FOR INFORMATION
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S.94-47
SIMON FRASER UNIVERSITY
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MEMORANDUM
TO: Senate ?
FROM: Walter Wattamaniuk
Secretary, Senate Committee
on University Budget
RE:
1994/95 Budget Planning
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DATE: May 19, 1994
On March 23 of this year, Dr. K. Heinrich, Chair of the Senate Committee
on University Budget, in a letter to the University community, asked for responses
to a set of 1994/95 Operating Budget Models. In her letter, she indicated that, based
on the responses and on SCUB's assessment of the situation, SCUB will be advising
the President on the 1994/95 budget and that the nature of the advice will be
reported to Senate.
Attached you will find a memorandum from K. Heinrich to the President
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outlining recommendations and suggestions from SCUB on the 1994/95 budget and
future planning. This item is being placed on the Senate agenda for information.
A copy of Dr. Heinrich's initial memorandum to the University community.
is also attached.
WJW:cr
Attach.
C:
K. Heinrich
0
SCUB BUDGET RECOMMENDATIONS, 1994-95 ?
Prepared by?
Katherine Heinrich?
Chair SCUB ?
May 2, 1994.
On March 23 1994, SCUB sent a memorandum to all members of the university commu-
nity describing three 1994-95 budget scenarios based on the budget information available to
the university at that time and asking for responses by April 23rd. In all SCUB received
16 responses /inquiries (13 of them in writing) and attended open meetings in three faculties
(Applied Science, Arts, and Science). In all I would estimate that SCUB had the opportunity
to discuss the budget with between 100 and 120 people. We were particularly encouraged
by the interest taken in this exercise and by the positive comments made on the process
itself: "Let me first compliment you on an excellent budget modelling report", "I am very
impressed that the university is asking for input into the system, but, just as important, that
they have embarked upon an education program to explain the entire process to the univer-
sity community", "I very much appreciate the chance to make these arguments to SCUB",
"I was happy to see, for the first time, that SCUB was seeking community participation."
The report that follows is based on the input received and the views of SCUB, noting that
with respect to items listed in the section entitled "Recommendations for Future Discussion",
SCUB made no attempt to investigate the issues raised. We assume that in subsequent
discussions a thorough review of the current situation will arise. The report consists of three
parts: recommendations for the 1994/95 budget itself; suggestions for the planning and study
that should now take place so that we can create a more open and equitable environment
in which to prepare for next year's budget; and some ideas which, although SCUB cannot
support them at this time, we feel you should be aware of.
1.
The 1994-95 Budget.
Our recommendations are based on the assumption that there is no general increase
in salaries.
• The monies moved from non-recurring to recurring should be restricted to $ 357K;
the funds necessary to support the Administrative Computer Lease.
• The $250K required to support the SFU Innovation Fund should be taken from
the $2,382K provided by the government to fund an additional 340 new students.
Some members of SCUB felt strongly that the terms of reference for the Innova-
tion Fund should state explicitly that only projects that will allow for additional
students to receive instruction at no long-term additional cost should be sup-
ported. We agreed that in general the Innovation Funds should be used to enable
more undergraduate students to receive instruction particularly through changes
in pedagogy.
• Of the $436K needed to provide continued scholarship and bursary support for
the additional 458 enrolments, something like $ lOOK is attributable directly to
new enrolment. For that reason it is recommended that this $100K also be taken
from the funding for new students.
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• • The remaining $1,200K available to support new students must be used for that
purpose and not put against the projected deficit. (However, it might be appro-
priate to charge some of the new library costs ($375K) against this amount.)
• The suggestions given above result in a projected deficit of around $870K. At this
time we see no alternative but to distribute this "across the board" as was done
last year. We trust that this will be done in a manner that fully recognises where
cuts can be best made and the differing needs of the various units.
2.
Recommendations for Future Discussion.
The following items were raised during our consultation with the community and we
have formulated them as recommendations for future discussion. No conclusions should
be drawn from the order in which they appear.
• Non-recurring to Recurring
We believe it is appropriate and proper for all recurring expenditures to be funded
as such and therefore support the long-term plan to move funds from non-recurring
expenditures to recurring expenditures. The question is whether or not the items
currently funded from non-recurring funds should be made recurring. Two areas
arose in our discussions: $370K for the VP Research Office and $515K for the
Development Office.
The VP Research Office has undergone considerable change in the last year but
there are faculty (notably those in the Faculty of Science) who do not see it as
particularly supportive or valuable. The office must become more proactive and
be seen to better meet the needs of all researchers before substantial funds are
moved into the budget for its support.
It has been suggested that fund-raising expenses (including the cost of the De-
velopment Office) should not be supported by the university's operating budget.
