2011-12 Budget Report

ECCMarch 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

4,000

7,000

10,000

13,000

16,000

19,000

22,000

00 01 02 03 04 05 06 07 08 09 10 11P 12P 13P 14P 15P

20,466

14,780

14,208

10,247

8,923

16,773

8,557

10,412

4,818

4,679

A&S St George

St George other divisions

Tri-campus graduate

UTM

UTSC

International Enrolment as a Proportion of Total Enrolment

0%

2%

4%

6%

8%

10%

12%

14%

16%

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000Total Enrolment Total International Enrolment as a % of Total Enrolment

3.8%

14%11%

Revenue category2011-

12$M

Operating Grants 4.4

Tuition – tuition and enrolment volume

14.1

Other (endowment, investment and application fees)

0.1

Total 18.6

Incremental Revenue over 2010-11

2011-12 New Revenue - UTM

Critical need to increase government support for per-student funding and student aid

Investment Income 2%

Provincial Grant38%

Scholarship grants1%

Other Income 1%

Tuition Fees 40%

Endowment 2%

CRC2%

Divisional Income12%

ICR2%

2011-12 Sources of Operating Revenue Total = $1.688B

Academic Budgets

Gross revenue

Net revenue to academic divisions

University-wide expenses

Student aid

University Fund

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: $122.8*steady improvement, differentiated

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 StrategyAvoid Return to Debt

SpiralProspects are Good

But Money is Still Tight

Occupancy$95.4 23%

IT $29.0 7%

University Mgmt $16.1

4%

Financial Mgmt $7.6 2%HR $17.2

4%

Pension $45.1 11%

Advancement $23.6

6%

UT Libraries $73.2 18%

Research Admin $13.0

3%

Student Services $24.4

6%

UW Academic $30.9

7%

UW General$37.8 9%

University Wide Costs $425M