January 9, 2009
By Colleen MacPherson
Ginger Appel, director of budget strategy and planning in Institutional Planning and Assessment, said the 7.33 per cent increase in the annual grant requested in the operations forecast covers both the economic and tuition needs of the U of S for 2009-10. If approved, that would mean the university's annual operating grant would be about $246.5 million.
The calculation of the university's total financial need for the year is realistic and well grounded, she said, but there is some uncertainty around how the government will handle the tuition portion of the request. In preparing the forecast, the university did its tuition calculations as it has for the past several years, governed by a tuition management plan brought in by the previous provincial government. Under that scheme, the university held tuition rates to 2004-05 levels and the government provided additional operating funding to make up the difference.
Appel said the same calculation was done for the 2009-10 forecast even though the university knows the government plans to change the tuition management plan. "But, we don't know what that will look like, what the amounts will be or when it will take effect.
"Tuition is ultimately the board's responsibility," she said, "but we need to know what the provincial government is granting us and then we will do what we need to do. That might mean a shift in the budget or a change in tuition, but tuition rates are based on many factors, not the least of which is ensuring continued access and affordability for students. We're not going to balance the budget on the backs of students."
The final version of the government's new tuition management plan will not likely be revealed until spring, she said.
In addition to the economic and tuition increase, the university is requesting $2.295 million for an investment in University Advancement (UA), a division that includes development, alumni relations and communications. Appel said the university plans to contribute $1.705 million for a total investment in UA of $4 million.
The planned investment is "an attempt to reduce our reliance on the province and the provincial grant by increasing our partnerships with other funding sources," Appel said.
"The provincial grant is an unknown factor in budget planning each year, so the more we can diversify our revenue sources and opportunities, the better."
Addressing questions about the operations forecast at the December University Council meeting, Heather Magotiaux, vice-president of University Advancement, said the $4 million would be used to expand the institution's fundraising capacity across campus in both centralized and decentralized units. Building on an advancement model of inform, involve and invest, the funding will help maintain relations with donors established during the last capital campaign as well as secure new support.
She added that in a comparison of the U of S with other, similar institutions, "we're not currently in a position to be as competitive as we should be."
Turning to the capital grant request in the operations forecast, Appel said the university is asking for an additional $10 million, $5 million of which would be to the annual capital allowance and $5 million for core area revitalization. Combined, the $10 million "is acknowledgement of the need to put more annually into the revitalization, adaptation and renewal of our basic assets."
Not making such investments only contributes to the university's growing backlog of maintenance projects, which, according to the operations forecast, now totals about $620 million. To deal with the most critical deferred maintenance, including $23 million in roof replacement, the forecast requests one-time capital funding of $62.1 million. That figure also includes just over $17 million for debt repayment on three projects—$7.2 million for the Thorvaldson Building restoration, $2.9 million for the College Building restoration and $6.9 million for upgrades to the university's cooling system.
Appel pointed out the university makes debt payments of $8 million annually on the projects so spending $17 million once to pay off all three would free up that money in the future for other kinds of investments. "That one-time payment would create an ongoing benefit for both the university and the province," Appel said.
Finally, commenting on the effects of the current instability in the world economy, Appel said the 2009-10 operations forecast holds true to the goals of the university's four-year integrated plan and its accompanying budget framework, as well as taking into account the current strategy of one-time measures designed to deal with possible shortfalls in revenue from investments. "This operations forecast, like all our plans, is based on reasonable assumptions and that provides us with a stability that enables us to weather these economic storms."
While it approved the forecast in December, the university's Board of Governors also asked administration to prepare a number of financial scenarios to reflect the possible impacts of the current economic uncertainty on the institution. That analysis will be presented to the board at its March meeting.