Report: UTM Campus Affairs Committee - March 27, 2024

1. Chair’s Remarks
   
   The Chair welcomed members and guests to the Committee’s cycle 5 meeting. Since the agenda featured a capital project, the Chair reminded members about the process for governance consideration of such items.  Finally, he noted that a speaking request to discuss the ethical conduct of a UTM student was received, which was declined.  

2. Answering Calls for Truth and Reconciliation
   
   Tee Duke, Director of the Office of Indigenous Initiatives (OII), commenced her presentation with acknowledgments of traditional territories and gratitude to the UTM community. She highlighted the role of the OII and the Indigenous Centre in fostering relationships with Indigenous communities. She emphasized the collective responsibility of Truth and Reconciliation efforts, challenging the notion that it fell solely on Indigenous communities.
   
   The achievements of the OII, including expanded visibility and the establishment of a Teaching Lodge, were outlined. Ms Duke also discussed challenges related to space limitations, emphasizing the need for collective support and concluded her presentation by inviting continued collaboration and participation from the UTM community.
   
   Members expressed admiration for the accomplishments of the OII and the team, recognizing the impact of their work and expressing anticipation for future endeavors.

3. Capital Project (Level 3): Report of the Project Planning Committee for University of Toronto Mississauga Residence (Phase IX) – Project Scope and Sources of Funding
   
   At the invitation of the Chair, Luke Barber, Acting CAO, provided a presentation about the proposed capital project.  He provided an overview of the Residence Capital Project, outlining the project's history, emphasizing its compliance with sustainability standards and since the committee’s consideration at the last meeting, the necessary adjustments made to meet energy efficiency targets.
   
   The residence was scheduled to open in fall 2026, was to accommodate 400 beds and expand the on-campus housing capacity to 1,000 residents. Key features included apartment-style units, amenity spaces, and the demolition of some existing structures to make way for the new development.
   
   Updates since the previous meeting included the addition of a rooftop photovoltaic array to exceed energy intensity targets, as well as plans for building envelope improvements. Mr. Barber reaffirmed the project's alignment with institutional goals and its progress towards meeting energy efficiency standards.
   
   On motion duly moved, seconded, and carried
   
   YOUR COMMITTEE RECOMMENDED
   
   THAT the project scope of the University of Toronto Mississauga (UTM) Residence (Phase IX), as identified in the Report of the Project Planning Committee for the UTM Residence (Phase IX), dated March 8, 2024, be approved in principle; and,
   
   THAT the project totaling 6,538 net assignable square metres (nasm) and 10,088 gross square metres (gsm), be approved in principle, to be funded by UTM Residence Construction Reserve, UTM Operating Reserve, and Financing.

4. Overview of the UTM Campus Operating Budget for 2024-25
   
   The Chair reminded members that they received an overview of campus strategic priorities by the Vice-President & Principal, and the Vice-Principal, Academic & Dean in the fall and in Cycle 4, a presentation on the University’s Budget Report 2024-25 and Long-Range Budget Guidelines 2024-25 to 8027-29 was also provided. He noted that these earlier items culminated in the campus operating budget presentation today. 
   
   He invited the following presenters for the item:  Professor Ian Orchard, Vice-President & Principal, and from the Budget, Planning & Finance Office, Christine Esteban, Executive Director, and Rabeeya Amjad, Director, Planning & Analysis to provide the presentation. 
   
   Professor Orchard began the presentation by framing the budget within U of T's academic story, highlighting two significant changes over time. He noted that twenty years ago, provincial funding accounted for about 45% of the university's total revenue, whereas today, it had fallen under 20%. Conversely, he said, U of T had risen 16 places in the QS world rankings over the same period. Despite decreased government funding, U of T had become a leading public university, showcasing positive change grounded in research and teaching strength.  He emphasized the hard work and ingenuity of the community, stating that U of T achieved seemingly impossible feats through creative solutions. Despite challenges, such as recent changes to federal and provincial policy, UTM projected a balanced budget through 2028-29, overcoming a projected deficit of $150M at the start of the pandemic in 2020.  He remarked that there was a need for adaptive budget solutions in a changing financial context.
   
   Ms Esteban continued the presentation by reporting that in 2024-25, UTM generated $455M in gross revenue, allocating $85M to university-wide contributions. This left $370M for campus-specific budgets, which funded departments and services. Despite mid-year budget changes, UTM managed expenses and set funds aside for future projects.
   
   By 2020, UTM faced a $150M deficit over five years. Last year, UTM balanced the budget with a series of coordinated steps, creating much of the savings by introducing administrative efficiencies and slowing down spending on big capital projects. UTM also planned to generate more revenue by increasing summer enrolment and adding 100 more full-time international students to our fall intake targets.
   
   Ms Esteban explained that since then, two significant changes had occurred:

• Increased Compensation Costs: Last September, the University agreed to raise salaries for Faculty, Librarians, and employees, adding about $12M more to salaries in 2023-24. This necessitated planning for reduced spending in other areas.
• International Enrollment Shortfalls: In summer 2023, only 66% of our international enrollment target was reached, partly due to limited online course offerings. Learning from this, UTM increased online course offerings to 31% in summer 2024. Despite improved performance in fall 2023, UTM still fell short by 175 international students, impacting revenue projections for the next five years.
  
