New budget balances cost savings, priorities

By McGill Reporter Staff

Despite the challenges raised by the global economic downturn, McGill has produced a budget for 2009-2010 that keeps the University on track to reduce its deficit to no more than $5 million, with the aim of operating on a balanced budget by May 2011.

The budget, presented to Senate and approved by the Board of Governors last week, maintains McGill’s commitment to increase quality in its academic mission while incorporating cost-savings recommendations that flowed from extensive consultations with the University community.

The plan, proposed by Provost Anthony Masi, is also designed to protect jobs – albeit not without sacrifice on the part of employees.

Of $17 million in cost restraints for the coming year, the single most important item is a $6.2 million saving from postponing wage and salary increases for all categories of employees from Dec. 1, 2009 to June 1, 2010 – a measure already agreed to by major employee categories.

In line with the drive for improved efficiency, each hiring unit will be responsible for finding savings by not filling about five per cent of administrative and support staff positions that become vacant during the fiscal year. Given the annual turnover of more than 300 staff, this would mean a reduction of about 15 jobs during the year.

“In the proposed measures, we have stayed firm to our commitment to increase quality in delivering our mission,” including retaining and recruiting the best academic talent in selected priority areas and remaining one of Canada’s leading employers, said Principal and Vice-Chancellor Heather Munroe-Blum in an accompanying letter to the McGill community.

Munroe-Blum also cautioned that “the worldwide financial downturn does not stop at the borders of our campuses, and its effects will be multi-year.”

The budget calls on all members of the McGill community to “find ways to do things differently, better, and at a lower overall cost.”

Munroe-Blum and Masi delivered essentially that message in a May 19 special meeting with a large group of McGill managers and administrators, prior to formal adoption of the budget. “We have to change the way we think, and work,” Masi told the assembled managers.

McGill expects to end fiscal 2009 with a $13-million deficit – down from $16.3 million a year earlier, but $3 million more than the budgeted $10 million. The shortfall stems from factors that include a lower-than-expected share of federal indirect costs of research grants and lower-than planned unrestricted donations.

Still, the budget document states, “we remain convinced that unless there are further funding cuts, we will be able to honour our commitment to both McGill University’s Board of Governors and to the MELS (Quebec’s Ministère de l’Éducation, du Loisir et du Sport) to operate with a balanced budget by FY2011,

as we have set out to do in the past three years with our multi-year plans.”

After that, the University would be positioned to begin to chip away at its accumulated operating deficit, which is forecast to reach $78 million in May 2010.

Resources are expected to continue growing, although more slowly than in recent years. From $589 million in revenue for 2008-09 (against $602 million in expenditures), they are projected to rise to $611 million for 2009-10 (against $616 million in expenditures).

The $17 million in spending restraints built into the 2009-10 budget include the three-per-cent salary reduction agreed to by senior administrators. Another measure, planned for 2011, would see the University pay professors on sabbatical 90 per cent of their salaries – in line with the Quebec comparative average – instead of 100 per cent as is presently the case.

The budget “launches a challenge to each and every member of the McGill community,” the document concludes.

“Help find ways to achieve our goals, ambitions and aspirations with concrete steps to create business efficiencies, redesign the ways in which we deliver services and programs, ask hard questions about what is really important to you in the compensation you receive for your efforts … Everyone can, should and must play a significant role in allowing the budget for FY2010 to become a framework for developing a new budget process fort McGill in subsequent years.”

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