President's Campus Communication 3/26/10
I met this week with the “budget leaders” group of deans, vice presidents, assistant vice presidents and governance group chairs to discuss the state budget outlook and budgeting and financial planning at UNC. For the meeting, Sr. Vice President and Chief Financial Officer Michelle Quinn and her staff put together a series of slides that provide an excellent snapshot of UNC’s financial condition. I urge you to look at them on the “Financial Matters” link at http://www.unco.edu/pres/.
The state’s March revenue forecast was slightly better than the December 2009 forecast, suggesting that Colorado’s economy is beginning to recover. This means there will be no further state budget reductions this year (FY10), and we continue to expect a $3.5 million drop in UNC’s state funding for FY11. However, Colorado will still face a significant shortfall in FY12 because so much one-time funding is being used to balance the FY11 budget. Higher education, in particular, will be vulnerable to FY12 reductions because the state will no longer have to hold funding at the FY06 level as it did to qualify for federal stimulus funds through FY11.
As you know, we are developing a $14-million reserve to smooth out the impact of the FY12 drop-off in state funding. We’re making good progress toward the $6.6 million target we set for FY11 and will continue to discuss savings proposals as we develop next year’s budget. Given the circumstances, we don’t need to engage in the lengthy budget proposal process we traditionally use.
We are also working to identify unbudgeted and/or unfunded operating expenses, develop revenue models for Extended Studies and summer session, and untangle our internal charging system. We will discuss tuition and fees with our trustees at their April 29 Finance and Audit Committee meeting and the May 7 meeting of the full Board, leading up to the Board’s adoption of an FY11 budget in June. Later today, I will be meeting with the University Compensation Committee to discuss the impact of House Bill 146, which affects PERA contributions. All of these efforts will inform the FY11 budget and be the foundation for an ongoing financial planning process.
Since the beginning of fall semester, we’ve put a concerted effort into focusing on those things which we can control. The results of this commitment are already evident in our budgeting and financial planning work as well as in our focus on intentional, strategic efforts to recruit students and help them succeed at UNC. We are doing these things well only because of the extraordinary efforts of many people working together on our campus.