Malaspina Board Adopts Balanced Budget for 2005/06 Fiscal Year

The Malaspina University-College Board, at its regular monthly meeting held on Thursday, June 23, has adopted a balanced operating budget of $87,466,217 for the 2005-06 fiscal year - up from $86,441,565 last year.

The budget consists of the following sources of revenue:

• $43,686,384 from the Ministry of Advanced Education for general operations and capital equipment - 50% of the total budget - up from, $43,346,761.




• $17,179,121 expected from ‘domestic’ student tuition fees - 19.6% of the total budget - up from $16,190,180.




• $18,600,000 estimated gross revenues from international education, business and industrial training contracts - 21.2 % of the total budget - $1.1-million more than last year.




• $5,400,000 projected gross revenues from ancillary services (cafeterias and bookstore) - 6.2% of the total budget.




• $2,600,712 anticipated revenues from programs and services, such as the hairdressing salon, trades programs, facilities rental, and application fees - 3% of the total budget.

"This has not been an easy budget to prepare," said Malaspina president Rich Johnston. "In the past six months a lot of hard work has gone into preparation of a balanced operating budget because we faced multiple challenges, including an increase of $855,000 for employee pension contributions as required by the College Pension Board which is facing lower than expected returns on investments and, at the same time, increased commitments to retirees."

Edwin Deas, vice-president of administration & bursar, said that the budget planning process started with an initial projected deficit of $2.3-million. This was later reduced to $1.2-million because of increased government funding for programs, courses and services, and projected revenues from a 2% increase in tuition fees, as set by the Ministry recently.

"An unfunded payroll inflation of $1,410,000 contributed to the projected deficit," said Deas. "The required increase in pension contributions, over which we have no control, started on September 1, 2004, and employees saw an increase in their pension premiums also. Last year, we identified that an additional $855,000 would be required to cover the full cost in this year’s budget," he said.

Deas said that the means to address the projected $1.2-million deficit were three fold: (1) by finding $600,200 of on-going and $445,000 of non-recurring expenditure savings in all areas of the University-College without any lay-off of regular employees; (2) by increasing targets for net revenues from International Education by $150,000; and (3) by carrying over a $460,000 surplus from the 2004/05 fiscal year.

Reduction approaches ranged from cuts to printing and supply budgets, non-replacement of temporary positions, part-time hirings for some positions, and postponement of some new hirings. Some departments sought ways to increase their revenue generation.

"While we’ve managed to balance the budget for the 2005/06 fiscal year, we’ll be facing challenges next year because we will start our budget planning cycle with a need to find $730,813 in permanent savings," Deas said. "The continued public policy of only partially-funding inflation, or not funding it at all, means that Malaspina will almost certainly be required to address projected budget shortfalls on a year-to-year basis."

Deas added that Malaspina’s entrepreneurial activities through International Education and Continuing Education continue to grow and increased revenues help offset deficits.

"Besides helping us balance our budgets and adding additional courses, our International Education activities greatly benefit Canadian students through opportunities to study abroad and take part in field schools. These overseas experiences allow our students to become more culturally aware and learn to interact with people from a variety of different cultures - important skills required by many employers," he said.

Malaspina’s 2005/06 fiscal year started on April 1, 2005.

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SIDE BAR STORIES:

CAPITAL FUNDING FOR CONSTRUCTION PROJECTS

Malaspina’s operating budget does not cover the cost of new buildings under construction at the Nanaimo campus. Capital projects are usually funded through several sources: Ministry of Advanced Education, federal and provincial research agencies, net revenues from Malaspina’s entrepreneurial activities, and fundraising by the Malaspina Foundation.

Recent construction projects include:

• $14.1-million Library, final completion in August 2005, $4.7-million received from the Ministry of Advanced Education;




• $13.2-million Student Residences, completed this month; self-funded through a 25-year mortgage repayable through rental of the units;




• $9-million School of Management, construction to start this fall; $7-million received from the Ministry of Advanced Education;




• $4-million Centre for Shellfish Research, completed in 2004; funded through grants from federal and provincial research agencies.




• $4.2-million Centre for International Education, completed in 2003; self-funded through net revenues from International Education activities.

TUITION FEES TO INCREASE

In accordance with guidelines set by the Ministry of Advanced Education, tuition fees will increase by 2%, effective August 1, 2005, as follows:

• Academic programs: $116.30 per credit ($348.90 per 3-credit course/$465.20 per 4-credit course) per semester, up from $114* per credit.




• Vocational programs, full-time studies: $348.90 per month ($3,480.90 for a 10-month program), up from $342* per month.




• Vocational programs, part-time studies: $209.35 per month, up from $205 per month.




• English as a Second Language, tuition for international students: $4,300 per semester, up from $3,900. Domestic students pay $94 per course, to a maximum of $376 per semester.

* Last year, students received a one-time-only 2.2% "respite" on their tuition and paid a reduced rate of $112 per credit/$336 per month.

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