Last fall the provincial government announced that funding for the Ministry of Advanced Education would be frozen for the next three years. Although UCFV has not yet received its official budget information at this point this "0-0-0" scenario has been interpreted to mean that UCFV should not expect any significant increase in base funding for the next three years.

During announcements from the provincial government on January 17, it was also learned that a number of "soft money" or "special project" sources of funding from the Ministry to UCFV have been eliminated. These include cuts of approximately $700,000 related to Institutional Based Training and New Learning Opportunities funds which UCFV has used to provide a variety of support and teaching services. The Ministry also announced a further $1 million in cuts at UCFV to a wide range of other non- base funded grants, the majority of which has gone directly to assist students. These include the Work Study program, Student Summer Works, a high-tech grant for co-operative education placements, the matching endowment fund, Training Assistance Benefits, and a Skills for Employment program.

At the same time the cost of operating UCFV will rise over the next three years. These increases will be fueled in part from increased costs associated with current contractual agreements, increments and reclassifications, benefits, and many operating and facilities expenses.

"Although we still don't have official information about our budget situation, we have begun the difficult task of developing a number of scenarios which we may need to implement to achieve a balanced budget within our new fiscal reality," says UCFV president Skip Bassford. "We are reviewing all of our options for maintaining programs and services for students, protecting our employees as best we can, continuing to meet the changing needs of our communities, and responding to the economic priorities set by the provincial government."

At this point UCFV administrators calculate that the total impact of the "0%" lift and the additional "soft money" cuts could be up to $7 million over the next three years. The largest portion of these adjustments may need to be made in the first year. This is because there are additional costs associated with any major reductions before a longer-term saving will be realized. Given the magnitude of the budget problem, UCFV may need to make up to $3 million in adjustments in the upcoming 2002/03 fiscal year.

Complicating this situation is the fact that there are other key factors which are still unknown. UCFV does not know yet what the Ministry will decide about tuition fees. Any increase in tuition fees would help to offset rising costs, but only a very significant increase would begin to address the anticipated shortfall. As well, UCFV does not know what other potential sources of additional revenue may be available.

UCFV's total current operating budget is about $45 million. Of this approximately $30 million comes in the form of various government grants. Tuition fees account for about $7.2 million or approximately 16% of the total operating budget. The remaining $7 million is from other sources of revenue such as contract training, international education, ancillary services, and other sources of revenue.

Over the next few weeks UCFV administration will be reviewing a wide range of options. These will include possible revenue increases from special contracts, ancillary services, partnerships, etc. It will also include consideration of areas where cost-saving measures can be implemented through revisions or reductions to programs and services. 

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