Waterloo - An enormous amount of effort has been devoted across our campuses to reducing budgets by five percent in 2009-10 and six percent in 2010-11. I would like to acknowledge the very difficult work that has been done so far, and to thank all those involved for their thoughtful and diligent attention to what is an unwelcome, stressful and challenging activity. I am convinced that Laurier will emerge from this financial turmoil with both a renewed sense of direction and with the strength and determination to thrive.

The purpose of this message is to update you on the factors that continue to guide budget development, to provide information on the process and timelines associated with budget decisions and approvals, and to ensure that you are aware of the principles that will guide decisions.

The information and analyses that you have provided have been invaluable and I encourage you to continue to send your thoughts, suggestions and questions. If there are questions we need to ask that are not covered in the Principles section, for instance, please send them along. I also invite you to attend one of the town halls that will be scheduled after the release of the provincial budget on March 26. Dates and locations will be publicized as soon as available.

Observations, assumptions and recent developments

As explained in budget presentations and messages earlier this year, Wilfrid Laurier University’s budget targets for 2009-10 and 2010-11 were established on the basis of a number of key observations and assumptions. No substantive changes have occurred with regard to these assumptions. In summary, it is expected that:

* Laurier’s enrolment will grow by five percent in 2009-10;
* The provincial government will not be providing year-end funding support that could be used to offset deficits, unlike in past years;
* As in the past, the funding received for enrolment growth will be discounted by approximately 33 percent;
* Tuition fees will not rise precipitously;
* Salary and benefit costs to the university will increase by approximately six percent;
* Non-salary costs to the university will increase by about one-and-a-half percent;
* Pension deficiency funding will be required (there will be no exemption and no holiday), and pension deficiency funding requirements will be at or worse than the minus 13 percent (-13%) scenario that was used in modeling;
* Capital projects, funded in large measure by the federal and/or provincial government, may proceed while universities are making significant cuts to their operating budgets;
* The provincial government shows no sign of giving pension relief;
* The Milton campus initiative will only proceed at some point in the future if capital costs are fully or close to fully funded by governments and if operating costs are fully or close to fully funded by the combination of fees and government operating grants. At this stage, the university has asked the provincial government for planning support but has received no word as to whether that funding will be forthcoming.

In the meantime, the university is working on proposals for capital projects at the Waterloo and Brantford campuses as part of the federal government’s Knowledge Infrastructure Program. These proposals are due in Ottawa at the end of March, and are expected to include repair, renewal, and new construction initiatives.

Budget development process and timelines

Individual budget managers submitted detailed plans to achieve the target budget cuts in mid-February. A data collection and verification phase began after these were received to ensure that all information was accurate and that there was a good understanding of the recommendations being advanced. Data were then summarized and integrated, and departmental budgets rolled up to higher levels (e.g. faculty budgets were rolled up to the VP: Academic budget line, administrative department budgets were rolled up to the appropriate Vice-President budget line, etc.). Development of the base-line budget submission data has been an iterative process, involving much back and forth with budget units to seek clarity and further explanations of the options that have been proposed and considered.

Now that this effort is nearing completion, President’s Group will:

* Review and assess all information, seeking further clarification and additional information as required;
* Hold town hall and other meetings at which members of the university community can share views and provide additional perspectives that will help inform the decision-making process;
* Incorporate into its decision-making any new information that becomes available which has a material impact on the budget-setting process, and share this information with the broader university community;
* Oversee the preparation of the final budget package for the Board of Governors according to established processes including prior review by Senate and its relevant committees.

The budget is normally presented to the Board of Governors in April. However this year it will be delayed to June because we believe it is critical to ensure there is sufficient time to understand the complexities of integration across the university of all that is being proposed, and to fully digest the implications of the provincial budget.

Principles that will guide the budget decisions

All budget recommendations will be tested against the following critically important factors:

* Does the decision align with the university’s overall vision and mission (as approved by the Senate and Board of Governors in November 2008) and support the institution’s strategic priorities including the multi-campus reality?
* Does the decision support increased efficiencies or revenue-generating entrepreneurship either within units or across a number of cooperating units?
* Does the decision reflect an appropriate balance between reducing costs and maintaining overall quality of the university experience for students?
* Does the decision account for the possibility of reducing revenues in another unit beyond the savings in the proposing unit?
* Does this saving pass along a cost to another unit?
* Are there contractual or other obligations that constrain or require particular resource allocations?
* Are there any unique timing considerations which impact when a decision needs to be made?
* Does the decision correct pronounced imbalances and/or realign resources in a way that more appropriately supports the university’s strategic priorities?
* How will this action or decision enable the university in general and the department in particular to emerge from the financial turmoil as strong as possible?