Expect no surprises in preliminary recommendations for next year’s operating budget for faculties, says University of Western Ontario Provost and Vice-President (Academic) Fred Longstaffe.
The recommendations for faculties will be released following the Feb. 26. Western is one of few universities to provide a budget preview to help faculties with planning. The budget year runs May 1, 2010 to April 30, 2011.
“We are going to have a steadier, less of a rollercoaster ride this year than it was last year, barring any unanticipated changes beyond our control,” says Longstaffe.
“Last year we laid out a plan that we believed would carry out for two years, which would bring us to the end of the current four-year plan.”
In the 2009-10 operating budget, the university included recommendations for support units in the February document. This year, support unit recommendations will be presented in April.
The upcoming budget will likely recommend an average three per cent initial budgetary reduction for all units, plus a further 1.5 per cent reduction – a measure similar to the last budget.
“There is not a whole lot of money to distribute this year,” he says, noting the current four-year plan was designed to maximize investments from the Reaching Higher provincial government program during the first few years. This is the last year of Ontario’s Reaching Higher plan (2009-10) and it is uncertain what a succeeding plan will look like.
It was a tumultuous financial year in 2009-10 and Western was not immune to the fluctuating markets. Looking ahead to 2010-11, financial forecasts are not as grim.
Longstaffe says he is cautiously optimistic.
“There is not in my mind a feeling that there will need to be large scale layoffs, at least the units supported by the operating budget … Within units that are funded by the operating budget we will see changes in staffing like we do in any year, but I don’t think we will see the very significant changes in staffing like we saw this year.
“Last year I know it was difficult for everyone. But our hope was to get it all out there and deal with it one way or another so we didn’t have to have an equally trying time this year. It’s not that it won’t be difficult. Units are facing reductions, but they are reductions they’ve known about for a long time now and have had a reasonable time to plan towards (them).”
In light of criticism last year, the university will not rely on investment earnings for the operating budgets.
Western has seen a recovery in the markets since the beginning of the fiscal year, says Lynn Logan, Associate Vice-President Financial Services. The trend had been quite positive, with year to date returns to Dec. 31 of 16.25 per cent. During January and February there has been some global market uncertainty that has negatively impacted equity market returns. “We don’t yet have results reflecting this most current period,” she says.
While the markets have shown a recovery since May of 2009 when the current fiscal year started, there remains uncertainty in the global markets related to the strength of the economic recovery, concerns about inflation and other global issues which influence equity values. Western’s endowed and non-endowed funds have not fully recovered yet, but have benefitted from positive returns so far this fiscal year.
Expecting an investment income revenue loss of $46.25 million over the last three years of the four-year plan from non-endowed investments, the university made budgetary adjustments in 2009-10, including shelving construction and renovation projects such as modernization of the Physics and Astronomy Building. It also withdrew an allocation of funds to match successful Canadian Foundation for Innovation (CFI) projects.
Money has since been added to the fund to meet CFI obligations and the university will provide matching funds as needed. Longstaffe hopes funding will be available to begin renovation of Physics and Astronomy, one of the oldest buildings on campus.
As the university moves along with the ‘long-range space plan’, recommendations will be included in the budget on use of vacated space in Talbot College and in the Richard Ivey School of Business building once the school has relocated. The Faculty of Information and Media Studies is also looking for a more spacious home.
Graduate expansion remains the only area where new revenues are being fuelled by the province. This will continue to be a priority in the 2010-11 university budget, particularly meeting PhD targets.
The Doctoral Supervision Internal Grant introduced in 2009-10 to offset the initial increase in research costs to supervisors with more doctoral students was successful. “I have been advocating very strongly that we should continue that for another year,” says Longstaffe.
The province has yet to outline a framework for tuition fees, making it difficult to factor tuition revenue into the budget. The February document will be vague about domestic tuition fees which depend on provincial guidelines.
“For the last several years there has been a provincial framework on tuition, which more or less made it simple for us to predict the revenues that we might anticipate from tuition and also to come up with what the tuition changes would be,” he says. “We are waiting to hear from the government on what the tuition framework for the coming year will be.”
The federal budget will be released March 4. The provincial budget is usually released the same month.
In the coming year, Western wants to attract an additional 100 first-year undergraduate international students. Tuition rates for international students at Western are significantly lower than at competitor institutions, so the university wants to increase fees over several years. The added revenue will support services and scholarships for international students.
As well, the February document will provide an indication of priorities for the next four-year plan. For example, Western will be taking “a hard look” at the revenue-sharing models that are currently used between faculties, support units and central services.
“What we forecast last year is turning out to be what we are going to be able do this year,” says Longstaffe.