Report: Business Board - February 03, 2021

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Via Virtual Meeting

REPORT NUMBER 256 OF THE BUSINESS BOARD

Monday, February 3, 2021

To the Governing Council,
University of Toronto.

Your Business Board reports that it held a virtual meeting on Wednesday, February 3, 2021 at 5:00 p.m. with the following members:

Present:
Anna Kennedy (Chair), Bruce Winter (Vice-Chair), Brian Lawson, Vice-Chair of the Governing Council, Scott Mabury, Vice-President, Operations and Real Estate Partnerships, Kelly Hannah-Moffat, Vice-President, Human Resources and Equity, Sheila Brown, Chief Financial Officer, Robert G. Boeckner, Harvey Botting, David Bowden, Teodora Dechev, K. Sonu Gaind, Sarosh Jamal, Kathryn A. Jenkins, Joan Johnston, Amin Kamaleddin, Kikelomo Lawal, Jan K. Mahrt-Smith, Rajiv Mathur, Brian A. Miron, Andrew Padmos, David Regan, Susan Rodgers, Danielle Skipp, Ian Taylor, Vishar Yaghoubian

Regrets: Sue Graham-Nutter

Secretariat: Anwar Kazimi, Deputy-Secretary of the Governing Council, Patrick F. McNeill, Secretary

Non-Voting Assessors:
Cheryl Regehr, Vice-President & Provost, Angela Hildyard, Special Advisor to the President, Joseph Wong, Vice-President, International, Trevor Rodgers, Assistant Vice-President, Planning and Budget, Heather Boon, Vice-Provost, Faculty and Academic Life, Andrew Arifuzzaman, Chief Administrative Officer, UTSC, Saher Fazilat, Chief Administrative Officer, UTM, Joshua Mitchell, Director, Real Estate, Ron Saporta, Chief Operations Officer, Property Services & Sustainability

In Attendance: Gwenn Burrows, Executive Director, Office of the Vice-President, International
Elizabeth Cragg, Director, Office of the VPOREP, Adrienne De Francesco, Executive Director, Capital Projects Group Planning, Design & Construction, Rosalyn Figov, Chief Operations Officer, Office of the VPHRE, Hayley Fuller, Office of the VPHR, Jane Harrison, Director, Office of the Vice-Provost, Faculty & Academic Life, Cherilyn Nobleza, Office of the VPHR, Owen McCartney, Development Finance Analyst, Real Estate Department, Daren Smith, President and Chief Investment Officer, University of Toronto Asset Management Corporation (UTAM), Pierre Gilles Piché, Controller and Director of Financial Services, Allan H. Shapira, Aon

IN CAMERA ITEM 19(a) WAS RECOMMENDED TO THE GOVERNING COUNCIL FOR
APPROVAL. ITEMS 10 and 12; AND IN CAMERA ITEMS 19(b), 20(a) AND 20(b) WERE APPROVED.
ALL OTHER ITEMS ARE REPORTED TO THE GOVERNING COUNCIL FOR INFORMATION

Pursuant to section 33(i) of By-Law Number 2,
items 17 to 20 were considered in camera.


OPEN SESSION

  1. Chair’s Remarks

    The Chair welcomed members and guests.
  2. Reports of the Administrative Assessors

    COVID-19 Update

    Professor Kelly Hannah-Moffat provided an update related to the COVID-19 pandemic. Highlights included the following:
  • University started new year with a provincial lockdown; planning underway for future work as pandemic continues regarding support for staff, students, faculty, librarians and the University community;
  • The delay to beginning of the winter term in January was implemented to support students, faculty and instructors to recharge over break;
  • Administrative staff who had returned on January 4th were granted 3 additional wellness days to be used before August 31, 2021;
  • Results of the updated Pulse Survey revealed continued mental health challenges and work-related stressors; based on feedback from academic heads, CAOs, and HR Directors, best practice recommendations including to limit length of meetings, improve support with flex hours, and to remind staff of options such as vacation time, lieu hours, wellness days, unpaid leave, and other HR indicatives; and
  • Working groups continued with consultations with stakeholders about what work will look like in coming years, including preparations for on-campus and fluid work arrangements for those who would like to continue working from home.

