Recently, the University of Lethbridge has been asked by media, and has fielded numerous questions from community members, about the Alberta Union of Provincial Employees (AUPE) information picket (held November 7, 2018), as well as the issue of AUPE choosing to seek mediation rather than direct negotiation with the University. Below is the response the U of L has shared with media in response to requests.
The Alberta Union of Provincial Employees (AUPE) held an information picket on November 7, 2018 at the University of Lethbridge. University administration respects the right of AUPE and its members to participate in such activities.
The University and the local AUPE chapter have been in negotiations for over a year since the current agreement expired on June 30, 2017. After a negotiation meeting in early September 2018, AUPE chose to seek mediation, which will occur in mid-November 2018, rather than continue to negotiate with the University directly to seek a favourable settlement for everyone. To be clear, the University absolutely values the important contributions of local AUPE members to students and the U of L community. Every day over 500 AUPE members provide vital and necessary support to the University that enhances the fundamental teaching and research mission of the University.
Recently, AUPE leadership out of Edmonton has stated that the University of Lethbridge has accumulated a surplus of $206 million. They suggest these funds be used to give salary increases to AUPE members at the University of Lethbridge. They also suggest the University has been unwilling to discuss this with them.
This of course is untrue.
It is important to know that the accumulated surplus AUPE refers to is actually the total net assets of the University and almost all of it is not accessible or available cash for on-going operating expenses like salaries. Net assets of the University includes the equity that the University owns of its buildings, land, and equipment (Investment in Capital Assets). Investment in capital assets is similar to your personal ownership of your home, which is not money in your bank account that you can spend. Also included in the net assets are externally restricted endowment funds and internally restricted funds.
A full explanation of each part that makes up the Net Assets of the University is publicly available at (www.uleth.ca/budget-finance/) and a brief description is included with this message along with a chart that illustrates the balances and what makes up the $206 million net assets.
Investment in Capital Assets: This represents the value of the University's buildings, furniture, and equipment minus the outstanding debt used to purchase those assets. As a practical example, if you own a house this would be the difference between the value of the house, let's say $400,000, less what you owe on the mortgage, let's say $100,000, giving you an investment in capital assets of $300,000. This balance has already been spent on purchasing the assets and thus is not available for further spending.
Endowments: Endowments are charitable donations or grants that have been given to the University for a specific purpose with the legal requirement that they be held in trust forever, meaning that funds originally given, cannot be spent by the University. Endowment funds are invested and the purpose of the donation or grant determines how the earnings from the Endowment investment can be used. The earnings from Endowment investments are used to support student scholarships and bursaries, and some academic and research programs.
Accumulated Remeasurement Gains and Losses: This refers to unrealized gains or losses on the University's investment portfolio. This measures the fair market value gains or losses in investments (for example: portfolios or foreign currency holdings) before they are sold. If you own a stock and it has changed in value since you initially purchased it, this would represent the difference of what you paid versus what it is worth now. You do not realize the gain or loss until you actually sell the stock.
Internally Restricted Surplus: This balance represents funds set aside by the University's Board of Governors for specific purposes and is sometimes referred to as reserves. This is like saving up a down payment for a car or house, or setting aside a "rainy day fund" to pay for the ongoing maintenance and unexpected costs of your house like replacing the roof or appliances when they wear out or when your furnace stops working. In the case of the University, it is, for example, upgrading IT systems, replacing roofs on residence buildings or replacing computers.
Unrestricted Surplus: This balance truly is available funds the University has at the end of the year. It represents the accumulated value of revenue over expenses since the inception of the University. These are funds that generally come from the savings realized when an employee leaves their position and the vacancy doesn’t get refilled immediately, from higher than expected investment earnings in one year, or from reducing expenditures in a particular year. The balance in the unrestricted fund is $465,000 out of a roughly $200 million total budget. To put this in perspective, it would be like having $140 left at the end of the year on a salary of $60,000/year after you paid all your bills and put aside any savings for the future. Unfortunately, these funds are “one-time" which means that they may not be realized or “earned” again the following year. For this reason, the University cannot use this surplus to support on-going expenses such as salaries.
Public Affairs | email@example.com