CUS Board to Vote on $500 Building Fee Referendum

Update 5:34pm: Today’s CUS meeting has been moved to Angus 296 from Angus 310.

Normally we try not to post snippets, but we feel this one is important enough.

At tonight’s CUS Board of Directors meeting (6:00pm, Henry Angus 310 296) there will be a vote to have the CUS go to a student referendum to implement a building fee of $500. This fee would only be implemented after the completion of Henry Angus building renovations.

Those of us who have been around since 2007 will notice this is a repeat of the same question asked then, which was deemed a Dean-initiated plebiscite instead of a proper student society fee, making it a tuition increase under their tuition policy.

The CUS was approached by Commerce Dean Daniel Muzyka as part of the faculty’s original financing plan to revisit the student fee three years later. The CUS is claiming that this student fee is necessary to secure donor money. Past Board documentation, however, states that the Faculty is seeking at most $18 million from students to simply pay off debt the Faculty was granted after their original financial plan collapsed.

The CUS has a media debrief tomorrow for media inquiries, which leads us to believe this is already a done deal for the CUS. At our last attempt to observe the CUS Board’s discussions, we were barred entry from their chambers, while the Dean was granted access. Minutes state this was for “a frank discussion of the situation with the current leadership of the CUS so all members are fully informed.”

More details forthcoming as we dig them up. Interested parties are advised to read through past board documentation (search: “Sauder”) and the Facebook note behind the jump by Dr. Peets in 2007.

Commerce Construction Conundrum
Saturday, September 22, 2007 at 4:31pm

By Dr. Darren Peets

A particularly challenging decision is coming to September Board, on the first phase of a $65M renovation and expansion of the Angus building (commerce). This is its tale, in part as an exercise to clarify my thinking.

Once upon a time, as all good stories begin, the Dean of the Faculty formerly known as Commerce (and now operating as the Sauder School of Business), decided he needed a nicer building. He found donors, got the building designed, then convinced the students to pay for half the cost, their support indicated by a non-binding plebiscite. They would pay $500/year each (plus inflation) for 25-30 years, but nothing in the first year and only $250 the second year. MBA students would pay twice that. Student fees would be building classrooms, and in exchange the student society would get first call on a small retail outlet in the lobby, for which they’d have to pay rent. There are many issues with all this, but they’re beside the point.

The BC government had decided some time earlier that fees could only increase by inflation, which it defined as 2% per year. It was expected that this, being a new fee, would be exempt, and encouraging rumblings were heard from Victoria. At May Board, the first phase ($35-40M) got Board 3 approval (which allows them to build it), provided the fee were approved by the Province and the tenders came in on budget. The tenders were fine, but the undergrad fee was canned. At the same time the fee was rejected, the government’s website explaining their 2% rule was rewritten to include this sort of fee in the controlled category. The MBA fee has not been canned yet, and we’re hearing encouraging rumblings from Victoria (anyone else instilled with confidence?).

It’s worth noting that if the undergraduate fee had been put to a student-initiated referendum rather than a Dean-initiated plebiscite, it would not have been subject to government veto. It would, however, have met with consternation from students in other faculties at the precedent this would set. Only about two faculties have students who’d be willing to let the Province and UBC off the hook and fund academic space themselves.

This left a situation where large portions of the Faculty had already moved into space that was being rented through a half-funded construction budget, space that would need to be vacated in short order for a Buchanan B-wing retrofit. Asbestos removal started, but everything else was left in limbo, and most of the tenders expired. Demolition would have to happen during the school year. The donor money could evaporate if delays occurred, and construction prices would increase, creating problems (everyone ultimately agreed to extend their tenders at the original price). A little more fundraising was done, some creativity was applied to the budget, and a $12.5M hole in the budget was filled by taking a loan out against UBC’s General Purpose Operating Funds (which would then need to pay $910k per year for 30 years to retire this debt, with no new funding). GPOF is facing down a $36M/year structural deficit, to become $8M worse next year, which happened because we made long-term spending commitments without the required funding. A further $5.5M in MBA fees would likely fall to the Sauder school if vetoed.

