Staff Report #3
April 27, 2022
To All Commissioners
Re: Tuition-based Pass Contract
Recommendation
That the Commission:
- DIRECT administration to establish a one-year extension for the 2022/23 academic year to the Tuition-based Pass Contracts with University Student’s Council at Western University, Society of Graduate Students at Western University, and Fanshawe Student Union at Fanshawe College providing for a 2% increase in the annual cost and utilizing the remaining terms and conditions that are currently in place; and
- DIRECT administration to finalize new multi-year contracts with each of the parties effective for the academic year beginning 2023/24 for Commission consideration no later than December 31, 2022.
Background
The Commission currently holds three tuition-based pass program contracts with Fanshawe College, Western University undergrads and Western University Society of Graduate Students. The contracts were set to expire in August of 2021; however, given uncertainty relating to the declaration of the pandemic, a COVID-related addendum was established with each of the parties. The addendum particulars provided the flexibility to the parties to ensure that students who would be interacting with the campus in any manner would be required to purchase the tuition-based pass while excluding those students who would not be returning to London to undertake their studies given the move to fully online classes for their particular program. While this addendum resulted in a decrease in participants at both Western and Fanshawe, the approach protected the universality concept of the program in that opting in or out was not allowed. The ongoing uncertainty with respect to the conditions in place in September 2021, resulted in the parties agreeing to a further one-year extension with the same terms and conditions remaining in place.
Given the ongoing uncertainty of the pandemic, and the impacts that may result should the next wave begin in the fall of 2022 as currently predicted, the parties have agreed that another one year extension should be executed. During discussions, the student council representatives from both Western and Fanshawe expressed concern with the increase in cost that would be implemented should the provisions in the contract be adhered to for the 2022/23 academic year. The contract provisions call for an annual price escalation that includes a base 1% increase intended to assist with funding annual service growth initiatives that benefit the tuition-based pass holders, and an additional increase based on the year-over-year change in Ontario Price Index, noting a cap of a 5% increase in any one year is included in the formula. The contractual increase that was applied for the 2020/21 academic year was 2.1% (1% + 1.1% OPI), and the increase for the 2021/22 academic year was 1.8% (1% + 0.8% OPI) resulting in the price of the annual tuition pass of $260.64. The increase that would apply to the 2022/23 academic year based on contract provisions is 5% (1% + 5.2% OPI, note 5% max) which would raise the cost of the annual pass to $273.67.
During discussions, the student council representatives expressed a desire for a 0% increase to be applied to the 2022/23 academic year, given their concern that students feel they are not receiving value for their investment in the annual pass and a one year price freeze would provide them with the opportunity to gain a better understanding of the price point students would be willing to accept for future contracts. Upon review of the 2021 and 2022 service improvements set to be implemented this year, it has been determined that approximately 74% of the changes will result in direct benefits to the students utilizing these passes given the routes they will apply to. After some discussion, and recognizing the perspectives of all parties, an increase of 2% for the 2022/23 academic year which results in the cost of the pass increasing to $265.85 was agreed to. All other terms and conditions that have been in place in the addendums during the pandemic will remain in place.
This approach recognizes the long-standing positive relationship between the parties and that the good-faith position that the contract impacts resulting from the pandemic declaration were unanticipated by the parties when the contracts were initially established.
The parties also agreed that a new multi-year contract that would take effect for the 2023/24 academic year should be established no later than December 31, 2022. This will provide for greater certainty for all parties going forward.
Subsequent to the Commission’s concurrence with this approach, administration will finalize the contract extension as set out in the report recommendation.
Recommended by:
Mike Gregor, Director of Finance
Concurred in by:
Kelly S. Paleczny, General Manager