    In closing, the VPHRE stated that the University continued its efforts to cultivate a culture of kindness and empathy in response to the COVID-19 pandemic.
  1. Annual Report: Vice-President, International

    Professor Joe Wong, Interim Vice-President, International offered a presentation, which included a progress report focused on five areas within the International Strategic Plan 2017 - 2022. He reminded members that the aim of the plan was to broaden and deepen the University’s global engagement opportunities for students, facilitate new opportunities for faculty members through global research partners, and expanding U of T’s global engagement through communications and alumni outreach.

    Professor Wong stated that much of the international activity was set against the backdrop of COVID-19; the University had pivoted and adapted extremely well, and that he was happy to report good progress on all files in the portfolio.

    Highlights of Professor Wong’s presentation included the following:
  • As part of International student recruitment, University continued to diversify, in service of enhancing the learning and class experience of all of its students by bringing in diverse experience;
  • In aggregate tracking very well for each region, better in some than others (i.e. Asian continent), and below in other (i.e. USA);
  • List of countries from which UofT attracted more than 40 undergraduate registrants increased from 8 countries in 2017 to 12 countries in 2020 (Vietnam and Nigeria were new);
  • Tools, experimenting this year, awarding of international scholar awards. 4 largest divisions, new substantial award for the 2020 admision cycle;
  • As part of COVID response, University had initiated a safe arrival and robust quarantine program;
  • UofT was named a Designated Learning Institute in fall 2020 by the federal government, which reflected the strength of the quarantine program which was viewed as extraordinarily safe and secure; program seen as gold standard among institutions.
  • Continue to support all students, including international students, many on campus, many at home, almost all learning remotely;
  • Tremendous innovation initiatives undertaken to support community building and connection, including an introduction to Toronto initiative; one on one consultations –5,800 students were assisted with various questions about study permits and border issues;
  • University intent on providing all students with global experience - introduced global classrooms as part of an effort to connect professors and students to classes around the world – provided resource tool kit for instructors, special advisors on each campus to encouraged more faculty to engage in global classrooms; and
  • Continued to collaborate across the University with partners around world – launching a new Global engagement index provided a snapshot of internationalization efforts across multiple dimensions;

    In response to a member’ question, Professor Wong stated that in terms of the University’s engagement with the African continent specifically, UofT was currently working with 7 African universities to develop a network around variety of initiatives bounded by larger theme of health, economic development and prosperity. As part of a 2-year process, it was exploring ways to support connections and collaboration.

    The Chair expressed thanks to Professor Wong and his team for the ongoing international initiatives and efforts.
  1. Reports on Debt:
    1. Debt Strategy - Annual Review

Sheila Brown, Chief Financial Officer, noted that the current debt strategy had been approved by the Business Board in 2012. The two key questions examined when conducting the Annual Review were whether the Strategy was still prudent and whether it currently provided sufficient debt capacity to meet the University’s needs.

The current review revealed that both questions were answered in the affirmative; and based on the current estimated timing of the debt requirement for capital projects under active consideration and expected to go ahead by 2026, and the forward assumptions made in the review, the debt policy limit would deliver enough debt to support the University’s capital needs. Based on assumptions for forward projections which may change, the University was looking at a number of capital additions over next years under the 4 Corners Strategy

The CFO reported that her office was also working on an expansion and revision of the strategy to incorporate the off -balance sheet or indirect debt to ensure that any impacts on the University’s financial health was monitored and managed well to ensure future financial health – the consultation process for a revised strategy continued.

In response to members’ comments and questions, Ms Brown stated the following:

  • The University treats debt as scarce resources that are allocated very carefully; it considered it to be very important to continue to act prudently;
  • In terms of debt taken on, some additional capacity needs to be developed, especially with those cases regarding external partnerships for projects that will be revenue generating;
  • Based on its credit ratings which were above the Province, the University had debt capability; and
  • In July 2021, UofT will be entering the UPP – the existing deficit will be crystalized and paid over 15 years (rule of thumb is that, based on the interest rate embedded, if you had $100M deficit, over 15 years you would be paying $10M per year).
  1. Status Report on Debt

The Status Report on Debt to January 31, 2021 was presented for information.

  1. Forecast of University Financial Results at April 30, 2021, prepared as of January 15, 2021

    Sheila Brown noted that the forecast, which was presented annually to the Board for information, contained forecasts of the net income and net assets of the University. Projections were made based on a number of assumptions, including a Long-Term Capital Appreciation Pool (LTCAP) annual investment return rate with sensitivity analysis provided for two other investment return scenarios.

