Report: January 10, 2005

UNVERSITY OF TORONTO AT MISSISSAUGA
Erindale College Council
RESOURCE PLANNING & PRIORITIES COMMITTEE

REPORT OF THE MEETING OF THE RESOURCE PLANNING & PRIORITIES COMMITTEE of Erindale College Council held on Monday, January 10, 2005 at 3:10 p.m., in the Alumni Lounge, Room 3138, South Building.

PRESENT: R. Beck (in the Chair), M. Jalland, J. Linley, U. Krull, M. Overton, D. Crocker, S. O’Connell, K. Krupica, B. Schneider, S. Kibria
REGRETS: K. Hannah-Moffat, M. Georges, M. Lord, B. Branfireun, R. deSouza, C. Misak, I. Orchard
In attendance: Mr. Chris McGrath, Director of Residence, Mr. Michael Wright (student)

Professor Beck announced that Professor Baker has taken up the position of Chair of Zoology on the St. George campus and subsequent resigned his duties as Chair of the Resource Planning and Priorities Committee. Professor Beck would act as Chair of the Committee as an interim measure, until a new Chair could be elected at the next meeting.

1. Adoption of the Agenda

The Agenda was approved. (S. O’Connell/M. Jalland)

2. Minutes of the Previous Meeting

The report of the November 22, 2004 meeting of the Resource Planning and Priorities Committee was approved. (D. Crocker/J. Linley)

3. Business Arising from the Minutes

There was no business arising from the minutes.

4. New Business:

The Chair called on Mr. Linley to give an overview of the budget process. Mr. Linley described the four basic operating principles that guide all ancillaries. These are: 1) to operate without subsidy from the operating budget; 2) to provide for all costs of capital renewal, including deferred maintenance; 3) having achieved the previous two points, to create and maintain an operating reserve as a protection against unforeseen events (10%); and 4) having met all these conditions, the service ancillaries contribute their net revenues to the operating budget. He added that ancillary operations at UTM are viewed as service operations and financial planning is carried out with a view to providing service with reasonable expenses and revenues, and in the event that an ancillary operation realizes a surplus beyond growth requirements, a contribution is made to the operating budget of the Campus. Mr. Linley noted that in recent years, UTM ancillary operations have not been in the financial position to contribute to the operating budget.

He also explained that when an ancillary is planning a major expansion, the operation must meet two financial requirements: the 5 and 8 year rules. This means that after the 5th year, operating results before commitments have to be in the positive and that by the 8th year after opening a new operation, a positive fund balance has to be achieved.

Mr. Linley explained that Business Services develops the service ancillaries annual budgets and long-range plans in coordination with the ancillaries and several sub-committees. Following a review by the Resource Planning and Priorities Committee and Erindale College Council, the budgets go to the Financial Services Department, the Service Ancillary Review Group in early February (SARG), followed by the University Affairs Board and Business Board.

i) Residence Ancillary Budgets / Financial Plans:

The Residence Services Ancillary in its entirety is attached hereto as Appendix A.

Mr. McGrath noted that the development of the Residence ancillary financial plans is achieved in coordination with the Residence Finance Committee, which meets several times to offer its feedback. He pointed to the document from members of the Residence Finance Committee, showing that Committee’s full support of the budget plans.

Mr. McGrath described the following key accomplishments during the 2004-05 year, which expanded programs and services offered to students:

  • Successful launch of Residence Academic Mentorship program, which matches first year students with outstanding upper year residence students in their academic discipline, for ongoing support and mentorship;
  • Collaborative integration of 2 student academic programmers into the Residence Life staff, whose focus is on programming with an academic focus and integrating success programs into the residence community;
  • Successful recruitment and hiring of a 66% FTE Personal Counsellor for Residence students, in our commitment to ensuring the personal health and wellness of our students during their time on campus;
  • Continued success of our Living Learning Communities, including sending 28 students on a service trip to Salama, Guatemala in May of 2005 to work with schoolchildren on literacy projects, and youth living with HIV/AIDS;
  • Successful completion of beginning stages of design process for the new Phase 8 student residence;
  • Moved a lot of application and operational processes on-line for students and moving toward a web-based student self-service module
  • Introduction of four study lounges and renovated and overhauled all of the laundry rooms, so that laundry rooms now exist in all of the phases of residence
  • Installed a new roof and internal upgrades in Leacock Lane
  • Converted a row of townhouses in Leacock lane to natural gas heating, contributing to UTM’s fuel cell initiative
  • Interior redesign of undergraduate units in Schreiberwood Residence, including new paint, carpet and furniture;
  • Successful investigation into mould problems in MaGrath Valley Residence and collaborative determination of remedies with students, including the installation of new exhaust fans and the replacement of all windows over a five-year period

