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MAY 9, 1991

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"The first objective was to get a clear under¬
standing of the roots of our problem "

"The formula and tuition fees produced fewer
dollars than our costs "

M

'We 're committed to maintaining the quality of
what we offer "

1991-92 College budget shows possible four and
one half million dollar shortfall
For some time now, Vancouver Community College has
been faced with serious budget difficulties. College revenues
have not matched expenses for several years. The basic
problem, identified by College administrators, has been that
funding methods for B. C. colleges, particularly those spe¬
cializing in vocational programs, do not work.

In the spring of 1990 the College Board received a

of concern: ESL grant revenue. Adjustments in the formula
were made which meant that costs and revenues were about
even.

But despite these changes and grant adjustments, our
financial problems remain. Currently, for 1991 -92 we face
a projected budget shortfall between revenue and expenses

of almost four and a half million dollars.

commitment from the Minister of Advanced Education to
review the revenue and expense gaps that had been plaguing
VCC for several years. Those gaps were projected to
continue, despite adjustments to the support dollars gener¬
ated by the funding formula. The focus became instructional
costs and instructional revenue provided through the Minis¬

In recent weeks there has been a lot of talk, inside the
College, about the budget situation. To clear up confusion
and provide more information, Spectrum spoke to Acting
President Ross Carter about the 1991-92 budget.

try grant.

for this fiscal year?

Last fall the College administration made important ad¬
justments to many of those expensive programs, but those
changes were not without controversy. Over a period of two
months, nine public meetings were held to discuss the pro¬
posed 1991-92 program profile.
In addition, (he Ministry addressed one of the largest areas

Hard information about the budget isn't available yet.
We're dealing with a situation where the province has not
provided a budget. Everybody at all levels, therefore, has
to make assumptions about what it's likely to be.
SEE NEXT PAGE

VANCOUVER
COMMUNITY

COLLEGE

Can you give us an overview of the budget situation

PAGE 1

FROM PAGE 1
We've been working on this for over
a year, because we foresaw then, that
if the trend which has appeared for
the last two or three years continued,
there would be a gap between Col¬
lege levenues and expenses. If that
continued to widen each year as it

of years and that was more or less
fixed up as of last year. But it was
clear that there was still a problem
and so the focus became the gap in
funding for instruction.

We felt, therefore, that we should do
something about this, long before we
reached that point. Not that we
haven't been doing something in
other years. In fact over the last two
or three years some fundamental
adjustments have been made in the
budget.
So you took action ... and that

More than that, a task force was
struck to address VCC's long term
problem. The task force consisted of
Ministry officials, our appointees and
Bob Elton, a financial consultant the

Ministry had used in the past and
who had already examined the VCC
budget from another point of view.
We began with an agreement that

VCC did have a problem.
And some strategies emerged from

that process?
The first objective was to get a clear
understanding of the roots of our
problem. We had to separate VCC's

Is that what has been referred to in
the past as the problem with the

Yes. In the process of examining the
fiscal base for instruction, we identi¬
fied some programs in the occupa¬
tional areas, which for a variety of
reasons, were not performing as the
College expected. They were not

program profile?

drawing students or pioviding skills

But that is a paper gap. In budget
planning you look at the program

expected to be, if we do meet our

that employers wanted, in the way the
college was offering them. So there
was a whole array of reasons why a
handful of programs were not work¬
ing as we felt they should.

And in the process of dealing with
the fiscal side of things, those pro¬
grams emerged as areas to work on.
So the College got at that element,

either by combining them with other
programs or reducing them or initiat¬
ing changes in the curriculum ...
whatever. A whole array of ap¬
proaches.

And that resulted in the revised
'91-'92 program profile?
Yes. But that still left a considerable
number of program areas where the
funding was not equal to the ex¬
penses of the program.

wasn't matching VCC's real costs?
Yes, that's right. There are two parts
to the funding formula. One funds the
actual cost of instruction and immedi¬
ately associated instructional activi¬
ties and the other part is for support
services. We have been addressing
the support services side for a number

PAGE 2

The projected gap (as of Friday, May
3) was in the order of $4.5 million or
about 7 per cent of our total budget.

profile and at the costs of delivering
that program profile, inflate those
costs for salary increments and
inflation, add an inflation factor on the
non-instructional side and generate a
projected expense.
But that doesn't take into account a
number of potential cost savings that
might be done without sacrificing pro¬
gram quality or PTEs.

What kinds of savings?
. (
A reduction in administrative posi¬
tions, augmentation of class size,
student contact and the pattern of
intakes, reductions in inventory, things
like that. Often they're small things,

but they all add up.
Could you put a dollar figure on
how much savings these measures

Why was that?
The formula and tuition fees pro¬
duced fewer dollars than our costs.

might generate against that four
and a half million dollar shortfall?
No. We are in the process of doing
that right now, reviewing where we

can trim without affecting the quality
Even though, in that process, you

of programs.

searched for all possible efficien¬
cies? So the formula itself was

"Quality of programs" meaning

flawed ... was that your conclu¬

people?

sion?

funding formula ... which wasn't

working for the college? That it

program areas than many other B.C.
colleges.

What is our actual budget shortfall

specific problems from those which
are endemic to the whole system.
The strategy that emerged was to
look at the revenue from the provin¬
cial grant and examine it in relation
to program costs. We did a great deal
of analysis along those lines.

