LAKELAND COLLEGE Annual Repor t 2008 - 2009

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14 ANNUAL REPORT 2008-2009 ManagemENT’s DisCUssiON ANd ANALysis Overview Management’s Discussion and Analysis should be read in conjunction with Lakeland’s annual audited financial statements and accompanying notes. These statements are reviewed and approved by the Lakeland College Board Audit Committee then forwarded to the Lakeland College Board of Governors for approval. In the 2008-2012 business plan, Lakeland budgeted an $800,000 deficit for the 2008-2009 year but the result was an excess of $437,000 of revenue over expenses. This $1.2 million variance is attributed to additional grants ($5.5 million), tuition ($800,000) and sales, rentals and services ($1 million) revenue exceeding budgeted amounts. These additional revenues were offset by supplies and services expenses of $7.1 million relating to grant spending and renovations to the Vermilion campus residences. In comparison to the 2007-2008 year, total revenue for 2008-2009 increased by $5.3 million while expenditures increased by $9.3 million inclusive of the $4.4 million of renovation expenses related to the Vermilion campus residences. Revenue increase was mainly attributed to grants ($4.4 million), tuition ($400,000) and amortization of deferred capital contributions ($700,000) which increased as a result of the grant and donor funding spent on the Bill Kondro Wing expansion at the Lloydminster campus. The expense line increases relate to salaries and benefits ($2.5 million), supplies and services (including the Vermilion campus residence renovations) of $5.8 million and amortization of capital assets which increased as a result of the September 2008 opening of the Bill Kondro Wing. Financial Information Revenues Total revenues increased 8.8 per cent from $57 million in 2007-2008 to $62 million in 2008-2009. The following table details the revenue sources of Lakeland as presented in the audited financial statements. Revenue By Source 2007 2008 2009 Grants $ 28,105,537 $ 32,449,903 $ 36,821,751 Tuition and related fees 10,892,314 10,304,775 10,746,780 Sales, rentals and services 4,989,706 5,361,073 5,611,361 Amortization of deferred capital contributions 2,486,207 2,578,117 3,292,462 Contract revenue 4,917,143 2,676,791 2,205,562 Investment income 807,262 1,060,282 877,119 Donations 289,169 241,548 186,464 Other 1,868,102 1,917,655 2,196,005 Total Revenue $ 54,355,440 $ 56,590,144 $ 61,937,504 Government grants Grant revenue represented about 59 per cent of Lakeland’s total revenue in 2008-2009, an increase of $4.4 million or 13 per cent from the previous year. Grants received from Advanced Education and Technology include base operations grants of $28.1 million (2007-2008 – $26 million), conditional grants of $4.2 million (2007-2008 – $1.8 million), as well as enrolment planning funding of $3.3 million (2007-2008 – $3.5 million). Conditional funding received from the Government of Saskatchewan was approximately $1.3 million which was up slightly from the $1.2 million received in 2007-2008. The general operating grant increase of $2.1 million is made up of the six per cent budgeted increase of $1.6 million, a $300,000 facility operations grant for the Bill Kondro Wing, and $200,000 tuition fee grant increase.
ANNUAL REPORT 2008-2009 Conditional grants increased by $2.4 million, due primarily to infrastructure spending on various repair and maintenance projects throughout Lakeland. In addition, $12.7 million in infrastructure grants that were received in 2008-2009 were not spent as of June 30, 2009. This money will be utilized for projects in future periods. Tuition Tuition revenue increased about $440,000 due to a significant increase in credit tuition fee revenue along with a decrease in non-credit programming tuition revenue. Credit tuition revenue increased by $1 million. This figure corresponds with the 6.5 per cent increase from the previous year in Full Load Equivalents (FLE). In addition, credit tuition fees were increased by the maximum allowable amount of 4.6 per cent for existing programs. New programs including event coordinator, renewable energy and conservation, pre-employment electrician, pre-employment welder and sign language interpretation accounted for 29 per cent of the FLE increase. The remaining growth is attributed to current programming particularly in the university studies and applied degree areas. Non-credit tuition decreased approximately $826,000 which is reflective of the shift in the emergency training centre’s programming to credit programming and the closure of the Strathcona County learning centre. Amortization of deferred capital contributions In 2008-2009, amortization of deferred capital contributions increased by $714,000 to $3.3 million. This reflects increased externally restricted funding provided for capital asset acquisitions which are subject to amortization. The opening of the Bill Kondro Wing in September 2008 accounted for the majority of the increase. Investment income Lakeland’s total investment income increased $31,000 to $1.6 million in 2008-2009 (see Note 17 of the audited financial statements). A significant portion of this investment income relates to the unspent grant funds. The investment income received from these funds was allocated to deferred contributions and deferred capital contributions as opposed to being reflected as investment income on the statement of operations. This is why investment income as reported in the statement of operations is $877,000 which is down $184,000 from the 2007-2008 total of $1,061,000. This decline in investment income is a result of the volatility and weakening of the markets in 2008-2009. Investment market challenges contributed to the $1.6 million reduction of Lakeland’s investment portfolios as detailed in Note 11 of the audited financial statements. Expenses Total expenses increased from $52.2 million in 2007-2008 to $61.5 million in 2008-2009, an increase of 17.8 per cent. Of this amount, $4.4 million was directly related to the renovation of the Vermilion campus residences compared to $800,000 spent on the residences in 2007-2008. The following table details Lakeland’s expenses as presented in the audited financial statements. 15 Expense By Source 2007 2008 2009 Salaries and benefits 26,826,878 29,268,210 31,778,421 Supplies and services 15,961,468 15,551,065 21,350,974 Amortization of capital assets 4,444,772 4,731,510 5,496,614 Utilities 1,849,871 1,841,927 2,179,431 Severance payments 135,142 124,345 - Interest expense 227,344 310,928 330,422 Scholarships and bursaries 374,835 366,505 355,405 Loss (gain) on disposal of assets (6,367) 48,826 9,778 Total expenses 49,813,943 52,243,316 61,501,045
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LAKELAND COLLEGE Annual Repor t 2008 - 2009

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