He outlined significant plans for 2005-06, including the following:

  • Collaboration with UTM Computing Services to provide residence students with a comprehensive telecommunications package (telephone and internet) in every student room;
  • Upgrade of the interior finishes in McLuhan Court Residence including new paint, carpet, lighting and plumbing fixtures
  • Ongoing monitoring and remediation of mould problems in student residences including installation of new exhaust fans in all MaGrath Valley apartments and the first phase of window replacement the same complex;
  • Upgrade and replacement of all exterior lighting fixtures throughout each residence complex;
  • Increased use of more energy efficient fluorescent bulbs throughout all residences;
  • Renovation of Erindale Hall Board Room to become a music studio for residence student use;
  • Ongoing Development of web-based residence admission processes for 2005 admissions cycle including launch of a web-based student self-service module;
  • Ongoing development of the Phase 8 Residence project, including beginning of construction.

Mr. McGrath explained that expenses were more than budgeted for two major reasons: the natural gas conversion of one of the residences costing $360,000 and the relocation of the main telephone and internet hub equipment for all the residences related to the construction of Phase 8, costing $212,000.

Mr. McGrath proceeded to discuss the budget for the upcoming year. A 6% increase is proposed in rates across the board for both undergraduate and family and graduate housing as compared to last year’s differential rate increase of 6.5% for undergraduate housing and 2.9% for family and graduate housing. The Tenant Protection Act (TPA) capped increases in the rental rates for graduate and family housing units at lower permissible amounts and these sections of the Act were previously thought to have applied to UTM. He commented that if UTM continued differential rate increases, undergraduate students would be taxed to a larger extent to offset expenses that are needed in order to maintain and improve the facilities and the programs and services offered to graduate and family students. Rate increases would go to cover costs associated with the construction of Phase 8 Residence and the need to do considerable maintenance upgrades to MaGrath Valley, in addition to anticipated similar expenses related to Schreiberwood Residence.

Mr. McGrath emphasized that the stability of the residence ancillary provides a solid financial foundation for the growth of programs and services and that the Residence department is committed to ensuring zero deferred maintenance each year, by allocating a substantial amount of money towards annual maintenance and capital renewal.

With the opening of Phase 8, another area of investment for Residence is in the human resource area and the budget includes up to an additional 7 FTE positions in the next two to three years.

Mr. McGrath pointed to the rate comparison document distributed to members, which showed that UTM’s rates are below average when compared to similar institutions across Ontario and community rental rates.

It was duly moved and seconded,

THAT the Residence Services Operating Plan and Management Report be accepted and recommended to Erindale College Council for approval. (C. McGrath/D. Crocker)

The Chair opened the floor for questions.

In answer to a member’s question about additional residence phases beyond Phase 8, Mr. McGrath explained that according to the Master Plan, the current Phase 8 represents both Phase 8 and 9 combined as one project. Once Phase 8 is completed, it will serve the needs of UTM for many years.

In response to a member’s question, Mr. McGrath explained that UTM is exempt from the rental increase clause of the Tenant Protection Act. In response to a member’s question about why the increase in rates for both undergraduate and graduate and family housing was set at 6%, Mr. McGrath stated that this was done in order to create an equilibrium between the two groups and to realize the funds needed to sustain planned growth. He added that marked increases would likely not be seen on an annual basis as a result of this change.

A member commented that many graduate students would favour a monthly rental fee, as opposed to a mandatory one-year lease. Mr. McGrath explained that the TPA allows for fixed term tenancy, which in turn allows Residence to make sure that it does not have tenants who are not students.

A member commented that the rent increase for graduate students comes at a time of limited stipend funidng and increased cost of living expenses, causing a financial burden for many graduate students. Mr. McGrath commented that the current budget tried to balance the needs of students and student services with the business costs of delivering these services and that without such increases, maintenance of the townhouses and other services would suffer.

