Yesterday's weather could hardly have been better as a way of welcoming 6,000 visitors to campus for the annual March break open house. Photo provided by Marketing and Undergraduate Recruitment.

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Town hall meeting to air budget issues

Let’s stay “realistic” but not discouraged in the face of financial hard times, says provost Feridun Hamdullahpur in a letter distributed to staff and faculty members Monday evening.

He uses the letter to announce another of the now familiar “town hall” meetings with UW’s top executives, this one to be held Thursday, April 8, at 3:00 in the Theatre of the Arts. Questions for the president and provost can be sent in advance by e-mail: townhall@ uwaterloo.ca.

Text of the provost’s letter:

I would like to update you on our financial condition, our ongoing budget-building process and the challenges we face.

Our university has been facing significant financial challenges which must be understood in the context of local, provincial, national and global economic conditions. In this, we are not alone — every university in Ontario faces similar challenges. These conditions are being exacerbated because world economic recovery is still tenuous and has plunged governments into significant debt.

These uncertain times require us to make sound and strategic decisions based on the best available information. In making these decisions, we must protect the university's mission, enhance our capacity to invest in critical new initiatives that support the Sixth Decade Plan, and preserve our long-term options for academic, research and enrolment growth.

I have reported previously in other venues that the financial health of the university for 2009-10 is stable, and that we expect to close the current fiscal year with a balanced budget. However, building the 2010-11 operating budget is a major challenge due to many uncertainties. It is one of the most uncertain budgets that we have faced in the past two decades for three reasons:

• Transfer payments to universities: The "Reaching Higher" program, a five-year program announced in 2005 committing $6.2 billion to universities and colleges, will end in 2010. While the provincial government has made reference to the possibility of a second plan, Reaching Higher 2, there is no certainty that it will materialize in this or next year’s provincial budget. The province faces a $25-billion budget deficit, the largest in the province's history, and all sectors of the economy will feel the impact. Given that nearly half of our operating income comes from this source, any reduction or even a freeze on grants will impact us significantly.

• The tuition framework: The current tuition framework has expired and it is unlikely that we will receive further directions from the province before we present this year’s budget to the Board of Governors on April 6. We have assumed no changes to the framework for budgeting purposes. If that assumption turns out to be incorrect, adjustments will be necessary.

• The pension plan and endowment income challenge: We face a $108 million gap between our pension assets and our pension liabilities which must be closed. This is a fiduciary and regulatory obligation. Closing this gap calls for additional payments over a long period of time that must now be built into our budget model. There is also a gap between our endowment fund earnings and our obligations since our payout is forecast to be 2% against a funding requiring 4% payout. Closing this gap is a drain on our operating budget, since many of the endowment funds support chairs, scholarships, bursaries and programs that must be fully funded. In order to close these gaps for our pension and endowment obligations, we must make an incremental 1-2% reduction in overall expenditures. . . .

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Provost: 'We proceed with our planning'

. . . Despite these uncertainties we are committed to enhancing the university’s intellectual environment, as articulated in our Sixth Decade Plan. Our goal is to build a leading university with outstanding teaching and world-class research. We must, therefore, proceed with our planning and focus on tough choices that will ensure future success. This means it is more critical than ever that our budget focuses on key strategic initiatives, maximizing other sources of income and carefully managing expenses.

How can we achieve this goal when we know that some of our expenses are externally driven costs that go up every year? Utilities, insurance and new building operating costs are expected to go up by 5-9%. Salaries and benefits account for over 70% of our operating expenses. Benefit costs also rise every year. Pension costs increase proportionately with salaries. In addition, we have made improving the quality of student experience a top priority. This will necessitate building into our budget plan strategic investments in selected student services.

After careful analysis of all these circumstances, we have concluded that to ensure stability and further evolve as a global institution of high quality we must make some tough choices and without delay.

First, we will continue with mission critical hiring only for on-going positions.

