Budget Town Hall 2018

Alan Shaver, President and Vice-Chancellor welcomed attendees to the second annual Town Hall Budget meeting and stated the following:

  • Acknowledge being on traditional lands of the Tk'emlúps te Secwépemc within Secwépemc'ulucw, the traditional territory of the Secwépemc people.
  • The Town Hall is being live-streamed
  • Will be doing online polling
  • If you have questions you can text them
  • Notes will be taken from the Town Hall and will be posted

The President introduced the Vice-Presidents:

  • Christine Bovis-Cnossen, Provost and Vice-President Academic
  • Matt Milovick, Vice-President Administration and Finance

Matt Milovick, Vice-President Administration and Finance - noted that online polling would be done during the presentation and provided instructions about how to participate.

Christine Bovis-Cnossen, Provost and Vice-President Academic presented the first poll question:

I attended todays Budget Town Hall because:

A. I like a free lunch 12%
B. I am interested in learning more about TRU's financial situation 12%
C. I am deeply concerned about TRU's financial future 0%
D. All of the above 68%
E. Other 8%

Christine Bovis-Cnossen and Matt Milovick proceeded with the presentation.

Christine Bovis-Cnossen, Provost and Vice-President Academic:

  • We are not planning any operating budget cuts for the 18/19 fiscal year.
  • Ministry of Advanced Education and Skill Training has no tolerance for deficit budgets and legally we are not allowed to pass a deficit budget.
  • We have prescribed increases for domestic tuition and fees of two percent as well. We have the opportunity to prescribe International tuition and fees increases which are not governed by the province.
  • We have accumulated surpluses but we cannot use these surpluses for annual operating expenses, we can only use for capital expenditures.
  • We continue to have inflationary pressures on operating budgets. Inflation is running at about two and a half to three percent and we have those infamous currency exchange fluctuations. As our colleagues in the library and IT know, a lot of what is purchased is in American dollars and therefore we are at the mercy of the Canadian exchange rate vis-à-vis other international currencies.
  • We continue to see a slight decline in our demography and our primary catchment area of school division 73, but I do understand that there was an increase of about 300 students enrolling in school district 73 this September. We won't see the fruition of that for about 10 to 15 years from now as that starts to roll through. It is an interesting trend and we will need to look at that more closely as we start planning far ahead for the future.
  • Our international enrollment is at an all-time high. Congratulations to everybody, there has been a lot of hard work. Thank you to our colleagues in TRU World enrolment services, IPE for crunching the data, and our deans, chairs and faculty for accommodating these international students. We are at an all-time high which is fantastic for us as an institution and it's great for the city of Kamloops as well, but there are always uncertainties involved in international enrolment and we should not be necessarily basing absolutely everything until we see more of a trend analysis come through.
  • Our on campus domestic enrolment is stagnant. We are not seeing any large increases or decreases, we are basically flat-lined.
  • The Domestic Open Learning enrolment continues to grow by three to four percent every year. I would like to give a huge shout out to our Open Learning colleagues for the continuing increase in our enrolments with regards to our Open Learning students. This has been consistent for about a decade where we have seen quarter on quarter increases in enrolments in Open Learning. But again there are others who are coming behind us and looking to see how we are actually doing in regards to Open Learning so we need to be cognizant of our competitors in that area.
  • Our outlook for future enrolment is optimistic.
  • When we presented last year we had indicated the infamous 19/20 financial cliff. We have managed to avoid that cliff for now primarily due to our strong international enrolment. That's due to a lot of hard work from a number of people so I want to thank all of those who have managed to get us to that place.

Matt Milovick, Vice-President Administration and Finance:

