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BOARD OF GOVERNORS

Meeting Friday, December 1, 2017

Student Centre – Active Learning Classroom (2nd Floor, Room 2.02) Trent University – Peterborough Symons Campus

OPEN SESSION: 1:00 p.m. – 2:30 p.m.

AGENDA

1. Welcome and Adoption of Agenda S. Kylie, Chair

2. Declarations of Conflicts of Interest S. Kylie

3. Consent Agenda S. Kylie

Draft motion:That the Consent Agenda be approved [as presented or as amended]

3.1. Approval of MinutesOpen Session, October 13, 2017 (for approval) (pg. 3)

3.2. Financial StatusReport (for information) (pg. 7)

3.3. Capital Projects – Status UpdateReport (for information) (pg. 14)

3.4. Annual Report on Deferred MaintenanceReport (for information) (pg. 18)

3.5. Quarterly Investment Summary/Socially Responsible Investment Sub-FundReport (for information) (pg. 26)

3.6. Housing Strategy - UpdateReport (for information) (pg. 37)

4. Chair’s Remarks S. Kylie

5. President’s Report L. Groarke

5.1. Enrolment Report

6. Presentation from Board Scholarship Recipient G. Cubitt / VP Davis / Presentation Ms. T. Smith

7. Deputation – Trent Lands Plan Consultation Ms. D. Jenkins Presentation

8. A. La Barge / VP Pillar 2018-19 Tuition StrategyReport & Recommendation (for approval) (pg. 41)

Draft motion:That the Board of Governors approve the OSAP-eligible tuition fees for 2018/2019 aspresented in the attached table.

BOARD OPEN SESSION - December 1, 2017 of 179

9. C. Bonello / VPs Davis & Pillar Special Resolution II.9 – Annual Distribution fromthe Endowment FundReport & Recommendation (for approval) (pg. 45)

Draft motion:That the Board of Governors approve revisions to Special Resolution II.9 – Annual Distributionfrom the Endowment Fund, as presented.

10. P. Dilworth / VP Pillar 2016-17 Pension Financial StatementsReport & Recommendations (for approval) (pg. 61)

Draft Motion:That the Board of Governors approve:The Financial Statements of the Contributory Pension Plan for Employees Represented byOPSEU Local 365 and Exempt Administrative Staff of Trent University (Registration Number0310409) June 30, 2017 as presented, andThe Financial Statements of the Contributory Pension Plan for TUFA Employees of TrentUniversity (Registration Number 1048826) June 30, 2017 as presented,AND FURTHER, that the Board of Governors receive for information the Financial Statementsof the Supplemental Retirement Arrangement for Members of the Contributory Pension Planfor TUFA Employees of Trent University dated June 30, 2017.

11. C. Bonello / VP Pillar Special Resolution II.5 – Statement of Investment Policies &Procedures: Trent University Pension Fund, SupplementalRetirement Arrangement Fund, and Special Investment FundReport & Recommendation (for approval) (pg. 120)

Draft motion:That the Board of Governors approve revisions to Special Resolution II.5 – Statement ofInvestment Policies and Procedures: Trent University Pension Fund, SupplementalRetirement Arrangement Fund, and Special Investment Fund, as presented.

12. Cleantech Commons (formerly known as TRIP) – UpdateReport (for information) (pg. 153)

13.

L. Edwards / A. La Barge VPs Pillar, Emery & Davis

A. La Barge / VP Pillar Bata Research and Innovation ClusterReport (for information) (pg. 158)

14. A. La Barge / VP Pillar Student Centre – Final ReportReport (for information) (pg. 163)

15. A. La Barge / V. Pillar 2018-19 Operating Budget – Fiscal EnvironmentReport (for information) (pg. 168)

16. Meeting Adjournment S. Kylie


of 4

Board of Governors Minutes of the Meeting– Open Session

Keene, October 13, 2017

Present: S. Kylie (Chair), C. Bonello, G. Cubitt, P. Dilworth, C. Dummitt, L. Edwards, C. Gray, S. Graham Parker, L. Groarke, R. Jacobson, G. James, L. Kerr, A. La Barge, I. Lord, T. Miller, J. Panchal, S. Pieper, S. Rafi, C. Salo, S. Sinclair, H. Stafford, A. Stewart, M. Younis, (Vice-President, External Relations & Advancement) J. Davis, (Vice-President, Research and Innovation) N. Emery, (Provost & Vice-President, Academic) J. Muldoon, (Associate Vice-President, Marketing & Recruitment) M. Burns, (Associate Vice-President, Facilities Management) K. Stringham, (Associate Vice-President, Finance) C. Turk, (University Secretary) Karen Spearing, Richelle Hall (Recording Secretary).

Regrets: K. Armstrong, B. Cowie, D. Tapscott

[The Secretary confirmed that quorum was present for this meeting.]

1. Welcome and Adoption of Agenda. The Chair called the open session of the meeting to order at 12:55 p.m.

Hearing no amendments to the agenda and no declarations of conflicts of interest made, it was moved/seconded (James/La Barge),

That the Board approve the agenda as presented. Carried.

2. Consent Agenda. It was moved/seconded (Lord/Graham Parker)

That the consent agenda be approved as presented. Carried.

2.1. Approval of Minutes. The Open Session minutes of June 16, 2017 was approved as presented.

2.2. Financial Status - Update. Received as information.

3. Chair’s Remarks. The Chair acknowledged Governor La Barge who was presented with the Canada 150 award on September 12 for his volunteer work, years of public service and contributions to diversity, inclusivity and social justice. The Chair also recognized Governor Garry Cubitt who was going to be presented with the Trent Distinguished Alumni award on October 18.

The Chair reported that during the closed session meeting the Board agreed to make a public declaration of support for the UNITY statement, along with a preamble statement that speaks to support of overarching values and principles. The UNITY

Item 3.1 - Approval of Minutes BOARD OPEN SESSION - December 1, 2017 of 179

Board of Governors – Open Session Minutes Page 2 of 4

Statement was developed by the Make Trent Safe group and a coalition of students and faculty in response to what was to be an anti-immigration rally to be held on September 30.

4. President’s Report. President Groarke reported on recent events and, including:

Rankings. President Groarke reported that the Maclean’s magazine University Rankings 2018 was released on October 11. For the category of top primarily undergraduate university Trent moved up nationally ranking third and maintained the number one spot in Ontario for the seventh year in a row. Trent was also ranked number one in Canada for bursaries and number one in Ontario for extra-curricular activities. President Groarke further reported that Trent placed 933 out of 27,000+ (top 3.4%) degree-granting institutions worldwide by the Centre for World University Rankings and was ranked 276 out of 300 in the Environment/Ecology subject of the National Taiwan University Rankings (only 21 Canadian universities were included on this list.

Enrollment Update. President Groarke reported that recruitment for the current year is complete and that according to the Ontario University Application Centre (OUAC) Trent is up 18.2% in confirmations. Trent showed the largest increase in the system, which had an overall increase of 2.1%. In terms of accepts, Durham increased by 18.9% and Peterborough had a 12.9% increase. Marilyn Burns, Associate Vice-President of Marketing and Recruitment, reported that Trent had a market share of 1.86%, up from approximately 1.7% in previous years. With the current year’s enrollment projections, it is expected that Trent will see similar movement in the next market share report. In terms of recruitment for next year, AVP Burns reported that at the Ontario Universities Fair (OUF) in September Trent’s contacts increased by 28% over the previous year. She further noted that 7.3% more view books were been handed out, and 824 people tried the virtual reality tour at the OUF. Additionally, campus tours are up at both campuses. President Groarke noted that the Associate Vice-President of International and the Dean of Graduate Studies were going to be heading to China the following week for the opening of a Trent office in China established in collaboration with Centennial College.

Student Centre. President Groarke reflected on the successful grand opening of the Student Centre, which took place on September 29. He thanked all who were able to attend.

It was moved/seconded (Lord/Pieper),

That the Board of Governors receive the President’s Report as information. Carried.

Financial Oversight.

4.1. Capital Projects – General Update (including EPC). Governor La Barge, Chair of the Finance and Property Committee, presented the Capital Projects update to the Board. He reported that in June Trent went to tender for the creation of 18



beds in Crawford House at Traill College. Bids received were not acceptable from a cost perspective and the tender was withdrawn with plans to retender this fall.

Governor La Barge reported that the University entered into invasive work throughout the summer, particularly in relation to the replacement of the HVAC system in the Otonabee College academic building. The targeted payback period for the EPC is 10 years. At this time, it is roughly estimated that the first $10M in initiatives should be yielding a payback period of approximately 11 years.

VP Pillar reported that the Trent Grounds Operation needs to be moved by spring 2018 in order to allow for the construction of the twin-pad arena. Suitable relocation options are currently being investigated and a project budget will be developed once a final location is confirmed.

In response to a question regarding the historic former Orange Hall facility, AVP Stringham reported that Facilities Management is currently working on rough estimates to either repair the building at its current location or relocation.

It was moved/seconded (Dilworth/Kerr),

That the Board of Governors receive the Capital Projects – General Update as information. Carried.

4.2. Student Centre – Status Update. Governor La Barge, on behalf of the Finance and Property Committee, reported that the Student Centre was going to be fully operational by the following week with all services and furniture scheduled to be moved in.

Vice-President Pillar reported that the Student Centre is coming in on budget at $16M. It was noted that the response from students and faculty has been very positive.

The Board Chair acknowledged the Advancement department for their fundraising efforts towards this project, as well as all of the departments who partnered together to bring this project to completion.

It was moved/seconded (Jacobson/Stafford),

That the Board receive the Student Centre report as information. Carried.

4.3. 2016-17 Audited Financial Statements. Governor Dilworth, on behalf of the Audit Committee, reported that Trent University’s Auditors, McColl Turner, completed their audit of the 2016-17 financial statements. In the Independent Auditors’ Report McColl Turner gave the opinion that “the financial statements present fairly, in all material respects, the financial position of the University as at April 30, 2017 and the results of its operations and its cash flows for the year then



ended in accordance with Canadian accounting standards for not-for-profit organizations.” It was noted that $333.4K in misstatements were found during the audit, however they were determined not to be material to the financial statements.

AVP Turk reported that the operating fund had a small surplus of $254K for the year due to the increases in enrollment and due to the management of expenditures. When combined with the fund balance at the beginning of the year, the operating fund had a cumulative surplus of $2.4M. She further reported that long-term debt changed substantially with the debenture issue in February 2017 that refinanced existing debt and provided additional proceeds for the Bata Library Transformation Project. It was noted that the net pension deficit, at April 30, 2017, was $56.8M, substantially better than the $78.2M in the previous year.

It was moved seconded (Dilworth/Sinclair),

That the Board of Governors approve the Trent University Audited Financial Statements as at April 30, 2017. Carried.

4.4. Review of Quarterly Investment Performance (Q2). Governor Bonello, on behalf of the Investment and Pension Committee, presented a summary of quarterly investment performance. It was noted that, overall, funds are tracking to respective indices as expected, with no negative influences. Of specific note was the socially responsible investment (SRI) sub-fund which outperformed its benchmark during the quarter.

I was moved/seconded (Kerr/Graham Parker),

That the Board receive the Investment Performance Summary (Q2) as information. Carried.

5. Meeting Adjournment. The meeting was adjourned at 1:30 p.m.

Karen Spearing Stephen Kylie University Secretary Chair


BOARD OF GOVERNORS Report

To: Board of Governors Date of Report: November 14, 2017

From: Armand La Barge, Chair – Finance & Property Committee Steven Pillar, VP Finance & Administration

Date of Committee Meeting:

November 14, 2017

Date of Board Meeting: December 01, 2017

Subject: Financial Update Confidentiality: Not Confidential

1.0 PURPOSE

For Information 2.0 RECOMMENDATION That the Board of Governors receive updated financial information. 3.0 EXECUTIVE SUMMARY Trent’s operating financial position continues to improve in 2017/2018. Based on the summer and fall final enrolment and preliminary winter enrolment projections, enrolment is currently projected at 515 FTEs higher than last year, or 448 FTEs more than planned in the 2017/2018 Board-approved budget. As a result of the projected enrolment increases, the annual surplus is projected to increase by $1.7 million (tuition only net of scholarships) to $1.9 million. The cumulative operating surplus at April 30, 2017 would be $4.3 million. If the enrolment growth is funded, it will generate an additional $2.7 million in grant revenue for the fiscal year, resulting in an annual operating surplus of $4.6 million and a cumulative surplus in the Operating Fund of $7.0 million. The projected operating surplus affords Trent the opportunity to make strategic investments that will positively impact on student services, facilities and teaching as noted in the 2017/2018 Budget Surplus Strategy Board Report dated October 25, 2017. An overview of Trent’s current financial position as of September 30, 2017 and projections to year-end are attached. These projections are subject to change once February 1 final enrolment counts are completed. 4.0 INPUT FROM OTHER SOURCES

Item 3.2 - Financial Status BOARD OPEN SESSION - December 1, 2017 of 179

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Not applicable 5.0 ANALYSIS Cash flows are better than the previous year due to the proceeds from the $71M in

debentures, which are intended to fund the University’s share of the Bata Library Transformation project. Cash on hand at September 30, 2017 was $52,467,555 compared to $36,296,885 on the same date in 2016.

Based on summer actual enrolment, November 1 fall final enrolment count, and winter projections, undergraduate enrolment is estimated to be 460 FTEs higher than last year. In addition, graduate enrolment is currently projected to be 55 FTEs more than 2016/2017, bringing the total projected increase in enrolment to 515 FTEs. The budget planned for an increase of 67 FTEs. These enrolment projections are preliminary using prior years’ experience regarding fall-to-winter ratios and retention rates; final enrolment will not be determined until the February 1 count date.

At this time, the University is not including in its financial forecast any increase in

government funding related to enrolment growth. The SMA2 is pending final approval, following which actual government grants will be finalized. The decrease of $315,000 in government grants relates to known changes in special purpose grants, which are not dependent on enrolment.

As a result of the projected increase in enrolment, tuition fees are expected to increase

by $3.595 million.

Student financial aid is also projected to increase by approximately $1.515 million over the Board-approved budget due to two factors: (a) the substantial increase in enrolment and (b) the increase in the quality of students, including an increase in entering students’ grade point average which is trending higher than last year.

6.0 FINANCIAL IMPLICATIONS To fulfill their responsibilities, Governors should be informed of the University’s financial situation. Regular financial updates such as these will maintain Governors’ awareness of the University’s current financial status and allow for input and oversight where needed.

7.0 ENTERPRISE RISK ASSESSMENT See 3.0 above. 8.0 STRATEGIC ALIGNMENT / COMPLIANCE Complying with a Board of Governors directive, the full Board will receive regular financial updates, in addition to a briefing at the Finance and Property Committee level.


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9.0 COMMUNICATIONS STRATEGY Not applicable. Steven Pillar, Vice President, Finance and Administration Cheryl Turk, Associate Vice President, Finance


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2016/17 ACTUAL

2017/18 BOARD-

APPROVED BUDGET

ANTICIPATED VARIANCES

AND BALANCING

ACTIONS

2017/18 PROJECTION

(November 2017)

REVENUEGovernment grants 55,969$ 55,515$ (315)$ 55,200$

Tuition fees 63,394$ 65,987$ 3,595$ 69,582$ Miscellaneous revenue 3,843$ 1,568$ -$ 1,568$ TOTAL REVENUE 123,206$ 123,070$ 3,280$ 126,350$

EXPENSES Instructional staff 57,434$ 64,180$ -$ 64,180$ Non-instructional staff 36,057$ 37,182$ -$ 37,182$ Student Financial Aid 8,516$ 9,113$ 1,515$ 10,628$ Non-staff expense 20,944$ 21,241$ -$ 21,241$ Total staff expense 122,951$ 131,716$ 1,515$ 133,231$

Cost recoveries -$ (7,689)$ -$ (7,689)$ TOTAL NET EXPENSE 122,951$ 124,027$ 1,515$ 125,542$

EXCESS OF REVENUE OVER EXPENSE (EXPENSE OVER REVENUE) 255$ (957)$ 1,765$ 808$

Change in Investment in Capital Assets/Internally Restricted -$ 1,116$ -$ 1,116$

ANNUAL SURPLUS (DEFICIT) for University Operations 255$ 159$ 1,765$ 1,924$

ACCUMULATED SURPLUS (DEFICIT) - BEGINNING OF YEAR 2,119$ 2,374$ -$ 2,374$

ACCUMULATED SURPLUS (DEFICIT) - END OF YEAR 2,374$ 2,533$ 1,765$ 4,298$

TRENT UNIVERSITY2017-18 OPERATING BUDGET PROJECTION

($000s)As of September 30th 2017


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Operating Actual vs Budget FY2017/18Year-to-date, Projection and Budget by Object (thousands of dollars)Report date: September 30, 2017Run date: November 7, 2017

YTD Budget ProjectionVariance Variance

YTD YTD Favourable Annual Annual FavourableActual Budget (Unfavourable) Budget Projection (Unfavourable)

REVENUEGovernment grants 22,762 23,131 (369) 55,515 55,200 (315)

Tuition 39,449 37,613 1,837 65,987 69,582 3,595

Miscellaneous revenue 296 296 0 1,568 1,568 0TOTAL REVENUE 62,507 61,040 1,468 123,070 126,350 3,280

EXPENSESalaries & BenefitsInstructional 18,837 19,254 417 64,180 64,180 0Academic Support 4,144 3,640 (504) 8,735 8,735 0Library 1,154 1,332 177 3,196 3,196 0Information Technology 1,112 1,160 48 2,785 2,785 0Student Services 1,033 1,170 137 2,807 2,807 0Physical Resources 2,685 2,750 65 6,600 6,600 0Administration 3,478 3,848 370 9,235 9,235 0External Relations 951 1,005 54 2,411 2,411 0Other 414 589 174 1,413 1,413 0TOTAL SALARIES & BENEFITS 33,808 34,747 939 101,362 101,362 0

STUDENT FINANCIAL AIDUndergrad 3,805 4,189 384 7349 8864 1,515Grad 623 469 (154) 823 823 0International 563 536 (26) 941 941 0TOTAL STUDENT FINANCIAL AID 4,991 5,194 204 9,113 10,628 1,515

Non-staff expenseUtilitiesElectricity 430 915 486 2,746 2,746 0Gas 168 198 30 594 594 0Water 40 56 16 168 168 0Oil 0 0 0 0 0 0TOTAL UTILITIES 638 1,169 532 3,508 3,508 0

SuppliesComputer equip, mtnce, licenses 1,144 958 (187) 1520 1,520 0Telephone 181 205 24 493 493 0Consulting, legal & professional 142 207 65 497 497 0PRD repairs & maintenance 468 760 292 1,825 1,825 0Travel 130 315 185 755 755 0Library acquisitions 850 708 (142) 1,335 1,335 0External contracts 613 748 135 1,795 1,795 0Fleming 0 172 172 412 412 0Insurance 288 174 (114) 417 417 0Professional development 133 224 91 537 537 0Interest 524 898 374 2,155 2,155 0Municipal taxes 573 573 0 604 604 0Other supplies & operating costs 1,576 2,245 669 5,388 5,388 0Appropriations 0 0 0 0 0 0TOTAL SUPPLIES 6,622 8,186 1,564 17,733 17,733 0

TOTAL NON-STAFF EXPENSES 7,260 9,355 2,095 21,241 21,241 0(including utilities)


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Operating Actual vs Budget FY2017/18Year-to-date, Projection and Budget by Object (thousands of dollars)Report date: September 30, 2017Run date: November 7, 2017

YTD Budget ProjectionVariance Variance

YTD YTD Favourable Annual Annual FavourableActual Budget (Unfavourable) Budget Projection (Unfavourable)

Cost RecoveriesPRD admin, MEM, caretaking, etc. (1,099) (1,099) 0 (2,677) (2,677) 0Admin overhead 0 0 0 (1,571) (1,571) 0Revenue line items (2,518) (2,518) 0 (2,678) (2,678) 0Other (57) (57) 0 (763) (763) 0TOTAL COST RECOVERIES (3,674) (3,674) 0 (7,689) (7,689) 0

EXCESS (DEFICIENCY) OF REVENUE OVER EXPENSE 20,122 15,417 4,705 (957) 808 1,765

Change in internally restricted 335 335 0 1,116 1,116 0

ANNUAL SURPLUS (DEFICIT) 20,457 15,752 4,705 159 1,924 1,765

SUMMARYRevenue 62,507 61,040 1,468 123,070 126,350 3,280

ExpensesSalaries and benefits 33,808 34,747 939 101,362 101,362 0Student financial aid 4,991 5,194 204 9,113 10,628 1,515Non-staff expense 7,260 9,355 2,095 21,241 21,241 0Cost recoveries (3,674) (3,674) 0 (7,689) (7,689) 0

42,384 45,622 3,238 124,027 125,542 1,515

EXCESS (DEFICIENCY) OF REVENUE OVER EXPENSE 20,122 15,417 4,705 (957) 808 1,765

Change in internally restricted 335 335 0 1,116 1,116 0

ANNUAL SURPLUS (DEFICIT) 20,457 15,752 4,705 159 1,924 1,765



To:

Board of Governors

Date of Report:

November 14, 2017


Date of Committee Meeting: November 14, 2017


Subject: Capital Projects Update

Confidentiality: Not Confidential 1.0 PURPOSE For Information

2.0 RECOMMENDATION That the Board of Governors receive this report for information.

3.0 EXECUTIVE SUMMARY The following provides an update with respect to capital projects recently completed or currently underway: 2017/2018 Facility Renewal Projects (FRP) Deferred maintenance on campus is estimated at $55m+. Ontario Universities receive an annual grant amount targeted towards the repair and maintenance of campus infrastructure. The 2017/2018 FRP Grant of $536k has been fully applied to the BRIC Project, as approved by the Ministry of Advanced Education & Skills Development (MAESD). This is in addition to the 2016/2017 FRP Base Grant of $535k, previously applied to the BRIC Project. It is intended that the 2018/2019 FRP Grant, when announced, will be utilized to resume addressing priority deferred maintenance and campus safety issues, as it has in the past. Trent Grounds Operation Relocation The Trent University Grounds Operation, on the southeast corner of Pioneer Road and Nassau Mills Road, must be relocated to allow for the construction of the new City Arena Complex. This Grounds Operation currently occupies approximately 4 acres.

Item 3.3 - Capital Projects - Status Update BOARD OPEN SESSION - December 1, 2017 of 179

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Suitable relocation options are still being investigated. Once a final location is confirmed, a project budget will be developed. The planning and consulting associated with the demolition of the current Grounds Operation is complete, with an RFP package ready to go to market when required. It is assumed that the current Grounds Operation must be moved, and the facilities demolished, by Spring of 2018. The Ministry of Natural Resources (MNR), who were tenants on this site, have already vacated the premises, as requested.

