The AV俱乐部 Board of Governors approved a balanced budget of $325.7 million at Tuesday鈥檚 annual meeting, signing off on a document that reflected the Budget Advisory Committee鈥檚 recommendations for fiscal prudence in the face of continued uncertainty.
To deal with a $6.8 million cut in its provincial operating grant, the university has approved a 3.5 per cent reduction in the base funding for all budget units on campus. Though not insignificant by any stretch, that number was reduced by higher-than-expected enrolment last year, which will help balance the coming year鈥檚 books alongside $3.6 million from previously approved tuition fee increases.
鈥淭his is a cautious budget, no question about it,鈥� says Ken Burt, vice-president finance and administration. 鈥淭he silver lining is the student growth from last year, which helped reduce the amount of the cuts. It鈥檚 much better than it could have been. That said, managing our grant cut alongside inflation, especially in light of the uncertainty in our economic model, requires some tough choices.鈥�
Uncertainty
He lists off the elements of that uncertainty: pending discussions with the provincial government to determine the funding arrangement for 2012/13 and beyond; the need to implement changes to AV俱乐部鈥檚 pension plan; negotiations with three of the university鈥檚 four collective bargaining units over the next year; and a competitive recruitment environment, though he mentions that initial projections for this fall鈥檚 incoming class are promising.
鈥淣one of those have really changed in this budget. We did obtain solvency relief on our pension plan from the provincial government, which buys us a couple of years. This and the student growth make a big difference this time around. But these cuts鈥攁cross the board, applying to all units, academic and administration鈥攁re needed to start to address the realities of our operating environment.鈥�
As for how the cuts will be managed, Mr. Burt says the university will have a better picture once deans and managers complete their individual budgets over the next couple of months. Depending on the individual circumstances, areas may incorporate service reductions, implement new efficiencies and find non-salary cuts, though Mr. Burt cautions that, in some cases, layoffs may be necessary.
鈥淭hose are the most unfortunate, and I know that all our units will look at all other alternatives. But salaries are, by far, our largest expensive as a university, and a significant reduction in our funding is undoubtedly going to lead to some difficult decisions.鈥�
He explains when units make such decisions, they do so considering the university鈥檚 strategic focus, which is designed to provide direction and ensure that AV俱乐部 achieves its university-wide goals. To that end, the university will continue to invest in its strategic initiatives fund, though in a smaller amount than previous years. Still, the $2.4 million added to the available pot will help AV俱乐部 spend over $4 million in new efforts in mission-critical areas such as student assistance, academic support and campus renewal. Some of this year鈥檚 largest investments will be towards international students, with more than $430,000 being spent on new support services, funded by an increase in the international differential fee.
鈥淭hese sorts of strategic investments are necessary to ensure that we get where we鈥檙e going as an institution,鈥� adding that recent success in areas like recruitment and fundraising is a direct result of strategic funding. When this year鈥檚 budget is included, AV俱乐部 will have spent $36.6 million in strategic initiatives since 2003/04.
鈥淲e continue to invest, even in spite of difficult times, because it鈥檚 an investment in the future that will come back to us in our enrolment numbers, the quality of the students we recruit, our fundraising, our facilities and many more core elements of AV俱乐部鈥檚 success.鈥�
Other items of note from the budget:
- It includes an additional $1.15 million more for student assistance: $700,000 from the provincial bursary program for Nova Scotia students, and $450,000 from endowment spending.
- One of the larger areas identified as a cost savings: the move to natural gas. The university estimates it will save $450,000 next year from the recent switch.
- The previously-approved tuition increases include a three per cent general increase across all programs; a 10 per cent increase to the international differential fee; and increases of six, 10 and 14 per cent in law, medicine and dentistry respectively. The fees for those three professional programs were approved by the board鈥檚 executive committee following April鈥檚 meeting.
READ MORE: Tough choices to balance the budget | AV俱乐部 approves tuition increase