available.

The university’s $7.5 million budget deficit has been reduced to $5.1 million after the implementation of a voluntary severance program, university president the Rev. Kevin Wildes, S.J., announced on Friday, Jan. 10.

After facing a budget deficit caused by an enrollment shortfall for the 2013-2014 academic year, the university constructed a two-phase plan that would ostensibly close the monetary gap.

The severance program was the first of the plan’s two phases.

PROGRAM’S PROJECTED RESULTS

Wildes said at the President’s Convocation for Faculty and Staff on Friday, Jan. 10 that when first considering the voluntary severance plan last summer, he wanted to “protect as many positions as possible.”

Wildes officially announced the university’s intent to implement the severance program in a Friday, Oct. 18 email to the faculty and staff.

In the email, Wildes said that the program’s main initiatives were “to facilitate the transition for long-serving employees who may desire to retire from the University; and to provide an opportunity for the University to realize the budgetary savings through position restructuring or modification, or possibly through position elimination.”

Jay Calamia, vice president of finance and administration, spoke to The Maroon for the Friday, Oct. 25, 2013 issue and said that the program was expected to reduce the deficit by $1.4 million, which would bring the budget deficit down to a projected $6.6 million.

PRELIMINARY REACTIONS

Wildes said that the program seemed like a fair way to address the deficit while keeping the integrity of the faculty and staff in mind.

“I thought it was the right way to go and a humane way to go,” he said. “It seemed right to give people the option.”

Maria Calzada, interim dean of the College of Humanities and Natural Sciences, was not eligible for and did not participate in the program, but said that she “was gratified that the institution was able to offer this generous voluntary program to help us address the $7.5 million deficit. This represented a win-win for both the participants and the institution.”

English professor Andrew MacDonald said that while he was grateful for the buyout of 1.5 year’s salary and the opportunity to “leave gracefully,” he thought it unnecessary that the structure of the buyout funds should result in great tax losses.

“I don’t understand why the lump sum couldn’t be sheltered from taxes,” MacDonald said. “This would cost Loyola little to nothing but would mean a great deal to the faculty member, who would avoid being pushed into a higher tax bracket.”

ELECTION PERIOD

The voluntary severance program’s election period was a time “for eligible employees to submit intention to elect into the program,” Meredith Hartley, director of public affairs, said.

In an email sent to Loyola faculty and staff on Friday, Oct. 18, 2013, Wildes announced the university’s intent to carry out the program on a first-come, first-served basis. He said that once the election period began, eligible faculty and staff would be admitted into the program until the monetary caps set for each category were reached.

Wildes said that the program followed the first-come, first-served procedure according to federal law.

In light of the announcement of the first-come, first-served process of acceptance into the program, interested and eligible faculty and staff members began arriving in the corridors of Mercy Hall as early as Friday, Dec. 13, 2013, even though the election period did not begin until the following Monday.

The situation in Mercy is one that many, including Wildes, considered avoidable, especially since all who elected into the program were ultimately accepted.

“As it turns out, they didn’t have to be there,” Wildes said. “A lot of times people just anticipate whatever. I wish we could’ve avoided it, but human nature is human nature.”

Wildes said that if eligible candidates elected into the program even after the monetary caps were reached, he was prepared to request permission from the Board of Trustees to include all who elected into the program.

Despite such comments that the overnight stay was not necessary, some faculty and staff members hoping to participate in the program felt that they had no other choice but to ensure their inclusion.

“The public relations line after the fact was, ‘We never told people to camp out,’ but we were told in speech and in writing that the program was ‘first come first serve.’ No one documented who came first, second, etc.,” MacDonald said. “So no one was told to camp out; they just had no other option.”

Robert Dewell, professor of languages and cultures, agreed that the situation in Mercy Hall should not have happened.

“The absurd ‘first come first served’ scene at Mercy could have and should have been avoided.”

Even though he questioned the “legal integrity” of the line formed in Mercy Hall, MacDonald said that he was glad that some efforts were made to ease the discomfort of those stationed in the hallway.

“Everyone there was enormously appreciative that the Provost, the Dean of Humanities, Melanie McKay, the Dean of the Law School and others did show up, with food and blankets, but these high level administrators were completely frustrated in their attempts to end the camping,” MacDonald said.

IMPLEMENTATION OF THE PLAN

After the election period closed on Wednesday, Dec. 18, 2013, the department of human resources took “about a week” to make offers to those who elected into the program.

Following these offers was a 45-day period in which faculty and staff members were instructed to carefully consider whether or not they wanted to participate in the program, Ross Matthews s
aid.

