•VIU VANCOUVER ISLANDUNIVERSITY

2009 - 2010

BUDGET PLAN

As approved June 25, 2009 by the Board of Governors

2009- 2010

2009- 2010

Vancouver Island University Proposed Budget Plan

Table of Contents

1. INTRODUCTION 1

2. BACKGROUND AND PLANNING CONTEXT 2

Enrolment..................................................................................................................... 3

3. PROPOSED BUDGET 5

Revenue 5

4. OPERATING CAPITAL BUDGET .

Domestic Contracts .

Transfers: Investment from and Contributions to Reserves ..

Business Operations .

Other Funds .

Expenditures........................................................................................................................ 7

Operating Fund...... 7

Holding Account 7

International Contracts........................................................................................................ 8

8

8

8

9

9

Information Technology (IT) Capital 10

Operating Capital (Non-IT) 10

Annual Capital Allowance 11

5. MOVING FORWARD 11

6.2010 BUDGET PROCESS 12

Schedule 1: 2009/2010 Consolidated Summary Statement of Operations 13

Schedule 2: 2009/2010 Operating Budget Statement of Operations 14

Schedule 3: Operating Budget Breakdown by Area 15

Schedule 4: Budget Change Detail by Area 16

Vancouver Island University Proposed Budget2009- 2010

1. INTRODUCTION

As a special purpose University, Vancouver Island University (VIU) has a mandate to provide relevant, responsiveand innovative programs and services to support the needs of the region we serve. In order to achieve this end,we must focus on fiscal responsibility that is well aligned with the strategic priorities of our organization and theeconomic needs of our region.

VIU is also reaching out around the globe to foster internationai relations, attract new economic opportunitiesfor our province, and create enriched experiences for both international and domestic students. Our budget hasbeen aligned to support this direction.

Post-secondary education will playa critical role in re-shaping local economies and strengthening communitiesas they emerge from the current econom lc downturn. As a publicly funded institution operating in a climate ofeconomic uncertainty, it is important that we manage our financial resources in ways that are prudent, strategicand demonstrate a high degree of ethical responsibility.

The interim 2009-2010 budget figures provided by the Ministry of Advanced Education and Labour MarketDevelopment (ALMD) indicate that VIU will receive an increase to our funding for our 2009-2010 operating yearand minimal increases for the subsequent two years. Two major factors affect increases in government funding;funding to support increases in enrolment and funding to support staff employment contracts. While it wasrelatively good news that the Ministry has provided VIU with an increase in funding for the 2009 - 2010 year, wemust be diligent and focus our priorities on enrolment growth and the creation of new revenue streams if weare going to meet the fiscal challenges of the two subsequent years.

To mitigate any further negative impact on our local economy, VIU is committed to minimizing job losswherepossible asa direct result of the 2009 - 2010 budget. The proposed budget plan for 2009-2010 reflects ourcommitment to faculty and staff and has, as much as possible, established base level funding to areas in theinstitution that have over a significant period of time relied on one-time funding to support ongoinginstitutional activities. These strategies left limited resources for new investment.

The budget plan outlined in this document is dependent on projected revenue increases from government,increased tuition rates and increased enrolment. VIU now receives lessthan half of its total revenue fromgovernment and asthe ratio of government funding falls proportionally to the total revenue, the dependence onother revenue sources increases as does the need for VIU to seek further diversification in the years ahead.

VIU is forecasting a balanced budget after transfers related to internally funded capital projects. Prior to theconsolidation of capital, a $567k surplus is forecasted for operations. The surplus from operations, plus a nettransfer of $2.2 million is required to support the University's portion ($2.7 million) of capital projectcommitments.

The University consolidates its operation with the Vancouver Island Foundation. On a consolidated basis, theoverall operating position is not expected to be significantly affected. The budget does not provide provision tooffset the impact of unrealized gains or losses in endowment investment losses.

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A total of $ 3S.2 million, including $ 31 million under the "Knowledge Infrastructure Program", a joint federaland provincial government capital funding initiative, has been secured to support the Deep Bay Field Station andthe new Cowichan Campus. VIU is continuing to pursue capital funding opportunities available for both short-and long-term initiatives identified in the recently approved Campus Master Plan. The VIU Development andAlumni office is currently completing a feasibility study as preliminary work in the preparation of a capitalcampaign.

VIU has grown into a first class centre of teaching, learning and research excellence and is playing an importantrole in shaping the educational, cultural, social and economic landscapes of our region. Our budget plan for2009 - 2010 and the economic challenges ahead reinforce VIU's need to focus on integrated planning,collaboration and innovation. To support this goal, VIU's budget must be clearly understood by alladministrators and budget holders. VIU's change to university status and the role of Senate also needs to berecognized in how we plan. The University will build on the foundations of transparency, collaboration andintegration of the past to develop our budget planning process aswe move ahead in 2010-2011.

