With the circulation of this Budget Development Report, we are beginning consultations for our 2018-19 budget.  This process is an opportunity to learn about our financial operations and to provide feedback on our most important fiscal issues. To complement this Report, the Budget Town Hall will take place on Thursday, March 22 at 4 pm in BMH-101.
We ended the fiscal year 2016-17 with an Operating Budget deficit of $443,722 which was covered by an inter-fund transfer.  The past year saw a decrease in expenditures with the largest being a $263,500 saving from the cancellation of the men’s varsity hockey program.  In the Ancillary Budget, there was a deficit of $81,828 which was a significant improvement compared to the previous deficit of $214,863. For the current 2017-18 fiscal year, we are forecasting an Operating Budget deficit of $443,600 before inter-fund transfers and an Ancillary Services surplus of $117,500.
While there has been progress in addressing our fiscal challenges, some of the positive variances were one-time items such as HST recoveries or investment returns which cannot be expected every year.  We have also recognized that extensive use of inter-fund transfers to balance the operating budget is unsustainable and, in particular, the overuse of internally restricted scholarship funds needs to be curtailed.  Our future Operating Budgets will need to accommodate a portion of scholarship expenditures.
Our highest fiscal priority is to continue to improve our financial sustainability and this involves several internal and external factors.  We cannot overlook that New Brunswick universities have been underfunded relative to their counterparts in Canada.  Even within the province, St. Thomas University has been underfunded relative to the other universities as our operating grant is 89% of the provincial average and is annually $1.4 million lower than it should be.  This is compounded by the challenges of a shrinking number of high school graduates, our relatively small endowment, and the volatility of capital markets that affect endowment income. 
As you are aware, we have been addressing the operating deficit with a multi-strategy approach to increase revenues and limit expenditure growth.  Some of these strategies, which will take more than one fiscal year to realize, include:
  • Stabilizing our enrolment level 
  • Continuing to implement retirement incentives for full-time faculty
  • Continuing to rationalize non-academic expenditures
  • Continuing efforts to sell our Forest Hill property and to consolidate residence life on the main campus
  • Intensifying efforts with the Provincial Government to address the operating grant inequity
  • Launching a successful Capital Campaign which will be helpful as funds raised will help re-build the scholarship endowment and provide modest assistance with residence renewal
As we begin planning for the 2018-19 budget, we face more uncertainty than previous years.  While inflation and collective agreement obligations result in annual cost pressures of 3.7%, other factors are less predictable.  We are assuming student enrolment of 1,800 (fee paying) students.  There is uncertainty regarding the amount of operating grant level in the absence of a signed MOU with the Provincial Government.  Lastly, 2017-18 was the final year of the five-year domestic tuition fee agreement with the Provincial Government. 
During this consultation process, we invite comments and suggestions on all of these issues, particularly the setting of tuition fees.  Our domestic tuition fee is now close to the provincial average, as was intended by the schedule initiated in 2013.  As we plan for the future, how should our domestic and international tuition fees compare to other universities in the Maritimes in light of the competitive nature of the post-secondary education sector, our fiscal challenges, the intention of the three other provincial universities to undertake tuition reviews, and the Tuition Assistant Bursary Program and the Tuition Relief Program for the Middle Class? The Budget Development Report 2018-19 contains much more information on these issues. 
As always, your feedback on these issues is greatly appreciated.  You may provide your confidential feedback to gallant@stu.ca by March 2, 2018. The Committee will consider the suggestions, comments and feedback received as confidential. 
In order to engage stakeholders and encourage feedback, the Budget Development Report will also be presented at the February meeting of the Senate and at the next meeting of the President’s Administrative Management Committee.  We will also hold a Town Hall meeting on March 22, 2018 at 4 pm in BMH-101.
Dawn Russell
President and Vice Chancellor
Members of the President’s Advisory Committee on the Budget
Dr. Kim Fenwick, Vice-President (Academic and Research) (ex officio)
Lily Fraser, Vice-President (Finance and Administration) (ex officio) – Committee Chair
Reg Gallant, Comptroller (ex officio)
Dr. Beth McKim, Professor, English Department (Senate Appointment)
Dr. Tony Tremblay, Professor, English Department (Senate Appointment)
Karen Preston, Registrar (President’s Appointment)
Matthew LeBlanc, Student (President’s Appointment)
Philippe Ferland, Student (President’s Appointment)
Garry Hansen, Director of Institutional Research and Planning (President’s Appointment)
Jeffrey Carleton, Associate Vice-President, Communications (President’s Appointment)