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VCC CITY CENTRE LIBRARY

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November 1991

Background on the
report of the long-term

financial viability of VCC
Vancouver Community
College has been wrestling with

employee groups.

was also placed on the agenda.

major financial difficulties for the

Meetings between Ministry
officials, Board representatives,
College administration and
faculty representatives identified
that a resolution might be
achieved through the use of an
objective outsider (Dr. Peter
Lusztig, former Dean of Com¬
merce at UBC) to advise on
solutions. A set of guidelines for
discussion was agreed upon by
the involved groups - the College
- Institute Educators' Association
in consultation with the VIA, the
LFA, the Board, College adminis¬
tration and the Ministry. Those
guidelines set the framework for

A resolution of the immedi¬
ate financial crisis was achieved.
Two groups of solutions emerged.
One included, as a pivotal factor,
an altered approach to accumulat¬
ing vocational full time equiva¬
lent student numbers - one of the
factors driving the College's
funding levels. The other was

past several years. In the year and

a half leading up to the beginning
of the 1991/92 fiscal year, the
College and the Ministry of
Advanced Education, with the
assistance of Price Wateihouse,
examined and implemented
several adjustments aimed at
resolving the problem.
When provincial grant
information became available in
the late Spring of 1991, however,
VCC budget planners perceived
that a large gap existed between
revenue and the necessary expen¬

ditures to deliver agreed upon
instructional programs. The
perceived gap translated into
reductions in instructional pro¬
grams and support services of 1015 percent or more. Such reduc¬

tions were not acceptable to the
Ministry, the College, the com¬
munity including students, or

resolution of the immediate 1991/
92 budget problems and set up a
phase two in which the "long
term financial viability of VCC"
would be examined. An exami¬

nation of problems and issues
arising from the administrative
structure at VCC and its relation¬
ship to the faculty associations

based, to a considerable extent, on
the use of "one-time" funds to

tide the college through the crisis
year. Both sets of solutions were
implemented to resolve the crisis.
The use of one-time funds -

operating capital and one-time
and extraordinary surpluses from
the previous year meant that in

1992/93 the financial problems
might re-emerge. Action on

VCC's long term financial viabil¬
ity, thus, had become of major
importance.

Dr. Lusztig, who had other
See page 2

1

From page 1
commitments after mid-Septem¬
ber, agreed to address VCC's
financial future through a prelimi¬
nary report. He reviewed the
work done by Price Waterhouse

which provided some 1990
background to budget difficulties
at VCC and he examined finan¬
cial and other reports residing
with the Ministry. He also
solicited from the instructor
unions, the Board and the College
administration, their perceptions
of the problems. In the few
weeks available to him Peter
Lusztig completed a report which,
in his words, would "serve as the
catalyst for additional construc¬
tive dialogue between the parties
most immediately concerned with
the long-term well-being of the
units that comprise VCC".
It was Lusztig's overall
view that "the Ministry should
support a significant restructuring
of VCC ... and to bring its overall
formula grants to the restructured
units more into line." From that
general premise he made specific
recommendations concerning how
such restructuring should occur

(through a division of the Col¬
lege) and how the structural

financial shortfall might be
addressed (through reductions of
administrative costs and through
review of the economy of scale
factor).
Because of limited time, his
analysis was based primarily on
the most recent system figures

available through the Ministry of
Advanced Education. These were

1988/89 compilations. He noted
the need to bring the analysis to
the present and to examine overall
administrative cost effectiveness.
Representatives of the

groups involved - faculty unions,

the Board, the VCC administra¬
tion and the Ministry undertook
an examination of the report and
its recommendations and shared
reaction at follow-up sessions. It

was agreed that the Lusztig
recommendations, in themselves,

did not seem to provide the full
answer to the budgetary problems
of the College and its "long term
financial viability". It was further
agreed by the representatives that
a thorough examination of the
recommendations and objectives
was required through the use of a
consultant or consulting team
with financial, management and
educational background.

Terms of reference for a
consultant were developed and
have been agreed upon as fol¬
lows:

educational services.

These tasks are to be pur¬
sued within the following context:
1. That tasks #1,2 and 3 be
completed and delivered to
the three parties (VCC,
faculty representatives and
Ministry of Advanced Educa¬
tion, Training and Technol¬
ogy) no later than January 3,

1992, and that task #4 be
completed no later than
January 23,1992;
2. That the two financial
models use the known costs
at other urban colleges in BC
as a basis for comparison;
3. That neither model should

diminish the accessibility or
quality of educational serv¬
ices currently offered by

VCC;
"The consultant shall:
1. Determine the financial
needs of a single VCC to

deliver its existing level of
service (program profile);
2. Determine the financial
needs of two colleges, VCC

(King Edward and City
Centre) and Langara College,
to deliver their respective
existing levels of service;
3. Examine the revised
organizational structure and
administrative cost effective¬
ness of the current VCC and
comment upon its strengths

4. That all colleges must
make financial choices and

the quality and accessibility
of educational service pro¬
vided through either model,
should be comparable to that
at other urban colleges;
5. That the unique demo¬
graphic characteristics of the

region served by VCC shall
be "considered."

or weaknesses;

Potential consultants have
been asked for a proposal and
interviewed. The final steps are
being taken to select the team that
will undertake the work.

4. Review the educational
effectiveness of the one
college model versus the two
college model in terms of the

As indicated, reports will be
filed on January 3,1992 (finan¬
cial and organizational issues) and
January 24,1992 (educational

accessibility and quality of

See Page 3

2

From page 2

• Langara Faculty Associa¬

issues). This will allow time for
any alterations to the approach to
VCC budgeting to be inserted
into the process for fiscal year

tion. The Problems. 12

1992/93.
Another undertaking agreed
to was the hiring of a consultant
to do a report on contract services
and international education
overhead and surplus distribution.

August 1991
•Lusztig, P. Set of tabula¬

tions. August 27,1991
• Warren, L. Langara Faculty

Association, letter to Peter
Lusztig dated September 4,

1991
• Kremer, D. Vocational

As the process evolves,
further information will be
provided from both the threeparty forum and the consultants.

Instructors' Association, letter
to Peter Lusztig dated Sep¬

tember^ 1991

C. R. Carter,

• Lusztig, Peter A. Report
on the Long-Term Financial

Acting President.

Viability of Vancouver
Community College, Sep¬

tember 11, 1991

Note:The following docu¬
ments concerning the VCC
financial requirements and long
term solutions will be available

at VIA and LFA offices, VCC
administrative offices and the

VCC libraries:
• Lavalle, Ed, CollegeInstitute Educators' Associa¬
tion of BC, letter to P.
Lusztig, June 20,1991
• Lusztig, Peter A. Memo,

June 21,1991
• College President. Van¬

couver Community Col¬
lege Perceptions of College
Financial History. July 23,

1991
• College Administration.
Vancouver Community
College General Financial
Analysis, August 8,1991

• VCC President, Prelimi¬
nary Analysis - Long Term

Financial Viability of
Vancouver Community

College, 1991 September