2006-07 Budget Planning - UNB · University of New Brunswick Vice-President (Finance & Corporate Services) 2006-07 Budget Planning Fiscal Framework UNB Fredericton Campus March 1,

University of New Brunswick

Vice-President (Finance & Corporate Services)

2006-07 Budget Planning

Fiscal Framework

UNB Fredericton CampusMarch 1, 2006

Vice-President (Finance & Corporate Services)2

Agenda

Conceptual Overview of UNB Finances

Outlook for the 2005-06 Fiscal Year

Outlook for key items in 2006-07 Budget

Basic Budget Strategy

Multi-year Outlook


UNB FINANCESConceptual Overview

16.0

138.0

20.0

-.15-2.4

-10.00.0

10.020.030.040.050.060.070.080.090.0

100.0110.0120.0130.0140.0

Chequing Acct(Operating Budget)

Carry Fwd Savings Trust Acct A(Endowments)

Trust Acct B(Research)

Trust Acct C(Residences)

Mill

ions


UNB FINANCESConceptual Overview

-106.0

6.0

-23.0 -21.8 -17.3

-110.0

-90.0

-70.0

-50.0

-30.0

-10.0

10.0

Capital Acct(Infrastructure

Renewal) Capital SavingsRetirement Acct A (1/2

Academic Pension Plan)Retirement Acct B (Early

Retirement Window)Retirement Acct C

(Retiring Allowances)

Mill

ions


Fredericton CampusUndergraduate & Graduate Enrolment (FT)Actual

6,200

6,400

6,600

6,800

7,000

7,200

7,400

7,600

7,800

8,000

8,200

8,400

1996-97 1997-98 1998-99 1999-2000 2000-01 2001-02 2002-03 2003-04 2004-05


Fredericton CampusUndergraduate & Graduate Enrolment (FT)Actual and Last 4 Year’s Budget

6,200

6,400

6,600

6,800

7,000

7,200

7,400

7,600

7,800

8,000

8,200

8,400

1996-97 1997-98 1998-99 1999-2000

2000-01 2001-02 2002-03 2003-04 2004-05

Actual Budget


Financial Outlook for 2005-06Fredericton Campus

($000’s)

Forecast

Operating BudgetBudget (Best Case) (Worst Case)

Budget Plan $ - $ (470) $ (845)

Accumulated Operating Deficit, April 30, 2005 (3,200) (3,200) (3,200)

Accumulated Operating Deficit, April 30, 2006 $(3,200) $(3,670) $(4,045)


Fredericton Campus Operating Budget Projections$(000’s)

2005-06Budget

2006-07Pro-forma(No tuition fee

increase)

$Change

%Change

Revenue $118,286.3 $120,508.9 $2,222.6 1.88%

Expenses

Operating Expenses 117,418.7 123,002.0 5,583.3 4.76%

Other 867.5 854.5 12.5 (1.44)

Total Expenses $118,286.2 $123,856.5 $5,570.3 4.71%

(Structural Deficit) $0 $(3,347.6) $(3,347.6)


UNBF Summary of Revenue Forecast$(000’s)

2005-06Budget

2006-07Pro-forma

No TuitionFee Increase

$Change

$2,704.0

0

(539)

Other Non-departmental Revenue 8,221.1 8,278.6 57.5 .70%

$2,222.5

%Change

3.8%

0

(40.74%)

1.88%

$73,911.1

37,535.1

784.0

$120,508.8

Provincial Operating Grant $71,207.1

Tuition Revenue (Base) 37,535.1

Tuition Revenue (Above Base) 1,323.0

$118,286.3


Provincial Grant (@ 60% Funding)

Pro-forma 2006-07 Actual to Actual

Estimated System-wide Increase(Government year end)

Estimated System-wide Increase(University year end)

Estimated UNB Share Increase

Estimated UNBF Share Increase

3.0%

2.65%

2.73%

2.82%


Tuition Revenue (@33% of Funding)

What are expected enrolments?

What will tuition fee be?