Education is a cornerstone to social development and economic prosperity in our region. VIU is committed andmandated to ensure that our actions, programs, and services are relevant and responsive to the needs of ourstudents and the communities we serve.

2. BACKGROUND AND PLANNING CONTEXT

Fundamental to this budget process was a need for a clear set of academic and fiscal priorities. Many of theexisting institutional planning documents are under development or review. Early in the budget process it wasdetermined to integrate the budget planning process with the institutional priorities that were developedthrough the consultative Signpost planning process in 200S-2006 and subsequently updated in 2007 and 2008,which are itemized below.

The "Signposts to the Future" identifies the following priorities as our strategic priorities:

);> Invest in recruitment and retention of students.

);> Enhancethe student experience and campus life.

);> Invest in faculty and staff.

);> Initiate institutional transformation.

);> Ensure quality programs.

l' Build and maintain financial and physical resources.

);> Engage regionally, nationally and internationally.

Funding from provincial government contracts and grants represents 49%' of the University's gross revenue onan annual basis with the next two highest contributors to total revenue being student tuition and instructionalcontracts at 30% and S% respectively. Some examples of how the University has been able to diversify itsrevenue stream include, international and domestic programs, securing research funding, investment returns

1 VIU Consolidated Financial Statements March 31, 2009: Government Grants & Contracts - Provincial; Tuitionand other fees and Instructional Contracts.

2

(current market not typical), and fundraising. At this stage, the flexibility that VIU has achieved has built afoundation, but, at this time the current university budget has limited flexibility.

The operating fund over recent years has become dependent upon significant "profit-targets" in internationaland domestic contract service areas and business operations to offset operating fund deficiencies. This couid bepresented differently by establishing overhead rates or distributing the gross revenue using an establisheddistribution formula. Regardless of the choice the institution makes in presenting the information, the outcomeis the same; there is an established dependency on securing a return in these areas in order to balance theUniversity's overall operating position. This should not necessarily be interpreted negatively. In 2009-2010, theamount of overall contribution at year-end was taken into account closely when establishing the proposedcontribution level. As we advance the budgeting process, a more detailed revenue and expense budget will beincorporated in most of these areas.

The 2009-2010 budget process required all faculties, departments and campuses to look closely at all operatingand program areas to identify efficiencies. All areas were asked to take into consideration the environment inwhich we operate, including government policy and funding levels, regional demographics and economy, andrelevant factors affecting current and potential students.

The drivers influencing the budget process are inflationary costs; salary and increments; infrastructure costs;government funding formula; a 2% cap on tuition; capital projects and the economy. It is anticipated thatenrolments will increase in 2009/2010. However, as presented in Table 1, enrolment performance onGovernment funded Full Time Equivalents (FTEs) continues to be low (84% - 07-08,89% 08-09) and an increasedfocus on enrolment management will be required to improve this rate to closer to the government target of 95%and our vision of 100% to support provincial government funding increases.

Enrolment

Enrolment forecasts for 2009/10 and beyond have been developed based on actual enrolment trends of thepast three years, combined with planned changes to curriculum or program offerings, in the context of currenteconomic and other environmental factors. A conservative approach has been taken to forecasting enrolmenttrends, especially where such trends are used to inform budget planning.

In general, we anticipate that university designation, combined with enhanced and targeted marketing andpromotion, will attract more students to VIU in the coming years, although it is difficult to quantify this effect.Similarly, the international economic downturn, with its spinoff effects on the regional economy andempioyment trends, will undoubtedly have an inverse relationship on post-secondary enrolment. It is a wellknown phenomenon that when the economy weakens, post-secondary enrolment increases, as people aremotivated to train or retrain for employment or take advantage of the opportunity of unemployment to pursuefurther education. We estimate an overall potential impact on enrolment of about +5% annually, although thisgain is again difficult to quantify. Although reductions to instructional budgets in the past two years havedecreased enrolment capacity somewhat, VIU still has capacity for enrolment growth in many program areas.We are currently delivering about 89% of our Ministry enrolment target.

As seen in Table 1 below, actual enrolment gain in 2008/09 was positive and exceeded our forecasts for theyear, with overall growth of 593.9 FTEs or 7.9%, including increases in both domestic students (503.5 FTEs or7.5%) and international students (90.4 FTEs or 11.1%). Growth trends were particularly strong in Developmentaland Degree programs.

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Developmental programs saw an increase of almost 13% in 2008/09 which is reflected in increased enrolment atall campuses. Over two years the trend is even more positive, with a 22% increase. We continue to fund thesuccessful new Aboriginal Bridging program with non-recurring funds. Based on these trends, we anticipatecontinuing growth, possibly up to 15%, in domestic Developmental enrolment. However, Adult Basic Educationprograms remain tuition-free, so unless the government tuition subsidy is increased, increased enrolment willnot be reflected in tuition revenue.

