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Vcncouver, Li

VCC budget crisis

JULY 19, 1991

resolved-for now
For the past year and a half, Vancouver Community College has wrestled with
projections that showed an alarming budget shortfall for 1991 -92. During that
time the College worked with Ministry of Advanced Education officials to resolve
the problems. As well, the College Board met several times with the Minister of
Advanced Education to alert him to the situation and to develop a framework for
a solution. This work provided several adjustments which, it was hoped, would
have a positive effect on the College.
However, when the College received its ministry grant for the 1991 -92 budget
year on May 24th, it became clear that those steps already taken had not been
enough. A $4.5 million dollar shortfall still remained. Spectrum talked recently
to Acting VCC President Ross Carter to find out more about how the situation
was finally resolved.

When we last spoke we had a four and a half million dollar budget shortfall.
Now we don't. How did we get from there to here?
Several things happened. When the campuses began to work out their budgets in
detail with the dollars available it became clear they were missing significant
amounts of money needed to deliver their program profile - in the millions at each
campus.

Acting President Ross Carter

One of the problems is that when you don't have the money to deliver the program
profile, you aren't receiving all the students you'd planned.
SEE NEXT PAGE

VANCOUVER
COMMUNITY

COLLEGE

PAGE 1

FROM PAGE!
If you're not receiving all the stu¬
dents, you no longer receive their tuition

fees. Tuition fees are about 16 or 17
per cent of our budget. For each stu¬

dent that disappears the College looses
roughly $1,100.00
So to accommodate that loss you have
to eliminate still more student spaces.

You don't have the money to pay the
instructors. When you eliminate more
instruction you lose even more stu¬

dents and you start that downwaid
spiral. Eventually it does get into
balance. But the point at which we
were getting into balance for a full
time equivalent student base of 9,700
FTE was at about the 8,000 PTE level

" Peter Lusztig
worked on the
premise that to
solve the
problem
everyone was

going to have
to bleed a
little"

What does that reduction involve?
It may mean the loss of some addi¬

tional administrator positions. It may
affect administrative salaries. It ma}
affect administrative services in terms

of tightening up on costs. We have
two years to deal with that. Our initial
analysis is that more than half can
come from this year's budget without
damaging the College.
The instructor unions agreed to
increase class sizes by 10 per cent in

the ESL and ABE areas (two students
per class on average). The College
agreed to move $500,000.00 over to
ESL to cover additional ESL student
FTE.
We were then able to say we could

That's a huge chunk of money lost.

Ministry and the College get together
with an objective outside person to

That's a $1.7 million, possibly a $2

look at solutions. Peter Lusztig (for¬

contracted for. There were still some

mer Dean of Commerce at UBC) was

details to be worked out.

or an under-performance of 1,700FTE.

million loss of tuition revenue.

deliver the full FTE that we were

suggested and everyone agreed he

And a loss of Ministry grant money
too?

would be a suitable individual to refe¬
ree this planning session.

Is that why we still don't know
exactly what impact this will have

on ABE and ESL?

A loss of grant money was also a
began to say we weren't even coming

Peter Lusztig worked on the premise
that to solve the problem, everybody

close to delivering what we'd prom¬

was going to, as he said, "bleed a

I think we're pretty clear on ESL.
We'll deliver 1,550 FTE in ESL. All
the regular instructors will be back

ised. You can't really keep the grant in

little". That proved to be the case. We

and the layoff notices have been re¬

that situation so, yes, we could have

emerged with the following:

scinded.

The Ministry adjusted the economy
of scale factor which controls part of

The ABE difficulties were more

our grant. That produced an addi¬

have now largely been resolved. We

was very concerned. We were very

tional $300,000.00. The Ministry
also adjusted what was acceptable as
a Full Time Equivalent Student, an

now know we will be able to continue
all regular ABE positions and as a
result, all previously issued layoff

concerned. The instructor groups were

"FTE" in the vocational area. More

notices have been rescinded. We are

very concerned because they saw jobs,

about that later.

continuing to promote and market the

a significant number of jobs, being
eliminated. It was a deepening crisis

The College agreed to cut further

continue to assess demand over the

up until about three weeks ago.

into administrative expenses. Approxi¬

next months and into the fall.

So senior administrators and the Board

mately $500,000.00 had already been
cut in the KEC/City Centre adminis¬

Chairman met with the Deputy Min¬

trative re-stracturing. The College

Does this 11th hour solution hol(

ister to explore what could be done. It

agreed to a further $360,000.00 re¬

the possibility of still further prob

was suggested that the unions, the

duction.

possibility. At that point the Ministry

lost 20 per cent of our grant. That

would have required that we go down
still further.
It never quite got to that point but it
was serious enough that the Ministry

complex with some small classes but

courses and the program. We will

FROM PAGE 2

as next year?

tiations - can you explain what
happened there - what we did to the
"FTE"?

I didn't yet mention that the Ministry

Sometime in the '70's arts and science

also opened the door for us to run a

and vocational FTE were defined. The
vocational FTE was set at 1,230 hours

lems down the road - even as soon

(

deficit (up to a million dollars) if that
would help - probably about 11 or 12
per cent of our budget, with the option
of paying it back over two or three

per year - one student attending classes

for 205 days at six hours per day.
Students don't always come in full

years.

time packages - often they're part
time, or they're students who attend

But instead, we explored another less
onerous option which was to draw on
our operating capital. Last year we got

$1.2 million in operating capital. This
year we got $2.2 million. While we
need every penny of that, we did feel
we could wait on some equipment,

furniture and so on, in order to build
back instruction instead. So at this
point we've decided to borrow from

operating capital to the tune of about
$1 million. It's a nice kind of borrow¬
ing because we don't need to pay it

back because it's College funds and
thus it avoids problems down the road.

