Business Plan and Budget

Transcription

1 Business Plan and Budget Approved by Board of Governors May 21, 2015

2 LAMBTON COLLEGE Business Plan and Budget Presentation to Board of Governors May 21, 2015 TABLE OF CONTENTS Page No. 1.0 EXECUTIVE SUMMARY LAMBTON COLLEGE STRATEGIC PLAN 2.1 Vision Mission College Priorities ENVIRONMENTAL SCAN 3.1 Provincial Funding Enrolment Tuition and Fees Staffing Compensation Contract Services Research Entrepreneurship Apprenticeship International Employment Programs School to College to Work Initiative Fundraising BUDGET SUMMARY DRAFT BUDGET 12 Page 2

3 LAMBTON COLLEGE BUSINESS PLAN AND BUDGET EXECUTIVE SUMMARY The Provincial government is making strides to return the Province to a balanced budget. The deficit of the Province is budgeted at $8.5 B, over $2.4B less than projected at the close of fiscal The Premier has called for continued fiscal restraint as the government strives to achieve the promise of deficit elimination by Measures to limit public sector compensation as well as cuts to the budgets of the majority of ministries have been announced. No funding reductions for the postsecondary sector were included in the Provincial budget. The Ministry of Training, Colleges and Universities plans to conduct a review of the formulae by which post-secondary education is funded, starting with the university sector in , followed by the college sector review in The existing college funding formula, which is focused on enrolment growth, no longer responds to the current reality facing most provincial institutions, nor can it continue to be afforded in these difficult economic times. The college sector is preparing to work with MTCU to devise a new formula that will meet the needs of the sector in the coming years. The Province s accumulated deficit is forecast to reach $190B. Annual debt service cost of $11.4B on Provincial net debt of $298.9B continues to impose significant strain on provincial cash flows. Despite an increase of $39.3M in enrolment growth funding, public colleges in Ontario continue to be the lowest funded on a per student basis of all provinces in Canada. Many colleges are now facing serious economic challenges resulting from the combination of declining enrolments and a continuing freeze on per student funding. Annual increases of 3% are allowed under current Ministry tuition policy. The spring Provincial budget included additional funding for apprenticeship training. After many years of static rates, the per diem funding for classroom training will increase over three years, commencing in Additional funding for pre-apprenticeship training and for the Apprenticeship Enhancement Fund for capital equipment was also allocated. Capital funding continues to be severely constrained. Government plans to construct three new satellite university/college campuses will limit direct funding of other postsecondary capital projects over the coming decade. However, the Province is participating in the New Building Canada Fund: Provincial/Territorial Infrastructure Page 3

4 Component-Small Communities Fund, a segment of which is open to college and university projects. Significant deferred maintenance issues exist at facilities across the Ontario postsecondary sector. In , provincial funding for facility renewal at post-secondary institutions will be restored to $40M, the level last received in Starting in , the government plans to increase this fund to $100M by fiscal , enabling institutions to address their most critical deferred maintenance projects. In 2014, the Ministry of Training, Colleges and Universities completed review and approval of Strategic Mandate Agreements (SMA) with all provincial colleges and universities. These documents define each institution s areas of strategic importance and major academic program focus, along with metrics against which institutions will be measured. New academic program proposals must align with areas of focus outlined in an institution s SMA in order to receive Ministerial approval for funding. After nine years of relatively strong growth, enrolment in Ontario s post-secondary institutions is expected to level out in , with a number of colleges in smaller, rural areas experiencing declines in enrolment. This trend is predicted to continue for the next few years. International students continue to seek educational opportunity in Ontario, although the rate of growth in enrolment of international students is slowing. Increasingly, both private and public institutions are relying on international enrolment to augment other revenuegenerating activities. The precipitous decline in the price of oil that occurred very late in 2014 and resulting reduction in the value of the Canadian dollar has helped to reinvigorate the Province s manufacturing sector. Provincial unemployment stood at 6.9% at the close of fiscal Locally, the unemployment rate of 7.4% continues to exceed that of the Province. NOVA Chemicals continues to study feasibility and potential sites for a new $1B world-scale polyethylene facility, with Sarnia-Lambton in consideration. The emerging bio-based industry saw construction and commissioning of the BioAmber succinic acid production facility in early The company is also studying North American sites, including Sarnia-Lambton, for a second facility. Research activity continues to grow across Ontario colleges, and is prominent in that success. In addition to significant multi-year funding received over the past eight years, the College awaits announcement of funding for yet another major project, anticipated early in As a result of the focus on research, Lambton College ranked seventh among Ontario s 24 colleges as measured by annual research funding. The Budget and Business Plan reflects continued progress toward the objectives laid out in the College s Strategic Plan and its newly developed Strategic Mandate Agreement. Plans for development of a new Centre for Health Education and Sustainable Care are taking shape, as the College awaits decision on Federal/Provincial funding under the New Building Canada Fund: Provincial/Territorial Infrastructure Component-Small Communities Fund, a segment of which is open to college and university projects. Page 4