Crawford House at Traill College – Residence Conversion Crawford House is one of four houses on the Traill Campus, constructed in the mid-1800’s. It’s recent occupants have included faculty and graduate students. Crawford House is physically attached to Wallis Hall. Crawford House is to be repurposed into an 18-bed residence building. The conversion project was intended to take place in Summer 2017, and was tendered in June. Unfortunately, market conditions within the local construction trades, at the time, resulted in competitive bids that were far from acceptable from as cost perspective. As a result, the tender process was withdrawn at that time. In anticipation of a Fall 2017 re-tender, Crawford House was emptied, and a new roof was installed in July 2017. Additionally, the student laundry facilities in the adjoining Wallis Hall were upgraded during the Summer to accommodate the 18 more students intended to live in Crawford House next Fall. This project was re-tendered in October 2017 resulting in a far better outcome. Five competitive bids were received, with Snyder Construction being awarded the contract. Construction is expected to begin as early as December 2017 with completion required by June 30, 2018. Energy Performance Contract (EPC) Ameresco and Trent continue to work in close partnership to design and implement the energy-saving initiatives contemplated under the original budget, while optimizing payback periods and addressing the most urgent of deferred maintenance issues, wherever possible. Given the reality of the academic calendar at a post-secondary institution, the majority of invasive mechanical/electrical work must take place during the summer months. Summer and Fall 2016 saw the retrofit of over 35,000 light bulbs and related ballasts along with the replacement of a major boiler system. Resulting from the design and engineering work that took place in early 2017, the following new initiatives have been completed in 2017 or are underway as of the date of this report:


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• Electrical Transformer Replacements Lady Eaton and Champlain College. Many more to come. Requires large scale electrical shutdowns so work will be timed with quieter periods in the academic year. – Partially Complete

• Athletics Pool Mechanical Infrastructure Pool was taken out of operation for six weeks while a complete pump and filter replacement took place. Other deferred maintenance issues addressed at the time. – Complete

• Champlain College Residence Boiler Replacements Replaced multiple boiler units in multiple building. – Complete

• Lady Eaton College Residence Boiler Replacement

Replaced multiple boiler units in multiple building. – Complete

• DNA Building ‘D’ Lab Demand-Based Ventilation Technology and infrastructure being installed to reduce the amount of heated or cooled air is discharged out of the building. Science spaces are targeted as they carry with them a large demand for air exchanges. – Partially Complete

• Chemical Science Building Lab Demand-Based Ventilation

Technology and infrastructure being installed to reduce the amount of heated or cooled air is discharged out of the building. Science spaces are targeted as they carry with them a large demand for air exchanges. – Partially Complete

• Otonabee College Academic Building HVAC The summer of 2017 saw this very involved replacement of the HVAC system in the OC Academic Building. This project impacted every space within the large building, while still enabling staff faculty and students to carry on normal operations. Although the most intrusive work is complete, the mechanical room is now being refitted to support the improved technology that now exists throughout the building. This large-scale replacement will allow Facilities Management to operate the building in a way that reduces energy costs and improves comfort throughout. – Complete.

The targeted payback period for this EPC is ten years. Ameresco is in the process of performing final closeouts of completed projects, and updating the estimated resulting energy savings from each initiative. They will also indicate the associated total estimated utilities cost savings at 2017/2018 rates. At this time, it is roughly estimated that the first $10m in initiatives should be yielding a payback period of approximately 11 years. The remaining $5m in uncommitted budget, as was the case with the first $10m, will be planned in such a way as to optimize both financial payback and addressing critical deferred maintenance issues.


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TRENT UNIVERSITY Energy Performance Contract (EPC)

As at September 30, 2017 Work Approved To-Date $10,382,527 67.0%

Remaining Budget $5,117,034 33.0%

Total Capital Budget $15,499,561 100.0%

Work Completed To-Date $7,669,416

4.0 INPUT FROM OTHER SOURCES

The Datatel Financial system, VFA Facilities Database, and Web Work Order system, Contractor Progress Billings.

5.0 ENTERPRISE RISK ASSESSMENT Energy Performance Contact: Construction will take place over the course of two years, and will impact all buildings and external mechanical and electrical at Trent. It must be ensured that all work will take place safely, within regulatory requirements and with as little interruption to normal business as possible. Once completed, this project will have addressed an estimated $5.8M in deferred maintenance issues.

6.0 STRATEGIC ALIGNMENT / COMPLIANCE

Section 10 of the Trent Act vests in the Board the power and responsibility over and for the management of the property of the University.

7.0 COMMUNICATIONS STRATEGY

The Facilities Management Department provides regular updates on the status of construction projects, highlighting how the projects will affect the Trent community via the myTrent portal as well as through the website. Key stakeholders will also be notified through the email system and site signage will be in place, as required.



To:

Board of Governors Date of Report: November 14, 2017

From: Armand La Barge, Chair – Finance & Property Committee Steven Pillar Vice President, Finance and Administration



Subject: Annual Report on Deferred Maintenance

Confidentiality: Not Confidential

1.0 PURPOSE For Information

2.0 RECOMMENDATION That the Board of Governors receive this report for information.

3.0 EXECUTIVE SUMMARY Background Similar to all Ontario Universities, Trent University’s Deferred Maintenance (DM) backlog encompasses building systems and infrastructure as they age such as roofs, boilers, windows, chillers, bridges, etc. that are kept in operation past their normal service lives when capital funds are not available to replace them. The deferred maintenance backlog at Trent University was estimated at $60m, in 2012, based upon a facilities assessment performed at that time. Trent intends to engage in another review in 2017/2018 to update the facilities condition database. This information will be used to inform longer-term planning related to major capital repair and replacement.

Item 3.4 - Annual Report on Deferred Maintenance BOARD OPEN SESSION - December 1, 2017 of 179

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Over the last five years, Trent has been able to complete approximately $20m in capital repair/replacement initiatives that targeted existing deferred maintenance issues. This was accomplished by way of:

-$5m in Board-approved deferred maintenance spending beginning in 2012 -$2.5m in Board-approved deferred maintenance spending – Residence Buildings -$6m as part of the $15.5m Energy Performance Contract (EPC) -$6m as part of the $18m Bata Building renovation. -$1m in annual Facilities Renewal Program (FRP) MAESD Grant

Taking this $20m investment into account, along with the $60m estimate from the 2012 study, along with the continued deterioration of campus infrastructure, Trent estimates a current deferred maintenance backlog of approximately $45m to $50m. The annual FRP Grant for 2018/2019, although not yet announced, is anticipated to be in the range of $500k to $750k. This funding will be used, as in past years, to address priority deferred maintenance and campus safety items issues. The ministry of Advanced Education & Skills Development (MAESD) has recently announced the Greenhouse Gas Campus Retrofit Program (GGRP) that would make capital funding available to Universities who can reduce greenhouse gas (GHG) emissions by way of capital improvements. As more information related to this new program become available, Trent University will look to identifying deferred maintenance issues that would fit with the spirit and intent of the program, to leverage this funding. Going forward, it is anticipated that the MAESD will insist that GHG reductions be an essential component of any deferred capital projects it intends to fund. An update regarding the potential for this newly-announced source of funding to assist in addressing additional deferred maintenance issues at Trent will be provided at the January 2018 meeting of the Finance & Property Committee.

Current Condition of Trent University Assets An external facilities condition audit is typically undertaken every five years and the last facility condition audit of Trent assets was performed in 2012. The graph, below, illustrates the level of critical and overall DM requirements for all Trent assets based on the 2012 facility condition audit. Currently Critical requirements were shown in red and are items that needed to be addressed in the short term (including violations of life safety, building, and electrical codes) or where the systems (building envelope, roof, mechanical systems, etc.) were at or exceeding expected service life.


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Illustration 2: Deferred Maintenance by Asset by Priority - 2012 As illustrated in the chart below, 61%, or just over $33.6M of the 2012 DM backlog consisted of systems that were beyond their useful life. Not all of those items were critical items. However, this fact illustrates that many of our systems were being stretched beyond their normal expected life which results in issues from the outdated appearance of our facilities (i.e. flooring, bathroom fixtures, etc.) to failure of a critical system (i.e. HVAC, roof, electrical).


- 4 -

Illustration 3: Deferred Maintenance by Category

Facility Condition Index (FCI) The overall condition of our facilities were further benchmarked by the Facilities Condition Index (FCI). This calculates the total estimated DM requirements over replacement value of the assets (buildings/bridges). Trent’s overall FCI, including academic, ancillary and infrastructure assets were calculated at 13.2% which indicated an overall poor condition of our facilities (any FCI over 10% is considered to be in poor condition). Over 50% of Trent University buildings, which equated to over 72,999 square meters of our facilities were classified as being in poor condition. Facilities Condition Index:

Ont. Universities Average Academic only FCI = 11%, poor Trent University Average Academic only FCI = 11.3% poor

Trent overall FCI = 13.2%, poor


- 5 -

As previously noted, the above analysis is based on the 2012 facilities condition audit. New deferred maintenance requirements, as systems continue to deteriorate, will not be captured until the next full facility audit. This audit, intended to take place in 2017/2018, is available as a result of a group tender with other universities, and would typically cost upwards of $150,000; funding for which would need to be identified. Deferred Maintenance Funding Strategies 2012 Board-Approved Strategy - $7.5m The last facilities audit of the condition of Trent University buildings was performed in 2012, where the deferred maintenance backlog was estimated at that time to be $60M. In an effort to begin to address this, in May of 2012 the Board of Governors approved a strategy to fund priority DM projects over three to five years by debt financing $5.0M for non-residence projects and $2.5M for Housing projects. Over the next four years a number of high risk projects were completed under this DM fund, including repairs to the Faryon Bridge, replacement of the main incoming electrical line to Symons campus and the replacement of the Stephenson (LEC) Bridge. This approved DM funding source was exhausted by Summer 2015. Facilities Renewal Program (FRP) Grant – Ministry of Advanced Education & Skills Development (MAESD) Ontario Universities receive an annual grant amount targeted towards the repair and maintenance of campus infrastructure. The 2017/2018 FRP Grant of $536k has been fully applied to the BRIC Project, as approved by MAESD. This is in addition to the 2016/2017 FRP Base Grant of $535k, previously applied to the BRIC Project. It is assumed that the 2018/2019 FRP Grant, when announced, will be utilized to resume addressing priority deferred maintenance and campus safety issues, as it has in the past. Although not yet announced, the 2018/2019 FRP Grant is anticipated to be in the range of $500k to $750k. Energy Performance Contract (EPC) – Ameresco Ameresco and Trent continue to work in close partnership to design and implement the energy-saving initiatives contemplated under the original budget, while optimizing payback periods and addressing the most urgent of deferred maintenance issues, wherever possible. It is estimated that the final scope of the $15.5m EPC Capital Project will have replaced or refurbished approximately $6m in deferred mechanical and electrical maintenance issues by December 2018. This would include replacement of several major boiler systems,


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underground and outdoor electrical infrastructure, ageing transformers, inoperable HVAC infrastructure and controls and building envelope repairs. BRIC Given the expansive scope of the $18m Bata Building renovation project, a significant number of deferred maintenance issues will be addressed by Summer 2018. The planned scope of work that will specifically address known deferred maintenance issues include:

• Roof replacement • Atrium skylight replacement • Cedar sun shade replacement • Electrical switchgear and related infrastructure replacement • HVAC and controls full replacement • Window remediation • All interior floors, walls, ceilings and finishes • Sprinkler system replacement • Ballasts and fixture components replacement

It has been estimated that approximately $6m in existing deferred maintenance issues, associated with the Bata Building, will have been addressed at completion of this project. Greenhouse Gas Campus Retrofit Program (GGRP) Under the umbrella of the Ministry of Environment & Climate Change (MOECC)’s ‘Climate Change Action Plan’ (CCAP), the Ministry of Advanced Education & Skills Development (MAESD) has just launched the GGRP. The GGRP is a capital grant program established to assist postsecondary institutions to reduce their greenhouse gas (GHG) emissions and improve the energy efficiency of their campuses. There are three distinct funding envelopes, under this program, that Trent is currently pursuing:

1. Retrofits Grant Fund - $2.3m will be granted to Trent University to fund 2017/2018 projects that result in GHG emissions reductions. Trent’s EPC has multiple qualifying initiatives that will be commenced and completed in 2017/2018. Project descriptions, with associated GHG reduction estimates have been submitted to MAESD for approval. Confirmation of this grant approval has not been received as of this date.

2. Innovation Grant Fund – Universities will be asked to submit capital project

proposals that will, similarly, result in reduced GHG emissions. This grant envelope will provide Universities the opportunity to compete for funding from a $77.2m pool. Preference will be given to projects that result in co-benefits, beyond GHG reductions, such as environmental, social, economic or educational. More information will follow regarding the application process.


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3. Interest-Free Loan Fund - Trent University has been advised that it may have the opportunity to access a $2.3m interest-free loan to fund retrofit projects that achieve a 10-year-or-better financial payback. This fund will be available for the next four fiscal years. More information is anticipated from MAESD as far as process and application timelines.

It is hoped that with the announcement of these three MAESD capital funding opportunities, that Trent can take advantage of the opportunities presented to address additional deferred maintenance issues on its campuses. Priority Deferred Maintenance Projects as of November 6, 2017

Estimated CostBata 'Catwalk' $1,100,000Great Hall Roof - Champlain $1,500,000Building Condition Study $150,000Electrical Switchgear Replacement $900,000Sound Attenuation Projects (MOE-mandated) $250,000Traill Campus Outdoor Stairs and Walkways $100,000Symons Campus Outdoor Stairs and Walkways $100,000

$4,100,000

Trent UniversityDeferred Maintenance Priorities - at November 2017

4.0 INPUT FROM OTHER SOURCES VFA Facilities Database; Datatel Financial System; CH2M Hill Report on Bata Catwalk, COU Ontario Universities’ Facilities Condition Assessment Program report, March 2016, Accessibility Improvements Implementation Cost Analysis April 14, 2014 F&P Report, University Risk List No.102. 5.0 FINANCIAL IMPLICATIONS

The scope of deferred maintenance on campus is beyond what the University can fund with current resources. Further funding sources will need to be identified from government grants or further debt-financing to undertake deferred maintenance items that have a high risk of failure which may result in damage to university property or reputation.


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6.0 ENTERPRISE RISK ASSESSMENT The deferred maintenance backlog represents a chronically underfunded liability for the institution that could lead to a severe financial loss if a strategic component fails in service. The likelihood of a deferred maintenance item failing increases each year that it is not repaired or replaced. Some deferred maintenance items could cause leaks, collapse, or present safety hazards that would then become much more expensive to repair and could result in business interruption or revenue loss. It is also a potential student recruitment and retention problem due to the aged appearance of the infrastructure.


Section 10 of the Trent Act vests in the Board the power and responsibility over and for the management of the property of the University. 8.0 COMMUNICATIONS STRATEGY

Facilities Management provides regular updates on the status of construction projects, highlighting how the projects will affect the Trent community via the myTrent portal as well as on our website http://www.trentu.ca/facilitiesmanagement/. Key stakeholders will also be notified through the email system as required. A current 2016 summer project list is available on the Facilities Management website and on myTrent.


http://www.trentu.ca/facilitiesmanagement/

Visit the Aon Hewitt Retirement and Investment Blog (http://retirementandinvestmentblog.aon.com); sharing our best thinking.

Trent University Funds | Quarterly Period Ending 30 September 2017

Investment Review - Executive Summary

Item 3.5 - Quarterly Investment Summary/ Socially Responsible Investment Sub-Fund


Executive Summary

Page 1



AllocationMarketValue($000)

%

Performance (%)

1Quarter

1Year

2Years

3Years

4Years

5Years

10Years

Pension Fund* 319,861 100.0 1.0 (43) 5.9 (56) 7.7 (53) 5.8 (89) 7.8 (88) 8.1 (90) 5.0 (100)Benchmark 1.0 5.9 7.6 5.8 7.8 8.1 5.2Value Added 0.0 0.0 0.1 0.0 0.0 0.0 -0.2Balanced Funds Median 0.9 6.1 7.8 7.0 9.2 9.8 6.2TDAM Emerald Canadian Equity Index 95,750 29.9 3.7 9.3 11.7 4.6 8.4 8.1 -S&P/TSX Composite 3.7 9.2 11.7 4.5 8.3 8.1 4.1Value Added 0.0 0.1 0.0 0.1 0.1 0.0 -

TDAM Emerald Pooled U.S. Equity Index 24,078 7.5 0.6 12.9 13.0 15.0 18.6 19.8 -S&P 500 (CAD) 0.6 12.9 13.0 15.0 18.7 19.8 9.9Value Added 0.0 0.0 0.0 0.0 -0.1 0.0 -

TDAM Emerald Hedged Synthetic U.S. Equity Index 24,004 7.5 4.3 17.9 16.3 10.4 12.8 14.2 -S&P 500 Hedged TR (CAD) 4.2 17.9 16.3 10.4 12.8 14.2 6.7Value Added 0.1 0.0 0.0 0.0 0.0 0.0 -

TDAM Emerald International Equity Index 48,229 15.1 1.5 13.4 8.8 9.1 10.2 13.8 -MSCI EAFE (Net) (CAD) 1.5 13.3 8.8 9.1 10.1 13.7 3.7Value Added 0.0 0.1 0.0 0.0 0.1 0.1 -

TDAM Emerald Canadian Bond Index 116,596 36.5 -1.8 -2.9 1.6 2.8 3.7 2.6 -FTSE TMX Universe Bond -1.8 -3.0 1.6 2.8 3.7 2.7 4.7Value Added 0.0 0.1 0.0 0.0 0.0 -0.1 -

TDAM Emerald Short-Term Index 11,159 3.5 0.2 0.9 0.9 1.0 1.0 1.1 1.5FTSE TMX 91-Day T-Bill 0.1 0.5 0.5 0.6 0.7 0.7 1.1Value Added 0.1 0.4 0.4 0.4 0.3 0.4 0.4

Executive Summary - By Plan

Trailing Period PerformanceAs of 30 September 2017

Parentheses contain percentile rankings.* Total fund market value includes cash account balance (if any).

Page 2




%

Performance (%)

1Quarter

1Year

2Years

3Years

4Years

5Years

10Years

Endowment Fund* 57,353 100.0 0.8 (53) 6.3 (39) 7.7 (52) 6.5 (72) 8.3 (85) 8.8 (83) 5.0 (100)Benchmark 0.8 6.3 7.7 6.4 8.3 8.8 5.4Value Added 0.0 0.0 0.0 0.1 0.0 0.0 -0.4Balanced Funds Median 0.9 6.1 7.8 7.0 9.2 9.8 6.2

Endowment (TDAM Funds) 53,436 93.2 0.8 (52) 6.4 (39) 7.6 (57) 6.4 (74) 8.2 (85) 8.8 (83) 5.0 (100)Endowment Benchmark 0.8 6.3 7.7 6.4 8.3 8.8 5.4Value Added 0.0 0.1 -0.1 0.0 -0.1 0.0 -0.4Balanced Funds Median 0.9 6.1 7.8 7.0 9.2 9.8 6.2TDAM Emerald Canadian Equity Index 10,659 18.6 3.7 9.3 11.7 4.6 8.3 8.1 -S&P/TSX Composite 3.7 9.2 11.7 4.5 8.3 8.1 4.1Value Added 0.0 0.1 0.0 0.1 0.0 0.0 -

TDAM Emerald Pooled U.S. Equity Index 5,361 9.3 0.6 12.9 13.0 15.0 18.6 19.8 -S&P 500 (CAD) 0.6 12.9 13.0 15.0 18.7 19.8 9.9Value Added 0.0 0.0 0.0 0.0 -0.1 0.0 -

TDAM Emerald Hedged Synthetic U.S. Equity Index 5,344 9.3 4.2 17.5 16.0 10.0 12.4 13.7 -S&P 500 Hedged TR (CAD) 4.2 17.9 16.3 10.4 12.8 14.2 6.7Value Added 0.0 -0.4 -0.3 -0.4 -0.4 -0.5 -

TDAM Emerald International Equity Index 10,738 18.7 1.5 13.3 8.8 9.1 10.2 13.8 -MSCI EAFE (Net) (CAD) 1.5 13.3 8.8 9.1 10.1 13.7 3.7Value Added 0.0 0.0 0.0 0.0 0.1 0.1 -

TDAM Emerald Canadian Bond Index 19,735 34.4 -1.8 -2.9 1.6 2.8 3.7 2.6 -FTSE TMX Universe Bond -1.8 -3.0 1.6 2.8 3.7 2.7 4.7Value Added 0.0 0.1 0.0 0.0 0.0 -0.1 -

TDAM Emerald Short-Term Index 1,597 2.8 0.2 0.9 0.9 1.0 1.0 1.1 1.4FTSE TMX 91-Day T-Bill 0.1 0.5 0.5 0.6 0.7 0.7 1.1Value Added 0.1 0.4 0.4 0.4 0.3 0.4 0.3



Parentheses contain percentile rankings.* Total fund market value includes cash account balance (if any).** Fund inception was 11 January 2016. Composite returns represent total returns realized by the Endowment Fund. Underlying fund returns are shown on a historical basis and sourced from the manager.*** Historical returns calculated on a monthly basis using an asset mix of 80% large cap and 20% small cap.

Page 3






%

Performance (%)

1Quarter

1Year

2Years

3Years

4Years

5Years

10Years

NEI SRI Funds ** (Sub-Fund of the Endowment Fund) 3,917 6.8 0.8 7.0 - - - - -NEI SRI Fund Benchmark 0.8 5.8 8.6 6.8 9.0 9.2 5.7Value Added 0.0 1.2 - - - - -

NEI Ethical Canadian Equity *** 1,173 2.0 2.3 8.6 14.4 7.5 10.3 13.1 7.6NEI Ethical Canadian Equity Benchmark 3.7 8.6 14.0 5.2 8.8 8.4 4.6Value Added -1.4 0.0 0.4 2.3 1.5 4.7 3.0

NEI Ethical Global Equity 1,376 2.4 1.5 14.9 16.8 14.8 15.6 17.4 8.0MSCI World (Net) (CAD) 1.0 12.4 10.8 11.8 14.3 16.4 6.6Value Added 0.5 2.5 6.0 3.0 1.3 1.0 1.4

NEI Canadian Bond 1,369 2.4 -1.3 -2.0 2.1 3.2 3.9 2.9 4.9FTSE TMX Universe Bond -1.8 -3.0 1.6 2.8 3.7 2.7 4.7Value Added 0.5 1.0 0.5 0.4 0.2 0.2 0.2

Parentheses contain percentile rankings.* Total fund market value includes cash account balance (if any).** Fund inception was 11 January 2016. Composite returns represent total returns realized by the Endowment Fund. Underlying fund returns are shown on a historical basis and sourced from the manager.*** Historical returns calculated on a monthly basis using an asset mix of 80% large cap and 20% small cap.

