King's College Task Force on the Future

8/9/2019 King's College Task Force on the Future

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College Task Force on theFuture

The 2015-16 Fiscal yearInterim Report

February 3, 2015

Background........................................................................................................................2

What is Kings current financial situation?...................................................................3

What are the options for 2015-16?..................................................................................4

Some of the issues:............................................................................................................4

Size of the administration:...........................................................................................5

Sabbaticals and Sessionals...........................................................................................8

Endowment....................................................................................................................9

The 51020 per cent solutions.................................................................................10

The $2.228 million in non-endowment investments..............................................11

Divinity funds.............................................................................................................13

Salary freeze.................................................................................................................14

Student fees..................................................................................................................15

Chapel Choir................................................................................................................16

Recommendations:.........................................................................................................17

Next steps:........................................................................................................................19


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courteous res"onses to our any *uestions, an+ their&orbearance in ansering our any &ollo-u" *ueries an+re*uests &or clarication$

/e ha#e e4aine+ the re"orts le+ by each o& the College)sa+inistrati#e an+ aca+eic units in res"onse to a re*uest &rothe u+get >+#isory Coittee$ The >C ha+ aske+ the to+etail ho they oul+ achie#e cuts o& 5, 10 an+ 20 "er cent intheir annual bu+gets, an+ the i"act such cuts oul+ ha#e ontheir ability to "er&or their i"ortant &unctions$

/e ha#e since et ith su"er#isors o& ost o& those

a+inistrati#e units to &ollo u" on those re"orts an+ ask &urther*uestions$ /e a""reciate their can+i+ an+ thought&ul res"onses$

?n @anuary 2=, 2015, the Task Force hoste+ a A0-inute Ton

Ball to allo the (ing)s Counity to +iscuss the o"tions"resente+ in our ;ra&t Interi !e"ort$

The &ocus o& this interi re"ort an+ ost o& our +eliberations to +ate is the short ter the 2015-16 scal year$ ?ur goal is to "ro#i+eebers o& the (ing)s counity ith a better un+erstan+ing o& soeo& the nancial challenges e &ace in the u"coing year, an+ therecoen+ations e are suggesting to res"on+ to the$

What is Kings current fnancial situation?/hat &ollos is the te4t o& a brieng e recei#e+ &ro the ursar on

;eceber 16, 2015

The College &aces a situation o& +eclining enrolent$ >s o&;eceber 1, 2019 &ull-tie un+ergra+uate enrolent as 1001,a +ro" o& 1A or 16$9D &ro the high three years ago$ ?settingthe +ecline to soe e4tent is the increase in gra+uate enrolent&ro to 9=$ The FE% enrolent on ;eceber 1, 2019 is 23=, a+ecline o& 20D in one year$

?ur o"erating cash balance on .arch 31, 2019 as negati#e1,265,000$ The "rocee+s &ro the sale o& the house an+ &urthereasures that ha#e been taken ay allo us to stay close tothat balance by the en+ o& .arch 2015$

ut looking ahea+ to 2015-16 an+ beyon+, i& enrolent +oes noti"ro#e, the College ill incur groing cash +ecits as theibalance beteen resources to &un+ the CollegeGs acti#ities an+the costs o& those acti#ities increase$ /hile there are any

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assu"tions that can be a+e in &orecasting here is one set &orthe ne4t &our years$

?"erating grant increases o& 0D$ >lloable stu+ent &ee increases ca""e+ at 3D$

Full tie un+ergra+uate enrolent +ecline in 2015-16 o&

5D as the sall current FE% class o#es into the u""eryears$ This assues an entering FE% class &or ne4t year o&290$ >&ter that it is +icult to "re+ict ith any con+encehat ill ha""en$ For "ur"oses o& these &orecasts I aassuing a 2D +ecrease in &ull tie un+ergra+uateenrolent &or each o& the three years$ ra+uate enrolentstays stea+y throughout$

Continuance o& the a++itional $5D en+oent +ra$ Increase+ non-instructional net incoe Hi$e$ con&erence

ser#ices$

Continuance o& the 300,000 >T cut in the 2019-15

bu+get but no &urther >T cuts$ JIn 2019-15, there as ana++itional 200,000 >T cut$K


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?n the one han+, that)s goo+ nes$ /e are ell an+ care&ully run,aca+eically an+ a+inistrati#ely$ ut, on the other han+, it eansany cuts ill alost certainly touch bone$

.o"e o the issues/;uring our eetings, ebers o& the Task Force raise+ soe +icult,e#en "otentially contentious *uestions$ For e4a"le