5 In support of this application, the County of Lambton has generously pledged to donate $5M over six years to the project, commencing in A long-awaited new recreation and fitness facility is in design phase, made possible through partnership with the College s Students Administrative Council. This facility should be open to students and the community in In order to align future operational activity with anticipated enrolment, announced a Post-Employment Benefit/Transition Assistance Plan effective in , available to longer service employees. The one-time cost of this program, while contributing to an in-year deficit, results in current year savings and will return significant cost savings for many years into the future. The Business Plan and Budget anticipates an in-year net deficit of $569,800 which includes a contingency expense of $500,000 and the one-time, $450,000 cost of the Post-Employment Benefit/Transition Retirement Program. The College will close with an accumulated unrestricted surplus of $2,830,700. This Business Plan and Budget articulates progress toward the strategic objectives of the College in a fiscally responsible manner, serving students and community partners at home and abroad, while building the foundation for long-term success in an increasingly challenging fiscal and regulatory environment. Page 5

6 LAMBTON COLLEGE BUSINESS PLAN AND BUDGET LAMBTON COLLEGE STRATEGIC PLAN 2.1 Vision fosters innovation and entrepreneurship among our faculty, staff, and students and in the local and global communities we serve. As the sole provider of higher education in our region, we remain committed to providing teaching and learning excellence in a broad range of program offerings, and a full range of credentials. We will enhance the student experience and learning outcomes by becoming a mobile learning college. In particular, we will distinguish ourselves amongst all Canadian colleges by leveraging our unique strengths to become a global leader in education and applied research in the areas of Energy & Bio-Industrial Technology, and Fire & Public Safety. 2.2 Mission is committed to student and community success. We achieve our mission through quality teaching and an innovative learning environment that: provides relevant, accessible, value added programs and services that engage and develop the whole student. proactively addresses the needs of a constantly changing labour market. supports community & economic development through innovative partnerships and applied research initiatives. 2.3 College Priorities We will realize our vision and fulfill our mission by achieving results and measuring our success in: 1.0 Enhance the Student Experience 2.0 Establish a Centre of Excellence in Energy & Bio-Industrial Technologies 3.0 Enhance Our Centre of Excellence in Fire & Public Safety 4.0 Provide Students with Innovative and Flexible Learning Options 5.0 Partner with Industry, the Community, and Other Post-Secondary Institutions 6.0 Renew our Campus Environment Plans and new initiatives contained in are directed at fulfilling the strategic priorities of. Page 6