Page 4




%

Performance (%)

1Quarter

1Year

2Years

3Years

4Years

5Years

10Years

Endowment Lands Fund* 2,727 100.0 0.9 (51) 6.4 (39) 7.7 (53) 6.4 (73) - - -Benchmark 0.8 6.3 7.7 6.4 8.3 8.8 5.4Value Added 0.1 0.1 0.0 0.0 - - -Balanced Funds Median 0.9 6.1 7.8 7.0 9.2 9.8 6.2TDAM Emerald Canadian Equity Index 544 19.9 3.7 9.3 11.7 4.6 - - -S&P/TSX Composite 3.7 9.2 11.7 4.5 8.3 8.1 4.1Value Added 0.0 0.1 0.0 0.1 - - -

TDAM Emerald Pooled U.S. Index 274 10.0 0.6 12.9 13.0 15.1 - - -S&P 500 (CAD) 0.6 12.9 13.0 15.0 18.7 19.8 9.9Value Added 0.0 0.0 0.0 0.1 - - -

TDAM Emerald Hedged Synthetic U.S. Equity Index 273 10.0 4.2 17.5 16.0 10.0 - - -S&P 500 Hedged TR (CAD) 4.2 17.9 16.3 10.4 12.8 14.2 6.7Value Added 0.0 -0.4 -0.3 -0.4 - - -

TDAM Emerald International Equity Index 548 20.1 1.5 13.4 8.8 9.2 - - -MSCI EAFE (Net) (CAD) 1.5 13.3 8.8 9.1 10.1 13.7 3.7Value Added 0.0 0.1 0.0 0.1 - - -

TDAM Emerald Canadian Bond Index 1,007 36.9 -1.8 -2.9 1.6 2.8 - - -FTSE TMX Universe Bond -1.8 -3.0 1.6 2.8 3.7 2.7 4.7Value Added 0.0 0.1 0.0 0.0 - - -

TDAM Emerald Short-Term Index 81 3.0 0.2 0.9 0.9 1.0 - - -FTSE TMX 91-Day T-Bill 0.1 0.5 0.5 0.6 0.7 0.7 1.1Value Added 0.1 0.4 0.4 0.4 - - -



Parentheses contain percentile rankings.The Endowment Lands Fund account opened in November 2013 and the funds came in on 19 December 2013.* Total fund market value includes cash account balance (if any).

Page 5




%

Performance (%)

1Quarter

1Year

2Years

3Years

4Years

5Years

10Years

SRA Fund* 1,896 100.0 1.0 (45) 5.8 (58) 7.5 (66) 5.7 (90) 7.7 (90) 8.0 (91) 4.8 (100)Benchmark 1.0 5.9 7.6 5.8 7.8 8.1 4.8Value Added 0.0 -0.1 -0.1 -0.1 -0.1 -0.1 0.0Balanced Funds Median 0.9 6.1 7.8 7.0 9.2 9.8 6.2TDAM Emerald Canadian Equity Index 568 29.9 3.7 9.3 11.7 4.6 8.3 8.1 -S&P/TSX Composite 3.7 9.2 11.7 4.5 8.3 8.1 4.1Value Added 0.0 0.1 0.0 0.1 0.0 0.0 -

TDAM Emerald Pooled U.S. Index 143 7.5 0.6 12.9 13.1 15.1 18.7 19.8 -S&P 500 (CAD) 0.6 12.9 13.0 15.0 18.7 19.8 9.9Value Added 0.0 0.0 0.1 0.1 0.0 0.0 -

TDAM Emerald Hedged Synthetic U.S. Equity Index 142 7.5 4.2 17.6 16.1 10.1 12.5 13.8 -S&P 500 Hedged TR (CAD) 4.2 17.9 16.3 10.4 12.8 14.2 6.7Value Added 0.0 -0.3 -0.2 -0.3 -0.3 -0.4 -

TDAM Emerald International Equity Index 286 15.1 1.5 13.5 8.8 9.2 10.2 13.8 -MSCI EAFE (Net) (CAD) 1.5 13.3 8.8 9.1 10.1 13.7 3.7Value Added 0.0 0.2 0.0 0.1 0.1 0.1 -

TDAM Emerald Canadian Bond Index 691 36.5 -1.8 -3.0 1.5 2.7 3.6 2.6 -FTSE TMX Universe Bond -1.8 -3.0 1.6 2.8 3.7 2.7 4.7Value Added 0.0 0.0 -0.1 -0.1 -0.1 -0.1 -

TDAM Emerald Short-Term Index 66 3.5 0.2 0.9 0.9 1.0 1.0 1.1 1.4FTSE TMX 91-Day T-Bill 0.1 0.5 0.5 0.6 0.7 0.7 1.1Value Added 0.1 0.4 0.4 0.4 0.3 0.4 0.3




Page 6




%

Performance (%)

1Quarter

1Year

2Years

3Years

4Years

5Years

10Years

Special Investment Fund* 2,932 100.0 0.7 (59) 4.2 (91) 6.6 (87) 5.0 (98) 6.9 (97) 6.8 (99) 5.2 (96)Benchmark 0.6 4.1 6.6 5.0 6.9 6.8 4.7Value Added 0.1 0.1 0.0 0.0 0.0 0.0 0.5Balanced Funds Median 0.9 6.1 7.8 7.0 9.2 9.8 6.2TDAM Emerald Canadian Equity Index 878 30.0 3.7 9.2 11.7 4.6 8.4 8.1 -S&P/TSX Composite 3.7 9.2 11.7 4.5 8.3 8.1 4.1Value Added 0.0 0.0 0.0 0.1 0.1 0.0 -

TDAM Emerald Pooled U.S. Index 147 5.0 0.6 12.8 13.0 15.0 18.6 19.8 -S&P 500 (CAD) 0.6 12.9 13.0 15.0 18.7 19.8 9.9Value Added 0.0 -0.1 0.0 0.0 -0.1 0.0 -

TDAM Emerald Hedged Synthetic U.S. Equity Index 147 5.0 4.1 17.5 16.1 10.0 12.5 13.8 -S&P 500 Hedged TR (CAD) 4.2 17.9 16.3 10.4 12.8 14.2 6.7Value Added -0.1 -0.4 -0.2 -0.4 -0.3 -0.4 -

TDAM Emerald International Equity Index 295 10.1 1.5 13.4 8.8 9.1 10.2 13.8 -MSCI EAFE (Net) (CAD) 1.5 13.3 8.8 9.1 10.1 13.7 3.7Value Added 0.0 0.1 0.0 0.0 0.1 0.1 -

TDAM Emerald Canadian Bond Index 1,362 46.5 -1.8 -2.9 1.6 2.8 3.6 2.6 -FTSE TMX Universe Bond -1.8 -3.0 1.6 2.8 3.7 2.7 4.7Value Added 0.0 0.1 0.0 0.0 -0.1 -0.1 -

TDAM Emerald Short-Term Index 102 3.5 0.2 0.9 0.9 1.0 1.0 1.0 1.4FTSE TMX 91-Day T-Bill 0.1 0.5 0.5 0.6 0.7 0.7 1.1Value Added 0.1 0.4 0.4 0.4 0.3 0.3 0.3




Page 7



2016 2015 2014 2013 2012 2011 2010Pension Fund 7.8 (36) 3.2 (92) 9.8 (74) 13.1 (90) 8.0 (80) 0.2 (43) 9.7 (64)Benchmark 7.9 3.1 9.8 13.0 8.0 -0.1 10.0Value Added -0.1 0.1 0.0 0.1 0.0 0.3 -0.3Balanced Funds Median 7.3 5.8 11.4 17.1 9.0 -0.8 10.6Endowment 6.1 (73) 5.5 (57) 9.9 (73) 15.0 (73) 8.8 (54) 0.6 (36) 8.4 (86)Benchmark 6.2 5.5 9.9 15.0 8.8 0.5 9.0Value Added -0.1 0.0 0.0 0.0 0.0 0.1 -0.6Balanced Funds Median 7.3 5.8 11.4 17.1 9.0 -0.8 10.6Endowment Lands Fund 6.2 (72) 5.5 (57) 9.9 (73) - - - -Benchmark 6.2 5.5 9.9 15.0 8.8 0.5 9.0Value Added 0.0 0.0 0.0 - - - -Balanced Funds Median 7.3 5.8 11.4 17.1 9.0 -0.8 10.6SRA 7.6 (44) 3.2 (92) 9.7 (78) 13.1 (90) 8.0 (81) 0.1 (43) 9.7 (68)Benchmark 7.9 3.1 9.8 13.0 8.0 -0.1 10.0Value Added -0.3 0.1 -0.1 0.1 0.0 0.2 -0.3Balanced Funds Median 7.3 5.8 11.4 17.1 9.0 -0.8 10.6Special Investment Fund 7.6 (44) 2.0 (93) 9.5 (82) 9.6 (97) 6.9 (90) 1.3 (29) 9.8 (62)Benchmark 7.6 2.0 9.6 9.6 6.9 1.2 10.0Value Added 0.0 0.0 -0.1 0.0 0.0 0.1 -0.2Balanced Funds Median 7.3 5.8 11.4 17.1 9.0 -0.8 10.6


Calendar Year PerformanceAs of 31 December

Parentheses contain percentile rankings.

Page 8



Commentary & Recommendations Executive Summary

As of 30 September 2017

Mandate Comments Recommendations

Pension Fund All index funds tracked their respective indices as expected.

No material negative influences.

No action is required.

Endowment Fund All index funds tracked their respective indices as expected.


The Socially Responsible Investing (SRI) Sub-Fund for the Endowment Fund startedon 11 January 2016 with investment in three funds on the Desjardins platformmanaged by Northwest & Ethical Investments L.P. (NEI).

The three SRI funds are NEI Ethical Canadian Equity Fund, NEI Ethical Global EquityFund and NEI Canadian Bond Fund.

The total SRI sub-fund, comprising the three NEI funds above, matched itsbenchmark during the quarter ending 30 September 2017. Global equities andCanadian fixed income added value. This was offset by value detraction fromCanadian equities.



Endowment Lands Fund All index funds tracked their respective indices as expected.



SRA Fund All index funds tracked their respective indices as expected.



Special Investment Fund All index funds tracked their respective indices as expected.



Currency The hedged S&P 500 Index return of 4.5% was above the unhedged S&P 500 Indexreturn of 0.6% over the quarter as the USD depreciated 3.7% against the CAD.


TDAM Tracking error may vary by Plan as a result of cash flows.

TDAM currently rebalances all portfolios on a monthly basis.


Page 9



Latest Thinking

Executive Summary

During the last quarter, we have produced papers on the following topics. Although these topics may not be directly applicable to your plan, they may be of general interest and provide some insight into Aon Hewitt’s global research. For more details, please contact your Aon Hewitt Investment Consultant.

Topic Summary

Adding China A

Shares to the MSCI

Index

This paper, written in the U.S., explains the background of the index change, discusses the possibility of future changes in the index composition, and points out the potential implications for market participants if China A-Shares are fully included as MSCI illustrates.

It is important to understand the potential implications of such a change and consider if it is necessary to make adjustments toinvestment policy setting, manager selection, investment approach and operational management.

http://www.aon.com/canada/attachments/thought-leadership/report_IC_adding-china-a-shares-to-the-MSCI-index.pdf

Alternative Premia,

Alternative Price

We believe alternative risk premia strategies may be an attractive investment for certain investors, as they offer different sources of return compared to traditional equity or fixed income investments at an attractive price point (versus hedge funds).

This paper, written in the U.S., discusses a range of strategies that offer a premium for taking unpopular risks or for exploiting persistent market anomalies.

http://www.aon.com/canada/attachments/thought-leadership/report_IC_Alternative-Premia.pdf

For more timely access to our latest thinking, please visit and subscribe to the Aon Hewitt Retirement & Investment Blog: https://retirementandinvestmentblog.aon.com/

Page 10




To:

Board of Governors

Date of Report:

November 14, 2017

From: Armand La Barge, Chair – Finance & Property Committee Steven Pillar, Vice President, Finance and Administration


November 14, 2017

Date of Board Meeting:

December 1, 2017

Subject: Housing Strategy Update

Confidentiality: Not Confidential 1.0 PURPOSE For Information

2.0 RECOMMENDATION That the Board of Governors receives this report for information.

3.0 EXECUTIVE SUMMARY Housing Services is developing a housing strategy to further align the housing program to the University’s strategic objectives and meet growing demand. A set of guiding principles have been developed to provide a framework for further discussions on short and long-term strategies with respect to occupancy, programming, facilities renewal, and capital projects. 4.0 BACKGROUND Trent University has seen increases in first year intake, which has expanded the need for residence beds for the University to meet the residence guarantee. Since the fall of 2014, residence bed spaces have been expanded by 38% through maximizing space on campus, leasing buildings from off campus developers and expansion of residence options at Traill College. Trent University has a first-year residence guarantee with about 60% of domestic first year students (defined as new intake) and 70% of international first year students live in residence. A limited number of returning students reside in residence. Housing Services assumes unpredictable institutional enrollment from year to year in the short-term and a housing strategy planning process began in spring 2017. Between July and October 2017, Housing Services has developed a set of guiding principles to further align the housing program to the University’s strategic objectives for

Item 3.6 - Housing Strategy - Update BOARD OPEN SESSION - December 1, 2017 of 179

- 2 -

the next 5 years and to provide a framework for discussion on future strategies. To develop the principles, Housing Services staff met with over 200 members of the Trent University community through a series of individual and community consultations to ascertain the desired attributes of an ideal housing system at Trent University. Discussions included the collegiate environment, demographic mix, space, facilities, and supporting student development and academics. In addition, Housing Services: Reviewed institutional documents, including the Strategic Mandate Agreement, and

the reviews and responses for Student Retention and Success, Internationalization, Traill College, and Recruitment

Conducted a housing SWOT analysis Reviewed residence best practices and literature review, including with reference to

the Association of College & University Housing Officers – International (ACUHO-I) standards

Reviewed institutional enrolment and intake data, and review of Housing Services data relating to satisfaction, student learning, occupancy, and Peterborough off campus market vacancy rates

Developed departmental mission, values, and vision statements The guiding principles will provide a framework for discussion on housing strategies for the next 5 years. The guiding principles for the next 5 years include: Prioritizing the needs of first year to Trent undergraduate students within the

housing stock, particularly to support recruitment in meeting the first-year guarantee Managing housing demand in the short and long-term Renew housing facilities to provide an environment that supports student academic

and social needs Developing a supportive community environment that promotes student success

and connection to the collegiate and academic environment Continuing to align Housing Services with the Association of College & University

Housing Officers – International Professional Standards

Housing Services continues to be in the consultation phase of the strategy development. Next steps in developing a comprehensive housing strategy include further consultations with respect to: Broader confirmation of the guiding principles Refining residence demand projections and investment priorities Developing a series of strategies to further align Housing to the University’s

strategic objectives 5.0 INPUT FROM OTHER SOURCES Housing Services consulted with over 200 students, staff and faculty. A detailed listing of the individuals participating throughout the process are outlined in Appendix A. In addition to the consultations, institutional enrolment and intake data occupancy were reviewed, and projections were developed by a Data Review Team consisting of the: Associate Vice President, Marketing & Communications, Associate Vice President,

Trent International, Director, Housing Services, Director, Food Services, Institutional Analyst, Manager, Operations, and Financial Officer


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6.0 FINANCIAL IMPLICATIONS Further discussions on short and long-term strategies are required. In the event that any renovations, redevelopment, construction or capital projects are required beyond what is covered by the annual housing budget, projects will be subject to approvals on a project by project basis.

7.0 ENTERPRISE RISK ASSESSMENT The housing strategy is intended to ensure Housing Services continues to meet our goals: Failure to meet the first-year residence guarantee would have a negative impact on

recruitment and retention, as well as reputation Conversely, failure to fill residence spaces could have a negative impact on the

housing budget Enrolment expansion, the Peterborough rental market, and the lack of upper-year

residence spaces could have an effect on upper-year students, including on retention

Maintaining and supporting the collegiate community includes a robust housing program located in the colleges; balancing this with the need to expand leasing opportunities to meet demand is challenging

8.0 STRATEGIC ALIGNMENT / COMPLIANCE Meeting Trent University’s first year residence guarantee as part of our recruitment

strategy. Note that most Ontario universities (with the exception of McMaster, Windsor, and Ryerson) guarantee residence for all first-year students who meet application deadlines.

Retention of students who lived residence in their first-year is significantly higher than those living off campus; providing a positive first-year residence experience assists with our retention efforts.


The communication strategy will be more fully developed with Marketing & Communications upon completion of the strategy. Target groups for communication include:

Current and former residence students Housing Services Advisory Committee Colleges and Student Services Committee Communications Trent University students, faculty, and staff

Steven Pillar, Vice President, Finance and Administration Nona Robinson, Associate Vice President, Students Jen Coulter, Director, Housing Services


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Appendix A - Input From Other Sources

Individual Interviews Leo Groarke, President Jacqueline Muldoon, Provost & Vice President, Academic Steven Pillar, Vice President, Finance & Administration

Community Consultations Joe Muldoon, Head, Trent Durham Mark Murdoch, Director, Food Services Nona Robinson, Associate Vice President, Students Marilyn Burns, Associate Vice President, Marketing & Communications Cheryl Turk, Associate Vice President, Finance Tariq Al-Idrissi, Associate Vice President, Information Technology Glennice Burns, Associate Vice President, Trent International Michael Eamon, Principal, Traill College Stephanie Muehlethaler, Director, Colleges Louise Fish, Director, Risk Management Jason Salo, Manager, Security Services Jane Mackie, Professor, Nursing Ray Dart, Professor, Business Administration Lindy Garneau, College Head Sako Khederlarian, Coordinator, Orientation & Transition Programs Brittney Blake, Coordinator, Employer & Recruiter Relations Ruth Walker, Manager, Student Health Services Kate MacIsaac, Crisis Response Coordinator Tina Fridgen, Academic Advisor Brandon Remmelgas, President, TCSA College Cabinets College Residence Council 100 current & former residence students

Data Review Committee Marilyn Burns, Associate Vice President, Marketing & Communications Glennice Burns, Associate Vice President, Trent International Mark Murdoch, Director, Food Services Jen Coulter, Director, Housing Services Steve Jones, Institutional Analyst Shaun McCracken, Manager, Operations Nikki Kuzoff, Financial Officer Review of Institutional Documents, Review of Association of College & University Housing Officer – International Standards and Best Practices & Literature Review Jen Coulter, Director, Housing Services Michelle Treleaven, Manager, Residence Life & Education Shaun McCracken, Manager, Operations Nikki Kuzoff, Financial Officer SWOT Analysis Jen Coulter, Director, Housing Services Michelle Treleaven, Manager, Residence Life & Education Shaun McCracken, Manager, Operations Nikki Kuzoff, Financial Officer Michele Sparkes, Occupancy Management Coordinator Robyn Gundy, Facilities Coordinator Shannon Brockbank, Residence Steward Cameron Door-Morin, Residence Education Coordinator Jillian Lue, College Residence Life Coordinator Aaron Tsang, College Residence Life Coordinator Nida Uz-Zaman, College Residence Life Coordinator



To: Boad of Governors Date of Report: November 14, 2017

From: Armand La Barge, Chair – Finance & Property Committee Steven Pillar Vice President Finance and Administration


November 14, 2017


Subject: 2018/2019 Tuition Strategy - Revised


1.0 PURPOSE

For Information For Approval

2.0 RECOMMENDATION

That the Board of Governors that the OSAP-eligible tuition fees for 2018/2019 be approved as presented in the attached table.

3.0 EXECUTIVE SUMMARY

In accordance with the Tuition Fee Framework extended to 2018/2019 by the Ministry of Advanced Education and Skills Development (MAESD) on December 15, 2016, the University is proposing undergraduate and graduate tuition rates increase by 3% for the fiscal year 2018/2019.

The approval of the 2018/2019 tuition fees is required at this time, in advance of the approval of the operating budget, as a new expectation of MAESD and a requirement of the Net Tuition Billing initiative in which Trent is participating.

Further analysis will be undertaken regarding non-OSAP-eligible tuition fees (international and non-Ministry funded professional programs) and a proposal for these tuition rates will be brought forward at a later date.


Iem 8.0 - 2018-19 Tuition Strategy BOARD OPEN SESSION - December 1, 2017 of 179

The proposed tuition fee increases are in accordance with the MAESD’s Tuition Fee Framework, which was extended on December 15, 2016 for an additional two years to 2018/2019. 5.0 ANALYSIS Earlier Approval Dates On December 15, 2016, MAESD approved the extension of the 2013/2014 to 2016/2017 Tuition Fee Framework to include fiscal 2017/2018 and 2018/2019. This extension was in part put in place while MAESD continued to work on preparing for Net Tuition Billing, an initiative in which Trent is participating. On February 7, 2017, MAESD provided clarification regarding the tuition fee compliance reporting process over the course of the Tuition Fee Framework to 2018/2019, stating: “The change in tuition fee compliance methodology is intended to assist universities in setting tuition fees for the next two years earlier and allow the ministry to confirm compliance with the framework at an earlier date compared to prior years. This approach is in support of advanced setting of tuition fees in order to have net offers more accurately reflect actual tuition fees and will ease the implementation of net tuition.” It was subsequently clarified through discussions with MAESD and Trent’s Net Tuition Billing implementation team that MAESD expects universities to submit OSAP cost codes for 2018/2019 in Fall 2017. The cost codes contain the university’s tuition rates and is used by OSAP (a) to determine the value of the grants/loans that students are eligible for, and (b) to populate the net tuition estimate that will be provided to students on OSAP’s website. Prior to this initiative, universities would provide cost codes to OSAP in June. With the Net Tuition Billing initiative, universities are expected to provide cost codes in the Fall as students now apply for OSAP starting in November. As a result of MAESD’s revised expectations regarding tuition fee compliance reporting and the implementation of the Net Tuition Billing initiative, the University must approve 2018/2019 tuition rates in Fall 2017 in advance of the operating budget process. Tuition Fees Increase Under the Tuition Fee Framework for 2017/2018 and 2018/2019: “…the overall average rate of tuition fee increase across all publicly funded programs at an institution is capped at 3.0% per year. The framework is based on the principle that tuition fees may increase within specified limits provided that the overall average tuition fee increase is less than or equal to the cap prescribed in the framework.” 1 Also, “…most postsecondary programs may increase by up to three per cent. Tuition for high-demand, professional undergraduate and graduate programs may increase by up to five per cent per year. In addition, the overall institutional average fee rate of increase cannot exceed three per cent per year.” 2


The overall cap is not on the individual rates but on the overall tuition revenue. This is an important distinction. If Trent wanted to increase graduate tuition rates by 5%, for example, then the increase in undergraduate tuition rates would have to be less than 3% to compensate. As Trent is a primarily undergraduate university it does not make sense to maximize tuition fee revenue for graduate programs by decreasing undergraduate tuition fee rate increases. Therefore, it is recommended that Trent increase undergraduate and graduate tuition rates by 3.0% for the fiscal year 2018/2019. 6.0 FINANCIAL IMPLICATIONS See above example 7.0 ENTERPRISE RISK ASSESSMENT Maximizing revenue in compliance with the Tuition Fee Framework will better position the University to maintain and/or enhance the resources required (including faculty, services, and administration) to support the academic outcomes of a growing student population. 8.0 STRATEGIC ALIGNMENT / COMPLIANCE Finance & Property Committee (Terms of Reference, Special Resolution 1.2) recommends student fees for the approval of the Board of Governors.