    Ms Brown reported net income for the year was projected to be $475 million, at 7% investment return rate. Net income is projected to range from $457 million (at 5% investment return) to $502 million (at 10% investment return). Net assets were projected to be $7.2 billion, at the 7% investment return rate. The projected range was from $7.0 billion (at 5% investment return) to $7.4 billion (at 10% investment return).

    In response to a member’s comment and question, Ms Brown stated that the University had just completed an annual review for service ancillaries. In its review, there were variations in how ancillary operations were doing as a result of COVID-19 impacts – some ancillaries were heavily affected, and revenues were down considerably, but this was not the case for all as some had reserves. In general, the forecast represented a good number, based on 8 months of actual results. Budgets were prepared without assistance from the University, but the intent is to provide some assistance for those who need help; there will be a variety of ways of resolving these operational challenges to be handled on case by case basis.
  2. Pension Plan Annual Financial Report for the Year Ended June 30, 2020

    Sheila Brown provided an overview of the Business Board’s responsibilities concerning the Registered Pension Plan (RPP) and highlighted the following financial results for the year ended June 30, 2020:
  • Going concern market deficit of the RPP had increased from $239.8 million at July 1, 2019 to $931.6 million at July 1, 2020;
  • This was an increase of $691.8 million, $537.3 million of which was due to the introduction of the PfAD (provision for adverse deviation) requirement under the new provincial funding rules, and $154.5 million of which was primarily due to investment returns of 2.30% which was below the target return for the period, and to changes in actuarial assumptions (particularly to the mortality table), partially offset by employer special payments totaling $72.4 million.
  • The solvency ratio as at July 1, 2020 was 73.8% compared to 79.9% as at July 1, 2019.

    Ms Brown reported that the Pension Plan Annual Financial Report for the year ended June 30, 2020 was approved by the Pension Committee at its meeting on December 1, 2020.

    This item was presented for information and there were no questions from members.
  1. Capital Projects Report: January 31, 2021

    Adrienne De Francesco, Executive Director, Capital Projects Group Planning, Design & Construction presented the Capital Projects Report for the period ending January 31, 2021. The presentation included a comprehensive list of capital projects under construction and in design.

    Professor Mabury commented that the construction market in the Greater Toronto Area continued to present challenges to the University’s current and planned construction needs as it related to labour supply and demand.
  2. Annual Report: Deferred Maintenance, 2020

    Ron Saporta, Chief Operations Officer, Property Services and Sustainability presented the annual report on deferred maintenance.

    Mr. Saporta stated that in fiscal 2020–21, $30.0M was being invested in the deferred maintenance program on the St. George campus. As reported in the 2020 budget report, deferred maintenance funding remained a key budget risk for the institution. The current level of funding for the St George campus would have to be increased to $61.9M to match the 1.45% average level of investment by our peers in Ontario. He added that the deferred maintenance budget was reviewed on an annual basis through the budget process. For the upcoming budget cycle, the Facilities and Services portfolio on St. George campus had submitted a 10-year budget plan to close the gap that included an additional $2.5M for fiscal 2021–22.

    Mr. Saporta stated that the deferred maintenance liability was significant and would have to continue to be managed strategically into the future. The University’s comprehensive deferred maintenance risk model focused on maintaining buildings to minimize the chance of an unforeseen problem having major consequences to the University’s academic and research mission and operating budget.

    This item was presented for information and there were no questions from members.
  3. Report on Employment Equity, 2019

    Professor Hannah-Moffat, Vice-President, Human Resources and Equity, presented the Report on Employment Equity, 2019 for information. She noted the pandemic had delayed the portfolio in preparing this 2019 report to the Board, and that the 2020 report would be forthcoming before the end of the academic year.

    Professor Hannah-Moffat stated that the reports continued to reveal the need to work on retention programs to support and respond to diverse needs of all employees, and further inform inclusivity initiatives designed to enhance employee experience. The 2019 employee survey had an 87.1% response rate, a 6% increase, the highest since it was launched in 2016. The survey was intended to provide a richer data profile of faculty and librarians to support discussions about employment equity issues across the University. Overall, the percentage of rates of staff who identified themselves as racialized persons and persons of colour increased.

    Professor Hannah-Moffat stated that together these reports were meant to demonstrate the University’s commitment and progress to attracting and retaining very diverse talent.

