Please receive this message as my best understanding of the current status of the university with its Framework for Sustainability. By way of background, all or most would know that we have been implementing Plan A of our sustainability plan which was submitted to the Province on March 28, 2012. While the implementation of the plan has not been without difficulty and sacrifice, the results have produced predicted and significant reductions in our operating deficit for the current fiscal year. We have been able to half the deficit projected from where we would be, had we done nothing. You will also know that we have been awaiting a decision by the Province to proceed with the implementation of Plan B. This plan is more ambitious and, if implemented, would have allowed the university to achieve almost immediate balanced budgets for the present and foreseeable future.
The principle component of this plan was dependent upon a provincially funded Early Retirement Incentive Plan (ERIP). The plan envisioned phased but manageable reductions in our employee complement by twinning early retirement with a non-replacement of vacated positions. The complement reduction to the plan was to be guided by a commitment to protect program integrity. There were other components in Plan B but this was the principle one.
Now fast forward to January 2013, the Province communicated formally its response to the outstanding requests contained in our sustainability plan. In that letter, it confirmed the following:
- Commitment to cover (up to $1.364 million) our 2012-2013 projected operating budget deficit;
- By an earlier decision (November 21, 2012), the province agreed to fund the two studies proposed in our sustainability plan—namely, a Space Utilization Study and an Affiliation Feasibility Study. The first study’s aim is to determine the efficiency with which we use our current space and ascertain what our spatial needs would be if we were to leave the Granville Campus. This study would also assess the capability of Dalhousie and Saint Mary’s to accommodate new construction on their respective campuses should we decide to affiliate.
The second study is intended to conduct a thorough, cost/benefit, risk assessment of a potential partnership/affiliation with either Dalhousie University or Saint Mary’s University. Please keep in mind that these studies will not be exploring merger options, a much mentioned fear. Rather, the studies will be conducted in such a manner as to ensure that affiliation options will not adversely affect NSCAD’s academic, financial and governance sovereignty. In other words, any affiliation must ensure that NSCAD retains control over its academic programs and regulations, including the appointment and promotion of faculty, control of its finances, and control over its management through an independent Board of Governors.
New information conveyed in the letter (dated January 10, 2013) stipulates that NSCAD needs to submit a new three-to-five year sustainability plan by March 15, 2013 that includes the following:
- a financial plan to eliminate the current unsustainable level of debt servicing costs;
- a detailed plan for how the university will meet current and future needs for office, classroom and workshop facilities on an sustainable basis;
- a plan to take full and effective advantage of opportunities provided by one or more universities and identified and elaborated through the upcoming affiliation study and facilities review; and
- a formal commitment by NSCAD Board of Governors to fully implement these elements of the sustainability plan.
The letter also states that decisions regarding new student fees rest with NSCAD, subject to review by the Province to ensure proper student consultations have occurred. Finally, the letter states that increases in tuition fees above the approved three per cent level will be addressed through the MOU process underway with the Province’s universities.
Notable by its absence is the central plank our 2012 Framework for Sustainability – a measured contraction of our employee footprint to be financed through a provincially funded Early Retirement Incentive Program (ERIP). It is important to note that the Province has not officially refused to fund this part of our sustainability plan, but its omission suggests that it is highly unlikely that we will be able to proceed with this part of our plan. However, I have been advised informally that while the government is not interested in direct funding (grant) of an ERIP, they have still not ruled out the possibility of introducing a SOFI loan program, which we would be eligible to apply for to support an ERIP. The savings to our budget with such a plan would be less than if we received a grant but would still be considerable. Please note the Province has not made a decision as yet on the reintroduction of a SOFI Plan. Therefore, while our position is subject to change, until instructed otherwise, this part of our 2012 sustainability plan is on hold.
I also wish to inform you that I have written to the Province to convey my surprise with the apparent shift of focus from the removal of operating deficits to the elimination of our debt. In the same letter, I have asked for further clarification of the conditions they have made for the payment of our 2012-13 operating deficit. As it now stands, the time lines they have set presuppose consultant study results, which are not likely to be available until May.
Essentially, this is my best read of the situation as I understand it. Unfortunately, the situation is still very fluid and subject to change as we receive more clarification from the Province. I will endeavor to keep you informed as I receive clarification. In the meantime, we will continue to “stay the course” with Plan A, which has allowed us to meet budget targets for this year. The executive committee of the board will meet at the end of this week to formalize its response to the aforementioned letter from the Province. As well, we will consult the community as best we can as we develop a debt reduction plan as requested by the Province by March 15, 2013 – a daunting task.
P.S. I intend to outline for you details surrounding how NSCAD is currently funded, including the grants we receive from the Province. I know it is part of popular belief at NSCAD that we are under-funded by the Province and all we need to do to remove our deficit is to demand larger grants from the Province. I hope to share with you some facts that will dispel that belief.