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U of G Sets Budget Targets
University's multi-year plan aims to balance budget by 2012
BY LORI BONA HUNT
U of G has developed multi-year targets to address its structural deficit. In total, the University is looking to find $36 million over the next four years.
Board of Governors endorsed the multi-year targets June 6 and approved the University's preliminary 2008/2009 Ministry of Training, Colleges and Universities operating budget.
The plan has Guelph reducing budgets by 2.5 per cent for 2008/ 2009, five per cent for 2009/2010 and 2010/2011 and four per cent for 2011/2012.
“It simply wasn't feasible to eliminate the structural deficit in one year,” says John Miles, assistant vice-president (finance and services).
“We needed a multi-year approach to remove structural costs or create net revenues to balance the budget.”
Budget adjustments were purposely kept lower for 2008/2009 to give colleges and divisions time to plan to accommodate changes aimed at helping the University achieve fiscal stability and aid in strategic planning.
The multi-year targets were created in the context of the University's integrated plan, which identifies priorities and a decision framework aimed at helping U of G meet its current and future missions.
“It effectively positioned us to address this situation in a strategic way,” says Prof. Maureen Mancuso, provost and vice-president (academic). “Our focus is on maintaining quality and continuing the reallocations and commitments started with the integrated planning process.”
The multi-year targets were guided by a series of metrics primarily based on student enrolment across disciplines and undergraduate and graduate levels. They are not across-the-board cuts but are intended to reflect changes where teaching commitments are lower. Targets will be reviewed each year.
Guelph's structural deficit for 2008/2009 is estimated to be about $16 million. Under the multi-year plan, the deficit will be eliminated by 2011/2012. A key component of the University's plan is the assumption that there will be an increase in provincial funding to help offset a portion of future cost increases through 2012.
The structural deficit has evolved over the past several years as government funding for operating costs has lagged significantly behind expenses in the face of rising costs for salaries and benefits, post-employment benefits such as pensions, deferred maintenance and utilities, says president Alastair Summerlee.
“We are not alone,” he adds. “Other Ontario universities are facing shortfalls and similar challenges.”
The Council of Ontario Universities is predicting a reduction in funding for the university system, which means no funding to offset any upcoming cost increases in the next year. In addition, undergraduate growth funding is now one-time, graduate growth funding is being renegotiated, and it's becoming increasingly difficult to predict other one-time allocations, says Summerlee. As well, most of the recent government investments, although welcomed, have been restricted to campus renewal.
“We cannot expect to see any relief for the structural deficit in the immediate future, so unless we take steps to address the problem, the deficit will continue to rise,” he adds.
Summerlee and Mancuso have been meeting with vice-presidents, deans, employee groups and student organizations to discuss potential actions and solutions.
The University also continues to look for ways to increase revenues and manage and reduce costs, such as streamlining administrative structures, making better use of space, reducing utility costs, and enhancing programs and course delivery. A voluntary early retirement/ resignation package for staff to complement the early retirement program for faculty has also been launched (see story).
“We will be actively planning priorities for investment and focus, rationalizing all resource allocations and assessing performance,” says Summerlee. “This is a thoughtful strategic approach, and I am confident that we will emerge from the process with a sound fiscal plan for the University's future.”