A message from Pam Skinner, Senior Vice President, Corporate Services:
Further to president Sean Kennedy’s video message from May 8 regarding the College’s 2020-2021 budget and the revenue challenges related to COVID-19, I’m writing to provide an update on the budget recalibration process.
Through our work over the past month, and as enrolment projections have shifted due to evolving COVID-19 measures and the development of plans for the Fall 2020 and subsequent terms, we have identified a projected revenue shortfall in the range of $25 to $30 million for the coming year, due largely to a decrease in domestic and international enrolment of approximately 16 percent. The enrolment decrease is driven by the necessary suspension of the level one intake for the Spring 2020 term, and reduced demand for Fall 2020.
Our budget recalibration process has identified a range of options for savings, and some have been implemented, including the deferral of most position vacancies, vacation and lieu depletion, deferral of capital and operational projects, and limits on overtime and non-salary spending. Others are under review, as we work toward finalizing a budget by the end of June.
Our decisions are guided by a clear set of principles, including:
- Adherence to our college values: student focused; respectful and inclusive; innovative; locally and globally connected; committed to excellence;
- Every effort will be made to balance short-term needs with our ability to respond once full activities resume;
- Adherence to collective agreements, terms and conditions of employment, and applicable labour laws;
- Consideration of the impact on all college operations.
We know that our budget shortfall is such that staffing reductions in accordance with collective agreement requirements will need to be considered – especially as salaries comprise 60 percent of our budget. However, our strong preference is to avoid making permanent reductions for what is expected to be a temporary fiscal challenge.
Due to the reduction of work in some areas of the College, we will also be offering administrative employees the option of voluntary reduction of hours, or voluntary unpaid leaves of absence. Further information regarding these options can be found here. The collective bargaining agreements for faculty and support staff also allow employees to request an unpaid leave of absence. Employees in these groups are encouraged to refer to their collective agreements or contact their union representative if they have questions about their entitlements in this regard.
Historically, through careful fiscal management and enrolment growth, the college has generated budget surpluses. In recent years, significant growth in international enrolment contributed to surpluses at a time that the College was also making necessary investments in our campuses – modernizing our learning environments, expanding our capacity in key areas, and creating campuses that meet and exceed the shifting needs and expectations of our learners. This accumulated surplus has also allowed for the acquisition of the Niagara Corporate Business Centre and surrounding property adjoining the Daniel J. Patterson campus at Niagara-on-the-Lake, which is currently generating additional revenue for the College, while providing flexibility for future growth. Utilizing accumulated surpluses for these important initiatives has eliminated the burden of debt and interest that otherwise would have made our current budget shortfall even more challenging.
This prudent fiscal management has resulted in an operating surplus of $17.8 million for fiscal 2019-2020. The financial performance from this past year has allowed the College to fund capital investments made in 2019-2020 and increase the contingency reserve to $10 million which will help us through the period of the pandemic, which we know may extend beyond fiscal 2020-2021. Access to the contingency reserve, along with revenues from our operations in KSA, will help offset the current shortfall but even with these measures a significant gap remains.
I, along with all of my colleagues on the college leadership team, recognize that this is a stressful process for our faculty and staff who continue to work hard in support of our students. Our commitment is to be transparent while we make difficult decisions for the short term, and to maintain our college’s ability to thrive in the recovery that lies ahead.
Thank you for your ongoing dedication during these extraordinary times. I will provide further updates on our process as it unfolds.
Pam Skinner
Senior Vice President, Corporate Services