9.0 COMMUNICATIONS STRATEGY The University Registrar and AVP Students have discussed the proposed increases to undergraduate and graduate tuition fees with the Colleges and Student Services Committee (CASSC), and with Trent and Durham Student Councils. Once approved, the 2018/2019 tuition fees will be posted on the University’s website and communicated to MAESD through the OSAP cost codes submission. Steven Pillar, Vice President, Finance and Administration Cheryl Turk, Associate Vice President, Finance Tracy Al-Idrissi, University Registrar

1 David Carter-Whitney, Assistant Deputy Minister, MAESD, February 7, 2017 memo: Tuition Compliance Reporting Process for 2017-18 and 2018-19) 2 Sheldon Levy, Deputy Minister, MAESD, December 15, 2016 memo: Extended Tuition Fee Framework & Technical Working Groups on Tuition Related Issues


Undergraduate Domestic Students Amount Amount Increase %Full Time Basic fee First Year and continuing (post-2011) 6,600.30$ 6,798.31$ 198.01$ 3.0%

Continuing (2011 and prior) 6,568.73$ 6,765.79$ 197.06$ 3.0%Part Time - per course Basic fee First Year and continuing (post-2011) 1,320.06$ 1,359.66$ 39.60$ 3.0%

Continuing (2011 and prior) 1,313.75$ 1,353.16$ 39.41$ 3.0%

Graduate Domestic StudentsFull Time First Year and continuing (post-2011) 8,728.01$ 8,989.85$ 261.84$ 3.0%

Continuing (pre-2011) 8,563.32$ 8,820.22$ 256.90$ 3.0%Part Time First Year and continuing (post-2011) 4,364.00$ 4,494.92$ 130.92$ 3.0%

Continuing (pre-2011) 4,281.67$ 4,410.12$ 128.45$ 3.0%

2018/2019

TRENT UNIVERSITYTuition Fees - Undergraduate and Graduate

2017/2018


1


To: Board of Governors

Date of Report: November 23, 2017

From: Connie Bonello, Chair – Investment & Pension Committee Steven Pillar, VP Finance & Administration Julie Davis, VP External Relations & Advancement



Subject: Revisions to Special Resolution II.9 - Annual Distribution from Endowment Fund

Confidentiality: Not Confidential 1.0 PURPOSE

For Approval 2.0 RECOMMENDATION That the Board of Governors approve proposed revisions to Special Resolution II.9 – Annual Distribution from the Endowment Fund, as presented. [Revisions allow the University to maintain a 4% annual distribution rate from the Endowment Fund; establishes a five-year cyclical review of the policy; and establishes thresholds for the stabilization fund as follows: a) Lower Threshold – If the Stabilization Fund falls below 1.5 times the annual distribution rate or 6% of the Market Value of the Endowment, a lower distribution rate should be considered; and b) Upper Threshold – If the Stabilization Fund accumulates above 5 times the annual distribution rate or 20% of the Market Value of the Endowment, a one-time reinvestment into individual endowment funds (that is, an increase in capital base or book value) may be considered]

3.0 EXECUTIVE SUMMARY Trent University’s Endowment Fund is a large financial resource that helps advance the University by providing additional funds beyond our operating budgets. The funds assist in recruitment by providing financial aid to students, assist with cutting-edge research, attract and retain world-class faculty, maintain and upgrade our facilities as well as many other purposes. The market value of the fund is currently $57.2 million, which is a 74% increase over the past ten years. The fund is made up of 900 individual donor funds, and last year disbursed more than $2 million to support more than 1,000 students and 65 programs and departments. Growing the fund is a strategic imperative of the University.

Item 9.0 - Special Resolution II.9 - Annual Distribution from the Endowment Fund


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At the May 2017 Investment and Pension Committee meeting, administration was asked to undertake a review of the current Special Resolution II.9 Annual Distribution from the Endowment Fund, which has been in place and not revised since 1994, and report back to the Committee with recommendations for revisions to the policy and/or current practice. Since inception of the policy, the distribution from the Endowment Fund has been 4% annually. The absolute objective of the Fund is to outperform the CPI by at least 4.5% over four-year rolling periods. (Special Resolution II.6 – Section 4.02a). The annual distribution rate was based on the target rate for the investment managers of 4.5% less 0.5% for expenses such as administration costs, fees and fundraising stewardship expenses. Reinvested realized earnings (per the annual financial statements) from the fund, after distributions and expenses, provide a stabilization fund to support a consistent annual distribution in years when the market underperforms. Because of this Stabilization Fund, Trent has been able to consistently disburse 4% for the past 20 years.

The Stabilization Fund at April 30, 2017 is $5.451 million, approximately 2.5 times that of the expected annual distribution for the following year – well within the proposed threshold included in the revised policy. Due to the sufficiency of the Stabilization Fund, there is no need to change the current 4% annual distribution rate from the Endowment Fund at this time. It is recommended that the University establish monitoring thresholds for the Stabilization Fund to ensure the 4% rate continues to be sustainable. Annual monitoring of the thresholds would alert administration of the need to consider a change in distribution rate well in advance. Should a change in distribution rate be required, it will take up to 24 months to implement due to distribution commitments. The recommended monitoring thresholds are as follows:

a. Lower Threshold – If the Stabilization Fund falls below 1.5 times the annual distribution rate or 6% of the Market Value of the Endowment, a lower distribution rate should be considered.

b. Upper Threshold – If the Stabilization Fund accumulates above 5 times the annual distribution rate or 20% of the Market Value of the Endowment, a one-time reinvestment into individual endowment funds (that is, an increase in capital base or book value) may be considered.

The policy should be reviewed every five years. The next review will be in 2022. 4.0 INPUT FROM OTHER SOURCES A working group consisting of Sherry Booth, Director of Philanthropy, Chris Armitage, Manager Advancement Services, Katy McGillen, Budget Analyst and Cheryl Turk, AVP Finance was established to review the Special Resolution II.9 as a review had not been conducted for several years. The working group reviewed the purpose of the endowment fund policy, the rationale underlying the policy’s distribution formula, the intent



3

of the reinvested realized earnings balance, the historical practice, potential changes to the distribution methodology, and strategies for communicating with donors. The working group also reviewed the distribution rates and policies of other universities for comparison purposes. In addition, CAUBO recently completed a review of university endowment funds. For details, please refer to the article “Review of University Endowment and Pension Funds” published in the Fall 2017 University Manager, page 37: http://www.kelmanonline.com/httpdocs/files/CAUBO/universitymanagerfall2017/index.html 5.0 ANALYSIS At the May 2017 Investment and Pension Committee meeting, administration identified that the Special Resolution II.9 did not necessarily reflect the current practice in such cases where investment performance was less than 4%. As a review of this policy had not been conducted in several years, administration agreed to undertake a review of the current policy and report back to the Committee with recommendations for revisions to the policy and/or current practice. Purpose of the Endowment Fund Trent University’s Endowment Fund is a large financial resource that helps drive the University by providing additional funds beyond our operating budgets. The funds provide financial aid to students, assist with cutting-edge research, attract and retain world-class faculty, maintain and upgrade our facilities as well as many other purposes. Trent University actively attracts support from donors to grow our endowment funds. Donors make these donations with specific outcomes they wish to achieve. By accepting the gift, the University commits to investing and stewarding the donation to provide a continued and stable stream of annual income (distribution) to deliver the intended impact. For example, if a donor donates a $25,000 endowment to provide a $1,000 scholarship annually, we need to be able to honour this commitment on an annual basis. Due to the perpetual nature of endowments, preservation of the original contributions and growth of the fund to counter the impacts of inflation over time are important factors to prudent endowment fund management. The power of Trent’s Endowment is that it is a perpetual source of revenue from more than 900 funds, that will continue to grow over time. As of April 2017, our Endowment surpassed $57 million and provided $2 million in annual distributions. Appendix B provides an overview of the Endowment Fund. Growing our endowment fund is a strategic focus for the University. Purpose of the Policy Trent University’s Endowment Fund is a pooled fund invested with the oversight of the Investment and Pension Committee. The University is responsible for investing the Endowment Fund in order maximize the benefit to current and future beneficiaries in accordance with our donors wishes. The purpose of Trent University’s policy is to preserve capital and grow the original contributions by the donors to enable a consistent annual distribution.



http://www.kelmanonline.com/httpdocs/files/CAUBO/universitymanagerfall2017/index.html

4

Special Resolution II.9 Annual Distribution from the Endowment Fund The current Special Resolution II.9 states the following: “The distribution from the Fund in any year will be the average of the actual rates of return on the fund in the preceding four calendar years, less the average of the rates of inflation in those same years, to a maximum of 4%…In any year which the average return on the fund minus the average rate of inflation is greater than 4%, the excess will be carried forward to subsequent years, to fund the distribution should the rate of return minus inflation fall below 4%. The distribution will be expressed as a dollar amount per unit. The amount will be based on the approved distribution rate times the four-year rolling average of the actual unit value at December 31 of the previous four years.”

Since inception of the above formula (approved for April 30, 1994), the distribution from the Endowment Fund has been 4% annually. The total distribution at April 30, 2017 was $2,094,473. The total unit value of the general endowment increased from $222.12 at April 30, 2016 to $240.35 at April 30, 2017. Key Findings of Review 1. The absolute objective of the Endowment Fund is to outperform the CPI by at least 4.5%

over four-year rolling periods. (Special Resolution II.6 – Section 4.02a). The annual distribution rate was based on the target rate for the investment managers of 4.5% less 0.5% for expenses such as administration costs, fees and fundraising stewardship expenses.

2. The annual review formula described in the Special Resolution II.9 provided a mechanism to assist in the determination of reasonableness of the 4% distribution rate. The formula uses a 4-year rolling average to smooth out fluctuations in the market and is based on a calendar year due to the timing of availability of the quarterly investment reports.

3. For the past 20 years, Trent has distributed at the rate of 4% as there has always been sufficient “reinvested realized earnings” per the annual financial statements to cover the next year’s expected distribution. The reinvested realized earnings are considered the “Stabilization Fund” as it is the accumulated realized gains remaining after expenses and the annual distribution. Realized gains or earnings result when actual transactions occur. For example, a transaction could be when dividends are paid, when a bond matures or when a security is sold. This is distinct from the increase in the market value of the Fund due to capital appreciation. The following table summarizes the reinvested realized earnings (Stabilization Fund) over the last 10 years. The reinvested realized earnings at April 30, 2017 of $5.451 million is approximately 2.5 times that of the expected annual distribution for the following year. Year

Ending Endowment at Market Value

Endowment at Book Value

Reinvested Realized

Annual Distribution



5

April 30 ($000s) ($000s) Earnings included in Book

Value ($000s)

($000s)

2017 $57,208 $48,326 $5,451 $2,094 2016 $51,127 $46,047 $5,002 $1,957 2015 $52,714 $43,859 $4,436 $1,823 2014 $48,600 $41,317 $2,782 $1,759 2013 $43,710 $39,515 $1,735 $1,601 2012 $39,925 $38,149 $1,232 $1,572 2011 $39,922 $37,183 $1,490 $1,574 2010 $35,882 $35,540 $1,723 $1,497 2009 $31,511 $39,125 $7,489 $1,350 2008 $34,732 $35,995 $7,888 $1,237 2007 $32,987 $29,231 $5,901 $1,108

Source: Trent University’s Annual Audited Financial Statements 4. The distribution of 4% is based on units, not dollar amounts. This is an important distinction

and partly why the actual distribution amount is not exactly 4% of the market value of the endowment funds.

5. A recent university comparison compiled by Marie-Claude Fillion of University of Ottawa indicates the range of distribution rate is from 3% to 4% with the average distribution rate at 3.76% and the median distribution rate at 4%. Trent is at the median distribution rate.

6.0 FINANCIAL IMPLICATIONS As noted above, the Endowment Funds provide financial aid to students, assist with cutting-edge research, attract and retain world-class faculty, maintain and upgrade our facilities as well as many other purposes. The power of Trent’s Endowment is that it is a perpetual source of revenue from more than 900 funds, that will continue to grow over time. As of April 2017, Trent’s Endowment surpassed $57 million and provided close to $2 million in annual funding. Dropping the disbursement rate from 4% to 3.5% would result in a shortfall of almost $300,000. A $1,000 student scholarship would be reduced to $875. A drop from 4% to 3% would result in shortfall of more than $570,000, a 25% decline in the distribution. The student scholarship would now only be worth $750. Appendix C provides a summary of the impact of a decline in distribution rates. Should a change in distribution be required, it will take up to 24 months to implement due to distribution commitments (such as a two-year research internship, or a four-year scholarship). 7.0 ENTERPRISE RISK ASSESSMENT The review of the annual distribution rate and monitoring thresholds will allow for necessary adjustments to ensure there is no erosion of capital over the long term. Donors expect the University to manage its endowment to balance capital growth with distribution commitments. A drop in distribution rates would cause concern amongst donors



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who gave a certain amount of funding to accomplish specific goals. This would require proactive and transparent communication. 8.0 STRATEGIC ALIGNMENT / COMPLIANCE The Investment and Pension Committee will receive an annual report on the annual distribution from the Endowment Fund and the balance of the Stabilization Fund. This report should be provided in November of each year for consideration of any changes for the future. If the Stabilization Fund remains within the thresholds established, the policy should be reviewed every five years.

9.0 COMMUNICATIONS STRATEGY The Office of External Relations and Advancement publicly posts an overview of the annual Endowment Fund performance and provides detailed individual performance reports to more than 600 donors each year. This communication is an essential part of our stewardship commitment to donors, and assists in attracting new donations to grow the Endowment Fund. Steven Pillar, Vice President, Finance and Administration Cheryl Turk, Associate Vice President, Finance Julie Davis, Vice President, Vice President External Relations & Advancement Sherry Booth, Director of Philanthropy



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Appendix A

CURRENT POLICY

SPECIAL RESOLUTION II.9

Annual Distribution from the Endowment Fund

The distribution from the Endowment Fund for expendable purposes will be established in February for the distribution at April 30. The distribution from the Fund in any year will be the average of the actual rates of return on the fund in the preceding four calendar years, less the average of the rates of inflation in those same years, to a maximum of 4%. For example, at April 30, 2002 the distribution rate for 2002-2003 would be the average of the actual rates of return on the Fund for the years ending 31 December 2001, 2000, 1999, and 1998 minus the average of the annual rates of inflation (% change in the Consumer Price Index from December to December) for the same calendar years, to a maximum distribution rate of 4%. In any year which the average return on the fund minus the average rate of inflation is greater than 4%, the excess will be carried forward to subsequent years, to fund the distribution should the rate of return minus inflation fall below 4%. The distribution will be expressed as a dollar amount per unit. The amount will be based on the approved distribution rate times the four-year rolling average of the actual unit value at December 31 of the previous four years. The Investment and Audit Committee will receive an annual report on the calculation of the level of the distribution and will periodically review the formula upon which the distribution is based. Approved by the Board of Governors: April 26, 2002



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PROPOSED NEW POLICY

SPECIAL RESOLUTION II.9

Annual Distribution from the Endowment Fund

Purpose of the Endowment Fund Trent University’s Endowment Fund is a large financial resource that produces annual income to provide financial aid to students, assist with cutting-edge research, attract and retain world-class faculty, maintain and upgrade facilities as well as many other purposes. Trent University actively attracts support from donors to grow its endowment funds. By accepting these gifts, the University commits to providing a continued and stable stream of resources to deliver the intended impact. Due to the perpetual nature of endowments, preservation of the original contributions and growth of the Fund to counter the impacts of inflation over time are important factors to prudent endowment fund management. Annual Distribution from the Endowment The annual distribution rate from the Endowment Fund will be 4%. The distribution will be expressed as a dollar amount per unit. Sufficiency of the Stabilization Fund The balance of the reinvested realized earnings per the most recently completed audited financial statements for the fiscal year ending April 30th represents the accumulated realized gains available for distribution in excess of the annual payouts and expenses. The reinvested realized earnings from the Endowment Fund acts as a “Stabilization Fund” which hedges against market fluctuations. Monitoring the balance of this Stabilization Fund is required to ensure that a sufficient pool is available to hedge against market fluctuations. Those monitoring thresholds are as follows:

a) Lower Threshold – If the Stabilization Fund balance falls below 1.5 times the distribution expected for the next year, or 6% of the Market Value of the Endowment, a lower annual distribution rate should be considered.

b) Upper Threshold – If the Stabilization Fund balance accumulates to above 5 times the distribution expected for the next year, or 20% of the Market Value of the Endowment, a one-time reinvestment into individual endowment funds (that is, an increase in capital base or book value) may be considered.



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Should a change in distribution be required, it will take up to 24 months to implement due to distribution commitments. Review of Policy The Investment and Pension Committee will receive an annual report on the distribution from the Endowment Fund and the balance of the Stabilization Fund. This report should be provided in November of each year for consideration of any changes for the following year. If the Stabilization Fund remains within the thresholds established, the policy should be reviewed every five years.



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Appendix B

Stewardship by the Numbers 2017

Total Market Value of Endowment as of April 30th, 2017 $57.2 Million 2017 Distribution from Endowment $2.1 Million

Endowments under Management Over 927 Funds 112+ Prizes $2.8 Million 111+ Scholarships $10.9 Million 573+ Awards & Bursaries $23.6 Million 37 Library Endowments $2.3 Million 20 Endowed Chairs, Professorships, Fellowships, Lectures $7.0 Million 18 Endowed Campus Improvement Funds $2.4 Million 56 Program, Department, College, Dean Endowments $7.5 Million # of student recipients from endowment funds in 2016/17 Over 1000 Market Value Growth of Endowment over last 10 years $32.9 to $57.2 Million 74% growth

Book Value Growth of Endowment over last 10 years $29.2 to $48.3 Million

65% growth Number of Trent Departments Serviced Over 65 40+ Undergraduate Programs 15+ Graduate Programs 10+ Non-Academic Departments

Financial Aid, Office of Research, Library, Colleges, Athletics, PRD, Alumni, etc Endowment Reporting # of Corporate & Individual Endowment Reports 572



11

Long Term TSX Market Growth over Last 50+ years



12

$32,987

$34,732

$31,511

$35,882

$39,922

$39,925

$43,710

$48,600

$52,714 $51,127

$57,208

$29,231

$35,995

$39,125

$35,540

$37,183 $38,149 $39,515 $41,317

$43,859

$46,047

$48,326

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Trent University General Endowment & SRI Funds

Market & Book Value

Total Market Value Total Book Value



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2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017Book Value $23,330 $28,107 $31,636 $33,817 $35,693 $36,917 $37,780 $38,535 $39,423 $41,045 $42,875Stabilization Fund $5,901 $7,888 $7,489 $1,723 $1,490 $1,232 $1,735 $2,782 $4,436 $5,002 $5,451

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

Trent University Book Value & Stabilization Fund

in Thousands (000's)

Stabilization Fund Book Value



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Appendix C

Considerations for Annual Distribution Rate

1. Endowments support academic departments, scholarships, bursaries & awards, the library and many more areas on campus.

Drain Chair in Ethics Would the University be able to provide for the shortfall?

Current $2.7M market value April 30, 2017

Current 4% = $108K expendable 3.5% = $94.5K (Shortfall - $13.5K) 3% = $81K (Shortfall - $27K)

Scholarships Scholarships support attracts academically strong students. Scholarships are generally a minimum of $1,000 per student.

Current $10.9M market value

Current 4% = $436K expendable 3.5%=$381.5K exp (Shortfall-$54.5K) ~50+ scholarships Or reduce to $875/student 3% = $327K exp (Shortfall - $109K) ~100+ scholarships Or reduce to $750/student

Awards and Bursaries Awards and bursaries supports student financial aid. This directly affects recruitment and retention. Support ranges from ~$250 - $1,000/student.

Current $23.6M market value

Current 4% = $944K expendable 3.5% = $826K (Shortfall –$118K) ~115 – 450 bursaries or awards 3% = $708K (Shortfall - $236K) ~235 - 944 bursaries or awards

Internships Internships are awarded on a 2 year basis.

Current $150,000 investment

Currently 4% = $6,000/year 3.5% = $5,250/year Shortfall - $750/student 3% = $4,500/year Shortfall - $1,500/student

Total Endowment The power of endowment is in its annual distribution of a consistent amount of financial resources. Lower distribution percentages greatly diminish your distribution amount.

Current $57.2M market value April 30, 2017

4% = $2.288M expendable 3.5% = $2.002M (Shortfall - $286K) 3% = $1.716M (Shortfall - $572K) HUGE effect of 1% change in distribution rate translates to a 25% decline in how much is available for distribution. $572,000 / $2,288,000 = 25% reduction in resources available.



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2. Conversely, if Trent University intends to provide a $1,000 scholarship, any change in the distribution percentage requires us to to raise substantially more funds for the original endowment.

$1,000 Scholarship from an Endowment Significantly larger endowments would be required to provide the same distribution amounts.

$25K endowment - Currently minimum investment

4% provides $1,0000 scholarship Current distribution rate.

$28.5K endowment required

3.5% provides $1,000 scholarship

$33.3K endowment required

3% provides $1,000 scholarship

3. To provide for a decrease in the distribution rate from our current endowment of $57.2M we would need to grow our endowment as follows.

Currently

$57.2 Million Endowment provides $2.288 Million in expendable at 4%

Substantial endowment growth required to maintain the same amount of financial resources as currently provided. $65.3M provides $2.288M at 3.5% 14% increase in size of endowment $76.2M provides $2.288M at 3.0% 33% increase in size of endowment

4. Meeting donor expectations or exceeding them

Due to the perpetual nature of endowments, donors expect that we will be able to honour our commitments to them. For 20 years, during some of the most turbulent markets, we have been consistently able to honour our commitments. a) Use the funds as intended – provide the scholarship, lecture, internship, etc. b) Invest wisely to ensure original capital security. Donors are looking for risk managed market growth. However, ultimately donors are most intently focused on the impact of the distribution.

5. Provide consistent financial resources to academic departs, the library, undergraduate, graduate and international scholarships, bursaries and awards, plus athletics varsity and team resources.

Reduction in available financial resources would:

a) Reduce available scholarships, bursaries and awards thus providing less financial aid to students. This would directly affect retention and recruitment.

b) Departments would have less resources for the intended use. Directly affects endowed lectures (ie. Ryle Lectures, Stair Lecture, Morrison Lecture, etc.) Directly affects library resources (provides digital access to resources, etc.) Directly affects varsity teams (equipment, travel funds, etc.) Directly affects internships, research funds, travel funds, conference funds Directly affects campus improvements – Trent Nature Area, gardens, trails, Alumni house

Though each department will have their own budgets, endowments often provide funds for program enrichment that would not have been possible otherwise.



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c) Planning for a reduction in resources available to a department would need to happen at least 12 – 24 months in advance as commitments to students and planning by departments would be required.

6. Consistency is essential for maintaining donor confidence as well as providing budget managers a steady financial resource and ease of planning.