The building project was considered a high priority in large part because it was fully funded. The Dean likes to say that he’s worried about losing accreditation if he doesn’t get a nicer building. It would appear that the Faculty has been accredited (by AACSB and EQUIS) since prehistory (i.e. late 2004). In the case of Medicine, Physical Therapy, Engineering, etc., “accreditation” means that your degree isn’t meaningless, and you can actually work. In commerce, as far as I can tell, it makes it easier to recruit the top MBA students, which can build the reputation (and money) of the Faculty — these students shop around, and are happy to pay outrageous sums of money for a well-regarded MBA. UBC’s is probably the only major business school in Canada to not be housed in a shiny new building with every imaginable bell and/or whistle, which the accreditation people see as a serious hindrance to achieving the Faculty’s strategic vision. By UBC’s standards, though, Angus is in pretty good shape. Of our ~300 buildings, it’s probably in the top 50. Does this mean that other departments in crummy buildings can come up with harebrained funding schemes, start construction, then stick GPOF with the financial consequences while reaping the benefits of a spiffy new building?

UBC is preparing a mid-level academic plan, to guide where money will and will not be chopped from as the budget is balanced. This process could, for instance, say that we should do an adequate job of everything, or that we should be exceptional at a few things and let other areas wither away. The plan is not complete, so we don’t know whether the Sauder school would be in line for excellence, mediocrity or oblivion.

If the building had tried to come to Board in May with the current budget, it would almost certainly have been denied before getting anywhere near the agenda. But now it’s an emergency. This is the biggest rock-vs.-hard-place decision I’ve seen come to Board.

Comments

Maayan Kreitzman Bloody bastards. Now instead of the tools in Sauder paying for a building they don’t need, we’re all paying for it. It’s absurd to commit money that the university doesn’t have for a thing it doesn’t need. Hooray for manipulation and dishonesty Dean Dan!
September 22, 2007 at 7:29pm

Ricky Chu 1. How much money has already been spent? If it’s a lot, then it may be a waste to discard the project, though I doubt it since construction shouldn’t have started yet.

2. Is there some way to make the Dean accountable for his screw-up(s)?

3. Is there time to delay things and have a student referendum on this, despite the precedent this would set? Perhaps students should own parts of the building outright.

4. Is the renovation plan somewhat modular so that you can renovate only the “important” parts of the building?

5. Does anything bad happen if the renovations are completely abandoned?
September 24, 2007 at 1:58am

Darren Peets 1) Probably a million or two, with probably another fair fraction of a million required to put things back the way they were.

2) How is getting his building to the top of the list and getting it built regardless of whether the money is in place a “screw-up” on his part?

3) Other projects start suffering.

4) It’s already phased. I’m not sure to what extent this or a reduction in scope would be possible.

5) It reduces the stature of the business school, and makes it more difficult to attract MBA students at the rates being charged (this is a substantial source of revenue, I gather). Note: the appointees on Board won’t delay or stop the building. Period.
September 24, 2007 at 9:24am

Cel Rince Hey all, just wanted to let people know that I’m writing an article about the Commerce building.

It’s going to be as objective as possible, laying out the facts for both sides.

I’ve already interviewed Darren and Conor Topley (CUS president), and might interview Jeff Friedrich if I think it’s necessary and if space allows.

I want to thank both Darren and Conor for taking the time to talk with me.
September 29, 2007 at 8:13pm

Stephanie Ryan I think Commerce should get $910K less a year out of GPOF for everything else in their budget, and I also think that students should get on running some sort of referendum- FAST. If this doesn’t happen, I think we should have a sit-in in Sauder so they can’t start construction! Yay for Trek Park 2!!
September 30, 2007 at 9:39am

Darren Peets I have much more trouble with a student fee model — having a large student-initiated fee to build academic space sets a precedent that I don’t want to set. I can’t imagine Arts, Science, Engineering, Forestry and so forth ever voting for this sort of a fee. Effectively telling the Province that students are happy to pay for capital construction costs on core academic buildings gives them an easy way to dodge these responsibilities in the future. Why should the Province pay when the students can raise the money themselves if they really want a better building?

Students at UBC have a long history of funding construction and renos (at least two gyms, aquatic centre, Brock Hall, SUB, the grad centre, ice rink, old Armoury, old stadium, MASS, Ladha, the old AMS dog barn, Whistler Lodge, and most recently a childcare expansion, off the top of my head). Not one of these was a core academic building, although Brock Hall has become one.
September 30, 2007 at 12:40pm

Stephanie Ryan I see your point, Darren, but now non-Commerce students are paying for this building without giving any consent whatsoever, and I feel like this is the worst of the two evils.
September 30, 2007 at 4:31pm

Peter Rizov Well, seeing that the GPOF pays for pretty much anything, so the argument that “other faculties” are paying for this building, is a little, well… iffy. I might be mistaken, but are the funds that renovated Buchanan C GPOF funds? How about that new biology building project?

