Dear faculty and staff,
Among the comments I received during my listening tour
was the desire for more transparency and communication about issues such as the budget. To that end, I’m writing with an update on the campus’s financial status for the coming fiscal year.
You may be aware that CU Denver is facing a budget shortfall for FY 16-17. This is due to the FY 15-16 enrollments coming in below expectations (down 0.3% instead of a projected 1.9% increase). As a result, the campus has a revenue shortfall of $6.8 million. To offset this deficit, we will be using one-time funds of $4 million from a contingency reserve fund. To cover the remainder of the deficit, reductions in administrative and unit operating budgets may be required once we know the actual fall 2016 enrollment numbers. Should that be necessary, we will work closely with leadership across the campus to identify efficiencies and areas where reductions can be managed with the least impact on instructional and support services for our students.
Because of this budget deficit, I regret that base-building pay increases for CU Denver employees will not be possible for FY 16-17. At my request, President Bruce Benson’s office has agreed to cover a one-time 2.0% non-base-building merit compensation pool for our faculty and staff. The CU Board of Regents approved this action at its April 6 meeting. Guidelines for the administration of this pool have been communicated to each campus unit. I realize that this solution is not ideal, but given our circumstances I am grateful that we can provide these one-time merit increases.
In addition to approving the compensation pool, at their April meeting the Regents also set tuition and fees for next year. For CU Denver, the differential between lower division and upper division undergraduate rates is being eliminated. To accomplish that, resident and non-resident lower division undergraduate rates will increase by 3.63% and there will be no increase for upper division. Graduate rates will increase by a minimum of 3% and tuition differentials for business and engineering courses were approved. Additional details about the tuition changes are available on the Bursar website. CU Denver’s full budget is expected to be officially approved at the June Board of Regents’ meeting.
Communicating difficult financial news is never easy. That said, there are actions all of us can take to help turn around our circumstances. CU Denver’s budget is highly dependent on tuition. In fact, 73% of our unrestricted general operating budget comes from tuition. Everything we do to increase our enrollment of qualified students and retain both new and continuing students to and through graduation has a positive impact on our bottom line. We have a number of enrollment and retention initiatives currently underway and we will be doubling down on our efforts to assure their efficacy and success.
Also, we have already begun reviewing our budget-setting process and financial models. This work will be among the top priorities for campus leadership and our Office of Budget and Finance in the coming year. While predicting enrollment is an imperfect science, it is our intent to learn from the past and do everything we can to build our budget forecasts to guard, as much as possible, against future deficits.
Should you have questions, suggestions, or comments related to our current budget situation, I encourage you to share those with your respective Dean or Vice Chancellor, Provost Nairn, Senior Vice Chancellor Carrothers, or me. In the meantime, thank you for your understanding and I look forward to all of us working together to address our current circumstances while taking actions to ensure a stable, sustainable financial future for CU Denver.
Dorothy Horrell, PhD