As outlined in the informational package director of human resources Ross Matthews sent to eligible candidates on Oct. 28, 2013, the university advised those who received offers to consult with financial advisers and attorneys before making their final decisions.

20 faculty members and 26 staff members elected into the program during the election period, Matthews said in an email.

All who elected to participate accepted their offers by the end of the 45-day consideration period, he said.

“All were accepted to participate in the program,” Matthews said. “No one was excluded.”

Meredith Hartley, director of public affairs, said that no money had to be moved between caps; no category reached 100 percent of its respective allocated funds.

“Staff represented 95 percent of the cap,” she said, “and tenured faculty represented 45 percent of the cap.”

Matthews said that 26 staff and 3 faculty members departed from the university on Jan. 2, 2014, while the remaining 17 faculty members who elected into the program will sever employment with the university on August 1.

The names of the participants in the severance program are being withheld in order to respect the privacy of those involved, Wildes said.

Lump sum payments will be made to participants via direct deposit on Jan. 17 or Aug. 15 depending on the decided date of resignation, according to the informational package.

EFFECTS ON THE UNIVERSITY

Although the full effects of the program are not known, there is much speculation about how the university will be affected by the loss of the faculty and staff members deciding to sever employment.

“We are in uncharted waters,” MacDonald said in an email. “The loss of large numbers of faculty [three from Foreign Languages] will mean a loss of institutional memory, all the knowledge about even trivial procedure which is not written down, or if it is, is very difficult to find. The effects of lost institutional memory are not easily seen since they involve the absence of something.”

Eileen Doll, professor of languages and cultures, said that adjusting to the changes within the departments that were effected by the program may take some time.

“We will have some tough times ahead as we adjust to the new landscape after so many retirements, especially among the staff,” Doll said.

Philosophy professor John Clark, who elected into the program and will depart in August, shared in this worry for changes within the department, specifically in regards to courses that he has taught exclusively.

“One of my regrets is that some of the courses that I teach, such as the ‘Imaginary Voyages’ philosophy and film course, Buddhist Philosophy, Global Ethics, Environmental Ethics, and several other environmental philosophy courses, have not been taught by other faculty,” Clark said. “I hope to continue to teach Global Ethics occasionally in our India program, and I hope that ways can be found to carry on some of these other areas of study.”

Wildes said that although he is unsure how the effects of the program will be felt throughout the university, he does not think the variety of courses is in danger.

“It’s hard to predict if it will have any effect, whether the effects will be positive or negative,” Wildes said. “I think we have a very broad faculty and a talented faculty, so I don’t know that it’s going to affect course offerings that much.”

CONCLUDING REACTIONS

Once electing into the program, accepting the university’s offer and deciding on severance dates, many faculty and staff members expressed their final thoughts on the voluntary severance program.

Clark said that his commitments to writing and research have become extensive in recent years, and he feels compelled to finish a few works in progress soon as well. Still, Clark said that he hopes the severance program does not mean the end of his teaching.

“At present I find teaching more fulfilling than ever, and I have never had so many gifted and capable students than at this very moment,” Clark said. “So at the same time that I look forward to more intensive research and writing, I regret deeply giving up full-time teaching.”

While still grateful for the opportunity to access his retirement funds early and to avoid “letting his money outlive him,” MacDonald was still dissatisfied with the course the program followed.

“The carrying out of the program was very hard on the people camped out in Mercy Hall, completely unnecessarily,” he said. “Dozens of people, many of them elderly, spent up to seventy hours in the hallway on hard chairs or sleeping on the floor.”

In terms of the deficit, Wildes said the program was helpful, as the monetary gap was closed by a million dollars more than anticipated.

“We’re going to probably have to do other things where we cut expenses, but this at least means I have $2 million less to make up,” Wildes said.

CLOSING THE REMAINING DEFICIT

Now that the budget deficit is down to $5.1 million, the university is moving forward with addressing the remainder of the monetary gap.

Wildes said that he hopes to eliminate the deficit by the end of this academic year and has encouraged departments to “think as thoughtfully and strategically as possible.”

“My goal financially is to get through this year, get this balanced out so we can go into next year not carrying a deficit but breaking even,” he said.

Speaking to The Maroon in the Oct. 25, 2013 issue, Jay Calamia said that two possible options are being considered for phase two of the university’s plan. These options are a reduction in workforce and a temporary reduction in the university’s contributions to retirement benefits, he said.

“There potentially could be layoffs,” Wildes said. “There’s no doubt in my mind about that possibility. I don’t see closing departments and things like that. I want to get as close to the ground as possible so we can get a hard look at what we’re doing and make sure that we don’t hurt ourselves in the process.”