Further, it seems that most of the GPOF revenue is from the Province, not tuition, so again, its not really “students” paying for a building, but the University allocating its income according to where it thinks that it needs to go.

What my concern currently is, is the bad precedent that this project sets for a) skipping the line, b) forcing the BoG to fund a project that it didn’t want to fund by holding them ransom. That said, I see exactly why the BoG Committee voted as it did, and really see no other choice. Remember, if this doesn’t go through, UBC would lose 30 odd million dollars in donations (not to mention the irreparable damage to its pristine and stratospheric reputation).
September 30, 2007 at 5:11pm

Stephanie Ryan I guess more than anything I’m concerned about the trade-offs present. Arts has taken a huge hit with the budget cut (we’ll lose the equivalent of 30 Faculty positions), and if $900K more from GPOF is going elsewhere I’m worried that we’ll lose even more (which would simply be detrimental).
September 30, 2007 at 7:23pm

Darren Peets UBC Renew (Phase I) was funded with a $60M debt against GPOF, and $60M from the Province. Among other things, it renovated or will renovate Buchanan A, B, C, and D, Chem D and E, Old Auditorium, Huts M-17 and M-18 (used by arts), and parts of Copp and Friedman. Most of the money went to Science and especially Arts. Should someone in LAFS, the planning school, or Engineering be complaining bitterly about all the money that went to fixing up arts buildings without any money touching McMillan, Laserre, or CEME? I’m pretty sure they weren’t asked.

I’d have to look up Beaty Biodiversity, but I don’t believe it had GPOF in it. It should have been around 40% CFI + 40% BCKDF + 20% donor. (There’s a museum attached that may have been funded outside this ratio).
October 1, 2007 at 12:39am

Conor Topley Seeing as how I’m the CUS President – I figured I’m overdue for a comment on this note. So here goes… I’m going to try to focus on addressing a few of the concerns and wrap-up with something unique (and hopefully helpful)

First of all – Darren, Thanks for writing the note. Although I disagree with the way you characterized some of the situations and individuals involved in this “Conundrum”, I sympathize with your struggle to come to terms with the funding structure.

“Why should non-Commerce students are paying for this building without giving any consent whatsoever”: Peter covered this one pretty well. Thanks Pete.
October 1, 2007 at 1:41am

Conor Topley “Arts losing more services/faculty”: From what I gathered from the Board Committee Meeting, it appears as though there’s an action plan in place to be able to fill the structural deficit over the next few years. As Darren said, the decision to draw the funds from GPOF didn’t come without concern. It was made clear that the amount being contributed to the building project was considered immaterial (1/10th of 1%) and a worthwhile cost considering the other variables already mentioned above. So understanding that there’s a plan in place to close the deficit and that the contribution was considered immaterial – I don’t think there should be any concerns of additional cuts made to programs outside of what’s already been planned.
October 1, 2007 at 1:42am

Conor Topley This Action is a Short Term Solution: This decision was made with the understanding that the implementation of a student fee will be brought to the provincial gov’t again in 3 year’s time. At this time, if the provincial gov’t decides to veto the fee once more, the University will continue to foot the bill, if not, the Commerce students will pay for their piece of the pie.

This was the BoG’s Plan & Decision, not the Dean’s: The new GPOF proposal was put together by the BoG, not the Business School. The President, Chairmen of the University, and the majority of the committee deemed this project to be of high importance to the strategic vision for the University as a whole. To make any form of accusation that Dean Dan was acting dishonestly is just wrong. How can you attack him when it was the committee that created this new structure and voted in it’s support (including the vote from Darren and Jeff: the student seats on BOG).
October 1, 2007 at 1:42am

Conor Topley I don’t understand how having Sauder cut 910k out of the rest of its budget will solve anything. The Business school, much like other faculties, has already trimmed down its spending to accommodate the deficit. No one (the Dean, the BOG, Commerce Students) wanted to be in this position, but here we are and BoG has made a call.

More Action Less “Sit-in in Henry Angus”: If anyone is really mad because they feel that they are paying for a building that they won’t be getting any use out of or that shouldn’t be renovated before others, then bring up the concerns with the individuals who rejected the proposed funding plan: the provincial gov’t. 47% of students voted 75% in favour of contributing the funds to this project and the gov’t said no. If you truly think that us “tools” paying for the building is the lesser of two evils, then pull out that quill and that piece of parchment, and get to work.
October 1, 2007 at 1:43am

Conor Topley Peter – i share your concerns with the “line skipping” comment and I’m not sure how that’s going to be addressed. But in terms of BoG being held ransom, I feel like this is not unlike other decisions face by boards of similar magnitude: They were put in a tough situation with a lot of complex variables, and much like any Board, they acted. Whether you feel they acted appropriately or not is your call.