Bas the a+inistration gron too big &or the siLe o& the

uni#ersityM

;o &aculty ebers really nee+ sabbatical lea#esM

/hy shoul+n)t e increase the +ra on the en+oent &urther

to hel" +eal ith the "roNecte+ 2015-16 short&allM

/hy not use 2$22= illion recently i+entie+ as non-en+oe+in#estents to eliinate our 2015-16 +ecitM

Is it "ossible to cut e4"enses by 5, 10 or 20 "ercent an+

continue to &unction as a uni#ersityM

/hat oul+ the uch talke+-about salary &reeLe actually look

like, an+ ho oul+ it i"act &aculty, sta an+ the institutionM

/hat oul+ be the eect on enrolent an+ re#enue i&

tuition an+ &ees ere re+uce+O or increase+M

These are all i"ortant *uestions, hich ha#e been consi+ere+ in ano"en, res"ect&ul atos"here$ That)s not to suggest e su++enly,agically agree on the ansers, but e all no ha#e a uch betteri+ea o& ho the College an+ its interconnecte+ counities actuallyork$

/hile it)s i"ossible to re"licate our Task Force learning e4"erience ina re"ort, e belie#e it ay be use&ul to re7ect on soe o& the orecontentious issues raise+, the *uestions aske+, an+ the ansers gi#en$

.i0e o the ad"inistration//e aske+ &or nubers to sho hether a+inistrati#e

+e"artents ha+ increase+ in co"leent an+ cost o#er the"ast +eca+e, by ho uch, an+ ho those increases co"are+to aca+eic increases an+ o#erall costs$

In 2019-15, accor+ing to our recent Institutional


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The table belo shos the costs o& aca+eic salaries Heneral>ca+eic, an+ CarnegiePQ*ualiLation #ersus sta an+

a+inistration o#er the "ast +eca+e, as ell as the year-o#er-year "ercentage increase in e4"ense in each category$1

1 Costs under Administration include two presidential salaries and two bursars

in 2012-13.

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There are, o& course, +ierent ays to "arse all o& thesenubers$ s a result, the ;irector o& >+#anceent tol+ us, there hasbeen an internal reorganiLation that ill allo the ?ce tobetter eet its ne an+ e4isting res"onsibilities$ It ill

re+uce our reliance on costly outsi+e contractors an+ sa#ethe college a iniu o& 90,000 "er year$In the "ast #e years, the College)s >nnual Fun+ has gron&ro roughly 100,000 to 225,000$ ?#erall, >+#anceenthas raise+ 9 illion in the "ast 2 years, ore than in anyother "re#ious siilar "erio+$ HFor co"arison, the'ni#ersity raise+ less than hal& o& that 1$5 illion in 2011-12 an+ 2012-13$

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The oce is "re"aring &or the *uiet "hase o& a ca"italca"aign$ The total ca"aign is assue+ to be a 5- yearun+ertaking$ It ill in#ol#e &ull consultation ith &aculty in

+e#elo"ing targets &or +esire+ "roNects$ The oce ill betesting the #iability o& a 15-20 illion ca"aign goal &roin+i#i+uals an+ the "ri#ate sector$ For co"arison, each o&the to "re#ious ca"aigns raise+ less than hal& o& thataount an+, in the case o& the $5-illion library, o#erhal& cae &ro go#ernent, hich is no longer a likelysource o& &un+s$

In 2019-15, the 'ni#ersity began regularly re#ieing the o"erations o&a+inistrati#e units using an a""roach siilar to tra+itional aca+eicunit re#ies$ The !egistrar)s ?ce as re#iee+ in 2013-19, an+ the

Ribrary in 2019-15$


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The issues o& sabbaticals an+ the e"loyent o& sessionals arerelate+ but also +ierent$ It oul+ be "ossible to generatesignicant sa#ings a""ro4iately 300,000 i& e ere to

eliinate all sessionals in the Buanities,2&or e4a"le$ ut ealso recogniLe that this coul+ co"roise the ca"acity o& those"rogras to +eli#er their core courses, an+ coul+ also i"actstu+ent recruitent an+ retention$ /e un+erstan+, &ro letterssubitte+ by stu+ents, that they ha#e legitiate concerns abouteliinating sessionals, or relying on "er-course &aculty to teachtheir core courses$

1eco""endation $/ In order to ensure the -ualit! o our

acade"ic o6erings, or the '($)*$+ acade"ic !ear, the7niversit! will e"plo! sessionals on contact ter"s to edeter"ined%

1eco""endation '/ In '($)*$+, decisions on saaticalleaves will continue to e deter"ined in the usual"anner%

8ndow"entRast ?ctober, the original oar+ Task Force on Financialttracti#e in#estent returns +uring 2019 ill also result in a

2 We reference only the Humanities here because we are focused on the 2015-16

budget year and only Humanities sessional contracts are up for renewal this year.

