Good afternoon, everyone. And welcome to our ninth community conversation, addressing planning, response, and operations in the time of COVID-19. I’m Joe Helble, I’m the provost of Dartmouth College, and I’m joining you as always from the Star Instructional Studio in Berry library. I’m joined today, once again, by Justin Anderson, our vice president for communications, who’s joining me from another studio here on campus. And today we’re joined by two of our frequent guests for these conversations, Josh Keniston the current interim vice president of campus services, the VP for institutional projects and the co-chair of Dartmouth’s campus wide COVID-19 task force. And by Dr. Lisa Adams, a faculty member in the Geisel School of Medicine, the associate dean for global health, a professor of medicine, a specialist in the care and treatment of infectious disease, particularly tuberculosis, and the co-chair of Dartmouth’s campus wide COVID-19 task force. Finally, today we’re joined by a third guest, someone who’s new to our campus conversations and that’s Mike Wagner, Dartmouth’s chief financial officer, and our vice president for finance.
Following our normal format, we’ll begin today with a campus update, we’ll turn to live question and answer moderated by Justin and then we will turn to a conversation with our campus leaders. So today, as you might guess, given the composition of our panel of guests, I’d like to briefly discuss three things, the budget focusing on the close of fiscal year ’20 and the start of FY’21. I’d like to provide an update on campus operations, focusing on the libraries in particular and also on research with an emphasis on the reopening that’s taken place successfully for the libraries over the course of the past two weeks. And then speak a bit about academic and operational planning as we look ahead to fall term. But first, before going down these paths, I’d like to return to a question that I addressed two weeks ago at the outset of our conversation.
The question related to the international student community, related to the guidance that the department of Homeland Security Student and Exchange Visitor Program, or SEVP, issued for international students on Monday, July 6. As you all likely know by now, last week on Tuesday, July 14, the federal government withdrew the new guidance and announced that it would return to its existing March, 2020 guidance, which does allow international students to participate in remotely delivered classes while living in the United States. This guidance applies to all continuing students, and it is something that was welcomed by Dartmouth and other institutions, and we are absolutely committed to welcoming the best and brightest students from around the world to engage in learning, scholarship, and the creation of new knowledge in our communities.
And it is essential that we have the opportunity to allow all Dartmouth students to continue their education. So, for this, we were grateful. For entering undergraduate students, those in the Class of 2024 as undergraduates, we and our peers are continuing to seek clarification on the relevant guidance from SEVP. First-year students, those members of the Class of 2024, are welcome to continue pursuing their visa applications at this time. Understanding, of course, that Dartmouth has no insight, unfortunately, into the outcome of that application process. But our plan at Dartmouth remains to operate in hybrid mode with some in-person classes or elements that would be available to those students. For entering graduate students, we encourage you to continue pursuing your visa applications and to contact your program administration with any questions.
For entering MS and PhD students, Dean Jon Kull, the dean of the Guarini School of Graduate and Advanced Studies, and his office have been in touch with many students and they will also be sending out periodic updates as more information becomes available. So, we intend to keep the community and particularly our international student community updated and informed as all this moves forward in the coming weeks and month as best we can. So now let me turn as promised to the question of budget. In several prior conversations, we’ve pointed out the budgetary challenges that COVID-19 has imposed on the operations of all colleges and universities, including Dartmouth. And in fact, in an early broadcast in this series, I noted that Dartmouth could potentially incur a fourth quarter $50 million or more operating loss against an overall university annual budget of approximately $1.1 billion.
As you might imagine, that potential deficit was the subject of many meetings and conversations among the leadership team, among faculty committees, among many cross-campus constituencies over the course of the past three months. And over the course of the nearly three months that we’ve been having these community conversations, we have been continually updating, not just our conversations, but our projections for the close of fiscal year 20. Now, I’ll be asking Mike Wagner, our chief financial officer, for some of the details later in our conversation, but the outcome is that for the fiscal year which ended on June 30, we closed with an operating loss of $36 million, which is still substantial, but it’s one third less than we had projected when we first met. And at a high level, this reduced operating loss, this reduced deficit, came about for several reasons; first because the investment markets improved and remained strong through the end of June, which significantly reduced the size of the projected losses to our working capital pool.
Thanks to the generous support of our alumni and friends and the incredibly hard work of our colleagues in the advancement division, the Dartmouth College Fund and other cross campus annual funds provided more support than had been projected three months ago at the low point in the financial and investment markets. And finally, because of aggressive steps that this community, the Dartmouth community, took immediately beginning in March to reduce expenses, particularly non-compensation expenses, we were able to bring fiscal year ’20 to a successful close. Some of the steps we took as a community address the immediacy of the fourth quarter, but some of them and others also help address projected significant shortfalls in the FY’21 budget. As some of you know, through conversations with me, with Rick Mills, our EVP for finance and administration, with Mike Wagner, and others, that we had estimated potential losses for fiscal year ’21, the fiscal year that started just three weeks ago on July, 1, of approximately $100 million, again against the projected overall annual operating budget of roughly $1.1 billion.
These losses in FY ’21 stem from increased expenses associated with both online and on-campus delivery of content, expenses associated with testing of our student community and increased cleaning of our facilities, expenses associated with anticipated significant increases in the need to make financial aid available to our student population and revenue projections, as best as we can make them given our anticipated hybrid operating mode of both online and reduced density in person education this coming year and uncertainty in the financial markets. For these reasons, we instituted a Dartmouth wide salary freeze for both faculty and staff for FY ’21, instituted a freeze on staff hiring for the first half of FY ’21 through the end of December, and recently offered a retirement incentive program for long-serving staff meeting several criteria, including at least 10 consecutive years of service and a combination of age plus years of consecutive service greater than or equal to 75.