From: Peter Dilworth, Chair – Audit Committee Steven Pillar Vice President Finance and Administration


November 22, 2017


Subject: 2016/2017 Pension Financial Statements Confidentiality: Not Confidential 1.0 PURPOSE

For Approval 2.0 RECOMMENDATION That the Board of Governors approve:

The Financial Statements of the Contributory Pension Plan for Employees Represented by OPSEU Local 365 and Exempt Administrative Staff of Trent University (Registration Number 0310409) dated June 30, 2017, as presented; and The Financial Statements of the Contributory Pension Plan for TUFA Employees of Trent University (Registration Number 1048826) dated June 30, 2017, as presented; AND FURTHER, that the Board of Governors receive for information the Financial Statements of the Supplemental Retirement Arrangement for Members of the Contributory Pension Plan for TUFA Employees of Trent University dated June 30, 2017.

3.0 EXECUTIVE SUMMARY The external audits of the University’s contributory pension plans for OPSEU Local 365 and Exempt Administrative Staff and for TUFA Employees was completed on November 8, 2017. As a result of the audit, McColl Turner notes that the financial statements present fairly, in all material respects, the financial position of each of the Contributory Pension Plans for OPSEU/Exempt employees and TUFA employees of Trent University as at June 30, 2017, as well as the TUFA Supplemental Retirement Arrangement (SRA), and the changes in net

Item 10.0 - 2016-17 Pension Financial Statements BOARD OPEN SESSION - December 1, 2017 of 179

assets available for benefits, and the changes in the pension obligation for the year then ended in accordance with Canadian accounting standards for pension plans. As at June 30, 2017, the OPSEU/Exempt Plan had net assets of $124.2 million and a pension obligation of $132.7 million resulting in a deficiency of $8.5 million. The TUFA Plan had net assets of $193.7 million and a pension obligation of $222.4 million resulting in a deficiency of $28.7 million. The TUFA SRA had net assets of $2.2 million and a pension obligation of $23.2 million resulting in a deficiency of $21.0 million. The audit was focused on higher risk areas, including employee and employer contributions, and timing of death benefits, withdrawal refunds and transfers. Materiality was established at $600,000 for the OPSEU/Exempt Plan, $900,000 for the TUFA Plan, and $23,000 for the SRA. The auditors confirmed the following:

(a) their continued independence from the Trent Pension; (b) they are not aware of any fraud or illegal acts; (c) there were no related party transactions requiring disclosure; (d) the selection and application of the relevant accounting policies and accounting

estimates are, in all material respects, in accordance with Canadian accounting standards for pension plans;

(e) there were no uncorrected misstatements in the financial statements; (f) there are no significant internal control weaknesses identified; (g) all appropriate management representations were made; and (h) no significant matters were identified during the course of the audit.

The detailed audited financial statements of the Pension Plans and the Auditors’ Communication Letter are attached. 4.0 INPUT FROM OTHER SOURCES The audit of the Pension Plans and SRA was in accordance with Canadian Auditing Standards section 260. Pension Plan valuation information was provided by AON Hewitt. 5.0 ANALYSIS See the attached Auditors Communication Letter and financial statements for details. 6.0 FINANCIAL IMPLICATIONS The Pension financial statements are presented on a going concern basis and present the financial position of the Plans as a separate financial reporting entity independent of the University as the sponsor of the plans and the members. The following summarizes the financial position of the plans as at June 30, 2017:


OPSEU/Exempt Plan

TUFA Plan TUFA SRA

Net Assets Available for Benefits $124,174,293 $193,681,796 $2,244,668 Pension Obligation $132,707,883 $222,423,492 $23,247,308 Deficiency of Net Assets Available for Benefits over Pension Obligation

$(8,533,590) $(28,741,696) $(21,002,640)

Increase (Decrease) in Net Assets Available for Benefits

$9,266,268 $15,220,906 $(1,247,413)

Decrease (Increase) in Pension Obligation

$(4,211,495) $(7,643,036) $629,046

Decrease (Increase) in Deficiency from Prior Year

$5,054,773 $7,577,870 $(618,367)

The OPSEU/Exempt Plan represents approximately 39% of the total master trust fund. The most recent actuarial valuation filed with the Financial Services Commission of Ontario for this Plan dated July 1, 2014 resulted in a solvency deficit of $36,582,507 and a going concern unfunded liability of $8,093,733. Trent is participating in amended Stage Two solvency funding relief whereby the University elected to defer new going concern and solvency special payments established as at July 1, 2014 by twelve months and to determine the special payments using the three-year deferral/seven-year amortization option. Beginning July 1, 2015, the University is required to make payments in respect of the going concern unfunded liability at a rate of $924,962 per year for eleven years and $55,548 for years twelve to fifteen. In addition, special payments in respect of the solvency deficit well be made at a rate of $201,346 for three years, which represent interest only payments, and $4,879,990 for years four to ten. The next actuarial valuation filing year for OPSEU/Exempt is July 1, 2017. The TUFA Plan represents approximately 61% of the total master trust fund. The most recent actuarial valuation filed with the Financial Services Commission of Ontario for this Plan dated July 1, 2016 resulted in a solvency deficit of $107,185,605 and a going concern unfunded liability of $37,275,507. Trent is participating in amended Stage Two solvency funding relief whereby the University elected to defer new going concern and solvency special payments established as at June 30, 2016 by twelve months and to determine the special payments using a seven-year amortization option. The University will fund 25% of the solvency deficit over seven years, commencing June 30, 2017, and also make interest only contributions of 100% of the balance of the deficit for the same period. Beginning July 1, 2017, the University is required to make payments in respect of the going concern unfunded liability at a rate of $4,586,040 per year for eight years and $2,457,204 for years nine to twelve. In addition, special payments in respect of the solvency deficit will begin on July 1, 2017 for seven years at a rate of $1,339,135 per year. The next actuarial valuation filing year for TUFA is July 1, 2019. 7.0 ENTERPRISE RISK ASSESSMENT An external audit of the Pension Plans and SRA provides full assurance to the users of the financial statements that the University’s Pension Plans accounting records are fair, complete and in adherence with generally accepted accounting principles, industry


standards and regulatory requirements. An external audit process ensures that the University’s internal controls, processes, guidelines and policies are adequate, effective and in compliance with governmental requirements, industry standards and company policies, and that reporting mechanisms prevent material errors in financial statements. The deficiency of net assets over pension obligation for the University’s Pension Plans represents a significant enterprise risk for Trent. The University continues to pursue participation in a Jointly Sponsored Pension Plan which will mitigate this risk and eliminate the special solvency payments of the TUFA Pension Plan, with a targeted effective date of July 1, 2019. 8.0 STRATEGIC ALIGNMENT / COMPLIANCE In accordance with The Trent University Act, 1962-63, section 31, the accounts of the University shall be audited at least once a year by an auditor appointed by the Board. The financial statements of the University’s Pension Plans have been prepared by management in accordance with Canadian accounting standards for pension plans.

9.0 COMMUNICATIONS STRATEGY Not applicable Steven Pillar, Vice President, Finance and Administration Cheryl Turk, Associate Vice President, Finance




From: Connie Bonello, Chair – Investment & Pension Committee Steven Pillar, VP Finance & Administration



Subject: Investment Strategy for Supplemental Retirement Confidentiality: Not Confidential 1.0 PURPOSE

For Approval 2.0 RECOMMENDATION That the Board of Governors approve revisions to Special Resolution II.5 – Statement of Investment Policies and Procedures: Trent University Pension Fund, Supplemental Retirement Arrangement Fund, and Special Investment Fund, as presented. [Amendments include transition of the asset mix to 100% Money Market in order to protect the assets and lock in the current ability of the assets to pay benefits; and to ensure that the University would not be required to make any contributions until the assets in the SRA reach zero (expected within two years), after which the University would then be required to make benefit payments from Treasury] 3.0 EXECUTIVE SUMMARY The Supplemental Retirement Arrangement provides benefits to members for the TUFA registered plan where pensions exceed allowable Income Tax Act maximum pension. Currently, the SRA has current liabilities of $26.4 million and assets of only $2.2 million resulting in a net deficit of $24.2 million. Annual pension payments are approximately $1.4 million, meaning the assets will be depleted within two years. The assets are currently invested 60% Equities and 40% Fixed Income, implying a mismatch given the mature nature of the liabilities. It is recommended that the asset mix move to 100% Money Market in order to protect the assets and lock in the current ability for the assets to pay benefits.

Item 11.0 - Special Resolution II.5 BOARD OPEN SESSION - December 1, 2017 of 179

4.0 INPUT FROM OTHER SOURCES The analysis and investment strategy regarding the SRA is provided by AON Hewitt. 5.0 ANALYSIS See attached Investment Strategy for the Supplemental Retirement Arrangement (SRA) for further details. 6.0 FINANCIAL IMPLICATIONS The SRA currently holds assets of $2.2 million and annual pension payments are $1.4 million. This means the assets will be depleted within the next two years. Once the assets reach zero, the University will be required to make benefit payments from Treasury. This strategy will result in an additional operating pressure of $1.4 million annually commencing late in the 2018/2019 fiscal year. 7.0 ENTERPRISE RISK ASSESSMENT The key risk for the SRA is liquidity risk as the Plan will be liquidating assets over the next two years. 8.0 STRATEGIC ALIGNMENT / COMPLIANCE The SRA provides benefits to members of the TUFA registered plan where pensions exceed allowable Income Tax Act maximum pension (up to the D22 salary cap).

9.0 COMMUNICATIONS STRATEGY Not applicable. Steven Pillar, Vice President, Finance and Administration Cheryl Turk, Associate Vice President, Finance


Statement of Investment Policies and Procedures

(Special Resolution II.5)

Trent University Pension Fund, Supplemental Retirement Arrangement Fund, and Special Investment Fund

June 16TBD, 2017

Prepared by Trent University with the assistance of Aon Hewitt APPROVED on June 16, 2017TBD by the Board of Governors of Trent University


Contents

Section 1—Overview 1 1.01 Purpose of Statement 1 1.02 Plan Background and Profiles 1 1.03 Objective of the Plans and Special Investment Fund 3 1.04 Investment and Risk Philosophy 4 1.05 Administration 4

Section 2—Asset Mix and Diversification Policy 5 2.01 Portfolio Return Expectations 5 2.02 Expected Volatility 5 2.03 Asset Mix 5 2.04 Management Structure 7

Section 3—Permitted and Prohibited Investments 8 3.01 General Guidelines 8 3.02 Permitted Investments 8 3.03 Minimum Quality Requirements 10 3.04 Maximum Quantity Restrictions 12 3.05 Prior Permission Required 13 3.06 Prohibited Investments 13 3.07 Securities Lending 13 3.08 Borrowing 14

Section 4—Monitoring and Control 15 4.01 Delegation of Responsibilities 15 4.02 Performance Measurement 16 4.03 Compliance Reporting by the Investment Manager 17 4.04 Standard of Professional Conduct 18

Section 5—Administration 19 5.01 Conflicts of Interest 19 5.02 Related Party Transactions 20 5.03 Appointing and Monitoring the Investment Manager 21 5.04 Dismissal of an Investment Manager 21 5.05 Voting Rights 22 5.06 Valuation of Investments Not Regularly Traded 22 5.07 Policy Review 22

Appendix A—Compliance Reports 23 Appendix B—Glossary of Terms 26


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Section 1—Overview

1.01 Purpose of Statement This Statement of Investment Policies and Procedures (the “Policy”) provides the framework for the investment of the assets in respect of the following:

(a) The Contributory Pension Plan for the Trent University Faculty Association (TUFA) Employees of Trent University, registration number 1048826 (the “TUFA Plan”);

(b) The Contributory Pension Plan for Employees Represented by Ontario Public Sector Employees Union (OPSEU) Local 365 and Exempt Administrative Staff of Trent University, registration number 0310409 (the “OPSEU/Exempt Plan”);

(c) The Supplemental Retirement Arrangement for Members of the Contributory Pension Plan for TUFA Employees of Trent University (the “SRA”); and

(d) The Special Investment Fund which supports Trent University’s Voluntary Early Retirement (VER) Program (the “Special Investment Fund”).

Together, the OPSEU/Exempt Plan and the TUFA Plan are referred to as the “Registered Plans”. Together, the OPSEU/Exempt Plan, the TUFA Plan and the SRA are referred to as the “Plans”. The funds for the Plans, together with the Special Investment Fund, are referred to as the “Funds”.

Both Registered Plans are administered through a Master Trust due to their similar long-term risk/return objectives. The administrator of each of the Registered Plans is the Trent University Board of Governors (the “Board”). The Board designates a senior administrative official of Trent University (the “University”) who is responsible to the Board of Governors for the Registered Plans and for the SRA and the Special Investment Fund.

This Policy is based on the “prudent person portfolio approach” to ensure the prudent investment and administration of the assets of the Registered Plans within the parameters set out in the Pension Benefits Act, (Ontario) and the Regulations thereunder. While the SRA and Special Investment Fund are not subject to the Pension Benefits Act, (Ontario) and the Regulations thereunder, these will also be governed by this policy.

1.02 Plan Background and Profiles The liability data presented below is taken from the latest actuarial valuation reports. This information will be reviewed and updated following the filing of the next actuarial valuation reports with the regulatory authorities.

(a) The TUFA Plan

(i) Background This pension Plan was established as a defined benefit pension plan effective July 1, 1998. Full-time faculty members are required to become members of the Plan upon their date of hire.


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(ii) Contributions Members are required to contribute an agreed percentage of eligible earnings each year (per the current collective agreement). The University contributes in accordance with the terms of the Plan, the collective agreement and the actuarial valuations.

(iii) Benefits The Plan provides an annual benefit equal to 2.0% of the member’s Final Average Earnings for each year of pensionable service. Pensions payable under the Plan may be increased annually in accordance with indexation formulas outlined in the Plan.

(iv) Liabilities Refer to the most recent actuarial valuation.

(b) The OPSEU/Exempt Plan

(i) Background This pension plan was established as a defined benefit pension plan effective July 1, 1969 and restated July 1, 1998. Full-time staff (OPSEU and exempt) of the University are required to become members of the Plan upon their date of hire.

(ii) Contributions Members are normally required to contribute an agreed percentage of earnings each year (per the current collective agreement). The University contributes in accordance with the terms of the Plan and the actuarial valuation.

(iii) Benefits The Plan provides an annual benefit equal to 2.0% of the member’s Final Average Earnings for each year of pensionable service. Pensions payable under the Plan may be increased annually in accordance with indexation formulas outlined in the Plan.

(iv) Liabilities Refer to the most recent actuarial valuation.

(c) The SRA

(i) Background This SRA was established with effect from July 1, 1998 pursuant to a collective agreement between the University and TUFA dated July 1, 1996 to June 30, 1999, a "framework agreement" between the University and TUFA dated January 30, 1998, and an Advance Income Tax Ruling dated May 26, 1998.

(ii) Contributions The University is required to set aside funds in the SRA to fund additional retirement benefits. The University contributes in accordance with the terms of the SRA, the collective agreement and the actuarial valuations.


http://www.trentu.ca/org/tufa/1996-1999-contract/title.html

http://www.trentu.ca/org/tufa/1996-1999-contract/title.html

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(iii) Benefits The SRA provides eligible members of the Plan with additional retirement income to compensate for the limitations prescribed under the regulations to the Income Tax Act (Canada) on the amount of lifetime retirement benefits payable from a registered pension plan.

(iv) Liabilities Refer to most recent actuarial valuation.

(d) The Special Investment Fund (i) Background

The liabilities and assets of the Special Investment Fund are held outside of the Plans. The VER Program covers a closed group of Faculty members who had a Normal Retirement Date on or before July 1, 2005 and who made an election on or before July 1, 1997 to take early retirement within the 5-year period prior to their Normal Retirement Date. The VER Program enhanced the early retirement benefits payable from the TUFA Plan. As such, all the liabilities for which the Special Investment Fund has been established are in respect of retired participants. All of the retired participants are currently over age 65. Pension benefits payable under the VER Program are indexed after age 65 at the same rate as under the TUFA Plan.

(ii) Contributions Members do not contribute to the cost of the VER Program.

(iii) Benefits Eligible members were able to choose to elect to retire on any July 1 during the 5-year period preceding Normal Retirement Date. During each year of Voluntary Early Full Retirement, the member is to receive a Transition Pension equal to the pension that would have been paid, in accordance with the TUFA Plan, with the early retirement reduction waived, as if the member had continued in employment at the appropriate normal salary during the immediately preceding academic year. Ultimately, at the Normal Retirement Date, the member will receive the pension which would otherwise have been payable had the option for Voluntary Early Full Retirement not been chosen.

(iv) Liabilities The average age of the VER members is approximately 79 so the expected time horizon for the VER Program liability is considerably shorter than for the TUFA Plan. With pension liabilities of this maturity, the plan will be forced to liquidate assets in order to pay benefits each year after such time that any funding ceases. Any indexation generated under the TUFA Plan from the excess investment earnings formula (4-year average pension fund investment returns in excess of 6.0%) is extended to pension benefits payable from the VER Program.

1.03 Objective of the Plans and Special Investment Fund The objective of the Plans is to provide members of the Plans with retirement benefits prescribed under the terms thereof. The objective of the Special Investment Fund is to provide eligible members with a Transition Pension.


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1.04 Investment and Risk Philosophy The Plans’ investment policy has been designed to provide levels of return to finance defined benefit levels, which keep pace with inflation while maintaining stability of employee and employer contribution rates. The investment policy is also designed to help avoid actuarial deficits and excessive volatility in annual rates of return.

In order to achieve their long-term investment goals, the Plans and the Special Investment Fund must invest in assets that have uncertain returns, such as Canadian equities, foreign equities and non-government bonds. However, the University attempts to reduce the overall level of risk by diversifying among the asset classes and further diversifying within each individual asset class.

In order to meet the Plans’ objectives, the long-term policy asset mix for the Plans’ funds has a bias to equities.

The Special Investment Fund liability is being funded over a fixed period ending May 1, 2019. As a result of the relatively short funding amortization period and the mature nature of the liabilities, there is considerably less room for risk in this arrangement.

1.05 Administration The Trent University Board of Governors (the "Board") is the legal administrator of each of the Registered Plans. The Board has appointed an Investment & Pension Committee (the "Committee") to whom the Board has delegated responsibilities related to the administration of the Plans and the oversight of the Special Investment Fund. In addition, there are pension subcommittees of the Management/Union joint committees for the OPSEU/Exempt Plan, and for the TUFA Plan and SRA, respectively, which the Board consults on certain matters as set out in the Plans.


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Section 2—Asset Mix and Diversification Policy

2.01 Portfolio Return Expectations The investment manager(s) appointed by the Committee to manage the investment of part or all of the assets of the Plans and the Special Investment Fund (the “Investment Manager)” is expected to achieve a satisfactory return through a diversified portfolio, consistent with acceptable risks and prudent management.

The long-term target of the Funds, measured over rolling four-year periods, is to achieve a total annual real rate of return (i.e. greater than the annual increase in the Total Consumer Price Index), net of all expenses, of at least 3.75%.

The four-year rolling period investment objective is to earn, gross of fees, the target policy benchmark return indicated in 4.02 below, plus or minus a tracking error of up to +/- 12 basis points per annum. The long-term asset mix policy has been established in order to provide a reference for long-term return requirements which are consistent with the Plans’ and Special Investment Fund’s liabilities at a risk level acceptable to the Committee.

2.02 Expected Volatility The volatility of the Funds is directly related to its asset mix, specifically, the balance between the asset classes chosen in the asset mix reflected in Section 2.03 (Asset Mix) below. Since the Investment Manager does not have the authority to make any type of leveraged investment on behalf of the Funds, the volatility of the Funds should be similar to the volatility of the Benchmark Portfolio set out in Section 4.02 (Performance Measurement).

2.03 Asset Mix (a) Total Asset Mix

Taking into consideration the investment and risk philosophy of the Registered Plan,s and the Special Investment Fund and the SRA, the following asset mixes (market value) have been established:

Registered Plans and SRA:

Assets Minimum % Benchmark % Maximum % Canadian Equities 20.0 30.0 40.0 U.S. Equities 12.5 15.0 17.5 Non-North American Equities 12.5 15.0 17.5 Total Equities 45.0 60.0 75.0 Bonds 26.5 36.5 46.5 Cash 0.0 3.5 10.0 Total Fixed Income 26.5 40.0 56.5 Total 100.0


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Special Investment Fund:

Assets Minimum % Benchmark % Maximum %

Canadian Equities 20.0 30.0 45.0 U.S. Equities 7.5 10.0 12.5 Non-North American Equities 7.5 10.0 12.5 Total Equities 35.0 50.0 70.0 Bonds 36.5 46.5 56.5 Cash 0.0 3.5 5.0 Total Fixed Income 36.5 50.0 61.5 Total 100.0

SRA

Assets Minimum % Benchmark % Maximum % Short Term Investments and Cash

100.0 100.0 100.0

Total 100.0

For purpose of the total asset mixes described above, the Investment Manager’s asset class pooled funds are deemed to be 100% invested, even though these funds may contain a portion held in cash and cash equivalent instruments.

In order to ensure that the Funds operate within the minimum and maximum ranges, the University shall monitor the asset mix on an on-going basis. In addition, the Committee shall review the asset mix at least quarterly. Re-balancing will be effected quarterly by the Investment Manager by redirecting net cash flows to and from the Funds and transferring cash or securities between portfolios, as required.

(b) Balanced Passive Investment Manager

The investment objective of the Investment Manager is to achieve the return and risk profile of each asset class indicated in this Section 2.03, as represented by the benchmarks in Section 4.02 (Performance Measurement). It is also the responsibility of the Investment Manager to ensure that the Total Fund asset mix remains within the ranges established in this Section 2.03 above.

(c) Currency Hedging In recognition that foreign equity investment carries with it potential risks related to currency exposure, the Plans have adopted a hedging policy, which the Committee may review from time to time. The current policy is to hedge one-half of the Plans’ U.S. dollar exposure. Due to the diversification provided by indexed non-U.S. equities and the higher cost to hedge


7

such currency exposure, the current policy is to leave exposure to non-U.S. dollar currencies unhedged.

2.04 Management Structure

A passive management structure has been adopted for the Plans consisting of indexed portfolios for each of the asset classes in Section 2.03 (Asset Mix).

It is Trent University’s view that passive management of fund assets best serves the interests of the plan membership because it protects the Funds from potential below-index returns that are experienced by many funds pursuing active management programs. Theory and experience have demonstrated that many active managers and active management programs do not consistently outperform suitably constructed market indices, net of associated fees and expenses. This was the University’s twenty-year experience and the experience that motivated the move to passive from active management in 2009.

Active management programs can be successful but only for those organizations managing much larger asset pools and that have the requisite resources, organizational commitment and skills to find, hire and manage skill-based investment managers. All things considered, the Committee and the Board believe that passive management is prudent and will likely be more profitable after fees and expenses than active management over the long-term.