Second, with regard to salary expenses, we have prepared a financial scenario that would permit us to offer a fair, responsible and equitable salary increase for our faculty, staff, and teaching assistants and avoid layoffs. Our salary assumption takes into account the current economic reality (CPI in 2009 of 0.3%), the impact of salary increases on the rest of the university operation, our obligation to fulfill our commitment to students, and our desire to position the university for the future. Underlying this is the reality that every 1% salary scale variance to the university’s expenses translates into a $3 million cut to our budget on an ongoing basis.

Third, we must call on all operating units across campus for a reduction in expenditures of 3.5 % simply to address an assumed flat-lining of government support and an unchanged tuition framework.

Finally, we will continue to act on recommendations of the information technology, retention, and marketing task forces for more efficient and effective operations.

It is important for all to understand that our purpose is not to discourage us from being innovative, creative and striving for excellence. Instead, we need to be realistic in the face of turbulent economic times. Our strength will be the ability of the entire community to work together and our acceptance of change for the overall good of the institution.

In these uncertain times we are committed to ensuring that our entire community is aware of our financial challenges and options, and that the decision-making process is transparent. The following elements will inform our decision-making:

• The tuition framework is unknown at this time.
• The provincial operating grant framework is unknown at this time.
• Our pension challenge will create additional cost pressures.
• Our salary settlement should be fair, responsible and equitable for all our employees.
• The goal is to continue to invest in teaching and research excellence, and enhanced student life, engagement and development.

As budget information is confirmed, I will keep you apprised.

Let me conclude with what is most important: my appreciation to you all for your great commitment and hard work over this past year. This has been a difficult time of scarce resources and it is with great respect that I extend my thanks to you all for your dedication to UW. We continue to face uncertain times and I look forward to your sustained understanding and support. We have a truly great future and I know we have the resolve to realize that future.

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Engineering students show off projects

Graduating students from five of Waterloo’s engineering programs will show off their projects — everything from pushbutton-controlled sunglasses to an electronic nose — at “design symposiums” to be held during the next few days.

Among the students who will put their work on public view are the 65 students in the first graduating class in nanotechnology engineering. "We are excited to see the first product of Waterloo's new nanotechnology engineering program in this class of graduating students, and the designs they have fostered," says electrical and computer engineering professor Hany Aziz, who is the fourth-year design project co-ordinator for nanotech. "Certainly the new and cutting edge nature of the program as well as the multidisciplinary nature of the work is well reflected in the projects to be displayed."

Among the nanotech projects that will be open for viewing on Friday, March 26:

• Photodetection of Dichlorvos Pesticide using Lab-on-a-Chip Technology: “The project demonstrates a portable lab-on-a-chip device capable of detecting dichlorvos residues, a pesticide currently used by many North American farmers despite concerns about its toxicity and carcinogenicity. The device is inexpensive, easy to operate and eliminates the need for laboratory testing.”

• Night vision stealth coating: “Infrared detection devices are heavily used in the military field as a method to detect enemy troops in the surrounding environment. As such, the ability to counteract this detection can provide a strategic military advantage. This project introduces a novel coating, using carbon nanotubes, that can be synthesized and applied to fabrics to enable night vision invisibility for stealth operations.”

The design symposia begin Monday, when final-year students in mechatronics engineering display their projects from 1:00 to 5:00 in the Student Life Centre.

They continue Wednesday, March 24, with a symposium featuring the work of electrical and computer engineering students (9:30 a.m. to 8 p.m. in the Davis Centre).

Two groups of students have their big day on Friday, March 26: nanotechnology engineering (9:30 to 8:00) and software engineering (9:30 to 7:00), both in Davis.

The series of symposia winds up Wednesday, March 31, when systems design engineering students show off their work in Davis (10 a.m. to 5 p.m.).

"This is a unique opportunity for members of the local community and the media to meet some of Waterloo's exceptional engineering students and interact with their innovative design projects first-hand," says E&CE professor Bill Bishop. "The symposium showcases the talent and innovation of our students graduating this year.”

CAR

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