INDEX OF BUDGET DOCUMENTS

Transcription

1 Board of Governors April 30, 2010 INDEX OF BUDGET DOCUMENTS Pages 2-4 Page 5 Pages 6-10 Page 11 Pages Page 14 Page 15 Pages Page 18 Page 19 Introduction to the Operating Budget Operating Budget Budget Variances from Projection Strategic Investments Operating Budget Main Assumptions Three-year Operating Budget Model Tuition Fees Compulsory Ancillary and Room & Board Fees Capital Cost Projections Statement of Financial Position 1

2 To: Re: Board of Governors Draft Operating Budget Overview The Budget presented has been prepared based upon the assumptions provided (Operating Budget Main Assumptions, Pages 12 and 13) for the years to The Integrated Planning initiative continues and the resulting Strategic Directions and related Unit Plans will be developed in This will help inform the assumptions in next year s Budget. A core principle followed throughout the process was to balance the Budget. Years two and three in the planning horizon ( and ) are projected for illustrative purposes only, and are subject to change once the Integrated Planning process evolves with adopted Unit Plans. Revenue and Expense Assumptions As has been the case in prior years, no inflation increases are currently being projected in government funding. Growth related to projected enrolment increases of 313 full-time heads and part-time equivalents in Peterborough and 65 full-time equivalents in Oshawa is projected to attract $1.168m in Accessibility (Growth) Funding from the Ministry of Training, Colleges and Universities (MTCU). Quality funding is projected to remain at the prior year level, which was augmented by $0.6m in year-end MTCU announcements. The Indirect Cost of Research envelope is projected to grow by $.209m and has resulting increases in funded support expenses. The enrolment projections shown of 215 new first year intake is supported by the increase in applications to Trent for next fall, converted at recent conversion rate experience. Modest retention improvements in upper year classes are also projected, as are further enrolment increases in the summer sessions. No increases are budgeted for eligible (government funded) graduate enrolment, but a modest increase in ineligible spaces is anticipated in response to the introduction of two new graduate programs. Eligible graduate spaces are currently capped by MTCU funding limits, however, appeals will continue to be made for increases to Trent s graduate quota to support student demand and new programming. International student enrolment is also not currently budgeted to increase, although the recent Provincial budget highlighted this area as a growth priority. We will monitor any further Provincial funding announcements that may support this proposal, however, it is not clear what incentives will be put in place at this time by the Provincial government. Tuition fee policy for the years and was just recently announced by the Provincial government and it is an extension of the prior policy, plus a requirement to set aside 10% of increased tuition rates for increased bursaries. The attached schedules fall within these guidelines and are highlighted by 4.5% and 4.0% tuition rate increases for new and continuing undergraduate students respectively. Projected expenses include provisions for modest increases based upon existing collective agreements or recent public sector agreements in cases where new contracts are to be negotiated in the next fiscal year. The implementation of a public sector wage freeze, as announced in the recent Provincial budget, will be monitored closely, and the eventual publication of the regulations/guidelines may cause variances to these assumptions. Included in the budget are increased employer contributions to Trent s Pension Plans, and other expense reductions/revenue 2