These steps plus the use of a revenue stabilization reserve created at the request of President Hanlon early in his tenure at Dartmouth, plus an outlining for division leaders of savings achievable through non-compensation spending reduction in this upcoming fiscal year, helped considerably in bringing Dartmouth closer to stemming the projected losses associated with COVID-19 and achieving balanced budget operations in FY ’21. They get us much closer, but they don’t quite get us all the way there. So, to take the final step to reaching balanced budget operations, over the past week, individual division leaders have received guidance on the revised budgetary targets for FY ’21. These targets vary by division and will require division leaders to take additional cost saving steps, looking at non-compensation spending opportunities, spending non-compensation savings opportunities, and also other steps appropriate to their division. We’ll have more to say on this in the weeks ahead, as individual division leaders continue to work on, review and implement plans for their FY ’21 budgets and as we begin to turn the conversation forward and think about planning for FY ’22 and beyond.
And in that exercise, let me say, there will be an effort to engage individuals from all divisions across campus in some creative cross-institutional thinking to seek more efficient ways to accomplish our work. More on that particular opportunity and those cross institutional conversations will be forthcoming within the next two weeks. So, let me now return to the operational questions and updates I promised at the outset, and I’d like to first start with the library. Particularly the reopening of the library that happened two weeks ago today, as of 10 a.m. on Wednesday, July 8. At that point in time, Baker-Berry and the Sherman stacks were reopened to Dartmouth faculty, staff, and to Dartmouth students who possess current IDs. And from what Dean of Libraries Sue Mehrer reports, that reopening has gone smoothly and, in my view, extraordinarily successfully.
In our first two weeks, Baker-Berry Library welcomed 210 members of the Dartmouth community and loaned 430 items primarily to faculty. Rauner Special Collections had four researchers on site, three faculty and one staff, and has a further three reservations pending this week. Remember Rauner is opened by appointment only. As staff were onsite every day, staff were also able to meet research needs of 31 additional researchers, remotely. One example of the type of activity that’s now resuming, one faculty member came in to consult a 16th century codex manuscript to facilitate a large digital project she’s working on. To adequately complete the project, she needed and was granted access to the physical object itself. Special collections continues to serve the worldwide scholarly community as well as Dartmouth. For example, Dean Mehrer tells me that with access to our special collections open again, her colleagues were able to supply the Robert Frost Correspondence Project with scans of original letters from the Robert Frost collection, letters that these colleagues had hoped to consult in person to meet an Aug. 1 deadline for Volume 3 of the collected correspondence of this noteworthy figure from Dartmouth’s past.
They were also able to provide in depth research assistance out of the Mario Puzo papers for a scholar completing a monograph from “The Godfather.” And on the student side, selected materials and created scans to support the FYSEP courses being offered for incoming first-generation students in August. In August, anticipate restarting inter library loan activities and providing accession to new materials received to add to the research collections as quickly as possible. And so, as I hope you can see over the past two weeks, the libraries have gone from a very quiet period to a very active period, both in Baker-Berry, in Sherman, and in the Rauner Special Collections Library. We anticipate additional updates from Sue and her colleagues around operations, including a look ahead at fall term, as plans are finalized over the coming month.
In the area of research, it’s worth a brief update, I think, because research and particularly laboratory-based research activity continues to increase. Phase 2, the phase of operation we are currently under, continues to proceed smoothly. For example, on Monday of this week, Vice Provost for Research Dean Madden reported that 348 lab researchers were on campus. And that is a 33% increase in the daily number from the end of phase 1B and double the numbers we had at the end of phase 1A. In addition to on-campus activity, grant activity also remains strong. For example, the July RO1 submissions to the National Institute of Health from Dartmouth increased from $17 million last year to nearly $25 million this year. That is nearly a 50% year-over-year increase in a single month submission and that bodes very well for the research enterprise at Dartmouth in the year ahead. Dean and his working group will be continuing to work on the next stages of reopening and, as with the library, more details are expected to be provided over the coming month.
Let me turn now to academic year planning. As the community knows, President Hanlon and I have stressed, and I have said this often throughout our planning, that it was, has been and remains our goal to support the maximum number of students we could return to campus guided first and foremost by the application of appropriate public health standards. As we announced two weeks ago, our plan for undergraduate students permits all to be here residentially for part of their education, but not all at the same time. We’re using our term-based system and the D-Plan to our advantage offering all students the opportunity for two residential terms during the 2020, 2021 academic year. Now, since that announcement, not surprisingly, we’ve gotten many questions from students and their families about the year ahead. Before I provide a few updates, I thought it might be worth commenting briefly once again, on our reasons for taking the approach that we have. First in developing our plan, we wanted to maximize the chances for it to be a successful plan.
In bringing students back to campus, we wanted to do all that we can to be able to keep students on campus for the full term. That’s not a guarantee, of course. Neither we, nor anyone can guarantee that plans will not change, but we intentionally built buffering capacity, quarantine and isolation capacity for on-campus residents into our residential housing plan. So, to those who have asked why we cannot bring more students back in any given term, that is the answer. And that was an intentional step that Dartmouth has taken. Second in developing our plan, as I said two weeks ago, but I think it’s worth reiterating, it was important to us that we give students some choice. It would have been far easier for us to look at the academic year and simply assign different classes to different terms. But we are committed to supporting the individual student as much as we can.
