Budget update: An interview with BAC Chair Carolyn Watters

In a few weeks, the Budget Advisory Committee (BAC) will release its second report: one that will outline a plan for balancing the 2013-14 university budget. That report will be followed by student consultations and university community input.

More on Dal’s budget scenario: Dal News’ budget BACgrounder

BAC Chair Carolyn Watters, vice-president academic and provost, has met with the DSU council, hosted a webinar for students and has been receiving feedback across the university on the committee’s first report. We asked her to respond to some of the more common questions she’s been hearing throughout the budget process thus far.

1. Is this year’s budget situation a surprise? Has Dal been preparing for this?

“We don’t get the official word about our provincial funding until late fall at the earliest,” says Dr. Watters. “However, we’ve been planning under the assumption that our operating grant would be cut this year, as it has been the past two years.”

Dr. Watters says the shortfall is larger than in recent years — the provision for increased pension contribution being perhaps the biggest contributing factor — but that it’s common at this stage in Dal’s budget to have a shortfall. She says the university has been preparing in a number of ways, including:

• Three-year look-ahead budget planning within faculties and service units that presumes a minimum 3% reduction in operating funds each year.
• A “rainy day” fund from prior years’ unbudgeted enrolment growth, available for one-time use.
• Slowed down hiring across the university.
• Increasing efforts in student recruitment and retention.
• Limiting the use of Strategic Initiative Funding to one-time projects to limit adding more expenses to the annual budget.
  

“This year’s budget scenario is challenging, for sure, but it’s not surprising,” adds Dr. Watters. “It speaks to the broader issues we face in an era of funding cuts and rising costs.”

2. How will the university determine tuition increases? What will that mean for students?

Dr. Watters says that, at this point, the BAC is not considering any additional tuition increases in medicine, law, dentistry and the international differential fees for next year beyond the 3 per cent cap for all programs.

“We can’t close our budget gap on increased fees alone, and we wouldn’t want to,” says Dr. Watters. “Our approach has to be balanced between the choices available to us — not just raising fees, but finding cost savings.”

Another factor motivating that decision is that Dal is in the early stages of a new tuition policy for the board — one that aims to clarify the factors taken into account in setting tuition fees and, where feasible, provide students with a multi-year outlook on what they can expect to pay for tuition. She says her team will be discussing this policy with students for feedback in the months ahead.

3. If Dal is facing budget challenges, why does the university continue to build new buildings?

“Very little of the funding for new buildings comes from our annual operating budget,” says Dr. Watters, when asked about construction on campus. “Each funding plan for a new building is different, but it’s a mix of sources including donors, the government, external grants, debt financing and, in the case of a new residence, the building’s tenants once it opens.”

She says Dal’s new buildings — like the Dalhousie Ocean Sciences Building and the Mixed-Use Building — are about meeting Dal’s current and near-future needs, catching up with enrolment growth and the modern environment for teaching, research and student life.

“These aren’t just aspirational projects – they meet real, present campus needs,” says Dr. Watters. “And we have cases where we’re using leased spaces and old houses for some of our activities, when it’s more affordable in the long run to get students into newer buildings, like the Mona Campbell Building, that cost less to operate.”

“Budget cuts require hard choices, but if we were to simply stop campus development, we’d be placing Dal’s future at risk in the interest of short-term saving. That’s not the right approach.”

4. Last year Dal asked for and received an extra increase to the international student differential fee. How is that being used?

“All of the funds raised from that fee increase have gone right back into services and supports for international students,” says Dr. Watters. “As our international enrolment continues to grow, it’s important that we invest in helping new students from around the world, with unique challenges and opportunities, succeed at Dal.”

Projects for which the funds have been used include:

• Three additional international student advisors providing advice and guidance to students.
• A new summer program that offers academic skill development for studying in Canada.
• New placement training for co-op terms in Computer Science, Engineering, and Science, and advisory services within the Faculty of Management.
• English skill development programs within Student Services and Continuing Education.
  

5. Why isn’t Dal doing more to cut administrative costs and salaries?

“Under our current budget model, everyone across the university faces cuts,” says Dr. Watters. “Whatever percentage we ask our faculties to cut, we ask the same of each of our administrative units, from the President’s Office to Student Services.”

Some of the ways units prepare to handle budget cuts include tapping into reserve funds; finding turnover savings from faculty or staff that retire or leave the university; considering rationalizing programs or services; finding reductions in non-salary budgets; and generating new streams of revenue.

“Our people are our greatest resource, and our collective agreements recognize this,” says Dr. Watters. “Finding cost savings from personnel is nearly always a path of last resort.”  

Dr. Watters adds that the amount Dal spends on administration and general expenses, as a percentage of its operating budget (6.7 per cent in 2010-11), is the lowest in Nova Scotia (average of 12.5 per cent in 2010-11). The average for the U15 universities nationally in that same period was 9.7 per cent, according to the data reported by the Canadian Association of University Business Officers.

“There are lots of areas where Dal wants to meet or surpass our peers, but that’s one number where I’m pleased we’re below the average,” says Dr. Watters. “We need to have a strong administrative structure as well as strong student services to support teaching and research, but we can’t lose sight of the fact that we’re all here for teaching and research. Our budget should reflect that.”