Durham College Business Plan 2011-2012
Index Introduction 4 Mission, vision and values 5 Quality Teaching and Learning 6 Strengthening our Student Satisfaction 7 Responsible Growth 8 Research Excellence 10 Sustainability and Renewal 11 Challenges to realizing the goals of the plan 12 2011-2012 Budget 13
4 Introduction Durham College is pleased to introduce its 2011-2012 Business Plan, a document developed by the college s senior leadership team and based in large part on regular and ongoing feedback and input from faculty and staff, along with external stakeholders. Following a successful and ambitious year where significant investment was made in growth objectives infrastructure, new programs and enrolment 2011-2012 will be defined as a period of implementing and refining our actions of the past 12 months. We will transition from moving into new spaces to utilizing them to full potential. We will move from start-ups to establishing our new programs as system leaders. We will continue to grow our student numbers strategically and responsibly. And, we will continue to further our reputation as a community builder. In short, the year ahead is about realizing the maximum possible return on our investments of the past 12 months. The Business Plan and its five core goals (each with specific objectives) are aligned with the Durham College 2010-2013 Strategic Plan, which continues to serve as the college s over-reaching guide for all college growth, academic and business decisions, and other activities. The Business Plan is also consistent with the strategies and practices of the college s Multi-Year Accountability Agreement (MYAA). From the broadest perspective, the 2011-2012 Business Plan sets a path for: Quality teaching and learning; Improved student satisfaction; Responsible and strategic growth; Excellence in research and innovation; and Increased sustainability and campus renewal. It is also important to note that the college expects the year ahead will bring continued opportunities to work with its Oshawa campus post-secondary partner, the University of Ontario Institute of Technology (UOIT). The college looks forward to further strengthening this relationship, to working with university leaders on maximizing pathways and other joint initiatives, and generally providing students with diploma-to-degree and degree-to-diploma opportunities that best meet their needs. The Durham College Business Plan was approved by the Durham College Board of Governors at its May 11, 2011 meeting.
Mission, vision and values Mission: The student experience comes first at Durham College. Vision: Durham College is the premier college in Canada for career-focused students who are motivated to succeed in a challenging, supportive and inclusive learning environment. Our programs are continually shaped by market needs and delivered by exceptional teachers with real-world experience. Our vibrant campus community enriches the student life experience. All of this combines to ensure our graduates have the skills to succeed in their careers and make a difference in the world. Values: Our values drive our organizational culture and behaviour in delivering our vision and mission. Goals: OUR STUDENTS to provide students with quality learning experiences and support in finding fulfilment in education, employment, productive citizenship and lifelong learning; OUR PEOPLE to support and empower each employee to make the best possible contribution towards student success; OUR BUSINESS to make business decisions that support teaching and learning while reflecting best practices that result in the college achieving its mission and mandate; and OUR COMMUNITY to ensure that the college contributes to the economic and social prosperity of the communities we serve. 5 WE VALUE: Integrity and transparency we behave and communicate sincerely and honestly; Respect we treat everyone with dignity and offer superior service; Equal access and diversity we embrace diversity, ensure accessibility and champion all learners; Innovation we are leaders in innovative and creative learning experiences and solutions; Personal and team accountability we do what we say we will do; and Sustainability we make decisions that ensure the integration of economic, environmental and social factors.
6 Business Plan goal: Quality Teaching and Learning Quality teaching and learning are at the heart of Durham College. Through new measures and actions in the year ahead, we will develop more opportunities than ever before for our students and support our faculty in realizing academic excellence. This includes reviewing and refreshing our existing programs, working to introduce others in high-demand areas, and taking the first important steps in the expanding of our program mix to include baccalaureate degrees. We will: Survey student satisfaction with and evaluate utilization of the Aboriginal Student Centre. Develop a tracking system to determine the number of Durham College and UOIT students transitioning between the two institutions and their graduation rate. Develop specialist high skills major learning opportunities in two programs. Act upon recommendations from the first meeting of the program advisory committee (PAC) chairs and Board of Governors and annualize the meeting in January. Move forward with the process, framework and resources that would see the development of two Durham College degree programs over the coming 24 months. Progress at the end of this fiscal year (March 31, 2012) will be measured by the finalizing of the programs of study and course descriptions, and presentation of the programs for approval by the Boards of Governors. Introduce at least nine new programs for 2012-2013 in high-demand and emerging areas, along with those where significant numbers of local students are leaving to pursue studies outside our community. This will include three new programs and increasing enrolment in two existing programs should Whitby Phase 3 be ready for occupancy in September 2012. Complete the Program Review and Renewal Process for 11 programs and ensure resources are available to implement recommendations for improvement. Develop a five-year capital plan to evergreen aging and obsolete lab/shop equipment and improve wireless connectivity at the Whitby and Oshawa campuses. Develop a plan to embrace universal design for learning (UDL) in our academic activities by creating a repository of UDL materials on the Centre for Academic and Faculty Enrichment website. This Quality Teaching and Learning goal aligns with the following Strategic Plan goals: OUR STUDENTS to provide students with quality learning experiences and support in finding fulfilment in education, employment, productive citizenship and lifelong learning. OUR PEOPLE to support and empower each employee to make the best possible contribution towards the student experience. OUR BUSINESS to make business decisions that support teaching and learning while reflecting best practices that result in the college achieving its mission and mandate.