  • This is going to be a bit of a review with respect to our 17/18 budget and the budget structure. These slides you will have seen before, if you have seen some version of this presentation. But we call the entire university budget the consolidated budget or the all funds budget.
  • The largest fund is the operating fund. This is where we pay for the day to day operations. You will see a breakdown a bit later but 75 percent of the operating expenses are salaries and benefits across all employee groups which is fairly typical for a university.
  • The next largest fund is the capital fund which has been bigger lately with all the construction we are doing; various provincially- and federally-funded projects as well as infrastructure work done to support those and our campus in general.
  • The ancillary fund is our revenue generation fund which is non-academically generating and includes things like the bookstore, parking, food services, etc.
  • The sponsored research fund is an "in and out" fund. This is where we park our research dollars and faculty spend out of this fund.
  • The specific purpose fund has a bunch of funds that are designated faculty funds, which include PD funds and specific purpose funds such as athletics and bursaries.
  • Looking at it by the numbers, when we went to the Board of Governors in March of last year this was the consolidated all funds budget that we put in front of them and that they approved. If you look to the far right in the black column, Consolidated all funds budget, you will see that we anticipated about $189 million against total expenses of about $187 million leaving us with a planned accounting surplus of about $2.4 million. Every year we and the government like us to show an accounting surplus in our budget. It leaves a bit of wiggle room in the case of unexpected expenditures.
  • Below that $2.4 million you will see that we did some spending in various areas; the biggest was in the purchase of fixed assets. That is capital and a lot of that was attributed to costs associated with the Industrial Training and Technology Centre (ITTC) as well as a number of projects that we did. So at the end of the year we basically ended up spending about $10.8 million more than we brought in but we dipped in to our accumulated surplus for some of that.

Poll question:

Most of TRU's budget dollars come from . . .

A. Provincial Grants 57%
B. International Tuition Fees 18%
C. Domestic Tuition Fees 20%
D. Ancillary Operations 5%

If you said provincial grants you would be right.

      Provincial Grants account for 45 percent of our revenues. What you are going to see when you see our budget presentation going to the Board in March is a shift.
      The largest revenue source is actually from tuition, and the biggest component of that is international tuition surpassing domestic tuition. So we've got a bit of a change ahead.
      I won't go into the detail but you can see in 17/18 how our tuition breakdown occurs with 52 percent being domestic undergrad and 39 percent being international undergrad.
      Tuition accounts for $69.3 million

Poll question:

In FY2016/17, TRU's largest expense category was . . .

A. Compensation & Benefits 100%
B. Buildings, Operations, & Maintenance
C. Operating Expenses
D. Professional Fees and contracted Services
E. Other

  • Overwhelmingly 75 percent of what we spend from the operating fund is on compensation and benefits. We saw an increase from 16/17 to 17/18 of 2.3 percent give or take.
  • All other categories of our expenditures pale in comparison.
  • The compensation breakdown will be explored in greater detail as we go through the presentation. TRUFA salaries and benefits make up the biggest percentage at 52 percent, CUPE group at 23 percent, excluded at 17 percent, TRUOLFA salaries and benefits at 7 percent.
  • So where are we? We are past Q3, and we are consolidating Q3, but these are our Q2 numbers. So year-end 16/17 we had revenues of about $183 million, we spent $113 million on compensation and benefits, direct expenditures of almost $67 million with an accounting surplus of about $3.4 million. Then we spent almost $12 million on capital, leaving us with $8.1 million less than we had before we started. In 17/18 we struck our budget at $189.5 million. When we adjusted it with various "puts and takes" throughout the year, we started with almost $192 million with an anticipated accounting surplus of $2.6 million. We had an endowment donation of $1.5 million. Planned capital spending on things like the ITTC would have left us with about $4.3 million in terms of expenditures over revenues. But then you look into the 17/18 forecast. As we look out the world has changed, and it has changed considerably. It has changed on the strength of strong unanticipated international student enrolment growth. The growth wasn't unanticipated; the extent of the growth was unanticipated. So our forecast budget to the end of March is that we have finally broken the $200 million revenue mark. We are at $203 million and so, tracking to the bottom line, the accounting surplus we anticipate ending the year with is about $13.4 million. Again we have an endowment donation of about $1.5 million and we have done a lot of capital spending. And there are some things that weren't necessarily anticipated when the year started. Some of the civil works and road construction wasn't anticipated, and we have done a lot more work with respect to Nursing and Population Health as well as several other projects on campus. So we will spend about $16 million in capital and that leaves us dipping into our reserves by about $1.4 million. As previously mentioned, one of the things that was unanticipated was the fact that most of the international students are coming from India and Indian visa approval rates are at an all-time high. This is a positive situation that we find ourselves in but it's one we have to be cognizant that we manage.

