BUDGET 2013-2014 - OVERVIEW

 

Once again this year, UWinnipeg faces difficult financial decisions as we prepare the 2013-2014 operating and capital budgets.

The provincial government provides approximately 59% of the University's revenues through an annual operating grant. Student tuition and fees provide approximately 36% of the University's operating revenues.

The Province of Manitoba does not link its annual grant to enrollment. Historically the University of Winnipeg has received a proportionally smaller annual operating grant per student from the province than other Manitoba universities. This disadvantage has been exacerbated as a result of our increasing enrolments.

This next year the University anticipates a 5% increase to our base grant, and an allowed tuition fee increase of approximately 1.5%. Assuming that enrolment levels remain stable, the combined operating grant and anticipated tuition fee revenues will translate into an increase of approximately $3 million in operating support.

Salaries make up 70% of the University's operating budget. The cost of general salary increases, , career progression increases, and changes in benefits costs mean that salary costs at UWinnipeg are projected to go up by approximately $4 million in the coming year before any additions to staffing levels.

This equation means UWinnipeg will have to find or generate another $1 million in operating revenue for 2013-2014 compared to last year. This gap is consistent with the previous year's budget in which the university either had to trim its costs by $1 million, or generate approximately $1 million in additional operating revenue. If future operating grant increases are lower than this year's 5% increase, and tuition fee increases remain low, this pattern will continue and the annual budget gap will continue to grow.

This scenario puts added pressure on the University to streamline our operations. It also puts an increased onus on our institution to diversify its sources of funding. This diversification is accomplished in part by examining the way in which we deliver our current undergraduate and graduate programs to see if there are more efficient ways to utilize our existing human resource capacities and physical space. It is also accomplished by generating increased revenues from our Collegiate, English Language Program, and Professional, Applied and Continuing Education (PACE) operations and by identifying opportunities for contracting university expertise to public and private entities. To address these pressures we will need to continue to attract additional sponsorship and donor dollars, as well. We have had some success in all of these areas over the last several years, and will continue to build on these successes in this year's budget, while at the same time identifying new ways to achieve operating savings and revenue generation opportunities.

In addition, the University continues to face fiscal pressures related to our Defined Benefits Pension plan. It is anticipated that, similar to last year, the University will be required to make an additional $2 million contribution to the Defined Benefits plan, through a combination of re-directing existing operating funds and a series of repayable loans from the Province as a result of factors outside the University's control, including lower than expected investment returns, recent changes to provincial pension legislation, and revised actuarial assumptions. The University continues to examine how it can meet the immediate increased fiscal demands on the institution's resources related to the Defined Benefit Pension plan this year, as well as explore options to stabilize the funding requirements of the plan over the long term.

It is worth noting that the University of Winnipeg is unique among Manitoba University's for having introduced a Defined Contributions Pension Plan in 2000, which is provided to eligible employees hired since that time. The Defined Contributions Pension plan is not linked to the current funding pressures associated with the University's Defined Benefits Pension plan.

Lean Operation - Making Do With Less

Faced with this reality, UWinnipeg has taken action to cut costs and enhance revenues. Since 2007, these efforts have brought in over $8 million (7%) in annual budgetary savings and new revenues:

In support of our academic mission, UWinnipeg has channeled some of these cost efficiencies to bolster our faculty strength. In the 2012-2013 academic year, UWinnipeg funded the hiring of 22 faculty and sessional instructors. This is in addition to 31 faculty positions added in the 2011-2012 operating budget. For 2013-2014, the President and Acting Provost and Vice-President (Academic ) have authorized the hiring of 25 permanent faculty members.

Our Historical Imbalance

Our provincial grant in 2010 was the equivalent of $6,500 per student, whereas Brandon University and the University of Manitoba each received $12,000 per student.

To put it another way, since 2000, UWinnipeg's grant per student has increased by 15%, while the University of Manitoba's has increased 28% and Brandon University's has increased by 45%.

UWinnipeg is attracting new students at a faster rate than Manitoba's other two universities. Our growth in the past decade is 42% (U of Manitoba is at 36% and Brandon U at 20%). We are successfully providing access to underrepresented youth through innovative student aid programs such as the Opportunity Fund.