Business Plan goal: Strengthening our Student Satisfaction Through its daily actions and decisions Durham College lives its mission that the student experience comes first. In the year ahead, we will build on activities and decisions of the past year by making additional investments in time, financial resources and expertise for our academic operations and support services, resulting in an overall enhanced student experience. We will: Increase our KPI Student Satisfaction score by three per cent from 72.5 per cent to 74.7. Increase the KPI Capstone Question results from the KPI Student Satisfaction area: > Question 14 (knowledge and skills), by three per cent, from 86.3 to 88.9 per cent; > Question 26 (learning experiences), by three per cent, from 76.5 to 78.8 per cent; > Question 44 (facilities/resources), by 5.4 per cent, from 64.5 to 68 per cent; and > Question 45 (quality of services), by 8.25 per cent, from 62.8 to 68 per cent. Increase our KPI scores by an average of three per cent across the five benchmark areas. Fully implement the new student services model by September 2011 at the Oshawa campus and introduce the new model by January 2012 at our Whitby campus. Implement an integrated academic support program for Whitby students with disabilities. Introduce a new online survey for programs not eligible for KPIs, including apprenticeship programs, this year followed by academic upgrading in 2012-2013. Develop and implement a student services support program to meet the WSIB program requirements. Implement a student communications strategy, including a comprehensive feedback mechanism. Launch updated external website by June 2011. Introduce revamped MyCampus web portal by November 2011. 7 This Strengthening our Student Satisfaction goal aligns with the following Strategic Plan goals: OUR STUDENTS to provide students with quality learning experiences and support in finding fulfilment in education, employment, productive citizenship and lifelong learning. OUR PEOPLE to support and empower each employee to make the best possible contribution towards the student experience.
We will: 8 Business Plan goal: Responsible Growth The coming year at Durham College will be marked by a continued commitment to the responsible, strategic growth introduced over the past 12 months. Through decisions that reflect best practices, we will maximize the investments we ve made in our infrastructure, grow enrolment to our established targets, add new faculty, staff and programs, introduce a public fundraising campaign and ultimately further our reputation. Our business: Achieve our enrolment targets: > Combined Domestic, Second Career, Collaborative Nursing and International 8,410. > Increase dual credit offerings with local district school boards from 15 to 22 (this includes dual credit postsecondary and OYAP courses). > Increase number of students participating in dual credit courses from 640 (September 2010 to June 2011) to 1,000 (September 2011 to June 2012). > Sign the delivery agreement with WSIB and track the number of students enrolling to be able to set a baseline for future years. Complete all current/scheduled construction projects: > Student Services building landscaping by August 2011. > Knowledge Infrastructure Program renovation projects in the Gordon Willey building by May 31, 2011. > Two-million dollars in renovations to the Willey building by September 2011. Make Whitby Phase 3 a reality. > Launch a $5-million public fundraising campaign May 26, 2011, with a target completion date of December 2012. > Develop partnerships with other sources that will realize the remaining funding required to build Phase 3. Prepare a Pickering site for launch. > Complete lease, site layout and business plan by September 2011. Develop a comprehensive information technology strategy that will deal with increasing demand, the need to keep abreast of new technology, and address our aging infrastructure. Develop a task force to examine the current and possible future utilization of the Integrated Manufacturing Centre (IMC) and then prepare a business plan for its future. Develop business plans for the: > Simcoe building; > Campus Tennis Centre; > Conference Services; > School of Media, Art & Design; and > School of Health & Community Services. Develop an emergency preparedness plan. > Schedule training and simulation exercises that will ensure all employees designated in the plan understand their roles in an emergency; > Develop and communicate new protocols to be used in emergency situations; and > Develop a business/academic continuity plan. Continue to demonstrate a commitment to fiscal responsibility by realizing a third consecutive year with a balanced budget. Implement the new internal branding and signage strategy: > Phase 1 by September 2011; and > Phase 2 by January 2012. Conduct a review of all facilities to determine current utilization and develop a space plan for our campuses.