Christine Bovis-Cnossen, Provost and Vice-President Academic:

  • So moving on to enrolment trends, what you have is various distributions. We do not have the actual 17/18 numbers because we are waiting for the winter stable enrolment numbers which will come in after the add-drop deadline date later this month. We will be able to update with regards to what our enrolment trends are, but colleagues will note there has been a steady increase in enrolment from 2008 onwards. We had a dip in 14/15 and then again an increase in 15/16 and 16/17. There was quite a significant increase in course enrolments in 17/18 and you can see that we are now projecting 100,000 course enrolments for the 18/19 academic year. You can see those numbers increasing substantially over the next four to five years. You can see the increase consistently moving up and, as stated previously, what we are looking at in our largest group of enrolments increasing is the International Actual increases. And these will continue to be refined over time. IPE is working with the Deans with regards to constantly refining the projected enrolments and obviously TRU World as well, so there will be constant updates to that. But if you actually look based on the projections last year, we didn't think that we would actually meet 100,000 course enrolments until 19/20 or 20/21 and we look like we are going to be exceeding that for 18/19. This feat is quite a substantial impact for us as an institution but is quite the milestone as well. I don't think people would have predicted five years ago that we would be looking at over 100,000 course enrolments at TRU.

Over the past 5 years, the category of enrolment growing at the fastest pace is

A. On-Campus Enrolments
B. Open Learning Enrolments 100%

Open Learning enrolments is correct.

  • Institutional Fiscal Year Course Enrolments -- you will see that Open Learning has consistently had the pace of change of 23 percent increase over the last five years and on campus has seen a decrease of 1 percent. That will of course change when we start to look at the numbers next year but Open Learning has consistently increased its enrolments year over year. One thing that I would also add to that is we have certainly heard nationally that other institutions are seeing an increase of about 10 percent for online enrolments. Ours has been a consistent three to four percent growth every year so I think that is going to be quite interesting. One of the explanations for that is that certain provinces, and I will name Ontario in this case, have been heavily investing provincially through their various ministries in online distance education and providing money to universities through a bid process for providing more online courses, particularly for large format courses. So that is something we need to take a look at as well moving forward in the future.

Matt Milovick, Vice-President Administration and Finance:

  • The operating grant per actual FTE - This is the amount of grant money that the government gives us on a FTE basis. You can see that we are second from the bottom at $7,652/FTE with UNBC getting more than twice that amount. It was encouraging that in the budget consultation report from the provincial government they signaled that they need to revisit the funding formula. It takes political will to do that and we will see when that happens, but I think it's long overdue. I believe this funding formula is over 15 years old. And, for a University that went through the transition that we did, from a University College to a University, I don't think the funding reflects what we do or what we can aspire to do.

From the perspective of cost, TRU's tuition and fees are . . .

A. In the top third of BC Institutions (most expensive)
B. In the middle third of BC Institutions
C. In the bottom third of BC institutions (least expensive) 57%

We are the bottom of the middle third

  • You can see where we stack up relative to the other institutions. Royal Roads is a bit of an outlier because of the way they run and design their course set ups, but everything else is a good comparator. Again one of the things that is easy to point to is the additional fees that we have. A lot of this is related to fees that we implemented when we became a university to allow us to catch up and do some things on the academic and student support side that we couldn't do before. We do have the highest additional fees for students in the province.
  • If you look at international by way of comparison you can actually see we are in the bottom third with respect to our tuition for International students and you can see the discrepancies right through.

Relative to other BC Institutions, TRU spends the most on which category of expense?

