2006-07 budget planning - unb · university of new brunswick vice-president (finance &...
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University of New Brunswick
Vice-President (Finance & Corporate Services)
2006-07 Budget Planning
Fiscal Framework
UNB Fredericton CampusMarch 1, 2006
Vice-President (Finance & Corporate Services)2
Agenda
Conceptual Overview of UNB Finances
Outlook for the 2005-06 Fiscal Year
Outlook for key items in 2006-07 Budget
Basic Budget Strategy
Multi-year Outlook
Vice-President (Finance & Corporate Services)3
UNB FINANCESConceptual Overview
16.0
138.0
20.0
-.15-2.4
-10.00.0
10.020.030.040.050.060.070.080.090.0
100.0110.0120.0130.0140.0
Chequing Acct(Operating Budget)
Carry Fwd Savings Trust Acct A(Endowments)
Trust Acct B(Research)
Trust Acct C(Residences)
Mill
ions
Vice-President (Finance & Corporate Services)4
UNB FINANCESConceptual Overview
-106.0
6.0
-23.0 -21.8 -17.3
-110.0
-90.0
-70.0
-50.0
-30.0
-10.0
10.0
Capital Acct(Infrastructure
Renewal) Capital SavingsRetirement Acct A (1/2
Academic Pension Plan)Retirement Acct B (Early
Retirement Window)Retirement Acct C
(Retiring Allowances)
Mill
ions
Vice-President (Finance & Corporate Services)5
Fredericton CampusUndergraduate & Graduate Enrolment (FT)Actual
6,200
6,400
6,600
6,800
7,000
7,200
7,400
7,600
7,800
8,000
8,200
8,400
1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05
Vice-President (Finance & Corporate Services)6
Fredericton CampusUndergraduate & Graduate Enrolment (FT)Actual and Last 4 Year’s Budget
6,200
6,400
6,600
6,800
7,000
7,200
7,400
7,600
7,800
8,000
8,200
8,400
1996-97 1997-98 1998-99 1999-2000
2000-01 2001-02 2002-03 2003-04 2004-05
Actual Budget
Vice-President (Finance & Corporate Services)7
Financial Outlook for 2005-06Fredericton Campus
($000’s)
Forecast
Operating BudgetBudget (Best Case) (Worst Case)
Budget Plan $ - $ (470) $ (845)
Accumulated Operating Deficit, April 30, 2005 (3,200) (3,200) (3,200)
Accumulated Operating Deficit, April 30, 2006 $(3,200) $(3,670) $(4,045)
Vice-President (Finance & Corporate Services)8
Fredericton Campus Operating Budget Projections$(000’s)
2005-06Budget
2006-07Pro-forma(No tuition fee
increase)
$Change
%Change
Revenue $118,286.3 $120,508.9 $2,222.6 1.88%
Expenses
Operating Expenses 117,418.7 123,002.0 5,583.3 4.76%
Other 867.5 854.5 12.5 (1.44)
Total Expenses $118,286.2 $123,856.5 $5,570.3 4.71%
(Structural Deficit) $0 $(3,347.6) $(3,347.6)
Vice-President (Finance & Corporate Services)9
UNBF Summary of Revenue Forecast$(000’s)
2005-06Budget
2006-07Pro-forma
No TuitionFee Increase
$Change
$2,704.0
0
(539)
Other Non-departmental Revenue 8,221.1 8,278.6 57.5 .70%
$2,222.5
%Change
3.8%
0
(40.74%)
1.88%
$73,911.1
37,535.1
784.0
$120,508.8
Provincial Operating Grant $71,207.1
Tuition Revenue (Base) 37,535.1
Tuition Revenue (Above Base) 1,323.0
$118,286.3
Vice-President (Finance & Corporate Services)10
Provincial Grant (@ 60% Funding)
Pro-forma 2006-07 Actual to Actual
Estimated System-wide Increase(Government year end)
Estimated System-wide Increase(University year end)
Estimated UNB Share Increase
Estimated UNBF Share Increase
3.0%
2.65%
2.73%
2.82%
Vice-President (Finance & Corporate Services)11
Tuition Revenue (@33% of Funding)
What are expected enrolments?
What will tuition fee be?
