July 20, 2020
Dear CU Boulder baby直播app and staff:
As we implement CU Boulder鈥檚 Road Map to Fall 2020 plan, we want to ensure our campus community understands in clear terms the budget and fiscal realities in which we鈥檙e operating, particularly the uncertainties that remain around enrollment, state funding and possible additional federal support, and how we are responding. With a commitment to transparency, we want to let you know our next steps in the budget process.
Our fiscal reality
The Board of Regents approved CU Boulder鈥檚 budget for the 2021 fiscal year on June 18, which included an overall decrease of $102.1 million (5.4%) across the general fund, auxiliary and restricted funds. That reduced budget does not include any of the approximately $69 million in one-time COVID-related costs or revenue losses that the campus incurred in the 2020 fiscal year after we went remote in mid-March.
We would not ask students, baby直播app and staff to return to campus without investing in health and safety measures. Those costs are a campus priority and continue to grow into the tens of millions.
Taken together, the campus faces a general fund gap upwards of $120 million (13%) compared to last year.
Our auxiliary units are facing potentially larger reductions and will continue to address their funding challenges with more immediate and necessary actions.
What we鈥檙e doing
We are working to determine the allowable uses of the CARES Act Coronavirus Relief Fund. If we are able to apply the full amount for COVID-related disruptions, doing so would partially reduce the fiscal year 2021 general fund gap to $71.5 million (7.7%).听
We have already taken steps to further mitigate this $71.5 million gap through periodic furloughs and temporary pay cuts鈥攁ctions that provide savings of about $14 million (1.5%). We additionally plan to use enrollment contingency funds that the campus began setting aside after enrollment declines in 2013 to close the gap. But even with these efforts and other savings that we hope to achieve over the next several months, we have a significant deficit to address.
Our next steps
This spring, we requested that each unit prepare three budget scenarios: 5%, 10% and 20% reductions.
As we start the fiscal year 2021, we are asking each school, college and administrative unit to plan for a 5% one-time general fund budget reduction.
This planning target represents the most modest of the options that we believe can offset our losses. We also believe this approach will allow for more effective planning than setting a smaller target and then needing to seek additional midyear cuts. Unless our financial situation significantly and unexpectedly declines, no unit will be asked to submit a budget reduction of more than 5% in fiscal year 2021.
Here is how our process will work: A team consisting of 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, will meet with deans, vice provosts and vice chancellors to discuss the 5% budget reduction targets.
The two of us will then have additional conversations with the unit leaders before recommending to the chancellor the specific percentage reductions for each school, college or administrative unit. Some units may receive less than a 5% reduction to allow us to focus on strategic priorities.
We will communicate the final targets by the end of August and will adjust unit budgets after the fall census in September. We believe that this approach ensures a collaborative, strategic and thoughtful set of budget decisions and enables us to make cuts strategically and not across the board.
Beyond fiscal year 2021
During fiscal year 2021, we should plan for long-term reductions in fiscal year 2022 and beyond. In the upcoming year, we are fortunate to have the one-time CARES Act Coronavirus Relief Fund. But once those funds are exhausted, we must be prepared for additional funding gaps.
We will continue to be transparent with our financial situation and how we will address the gaps. In making those decisions, we must all focus on sustaining CU Boulder鈥檚 long-term financial viability.
Later in the fall or early next spring, once we have a better understanding of current academic year 2020-21 and projected academic year 2021-22 enrollments, we will let units know whether the fiscal year 2021 reductions will become continuing reductions for fiscal year 2022. We encourage you to approach the fiscal year 2021 reductions with long-term strategic plans in mind.听
We know you are making difficult decisions on behalf of our campus community, and we are grateful. The difficult decisions now 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 that budget cuts have on the lives of our community members and thank you for the sacrifices you have made for CU Boulder. 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