A. Academics 100%
B. Administration
C. Student Services
D. Physical Plant
E. Information Technology
F. Library

  • " So if you look at all the categories this is how we stack up against other universities in the province. We are spending the most in academic of our operating budget, at almost 64 percent. Admin and general at just under 12 percent, student services at 11.5 percent and it gets worse from there. It's great that we are spending the most on academic relative to our peers , it's good that we are competitive in respect to what we are spending on student services and I am always amazed at what we do with respect our physical plant, our IT and our library considering our counterparts are spending considerably more but it is about priorities and these are the priorities that we have chosen as an institution.
  • " Employee group trends - this slide gives a bit of a snap shot of how the compensation masses for all of our employee groups have changed over time, relative to our enrolment streams, being on-campus enrolments and Open Learning enrolments. If you cut to the end to 2018, not surprisingly, we are seeing undergraduate enrolments increasing and on campus enrolments increasing. You are seeing a corresponding increase in the TRUFA salary mass of about 7.1 percent. Included in that of course is the collective agreement settlements. You are seeing an increase in CUPE of about 5 percent, in excluded about 3.7 percent, and TRUOLFA about 4.4 percent. So things now seem to be trending with the slight growth in enrolment across both categories, but that is the reality of our compensation. Our compensation continues to grow and these are costs that we need to be cognizant of going forward.
  • " Most of you are keenly aware of what the salary increases are by employee group. We do like to trend it out and show it year over year but it has been pretty static and I am happy to say on the excluded group there will be an increase in the bands just slightly below 2 percent. The government has given approval across the system for that so in 2018 we have some certainty with respect to the administrative group; beyond that we don't. And all of the categories are increases that are bargained collectively.
  • " So taking each employee group, by group this is the trend with respect to TRUFA. Overall, for TRUFA fulltime over that five year period there has been a decrease of FT's of 14, or 3 percent. I will couch that by saying this is a snapshot at a point in time. We've had challenges filling vacancies so there hasn't been an effort to not hire, it's that we have had challenges hiring. So we have seen a decline over the last, on an average basis, over five years. But it is encouraging to see from 2015 onward that we are seeing increases in that faculty complement; in this comparator, 2013 being the highest at 431. We see a corresponding increase in sessional as well. Of course, as we talked about with Open Learning, they have grown consistently year over year and we see that reflected in the overall FTE change there. So no real surprises in that group.

Over the past 5 years, the average on campus lecture size has….

A. Increased 28%
B. Decreased 18%
C. Stayed the same 54%

The majority are right at 54%

  • These are the numbers split out over the last five years. You can see that the number of sections has increased over the five year period for both the lower level and upper level, and the average class size is relatively the same. In lower level in 2013 we had 33.1 and in 2017 we have 33.7. It's a flip side in the upper level with 29.8 in 2013 and 29.1 in 2017. So for all intents and purposes if you smoothed it they have stayed relatively the same.
  • We include this regarding Administration year over year just as a reminder, because sometimes when we talk we talk about the administration, we talk about the executive, and depending on how you slice the pie different people end up in different categories. So we as an institution have taken the view that the Administration or the executive are 22 full time employees. And that is the President, the Vice-Presidents, the associate Vice Presidents, Chief Information Officer, General Counsel and Deans. These are the positions that makes up the administration or the executive. Within management, 165 full time employees and these in various sub-groups including academic management, non-academic, athletics, student services, and open learning. This is a point of clarity so that when we talk about administration or we talk about management we are all talking about the same categorization of employees. All of these people are considered exempt as they do not belong to a bargaining unit.
  • If you look at the trend line for management or administration over the last five years you can see some growth in academic management, you see some growth almost everywhere except in the executive and even the executive is a point in time. We had two vacancies when this data was taken. Executive seems to stay stable at 23 or 24 over time. And we see a decline in Open Learning and again there are vacancies there that attribute to that. Overall, in that five year period the exempt grown by 19 employees, or an average growth of about 3.8 employees a year.
  • Trend line for CUPE is relatively flat at the point in time in 2017. If you compare 2013 to 2017 there has been a decrease of 11 CUPE members for an overall decrease of three percent.
  • Taken together you see all the various categories, you see the change in administration and management, the decline in CUPE that I talked about, the increase in TRUFA, and then you see the total full time employee count. Overall as an institution we have actually increased our employee count by three percent if you count everybody. The student full time equivalent has grown by eight percent.