That’s embodied in the Dartmouth D-Plan, which gives students choice. It’s embodied in our liberal arts curriculum and our liberal arts education. For me, this is who we are as an institution. I’ve said often that we’ll be informed by decisions made on other campuses, but not bound by them. We will take advantage of things that are unique to Dartmouth and make the decisions that are right for us. I firmly believe that this is one of those decisions. For that reason, we asked all students to identify their preferences for residential terms in Hanover. The Dean of the College office, working with Alicia Betsinger and her team at the Office of Institutional Research, asks students to rank choices, reminding them of our announced priorities. The Class of ’24 was offered priority for fall and spring residential terms with a remote winter term, and no rankings were requested from this group of incoming students. Class of ’23 had summer term as the priority sophomore summer. Class of ’22 would be prioritized for fall term. Class of ’21 prioritized for spring term. In addition, we informed new transfer students who are new members of the Dartmouth community that they would be offered priority for on-campus accommodations for fall term if, they wished.
Students were then asked to confirm that their choices aligned with their preferences for the 2024s, they were asked simply, “Do you want to be here in the fall and or the spring?” And if that’s the case, no ratings were requested. Continuing students and transfers were asked, “Do you want to be here for your designated priority term? Answer, yes/ no, and then rank the rest.” Those preferences were due Monday evening, July 20, less than 48 hours ago. And Dean of the College Kathryn Lively and her colleagues are now looking at the sorted data with the intention of informing students on July 31. We know, and I can tell you this today, that we will be able to accommodate all the members of the Class of 2024, and the Class of 2022, and all new transfer students who requested an on campus fall residential term. We also know that we can accommodate those students in those classes who have, as I said, designated this as their first priority.
Beyond this, we ask you to be patient as we work through the data, and determine who else will be offered residential opportunities for the fall term, for the winter term, and the spring term, we will be completing the process by July 31, students will be informed on July 31 about their fall term assignments, and more information will be provided subsequent to that date. So, let me close this part by saying, I thank you for your patience as we work through your responses and your preferences. Once the residential assignments for fall term are made, I anticipate there will immediately be many questions about arrival time, drop off, in the meaning of quarantine. Dean Lively addressed many of these points in her note to students two days ago, and as she stressed, many of the answers to those questions will not be available until the middle of August, specifically the week beginning, Sunday Aug. 16.
To help address some of these questions, and particularly those related to the student residential experience over the course of this year, Dean Lively has formed a student advisory committee of 12 students, drawing from members of the classes of ’21, ’22, and ’23 to provide input on student concerns related to campus life, particularly in the era of COVID-19. To those students who’ve agreed to serve, I’d like to thank you for your willingness to help us address complicated questions that often have no single right answer.
Finally, let me close with just a few additional comments on the months ahead. I had promised that we would have more information on winter term undergraduate off-campus programs when we next met, and I wanted to be sure that we got to that today before we turned to questions. Based on the input of the relevant working groups on our COVID-19 taskforce, and the arts and sciences leadership who oversee off-campus programs. We have decided that we will not offer undergraduate off-campus programs during winter term 2021. This cancellation, which I had said was likely two weeks ago, is a result of continuing travel restrictions related to COVID-19, continuing travel uncertainties related to COVID-19, and the six-month planning horizon needed for many of these undergraduate programs. We are hopeful that we may be able to offer a limited number of undergraduate programs through the Guarini Institute in spring 2021 and we will have more to say on that front, including at these community conversations in the coming month, to month-and-a-half.
Now, let me close by saying that clearly many decisions still lie ahead. Details for undergraduate students of arrival, housing, testing, monitoring, and quarantine remained to be finalized. Course listings need to occur, course selection needs to occur, and we will also be working to provide more information on what campus life will look like in the fall. The next steps of research and library reopening also need to be finalized. With each decision that we make or announce, as we all recognize by now, many more equally complex and complicated ones lie ahead. So, let me end by thanking all of those who are so committed to our students’ education, and to the return of research, scholarship, and learning to this campus. As I say each time we gather, this is certainly not how I were, any of us envisioned our lives this year. 2020 is absolutely going to be a year to remember. But I continue to draw inspiration and hope from our students and their deeply held desire to be present in Hanover, and from our staff and faculty who were working so tirelessly, and incredibly hard in the face of frequently changing conditions to make that possible. Thank you to everyone for your dedication to the Dartmouth community. I’m happy to take a few questions, and then we’ll turn to Lisa, Josh, and Mike for further discussion. Justin, over to you.
Thank you, Joe. It’s good to see you this afternoon. We have a number of questions coming in that I think really reflect the anxiety that many community members are feeling, which is quite understandable under the circumstances, particularly around the rising rate of infection across the country. And one questioner asks whether or not, as the infection rates are increasing, with the possibility of another million or so cases over the course of the next week, at what point will Dartmouth decide whether or not it is safe to have students back onto campus at all this fall, given the rising rate of transmission?
