Stories from the Front:
When the Going Gets Tough, Relationships Matter

Craig Jeffery: 

Welcome to The Treasury Update Podcast. This is Craig Jeffery. Today’s episode is part of the Stories from the Front series. And the title is, When the Going Gets Tough, Relationships Matter. I’m here with Dr. Kathy King-Griswold. She’s the Associate Treasurer and Director of Treasury Operations & Compliance at the University of Rochester. Kathy, welcome to The Treasury Update Podcast. 

Dr. Kathy King-Griswold: 

Thank you, Craig. I’m glad to be here and sincerely appreciate this time that we’ll have together. 

Craig Jeffery: 

I don’t know how many people have been to Rochester. I’ve been to Rochester. It’s a great city. The nine months a year when it’s not buried under snow. And this is one of those months where it’s not buried under snow. It’s a cool university. I’d love it if you could give us a rundown on the University of Rochester. Some of the key points to fix it in our minds? 

Dr. Kathy King-Griswold: 

The university was founded in 1850. We are located in Rochester, New York, which is Upstate New York. And it’s almost halfway between Buffalo and Syracuse. The university, even though our New York State Charter indicates that we are an institution of higher learning, we’re actually very heavily into healthcare, with the second major revenue stream being research and then tuition and several auxiliary operations followed behind that. 

Dr. Kathy King-Griswold: 

We have some 29,000 plus employees at the university, and approximately 11,000 students. And that number is probably off a little bit this year because of COVID, but it’s generally in that 11 range. And I will say that of our revenues 75% do come from healthcare. We have six hospitals. One that has our flagship, and that’s the original, which came out of the teaching part of the School of Medicine and Dentistry. We have five schools in art gallery, laser labs and et cetera. 

Craig Jeffery: 

There’s obviously a number of universities that have medical centers and hospitals, but that’s a huge part of your business. And I know that it’s going to play a role in our discussion about Stories from the Front. But before we get there, maybe you could give us a bit of the challenges you faced in this moving to remote. I think it caught everyone a little bit by surprise. And the New York situation was the tightest in the country, particularly in the early days with deaths and concerns about what’s going on. So maybe you could tell us about the beginning of the COVID work from home environment? 

Dr. Kathy King-Griswold: 

We actually began to move and consider remote working when our president was working with the provost to actually move our students to a remote learning environment. And that was probably around the first week of March, where those conversations were beginning. But by the middle of March, the New York State Department of Health came forward and decided it was appropriate, with everything that was going on, to shutter the clinical operations. And as a result of that with the operations shuttered, work staff was also suggested to work remotely. And by that time, the timing was very similar in New York State as to when the public school system actually moved to a remote environment as well. So it was all happening within a matter of maybe a week of everything. 

Dr. Kathy King-Griswold: 

And as far as treasury is concerned, we moved immediately right into the remote work environment, mainly because three of my staff have school-aged children. And so they needed to be accessible to their children. And so that was a quick move. And I think there’s other areas of the university. And for that matter, the region that faced the same thing. 

Dr. Kathy King-Griswold: 

And we were faced as treasury, and then along with the rest of the institution, there were several areas that were impacted. So we not only had issues with working remotely, but treasury payments were affected. And then also we had to consider capital needs. And those capital needs were not just our borrowing capacity, but the capital that was going on. 

Dr. Kathy King-Griswold: 

And the technical issues, we’ll start with that first, relating to remote work was that, we did not have sufficient VPN licenses for some… I don’t know how many, but it’s more than 10,000 staff that are actually working remotely. So university IT was scrambling to purchase many more VPN licenses. That’s the virtual private network. And they also purchased our expanded the Zoom capacity because we also had students that were going to be using our Zoom network. 

Dr. Kathy King-Griswold: 

Also, another issue that we were faced with was depository of a few larger checks. We had some checks that they don’t come in routinely. They might come in quarterly, they might come in semi-annually or even monthly, but they’re fairly large and go to someone’s specific right to their desk. So their attention. So what do we do with those? And then also some of the branches were closed. Or you had to in fact identify specific hours that you would be at the branch. And another technical issue was the execution of requests for payment. And what we did with those is, those are the one-off payments that come in to treasury. And those typically were manually executed by whoever was requesting them and then would be scanned to treasury. And I guess the final major thing was that the university had a bond issue that was in progress, all at the same time. And we had desired that to be closed in April. 

