With the 2020-2021 business plan and budget now finalized, I am writing to provide an update on the measures we have taken to address the significant revenue loss related to COVID-19.
The business plan for 2020-2021 represents the most challenging budgeting exercise in our College’s recent history. The sudden global pandemic has caused a $25-$30 million loss in revenue for the year due to declines in enrolment and other revenues. Key variables such as student demand continue to fluctuate along with the evolving state of the pandemic and related measures and restrictions. But while the challenges are substantial, we also know they are temporary, and will be followed by a period of recovery where our college will again flourish – requiring an approach to expenditure reduction for the year ahead that minimizes permanent layoffs by implementing a range of temporary non-salary and salary reductions.
In addressing this shortfall we worked to leverage savings related to reduced enrolments and activities, and identify non-salary reductions, including significant cuts to discretionary spending and the deferral of projects. To bridge the revenue gap, we have also had to implement staffing reductions – including the deferral or elimination of vacant positions, and full and part-time reductions in areas where lower enrolments and decreased activity due to public health restrictions have resulted in a temporary reduction in work.
Even with these measures, the 2020-2021 budget contained a deficit that was balanced by drawing upon $4.2 million from the college’s reserves.
The Revenue Shortfall
Enrolment: Our enrolment projections for 2020-2021 are down 11.2% over last year, and are significantly lower than the projections in March 2020, just before the province of Ontario declared a state of emergency on March 17. In monetary terms, revenue from tuition and fees – our largest source of revenue – is down more than $17 million over last year.
Other revenue sources: Ancillary operations such as parking, residence, enterprises, contract training and others are down more than $13 million over last year.
Expenditure reductions
Non Salary: Expenditure reductions have been achieved through reductions in discretionary spending and the delay of projects including: the expansion of wireless and scheduled renewal of IT infrastructure where risk is manageable; the conversion of door controls to swipe-card access; the expansion of internal wayfinding functionality; and facilities improvements.
Position vacancies: A total of 90 full-time positions college-wide will be left unfilled including 28 administrative positions, 39 faculty positions and 23 support staff positions. As part of this strategy, the hiring of the VP, International and VP, Student Success positions will also be deferred until 2021.
Staffing reductions: Over the next week we will begin to implement staffing reductions within the administrative and support staff groups where decreased enrolments and lower levels of activity have resulted in less work. These difficult decisions have been guided by a need to minimize the effect on students, and our desire to avoid permanent changes to address the temporary challenges that we are facing this year. Impacted employees will be advised by July 24.
With lower enrolments and on-campus activity, expenditure reductions have also been realized through the elimination or non-renewal of several part-time administrative, academic, support and student positions.
Unless there is a dramatic shift in the status of pandemic or related measures and restrictions, we do not expect further staffing reductions in the year ahead.
The full 2020-2021 Business Plan is available online here.
I want to recognize how challenging the budget recalibration process has been for all areas of the college, and thank you for your ongoing dedication during what is an exceptional and challenging time. The decisions that affect valued members of our college community are very difficult and our intent is for these measures to be temporary as we position our college to weather the significant short-term fiscal challenges of 2020-2021, while looking forward to playing a leading role in supporting Niagara’s economic recovery as a thriving college.
