S .1'

SIMON FRASER UNIVERSITY, BURNABY, B.C., CANADA V5A 1S6

OFFICE OF THE PRESIDENT; 291-4641

May

7, 1981

William C. Gibson, M.D., F.R.C.P.

Chairman

Universities Council of B.C.

Ste. 500 - 805 West Broadway

Vancouver., B. C.

V5Z 1K].

Dear Dr. Gibson:

On April 27, 1981 the workingpapers documenting the

distribution of the 1981-82 operating grant were distributed

during a meeting of the UCBC Long Range Planning Committee.

Since that time, we have awaited receipt of the written

rationale which would provide us with a basis for understand-

ing the allocation process used this year by UCBC. Given that

no rationale has been forthcoming, I feel that I must provide

my own interpretation and conclusions based on the working

papers and the brief discussion held at the Council's office

at the time the materials were presented to the three

presidents. Stated briefly, the conclusions reached at SFU

are:

(1)

First, the formula allocation process has

again been confounded by an arbitrary decision

of Council, despite a firm commitment from

UCBC to the development of a formula which

would assist each particular university in

forecasting its provincial grant for a

minimum of two years in advance.

(2)

Second, no recognition has been given to the

unique enrolment situation faced this year

by SFU, the direct result of a prolonged

strike of Local 2 of the Association of

University and College Employees in 1979.

This we find quite difficult to comprehend,

given the concerns raised with Council at

the time of our being forced to take this

lengthy strike and our specific request that

Council consider this matter in addressing

the allocation of the 1981-82 special purpose

grants.

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. .

./2

William C. Gibson

May 7, 1981

Page 2

(3)

Third, we find it positively absurd that

the fastest growing university in this

province by far, namely SFU, receive the

smallest increase of any of the universities.

(4)

Fourth, given that provincial operating grants

in the past several years have been

insufficient

to meet the rapidly rising costs associated

with inflatiOn and enrolment increases, we

find

incomprehensible for

Council to

designate a substantial portion of the total

operating grant for what Council describes as

a "system development fund", but for which

explicit guidelines have yet to be formulated.

I would like to amplify on each of our conclusions.

First, the base year for the di0tribution of the 1981-82

operating grant is 1979-80. Previous enrolment discussions

between the universities and Council were based on the under-

standing that prior year enrolments and enrolment bases for

use

the formula could not and would not be modified. Last

year, because of the inability of the tHe universities to

agree among themselves on the appropriate enrolment base for

1979-80 and 1980-81, Council was asked to make the decision

which pres mably would'be binding for subsequent years. In

spite of this, for 1981-82, Council has changed the base

enrolments for 1979-80, thereby reversing its decision of

last year and in the process has generated a grant

distribution

which operates to the extremely serious financial disadvantage

of this University. Trying to operate universities these days

is a difficult enough task without having to take on the

assignment of guessing the latest "preferences" of the Council

in the allocation process.

With regard to the 1979 strike of AUCE 2 here at SFU,

we were very much concerned at the time about the potential

difficulty this situation would have on enrolment and this

matter was raised with Council personnel on more than one

occasion. We were assured that the matter would certainly be

carefully considered should the need arise. Furthermore, in

submitting our 1981-82 operating grant request, we drew

particular

attention

to the fact that we had experienced this

strike situation which had resulted in a substantial--impact

on our enrolment in the

ensuing

academic terms, and,èspecially

during the 1979 Summer and Fall semesters. Furthermore, given

the two-year time lag applicable to enrolment statistics which

is a major characteristic of the Grant Allocation forjnula,

coupled with the fractional multiplier which is appUjd to

enrolment increases between the base year (1979-80) and the

grant year (1981-82), it was apparent that Simon Fraser

William C. Gibson, M.D., F.R.C.P.

May 7, 1981

Page 3

University would be penalized by reason of the responsible

stance which was adopted in resisting excessive wage and

salary demands.

Consequently,

we specifically asked Council

to consider this matter this year when determining the

allocation of the Special Purpose Grants. There is nothing

in the 1981-82 grant distribution to indicate that SFU's

anomalous enrolment

downturn

in 1979-80 was considered, let

alone recognized in the distribution to date of the discre-

tionary funds which are at Council's disposal. It should be

noted that this lack of. willingness to recognize this situation

through the grant distribution certainly offers the University

little incentive to sustain a strike in order to resist undue

wage demands.

It is important for Council to be aware that these two

events; namely, the arbitrary UCBC change in procedures

affecting the 1981-82 grant distribution and the failure of

Council to recognize the strike-related impact on the 1979-80

SFU enrolment, have placed this University in a situation

where it is absolutely impossible for us to establish a

balanced annualized budget for the present fiscal year. This

•

remains the case in spite of important restrictions in selected

areas of our budget and certain assumptions about future wage

settlements which are probably too optimistic, given the

current wage settlement scene. In an institution the size of

ours, a shortfall of between one-half and three-quarters of a

million dollars is quite significant.

