Well, what to say this week, except that the ideological and political basis for the financial/employment/governance/morale/quality crisis at Queen’s keeps getting clearer. When we call something ideological, we are recognizing that while it might be presented as being true or factual or common sense, it actually arises from a particular set of beliefs and values, and these are often heavily biased towards those in positions of power. See below.
1. The Board of Trustees meets this weekend. As staff members wait to find out who has and has not been approved for the Voluntary Exit program, who will and will not be laid-off, we were shocked (well, not really – and if you have been reading these newsletters you will not be either) to read that the University is now projecting an operating budget surplus of $36.4 million. Yes, a surplus. This surplus is based on $69.8 million in returns from the Pooled Investment Fund, aka the PIF, about which QCAA, the unions, and others have been asking questions since last fall. Here is the relevant section from of the Financial Projection, a report submitted by the Vice Principal (Finance and Administration) and included in the Board of Trustees’ agenda package:
The annual operating budget includes Pooled Investment Fund (PIF) income of $5.2 million… PIF returns are volatile and should not be relied on to support on-going operating budget expenditures beyond the operating budget allocation. The PIF has experienced losses in two of the last four fiscal years. At February 29, 2024, PIF returns were $69.8 million, which is $64.6 million in excess of the $5.2 million budgeted. Should these returns materialize at April 30, 2024, the projected operating budget surplus will be $36.4 million… Note that these returns can change substantially by the April 30, 2024 fiscal year-end. The PIF investment income greater than budget, should it materialize, will be allocated to the general capital reserve to fund priorities in support of the University’s academic and research mission, and to cover future PIF investment losses. (p. 36)
In other words, despite this windfall, the Vice Provost and other senior administrators have decided not to use this money to deviate from austerity measures. The University argues it would be imprudent to do so because markets are volatile. Indeed, they are, and sometimes that volatility leads to significant gains. We argue that once the income has been earned, it is cruel and irresponsible for the University to perpetuate a budget ‘crisis’ that will lead to significant job loss and threaten the academic mission at Queen’s. The decision to keep the University on the austerity track, to grow capital reserves and prioritize future buildings over the livelihoods of current employees, is a political one.
2. The Board of Trustees’ agenda package (p. 73) also includes the operating budget for 2024-25, which projects a $35.7 million deficit, that is, $700,000 less than this year’s projected operating surplus of $36.4 million. As we’ve noted previously, Queen’s has a history of over-projecting deficits. This past year was no exception. You’ll remember that last spring’s budget projected a deficit of $62.8 million. The financial projections for this week’s Board of Trustees’ meeting now anticipate a $36.4 million surplus. If that figure holds, the difference between the initial projected figure and the actual outcome will be a whopping $99.2 million. Even without the income from the PIF, the reduction from the projected deficit to the end-of-year reality would be $34.6 million. This is where we remind you that the University’s budget, like all budgets, is a projection; it is not a representation of funds that have actually been earned or spent.
3. In the past couple of weeks, two credit rating agencies have released their reports on the financial health of Queen’s. S&P kept their rating at AA+ and Morningstar DBRS kept their rating at AA. Clearly, these agencies do not agree with the Provost, who, just five months ago, suggested that the university was at risk of closure (he has since tempered his rhetoric). Both reports present the University as an extremely stable institution. As Morningstar DBRS reports: “Queen’s benefits from a relatively strong balance sheet and a large pool of internal reserves, which provides financial flexibility to endure a difficult operating environment. It has one of the strongest liquidity positions (expendable resources were 204.8% of the University’s total debt as at April 30, 2023) among Morningstar DBRS-rated universities.”
For relative comparisons in Ontario, Queen’s credit rating of AA+ from S&P is the same as the University of Toronto’s, and higher than the ratings received by McMaster, Guelph, Western (AA), York (A+), Laurier, and Brock (A).
4. This week staff in FAS who applied to the Voluntary Exit program start finding out if their applications have been accepted. In refusing to simply accept all applications from those who have made the difficult decision to submit them, administrators in FAS display a view of staff as cogs in a wheel rather than people who deserve respect and consideration.
5. Also in the Board of Trustees agenda package (p. 58): A letter from the Society of Graduate and Professional Students (SGPS) President Emils Matiss calls for members of the Board of Trustees to turn their attention to the on-going and worsening funding crisis for graduate students. Deficit mitigation measures “could severely impact even the most resilient departments and academic programs,” and “will undoubtedly hinder efforts to increase student stipends.” Matiss continues, “It is widely recognized that our stipends do not meet the living costs of our students, leading to significant stress and failing to attract top talent, which in turn diminishes the quality and output of Queen’s research. This situation calls for ongoing, open discussions about how to advocate for increased financial support when additional funds might necessitate reallocating resources from other university areas.”
6. The last newsletter mentioned that members of the York University Faculty Association had passed a motion of non-confidence in senior administrators at York. More than 500 faculty members attended the special meeting for the vote. This article, published in Canadian Dimension magazine, discusses the reasons for the vote. They are not unfamiliar.
7. Also from York: At a recent town hall meeting, senior administrators were questioned about the financial and academic rationale for hiring Nous, the consulting firm to which York has paid more than $7 million and which has recently been hired by Queen’s. I’ve excerpted part of the response from York’s VP Finance and Administration (who previously worked at Laurentian). As this quotation shows, although Nous was hired to assist with “efficient change management,” six years and millions of dollars later, it still isn’t clear that the process has had a serious impact on improving the quality of services:
“Nous was hired on a three-year contract to lead us through what efficient change management looks like, then work beside us as we built skills, and then finally to leave us with some lasting skills, which is exactly what’s happened, and a team now led by [Executive Director, Service Excellence Program within the Vice President Academic & Provost office] is indeed doing exactly what Nous had come in to teach us to do.
“In terms of the return on investment, we’ve been part of the Cubane UniForum process of benchmarking our cost structures against other universities. We’ve been part of that process since 2017. We are one of the Canadian early adopters, along with UBC and McMaster. There are now many Canadian universities, so we don’t have just international comparators; now we have a lot of Canadian comparators, about our administrative cost structures.
“At the time we brought in Nous to start our process of administrative redesign for efficiency purposes and service improvement, we recognized there’s about a $50 million improvement potential – difference between our cost structure and other institutions that are similar in their size and research intensity. So, we’ve actually set an objective of some portion of that, more like $20 million, to save over a three-year period. A lot of that we have been able to achieve by reducing the FTE required to deliver some of our services in Finance and HR, but also, and importantly, because the community wanted to improve our services. So, it doesn’t always turn out to be exactly (that) you save money, but our program wasn’t exactly aimed at efficiencies or cost containment, it was also aimed at freeing up resources in order to do more things including deliver better services.
“So, you know, I think the jury is still out on if we’ve had enough of a lasting impact on our administrative service quality. I think that the surveys we do suggest that we have had an impact on quality; on cost I think we are going to have to continue that, as the President talked about in her opening remarks [where she admitted that some management staff on the administrative side may need to be cut].”
Queen's Coalition Against Austerity 