Report: January 14, 2008

UNIVERSITY OF TORONTO MISSISSAUGA

Report of the RESOURCE PLANNING AND PRIORITIES COMMITTEE meeting of Erindale College Council held on Monday, January 14, 2008 at 3:10 p.m. in the Ante Room, #3129, South Building.

Present: R. Reisz (in the Chair), G. Averill, U. Krull, A. Wensley, R. deSouza, W. Khogali, C. Capewell, V. Barzda, Y. Li, C. Jones, D. Pond, T. Al-Sarraj, N. Basiliko, N. Collins
Regrets: I. Orchard, D. Crocker, M. Levene
In attendance: Bill McFadden, Manager of Retail Planning, Development and Operations; Chris McGrath, Assistant Dean of Student Affairs; Gale Richter, Manager of Conference Services; Alex MacIsaac, Manager of Parking and Transportation; Mark Overton, Dean of Student Affairs

1) Approval of Minutes of the Previous Meeting (November 26, 2007)

The minutes of the previous meeting were approved.

2) Reports of Committees and Officers:

a) Overview of the Budget Process - Chief Administrative Officer, Ray deSouza

Mr. deSouza explained that the Service Ancillary Review Group (SARG) provides advice and formulates recommendations on the operating capital budgets for the ancillaries of Conference, Food, Parking and Residence. The group reviews rates, fees and financials and ensures that the budgets represent a responsible approach for each ancillary operation for the year; the group also ensures that revenue projections are realistic.

The guidelines of SARG for ancillary budgets are as follows:

  • To operate without a subsidy from the University operating budget
  • To provide for all costs of capital renewal including deferred maintenance
  • To generate sufficient surpluses to cover operating contingencies
  • To contribute net revenue to the University operating budget, where possible
  • Where capital expansion has occurred, the operating budget is in a surplus position within 5 years of the building opening; the Total Fund Balance is in a positive position within 8 years of the building opening.

The Chief Administrative Officer explained that the lengthy ancillary budgets development and approval process involves ongoing consultations throughout the fiscal year, leading up to a preliminary budget in the fall, followed by submission to the office of the Provost, governance approvals at UTM and at central committees like SARG and the University Affairs Board (UAB). The budgets are then reported from UAB to Business Board and through that board to the Governing Council.

The Chair opened the floor to questions.

A member asked whether the ancillaries contribute to the operating budget, and whether the contribution would go towards the deficit or whether it would be absorbed into the operating budget as a whole. The Director of Business Services explained that although ancillaries have not contributed to the operating budget recently, in the past when the operating budget was cut, the parking and conference services budgets contributed money that went against the cut the operating budget would have taken.

b) Ancillary Budgets and Financial Plans

i. Residence - Chris McGrath, Assistant Dean of Student Affairs and Christine Capewell, Director of Business Services

The Residence management report and operating plan are attached hereto as Appendix A.

Mr. McGrath reported the consultation process for the residence budget included the residence council executive and the association of graduate students.

He reported that the forecast for 2007-08 was better than initially planned. The budgeted operating result was a deficit of $1.324M, reflecting the rapid expansion of student residences in the past seven years, including the addition of 812 new undergraduate beds to support the campus' enrollment expansion plan. The forecast for 2007-08 then, is an operating deficit of $977,385, $346,723 less than the plan. A number of factors contributed to this result, including a lower than anticipated occupancy rate, at 92%, which resulted in a revenue shortfall of $745,238. Mr. McGrath added that the university continues to operate under the first-year residence guarantee. All other expense areas are close to plan. Savings were made associated with the mortgage on Oscar Peterson Hall, resulting in the ability to improve performance on SARG requirements: the operating budget will be in a surplus position within 4 years (SARG requirement of 5 years) and the total fund balance will be in a positive position within 10 years (SARG requirement of 8 years) instead of last year's projected 13 years.

Mr. McGrath reported that for the coming year undergraduate residence fees are planned to increase by 8% in 2008-09 as compared to 8.8% in 2007-08. Family and graduate rental rates are planned to increase by 4% in 2008-08, as compared to 5.13% in 2007-08. He noted that undergraduate room rates, when combined with mandatory meal plan fees, remain competitive compared to other residence ancillaries within the university and within the Southwest region of Ontario. With respect to family and graduate housing, rates remain competitive in comparison to off-campus accommodation.

Mr. McGrath emphasized that the residence budget is healthy given the amount of expansion it has undergone and the large range of programs and services offered to students living on campus.

It was duly moved and seconded,
THAT the Residence Services Operating Plan and Management Report for 2008-09 be recommended to Erindale College Council for approval.

(C. McGrath/G. Averill)

The Chair opened the floor to discussion.

A member asked whether being in the mid-to-upper range for rates with competitor institutions was a general trend or where UTM was purposely positioning itself. Mr. McGrath explained that the quality of the residence operation's services matches the rates charged. He added that residence has received awards for the excellence of its quality of life programs that contribute to student success.

A member commented that in order to remain competitive, the university should provide parents with a full accounting of fees, including residence costs plus tuition and that any marketing plans residence may develop in the future should include this type of total package of costs. Mr. McGrath responded in agreement and said that fees would be communicated in this type of holistic way, including offering multiple installment payment plans.

In response to a member's question about where the money originates when the campus experiences a deficit position, the Director of Business Services explained that central university advances the campus funds. This allows UTM to spend more than it brings in, but the money is then owed with interest.