9 Our people: Implement a new talent management plan that will assist 100 employees in increasing and developing their leadership capacity. Establish a DCLT-specific succession plan to be presented for review by the Board of Governors and then reported on annually. Implement strategies to further increase employee engagement by using the recent engagement survey results to identify and address areas of concern as well as strengthen leadership capacity. Complete the process of refining the college health and safety system towards full Workwell compliance and certification of the provincial health and safety association as well as complete the implementation of measures required to prevent workplace violence. Contribute to continuous quality improvement by conducting four organizational reviews of key college departments and functions. Be recognized as a top employer by Mediacorp. Commit to hiring a minimum of 30 net new positions, with a mix between faculty and staff. Design new wellness and employee recognition programs to respond to the changing employee demographic. Internationalize Durham College faculty and staff through three professional development training sessions for the academic and student services areas. Complete 360 reviews of all deans, directors and members of the senior leadership teams in Winter 2012. This Responsible Growth goal aligns with the following Strategic Plan goals: OUR STUDENTS to provide students with quality learning experiences and support in finding fulfilment in education, employment, productive citizenship and lifelong learning. OUR BUSINESS to make business decisions that support teaching and learning while reflecting best practices that result in the college achieving its mission and mandate. OUR COMMUNITY to ensure that the college contributes to the economic and social prosperity of the communities we serve.
10 Business Plan goal: Research Excellence Durham College has a considerable impact on the overall well-being of the communities it serves, including a recent third-party report that projects the college will have a $1.4-billion economic impact through 2015. In the year ahead, our communities will realize new economic advantages as we further advance our research operations by introducing new opportunities that will help local businesses innovate, advance and commercialize their ideas, and gain new tools that will help them be more competitive. We will: Develop and publish a strategic research plan. Have in place fully functional Research Ethics and Research Ethics Appeal boards. Receive approval for Social Sciences and Humanities Research Council of Canada eligibility and submit at least one application for funding. Begin exploration of research opportunities for industry within the College Sustainable Building Consortium. Increase the number of faculty participating in research to 20, from 13 in 2010-2011. Submit a CFI proposal for research infrastructure. Deliver 10 faculty and staff research-related information sessions. Realize successful completion of 12 FedDev projects. Realize successful completion of four CONII projects. Realize the successful completion of the Office of Student Affairs HEQCO and First Generation research projects. Have a fully functional Incubator Centre with tenants. Ensure active participation in the Regional Innovation Centre Innovation Durham Northumberland, including referral of at least 10 companies to IDN. Participate in an electric vehicle project with community partners. Deliver new communication tools and approaches to support the growing research enterprise, including an enhanced web presence, media coverage for all projects, a marketing plan for the Incubator, and support with special events and co-ordination with external partners. This Research Excellence goal aligns with the following Strategic Plan goals: OUR STUDENTS to provide students with quality learning experiences and support in finding fulfilment in education, employment, productive citizenship and lifelong learning. OUR PEOPLE to support and empower each employee to make the best possible contribution towards the student experience. OUR BUSINESS to make business decisions that support teaching and learning while reflecting best practices that result in the college achieving its mission and mandate. OUR COMMUNITY to ensure that the college contributes to the economic and social prosperity of the communities we serve.
