On February 2, the U of T Governing Council’s Business Board gathered to discuss the future of the U of T Asset Management Corporation (UTAM), the status of the university’s finances, the U of T pension plan, various capital projects, and UTM’s Master Plan.
Tremendous UTAM changes
The UTAM is the investment manager for the university’s pension, endowment, and short-term working capital assets. U of T President Meric Gertler spearheaded the talk on the UTAM’s future.
Gertler touched on the UTAM’s plan to centralize its duties, which involves transitioning away from the management of pension assets after March 31, following the creation of the University Pension Plan (UPP), a joint pension plan with other universities. The consequent transfer of responsibility to the UPP would mean the UTAM could concentrate on managing U of T’s long-term non-pension assets — also known as the Long-Term Capital Appreciation Pool — as well as the short-term cash reserves and working capital — otherwise known as the Expendable Funds Investment Pool.
The resulting changes would mean that assets under the UTAM’s management would be heavily reduced, from approximately $14 billion to $7 billion. Long-term assets would be reduced from $10 billion to roughly $4 billion. During this time, U of T prepares to launch the public phase of its next major fundraiser, the new Bicentennial Campaign, through which it aims to secure $4 billion.
The impending drastic changes had led Gertler to establish a working group to reassess the effectiveness of the UTAM and its role in serving the university. “I was really delighted to be able to bring together such an impressive set of respected and experienced individuals to join the working group,” Gertler said.
Following a thorough review, the working group determined that no further changes were necessary and that the UTAM’s current mandate continues to serve U of T’s best interests.
“I am very pleased to accept all of the recommendations of the working group and will undertake to implement them in a timely manner,” said Gertler.
Positive debt
U of T Chief Financial Officer Trevor Rogers also reported on the university’s finances and provided a status report on its debt position. Rogers mentioned that the total debt policy limit is $1.9 billion as of April 2021, and the university’s actual debt — which consists of internal and external debt — is $982.4 million. The debt burden ratio, which represents the amount of debt a company has compared to their assets, was a modest 2.7 per cent. 0.9 per cent of the debt ratio was internal loans and 1.8 per cent was external debt issuance.
Rogers is hopeful that the generally positive position on debt would help support the university’s capital projects and needs for the foreseeable future.
In his annual review of the university’s debt strategy, Rogers not only voiced his confidence to the Business Board but also outlined U of T’s position in comparison to other universities. In his report, he concluded that based on April 2021 data, U of T had lower debt service costs to total expenditures compared to selected Canadian universities. At the same time, U of T had higher expendable resources to pay off its outstanding debt than all its peer universities.
UTM’s Master Plan
UTM Vice-President and Principal Alexandra Gillespie introduced UTM’s Master Plan — a University Planning and UTM joint initiative — as an update to its predecessor, the 2011 Master Plan. The comprehensive document provided a 10 to 15 year long-term plan to develop and create a framework that would set the stage for UTM to achieve its goals, such as focusing on ecology and community synergies to enable Indigenous placemaking and the diversification of learning spaces.
Gillespie emphasized three elements of the Master Plan — UTM’s commitment to Indigeneity through the common space at the heart of campus; investment into research, including UTM becoming the hub of Canada’s national robotic strategy; and further support for the Peel, Mississauga, and Brampton communities.
UTM selected Brook McIlroy, a design practice, to lead the project, with a team headed by its principal Anne McIlroy. McIlroy explained that the promotion of sustainability, connection, and vitality are all part of UTM’s vision for the campus, and play an important role in ecological and Indigenous learning.
“Buildings, landscapes, wayfinding, and interpretive elements are further extended to natural connections to create larger stories of Indigenous culture and history. U of T’s low carbon action plan and tri-campus sustainability plan are an important part of the campus as it goes forward,” McIlroy said.
Capital projects
Brian Szuberwood, the interim executive director of capital projects, presented the Capital Projects Construction Report. Among the projects discussed was Robarts Common, which was reported to be 97 per cent complete. While the municipal occupancy and substantial performance certificates were issued to the project in December 2021, final landscaping has been deferred until “better weather,” claimed Szuberwood. Alongside weather issues, finishing security training was also cited as a factor that needed to be addressed before the library could open.
Other capital projects in progress include UTSC’s new residence and Instructional Centre 2, as well as UTM’s Science Building. Currently, the new residence building is 41 per cent complete, the instructional centre is only four per cent complete, and the UTM Science Building is 58 per cent complete.
Deferred fees
Toward the end of the meeting, Ron Saporta, the chief operating officer of Property Services & Sustainability, presented the Annual Deferred Maintenance Report. Maintenance costs only increased marginally from last year, but Saporta emphasized the need to align maintenance goals with the university’s strategic goals.
“Quite simply put, an old building has old assets. It also emits a lot of carbon,” Saporta said. “So when we pull out and renew those buildings, we reduce our carbon emissions: great alignment between these two initiatives.”
The next meeting of the Business Board is scheduled for March 15.
