June 12, 2020
Dear CU Boulder Faculty and Staff:
As we prepare for the upcoming fiscal year, and following the Chancellor’s message yesterday, we want to provide you with the most up-to-date information about CU Boulder’s current financial situation and what we anticipate in the future.
COVID-19 caused the campus to sustain immediate and significant financial losses, including more than $22 million in refunds for housing and dining fees, more than $5 million to maintain the employment of employees who were unable to work remotely, and hundreds of thousands of dollars in expense to enable remote learning and to provide more safety and sanitation on the campus.
In the fall, we will continue to have significantly greater expenses, including an estimated $6 million to protect the health and safety of the campus community through investments in testing, personal protective equipment, sanitation equipment, and other risk mitigation measures. We will need to allocate an estimated $12 million to address facilities needs related to classroom reconfigurations and housing to provide adequate social distancing. And we will need approximately $10 million in technological investments to allow us to provide effective education.
The campus also will not charge any increased tuition to this year’s incoming class, whether for in-state or out-of-state students. Not raising tuition was the right decision for our students and their families.
At the same time that we have these increased expenses, we face significant revenue shortfalls. We won’t know the full extent of those shortfalls until we have confirmed our enrollments in the fall, but our current budget for the upcoming year is based upon a projected $45 million reduction of our educational and general fund revenues, a $59 million reduction in auxiliary and self-funded activity revenues, and a $22 million reduction in restricted fund revenues. These losses could become greater than we are estimating.
We have received some funding from federal relief programs through the CARES Act: about $9 million for emergency student grants, which are distributed directly to students who have experienced COVID-related financial losses, about $9 million in direct federal relief, and $48 million in funding that the state can distribute to us to address COVID-related expenses. While we greatly appreciate these relief funds, it’s important to remember that they are occurring at a time when the General Assembly is reducing state higher education investments. It is important to note that CARES funds are also one-time in nature and won’t be in place to resolve our deficits in the long run, and therefore, we are likely to experience financial losses well beyond this fiscal year.
All of these challenges factored into the personnel actions that Chancellor DiStefano announced yesterday. We proposed these temporary pay reductions and furloughs to Chancellor DiStefano to avoid layoffs, additional continuous furloughs, and other actions that would hamper our ability to sustain the campus’s educational mission.
The pay cuts and furloughs are an important step toward addressing our fiscal challenges and will result in saving about $15.1 million in the upcoming year, but we will need to do more.
In addition to the above, we will be looking for ways that we can reduce costs, be more efficient, and create new revenues wherever we can. We need to invest in areas with the greatest benefit to the campus, and we need to limit expenditures that are less crucial.
On that note of crucial expenditures, we want to be clear that we are not going to allow the financial impact of COVID-19 to slow our efforts to improve diversity and inclusion on campus. We know we have a long way to go with this effort, and you have our commitment that we will invest significant resources–from financial to time and energy–into changing the culture at CU Boulder.
As the Chancellor noted, this is one of the most difficult times in CU Boulder’s history. But we are working hard to hold ourselves accountable for the values we espouse while limiting drastic financial impacts to employees. Thank you for your continued work in service to our public mission. We will get through this, together, and come out stronger than ever.
We are Buffs Together,
Provost Russell Moore and Interim Chief Operating Officer Patrick O’Rourke