January 25, 2008
By Colleen MacPherson
With specific initiatives yet to be identified for the next four-year integrated planning cycle, the University’s Operations Forecast for 2008-09 looks very much like last year’s, with one exception.
“This year is a bit of an anomaly,” said Richard Florizone, vice-president of finance and resources, commenting on the forecast document. “We are in transition between two integrated plans and we’ve yet to finalize our priorities for the next four years so we’re not looking to do a lot of new, innovative things in this forecast. Instead, we’re asking the provincial government for a reasonable and realistic increase in the operating grant to support our basic needs and help us maintain the momentum we’ve developed over the past four years.”
The forecast, which will be formally submitted to the provincial Ministry of Advanced Education, Employment and Labour in advance of the government’s budget consideration process, calls for a 7.1 per cent increase in the University’s operating grant. Jim Spinney, director of budget planning in the Integrated Planning Office, said that figure represents $14.707 million and would push the total grant to $223.233 million. The request combines an economic increase with the funding necessary to maintain U of S tuition at 2004-05 levels.
“Our understanding is that the previous government’s tuition management program of holding tuition at 2004-05 levels is supported by the current government at least for the next year,” said Spinney, “so our operating grant request for 08-09 is consistent with the percentage increases we’ve received over the past two years.”
New in this Operations Forecast is a special request for a $2 million injection into the University’s Academic Priorities Fund (APF), for a total grant request of about $225.233 million.
Florizone said the University’s relationship with the provincial government has hinged, in part, on demonstrating the institution is serious about planning, and about making strategic moves to improve the quality of education it provides, to recruit and retain top faculty and to be competitive in the post-secondary sector. “I believe we’ve proven that our planning process produces tangible results but also that we need to ensure we have the accumulated funds in the APF to support our ongoing and future priorities.”
Along with the request for $2 million comes a commitment from the University that the APF will not be used to solve any future budget challenges.
While the University is up front about its financial needs, the Operations Forecast also acknowledges the risks faced by the institution, a significant one being enrolment. Spinney said changing demographics in the province have focused attention on potential declines in undergraduate enrolment levels and the need to invest in recruitment and retention.
“There was no conscious effort when we were drafting the document to make it more student-focused than in the past but there are a number of messages that relate to student demographics and undergraduate enrolment.”
The document indicates that in 2007-08, undergraduate tuition totaled $64.9 million, more than 80 per cent of the University’s total tuition revenue of $78.1 million. That total is under pressure, said Spinney, but is expected to remain unchanged for 2008-09.
“If you have enrolment challenges, you have revenue challenges.”
The Operations Forecast also projects a 4.5 per cent increase in salary and benefit costs in 2008-09 – one per cent as “normal progression” (annual increments, merit increases and promotions) as well as 3.5 per cent for negotiated increases. This category of costs represents more than 70 per cent of the University’s total operating expenditures in a year.
As for the annual capital allowance, the University is requesting a minimum increase of $3 million for 2008-09, for a total of $20.498 million, to cover two categories of need: sustaining capital for facility renewal, replacement and adaptation and capital equipment; and core area revitalization. There is also a request for the government to develop a mechanism that would adjust the capital allowance for cost escalations.
The University is also again requesting the capital allowance be put back into the provincial budget for 2008-09. Over the past several years, the allowance has come in the form of a cash grant from the government plus an annual commitment to finance the principal and interest on money borrowed by the University. Restoring the grant as a line item in the provincial budget “will give us greater assurance of the province’s commitment to provide annual capital funding,” explained Spinney.
Other repeat requests in the forecast include a program to provide matching funds for private donations to student scholarships, grants and bursaries and matching funds for a chairs program.