Memorial University’s Board of Regents has approved the university’s budget for 2015-16 as proposed by the administration. To address the shortfall in funding arising from this year’s reduced government grant for operating and capital expenditures, the university will implement a range of measures over two years. The approved budget framework includes a combination of one-time and ongoing base budget administrative expenditure reductions, restricted spending on deferred maintenance and a deferral of a pension plan special payment in 2015-16. As well, it includes increases to some tuition fees and to residence fees in 2016-17 starting in the fall of 2016. There will be no tuition or residence fee increases for any students in the academic year starting September 2015.
“Extensive consultation and incredible co-operation across the institution resulted in a budget proposal that balances our complex fiscal reality with our mandate to deliver excellent academic programs,” said Dr. Gary Kachanoski, Memorial’s president and vice-chancellor. “All sectors of the university community are contributing to addressing the shortfall.”
The 2015-16 operating budget includes a one-time reduction of $1.3 million and an ongoing base budget reduction of $2.6 million to administrative/support expenditures for all units. Direct academic expenditures and unavoidable operating costs (like utilities and snow clearing) are exempted.
Despite receiving no funding for deferred maintenance needs this year, the university is allocating $7 million to its capital infrastructure budget. These funds will be used for critical deferred maintenance, health and life safety needs and top priority infrastructure planning. The funding will come from the university’s Infrastructure Renewal Fund and from funds earmarked for other infrastructure planning, which has now been deferred.
Approval was also given for the next stages of work on the core science facility, with mortgage payments coming from the Infrastructure Renewal Fund after the building is completed in 2020.
The Board of Regents will be requesting a one-year deferral of the approximately $21.9 million special pension payment required by provincial solvency legislation, a recommendation that was unanimously endorsed by the University Pension Committee.
Even with these measures, the university expects to be $800,000 short of balancing its budget for 2015-16, since its revenue-generation options for the 2015-16 fiscal year are limited. The provincial government reduced its support for a tuition fee freeze, indicating that the grant in lieu of tuition is exclusively for Canadian undergraduate students. Additionally, government indicated that additional revenues could be found by increasing student residence fees.
To give students sufficient time to plan for future fee increases, the university announced previously that tuition and residence fee increases will not be implemented in the 2015-16 academic year.
Therefore, the Board approved several revenue-generating measures that will come into effect in 2016-17. Memorial will generate an additional $2 million from graduate student tuition fees, and $600,000 in tuition fees for the MD program in the Faculty of Medicine, starting in September 2016.
As well, the university will move to a full operating-cost-recovery model for residence fees. Starting in September 2016, this is estimated to generate approximately $1.9 million.
All these decisions were based on the university’s current understanding of the long-term fiscal forecast of government. “We felt it important to lay out the anticipated picture of 2016-17 now for the board, and to let students and the broader university community know well in advance of the next budget cycle what we are looking at,” said Dr. Kachanoski.
“This year’s level of cost-cutting cannot be absorbed again without further impacts,” he stated. “Next year if there are further reductions in government funding, further tuition fee increases and budget cuts will have to be considered. We know that any fee increases will impact students. We take seriously our special responsibility as the province’s only university and within that responsibility we continue to strive for affordability, accessibility, growth and quality.”
Throughout the budget planning process, consultations on the budget proposal were held with students’ unions, deans and directors, Senate, the Senate’s Executive Committee and its Planning and Budget Committee, the University Pensions Committee and the Board of Regents’ Executive Committee and its Finance Committee.
Dr. Kachanoski expressed gratitude for all the input and advice from the people involved in budget planning and consultation process. “We very much appreciate their efforts to help us arrive at an equitable solution to a difficult budget situation,” he said. “I would like to extend my thanks to Memorial’s employees and Board of Regents for all of the work that went into this proposal. I appreciate that this has been an anxious time for students and employees.”