3 increases are included to provide the necessary in-year funding to fulfil these requirements. Appeals for solvency relief and MTCU funding assistance will continue, but no exemptions or funding relief from such sources are included in the budget. A modest inflation factor for supplies expense is included and will in part help to fund the projected impact of the cost of HST when implemented in July Provisions have also been allowed for the increased costs associated with Oshawa expansion, Module C operating/financing and Integrated Planning support. Budget Impact The budget priorities were prepared by the Provost Planning Group (PPG) after gathering input and information through consultation with the Trent community and in detail from Unit Managers/Directors. The budget process began in January and over the last three months, numerous opportunities were provided for input. Individuals had the opportunity to the Vice-President, Administration their suggestions and communiqués have been provided on the university s intranet. The budget has been another difficult challenge requiring a $4.3 million reduction in expenditures; after reducing the budget by $7.8 million last year and $10.5 million two years ago. In total over three years, the university will have reduced its expenditures by 25%. The reductions were necessary because there has not been any appreciable inflation increase in revenues from government funding. Therefore, with collective agreement contractual obligations, increased pension funding liabilities and increased operating costs, significant expenditure reductions were required. What is the impact to the university resulting from a $4.3 million expenditure reduction? All university departments were required to reduce budgets by a target of 5%. The most significant impacts are: 1. $2.4 million reduction in the instructional budget, primarily undergraduate teaching and undergraduate academic services. This reduction has required a hard look at programs and class sizes. The academic program emphasis is on core, required program courses. The opportunity to provide course selection and flexibility will be constrained. The significant reductions will be achieved by: a reduction in hiring contract faculty minimal replacement of tenure track retirements and resignations 2. A $355,000 reduction in undergraduate scholarships. Careful consideration and review of how scholarship funding is used has been undertaken. The analysis determined that through more strategic management of scholarships, the use of scholarships supported by endowment funds and expendable scholarship funds, an overall operating scholarship budget reduction is possible without compromising our student recruitment and our obligation to government scholarship and bursary policy. This has been offset in part by increasing the bursary set aside requirement from increased tuition rates of $140, Administrative budget reductions total $1.4 million. These reductions are in numerous service areas. Examples of impacts include: 3

4 changes in staffing levels due to retirements, deferred replacement of vacancies and restructuring reductions in contingency funds, equipment funds, library acquisitions, advancement and professional development funds fewer students hired in support departments and a reduction in back office custodial service Regardless of a budget process that focused primarily on expenditure reduction, $665,000 more has been included in new investments; areas that are determined to be vital by PPG and requiring investment such as additional funds for advertising, a business process review of information technology, student retention initiatives, human resources information systems, Integrated Planning resource support and Oshawa expansion. In addition, a small contribution toward the reduction of the accumulated deficit is provided as is the funding required for increased employer pension contributions. Don O Leary Vice-President, Administration April

5 TRENT UNIVERSITY OPERATING BUDGET COMPARISON TO PROJECTION ($000s) CHANGE PROJECTION DRAFT BUDGET DRAFT BUDGET TO PROJECTION REVENUE Government grants $48,683 $50,387 $1, % Tuition fees Total fees 41,897 45,477 3, % Less: Student financial aid funded by fees (6,035) (5,546) % Net 35,862 39,931 4, % Miscellaneous revenue 1,881 1, % 37,743 41,869 4, % TOTAL REVENUE $86,426 $92,256 $5, % EXPENSE Instructional staff $49,436 $51,636 $2, % Non-Instructional Staff 28,033 29,551 1, % Total Staff expense $77,469 81,187 3, % Non-Staff expense 15,689 16, % TOTAL EXPENSE 93,158 97,705 4, % Cost Recoveries (6,663) (6,730) (67) 1.0% TOTAL NET EXPENSE BEFORE THE UNDERNOTED 86,495 90,975 4, % Strategic Investments % TOTAL NET EXPENSE 87,399 91,933 4, % EXCESS OF REVENUE OVER EXPENSE (EXPENSE OVER REVENUE) ($973) $323 $1,296 Quality and Sustainability Reserve 870 (870) Restructuring Reserve 350 (350) Change in Investment in Capital Assets/Internally Restricted 80 (80) ANNUAL SURPLUS (DEFICIT) $327 $323 ($4) CUMULATIVE DEFICIT - OPERATING BUDGET Opening balance ($6,709) ($5,282) $1,427 Annual surplus (deficit)/contribution to accumulated deficit 327 $323 Reversal of prior year's instructional restructuring reserve 1,100 Closing balance ($5,282) ($4,959) $323 5

6 Trent University Draft 2010/11 Operating Budget Variances from 2009/10 Projection ($000s) REVENUE Government Grants budgeted to increase by $1,704 $1,704 due to: Increase in Accessibility grant $1,168 Increase in Oshawa grant (service teaching previously credited to expenses) 785 Increase in Indirect Costs of Research grant 209 One-time and prior year unspent targetted grants removed from budget (458) Tuition revenue budgeted to increase by $3,580 3,580 due to: Tuition rate increases ( % domestic undergrad) $1,849 Increased enrolment of 313 FTEs (including base adjustments) 1,362 Increased graduate program enrolment due to introduction of new programs 63 Increased Oshawa enrolment of 65 FTEs 306 Budget for Student Financial Aid funded by tuition fees budgeted to decrease by $489 due to: 489 Decrease in undergraduate and international scholarship budgets $355 6