7 3.0 ENVIRONMENTAL SCAN 3.1 Provincial Funding The Province of Ontario s Spring Provincial Budget includes measures to address the government s $8.7B deficit. Constrained operating funding and very limited capital spending will affect public services in the Province in After two years of decline, the rate of per student funding will remain at the level of $4,274 per Weighted Funding Unit (WFU). The grant funding formula includes a Base General Purpose Operating Grant (GPOG) calculated on the average WFUs of , and , as well as Enrolment Growth funding, based on the increase in the average of enrolment in and over the Base enrolment. Second Career funding declines as the government reduces the number of students funded by this program. Second Career and Cooperative Diploma Apprenticeship (CODA) funding per student has been frozen since introduction of these programs. Grant funding for Bachelor of Science - Nursing students remains at level on a per student basis. The Northern/Rural Grant has remained at the same level for many years. The capital instructional equipment grant is assumed to remain at the level. Grant funding of $40M for maintenance of facilities at colleges and universities is a significant increase over the amount allocated to the post-secondary sector for the past five years. The Province continues to redistribute funding for the School to College to Work Initiative (SCWI) across an increasing number of colleges, resulting in declines in revenue to be received in by some institutions. Funding for Aboriginal Education remains constant with the previous year. Through competitive process the Ministry allocated funding for development of courses for Ontario Online, a collaborative portal of courses hosted by colleges and universities across the province. 3.2 Enrolment Following nine years of uninterrupted growth, full-time enrolment at Ontario postsecondary institutions is levelling off in Total enrolment at all postsecondary institutions across the province is expected to decline by about 1% over levels. Page 7

8 is anticipating a larger than average decline in enrolment in , as the decline in numbers of regional secondary school graduates impacts recruitment of students. As well, expansion of a local call centre operation is negatively affecting mature student registrations. Fewer Second Career students expected in also negatively impacts enrolment. Extremely strong competition for students, both at home and abroad, results in a decline in International student enrolment on campus in Both full-time Ministry programs and Board of Governors certificate programs will see decreases in enrolment. 3.3 Tuition and Fees Tuition rates will increase by 3% for all post-secondary programs, as authorized by MTCU Tuition and Compulsory Ancillary Fees policy. Compulsory ancillary fees, inclusive of fees imposed by the Students Administrative Council, have increased an average of 2.7% over the previous year. 3.4 Staffing A reorganization of academic and service departments to support achievement of the College s strategic priorities while addressing current enrolment trends results in a number of personnel changes. In recognition of the downward enrolment trend impacting and institutions province-wide, the College offered a Post Employment Benefit/Transition Assistance Plan to employees with ten or more years of service. A total of 16 employees chose to retire or resign by the end of the calendar year 2015 under the program. Overall, the budgeted staffing complement declines by a net of ten positions. 3.5 Compensation Negotiated increases included in the current faculty and support staff collective agreements are reflected in the budget. Faculty compensation rates will increase 1.5% and Support Staff rates by 1.0% effective September 1, The collective agreement for faculty concludes August 31, 2017 and the Support Staff agreement concludes on August 31, Legislative changes to the Broader Public Service Executive Compensation Act are currently proposed by government. Compensation for Executive level positions remains frozen. An increase of 1.5% in the compensation grid for all other administrative staff, as recommended by the College Employer Council, is reflected in the budget. Page 8

9 Movement through the range for all employee groups has been estimated in this budget. 3.6 Contract Services Corporate training continues an upward trend through collaboration between the Learning and Training Solutions department and other client-focused departments in the College. Commercial fire training, together with other corporate training offerings, create important synergies in the area of research partnerships as well as domestic and international training opportunities. This activity will remain an area of key focus during this fiscal year. 3.7 Research An announcement on a major research project is anticipated early in This project will add to a growing number of major initiatives funded through federal and provincial grants. An estimate of activity related to this grant proposal has been included in this budget. A one-year extension for completion of the Renewable Energy Conversion and Storage Research project, funded by the Natural Science and Engineering Research Council (NSERC) will see that work continue in Overall research revenue declines as a number of one-time capital equipment grants received in the prior year are not repeated. 3.8 Entrepreneurship In support of s commitment to social entrepreneurialism, reflected in Lambton s SMA, an increased focus will be placed on development of entrepreneurship across the student body in Apprenticeship The per diem rates received from MTCU for training of apprenticeship students increase by 7%, effective in Classroom fees paid by students remain at the previous rate of $400 per session. The province announced plans to increase Apprenticeship Enhancement Funding (AEF) available to colleges by $23M over the period International After years of continued growth, contribution from Lambton s International activities is expected to decline in Strong competition for international students, both at home and abroad is affecting many post-secondary institutions in Ontario. Lower enrolment of students from India and China is expected at the Sarnia campus. Off-shore campuses at partner institutions in China are experiencing similar declines, most pronounced at Hubei University in Wuhan. Page 9

