88% Vote No Confidence – What Now? Update on Salary & Benefit Negotiations

The following is an update letter to the Fordham Community from Andrew H. Clark, Chair of the Faculty Salary & Benefits Committee.

April 24, 2017

Dear Fordham Students, Families, Staff, and Alumni,

Over the course of the last week, students, staff and alumni have approached us about a flurry of email communications they’ve received from the University’s Board of Trustees. Some have been alarmed, wondering if this email signals yet again another upward leap in their extraordinary tuition and fees. Some simply asked “What is going on here?” This letter aims to answer your questions and respond to the letters you’ve received from the Trustees.

Our letter is a bit on the long side — we want you to have all the facts — but this is summary of our main points:

  • The University intends to violate its October 2014 agreement on faculty health benefits and has pushed to have current benefits replaced by a new health care plan that would result in significantly increased costs for faculty and staff and would threaten our health, well-being, and finances.
  • The Administration’s unilateral imposition of faculty wage increases for 2016-2017 violated the University Statutes and overturned more than 30 years of precedent.
  • The Administration has undermined its mission to be in service for others and to help those who deserve workplace representation by refusing to allow the contingent faculty to hold a democratic election to decide whether they want to be represented by a union.
  • The Administration’s approach during eight months of negotiations has suggested, from the outset, that regardless of our best efforts to find common ground, they would impose their own draconian health care cuts as soon as July 1, 2017, again violating the Statutes and our contracts.
  • Fordham’s full-time faculty registered their deep concern over these matters last week in a difficult and unprecedented vote: 88% voted No Confidence in the University President last Wednesday.
  • In their communications with the Fordham Community, the University has spread misinformation and misconceptions about the potential consequences of the breakdown in salary and benefits negotiations.

And now, to the questions…

1) What’s up? Why am I hearing from Fordham’s Board of Trustees for the first time ever?

Since September 2016 Fordham’s Administration and Faculty have been in salary and benefits negotiations. The Administration, backed by the Board of Trustees, has sought to cut faculty healthcare in violation of our existing contract (that had only begun on January 1, 2015). The proposed changes would affect staff as well, and would shift millions of dollars of healthcare costs to the over 1500 employees enrolled in the Fordham health insurance plan, by forcing them onto one pared-down health care plan with high co-pays, high deductibles, and extremely high out-of-pocket maximums. This will affect 96% of all Fordham employees. Everyone, except those who are lucky enough never to get sick, will be hard hit. The sickest and most economically vulnerable members of the Fordham community will, of course, suffer the most.

The Administration set the tone for the negotiations by insisting that any discussion of salaries would be contingent on dramatic cuts in faculty and staff healthcare. They ignored the fact that faculty had provided millions of dollars of healthcare givebacks to the University in our 2014 agreement. They demanded that faculty and staff move to a substandard “Standard Plan” as soon as July 1, 2017, a move that would violate the open enrollment agreements that faculty and staff enter into their annual health coverage elections. They signaled their intentions to offer no concessions when they hired union-busting attorney Doug Catalano, who had represented the Long Island University administration in the disastrous negotiations that led to that university’s 2016 faculty lock out. And finally, the Board of Trustees fomented a climate of urgency and crisis by demanding that the statutory deadline for salary and benefits negotiations of June 15th be moved up to April 20th.

Despite the tone and tenor for negotiations set by the Board and the Administration, and despite their violation of our University Statutes in our 2016 negotiations, the faculty negotiation team, which consisted of members of the Executive committees of the Faculty Salary and Benefits Committee and the Faculty Senate, came to the table willing to bargain. Faculty were even willing to discuss changes to our existing and standing agreement that runs at least through 2019, so long as changes would not be damaging to the health and well-being of Fordham’s faculty and staff. We were willing to work with the Administration to help close a putative budget gap (despite the dubiousness of the shortfall figures being presented and expansive spending in other areas of the university budget).

Over the next eight months the faculty negotiating team developed multiple proposals that would save the University millions of dollars without putting the physical and financial health of our community members at risk. These generous givebacks were rebuffed, week in and week out. When documents necessary to a fair and open discussion of the university’s financial situation and of health care costs were requested, they arrived weeks–sometimes months–after they were requested, when they arrived at all. In this fashion, the Administration ran out the clock on the negotiations and came up against the artificial deadline set by the Board of Trustees.

