Financial issues update from the President...

(12-18-2008)

Dear Friends and Colleagues:

Before many of you depart for a well deserved break, I need to update all of you on pending issues, both at the State level as well as issues with our own Foundation which will affect ASC's financial resources this year and next. Reading about events in the newspaper or on-line should not be the first time you hear of these issues. Obviously the state of our national economy is now impacting all of us and especially state revenues and the earnings of private foundations.

We are hearing from dependable sources that a rescission order is probable for this fiscal ear. This means a certain percentage of new funds we were initially awarded for this fiscal year will be "called back". As of this writing we do not have a percentage that we can translate into a number. For us, any decrease will be painful. We will need your help and advice as we make determinations in how we cope with a mid-year decrease in funds. As of this writing, I am suspending all new searches and new spending until we can prioritize positions which we fill and those which we hold open. Searches for faculty positions already advertised may continue but a final determination on which positions are filled and which may be held vacant still needs to be made. I will say that the classroom is the last place where we want to cut positions and we will look at gaining efficiencies in administrative and support positions before we make any decisions on classroom positions. One idea being discussed which would achieve immediate salary savings is a mandatory unpaid furlough for administrators making more than $50,000. Initial calculations project that for each day of furlough, would generate about $10,000/month of salary savings. I am sure some of you can think of other advantages to having administrators on furlough..... The rescission will not only impact us this year but the cut will most likely carry into the next fiscal year. The outlook for new funds for the next fiscal year is thus bleak as are the possibilities for raises for all exempt staff and faculty. Constitutionally, we will be required to award classified staff market salary increases which are based upon the Colorado Department of Personnel and Administration salary survey, but we do not anticipate the funding of Achievement pay.

Second, we are in the midst of restructuring the ASC Foundation Office. With volatility in the stock market, there have been literally no earnings on much of the corpus held by the Foundation. This means little interest has been earned which can be used to pay staff. This has impacted their staffing and 2 of their positions have been cut with those employees transferred to vacant positions elsewhere on campus. However, scholarships will still be awarded but the number of such scholarships may be decreased as the interest from endowments has decreased. Moreover, over the last few years, the Foundation has funded a number of program costs primarily in Enrollment Management and Admissions. Because of the decrease in interest earnings, ASC institutional funds will need to be used to fund the high priority program costs both this year and next. This is an added burden to our General Fund Budget. Fortunately, our Extended Studies Division has continued to earn record profits and some of those funds may be used to offset some of these unanticipated costs.

After break, we will seek help and advice from Faculty Senate, Classified Employees Council, Academic Council, Cabinet and all of you. While I want to stress that NO decisions will be made prior to thorough consultation and communication, our time line is short and decisions must be made before the end of January.

I wish I had better news to share during this usually merry time of year. I would say that the above issues are largely beyond our control. Few economic experts saw this recession coming and literally no one knows how deep or how long it will last. Nothing quite like it has happened before. We will work very hard with you to meet the challenges. Thank you for your work and your dedication to our students.

President Svaldi