Efforts should continue to look at alternative methods to fund the Development
Office (eg. a tax on endowments or a hold-back on payments from the funds) and
until this has taken place these should not become recurring expenditures.
• Services
Accepting growth means more careful planning in the area of services. It
appears that there are many places in the university where duplication of service
takes place (examples are: career services offered by Student Counselling and a
large and very active Co-op Program; supplies ordered through the book store,
science stores and central stores; Academic Resources and departmental advising).
We recommend that a rationalization of services be undertaken. Such a study
should rely heavily on the comments/advice of front-line staff.
It was suggested that several of the services offered by the university should be
operating on a cost-recovery basis. The areas so designated were: some services
provided by Continuing Studies, Athletics and Recreation, Student Counselling
Services. We understand that the Working Group on Student Services is one place
for these concerns to begin to be addressed.
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• Cost of Administration
We recommend a careful study of the full cost of depart-
mental and faculty adminstration with strategies for reducing the cost (and reduc-
ing the need for so much administration). At this time the costs include stipends
(for Chairs, Associate Chairs, Associate Deans, Directors), teaching release (for
many administrative duties), research support, administrative leave. We suspect
that no matter how important the tasks supported in this way are, the cost is too
high. The administrative structure can be streamlined with more decisions being
made at the departmental level, tasks can be abolished, some can be viewed as
part of the faculty member's regular duties (and recognised and appreciated as
such!) and in many cases less expensive alternatives which are equally attractive
to faculty (noting that different faculty will have different preferences) can be
considered. (One example suggested is a research grant instead of a stipend - the
funds might be used to fund a research assistant and thereby support two people;
the faculty member and the student.)
Further, there are clearly inequities across the university in how and when such
administrative work (above the expected norm) is recognized and this too needs
to be addressed.
It was also suggested that many adminstrative positions could be abolished and
replaced by short-term contractual positions to take on specific tasks. With this
comes the question of "contracting out" parts of the adminstrative operations (for
example, payroll and computing services).
• Generation of Revenue
We would like to
see
an environment develop which en-
courages and supports departments to become involved in external revenue gen-
erating activities. In making this possible we would need guidelines that provide
the appropriate return of revenue to the university and the department, and that
recognise the contribution of the individual faculty members involved.
At the same time we must ask: "Are we currently losing substantial revenue be-
cause faculty members are making private arrangements (eg establishing their own
companies) using university resources rather than working within the university
structure?" We would like to know to what extend this is currently taking place
and encourage an investigation of the matter.
• Library
In our discussions with members of the university we repeatedly were
told: "Do not make any cuts to existing library support and continue to recognise
inflationary costs." While supporting that position we still believe savings can
be made and recommend that each department (with their library representa-
tive) look closely at ways to reduce costs. Two possibilities: updating of faculty
research profiles to ensure that the materials being ordered regulary still fit the
interests of the department, and association memberships held by the library (or
department) which could substantialy reduce the cost of certain journal subscrip-
tions. Other possiblities almost certainly exist.
• Facilities Management
This unit is one that is perceived to have particular prob-
lems. Difficulties were discussed extensively in the Faculty of Science meeting but
we believe the problem to be more widespread. Issues raised included: costs are
. too high, estimates often turn out to be incorrect, and jobs seem to encounter more
difficulties than they should. There was a general tone of dissatisfaction. Clearly
the perceived problems need to be identified and resolved. We believe some of
these concerns are being addressed but even still we recommend a detailed study
of the situation.
• The Haves and the Have-nots
There is a definite perception that some units have
considerably more resources than other units; in particular that administrative
units have more staff and resource support than departmental units. Clearly,
this issue must be addressed and if indeed it is just a matter of perception this
needs to be understood. We must ensure that all units have an equitable level
of support (where equitable means that the level of support is appropriate to the
unit). If we can do that (and we believe we can), units can then be assigned
budgets and left to "make it work" with, of course, an appropriate accountability
mechanism. (This might also help reduce adminstration within faculties.) We
recommend that steps be taken to determine appropriate support levels (within
the present university budget).
Part of this involves looking at existing resources within a unit and estimating
the number of students, programs and research activities etc. we would expect
that unit to be supporting. With this and the opportunities presented from the
funds for additional enrolments) we could move towards a "level playing field" and
then provide incentives to departments to take additional students, to restructure
. their programs, to work co-operatively with other units and to redesign their
format of instruction. At the same time we need a mechanism to share our
experiences and knowledge (perhaps an innovation column in SFU WEEK or
reports at Chairs'/ Administrators' meetings).
• Change
of
Status
It was suggested that if the early retirement package was more
attractive there would be more early retirements. More incentives might also be
proposed to encourage faculty to consider the option of changing to part-time
status. We recommend further consideration of the remuneration packages with
particular emphasis on pensions and more alternatives for faculty retiring early.
