Achieving Our 2030 Vision Together

Our Plan to Create Stronger Financial Health to Achieve Our Strategic Plan

Nov. 16, 2022

Dear CU Denver faculty and staff,

I write to you today to provide an update on our budget situation, how we will achieve financial health to achieve our 2030 strategic plan, and how we are going to get there together. As we talked about during our series of Town Halls and CFO talks this year, the budget of CU Denver is complicated and directly linked to our recruitment, retention, and graduation success. Continuing to focus on student success is critical to how we will achieve greater outcomes for our students and greater financial strength to make education work for all. The goals that we developed as a community are ambitious, and while I am confident that we will reach them together by 2030, I also know that we will need to work, operate, and grow in new and innovative ways in order to be successful, support our students most effectively, and strengthen our financial future.

As you likely know, higher education institutions, especially public universities, are facing significant internal and external pressures that impact financial viability, including enrollment challenges, higher costs of doing business, and inflation. CU Denver is not immune from these financial realities, which have created the need for near-term and longer-term budget reductions. In the nearest term, our Fall 2022 enrollment came in 1.2% under budget. Although we are able to balance that reduction with one-time funds through June 30, 2023, that drop and other external pressures require significant budget changes. As with the many obstacles we’ve faced before, we need to address these challenges head-on and meet this important moment together by shoring up our finances, which includes closing a budget deficit while also delivering on our mission to our students.

Given the challenges mentioned above including steep cost increases, we need to close an anticipated $12 million budget shortfall by FY24-25. We are giving ourselves 18 months to approach this work in a strategic and focused way so that we can make necessary reductions while also positioning ourselves for current and future enrollment growth. This type of budget realignment is not new to CU Denver, and we have the benefit of a strong strategic enrollment management plan and a leading-edge digital strategy to help guide us.

What we need to do now:

• As a first step, we are asking administrative units to propose plans for 4% reductions and schools and colleges to propose plans for 3% reductions ahead of the next fiscal year that begins July 1, 2023. Over the following fiscal year, additional cuts will be identified in the administration units and schools and colleges to balance the budget. From there, we will determine any additional reductions or changes that need to be made based on our budget position, the financial outlook, and our ability to innovate and increase our enrollment.
• We need to focus with greater clarity and intentionality on student recruitment, persistence, retention, and graduation, which is core to our mission and the most important aspect of all of our work.
• We need to prioritize our work in line with our strategic plan and strategic enrollment management plan, including leveraging our new digital strategy.

 

Why are we in this situation right now?

At CU Denver, like much of higher ed, the cost to do business has sharply increased in recent years, and we are continuing to feel the financial effects of the pandemic and inflation. Major factors influencing our financial picture include:

• We have not met our enrollment targets in recent years
• We have worked to keep tuition and fees affordable at CU in the interest of our students and families
• State funding for research institutions has not kept up with inflation
• We want to pay our employees competitively and equitably, including merit increases in January 2023 and beyond
• Our costs for employee benefits and other campus costs have gone up significantly

From a financial perspective, these competing demands do not add up to a healthy financial outlook—unless we take strategic action that will set us up for long-term financial health, which we intend to do, together.How will we move forward together?

We intend to stage this budget and enrollment growth work to ensure we are moving at a measured and strategic pace:

• Starting in November, we will charge the deans and vice chancellors to work with their teams and each other, with input from shared governance leadership, to take a critical look at their operations and budgets to identify key reductions, innovative ideas, and redesigns that will a.) enable us to balance our overall budget and b.) position their units—and the institution—for strategic growth down the line. The intention is to tackle this work collaboratively and meet important milestones together along the 18-month initiative.
• In addition to the administrative and academic work mentioned above, Provost Nakuma will assemble an academic committee, likely in Spring 2023, to study specific academic issues and structures that are either helping or hindering our growth. Committee membership will be broad and representative. Additional details about process and timeline will follow next semester.

In closing

I know that the next few months—and, frankly, the next few years—will be hard as we move through this process. By working together, across our campus, we can and will lift ourselves out of this challenge. But it will take broad participation, innovative ideas, and a collaborative mentality. I’ve seen this institution in challenging times tackle difficult issues, and we will rise to the occasion again, just as we did during the pandemic, during the strategic planning process, and during the recent Office of Digital Education transition. And, from the hard work that we do together, we will create a stronger learning and campus environment for the thousands of students we educate every year, as well as for our faculty and staff, in our collective pursuit to make education work for all, to expand economies, and to uplift communities.

We need your good thinking and fresh ideas to improve and grow strategically. In fact, beginning later this month, Provost Constancio Nakuma and EVC of Administration and Strategy Jennifer Sobanet will visit schools, colleges, and administrative units to host information sessions to provide a more detailed look at our budget, review the budget realignment process, and hear your ideas for reaching greater financial health and enrollment growth. We have also created a dedicated website for this work, which you can visit here.

By meeting this moment together, we will carve out a financially sustainable path forward that continues to transform CU Denver into the community asset we all envision and that our students deserve.

Michelle Marks
Chancellor
@MarksMichelleA