Report: Planning and Budget Committee - October 31, 2019

1. Chair’s Remarks
   
   The Chair welcomed members and guests to the meeting.
    
2. Assessors’ Reports 
   
   In the Provost’s absence, the Report of the Vice-President and Provost was delivered by Mr. Trevor Rodgers, Assistant Vice-President, Planning and Budget, and Ms. Meredith Strong, Director of the Office of the Vice-Provost, Students.  
   
   Status of the Strategic Mandate Agreement (“SMA3”) 
   
   Mr. Rodgers noted for members that in the 2019 Ontario Budget, the government had announced that the next round of strategic mandate agreements would include a performance-based funding model for colleges and universities that would link a larger proportion of operating funds to outcomes, measured by 10 performance metrics, with 9 common metrics across all institutions and 1 institution-specific metric in the area of economic impact. 
   
   Metrics would be grouped as follows: 
   
   Six metrics in the area of skills and jobs:
    
   1. Graduation rates
   2. Graduate employment
   3. Graduate earnings
   4. Experiential learning opportunities
   5. Skills and competencies
   6. Enrolment in areas of institutional strength
      
      
      Four metrics in the area of economic and community impact
   7. Tri-council research funding
   8. Research funding from industry sources
   9. Community impact as measured by institutional enrolment
   10. Economic impact (as defined by the University)

Mr. Rodgers explained that this would be a new accountability mechanism for existing funds and would shift funding that had been tied to enrolment into a new performance-based funding envelope.  It was expected that the performance-based envelope would be approximately $170M in 2020-21, growing to $400M by 2024-25 (or 60% of total provincial funding - which represented approximately 12% of the total operating budget).  Members were advised that the remaining operating grant would continue to be attached to the University’s existing enrolment corridor, which included the domestic student enrolment target negotiated in SMA2, plus the growth the University had achieved in the graduate expansion program over the last several years.  It was stated that there would be no funding for additional graduate spaces in SMA3. 

In closing, Mr. Rodgers reported that input from the sector had been reflected in the final SMA3 technical documents.  He added that a committee of Deans were working to advise the President and Provost on the structure and content of the SMA3 agreement, including how best to allocate the performance funding envelope across the 10 metrics. The first round of bilateral discussion with the Ministry was scheduled for November 25, 2019, with a target to finalize the agreement by March 31, 2020. 

In response to a member’s request for further clarification regarding how the metrics would be weighted and funding allocated as a result, Mr. Rodgers explained that there was a formula to weight funding across the 10 metrics in the agreement.  He advised that some parameters had been provided including that no less than 5% and no more than 25% could be allocated to any one metric. 

A member asked how the funding would be distributed to the divisions once received by the University.  In response, Mr. Rodgers stated that it was not the University’s intent to roll funding down to divisions based on all of the performance-based metrics, and that the University would do so in situations where such metrics-based funding allocations might support divisions to take action in areas within their local control.

In response to a member’s question as to how ‘Community Impact” would be defined, Mr. Rodgers advised that this would be a measure of the University’s enrolment as a proportion of the census population of our local municipalities (Toronto and Mississauga). 

A member raised concern as to whether the Graduation Rate metric would create financial disadvantages given the number of students registered with Accessibility Services who, because of their disabilities, were taking longer to graduate.  Mr. Rodgers clarified that the premise of the new funding model was that it was structured to have institutions measured against their own performance not against that of other universities.  He added that the same rationale applied to the Student Earnings metric.  Recognizing that many students were engaged in not-for-profit work, the intent was not to penalize that work or discourage students from engaging in it.  For that reason, so long as the University’s performance on metrics was consistent with past patterns, performance would be contextualized and not result in a financial disadvantage just because other institutions ‘out performed’ it on any one measure.  