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higher le#el o& +istributions &ro the en+oent in 2015 un+erthe current +istribution &orula$ ut, gi#en the current state o&in#estent arkets, it)s unlikely there ill be a siilar increase

in 2016$

n+, *uoting &ro Inside HigherEd, the Facultyre"ort a++e+ en+oents shoul+ e4ist to su""ort the

e+ucational issionS the college)s ission is not to increase theen+oent$

The 7i" si+e o& that, o& course, is that consi+eration o& sucho"tions ust take into account

Hi the current en#ironent o& lo interest rates an+

in#estent returnsS

Hii the "otential i"act on +onors) illingness to

contribute to the en+oent in &utureS an+

Hiii the ishes, legal an+ i"lie+, o& the +onors ho

contribute+ to the en+oent in "re#ious years$

;eci+ing ho uch one can reasonably take as a +ra &roen+oent incoe is ine#itably a atter o& Nu+gent, but onethat is constraine+ by the +uciary res"onsibility o& the oar+ to"reser#e an+ "rotect the en+oent &or the &uture$

1eco""endation 9/ The Task Force is reco""ending a"odest increase o an additional %') per cent increase:#;),(((< in the internal ad"inistrative charge to helpreduce the '($)*$+ defcit%

The )=$(='( per cent solutionsThe Task Force has looke+ at the narrati#es "ro#i+e+ byaca+eic an+ a+inistrati#e units concerning the i"act o& 5,10 an+ 20 "er cent bu+get re+uctions$

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It is clear &ro e4aining the that a 20 "er cent cut across theuni#ersity is si"ly unsustainable$ (ing)s coul+ not sur#i#e sucha cut$

> 10 "er cent cut oul+ ean the eliination o& "rogras an+"ositions$ (ing)s ight sur#i#e but it oul+ not be the uni*uean+ #alue+ institution e re&erre+ to at the beginning o& thisre"ort$

> 5 "er cent cut hich oul+ "ro+uce 561,000 in sa#ings3oul+ be incre+ibly "ain&ul, but e belie#e it coul+ be anage+in the short ter in or+er to gi#e us breathing roo to "lan aore sustainable &uture$

1eco""endation &/ The Task Force thereorereco""ends an overall ) per cent udget reduction or'($)*$+%

In relation to the 5 "er cent bu+get re+uction, the &olloingca#eats an+ &actors shoul+ be ke"t in in+

The 2019-15 bu+get alrea+y inclu+e+ a 300,000"eranent cut, 90,000 aecting the aca+eic+e"artents an+ 260,000 aecting the a+inistrati#e+e"artents$

Cuts shoul+ not be a+e across the boar+$ There are units

an+ "rogras that cannot sustain e#en a 5 "er cent cut,others that can co"e ith ore$ /e nee+ to be selecti#eith the cuts, aiing at an o#erall cut o& 5 "er cent$

These cuts, &or the ost "art, shoul+ be consi+ere+

te"orary an+ reconsi+ere+ a&ter a year$

;eterining the s"ecic cuts is beyon+ the sco"e o& this

Task Force$ /e belie#e this is the role o& the u+get>+#isory Coittee$

/e belie#e the gui+ing "rinci"le &or cuts to a+inistrati#e

an+ aca+eic units ust be to ake sure those cuts +o

the least har to the interests o& our stu+ents$

3 For clarity, the calculation of the 5 per cent saving is not based on the overall

university budget of $20,475,000 but on that amount, minus those expenses

($9,237,000) the university does not control, such as Carnegie and Equalization

professor costs, the Dalhousie allotment, scholarships, utilities, interest and

service charges, etc. The budget subject to cuts is $11,238,000.

