April 22, 2020 @ 10:52 a.m.
Over the last several weeks, we have communicated a number of decisions related to campus operations as a result of the COVID-19 pandemic. Today, we’re writing to share the latest information about the anticipated financial impacts on our campus,
our principles for decision making, and the steps we’re taking. While the challenges are significant, we are confident that the creativity, resilience, and collaborative spirit that are part of CU Denver’s DNA will serve us well going
The budgetary challenges we face due to the impacts of the pandemic are becoming increasingly apparent. For the current fiscal year, we estimate our related expenses and loss of revenue to be close to $5 million. This includes the costs to move to remote learning, reimbursements for housing and dining, reduced revenues from auxiliaries including parking and leasing, and continuing to pay student workers through the end of the semester regardless of their ability to work. In addition, CU Denver will need to address our share of the losses that AHEC is experiencing.
Future fiscal impacts are likely to be significantly greater than those we are currently facing. That is because of the many unknowns that affect our financial picture going forward. These include anticipated reductions in state support, uncertainty about the federal stimulus relief funds, the effect of market volatility on the university’s investment portfolio, and how our enrollment will be affected—including the mix of resident/non-resident, and international students. All of these could result in a multi-year decline in revenue.
In response, we’ve begun scenario planning to explore budget-balancing options that will need to be considered. This scenario planning will allow us to be prepared and ready to act when the full impact of the COVID-19 pandemic is more clearly known.
Our Values and Priorities
To address these difficult economic realities, we will need to make tough choices in the months ahead. We want to assure you that these decisions will be grounded in and shaped by our values. Our first priority is to ensure the health and safety of our community. We are committed to our students’ educational success and well-being and to continuing our mission of education and research. We recognize our employees are our most important asset and we will strive to protect jobs to the extent possible. And, we are committed to safeguarding the long-term financial health of the university and to being transparent about decisions that are being made. We will be asking everyone across the campus to help us meet these challenges, for it is only through our combined efforts that we will make the most progress.
Steps We’re Taking to Sustain CU Denver’s Financial Health
We are taking some immediate steps to preemptively manage the potential risks created by the current economic uncertainty in Colorado and across the country.
Hiring chill—We are limiting hiring of new employees and replacing only those vacant positions deemed “mission critical,” including positions already posted. A process for executive review of these personnel actions has been implemented.
Pause in merit increases—Due to our changed circumstances, the previously proposed compensation and merit increases are no longer feasible. Therefore, the normal July merit increase cycle is indefinitely delayed. In addition, a temporary moratorium is now in effect on pay increases, promotions, and employee transfers until further notice. Any exceptions require approval of the Chancellor, Provost or Senior Vice Chancellor of Administration and Finance.
Pause on travel—All international and domestic travel sponsored or supported by the university has been suspended. When traveling safely becomes possible, only essential travel will be permitted, and it must be approved through the appropriate channels.
These decisions have not been made lightly but in the belief that taking swift action now will provide more flexibility as the impact of this crisis continues to unfold. In the coming days and weeks, we will be working with leaders across the university to plan budget reduction scenarios for their units.
Using Tools Already in Place
The good news is that long before the pandemic, CU Denver had been cultivating the mindset to address financial pressures. We transitioned to an incentive-based budget model in 2017-18 and have begun implementing our strategic enrollment management effort. The same principles apply here: a transparent process with shared decision-making responsibility and a shared commitment to the university’s fiscal health. We’ll be using this same process to manage the challenges resulting from the pandemic, including a toolkit that contains a wide array of possible strategies for budget reductions such as a continued hiring chill, temporary pay reductions, furloughs, workload adjustments, early retirements, and layoffs.
While this is a highly fluid situation and we cannot fully predict the future, we are optimistic that we will get through this and emerge even stronger on the other side. As CU President Mark Kennedy wrote earlier this morning, CU is viewing its approach in three phases: triage, stabilization, and transformation. Our triage began when we transitioned to remote teaching and learning. Through stabilization, of which these financial steps are part, we will need to be especially disciplined as well as innovative, which is a defining strength of our community. And when we reach the “new normal,” we look to a transformation that ensures we are even better positioned for the future.
Meanwhile, we understand the stress and uncertainty that this crisis is creating for all of us. We have been inspired by and grateful for the amazing response we have seen despite these challenges. We hear stories everyday of faculty and staff going above and beyond to support our students and each other. Perhaps a silver lining is that we are all gaining a renewed awareness and appreciation for the strength of our community and the values that underlie it. That is what gives us hope and confidence for brighter days ahead.
Know that we will continue to closely monitor our financial situation and communicate regularly with you in the days and weeks ahead. For starters, we invite you to join us for a live Zoom webinar on the topic Tuesday, April 28, from 2:45 – 3:30 p.m. You may submit questions in advance of the webinar, as well as ask questions through Zoom's chat feature during the event. It will also be recorded and shared on the university’s COVID-19 website and YouTube channel within 24 hours of the live Zoom.
Please continue to take care of yourselves and your loved ones. Thank you for all you do for CU Denver.