Business Plan goal: Sustainability and Renewal By empowering each employee to make his and her best possible contribution and through the pooling of their collective expertise, Durham College will take specific actions and implement new measures that will make us better environmental stewards and champions in the year ahead. We will: Develop and implement programs to reduce the college s energy consumption by five per cent this fiscal year. This will be measured by the number of energy units used. Develop a campus-wide waste management plan that includes public awareness via education and participation; standardizing recycling stations; developing a tracking system; and participating in annual waste audits. Introduce a Durham College Green Team made up of employees from all areas of the organization. The team will be charged with developing and leading new initiatives that reduce the college s carbon footprint and demonstrate green and sustainable practices. Ensure the Durham College Leadership and Academic Leadership teams become paperless, reducing the volume of paper generated for their meetings and operations. This Sustainability and Renewal goal aligns with the following Strategic Plan goals: OUR PEOPLE to support and empower each employee to make the best possible contribution towards the student experience. OUR BUSINESS to make business decisions that support teaching and learning while reflecting best practices that result in the college achieving its mission and mandate. OUR COMMUNITY to ensure that the college contributes to the economic and social prosperity of the communities we serve. 11
12 Challenges to the realization of Business Plan objectives The Durham College 2011-2012 Business Plan is an ambitious document that establishes five high-level objectives and sets out specific benchmarks for realizing these objectives. The success of the plan will be realized by the engagement of all faculty and staff, regular reviews of deliverables, reports to the Board of Governors and focused college leadership. There are a few potential challenges outside the control of Durham College that may impact the achievement of one or more deliverables. These include: Funding levels less than budgeted or anticipated funding would result in the college not being able to fully deliver its agenda. Capital campaign failure to achieve the goal could result in the college not being able to deliver new programs in some planned areas. Enrolment failure to realize enrolment targets would have an impact on the college s expansion plans. Provincial approvals for new programs failure to receive ministry approval and/or related funding would impact on the introduction of new programs. Succession planning unanticipated large numbers of retirements amongst college senior leaders could impact on the delivery of large projects where senior leadership is critical. Outside contractors unexpected delays or failure to meet agreed upon timelines could result in projects being delayed and impact on related plans. UOIT significant changes in university direction or decisions could have a direct impact on Durham College. However with new leadership incoming at the university, it is expected the relationship between the two institutions will be as strong as ever. Success matters for the Business Plan The Durham College 2011-2012 Business Plan will serve as the operational guide for all Durham College actions and activities in the coming year. The college will measure the success of this plan: Through two reports to the Durham College Board of Governors during the fiscal year, sharing plan accomplishments, progress and challenges. By establishing Business Plan goals and measures within the performance plans of senior leaders and using annual performance reviews to ensure these actions are met. By reporting back on deliverables through the Durham College 2011-2012 Annual Report.
2011-2012 Budget 13
14 Durham College 2011-2012 Budget Durham College is presenting a balanced budget for 2011-2012. The budget targets increases in domestic and international enrolment, with the total population of full-time domestic, second career and international students expected to increase by 407 from 7,553 in Fall 2010 to 7,960 in Fall 2011. With the addition of 450 Collaborative Bachelor of Science in Nursing Degree program students, the number of post-secondary students reaches to 8,410. The budget includes funding for the employment of 20 new faculty and 10 staff to address the increase in enrolment. Durham College recently completed two Knowledge Infrastructure Program (KIP) projects on-time and on-budget. The new Student Services building created a service hub that combined the bulk of student services in one location. The space vacated by these services at the Gordon Willey building was converted to classrooms, faculty offices and student study space. Phase 2 of the Whitby campus expansion project created four new classrooms for additional enrolment capacity of 400 students and 15,000 square feet of high-bay shop space for the use of apprenticeship training programs, including Carpentry, a new expanded HVAC lab and a renewable energy lab. Balancing the 2011-2012 budget has been particularly challenging for the college due to the following factors: Reduction in Second Career program funding: The college is anticipating a reduction of $2.7 million in Second Career revenue due to the recovering regional economy, which reduces the demand for this very successful program. The projection is for 120 students, down from 340 a year earlier. Although it is likely that an expected new agreement with the Workplace Safety and Insurance Board (WSIB) will provide new students to the college and will offset some of this loss, it is still uncertain what the future financial contribution will be. Introduction of new programs: The introduction of 14 new programs is forecasted to realize a negative net contribution of $0.3 million as opposed to a positive 30 per cent overall contribution expected from all recurring programs. Only full tuition and student-related fee revenues will be realized in 2011-2012 as a portion of the General Purpose Operating Grant (GPOG) funding will not be received until the subsequent year. Loss of Trent revenues: Trent University s decision to leave the Oshawa campus in 2010-2011 creates a loss of revenues. Realignment of shared services: Durham College and UOIT are continuing negotiations regarding service level agreements for the provision of services from one institution to the other. For the areas that separated in fiscal 2010-2011, there are $1 million of annualization costs that will have to be absorbed in 2011-2012. Due to uncertainties related to the realignment of shared services, it is anticipated that the college may have to absorb additional costs of approximately $1.5 million. The budget gap that was created by these challenges was closed with the collaborative efforts of the academic schools and service departments of the college through a thorough process of examination of all revenues and expenses and increased revenues from domestic and international enrolment growth. The budget includes funding that supports the college s Business Plan, meets the college s minimum requirements of maintaining and improving the quality of academic programs and supporting curriculum renewal and new program development. However, the 2011-2012 budget could be best described as a growth budget that aims to: Grow full-time post-secondary enrolment to 8,410 students, including Collaborative Nursing students; Add 14 new post-secondary and one apprenticeship program; Hire 20 additional full-time faculty and 10 full-time staff; Expand academic space with new classrooms, laboratories and faculty offices at the Oshawa and Whitby campuses; Operate the new Student Services building under a new service delivery model and; Expand student services at the Whitby campus.
