The University of Otago is anticipating another budget deficit of up to $26 million next year as costs spiral and it hurries to upgrade and expand its facilities.
While the 2009 interim budget tabled at a university council meeting yesterday showed an operating surplus of $19.6 million, that amount and more would be soaked up by proposed capital works, chief operating officer John Patrick said.
The university was about one third of the way through a plan to address critical space shortages across most teaching divisions, he said.
The interim budget allowed $37 million for capital works, but Mr Patrick said he knew that figure was significantly under-estimated.
After the meeting, he said he expected at least $57 million-$60 million to be spent on capital works and two strategic land purchases next year - about the same amount being spent on capital works this year - and said he would not be surprised if the deficit reached $26.5 million, which is the deficit anticipated for this year.
One of the land purchases was so teaching spaces could be built at the proposed Otago Stadium near Logan Park, he said.
He would not say what the other was.
In addition to the stadium, other capital projects under way or about to begin are construction of a new psychology building, a Design School on the former Wickliffe Press site, and an upgrade of several science and health sciences buildings.
Otago Students Association president Simon Wilson suggested the university slow down its capital works programme.
But vice-chancellor Prof David Skegg said capital development was a necessity and he could spend "hundreds of millions of dollars tomorrow" if money and contractors were available.
Prof Skegg told the meeting all New Zealand universities were inadequately funded.
Otago expected about $240 million next year from various public funding sources, but he said departmental budget cuts and tuition fee increases next year had been necessary to avoid "painful" staff redundancies.
After the meeting, Prof Skegg said no redundancies were expected next year "but no university could rule out that possibility in the current funding environment".