Dr. Kathy King-Griswold: 

So some of these issues were resolved. I know ultimately clinical operations were able to resume somewhat via telemedicine. However, when it did resume early on, I’m not sure when it did switch, but it did ultimately switch to a billable service. I’m not sure if that was in April or early May. And then with our capital, the concern there was that we would have less capital because a lot of the operations were closed down because of the department of health, there’d be less capital to fund payroll and other things. So there’d be a tightening there. And also we needed to basically shutter some of the capital projects that were in work in progress at the current time. 

Craig Jeffery: 

Yeah, so that’s a lot of serious hits. Maybe we could take a few of them piecemeal just to touch briefly before I get onto the capital question. But on the tech side, the VPN getting licensing, did that impact treasury at all? You had to figure out a time you could get in when there was availability? 

Dr. Kathy King-Griswold: 

Craig, it did a little bit in the beginning. And that’s not because there were specific times, but it was just because of the traffic. You would get in and you’d get booted out. It did get resolved fairly quickly as they were continuing to add the licenses, which I think some of IT was working probably 22 hours a day in order to accommodate some of the need that wasn’t necessary. 

Craig Jeffery: 

Yeah, that’s a that was a common experience. Nobody was set for that many people working from home all at once. I’m glad you guys were able to adapt to that. I wanted to spend a little bit of time on the capital question, losing or having close to three quarters of your income sources, severely impacted with the shutdown per the state, how did you manage this? What had to be done? You started alluding to parts of it, but I was wondering if you could talk about that because that’s a rapid and required rapidly adapting to the reality on the ground? 

Dr. Kathy King-Griswold: 

Well, what I did early on, and actually this was even before March was, we were suspecting that COVID would get into the United States and it wasn’t sure how far it would spread and how quickly, but I began immediately to look for additional lines of credit. The university had some, we don’t typically draw on them, but when we have $125 million payroll that occurs periodically, that’s quite a load to lift when you have lost 75% of your revenues. 

Dr. Kathy King-Griswold: 

So what I did is, I issued, early on, and those were all out there, I would say by middle of March, I issued an RFI to several banks. And those banks not only included the university’s relationship banks, but it included banks outside. Ones that we had been talking to and perhaps had very little relationships or even had no relationships, but it was worth exploring how far we could go with it. So that was many hours of conversations, emails, sharing of information, looking at different things with the banks. And of course, for our primary relationship banks, we actually was able to identify agreements. And then, of course, working through the agreements. 

Dr. Kathy King-Griswold: 

One thing I did learn through that is that, even if you do have a small bank relationship, it may not be, if the circumstances are sufficient, it may not be enough to get you something. And that was proof that because I thought, “Okay, well, we’re buying this treasury service and we’re doing this also. Why wouldn’t that be sufficient?” But it wasn’t. They were focusing on their much larger relationships and leaving the others basically out in the cold. That made me think that it’s really necessary to spread as much around as possible and to build these relationships whenever possible. 

Dr. Kathy King-Griswold: 

But also we did make a lot of adjustments through university operations. 85% of the administrative staff was on furlough to one degree or another. That could have been as low as a week, to as much as basically the whole summer. Those furloughs began May 11 and pretty much we’re finished around September 1st. And so that was about 85% of the administrative staff. 

Dr. Kathy King-Griswold: 

Senior leadership also decided to take a pay reduction for a period of time. We also re-evaluated our funding to our retirement plan. And we put a capital spend on pause. So we had many projects, some big, some small that were in progress and we opted to put them on hold. And thankfully, the government came through with a little bit of help, especially on the healthcare side where CMS Medicare and Medicaid loaned us basically future revenue streams. And so now they have even lightened a little bit more. Those were to begin being repaid in August, but now it’s deferred until April of 2021. So that’ll help us out a little bit further, especially if we have a second wave, God forbid. 

Dr. Kathy King-Griswold: 

Also, what we have, treasury has been doing is a lot more modeling for liquidity planning. We typically built a forecast that was consistent with our fiscal year, which is July 1 to June 30. And then would adapt it as we learned for each of those months that fell within that timeframe. But now what we have found through working through COVID is that, it’s appropriate and necessary to do multiple models. 

Dr. Kathy King-Griswold: 

So we might have four or five models. We might have one that’s our typical, what we would have had historically based on what has occurred per in the past. We probably have another one where they feel it’s the best case. And the best case would be a reflective of the health care revenues, as well as student receivables that are being incurred. What level of students do we think we will have? And then two or three other levels. One of those other two or three, would definitely be a disastrous case that would be that really extenuating. And likely as a result of a second wave of the virus, another cutback or maybe even a total shutter of a lot of the clinical operations, students being totally removed from on-campus back to their homes, et cetera. So we find that we’re now ever since, probably March, April, maintaining multiple cash forecast models. 