Table 1: EnrolmentFullTime Equivalent (FTE) 05·06 06..()] 07-0B 08-09 08-09

change

ALMD Funded 5,616.63 5,526.44 5,567.64 5,900.24 +6.0%

ITA 959.67 1,020.98 1,114.05 1,281.61 +15.0%

International 904.38 904.67 817.96 909.18 +11.2%

FTE Total ~~ ~ ~ +79%

AlMDTarget 6,510 6,566 6,654 6,636

AlMD Performance ....". llMll auli BUli

Note:MinistryAdvanced Education and labour market Development (ALMO), Industry Training Association (ITA)

There was a slight increase in enrolment in certificate and diploma programs over the last two years, as well assome significant adjustments to programming. For example, the Interior Design and Graphic Design diplomaprograms were discontinued in favor of four-year degree programs, and so no longer contribute to the diplomacategory. The Green Building Renewable Energy program was funded, as was a first year Business Certificate inCowichan. Several new unfunded programs will be added in 2009/10, including Wine Certificate, Sommelier,First Nations Diploma, and Theatre Intensive Diploma. These unfunded programs are intended primarily toprovide additional options for existing students, but may draw some new students to the institution. With nofurther reduction in programming anticipated, we expect continuing minimal increases in enrolment incertificate and diploma programs. There is a small possibility that the Ministry of Advanced Education andLabour Market Development will allocate new funding to support targeted Health programs at VIU, but thewindow of opportunity for 2009-10 implementation is nearly closed.

Enrolment in degree programs increased by about 7.7% in 2008-09 and less over two years (3.9%). While somenon-recurring funding will be discontinued in 2009/10, the final funded implementation of the Bachelor ofInterior Design and Bachelor of Resort and Hospitality Management will be completed, and unfunded degreeoptions in Digital Media Studies, Economics, and Political Science will be introduced. While the net effect onenrolment in degree programming may be minimal, we expect that the continuing positive impact of universitydesignation will lead to increases in degree enrolment of up to 5%.

The expansion ofTeacher Professional Upgrading and introduction of the Master's in Educational Leadership ledto significant enrolment increases in the post-degree and graduate degree categories in 2008-09. Theseprograms are continuing, and the introduction of the Master's in Sustainability and Innovation in Leisure willmean further growth in 2009/10. We anticipate growth in the neighborhood of 10 FTEs in this programcategory.

After several years of dynamic expansion in Trades enrolment, we anticipate that growth will slow in the contextof provincial budget restrictions in 2009-10. Most Trades programming is funded directly by the ITA, which hasnot identified additional funding for 2009-10. Nevertheless, there may be some growth in apprenticeshipenrolment as part of a multi-year trend in which the most recent year saw an increase of 140 apprentice FTEs, or19%. However, part of this increase was a consequence of the ITA moving existing trades programs from theFoundation level into the apprentice category, so we would anticipate real growth of less than 10%.

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In summary, we anticipate continuing positive growth in enrolment as a consequence of both universitydesignation and a weakening economy, even in the context of a static level of government funding. Many of ournew program options are being offered on a cost-recovery or minimal cost basis, and our government deliverytargets will remain stable. We anticipate the greatest percentage growth in Developmental, Trades, and Post-Degree/Graduate programs, although the largest FTE growth may be in university degree programs in which westill have enrolment capacity.

3. PROPOSED BUDGET

Preliminary budget planning assumptions projected $2.3' million shortfall in the operating budget. There wereseveral reasons for this shortfall the most significant including: unfunded salary and benefit increments ($1.5m);realignment of tuition revenue budget ($400k); decreased investment return ($120k); utility and unfundedprevious year inflation costs ($325k); and increased investment in scholarships ($37k). Also the 2008-2009budget strategy included the removal of support for operating capital.

The University consolidates its operation with the Vancouver Island Foundation for financial statementpresentation. The University's net operating position is not expected to be materially affected by theconsolidation ofthe Foundation general operations, exclusive of the impact of unrealized gains or losses fromendowment investments. The budget does not provide provision to offset the impact of unrealized gains orlosses in endowment investment losses.

As outlined in Schedule One, VIU is forecasting a balanced budget after transfers related to internally fundedcapital projects. The University's consolidated total revenue and expenditures are expected to be $116.2 millionand $118.4 million respectively. Prior to the consolidation of capital a $567k surplus is forecasted for alloperations. The surplus from operations plus a net transfer of $2.2 million is required to support the internallyfunded portion ($2.7 million) of capital asset commitments.

The combined net operating surplus of $567k is a result of the operating fund excess expenditure over revenueof $2,294,127 (see schedule 2) offset by net profit targets from international and domestic contracts andbusiness operations totaling $2,861,115.

Revenue

Operating fund revenue, outlined in Schedule Two, exclusive of gross contract service and business operationsrevenue is projected to increase by approximately 3.6%. Full budgets at this time are not prepared for contractservices (domestic and international) and business operations, therefore last year's actual performance with thekey assumptions identified in schedule one, have been used to project their respective budgeted revenue.

