Ever since Stephen Toope announced the date of his resignation from the presidency of UBC, I and a few other members of the Board of Governors have been struggling with some tough questions. Should this administration stop, or at least slow down, its relentless pace in land development and large-scale capital projects? And if not, how far should they go in committing the incoming administration to a vision of campus they may not be willing to adopt?
I have never been accused of being overly cautious, or of being immune to hyperactive (academic) entrepreneurship and initiative. But, I have to admit that the steady stream of capital projects that the UBC administration has been generating and executing during the past seven years, has challenged even my own inclination towards unabashed growth, development and change. The students who will always see themselves as the class of construction, should realize that there are Governors who are equally concerned about belonging to the “Board of the construction bubble,” with all what it represents in terms of sanctioning the current priorities, investments and financial commitments and their potential effect on the university’s future.
Subjected to the hyperactive financial wizardry of its Vice President-Finance, UBC has become a permanent construction site. I wonder sometimes whether he is trying to out-do Baron Georges-Eugène Haussmann, who was responsible for the rebuilding of Paris in the 19th century, before his critics forced his resignation for extravagance. One former dean mentioned half-jokingly that it seems he needs to start another project before the high from building the previous one starts to wear off.
A complete list of the projects under construction at UBC is routinely given to the Governors, and I do not recall ever seeing total expenditure drop below the $1.2-billion figure. I once remarked at a Board meeting that I thought I was joining the Board to help UBC beat U. Toronto academically, until I realized that we are actually competing with Dubai. Whether we –administration and Board– have been doing the right thing for the last few years remains to be seen. But the environment has changed and it is time to reassess.
UBC is facing uncertainty on at least two fronts: a potential change in provincial priorities – whether or not the government changes – and a guaranteed change in its leadership, which will bring changes to the administration along with a new strategic vision for the university. These facts must be factored into the analysis, the rationale and the scale of any/all the proposed projects that this administration will bring forward to the Board before June 2014, the date when the President steps down.
Even when favorable to the proposed projects, the Board should be more deliberate than usual in its approval processes by considering carefully the internal and external contexts under which the capital projects are supposed to be initiated and completed.
First, we have to address political uncertainty. We should not assume that our relationship with the provincial government will be “business as usual,” after the upcoming provincial election. Whether or not the incumbent government gets re-elected, there is a very real prospect that a freshly elected government will chart a new path. There will be campaign promises to fulfill and both major parties are committed to managing its deficit and balancing its budget albeit with different target date. We have seen how, in just about every province, budgetary considerations have negatively impacted provincial allocations to universities, sometimes adversely. Any movement in this direction could have a very negative and direct impact on our “operating debt” projections.
Second, we should be wary of over-committing the next administration. Most projects under consideration today constitute major long-term financial commitments on the next UBC administration. We have often discussed how such moves by an outgoing administration constrain the flexibility of those coming in. It is especially unacceptable when the scale of those commitments dwarf those inherited by the current administration from its predecessors.
There are other considerations such as the unsettled business of coming to an agreement with the bargaining units. We are at a delicate stage of the bargaining process with the Faculty Association (FA). In the context of assisting the FA in preparing its case to the arbitrator, Ms. Eleanor M. Joy of Pricewaterhouse Coopers LLP uncovered that over the last 7 years, the central administration has transferred $610.5 million out of the General Purpose Operating Fund (GPOF), in order to invest directly or indirectly in capital assets, in such a way “that the GPOF actually showed a deficit as at March 31, 2012.” The report shows that the interest on long-term debt increased from $2,228,000 in 2006 to $31,480,000 in 2012. During the same period, the professional and consulting fees increased from $9,591,000 to $26,296,000. While these numbers may be challenged by the administration, they raise a hard question: Are mega-investments in capital projects affecting the university’s ability to support its human resources?
We should be analyzing the long-term impact of the “Flexible Learning Initiative” (our version of MOOC!) and how it may affect the large supply of student housing –and other capital projects– that we are building or planning to build.
We should proceed with more caution vis-à-vis the nascent international college (now Vantage). No major commitment to build its infrastructure, such as the Orchard Commons, should be made before some kind of an initial period, where a pilot could be tested. We should be cautious not only about investing in its infrastructure, but also about hiring the small army of instructors that is supposed to run the program.
The transition to a new administration triggered by Stephen Toope’s announcement sheds a new light at what belongs to this administration to decide and envision and what should be the purview of the next one, which may have different academically-oriented priorities where it wants to spend money, or whatever is left.
Addendum: I have just learned that Maureen Howe has stepped down from being chair of the Board’s Finance committee. This is most disappointing. In my opinion, this Board needs more of Maureen not less.