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Section 3—Permitted and Prohibited Investments

3.01 General Guidelines The investments of the Registered Plans’ funds must comply with the requirements and restrictions set out in the Federal Investment Regulations, the Income Tax Act (Canada) and the Pension Benefits Act (Ontario) and their respective Regulations. As described in 1.01 above, the SRA and Special Investment Fund, due to a similar risk profile and similar return objectives, will also be governed to comply with these requirements and restrictions.

3.02 Permitted Investments The Investment Manager will invest the Fund’s assets on a passive basis1 and may invest in any of the following asset classes and investment instruments listed below:

(a) Canadian and Foreign Equities (i) Common and convertible preferred stock.

(ii) Debentures convertible into common or convertible preferred stock provided such instruments are traded on a recognized public exchange or through established investment dealers.

(iii) Rights warrants and special warrants for common or convertible preferred stock,

(iv) Installment receipts, American Depository Receipts and Global Depository Receipts.

(v) Units of real estate investment trusts (REITs).

(vi) Units of income trusts domiciled in jurisdictions that provide limited liability protection to shareholders.

(b) Bonds (i) Bonds, debentures, notes and other evidence of indebtedness of Canadian,

supranational or developed market foreign issuers whether denominated and payable in Canadian dollars or a foreign currency.

(ii) Mortgage-backed securities.

(iii) Asset backed securities.

(iv) Term deposits and guaranteed investment certificates.

(v) Private placements of bonds subject to Section 3.03 below, provided that they are marketable and meet the liquidity and minimum issue size requirements for inclusion in the FTSE TMX Canada Universe Bond Index.

1 Except for cash and short term investments, which are not passively managed


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(c) Cash and Short Term Investments (not passively managed)

(i) Cash on hand and demand deposits.

(ii) Canadian Treasury bills issued by the federal and provincial governments and their agencies.

(iii) Sovereign short-term debt instruments of developed countries, with maturities not exceeding 18 months.

(iv) Obligations of trust companies and Canadian and foreign banks chartered to operate in Canada, including bankers’ acceptances.

(v) Commercial paper and term deposits.

(d) Other Investments (i) Investments in open-ended or closed-ended pooled funds provided that the assets

of such funds are permissible investments under this Policy.

(ii) Deposit accounts of the custodian can be used to invest surplus cash holdings.

(iii) Currency forward and futures contracts to hedge the currency risk of investment positions in non-Canadian dominated securities.

(iv) Index-linked futures contracts/swaps are permissible derivative investments for stock/bond exposure.

(e) Pooled Funds Investment in pooled funds is permissible subject to the prior approval of the Committee. While the guidelines in this Policy are intended to guide the management of the Funds, it is recognized that, where pooled funds are held, there may be instances where there is a conflict between this policy and the investment policy of a pooled fund. In that case, the pooled fund policy shall dominate, subject to the compliance reporting procedures outlined in Section 4.03 and Appendix A. However, the Investment Manager is expected to advise the Committee in the event of any material discrepancies between the above guidelines and the pooled fund’s own investment guidelines. In addition, the Investment Manager will ensure that the Committee has received a copy of the most recent version of the pooled fund policy and of any amendments made to the pooled fund policy.

(f) Mutual Funds Investment in mutual funds is permissible subject to the prior approval of the Committee. While the guidelines in this Policy are intended to guide the management of the Funds, it is recognized that, where mutual funds are held, there may be instances where there is a conflict between this Policy and the investment policy or prospectus of the mutual fund. In that case, the mutual fund policy shall dominate, subject to the compliance reporting procedures outlined in Section 4.03 and Appendix A. The Investment Manager is expected to advise the Committee in the event of any material discrepancies between the above guidelines and the pooled fund’s own investment guidelines. In addition, the Investment Manager will ensure that the Committee has received a copy of the most recent version of the mutual fund policy and of any amendments made to the mutual fund policy.


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(g) Derivatives

The Fund may invest derivatives of equity, fixed-income or currency-related investments, futures and/or forward contracts, swaps, options, warrants, depository receipts, rights or other similar instruments are all permitted for the purposes of exposure and/or hedging. The exposure should be consistent with the Plans' investment objectives and guidelines laid out in this document. Any derivative will be measured against its underlying exposure. Derivatives cannot be used for speculative purposes or to leverage the portfolio. Similarly, the Fund may indirectly invest in derivatives through its investment in pooled or mutual funds, if the objectives and strategies of these funds permit.

3.03 Minimum Quality Requirements (a) Quality Standards

Within the investment restrictions for individual portfolios, all portfolios may hold a prudently diversified exposure to the intended market.

(i) The minimum quality standard for individual bonds and debentures is ‘BBB’ rating or equivalent as rated by at least two of the three recognized bond rating Agencies at the time of purchase. Unrated bonds should be assigned a rating by the Investment Manager before purchase.

(ii) The minimum quality standard for individual short term investments is ‘R-1’ or equivalent as rated by at least two of the three recognized bond rating agencies, at the time of purchase.

(iii) The minimum quality standard for individual preferred shares is ‘P-1’ or equivalent as rated by at least two of the three recognized bond rating agencies, at the time of purchase.

(iv) All investments shall be reasonably liquid.

(b) Split ratings In cases where recognized bond rating agencies do not agree on the credit rating, the bond will be classified according to the methodology used by FTSE TMX, which states (i) If two agencies rate a security, use the lower of the two ratings; (ii) If three ratings agencies rate a security, use the most common; and

(iii) If all three ratings disagree, use the middle rating.

(c) Downgrades in Credit Quality

(i) An active Investment Manager, based on their own internal credit analysis, may invest in fixed income securities with credit ratings that do not meet the Quality Standards described above in Section 3.03 (a), as rated by the Recognized Rating Agencies described in 3.03 (d)., provided that they supply a detailed report on the credit ratings for fixed income securities in the portfolio or pooled fund in question, at least semi-annually.

(ii) A passive Investment Manager will not comply with the above notification requirements. Their reporting will be limited to the compliance reporting as described under Section 4.03.


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(d) Rating Agencies For the purposes of this Policy, the following rating agencies shall be considered to be ‘a recognized bond rating agency’:

(i) Dominion Bond Rating Service (Canadian issuers only);

(ii) Standard and Poor’s;

(iii) Moody’s Investors Services; and,

(iv) Fitch Ratings (foreign issuers only).

(f) Derivatives The Fund may indirectly invest in derivatives through its investment in pooled or mutual funds, if the objectives and strategies of these funds permit. Derivative instruments utilized by the Funds, or on the Funds’ behalf, shall only be entered into with a major financial institution acting as counterparty, with a long-term credit rating of at least ‘A-‘ from Standard and Poor’s or equivalent rating as rated by another rating agency.

For both direct and indirect utilization of derivatives, the exposure to the derivatives must be subject to limits based on the intended use and strategies for derivatives, and the risks associated with them. Investment in derivatives must also comply with all applicable statutory provisions and regulations, including the Prudent Person Rule, and must be invested and managed in accordance with regulatory derivatives best practices.

(f) Environmental, Social and Governance Factors “ESG” refers to the environmental, social and governance factors relevant to an investment that may have a financial impact on that investment. Consistent with its obligation to act in the best interest of the Plan and its members, the Board chooses Investment Funds that it believes will deliver superior financial performance over the longer term. The Board believes that ESG issues can have a material impact on the value of the companies and securities that comprise investment funds, and that ESG risks and opportunities should offer commensurate long-term reward potential. The primary responsibility of the Board requires that there be an appropriate balance between the need to seek long-term investment returns to help secure promised pensions for all members of the Plan and the needs for those returns to be delivered in as stable a manner as possible to limit downward impact (given the nature and behaviour of the investment markets).

Notwithstanding the foregoing, the Administrator does not take environmental, social or governance factors (“ESG factors”) directly into account when making investment decisions for the Plan. The Board recognizes; however, that some fund managers may consider ESG factors as a way of determining which investments will have the best economic outcome, but this is not a factor considered by the Board when choosing fund managers nor are the fund managers instructed to monitor the policies and practices of the various investments relating to ESG factors. In order to protect and enhance the value of the fund’s investments, when choosing fund managers, the Board considers criteria that include the Investment Manager’s business, staff, historical performance, and investment process. The Committee neither favours nor avoids asset managers based on ESG integration in their management style.


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However, the Committee believes asset managers may take account of ESG factors to the extent that these are relevant in meeting the above goals.

3.04 Maximum Quantity Restrictions (a) Total Fund Level

The administrator of the Plan shall not directly or indirectly lend or invest moneys equal to more than 10% of the total market value of the plan’s assets in any one person, two or more associated persons or two or more affiliated corporations.

(b) Individual Investment Manager Level The Investment Manager shall adhere to the following restrictions for each of the Funds:

(i) Equities (A) No one equity holding or private placement shall represent more than 10%

of the total market value of the Investment Manager’s equity portfolio.

(B) No one equity holding shall represent more than 10% of the voting shares of a corporation.

(C) No one equity or private placement holding shall represent more than 10% of the available public float of such equity or private placement security.

(D) No more than 15% of the Canadian equity portfolio shall be invested in income trusts and limited partnerships.

(ii) Bonds and Short Term (A) Except for federal and provincial bonds, no more than 10% of an

Investment Manager’s bond portfolio may be invested in any one company or affiliated group of companies.

(B) No more than 15% of the market value of a manager’s bond portfolio shall be invested in bonds rated ‘BBB’.

(C) Net foreign currency exposure is limited to no more than 5% of the market value of the bond portfolio.

(D) No more than 20% of the market value of the bond portfolio may be held in foreign issuer bonds.

(E) No more than 10% of the market value of the bond portfolio shall be invested in direct mortgages backed by Canadian real estate.

(iii) Pooled Funds The investment by the University in a pooled fund may not exceed 10% of the market value of the pooled fund.

(iv) Other The use of derivative securities shall be supported at all times by the explicit allocation of sufficient assets to back the intended derivative strategy. For greater certainty, the Investment Manager is not permitted to leverage the assets of the Funds. The use of derivative securities is only permitted for the uses described in this Policy. Purchase or sale of any of these instruments cannot expose the Funds to any more risk than the cash market.


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3.05 Prior Permission Required The following investments are permitted provided that prior permission for such investments has been obtained from the Committee:

(a) Direct investments in resource properties;

(b) Direct investments in real estate;

(c) Direct investments in venture capital financing;

(d) Investments in a pooled fund that conflicts with this Policy;

(e) Investments in private placement equities;

(f) Derivatives other than those otherwise permitted by this Policy;

(g) Commercial and residential mortgages secured against Canadian real estate;

(h) Units of limited partnerships which are listed on the TSX exchange.

(i) Private Placement Bonds

Private placement bonds that do not qualify for inclusion in the FTSE TMX Canada Universe Bond Index are only permitted subject to all of the following conditions:

(i) The issues acquired must be at least ‘A’ or equivalent rated;

(ii) The total investment in such issues must not exceed 10% of the market value of the Investment Manager’s bond portfolio;

(iii) The Investment Manager’s portfolio may not hold more than 5% of the market value of any one private placement; and

(iv) The Investment Manager must be satisfied that there is sufficient liquidity to ensure sale at a reasonable price.

3.06 Prohibited Investments The Investment Manager shall not:

(a) Invest in companies for the purpose of managing them;

(b) Purchase securities on margin or engage in short sales;

(c) Invest in debt instruments issued by the University; or,

(d) Make any investment not specifically permitted by this Policy.

3.07 Securities Lending The investments of the Funds may be loaned, for the purpose of generating revenue for the Funds, subject to the provisions of the Pension Benefits Act (Ontario), the Income Tax Act (Canada) and their applicable Regulations, as applicable.


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Such loans must be secured by cash and or/readily marketable government bonds, treasury bills and/or letters of credit, discount notes, banker's acceptances of Canadian chartered banks or high quality, liquid equities. The amount of collateral taken for securities lending should reflect OSFI standards and best practices in local markets. This market value relationship must be calculated at least daily.

The terms and conditions of any securities lending program will be set out in a contract with the Custodian. The Custodian shall, at all times, ensure that the Administration of the University has a current list of those institutions that are approved to borrow the Funds’ investments. If the Funds are invested in a pooled fund, security lending will be governed by the terms and conditions set out in the pooled fund contract.

3.08 Borrowing The Funds shall not borrow money, except to cover short-term contingency and the borrowing is for a period that does not exceed ninety days, subject to the Pension Benefits Act (Ontario) and the Income Tax Act, as applicable, and only with the written permission of the Board.


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Section 4—Monitoring and Control

4.01 Delegation of Responsibilities The Board has responsibility for the Plans and Special Investment Fund as stated in Section 1.05 of this Policy. The Committee assists the Board in fulfilling its fiduciary duties and provides direction to the senior University official with respect to the Funds. The Committee may also hire or terminate the Investment Manager(s) at its discretion.

The Committee has delegated certain functions relating to the management and administration of the Funds to external organizations, as outlined below:

(a) Investment Manager The Investment Manager will:

(i) Invest the assets of the Funds in accordance with this Policy;

(ii) Meet with the Committee as required and provide written reports regarding their past performance, their future strategies and other issues requested by the Committee;

(iii) File quarterly compliance reports, unless the investment is in a mutual fund (see section 4.03);

(iv) Reconcile their own records with those of the custodian, at least monthly;

(v) Provide quarterly a performance report in a form acceptable to the Committee. The performance should be provided for the total portfolio managed by the Investment Manager and for each major asset class; and,

(vi) Where investment via a pooled fund has been authorized by the Committee, the Investment Manager will provide the Committee with copies of each pooled fund’s audited financial statements within 180 days of the pooled fund’s fiscal year end.

(b) Custodian/Trustee The custodian/trustee will:

(i) Maintain safe custody over the assets of the Funds;

(ii) Execute the instructions of the Board, the Committee and the Investment Manager; and,

(iii) Record income and provide monthly financial statements to the University or as required.

(c) Actuary The actuary will:

(i) Perform actuarial valuations of the Plans and Special Investment Fund as required;

(ii) Advise the Committee on any matters relating to the Plan design, membership and contribution rates; and


16

(iii) Assist the Committee in any other way required.

4.02 Performance Measurement For purposes of evaluating the performance of the Funds and the Investment Manager, all rates of return are measured over rolling four-year periods, and on a time-weighted return basis. Return objectives for the Investment Manager are gross of fees and include realized and unrealized capital gains or losses plus income from all sources.

(a) Total Fund The absolute performance objective of each Fund the Registered Plans and Special Investment Fund is to outperform the CPI by at least 3.75% over four-year rolling periods. An absolute performance objective has not been defined for the SRA. In addition, investment weightings and results of the Funds are to be tested regularly against a Benchmark Portfolio comprising:

Registered Plans and SRA:

Benchmark %

S&P/TSX Composite Index 30.0 S&P 500 Index (C$) 7.5 S&P 500 Hedged Index (C$) 7.5 MSCI EAFE Index (C$) 15.0 FTSE TMX Canada Universe Bond Index 36.5 FTSE TMX Canada 91-day Treasury Bill Index 3.5

Special Investment Fund:

Benchmark %

S&P/TSX Composite Index 30.0 S&P 500 Index (C$) 5.0 S&P 500 Hedged Index (C$) 5.0 MSCI EAFE Index (C$) 10.0 FTSE TMX Canada Universe Bond Index 46.5 FTSE TMX Canada 91-day Treasury Bill Index 3.5


17

SRA:

Benchmark %

FTSE TMX Canada 91-day Treasury Bill Index 100.0

(b) Balanced Passive Investment Manager The investment objective of the Investment Manager is to achieve the annual market rate of return for each asset class component within the following tracking variance ranges over four-year rolling periods:

Registered Plans, SRA and Special Investment Fund:

Benchmark Tracking Variance (+/- %)

S&P/TSX Composite Index 0.12 S&P 500 Total Return Index (C$) 0.12 S&P 500 Total Return Hedged Index (C$) 0.15 MSCI EAFE Index (C$) 0.20 FTSE TMX Canada Universe Bond Index 0.08 FTSE TMX Canada 91-day Treasury Bill Index -.10/+.50

SRA:

Benchmark Tracking Variance (+/- %)

FTSE TMX Canada 91-day Treasury Bill Index -.10/+.50

4.03 Compliance Reporting by the Investment Manager The Investment Manager is required to complete and deliver a compliance report to the Committee each quarter (a sample is included in Appendix A). The compliance report will indicate whether or not the Investment Manager was in compliance with this Policy during the quarter.

In the event that an Investment Manager is not in compliance with this Policy, the Investment Manager is required to advise the Committee immediately, detail the nature of the non-compliance and recommend an appropriate course of action to remedy the situation.


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The Funds may invest in pooled funds with separate investment policies. Should a conflict arise between those investment policies and this Policy, the Investment Manager is required to advise the Committee as per section 3.02(e).

The Funds may invest in mutual funds with separate fund prospectuses. In this case, at inception the Investment Manager is required to provide the prospectus to the Committee and identify any areas in which the investment policy of the mutual fund may not be fully compliant with this Policy. Subsequent to this initial disclosure, the Investment Manager must notify the Committee if it is not in compliance with its own policy or fund prospectus.

4.04 Standard of Professional Conduct All professional service providers are expected to comply with the standards of their professions and general prudence.

The Investment Manager will manage each Fund with the care, diligence and skill that an investment manager of ordinary prudence would use in dealing with similar pension or investment funds. The Investment Manager will also use all relevant knowledge and skill that it possesses or ought to possess as a prudent investment manager.


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Section 5—Administration

5.01 Conflicts of Interest (a) Responsibilities

This standard applies to members of the Board and its Committee, members of all other committees involved in supporting the work of the Plans and Special Investment Fund, and all administrators and agents employed by the University (e.g. Investment Manager, trustees, actuaries, consultants) to support the work of the Plans and Special Investment Fund, in the execution of their responsibilities under the Pension Benefits Act (Ontario) if applicable and this Policy (the “Affected Persons”). An “agent” is defined to mean an organization, association or individual, as well as its employees who are retained by the Committee to provide specific services with respect to the investment, administration and management of the assets of the Funds.

(b) Disclosure In the execution of their duties, the Affected Persons shall disclose any material conflict of interest relating to them, or any material ownership of securities, which could impair their ability to render unbiased advice, or to make unbiased decisions, affecting the administration of the Funds’ assets.

Further, it is expected that no Affected Person shall make any personal financial gain (direct or indirect) because of his or her fiduciary position. However, normal and reasonable fees and expenses incurred in the discharge of their responsibilities are permitted if documented and approved by the University.

No Affected Person shall accept a gift or gratuity or other personal favour, other than one of nominal value, from a person with whom the employee deals in the course of performance of his or her duties and responsibilities for the Funds.

It is incumbent on any Affected Person who believes that he or she may have a conflict of interest, or who is aware of any conflict of interest, to disclose full details of the situation to the attention of the Committee immediately. The Committee, in turn, will decide what action is appropriate under the circumstances but, at a minimum, will table the matter at the next regular meeting of the Committee.

An Affected Person who has or is required to make a disclosure as contemplated in this Policy shall normally withdraw from the meeting until the issue causing the conflict has been dealt with. He or she may be present at, or take part in the discussions on the issue causing the conflict only if the voting members of the Committee unanimously agree that circumstances warrant such participation. Regardless of the position taken by the Committee, an individual member may still elect to suspend all activities relating to the conflict. In no case is a member permitted to vote on any resolution to approve a contract or investment transaction in which he or she has a material interest.

Notwithstanding the above, the parties listed above may, instead of adhering to this Conflict of Interest Policy, adhere to an alternate Conflict of Interest Policy that the University and the Board deem reasonable.


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5.02 Related Party Transactions The University, on behalf of the Plans or Special Investment Fund, may not enter into a transaction with a related party unless:

a) The transaction is made for the operation or administration of the Plans or Special Investment Fund under terms and conditions that are not less favourable to the Plans or Special Investment Fund than market terms and conditions and such transaction does not involve the making of loans to, or investments in, the related party; or

b) The combined value of all transactions with the same related party is nominal or the transaction(s) is immaterial to the Plans or Special Investment Fund.

For the purposes of this section, only the market value of the combined assets of the Plans or Special Investment Fund shall be used as the criteria to determine whether a transaction is nominal or immaterial to the Plans or Special Investment Fund. Transactions less than 0.5% of the combined market value of the assets of the Plans or Special Investment Fund are considered nominal. In addition, the prohibition to entering into transactions with a related party does not apply to investments:

a) In an investment fund (as that term is defined in Schedule III to the Pension Benefits Standards Regulations, 1985 (Canada)) or segregated fund in which investors other than the Administrator and its affiliates may invest and that complies with the requirements set out in Sections 9 and 11 of Schedule III to the Pension Benefits Standards Regulations, 1985 (Canada).

b) In an unallocated general fund of a person authorized to carry on a life insurance business in Canada;

c) In securities issued of fully guaranteed by the Government of Canada, the government of a province, or an agency of either one of them;

d) In a fund composed of mortgage-backed securities that are fully guaranteed by the Government of Canada, the government of a province, or an agency of either one of them;

e) In a fund that replicates the composition of a widely recognized index of a broad class of securities traded at a marketplace (as that term is defined in the Pension Benefits Standards Regulations, 1985 (Canada)); and

f) That involve the purchase of a contract or agreement in respect of which the return is based on performance of a widely recognized index of a broad class of securities traded at a marketplace (as that term is defined in the Pension Benefits Standards Regulations, 1985 (Canada)).

A “related party” in respect of the Plans or Special Investment Fund means: a) A person who is the administrator of the Plans or Special Investment Fund including any

officer, director or employee of the administrator. It also includes the Managers and their employees, a union representing employees of the employer, a member of the Plans or Special Investment Fund, a spouse or child of the persons named previously, or a corporation that is directly or indirectly controlled by the persons named previously, among others. Related party does not include government or a government agency, or a bank, trust company or other financial institution that holds the assets of the Plans or Special Investment Fund, where that person is not the administrator of the Plans or Special Investment Fund;

b) An officer, director or employee of one of the administrators of the Retirement Program; c) A person responsible for holding or investing the assets of the Plans or Special Investment

Fund, or any officer, director or employee thereof;


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d) An association or union representing employees of the University, or an officer or employee thereof;

e) A member of the Plans or Special Investment Fund; f) The spouse or child of any person referred to in any of paragraphs (a) to (e); g) An affiliate of the University; h) A corporation that is directly or indirectly controlled by a person referred to in any of

paragraphs (a) to (f), i) An entity in which a person referred to in paragraph (a), (b), or (e), or the spouse or a child

of such a person, has a substantial investment, and/or j) An entity that has made a substantial investment in the University.

5.03 Appointing and Monitoring the Investment Manager In accordance with its terms of reference, the Committee is responsible for the appointment of the Investment Manager and is not required to obtain the approval of the Board before appointing any Investment Manager. The committee will monitor and review the: (a) Assets and net cash flow of the Funds;

(b) Investment Manager’s financial stability, staff turnover, consistency of style and record of service;

(c) Investment Manager’s current economic outlook and investment strategies;

(d) Investment Manager’s compliance with this Policy where a manager is required to complete and sign a compliance report; and,

(e) Investment performance of the assets of the Funds in relation to the rate of return expectations outlined in this Policy, on a quarterly basis.