Student Choice Initiative (SCI)

Ms. Strong provided a brief update on the Student Choice Initiative which included the following highlights, noting that reported results were for the Fall 2019 term only: 
 

• In total, 523 optional fees had been identified. 
• Depending on a student’s registration status, each may have had upwards of 30 optional fees presented to them on the opt-out portal. 
• Students had the opportunity to make selections in the opt-out portal for each term.
• The overall median opt-out rate for student services and student societies was 22%
• Reduction in revenue from student fees due to opt-out of the optional fees was $1.3M - of that, $300,000 was attributed to student services; with the total impact to student societies at just over $1M spread across the 45 student societies.
• As a percentage of the total non-tuition fees that would have been collected if there were no opt-outs, the reduction in the total revenue for student services and student societies was just over 2%.
• The Winter term opt-out period would begin November 1, 2019.
  
  A member questioned what would happen in the eventuality that a judicial review of the SCI was successful.  Ms. Strong remarked that the University was monitoring the case and to date had no other direction from either the courts or the government. She added that until such time as the University did receive such direction, it would continue forward with the SCI as per the directive issued by the government. 
  
  In response to a question, Ms. Strong advised members, that until one full year of data had been compiled it was premature to accurately report whether any one student group had been disproportionately impacted.  In response to a specific question pertaining to The Varsity, she stated, that The Varsity was in the middle in terms of percentage of opt out rates. 
  
  A member asked whether there was any significant difference between the optional student service fees indicating that students may deem those services less valuable. In response, Ms. Strong stated that there were no significant deviations. 
   

3. Budget Model Review (“BMR”) 

Mr. Rodgers provided an update on the BMR which had begun in Spring 2018 and was nearing its conclusion.  Mr. Rodgers noted that key to the success of the University’s budget model was its adherence to three principles:
o    Transparency (clear delineation of revenue and expense by division)
o    Incentives (local decision-making and allocations linked to performance indicators, revenues, and costs)
o    Engagement (consultation and review processes)

Mr. Rodgers noted that the University’s budget model had been adopted in 2006, and that the last comprehensive review had been undertaken in 2010-11. He explained that as provincial support continued to decline and began to shift toward performance-based metrics, it was an opportune time to ensure that the budget model would continue to serve the University well into the future.

The objective of the BMR was to improve budgetary processes across a number of different areas. The Review was divided into five pillars:
1.    Inter-divisional Teaching Working Group
2.    Alternative Funding Sources Advisory Group
3.    Strategic Mandate Agreement Budget Implementation Committee
4.    Operational Excellence Working Group
5.    Tri-Campus Budget Relationships Working Group

The Steering Committee would play a key role in harmonizing the recommendations of the working groups and in determining when and how to implement those recommendations that it endorsed.  

Mr. Rodgers concluded his report by indicating that the BMR was scheduled to conclude by December 2019. 

In response to a member’s question. Mr. Rodgers reported that results had not yet been received from the UniForum benchmarking program.  He added that those were expected at the end of November 2019, and that the intent was then to establish a separate committee to review those results over time. 
 

4. Academic Plan: Rotman School of Management’s A Catalyst for Change: Academic Plan 2019-2024

The Planning and Budget Committee received the Rotman School of Management’s A Catalyst for Change: Academic Plan 2019-2024 (Rotman’s), for information. 

Professor Tiff Macklem, Dean of the Joseph L. Rotman School of Management gave a brief      presentation speaking to the four sets of strategic priorities and high-level goals for 2019-2024 and how progress on each would be measured:

1.    Advance the frontiers of management thinking
2.    Deliver transformational management education
3.    Take insight to impact
4.    Harness the power of community
 

As part of the ensuing discussion regarding a new separate building for undergraduate students, Dean Macklem explained that Rotman would have preferred to add on to the existing building, if space had been available.  As that was not possible, the Faculty was moving forward with the next best alternative - a separate building in close proximity to the existing Rotman building, focused on student needs (e.g. classrooms, student facing frontline services, and community spaces). 