Status Quo Pro-forma Enrolment ForecastUNBF Campus Enrolment ForecastFull-time Undergraduate and Graduate

8000

8050

8100

8150

8200

8250

8300

8350

8400

8450

2005 Dec.Act 2006 Proj 2007 Proj 2008 Proj

Source: Registrar’s Office


UNB Tuition Fees

Decisions by Board of Governors

Basic Tuition FeesInternational Supplemental FeesDifferential FeesSupplemental Fees


Tuition Fee Environment

Average Canadian Increase Last Year 1.8%Freezes or restrictions in return for more $

Nova Scotia increase was 3.9%

UNB increase was 5.0%

UNB still competitive regionally, however, region is high


UNB Tuition Fees

Current Modeling:

Basic Fees 4%-5%• Upper end competitive zone

International Supplemental 4% - 7.5%• Competitive Zone

Differential • Law Proposal• Engineering Proposal

Supplemental• No anticipated changes


Other Revenue

No major changes anticipated

Assumes Federal Indirect Cost Program Continues


UNBF Operating Expenses$(000’s)

2005-06Budget

2006-07Pro-forma

$Change

$3,598.8

530.5

562.2

Maintenance & Utilities 11,245.9 12,137.7 891.8 7.93%

$5,583.3

%Change

5.41%

2.34%

3.31%

4.76%

$70,146.1

23,167.4

17,550.8

$123,002.0

Faculties and departments $66,547.3

Academic & Student Support 22,636.9

Administration & Development 16,988.6

$117,418.7


UNBF Expenses

2005-06Budget

2006-07Pro-forma $ Change

OTHER

Sustainability Issues $250.0 $250.0

Contribution to Capital $625 64.5 (560.5)

Unallocated Variable Funds 297.5 297.5

Net Ancillary Operations 242.5 242.5 0

$867.5 $854.5 $(12.5)


UNBFBaseline Expense Modeling

SalariesFaculty

• Reflects collective agreement

PTR and Attrition• @ 80% receive PTR cost @ $900,000• Attrition savings @$900,000 offset PTR’s

Vacancies• Assumes Academic vacancy savings of @$500,000 per year, these

savings used for Academic transition/priorities



Staff SalariesUNBEA

• 3% per collective agreement

BenefitsBasic benefits 5% increase

Faculty Pension Plan• Current UNB funding rate 10.22%• New rate July 01, 2006 11.30%

(increase of 10.6% @$500,000 per year)



- Utilities

- Insurance $100 K more 23.2% increase

- Basic Non-Salary Inflation 2.5%

- New Priorities None in modeling

Electricity $390 K more 19.4% increase

Heat $252 K more 11.1% increase


UNBFBudget Sensitivity AnalysisModeling Impact of Tuition Fee Increase

Impact onRevenue

2006-07Structural

DeficitNo Tuition Fee Increase $0 $<3,348>

Basic Tuition Fee Increase of:4.0% 1,488 <1,860>

4.5% 1,671 <1,677>

5.0% 1,854 <1,495>


UNB BudgetSensitivity Analysis

Balance UNB budget with:

Only tuition fee increase, 11.0% Fee Increaseno expense reduction

Only Government grant increase, 9.5% Grant IncreaseNo tuition fees increase or expense reduction

Tuition fees in 4%-5% zone, 6.5% Grant Increaseno expense reduction


UNBF2006-07 Basic Budget Strategy

Sustain recent key strategic investmentsStudent services/scholarships

Manage growth in expenses to match level of growth in total revenue

Selective budget caps to achieve $1.5-$19 million

Currently modeling basic tuition fee increases in a competitive zone

Less than 2005Range 4-5%No changes in /or new supplemental fees


UNBF Campus Approach to2006-07 Expense Restriction

Baseline Budget Caps (target $1.5 - $1.9 million)

Faculties & Departments 3.0%Academic & Student Support 1.4%Administration & Development 1.4%Library and Branches (non acquisitions) 0.5%Student Affairs & Services 0.5%

(no reductions to scholarships, School of Graduate Studies, Library acquisitions, maintenance & utilities)


UNBF Operating Budget Multi-Year Forecast$(000’s)

2006-07 2007-08 2008-09

Structural Deficit $<1,860> $<2,504> $<3,527>

Main Assumptions:-Status Quo Operations-Basic Tuition Fee increase of 4%-Current Enrolment forecast


