Stormy financial waters ahead for Dal

Pension fund problems included in potential "perfect storm" of money troubles for Dal, says VP Alan Shaver.

Dalhousie University could be facing a "perfect storm" in coming years, but the man at the helm says the rough financial waters may be a chance to sail ahead of the school's competitors.

A massive pension shortfall is the darkest cloud on the horizon, but uncertain provincial funding and a possible drop in admissions are also looming issues, said Vice-President Alan Shaver.

"If we were to experience one of the three ... we could probably deal with it," Shaver said, speaking at Monday's school senate meeting.

"But if there was a perfect storm and they all happened together ... this is a very serious possibility," he said, adding that he is optimistic that won't happen.

The presentation from Shaver, Chair of Dalhousie's Budget Advisory Committee, was meant to outline the school's financial situation to the university community, part of a consultation effort in anticipation of the school's 2010-11 budget. Shaver said this call for feedback is a first for Dalhousie, but one made necessary by current recession.

Hardest hit was the university's pension plan.

An update last June revealed Dalhousie needs to top off its annual $19.5 million pension fund contributions by another $17 million, according to the document Shaver spoke to.

This nearly 87.2 per cent increase would put the school's yearly contributions at $36.5 million.

"If the university alone had to make up the shortfall ... the increase in annual contributions would be equivalent to a reduction of 8.5 per cent in base expenditures of all budget units," according to the document, entitled "Context for development of the 2010-11 university operating budget."

Shaver said the school won't know exactly how deep in the red the pension fund is until the end of June, the next scheduled valuation of the fund by government regulators.

Adding to Dalhousie's woes is the uncertainty surrounding the provincial government's future plans for university funding.

The current funding agreement - a memorandum of understanding that froze tuition levels for three years and created a bursary for in-province students - will expire at the end of March.

What comes next is unclear, and it may not be good news for Dalhousie, Shaver said.

"If the education budget for 2011-12 is the same as we expect for 2010-11, that is no increase and no decrease, we would effectively have a five per cent budget cut because of our increase in costs," he said, adding that a return to 2009-10 funding levels take a 10 per cent chunk out of Dal's budget.

On top of that, Shaver said there are concerns student enrolment may drop in years to come. This year saw a slight rise, but Shaver credits that in part to the recession sending people back to school.

Though clouds may be gathering at Dalhousie, Shaver said the university has two choices.

"One would be to batten down the hatches, and simply not do anything and see how it turns out," Shaver said.

On the other hand, with a stormy financial forecast at universities nationwide, now is the ideal time to make the university a stronger competitor, he said.

"There has been a lot of budget cutting across Canada. We haven't seen any of it here. We might get through another year (without cuts)."

Instead, putting the rainy-day fund towards "strategic initiatives" such as student services or capital projects could lend the school a competitive edge.

But choosing between two tactics isn't tough, at least for Shaver.

"I'm not a batten down the hatches kind of guy."

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