Over the 1970's, enrolment increases at Simon Fraser

University have far outpaced those of the other two universities.

Further, between 1979-80 and 1980-81, SFU's full-time equivalent

enrolment increase was 5.5%, compared to 4.5% and 1.4% for the

Universities of Victoria and B.C. respectively. Current advance

registration

information

for the Summer and Fall Semesters of

1981 at SFU suggests even higher increases. Despite these relative

figures, the 1981-82 distribution of the provincial operating

grant provides this institution with the smallest grant-over-

grant increases awarded to any of the B.C. universities. More

specifically, if the formula component of the 1981-82 grant

is compared with 1980-81, the increases are:

(a)

University of Victoria

14.49%

(b)

University of B.C.

11.97%

(c)

Simon Fraser University

10.81%

If the composite special purpose and formula grant for

•

1981-82 is compared with like figures for the previous year,

the increases become:

. . .14

William C. Gibson, M.D., F.R.C.P.

May 7, 1981

Page 4

(a)

University of Victoria

15.66%

(b)

University of B.C.

12.50%

(c)

Simon Fraser University 11.45%

• Regardless of the comparative figures used, however, it

is extremely difficult for us to understand why Council did

not give cognizance to these disparate outcomes in its

discretionary allocation. This type of situation was, of

course, the reason it was agreed by everyone concerned that

five percent of the overall grant should not be distributed

through the formula but rather should be allocated by the

Council itself to rectify difficult anomalies as they arose.

There is a further less critical concern which I wish

to raise and it has to do with the manner in which the

expansion of the Medical School at UBC is being handled

outside the normal allocation process. If the additional

operating funds for this purpose are added to the UBC alloca-

tion, their percentage increase goes from 12.5% to 15.93%.

Presumably this expansion is being treated as the equivalent

of an "emerging program'

but if this is the case, then the

base enrolment in Medicine should be remaining constant.

This is nct the case, however, and we ask that this matter

be reviewed. As well, we would be interested to know if

these funds for expansion are categorical (i.e. restricted

only to Medicial School use) or whether the institution is

free to use them as it believes appropriate. Perhaps the

question of whether one academic administrative unit should

be treated in an atypical manner is one 'which needs to be

considered further.

Presumably in response to the case made by UCBC, and

assisted admirably by the Ministry, Council received for

distribution among the universities a provincial operating

grant in excess of its request. This $1.2 million, plus an

additional $1.5 million, totalling approximately 1% of the

total grant, has been designated by Council to providefor

"system development" projects of various kinds. Given the

discussion at the Long Range Planning meeting, and the absence

of any written rationale, we remain unclear as to the specific

purpose for which these funds are intended. To add to the

confusion, we have received conflicting verbal statements

which provide little in the way of encouragement to us that

the needs of this University will be addressed through the

use of these unallocated funds. In fact, the designation of

these funds for "system development requirements" suggests

to us a

failure of Council to appreciate that provi'1Icial

operating grants over

the past three years have not kept pace

with the combined.factors of general inflation and enrolment

growth.

'-I

• • .

William C. Gibson, M.D., F.R.C.P.

May 7, 1981

Page 5

In closing, I want to emphasize that our criticisms

are not directed at the allocation formula. Rather, we find

fault only with the chronically inconsistent manner in which

Council has calculated the enrolment units used to drive the

formula and with the manner in which Council has chosen to

allocate its discretionary funds. For us, the difficulties

associated with this distribution merely exacerbate the

inadequacy of the operating grants in trying to meet infla-

tionary costs and enrolment increases over recent years.

In the same vein, we do not understand an allocation

made without explanation except to say "it has strings attached",

nor can we comprehend the decision to fund arbitrary and currently

ill-defined system development needs with funds provided by

the Ministry, reportedly in response to persuasive arguments

made by the universities. Furthermore, we must express our

extreme disappointment at Council's failure to recognize

abnormal extenuating circumstances (i.e. the AUCE strike) that

were to a considerable extent beyond our control.

The "bottom line" in all of

extreme dismay about a situation

significant margin, the smallest

universities, but are expected to

population that is increasing

TflO

has a response to this situation

your return correspondence.

this is to articulate our

whereby we receive, by a

grant increase of any of the

provide quality service to a

st rapidly. No doubt Council

and we look forward to reading

Fent

since

C-

ge Pedersen

KGP:ajj

cc: Dr. J.M. Munro, Vice-President, Academic

Mr. G.

Suart, Vice-President, Administration

Dr. E. Scott, Director of Finance

The Hon. P.L. McGeer

Minister of Universities, Science and Communications

Dr. Robert Stewart, Deputy Minister

Mr. A.E. Soles, Assistant Deputy Minister of Universities