"It was a

for six months only or for three months

deepening
crisis up
until about

way of tallying things for budgetary

four weeks
ago."

on a quarter time basis and so on. The
purposes was to accumulate those part
time students and count them, ulti¬
mately, as full time equivalent stu¬
dents or "FTE's".

At that time, instructors were, by and

large, in the classroom 205 days a year
for six hours a day. So an instructor

FTE and a student FTE matched.
However the programs that the col¬

lege was delivering in the vocational
area began to shift. The way programs

But that means fewer computers,

to borrow that $ 1 million again repre¬
senting the operating capital that we

less furniture etc. Doesn't that ulti¬

drew on. We will have reduced our

mately have an effect on the quality
of instruction?
Indeed. In the mid-eighties, we had a
couple of years without any operating
capital in order to balance the budget.
But we paid for it. We had equipment
that was breaking down and was not

expenses however, in the administra¬

student was not only taught in a class¬

tive area and we can reap the benefit

room setting but also had to work in¬

of that. We will have the new FTE
formula and hopefully we'll generate

dependently, that this was as impor¬

replaceable. It was very short sighted.

But while we recognize the need for
more operating capital, particularly in
the computing area, we feel we can
get by for one year, maybe two, with

operating capital in the range of $1.2
million. So we're looking at which is
the least unacceptable solution.

And next year as we go into April
will we face the same situation?
Yes, to some extent. We may still have

and courses were delivered began to
change. It was recognized that the

tant as having an instructor in front of

more FTE than we agreed to. So if we

the class telling the student what the

get an increase in our funding to cover

facts were or how to do things.

that additional FTE we'll have some
discretionary funds to fill in the gap.
So more and more directed learning
If we delivered only a hundred new
FTE over the 9,700 we are funded for
this year we could get an additional
grant of $7,000.00 per FTE. There's
$700,000.00. So those fully-funded
additional FTE, can be very helpful in

classroom time began to shrink and
other forms of scheduled learning were
introduced. Ultimately in 1991, a 920
hour instructional assigned duty be¬

future years.

came the vocational instructor norm

was occurring which required more
and more preparation, and the actual

and there was an effort to make the
Lets move to the new FTE calcula¬
tion which was part of these nego¬

collective agreements match that realSEE NEXT PAGE

PAGES

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students. Therefore we 're still receiv¬

gap but until the departments had an

ity. However, the PTE student was

ing their tuition fees and we can plough
that back into the budget.

actual allocation and started to work

still calculated at 1,230 hours.

through their budgets and say "look
this is not enough money to keep in'

So that required more instructors
to get each FTE student paid for by

In addition, for this yeai, instructors

structors on - here's how many we're

have agreed to add two students in

going to have to lay off..." I don't

the Ministry?

program areas where there are about

think we fully appreciated the seri¬

That's right. If the College was going

2,000 FTE. That comes to approxi¬

ousness of the problem. I don't think

to put an instructor in front of a class

the instructor unions understood the

needed 1.2 instructors for every full

mately 200 new FTE students and that
helps both in terms of getting the
Ministry grant and in getting student

time equivalent student.

tuition.

That became a financial nightmai e for
the College and was a significant part
of what we were dealing with in the
1991-92 budget. The agreement on
the part of the Ministry to recognize
forms of educational delivery other

When the College signed the last
collective agreement with the VIA
did you not foresee this as a prob¬
lem - the financial impact of lower¬
ing the classroom time for each in¬
structor?

than direct classroom instruction

There was some argument over that. I

sure. I've also learned that you need

really was what made the resolution
of the financial difficulties possible. It

don't think the full impact had been
worked out either by the College or

good solid information on the budget
side of things so you can identify
problems before they get to the crisis

to meet the student 1,230 hours, it

seriousness of the problem. I don't

think the Ministry understood the se¬
riousness of the problem. Until you
understand a problem you can't get at

was recognized that seminars, directed

the faculty representatives. It was dif¬

study, field work - a whole range of
learning activities, were possible and
that the important thing was that the
student should achieve the program
objectives which the College Board

ficult to get a handle on it. It wasn't
until there had been full analysis that
we actually realized the full impact.

has approved for the program.

I've learned that most problems are
resolvable if you have enough pres¬

stage. We've got to work on that as a
College.

,

In one sense it didn't all happen at the
11th hour. The recognition of the
problem occurred more than a year

By and large. There are some mar¬

ago and discussions with the Ministry

ginal things to be worked out such as
a consistent way of calculating this

started more than a year ago.

new tallying method so there is recog¬

I think it required a detailed analysis

nition by instructional departments

of the impact before the seriousness

that there are ground rules here - that

the budget?

of the problem was realized by any of
the players. That didn 't occur until we
had actual budget information from
the government in hand. The College
received that on May 24th. We'dbeen
doing modelling up to that point and
recognized there was going to be a

That's right. It now means that in

problem.

So does that ultimately mean fewer
instructors at the college? And lower
costs? Is that how we've balanced

What have you learned from this
whole process?

Why did it all have to happen at the
11th hour?

So we've again matched an FTE in¬
structor with an FTE student?

it's not a free for all.

it.

ordei to deliver the same FTE we need
.2 fewer instructors. However, we

are still teaching the same number of

In fact before May 24th we had iden¬
tified the four and a half million dollar

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