10 Enrolment is expected to increase at the campus of a partner school in Toronto. In order to manage the changing patterns of international enrolment, the College is exploring new avenues of revenue generation in this marketplace Employment Programs Following Federal/Provincial agreement regarding the new Canada Job Grant, the Budget anticipates little change in funding of existing adult employment programs in the coming year. The existing provincial Youth Employment Fund concludes in The Provincial Budget included funding of $250M for a new Ontario Youth Jobs Strategy. No funding from this new venture is included in this budget School to College to Work Initiative This program continues to successfully serve students from this region. Funding provided by the Ministry of Education will be at levels comparable to but further redistribution to colleges across the province continues in Fundraising In The Foundation will launch the largest fundraising initiative in the College s history. The Envision Tomorrow Capital Campaign will raise funds to address two of the institution s major strategic goals, construction of a Centre for Health Education and Sustainable Care (CHESC) and of a new Recreation and Fitness Complex, as well as to renew key instructional equipment. Decision regarding a major grant proposal in support of the CHESC under the New Building Canada Fund: Provincial/Territorial Infrastructure Component- Small Communities Fund is anticipated in spring of Page 10

11 4.0 BUDGET SUMMARY Year End Budget Estimate Revenue $ 65,854,200 $ 68,009,900 Expenses $ (65,097,700) $ (65,608,900) Surplus before One-time Expense and GAAP Adjustments $ 758,500 $ 2,401,000 Total GAAP Adjustments $ (1,334,600) $ (1,273,600) (Deficit) / Surplus after GAAP Adjustment $ (576,100) $ 1,127,400 One-time Expense $ (450,000) $ -- (Deficit) / Surplus after One-time Expense $ (1,026,100) $ 1,127,400 Transfer from Reserve $ 497,700 $ 683,900 Transfer to Reserve $ (41,400) $ (392,100) Net Deficit / Surplus after Reserve Transfer $ (569,800) $ 1,419,200 Opening Accumulated Unrestricted Surplus (see Note) $ 3,400,500 $ 1,981,300 Closing Accumulated Unrestricted Surplus $ 2,830,700 $ 3,400,500 Note: In-year adjustments requiring actuarial estimates are not yet available so have not been included but are assumed not to be material. Page 11

12 THE LAMBTON COLLEGE OF APPLIED ARTS AND TECHNOLOGY Budget Statement of Revenue and Expenditure For the Period April 1, March 31, 2016 Page 12

13 Budget THE LAMBTON COLLEGE OF APPLIED ARTS AND TECHNOLOGY Statement of Revenue and Expenditure For the Period: April 1, March 31, Budget Winter Forecast Variance REVENUE Post Secondary Sch 2A $ 38,117,400 $ 38,464,100 $ (346,700) Contract Services Sch 2B 18,992,300 20,151,500 (1,159,200) Child Care Services Sch 2C - 153,800 (153,800) Student Services Sch 3 3,048,200 3,053,300 (5,100) Administrative Services Sch 4 589,200 1,055,100 (465,900) Physical Resources Sch 5 559, ,500 86,500 Ancillary Sch 6 4,548,100 4,655,200 (107,100) 65,854,200 68,005,500 (2,151,300) EXPENDITURE Post Secondary Sch 2A $ 29,038,200 $ 29,122,000 $ (83,800) Contract Services Sch 2B 15,484,500 15,721,600 (237,100) Child Care Services Sch 2C - 200,000 (200,000) Student Services Sch 3 6,214,600 6,130,400 84,200 Administrative Services Sch 4 5,338,300 5,484,200 (145,900) Physical Resources Sch 5 4,696,600 4,526, ,100 Ancillary Sch 6 4,323,500 4,419,800 (96,300) 65,095,700 65,604,500 (508,800) EXCESS OF REVENUE OVER EXPENDITURE BEFORE GAAP ADJUSTMENTS $ 758,500 $ 2,401,000 $ (1,642,500) LESS: GAAP ADJUSTMENTS Depreciation/Contribution Amortization Expense 1,227,000 1,150,200 76,800 Vacation Pay Expense 107, ,400 (11,800) Termination Gratuity Expense - 4,000 (4,000) NET (DEFICIT)/SURPLUS AFTER GAAP ADJUSTMENTS (576,100) 1,127,400 (1,703,500) One-time Extraordinary Expense 450, ,000 NET (DEFICIT)/SURPLUS AFTER EXTRAORDINARY EXPENSE $ (1,026,100) $ 1,127,400 (2,153,500) TRANSFER FROM CAPITAL RESERVES 497, ,900 (186,200) TRANSFER TO CAPITAL RESERVES (41,400) (392,100) 350,700 EXCESS OF EXPENDITURE OVER REVENUE $ (569,800) $ 1,419,200 $ (1,989,000) OPENING ACCUMULATED UNRESTRICTED SURPLUS 3,400,500 1,981,300 1,419,200 CLOSING ACCUMULATED UNRESTRICED SURPLUS $ 2,830,700 $ 3,400,500 $ (569,800) Page 14

