SFU scrambles to adjust after surprise Victoria funding cut

April 2, 2008

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Revisions appended: see editors’ note

SFU administrators have been left scrambling to address an unexpected $6.3-million budget shortfall for 2008/09 since the B.C. government abruptly announced last month that it was cutting operating grants for all universities and colleges by 2.6 per cent.

The funding cut, which the Ministry of Advanced Education announced March 12 after the university had already prepared its 2008/09 budget proposal for the SFU board of governors, includes the loss of 90 funded student seats.

Since SFU is already well into its fall enrollment cycle, VP-finance Pat Hibbitts says the university probably ended up paying for a number of accepted students not funded by the ministry – at a cost to the university of $7,200 each.

Hibbitts says administrators are re-examining every aspect of university operations as they look for ways to shave $6.3 million from an already tight budget. “We’re looking at everything,” she says, from ways to reduce expenses to new ways to increase revenues.

Some initiatives under consideration include:
  • Reducing any budgets that have been historically under-spent
  • Re-examining discretionary expenses such as travel, consulting fees and credit card costs
  • Finding new ways to improve research-grant funding, which will increase federal indirect-costs funding
  • Expanding revenue-producing programs such as ESL classes
  • Eliminating free services to the external community
  • Examining alternate ways to fund the university’s share of the U-Pass transit subsidy

New faculty hiring to meet anticipated student growth will go ahead, says Hibbitts. “The last place we want to feel the impact is in the classroom.”

However, she adds, “we’re meeting with employee groups and delivering the message that there will have to be some mechanism for controlling staffing levels.”

The 2008-9 budget was to have gone to the SFU Board of Governors on March 27.  A revised budget now will be submitted in May.

President Michael Stevenson sent a message to the SFU community on March 20, saying:
"I need to inform members of the community that we have received information from the Ministry of Advanced Education (AVED) which, if confirmed in official budget letters, will create significant new budget problems for the coming fiscal year.

"Total provincial grant revenues for SFU in 08/09 will increase beyond those for 07/08, reflecting negotiated compensation increases and targeted enrolment growth.  However, there are significant changes forecast in funding commitments previously announced and used in budget planning so far.

"Our indications are that there will be cuts to SFU's provincial grant transferred in 07/08, a reduction in our enrolment growth previously committed for 08/09, and a reduction in the value of the grants attached to enrolment growth planned for SFU's Surrey campus.  These are major changes to the previous announcements from government on which we have depended in planning for board approval of the 08/09 budget."

Stevenson noted that budget planning for fiscal year 2008/9 already had to accommodate increased costs of about $9 million that were not covered by the government.

"The impact of the latest information we have received would require further reductions of more than $6 million.

"The timing of this new information just weeks prior to the start of a new fiscal year means that most decisions have been made for new appointments and new admissions for 08/09, with little flexibility remaining to accommodate new budget pressures. "We are therefore concentrating on intensive conversations with government in the hope of clarification and relief.

"At the same time, I have asked the Vice-Presidents and Deans, and the budget task force established in the Summer of last year, to consider options for managing further reductions in the cost of our operations, in light of the information so far received.  I will be reporting to the Board of Governors and to the Senate, and I will also be reviewing these matters with all employee associations and with the Student Society.

"I will update the community on the results of these discussions inside and outside of the university as soon as I am able."

Editors’ note: April 3, 2008

Today’s print version of this story does not include the text in this online version from SFU President Michael Stevenson’s message to the university community on March 20. In addition, the print version includes residence and tuition information that is not related to the funding cut and is not included in this online version.

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