Enrolment Durham College s post-secondary full-time domestic enrolment is targeted to reach 7,620 students in Fall 2011, an increase of 524, or 7.4 per cent from the previous year. Fourteen new programs will be introduced in 2011-12, contributing 354 students in Fall 2011: 15 Accessibility Co-ordinator; Chemical Laboratory Technician; Construction and Hoisting Techniques; Construction Carpentry; Development Services Worker; Digital Photography; Digital Video Production; Emergency Services Fundamentals; Energy Management and Sustainable Building Technology; Fine Arts Advanced; Science and Engineering Fundamentals; VFX and Digital Cinema; Victimology; and Welding Techniques. The following table presents fall semester post-secondary domestic full-time enrolment by academic schools: Actual Budget School 2010-2011 2011-2012 Change Business, IT & Management 1,429 1,473 3.1% Health & Community Services 1,138 1,245 9.4% Interdisciplinary Studies & Employment Services 669 688 2.8% Justice & Emergency Services 1,252 1,344 7.3% Media, Art & Design 1,268 1,345 6.1% Science & Engineering Technology 788 839 6.5% Skilled Trades, Apprenticeship & Renewable Technology 552 686 24.3% Total 7,096 7,620 7.4% A new international education strategy based on the recruitment of students to Canadian campuses through a network of agents in targeted South and East Asian countries was implemented in fiscal 2010-2011. As a result of this initiative, international enrolment in Fall 2011 is targeted to reach 220 students, compared to 117 students in 2010-2011, an increase of 88 per cent. Fall 2011 post-secondary, full-time students, including Second Career and international, is targeted to be 7,960, which is 407 or 5.4 per cent higher than Fall 2010. A total of 1,350 apprenticeship training students are expected to attend programs at the Whitby campus. This figure is 25 students or 1.9 per cent higher than 2010-2011. In addition, 702 Academic Upgrading, 20,094 Continuing Education registrants, and 1,611 secondary school students through the School-Work initiative are expected for 2011-2012. 9.4% 7.3% 24.3% 3.1% 2.8% 6.1% 6.5%
Operating budget assumptions 16 Operating grants Tuition fees Salaries and benefits full-time faculty Funding for base and growth funding units according to the current funding formula. Five per cent overall increase for all programs, in line with the current MTCU policy. Two per cent economic adjustment as per the current collective agreement, plus step increases. Salaries and benefits contract faculty $3,000 per 42-hour course. No change from 2010-2011. Salaries and benefits support staff Salaries and benefits administration Annual cost of interest Three per cent economic adjustment as per the current collective agreement, plus step increases. Increase for progress in pay band based on performance. Four per cent. In-year college revenues and expenses for the 2010-2011 (forecast) and 2011-2012 (budget) are presented below. Schedule of revenues and expenses Actual Forecast 1 Budget Variance $ 000s 2009-2010 2010-2011 2011-2012 Budget to Forecast 2 Operating grants 43,754 45,104 45,273 169 One-time year-end grant funding 1,905 - - 0 Tuition fee revenue domestic 23,809 26,735 29,102 2,366 Apprenticeship training revenue 3,516 3,314 3,645 331 International education revenue 895 1,333 2,879 1,546 Corporate training revenue 6,953 6,540 6,764 224 Other academic revenue 7,439 9,076 9,075 (1) Total academic revenues 88,271 92,103 96,736 4,634 Academic salaries and benefits 47,500 49,253 52,925 3,672 Academic operating expenses 9,390 9,303 9,799 497 Total academic expenses 56,890 58,556 62,724 4,169 Academic contribution 31,381 33,547 34,012 465 Academic contribution margin 35.6% 36.4% 35.2% n/a Net funds allocated for services (23,676) (25,151) (29,203) (4,052) Ancillary operations 7,630 7,347 8,032 684 Trent@Durham 830 99 - (99) Other corporate revenues (expenses) (5,195) (3,763) (706) 3,057 Net amortization expense (6,613) (7,441) (8,019) (578) Interest expense (4,377) (4,259) (4,116) 143 Derivatives gain (expense) 2,051 (166) - 166 Central revenues (expenses) (5,673) (8,182) (4,809) 3,373 In-year surplus (deficit) 2,031 215 (0) (215) 1 Based on year-to-date activity and preliminary projection at February 28, 2011 2 Figures in brackets represent unfavourable variances
