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UNB Budget Update

April 7, 2009

To: The University Community
From:
John McLaughlin, UNB President

As a follow-up to my memo of March 23 regarding the global situation and the impact it is having on UNB’s finances, I would like to share our immediate plans to manage responsibly through what has become a global recession. As we continue to navigate our way through today’s global financial environment, we will continue to provide updates as new information becomes available.

The global picture continues to create new challenges for public institutions, businesses and employees. Regular reports in The Globe and Mail and other media outlets indicate universities in particular are dealing with shrinking endowments and budget shortfalls, requiring everyone to be more creative about how they deliver on their mandate.

In New Brunswick, UNB continues to deliver many great success stories, despite a challenging demographic picture and increasingly lower operating grants that are now among the lowest in the country. Our provincial government is aware of this disparity and we continue to work with them to define a model that works best for our province, its universities and students. In the meantime, the Government of New Brunswick has made available additional capital funding that will keep New Brunswickers working, while at the same time addressing some of UNB’s most pressing infrastructure requirements. We are also discussing the possibility of one-time measures for next year to allow us time to develop new, multi-year budgeting arrangements.

You will recall from my last memo that UNB is projecting a significant operating budget shortfall in 2009-10, with a freeze to our base grant by the provincial government contributing to the shortfall. The Finance Committee of the Board met on March 27 and agreed with university management that UNB simply cannot accept such a shortfall. Like other universities and organizations everywhere – including our own provincial government – we are forced to continue to make difficult decisions. As a result, we have taken the following steps:

Wages

Salaries and benefits account for more than 75 per cent of UNB’s $160-million operating budget.

To help reduce the projected shortfall in UNB’s operating budget, all administrative, professional and technical (APT) employees, as well as the president, vice-presidents and deans, will not receive an economic adjustment in 2009-10 and 2010-11. Eligible APT staff will, however, continue to receive applicable progression-through-the-ranks (PTR) adjustments around the time of their anniversaries.

This decision was not made lightly as we place tremendous value in all of our employees and the contribution they make to UNB, our students and province. However, managing expenses in this area versus further reducing programs will help us preserve the quality of the experience our students expect and deserve. This is critical to keeping healthy enrolment numbers, which contribute to UNB’s sustainability and overall future.

For faculty and staff who are part of collective bargaining units that are, or about to, negotiate new contracts, UNB will continue to respect the collective bargaining process. Through this process, the economic context will feature prominently.

New Positions and New Hires

In order to limit our long-term commitments with respect to new faculty and staff, UNB will only approve one-year terms, and only if the position is deemed to be necessary to the university at this time. I will consider a two-year term position, or other arrangements, in only truly exceptional circumstances. All new hires must be approved by the appropriate vice-president, and exceptions must be approved by me.

2009-10 Budgets

While the budget savings resulting from the above actions are material, UNB will still have a significant ongoing budget shortfall that must be addressed. Accordingly, I have instructed the campus budget committees to reopen the 2009-10 budget process and examine further options for increasing revenues and decreasing expenses. Campus vice-presidents chair the budget committees and will be communicating the details of this continued budget review to budget units. In the meantime, it is important that all budget units carefully manage all discretionary expenses, including travel. As I indicated in my last memo, we will present the 2009-10 budget to our Board of Governors at the May meeting.

These are difficult financial times not only for UNB, but for organizations around the world. Thanks to our prudent financial practices in the past, and thanks to our sense of community, UNB will continue to strive for and attain excellence. Through the cooperation of budget units on both campuses, we have secured the funds to offer our full slate of scholarships and bursaries to our students next year. Not every university can say the same thing. Similarly, we have been very aggressive with respect to capital planning, so that we can take full advantage of both provincial and federal capital stimulus programs. Our applications are in, and we are currently awaiting notification as to which projects have been approved. We expect to begin some significant infrastructure renewal projects later this spring on both the Saint John and Fredericton campuses. This will further enhance the student experience, contributing to UNB’s future.

In my previous memo, I asked all faculty and staff to think of ways to further reduce expenditures and to generate revenue. I want to thank our community for the many ideas being discussed in our budget planning committees. The generation of new ideas, big and small, is critical. UNB will continue to look at all reasonable options and opportunities to adjust to the current economic environment, to protect the student experience and minimize impact to service areas as much as possible.

UNB has had a number of recent successes in teaching and learning, research, athletics, partnerships and new infrastructure projects. These successes are happening on both campuses, and they are a testament to our students, faculty, staff, alumni, donors and volunteers and their dedication to excellence. Together, our achievements weave a rich and compelling story about UNB that resonates across Canada and beyond.

I thank all members of the UNB community for their understanding and their belief in UNB. I particularly thank our APT staff and deans for their patience and their dedication. Together, we will ensure that our record of excellence continues on our campuses, even during these tough financial times.

We plan to hold town hall meetings on each campus over the next few weeks to discuss our situation. I encourage all members of the university community to attend. Meanwhile, please feel free to give me a call or send me an email if you have any related questions or comments.

Sincerely,
John McLaughlin,
President & Vice-Chancellor

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