At the University Council meeting on Oct. 15 it was confirmed that the university’s reserves, which are for one-time emergencies, have been depleted. Greg Fowler, U of S vice president of finance and resources, says the university’s situation is partly due to previous provincial government reductions. These temporary reductions have had a big impact over the last few years, especially when they were made permanent.
“We need to make fiscally sound decisions that support the long term health and vitality of our great university,” Fowler said.
“Although we are very well supported by our government, we have used reserves until … we knew that adjustment was permanent. Now we have to address the decline in our resource depletion of our reserves and the direct permanent reduction of the grant.”
According to Fowler, over the last several years the university’s costs have continued to grow while most revenue has remained stable or declined.
The now-depleted reserves are not only a result of pandemic, as provincial government holdbacks have been impacting the university for some time.
According to the university’s 2018-19 Operations Forecast, cuts to provincial funding for the university in recent years have resulted in reductions in funding to colleges, support centres and strategic funds. Subsequently, all uncommitted funds were funneled to the central operating reserve and contingency fund balances were emptied.
Still, COVID-19 is something the university could not have anticipated and now has to make paying the one-time costs a priority.
The U of S interim provost and vice-president academic Melissa Just says that although the university has worked to mitigate the financial consequences of COVID-19, there are still things to address. Addressing the university’s depleted reserve funds is something that will be accounted for in the next budget cycle, with intentions of having a balanced budget by next year.
“We’re carefully monitoring the cost of COVID as the year progresses because of course we don’t yet know when things will return to relative normal,” Just said. “We’re factoring those costs into our long term planning, and our overall financial stability plan.”
According to Fowler, the idea is to start paying off the one-time costs of COVID-19 over the next five years, followed by restoring the reserves that are currently in deficit. By having a current budget set, the university can continue planning for the long term and make decisions that lessen the impact on students while serving students’ interest.
Just says that for now the university is operating under the budget set for the current financial year and that “it is balanced.”
The end goal, according to Fowler, is to ensure the sustainability of the university’s existing services for the future.
“We’ll continue to do our long term planning and continue to make decisions that don’t impact students as much as possible, and serve the university students’ interest,” Fowler said.