Taking issue with Denver Post story
By Mark Reaman
Western State Colorado University officials are disputing the tenor of an article published in the Denver Post last week that indicated the school was in the throes of major financial difficulties.
The February 9 article stated: “Western State Colorado University in Gunnison is trying to claw its way out of a financial hole. For several years the university has been bleeding cash—nearly $19 million over the last five years… A performance evaluation by the Colorado Office of the State Auditor shows the 2,149-student university needs to harvest $2 million to $3 million more a year to break even.”
But that characterization is not accurate, say university administrators. WSCU chief operating officer Brad Baca said the article was “grossly out of context and misleading.”
“We are not bleeding cash by any stretch,” Baca told the Crested Butte News Monday. “In fact, the audit concluded that our cash margins are strong.”
In a response letter to the Post, Baca noted, “State auditor Dianne E. Ray agrees, ‘The evaluation has identified stabilized and positive trends over the past three years in Western’s operating cash flow, student enrollment, and retention rates.’ The article ignores funding cuts by the State of over $3 million from 2009 to 2012 combined with minimal appropriations for capital needs. The comment about Western ‘bleeding cash’ is unfair.”
Baca explained that a series of campus construction improvements begun about 2009 are now being depreciated on the books. Depreciation is an accounting method and does not directly reflect the university’s cash situation.
“We are in a sound financial position,” emphasized Baca. “As the audit report notes, our cash margins are well above minimum thresholds and our composite financial index score has been climbing and was ‘above the zone’ according to Higher Learning Commission standards this past year, another indication of strong financial position.”
When it comes to how WSCU compares to similar schools in Colorado, Baca says the debt on a per-student basis is high but not a significant worry. “We are high on a debt-per-student basis. This was mainly due to lack of available state capital revenues several years ago at a time when we needed improved facilities, and took on additional debt to remain competitive. However, we have dedicated, structured revenue sources to service our debt and with the recent trends in enrollment growth we have been outperforming our revenue projections, allowing us to put more money into our debt service reserve fund, which currently sits at over $1 million.”
As would be expected, Baca noted that the increasing enrollment at Western is helping to address the money situation.
“Enrollment is increasing. In fact, this past fall Western experienced the largest percentage growth [6.8 percent] of any Colorado public institution of higher education,” he explained. “In the current year, our FTE enrollment is projected at 2,336, making it the fourth year in a row in which we have experienced growth and placing our four-year gain at 15.5 percent. Our student loan debt for those who borrow is less than half the national average, as is our student loan default rate—which speaks to our affordability and the employability of our graduates. And we deliver our education at a cost per student that is at or below our peer averages, demonstrating our efficient use of the resources we have. For instance, our peer set, on average, spends over $1 million more annually on administrative costs than Western.
“Enrollment growth will be critical to our continued financial improvement,” Baca continued. “Tuition deposits for next year are pacing well above last year’s. Part of our growth includes our graduate programs that were up 25 percent just last year, and we are looking at bringing two new programs on next year. Further, our retention and graduation rates remain both higher than a few years ago and higher than peer group average. So overall, we see a bright financial future for Western.”