How CC is navigating economic challenges - Colorado College

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How CC is navigating economic challenges

This Web site was created in an effort to be transparent about the financial challenges facing the Colorado College because of the global economic slowdown, and to foster discussion and solicit suggestions from members of the campus community.

A Message from the President

Campus Messages:

Budget Suggestions

Please use the form below to make specific suggestions for the College as it responds to the economic crisis.









Suggestions may be posted to the Electronic Town Square for discussion.

What's Next / Upcoming Events
  • Departments review their programs to identify an additional $4 million in case economic conditions require further budget cuts.
Documents
Ad-Hoc Budget Planning Team
Membership
Susan Ashley, chair
Sue Allon, trustee
Angela Cobian, student
Mike Edmonds, administration
Judy Laux, faculty
Brittany Linton, student		 Robert Moore, administration
Nan Papiernik, staff
Jack Pottle, trustee
Matt Reuer, staff
Fred Tinsley, faculty
David Weddle (as of block 5), faculty

The Budget Planning Team can call on a resource group including Randy Stiles, Stacy Davidson, Lyrae Williams, John Calderhead, Barbara Williams, Jane Turnis, and Beth Brooks.

The Budget Planning Team’s Approach

The Budget Planning Team established the following standards, objectives, actions and timeline for its work.

News from Around the Web
Frequently Asked Questions

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  • Q: How has the economic downturn affected Colorado College?
    A: The stock market’s huge losses have of course also reduced the value of the college’s endowment. We also anticipate a reduction in charitable giving as well as very limited general non-endowed investment revenue. Given the day-to-day flux of economic information, the current and long-term impacts are still evolving. («hide answer)     (show answer»)
  • Q: From where does money in the endowment come?
    A: The endowment is made up of 135 years of gifts to the college; most of it is from alumni, some is from parents, and the rest from friends of the college. Our Board of Trustees’ investment committee determines the strategy for investing these funds. The committee has diversified our endowment, and because of that CC has fared better than some comparable institutions. A percentage of the endowment’s earnings or assets are used each year to fund financial aid, professorships and programming. («hide answer)     (show answer»)
  • Q: What is the college doing to weather these financial challenges?
    A: The college’s Board of Trustees has passed a resolution urging the college to reduce the next fiscal year’s budget by $8 million to $12 million. They based the resolution on a particular set of budget parameters developed in December and on the anticipation of a possible further decline in investment income and in the value of the endowment.

    Even prior to this resolution, the college was reallocating current resources based on its commitment to financial aid. Because deficits were already projected beginning this fiscal year, the college established a Working Group on Stewardship and Cost Containment in fall 2008. Administrative departments submitted more than 70 ideas for reducing their budgets to this group. In addition, all departments have been asked to cut spending in the current fiscal year.

    Recently, President Celeste appointed an ad hoc Budget Planning Team, comprised of faculty, staff, students, and trustees to consider the working committee’s findings and to look at other ways of reducing the deficit. As part of their review, team members plan to ask all units to evaluate their activities in terms of contributions to the core mission of the college and to identify ways of enhancing efficiencies and of making cuts in programs. The Budget Planning Team itself will take a more comprehensive approach to the evaluation of all programs of the college.

    Also prior to the downturn, the college was working to reduce the number of staff positions; it placed a freeze on new positions, and scrutinized vacant positions to determine if they were essential. In view of the size of deficits we need to address, and in light of the Board of Trustees’ resolution, we will need to give additional consideration to compensation and staffing. The whole community will be involved in identifying the best ways to accomplish these economies. («hide answer)     (show answer»)
  • Q: What percentage of the budget is the trustees’ proposed $8 million to $12 million reduction?
    A: The 2008-09 operating budget is - $92,909,504; an $8 million to $12 million reduction would result in an 8.6-12.9% reduction in how the current budget is presented. However, the current operating budget presents financial aid as an expense, but in actuality, financial aid is a "tuition-revenue discount." So, when you move financial aid out of the expense budget and into the revenue budget, as a discount, the 2008-09 operating budget is actually closer to $77,652,038. Using $77 million as the base for the reduction, then an $8 million to $12 million cut would be a reduction of about 10-15%. («hide answer)     (show answer»)
  • Q: What is the timetable for major budget decisions?
    A: December 18-19: The Working Group on Stewardship and Cost Containment shares with President Celeste and senior staff its report on initial cost-containment and revenue-building strategies submitted by administrative departments. The report will be available on this web page as soon as possible. January: All departments, programs and divisions examine their budgets and operations to find areas where savings can be achieved. Administrative departments will seek savings beyond what they submitted earlier to the Working Group on Stewardship and Cost Containment. Budget scenarios are to be submitted to the ad hoc Budget Planning Team by Jan. 30.