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The #'%''> "illion in non*endow"ent invest"ents>s you ay ha#e rea+ in our last '"+ate, the ursar an+ oar+

Treasurer in&ore+ our Task Force that, hile re-e4aining thelong ter accounts, &ocusing on the +etails o& the in#estentan+ en+oent linesO JtheyK +isco#ere+ that a signicantaount o& &un+s ay in+ee+ be a#ailable that ere not"re#iously a#ailable$ The &un+s are the result o& "ast internalrestrictions relate+ to ites not inclu+ing general o"erations$

>s elcoe as that nes as, it raise+ to *uestions1$ >re there ore such &un+s that ight be a#ailableM2$ Bo shoul+ this &un+ be use+M

The Finance Coittee is in+ee+ continuing to e4aine allin#estent an+ en+oent lines$ I& a++itional &un+s are+isco#ere+, they ill be re"orte+ in a tiely an+ trans"arentanner$

There are no "articular legal constraints on ho e use the2$22= illion$ Boe#er, the ursar an+ the Treasurer ha#ea+#ise+ the &un+s shoul+ not be use+ &or a one-shot 4 &un+ing our 2015-16 short&all, &or e4a"le but shoul+ instea+be in#este+ to "ro#i+e a return to the College &or its long tersustainability$ This coul+ inclu+e &un+ing such ites as earlyretireents an+Por buyouts, a+inistrati#e restructuring costs,+e&erre+ aintenance "roNects that oul+ ha#e an o"erational"ayback, +e#elo"ing con&erence ser#ices, +ebt re+uction an+ anaca+eic inno#ation &un+$

Ret us consi+er a &e o& those o"tions$

8arl! retire"entsu!outs?ne i+entie+ "otential use &or soe o& the &un+s oul+ beto su""ort early retireents an+Por buyouts$ (ing)s

currently has 15 &aculty an+ sta beteen the ages o& 60an+ 0$

It is +icult to kno ho any o& the ight take u" suchan oer an+ the sa#ings oul+ +e"en+ on a nuber o&&actors /ill the "osition be re"lace+M y hoM >t hatsalaryM /henM but estiates in+icate such an

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in#estent coul+ "ay &or itsel& in 1= onths to toyears$

I& e use+ "art o& the 2$22= illion to nance &acultyreneal, &or e4a"le, e coul+ e4"ect ie+iate sa#ingsas a result$ In 2015-16, the et sa#ing is "roNecte+ to be100,000$

The Carnegie "ro&essors are a s"ecial case$ ecause;alhousie reiburses (ing)s &or 2P3 o& the salaries o&Carnegie "ro&essors, the sa#ings to (ing)s i& a Carnegie"ro&essor retire+ oul+ be one-thir+ o& the cost o& thesalary, but Nust 12 "er cent a&ter &actoring in the Carnegieen+oent$

'n+er the ters o& the en+oent, Carnegie "ro&essorsust be re"lace+$ ut hat i&, instea+ o& hiring a ne"ro&essor &or a "osition at ;alhousie, e ere able to naean e4isting (ing)s "ro&essor a Carnegie or ha#e a (ing)s"ro&essor teach hal& tie in a ;alhousie +e"artentM Thisoul+ clearly ha#e to be negotiate+ ith ;alhousie$ ut in2019-15, it coul+ lea+ to a++itional sa#ings o& u" to5,000 i& success&ul$

8nerg! 1etroft

?#er a year ago, the College coissione+ a go#ernent-&un+e+ engineering re"ort that i+entie+ "otential sa#ingso& 100,000 150,000 "er year in utilities costs Hheat,light, ater$ To achie#e that sa#ing, the 'ni#ersity oul+nee+ to s"en+ =60,000 in a ca"ital e4"en+iture$ i#encurrent interest rates our Treasurer has sai+ it ake oresense to borro &or the retrot "roNect than to use a"ortion o& the 2$22= illion$

1eco""endation )/ That the College orrow#>+(,((( or a capital expenditures or a Collegeenerg! retroft pro@ect%

/e ha#e inclu+e+ 50,000 as the estiate &or sa#ings inEear 1 base+ on the tie it oul+ take to co"lete the"roNect$

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Conerence .ervices and .pecial Aro@ects(ing)s recently hire+ ;irector o&


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There is no also an accuulate+ uns"ent incoe in the

;i#inity Fun+ o& a""ro4iately 200,000$

1eco""endation ;/ That the College draw #&(,((( ro"the accu"ulated unspent inco"e in the ivinit! Fund toalance the choirs udget or '($)*$+, with uture drawsto e considered ater the external review o the Chapeland Choir%

.alar! ree0eThe i+ea o& a age &reeLe has been on the table since at leastlast suer$ It as one o& the recoen+ations o& the oar+Task Force$

The Faculty /orking rou", in its re"ort, raise+ any *uestionsabout hat that oul+ actually ean$ /ho oul+ be aecte+M/hen oul+ it startM Bo long oul+ it lastM /hat oul+ ha""ena&terM Bo oul+ it aect the "arity clauseM