7 Trent University Draft 2010/11 Operating Budget Variances from 2009/10 Projection ($000s) Anticipated shift in bursaries currently funded by operating funds to trust funds as a result of recent estate gift 100 Remove bursaries funded by appropriation in current year projection 214 Increase in bursaries funded by tuition fee increase as per recent MTCU tuition policy announcement (140) Increase in graduate student scholarships due to introduction of two new Masters' programs (40) Miscellaneous revenue budget increased by $57 due to: 57 Anticipated revenue from Oshawa expansion $57 Total Increase in Revenue Budget $5,830 EXPENSES Instructional staff budget increased by $2,200 $2,200 due to: Step and scale increases $1,719 Base adjustments including pension contribution increase, annualization of 09/10 step/scale increases, anticipated increase in extended health and dental premiums and removal of one-time savings in 09/10 projection 2,479 New investments including restoration of Oshawa base budget and additional GTAs due to introduction of new Masters' programs 266 7

8 Trent University Draft 2010/11 Operating Budget Variances from 2009/10 Projection ($000s) Oshawa expansion budget 95 Reduction in staffing levels including 11 retirements/resignations and LTA reductions (2,359) Non-instructional staff budget increased by $1,518 1,518 due to: Step and scale increases $804 Base adjustments including increase in pension solvency payment funded by operating budget, annualization of 09/10 step/scale increases, anticipated increase in extended health and dental premiums and removal of one-time savings in 09/10 projection 836 Oshawa expansion budget 398 Increased investments in areas such as AODA compliance management, graduate program secretarial support and dedicated VP (Academic) assistant 141 New positions funded by increased Indirect Cost of Research grant 67 Module C occupancy costs and increase in Research Office contingency 126 Reduction in staffing levels in both base and on a one-time basis of approximately 7 FTEs (854) Non-staff expense budget increased by $ due to: Debt payments re Traill College and Module C of Health Sciences building $507 Module C operating costs 240 8

9 Trent University Draft 2010/11 Operating Budget Variances from 2009/10 Projection ($000s) Expenses re Oshawa expansion, including debt payments 654 Anticipated expenses re Integrated Planning initiative 250 Expenses funded by Indirect Cost of Research grant 177 Increased investments in areas such as HRIS and Convocation and other ceremonies 151 Increase in Research Office Contingency and reallocation of President's Strategic Investment fund allocation to President's Office budget 71 Provision for inflation, including HST impact 256 Remove expenses funded by appropriations and other one-time items in 09/10 projection (901) Budget reductions in many areas including new faculty start-up fund, faculty professional expense allowance, library acquisitions, equipment replacement fund, part-time academic travel, senior officers' contingency funds and Nursing program supplies and support costs (576) Cost recoveries budget increased by $67 (67) due to: Increases in areas such as Physical Resources project management fees on deferred maintenance projects, Nursing program recovery from George Brown College bridging program and Alumni Affairs increase from affinity partnerships ($67) Strategic Investments budget increased by $54 due to: 54 9

10 Trent University Draft 2010/11 Operating Budget Variances from 2009/10 Projection ($000s) Increased investment in areas such as university fair booth, philanthropic researcher and writer, campus virtual tour and corporate identity and branding materials $130 Budget reduction in allocation for External Relations & Advancement and Distance Education (35) Reallocation of President's allocation to President's Office budget (non-staff expense) (41) Total Increase in Expense budget $4,534 Excess of revenue over expenses before the undernoted increased by $1, /09 appropriation from Quality and Sustainability grant reversed in 2009/10 (870) 2008/09 restructuring appropriation reversed against related non-staff expenses in 2009/10 (350) 2008/09 appropriation to balance 2009/10 budget reversed (80) Annual Surplus decreased by ($4) 2009/10 Projected Surplus (Deficit) /10 Draft Budget Annual Surplus (Deficit) $323 10

