Malaspina predicts a $1.4-Million budget shortfall for 2000/2001

Malaspina University-College is anticipating a shortfall of $1.4-million for the 2000/2001 fiscal year, which starts April 1, 2000.

"This time of year we start to identify the difference between budget expenditures for this fiscal year and next year’s, and present our best guess," said Edwin Deas, Malaspina’s Vice-President of Administration & Bursar. "Every year it costs more to operate."

For the past four years Malaspina’s budget has been short, as follows: in 1996/97 $1.6-million; in 1997/98 $1.6-million; in 1998/99 $1.2-million; in 1999/2000 $1.2-million. At the same time, enrolment has increased from 5,914 students in 1995 to 9,663 in 1999.

Deas said that Malaspina’s budget problems stem from three sources: (1) the cutback in federal transfer payments to the Province; (2) the lack of funding for inflation in the 1990s; and (3) lack of compensation for the government’s tuition fee freeze which is now in its fourth year.

Malaspina’s budget takes approximately six months to prepare, starting with the preliminary budget planning assumptions which identify issues for the following year’s budget. Next, administrators come up with a recommended action plan to deal with the projected shortfall. Once Ministry funding is known and the detailed line-by-line departmental budget planning is finalized, the Board is presented with a balanced budget for the next fiscal year, completed according to the previously approved assumptions and action plan.

Unlike school districts, B.C. post-secondary institutions are not allowed to plan for an operating budget deficit; instead, cuts have to be made or revenues have to be increased to meet budget expenditures.

For 2000/2001 Deas is projecting a budget shortfall of $1.4-million which is made up of the following projected additional expenditures:

• $400,000 for annual salary increments which are not funded by the Ministry;
  




• $338,000 for increases in benefit premiums and changes in premium cost-sharing, as well as the cost implications of items approved during provincial bargaining, none of which will be funded by the Ministry;
  




• $40,000 reduction for Apprenticeship programs funding by the province’s Industry Training & Apprenticeship Commission (ITAC);
  




• $106,000 for on-going positions which were previously funded from non-recurring sources;
  




• $172,500 to fund service expansions which were started half-way through the 1999/2000 budget and now require ongoing funding: Registration in Nanaimo and Cowichan; Information Technology; Management Information Systems; and scholarly activity;

The following budget issues are identified as "problematic" for 2000/2001:

• Funding for Co-operative Education, as a result of cuts in federal funding ($69,000).
  




• Projected shortfall in the Physical Plant budget ($100,000).
  




• Increase to the sick leave fund ($40,000).
  




• Projected shortfall in savings of $215,000 which is the result of permanent expenditure cuts that are started half-way through the budget year. This is due to the fact that the academic year and fiscal year start at different times.

"By January 2000 we’ll have to come up with an action plan to eliminate the $1.4-million shortfall," said Deas.

Malaspina University-College’s operating budget for the 1999/2000 fiscal year is $58-million which is made up of the following components:

• $ 33.5-million from the Ministry of Advanced Education, Training and Technology for general operations and capital equipment -- 57% of the total budget.
  




• $8-million from student tuition and lab fees -- 13 % of the budget.
  




• $11.5-million gross revenues from international education, business and industrial training contracts, temporary-funded courses, and special grants -- 19%.
  




• $3.5-million gross revenue from ancillary operations (cafeteria and bookstore).
  




• $1.5-million revenue from programs and services such as the hairdressing salon, trades programs shops, rental of facilities and application fees.