For &aculty, the issue o& a salary &reeLe is "articularlyco"licate+

For a #ariety o& union an+ "olicy reasons,

CarnegiePQ*ualiLation "ro&essors an+ unioniLe+ &acultyoul+ be e4e"t &ro the &reeLe$ That eans there oul+

be a +is"arity in salary beteen those (ing)s "ro&essorsaecte+ by the &reeLe an+ those +esignate+ as Carnegie orQ*ualiLation &aculty, e#en i& all other *ualications an+cre+entials are e*ual$ (ing)s &aculty teaching in F>


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1eco""endation >/ The Task Force elieves that should asalar! ree0e e adopted, the ollowing considerationsshould appl!/

The ree0e should not take e6ect until Dul! $, '($)and e in orce or one !ear, until Dune 9(, '($+%That "eans that the '($&*$) salar! increasesagreed to ! alhousie and the alhousie Facult!5ssociation :including retroactive pa!< would ei"ple"ented ull!% But an! alhousie*F5 salar!increases or Dul! $, '($) and e!ond would epostponed%

In the interests o airness, the ree0e would notappl! to e"plo!ees earning less than #+(,((( per!ear%

Because o union and polic! considerations, theree0e would not appl! to Carnegie8-uali0ationproessors or unioni0ed acult!%

B! ece"er '($), a Financial .ustainailit!

Working Eroup si"ilar to the Aension WorkingEroup and representative o the College co""unit! should e estalished to assess the state o theuniversit!s fnances and to reco""end i the wageree0e needs to e continued, in whole or in part%The Working Eroups process would e transparent

and its report shared with the Kings co""unit!% The Task Force acknowledges that, given the

universit!s fnancial situation, an! salar! ree0e willlikel! last longer than one !ear% I that is the case,the Financial .ustainailit! Working Eroup shouldcontinue to "onitor and report regularl! on theColleges fnancial situation%

The goal should e to end the ree0e as soon aspractical%

3nce the ree0e ends, the goal should e to returnto parit! with alhousie on a go*orward asis as

-uickl! as possile% The Task Force elieves an! salar! ree0e should e

a te"porar! "easure to give the College reathingroo" to co"plete necessar! structural changesneeded to achieve fnancial sustainailit!%

While actual parit! "a! e a6ected in the shortter", we elieve the principle o parit! "ust e a

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guiding one, and the goal should e a return, overti"e, to actual parit!%

We would urge the Board o Eovernors to pass a

resolution rea4r"ing the Colleges co""it"ent tothe principle o parit!%

Tuition and student ees

We discussed the question of Kings high tuition and student fees, which are not

only of vital everyday concern for our students and their families who must pay

them, but also for the College itself as we attempt to recruit new students and

retain those we have. During our Town Hall, we heard the frustrations of current

students loudly and clearly.

But the question of tuition fees is complicated. Except in Journalism, Kings does

not set its own fees. Because FYP and our upper year humanities programs are so

intertwined with Dalhousie, we follow its lead in setting tuition for those

programs.

Dalhousies options are also limited. On the one hand, the provincial government

cut operating grants to universities by 10 per cent over three years (2011-2014)

and in 2014-15, it gave universities a 1 per cent increase. It has indicated that in

2015-16 there will be no increase. The government also limits universities to

tuition increases of no more than three per cent.

That disconnect between rising costs and the governments lack of increased

support is one of the reasons Kings faces the dilemma it does.

We will need to address that issue and the need to make university education

more affordable to more people in the next phase of our Task Forces work.

In the short term, however, there are a few things we can do to provide at least

modest relief for our students.

Recommendation 9: That College suspend its Technology Fee ($100) for two

years.

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Recommendation 10: That the College review the various ancillary fees it

charges to ensure they are necessary and appropriate, and are properly and

transparently explained to students and prospective students.

Chapel Choir/e +iscusse+ the #alue o& the Cha"el Choir$ We have een told itprovides tangile enefts in ter"s o recruit"ent andretention as well asintangible "ublic relations benets to theCollege aong the broa+er counity, but it has a net cost o&a""ro4iately 90,000 "er year$ Is the benet orth the costMThe choir)s role an+ &uture ill be consi+ere+ as "art o& the 2015-16unit re#ie o& the Cha"el$ /e belie#e this is an a""ro"riate #enue &or

consi+ering its costs an+ benets, an+ aking +ecisions o#ing&orar+$

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ecause o& union an+ "olicy consi+erations, the &reeLe

oul+ not a""ly to CarnegiePQ*ualiLation "ro&essors orunioniLe+ &aculty$

y ;eceber 2015, a Financial


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1eco""endations :'($)*$+< 8sti"ated .avings:'($)*$+

Documents

King's College Task Force on the Future