Board of Governors Approves Budget
April 10, 2014 - Campus Bulletin
The 2014/2015 Ministry of Training, Colleges and Universities (MTCU) operating budget for the University of Guelph was approved by Board of Governors today.
The budget -- prepared within the third year of the University’s five-year Integrated Plan (2013-2017) -- was presented by Maureen Mancuso, provost and vice-president (academic), and John Miles, associate vice-president (finance and integrated planning).
Consisting of $411 million from provincial operating grants, tuition and cost recoveries, the MTCU operating budget is the largest component of the University’s revenue and makes up more than half of total funding.
These monies fund nearly 90 per cent of faculty compensation and 80 per cent of full-time staff compensation, and all main campus infrastructure costs. Overall compensation costs for University employees make up about two-thirds of the MTCU operating budget.
The operating budget also covers utilities and capital infrastructure, debt repayments, and funding for critical investments, academic programs and administrative support services.
The University’s Integrated Plan includes a five-year financial plan with overall University revenue and expenses projections through 2016/2017. This financial plan is intended to maintain the University’s balanced financial position. No budget reductions took place during the first two years of the multi-year plan, allowing units and colleges to plan for closing the fiscal gap, Mancuso said.
As funding increases are expected to lag projected base expense increases by two to three per cent each year, the University projects a $32.4-million funding structural shortfall by 2016/2017.
In order to address this projected budget deficit, last fall the University assigned three-year budget targets to colleges and units so they could begin preparing revenue-generating or cost-saving plans.
Colleges and units will begin implementing those plans in the 2014/2015 fiscal year in order to attain cost savings or revenue worth $7.6 million. The balance of the $32.4-million shortfall will need to be identified by 2016/2017.
For fiscal 2014/ 2015, the University increased its base revenue by $7 million due to increases in enrolment and grant income, Miles told B of G members. Assuming that the University continues to earn that additional revenue, he said, that funding will be used to help make up the $32.4-million shortfall. That gain will be passed on to the colleges by reducing their targets in the third year of the multi-year plan (that year contained the most significant cuts). Non-college targets will remain unchanged.
With an overall remaining shortfall of $25.4 million, colleges and units will prepare plans to achieve budget reduction targets each year. Budget reduction targets range from $720,000 to $3.9 million among the colleges (total: $17.1 million) and from $950,000 to $1.8 million in non-teaching units (total: $8.3 million).
Tuition revenue for 2014/2015 makes up about 33 per cent of MTCU operating fund revenues. The four-year tuition framework announced by the province allows program fees for domestic students to increase by up to three per cent. Within that cap, fees for professional and graduate programs may increase by up to five per cent, depending on the year of study.
U of G tuition will increase by 2.81 per cent for entering and continuing undergraduate domestic students. Tuition for continuing undergraduates in professional programs will increase by four per cent; students entering professional programs will pay five per cent more. Graduate tuition will increase by two per cent for both entering and continuing students.
No provincial framework exists for international tuition rates. University fees for new international students will increase by one per cent; there will be no increase for continuing international students.
Ana Paula Becerra, the undergraduate student representative on B of G, voted against the tuition increases, saying that students should not have the bear the expense of increasing operational costs and government underfunding.
About a dozen students also staged a silent protest against the tuition increases before and during the Board meeting.
The new tuition rates for 2014/2015 will generate about $4.4 million in additional revenue.
Board of Governors also received an update on the University’s pension plans.
With plan costs rising due mainly to increasing liabilities, the University’s contribution levels are projected to double to more than $80 million a year starting in 2019. Much of this projected increase reflects continuing low interest rates, lower-than-expected returns, longer life expectancies and provincial “wind-up” provisions for funding pension plans.