    Mid-January: Tuition increase and financial aid determinations will be made and submitted to the Board of Trustees for approval in February.

    May: 2009-2010 budget will be submitted to the Board of Trustees for approval. («hide answer)     (show answer»)
  • Q: What has the Working Group on Stewardship and Cost Containment found while reviewing unrestricted operating costs in administrative units?
    A: That group expects to complete its work in December 2008. Members have collected cost reduction and revenue enhancing ideas from all administrative units on campus and have also examined our spending on college-wide expenses such as travel, food and entertainment, and paper/printing/copying. All of these suggestions could contribute more than $1 million in cost reductions starting next year, so it will be an important contributing factor to our budget challenges but it will not solve our problem. All of us can help by reining in spending immediately. («hide answer)     (show answer»)
  • Q: On Dec. 1, President Celeste sent a message saying that “The effects of current economic circumstances on the Colorado College endowment mean that we must address a projected budget deficit of at least $4-5 million per year for the next several years.” Now, less than two weeks later, the Board of Trustees has passed a resolution instructing the College to take immediate steps to reduce next year’s budget by $8 million to $12 million and noting that such reductions can only be achieved through a “substantial reduction in positions and a constrained compensation pool.” Why have things changed so much in just a few days?
    A: Recent and deeper analysis of the budget challenges suggest a projected deficit in excess of $5 million in 2009-2010, more than $8 million in 2010-2011, and more than $10 million in 2011-2012. These progressively increasing deficits are, in part, the consequence of a three-year trailing average in the endowment payout formula, a formula used to smooth out the payout when sudden changes in the market occur. However, the size and unpredictable nature of market fluctuations now put us in uncharted territory. So, rather than making a series of budget reductions over the next three years, the Board wants the college to make plans now with the subsequent three years in mind. That process will involve determining how to address projected deficits and establishing contingency plans should the economy cause those predictions to increase (or decrease). («hide answer)     (show answer»)
  • Q: What is meant by “a substantial reduction in positions?”
    A: . It is too soon to say. Determining the answer to this question is one part of the work of the Budget Planning Team. («hide answer)     (show answer»)
  • Q: Would reducing compensation significantly reduce the deficit?
    A: The answer depends on assumptions about the budgeted size of salary pools and that is still under review, however salaries and benefits comprise more than half of the college’s operating budget. As of September, assumptions about faculty and staff salary pools were 7.25% and 4.25 %, respectively. Relative to these assumptions, budgeted salaries would be reduced by more than $1.8 million if the pools were zero this year. The ad hoc Budget Planning Team is beginning with other assumptions (3% increases for staff and faculty), with the understanding that this, and other initial parameters, may change. («hide answer)     (show answer»)
  • Q: Tuition revenue and financial aid are very large parts of our revenue and expenditures, respectively. What assumptions are we making about these two categories in the budget?
    A: The ad hoc Budget Planning Team is positing a 4% increase for each of the next three years in tuition, room and board. It is working on financial aid assumptions and plans to complete those recommendations by mid-February. («hide answer)     (show answer»)
  • Q: Can the college bring in more revenue by enrolling a slightly larger student body?
    A: Each full paying student adds to tuition revenue. However, the college’s upper level of 25 students per class (32 if team taught) and the limit of 16 (25 if team taught) on First Year Experience courses reduces our capacity to absorb significant numbers of additional students. Also, any increase would also require a corollary increase in temporary teaching assistance, financial aid, and other academic support. The Budget Planning Team will carefully review this question. («hide answer)     (show answer»)
  • Q: Will financial aid be reduced for current students?
    A: No. («hide answer)     (show answer»)
  • Q: I have heard it said that “everything is on the table” as the Budget Planning Team does its work. Does that mean that faculty departments and positions will be reviewed as well as administrative units and staff positions?
    A: Yes. («hide answer)     (show answer»)
  • Q: What’s the likelihood that the college can hire and retain quality faculty while making such significant budget cuts?
    A: Our faculty salaries are and will remain competitive. We will also continue to provide strong support for faculty research and development. The faculty is committed to enhancing academic quality and to maintaining a strong financial aid program. They, along with the rest of the college community, will play an active role in determining how to deal with the impending deficits while preserving these commitments. («hide answer)     (show answer»)
