Proposed budget cut is 3 per cent

As the provost presents a 2009-10 budget that would see a 3 per cent cut in the university’s spending, the president has issued a message to “friends of UW” assuring them that Waterloo is “in good financial health” and can cope with hard times.

“This isn’t the first time we have faced an economic downturn in this country,” president David Johnston says in his letter, which was sent by e-mail and on paper this week to major donors and other outside supporters of the university. “As a relatively nimble and flexible institution,” he goes on, “the University of Waterloo performs well under pressure, using challenging times like these to keep focused on our mission and supporting objectives.”

An e-mail memo was sent to staff and faculty members this morning to let them know about the letter and point to the online version of its text.

The president reminds his readers that when the worldwide economic slump began last fall, “we made swift decisions — initiating a review of our discretionary spending and identifying areas where greater efficiencies could be made. We focused on mission-critical funding needs by reducing operating expenditures and instituting a temporary hiring freeze. As the government strives to stabilize this crisis, we have to operate under the assumption that our government funding will remain flat or possibly decrease, and take the necessary steps to ensure we are able to maintain student support and meet our ambitious sixth decade goals.”

Now, he writes, “we have done a thorough analysis of our financial situation and are closely monitoring our pension funds, tuition fees and government grants which all impact our operating budget. We are being as proactive as possible in our approach to what is still an uncertain future and expect to implement a 3 per cent budget cut for the 2009-10 fiscal year across the university, and will caution the faculties and departments to spend conservatively within their operating budgets.

“We continue to work hard at developing additional sources of revenue such as private support, international enrolments, professional graduate programs and externally-funded research to improve our overall financial position.”

The 3 per cent cut to most of UW’s spending would save the university about $7.7 million in the coming fiscal year, according to documents prepared for the provost to present to today’s meeting of the senate finance committee. That meeting starts at 11 a.m. in Needles Hall room 3001.

The finance committee is the first public body to look at the university’s proposed operating budget each year, before it goes to the senate and finally the board of governors for approval.

For the record, previous years’ budget reductions have been 2 per cent in 2008-09, 2 per cent in 2007-08, 1.5 per cent in 2006-07, 1 per cent in 2005-06, 2 per cent in 2004-05, 2 per cent in 2003-04, 2 per cent in 2002-03 and 3.5 per cent in 2001-02

According to the agenda documents, provost Amit Chakma foresees spending of $435.5 million in the year that will begin May 1. That would be up from $405.7 million in the current year. About three-quarters of the money goes for salaries and benefits: $308.4 million next year, up from $293.3 million this year.

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Endowment fund losses ‘less dramatic’

The president’s memo to “friends of UW” gives special attention to endowment funds, which are largely made up of lump-sum gifts received by the university from its benefactors. The interest on endowments each year helps pay for everything from scholarships to faculty positions.

Johnston writes: “Our endowments are especially important when our budgets are constrained, and allow us to plan strategically for the future and provide the funds for students and researchers to tackle important issues. The current health of our endowments is a significant concern as we anticipate our investment returns will be less than our disbursements for more than the coming year.

“Due to our conservative investment practices, our estimated market loss for May 2008-February 2009 is 22 per cent, a less dramatic loss than some other universities are experiencing. Of course, we will continue to monitor our results between now and our fiscal year-end on April 30.

“In managing our endowments, our priority is to maintain the permanent purchasing power of the principal while trying to protect the value of each endowment fund award. Achieving this in the short term will be difficult but we will work with the faculties to assess the impact on each endowment fund and the program it supports. We will constrain our endowment spending in 2009-10 to a 2 per cent disbursement, from our targeted 4 per cent, and will examine all options to bridge the gap between funding and spending. . . .

“We deeply value the important role donors play in the life of this institution and while we don’t have all the answers at the moment, we want you to know our actions to date were made to minimize the impact on our students, faculty, staff, and certainly, on your investments in UW.”

He keeps an upbeat tone, telling readers about UW’s achievements and big plans, ranging from the United Arab Emirates campus to the construction of Engineering V and the Quantum-Nano Centre. “Applications for the fall are very strong,” he adds, “especially from high-quality applicants.” He also refers to sizeable government grants and private gifts received in recent months, and stresses, “In spite of our economic uncertainties, the university has much to celebrate and has an important role to play in building a strong future for our community and country. . . . We are deeply grateful for your leadership, support and loyalty during these challenging economic times.”

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Seeking an associate provost (HR)

One of UW’s most senior administrative jobs is coming open, as the post of associate provost (human resources) was quietly listed in yesterday’s Positions Available.

The new associate provost will be a partial replacement for Catharine Scott (left), who holds the double portfolio of “human resources” and “student services”, and who will be retiring at the end of 2009.

Scott was one of three people named to senior positions on May 1, 1996 (the other two are Dennis Huber, vice-president, administration and finance, and Bud Walker, director of business services). Only one person has been among UW’s top administrators for longer: university secretary Lois Claxton.

The position is being divided, although no decision has been announced yet about exactly how “student services” will be structured. That part of Scott’s portfolio includes athletics, health, counselling and similar support departments, as well as the student life office. Other student-related functions report to other administrators: housing and residences is part of Walker’s “business” portfolio, student awards are with the registrar’s office reporting to the associate provost (academic and student affairs), and so on.

But vice-president (academic) and provost Amit Chakma is ready to recruit for the “human resources” half of the job, and yesterday’s posting listed a March 31 deadline for applications. The job is being advertised outside UW (through the Globe and Mail) as well as inside.

Says the job posting: “The position of Associate Provost, Human Resources, reports directly to the Vice President Academic and is a member of the University’s Executive Council. The position is responsible for all areas of human resources management including strategic planning, change management, pension and benefits, salary administration, policy development and application, organizational and human development, succession planning, recruitment and retention, and particularly for preserving and enhancing UW’s collegial and collaborative employee relationships.

“The successful candidate will have several years of leadership experience in Human Resources management and related areas, and will be well versed in current employment and pensions and benefits policy and law. He /she will be accustomed to working in an environment where team work and creativity provide the catalyst for success. The successful candidate must be a prudent financial manager with a solid understanding of salary administration and classification techniques and a proven track record in the recruitment of talented individuals. An advanced degree is preferable and advanced writing, facilitation and presentation skills are essential. Given the collaborative environment, interpersonal skills at the highest level are required including adaptability, flexibility, good humour and persuasiveness.”

UW’s human resources department, reporting to Scott, is headed by two directors — David Dietrich (pension and benefits) and Neil Murray (staff and labour relations) — as well as assistant director Sandra Hurlburt (information support systems, including payroll). The office of organizational and human development is a separate unit, headed by director Katrina Di Gravio.

CAR

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