Approximately $57.9 million is expected from provincial government grants and contracts, representingapproximately a 5.9% increase; however the overall proportion of government funding as a percent of totalfunding is expected to remain between 48% and 49%. The proportion of government funding as a percent oftotal revenue has been steadily declining to hover around 48% in the last few years, from +60% in 2000; +70%in the 1970s and + 80% in the 1980s.

22009-2010 Resource Plan: www.viu.ca/budgetldocumenls/ResourcePlan2009-2010.pdf (slide 21)

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Provincial government grants and contracts is the combination ofthe following:

» provincial budget allocation, $50.4 million (2009-2010) versus $47.4 million (2008-2009);» annual capital allowance (ACA), $2.5 million(2009-201O) versus $2.0 million (2008-2009);» industrial training association funding (ITA), $4.7 million (2009-2010) versus $4.9 million (2008-2009)

and» other provincial sources $0.2 million(2009-2010) versus $0.3 million (2008-2009)

The 2009-2010 provincial government budget allocation reflected a general increase of $1.2 million andfunding to support negotiating framework. The provincial government has already signaled strongly thatfunding levels for the subsequent two years will not increase.

The primary factor related to the change in ACA and ITAfunding is a result ofthe timing of revenue recognitionvis-a-vis program delivery. On a funding allocation basis, ITA funding level has remained unchanged from 2008-2009 and ACA funding has decreased by $102k.

Table 2 Grant & Tuition Revenue

Government Grants & Contracts - Provincial'Budget 2008 - 2009

Increase (Decrease):

Negotlati ng Framework Allocation

Increase funding.pt:::~general noticeAdjust ment to top up targeted FTEs

Decrease in Annual Capital Allowance GrantExpenditure of Deferred ACA FundingDecrease in ITA Revenue

Change ,in

Expenditures

Operating fund expenditures, exclusive of contract service and business operations expenditures is projected toincrease by 4.6%, from $73,532,265 to $ 76,872,711 (Schedule 4). When grossed up to consider all expendituretotal expenditures wiil be $118.4 miilion.

The details of the budget change by faculty and departments are outlined in Schedule 4. As identified in Table 3,significant budget reductions ($1,694,500) are required to offset the impact of annualizing 2008-2009 resources.A smail amount of FTE funding ($588k) has also been added to the 2009-2010 budget, the submission related tothe 2009-2010 cail for targeted programs has not been included in the current plan, if VIU receives approval,adjustments wiil be made.

Table 3: Area Budget Change (see Schedule 4)

1008-2009 OperatingFundBudget

Removal Non-recurring Z008-2OO9

AddbackRecurring funding

AddbackNon-recurring funding

AddbackOperating Capital

Other -holding /revenue dependent

GridandIncrements

Status quo

Budgetadjustment

New revenue

FTE allocation

Planned useof carryforwards

2009-2010 Budget

$ 73,532,265

$ (3,590,080)

U39,OOO

1,089,630

1,600,000

1,250,619

1JllJl.8H U§2.W.

$ 77,292,318

$(1.694.500)

(70,000)

588,490

lli.ill lill.§.Q2l

$76,872,711

Operating Fund

The operating budget consolidates ail recurring and non-recurring budget ailocations for ail faculties, anddepartments that are directly related to provincial government funding. Excluded from this fund are businessoperations, international and domestic contracts, special purpose funds and the foundation. The operating fundbudget includes details of both revenue and expenditures. The proposed operating budget and related budgetchanges are summarized in Schedule 2 in a statement of operations format and by area in Schedule 3.Differences in the presentation of revenue between Schedule 2 and 3 have been identified in Table 2.

Holding Account

This account is part of the operating fund budget and it is centraily controiled. Ailocations are made as issuesare resolved. It consists of undistributed budget at the beginning of the budget year and is usuaily fuily depletedby mid-year review. The balance at this time is $684k, at least $78k is committed to capital and the remainingbalance wiil be required to support unfunded commitments.

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International Contracts

International Education offers a variety of programs and education opportunities to international and Canadianstudents. Activities include the International High School, University Preparation, ESL, MBA, Study Abroadopportunities, as well as a variety of worldwide educational partnerships.

The budgeted international contract overhead represents the minimum net contribution required from theseinternational activities. For the purposes of the budget plan, international contract excess revenue overexpenditure of $2,220,083 is assumed to be a result of gross revenue of $11.0 million and total expenditures of$8.8 million. During 2009-2010 detailed revenue and expenditure budgets will be developed.

Domestic Contracts

A variety of entrepreneurial contract activity is undertaken throughout the VIU community. Activities such ascontracts with external partners, research projects, continuing education and technical training, field schools,and online programs contribute a wide range of revenue generating initiatives.

