Operations Forecast looks to 2007-08

By Colleen MacPherson

Spinney

A provincial grant increase of seven per cent, which will allow the U of S to hold tuition to the 2004-05 level promised by the Saskatchewan government and to cover its economic needs, is at the core of the University’s operating and capital requirements for 2007-08.

The grant increase request comes in the annual Operations Forecast, which will be submitted to the provincial Department of Advanced Education and Employment this month. The document also includes a request for more money for capital expenditures and some specific investments tied to the centennial year.

Referring to the forecast, Provost Michael Atkinson pointed out it asks the province for support for both the operating and capital budgets, and that it has been widely discussed at various levels of the University, including Council and its committees. The document has received approval from the Provost’s Committee on Integrated Planning and the Board of Governors.

For Richard Florizone, vice-president finance and resources, the forecast details “where we’ve come from and where we’re going in terms of Integrated Planning.” It documents sound financial management on the part of the University and is “fair and reasonable” in terms of what the U of S needs to provide quality education, attract faculty, conduct research and compete for federal funding.

Although the Operations Forecast makes very specific requests of government in terms of projected financial needs, Jim Spinney, budget planning director in the Integrated Planning office, pointed out it is only part of the ongoing discussions between government and the U of S.

Conversations between the University and the department that represents post-secondary education in Saskatchewan continue throughout the year, he said. “They (department officials) then have to have conversations with Treasury Board about the needs of the post-secondary sector and this document helps to provide them with the information they need from us to do that.”

Not that the information is new, he explained. The forecast builds on “projections and assumptions” that went into a preliminary 2007-08 budget prepared last spring as part of updating the multi-year operating budget framework.

Operating grant

Looking at the forecast in detail, Spinney said the request for an additional $15.471 million in the operating grant actually represents an 8.2 per cent increase, but the provincial government has already committed to 1.2 per cent of that for College of Medicine accreditation and for medical residency training. What remains is an economic and tuition increase of seven per cent, the same as the University received in 2006-07.

At that time, the province indicated it did not want a tuition increase in 2007-08 and that it would provide relief to the University just as it had in 2006-07 “but we hadn’t presented any information about the University’s tuition plans for 2007-08,” Spinney said. “What we’re saying to the government this year is that if seven per cent, including tuition, was good for you (the government) last year, then seven per cent is a fair and reasonable amount for 07/08.”

Although it does not discuss tuition in detail, the forecast projects that undergraduate enrolment will remain stable with a modest increase in graduate enrolment. The other main factor cited in support of a larger grant is a projected increase of 3.9 per cent in salaries and benefits for all employees, including normal progression.

Capital funding

In addition to more operating funds, the forecast requests the government restore the annual capital allowance to the U of S, and increase it by $10 million for 2007-08. Spinney explained the University received $14.44 million annually for several years for capital expenditures. In March 2005, the government essentially gave the University two years worth of allowance at once, “then took it out of their annual budget for 05/06 and 06/07. We will have a significant problem, particularly with deferred maintenance, if it isn’t restored.”

In fact, he said the University makes a case in the forecast it needs about $39 million annually to cover its capital costs. Going by industry standards, the U of S should be spending one to three per cent of the current replacement value of its assets annually on cyclical renewal, and its assets are valued at about $2.4 billion.

Add to that about $5 million a year for what is called Campus Core Revitalization – capital projects in the range of about $500,000 to a few million dollars – and the total is $44 million “but we’re trying to be reasonable” by asking for $24.44 million in 2007-08. He added that the $14.44 million capital allowance remained unchanged from 1998-99 to March 2005 “and today, that doesn’t buy anywhere near what it did back then.”

The capital funding request “makes up for lost ground and will help us deal with a backlog of deferred maintenance. It’s an opportunity to move forward to providing a more adequate level of funding…and away from individual requests for smaller capital projects.”

Centennial investments

To mark its 100th anniversary, the U of S is also encouraging the province to make a series of centennial investments including $8 million either to support Saskatchewan Chairs for a determined length of time or match the University’s $8 million commitment to its chairs program.

There is also a request in the Operations Forecast for an incentive program and matching funds to encourage private giving in support of student scholarships, grants and bursaries.

Spinney said in this kind of program, the government would contribute a dollar for every dollar raised up to a pre-determined maximum. Such a program will continue beyond 2007, he said.

The other Centennial request is for an immediate injection of $15 million in capital for academic and student space needs in the humanities and social sciences.

Bryan Bilokreli, director of integrated facilities planning in the Integrated Planning office, said the funds would help address deficiencies in faculty and grad student space, teaching space and research space either through new construction or changes and improvements to existing facilities.

A project development committee representing the College of Arts and Science and Facilities Management Division will be set up soon, he said, to explore strategies and options. He hopes a report on how to proceed will be ready in the spring.