Yeah, that’s a really good question, and I would also suggest we put that question to Lisa again when we have her on the screen shortly, but I’ll offer my perspective and my answer. Certainly, we are aware, and I’m aware of the increasing rates of infection. Two weeks ago, I spoke about this and expressed concern that we had now reached the 60,000 new infection per day thresholds. And if you look at trends over the past two weeks, I believe it’s 10 out of the past 12 days, we’ve gone beyond 60,000 new cases confirmed in a day. We’ve had two days with more than 70,000 cases. So, to put it euphemistically, the numbers are not our friend right now. We are very attentive to this. We are looking at the modeling that predicts the continuing spread of the disease nationally. We are looking hopefully at signs that leaders in different states and communities are taking to be much more serious about masking and social distancing restrictions to impose what had been in place earlier. And we are remaining, I will say, vigilant, in watching these trends and seeing if they will help turn the corner on the disease.
Lisa can speak to this further, but this is one of the reasons why we are intending to test students as soon as they arrive, why quarantine is an important part of our planning. We have heard from family members who are not excited by the quarantine protocol, but in fact, testing and quarantine are two of the most important steps we can take to ensure that we begin the fall term with as healthy a population as is absolutely possible. So, the listener asks a question about when we might decide to shift in another direction, I’m not going to answer that, because there are many, many inputs that go into a decision like that. We are continuing to go down the path of planning extensive testing, monitoring, tracing, and quarantine that we believe, given current trends, will enable us to operate as safely as possible in the fall. But that can’t be a guarantee that things won’t change in the next six weeks. So, the best short answer is we are aware, we are moving forward confidently, but we are being very attentive to what’s happening nationally and prepared to adjust our plans, if needed.
And Joe, you mentioned the questions around quarantining, and I just wanted to acknowledge, there are a lot of questions about quarantine, and I know that we’ll get to that later, but for those of you who are sending in questions about that, I just want you to rest assured that when Lisa joins us, that will be the opportunity at which we can talk more about the specifics of the quarantine, at least that we know of as of right now.
Right. I think that would be appropriate, Justin. And also, I’ll just say as a caveat, and this is one of the places where the student advisory group that’s working with Dean Lively, we are counting on them to be helpful. They won’t be designing the protocol, but they can certainly help us with input on feasibility, workability, and the best ways to make this a manageable experience for our students.
Someone writes in acknowledging that students have been told that they are going to have the option of taking any term as a remote term, that that will be an option for them, that they need not actually physically come to campus, that they could remain at home or someplace else to take classes. And similarly, faculty are being given that option to a great extent. This person asks, What about staff? Particularly staff who have to be on campus in order to do their jobs. And then among that group of staff, those who might be at-risk themselves, or have family members at home who are either themselves sick, or who are also at-risk? So, the question is really about the flexibility of staff to be off-campus in the interest of their own health concerns.
So, Justin, that’s a good question and here not to continue deferring that, but I think Josh can answer that question in more detail, particularly as he oversees a large employee group as the interim head of Campus Services. I can tell you, from where I sit, it was very important to us that we give students choice in the terms in which they want to be in residence. This is Dartmouth’s attention to and commitment to the individual. It was very important to deans Alexis Abramson and Elizabeth Smith and the graduate school deans, and me, that we give faculty consideration for individual circumstances and their desire to teach in-person or remotely. Similarly, and Josh has said this before, but it’s worth asking the question again, to the extent that we possibly can, we are committed to working with individual staff members to help accommodate their particular situation. Obviously, we have a challenge. There are some functions which are absolutely essential that they be accomplished in person, because of the student-facing nature of what they do. But we want to take those questions on an individual staff member basis. We want to see if there are steps we can take that can make that staff member comfortable working in a non-campus environment. And if not, is there a way within the organization to help accommodate that individual’s needs if someone else might be willing to take on part of the responsibilities?
And so, it’s a commitment to work with people individually as best we can, recognizing that for staff, as well as faculty and students, there will be circumstances and situations where working physically present on campus may not be the best step for them.
Joe, I mentioned when I came on that a lot of the questions reflect the deep anxiety that our community members are feeling, and the first couple of questions were related really to concerns about health. There’s also a lot of concerns about people’s jobs. You have said in the past that we were committed to the employment of our employees or our staff through July 31, looking at the calendar, it’s July 22, and so people are clearly wondering about what happens after July 31. So, can you address that?
(Background intercom: The library is now closed. Be advised, the gates in [inaudible] will be dropped in the next few minutes, so please exit in the library promptly. Thank you).
Can you address what will happen, excuse me ...
Not sure that I can, since you need to leave the building, apparently.
Right, exactly. Yeah, can you address what will happen, not when the library closes, but after July 30, right?
I can, and I can do much more on that point, Justin, in two weeks. And so, you are absolutely right, and the questioner is right to note that we have made a commitment to keep everyone employed as they were, through July 31. That commitment has not been extended beyond July 31. I said earlier in reviewing FY ’20, and the projections for FY ’21, that we have taken all of the cross-institutional steps that we can, including using reserve funds, that president Hanlon set aside at the start of his tenure for a moment like this, having pan-institutional sacrifice by freezing salaries and wages, and by putting in place a hiring freeze. These steps significantly reduced the magnitude of the deficit that needs to be addressed in FY ’21, but they don’t completely eliminate it. We have given managers and division leaders guidance on the opportunity for substantial savings in FY ’21 through non-compensation spending reduction. The kind of adjustments that people made around travel, around events, around materials and supplies, around consulting and other contracts and external labor, that we asked them to reduce in fourth quarter of fiscal year ’20.