Keep the comment/concerns coming. the CUS student council will be meeting with our Dean tomorrow so any other concerns will be more than helpful to bring up with him.

Cheers,

- Conor

sorry for the multiple posts. fb wouldn’t let me post a big one (tear*)
October 1, 2007 at 1:43am

Cel Rince Hey all, the article I did has finally been published. (I wrote it over 2 weeks ago, so I’m not *that* slow)

http://www.ubyssey.bc.ca/2007/10/26/all-students-now-on-hook-for-new-commerce-building/

October 26, 2007 at 3:30pm

Darren Peets An interesting postscript:

Board was told that this had to be done immediately, to free up the swing space building for BUCH B. In fact, the two projects overlap substantially, Angus’ need for swing space was not anticipated in swing space scheduling (or the project budget!), and it will not be possible to construct adequate swing space for September 2008. The next two paragraphs are taken from an application for a rush renovation of the University Centre (Faculty Club) that could potentially help if a number of unlikely possibilities fall together.

”
Classroom Services refers to a “perfect storm” whereby major renovations on campus are removing 15% of the classrooms from the inventory for academic year 2008/09. There is insufficient swing space on campus to provide the classroom seats needed. Classroom Services is working with the academic community to develop strategies that will increase utilization of existing classrooms and open doors to additional teaching spaces.
December 7, 2007 at 1:46pm

Darren Peets One money source — fees — has been partially replaced with GPOF. The other, provincial, I believe has been allocated to Phase II. There’s no reason to think that money will be forthcoming — UBC is looking at a $70M provincial capital envelope for the next 3 years with ~$800M worth of projects lined up for it (including *well* over $70M in the “necessity” category). Treasury Board has not released a cent for capital projects in about half a year, notably including cases where the money’s been allocated but not divvied up among specific buildings (e.g. UBCO Engineering/Management).

This irks me anew because 1) we were told we had to approve the Sauder project to avoid a swing space crisis, when approving it actually *created* the crisis; 2) We had to approve it because construction had started without funding, to which the correct response is “idiot!”, and 3) Sauder is demolishing Classroom Services’ lecture halls, which are in short supply, without consulting Classroom Services.
December 7, 2007 at 1:53pm

Darren Peets The Angus/Sauder School of Business (“SSB”) project, currently underway, has a major impact on teaching space because it removes two large lecture theatres (320 and 240 seats) which are in short supply at UBC. In addition, the SSB project proposes a 25% net overall reduction in classroom seats (from 1,932 to 1,449 = loss of 483 seats) in the Angus Building.
”

Many of these problems arose because Dean Dan assumed that swing space would magically materialize (or not be needed — classes can be held in a construction site even if offices have to move, right?) and be free (nope, have to rent it from the construction budget), funding would appear (two major sources haven’t), and that the classrooms in the building were allocated to Sauder and Sauder alone (untrue). The project was done without consulting Classroom Services or Facilities & Capital Planning.
December 7, 2007 at 1:54pm

Darren Peets By the way, for those wondering what effects you might feel from this swing space crunch, expect more classes before 9am and after 3pm, and at lunchtime Tuesday/Thursday. Some departments may also have their private seminar rooms temporarily confiscated where possible.

And I should probably also mention that the two lecture halls being demolished were upgraded recently for a combined cost of $3M, out of a thinly-stretched classroom upgrade budget created when tuition was drastically increased a few years back.
December 7, 2007 at 2:01pm

Alexander Michael Lougheed Darren, willing to start a lobby for a plebiscite with me to get Hennings renovated in a similar manner? We just need to get Young on board and get him to act headstrong without thinking things completely out.

Henn 200 is only used for those 257-person large physics classes, right?
December 11, 2007 at 5:18pm

Darren Peets The lecture halls or the building itself? It would be irresponsible for me, as a Board member, to cousel people to subvert the university’s priorities and get Hennings renovated or replaced out of the operating budget ahead of its turn. It would also be somewhat hypocritical.

Hennings, by the way, can’t be redone under UBC Renew because the cost of renovation would exceed 2/3 the replacement cost. To make the building seismically stable, you’d basically have to pull the big granite blocks off the front, replace the rest of the building, and put them back.

Now, if someone kicked Hennings at 4am and it collapsed…
December 11, 2007 at 7:43pm