1. University of Toronto Impact of the Recession on the University’s Budget
P/M Staff
May 11 and 12, 2009

2. Discussion Today University’s budget: 2009-10 and long-range
Revenue / enrolment
Expense
Impact of endowment losses
Compensation costs
Deficit plan
Impact and mitigation of budget pressures

3. Budget Overview 2009-10 2013-14 Revenue 1437.6 1690.6 Expense 1482.6
Annual planned deficit
(45.0)
Accumulated deficit
(77.7)
(9.0)

5. Revenue

7. Enrolment
UG enrolment projected to increase by 500 FTEs over planning period
Reductions at St. George A&S and Engineering
Increase at UTM, UTSC plans on hold
Graduate Expansion continues to
Applications are strong

8. FTE Enrolment at the University of Toronto

9. Funding Per BIU
27%
27%
27%
27%
27%

10. Revenue: increment relative to 2008-09 (excluding divisional revenue) To
Grants
11.0
13.4
Tuition
39.9
210.5
Endowment
(39.8)
4.2
Other
(10.6)
10.9
Total revenue
0.5
239.0

11. Tuition Revenue
Tuition fee increases are regulated as per the provincial framework (max is 5% avg. for domestic)
UofT :
Average domestic increase 4.31%
Average international increase 5.9%

12. Estimated Endowment Loss 2009-10
Total endowment payout was slated to be $62M in 2009 payout cancelled
$46M flows through the operating budget to support chairs and student aid
The remaining $16M stays in restricted funds to support research and departmental expenses
Anticipate some payout next year

13. Impact of endowment loss on the operating budget
Endowed Chairs ($M)
Student Aid ($M) 12 – 34

14. Other Revenue Assumptions
Investment income significantly reduced but projected to return to normal levels
Reduction in CRC program: 7 chairs, probably starting in
Institutional Cost of Research: At current levels

16. Expense Student Aid Compensation Shared Services Academic Divisions

17. Expense There are two major components:
Shared services  $ 310M
Academic divisions  $ 850M
Objective is to maximize funding for academic divisions to maintain quality of the student experience
Over 70% of the budget is allocated to compensation costs

18. Student Aid:
We anticipate higher demand for needs-based student aid
Projection is $90M
More funds allocated to needs-based
University is committed to guarantee accessibility as per GC policy

19. Cost Increases — Union Compensation
USW
8.9
TAs
1.3
Other unions
2.3
Total
12.5

20. Cost Increases — Senior Admin and Faculty Compensation
Senior Administration 0%
Faculty, ATB if: 1%
4.2 3%
12.6
Faculty, PTR (merit)
8.4
Total
0 – 21.0

21. Cost Increases — P/M Compensation
PM/Confidential $M
ATB if : 1%
0.8
ATB if: 3%
2.3
Merit
1.5
Total
0 – 4.6

22. Pension Pensions are guaranteed
University required to make special payments  the budget allocates $27M per year which is more than amount required

23. Shared Services Expenses
Budgets for university-wide services reviewed by the President’s Budget Planning and Priorities Committee (BPP)
Review aims to ensure alignment between services, academic needs, budgets
Very few new allocations made based on top priorities

24. Shared-Services $M Non-discretionary costs 9.8 Compensation 5.0
Other costs
6.5
Total
20.3

25. Shared-Services $M Total needed 20.3 Redirected cfwd (6.3)
Cost containment
(4.5)
Total increase
10.5

26. Total U-W Expense $M Shared services 10.5 Central funds (11.0)
Net increase
(0.5)

27. Non-discretionary Expenses
Total non-discretionary $9.8M, including:
USW job evaluation adjust. fund and costs ($3M)
Utilities ($3.6M)
Compensation increases: U-W service ($5M) – based on settlements, otherwise total increase no more than inflation

29. Funding for Academic Divisions
Academic divisions have significant financial challenges
Multi-year plans reviewed by Provost and advisory committee
Review informs UF allocations and approval of faculty appointments

30. Net revenue to academic divisions: overview relative to 2008-09 To
Revenue available to University
0.5
239
UW Expenses: reduction
(45)
Student aid: reduction
5.2
(11)
Net revenue to academic divisions
6.2
183

31. Fiscal Position 2009-10 To 2013- 14 Net revenue to academic divisions
6.2
183
Estimated divisional costs
(61.0)
(288)
Expense containment required
(54.8)
(105)

32. Deficit Financing 2009-10 To 2013- 14 Expense containment required
(54.8)
(105)
Deficit financing
45.0 9
Remaining expense containment required
(9.8)
(96)

33. Deficit Financing for Academic Divisions
A division may request approval for deficit financing from the Provost to assist in managing endowment and investment losses
Repayment will be in equal installments over five years

34. Accumulated Deficit Repayment
09-10
10-11
11-12
12-13
13-14
Historical accumulated deficit — $43.9M
11.2
10.3 –
New divisional deficit financing — maximum $45M
9.0

35. Impact and Mitigation of Budget Pressures

36. UofT approach
No “broad-brush” approach – each academic division is impacted differently and will respond accordingly
Cost containment of 3% applied to shared service divisions
Year-end OTO funds received from province provide short term relief ($18M)
Continued advocacy with both levels of gov’t.

37. Academic Division Responses
Redirection of carry-forward funds
Faculty searches cancelled
Some staff positions left unfilled/some layoffs
Increased contribution from research grants to graduate student support
Short-term adjustments to enrolment targets
Travel/conferences/catering reduced

38. Service Division Responses
Re-lamping and chiller replacement estimated to have reduced consumption by 16 GWh, saving $1.6M annually
Review of printing costs is underway
Resources Committee
CIO position — integrated approach to IT
Some staff positions left unfilled/some layoffs

39. Concluding Remarks
Flat revenue projections next year – difficult, but manageable with short-term deficit financing
Revenue projections improve in outer years, but deficit will need to be repaid
Academic and administrative review process is helping in managing revenues and costs
Thanks to responsive divisional planning, we are in a better budget position than we could have been