3. Other thoughts
The following suggestions also arose during our discussions. At this time we do not
recommend them. They are included here as they may prove to be useful in the future
should the financial situation of the university deteriorate further.
• Vertical Cuts
It was strongly recommended that we stop making percentage cuts
across the university and make vertical cuts. However, every time we heard this
it was clear that the proposer expected it to take place "somewhere else" other
than his/her unit. We advise that before vertical cuts are ever made we ensure
that all the above avenues of potential savings have been exhausted and that we
have fully investigated all possible "middle grounds" between vertical cuts and
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percentage decreases - these might include combining departments, strengthening
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co-operation between units, and sharing of resources.
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• University Size
It was suggested that we further limit the number of students we
admit so that we take in only the very, very best.
• Borrowing Against the Future
It is expected that within the next 5 to 6 years the
cost of progression through the ranks will be zero as the number of retirements
increases. It was suggested that to overcome our current deficit problem we borrow
against that time (say by using endowment funds or taking out mortgages). We
advise against this on the grounds that one cannot afford such a risk. On the
other hand we could begin now to bridge some positions to expected retirements.
However, at all times we recommend caution in planning to use these possibly
non-existent funds.
Finally, some comments were made regarding merit increases and salaries and benefits.
We will not discuss these here but trust that the individuals who made such comments
will bring them up within their own bargaining units.
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•
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SIMON FRASER UNIVERSITY
MEMORANDUM
TO: University Community
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FROM: Katherine Heinrich, Chair
Senate Committee on
University Budget
RE: 1994/95 Budget Planning ?
DATE: March 23, 1994
As members of the University community, we all took part in a budget
planning exercise during the Fall 1993 semester to cut ten percent from our units'
budgets over three years. Based on those reports as presented by the Deans and Vice
Presidents at the President's Advisory Committee on Planning and Budget, the
President distributed the "Budget Modelling Report and the President's Statement
on Planning" which described his view of our situation and the beginnings of a
planning process. More recently, a copy of the B.C. Universities Budget Submission
to the Provincial Government was distributed to Deans, Chairs and Directors.
The next task is to explicitly address the 1994/95 operating budget. Attached
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you will find descriptions of three 1994/95 Operating Budget Models, prepared by
Financial Services, which are being considered pending the Government funding
announcement. The first assumes no change in the Government grant; the second,
a one percent decrease; and the third, a two percent decrease. Each assumes an
enrolment grant of $3,361,000 (to fund an additional 485 FTEs) and a salary increase
of zero percent in all employee categories. (Note that most of the information
contained in the attached description can be found in the "Operating Budget
Application" book. This document and all University financial statements are
available in the Library and are usually also held by all Chairs and Deans.)
One of the tasks of SCUB is to advise the President on the allocation of
the operating budget. To that end, it is important to us that the entire University
community has a full understanding of the possible distribution of funding and
the opportunity to ask questions and make comments. We now invite your
response. You may direct your questions and concerns to any member of SCUB
by approaching us individually or by sending mail or, preferably, e-mail. We will
respond as quickly as possible. The only time we will refrain from making
comment is if your question is directly related to an issue (e.g., salary or benefits)
that would normally be part of employee-group negotiation process. We have no
role to play in such negotiations.
This change in practice reflects a desire, both of SCUB and the administration,
for more openness in the financial plannin g process. We look forward to hearing
from you and ask that you respond by April 23. Using your responses and our
assessment of the situation, we will then advise the President. The nature of that
advice will be reported to Senate.
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SIMON FRASER UNIVERSITY
1994/95 BUDGET MODEL ASSUMPTIONS
Base Provincial
Operating Grant
Consistent information received indicates that the most optimistic scenario will be a 0% change
to the base grant. We have modelled projections ranging from no change to a 2% decrease.
Enrolment Grant
Preliminary information received would indicate a 4% increase in undergraduate enrolment
expected by the Provincial government, which we assume will be fully funded at $6,929. There
will not be any increase in funding for additional graduate students. Last year we received
$5,889. (485
x $6,929 = $3,361,000)
Student Tuition Fees
($5/credit hour)
At this point in time we are modelling a
$5/cr.
hr.
(7.35%)
increase in tuition fees.
Additional Enrolment
Undergrad - we did not reach our funded target by 85 FTE in 1993/94 and must therefore adjust
1994/95
levels (for a total of 485 -
85
=
570
new FTE) for both prior year shortfall and the
1994/95 4% increase. The mix of anticipated domestic and VISA undergraduates has been
revisited in light of current enrolment trends for those groups. Reductions in Visa student
enrolment have resulted in a decrease in total tuition revenues. Grad - no change is modelled.