The budgeted domestic contract overhead represents the minimum net contribution required from thesedomestic activities. For the purposes of the budget plan, domestic contract excess revenue over expenditure of$483,032 Isassumed to be a result of gross revenue of $12.4 million and total expenditures of $11.9 million.During 2009-2010 detailed revenue and expenditure budgets will be developed.

Business Operations

Business Operations include the following: the bookstore, food services and events, print shop, and vendingmachines. Revenue and expenditures from the student residences has been reported separately. Thebudgeted overhead for BusinessOperations, represents the minimum net contribution required from theseancillary activities. For the purposes of the current budget plan, BusinessOperations excess revenue overexpenditure of $158,000 (overhead) is assumed to be a result of gross revenue of $6.8 million and totalexpenditures of $6.6 million. During 2009-2010 detailed revenue and expenditure budgets will be developed.

Business Operations includes all the revenue and expenditures related to the operation of the studentresidences. The residences are operated by a wholly owned controlled entity, Western Student Housing Ltd.The University consolidates the revenue and expenditures of Western Student Housing Ltd. for financialstatement purposes. The 2009-2010 revenue projection reflects the 2009 residential increase, expenditures forthe student residents includes a transfer of $763k to capital. The capital fund obligation will be complete in2030-2031.

Other Funds

The Vancouver Island Foundation is a registered charity incorporated under the Society Act (British Columbia).The main purpose of the foundation is fundraising in order to further the interests of the University andadminister the University's endowments. The consolidated budget does not include provision for unrealizedgains or losses on endowment investments.

The Special Purpose fund primarily includes receipts and disbursement for external scholarships and bursaries,parking and safety, and Milner Gardens. Revenue is projected to be evenly offset by expenditures plus thebudget includes a committed $80k transfer to Milner Gardens.

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Transfers: Investment from and Contributions to Reserves

Faculty and departments are permitted to hold a portion of their surpluses at year end as restricted net assets.These restricted net assets (carry forwards) are distributed throughout the budget divisions to supportexpenditures for the carry forward of activities.

External funding received to support investment in capital assets is set aside as deferred contribution andamortized over the useful life of the asset, therefore flows in as revenue in the current year. In addition, theUniversity has chosen to fund certain capital projects and equipment (assets) from operating dollars. Theportion of operating dollars used to support capital assets is shown as a contribution to the capital reserve(Investment in Capital Assets). As the asset is depreciated, the internally funded portion is then drawn as atransfer from reserves.

The library is being funded at $600k per year until 2017. The University has also committed to fund two newbuilding projects the Gathering Place and the Sturgeon Centre. The transfers related to these projects will bereflected in future budgets.

4. OPERATING CAPITAL BUDGET

In 2008-2009 there was no investment in operating capital; this reduction in annual spending was used torespond to the 2.6% reduction in provincial funding for 2008-2009. Early in the 2009-2010 planning process acommitment was made to support the reinstatement of the financial support for operating capital.

The process was similar to past years, where budget holders were requested to submit requests for generaicapital to the VPAdministration and Finance, Information Technology (IT) capital to the Director of InformationTechnology, and capital renovation requests to the Executive Director, Facilities and Campus Development.

The capitalization threshold will increase from $500 to $S,OOO; this is consistent with the recommendation in the2009 audit report. This will be accomplished in the current year by the establishment of a new object code foritems between $500 and $5,000 and these items will be reviewed at year-end for capitalization. This changeshould be seamlessto budget holders and does not affect allocations in the current budget cycle.

The operating capital allocation is proposed to be increased to $1.6 m from $1.S m (2007-2008) and will bedistributed as follows:

• $900k base for IT Evergreening Strategy (IT equipment)• $700k allocated to Operating capital (non-IT) $475k VPA (68%) and $225k (32%) Service (VPAF &

President). These allocations have been further distributed as indicated in Table 4.

In addition, $400k (non-recurring), from the $500k non-recurring transition allocation is to be invested in four ITcapital projects: timetabling & room booking ($100k), electronic resource management ($50k), student portal($170k) and fund raising software ($80k). The Director of Information Technology will work with projectsponsors to complete the project proposal prior to proceeding. Ongoing maintenance and licensing costs forthese systems will impact the 2010-2011 budget.

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Information Technology (IT) Capital

The total of all IT requests was $1,124,333 plus $474,400 for four IT capital system projects. A differentapproach is proposed for IT equipment. The University currently has approximately 2,000 computers,(desktops/laptops) and 60 projectors. VIU currently has $173k annual base budget for IT equipmentsupplemented with non-recurring allocations depending on available funding. This ad-hoc approach hasprevented long term planning to support investment in technology. The proposed increased allocation of $900kfor IT equipment is not ideal, but should support a four to five year evergreening strategy. This base allocationis critical to support longer range planning and allow an equipment plan to be developed and implemented inthe years ahead.