  These changes tightened UTM’s budget context, which were marked by:
• Historical decreases in government operating grants' real value.
• Tuition constraints due to limited capacity to increase international tuition and frozen domestic tuition rates.
• Disparity between domestic tuition rates and educational costs.
• Increased divisional contributions for institution-wide priorities.
• Escalating capital costs, rising by up to 17.5% annually since 2020 due to inflation and supply chain disruptions.

Chaired by the Vice-President and Principal, the Strategic Planning Advisory Committee (SPAC) worked to address budget challenges and made final budget decisions based on campus priorities, as follows.

• Personnel:

Last fall, UTM adjusted its complement plan to adapt to new budget pressures. The committee chose to maintain investment in existing student supports and faculty, librarian, and staff complement. However, new hiring was scaled back, with only four faculty searches conducted in 2023-24 instead of the initially planned 19.

• Capital Developments:

Following provincial and federal announcements in early 2024, spending on new infrastructure projects slowed down. While investments in critical projects like the new residence continued, other building plans were scaled back. Projects such as the planned parking structure were paused, and ambitious developments, like the F2 building, were shelved due to budget constraints.

• Other:

Budget strategies introduced last year were continued, including maintaining reductions in non-compensation budgets, academic carry-forward allowances, and one-time-only budgets for new initiatives. Additionally, strategies were implemented to offer a portion of courses online, increase international student enrollment, and manage faculty searches. UTM deferred 15 of the 19 planned faculty searches starting in 2023-24 and reduced future capital projects. 

UTM presented its targets for new undergraduate enrollment in 2024-25, aiming for 3,942 new students, with 68% domestic and 32% international. Over the past decade, enrollment at UTM fluctuated due to various challenges, including those from the pandemic. In 2022-23, falling below targets for both domestic and international students prompted a more conservative approach. Efforts in 2023-24 led to strong domestic enrollments but still fell short by 175 international students. To address this, UTM accelerated strategic enrollment management efforts, showing early signs of improvement compared to other divisions at U of T.

Ms Amjad outlined UTM’s enrollment targets for 2024-25, noting that UTM was aiming for 15,816 undergraduate students (73% domestic, 27% international) and 515 professional graduate students (65% domestic, 35% international). Compared to the previous year, undergraduate enrollment increased by 7%, with domestic and international numbers up by 9% and 3% respectively. Graduate targets remained steady, but domestic enrollment decreased by 7% while international rose by 14%.  The shift reflected UTM exceeding its new intake target in fall 2023 and strong continuing enrollment, particularly from domestic students. However, UTM's graduate enrollment has consistently fallen short of target since 2019, prompting a conservative projection for 2024-25.

Key revenue assumptions included provincially frozen undergraduate domestic tuition, potentially resulting in a $2 million revenue reduction if the freeze continued. Non-Ontario resident undergraduate tuition was set to increase by 5%, while international tuition would rise by 2%. Graduate domestic tuition was planned to stay flat, with international rates increasing by 0-2%. Revenue growth was slowing due to lower-than-expected international undergraduate intake, a freeze in base operating grants, and market limits on international fees. The budget assumed additional operating grants to offset the impact of the domestic tuition freeze. Advocacy continued for a 10% increase in operating grants, which could result in an additional allocation. Any significant budget variances would be addressed through the University's budget model.

UTM’s revenue categories were shown with UTM's revenue at $455 million, comprising mainly tuition (66%), operating grants (14%), divisional revenue and reserves (10%), and allocation through the University Fund (7%), among other sources (3%). After deductions, $54M went towards university-wide costs, and $31M was allocated for student aid, including the international scholarship program. After contributing $85M to U of T as a tri-campus, UTM's net revenue amounted to $370M.

The 2024-25 operating expense budget for UTM was then summarized.  Expenses amounted to $370 million, categorized as follows: salaries and benefits for faculty, librarians, and staff excluding Student Services (66%); self-funded student services (8%); equipment and supplies (7%); infrastructure, deferred maintenance, and renovations (5%); facilities and maintenance (4%); reserves and contingencies (4%); research and library costs (2%); campus-specific student aid (2%); and capital construction (2%). Notably, the largest investment annually was in personnel, encompassing faculty, librarians, and staff, who played a pivotal role in advancing the academic mission.

Ms Esteban continued the presentation to discuss complement planning. Between 2010 and 2020, UTM implemented an ambitious plan of faculty hiring, adding approximately 150 net new positions, which significantly reduced the student to faculty ratio. However, the same investment was not made in supporting staff during that period, necessitating catch-up efforts to ensure adequate resources for the campus. The four faculty searches, funded from UTM's operating budget, impacted the 2024-25 budget.  For staff hires in 2024-25, positions included facilities staff for maintaining the new science building and limited administrative positions, including approximately three continuing positions and 11 one-time-only positions with a two-year term.

