Dear colleagues, 

As promised in my September campus memo, I am writing to give you an update about our multi-year budget planning efforts. I am happy to say that because of the community’s collaborative work in phases 1 and 2 of our budget realignment initiative, our finances are balanced through the end of this current fiscal year, 2024-2025. Through engagement with our community, we collected ideas, acted on some, and launched exploratory work for others, as reflected in the ongoing budget model redesign and Academic Transformation work being shared with the community this month. Now we are refocusing our attention and looking forward. 

My team has been analyzing numbers, looking for ways to build a reliable multi-year budget forecasting model that better positions us to serve our students and improve our financial health. The goal is to get out of the largely reactive year-to-year budget process and look more holistically over the next few years. We will soon be engaging with you in a multi-year budget planning process that looks at our projected revenue and expenses to address gaps we anticipate in best- and worst-case scenarios through 2028.

To do so, we must consider the elements that drive our budget in terms of both revenue and expenses. They are: 

The forecasting we have begun involves all of these elements, along with historical CU Denver data and national and regional trends, in order to develop a variety of possible scenarios. Our forecasts change and evolve over time as new information is available and decisions within and beyond our control are made. The latest set of variables we are incorporating come from the budget proposal the governor released last week, although the final state budget and its contributions to higher education and our budget will not be known until April or May at the end of the legislative process; it is likely to differ some from the governor’s proposal. The scenarios we develop and refine help us plan for a range of possible outcomes, so we can begin to plan appropriately and understand where we may need to pivot as circumstances change. This puts us in the best position to make decisions that prepare us for whichever future comes to bear.

Based on the data we have now, we anticipate a potential shortfall between $7.8 million to $8.7 million in the 2025-26 fiscal year. The range will likely narrow as we get closer to the start of the fiscal year and the data informing each element becomes more certain, but it is fundamentally based on sound assumptions about declining student enrollment and increasing costs. For example, we assume that CU Denver will continue to experience declining enrollment because of the compounding effects of the past several years, and the overall drop in traditional student-aged demographics in Colorado and across the country. Even if enrollment were to remain flat, we would see only a slight increase in revenues, yet we can expect many of our expenses will continue to rise.

Looking Ahead

Each year, we are required to present a balanced budget to the Board of Regents for the next fiscal year by April. We are already looking at ways to mitigate the likely scenario of an estimated $8 million deficit. We anticipate leveraging the remaining $5.5 million from last year’s retirement incentive program to offset the majority of the budget deficit, which will still leave us with about a $3 million shortfall. We are committed to finding administrative efficiencies to cover most of the remaining gap. We are asking for our community’s suggestions as we explore the most viable and impactful options to pursue.

Over the next few months, we will conduct a series of campuswide meetings to explore the ways in which we can influence the elements that impact our budget—our revenue streams and expenses—and to look at ways we can prepare for the range of best- to worst-case scenarios in 2026, 2027, and 2028. We remain committed to serving our students well and have an obligation to keep tuition and fees as manageable as possible to ensure a CU Denver education remains accessible to them and their families. We will also continue to drive toward key commitments in our strategic plan, which include becoming an equity-serving institution and best place to work. And, we know compensation is key to retaining our talented faculty and staff in a competitive marketplace.

Your Role

In phases 1 and 2, community input helped to inform and shape our budget planning, and we are looking back at ideas to generate revenue and reduce our expenses from those earlier phases that could not be easily or quickly implemented at the time. We need your continued help and creativity to surface additional recommendations as we proceed. Ideas about how we can enhance or improve our enrollment, including through increased retention, are just as important as creative ways to reduce expenses with minimum impact. I encourage you to attend the enrollment information sessions and the Academic Transformation sessions which have been ongoing since October to see some of your ideas represented in our shared governance approach to changes on campus. We need your collective minds again to keep us moving forward. I know you are all stretched thin, and I thank you in advance for your time and ideas. When we collaborate to surface and share ideas, we realize better outcomes.

Specifically, we are asking our colleagues in the schools and colleges and central units:

• To propose ideas that can be leveraged across campus to help enroll and retain more students.
• To start brainstorming ideas to reduce campuswide expenses that could be implemented in 2025-2026 and over the subsequent three years.
• To look for and recommend creative and innovative ideas that affect a lot of people in small ways such as eliminating licenses for redundant software applications, rather than focusing on unilateral reductions.
• To share ideas that could generate structural changes. An example might be to organize shared services across units in ways that contain costs while also providing better back-up service, career growth for employees, and a broader variety of work opportunities.

The Process

I will lead two foresight sessions on Dec. 4 and Dec. 5 during which we will assess the trends in scenario elements, consider the implications of each scenario, and identify ideas for planning and action. The session on Dec. 4 will be held from 8:30 to 11:30 a.m. in the Business School, room 2600, and will focus on the elements of the financial picture, trends in higher education, and an understanding of possible future scenarios; the Dec. 5 session will be held from 8 to 11 a.m. in the Business School, room 3300, and will focus on scenario assumptions, the identification and development of wise actions, and a discussion of CU Denver’s future identity. You will receive an invitation to those sessions with additional information soon. In parallel, we are asking deans and unit leaders to engage with their shared governance representatives to come up with additional ideas.

The budget realignment website also has a link to a form to submit your own ideas directly.

More engagement opportunities are being planned for January and February and we will share those details in the new year.

Budget recommendations will be shared with a review team that is being formed to provide cross-functional perspective. Then, the Campus Advisory Committee on Budget, which includes a cross section of leaders from the schools and colleges and Cabinet, as well as shared governance, will review and make its recommendations to the chancellor and executive team. The goal is to have solutions identified ahead of the April 2025 Board of Regents meeting when we are required to submit a balanced budget for the university. We anticipate welcoming a new Chancellor to campus in the spring and we will want to incorporate their vision and ideas into any recommendations. Ultimately, the Chancellor will make the final decisions on how we proceed.

I’ve been in conversations with deans and shared governance representatives over the last couple weeks to share where we are and where we want to go with our multi-year budget planning. We must not limit our thinking, but we do need to work together in the spirit of finding the most creative ways to navigate what lies ahead. I look forward to partnering with you as we apply our collective expertise and innovative ideas in service to CU Denver’s mission and our students.

Warm regards,

Ann Sherman
Executive Vice Chancellor for Finance and Administration