A member asked Dean Macklem to elaborate on how “putting research and learning into action” would be measured.  In response, Dean Macklem acknowledged the challenge of measuring this in its entirety, but identified possible metrics, including citations or media mentions, faculty appearances on government taskforces, and corporate sponsorships.

Dean Macklem reported that the academic plan was the result of significant consultation.  He clarified that while an outside consultant had been engaged for the Faculty’s brand strategy and that the academic plan drew on that process, the academic plan itself had been developed using the School’s considerable in-house expertise.

The Chair congratulated Rotman on its carefully developed plan. 
 

5. Capital Project: Report of the Project Planning Committee for 700 University, 17th floor: Fit-out for the Faculty of Arts & Science Interim Space Needs

The Committee received a presentation from Professor Jay Pratt, Vice-Dean Research and Infrastructure, Faculty of Arts and Science and Ms. Christine Burke, Director, Campus and Facilities Planning.  

Highlights of the capital project included the following: 
•    Leased space on the 17th floor of 700 University presented an opportunity for the Faculty of Arts & Science to fit-out space to serve as interim accommodations for academic and administrative units that need to relocate or need more space while the Faculty continued its work on long term space planning.
•    The project had developed based on the needs of the Department of Sociology, and the Faculty’s Office of Information & Instructional Technology (IIT).
•    IIT would move into the space upon completion, while the balance of the space would be used to accommodate immediate staging needs.
•    IIT would likely occupy the leased space for 5-10 years.
•    The space vacated would remain within FAS and be allocated to address other pressing space needs. 
•    The same architects engaged for the 9th floor (a project previously allocated to the 4th floor), had been retained for this project. 

As part of the discussion, the following aspects of the project were clarified:
•    Key fob access would be required after 6:00 p.m., and there would be differential security access per floor.
•    The project overall was working to be as flexible and efficient as possible, with more shared and collaborative work stations located at the periphery, offices located toward the interior of the space, and less space allocated to hallways. 
•    Future planning considered a relocation of the faculty of the Sociology department into a redesigned larger Sidney Smith Hall, but that would not likely occur for another 10 years.
•    Only the back-office function of IIT would be relocated; the student facing front office would remain on campus. 

On motion duly moved, seconded and carried

YOUR COMMITTEE RECOMMENDED

THAT the Report of the Project Planning Committee for 700 University: Fit-out for the Faculty of Arts & Science Interim Space Needs, dated October 2, 2019, be approved in principle; and,

THAT the project totaling 5,238 rentable square metres (sm), be approved in principle, to be funded by the Faculty of Arts and Science Divisional Reserves.

OPEN SESSION CONSENT AGENDA

On a motion duly moved, seconded, and carried 

YOUR COMMITTEE APPROVED THAT
 
the consent agenda be adopted.

6. Reports of the Previous Meeting - Report Number 188 – September 17, 2019
   
   The Report of the Previous Meeting was approved.
    
7. Business Arising from the Reports of the Previous Meetings
   
   There was no business arising from the reports of the previous meetings. 
    
8. Date of the Next Meeting – Thursday, January 9, 2020, 4:10 – 6:10 p.m.
   
   The Chair reminded members that the next meeting would be held in the New Year on Thursday, January 9, 2020. 

END OF CONSENT AGENDA

9. Other Business
   
   There were no items of other business. 

THE COMMITTEE MOVED IN CAMERA.
 

10. Capital Project: Report of the Project Planning Committee for 700 University, 17th floor: Fit-out for the Faculty of Arts & Science Interim Space Needs - Total Project Cost and Sources of Funding
    
    On motion duly moved, seconded and carried
    
    YOUR COMMITTEE RECOMMENDED
    
    THAT the Acting Vice President, Operations’ recommendation, as outlined in the memorandum dated October 21, 2019, regarding the Report of the Project Planning Committee for 700 University, 17th floor: Fit-out for the Faculty of Arts & Science Interim Space Needs be approved.

The Committee returned to Open Session.

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

The meeting adjourned at 1:26 p.m.

November 4, 2019