Operating Capital (Non-IT)

Using data from 2004-2005 to 2007-2008 the average annual expenditure on operating capital (excluding IT) hasbeen just over $1 million: $689k (68%) Vice President Academic portfolio and $327k (32%) between the Vice-President Administration and Finance and President's areas. The total of all submitted requests was$1,251,260, the proposed allocation of $700k would support approximately 56% of the total ask. 2009-2010,operating capital (non-IT) allocation has been based on past trends for operating capital. The proposedallocation has been distributed to a division level and where possible to individual departments, campuses orfaculties asdetailed in Table 4. Executive officers have a portion of the allocation which respective faculties,campuses or departments can call upon during the year.

Table 4: Allocation of Operating Capital (Non-IT)

Amount

VP AClldemi( 111,000

Education 10,000

Sodal5clences 15,000

Management 15.000

Arts and Humanities 55,000

Scll!nce & TeclmolollV 140,000

Centre for Continuing Studies 29,000

Trades ao,ooo

Cowkhan 16,000

Powell River '.000

VP Administration and Flnenee 105.000

Office of the President '.000

Humarl ReSO\lrces '.000

facilities lind Campus Development 114,000

TOTAL $700.000

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Annual Capital Allowance

The Ministry Of Advanced Education and Labour Market Development (ALMD) provides funding for capitalprojects via the Annual Capital Allowance (ACA) grant. For 2009-2010, the annual funding was reduced by$101,635 to $1,931,067 .The ACAgrant is used for capital improvements required during the economic life ofthe physical plant, to complete its useful life by extending the life of components to prevent accelerateddeterioration and obsolescence necessitating premature replacement. It is also used toward projects thatincrease campus life safety and security, disabled access, pre-planning, site works, and reducing greenhouse gasemissions. The grant generally does not apply to expansion projects, large renovation projects or routineoperating maintenance projects. Budget holders have submitted their requests for maintenance projects to theExecutive Director, Facilities and Campus Development. The 2009-2010 budget of $2.5 million is made up of thecurrent year allocation and 2008-2009 carry forward of $605k (deferred).

5. MOVING FORWARD

Vancouver Island University through its four campuses, 2000-plus employees and thousands of graduates isshaping our communities in a very real and positive way. In addition to an annual injection of over 100 milliondollars to the local economy, VIU is adding value to communities in the areas of Aboriginal Engagement, CulturalEnrichment, Environmental 5ustainability and Social Development.

Academic, physical, and resource planning provide the basis for institutional decision-making. We will continueto develop our budget planning process to reflect VIU's commitment to integrated planning, collaborativeenrolment management and community consultation. New planning initiatives in Academic, Aboriginal,Regional and Master planning will guide budget planning in the coming year.

Our new campus master plan contains a set of sustainability principals as well as recommendations forinitiatives to green the campus. These initiatives should realize substantial savings in energy and waterconsumption aswell as reducing waste.

Enrolment management initiatives are under-way to link and support institution-wide efforts in recruitment,retention, promotion, communication, admissions, registration, fee structures, advising and others.

Our behalf of the Administration at VIU we thank all budget holders for your on-going commitment to ensurethe dollars provided to VIU on behalf of our public are well managed and used in ways that support the mandateand goals described in our institutional planning documents.

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6. 2010 BUDGET PROCESS

In 2009, VIU implemented changes to its approach to budgeting and formed a Budget committee to provide aforum to support a regula r and transparent institutional-wide process for fiscal planning, budgeting andallocating resources. As a new University governed under the University Act, the 2010 budget process will berevised to support consultation with the appropriate committee of Senate. Section 62 (2) of the University Actstates that the President must prepare and submit to the board an annual budget in consultation with theappropriate standing committee of the Senate. The President has delegated the responsibility to assist in thepreparation of the university budget to the Vice President Academic (VPA),Associate Vice President Academic(AVPA) and the Vice President Administration and Finance (VPAF). Senate has identified Planning and PrioritiesCommittee (P&P) as the appropriate committee identified under the act. The Management Committee (MaCo)is comprised of Deans, Directors and Campus Principals that report to the President, VPA and VPAF.

The work begun in 2009 on increasing consultation and transparency will be expanded utilizing existingcommittee structures within the University for consultation throughout the budget development process. Thiswill enable broader consultation and integration. The Planning and Priorities Committee of Senate (P&P),Senate, Executive Council and MaCo will be consulted at three key stages of the process (1) Key Messages(inform the Budget letter to the University Community); (2) Consolidation of Deliberations and (3) DraftProposed Budget Report. The budget committee established in 2009 will not be required to meet in the future.

Another change to the 2010 process will be the incorporation of consultation with student representatives.Students will be asked to participate in an environmental scan early in the budget process and students arerepresented on P& P, Senate and the Board of Governors. To keep the University community at large andvarious stakeholders informed, various forms of communication (as before) including written updates or openforums will be utilized.