Variances analysis between 2010-2011 forecast and 2011-2012 Budget Operating grants: $169K (0.4 per cent) increase is assumed in operating grants as a result of post-secondary, full-time enrolment growth. The minimal increase can be attributed to the decrease in Second Career grants. Tuition fees: $2,366K (8.9 per cent) increase in full-time domestic tuition fee revenues is due to the combined effect of the tuition fee increase of 5 per cent and the enrolment increase of 7.4 per cent, partially offset by the relatively flat part-time student tuition fees. Apprenticeship revenue: $331K (10.0 per cent) increase is estimated in Apprenticeship Grant Revenue due to the projected increase in student demand for apprenticeship programs and introduction of a new apprenticeship program. International education revenue: $1,546K (116.0 per cent) increase in international education revenue is the result of the expected increase in international enrolment by 103 students in Fall 2011. Corporate training revenue: $224K (3.4 per cent) increase in corporate training revenue is primarily attributable to the attraction of new business as a result of a new branding campaign. Academic salaries and benefits: $3,672K (7.5 per cent) increase in academic salaries and benefits is the result of increases as per collective bargaining agreements and the additional faculty hires. With the increase in enrolment, 20 new faculty, two new administrative and one support staff will be hired to the various schools. Academic operating expenses: $497K (5.3 per cent) increase in academic operating expenses is due to an increase in new program offerings. Academic contribution margin: As the result of the changes explained above, the academic contribution margin improves from $33,547K in 2010-2011 to $34,012K in 2011-2012. This represents a 1.2 percentage points decline in the margin from 36.4 per cent in 2010-2011 to 35.2 per cent in 2011-2012. Net funds allocated for services: $3,976K (15.8 per cent) increase is primarily due to the investment in academic quality, institutional and applied research, increased costs due to the organizational realignment with UOIT in student affairs and the Innovation Centre, and additional costs associated with the expanded student services in Whitby and Oshawa. An additional two administrative, five full-time and one part-time support staff have been approved to support enrolment growth. Cost increases in other service areas are due to the inflationary increases associated primarily with the collective bargaining agreements. A listing of net funds for services by service area is provided below. 17 Net funds allocated for services Actual Forecast 1 Budget Variance $ 000s 2009-2010 2010-2011 2011-2012 Budget to Forecast 2 Library and other academic support (1,874) (2,527) (3,542) (1,014) Student Affairs (2,403) (2,487) (3,414) (928) Office of the Registrar (2,237) (2,153) (2,976) (823) Finance (1,833) (2,000) (2,094) (95) Communications, Marketing and External Relations (1,969) (2,218) (2,260) (42) IT Services (2,440) (2,904) (3,393) (489) Facilities (7,297) (7,009) (7,606) (597) Human Resources (1,940) (1,977) (1,900) 77 Campus Safety (931) (1,115) (1,227) (112) President's Office and BOG (753) (761) (790) (28) Total (23,676) (25,151) (29,203) (4,052)
18 Ancillary operations: $684K (9.3 per cent) increase is due to the improved contribution from the parking and bookstore operations. The net increase in parking is attributable to more Durham College students parking on campus with the reallocation of UOIT programs to downtown Oshawa. The net increase in bookstore operations is the result of enrolment growth. Trent at Durham: $99K (100.0 per cent) decrease in revenues is a result of Trent University moving to its own campus in Oshawa. Other corporate revenues and expenses: $2,980K (79.2 per cent) improvement in other corporate revenues and expenses is primarily due to the following: Increase in revenue from the 199 Wentworth location; Increase in revenue from the sale of the Simcoe Street parking lot; Reduction in vacation accrual expenses; Reduction in the maternity/sick leave expenses; Reduction in the leadership contingency; and Increase in the provision for the realignment of shared services. Net amortization expense: $578K (7.8 per cent) increase is due to the capital investment for 2011-2012 which is not offset by revenues. Interest expense: $143K (3.4 per cent) decrease in interest expense is the result of the reduction in bank service fees associated with the use of the line of credit. Derivatives: $166K (100.0 per cent) decrease is attributed to the college not budgeting for the fluctuations in the marketto-market values of the college swap agreements. Risk and opportunity assessment The 2011-2012 budget was prepared through extensive consultation with the college s academic and service areas. There is sufficient detail associated with this budget from an operational perspective to allow for effective control and monitoring of each budget unit and item within the college. The primary risks in the 2011-2012 budget can be summarized as follows: Post-secondary domestic and international enrolment: The achievement of the domestic and international postsecondary enrolment targets depends on certain variables that are beyond the control of the college, including demographic trends, state of the regional economy, and competitive factors. A five per cent change in domestic