14 Budget THE LAMBTON COLLEGE OF APPLIED ARTS AND TECHNOLOGY Analysis of Post Secondary Expenditure For the Period: April 1, March 31, 2016 Schedule 2A Budget Winter Forecast Variance REVENUE: Fees: Tuition and Other $ 13,853,200 $ 14,734,300 $ (881,100) MTCU Grants 23,610,400 23,294, ,000 Other 653, , ,400 38,117,400 38,464,100 (346,700) EXPENDITURE: Compensation 24,899,700 24,997,900 (98,200) Instructional Software & Equipment 1,271,400 1,248,500 22,900 Equipment Maintenance & Rentals 188, ,700 18,500 Field Work 78,800 80,200 (1,400) Advertising & Promotion 81, ,700 (68,300) Instructional 1,016, ,200 39,800 Premise Rental 2,900 2, Office 86, ,200 (16,500) I.T. Networking 226, ,200 26,700 Professional Development 266, ,000 22,700 Travel 221, ,000 26,400 Tuition Set Aside 698, ,900 (56,800) 29,038,200 29,122,000 (83,800) CONTRIBUTION: $ 9,079,200 $ 9,342,100 $ (262,900) Page 14

15 Budget THE LAMBTON COLLEGE OF APPLIED ARTS AND TECHNOLOGY Analysis of Contract Services For the Period: April 1, March 31, 2016 Schedule 2 B Budget Winter Forecast Variance REVENUE: Contract Revenue $ 380,500 $ 412,000 $ (31,500) Course Fees 988,800 1,582,000 (593,200) International 6,622,800 6,686,100 (63,300) MTCU Apprenticeships 1,482,400 1,420,400 62,000 MTCU Contracts 2,773,900 3,034,000 (260,100) Other Provincial Contracts 2,198,800 2,295,600 (96,800) Municipal Contracts 290, ,700 (12,700) Research Contracts 2,807,200 2,802,500 4,700 Fire School 1,002,900 1,155,600 (152,700) Other 445, ,600 (15,600) 18,992,300 20,151,500 (1,159,200) EXPENDITURE: Compensation 8,069,600 7,804, ,100 International Recruitment 2,757,500 2,330, ,500 Stipends & Support Allowances 659, ,500 (251,100) Equipment 706,700 1,291,000 (584,300) Equipment & Building Maintenance 210, ,800 (42,800) Advertising & Promotion 282, ,300 (39,300) Instructional & Program 1,483,000 1,524,600 (41,600) Office 235, ,500 15,700 Travel Domestic 555, ,900 9,400 Travel International 135, ,500 14,500 Professional Development 36,900 32,100 4,800 Premise Rental & Utilities 353, ,900 (15,000) 15,484,500 15,721,600 (237,100) CONTRIBUTION: $ 3,507,800 $ 4,429,900 $ (922,100) Page 15

