presentation to the board of governors

PRESENTATION TO THEBoard of Governors

April 28th, 2015

• Financial Overview

• What has changed since December 2014

• 2015-2021 Planning Assumptions

• 2015-2016 Tuition Fees

• 2015-2016 Allocations

• Recommendations

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PRESENTATION OUTLINE

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BOARD OF GOVERNORS SCHEDULE

September /October 2014• 2013-2014 Audited Financial Statements• KPMG External Auditors Report

November /December 2014• 2015-2016 Operating & Ancillary Budget Framework• Investment Committee Report

March /April 2015• 2015-2016 Operating and Ancillary Budget • Annual Risk Assessment• Deloitte: Internal Audit Report• Investment Committee Report

FINANCIAL OVERVIEW

2015-16 InvestmentsOperational Activity April 10, 2015

Operating $414m Pension $1,104m

Ancillaries $ 90m Endowment $ 212m

Research $ 60m

Capital $ 30m

Capital DebtDebt Financing for Buildings $125m

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Total: $414 Million

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2015-16 BUDGETED OPERATING REVENUES

2015-16 BUDGETED OPERATING EXPENDITURES

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Total: $414 Million

Revenue:• Enrolment Forecast: Undergraduate Graduate

• Tuition Fee Framework• Government Funding

Expenditures:• Pension Plan• Deferred Maintenance

BUDGET CONSIDERATIONS

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PROJECTED CHANGE IN 18-YEAR-OLDPOPULATION IN ONTARIO: CARLETON IMPACT

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PENSION OUTCOME OF JULY 1, 2013 VALUATION

• Going concern deficit $ 87m

• Solvency deficit $159m

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ONTARIO GOVERNMENT POLICIES

Post Secondary Education:

• Tuition fees• Government grant• Mandate agreements/Differentiation/Metrics• New campuses

Other Policies:• Pensions• Public Sector Compensation Restraint

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Audit & Finance – November 11th, 2014 #xx

Indicator Short-term objective

Current Level(November 2014) Proposed Target Long-term

objective

TEACHING EXCELLENCE

BA Enrolment -4.0% Increase

BA Retention -0.6% Increase

College Transfer Students -3.5% Increase by 25%

New 1st year FT Enrol. 1.0% Grow minimum of 1% per year

1st year Enrolment International 22.5% Grow 3% year

Graduate Enrolment -5.4% Meet prov. targets

Retention Rate .3% above Exceed Prov. Avg. by 1%

Results: & crimson lettering =below short term target & green lettering=at or above short term target

SIP INDICATORS #1

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Audit & Finance – November 11th, 2014 #xx

IndicatorShort–term

objectiveCurrent Level(November 2014) Proposed Target

Long-term objective

RESEARCH EXCELLENCEResearch Ranking 5 Top 3STUDENT CENTEREDIncrease endowment for student support $134m*

Student SurveyU/G-Upper 50%*Grad-Lower 33% Top Third

ORGANIZATIONAL EXCELLENCE

Student & Staff Customer Satisfaction Survey

Staff-61%Students-68% Over 7.5

Capital Campaign (Annual) $21.2m* $37mResults: & crimson lettering =below short term target & green lettering=at or above short term target

* Updated to April 2015

SIP INDICATORS #2

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WHAT HAS CHANGED SINCEDECEMBER, 2014

APPLICANTS/TARGETS - FALL 2014/2015

Carleton data as at April 10, 2015; OUAC data as at April 2, 2015

Carleton University First Year2015 2014 % +-

Applicants 23,053 23,154 -0.4%Approved 12,588 12,396 1.5%Applicants (1st and 2nd Choice) 10,730 10,831 -0.9%

2015 2014 % +-

First Year 6,100 6,157 -0.9%

Undergraduate 20,107 19,907 1.0%

2015 2014 % +-

Applicants 137,412 139,084 -1.2%

Confirmations 17,417 16,348 6.5%

Applicants (H.S. – ‘OUAC 101s’) 88,458 90,020 -1.7%

Ontario University Application Centre Systems Data – First Year

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• Facilities Condition Assessment Program Average age 40.4 years $105m deferred maintenance Overall Condition Assessment – Poor

• Recommendation from Joint Building Program and Board of Governors on February 12, 2015 to invest $14m per year for ten years to fund deferred maintenance/capital renewal.

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DEFERRED MAINTENANCE / CAPITAL RENEWAL

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2015-2021 PLANNING ASSUMPTIONS

REVENUE• Retention at current rate.• Domestic tuition fees will increase by 3% per

year.• First-year enrolment will mirror demographic

projection.• Discounted government funding to university

sector for undergraduate growth.