Christine Bovis-Cnossen, Provost and Vice-President Academic:

  • So moving on to our budget assumption for 18/19 fiscal year. You can see that these are changes from what is listed in the first grouping, the actual proposed changes on the 17/18 budget. You will see with regards to revenue that we are anticipating a $933,000 increase in funding for unionized settlements--that also includes the economic stability dividend as well. The other aspect that is new for us for the 18/19 fiscal year is we now have base funding for Adult Basic Education and English as an additional language. We see that there is a proposed increase for IT grants for the new programming. We see an increase available from trades and technology center and we are looking at projecting a stable balance with regards to research funding. When it comes to domestic tuition and fees the decrease is with regards to the slight decline in domestic enrolment. You can see that the reduction for ABE and ESL has been moved to grants so that's a balance out, and you can see that there are projected increases for the domestic enrolments, Open Learning enrolments and the domestic tuition fee increases of a proposed two percent. The lab and course fee increases and domestic graduate enrolments were projecting a significant increase percentage-wise. And that is as our new Master's programs come on board and start to populate with students. So those are our revenue assumptions first page, the second page is where we are actually going to see the greatest growth in projected revenue increases. This is because of the roll through in regards to the international enrolments and then a modest increase (or not so modest increase) of an anticipated 14 percent in new enrolments in international students for our 18/19 cohort, and you can see our other increases. When it comes to other revenues, the interest on investments, that is because of the capital expenditure. So we are taking money out of our reserves and spending it on capital projects which is the only thing we can spend it on. And a result of that is, we are not attracting as much interest because of the decrease in the actual amount available for investment. We can see an increase in regards to ancillary revenues and contract revenues. So the proposed changes to revenues are an increase of about $17.8 million.

Matt Milovick, Vice-President Administration and Finance:

If we had another poll and I asked where did the increase in ancillary revenues come from and I had parking, bookstore, food services, and other as the available options, every one of you would likely say parking. The reality is that parking is actually down, that $567,000 increase is resulting primarily from McGill housing residence.

Christine Bovis-Cnossen, Provost and Vice-President Academic:

And I also believe that there has been an increase in revenue from sales in the bookstore but it is not books, it is actually merchandising.

  • " When it comes to the expense assumptions we are looking at general wage increases, the progression through the steps and promotions, the increases in faculty, OLFM's etc., that are driven by our enrolment increases. Now I had a question and thanks to those that provided the answers about the associated benefit net change. You can see that there is about a half a million dollar decrease with regards to the associated benefit to compensation. I was wondering where that actually came from. That is because apparently there had been an over-estimation on the amount being spent on benefits and this is actually a redressing of that based on actual expenditure on benefits. You can see that there is a projected increase in regards to expenses for program development and enrolment contingency. This is to support additional sections largely or where we need to get additional support into various areas to support student services.

Matt Milovick, Vice-President Administration and Finance:

When we establish our budget assumptions we do usually at least 3 iterations. So this will likely change and I think it's important to hone in on Program Development and Enrolment Contingency. We have $2.6 million parked for that but as we analyze and assess the impacts on international enrolments my gut tells me that that number is going to have to increase to pick up some of the teaching that is going to have to be done. So this isn't the last iteration of these assumptions.

Christine Bovis-Cnossen, Provost and Vice-President Academic:

  • Thank you and that is largely with regards to increased sessional costs and overloads associated with teaching increased sections. And again we are going to be looking very closely at the trends with regards to enrolment and where necessary make those adjustments with regards to faculty and other hires moving forward in the future. Non-Compensation - you can see the proposed expenses and changes. The notable ones are around the effect of inflation on non-salary, the increase in Professional Fees and Contracted Services, and a number of other items including amortization and permanent allocation of SIF funding in 17/18 that needs to be recovered in 18/19. And that is because a number of our SIF proposals that have been funded in the past are involving hires and those are ongoing positions so they need to be regularized and that money needs to come from there.
  • What we are looking at in regards to the increase of about $15 million in projected changes to expenditures. And here we have the changes to accounting surpluses. Not in brackets or in red or with a negative sign, so the surplus we are looking at is about $2.8 million. You can see that there is a Contribution to Board Reserves and the Institutional Capital Equipment & Buildings expenditure for our two new buildings moving forward, and service moves and things like that are associated with our two new buildings. And we are looking at a deficiency of Revenues over Expenditures of about $16 million but that is not a deficit-that is where we take from reserves in order to help us with our capital projects, and very exciting projects they are.
  • Moving forward to 18/19 all the way through to 20/21 you will see that we are projecting significant increases with regards to our revenue, particularly hitting past that $200 million mark. And you will also see what we are projecting with regards to reserves and capital purchases for 18/19, looking at about $22 million in expenditure of reserves on capital, decreasing to $15 million and then a mere $6 million in 20/21. And then you can see the excess or deficiency in the first two years in revenue over expenditures, and looking back in 20/21 all things being as they have been projected with tweaks along the way we are looking at a surplus of $3.7 million.

