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This Document Contains Confidential Information BRANDON UNIVERSITY 2018-19 Operating Budget Approved (As approved by the Board of Governors) May 2018 Table of Contents Page A. Recommended Budget 3 B. General Budget Information 25 C. Grant Information 32 D. Fee Schedule (2018-2019) 36 E. Unit Budgets 39 F. Renovations & Equipment 154 G. Board Budget Committee 181 H. Eckhardt-Gramatté Conservatory of Music Budget 202 I. Ancillary Services Budget 205 J. Campus Manitoba Budget 212 K. Process Schedule and Target Dates 214 2 A. Recommended Budget 3 Brandon University Draft Operating Budget 2018-2019 Proposed Adjustments to the Draft Base Budget And Rationale April 20, 2018 Introduction The budget process begins with development of the Budget Estimates document, which is presented to the Province in September. The Provincial budget was presented in the Legislature March 12, 2018. The new Tuition policy from the Province was announced last year to provide for maximum increases of CPI plus 5%. On January 31st , the Province determined that based on CPI in December, the maximum tuition increase for 2018-19 would be 1.6% plus 5% for a total of 6.6%. Provincial grants were announced March 12th as a decrease of 0.9%. The proposed budget adjustments are recorded in the Decision Matrix in the Recommended Budget section of the Budget Book. It contains all adjustments to both revenues and expenditures that are proposed to achieve strategic objectives and a balanced budget. Staffing plans and budget submissions were provided by each budget unit in the fall of 2017. Subsequent budget submissions from each budget unit were provided in February 2018 and are included in this document. These documents contributed to the development of the final budget recommendations. Cost increases for 2018-2019 The base budget for 2018-2019 compared with the final approved budget for 2017-2018 increased by $3,064,105. Of that amount $1,659,416 was the portion of ongoing expenses from 2017-2018 that were covered with surplus funds and because surplus funds are not ongoing, these funds must be found again for 2018-2019. $1,404,689 are new cost increases. Salaries and benefits increased by $1,008,367 due to bargained increases, sabbatical and other leave adjustments, retirements and new hires, positions unfilled for the year and additional positions to be filled, and includes a reduction in special pension payments of $371,000. Other cost increases include non-salary inflationary adjustments of $163,412, a subsidy to bring PENT student tuition in line with other student tuition of $45,000, increased demand for Board of Governors entrance scholarships and employee tuition waivers of $112,000, and miscellaneous adjustments of $75,910. Provincial Grant and Tuition Changes The Provincial grant decreased by 0.9% or $345,000. Tuition revenues are projected to increase by a 6.6% fee increase and a 6.0% enrolment increase for a total of 12.6% or $1,190,500 over 2017-2018 levels. Therefore, the net increase in revenues is projected to be $845,500. Salaries and Benefits Approximately 90% of the annual operating budget of Brandon University is allocated for salaries and benefits, including the additional special payments into the BU Retirement Plan. 4 Salaries and benefits have been adjusted for collective agreement increases, position turnovers and leaves. Five positions were left temporarily vacant for the 2018-2019 year and 6 FTE new positions were added as well as additional Indigenous Elder resources. Further, it is anticipated that there may yet be additional staff turnovers resulting in salary savings during the year. During the staffing planning completed in the Fall of 2017, all positions coming vacant were replaced with the exception of the five positions (one in each Faculty) agreed to left vacant for one year to assist with budget. In addition, all sessional requirements and requested term positions were filled. This has provided a saving of $492,760 for 2018- 2019 over anticipated requirements in the base budget. During the 2017-18 fiscal year, the Province required all post-secondary institutions and other public sector employers to reduce management positions by 15%. Brandon University was able to accomplish this requirement and announced the changes in March of 2018. The savings from these vacancies and turnovers will arise over the next couple of years. The additional savings over the draft base budget for 2018-2019 is expected to be $88,776. Other savings include one position that is not part of the operating budget and one position in 2018-2019 that was not expected to be filled until late in the year so some savings had already been recognized. Total BU salary savings for 2018-2019 is expected to be in the range of $316,000. Brandon University Retirement Plan The BU Retirement Plan is currently valuated annually while the solvency ratio of the plan assets