In early Fall, the President, VPA, AVPAand VPAF will meet to gain consensus around assumptions and prioritiesinformed by an environmental scan. The environmental scan will be prepared and presented by key stakeholdergroups such as: Office of the VPA which will present Academic Plan and priorities; Financial Services- mid-yearreview/last year activity; Human Resources- demographics and key drivers; Education Planning & Registrar-FTE and registration trends; and Student representatives - student trends and perspective. The summary of theassumptions and priorities will be taken for broader consultation to Executive Council, MaCo, P&P and Senateprior to the release ofthe University Budget letter and call for budget submission.

From October to December, updates and/or submissions will be developed by Deans, Principals and Directors inconsultation with their respective VP. December/ January, the President, VPA, AVPA, and VPAF will listen topresentations to enable them to collate a proposed operating budget strategy for presentation to ExecutiveCouncil, P&P, MaCo and Senate beginning in February/March. The presentation dates will be published andmembers of MaCo are free to attend as observers.

March/April the final draft budget will be presented to Executive Council, MaCo, P&P and Senate for informationand discussion prior to being presented to the Board for approval.

The final draft budget will be presented to the Board for approval will include the summary of comments fromSenate.

A detail draft activity plan with timelines will be posted by the end of June at (www.viu.ca/budget).

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VANCOUVER ISLAND UNIVERSITY

Schedule 2: 2009/2010 Operating Budget Statement of Operations

2009/2010

ProposedOper~ti"l Fund

BUDGET

2008/2009

Budget (hal\llllOpt!rating Fund Incrlla""

BUDGET IDlec.reasel % (/\ann

2008/2009

ACTUALS

Change in 09/10Budget vs. 08/09

ActualIncrease

lDecreasel % Change

65,309,721 65,375,466

2,401,399 2,359;130

712,896 984,276

528,237 376,064

933;866 1,000,838

1,810,452 2,015,365

8,139,397 6,114,418

2 $$ (2,806,526)

RevenuesGovernment Grants & Contracts - Provincial

Government Grants & Contracts - Federal

Instructional ContractsTuition and other fees

Sales of goods & services [excludes Business operations)

Amortization of deferred contributions

Interest and other Investment incomeGifts, grants and bequests

Gain on interest rate swap derivative

Other

ExpensesSalaries & Benefits

Fees & Purchased Services

Travel & TrainingScholarships & Bursaries

Equipment Rental & MaintenanceUtilities, Insurance & Taxes

Materials & SuppliesAmortization of capital assets

Cost of goods sold (excludes Business operations)

Holding account to be distributed

Operating fund deficiency of revenue over expenditures

57,898,293

19,280,941

145,388

200,000

943,594

78,468,216

S 54,687,124

19,054,173

159,031

320,000

1,517,350

75,737,678

3,211,169 Gs 55,363,405 $ 2,534,888 4.5%226,768 1.2% 19,676,178 (395,237) ·2.0%

(13,643) -8.6% 180,218 134,830) -19.3%

(120,000) -37.5% 348,535 (148,635) -42.6%

(573,756) -37 % 588,723 354,871 60.3%

2,730,538 3.6% 76,157,159 2,311,057

(65,745] -0.1% 64,019,700 1,290,021 2.0%

42,269 1.8% 3,901,444 (1,500,045) -38.4%

(271,380} -27.6% 1,141,340 (428,444) -37.5%

152,173 40.5% 393,567 134,670 34.2%

(66,972} ·6.7% 1,108,772 (174,906) -15.8%

1204,913) -10.2% 2,015,663 (205,211) -10.2%

2,024,979 33.1% 3,615,054 4,524,343 125.2%

666 0.3% 430,038 (188,390) -43.8%

607,062

2,218;139 2.8% 76,625,578 3,452,038

512,399 $ (468,419) $ (1,140,981)

Other FundsOperating Fund Overhead from:

Internatfcnal ContractsInternational Contracts (PreVious years split as two targets)

Domestic Contracts

Business Operations

Excess Revenue-over Expenditures

Operating funding transfers

Operating funds used to finance library

Milner subsidy

Capital funded through operatingUse of internally restricted net assets

Use of Excess Revenue over Expenditure

2,220,083 1,170,083 1,050,000

1,500,000 (1,500,OOO)

483,032 542,032 (159,000)158000 158,000

Ci 2,861,115:> S 3,470,115 $ (609,000)

c( 566,9V S 663,589 S (96,601)

(600;000) (600,000)

(80,000) (80,000)

j643;391) (416,398) (226,993)

756,403 432,809 323,594

(566;988) (663,589) 96,601

Page 14

VANCOUVER ISLAND UNIVERSITY

Schedule 3: Operating Budget Breakdown bVArea

REVENUE

TuitionMinistry Base grants

EXPENSESFACULTIES

Arts & HumanitiesCentre lor Continuing Studies & Adult Basic Education

Cowichan

Education

Health & Human Services

International

library

ManagementPowell River

Science & Technology

Social Sciences

Trades

SERVJCES

Education Planning, Teaching & Learning, Research office

Registration

Student ServicesFacilities

Facilities' Annual Capital AllowanceFinance

Human ResourcesInformation Systems

Information TechnologyCommunications & Public RelationsDevelopment & Alumn;