But for some divisions, either the balance of what’s needed to achieve programmatic goals, or their ability to meet the targets simply through non-compensation savings is not going to be sufficient. And so individual division leaders are now in the process of formulating plans that will be discussed with me, and with Rick Mills, and with the other senior officers that will detail how they [inaudible]. In some cases, that will mean simply leaving vacancies unfilled, or permanently eliminating vacancies. In others, there may be personnel adjustments that need to be made. It will not be widespread. It will not be pan-institutional. And I can’t project a number because the early-retirement incentive offer is on the table right now, and that may in fact provide the reduction in employment that is necessary for us to be able to balance our budget for FY ’21.
And so I understand that these next steps create some anxiety, but our intention in putting this range of possibilities in front of managers and trying to provide targets that are achievable, significantly through means other than compensation, not exclusively, but significantly, will reduce the impact and reduce the number certainly, of any employment adjustments that need to be made. I can’t be more specific than that, because it’s too early to answer that question, but in two weeks or in four weeks, certainly we’ll know a lot more.
Joe, we have time for one more question before we get to our guests, and I think it’s a quick one. Will the library be physically open and available to all students who are paying tuition when the academic year begins? And then the questioner asked specifically about what you said when you said students with a current ID. So, I guess just explaining a little bit more about who will be able to access the physical space, the physical library.
So, the anticipation is, the details have not been finalized, but the anticipation is that students are here for residential learning in the fall, their ID will provide them access to the library facilities. There will likely be limits on occupancy at any particular point in time. And so, there are elements of an operating plan that need to be developed because de-densification is an operating term as we think about all of our facilities. This is why we have reduced capacity in the residence halls. This is why we’re approaching dining in the way we are. This is why classrooms will have significantly reduced capacity. And this is why the library cannot be fully opened to all-comers without any screening as it had been in the past. We do anticipate all students who will be here on campus, with therefore current IDs that identify them as residential-term students, can utilize the library facility. They will not all be able to be in the library at the same time.
So, thank you, Justin. And thank you all for the questions as always. I’d now like to turn to the second half of our conversation and bring back our guests who are joining us today, Dr. Lisa Adams from the Geisel School of Medicine, and taskforce co-chair, Josh Keniston our VP for Campus Services and taskforce co-chair, and Mike Wagner, our chief financial officer and VP for finance. Good to see you all on the screen in front of me and thanks so much for joining us. So, I’d like to jump right into us and Mike, since you are new to these conversations, I’m going to give you the opportunity of going first, particularly given the interest in questions that are financial questions. And so, if you don’t mind, I’m going to ask you a few back-to-back before I turn to Josh and Lisa and ask operational and public-health questions.
And I’d like to focus briefly both on FY ’20, the close, and then FY ’21 and the projections. And so, if you don’t mind, let’s start with FY ’20. And, as I said earlier, over the course of the fourth-quarter of the fiscal year, that just ended, we had projected operating losses of approximately $50 million for the quarter. The final result, as I mentioned, was $36 million, and could you just comment on what contributed to those losses?
Sure, sure. Thanks Joe. The $36 million, as you said, was a bit of a moving target over the course of the fourth quarter. The largest components of the $36 million, where we expect to end the year, the biggest piece was a loss of estimated room and board revenue for the fourth quarter because we didn’t have undergraduate students obviously living in the dorms for the fourth quarter. So that was about $15 million, almost half of the $36 million. The rest of the revenue losses were from a variety of different places. The second largest was the combination of the professional schools, where we estimate a shortfall of about $7 million. And that’s a combination of room and board revenue at the Tuck School, some research revenue losses, and some philanthropy shortfalls at the professional schools.
The rest of it is really a variety of things, including investment income, including some other research revenue, including athletics, the Hanover Inn. As you know, the spring term here is very busy and there are a lot of activities that didn’t generate the kinds of revenue that they normally would. The change over the reason it was a moving target, the two biggest contributors to the change were the Dartmouth College Fund. As you mentioned, the volunteers and the Advancement staff really worked miracles in terms of bringing that in close to expectation for the full year. And then the investment markets cooperated. We were looking at negative returns as we were estimating that $50 million-plus loss, and then we’ve come out with slightly positive returns for the year. So those are the largest components of that $36 million.
All right, so thank you, Mike. That detail is really helpful for me and for the community. And we asked, as I mentioned, the community to take steps to mitigate those losses significantly by reducing non-compensation spending, but could you just take a minute to comment on the positive actions in Q4 of FY ’20, that the community came together to support and how those enabled us to close the year with balanced budgets?
Sure. It’s another great opportunity to pass along kudos to so many people for controlling expenses as well in every division, Joe. It’s interesting to know you mentioned that the $36 million as it relates to our full $1 billion budget, what’s even more dramatic is to think of it as $36 million that we were trying to cover in one quarter. So, when you look at it as one quarter, it’s actually more than 10% of that quarter. So, it’s even more significant, but every division contributed to saving non-compensation expenses. So, what does that include? It includes the widest variety of things that you could imagine. It’s everything from travel, to events, to professional services, to consulting, to equipment purchases that might happen at year-end, everything that goes into running this really busy place during the spring term.
The other things that were put in place were the hiring freeze, which didn’t contribute a lot in fiscal ’20 because it happens so close to year end, but that we hope will help in fiscal ’21. And then those central reserves, that’s filling the gap of the rest of it. We think that the non-compensation savings will cover more than half of that $36 million and that the central reserves that you pointed to, that we established under president Hanlon since he arrived, we’ll cover the rest of it. So that will be a really important factor in closing the gap for fiscal ’20.
