Present as Associate members of Senate
J. Drover, N. Baldwin, D. Stewart

Present as members of Faculty Council
P. Baker, R. Beattie, M. Beattie, M. Blagrave, K. Craft, P. Ennals, A. Fancy, M. Fancy, B. Fleming, J-G. Godin, K. Hamer, R. Hawkes, C. P. Hunter, C. Hunter, R. Lapp, S. Lochhead ,R. Macpherson, B. McNally, M. McCullough, B.A. Miller, R. Miller, I. Newbould, N. Ralph, J. Read, B. Robertson, R. Rosebrugh, C. Storm, R. Summerby-Murray, D. Tokaryk, J. vanderLeest, N. Vogan,

Observer
J. Good

Regrets
N. Anand (Senate), B. Ellard (Faculty Council), C. Riggs (Senate), G. Tucker (Faculty Council and Senate), J. Weiss (Faculty Council and Senate)

01.04.01 Approval of the Agenda
I. Newbould introduced the process of developing the budget, noting that the Budget Advisory Committee had met on a number of occasions and there had been some recent adjustments to the draft budget as a result. The room for manoeuvre had disappeared and a tight, but still balanced, budget was being presented. Most Canadian universities face a similar situation, especially as federal and provincial governments continue to explore other funding options.

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01.04.02 Presentation of Draft Budget
J. Good outlined the draft budget, highlighting specific points for each table. From Table 1, the proportions of government funding and student fees contributing to revenues are essentially unchanged. Table 2 shows that the actual amount of the provincial government grant will increase by 2%. Also, changes to the municipal tax process mean that a property tax component will be added to expenditures in 2002 and this is compensated for by an addition to the provincial government grant. Student tuition will increase by 5% and the mix of students is changed with an increase from 45 to 72 international students, reflecting both actual numbers of students and increased international fee revenues. Related to this, the English Language Institute is also forecast to generate increased revenue, as well as revenues from other agreements such as the one with International Buddhist University. Other revenues include $100,000 of unrestricted alumni giving. In total, there are additional resources of $1.6million budgeted. Most of the increases in expenditures are found in wages, salaries and benefits, the new mechanism for paying municipal taxes, and increases in utilities. Other changes include devoting some resources to External Relations to maintain elements of the Capital Campaign beyond the formal end of the campaign and adding resources to Computing Services.

The Ancillary operations budget included the Residence operation which was planned as a break even operation based on 1100 students and a provision for withdrawals. Meal plan fees are increased to reflect increases in salaries, wages, and utilities. The ‘quality of life’ elements of residential spending (including such things as furniture and painting) have been maintained. Conferences is being repositioned within Administrative Services and the Bookstore continues to operate with low costs.

The Endowment budget provides just under $3million, based on the 5% of market value policy. Much of the increase comes from gifts made toward the end of the Capital Campaign. Unfortunately some of these increases have been off-set by declining stock market values. Special Operating Funds include the possibility of the Centre for Learning Technologies securing a major contract that would generate sustainable funding and revenue generation. The Meighen Centre benefits from increases in endowment revenues. The Rural and Small Town Programme allocation is down from the 2000-2001 level, reflecting major conference activity in 2001.

I. Newbould advised the meeting that J. Good would be leaving the university shortly and that his expertise would be missed. I. Newbould commented on the role of the Budget Advisory Committee and outlined the committee’s recommendations on page 6.2 of the Budget document, noting the extent to which these had been followed in each case. The recommendation on numbers of international students had been followed in part by bringing the number to 72. The issue of filling endowed chairs requires further work, including the possibility of amalgamating these to provide a sufficient income. The recommendation on how to deal with student number-based shortfall ‘revenues’ is not being acted upon in part because there are frequently additional items that need to be covered from such ‘revenues’, including building maintenance and other un-budgeted expenses. The Budget document has been produced so as to follow Board policy. The Chair opened the floor to discussion.

R. Hawkes expressed concern first at the decrease in teaching faculty (4) and increase in administrative positions, second at the $17,000 deficit budgeted for the Performing Arts Series, and third over where overhead on research contracts is being accounted. Dealing with the latter concern first, I. Newbould indicated that the special programmes item accounts for research contract overhead. The Performing Arts Series has seen its revenues increase slowly and has also kept its operating costs very low. Other possible areas of revenue generation continue to be investigated, including the suggestion of external fundraising and sponsorship. R. Summerby-Murray noted that the budget figure reflected a more realistic assessment of expected revenues than has been the case in past budgets and N. Vogan pointed out that part of the expenditure side was internal cost recovery. R. Summerby-Murray added that the Series covers all of its external contract costs from revenues. After discussion of further experimentation with ticket and subscription pricing, I. Newbould argued that the Series provided an important form of community outreach. Addressing R. Hawkes’ concern with the decrease in teaching faculty, I. Newbould noted that with other costs rising, there is no room to increase the number of faculty. J. vanderLeest noted that increased costs were not entirely salary-driven and that increased revenues from the government grant and student fees helped to cover such cost increases. M. Fancy asked how many fewer courses would be taught next year as a result of not increasing the faculty complement. P. Ennals estimated approximately fourteen, noting that this figure carried the implication of larger classes and more dependence on stipendiary monies in the future, where available. Departments would need to consider seriously how programmes might need to be adjusted. J. Read reiterated the President’s thanks to J. Good and argued that as three additional faculty positions had been approved at various levels and the need for them was clear, they should be seen as the top academic priority. I. Newbould replied that the present budget could not support these positions. A. Fancy asked whether the budget reflected any revenues from the Canada Research Chairs initiative and I. Newbould noted that any revenues were still be to accounted for.