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2015-2021 PLANNING ASSUMPTIONS

EXPENDITURES

• Extraordinary pension payments (started in 2010-2011);

• Annual base fund of $1m for mission critical initiatives;

• Enrolment-Linked Budget Allocation model in place that provides 40% of net new income from undergraduate growth to Faculties.

• $14m annual allocation for deferred maintenance/ capital renewal

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TUITION INCREASES FOR 2015-2016

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Domestic InternationalOverall Increase 3.0%* **

BAS, BCS, BEng, BID, BIT, BPAPM• First, Second, Third Year 5.0% 8.0%• Fourth Year 4.0% 8.0%BComm, BIB (All Years) 3.0% 8.0%Other Undergraduate (All Years) 3.0% 8.0%

Master's (Most), PhD: First Year 3.0% 3.0%Graduate (Most): Upper Year 0.0% 3.0%MArch(S), MPM, MSW, MPNL (First Year) 5.0% 3.0%MBA• First year 5.0% 0.0%• Upper years 0.0% 0.0%MEng• First year 5.0% 8.0%• Upper years 0.0% 8.0%* According to the provincial government tuition framework using MTCU methodology.** International fees are unregulated; set using competitive analysis.

EXAMPLES OF TUITION FEE CHANGESEXPERIENCED BY FALL 2010 ENTRANTS*

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2012-13 2014-15 2015-16 4-YearYear 1 Year 3 Year 4** Change**

Bachelor of Arts/Science $5,568 $5,963 $6,171 10.8%

Bachelor of Commerce $6,475 $7,238 $7,238 11.8%

Bachelor of Comp. Science $7,229 $7,892 $8,524 17.9%

Bachelor of Engineering $7,938 $9,088 $9,815 23.6%

* Fees shown are for domestic students ** Proposed

‘NET’ TUITION EXAMPLES

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Notes:• Adapted from ‘The Many Prices of Knowledge’ A. Usher et al, HESA, 2014. • Uses proposed Carleton 2015/16 Tuition fees, and an average Carleton student scholarship and bursary from 2014/15; students

are studying full-time and are ‘resident’ in Ontario• Sticker Price = Tuition + Misc. Fees (i.e., ancillary, UPASS, etc…)

$1,780$0

$2,220$635

$7,180

$4,765

$2,545

Grants Loan Remission Tax Credits Avg CUscholarship

Sticker Price Up-Front Net Tuition

Third Year BA (Parental income=$120,000)

2014-2015 DOMESTIC TUITION(NEW COHORT)

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B.A./ B.Sc. B.Com. B. Eng.M.A./ M.Sc. M.Eng. M.A.Sc.

PhD (Most)

Carleton 5,992 7,300 9,620 7,902 8,937 8,436 7,785Guelph 6,022 7,904 10,893 7,468 7,468 - 7,468McMaster 5,966 8,552 10,148 7,008 7,722 - 7,008Ottawa 6,010 6,895 8,612 7,799 8,650 7,799 7,074Queen's 6,053 15,590 11,404 6,414 7,746 - 6,414Ryerson 6,032 7,681 9,314 9,464 9,464 9,464 9,194Toronto 6,040 14,550 12,980 7,115 12,250 7,115 7,115Waterloo 6,054 16,056 12,772 7,236 7,662 7,236 7,236Western 5,975 23,948 11,240 6,740 9,944 - 6,740York 6,040 7,904 7,904 4,785 - 4,785 4,785

Average (Ont. All) 5,983 9,681 9,766 7,740 8,603 7,649 7,510Average (Ont. Major) 6,018 11,638 10,489 7,193 8,871 7,473 7,082Median (Ont. Major) 6,027 8,228 10,521 7,176 8,650 7,518 7,095Carleton +- UofO -18 405 1,008 103 287 637 711Carleton +- Avg.(Maj.) -26 -4,338 -869 709 66 963 703Carleton +- Med.(Maj.) -35 -928 -901 727 287 919 691

2014-2015 INTERNATIONAL TUITION(NEW COHORT)

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B.A./ B.Sc. B.Com. B. Eng.M.A./M.Sc

. M.Eng. M.A.Sc.PhD

(Most)Carleton 20,012 21,033 23,818 19,287 21,837 21,015 19,020Guelph 18,429 20,899 23,866 17,825 17,825 - 16,991McMaster 21,348 26,966 30,898 16,761 17,766 - 16,761Ottawa 21,711 23,067 26,736 18,699 20,159 18,699 16,334Queen's 27,413 34,981 32,030 12,674 17,000 - 12,674Ryerson 20,509 21,337 23,211 19,711 21,356 21,356 18,886Toronto 35,280 37,960 39,580 18,620 39,580 18,620 18,620Waterloo 20,860 32,666 30,038 18,228 21,024 18,228 18,048Western 21,127 31,122 27,112 16,612 24,352 - 16,612York 19,611 25,825 21,476 18,825 - 18,825 18,000