16 Budget THE LAMBTON COLLEGE OF APPLIED ARTS AND TECHNOLOGY Analysis of Student Services For the Period: April 1, March 31, 2016 Schedule Budget Winter Forecast Variance REVENUE: MTCU Revenue $ 1,010,100 $ 945,500 $ 64,600 Sundry Fees 1,585,700 1,591,900 (6,200) Other 452, ,900 (63,500) 3,048,200 3,053,300 (5,100) EXPENDITURE: Compensation 5,363,300 5,195, ,400 Advertising & Promotion 255, ,300 (20,700) Equipment 38,800 37,200 1,600 Athletics 141, ,900 (55,400) Educational Resources 159, ,800 5,200 Awards 120, ,000 - Office 89, ,600 (14,500) Professional Development 2,700 3,100 (400) Travel 44,600 43,600 1,000 6,214,600 6,130,400 84,200 CONTRIBUTION: $ (3,166,400) $ (3,077,100) $ (89,300) Page 16

17 Budget THE LAMBTON COLLEGE OF APPLIED ARTS AND TECHNOLOGY Analysis of Administrative Services For the Period: April 1, March 31, 2016 Schedule Budget Winter Forecast Variance REVENUE: MTCU Revenue $ 260,700 $ 715,200 $ (454,500) Rental Revenue 153, ,600 (3,600) Other 175, ,300 (7,800) 589,200 1,055,100 (465,900) EXPENDITURE: Compensation $ 3,052,300 $ 3,375,800 (323,500) Advertising & Marketing 388, ,000 6,400 Insurance 178, ,100 8,200 Duplicating & Printing 235, , Postage 89,500 89,500 - Office 92,200 67,300 24,900 Service Charges 192, ,500 (195,000) Professional Fees 192, ,000 (38,400) Taxes 227, ,000 - Travel 96,400 97,200 (800) Staff Employment & Recruitment 37,500 39,300 (1,800) Contingency 500, , ,000 Other 55,800 82,300 (26,500) 5,338,300 5,484,200 (145,900) CONTRIBUTION: $ (4,749,100) $ (4,429,100) $ (320,000) Page 18

18 Budget THE LAMBTON COLLEGE OF APPLIED ARTS AND TECHNOLOGY Analysis of Physical Resources For the Period: April 1, March 31, 2016 Schedule Budget Winter Forecast Variance REVENUE: Facilities Renewal $ 277,400 $ 177,400 $ 100,000 Other MTCU Revenue 23,300 23, Facilites Fee 154, ,900 (13,800) Other 104, , , ,500 86,500 EXPENDITURE: Compensation $ 1,189,900 $ 1,181,600 8,300 Equipment 95,600 53,900 41,700 Equipment & Building Maintenance 824, , ,600 Utilities 1,426,200 1,452,700 (26,500) Contract Security & Cleaning 916, ,500 10,400 Office 3,300 3,300 - Telecommunications 170, ,000 - Vehicle 9,500 8,400 1,100 Travel 9,300 9,600 (300) Other 51,500 65,700 (14,200) 4,696,600 4,526, ,100 CONTRIBUTION: $ (4,137,600) $ (4,054,000) $ (83,600) Page 18

19 Budget THE LAMBTON COLLEGE OF APPLIED ARTS AND TECHNOLOGY Analysis of Ancillary Operations For the Period: April 1, March 31, 2016 Schedule Budget Winter Forecast Variance REVENUE: Campus Shop $ 2,438,600 $ 2,546,800 $ (108,200) Parking 527, ,800 1,000 Residence 1,581,700 1,581, ,548,100 4,655,200 (107,100) EXPENDITURE: Campus Shop $ 2,329,500 $ 2,382,300 (52,800) Parking 303, ,500 (22,700) Residence 1,690,200 1,711,000 (20,800) 4,323,500 4,419,800 (96,300) CONTRIBUTION: $ 224,600 $ 235,400 $ (10,800) Page 19