11 OPERATING BUDGET STRATEGIC INVESTMENTS ($000s) /11 PROJECTION DRAFT BUDGET Recruitment-Related Advertising & Branding $503 $545 Retention Initiatives Distance Education Course Development Government Relations 6 6 Advancement/Stewardship Convocation & University Functions Media and Corporate Communications Institutional Research and Planning President's Discretionary 41 - TOTAL $904 $958 11

12 TRENT UNIVERSITY Preliminary Operating Budget Projections for Main Assumptions REVENUE Government grants Projection Budget Projection Projection (thousands $) (thousands $) (thousands $) (thousands $) (thousands $) Increase Total Increase Total Increase Total Increase Total Increase Total Base Operating grant +0% +0% +0% +0% +0% Differentiation grant +0% $ 2,357 +0% $ 2,357 +0% $ 2,357 +0% $ 2,357 +0% $ 2,357 Quality Improvement Fund +$0 $ 3,598 +$600 $ 4,198 +0% $ 4,198 +0% $ 4,198 +0% $ 4,198 Tuition Backfill Grant +$0 $ 935 +$24 $ % $ % $ % $ 959 Performance grants Graduation, Employment +$0 $285 -$28 $257 +0% $257 +0% $257 +0% $257 Accessibility (enrolment) +$0 $10,219 +$949 $11,168 +$1168 $12,336 +$1049 $13,385 +$716 $14,101 Targeted government grants: UCD grant +$0 $2,000 +$0 $2,000 +$0 $2,000 +$0 $2,000 +$0 $2,000 Indirect Cost of Research +$300 $1,522 +$277 $1,799 +$209 $2,008 +$0 $2,008 +$0 $2,008 Fair Funding grant +$0 $1,255 +$0 $1,255 +$0 $1,255 +$0 $1,255 +$0 $1,255 ATOP Funding grant: $41 +$82 $123 -$123 $0 +$0 $0 +$0 $0 Enrollment Assumptions below reflect tuition counting methodology - Full Time Peterborough Heads plus Fte's for Oshawa, Peterborough part time, Graduate Studies, and International (pro-rate Head Start students). Enrolment Base Budget: Projection Budget Projection Projection Increase Total Increase Total Increase Total Increase Total Increase Total Full time Undergraduate : new students Nov 1 1st year (includes UCD) + 80 heads 1231 heads heads 1385 heads heads 1600 heads 1600 heads 1600 heads Transfers, readmits (Arts&Science) 1st year - 66 heads 94 heads - 1 heads 93 heads 93 heads 93 heads 93 heads 2nd year - 11 heads 156 heads 156 heads 156 heads 156 heads 156 heads Retention (Arts&Science) 2nd year rd year th year Retention Effect(Arts&Science) + 88 heads heads heads Part time - summer and fall/winter, spring (incl. UCD) + 6 fte 942 fte + 50 fte 992 fte + 40 fte 1032 fte + 40 fte 1072 fte + 40 fte 1112 fte Graduate (full time and part time) - eligible enrolment +35 fte 248 fte +11 fte 259 fte 259 fte 259 fte 259 fte Oshawa program enrolment Full time FTE +16 fte 428 fte -19 fte 409 fte +65 fte 474 fte +95 fte 569 fte +160 fte 729 fte (included in Full and Part time FTE -4 fte 171 fte -4 fte 171 fte 171 fte 171 fte 171 fte Part Time above) Total International students Undergraduate TIP November 1 Full time & part time -14 heads 427 heads +59 heads 486 heads 486 heads 486 heads 486 heads Consecutive Education -14 fte 350 fte -53 fte 297 fte +35 fte 332 fte 332 fte 332 fte Total Heads & FTE (eligible & ineligible, Incl. Ed)

13 TRENT UNIVERSITY Preliminary Operating Budget Projections for Main Assumptions Projection Budget Projection Projection Tuition fees ( note: Provincial Tuition Fee Policy still not announced) assumption: First year undergraduate domestic +4.5% +4.5% +4.5% +4.5% Continuing undergraduate domestic +4.0% +4.0% +4.0% +4.0% First year Graduate domestic +6.0% +6.0% +6.0% +6.0% Continuing Graduate domestic +4.0% +4.0% +4.0% +4.0% International Undergrad student differential fee (Added to Base domestic fees above) +5.6% +5.6% +5.6% +5.6% EXPENSE All staffing Provision has been made for increases for parity adjustment and scale. Other increases estimated based on recent public sector collective agreements. Budget Projection (thousands $) (thousands $) Total Increase Total Pension Plan Employer Contribution(excludes transfers from Stabilization fund or SRA) $5,266 +$2167 $7,433 Non-staff exprovision has been made for principal and interest carrying costs for Module C & Traill Renovations. Budget Projection Projection Provisions have been made for inflation for utilities and expenses as follows: General expense (1% represents approx. $128k per year) +2.00% +2.00% +2.00% 13

