‘Living within our means’
Forecast details financial requests

October 22, 2010

By Colleen MacPherson

Vowing to continue “living within our means” while maintaining its scope of operations and mandate, the university has requested an $11.5 million or 4.3 per cent increase in its operating funding from the provincial government for 2011-12. If successful, that would see the organization receive a grant of just over $282 million.

The request is part of the annual operations forecast which outlines the university’s financial needs in advance of the preparation and release of the provincial budget in the spring.

Ginger Appel, director of budget strategy and planning in the Institutional Plan- ning and Assessment office, said the operations forecast outlines for the government the university’s assumptions for both revenue (tuition, investment income) and expenses (salaries and benefits, utility costs, pension contributions) in the coming year in order to frame its grant request. In addition to the base grant, the university has also asked for an additional one per cent, or about $3 million, for strategic initiatives such as the Aboriginal imperative, program innovation, recruitment and research.

“This additional request,” said Appel, “is to take us beyond what we’re already doing in these important areas.”

The forecast also includes a request for an annual capital grant of $35 million to address capital priorities. Last year, the university asked for $30 million in capital funding but received only $12 million, explained Appel. This year’s ask includes $13 million to “catch up” from last year’s reduced grant, a $5 million increase for 2011-12 and an additional $5 million for campus core revitalization. Defined as a strategic link between initiatives and priorities in the integrated plan and the reallocation and development of space, campus core revitalization includes projects like upgrades to the Emmanuel and St. Chad’s residence and McLean Hall as well as classroom enhancements.

The operations forecast highlights in particular the university’s $617 million in deferred maintenance on buildings and infrastructure that have a current replacement value of $4.4 billion. Appel said the university recognizes its role as stewards of publicly funded assets, and that addressing deferred maintenance is necessary to avoid further deterioration of those assets.

This year’s forecast document even includes a number of photographs of particularly high-priority maintenance projects like ruptured steam and condensate lines, and deteriorating concrete and steel.

In addition to the annual capital grant, the forecast requests $38 million in one-time funding for the Gordon Oakes-Red Bear Student Centre ($10 million), infrastructure projects ($10 million) and student-related enhancements ($18 million) including housing, child care and classroom upgrades. These are all projects that Appel described as being “in the later stage of our capital planning process and priorities for the university.”

New in this year’s document is an analysis of various scenarios related to grant outcomes other than the 4.3 per cent requested. An operating grant increase of only three per cent, for example, would result in an operating budget deficit of $3.4 million in 2011-12 and $13.2 by 2013-14. Any increase of less than three per cent or a reduction in the grant “would create a serious structural deficit with a major impact on academic programming and administrative functions,” according to the document.

Appel said the Ministry of Advanced Education, Employment and Immigration provided guidelines in August for the preparation of operations forecasts for all post-secondary institutions in the province. “It’s the first time they’ve done that and they requested we start to look at scenarios with grant changes of plus five per cent, zero and minus five per cent. We’ve acknowledged their request for that information but have not developed our thinking further on how to mitigate those deficits. That would be very complex and would require consultation and commitment from the entire university. It’s a huge process and we don’t feel it’s a good use of our resources just to speculate.”

The university also included in this year’s document its multi-year budget framework up to 2013-14. “The intent is to help the government plan for our expectations because within that framework, we’re signaling specific targeted funding for our priorities that is beyond the annual grant.”

The operations forecast was presented to the provincial government Oct. 19 and can be viewed online at www.usask.ca/ip