Well, thanks Mike. So, since I’ve got you and we’re on financial questions, let me just ask you to take a quick look ahead at FY ’21. So, what are the current projections? What are the major contributors to COVID-related projected operating losses and how does the budget look right now? I touched on the measures that we’re asking the community to take, including divisional reductions in spending, but perhaps you could provide us just a little bit more detail of how that will play out.
Sure, sure. So, our estimates are in the range of a $100 million, a little bit less than a $100 million, and we are estimating shortfalls in all of those revenue sources that I described earlier. The biggest one again, is room and board, which we’re estimating to have a shortfall of about $32 million. So, it’s not as easy as taking the $15 million from the spring term and multiplying it by four because we are expecting over the course of a fiscal ’21 that we will have a half of the students in residence. So that’s why it ends up being $32 million of losses during fiscal ’21, lost revenue during fiscal ’21. The other revenue shortfalls as I mentioned, are comparable to the spring term around research, some of the auxiliaries like that Hanover Inn, annual giving, and investment income. We’re being cautious about what we’re assuming for investment income for the year ahead.
It’s just, the markets have been so volatile. It’s hard to predict that we will remain on budget. The other things that are a little different because the summer term that we’re in right now is part of fiscal ’21, not fiscal ’20. So, we also have revenue shortfalls from the summer camps and from executive education programs. The other thing that we’re estimating for fiscal ’21 is about $15 million of costs related to testing, health management, personal protective equipment, and also a couple million dollars for technology in the classroom.
So about $11 million for all kinds of testing and other health management costs that we don’t have exactly pinned down yet but that’s our estimate for right now. When we think about how that will be reconciled Joe, it is a combination again of non-compensation savings and the re-budgeting efforts that are happening across campus that you alluded to earlier. And again, using those central reserves to cover what’s not going to be able to be covered from the divisions and from the salary freeze. Let’s not forget that, that’s about $15 million of expense that will be avoided in the budget for fiscal ’21.
All right, so thanks Mike. So, let me just ask you one related question and then I’m going to turn to Josh and Lisa. We know that all universities are struggling with financial challenges. Some, particularly those who own their health care system, their hospital systems are facing vastly greater financial operating losses projected for FY ’21. What are you hearing from your peers? What are other institutions doing to address this? And what do we learn from them?
Yes, the stresses are very comparable, which isn’t surprising. Our revenue mix is pretty balanced. Some of our peers are much more reliant on endowment income. So, the investment markets coming back are really, really important for all of us, but especially those that are even more endowment-dependent than we are. There are some that have even more significant operations around room and board. So for them, having students on campus or not on campus is really important.
The other area that I’ve heard is a big stressor are those schools that have really significant net revenue contributions from athletics and those schools, in addition to the clinical revenues that you mentioned, those schools are seeing really large decreases in revenues expected. In terms of the tactics that they’re taking, I would say it’s very comparable to what we’re talking about, trying to slow down non-compensation spending, re-budgeting in the divisions, hiring freezes, salary freezes. Those are the toolkit. The one other item that we have seen that we are not doing is a pause or an actual cancellation in retirement contribution for fiscal ’21. Some schools have gone to that and we’re not doing that. So that’s one, that’s a little bit different.
Thanks, Mike. And on that point, as you know, I was actually quite pleased the way different groups in the community came together to weigh in when we’d surfaced the possibility of thinking about this. And we had really thoughtful conversations from faculty leaders, from staff leaders, from the budget committee and others that helped shape ultimately the decision to not go down that path. And it was an extraordinary demonstration of the Dartmouth community coming together around a shared challenge and leading to a very productive outcome and decisions, thank you Mike.
So, Lisa I’d like to turn to you next and talk a bit about the progression of the disease before we turn to some Dartmouth specific questions. You’re, as I said at the outset, an infectious disease specialist, and I wanted to start by asking you a question about national trends. So, as I mentioned briefly, we’ve actually seen an inflection point in the daily COVID-19 new case count happened about a month ago.
We had been running at about 20,000 new cases per day, and suddenly on June 16 or 17, depending upon where you put the inflection point, the rise began fairly steeply. We passed in a month, over 70,000 new case per day threshold. And in fact, the slope of the curve, the increase in the rate of new cases per day, over the course of mid-June to mid-July looks almost identical to what it was in March at the beginning of the pandemics. So, what’s driving this and how does it inform your planning about steps that we need to be taking at Dartmouth. This is in some ways related to the question that Justin relates to me earlier, how are we thinking about the progression of the disease as we plan?
Sure. Well, let me say like you and clearly our viewers today, I am following these data very closely and have concern and sadness over what many communities and my health care colleagues in those communities are experiencing as we watch the ramp and spread of COVID in these new hotspots across the country. Unfortunately, that summer low in cases that many of us were hoping to see it just didn’t happen. Now, this is a multifactorial situation, there are many drivers to these change of events, but I think it’s probably what we’re seeing is most likely related to the lifting of lockdown restrictions too early, including in states that did not meet federal guidelines for reopening, but did so anyway. Some isolated outbreaks in those communities that could not be contained swiftly. Limited adherence to the individual public health measures, and the fact that all communities where there had been previously little spread, these are largely susceptible populations.
So, there’s probably no need to remind us, but it really, I think it should be stated that this is what exponential growth of an epidemic looks like. And it is always harder to play catch up once uncontrolled spread starts. So in terms of how the national situation is affecting our planning at Dartmouth, well, as you’ve said, and as you know from our conversations, we are looking at this and on a weekly basis, trying to figure out what we need to do with our planning process. And as you said, it’s six weeks away we are, but we will continually on an incremental level, be looking at what our plans are and seeing if they remain realistic and feasible and we’ll do the best to promote health and safety for our communities. Both our students, employees, and the local community.