compared to liabilities remains below 90%. Special payments are required for the unfunded liability arising out of the going-concern valuation of the Plan. The unfunded liability on December 31, 2017 is estimated to be lower than was calculated for 2016. As a result, projected annual special payments related to that liability have been decreased for 2018 by $371,000 for an estimated payment requirement of $293,000. Current service costs for the Plan also are estimated to decrease slightly. Revenue Increases English for Academic Purposes has been a successful program for Brandon University and our international partners over the years. Fee increases approved by the Board is expected to bring in an additional $32,500 in revenues. The General Endowment Trust Reserve is an endowment fund in the BU Foundation that is growing. Funds disbursed from that endowment are used to fund the Advancement Office at BU and revenues from that source are expected to increase by $28,904 in 2018-2019. Investment in Programs and Services While the focus is often on reducing expenditures, it is also important to invest in programs and services that reflect the goals and values of Brandon University. $25,000 has been allocated for a Library repository. $15,000 for Advancement travel related to donor visits and alumni events. $35,000 has been allocated for the 50th Anniversary Homecoming events planned for October. $25,000 has been added for graduate student scholarships or assistantships, one $5,000 amount for each Faculty. 5 $5,000 has been allocated for Music recruitment materials. $10,000 has been allocated for Student Services recruitment materials and activities. $17,000 has been allocated for SPSS licensing previously covered out of the VP Academic and Provost Office, which frees those funds for conference support for BU faculty. $5,000 has been allocated for a new exam invigilation process to improve the integrity of the exam writing process and to be consistent with what other universities across the country already do. In 2019-2020, a further $5,000 will be required to support the changes. $2,000 has been allocated to support the co-op education program recently launched at Brandon University. This amount reflects approximately $7,000 of costs to operate the program in 2018-2019 less approximately $5,000 of revenue from student fees related to the Program. $30,000 has been allocated to Physical Plant to assist with repairs and cost inflation reflected in services and materials to maintain the facilities on campus. This is intended to allow for more on campus work to be done by Physical Plant without having to recover as many costs from other units on campus for whom work is being done. Surplus Funds It is proposed that $1,606,150 of the budgeted cost increases be addressed through the use of surplus funds. This number reflects anticipated use of the appropriated, the unappropriated, and Ancillary Services surplus funds available on March 31, 2018. As this revenue source is not on-going, these funds will have to be found again as part of the 2019-2020 operating budget. This is a slightly smaller amount of the cost increases being funded by surplus funds than in the previous year. International Student Tuition Fee Premiums Universities in Canada tend to charge students from outside of Canada studying with Student Visa authorization in Canada, higher rates of tuition than what is charged to domestic students of Canada. Brandon University has done this as well for more than fifteen years. The principle rationale is that students and their families, who are not citizens, do not pay the same taxes in Canada as do domestic students and their families. Therefore, given that universities are significantly funded by taxpayers through Provincial Government grants, the differential is thought to be reasonable. Tuition fees for international students will remain at the same level relative to domestic students for the 2018-2019 budget – that is undergraduate students will pay 2 times what domestic students pay and graduate students will pay the same tuition as domestic graduate students. Beginning in September 2019, international tuition fees will increase as follows. Students beginning programs at the undergraduate level will pay 3.7 times what domestic students pay. This rate is consistent with rates charged at the University of Winnipeg and the University of Manitoba. Continuing undergraduate students will pay 2.5 times what domestic students pay for 2019/20, 3 times for 2020/21, 3.5 times for 2021/22, and 3.7 times for 2022/23. Beginning in September 2019, students beginning programs at the graduate level will pay 2 times what domestic students pay. This rate is also consistent with what other 6 Manitoba universities currently charge. Continuing graduate students will pay 1.5 times what domestic students pay for 2019/20, and 2 times for 2020/21.
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