McMaster’s budget process update

An update on McMaster's budget process to the McMaster community has been prepared by Ken Norrie, provost, and Karen Belaire, vice-president administration.

Following is the update sent out today:

Dear colleagues,

The preparation of the University's budget always begins in the fall and the process for the 2005/06 budget year is now underway. Our goal is to ensure that the University community is kept informed as the budget is developed.

The process has not been changed. The Budget Committee, a sub-committee of the University Planning Committee (UPC), advises the President on the annual operating budget which is then presented to the Board of Governors for final approval. UPC plays a key part in the process and ensures that resources are aligned with the University's strategic priorities as established in Refining Directions.

When we communicated with you last year, we predicted that without significant changes in funding, the challenges of the 2005/06 budget would be substantial. This prediction still holds. Our costs have continued to rise faster than our revenue, and there is great uncertainty on the revenue side. We are hopeful that the recommendations made by the Bob Rae Postsecondary Review will reflect the urgent funding needs of Ontario's universities and that these recommendations will lead to new support in the provincial budget this spring.

McMaster has a long tradition of taking a conservative approach to budget planning and forecasting. This has traditionally left us in a strong financial position and better able to take advantage of strategic opportunities as they arise. Given the uncertainties we face at this time, we are currently developing three forecasting models that will allow us to look at conservative, mid-level and optimistic revenue projections. Even in our most optimistic scenario, however, sustaining our operations at current levels will be challenging.

On the cost side we face increasing utility charges, the need to maintain expanded academic and research space, rising compensation costs, the second year of increases in the employer contributions to the salaried pension plan, and much needed investments in technology.

In order to assist Faculties and administrative support units in their budget planning we will be forwarding the budget guidelines earlier than usual. Operating budget guidelines will be out the week of December 13.

We will continue to provide updated information to you over the next few months as the budget is further developed. We appreciate your support and value your input and we are confident that with everyone's participation we can meet the challenges we face. A series of budget consultation sessions with the McMaster community will be held in the New Year.

Ken Norrie, provost

Karen Belaire, vice-president, administration