2007
35 Years of Management by Crisis
On April 18th, the Guelph “Mercury” carried a front-page story with the banner headline “U of G deficit ‘devastating’”. This is a quote from Dr. Summerlee describing the administration’s view of the financial status of the University.
Is the University facing a challenging financial situation? Yes. Is it a “devastating” financial situation? No. The Administration’s decision to use extravagant descriptors like ‘devastating’ creates anxiety on campus, just at the time when (as is pointed out in the University’s MTCU Initial Budget Position document) “most employee groups have negotiations in 2007/2008“.
This is certainly not the first time that the University has publicized claims of imminent financial difficulties. The University has a long history of doing so. Senior faculty recall that we have weathered many such “crises” over the years. To quote the March 2005 News & Views “what is not clear about the present financial crisis is - why does the University of Guelph appear to be in such dire straits, in comparison with other Ontario universities who face many of the same issues?”
We recognize that, at this time, the University faces significant budgetary challenges. Government funding has, over the past two decades or so, become much less predictable and straightforward. Today, rather than simply receiving a single “block” transfer into the base budget, the University must also apply for targeted funding, demonstrate that it has met performance criteria, has increased enrollment, and so on. This situation makes budgetary planning more difficult, because revenue is less predictable.
Budgets are not bank statements. They are simply predictions and intelligent guesswork of what may happen in the coming year. The University’s pleas of poverty are a familiar tactic, employed while budgets are being developed and contracts are being negotiated.
Somebody said “I’ll believe the University is really in a financial crisis when they start cutting the positions of senior administrators.” In fact, over the past year the University has created at least three new associate/assistant Dean positions.
A senior administrator who retired in the not-too-distant past described his experience at Guelph as “35 years of management by crisis”.
Update on Negotiations
All non-financial proposals were delivered to the administration on March 19th. Since that time, we have been waiting patiently for further meetings.
Test your knowledge of the University budget. [Figures are approximate.]
The first three questions compare the situation in 2006 to the situation in the year 2000.
1. The Revenue of the University has increased:
a. 35% b. 40% c. 45%
2. The Expenses of the University have increased:
a. 46% b. 56% c. 66%
3. The average faculty salary has increased:
a. 14% b. 17% c. 21%
4. (i) The percentage of the total operating budget spent on academic salaries in 1993/94 (as per the COU compendium) was:
a. 30% b. 40% c. 50%
4. (ii) in 2004/05 (the last year for which statistics are available), the corresponding figure was:
a. 30% b. 40% c. 50%
5. (i) The Student/Faculty Ratio in 1999/2000 was:
a. 22:1 b. 24:1 c. 26:1
5. (ii) In 2006 the corresponding figure was:
a. 22:1 b. 24:1 c. 26:1
Answers:
1-c 2-b 3-a 4(i)-b 4(ii)-a 5(i)-a 5(ii)-c
Each of the following statements was made during a University of Guelph budget crisis. Can you identify the presidential administration corresponding to each?
Dr. Summerlee Dr. Rozanski Dr. Segal Dr. Matthews
6. “U of G deficit ‘devastating’”
7. “The Administration asked the Faculty Association to reopen [the] salary agreement”
8. “...for the first time in several years, the University does not have access to savings from employer pension contributions.”
9. “At Senate...[the administration] reported...a 7.8 million base deficit.”
10. “...The University expects to realize ... $8.6 million in expected resignation and retirement savings; cost recoveries from ancillary operation, employer pension contribution savings...”
11. “...cost-cutting measures could include restructuring the curriculum and examining employees’ compensation packages.”
12. “If adequate budgets are to be provided for universities in the future, the public and politicians must understand the long-term implications of budget cutbacks.”
13. “The university has responded by requesting that we re-open and renegotiate the second year of the two year contract [with faculty and librarians] that we signed...last spring.”
14. “Guelph anticipates a gap between expenditures and expected revenues of about $8.7 million.”
15. “The most difficult financial operation at Guelph is hiding the surplus and solving the parking problem.”
Answers:
Dr. Summerlee: 6, 11, 14
Dr. Rozanski: 7, 8, 9, 12, 13
Dr. Segal: 10
Dr. Matthews: 15