SENiORADMIN15TRATJON

President

SecretariatVP Administration & Finance

VP Academic

Institutional Costs

Holding account

Operating fund deficiency of revenue over expenditures

FundingOperoting FundO~erhead from:

lnternatlonal Contracts rxcess Revenue over Expenditures

Intemational Contracts [shewn as prior year transfer)

Domestic COntracts E~ce5S Revenue over hpenditures

Business Operations recess Revenue over Expenditures

E~ce5S Revenue over Expenditures

Operating funding transfersOperating funds used to finance library

Milner subsidyCapital funded through operating

Use of internally restricted net assets

" Vori"nct " Vorionce " Vruionce1009/1010 1008/1009 09 Budvs 08 100s/1009 09 Bud vs 09 Bud vs

Budget Budget V"rjanct "d Actual 08 Actual OBActualHigh.,r• ...,.,} Hi

Schedule 4: Budget Change Detail by

AreaFACULTIES

Recurring to Non-Recurring Operating Planned use ofSupport to support Capital! Major "carry forward"

Removal of existing existing Supplies 09!10 Planned (Internally

Z008/ ZOO9 08/09 Non- unfunded unfunded (removed in Grid & 09/10 Budget New Revenue 09/10 fTE Restricted Net 2009/2010BUDGET Recurring Activity activity OSI091 Increments Adjustments Generation Allocations Assets) Other BUDGET

Arts & Humanities 7,010,526 1171,229) 102,000 - 55,000 145,061 (292,000) 75,288 500 6,925,146Centre for Continuing Studies & Adult BasicEducation 3,331,398 (276,908) 29,000 49,733 {150,000) 102,925 3,086,148Cowlchan 3,246,535 163,078) 43,000 14,500 16,000 57,375 (131,000) 77,761 29,459 3,Z90,55ZEducation 3,020,765 18,652} 10,000 66,336 (49,OOO) 110,720 33,070 3,183,239Health & Human Services 7,898,880 (228,913j 155,562 (185,OOO) 55,670 59,470 7,755,669International 205,000 (zns.ooo;library 2,698,609 (10,0001 36,000 54,951 - 378,745 (200,OOOj 2,958,305Management 3,093,278 (43,880j - 15,000 86,366 (185,000j - 45,949 3,011,713Powell River 1,630,493 (33,711) 4,000 45,430 (60,000) 20,285 1,606,497Science & rechnclcev 6,780,921 (355,307) 266,000 140,000 287,962 (134,500) 88,365 7,073,441Social Sciences 4,297,272 (78,675) 32,000 - 15,000 278,003 (25,000) 4,518,600Trades 5,223,803 (52,396) - 80,000 188,061 (50,000) (50,000 31,812 - (144,275) 5,227,005

VICES

Educational Planning 423,977 (30,000) 32,500 26,938 - 453,415Research & Scholarly Activity 269,229 (70,040) 2,000 55,000 17,388 273,577Teaching & learning Centre 320,625 {28,OOO} 29,500 16,809 338,934Student Services 4,175,231 (103,408) 37,000 55,408 (62,000) 92,510 4,194,741geetstrauon 1,192,792 (44,331j 47,358 (23,000) (20,0001 1,152,819Facilities 4,544,029 (6,160j 125,000 114,000 74,597 (91,000) 4,760,466Facilities - Annual Capital Allowance 2,032,702 - - 503,558 2,536,260Finance 1,203,269 (8,000) 120,000 74,556 (22,OOOj 1,367,825Human Resources 1,524,921 (75,385j - 1,000 55,327 (30,0001 - 36,769 1,512,632Info. Svstems 822,954 (231,200) 79,000 35,492 - 13,647 719,893Info. Tech 1,716,820 187,200 900,000 58,812 - 6,491 2,869,323Communications & Public Relations 1,194,982 (629,785) 567,000 81,500 - 66,831 43,391 (43,391) 1,280,528Development &Alumni 753,372 (370,018) 341,430 59,848 784,632

IIOR ADMINISTRATION -President - Office 700,168 !245,128) 80,000 10,654 545,694Secretariat 225,968 16,693 242,661VPAdmin" Office 516,430 10,401 10,000 110,000 31,309 678,140VP Academic - Office 653,008 1115,461) 32,000 111,000 8,024 688,571

TITUTIONAL

Institutional- President 78,600 38,000 116,600

Institutional- Service 1,647,918 (614,302) 261,200 684,727 1,979,543Institutional- Academic 1,323,758 (157,682) 25,000 57,000 42,066 450,000 1,740,142

SER

INS

SEN,

Totals 73,532,265 (3,590,080) 1,339,000 1,089,630 1,600,000 2,070,884 (1,694,500j 170,000) 588,490 756,403 1,250,619 ( 76,872,711

Page 16