enrolment is calculated to have a $0.9 million impact on the budget. A 10 per cent change in international revenues creates a $0.3 million impact on the budget. Derivatives interest: Estimating interest rates is highly speculative as it is dependent on market fluctuations and relevant bank rates. The college has not budgeted for any impact from these fluctuations for 2011-2012. Realignment of shared services: In anticipation of further realignment, the college has budgeted $1.5 million to absorb additional unforeseen expenses. The budget does not include any contingency allowance other than the allocation for the unforeseen realignment expenses. However the college was able to allocate $290K to various leadership and strategic initiatives including program development and an additional $1.8 million towards new hires. Twenty new faculty will be hired to the various schools to match increasing enrolment in those schools directly attributed to new programs. Further, four new administrative and seven new support staff (one part-time) positions have been added to strengthen the academic, student services, admissions and international operations. No extra year-end funding was included in the budget. The Ministry provided unannounced additional year-end operating grants both in 2008-2009 and 2009-2010 of $3.0 million and $1.9 million respectively. No additional funding was received for 2010-2011 nor is it expected for 2011-2012. The actualization of the budget will be closely monitored on a monthly basis and reported to the Audit and Finance Committee of the Board of Governors. Any unforeseen budget pressure will first be mitigated by deferring the implementation of the strategic initiatives to the following year. Budget reduction measures will be implemented across the college if a probable budget deficit is foreseen during monthly budget reviews. Projection for fiscal year 2012-2013 In line with the assumptions presented below, the college projects $88K surplus for the 2012-2013 fiscal year, indicating a viable college operation provided that the conditions created by the 2011-2012 budget can be sustained in 2012-2013. Post-secondary domestic enrolment growth Operating grants Tuition fees 5.0% increase 3.0% increase 4.0% increase Annual cost of interest 4.5%
Schedule of operating revenues and expenses Forecast 1 Budget Projection $ 000s 2010-2011 2011-2012 2012-13 19 Total Academic Revenues 92,103 96,736 99,663 Total Academic Expenses 58,556 62,724 64,321 Academic Contribution 33,547 34,012 35,342 Academic Contribution Margin 36.4% 35.2% 35.5% Net Funds Allocated for Services (25,151) (29,127) (30,639) Central Revenues (Expenses) (8,182) (4,886) (4,616) In-year Surplus (Deficit) 215 (0) 88
Capital expenditures budget 20 Total capital expenditures for the 2011-2012 fiscal year are budgeted at $10.263 million for annual renovations and infrastructure investments. The budget provides funding for capital projects to accommodate the needs of the academic programs and renewal of some of the aged infrastructure. The following table shows the distribution of the capital expenditure budget to major capital expenditure projects and the available funding from external sources. Budget Forecast Budget $ 000s 2010-2011 2010-2011 2011-2012 College Equipment Renewal Fund 1,600 390 390 Facilities Renewal Fund 560 336 355 Apprenticeship Enhancement Fund 365 728 498 Aboriginal Grant 0 71 0 Federal Government Accessibility Grant 0 75 0 OPG donation 0 0 200 Your SA donation 0 0 250 Total funding 2,525 1,600 1,693 Capital expenditures Academic 700 724 1,293 Apprenticeship projects 365 728 498 Student services and general administration 202 337 517 Mobile program 555 0 0 Student services model project 1,300 1,300 0 Banner 8/Luminis 4/Oracle 11g Upgrade (DC share) 0 0 374 Canadian Banner financial aid module 0 0 260 Other IT expenditures 1,334 1,326 1,906 General renovations 2,100 2,064 2,620 Food services renovations 1,461 1,375 129 Road upgrade, landscaping, parking and signage 0 15 1,665 Deferred maintenance 600 520 700 Accessibility pool 200 200 200 Contingency 0 0 100 Total expenditures 8,817 8,589 10,263 Funded from college resources ($6,292) ($6,989) ($8,570)