B. Fleming gave notice of motion (moved Fleming, seconded J. vanderLeest) that immediately upon confirmation of the student enrolment for each academic year, the Budget Advisory Committee be convened and provided with the second quarterly report, so that it might contribute to decisions as to the allocation of any extra or freed-up revenues, including those originally set aside under the rubric of ‘provision for revenue shortfall’.

J. vanderLeest asked whether the anticipated Centre for Learning Technologies contract would generate a surplus. I. Newbould noted that there was an accumulated deficit of $327,000 that needed to be covered in the special purposes account before any surplus would be available. J. vanderLeest suggested that this detail should be noted in the budget document.

Further questions were raised about revenues in Endowment funds with J. Good explaining that the McCain Fellowships would have an impact here, as well as monies available to the Meighen Centre. C. Storm asked about the mechanism for appointing McCain Fellows and P. Ennals responded that the Fellowships were distributed around the three faculties.

M. McCullough returned to the issue of teaching faculty, noting the unfairness of having stipendiary appointees teaching large classes. B. A. Miller noted that this had been raised at the Budget Advisory Committee but had not found resolution. J. Houtsma argued that the proportion of budget spent on faculty had decreased while I. Newbould indicated that the percentage was essentially static with academic departments receiving a similar proportion as in the past. R. Rosebrugh queried the validity of maintaining a constant proportion anyway and urged that the budget process address the issue of faculty appointments. B. Robertson asked whether the flow-through of CRC monies into departmental areas was a legitimate use of these research funds and I. Newbould replied that the federal government had provided relatively unrestricted use of these monies in order to implicitly fund post-secondary education in a way that is constitutionally possible. Many universities are applying these funds to deal with a variety of longstanding problems in their research capacity. N. Baldwin asked whether the Association of Universities and Colleges of Canada had indicated any directions for dealing with these monies and I. Newbould responded that there was no such directive.

N. Baldwin asked for clarification on the increase in residence fees and J. Good responded that increases in salaries and utilities precipitated fee increases. I. Newbould further noted that any surplus generated out of the residence operation is kept within the residence budget to allow for refurbishment and re-building. J. Good clarified for M. McCullough that the revenues and expenditures for the International Exchanges were generated largely from the Strasbourg programme.

Returning to the issue of faculty appointments, C. Storm noted that the Psychology Department was in desperate need of an increased faculty complement and pointed to a 25% increase in enrolments. I. Newbould acknowledged the validity of the information but indicated that it was difficult to tackle this problem without new money. M. Blagrave asked how long revenue shortfall provisions have been included in the budget process and how often they have been used. I. Newbould replied that it was in place when he began his term as President and has been used at least once. The budget has to be conservative in order to avoid running deficits. It would be preferable to be spending more on teaching equipment, academic programmes and building infrastructure but any surplus from the ‘revenue shortfall provision’ should not be allocated prior to it existing. And we are fortunate to have a relatively stable enrolment pattern compared to many other universities. Z. Taylor asked who decides on the allocation of any surplus from the shortfall provision and I. Newbould noted that the vice-presidents contribute to these decisions with advice from the deans. B. Fleming noted that this was the context for the notice of motion above and that this process could occur much earlier in the academic year with the Budget Advisory Committee also offering advice.

In response to a question from J. Houtsma, I. Newbould clarified the $75,000 allocated to External Relations noting that it actually represented a cut to that unit compared to past years. When the campaign began, a decision was made to fund the campaign initially with a transfer of funds and certain donors were asked if earnings on their gifts could be used in the first year to pay for campaign costs. The administrative costs of the campaign have been in the order of 7%, well below the 13-14% of other similar campaigns. The budgeted allocation allows for the momentum to be maintained to some extent.

There was considerable further discussion on the reduction in academic positions, with Senators noting that the usual processes for making recommendations on appointments had been followed and the appointments identified as high priorities. Concern was expressed that non-academic appointments appeared to have been given higher priority. I. Newbould noted that it was a question of balancing all of these priorities. R. Hawkes pointed out that there was an opportunity here with the anticipated CRC monies to address these academic priorities and yet this route appeared not to have been taken. I. Newbould indicated that even with an injection of this sort from the federal government, our revenue streams were not coping with the demands placed on them. R. Hawkes argued that there were real human costs here for students, expressed in larger class sizes, fewer faculty and the potential downgrading of what we offer academically.

N. Baldwin addressed the issue of revenues not keeping pace with expenditures and asked how the university intended to approach this. I. Newbould replied that it was clear that financial salvation would not be coming from provincial governments, especially given the competing priority of healthcare. What changes in government support that might be forecast would appear to be in the area of transfers from the federal government, as a focus on excellence develops and replaces the former emphasis on equalisation. There is a tremendous competition for federal funding with even the largest universities needing substantial reinvestment in their research and teaching capacities. The CRC programme is an indicator of the type of approach that might be taken. N. Ralph asked the President what his thoughts were on the implications of these changes for Mount Allison over the next ten years and I. Newbould suggested that increasing our research funding was paramount. While this funding might come from federally-supported initiatives, the other elements of operational budgets would have to be found in other funding sources. A. Fancy asked whether the Capital Campaign has had an impact on this budget and I. Newbould replied that there was as yet little impact as the Capital Campaign does not support operating budgets. There may be portions showing up in endowment budgets.

The meeting adjourned at 3:23pm.

Respectfully submitted,

Robert Summerby-Murray
Secretary of the Senate