University’s financial health rated adequate
Colorado Mesa University’s financial health passed a checkup by staff of the legislature’s Joint Budget Committee. But not all schools fared as well.
Joint Budget Committee staff awarded financial index scores in December to all public, four-year colleges and universities in Colorado. The Colorado Commission on Higher Education reviewed an extended analysis of the scores at their Feb. 14 meeting in Denver.
Three schools — Colorado School of Mines, the University of Colorado system and Metropolitan State University of Denver — got an index score above three, meaning they had “moderate financial health,” according to a JBC report. The Colorado State University system and Colorado Mesa University’s index scores fell just below that threshold, followed closely by the University of Northern Colorado and Fort Lewis College.
Western State Colorado University and Adams State University had the state’s worst financial health. Both had negative index scores, largely because small enrollment (Adams had 3,033 students in fall 2012 while Western had 2,029) meant even increased tuition wasn’t enough to cover decreasing state support. Their debt also increased in recent years because of “heavy spending on new buildings” to attract more students, according to the JBC report. The report suggests closer state monitoring, less borrowing, and possibly having Adams and Western join onto a larger university system that could subsidize their smaller campuses.
Colorado Mesa operated in a single system with Adams and Western prior to 2003 but the university has not been asked to absorb Western or Adams, nor is Colorado Mesa seeking that opportunity, according to CMU spokeswoman Dana Nunn.
Colorado Mesa has $175.2 million in principal, plus $118.8 million in interest, to pay off in bonded debt for residence hall, university center and classroom building construction and renovation projects that have gone up in the last seven years, leaving the school with the fourth-highest principal debt among Colorado’s public four-year institutions. But the university’s financial index score is higher than those of Western and Adams, largely because enrollment grew by 54 percent in 2012 compared to 2007 so tuition and student housing fees could help pay the debt for new buildings.
Among the four components that determine the financial health index, Colorado Mesa had the highest score among the state’s four-year public schools for its ratio of net income to total operating revenue and the fifth-highest score for asset performance, which is the school’s change in net assets over time as a portion of net assets. It scored higher than only Adams and Western, however, when it came to the ratio of assets on-hand to either expenses or debt.