Aware that negotiations were not progressing, on two separate occasions, the Senate Executive Committee, in their periodic meetings with the University Provost, requested that we move to mediation. We were told that was unlikely to occur, and, indeed, it did not

In mid-March the Senate President requested that the University President meet with the Senate’s Executive Committee to seek a way out of this impasse. That request was reiterated in a Senate meeting on March 24th. The University President elected not to meet with the Senate Executive Committee, and directed us to continue working with his team, in whom he placed his confidence. On April 7th, with the Board-designated deadline for negotiations rapidly approaching, the Faculty Senate took the difficult decision to call for a faculty-wide vote of no confidence in the President’s leadership.

On Wednesday, April 19th, Fordham’s faculty held a vote of No Confidence in the matter of the the University President’s leadership. The community registered its exceptional concern in a decisive turnout (80%) and response: 88% voted no-confidence in University’s leadership. Six hundred and eleven (611) full-time tenured and tenure-track faculty were eligible to vote; 488 voted; and 431 expressed no confidence in the leadership of the President.

On April 20th, the Board of Trustees passed the 2018 budget, but directed the Administration to continue negotiations with the faculty Salary & Benefits Committee and “to find accommodation with the Faculty Senate’s Salary and Benefits Committee within the Board’s approved budget. While the current health care plan will definitely change, there is an opportunity for the faculty to have input as to how the money is allocated and/or spent.” In short, the Trustees have already determined to violate our 2014 healthcare agreement, and have given the Faculty’s bargaining committee a week to mitigate the damage this ill-conceived move will cause to staff and faculty across the University.

We hope that the Administration will not violate the Statutes once again as they did in 2016, and will restrain themselves from imposing a salary and benefit change without the approval of Salary and Benefits and the Faculty Senate.

2) Is Fordham’s health care better than that at Columbia and NYU?

Fordham has offered excellent health care to its faculty and staff. But it offers neither faculty nor staff the competitive salaries or other benefits that these institutions do. In particular, Columbia and NYU provide subsidized housing for their faculty and childcare options, something Fordham does not. Columbia and NYU also have lower teaching loads, larger research funds, better leave policies, and variety of other benefits unheard of at Fordham. Given this reality, cutting healthcare benefits will make recruiting and retaining excellent staff and faculty even more difficult.

3) Is it true that the Trustees must choose between supporting student financial aid and providing faculty and staff with adequate healthcare and salaries?

Of course not. The Administration and Trustees made the zero-sum game argument that either financial aid or faculty and staff benefits must be cut to ensure Fordham continues to serve its mission. That argument is both cynical and false. Salaries, benefits, and financial aid each need to be sustained. To that end, let’s look at each of their premises in turn.

a) The Board claims that faculty healthcare costs are spiraling out of control. Nothing could be further from the truth. In point of fact, spending on faculty health care costs at Fordham have fluctuated very little. The cost of health insurance coverage to the University, per faculty member, has barely increased: in 2010-2011 the average cost per faculty member was $21,340 and, in 2016-17, it is $22,722. When adjusted for inflation, the cost of faculty health insurance has actually dropped.

Citing advice from Mercer (the consulting firm they hire for information on employee costs), the Trustees make the extraordinary claim that the University’s health insurance costs are going to increase by 66% over the next three years. Yet Mercer’s own publicly available projections note that

Employers predict that in 2017 their total health benefit cost per employee will rise by 4.1% on average. This increase reflects changes they will make to hold down cost, such as switching carriers, adding a CDHP, or changing plan design. If they made no changes to their current plans, they estimate that cost would rise by an average of 6.3%.” (emphasis added) [1]

There’s a big difference between 6.3% and 22% annually. While we share the Board’s concern for the fiscal health of the University, we find this fear-mongering to be unhelpful, at best.

b) The Board of Trustees suggests that faculty salary and benefits are driving up tuition rates. Again, the facts clearly indicate otherwise. Student tuition and fees increases simply don’t track to faculty compensation. The graph below shows the percentage increases in tuition (in red) compared with faculty salaries (in blue).

Tuition-Red-Salaries-Blue
Sources: IPEDS Data Center – National Center for Education Statistics, Fordham website (cost of attendance for 2017), publicly reported salary agreements in Faculty Senate Actions Minutes, 2009-present—see links at bottom.[2]
Tuition and fees are certainly rising, and our faculty are acutely aware of the challenges this creates for students and their families. Since faculty compensation isn’t the source of rising costs for students and their families, what has been? One doesn’t need to look far to see that administration salaries, administrative expansion, poor investment management, and an under-capitalized building boom have increased Fordham’s expenses.