In response to a member’s comment about other possible sources of revenue, Mr. McGrath explained that ancillaries do not receive funds from the operating budget. He added that there are few avenues for generating other revenues, but that Residence is making efforts in this regard, for example offering a telecommunications bundle to students. In response to a member’s suggestion of enshrining no further rate increases for future years, Mr. McGrath explained that the ancillary budgets are approved each year and reflect that particular year’s circumstances. He added that he is investigating other funding sources including grants for energy conservation, but that this type of funding is extremely limited and mostly awarded to public housing.

A member observed that these budgets are a product of the way the government underfunds universities and that no significant changes would occur unless post secondary education receives increased funding from that source.

In response to a member’s question about the feasibility of changing the 5 and 8 year financial requirement rules mentioned above to 8 and 10 years respectively, Mr. Linley explained that this kind of change would ultimately increase the university’s borrowing costs and affect the university’s overall credit facility. In addition, he added that any significant changes to the Residence budget would jeopardize the Phase 8 project.

The motion was called to question. The motion was carried with one opposed.

ii) Conference Services Ancillary

The Conference Services Ancillary in its entirety is attached hereto as Appendix B.

Mr. Linley reported that the ancillary is continuing to face the following challenges:

  • Continued recovery to business levels prior to SARS and market new groups to the campus.
  • Utilize space in an expanding and constantly changing environment at UTM
  • Attempt to grow business within the constraint of renovations required to some UTM Residences during summer 2005.
  • Uncertainty of conference business from Toronto Argonauts with the recent development of a new stadium and sports complex to be built in coordination with York University.

Mr. Linley stated that traditionally, this ancillary was in a position to contribute to the operating budget of UTM, but financial circumstances have not allowed it to do so for the past two years. Conference services is working more closely with Residence to plan and coordinate the stock of rooms affecting summer conference business. The operation is also planning to market its services more aggressively. Total revenues are expected to increase modestly by $60,000 from the 2004-5 forecast due to anticipated recovery of the business combined with the lack of accommodation space owing to UTM Residence renovations. Mr. Linley explained that the contract of the Toronto Argonauts Football Club with UTM ends at the end of 2005, at which time other opportunities may be pursued.

It was duly moved and seconded,

THAT the Conference Services Operating Plan and Management Report be accepted and recommended to Erindale College Council for approval. (J. Linley/D. Crocker)

The Chair opened the floor to questions.

In response to a member’s comment, Mr. Linley confirmed that Conference Services pays an overhead charge for the space it uses. A member inquired about how aggressive Conference Services is in soliciting conference business. Mr. Linley observed that the operation has trouble in this regard because of the availability of space and ‘smart’ meeting rooms, which are increasingly sought after by clients. The Registrar commented that the Office of the Registrar is working very closely with Conference Services to free up space suitable for conference business during the summer. In response to a member’s question about divesting this operation and the effect this would have on UTM, Mr. Linley commented that in past years Conference Services has contributed significantly to the operating budget and that this is expected to resume in the future.

The Motion was called to question. The Motion was carried with one abstention.

iii) Food Services

The Food Services Ancillary in its entirety is attached hereto as Appendix C.

Mr. Linley reported that Food Services has experienced a year of transition with Chartwells Compass Group of Canada and working through the marketing of new concepts and the renovations of food outlets to provide service to the UTM community. He explained that extensive renovations had been completed during this academic year. Williams Coffee Pub and the Spice cafeteria in the North Building outlets remain to be completed, and this delay has affected revenues negatively.

Expansion plans for the future include a Residence Dining Hall and Meal Plan (2007) and a Library Café (2006), however, the current long-range financial plan is based on current operations with no assumed increase in revenues for these outlets. A campus card system will be implemented to facilitate the use of the meal plan.

Mr. Linley commented that space is currently insufficient, poorly located and pressed by other needs and uses including study and prayer space. This situation results in much lower revenues than should be generated by Food Services at UTM.

In the 2004-05 forecast, total revenue is expected to be approximately $125,000 less than the original budget related to the delays of some of the outlets as mentioned above. Total expenses will be approximately $47,000 less than budget. The operating result before commitments is $77,000 lower than budget due to the negative revenue variance and the costs of renovations and transition. The increase in the capital reserve is being maintained to finance future capital expenditures required for future growth.

