Tuesday, March 26, 2013

Financial fear-mongering

I'm not the least bit happy about getting into this subject: indeed, I'm not happy any time that I find myself compelled to say things about my employer that I'd rather not say. In brief, members of the University of Victoria's executive are making statements that, whether the individuals realize it or not, I'd interpret as borderline unethical tactics to discredit the well-grounded bargaining position of its Faculty Association.

It's no secret that funding is seriously tight for Canadian postsecondary educational institutions, and that government priorities are changing strangely. The province of Alberta is in the early stages of ideologically amplified financial slashing, with shocking budget cuts, so here in BC we're grateful not to be facing this -- and if I may say, intensely supportive of our Alberta colleagues as they prepare for an unprecedented struggle.

My point in this post, however, is actually a very narrow one. Today, I just don't have the stomach to deal with larger budgetary matters, so I want to take on a single aspect of the executive's campaign against the Faculty Association.

I've heard rumours of the phrase being used orally, but today, I saw it in the wild for the first time, and in written form at that. When someone in the administration executive wants to talk about financial trouble, a key factor in that uncertainty is now being identified as "the upcoming Faculty Association arbitration."


It's unacceptable: it's destructively anticollegial, and to some degree incorrect. More than that, it's amateurish enough that I'm embarrassed for the Deans who find themselves unable to escape using what I assume is a talking point from senior executive. (And to be clear, I don't blame the Deans for the phrasing, not really. They're in an impossible position.)

You need to understand that arbitration isn't dealing with an overly large sum of money. As Faculty Association members have been told already, more than once, the salary gap at the end of mediation worked out to 1.75% in each of the two years, with the FA ask remaining at 3.75% and the executive offering 2%: since the total salary bill is around $100 million, arbitration represents a maximum financial instability of about $1.75 million in the first year. The arbitrator isn't required to choose one option, so it's possible that the final number will fall between these values. There are some additional costs under discussion for assorted benefits, but they're relatively small, so let's stick to salary to keep things simple.

Now, $1.75 million may look like a lot of money, but only if you're not looking from one of several eminently reasonable perspectives. Let's look at those, because there are all kinds of angles that shed essential light on the executive's emphasis on the upcoming Faculty Association arbitration as a significant source of financial instability.

First, the university's revenue is comfortably over $500 million. Arbitration will therefore decide on the fate of less than 0.35% of the university's revenue. If you'd rather compare the money to the university's more than $300 million general operating fund, fine: it's less than 0.6% of its general operating fund.

Second, while these kinds of comparisons are both inflammatory and unfair, to the point that I feel like a jerk for writing the words, it's maybe worth remarking that $1.75 million is almost exactly the amount paid as executive compensation to the university's president and four vice-presidents. It's impossible to figure out how the budgeting works for any administrative office or track, but we did hire an additional associate vice-president last year, and there's always going to be a budget attached to a new office, presumably including staff.

(And let me say, for the record, that the university's administrative staff work hard and conscientiously. This post is IN NO WAY intended to impugn the efforts of the people in these positions, though I recognize that administrative cuts are likely being considered that would hopefully have comparatively little effect on the university's functioning.)

Third, the BC provincial government is cutting its grant to UVic by 1.5% for 2013/14, to the approximately 60% of the university's revenue that comes from the province. The university, however, is implementing an across the board cut of 4% to program budgets. Like I said above, there's no detailed budget work behind this post, but that's a difference of 2.5%. The university allocates more than $300 million to its general operating fund, which looks to me like a gap of $7.5 million. The university has not yet accounted publicly for this gap.

Fourth, and maybe most complicatedly, CARSA, the Centre for Athletics, Recreation, and Special Abilities appears set to gobble up the university's loose change for years to come. When the Board of Governors approved the projected construction, it did so with a budget of $72.675 million. In January 2013, the Board was advised -- before construction had even begun, mind you -- that the construction contract was now approximately $77 million. That's a gap of $4.3 million, before the inevitable additional challenges that arise in the next two years while the project gets built. (I'm betting on $86 million in the end, but I'm a cynic.)

Now, nobody should be all that happy about the explanations for how we'll pay for a more expensive CARSA (increased leasing costs to the Special Abilities area being one possibility, for example, or a restatement of predicted parking revenues), but that's not my point here. My point is simply that the current CARSA budget gap is 2.5 times what's up for discussion at arbitration; I'm expecting that this gap will grow, and that the university will find a way to deal with it.

Next time you hear someone in the executive suggesting that the upcoming Faculty Association arbitration is a significant issue, feel free to consider raising one of these four points:
  • $1.75 million represents less than 0.35% of the university's overall revenues;
  • the $1.75 million at issue in arbitration for salary matters is roughly the amount paid just to the university's president and four vice-presidents;
  • the university still hasn't talked about what it's doing with what looks like $7.5 million that'll flow from the significant gap between the province's budget cut and the university's budget cut; and
  • if the university's Board of Governors doesn't seem that concerned about a $4.3 million increase in construction costs for CARSA, why should the executive be so concerned about a possible salary increase less than half that size?
Maybe remind the person, too, that the average salary here is one of the very lowest in Canada among comparator schools, even though we score very well on the (dubious at best, admittedly) metrics of Maclean's, Times Higher Education, and Re$earch Infosource.

There are clear budget pressures at UVic. I'm hoping the executive stops embarrassing itself by over-hyping the possible resolution to the upcoming Faculty Association salary arbitration.

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