14 TRENT UNIVERSITY THREE-YEAR OPERATING BUDGET MODEL For illustrative purposes only REVENUE PROJECTION DRAFT (April, 2010) BUDGET PROJECTION * PROJECTION * Government grants $48,683 $50,387 $51,436 $52,152 Tuition fees Total fees 41,897 45,477 48,683 51,618 Less: student aid funded by fees (6,035) (5,546) (5,939) (6,297) Net 35,862 39,931 42,744 45,321 Miscellaneous revenue 1,881 1,938 1,938 1,938 TOTAL REVENUE $86,426 $92,256 $96,118 $99,411 EXPENSE Instructional staff $49,436 $51,636 $54,174 $56,533 Non-instructional staff 28,033 29,551 30,909 31,862 Total staff expense 77,469 81,187 85,083 88,395 Non-staff expense 15,689 16,518 17,481 17,761 TOTAL EXPENSE 93,158 97, , ,156 Cost recoveries (6,663) (6,730) (6,678) (6,678) TOTAL NET EXPENSE 86,495 90,975 95,886 99,478 Strategic investments TOTAL NET EXPENSE INCLUDING STRATEGIC INVESTMENTS $87,399 $91,933 $96,764 $100,356 EXCESS OF REVENUE OVER EXPENSE (EXPENSE OVER REVENUE) ($973) $323 ($646) ($945) Quality and Sustainability Reserve 870 Restructuring Reserve 350 Change in Investment in Capital Assets/Internally Restricted 80 ANNUAL SURPLUS (DEFICIT) $327 $323 ($646) ($945) CUMULATIVE DEFICIT -- OPERATING BUDGET Opening balance ($6,709) ($5,282) ($4,959) ($5,605) Annual surplus (deficit)/contribution to accumulated deficit (646) (945) Reversal of prior year's instructional restructuring reserve 1,100 Closing balance ($5,282) ($4,959) ($5,605) ($6,550) * assumptions to be up-dated in future planning cycles 14

15 TRENT UNIVERSITY Tuition Fees for Amount Increase % 1 Undergraduate Students Full Time Basic fee First Year $4, $5, $ % Continuing , , % Continuing , , % Continuing , , % Continuing , , % Continuing pre May , , % Part Time - per course Basic fee First Year $ $1, $ % Continuing , % Continuing , % Continuing , % Continuing , % Continuing pre May , % 2 Undergraduate International students Full Time Basic fee $4, $5, $ % pre May 2006 Differential fee 8, , % Total fee 13, , % Part Time - per course pre May 2006 Basic fee $ $1, $ % Differential fee 1, , % Total fee 2, , % 3 Graduate Domestic Students Full Time First Year $6, $6, $ % Continuing , , % Continuing , , % Continuing pre Sept , , % Part Time First Year $3, $3, $ % Continuing , , % Continuing , , % Continuing pre Sept , , % 4 Graduate International students Full Time Basic annual fee First Year * $6, $6, $ % Differential fee 7, , % Total fee 13, , % Part Time - per course Basic annual fee First Year $3, $3, $ % Differential fee 3, , % Total fee 6, , % Continuing Grad International student Base annual rate to increase by 4.0% plus 5.0% differential. 16 April 2010 Finance & Property Committee 15

16 TRENT UNIVERSITY Student Compulsory Ancillary and Room & Board Fees Amount Increase % Full-Time Students College Fee Undergraduate $ $ $ % Graduate % Student Health Undergraduate and Graduate % Athletics Undergraduate and Graduate % Transportation % Convocation Fee % Introductory Seminar Week (ISW) % Campus Card % Part-Time Students (per full course) College fee Undergraduate % Graduate % Student Health Athletics Undergraduate Fall/Winter % Convocation Fee % NOTE: excludes Student Government Fees which are approved by Student Referendum. 16

