Sept. 3, 2020
Dear faculty and staff,
The fall 2020 semester is underway after months of careful planning to ensure the safety and well-being of our campus community, and there are other challenges that lie ahead for us as we continue to navigate the ongoing impacts of COVID-19. Like all of higher education, we face numerous challenges, many of which are beyond our control. We are faced with uncertain enrollment trends, dwindling state funding sources, and the expiration of one-time federal CARES Act Coronavirus Relief funds that will not be available to us next year.
As promised last month, we are providing you with this fall update on where we stand. We remain committed to transparency, accountability and building greater fiscal resiliency and to ensuring that faculty and staff understand our budget and fiscal realities.
Leaning into fiscal resiliency
In our July update, we shared that on June 18 the Board of Regents approved 精品SM在线影片鈥檚 budget for fiscal year 2020-21, which included an overall decrease of $102.1 million (5.4%) across general fund, auxiliary and restricted funds.
That reduced budget did not include the approximately $69 million in COVID-related costs or revenue losses the campus incurred in the spring semester after we pivoted to a remote model in mid-March. Since then, we have worked diligently to return our students, faculty and staff to campus with a protecting our herd spirit. The necessary costs of preparing a COVID-ready campus have grown into the tens of millions of dollars.
State funding cuts, enrollment changes, and the unprecedented costs related to COVID-19 left us with an estimated funding gap of $120 million (13%) this fiscal year, compared to where we were a year ago. And while we received $48 million from the state of Colorado in one-time CARES Act Coronavirus Relief Funds, we still face a gap in our operating budget. We have been able to partially mitigate the gap through $14 million in savings from periodic furloughs and temporary pay cuts and $7 million in contingency funds we set aside after 2013 enrollment declines. This leaves us with at least a $51 million (5.5%) general fund gap.
All administrative and academic units must begin addressing our new budget reality with current and planned cost-saving efforts that we will begin to implement in the upcoming weeks. Auxiliary units, facing potentially larger reductions, will continue to address funding challenges with immediate actions.
What we鈥檙e doing
In response to the remaining gap, at the start of this fiscal year, we asked each school, college and administrative unit to plan for a one-time 5% general fund budget reduction. We also asked campus unit leaders to plan for the possibility of further reductions in fiscal year 2021-22 and beyond with the understanding that the ongoing impacts of enrollment and state budget outlooks require more time to take shape.
Over the last several weeks, Katrina Spencer, associate vice chancellor for budget and finance; Carla Ho-a, vice chancellor and chief financial officer; Ann Schmiesing, executive vice provost for academic resource management; and Regina Houck, director of budget and finance for academic affairs, met with deans, vice provosts and vice chancellors to discuss the impact of the 5% budget reduction targets on each school, college and administrative unit.
The two of us have also discussed our budget reduction process with unit leaders, and the following are the outcomes of our collective discussions:
- Expected FY21 budget cut target amounts will be communicated to schools, colleges, and administrative units by the end of this week.
- For administrative units, this is the amount they should plan for as their final FY21 temporary budget cut.
- For schools and colleges, the campus will adjust FY21 temporary budget cut target amounts after fall census numbers are finalized in September. This will enable us to make adjustments due to school and college-specific enrollment changes.
- Most units will receive a 5% reduction. Some units may receive less than a 5% reduction depending on enrollment shifts and to preserve strategic priorities such as:
- Ensuring the health, safety and well-being of our students, faculty and staff
- Advancing diversity, equity and inclusion efforts
- Supporting equitable student success and retention
- Providing faculty and staff with academic technology and support for academic integrity in a remote/online teaching and learning environment
- Promoting activities that support stable or increased enrollment next year, particularly since recent enrollment trends and uncertainties are expected to continue over the next several years.
- Unless our financial situation significantly and unexpectedly declines, no unit will be asked to reduce their budget more than 5% in this fiscal year.
Factors we considered when setting school/college and administrative support unit-level budget reduction amounts include: the campus鈥檚 strategic priorities, and a unit鈥檚 overall fiscal resiliency, ability to absorb budget cuts, available reserves, previous cost reductions, and unit enrollment changes. Within the framework and priorities we鈥檝e described above, academic and administrative units will have broad discretion on what they decide to cut.
In setting guiding principles for how schools, colleges and administrative units should approach budget cuts, we asked campus leaders to consider deferring new initiatives, avoiding new financial commitments, and eliminating lower-priority activities. We also asked them to examine expenses that will be naturally reduced this year, such as travel and official functions, and to search for opportunities to achieve savings through consolidation and/or centralization of activities.
Our Next Steps
In September and October, following the fall 2020 census, we will further evaluate COVID-19 impacts on enrollment鈥撯�揳 critical financial determiner for us鈥撯�揳s well as the outlook for state and federal funding and other variables with the goal of gaining greater insight into where we are headed in fiscal year 2021-22 and beyond. This process will include discussions with faculty, student, and staff governance groups, unit budget managers and campus and unit leadership.
We will notify schools, colleges and administrative units whether the current year鈥檚 temporary budget reductions will become continuing budget reductions once we have a better understanding of this year鈥檚 and next year鈥檚 enrollments. Until then, we encourage units to approach this year鈥檚 reductions with long-term plans in mind.
We expect the decreased enrollment we are currently experiencing due to COVID-19, and the related decline in revenues, to have an ongoing reductive impact on our baseline budgets. Our early enrollment estimates are a $17 million reduction from our June budget due to higher than budgeted 鈥渕elt鈥� rates of admitted resident and nonresident students; we will have a more precise number after fall census. This enrollment decline and the associated budget reduction was included in our budget planning exercise, and is covered within the 5% budget reduction.
After the one-time funding we鈥檝e received through the federal CARES Act is spent, this decline will be felt even more profoundly in the coming years. We need to use this time now to extend our planning horizon into next fiscal year and beyond.
You have our continued commitment that we will:
- Be transparent with our financial situation and how we will address gaps at a campuswide level.
- Minimize impacts to our institutional mission by not cutting more or sooner than is necessary.
- Approach needed cuts strategically and, as much as possible, avoid across-the-board cuts.
- Support units鈥� ability to plan by avoiding additional midyear cuts unless absolutely necessary.
Each of you has been impacted by furloughs and temporary pay reductions, and our academic and administrative units are making difficult decisions on behalf of our campus community. We remain grateful. We believe these difficult decisions will prepare us for a more rapid recovery and enable us to be a stronger university in the future.
We also understand the real impacts budget cuts have on the lives of our community members and thank you all for the sacrifices you have made for 精品SM在线影片. We appreciate your commitment and understanding as we face these unprecedented times together.
Sincerely,
Russell Moore
Provost and Executive Vice Chancellor for Academic Affairs
Patrick O鈥橰ourke
Interim Executive Vice Chancellor and Chief Operating Officer