  • Q: How will the Budget Planning Team go about finding the “right” areas for elimination of programs or reductions of staff?
    A: The Budget Planning Team met twice in recent days to identify standards against which to measure budget decisions, to establish a recommended set of operating assumptions or parameters, and to lay out a plan for its work. The standards, operating assumptions, and the resulting deficits will be available to the campus community. The team plans to ask all units of the college to identify ways of maximizing efficiencies and of cutting non-essential activities. It will ask for these plans by Jan. 30. Meanwhile, the team will also develop a more detailed plan for a more comprehensive program review. («hide answer)     (show answer»)
  • Q: How will budget cuts affect athletics?
    A: The athletics department is already enacting cost-saving strategies including limiting travel rosters, reducing competition schedules, and pursuing group negotiations of travel costs. («hide answer)     (show answer»)
  • Q: Is there a plan to increase the college’s efficiency regarding its use of energy and water resources?
    A: Yes; the new plan from the Campus Sustainability Council looks at ways we can start with conservation to help the budget. In January, we are launching a coordinated campus-wide campaign to green CC, that will give every member of our community an opportunity to save natural resources and money at CC. See http://sustainability.coloradocollege.edu/CC+Sustainability+Plan («hide answer)     (show answer»)
  • Q: What’s happening with Vision 2010? Is it still achievable?
    A: Reaching our goals may become a four-year effort rather than a two-year effort. («hide answer)     (show answer»)
  • Q: The college has brought in nearly $150 million in recent years through its Vision 2010 capital campaign. Doesn’t that offset the endowment losses?
    A: Only to a modest degree. The $150 million in commitments made in recent years includes gifts to capital construction projects and annual support, not just endowment. Commitments made to Vision 2010 -- whether restricted to construction, programs, or endowment -- include multi-year pledges as well as confirmed estate commitments. And the new endowment gifts that have been received in recent years are already included in the endowment reports that we see today. («hide answer)     (show answer»)
  • Q: Does the new Edith Kinney Gaylord Cornerstone Arts Center drain the budget further?
    A: The college took down two inefficient buildings prior to building Cornerstone. No new maintenance workers were hired to service the building. It will cost between $70,000 and $100,000 to run and maintain the building each year. Currently the operating budget provides $933,000 toward debt payments on the college’s outstanding bonds, partially offset by earnings on the Next Generation Fund. («hide answer)     (show answer»)
  • Q: Will buildings be renovated or will new buildings such as the KRCC Earthship be built now?
    A: Except for Americans with Disabilities Act compliance projects and sustainability investments, building renewal and renovation projects will slow. The college will pursue the KRCC building project only when all funding is in hand. («hide answer)     (show answer»)
  • Q: Who can I talk to for more information about the budget?
    A: Campus community members are welcome to visit the budget office to ask questions or talk about the budgeting process. You may contact Lyrae Williams, director of the budget, at 389-6699. («hide answer)     (show answer»)
  • Q: How can I make suggestions for budget cuts and revenue growth?
    A: A Budget Suggestion Box is provided above (at the top of this page); members of the ad hoc Budget Planning Team will receive suggestions and consider them. Ideas may be submitted anonymously if you wish. Ad hoc Budget Planning Team members encourage all campus community members to participate in the process, join in budget discussions and contribute suggestions. («hide answer)     (show answer»)
  • Q: What can college employees do to handle stress about these issues?
    A: The college provides Employee Assistance Program benefits; information is available here http://www.profileeap.org/; contact Human Resources for sign-on information, 389-6421. Be supportive of colleagues and notify HR or your supervisor if you have concerns about others or yourself. («hide answer)     (show answer»)
  • Q: What impact has the economy had on our Variable Bond payments?
    A: The college's variable rate bonds have performed very well in the ultra-low interest rate environment of the current economy. We have three variable rate issuances with approximately $57.7 million in outstanding principal. Over the last 30 days*, the interest rates have been below 1%. For reference, we have budgeted for 4% interest. Obviously, interest rates can and will rise, though there is no expectation of this in the near term. The college is evaluating this risk and the option of converting some or all of the outstanding variable rate bonds to fixed-rate at some point in the future. * this answer was posted 12/19/08 («hide answer)     (show answer»)

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