17 TRENT UNIVERSITY Student Compulsory Ancillary and Room & Board Fees Amount Increase % Full-Time Students Residence Single Room (Gzowski College) $ 6,319 $ 6,494 $ 175 3% Single Room 5,314 5, % Double Room 4,184 4, % Triple Room 3,370 3, % Apartments - Single 5,611 5, % Apartments - Double suite 4,265 4, % Apartments - Double one bedroom 4,400 4, % Meals * 12 board meals + flex $ 4,480 $ 4,659 $ 179 4% 16 board meals + flex 4,540 4, % Small flex plan 2,693 2, % Medium flex plan 4,158 4, % Large flex plan 4,345 4, % Note: Residence rates include phone and internet cost * Student protocol approval pending 17

18 Trent University Capital Cost Projections for fiscal years 2009/10 to 2012/13 (with comparative figures for 2008/09) (thousands of dollars) Actual Projection 2008/ / / / /13 Total Project Cost Facilities Renewal Strategy Projects Athletics Renovation & New Wing 1,365 7,691 6,789 15,845 Health Sciences Module C (MTCU) 2,200 10,676 3,444 16,320 Graduate Studies Facilities - Traill College - Wallis Hall 4,123 4,123 Bata Library and associated projects - 5,073 6,000 11,073 Bagnani Lecture Hall - Traill College 105 1,007-1,112 7,793 19,374 10,233 5,073 6,000 48,473 MTCU Campus Renewal Fund-PCBs, ESC roof & podium 179 2, ,263 MTCU Campus Renewal Grant-Alumni & SC roofs, DNA walkway ,367 MTCU FRP annual grants $434 per year ,800 1,178 3,108 1, ,430 Powerhouse redevelopment ,000 10,000 1,757 20,000 Trent in Oshawa - 2,500 8,913 11,413 Health Sciences Module D (KIP) - 2,675 20,000 2,015 24,690 Other Capital Fund 35 Projects ,631 CFI Research equipment, labs, furniture & equipment 3,608 1,800 1,800 1,800 1,800 10,808 Equipment, software and library acquisitions 1,747 1,700 1,700 1,700 1,700 8,547 Total capital cost 14,774 32,083 52,422 21,522 12, ,992 18

19 Trent University Statement of Financial Position Pro Forma as at April 30, 2010 to 2013 (with comparative figures for April 30, 2009) (thousands of dollars) Actual Pro Forma ASSETS Current Cash and cash equivalents $ 25,807 17,060 13,398 17,614 15,326 Accounts receivable 6,143 5,634 5,634 5,634 5,634 Inventories Prepaid expenses and deposits ,943 23,687 20,025 24,241 21,953 Long term investments 28,453 37,474 38,974 40,474 41,974 Capital assets 141, , , , ,195 $ 202, , , , ,122 LIABILITIES AND DEFERRED CAPITAL CONTRIBUTIONS Current Accounts payable and accrued liabilities $ 14,317 14,317 14,317 14,317 14,317 Current portion of long term debt 1,311 1,565 1,863 2,086 2,304 Deferred revenue 28,527 19,366 18,524 18,524 18,524 44,155 35,248 34,704 34,927 35,145 Long term debt 29,907 45,483 68,163 87,140 90,836 74,062 80, , , ,981 Deferred capital contributions 76,455 85, , , ,976 NET ASSETS Deficit (13,416) (11,658) (11,335) (11,981) (12,926) Internally restricted 6,952 4,552 4,552 4,552 4,552 Investment in capital assets 26,898 25,328 22,502 19,263 15,838 Endowments 31,511 40,201 41,701 43,201 44,701 51,945 58,423 57,420 55,035 52,165 $ 202, , , , ,122 Debt to Equity (including Deferred capital contributions) 58% 56% 63% 77% 81% Working capital $ (11,212) (11,561) (14,679) (10,686) (13,192) Operating cash (less deferred revenue and internally restricted net assets) $ (9,672) (6,858) (9,678) (5,462) (7,750) 19