Additionally, UTM participated in U of T's Diversity in Academic Hiring Fund and Indigenous Hiring Fund for both faculty and staff, with approvals for new hires. Specifically, a new hire for the UTM Department of Psychology was approved for Diversity Hires funding for the 2024-25 fiscal year.  It was also noted that UTM continued to invest in students. The efforts to diversify internationally continued, including through international scholarships, to reduce dependence on a single source country. UTM allocated a percentage of international tuition for international scholarships, with the percentage increasing since 2021-22 and remaining at 6% annually thereafter. Additionally, UTM invested in prestigious entrance awards of $25K or $45K, renewable for three years, to recruit promising students nationally and internationally and ensure accessibility to a world-class education regardless of financial circumstances.

Investment in new initiatives for 2024-25, related to UTM’s strategic plan:

UTM launched the Student Advising Project and approved the hiring of a Student Recruitment and Admissions Officer to strengthen enrolment operations. To promote collaboration and belonging, UTM supported the continued and expanded delivery of SEE@UTM, a pathway for Black students in Peel District High Schools. For research discovery and impact, UTM approved the recruitment of an Academic Graduate Coordinator to foster graduate student training and support. Additionally, a Research Communications Officer position was approved to amplify faculty work and advance research goals. With respect to the goal of embracing the community, UTM hired two positions for the UTM Co-op Internship Program, connecting students with job opportunities in priority industries. 

Lastly, UTM invested in sustainability and climate-positive strategies, including implementing energy efficiencies, as part of its goal to go carbon neutral before 2043 and capture more carbon emissions by 2050.  The budget included allocations for new buildings, renovations, and maintenance, contributing to efficient and sustainable operations. Plans included opening the student services hub, the new science building, and developing proposals for renovated space. Additionally, budgets were allocated for UTM’s Infrastructure Plan, renovations, and deferred maintenance.

Following the presentation, members expressed gratitude for the actions outlined in the presentation despite the challenges faced and complimented the thoroughness of the documents shared.  In response to a member’s question about the modification or cancellation of the F2 building project, it was clarified that the project was indeed canceled.  A member thanked the presenters and inquired about advocacy efforts, leading to a discussion about ongoing advocacy at federal and provincial levels. It was mentioned that UofT was advocating for an increase in the indirect cost of research and discussing funding allocation for international students. Additionally, advocacy efforts led to adjustments in housing loan programs benefiting universities and colleges.

Further clarification was given regarding the cancellation of the F2 project, explaining that while the academic building was canceled, the construction of a second Central Utilities Plant (CUP2), which was originally included in that project, would proceed to meet energy needs and sustainability goals. Concerns about graduate student enrollment were addressed, particularly in Professional Masters programs, where factors such as high tuition and a competitive job market were influencing enrollment numbers. Efforts to attract students included proposing a zero percent tuition increase and intensifying marketing efforts. It was clarified that the enrollment issues were specific to Professional Masters Programs in accounting, separate from thesis research-based Masters programs. 

5. Assessors Reports
   
   At the invitation of the Chair, Mr. Barber provided an update on deferred maintenance.  He highlighted the institutional 2023 deferred maintenance report, which was published earlier that year and presented through university governance.  He explained the concept of deferred maintenance and presented various metrics indicating that UofT lagged behind in deferred maintenance compared to provincial and national averages. He also discussed the scarcity of funding despite rising costs, leading to a decline in investments.
   
   Mr. Barber pointed out that UofT’s deferred maintenance backlog increased by 1.8% last year, reaching 18.2% overall for the tri-campus. Despite UTM having relatively newer buildings, funding remained insufficient to address deferred maintenance adequately. He outlined the strategy to address this, emphasizing a data-driven approach to funding allocation and integrating deferred maintenance work into new construction and academic projects. He highlighted the upcoming opening of the Student Services Hub as an example of incorporating maintenance work into ongoing projects.
   
   Members had no questions.

CONSENT AGENDA

 

On motion duly moved, seconded, and carried

YOUR COMMITTEE APPROVED

THAT the consent agenda be adopted and that Item 5, report of the previous meeting, be approved.

6. Report of the Previous Meeting: Report Number 63 – February 8, 2024
7. Business Arising from the Report of the Previous Meeting
8. Date of the Next Meeting – Tuesday, May 7, 2024
    

9. Other Business

   
   There was no other business.
   
   The Committee moved In Camera.

IN CAMERA SESSION

10. Capital Project (Level 3): Report of the Project Planning Committee for University of Toronto Mississauga Residence (Phase IX) – Total Project Costs and Sources of Funding+
    
    On motion duly moved, seconded, and carried
    
    YOUR COMMITTEE RECOMMENDED
    
    THAT the recommendation regarding the Total Project Cost and Sources of Funding for the University of Toronto Mississauga Residence (Phase IX) capital project contained in the memorandum from the Acting Chief Administrative Officer, UTM, dated March 8, 2024, be approved.
    
    The Committee returned to Open Session. 

The meeting was adjourned at 4:31 p.m.

April 3, 2024