    In response to a member’s question, Professor Hannah-Moffat stated that the University considered gender pay equity issues very seriously. Reports are posted on the Provost’s web site that specifically speak to how the University had addressed gender based salary anomalies. In terms of staff complement, the University had worked very hard to make sure that there was equity across comparable cohorts regarding compensation.
  4. Annual Review of Policies: University of Toronto Health and Safety Policy, Policy with Respect to Workplace Harassment; and the Policy with Respect to Workplace Violence

    On a motion duly moved, seconded, and carried

    YOUR BOARD APPROVED

    THAT the on-going application of the University of Toronto Health and Safety Policy, the Policy with Respect to Workplace Harassment and the Policy with Respect to Workplace Violence, copies of which are attached to the Memorandum dated January 25, 2021 from Professor Hannah-Moffat, Vice-President Human Resources and Equity, be confirmed.
  5. Health and Safety Requirements: Quarterly Report on Compliance

    The Quarterly Report on Compliance was received for information.

OPEN SESSION CONSENT AGENDA

On a motion duly moved, seconded, and carried

YOUR BOARD APPROVED

THAT the consent agenda be adopted.

  1. Report of the Previous Meeting

    Report Number 255 of the Business Board, November 25, 2020 was approved.
  2. Business Arising from the Report of the Previous Meeting

    There was no business arising from the Report of the previous meeting.
  3. Report Number 140 of the Audit Committee, December 1, 2020

    Report Number 140 of the Audit Committee dated December 1, 2020 was received for information.
  4. Date of the Next Meeting – Wednesday, March 17, 2021

    The Chair advised members that the next meeting would be Wednesday, March 17, 2021 at 5:00 p.m.
  5. Other Business

    There were no items of other business.

THE BOARD MOVED IN CAMERA

  1. In Camera Reports of the Administrative Assessors

    UPP Update

    Professor Angela Hildyard, Special Advisor to the President, provided an update on the UPP.
  2. Collective Agreements:
    1. University of Toronto and CUPE Local 1230 (Full-Time and Part-Time), July 1, 2020 – June 30, 2021

      The Collective Agreement between the University of Toronto and CUPE Local 1230 (Full-Time and Part-Time), July 1, 2020 – June 30, 2021, was received by the Board for information.

    2. University of Toronto and OPSEU Local 519, July 1, 2020 – June 30, 2021

      The Collective Agreement between the University of Toronto and OPSEU Local 519, July 1, 2020 – June 30, 2021, was received by the Board for information.
  3. Capital Projects:
    1. New Classroom, Academic, and Administrative Building (Instructional Centre-2 or IC-2) at the University of Toronto Scarborough (UTSC)
      1. Financing Requirement

        On motion duly made, seconded and carried

        YOUR BOARD APPROVED

        The recommendation of Professor Scott Mabury, Vice-President, Operations and Real Estate Partnerships, as outlined in the memorandum dated January 25, 2021, regarding the financing of the New Classroom, Academic, and Administrative Building (Instructional Centre-2 or IC-2) at the University of Toronto Scarborough (UTSC) capital project.

      2. Execution of the Project

On motion duly made, seconded and carried

YOUR BOARD APPROVED

The recommendation of Professor Scott Mabury, Vice-President, Operations and Real Estate Partnerships, as outlined in the memorandum dated January 25, 2021, regarding the
execution of the New Classroom, Academic, and Administrative Building (Instructional Centre-2 or IC-2) at the University of Toronto Scarborough (UTSC), capital project.

b. Utility Services – Devonshire-Bloor Expansion - Execution of the Project

On motion duly made, seconded and carried

YOUR BOARD APPROVED

The recommendation of Professor Scott Mabury, Vice-President, Operations and Real Estate Partnerships, as outlined in the memorandum dated January 25, 2021, regarding the
execution of the Utility Services – Devonshire-Bloor Expansion capital project.

  1. Property Acquisition Matters
    1. Property No. 1

      On motion duly made, seconded and carried

      YOUR BOARD APPROVED

      The recommendation of Professor Scott Mabury, Vice-President, Operations and Real Estate

      Partnerships, as outlined in the memorandum dated February 2, 2021, regarding the acquisition of property number 1.

    2. Property No. 2

      On motion duly made, seconded and carried

      YOUR BOARD APPROVED

      The recommendation of Professor Scott Mabury, Vice-President, Operations and Real Estate

      Partnerships, as outlined in the memorandum dated February 2, 2021, regarding the acquisition of property number 2.


The Board returned to open session.


The Chair thanked members for their attendance and participation in the Board meeting.

The meeting adjourned at 7:20 p.m.



February 7, 2021