CC taking ax to budget amid major financial issues

Colorado College officials say the school is facing a financial challenge of a magnitude they haven't seen in recent history, and they're looking at ways to cut up to $12 million from the annual budget - with layoffs a possibility.

Several factors have affected the school's finances. Like other colleges around the nation, the small, private liberal arts school north of downtown Colorado Springs is experiencing significant losses from its multimillion dollar endowment fund. The college's budget also took a hit from last year's interest spikes on a nearly $33 million variable-rate bond that helped fund a new performing arts center.

At the same time as revenue is declining, CC wants to increase expenditures to provide more financial aid for students.

As a result, the board of trustees has asked college officials to trim $8 million to $12 million from its annual operating budget of about $100 million, said Robert G. Moore, who just started his job on Monday as vice president of finance and administration/treasurer.

The cuts will likely extend over several fiscal years, he said. In May, trustees will consider the 2010 budget, which takes effect July 1.

Although Moore acknowledged that layoffs among the 734 staff and faculty members are a possibility, he said it's too early to tell if downsizing will be necessary.

"We might consider that, but we're months away from knowing," he said Tuesday.

Officials have identified $1 million to eliminate from the college's operating budget that does not include axing current jobs, Moore said, but vacant positions are not being filled.

In addition, CC President Dick Celeste is meeting with staff, faculty and students to discuss how to reduce expenditures, Moore said. An ad hoc budget planning group also is brainstorming ideas.

"This is an opportunity for us to figure out what things we did in the past no longer have high priority and what we can do that's new and more closely related to our goals," Moore said.

Total investments that were at more than $500 million in October have slipped beneath that amount, he said, although he could not provide an exact figure.
"We're clearly down - our endowment has suffered like everyone else's - but it's difficult to estimate how much we would have if we cashed it in today," Moore said.

There is one piece of good news for the college: Although the interest rate skyrocketed to double digits last year on the college's variable-rate bond on its new Cornerstone Arts Center, which opened about six months ago, rates have since plummeted to below 1 percent, stemming those costs, Moore said.
Reconfiguring the budget is expected to free up more money to address a priority to increase financial aid for students. The college contributes about $20 million annually to financial aid.

Many colleges are bracing for the possibility that more students will seek financial aid next year if the economy does not improve.
"It's way too early to say what enrollment will do, and there is no course of action to take right now," Moore said. "It's fair to say there's a concern, though."
The budget situation does not jeopardize future capital construction projects, Moore said.
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Contact the writer: 636-0235 or debbie.kelley@gazette.com