2011-12 Budget Report ECC March 9, 2011 Fiscal Context • Funding for higher education is flat, and decreasing in many jurisdictions • Regulated provincial tuition framework continues • Enrolment demand remains strong at UTM • Pension challenges: like almost every other Canadian and US public sector institution with Defined Benefit pension plan Overview • Balanced budget for 2011-12; Gross ‘Y’ $171.6m (Ancillaries ‘Y’ of $23.4m not included) • Continue to pay down accumulated deficit @ $3m/yr High = $20m; Now = $14m; 2015/16 = $0 • Fiscally prudent & responsible budget enables us to manage well relative to other academic and central divisions • Continuing uncertainty: (i) compensation settlements in new regulated provincial environment; (ii) pension debt Enrolment • Total UofT Planned growth of 2500 students by 2015-16 to 81,000 (69,400 FTE) • St George A&S Decrease of 1200 full time students • UTM and UTSC additional growth planned but dependent on space capacity • MTCU caps on domestic graduate and UG spaces • International enrolment planned to increase across many divisions FTE Enrolment at the University of Toronto 2000 - 2015 22,000 A&S St George 19,000 16,000 20,466 16,773 14,780 St George other divisions 14,208 13,000 10,412 UTM 10,000 8,557 Tri-campus graduate 4,818 7,000 10,247 8,923 UTSC 4,679 4,000 00 01 02 03 04 05 06 07 08 09 10 11P 12P 13P 14P 15P International Enrolment as a Proportion of Total Enrolment Total Enrolment Total International Enrolment as a % of Total Enrolment 90,000 16% 11% 80,000 14% 70,000 60,000 14% 12% 3.8% 10% 50,000 8% 40,000 6% 30,000 20,000 4% 10,000 2% 0 0% 2011-12 New Revenue - UTM Incremental Revenue over 2010-11 Revenue category Operating Grants Tuition – tuition and enrolment volume Other (endowment, investment and application fees) Total 2011-12 $M 4.4 14.1 0.1 18.6 Critical need to increase government support for per-student funding and student aid 2011-12 Sources of Operating Revenue Total = $1.688B Divisional Income 12% ICR 2% Investment Income 2% CRC 2% Endowment 2% Tuition Fees 40% Provincial Grant 38% Scholarship grants 1% Other Income 1% Academic Budgets University Fund University-wide expenses Gross revenue Student aid Net revenue to academic divisions Expense • Careful controls on spending • Base and OTO cost containments continue: – 3% base across central divisions – % varies across academic divisions Gross to Net (Operating) • Gross: $171.6 • Less: UWC ($28.7) UF ($16.8) St. Aid ($ 6.9) Other ($ 1.3) • Add back UF $ 4.9* • Net: *steady improvement, differentiated $122.8 Pension Problem • Estimated solvency deficit ~ $1billion • Based on certain conditions, government may approve plan to amortize over 15 years (instead of 5 years) • IF extended amortization period not approved, will face $200M per year pension special payments Pension Impact at UTM • Historically, paid about $2m/year toward debt • 2011/12 will pay an additional $2.9m (total of almost $5m) • Included in UWC of $28.7m • Opportunity costs ($5 + $3 debt payment) significant • Town-hall meeting: April 1st, 9 – 11 v/c tie-in Summary Sound Budget Strategy Avoid Return to Debt Spiral Prospects are Good But Money is Still Tight University Wide Costs $425M UW Academic $30.9 7% UW General $37.8 9% Occupancy $95.4 23% Student Services $24.4 6% IT $29.0 7% University Mgmt $16.1 4% Research Admin $13.0 3% UT Libraries $73.2 18% Advancement $23.6 6% Financial Mgmt $7.6 HR $17.2 2% 4% Pension $45.1 11%