Without a provincial bailout expect more budgets cuts and possible tuition increases, said top-ranking university administrators at the latest Governing Council Business Board meeting last Monday.
Held atop the Chestnut Residence surrounded by a luminous Toronto skyline, Business Affairs VP Felix Chee laid bare in charts and figures falling capital and run-away expenditures that have managed to outpace revenues by 5.2 per cent since 1998.
Chee said shoring up revenues is the only long-term solution. “Either fees for students have to go up or [government] grants have to go up,” he said afterwards.
Summarizing financial statements, Chee detailed how U of T accrued more than $164 million in deficit last operating year. He attributed the numbers to myriad factors, including increased borrowing and an 8.3 per cent growth in salaries and benefits since 1998.
Chee emphatically advised the university to pinpoint revenue spending to better curb losses. But he cautioned against overzealous cost-cutting as a way to get there. “You can’t cut yourself to greatness,” he told board members.
The university may just have to, however. When asked about the fallout of insufficient government grants, Vice-President and Provost Shirley Neuman answered bluntly: “[We’ll] cut budgets. We have no choice.” U of T has already made a 4.6 per cent cut to all academic and administrative divisions this year.
Neuman is frustrated with what she considers lackluster government funding that has placed Ontario dead last in per-capita university spending. “It’s the grants that are the problem,” she explained. “We’d like to see governments bring operating budgets to [Canadian] standards. We haven’t seen that.”
“There has been chronic underfunding of the system. That’s the primary issue that needs to be tackled,” echoed Chee.
Neuman said private talks with the provincial government have yielded verbal commitments of support. But it is difficult to fathom how the McGuinty Liberals will do good with a $5.3 billion deficit inherited from the outgoing Tory government–a revelation that forced McGuinty to reassess his campaign promises, including a promised two-year tuition freeze.
Compounding all this is a $203 million pension deficit. “All is not rosy with the pension plan,” said George Myhal, Chair of the Audit Committee. Chee added that although investments were hit hard-endowment losses totaled $142 million-university stocks are performing above the required return of seven per cent.
Members of the Business Board were also updated on the Capital Campaign, which has raised $993 million to date. Chief Advancement Officer Jon Dellandrea said U of T is well on track to meeting it’s $1 billion milestone by January. Strong growth has seen endowed student aid climb a remarkable 578 per cent since 1995.
For the future, U of T aims to boost alumni giving by enhancing alumni programming and volunteer networks. A new campaign will launch in 2007. “The university is wonderfully positioned to move forward,” said Dellandrea.
The university is also looking to make University of Toronto Schools (UTS), a high school teaching lab controlled by OISE, a self-governing entity within U of T. The move, say university officials, will allow more financial flexibility and local level accountability for UTS as U of T seeks to eliminate the $3,000 to $4,000 it provides in indirect subsidies per UTS student. A motion calling for an interim period of discussions and restructuring was passed at the Business Board meeting.
In an attempt to bolster rankings, the university has been tracking its “brand” presence in the media. Susan Bloch-Nevitte of Human Affairs issued statistics to Board members: more than 50 per cent of expert quotes come from U of T researchers; numerous awards have been won; and, most covetously, U of T ranks first in three of four reputation categories in the latest Maclean’s ranking.
This was accomplished, said Bloch-Nevitte, by selling U of T’s image as a place of innovation through university publications like the U of T Magazine. “I think we’d all agree it was funds well placed.”
