Nfld. & Labrador

MUN has to find millions in savings, but won't introduce 'new' fees in its upcoming budget

Memorial University students won't have any surprises next fall, but the university is in dire need to find areas to cut costs.

Tuition hikes announced last year will take effect next fall

Students at Memorial University will not have any new fees added to their costs in September 2018 — at least, not ones that hadn't already been announced before Tuesday. (CBC)

Memorial University brass will be putting forth a budget with no big surprises for next year — but a lot of questions about where to find savings.

The school will have to eliminate $8.9 million from its base budget — including $5.4 million in the category of academics.

While they've figured out how to cut about $3 million in attrition, there are still plenty of questions about where to turn next.

"There are no obvious answers," vice-president of academics Noreen Golfman told a crowd at MUN's monthly senate meeting Tuesday.

It was the last senate meeting before the proposed budget goes before the board of regents for a vote.

Tuition costs will climb for all non-Newfoundland and Labrador students in September, but it's due to measures introduced in the budget passed last spring, hence the "no new fees" mantra touted by president Gary Kachanoski on Tuesday.

Dr. Gary Kachanoski is president of Memorial University. (CBC)

The school has made reductions to its base budgets for the last seven years now, cutting more than $30 million across the campus.

In the process, it has racked up major amounts of deferred maintenance — work on aging and crumbling buildings that needs to be done, but is being pushed down the road.

But the provincial government — which contributes 84 per cent of the university's revenue — has made major cuts to MUN's budget over the last two years.

Pushing the pension problem

Kachanoski said this budget could have been a lot worse, if a looming pension issue hadn't been set aside for another year.

Memorial University is expected to switch to a shared liability in its pension plan with union employees. As it stands now, the school — and in turn, the government — is on the hook for all deficiencies in the plan.

In the near future, those risks will likely be shared between the university and its employees. But first, the unions want to see the school ensure the pension plan is 100 per cent funded.

There is plenty of maintenance needed on old buildings around Memorial University, some of which are literally crumbling. (Cec Haire/CBC)

Right now, it sits at about 93 per cent funded, Kachanoski said, leaving a gap of between $150 million and $180 million.

Memorial University will have to take out a bond for that amount to ensure the pension is fully funded.

Kachanoski expects the university will be on the hook for $8 million in annual payments towards that bond once it is granted.

"It's a question of who pays for that," he said. "If we had that cost on top of everything you see here, then I think you'd have had a different outcome in what kind of budget would have been presented here."

Old science building will cost millions

With a new core science building expected to be finished by 2020, Kachanoski said they will be left to decide what to do with the old science building and some other older buildings on campus.

"We really haven't addressed the long-term infrastructure issue," he said. "Tearing down those buildings because they are simply not cost-effective to fix, I think, is a process that we are looking at now."

A steelworker affixes a beam at the Core Sciences Facility now under construction at Memorial University. (CBC)

Kachanoski pegged the one-time cost of tearing down the science building at $8 million.

And as for the cost of keeping it up? He estimates it would take a staggering $3 million annually just to maintain the building.

"It doesn't make any sense to play catch up, and some of those buildings are so full of asbestos that you can't really bring them up to a modern functionality."

About the Author

Ryan Cooke works for CBC out of its bureau in St. John's.