UBC’s Balanced Budgets for 2010‐11

UBC’s Balanced Budgets for 2010‐11

Letter to the UBC Community,

Stephen J. Toope,
President and Vice‐Chancellor

I am pleased to share with you that UBC’s Vancouver and Okanagan campuses should enter fiscal 2010‐11 with balanced operating budgets. This is an important achievement given the difficult economic environment for universities in North America, and it positions UBC well to build on its current successes.

Our focus for 2010‐11 is to support our Place and Promise strategic plan with a budgeting framework that reflects the priorities agreed upon in the plan. That is why, for example, we are investing $1.5 million in base budgeting for the Downtown Eastside Learning Exchange and community service learning, and committing half a million new dollars to the University Sustainability Initiative and to Aboriginal strategic initiatives. The new budget also proposes $6.1 million in new student aid funding, including additional graduate fellowships and further commitments to the UPASS program and the national enrolment strategy. The upcoming year will also see a $3.4 million capital outlay as a first step in our commitment to double childcare spaces in Vancouver to 1,000 over the next four years.

UBC has fared better than most universities during the financial challenges of the past 18 months. The provincial government’s support of post‐secondary education has been crucial to this result: we have experienced only limited cuts to our provincial funding, and we have been protected from the impact of the HST. We also benefit from tremendous research momentum, with annual external funding for research now at $475 million. In addition, there is strong demand for UBC programs, including sharply rising demand from international students.

Despite these real positives, our operating budgets on both campuses face significant pressures. We began this year with a structural deficit in the Vancouver campus budget which had developed over a time of steady state operating funding and tuition increases capped below the rate of inflation. The provincial cuts to funding for campus maintenance, although limited, nevertheless added $13 million to this gap. In total, we were faced with a $32 million shortfall that we had to address in this budget cycle. On the Okanagan campus, which operates on a somewhat different budget model and which has not faced a structural deficit, the upcoming year will be the first in which the provincial government is not funding expansion.

Delivering balanced budgets under these conditions, therefore, is all the more significant a milestone. Hard choices have been made across all parts of our operations and I am grateful for the efforts throughout the university community to achieve balance. In Vancouver, the largest cuts have been to centrally funded activities, to a total of $19 million, and include the loss of a number of management positions. Faculty budgets have been reduced by 2.5 per cent across the board, for a total of $10 million in cost reduction. Additional savings have come from reducing contingencies, simplifying accounting, and from anticipated efficiencies such as campus‐wide IT licensing and document management innovations. Four million dollars of these savings will be transferred directly to the faculties, to ameliorate the reductions. We also expect a $7 million increase in investment and business revenues.

In the Okanagan, the operating budget will reach $98 million in 2010‐2011, with incremental growth of $5.9 million. Pressure on the budget could increase if student growth expectations are not realized. The Okanagan budget envisions selective growth to Faculties and units, for example through additional projected hiring in Engineering, Management, and in Health and Social Development.

We are committed to sound financial underpinnings, so we have tackled cost reduction at a tough, structural level, rather than by shuffling ‘soft’ or ‘one‐year’ money and other stopgap measures. From this perspective, the 2010‐11 budget delivers on our Place and Promise commitment of economic sustainability in a real and significant way.

Thank you for the energy and skill that has produced this remarkable result and will propel our progress in delivering on our commitments. All members of our campus community, including our Board, have contributed to making this result possible. Our collective capacity to rise to challenges likes these continues to be a source of inspiration for me.

The balanced budget proposals will be presented to the Board of Governors early in April 2010.