Recently, the University administration provided a budget update to the community that provided information about the administration’s plans to balance the University’s budget for next year in the face of the tuition freeze and their ongoing desire to invest our operating funds into capital projects. In fact, of the slightly more than $6M deficit currently projected, at least $5.6M of the deficit is due to capital projects that the administration has chosen to prioritize: the new build and an upgrade to ACE.
The Faculty Association continues to monitor Ontario Tech’s budget process and hope that you find this report useful and informative. In the last Faculty Forum, we notified members of the “Budget Technical Meeting” that took place on February 26th, 2020. At that meeting the Provost, Interim Chief Financial Officer, and Associate Vice-President Planning and Analysis reviewed a short set of slides previously presented to the Board’s Audit and Finance Committee at their February 19th 2020 meeting. Those slides are available at this link.
What these meetings revealed was while efforts have clearly been made to balance the budget, is that these efforts have been based on preserving the capital expansion priority at the expense of – arguably – the mission of the university. The chart below is taken from the slides used at both meetings mentioned previously.
| Capital and Operating Reserves | ($3,500,000) |
| Capital Asks | ($5,639,000) |
| Base Asks | ($687,000) |
| One-time-only Asks | ($221,000) |
| One-time-only Salary Savings | $2,049,000 |
| Total | ($2,776,000) |
(negative amounts are costs, positive are savings)
On top of this, they are projecting an additional $3M shortfall based on a 10% drop in applications compared to last year, and some “compensation costs” of $300,000 to bring the deficit to about $6M.
To break this table down:
- “Capital and Operating Reserves” means money taken from the operating budget – tuition revenue and government base-operating grants and ear-marked for the new building, which according to the administration, is set to open in 2021. A project that, so far, has almost no external funding coming from government, industry or donors, despite commitments from the administration to raise that money. See the UOITFA’s earlier commentary on this situation towards the end of the article at this link.
- “Capital Asks” probably means some very legitimate maintenance and necessary upgrades, but it was confirmed that it also includes $2.1M to cover cost overruns in the ACE “Moving Ground Plan” upgrade project. The Board had previously committed $500,000 to this project and the rest of the money was to have been raised from industry partners and government, however this represents over a 300% increase to the university’s commitment to this project with little consultation. A business plan has not been made available to show how this investment might possibly be recouped.
- “Base Asks” and “One-time-only Asks” represent requests from faculties and departments to improve their operations – presumably these are justified based on the university’s mission.
- “One-time-only Salary Savings” probably represent money saved by delaying hiring and/or hiring contract faculty and staff in order to save money. It was confirmed by the Provost that new hires would be contractually limited appointments.
In short, it appears the only positive offset to the budget deficit is through faculty and staff, while the administration is very happy to present to the community that additional cuts will be needed in order to present their capital ambitions through bricks, mortar and other capital projects.
Your next opportunity to have any say at all in this process will be at Academic Council on March 23rd. You might consider expressing any concern you might have to your Academic Council reps or even to your Dean. If you are unsure of who your Faculty representative to Academic Council is, please click here.