Editor's note: President Alastair Summerlee welcomes comments on his column at president@uoguelph.ca.
As most of you know, budget challenges are nothing new for this university.
In the mid-1990s, Guelph started increasing undergraduate and graduate enrolment in response to opportunities for additional government revenue that could help us improve the quality of the University.
The enrolment increases came at a cost, including larger class sizes and changes in practices and services. Unfortunately, some of the government commitments to increase support did not materialize.
Most recently, commitments for quality investment associated with the double cohort were not fulfilled in 2004. As a result, last year the University had to introduce across-the-board cuts and an early retirement/resignation program to help provide ongoing reductions to base budgets.
Against this backdrop, the reputation of the University has continued to rise, thanks to the considerable hard work and commitment of staff, faculty, students and alumni. But we — and the entire Ontario university system — have substantial challenges in the coming year.
There are expectations from the current round of negotiations with almost every employee group, and the cost of benefits, including pensions, continues to rise. Student/faculty ratios are still critically high despite a significant period of hiring, and staff hiring has not kept pace with the new facilities and increased enrolment. Buildings across campus are in dire need of renovation, and we have ongoing commitments for construction projects needed to maintain and enhance quality.
Finally, our contract with the Ontario Ministry of Agriculture and Food has been stable for a number of years, and every effort is being made to ensure that it will continue to be so. But the funding level doesn't change from year to year, so the University has to cover incremental costs such as salary increases and expenses, while maintaining the research component of the programs.
Although there is optimism about the recommendations of the Rae review of post-secondary education, it is necessary to be cautious about the possibility of significant provincial re-investment in universities for the next two years due to the provincial budget situation and the challenges of health care. This means Guelph and every other university in Ontario will once again face difficult fiscal times.
Currently, the provost and deans are developing an integrated planning process that will guide strategic decision-making across campus. It is extremely important that we allow time for this process to be completed.
In the interim, it is imperative that we develop a short-term plan to deal with the financial realities of the next two years. The provincial government is not expected to release its budget until after our budget year begins May 1. As was the case last year, we cannot wait for the government. We must be fiscally prudent and move forward with our planning, so we can submit a preliminary budget to Board of Governors in April. The short-range plan must also fit into the context of the long-term vision for the University, serving as a bridge between the current budgetary challenges and our future aspirations.
Our immediate focus must be on committing resources and/or personnel to critical strategic areas and initiatives, and on finding ways to contain costs, increase revenues and reduce operating expenses.
Options that will have to be considered include budget cuts to departments and units; reductions to building operating costs; and reductions in personnel costs, including a second voluntary retirement/resignation program and limits to salary increases.
We will also have to find new ways of increasing revenues from a variety of sources. This could include increasing the percentage of graduate students eligible for funding; boosting fundraising efforts to alleviate operating budget expenditures; maximizing revenue from federal infrastructure operating funds; aggressively pursuing greater financial flexibility through increased research activity, revenues and cost-recovery initiatives; and, when appropriate, reviewing tuition and ancillary fees.
There is still much uncertainty about the budgets and prospective revenues for the 2005/2006 budget. We will, of course, continue to press the government to honour and increase its funding commitments. But even the most optimistic forecasts suggest that the University will have a shortfall of between $11 million and $12 million. This is about twice the size of the shortfall we faced at this time last year.
I have asked vice-presidents, deans and directors to consider how we can bridge this funding gap. As I mentioned earlier, one of the options is reducing cost increases. Already, the vice-presidents and I have agreed to forgo salary increases for 2005/2006.
I realize this will be an arduous process and a difficult time for the entire institution. But I am confident that, working together as a community, we can achieve the necessary budgetary savings while moving forward with a long-term strategic plan for the University's future.