Craig Jeffery: 

Yeah, that’s a lot of adjustments. I guess it makes a lot of sense to build these multiple models in the eventuality that something else occurs and you hope you don’t have to use those. But I was hit by the human impact of the staffing adjustments from furloughs, layoffs, pay cuts, and stopping projects that were underway. That’s that was, you hit all the levers you could, adding to your credit relationships. I just want to ask one more question or maybe one or two more questions on the relationship side. What did you learn from the process beyond spreading some of the credit and services around? Anything else about counting on institutions, what’s important there? 

Dr. Kathy King-Griswold: 

Well, I would definitely say that an institution that I thought back in February I could count on, I couldn’t. I think that it’s necessary to have a lot of a relationship in place in order to account for that. The other thing is, is that even the primary relationships that are in existence and very heavy in relationship, coming through that environment, the fees aren’t what they used to be. The fees doubled, tripled. And the ability to negotiate was diminished dramatically. And some of the relationship officer said that there had been concern throughout their institution that we might experience that. And sure enough we did. And not that I have any concern negotiating, but a lot of times you could just go to an institution and say, “I want x, y, or z.” And you get it as long as you can pay for that price. But in this case there was a price, but you couldn’t even get it because there wasn’t liquidity available. 

Craig Jeffery: 

Yeah. Now moving off of the capital side over to tech and remote working. We already talked about VPN sufficiency, but are there any other stories here about the impact of tech? Did you change any processes? You started talking about payments. I wanted to see if there’s anything that changed on the payment side? That’s a real common area for shifts in this a work from home environment 

Dr. Kathy King-Griswold: 

Relating to payments, and I’m specifically going to focus on treasury only here is that, a one-off payment or that contract that doesn’t go through the procure-to-pay, will come to treasury for payment. And being that we were all working remotely, there is a necessity, even before working remotely per policy that there’d be two signers on that request for payment form. And all that really did was signified that there were least two individuals within that department or that group that had reviewed and do believe that that invoice should be paid and they’ll be held accountable for it and et cetera. 

Dr. Kathy King-Griswold: 

But working remotely, we had many requests coming to us. “Well, how can I do this? I’m working remotely. Can I just go with one signature?” “And what else can I not send it to you via scan? Can I just email you the form?” And we said, “No.” And especially during that environment, those would be the things and the opportunities for us to get caught in a negative situation. So what treasury staff actually did is, we looked for ways that were really inexpensive for us to still accommodate that to signature process. 

Craig Jeffery: 

So Kathy, with this requirement to have multiple people sign it and they’re not together, obviously they’re not shuttering it around, did you use some type of digital signing platform to accomplish this? 

Dr. Kathy King-Griswold: 

What we actually used is Adobe, the Fill and Sign feature. And that was generally not known to the general public, including myself, but my staff actually did the research and looked at what options were available that would basically be on everyone’s desktop. And the Adobe solution was the winner. It was very easy. And I should add that the university is also looking at DocuSign, but being that it is a costly solution, I’m not so sure it would be relevant and necessary to treasury because, hopefully, down the road, three years or so, we can have all the procure-to-pay handle all the transactions and they just come through that way. And I should add also that through procure-to-pay, there’s a lot more than two people that are actually seeing that invoice. And so we know that it’s going to be approved by the time it gets to treasury. 

Craig Jeffery: 

Yeah, just adapting on the fly to handle that. It seems like nobody built the digital signing into the business continuity planning and we all solved it somehow really quickly. These stories that you’ve been discussing, they talk about adaptability, being able to change on the fly. And I’m just wondering what were, were there any permanent changes that you made that will continue post-disruption? Anything like, well, you’re forecasting where you continue to have multiple models? Anything else that you think will have ongoing change built in? 

Dr. Kathy King-Griswold: 

Craig, I agree with you that forecasting is going to be the one thing that will continue for a period of time to have more than one scenario. I’m not sure how long that period of time is, perhaps forever, but I know we will have at least two to three versions at a minimum going at all times for the next couple of years. We are looking at bringing in a capital budget that will also help us to do the cash forecasting long-term consistent with the capital budget, and the budget itself. And that is a five-year look forward. So that will then be another model. 

Dr. Kathy King-Griswold: 

As far as other aspects that are going to stay in place, definitely the procure-to-pay through workday, we do intend to bring more into that fold and have more invoices go through that process. The signing and sharing of a doc, all the documents through Adobe, that we’ll still stay until we have some other solution. But even though if we get the DocuSign, there will be a limited number of users whereas the Adobe Fill and Sign, everybody can have access to the no-cost version that Adobe offers. 