5.04 Dismissal of an Investment Manager It is the responsibility of the Committee to monitor the performance of the Investment Manager and to remove any Investment Manager where necessary, in accordance with this Section. Reasons for considering the termination of the services of an Investment Manager include, but are not limited to, the following factors:

(a) Changes in the overall structure of a Fund’s assets such that the Investment Manager’s services are no longer required;

(b) Change in personnel, firm structure or investment philosophy which might adversely affect the potential return and/or risk level of the portfolio;

(c) Performance results which are below the stated performance benchmarks; and/or

(d) Failure to adhere to this Policy.

When one of these or any other serious concern arises, the Committee will normally request a special meeting with the Investment Manager to discuss the issue. In any such case, the Committee may recommend corrective action up to and including termination of the services of the Investment Manager. The Committee is not required to obtain Board approval to terminate the services of an Investment Manager.


22

5.05 Voting Rights The Board has delegated voting rights acquired through the investments held by the Funds to the custodian of the securities to be exercised in accordance with the Investment Manager’s instructions. The Investment Manager is expected to exercise all voting rights related to investments held by each of the Funds in the interests of the members of that plan or fund. Upon request, the Investment Manager shall report their voting activities to the Committee.

The Board reserves the right to take-back voting rights of assets held in segregated portfolios for specific situations.

5.06 Valuation of Investments Not Regularly Traded The following principles will apply for the valuation of investments that are not traded regularly:

(a) Equities Average of bid-and-ask prices from two major investment dealers, at least once every month.

(b) Bonds Same as for equities.

(c) Mortgages Unless in arrears, the outstanding principal plus/minus the premium/discount resulting from the differential between face rate and the currently available rate for a mortgage of similar quality and term, determined at least once every month.

(d) Real Estate A certified written appraisal from a qualified independent appraiser at least every two years.

5.07 Policy Review This Policy must be formally reviewed by the Committee at least annually and may be amended by the Board at any time. A copy of the most current Policy is to be provided to the actuary and Investment Manager.


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Appendix A—Compliance Reports

Trent University Registered Plans and SRA Fund Passive Balanced Manager Compliance Report for the period____________________(date)

GUIDELINES

POLICY COMPLIED

WITH

ASSET MIX (at Market Value) % YES/NO *

EQUITIES CANADIAN 20-40

U.S. 12.5-17.5

NON-NORTH AMERICAN 12.5-17.5

FIXED INCOME BONDS 26.5-46.5

SHORT-TERM & CASH 0 – 10

* If policy not complied with, comment on specifics The undersigned hereby confirms that throughout the reporting period noted above: 1. The management of the Pooled Funds was in accordance with all the terms, conditions and guidelines

stipulated in the Pooled Funds’ Confidential Offering Circular dated ____________ or Simplified Prospectus dated ____________ (the “Policy”).

If not, attached are details of what activities were outside the Policy guidelines, the consequence of such activities to the Pooled Funds, and the actions taken to remedy the situation.

2. The Pooled Funds were managed in compliance with provisions of the income tax, pension and other legislation, as applicable, which govern the investment of assets. If not, attached are details of any non-compliance issues.

3. The Policy was not amended during the reporting period. If the Policy was amended, Trent University was notified in writing of such amendments on ____________.

4. The Investment Manager has complied with the Standard of Professional Conduct contained in Section 4.04 of this Statement of Investment Policies & Procedures.

If not, attached are details of any non-compliance issues.

5. The manager and/or its professional staff are not currently under investigation by any regulatory authority.

If yes, attached are details of such investigations.

COMPLETED BY:_________________________ SIGNED BY:_________________________


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Trent University Special Investment Fund Passive Balanced Manager Compliance Report for the period _____________________(date)

GUIDELINES

POLICY COMPLIED

WITH


EQUITIES CANADIAN 20-45

U.S. 7.5-12.5

NON-NORTH AMERICAN 7.5-12.5

FIXED INCOME BONDS 36.5-56.5

SHORT-TERM & CASH 0 – 5




2. The Pooled Funds were managed in compliance with provisions of the income tax and other legislation, as applicable, which govern the investment of assets. If not, attached are details of any non-compliance issues.






COMPLETED BY:_________________________ SIGNED BY: _____________________


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Trent University SRA Fund Passive Balanced Manager Compliance Report for the period____________________(date)

GUIDELINES

POLICY COMPLIED

WITH


FIXED INCOME SHORT-TERM & CASH 100




2. The Pooled Funds were managed in compliance with provisions of the income tax, pension and other legislation, as applicable, which govern the investment of assets. If not, attached are details of any non-compliance issues.






COMPLETED BY:_________________________ SIGNED BY:_________________________

Formatted: Numbered + Level: 1 + Numbering Style: 1, 2,3, … + Start at: 1 + Alignment: Left + Aligned at: 0" + Tabafter: 0.25" + Indent at: 0.25"





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Appendix B—Glossary of Terms

As used in this Policy: Active Management Managing the investments of a fund with the objective of

outperforming the return of a broad-based index or combination of broad based indices.

Administrator Person or persons that administer the pension plan. American Depository Receipt (ADR) Receipt for the shares of a foreign-based corporation held in

the vault of a U.S. bank and entitling the shareholder to all dividends and capital gains.

Asset Anything having exchange value. Asset Classes Groups of securities or assets with similar characteristics.

These may be broadly defined (equities, bonds) or more narrowly defined (Canadian small cap equities, Real Return Bonds).

Basis Point One-one hundredth of one percent (0.01%). Bond Any interest-bearing or discounted government or corporate

security that obligates the issuer to make specified payments of interest and principal to the holder over a specified period.

Book Value The acquisition cost of an asset, including all direct costs

associated with the acquisition, prior to any external financing.

Common Stock Units of ownership of a public corporation where owners

typically are entitled to vote on the selection of directors and other important matters as well as to receive dividends on their holdings, and in the event that a corporation is liquidated, the claims of secured and unsecured creditors and owners of bonds and preferred stock take precedence over the claims of those who own common stock.

Consumer Price Index (CPI) The Consumer Price Index for Canada as published by

Statistics Canada under the authority of the Statistics Act (Canada).

Custodian A bank or other financial institution that holds the investment

assets of the Plan. Debenture A general debt obligation backed only by the integrity of the

borrower and documented by an agreement called an indenture.

Derivative Instruments or Securities Financial contracts that derive their value from the value of

an underlying asset (such as a financial instrument, index, or commodity) through contractual relationships. Derivatives include forwards, swaps, futures, options and warrants.

FTSE TMX Canada Universe Bond Index An index maintained by FTSE TMX that covers all marketable Canadian bonds with term to maturity of more than one year. The purpose of the index is to reflect the performance of the broad Canadian bond market, including


27

federal, provincial and municipal government issues, as well as corporate issues.

FTSE TMX Canada 91-day T-Bill Index An index maintained by FTSE TMX that covers Canadian Treasury Bills. The index is constructed by selling and repurchasing Government of Canada T-bills with an average term to maturity of 91 days.

Diversification The spreading of risk by investing assets in different

categories of investments. Duration The weighted-average time (in years) to cash flow recovery. Equity The ownership interest possessed by a shareholder in a

corporation - stocks as opposed to bonds. Foreign Equity Ownership in non-Canadian stocks. Foreign Exchange Contract A contract for the immediate (spot) delivery of a specified

amount of foreign currency in exchange for Canadian dollars.

Forwards Any over-the-counter (OTC) contract, which calls for the

delivery of an underlying asset, for a specified price (the forward delivery price), to be delivered at contract maturity.

Futures Any exchange-traded contract, which calls for the delivery of

an underlying asset at a predetermined maturity date, for a pre-specified price (the futures delivery price), to be delivered at contract maturity.

Funded Position The ratio of the Plan’s ongoing assets to its ongoing

liabilities. Global Depository Receipt A receipt denoting ownership of foreign-based corporation

stock shares, which are traded in numerous capital markets around the world.

Income Tax Act (ITA) The Income Tax Act (Canada) and the regulations made

thereunder, as amended from time to time. Income Trust An investment structured as a trust that invests in income-

producing assets where the revenues, net of expenses, are distributed to investors.

Index A statistical composite that measures changes in the

economy or in financial markets, often expressed in percentage changes from a base year or from the previous month.

Indexing Tying pension benefits to an index, such as the CPI. Inflation The rise in the prices of goods and services. Investment Manager An investment counselor who is an individual or company

with the responsibility for providing investment advice to clients and executing discretionary investment decisions.

Liquidity (a) The characteristics of a security or commodity with

enough units outstanding to allow large transactions without a substantial drop in price, and


28

(b) The ability of an individual or company to convert assets into cash or cash equivalents without a significant loss.

Market Value The most probable price that would be obtained for property

in an arm's length sale in an open market under conditions requisite to a fair sale, the buyer and seller each acting prudently, knowledgeably and willingly.

MSCI EAFE Index An index maintained by MSCI, the MSCI EAFE Index is free

float-adjusted market capitalization index that is designed to measure developed market equity performance globally, excluding North America.

Mortgage A debt instrument by which the borrower (mortgagor) gives

the lender (mortgagee) a lien on property as security for the repayment of a loan.

Options Any contract granting the purchaser of the contract, the right,

but not the obligation, to exercise or fulfill the terms and conditions specified in the contract.

Passive Management Managing the investments of a fund with the objective of

matching the return of a broad-based index such as the S&P/TSX Composite Index.

Pension Benefit Act (Ontario) The Pension Benefit Act (Ontario) and the regulations made

thereunder, as amended from time to time. Policy The Statement of Investment Policies and Procedures for the

Trent University Pension Plan. Preferred Stock A class of capital stock that pays dividends at a specified

rate, usually does not have voting rights and that has preference over common stock in the payment of dividends and the liquidation of assets.

Private Placement Stocks, bonds or other investments that are issued directly to

an institutional investor and are not publicly traded. Real Estate Investments with returns derived from rental incomes from

properties and gains from development, redevelopment and/or sale of properties including office buildings, multi-unit residential buildings and retail space.

Resource Property Any property that is, (a) A right, license or privilege to explore for, drill for or take

petroleum, natural gas or related hydrocarbons; (b) A right, license or privilege to;

(i) Store underground petroleum, natural gas or related

hydrocarbons; or (ii) Prospect, explore, drill or mine for minerals in a

mineral resource; (c) An oil or gas well or real property, of which the principal

value depends on its petroleum or natural gas content, excluding any depreciable property used or to be used in connection with the extraction or removal or petroleum or natural gas there from;

(d) A real property, of which the principal value depends on

its mineral resource content, excluding any depreciable


29

property used or to be used in connection with the extraction or removal of minerals there from; or

(e) A right to or interest in any property described in clause

(a) to (d) above.

S&P/TSX Composite Index An index maintained by the S&P/TSX Canadian Index Policy Committee that measures the return on the largest companies that trade on the Toronto Stock Exchange. The index is float-weighted and calculated on a total return basis with dividends reinvested.

S&P/TSX Composite Capped Index Contains all the constituents of the S&P/TSX Composite Index, with weight of any single index constituent capped at 10 percent.

S&P 500 Index An index maintained by the Standard & Poors U.S. Index Committee, this widely recognized index measures the performance of 500 large cap U.S stocks.

Securities Lending Agreement An agreement entered into by the trustees of Trent

University and a borrower of the securities outlining the terms of the loan.

Security Any document, instrument or writing commonly known as a

security and includes a share of any class or series of shares or a debt obligation of a corporation, a certificate evidencing such a share or debt obligation and a warrant.

Segregated Fund or Portfolio A fund established by a sponsor that is duly authorized to

operate a fund in which money from one or more contributors is accepted for investment and the assets of the fund are maintained by the sponsor as separate and distinct from the general funds of the sponsor.

Supranational bonds Debt issued by supranational organizations such as the

World Bank (IBRD), the European Development Bank (EIB) or Inter-American Development Bank (IADB).

Total Fund Benchmark A portfolio that represents the long-term asset allocation

set by the Board of Governors in order to meet the portfolio return expectations.

Warrant A type of security, usually issued together with a bond or preferred stock that entitles the holder to buy a proportionate amount of common stock at a specified price, usually higher than the market price at the time of issuance, for a period of years or to perpetuity.



To: Board of Governors Date of Report:

November 22, 2017 From: Lucie Edwards, Chair – Endowment Lands Committee

Armand La Barge, Chair – Finance & Property Committee

Date of Committee Meetings:

Nov 14, 2017 F & P Nov 22, 2017 ELC

Date of Board Meeting: Dec 1, 2017

Subject:

Research Park – Cleantech Commons at Trent University - Status Update

Confidentiality: [x] Not Confidential

1.0 PURPOSE [x] For Information 2.0 RECOMMENDATION THAT the Board of Governors receive the research park status update for information. 3.0 EXECUTIVE SUMMARY As denoted in the 2017/18 Committee work plans, the Finance & Property and Endowment Lands membership will receive regular updates regarding progress on the research park project. In an effort to keep Governors apprised of the 85-acre development at the north-east edge of Trent University’s Symons campus regular informational updates will come forward as well as recommendation reports with items for approval, as required. In this report, a key point of information is the new name for the park, “Cleantech Commons at Trent University”; details are included in section 9.1. 4.0 INPUT FROM OTHER SOURCES TRIP Management Committee, BrandHealth plus City, PKED and Trent key communications stakeholders, Aubs & Mugg creative design consultants

Item 12.0 - Cleantech Commons - Update BOARD OPEN SESSION - December 1, 2017 of 179

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5.0 ANALYSIS 5.1 Construction Status: Roads and Utilities The amount of roadwork carried out since the Spring 2017 is immense and as of November 3, 2017 the portion of Pioneer Road between Nassau Mills Road and East Bank Drive was re-opened in time for the Fall Open house at Trent University. With a record number of participants attending the Open house the need for road access was crucial. The portion of Pioneer Road east of East Bank Drive will continue to be developed over the winter months, weather permitting.


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5.2 Trent & City management committee update Meeting monthly, the (TRIP) management committee comprised of Allan Seabrooke, Malcolm Hunt, Neil Emery and Steven Pillar have a fulsome exchange of current topics and concerns related to the research park. 5.3 Tenant update: Noblegen plans for construction On October 31, 2017 a small contingent of Trent administration and Noblegen planners toured the physical site for the future building by foot. The group will also travel to Waterloo, Ontario to meet with a sustainable building company who has expressed an interest in developing a facility on the research park land and would mesh well with the park’s spirit overall. As a side note, a large group of university administration, Indigenous community leaders and Noblegen management including co-founders Adam Noble and Andressa Lacerda will meet on Wednesday, November 22 to allow for a tour of the Kingsway facility, a review of business operations and a discussion about Noblegen’s gateway destination at the research park.


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6.0 FINANCIAL IMPLICATIONS Trent University will contribute $2M towards infrastructure servicing, as previously approved by the Board of Governors. At the May 12, 2017 Board of Governors meeting, approval was granted for administration’s execution of the Head Lease with the City of Peterborough which will include sub-lease arrangements with research park tenants. 7.0 ENTERPRISE RISK ASSESSMENT To ensure careful governance of risks associated with major land development the Board of Governors approved, last Spring, the formation of a new committee to “accelerate development of Trent’s endowment lands (in particular the Trent Research and Innovation Park, and possibly residential developments and/or the Sustainable Village), including the necessary governance structures”. The Trent Lands Committee (TLC) will be focused on endowment lands development and oversight of the Research Park with a membership of real estate, land developer and legal experts. 8.0 STRATEGIC ALIGNMENT / COMPLIANCE SR II.4 – Property & Land Use SR II.7 – Stewardship & Use of Endowment Lands Revenue Board Strategic Objective (2016-22) Accelerated Development of Trent lands

9.0 COMMUNICATIONS STRATEGY 9.1 Naming development Following two presentation rounds of potential research park names, and based on background information and survey results, BrandHealth has worked with the key stakeholder Communications team (representing Trent, the City and PKED) to recommend: Cleantech Commons at Trent University. The highlights and rationale behind this particular name are:

• “Cleantech” differentiates the park nationally (no other park currently occupies this segment) on the basis of Trent’s and the region’s unique positioning for environmental and green/clean research and business

• Cleantech was deemed a recognizable term for those with business interests in the primary sectors considered to be advantageous and unique to the park, while remaining broad enough to attract other compatible start-ups and businesses as the tenants come on-board


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• Cleantech reflects the values upon which the park was established and keeps a promise to the University and broader community to be environmentally focused

• Commons was favoured over Village partly because of the possible confusion with the Sustainable Village. As a location-based word, it helps to communicate a sense of place: a destination

• Commons has a number of definitions – generally positive meanings and connotations related to being in association with others, collaboration, community, shared interests “affecting the whole community.” In the University setting, of course, commons is understood to be a gathering place of social, intellectual, living/working space…

• Cleantech pairs well with Commons by providing a commercial, business and science/research basis for the space; while the word Commons provides a warm balance to the commercial business interests

• It was felt that the name Cleantech Commons would resist being changed to an acronym (likely after the first few references in text or dialogue, it would be shortened to “The Commons”)

• Based on research to date, no other research park in Canada had claimed the “commons” term - so when paired with Cleantech it sets the venture apart from others

9.2 Website & Branding initiatives The key stakeholder Communications team has also been working concurrently with Aubs & Mugg, creative design consultants (http://www.aubsandmugg.com/2017/about-us/) to develop a website contemplating functionality and interaction for visitors and users of today and in the future. Aubs & Mugg’s project scope comprises the presentation of Logo, Word Mark, Colour Palette Visual Identity and Design Guidelines. The consultants have presented three website layouts all of which appeal to the Communications team. The final web and branding options will be presented to the (TRIP) management committee at their meeting on Tuesday, November 21 and, assuming a smooth continuation of process, the Board of Governors shall observe the unveiling of naming, branding and webpage samples at their meeting on December 1, 2017.


http://www.aubsandmugg.com/2017/about-us/


To:

Board of Governors

Date of Report:

November 14, 2017




Subject: Bata Research & Innovation Cluster (BRIC)


1.0 PURPOSE For Information

2.0 RECOMMENDATION That the Board of Governors receive this report for information. 3.0 EXECUTIVE SUMMARY The revitalization of the 50-year-old Bata Library Building began in May 2017, and is expected to achieve substantial completion by April 30th, 2018. Approximately $8.1m in Federal and Provincial funding has been provided to enable this $18m construction project to take place. All four floors of the iconic building will be refurbished and repurposed, along with upgrades of all mechanical and electrical systems. Additionally, the roof, skylight and sun trellises that surround the building will be replaced. This building is considered a significant architectural heritage asset, thus all contemplated work will take place with an eye to preserving some architectural features that Ron Thom put in place in 1965. The 110,000 sq ft of the Bata building has been entirely vacated to allow for this transformational work to take place. This has resulted in the displacement of approximately 500,000 library and archive pieces, 100 employees, 150 computer access spaces and 800 student study spaces.

Item 13.0 - Bata Research and Innovation Cluster BOARD OPEN SESSION - December 1, 2017 of 179

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The displaced Library services have been relocated to offsite locations with a temporary Library Service Point established on the 3rd Floor of the new Student Centre. Student study spaces have been reconstituted around the Symons and Traill Campuses for the 2017/2018 Academic Year, utilizing cafeterias and other repurposed areas. Exterior Work As at this date, the Bata Building roof replacement is complete. Beginning the second week of November, the materials associated with the atrium skylight replacement will be hoisted onto the roof of the Bata building. In order to complete the required work, the skylight is being accessed from both the roof and by way of tall interior scaffolding. The skylight is being fully replaced, but will be identical to the original, respecting the architectural intent of Ron Thom. The cedar trellises that project out from all four floors of the building are currently being replaced. This work is about 75% complete. The replacement trellises are cedar, just as the originals were. Interior Work All flooring has been removed. All interior walls on the 2nd, 3rd and 4th floors have been demolished. Built-in Ron Thom cabinetry has been carefully removed and stored for reinstallation at a later date. The iconic concentric wood ceiling has been fully removed on all floors, and each panel is being recreated utilizing contemporary materials that meet current building codes. The ceiling will retain its original appearance in both colour and pattern. The grid structure, itself, is being remediated to allow better access for operational maintenance and repair. The lighting, that forms part of the concentric ceiling pattern is currently being retrofitted to LED. The existing ceiling HVAC infrastructure has been demolished and awaiting installation of contemporary air handling boxes that will allow Facilities Management to better-manage energy consumption and occupant comfort. Some new interior walls are in place. In late October, by way of campus-wide electrical shutdown, the Bata Building was disconnected from the main campus electrical infrastructure. This allows the fifty-year-old major electrical components to be replaced, as planned. It is anticipated that the Bata Building will be reconnected to the main campus electrical infrastructure during the Holiday Break in December. In order to minimally heat the building, while it is disconnected from its main electrical supply, large propane heaters will be operating, outside the building, pumping warm air into two of the large four-story stairwells. Although the project is still on time and on budget, there have been two unexpected site conditions, of note, that need to be dealt with by way of construction contingency.


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The existing fire sprinkler system was determined to be in more extensive need of replacement than originally recommended in the base scope of the project. This existing condition was discovered, of course, when all ceilings had been removed on all four floors of the building. The four large mechanical shafts that rise four stories at each corner of the building were poured in 1965 with large access openings at each corner of each of the four floors. It has been determined that the materials used in filling these sixteen large access openings was not of good quality, resulting in the need to fully replace them with superior structural, and fire resistant solutions. This slightly impacts the intended floor plans and infrastructure installations on each floor, resulting in some required redesign.

Expense Line Item Budget Total Known Committed Cost

Project-to-Date Actual Expenses

% of Budget $ Committed

Forecasted Final Cost

Hard Construction Costs:

Construction Costs 12,581,000$ $ 12,581,000 2,105,599$ 100% 12,581,000$ Construciton Scope add-back 500,000$ -$ -$ 0% 500,000$ Construction Contingency 1,113,880$ 251,833$ 69,453$ 23% 1,113,880$

Total Hard Construction Costs 14,194,880$ 12,832,833$ 2,175,052$ 90% 14,194,880$

Soft Costs:Architect Design Fees 1,188,352$ 1,169,926$ 951,741$ 98% 1,188,352$ Architect Disbursements 118,835$ 23,460$ 18,540$ 20% 118,835$ Consultants & Testing 115,000$ 95,340$ 77,046$ 83% 115,000$ Permits & Legal Fees 250,000$ 138,392$ 138,392$ 55% 250,000$ Insurance 75,000$ 48,970$ 48,970$ 65% 75,000$ Interest on debt costs 386,120$ 154,448$ 154,448$ 40% 386,120$ Furniture & Fixtures 200,000$ 6,250$ 2,087$ 3% 200,000$ Signage 15,000$ 4,072$ 4,072$ 27% 15,000$ Audiovisual & I.T. 725,000$ 9,756$ 9,756$ 1% 725,000$ Soft Cost Contingency 100,000$ 70,779$ 70,779$ 71% 100,000$

Total Soft Costs 3,173,307$ 1,721,393$ 1,475,831$ 54% 3,173,307$

Unrecoverable HST 590,367$ 486,382$ 114,578$ 590,367$

Total Hard & Soft Construction Costs 17,958,554$ 15,040,608$ 3,765,461$ 84% 17,958,554$

* Includes months not yet closed

Funding Sources AmountFunds allocated to Capital Account to

DateFederal SIF 7,000,000$ 3,875,000.00$

Provincial SIF (FRP 2 yrs) 1,071,573$ 535,352.00$ Donations Received 127,290$

8,071,573$ 4,537,642$

TRENT UNIVERSITYBata Research & Innovation Cluster Project

To Sept 30, 2017 *


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Perkins + Will, Trent Financial System

5.0 ENTERPRISE RISK ASSESSMENT Project will displace collections, employees and students for up to 12 months. Alternate methods for service provision will have to be established to ensure stakeholder satisfaction and minimal disruption to normal operations.