Utilities
Major rate increases have been announced for gas
(25%),
water/sewer (20%) and electricity
(4%), this is an overall increase of 6.32%.
General Inflation
As in the past two years no increase has been allocated for general inflation. SFU is currently
experiencing approximately 4% inflation, compared to the current Vancouver rate of 2.4%, for
goods and services.
Merit/Step Increases
At 1993/94 levels are provided for all eligible employee groups.
General Salary Increases
For 93/94 TSSU (in negotiations), all other contracts in effect. For
94/95
all assumed 0% in
these models.
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0122Bah ?
3/23194
SIMON FRASER UNIVERSITY
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Operating Budget Models
1994195 ?
S,000
Apr. 1/93
Case A
Case B
Case C
Base grant changes:
0%
-1%
-2%
Revenue
Base
Apr. 1/94
Apr.1/94
Apr.1/94
Prov. of B.C. Grant
115,546
115,483
115,483
115,483
Reduction to base grant
0
(1,155)
(2,310)
Endowment Lease Income(HC)
1,401
1,421
1,421
1,421
Enrolment Grant(435x$6,929)
3,361
3,361
3,361
Graduate Support(Provincial Grant)
565
565
565
565
Student Tuition Fees
31,270
34,676
34,676
34,676
Investment Income
1,500
1,300
1,300
1,300
Credits to Medical Serv(cost recov)
744
840
840
840
Overhead Recoveries(eg CA)
948
948
948
948
Rental & Misc Fee(eStudent Fees)
785.
950
'950
950
Athletics & Recreation Fees
868
888
888
888
Total Revenues ?
153,627
?
160,432 ?
159,277 ?
158,122
Expenditures
Non-discretionary
.
Expenditure Base-SALARY
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120,050
NON-SALARY(1) ?
33,577
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Changes to 1993194 Base
Salary - General Increase
Progress /Merit
Retirement/Turnover Savings
Benefits on Salary Increases
Benefits- Workers'Compensation(increased use)
- UIC (rate)
- Extended Hea]th(increased use)
- CPP(rate)
-Dental(rate)
Student Services(improvernents funded by Student Services fee)
Rent Increases(eg Cont Arts downtown space)
Library Acquisitions(inflation)
New Space-O & M costs(West mall)
Inflation, Utilities
Reorganization - savings
Non-recurring to recurring(2)
Discretionary
Innovation Fund(per budget modelling exercise)
Scholarships and Bursaries(per existing formula)
Enrolment Costs(for support of 485 new students)(3)
Total Expenditures
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153,627
To be Allocated/(Shortfall) ?
0
119,758
119,758
119,753
33,575
33,575
33,575
0
0
0
2,024
2,024
2,024
(320)
(320)
(320)
249
249
249
45
45
45
199
199
199
86
86
86
80
80
80
60
60
60
80
80
80
93
93
93
375
375
375
825
825
825
289
289
289
(440)
(440)
(440)
445
445
445
250
250
250
446
446
446
2,536 (4)
2,536
2,536
160,655
160,655
160,655
(223)
(1,378)
(2,533)
r.
(1)Detail of Non-salary Expenditures-
1994/95
Budget Models
VP Harbour Centre Contingency
15
VP Research Contingency
25
Training
50
VP Admin Contingency
52
VP Acad Contingency
108
University memberships(a)
138
Mortgage Assistance(b)
150
Research Support
163
Graduate Student Support
230
Professional Development(c)
235
Miscellaneous GUR(d)
235
Insurance
285
General Contingency
300
Moving and Recruiting(e)
320
Tuition Waiver
350
Legal and Consulting
370
Equipment(f)
1,166
Leases(g)
1,372
Janitorial
1,532
Utilities
3,041
Library Acquisitions
3,379
Scholars hips,B ursaries and Awards
3,853
Departmental Non-salary(h)
16,206
Total
33,575
(a)
e.g. Association of Universities and Colleges of Canada,Universities Presidents' Council,
Association of Commonwealth Universities
(b)
mortgage assistance for qualifying faculty
(c)
negotiated allowances for APSA,Faculty
(d)
miscellaneous,centrally budgeted expenses, e.g. study leave for lab instructors,
convocation expenses,property taxes,general travel expenses,Teaching Excellence
Awards
(e)
faculty and staff moving costs
(f)
one of several sources of equipment funding,used for (1993/94) South Sciences equipment
and departmental equipment purchases.
(g)e.g. leases for Harbour Centre, Contemporary Arts space
(h) Includes
all
departmental non-salary budgets for items such as travel, paper and
printing,telephone, materials and supplies, as well as non-salary budgets
for buildings & grounds, electrical and mechanical maintenance.
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