Vice-President (Finance & Corporate Services)12
Status Quo Pro-forma Enrolment ForecastUNBF Campus Enrolment ForecastFull-time Undergraduate and Graduate
8000
8050
8100
8150
8200
8250
8300
8350
8400
8450
2005 Dec.Act 2006 Proj 2007 Proj 2008 Proj
Source: Registrar’s Office
Vice-President (Finance & Corporate Services)13
UNB Tuition Fees
Decisions by Board of Governors
Basic Tuition FeesInternational Supplemental FeesDifferential FeesSupplemental Fees
Vice-President (Finance & Corporate Services)14
Tuition Fee Environment
Average Canadian Increase Last Year 1.8%Freezes or restrictions in return for more $
Nova Scotia increase was 3.9%
UNB increase was 5.0%
UNB still competitive regionally, however, region is high
Vice-President (Finance & Corporate Services)15
UNB Tuition Fees
Current Modeling:
Basic Fees 4%-5%• Upper end competitive zone
International Supplemental 4% - 7.5%• Competitive Zone
Differential • Law Proposal• Engineering Proposal
Supplemental• No anticipated changes
Vice-President (Finance & Corporate Services)16
Other Revenue
No major changes anticipated
Assumes Federal Indirect Cost Program Continues
Vice-President (Finance & Corporate Services)17
UNBF Operating Expenses$(000’s)
2005-06Budget
2006-07Pro-forma
$Change
$3,598.8
530.5
562.2
Maintenance & Utilities 11,245.9 12,137.7 891.8 7.93%
$5,583.3
%Change
5.41%
2.34%
3.31%
4.76%
$70,146.1
23,167.4
17,550.8
$123,002.0
Faculties and departments $66,547.3
Academic & Student Support 22,636.9
Administration & Development 16,988.6
$117,418.7
Vice-President (Finance & Corporate Services)18
UNBF Expenses
2005-06Budget
2006-07Pro-forma $ Change
OTHER
Sustainability Issues $250.0 $250.0
Contribution to Capital $625 64.5 (560.5)
Unallocated Variable Funds 297.5 297.5
Net Ancillary Operations 242.5 242.5 0
$867.5 $854.5 $(12.5)
Vice-President (Finance & Corporate Services)19
UNBFBaseline Expense Modeling
SalariesFaculty
• Reflects collective agreement
PTR and Attrition• @ 80% receive PTR cost @ $900,000• Attrition savings @$900,000 offset PTR’s
Vacancies• Assumes Academic vacancy savings of @$500,000 per year, these
savings used for Academic transition/priorities
Vice-President (Finance & Corporate Services)20
UNBFBaseline Expense Modeling
Staff SalariesUNBEA
• 3% per collective agreement
BenefitsBasic benefits 5% increase
Faculty Pension Plan• Current UNB funding rate 10.22%• New rate July 01, 2006 11.30%
(increase of 10.6% @$500,000 per year)
Vice-President (Finance & Corporate Services)21
UNBFBaseline Expense Modeling
- Utilities
- Insurance $100 K more 23.2% increase
- Basic Non-Salary Inflation 2.5%
- New Priorities None in modeling
Electricity $390 K more 19.4% increase
Heat $252 K more 11.1% increase
Vice-President (Finance & Corporate Services)22
UNBFBudget Sensitivity AnalysisModeling Impact of Tuition Fee Increase
Impact onRevenue
2006-07Structural
DeficitNo Tuition Fee Increase $0 $<3,348>
Basic Tuition Fee Increase of:4.0% 1,488 <1,860>
4.5% 1,671 <1,677>
5.0% 1,854 <1,495>
Vice-President (Finance & Corporate Services)23
UNB BudgetSensitivity Analysis
Balance UNB budget with:
Only tuition fee increase, 11.0% Fee Increaseno expense reduction
Only Government grant increase, 9.5% Grant IncreaseNo tuition fees increase or expense reduction
Tuition fees in 4%-5% zone, 6.5% Grant Increaseno expense reduction
Vice-President (Finance & Corporate Services)24
UNBF2006-07 Basic Budget Strategy
Sustain recent key strategic investmentsStudent services/scholarships
Manage growth in expenses to match level of growth in total revenue
Selective budget caps to achieve $1.5-$19 million
Currently modeling basic tuition fee increases in a competitive zone
Less than 2005Range 4-5%No changes in /or new supplemental fees
Vice-President (Finance & Corporate Services)25
UNBF Campus Approach to2006-07 Expense Restriction
Baseline Budget Caps (target $1.5 - $1.9 million)
Faculties & Departments 3.0%Academic & Student Support 1.4%Administration & Development 1.4%Library and Branches (non acquisitions) 0.5%Student Affairs & Services 0.5%
(no reductions to scholarships, School of Graduate Studies, Library acquisitions, maintenance & utilities)
Vice-President (Finance & Corporate Services)26