A negative total fund balance of $71,614 is projected, which is expected to improve in 2005-6 and be positive by 2006-7 as revenues exceed expenditures annually with the completion of space and growth in the operations.

Mr. Linley concluded with estimates for the 2005-06 budgets, for which sales are expected to increase due to enrolment increases and a full year’s operation of Williams Coffee Pub and Spice in the North Building. Total revenues have been conservatively budgeted at approximately $108,000 higher than forecast in 2004-5.

It was duly moved and seconded,

THAT the Food Services Operating Plan and Management Report be accepted and recommended to Erindale College Council for approval. (J. Linley/D. Crocker)

The Chair opened the floor to questions.

A member asked whether the delayed food outlets had a large effect on sales, because clients could still rely on existing services. Mr. Linley answered that although the demand is present, because the supply is lacking in terms of food outlets and space, clients may decide to forgo use of the current facilities because of the inconvenience of line-ups.

The motion was called to question. The Motion was carried with one abstention.

iv) Parking Services

The Parking Services Ancillary in its entirety is attached hereto as Appendix D.

Mr. Linley reported that in keeping with its Grow Smart, Grow Green mandate, which discourages additional paving for parking lots, UTM is building an above-ground parking structure on top of Lot 4, which will provide a net increase of 543 spaces, for a total of 3200 spaces. This structure of approximately 1000 spaces is scheduled to open in July 2006. He explained that significant increases in parking rates would have to be implemented to finance this new construction.

Mr. Linley also noted that a Request for Proposal has been issued to seek for an alternate parking service delivery. Investment by a contractor for the parking structure is estimated to cost between $18MM to $25MM, and the storm run-off control system consisting of a pond and landscaping is estimated to cost under $1MM.

For the 2004-05 year, revenues are expected to exceed the budget by approximately $117,000 due mostly to the increase in sales of unreserved permits and daily cash parking. Expenses are over budget by only $2500. Significant negative variances include major maintenance, which is higher than expected by approximately $89,000 due to final payments for the expansion of Lot 8, changes in parking lots and the ring road due to campus construction, and the expansion of the South Building bus route and passenger drop-off area. This negative variance is offset by a favourable variance for utilities costs, which are lower than anticipated due to an over budgeted utilities expense for the CCIT underground garage. The net impact of these variances is that the operating result for 2004-5 after the commitment to the operating reserve is expected to be a surplus of $88,500, which is more than budget by $120,500.

The budget for 2005-6 reflects proposed rate increases of 30% for reserved and underground permits and 25% for unreserved permits. Daily parking rates increase by 25% while meter prices will remain at $5 per hour. The overall supply of parking spaces is reduced by 457 with the construction of a raised parking structure on Lot 4. Total revenues are therefore budgeted at $1.8MM.

In the long-range plan, prices are planned to increase annually at a rate of 30% for reserved and underground permits and 25% for unreserved permits and cash payments. Starting in 2007-8, rates would increase at 10% for all permits for the next four years, and at rates of 4% and 3% beyond that.

It was duly moved and seconded,

THAT the Parking Services Operating Plan and Management Report be accepted and recommended to Erindale College Council for approval. (J. Linley / S. O’Connell)

The Chair opened the floor to questions.

In response to a member’s question about why the parking structure would be built on top of Lot 4 as opposed to Lot 2, Mr. Linley explained that stemmed from the design laid out in the Master Plan, which calls for the main access to UTM through The Collegeway, which would lead directly to Lot 4. He further explained that traffic studies conducted for the Master Plan showed the need to eliminate traffic on the ring road, by placing the parking structure close to the main entrance.

A member stated that there was an upcoming meeting with Transportation Minister Harinder Takhar, at which she hoped to discuss UTM’s parking and other transportation issues and suggested that the Committee wait until the results of this meeting could be realized before voting on the parking ancillary. The Chair explained that because of the schedule of ancillaries and their procession through other governance bodies, it would be difficult to delay such discussions until the planned meeting with the Minister. Mr. Linley noted that in examining supply and demand ratios, UTM has a great need for expanding and providing for additional parking spots. The Chair asked what could be gained from the meeting with the Minister that would justify a change in the entire schedule of the approval process. Another member added that the result of the meeting would be unlikely to affect the current decision for one year. Another member noted that unless the member could provide assurance that a cheque would be sent to the University of Toronto at Mississauga specifically designated for the parking ancillary, the budget process should not be delayed.