There are a number of appendices that go along with this presentation including enrolment data information, and break down by school or faculty with regards to average class sizes. They are there for you to peruse, ask any questions about, or if you want to have some general light reading about some of our trends and how things have changed over the years they are there for you. That is our presentation and we are now open for questions or comments.

Marion Oke - I know that it is an ongoing issue with our funding and it's been a problem for a long time. So I am always trying to come up with arguments for the provincial government and we have proven now that we have been extremely successful in Open Learning which we were required to take on when we became a university. So I feel like a kid in that, can we finally get a raise in my allowance, I did my chores even better than expected so how about a raise. That's just my two cents to help you guys out.

Christine Bovis-Cnossen, Provost and Vice-President Academic:

Thanks Marion, That's actually been really helpful. I can go a little bit more and I am looking to my colleagues in IPE to keep right on this one. Part and parcel of it is our utilization rates, and not all Universities have the FTE's that they are funded for, so that's why in that slide where we were looking at where we all are in funding per student some of those institutions haven't achieved 100 percent utilization for their student numbers. We are sitting at about 105 percent utilization of the balance of students and what we are actually funded for. There are some institutions that are above that and they are saying, "can we actually have some wiggle room and actually get that funding for those additional students?" And quite right too it is Open Learning that is critical to our success in that point so thank you for that endorsement, and I know that the President and others will continue to fight the good fight in order to get that recognition.

Other questions or comments?

President Shaver - So we have been lobbying for a long time. As Matt said there is a recommendation that the government review the funding formula. It will take a review and when you have a funding formula that is 15 years old and you think of everything that has changed in this country, in particular in university education, in BC, the number of institutions in BC, you see that it is long overdue.

Matt Milovick, Vice-President Administration and Finance:

While we wait for a question I will say this from my own perspective, success never felt so uncomfortable. So we are doing well and we are doing well on the strength of international enrolments but just as the tap got turned on in India this year it could easily get turned off tomorrow. While the situation is good it still forces us to be prudent in the way we make our allocations and the permanent expenditures that we take on, we do have to be careful. It is a tenuous time.

Christine Bovis-Cnossen, Provost and Vice-President Academic:

As Matt had pointed out about the tap being turned on with India I am also conscious of the fact that currency fluctuations in people's home countries have a huge impact on actual ability to take up opportunities for international study. For those of you that can remember not quite a decade ago the crash of the rupee vis-à-vis other currencies. That had a huge impact on markets that traditionally relied upon students coming from India. One British university was looking at an £18 million difference in tuition fee revenue when the rupee collapsed compared to the British pound. And that was an £18 million hole that they needed to find at the beginning of the fiscal year and they had already banked on a number of expenditures. So I am always cautious; it is fantastic to see such diversity of students on our campus and in our city, but I am also cognizant that we need to take into account that these things do happen, or internal strife, or political upheaval. Any number of things can have an impact. The second point in regards to what Alan said in regards to funding review-I have worked in two jurisdictions that have undertaken a review of their funding formula. In the case of one jurisdiction it was an eight-year project and nothing happened at the end of eight years. The second one was a five-year and there has been very little movement despite all the fanfare. So these do happen and they come in waves and cycles but it is not an immediate, unless British Columbia is going to buck all the trends with regard to funding formula review, it is a time consuming process because every stakeholder is going to want to have a say in what happens. Particularly the haves who may actually see a decrease or some changes.

Any other questions? If you have any other questions don't hesitate to get ahold of either one of us. My email is provost@tru.ca, Matt's is mmilovick@tru.ca. Please feel free to ask us, we will continue to do presentations as the budget evolves. Forth coming at Senate in just over a week there will be a draft budget presentation as well as at the Board of Governors on February 2nd, and there will also be a budget update at Budget Committee of Senate itself. So thank you all very much, we appreciate your time and contributions and especially your participation in the interactive polling session.

The meeting ended at 1:38pm.

Search To Top