UNBF Operating Budget Multi-Year Forecast$(000’s)
2006-07 2007-08 2008-09
Structural Deficit $<1,860> $<2,504> $<3,527>
Main Assumptions:-Status Quo Operations-Basic Tuition Fee increase of 4%-Current Enrolment forecast
Vice-President (Finance & Corporate Services)27
University of New BrunswickCapital Fiscal FrameworkFredericton Campus
Source of Funds2005-06Budget
2006-07Pro-forma
OngoingProvincial A & R Grant $1,827,029 $1,881,840Land Revenues 71,000 71,000Ongoing Operating Budget Contribution 250,000 250,000Supplemental Infrastructure Fee 1,575,000 1,575,000
Subtotal 3,723,029 3,777,840
One-timePrevious Year’s Enrolment Spread 675,000 650,000Funding from UITF 1,200,000Funding From Capital Assistance - 1,366,700Academic Priority Fund 80,500 TBDContributions from Funded Reserve 324,500 n/a
Subtotal 2,280,000 2,016,700
Amount Required to:- Hold Overall FCI Position $6.3 million
Total $6,003,029 $5,794,540
- Reduce FCI Overtime $8.1 million
Vice-President (Finance & Corporate Services)28
INSTRUCTION & NON-SPONSORED RESEARCHThree-year Average ending 2003-04as a % of General Operating
55.0
59.5
56.9
50
51
52
53
54
55
56
57
58
59
60
UNB Maritime Maclean's Comprehensive
%
Source: CAUBO
Vice-President (Finance & Corporate Services)29
Instruction and Non-sponsored Research
Current academic model is focused on Quality
• Higher % allocated to Instruction & Non-sponsored Research
• Smaller class sizes
• Lower student to faculty ratios
• High % faculty full professor
• National salary averages – National Caliber faculty
Vice-President (Finance & Corporate Services)30
% of Students in SelectedClass Size Ranges1st & 2nd Year LevelClasses of =<502004-05
42.03
48.37
33.22
0
10
20
30
40
50
60
UNB Maritime Universities MacLean's Comprehensive
Source: MacLean’s
Vice-President (Finance & Corporate Services)31
Full Professor Ranks as a %of Total Academic Ranks2004-05
41.4
33.731
0
10
20
30
40
50
UNB Maritime Universities Maclean's Comprehensive
Source: Statistics Canada, Education Statistics, Salaries and Scales of Full-time Teaching
Staff at Canadian Universities, 2004-05
Vice-President (Finance & Corporate Services)32
Ratio of Full-time Studentsto Full-time Faculty2004-05
19
22.6
25.5
10
15
20
25
30
UNB Maritime Universities MacLean's Comprehensive
Source: Office of Institutional Research, UNB
Vice-President (Finance & Corporate Services)33
LIBRARYThree-year Average ending 2003-04as a % of General Operating
5.9
6.7
5.2
0
2
4
6
8
UNB Maritime Maclean's Comprehensive
%
Source: CAUBO
Vice-President (Finance & Corporate Services)34
COMPUTING & COMMUNICATIONSThree-year Average ending 2003-04as a % of General Operating
3.94.1
6.0
0
1
2
3
4
5
6
UNB Maritime Maclean's Comprehensive
%
Source: CAUBO
Vice-President (Finance & Corporate Services)35
ADMINISTRATION & GENERALThree-year Average ending 2003-04as a % of General Operating
10.410.5 11.2
0
2
4
6
8
10
12
UNB Maritime Maclean's Comprehensive
%
Source: CAUBO
Vice-President (Finance & Corporate Services)36
PHYSICAL PLANTThree-year Average ending 2003-04as a % of General Operating
10.010.7
10.5
0
2
4
6
8
10
12
14
UNB Maritime Universities Maclean's Comprehensive
%
Source: CAUBO
Vice-President (Finance & Corporate Services)37
STUDENT SERVICESThree-year Average ending 2003-04as a % of General Operating
8.8
4.6
7.8
0
1
2
3
4
5
6
7
8
9
UNB Maritime Maclean's Comprehensive
%
Source: CAUBO
Vice-President (Finance & Corporate Services)38
Why Do We Always Seemto Have Financial ChallengesUnsustainable Business Model
Comprehensive ProductNational ProgramsNational Compensation ModelSmaller Class SizesLower Student/Faculty RatiosBroad Research Agenda
Under FundedRegional Funding ModelLack of Market Growth Potential
Older Facilities
Limited Flexibility/Innovation
Vice-President (Finance & Corporate Services)39
Result
Costs rise faster than revenuesStructural operating deficit
Under Funded Priorities
Significant Levels of Capital and Retirement Debts
Vice-President (Finance & Corporate Services)40
UNBFAnnual Funding Challenge
$1.5
$2.0
$2.6
$4.0
$0.80
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
Structural Deficit Unfunded PrioritiesHold Current Infrastructure Position Improvements/modernize FacilitiesEquipment Technology
Millions