Christmas season is a time when most of us pay particular attention to our budgets. Here at the College we have just completed our family budget, and I would like to discuss some of the financial decisions Council made in 2007 and some we will have to make in 2008.
For those who respond to the words “finance” and “budget” by immediately finding something else to read, I will admit that, upon being elected to Council in 2003, I expected budget deliberations and finance reports to be mind-numbingly boring.
I was wrong. College finance has proven to be an intricate and interesting pursuit. Every year we are faced with new and different financial challenges.
In our annual budget deliberations, Council has three objectives – to appropriately fund services, to set fees at reasonable levels and to accumulate resources to ensure stability and independence.
I think a good way to look at how we satisfy these objectives is to examine our fee for the past five years.
In 2002, the fee was $104, but it rose dramatically to $139 for the following two years because of government legislation requiring the College to manage a Professional Learning Program (PLP).
When the current government ended the PLP, the third Council (2003–06) reset the fee to $104, but not until it had dealt with a very interesting problem.
With the end of the PLP, we were left with a surplus, and it is arguable therefore that the third Council could have set the fee even lower.
Instead, two reserve funds were established – one to stabilize future fees ($3.4 million) and one to offset the cost of future facility needs ($6 million).
I supported both of the decisions at the time, and I believe we are seeing the benefits of those decisions today.
The good financial news I would like to share is that our fee will remain at $104 for 2008. This is remarkable in that the average fee for regulatory bodies in Ontario is $650. Our fee is the lowest in the province at $20 less than that of the Ontario College of Nurses.
A fee of $104 is possible only because we have the reserves to allow it. During 2007, we drew from our fee stabilization reserve for the first time. If the reserve had not been there, it is probable that our fee would have been $107 in 2007 and would be $111 in 2008, a reflection of our actual costs.
You might ask why the need for a future facility reserve fund.
The answer is that our lease must be renewed or abandoned in 2011. At that time, we will have three options – stay, lease elsewhere or purchase.
If we stay, we will certainly have higher rent to pay.
If we lease elsewhere, we will incur moving and renovation expenses.
If we purchase a facility, we will need a down payment. This reserve will offset future expenses and help stabilize our finances into our second decade.
In October, Council established an ad hoc committee to examine future facility needs. This committee will issue its report in March 2008.
It is possible, therefore, that Council may have clarity as to future facility costs as it conducts its budget deliberations in 2008.
Of course, the question is how long can our fee remain static? The answer is certainly not forever – but be assured that Council will continue to consider the objective of establishing a reasonable fee in all of its financial deliberations.
On behalf of Council, I would like to extend our best wishes to you and your family for a joyous and peaceful holiday. ps