Dr. Kathy King-Griswold: 

There’s also some deposits or paper checks. Shall I say that are received from some remitters that go on to individuals’ desks. Some of those have already been moved to ACH as a result of the pandemic. So what we’ll be doing there is leaving those in place. The other thing that was added, we didn’t have really any of this outside of treasury before, and that is mobile banking. So now what we have in a couple of areas, we have given them the ability to log into our bank site to scan a paper check that’s received by them. And of course, it’s small volumes. So it might be one, two, three a day at most. We do plan to leave that in place for the future. 

Dr. Kathy King-Griswold: 

And of course, to increase more users, if there’s a need in other areas, and those other areas have the ability to do the ad hoc bank deposit within our workday ledger system, then we’ll continue to add more users to that. Also, treasury has adapted to working basically longer hours. And I think some of that is a result of us working in our homes, but also my staff having children, they realized that some of what they have working with their children is taking up their typical work time. So I see my staff working till 10 o’clock at night. Pre-COVID, it was only extraordinary. So I think that that’s also the case. 

Dr. Kathy King-Griswold: 

And I think the other thing that we’ll be adapting to in the future is more longer term of working remotely. The university did a survey to all staff a few months back and found that more than 60% of the administrative staff preferred to work remotely versus in the office. So that will give us a chance, if we can work better and more efficient, the university could cut back some of its real estate footprint. 

Craig Jeffery: 

Interesting. Yeah, that’ll be very interesting to see how that plays out as everyone goes from nearly 100% working from home to perhaps a gradual returner, a mixed environment. Very, very interesting. Now, Kathy, as we draw to a close in this discussion, I wanted to get your final thoughts, particularly with regard to recommendations you would have for others. Any learning that can be shared or emphasized if it’s something you’ve already said? 

Dr. Kathy King-Griswold: 

Well, thanks, Craig. I think there’s a couple of things that I have in mind. I would say first off treasury needs to be open-minded. You need to be thinking about outside of the box, I guess is a better way to say it. And think what you can do better, what you can do differently, how you can accommodate, and perhaps even spread that further outside of treasury into other areas of administration or outside of that into the rest of the group. 

Dr. Kathy King-Griswold: 

We also need to be mindful of how our time is utilized so that we can be more strategic. I am really guilty of this and I see myself doing that as I get caught up in all the firefighting, which is pretty common for treasury folks. And those blinders are on and you don’t have a chance to think into the future and how you can be more strategic with what you’re faced with. 

Dr. Kathy King-Griswold: 

And also collaboration. This is something that treasury, I think has grown into over the past… At least during my timeframe in treasury, which is a really long time. But we have become more collaborators across. That’s because we need to gather that information from all those other areas in order to do our job better. So they see us and they share the information, which I think is why treasury most often now is at the table. What we do need to remain at the table so that we can learn that information first. Or just when everybody else is in senior leadership, it’s really important, especially when you’re in a crisis and you need to manage money as an example. If something is shuttered, how can you learn about how that’s going to be impacted, only if you’re at the table? 

Craig Jeffery: 

And I did say that that was going to be final thoughts, but it’s true. One more question, Kathy, so if you would indulge me? It’s this idea of there was so much to do to make things work and capital, in an environment where, like you said, 75% of your cash cashflow was sorely impacted for a time. How has that changed in terms of the appreciation for treasury within the organization? Anything that you would say you view differently or is it pretty much they knew they could count on you and if times got tough and you came through as expected? 

Dr. Kathy King-Griswold: 

I think it’s some of both, Craig. I think many always knew that treasury was there, but when we reacted how we did or how I did and looking at and identifying additional liquidity facilities, it gave the senior financial officers, the CFO in particular, a greater level of comfort that we would have some sustainability here for the immediate future. And we’ll say that there’s also now I feel more of a presence where we are thought of, maybe not first, but we’re not last. Before, not that we’d be last, but we’d be close to the end. And so I think now we’re more up there. And thought of as to treasury needs to know this, can you share that with them? Or bring treasury into the conversation? 

Craig Jeffery: 

Thanks so much for sharing your story and working through those issues and telling us a little bit about the university of Rochester. I really appreciate your time and your comments. 

Dr. Kathy King-Griswold: 

Thank you, Craig. It’s been an honor. I’ve really enjoyed the conversation. 

OUTRO: 

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