But one concrete example I can give of how this national data has really affected our planning is that we are now carefully considering an actively exploring options for pre-arrival screening and testing of our undergraduate students. Let me emphasize that any pre-arrival testing that would be done would be arranged in an equitable manner to ensure access to all of our students and the results could be guaranteed and a useful turnaround time. Many testing sites now are experiencing significant delays in releasing results and so that’s an important consideration for us. And this would all be in addition to our post arrival testing and quarantine practices, which I’m also happy to talk about. But if I can end on a positive note, I will say that I’m happy to report that Hanover, Grafton County, and the states of New Hampshire and Vermont continue to have very few cases with currently only seven active cases in all of Grafton County and currently none in Hanover.
All right. That’s great Lisa, so thank you. So maybe let me ask you one quick follow-up question and then I’ll turn to Josh for an operational question or two, before we open it up to the audience. And you’ve touched on this and I did as well in my remarks, but our current plans call for a 14-day quarantine on arrival for most students we’re talking about, and you’ve just mentioned potentially pre-arrival testing, certainly testing at least twice within the first seven days. So, putting that all together, why is that important?
Yes. OK, there’s a lot to unpack in there, but let me see if I can take us all through it. So that initial 14-day quarantine period combined with the rigorous testing protocol is important because we know that the virus has an incubation period. That period from the time of exposure to development of symptoms ranges from two to 14 days. So currently both CDC and state guidance recommend a 14-day quarantine period after possible exposure or travel to make sure that no one develops those symptoms on that outer time limit.
And we know that people will be traveling to campus from all over the country and some internationally to start fall terms. So, we have to be especially vigilant in those first 14 days. Let me add to just a word about the quarantine period for that initial 14 days. As Dean Kathryn Lively shared with the undergraduate students recently, at the moment, quarantine means that you remained in your room, meals will be delivered, and you engage with faculty and classmates virtually. And we know, I know this sounds extremely stringent and we will continue to reassess. And if we can create circumstances to responsibly allow people to be out of their room in our beautiful outdoors, we will do so, but everyone has to be prepared for the possibility of a strict 14-day in-room quarantine if that is deemed necessary. So, I know more information is going to be coming up about student arrival details. So, I’ll leave that piece there.
But let me just now move quickly to testing. Testing is another important and powerful tool. So, what testing allows us to do is to detect individuals at a single point in time with pre-symptomatic, or asymptomatic disease, and those who could be contagious without knowing it. And it’s really this pre-symptomatic and asymptomatic transmission that is the virus’s competitive advantage. And it’s our curse for this disease. If only those with frank, overt symptoms were the ones who could transmit it, it would be much easier to control this pandemic. And frankly, we would be in a very different place than where we are today.
But the latest data indicate that as many as 40% of cases may be asymptomatic and that the viral load may be highest in the earliest days of infection, when people may be in that pre-symptomatic period. So, testing upon arrival, and at day seven will help us detect pre- and asymptomatic disease that was either contracted in the immediate timeframe right before, during, or after travel to campus. So again, really important that we have that rigorous testing protocol initially in place.
Go ahead. I was going to say that’s really helpful clarification. And let me just say perhaps to summarize at a high level, including for our community. To me, as a scientist, you very nicely outlined the incredible challenge of trying to figure out how to manage the disease. And it stresses the importance of our being very careful at the outset and doing all that we can when students first arrive as we work through that 14-day period, to open up the campus as much as possible for the balance of the term.
And so, what we’re effectively asking the campus to partner with us in doing is understand the importance of taking careful measures at the very beginning, to maximize the possibility that we have a successful 10 weeks beyond those first two. And that’s the challenge that we’re trying to weigh, that’s the balance we’re trying to strike. And this is why partnering with the student advisory group in part is going to be extraordinarily important. So, thank you, Lisa.
Josh, I wanted to ask you about dining services, about staff returning to work. And of course, the question that’s on every student’s mind, the progress of the return of belongings. But given that we’re short on time, I’m simply going to ask you an easy question. What are the immediate near-term issues that the task force needs to address? What challenging topics are top of mind?
Yeah, it’s a lot of the things connected to what Lisa was just talking about. So, we’re trying to figure out how do we set tents up so that we can perform testing? How do we change the way that our buildings are laid out? Whether it’s the library, the gym, Collis, dining halls, other spaces, so that they have the kind of physical changes, or policies, or tracking devices, whatever we may need in those spaces, so that we can welcome students back. So, the task, it’s really taking all of the health guidance we’re getting from Lisa and figuring out how do we deploy it on our campus.
And you think about Dartmouth, who’s been around hundreds of years, and the systems and processes we have in place have been developed over decades. And there are a lot of things that just happen because they’ve always happened. And now we’re having to reinvent them in the matter of weeks. So, lots of work to figure out how do we do things in this new paradigm?
Well, I appreciate the work that you, your colleagues, and the task force are doing, because certainly the understatement of the year is that none of this is simple or straightforward.
So, we have about six or seven minutes left and I want to make sure we have a chance to take questions from the outside. So, we’ll turn it to Justin, who will put questions your way. Justin?