VCC had many more of these difficult1

the program profile?

involved last fall's program profile
review?

control. However, it did seem that

And out of that came changes to

has, it was going to be a difficult year
for VCC.

and some of which may be system

wide, over which the College has little

Yes, that was our conclusion. Some
of that may have been a reflection of
elements on the expenditure side over
which the College has some control class sizes fixed by safety considera¬
tions, salary levels, program length,
contact hours and so on. All of these
factors affect cost. But there were
formula factors on the revenue side,
some of which were unique to VCC

Yes, but it also means support for
instruction. It certainly means without
affecting either the number of students
or the number of instructors. And that
is the fiist step we are taking. The
Board motion says we should take:
"... all measures to reduce expendi¬

tures and increase revenues other than
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FROM PAGE 2

Currently,

tuition fees, short of reducing the
current proposed program profile

for 1991-92

activity, while maintaining the quality
of instruction ..."

we face a

Can this initial strategy realisti¬
cally close that large a budget gap
completely?
No, in all likelihood, it's not going
to. But I think it will make a dent in
it. That's guess work on my part.
No, really, it's informed intuition.
It's what we've been able to do in the

What is the next step in this proc¬
ess, if we do find out the projected
deficit is, in fact, real?

But that possibility has to be matched

between

budget and the necessity to deliver the

expenses of
almost 4.5
million dollars.

It depends on the size. At that point
if there is a significant gap we're
going to have to look at several
approaches. One is to go hard at the
Ministry for additional grant revenue.

Why are some programs more costly

The College is joining with other

than others?

institutions under the banner of the
Advanced Education Council of B.C.
Representing the boards of all B.C.
community colleges and institutes) to

take that initiative, but I must admit
I'm not optimistic about this initia¬
tive.

Another strategy is to reduce our
instructional activity to a point where
it meets the grant revenue. That
translates into cutbacks in classes,
programs and support.

How would we go about doing

that?
Initially, we would look at which
programs are contributing most to the
financial gap, in other words the most
expensive programs. I say initially
because that's only one factor.

How is that figured out?
We take all the college programs and
look at the revenue they generate fees and the giant and so forth. Then
we estimate the cost of delivering a
piogiam. We then figure its projected
budget. We add all the support areas
and pro-rate them on an PTE basis:
library support, payroll and account¬
ing support, for example. Then we
look at the diffeience between the

You're saying that you've trimmed
wherever demand was low, so now,
to cut programs would mean failing
to meet real community demand?

projected
budget
shortfall
revenue and

past.

cause of lecent changes to the program
profile, we aie now running with an
an ay of programs that is pretty strong.
There is demand there.

two.

They may have low instructor-student

ratios. They may have high supplies
or maintenance costs in terms of
equipment. But a progiam may also
generate low revenue. It may not be
intrinsically expensive but cost more
than the College gets to mn it.

If you had to cut programs would
you always choose the most expen¬
sive ones first?
Well, we would have to look at those.
But as I said we also have to add in
other very important factors, like
community need and student demand.
It can't be done simplistically. But
we've got to look at where our dollar
gaps are.

Some will argue that education
shouldn't be planned on a purely
cost basis - that it should be deter¬
mined by society's needs. Should
we be taking a purely economic
approach to cuts?
No, we shouldn't and we won't and if
we have to make reductions then ob¬
viously multiple factors have to be
considered and judgements have to
be made. The College has gone
through this befoie. We aie con¬
stantly adjusting om programs. Be¬

That's right, but we know we're
already not meeting some demands.
with the necessity to balance our
program profile. The College has to

sort out its priorities in the light of
its responsibilities.

But one of the difficulties of reducing
when we're already into a budget year

is that to make it all match up evenly
at the end of the year, we've got to cut
somewhat deeper because we're only
cutting for part of the year. If we're
cutting in areas with contractual obli¬
gations to employees we don't turn

those off, just like that. We have
longer term commitments.
So we may consider if there are ways
to spread that process out over a
couple of years. The College is

constiained by the Colleges Act from
running a deficit but there may be
ways to deal with reductions, if they're
necessary, over a two year period.

Borrowing from one year to pay the
next? Won't that cause problems

down the road?
Indeed it may. All these possibilities
are fraught with problems. But we
have to be as creative as we can. We
shouldn't close off any options and the
board has, in essence, approved

looking at that possibility.
Then should we expect layoffs and
class reductions in 1991?
My best guess is, yes. The real
question is how many and how much
and I can't really judge at this point.
We're committed to maintaining the
quality of what we offer and we're
committed to delivering as much of
the progiam profile as possible.

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PAGE 3

FROM PAGE 3
As opposed to some kind of acrossthe-board cuts?

We tried that in the mid eighties and
almost everybody involved felt it was
a mistake.

the coming year, what would you
say.'

We'll make every effort to minimize
the reductions. That's what we'ie
going thiough now - a process of
making sure that if theie are to be
reductions, they're minimal. Every¬

There was a lingering effect?

one involved has got to be creative.
We must make sure we've got rev¬

We'ie still paying foi that in many
ways. But if we ultimately have a sig¬
nificant gap that can't be finessed, then
we will look at program cuts.
How does that make you, as an educator, feel?
I don't like it. I don't like it at all. We have the capacity
to deliver. We've got strong programs. We're meeting
real community need. The long term benefit of what we
do is positive and contributes to our community. It is slow
economic suicide, in a way, to be cutting programs wheie
there is real community need but we are constrained by the
setting in which we operate.

If you were asked to give a message to the College
community concerning their anxieties as they face

PAGE 4

enues up as high as they possibly can
be. But until we have hard informa¬
tion, speculating is very difficult. By
natuie I'm a very optimistic person
and I've found that in the past, we
have to be very creative with this kind of problem. But
until we know the outside edges of the problem, it's
difficult to do more than say what we will do "if.

It's very difficult to say to people in the College commu¬
nity "don't worry". I am optimistic that we will mini¬
mize this but if our assumptions are correct, we're dealing
with an internal inflation on salaries of more than 10 per
cent and a potential levenue (underlining this as an as¬
sumption), inflation factor of about 4 to 5 per cent and that
leaves a significant gap.