Report predicts critical strain on University’s resources
McMaster has found itself back on healthy economic ground, but the University's Finance Committee predicts this stability may be threatened by future trends beyond their control.
Three years ago, the University had an operating deficit of close to $15 million. Now, the operating fund has a small surplus balance ($321,000 as of April 30, 1999), as do a number of other funds, including ancillaries and endowments.
Five-year plan approved
The Board of Governors approved the University's 1999-2004 Financial Plans at its Dec. 9 meeting. The document forms the basis for the University's development of the 2000-2001 budget.
“The positive positions of these current surplus balances are offset by the realization that University's physical facilities need attention for deferred maintenance and renovation and expansion,” the report says.
Renewal and expansion are emphasized in anticipaton of an expected increase in University applicants in 2003, when two classes of high school students will graduate in the same year.
It is also predicted that the specter of that expanded class of high school graduates will cause many students to fast track through high school to avoid the expectedly competitive entrance requirements.
Coupled with demographic projections that indicate a 1-2 per cent increase in the 18-24 age group, the source of the majority of applicants, the report predicts a “critical” strain on the University's resources.
“Financial plans and academic plans are inextricably linked,” says Harvey Weingarten, provost and vice-president academic. “This document identifies what we will face in upcoming years. The reality is you have to identify the challenges you have. At this institution, we develop an academic plan. The budgetary plans are the instrument by which do so.”
Enrolment plan developed
The University Planning Committee has approved an enrolment plan for the next nine years which would see full-time undergraduate enrolment jump from 11,870 this year to 14,090 in 2009.
The large increase occurs between the 2002-2003 and 2003-2004 sessions, when the double cohort arrives, with a jump from 13,380 to 14,265 (a 6.7 per cent increase). The plan is also broken down by departmental enrolment, predicting the Faculties of Science and Engineering will weather the largest increases on campus.
“The University is presented with critical human resource issues in the recruitment, retention, development and compensation of faculty and staff,” says the report. “In the faculty ranks in particular the university sector in Canada and United States will see many present faculty retire in the next five to seven years. Universities will be competing for the best young PhD candidates to fill the positions of these retirees as well as the new positions developed due to increased enrolment.”
The two main sources of the University's operating budget are government grants and tuition fees from students. Government grants have decreased from $123.5 million in 1992 to $96.1 million in 1998. The committee expects that any future increases in grants will be in “areas of specific government priority.” The plan also does not incorporate any possible tuition fee increases.
To ensure that priorities are addressed, the University must continue to seek out additional sources of funding. These include the current fundraising campaign and McMaster's proposals to the Ministry of Training, Colleges and Universities' SuperBuild Growth Fund initiative.
The committee recommended allocating $1 million per year from the operating budget for facility renewal. “During this planning for enrolment growth, the academic areas of strategic importance to the University must continue to receive investment as new programs are developed and established programs evolve,” concludes the report.
“This (financial) plan addresses these academic priorities. At the same time, it is necessary to fund the required supporting services and continue to develop the infrastructure needed to support current and future activities.”