Thanks a lot, Joe. And I’m going to start with Lisa, if you don’t mind, Lisa. As I mentioned earlier, a lot of questions about quarantining. And I’m actually just going to read one, because I think this touches on a lot of what I’m seeing. This person writes in, As a parent, I’d like to submit the question about concern for quarantine on the mental health of new freshmen. If they already test negative, why do they need to self-quarantine when the risk with a negative test is negligible? So that’s the question I want to put to you, but then I want to just add one more component, which is about quarantining indoors. Several people have written in, isn’t it much, much safer to be out-of-doors. And what’s the point of having to stay inside for 14 days when the chances are it’s probably safer to simply be outside?
Right. So, all great questions and I appreciate your passing those on. So, if I can talk about the testing one first. So, a test only tells us about that moment in time. If someone is still incubating the virus and it can take up to two days after someone’s been infected for a test to turn positive, that’s what we could be missing. OK? So that’s why we have this very strict protocol of repeated testing, to make sure that we are not missing someone who tested negative, because they were still incubating, but we are going to catch them with that follow-up test.
The test that happens if we do pre-arrival testing, that would happen when they’re at home, would really capture where they are starting from at that point and make sure that nobody who tests positive travels and arrives on campus. But the testing efforts, it really does take testing over a period of time for us to be able to say with confidence that nobody has disease. And it really just has to do with the limitations of our testing ability and the incubation of the period of the virus. So that’s why we are being extremely careful with our testing period.
In terms of being indoors, outdoors. Yes, I agree that we know that outdoor exposure, if you’re going to be in contact with others, is better than having indoor exposure with others. But of course, being in a room with the door closed means you’re not in contact with others. Limited contact if you’re going out to use bathroom facilities. That’s what we are weighing right now. And if we are going to allow people to go outdoors, just how do we do it safely? So, there’s just a lot of thinking and planning that has to go into that. But I absolutely appreciate and understand the concerns and share some of them. So that’s why we are going to work really hard to see what we can do safely to get people outdoors.
Mike, if I could turn to you a question about the budget for the current year. And I know as you do your work regarding the budget, there’s a lot of assumptions that are baked into your planning. And a questioner asks, What will happen if the pandemic prevents students from returning at all? Should that happen, should we expect additional budget cuts and challenges and sacrifice from the community?
Thanks, Justin. You’re right. The models that we’ve done so far are based on the hybrid method for the whole year. So, if there were no students on campus for the whole year, or for one term, there would be additional losses for the year. And we would have to look at what expense savings could be reasonably saved. I think we would go back to some of the same tools. Where could we save on expenses? And we know that there are backstops with our central reserves. So, I think we would have to continue to look at the range of tools that we have and see where expense savings make sense and where reserves need to be the backstop, because that’s what they’re there for.
Josh, I’m going to go over to you and Joe let you off the hook a little bit. I, however, am not going to do that. I want to hear about the belongings. This is the one issue that comes up week, after week, after week. So, it would be great if you could provide an update for our viewers on the status of the belongings and getting them returned to students.
Thank Justin. Yeah, and this is the one that I get a lot of emails about as well. So as of today, we have packed 98% of the student belongings. So, we are at the very end of the packing phase. Reminder that there are a couple of phases to this. So, after it’s packed, we then have to either ship, or have students come pick it up, or put it into storage. And so, we’ve really started focusing our attention on the shipping component of it. We’ve added two additional teams, so some of those teams that were packing are now focused on shipping. Students at this point that opted for the option to come to campus to pick up their belongings. Everyone should have been contacted by now about those options. So, that’s going to run through August 14. And then those students that opted to have their belongings put into controlled storage will be able to use the controlled storage process to access their belongings if they’re returning in the fall. So, we’re picking away at it and making good progress and really driving toward having this wrapped up by the middle of August.
Thank you for that, Josh. I know that that response will hopefully satisfy folks who have been asking. Although I’m sure you’ll continue to get emails and will continue to be asked this question. So, when you come back, perhaps in a future episode, you can give us a final update.
Those people who haven’t had their stuff back, just like you, I am really hoping to get to that point where we say we are done with this. We are spending a lot of time. And again, this is one of those things that we don’t normally do. And so, we’re moving as quickly as we can for sure.
Thank you for that, Josh, thank you very much for all of your hard work. And thank you, Lisa and Mike for joining us. Unfortunately, that’s really all that we have time for today. This could go on and on, but there will be another episode of Community Conversations in two weeks. Joe and I will be back. But for now, I’m going to toss it back to Joe. Joe?
Thank you, Justin. And let me add my thanks to Lisa and Josh for being frequent guests and contributing today and providing your insight and leadership of the task force. And Mike for joining us with what I hope was extraordinarily helpful budget detail for the community, to have a sense of the challenge we faced and the challenge we successfully addressed in FY ’20, and how we’re working through FY ’21 in a similar fashion.
We will be back in two weeks as Justin indicated on Aug. 5 for the next edition of Community Conversations. And there will be a lot for us to discuss and provide updates on at that point in time. Student term assignments, course selection, testing, and quarantine. We hope to be able to say something more specific, certainly on the testing front, if not the quarantine front. Questions about campus access and continuing discussion of the budget, as well as a range of other issues that we are all working through.
So, thank you all once again for your engagement and your interest. Thank you to every member of the Dartmouth community who has been, as I’ve said so many times, such an important contributor, doing inspiring work, to help enable the return of students to campus. And to help support the teaching, learning, and research activity of our students. It’s a privilege for me and for all of us to be working with you. Be well and be safe everyone. And we look forward to seeing you on Aug. 5. Take care.