The capital expenditures for the academic areas include equipment for the new programs, a Drive Wise simulator for the School of Justice & Emergency Services programs, and new software for the School of Business, IT & Management. Student services and general administration projects primarily include investment in security equipment, a donor wall at the Whitby campus and upgrading of furniture and equipment in Corporate Training Services. Information Technology projects include the upgrade of the Banner enterprise software to Version 8 and implementation of the Banner financial aid module. Other IT projects include computer purchases for faculty and staff, computer refresh program, investment in IT infrastructure, additional storage for the data centre, network control access and additional audio-visual equipment for the Whitby campus. General renovation projects include continuing renovations to the third floor of the A Wing and second floor of the F wing of the Gordon Willey building and renovation of the Community Room. Renovations include upgraded corridors, classrooms, offices and washrooms. The capital expenditures budget also includes provisions for the rebuild of the north side of Commencement Drive and a parking lot and signage for the Student Services building. In addition, the project for residential housing and overall landscaping at Whitby is deferred from 2010-2011 to 2011-2012. Major construction projects The two KIP projects were completed in 2010-2011 except for an extension for the landscaping of the new Student Services building, which required warmer weather, and a portion of the Willey building renovations. The remaining $1.9 million for the completion of the Student Services building and Willey building renovations will be spent within the first quarter of 2011-2012. An additional $7.5 million in capital funding has been requested from the Ministry of Training, Colleges and Universities for the Phase 3 expansion of the Whitby campus. Upon granting of the funding from the Ministry, a full budget for Phase 3, including the design, plan and funding strategies will be provided to the Board of Governors for review and approval. Cash flow Cash flow from operations is estimated to be sufficient to pay for the planned capital expenditures. However some funding may be required for working capital and some of the externally funded projects due to the differences between the time that funds are received and spent. A total of $2,782K is allocated for the principal payment in long-term debt. The cash flow budget does not require any increase other than a small increase in the college s operating line of credit. It is estimated that the college will be in a net cash position of $0.1 million at the end of fiscal 2011-2012. The college has a total $11.0 million line of credit and may have to use a portion of this between May and July 2011 due to the seasonality of the student revenues. The following table shows the budgeted cash flow for 2011-2012 fiscal year. Budget $ 000s 2010-2011 Comments Cash flow from operations 8,907 Impact of adding back non-cash amortization expense Cash flow from working capital (6,411) Increase in accounts receivable due to enrolment growth Investing activities (1,942) Capital expenditures Deferred contributions 2,161 Deferred capital contributions and restricted contributions for endowment Repayment of long-term debt (2,782) Principal payment on long-term loans Net cash flow (67) 21 Capital expense projection for fiscal year 2012-2013 The capital expenditures currently planned for fiscal year 2012-2013 include the planning and design for continued renovations at the Oshawa campus for $2.0 million and deferred maintenance for $0.6 million. The balance of the 2012-2013 capital expenditures will be planned during the preparation of the 2012-2013 budget.
Conclusion 22 After three years of consecutive financial deficits between 2006-2007 and 2008-2009, Durham College managed to report a surplus in 2009-2010, forecasts another surplus for 2010-2011 and is now presenting a balanced budget for 2011-2012. The budget targets are tight but achievable. The principal objective of the budget is to expand the operating activities of the college and enhance the academic quality and occupational relevance of the academic programs where possible. The budget allows for the continuation of all existing academic programs and the introduction of 14 new programs. The budget also supports the college s business plan priorities for 2011-2012. Major budget risks include the achievement of domestic and international enrolment targets, as well as any further costs that result from the realignment of services with UOIT. There is no contingency allowance in the budget, however funding is provided for strategic initiatives, for leadership initiatives and new program development. The proposed capital budget provides $10.263 million for capital expenditures in fiscal 2011-2012 including an investment in IT and academic equipment, and ongoing infrastructure investment. Further, an additional $7.5 million has been requested for the continuing expansion of the Whitby campus. The college has not made any budget provisions for this project until confirmation of funding is received from the Ministry. The projected cash flow indicates that the college will be able to sustain its operations without requiring additional external financing and reduce its long-term borrowing by $2.8 million in 2011-2012.
2000 Simcoe Street North, Oshawa, Ontario, Canada L1H 7K4 T: 905.721.2000 www.durhamcollege.ca