  • According to the University’s publicly available Tax Form 990, the salaries of the top three administrators at Fordham between 2004 and 2014 have increased by 90% in comparison to a 23.5% increase in the across-the-board salaries of faculty during the same period.
  • From 2008-15, Instructional salaries and benefits decreased as a percentage of the overall salary budget by 2.3%. In that same period, administrative salaries rose 1.5%.
  • Fordham’s endowment earned 3.8% per year over the past ten years, which is in the bottom 22nd percentile of all university endowments. The spending plus inflation benchmark was 6.5%, so it lagged by 2.7% per annum for 10 years. This equates to over $200M of lost value. Although these 10 years were a tough period because of the financial global crash in 2007-2009, 78 percent of endowments still did better. We lost a lot in the 2007-2009 crash, but more importantly did not recover strongly when other endowments did.
  • Fordham’s building boom—with a new Law School Building and newly renovated spaces for the business school—was undertaken without adequate fund development to support this expansion. Even the funder-naming opportunities for those new sources of debt have not been secured.

Whether Fordham is actually facing an economic challenge remains difficult to assess. Lack of transparency regarding finances makes certainty on this question elusive. Spreadsheet sleight of hand—tricks like increasing one’s rate of depreciation on assets—can make even a well-balanced operating budget look as though it’s running at a deficit. Fordham’s financial team is skilled in spreadsheet wizardry, and has adjusted depreciation rates to suit their purposes. Other figures are also manipulated. One week there’s no money for faculty health benefits and the next week major construction plans are announced. In another year, there were tightly limited funds for faculty salaries, but there were funds for a basketball coach with a losing record and a salary close to $700,000 per year.

Each year, when the faculty is in salary and benefits negotiations, we hear that the sky is falling. We’re told that there will be a deficit in the millions or tens of millions, there will have to be serious belt tightening, and so on. Yet each year—once the barebones salaries have been set for faculty—the Administration suddenly discovers millions here and there. Chicken Little budget management has got to stop. And Fordham’s Administration must open its books to the university community if we’re to believe their claims of fiscal calamity, especially in a year when they’re enjoying their highest bond rating ever.

c) Shamefully, the Board of Trustees claims that faculty would cut student financial aid to bolster our compensation. Again, there is no truth to this claim. However, their suggestion surfaces a little-discussed practice in admissions: that some universities allocate financial aid to bolster their position in college rankings such as the US News and World Report “Best College” list. In just one recent year (2015-2016) Fordham spent more than $5M to secure enrollment commitments from students with high SATs. The practice of buying SATs scores in an effort to up one’s rankings is one that some members of the faculty question.

This approach directs financial aid dollars from worthy students with genuine financial hardship to students whose wealthier families can better afford the university’s tuition—based on test scores that have long been shown to reproduce social and economic inequality. Indeed, these sorts of aid allocations contribute to the perennial lack of diversity in our student population. These practices, not the fact of financial aid, or total financial aid allocations, have come under faculty scrutiny as we believe that the pursuit of higher rankings at the expense of the diversity of our student body is one that requires close interrogation.

Faculty and students at Fordham share the goal of making Fordham a place where students of all backgrounds have the opportunity to gain a world-class education. We aim to see that students in our community emerge from their studies at Fordham positioned to pursue lives full of successful endeavors in the arts and sciences, in social services and education, in business and law. And we support them as the principle of cura personalis, the care of others, guides our work and helps shape them as men and women for others.

•    •    •

Fordham faculty are not fighting with our university, we are fighting for our university and for the values of social justice that drew us to Fordham in the first place. We’re not ready to swap Fordham’s soul for some dubious spreadsheets. We hope you aren’t either. Please join us in this effort.

One last thing—please forward, post, and circulate this widely to your friends, colleagues, and other members of the community here at Fordham and beyond.

And if you’d like to receive updates from us in the future, please add your name and email using this brief form (http://bit.ly/FordhamRightsEmailSignUp).

Yours in service to our community,

Andrew H. Clark, Chair, Faculty Salary and Benefits Committee
On behalf of the Faculty Salary and Benefits Executive Committee

[1] Mercer Survey: Health Benefits Costs Slow to 2.4% in 2016 as Enrollment in High Deductible Plans Climbs, October 26, 2016: https://www.mercer.com/newsroom/national-survey-of-employer-sponsored-health-plans-2016.html. Last accessed: April 22, 2017.

[2] IPEDS: https://nces.ed.gov/ipeds/datacenter/login.aspx; Fordham Website Cost of Attendance: https://www.fordham.edu/info/20969/costs_and_affordability/2739/costs_of_attendance_costs_for_2017; Faculty Senate Minutes: https://www.fordham.edu/info/24255/faculty_senate_minutes

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