University of New BrunswickCapital Fiscal FrameworkFredericton Campus

Source of Funds2005-06Budget

2006-07Pro-forma

OngoingProvincial A & R Grant $1,827,029 $1,881,840Land Revenues 71,000 71,000Ongoing Operating Budget Contribution 250,000 250,000Supplemental Infrastructure Fee 1,575,000 1,575,000

Subtotal 3,723,029 3,777,840

One-timePrevious Year’s Enrolment Spread 675,000 650,000Funding from UITF 1,200,000Funding From Capital Assistance - 1,366,700Academic Priority Fund 80,500 TBDContributions from Funded Reserve 324,500 n/a

Subtotal 2,280,000 2,016,700

Amount Required to:- Hold Overall FCI Position $6.3 million

Total $6,003,029 $5,794,540

- Reduce FCI Overtime $8.1 million


INSTRUCTION & NON-SPONSORED RESEARCHThree-year Average ending 2003-04as a % of General Operating

55.0

59.5

56.9

50

51

52

53

54

55

56

57

58

59

60

UNB Maritime Maclean's Comprehensive

%

Source: CAUBO


Instruction and Non-sponsored Research

Current academic model is focused on Quality

• Higher % allocated to Instruction & Non-sponsored Research

• Smaller class sizes

• Lower student to faculty ratios

• High % faculty full professor

• National salary averages – National Caliber faculty


% of Students in SelectedClass Size Ranges1st & 2nd Year LevelClasses of =<502004-05

42.03

48.37

33.22

0

10

20

30

40

50

60

UNB Maritime Universities MacLean's Comprehensive

Source: MacLean’s


Full Professor Ranks as a %of Total Academic Ranks2004-05

41.4

33.731

0

10

20

30

40

50

UNB Maritime Universities Maclean's Comprehensive

Source: Statistics Canada, Education Statistics, Salaries and Scales of Full-time Teaching

Staff at Canadian Universities, 2004-05


Ratio of Full-time Studentsto Full-time Faculty2004-05

19

22.6

25.5

10

15

20

25

30

UNB Maritime Universities MacLean's Comprehensive

Source: Office of Institutional Research, UNB


LIBRARYThree-year Average ending 2003-04as a % of General Operating

5.9

6.7

5.2

0

2

4

6

8


%

Source: CAUBO


COMPUTING & COMMUNICATIONSThree-year Average ending 2003-04as a % of General Operating

3.94.1

6.0

0

1

2

3

4

5

6


%

Source: CAUBO


ADMINISTRATION & GENERALThree-year Average ending 2003-04as a % of General Operating

10.410.5 11.2

0

2

4

6

8

10

12


%

Source: CAUBO


PHYSICAL PLANTThree-year Average ending 2003-04as a % of General Operating

10.010.7

10.5

0

2

4

6

8

10

12

14

UNB Maritime Universities Maclean's Comprehensive

%

Source: CAUBO


STUDENT SERVICESThree-year Average ending 2003-04as a % of General Operating

8.8

4.6

7.8

0

1

2

3

4

5

6

7

8

9


%

Source: CAUBO


Why Do We Always Seemto Have Financial ChallengesUnsustainable Business Model

Comprehensive ProductNational ProgramsNational Compensation ModelSmaller Class SizesLower Student/Faculty RatiosBroad Research Agenda

Under FundedRegional Funding ModelLack of Market Growth Potential

Older Facilities

Limited Flexibility/Innovation


Result

Costs rise faster than revenuesStructural operating deficit

Under Funded Priorities

Significant Levels of Capital and Retirement Debts


UNBFAnnual Funding Challenge

$1.5

$2.0

$2.6

$4.0

$0.80

$0.0

$2.0

$4.0

$6.0

$8.0

$10.0

$12.0

Structural Deficit Unfunded PrioritiesHold Current Infrastructure Position Improvements/modernize FacilitiesEquipment Technology

Millions


DISCUSSION/QUESTIONS

Documents

2006-07 Budget Planning - UNB · University of New Brunswick Vice-President (Finance & Corporate Services) 2006-07 Budget Planning Fiscal Framework UNB Fredericton Campus March 1,