Brock University has earned itself a credit rating of A High for the second year in a row.
The Dominion Bond Rating Service (DBRS) reconfirmed the University’s credit rating of A High and placed its financial position in the Stable category on Feb. 1. Brock was upgraded from A to A High last year by DBRS, and maintaining that position is great news. However, there’s still more work ahead to shape a sustainable long-term fiscal strategy, said Josh Tonnos, Brock’s Associate Vice-President, Financial Services.
“This report reflects the fact that the University continues to work toward sustainable cost growths in an environment where we have limited flexibility to grow many of our revenues,” said Tonnos.
Of the eight Canadian comprehensive universities rated by DBRS, only one has a higher rating than Brock. Two others have the same A High rating, two have A ratings and two have A Low ratings.
In its rating report, DBRS noted four strengths of Brock University:
- Stable revenue base
- Moderately low debt burden
- Industry-leading financial reporting and transparency
- Relatively low post-employment obligations
Four challenges facing Brock identified by DBRS include:
- Limited ability to grow revenue
- Salary and benefit pressures
- Competition for students and demographic headwinds
- Low level of expendable resources
In response to these challenges, Brian Hutchings, Vice-President, Administration said Brock is continuing to exercise sound financial planning through its Fiscal Framework, which is a foundation for long-term sustainability.
“Awareness and comprehension of the University’s financial position improves each year through regular and transparent consultation. There is a growing sense of optimism at Brock with the University Community coming together to discuss and tackle our challenges collectively,” Hutchings said.
The Fiscal Framework update for 2018-19 aims to chart a path toward sustainability without the need to rely on enrolment growth. It also sets guidance for salary and benefit costs, and if achieved, will take some pressure off the need for enrolment growth and facilitate investments to enhance the academic and research mission of the University.
“DBRS was supportive of the Fiscal Framework and cited the document as a tool to strengthen Brock’s financial sustainability in its report,” Tonnos said.
Brock has also focused on improving student retention rates and continues to set aside funding in the budget for employee future benefits, debt repayment and capital replacement.
“The Financial Planning and Investment Committee is very pleased with the DBRS Rating that Brock has been able to achieve through strong fiscal management,” said Committee Chair Dennis Hewko. “This rating confirms that Brock is going in the right direction and continuing to take steps to address the long-term sustainability of the University.”
