Budget Context for Academic Planning

1
Budget Context for Academic Planning

• Gary Brewer
• Vice-President Finance and Administration
• Report to SENATE June 22, 2006

2
Presentation Outline

• Review 2005-06 Year End Highlights
• 2006-2009 Budget Plan Update
• Tuition Fee Framework
• 2006 Provincial Budget
• Budget Plan 2006-2009

3
2005-06 Highlights Balance Sheet

• Total Assets increased to 1,212M
• (Last year 1,109M, and two years ago 924M)
• Capital Assets increased to 635M (net of annual
  depreciation)
• (Last year 617M, and two years ago 559M)
• Accolade project 35M expenditure in year
• Endowments increased to 265M
• (Last year 221M, and two years ago 173M)
• Proceeds from 2nd land sale (22M)
• Proceeds from fundraising and OTSS matching
  (10M)
• Increase in market value (13M)
• (Scholarship/Bursary spending increased to 49.5
  M from 45.5 M last year, and 28.6 M five years
  ago)

4
Endowment Growth from 1997 to 2006
5
2005-06 Highlights Balance Sheet

• Long-Term Debt decreased to 353M
• (Last year 361M, and two years ago 268M)
• Long-term debt includes 200M debenture issue
  from March 2002, and 100M debenture issue from
  May 2004
• Principal payments on outstanding mortgages and
  loans are about 8M annually
• Repayment of debenture principal due at end of
  40-year term. Repayment obligation to be managed
  by setting aside amounts over the term of the
  debentures

6
2005-06 Highlights Balance Sheet

• Net Asset Deficit decreased to 44M (Last year
  45M)
• The deficit was originally projected to increase
  to 50M
• Positive variance caused by improvement over plan
  for ancillary operations

7
Deficit (Net Assets Balance As at April 30)
8

• Review 2005-06 Year End Highlights
• 2006-2009 Budget Plan Update
• Tuition Fee Framework
• 2006 Provincial Budget
• Budget Plan 2006-2009

9
Government Tuition Fee Framework - (March/2006)

• A regulated framework for publicly-funded
  programs
• Allows tuition fee differentiation based on
  program and year of study
• Tuition fees are permitted to rise within
  specified limits based on the base of fees that
  existed in 2003-04 at time of government freeze
• Institutional average tuition fee revenue not to
  exceed 5
• Effective for the 2006-07 academic year through
  2009-10
• Institutions will be required to sign multi-year
  accountability agreements that will include a
  Student Access Guarantee
• Requirements for the Student Access Guarantee
  are not yet clarified

10
Maximum Allowable Fee Increases
PROGRAM YEAR
CONTINUING
PROGRAM TYPE
FIRST YEAR
YEARS
Arts Science, and Other Programs
4.5
4.0
Professional and Graduate Programs
8.0
4.0
5.0
Total Tuition Revenue Increase
11
Tuition Fee Increases - Summary of Proposals to
Board

• No change to graduate fees for most programs
  through 2007-08
• Research Masters and PhD tuition fees frozen in
  Fall 2005
• Professional Masters/undergraduate programs
  increased at allowable amount for 2006-07 through
  2008-09
• 8 for entering year / 4 for continuing
• Remainder of undergraduate programs increased at
  allowable amount for 2006/07 through 2008/09
• 4.5 for entering year / 4 for continuing
• Average annual increases are 4.2 in 2006-07,
  4.7 in 2007-08, and 5.0 in 2008-09

12
2006 Provincial Budget Overall Funding Summary

• Re-affirmed the Reaching Higher Plan
• 6.2 B by 2009-10
• Confirmed an operating grant increase of 290 M
  in 2006-07 for both colleges and universities (an
  8 increase)
• Little new information provided
• No direct funding for inflation
• No incremental funding for deferred maintenance

13
Reaching Higher - Summary
14
2006 Provincial Budget Operating Grant
Breakdown (2006-07)

• Unlike last year, MTCU did not provide details of
  operating grants for 2006-07.
• Earliest possible date for additional information
  will be June 30/06.
• Focus will remain on Quality and Access
• continuation of the Quality Improvement Fund
• additional 50 M for graduate expansion
• additional funding for designated groups
  (students with disabilities, francophone, first
  generation)
• additional funding for medical clinical
  education

15
2006 Provincial Budget Graduate Expansion
Funding

• Graduate expansion funding remains as announced
  last year.
• Funding will be tied to negotiated growth
  targets.
• Targets for 2006-07 and 2007-08 are expected to
  be finalized by end of June.

16
Yorks Budget Planning Process

• Yorks budget planning is a multi-year approach
• Typically a 3-year horizon
• Incremental building on the previously approved
  plan
• Updated annually for new information and changes
  in revenue and cost assumptions from the prior
  plan
• First year of the multi-year plan is the basis
  for detailed annual operating budgets for
  Faculties and administrative units
• Updated budget typically developed in Dec-Mar
• Information delays from government adds planning
  uncertainty and pushes back budget timeline

17
2004-07 Budget Plan (June 2004)
( millions)
2003-04
2004-05
2005-06
2006-07
Operating Revenue
510.7
564.9
583.7
584.2
Total Operating Expenses
509.9
560.4
582.5
585.1
Annual Surplus/(Deficit)
0.8
4.5
1.2
(0.9)
Cumulative Surplus/(Deficit) Balance
(3.7)
0.8
2.0
1.1
2003-04
2004-05
2005-06
2006-07
BASE - Faculty/Libraries
3.00
1.45
1.75
2.5
Administrative
2.50
1.00
1.75
2.5
18
Budget Plan Update - Summary of Major Changes

• REVENUE CHANGES
• Enrolment Growth (Graduate and Undergraduate)
• Tuition Fee Increases
• Quality Improvement Grant Funding
• COST CHANGES
• Enrolment Growth
• Complement and support staff
• Graduate student support
• Additional capital investment
• Salary/Benefit/Pension cost inflation
• Other Inflation cost pressures (including
  utilities)
• Strategic Investments

19
Budget Plan Update - Revenue Changes
( Millions)
2005-06
2006-07
2007-08
2008-09
Enrolment Growth
Tuition
in plan
9.7
13.5
17.0
Grants
in plan
10.9
18.6
21.5
20.6
32.1
38.5
Fee Increases
Domestic
in plan
3.4
12.9
23.7
International
in plan
0.5
2.3
3.6
Government Grants
ATOP
2.5
2.5
1.0
1.0
Quality Improvement Funding
8.5
15.5
17.5
17.5
Undergraduate BIU Growth
2.0
2.0
2.0
11.0
20.0
20.5
20.5
Net Revenue from In-Year Growth
5.0
Total
16.0
44.5
67.8
86.3
20
Budget Plan Update - Cost Changes (1)
21
Budget Plan Update - Cost Changes (2)
22
Budget Plan Summary - 2006-07 to 2008-09
1.75
2.5
BASE CUT - Faculty/Libraries
1.75
2.5
- Administrative