Section 10 of the Trent Act vests in the Board the power and responsibility over and for the management of the property of the University.


The Facilities Management Department provides regular updates on the status of construction projects, highlighting how the projects will affect the Trent community via the myTrent portal as well as through the website. Key stakeholders will also be notified through the email system and site signage will be in place, as required.

Scaffolding for atrium skylight replacement


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Fully demolished level with LED retrofits in place

Interior wall materials being craned to upper floors. New trellises shining in the sun!




From: Armand La Barge, Chair – Finance & Property Committee Steven Pillar - VP, Finance & Administration


November 14, 2017


Subject: Student Centre – Final Report


1.0 PURPOSE

For Information. 2.0 RECOMMENDATION THAT the Board of Governors receive this report for information. 3.0 BACKGROUND Status report for the Board. The overall project budget is $16,000,000. 4.0 ANALYSIS

4.1 Schedule and Budget Update The Grand Opening for the Student Centre occurred on September 29th. The building was also showcased during the weekend of HOTT. The majority of the building was then occupied following the weekend of October 21-22nd. The only remaining space to complete (due to a long lead delivery item of the acoustic ceiling panels) is the Event Space.

Item 14.0 - Student Centre - Final Report BOARD OPEN SESSION - December 1, 2017 of 179

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We forecast being materially on budget. Change orders are being managed. Below is a table depicting the budget expenditures to date, versus the allocated budget as of September 30, 2017.

Expense Line Item Budget Total Known Committed Cost

Project-to-Date Actual Expenses

% of Budget $

Committed

Forecasted Final Cost

Construction Costs $12,997,000 $12,997,000 $10,589,565 100% $12,997,000Owner Contingency $455,000 $406,646 $406,646 89% $712,000Architect Design Fees $991,468 $869,512 $778,345 88% $914,000Architect Disbursements $30,000 $30,000 $17,045 100% $30,000Permits & Testing $174,282 $193,133 $169,614 111% $190,000IT/AV & Phone Equipment $215,000 $243,925 $218,057 113% $320,000Furniture & Fit-out $400,000 $205,583 $136,483 51% $226,000All Other Project Costs $213,944 $201,443 $201,443 94% $146,500

Sub Total $15,476,694 $15,147,241 $12,517,197 98% $15,535,500

Unrecoverable HST $523,306 $510,586 $420,902 $523,546

Total $16,000,000 $15,657,828 $12,938,099 98% $16,059,046

Funding Sources AmountFunds allocated to Capital Account to

DateTCSA 10,500,000$ 5,732,847$

Fundraising 4,000,000$ 2,724,343$ Trent University 1,500,000$ -$

16,000,000$ 8,457,191$

TRENT UNIVERSITYStudent Centre Project

To September 30, 2017*

*note: includes expenses over months that are not yet closed

4.2 Construction Update As of October 30 2017, the Event Space is still not 100% complete but is in use. It will likely be completed during the Christmas shutdown period. Aquicon is continuing to work on the detailed list of deficiencies. Facilities Management staff of Trent have received their first round of training and are working to familiarize themselves with the building systems. CFMS (the Commissioning agent) continues to work on Final Commissioning of the building. The heating has been switched on and the Balancing Agent continues to better balance the air movement throughout the building.


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5.0 FINANCIAL IMPLICATIONS The overall project budget is set at $16.0M, of which the TCSA has committed $10.5M and Trent has committed $5.5M. The TCSA has established long-term debt financing for their share of the project. Principal and interest payments will be funded by the annual student levy. The initial levy of $95.01 per full-time Peterborough undergraduate student will increase annually by the Consumer Price Index. The University’s capital commitment of $5.5M will be funded from the fundraising campaign goal of $4.0M. The balance of up to $1.5M will be funded through internal sources, rather than externally financed as previously reported to the Board.

1st Level view


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2nd Level view

Ground floor view - looking up toward ceiling


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To:

Board of Governors Date of Report: November 14, 2017

From: Armand LaBarge, Chair Finance & Property Steven Pillar Vice President, Finance & Administration



Subject: Budget Planning 2018/2019 to 2020/2021; Current Fiscal Environment, November 2017

Confidentiality: Not confidential

1.0 PURPOSE

For Approval For Information 2.0 RECOMMENDATION That the Board of Governors receives this report for information. 3.0 EXECUTIVE SUMMARY This report summarizes the fiscal environment as of November 2017 and includes topics of RCM, enrolment projections, Government grants, tuition rate policy, student aid and increased scholarship utilization, salaries, benefits & other expenses, pension expense & capital spending. Also included is the budget development timeline & process. Please see attached report: Budget Planning – 2018/2019 to 2020/2021; Current Fiscal Environment, November 2017

Item 15.0 - 2018-19 Operating Budget - Fiscal Environment BOARD OPEN SESSION - December 1, 2017 of 179

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4.0 INPUT FROM OTHER SOURCES Reviews with individual account holders across the university Ministry of Advanced Education and Skills Development (MAESD) Tuition framework Datatel Financial System 5.0 ANALYSIS Please see report. 6.0 FINANCIAL IMPLICATIONS To fulfill their responsibilities, Governors should be informed of the University’s

financial situation. Regular financial updates such as these will maintain Governors’ awareness of the University’s current financial status and allow for input and oversight where needed.

7.0 ENTERPRISE RISK ASSESSMENT Please see report. 8.0 STRATEGIC ALIGNMENT / COMPLIANCE Complying with a Board of Governors directive, the full Board will receive regular

financial updates, in addition to a briefing at the Finance and Property Committee level. 9.0 COMMUNICATIONS STRATEGY Not applicable.

Steven Pillar, Vice President, Finance and Administration Cheryl Turk, Associate Vice President, Finance


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Budget Planning – 2018/2019 to 2020/2021 Current Fiscal Environment, November 2017 Summary for Board of Governors December 1, 2017 Introduction In Fall 2017, Financial Services conducted 27 consultations with 65 individual budget account holders and managers to begin discussions on opportunities for improvement in the budget planning process. One suggestion consistently identified was improved communication of key budget assumptions, such as enrolment projections, and salary and other inflationary pressures. This year, Trent will be introducing multi-year budgeting as a way to promote longer-term planning and more efficient use of critical resources required to address projected enrolment growth and to align with the University’s strategic direction. As deliberations begin for the development of the next three years’ budgets (2018/2019, 2019/2020, and 2020/2021), a wide range of internal and external factors need to be considered in determining the fiscal constraints that Trent University will be challenged with. In the spirit of open communication and developing budget awareness and accountability at various levels of the organization, what follows is a discussion of various budget factors and the implications for Trent as it seeks input for the update of these assumptions. Responsibility Centered Management (RCM) The University will continue to phase in its new approach to budget planning called Responsibility Centered Management (RCM). RCM is an activity-based model intended to promote stronger linkages to academic goals and priorities. The aim of RCM is to improve financial sustainability by emphasizing the University’s strengths in teaching, research and services and by supporting selected opportunities and innovations. The budget model attributes revenues to the decanal units that generate them, primarily through tuition and operating grants largely determined by enrolment. The decanal units each contribute to a university fund for institutional strategic priorities and proportionately share in the indirect costs of the university (for example, library services, information technology, student services, occupancy costs, and administration). The remaining net revenues of each decanal unit support their direct costs, including instructional staff and resources for the provision of their academic programming. While RCM does not in and of itself increase net revenue for the University, it does promote innovative and efficient delivery of academic programming and enrolment planning by allowing increased revenue and cost savings to remain in the decanal unit that generates the positive change. RCM will be implemented gradually over the next three years in a way that is sensitive to our fiscal realities and the complexities that arise as the University attempts to achieve a sustainable budget in the long term. Administrative and support functions will be assessed


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against available University benchmarks and adjusted accordingly. An important feature will be the availability of some incentive funding to help in the development of new programs and revenue opportunities. Further information about the University’s introduction of RCM is available at: http://trentu.ca/rcm/. Sensitivities for Trent During the introductory years of RCM (2014/2015 to 2017/2018), a number of decanal units are being held harmless. It will be necessary to use part of the university fund set aside for institutional strategic priorities to partially mitigate the impact of changes required during the transition to full implementation of the RCM. Changes in programming and resources will take multiple years to implement due to continuation of students, and collective agreements, for example. Enrolment Projections The key driver in the University’s planning is student enrolment. Approximately 80% of the University’s revenue is generated through tuition fees and provincial operating grants that are dependent on enrolment. Resources required for academic programing are determined by the number and types of students. Other university operations and support services (e.g. student services, wellness, libraries, etc.) as well as ancillary services (e.g. housing and dining services, etc.) are significantly influenced by the student population. Trent continues to experience growth in student enrolment far exceeding that previously planned. The 2017/2018 budget assumed an enrolment growth of +67 undergraduate FTEs over 2016/2017. Based on November 1 Fall count, Trent is currently projecting undergraduate enrolment will be 460 FTEs higher and graduate enrolment will be 55 FTEs more than last year. The total projected increase in enrolment of 515 FTEs is 448 FTEs higher than the budget. These enrolment projections use summer and fall actual enrolment and prior years’ experience regarding fall-to-winter ratios and retention rates for winter projections. During the Strategic Mandate Agreement 2017-2020 (SMA2), Trent University projected its funding-eligible enrolments (in full-time headcount) based on a controlled enrolment growth strategy. For this budget cycle, senior administration is recommending a conservative approach to enrolment projections. This approach will allow the University to plan sufficient resources and address capacity challenges related to growing enrolment while ensuring the budget is flexible to respond to unmet enrolment targets should there be any. The following charts provide preliminary undergraduate head count estimates by campus based on the following high-level assumptions:

1. Unless otherwise stated, intake for Peterborough campus will increase by 6% and 3% in 2018/2019 and 2019/2020 respectively. Intake for Durham campus will increase by 15% and 8% in 2018/2019 and 2019/2020 respectively. It is projected that intake will remain flat at 2019/2020 levels in future years.


http://trentu.ca/rcm/

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2. Intake for certificates, upper-year social work and collaborative nursing will remain flat at 2017/2018 levels.

3. Intake for B. ED will be half of the overall cap (136) each year. 4. International students will increase to reach 10% of Trent enrolment by 2024.


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Work is currently being undertaken to convert the head count projections to student full-time equivalents (FTEs) and weighted grant units (WGUs) for the purposes of planning revenues and resources. Sensitivities for Trent The enrolment projections assume many factors will continue at the current state. For example, recent changes of the funding corridor may alter the behavior of other institutions regarding offers and accepts, or changes to the scholarship program and net tuition billing may alter the decisions of students. Discussions are also underway regarding entrance averages that may influence the University’s ability to control and gradually slowdown intake to within manageable levels. Continuation rates may change depending on student needs or the University’s ability to meet higher student demand. The impact of the Durham Expansion project is also uncertain as projections can fluctuate significantly with smaller numbers. The increase in enrolment over base projections is welcome news for Trent, but we have to be able to account for increases in expenses as related to increases in enrolment. Opportunities for administrative budget developers to present their cases as related to increased enrolment will happen during the budget development process. Government Grants


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Effective for the 2017/2018 fiscal year, the Ministry of Advanced Education and Skills Development (MAESD) introduced a new funding formula with three funding envelopes:

1. Core Operating Grant (COG): The COG is an enrolment-based funding envelop for domestic undergraduate and graduate students. The COG uses an enrolment corridor mechanism with the 2016/2017 enrolment as the base year and with a range of +/- 3% for all universities. COG for 2017/2018 will be based on the mid-point of the 2016/2017 corridor. COG will not increase if enrolment is in excess of the corridor midpoint; growth funding, if available, is individually negotiated outside the COG. For budget planning purposes, it is assumed the COG will remain constant at 2017/2018 levels for the three fiscal years of this planning cycle.

2. Differentiation and Student Success: Funding through the Differentiation Envelope will be linked with key performance metrics, quality funding and research overhead infrastructure. These outcome-based metrics will be developed over SMA2 (2017/2018 to 2019/2020) with a portion of funding at risk effective in SMA3 (2020/2021 to 2022/2023). For purposes of this multi-year planning, it is assumed that differentiation funding will not change materially from that of 2017/2018, except funding related to enrolment growth that, if available, will be received through Differentiation.

3. Special Purpose Grants: This funding will include existing grants addressing government priorities and initiatives. For planning purposes, Special Purpose Grants are anticipated to continue at the same level as 2017/2018, subject to the same accountabilities and processes.

Sensitivities for Trent Enrolment is projected to increase over the next three fiscal years and will exceed the corridor established under the COG. If this enrolment growth is not funded, there is significant impact on the revenue and resources of the University. For example, the increase of 515 FTEs for 2017/2018 noted above equates to approximately $2.7 million in annual government funding. Tuition Rate Policy In December 2016, MAESD extended the Tuition Fee Framework for two years to 2018/2019. Under this framework the overall average rate of tuition fee increase across all publicly funded programs (domestic graduate and undergraduate) at an institution is capped at 3.0% per year. This policy is governed and monitored by the provincial government through the annual Tuition Fee Compliance report. In alignment with this policy, Trent is assuming a 3.0% increase in tuition rates for each of the three years during this budget cycle. Sensitivities for Trent


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At this time, the Tuition Fee Framework has not been established for fiscal years beyond 2018/2019. Changes to the policy have the potential to make a significant impact on the University’s revenues. Student Aid and Increased Scholarship Utilization The University has historically provided a high level of student aid relative to comparator universities, consistently standing at or near the top of university rankings in the percentage of its operating budget expended on scholarships and bursaries. The University currently projects that the undergraduate scholarship budget for the 2017/2018 fiscal year will be overspent primarily due to increased enrolment and improvement in the quality of the student body. Based on the past three years, undergraduate scholarship costs have increased from 8.4% to 9.9% of undergraduate tuition fees revenue. During the current year, changes were made to the scholarship program to eliminate full tuition; all other aspects of the current program remain intact at this time. As a result of this change, it is anticipated that undergraduate scholarship costs as a percentage of tuition fees revenue will be reduced. For the purposes of multi-year budgeting, the University will plan for undergraduate scholarship expense to be approximately 9.0% of tuition fees revenue. Sensitivities for Trent Careful monitoring of the scholarship program will be required. As entrance grades increase, the quality of the student body will increase thereby increasing scholarship utilization. In addition, it will be important to monitor the impact of the change in the scholarship program with respect to the University’s reputation and rankings. Salaries, Benefits & Other Expenses Salaries Compensation increases for all employee groups are based on collective agreements and progression through the salary grids and Trent will continue to see an escalation of salary costs. Currently, salaries comprise approximately 76% of our operating expenditures. In May 2017, new legislation was passed that includes increasing the minimum wage from $11.60 per hour in October 2017 to $14 per hour effective January 1, 2018 and to $15 per hour effective January 1, 2019. This legislated increase of nearly 30% over the two years will have an impact on Trent’s casual employees, in particular student casual employees. Benefits Based on current information from the University’s benefits consultants, Trent is anticipating that the overall benefits costs, including health, dental and LTD, will not significantly change from that included in the 2017/2018 budget. Utilities Current estimates from the utilities provider indicate that electricity rates will be constant or perhaps even lower than that anticipated in the 2017/2018 budget. As work continues on initiatives under the Energy Performance Contract (scheduled for completion in December 2018), energy consumption is expected to


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decrease. Savings related to the EPC agreement will be used towards financing the project over the next 10 years so will not lead to operating savings during this budget cycle. Sensitivities for Trent Increases in full-time academic and administrative staff substantially increases the compensation pressures imposed on Trent. Very careful consideration to full-time positions should be considered. In addition, changes to the collective agreements during the three-year budget cycle may have a significant impact on the operating budget. The current OPSEU collective agreement expires in June 30, 2018, TUFA is settled to June 30, 2019 and CUPE 1 is settled to August 31, 2019. The only collective agreement not expiring in this budget cycle is CUPE 2, which is settled to August 31, 2021. Careful consideration of the impact of forecasted future rate changes for utilities will be required in developing the budgets for 2018/2019 and beyond as rates may substantially change over the three-year budget cycle. Pension Expense Trent’s Defined Benefit Pension Plans remain a funding challenge for both members and the University. Unfortunately for Trent, while our asset returns are currently tracking to benchmark with very low fees, they are still below the long-term rate of return required to sustain the going-concern obligations of the Plans without increased contributions and/or future benefit reductions. The largest contributing factor to this problem is, as for all other defined benefit plans, historic low interest rates. TUFA The most recent valuation filed for the TUFA faculty plan was July 1, 2016 and annual actuarial valuations are completed each anniversary. Trent’s budget will need to accommodate the university normal cost of 10.57% of salaries effective July 1, 2016 plus going concern and solvency special payments. Trent is currently benefiting from the amended Stage Two solvency relief framework introduced on October 31st, 2016 that significantly reduces the solvency special payments required. In 2017, an agreement on a Jointly Sponsored Pension Plan was reached that would allow Trent’s faculty to join as early as July 1, 2019 (Trent’s next filing date). Joining the JSPP would allow for solvency special payment exemption. OPSEU/Exempt The actuarial valuation for the OPSEU/Exempt staff plan for July 1, 2017 has just been received at the time of this report. July 1, 2017 is a filing year for this plan. Trent’s budget will need to accommodate the university normal cost of 10.61% of salaries effective July 1, 2017 as well as annual going concern and solvency special payments. Supplemental Retirement Arrangement


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In addition to the above, the budget will need to accommodate additional contribution costs for the SRA once the plan’s assets reach zero (in approximately 2 years) if Trent transitions to a pay-as-you-go plan. Sensitivities for Trent The solvency deficits and going concern unfunded liabilities for both the staff and faculty plans continue to grow. These effects are realized in and subsequent to a filing year. The results of the annual valuations may alter the provisions required in the budgets for the next three years. Capital Spending Deferred Maintenance Deferred maintenance on the physical infrastructure remains a problem for all Ontario universities. The deferred maintenance backlog at Trent was $60M at the time the last physical audit was completed in 2012. From 2012-2016, $5 million in deferred maintenance projects were completed and financed from the capital fund. Beginning in 2017/2018, these costs are being amortized from the operating budget over 10 years or $500,000 annually. Furthermore, a total of $2.5 million from the ancillary funds in 2016/2017 were directed towards completing housing improvements from the deferred maintenance backlog. In addition to the deferred maintenance expended out of the capital fund, a further $5.8 million in deferred maintenance backlog will be completed by Ameresco by December 2018 as part of the Energy Performance Contract (EPC). The EPC will result in $1.5 million annually in energy savings, which will be used to finance the project. Trent has received strategic investment funding from the federal government which will be used to help fund the major renovation of our Bata Library. This will be a $18 million project and it is anticipated to address approximately $5 million to $6 million in deferred maintenance backlog projects. The transformation is expected to be substantially complete by April 2018. Beginning with the 2018/2019 fiscal year, the capital costs will need to be amortized out of the operating budget over the 40-year accounting life of the building. Additional interest costs based on the project’s share of the debenture financing will also need to be accommodated in the operating budget. Approximately $1.5 million in capital costs towards the Student Centre, which was completed in Fall 2017, are being amortized from the operating budget over 10 years or $150,000 annually beginning during the 2017/2018 fiscal year. Other deferred maintenance and capital projects are currently being assessed, which may require additional investments from the operating budget. Greenhouse Gas Reduction Initiatives


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In November 2017, under the umbrella of the Ministry of Environment and Climate Change’s “Climate Change Action Plan”, MAESD launched the Greenhouse Gas Campus Retrofit Program. This capital grant program was established to assist postsecondary institutions to reduce their greenhouse gas emissions and improve the energy efficiency of their campuses. Trent is currently pursuing funding under three envelopes:

1. Retrofits Grant Fund: Trent will have the opportunity to access this fund for 2017/2018 projects that result in GHG emissions reductions. Projects have been submitted for MAESD consideration and approval.

2. Innovation Grant Fund: Universities will have the opportunity to submit capital project proposals for consideration from this grant envelope of $77.2 million. Projects must reduce GHG and have environmental, social, economic or educational benefits.

3. Interest-Free Loan Fund: Trent has the potential to access an interest-free loan to fund retrofit projects that achieve a 10-year-or-better financial payback. This fund will be available for the next four fiscal years.

More information on these capital funding opportunities is pending. Information Technology At the conclusion of the IT Strategic Plan in April, 2017, no further funding is directed to technology infrastructure renewal at this time. A recent estimate by IT places this IT capital renewal cost at $1.2 million per annum. Trent is currently in the process of evaluating and selecting a new Human Resources Information System (HRIS) for implementation in 2018 with a go-live date of January 2019. The preliminary estimate of costs for the HRIS is $2.5 million in one-time and annual costs over 5 years. The IT Strategic Planning Committee is currently in the process of identifying any additional IT requirements that may impact the Operating Budget. Sensitivities for Trent While we believe many of the investments listed above have helped alleviate the deferred maintenance challenge, deferred maintenance remains a challenge for Trent and further investment is needed. IT capital spending remains a challenge for Trent and consideration should be given to the level of increased funding needed in this area to support learning and uninterrupted services.


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*NOTE: Budget documentation will be available on myTrent throughout the development process.

TRENT UNIVERSITY 2018/2019 Budget Development Timeline & Process

Preliminary Budget Discussions

PVP Finance and Property

Board of Governors Academic Planning and Budget & PPG

Senior Management Committee Administration Planning Group

Operations Management Committee FISC

CASSC

November 13, 2017 November 14, 2017 December 1, 2017 December 7, 2017 December 13, 2017 November 23, 2017 TBD Early January 2018 TBD

Costing Implications Provided to Budget Developers

December 1, 2017

Send Guidelines and Budget Packages to Budget

Developers

December 15, 2017

Submission deadline to Financial Services (following Vice President’s review)

January 19, 2018

Budget Developer meetings with PVP

February 5, 2018 to February 9, 2018

Draft Budget Updates

PVP Senior Management Committee

Finance and Property Academic Planning & Budget & PPG

Senate Board of Governors

February 26, 2018 March 20, 2018 March 2, 2018 March 29, 2018 April 17, 2018 March 23, 2018

Final Budget for approval at: Finance & Property

Board of Governors

April 20, 2018 May 11, 2018