The provincial funding discrepancy goes back decades and persists without good reason. The impact on us is substantial. The University has been working with the Provincial Government to address the inequality for several years, including a proposal to increase the University's grant by $6 million over four years made in 2008. The Province provided the first $2 million of this plan; had the remainder been received, UWinnipeg would have received an additional $8.5 million over the past four years, and our annual operating grant would have risen by $4 million annually for future years. Those funds would have allowed us to hire more faculty, improve student services, upgrade technology infrastructure and reduced the immediate and longer term financial impacts of the loans required to meet our pension commitments. More recently, the University has approached the government about adjusting the annual grant program to factor in an allowance for student enrolment growth.

Although UWinnipeg's senior executive team has been working extensively with the Province to address this imbalance, we do not anticipate and cannot plan for a correction to this chronic underfunding in the coming fiscal year. Recent legislation ties future tuition increases to the consumer price index. 2013-2014 represents the last year of a three year commitment by the Province for an operating grant increase of 5%. Future grant increases could be substantially lower than 5%.

Capital and Research Budgets

 

Building projects are funded from the Capital budget, which is separate and distinct from the Operating budget. The new buildings on campus are possible only because of generous public grants and private sector donations.

Our successful capital campaign has attracted more than $170 million in private and government donations to our campus and downtown community. New construction has added 200,000 badly needed net square feet to campus (a growth of 24%, while student enrolment has climbed more than 40%). Even with our new buildings, however, we have just 132 sq ft of space per student, placing us below average among Universities in Canada.

Costs associated with maintaining new facilities have been offset by cost savings, new revenues and provincial adjustments to our operating grant,By consolidating our campus, we have significantly reduced expensive lease space around the city and we have increased campus revenues through retail and other community and commercial partnerships. The Buhler Centre is a prime example of this, where we reallocated monies being paid to a third party landlord to pay for the mortgage and operating costs of a building we own with a partner.

The Province has also granted the University $2.1 million in deferred maintenance funds, $1.9 million of which has been allocated to a sustainability retrofit program which will contribute to operational savings in future years.

Like our capital budget, the University's research budget is largely distinct from the operating budget. However, UWinnipeg supports researchers using internal operating budgets through a variety of research and travel grants. The University has increased its support of these grants by 17% over the last five years. This increase has helped leverage additional external research grants. As a result, UWinnipeg academics are attracting significantly more research dollars to campus, up from $4.4 million to $7.1 million in the last five years. That is a 60% increase in external research funding flowing through UWinnipeg.

Our Budget Options

 

We are required, by law, to present a balanced budget.

The University is working hard to identify new revenue sources complementary to the University's strengths that can be used to subsidize our core operations. Some examples of these are the commercialization of research in partnership with our Faculty members, and expansion of our professional studies, English Language and Collegiate programs. We also launched our new Future Fund in the fall of 2012 with the express goal of raising $15 million to support academic programs, research and innovation on campus. The Future Fund has raised approximately $773,000 to date and has supported items such as the Bloomberg Terminal for use by our business faculty and students and the new Chair in Co-operative Enterprises.

The University of Winnipeg Foundation recently launched the 2013 Family Campaign and faculties and departments have also begun fundraising campaigns using the Foundation's phone bank. More than $90,000 has been raised to date as a result of these initiatives to be utilized for faculty and department initiatives. The University also continues to support our Community Learning programs via private sector support. Community Learning programs attract $800,000 in funding on an annual basis.

It is worth noting that UWinnipeg is not alone in facing difficult budget decisions. Universities across Canada face similar funding challenges and many are in much more dire positions, necessitating even deeper cuts to academic programs and administrative services.

The Budget Process

 

The University's budget process is a consultative one. The budget team continues to meet with the Deans and departmental managers on campus as well as the Senate's Budget Advisory Committee to identify the most appropriate way to balance the budget. Over the next three weeks, President and Vice-Chancellor Dr. Lloyd Axworthy will also meet with all Faculty Councils to discuss budget priorities, prior to the document going to Senate.

We are focusing on increasing revenues where possible, while any budget reductions will be viewed through the lens of maintaining the quality student experience so valued at UWinnipeg.

If you have any budget related questions, please submit them to budget@uwinnipeg.ca

The University will compile Frequently Asked Questions and answers and circulate the information to the entire campus via the staff bulletin, and we will post budget updates on our website homepage.

Decisions

The Board of Regents is responsible for reviewing and approving the operating and capital budgets for the University, usually in May or June.