Average (Ont. All) 20,854 24,011 25,923 18,452 21,762 19,267 17,774Average (Ont. Major) 22,630 27,586 27,877 17,724 22,322 19,457 17,195Median (Ont. Major) 20,994 26,396 26,924 18,424 21,024 18,762 17,496Carleton +- UofO -1,699 -2,034 -2,918 588 1,678 2,316 2,686Carleton +- Avg.(Maj.) -2,618 -6,553 -4,059 1,563 -485 1,558 1,825Carleton +- Med.(Maj.) -982 -5,363 -3,106 863 813 2,253 1,525International graduate program fees are measured on a three term basis, all others on a two term basis.

IMPACT OF 0% TUITION INCREASE

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• Impact of 0% tuition increase for 2015-16: up to ≈ $9 Million

• Option A – seek same income through higher undergraduate enrolment:• Extra 18% increase in annual intake required (+868 new, FT domestic students – assuming

same mix of first year students by program)• Much lower entry standards• Much larger classes, and crowding of other facilities• Assumes full government funding - Will the government fund extra students?

• Option B – cut costs:• Reduce payroll by 74 faculty or 133 professional services staff or a combination• … and/or no salary increases• Collective bargaining issues … attrition and extended hiring freeze• Serious impact on all aspects of campus experience• Higher risks to students, employees, and institution

MISCELLANEOUS ADMINISTRATIVE FEES

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Fee 2014-2015 Fees

2015-2016 Proposed

Increase * Percentage

Omnibus Fee $37.75 $38.50 $0.75 1.99%

Supplement Fees $67.75 $69.00 $1.25 1.85%

Off Campus Exam ( in Canada) $78.50 $80.00 $1.50 1.91%

Off Campus Exam (International) $141.25 $144.00 $2.75 1.95%

Challenge for Credit $201.75 $205.75 $4.00 1.98%

Returned Cheque Service Charge $32.00 $33.00 $1.00 3.13%

Deferred Payment fee $100.00 $100.00 $0.00 0.00%

Grad Application Fee $100.00 $100.00 $0.00 0.00%

Grad Reinstatement Charge $67.75 $69.00 $1.25 1.85%

Deferred Admission Fee $43.50 $44.25 $0.75 1.72%

Letters Of Permission $37.50 $38.25 $0.75 2.00%

Display Diplomas $111.50 $113.75 $2.25 2.02%

Replacement Diploma $78.50 $80.00 $1.50 1.91%

New Special Students Documentation $49.50 $50.50 $1.00 2.02%

Grad Leave of Absence $67.75 $69.00 $1.25 1.85%

Admission Processing Charge $61.75 $63.00 $1.25 2.02%

Grad Extension of Time $67.75 $69.00 $1.25 1.85%

*most fees increased by inflationary increase of 2% rounded to the nearest $0.25;

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2015-2016 FUNDING AVAILABLE FOR NEWRESOURCE ALLOCATION

Base Operating 1.0m

Fiscal Operating 4.8m

Fiscal Capital Projects 28.0m

Matching Funds 14.0m

Student Support 2.2m

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MAJOR PRIORITIES FOR 15-16 BUDGET

Priorities identified in Strategic Integrated Plan: “Sustainable Communities – Global Prosperity”

• Programs for Today and Tomorrow

• Research Excellence & Connectedness

• Productive and Engaged Students

• Organizational Excellence

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2015-16 MAJOR FUNDING INITIATIVES

New Faculty Positions Two new faculty for Bachelor of Global &

International Studies One new faculty for Masters Indigenous Policy

and Administration Three new faculty for Bachelor Health Science One new faculty for Masters Accounting

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2015-16 MAJOR FUNDING INITIATIVES

New Staff Positions

One Learning Specialist in Education Development Centre

One Human Resource Officer in Human Resources

One High School Liaison Manager in Student Recruitment

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2015-16 MAJOR FUNDING INITIATIVES

Capital Projects New Construction

» Additional Floor - Health Science Building 7.0m» New Business Building 3.9m

Deferred Maintenance 14.0m Information Systems Renewal 1.4m Classroom Renewal 2.0m

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OTHER FISCAL FUNDING

Advertising / Public Relations 1.1m

Student Support 2.4m

Matching funds» Research 1.0m» Advancement 13.0m

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MAJOR FINANCIAL UNCERTAINTIES

Demographics – Participation Rates Special Payments to Pension Plan Provincial Operating Grant Reductions Three new undergraduate campus

locations in GTA Tuition Fee Policy

The 2015-2016 Operating Budget, as presented, be approved.

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RECOMMENDATION

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