Another member suggested that discussions with Minister Takhar could proceed and if these discussions yield a positive funding opportunity, the parking budget could be reshaped to reflect such changes. The Director of Business Services commented that if this meeting was successful in terms of providing additional funding, the rates could be re-examined. However, given that the result of the meeting with the Minister is very uncertain, it was his opinion that it would be imprudent to put a budget forward that was dependent on uncertain external funding. He emphasized that budgets have to be discussed and approved based on known facts.

The Chair noted that the next meeting of the Committee would feature an agenda item related to this issue and asked that the member report on her meeting with the Minister, and outline any prospect of funding from government sources with some indication of when those funds are likely to flow in. If such positive variance is reported, the budgets could then be revisited.

It was duly moved and seconded,
THAT consideration of the motion under discussion with respect to the parking ancillary be postponed until the next meeting of the Resource Planning and Priorities Committee. (S. Kibria / B. Schneider)

The member who proposed the motion asked what information she would have to bring back to the Committee’s next meeting. A member explained that the motion only means that a decision on the main motion would have to be delayed until the next meeting. Other members asked for clarification of the subsidiary motion and the potential results this meeting could produce. Another member questioned the premise of the subsidiary motion and asked whether an alternate financial plan would be presented to replace the one presented at the current meeting.

The Chair added that substantial funding which would necessitate a re-drafting of the parking budget would be unlikely, but that if such funding came to fruition, the budget could be reopened. The Director of Business Services explained that $2.3M per year would be needed to finance the parking structure. Another member noted that there has been a commitment to revisit the budget if appropriate additional funding to the parking ancillary becomes available. Another member agreed that this Committee would welcome a report of said discussions with the Minister and would take into consideration any ideas that come out of meeting. The Chair again guaranteed that if favourable news arose that could affect the parking fees for this year, the Resource Planning and Priorities Committee would immediately revisit the fees and implement short term relief.

Given the above discussion, the subsidiary motion was withdrawn from the table.

With a motion duly moved and seconded, members approved the extension of the time of adjournment to 5:30 p.m.

In response to a member’s question about whether the Transportation and Parking subcommittee approves the parking budget, it was explained that the subcommittee does not have jurisdiction to approve the parking budget, but is instead tasked with operational transportation and parking related projects, such as carpooling. The Chair agreed to raise this issue with the Executive Committee in order to address members’ concerns about the limited time available to consider ancillary budgets. In response to the member’s question about whether the Request For Proposals mentioned in the Executive Summary of the Parking Ancillary would be submitted to this Committee for discussion and approval, it was explained that a meeting in the near future would feature this as an agenda item, followed by consideration at Erindale College Council.

The member also asked how a change in the previously discussed 5 and 8 year rules would affect UTM financially. The Director of Business Services explained that the change would not have a substantial impact on the parking situation of UTM. A member asked for a clarification of the RFP with respect to the parking garage. The Director of Business Services explained that it is similar to UTM’s arrangement with Food services and its contract with Chartwells.

A member suggested that parking rates be charged differentially so that higher rates would apply to faculty and staff versus those charged to students. The Director of Business Services noted that the University does not discriminate in its rates, although he added that typically more faculty and staff elect to park in reserved parking lots than other users. He added that this type of differential rate could be a future consideration.

A member noted that past discussion for building parking structures called for them to be built in stages, which allowed for rate increases to be implemented in stages. Mr. Linley emphasized that UTM is dealing with a serious supply issue in the face of the large demands for parking spaces. He added that there are no simple answers to the parking situation, but that budget reflects UTM’s goal of trying to achieve a balance between parking rates and demand, while maintaining rates that compare favourable to other universities and hospitals.

In response to concerns expressed by a member regarding the cost for a CCIT parking permit and the large number of spaces unfilled in that garage, Mr. Linley stated that construction delays have affected the potential number of users. He added that UTM plans to implement aggressive marketing plans for the upcoming year with the hope of filling the CCIT underground parking garage.

The Motion was called to question. The Motion was carried with three abstentions.

5. Other Business:
There was no other business.

6. Next Meeting
The next meeting of the Resource Planning and Priorities Committee will be on Monday, February 21, 2005.

7. Adjournment
The meeting was adjourned at 5:30 p.m. (K. Krupica / S. O’Connell)