A member pointed to the 92% occupancy rate and asked why rates were not reduced in order to attract more tenants. Mr. McGrath explained that rates have to increase in order for the residence operation to pay its existing bills. He noted that Residence Services would be developing a comprehensive marketing plan to attract more residence students, including graduate students and added that it is still less expensive to live in residence than in off campus housing.

A member commented that in his opinion graduate students were moving off campus, because of the expense of living in residence, the lack of services available to them and isolation. Another member noted that it was not desirable to have a 100% occupancy rate, because the university needs to provide for contingencies and emergency situations.

The motion was carried.

ii. Parking Services - Alex MacIsaac, Manager Parking & Transportation

The Parking services management report and operating plan are attached hereto as Appendix B.

Mr. MacIsaac reported that the plan is to reduce parking permit rates by 5%; pay and display machines will be reduced by $1, from $13 to $12 per day. These reductions are the result of improved management practices and the related revenue increases and expense reductions. Revenues have increased, most notably for Pay & Display meter revenues, due to more effective enforcement practices. Therefore, revenues are expected to exceed budget by a total of $290,995 mainly due to Pay & Display revenues, which continue to rise due to improved parking management.

Mr. MacIsaac also noted that since the parking operation moved office location to Alumni House, it was able to reduce wait times for ticket sales purchases.

He explained that there is no plan for a reserve for new construction. Current campus population growth plans should be able to be accommodated with the current inventory of parking spaces. If, however, the campus embarks on increased growth plans, parking inventory will probably be inadequate and an above-ground parking structure would most likely have to be considered.

Mr. MacIsaac pointed to schedule 2 of the ancillary budget and noted that $450,000 will be contributed to the Storm Water Management Pond project, to recognize the new surface that this project will provide for the ancillary for lot 4 when it is complete.

It was duly moved and seconded,
THAT the Parking Services Operating Plan and Management Report for 2008-09 be recommended to Erindale College Council for approval. (A. MacIsaac/R. deSouza)

The Chair opened the floor to discussion.

A member pointed out that on page 2 of the report the capital renewal reserve increase to $300,000 is being charged retroactively.

In response to a member's question about any plans for new construction, the Director of Business Services reiterated that based on current information the university cannot justify building a parking garage, since there is not enough current parking demand. However, if demand increases substantially, this option would have to be considered.

The Chief Administrative Officer added that an independent consultant's report on parking demand recommended no change in the current inventory, even factoring in the loss of spots for the Storm Water Management Pond. The parking inventory would need to be re-evaluated again during the 2008-09 academic year.

In response to a member's question about why the parking ancillary is paying for part of the SWMP, Mr. MacIsaac explained that Lot 4 needed to be repaved, so that need was tied to the pond project.

The motion was carried.

iii. Food Services - Bill McFadden, Manager of Retail Planning, Development and Operations

The Food services management report and operating plan are attached hereto as Appendix C.

Mr. McFadden explained in addition to the SARG guidelines, the Food Services ancillary has a number of objectives as follows:

  • To serve a variety of quality products in clean and relaxing, engaging food service outlets, at prices that provide value to customers
  • To operate a financially viable ancillary
  • To reduce the overall food capacity shortfall by finding and developing new conveniently located, engaging and efficient food services spaces, which are in keeping with the quality of new buildings on campus.

Mr. McFadden listed all of the food service outlets on campus, in addition to noting that UTM also accommodates the joint program students at Sheridan and UTM, through a meal service that is provided to students at Sheridan College.

He noted that it had been a busy year for food services, with the opening of the Colman Commons Dining Hall, the launch of the new residence student meal plan, campus value plan for non-residence students, faculty and staff, the opening of the new Starbucks café in the Library and other enhancements on campus.

The budget for 2007-08 reflects the increased sales associated with the above new locations. It also reflects the start up costs associated with these facilities and the infrastructure required to administer a declining balance a la carte resident student meal plan. Forecasted revenues are expected to exceed budget by a total of $497,335 mostly due to higher than budgeted cafeteria cash sales and catering sales. Forecasted expenses are expected to exceed budget by $278,197. This is largely due to increased cost of sales, a result of increased sales. The furniture and equipment repair expense will exceed budget by $33,303 due to the unexpected cost of repairing refrigerators and other equipment in Spigel Hall, the meeting place and other outlets. Additionally, garbage and recycling expense exceeded budget by $8,360 due to higher than expected waste management costs associated with the new Colman Commons dining hall. Finally, salaries, wages and benefits are expected to exceed budget by $67 561. This is a result of the need for additional I.T. support required during the implementation of the systems related to the resident student meal plan. The forecasted operating result after commitments is a surplus of $138,491 and the forecasted closing total fund balance is a negative $414,477 at the end of 2007-8.

Mr. McFadden reported that the budget for 2008-09 reflects an increase in meal plan revenue associated with planned higher occupancy in residence and reduced catering revenue to reflect the uncertainty of a number of conference customers. He referred members to schedule 6 of the budget, which outlined meal plan rates, noting that Group A represented the mandatory meal plan for first year students and that Group B was the plan for returning undergraduate students. Within Group A, he reported that plan 1 was increasing by $155, plan 2 by $170 and plan 3 by $95. Group B prices remain the same as in the previous year, with no increases planned in order to retain members.

Mr. McFadden explained that with respect to expenses furniture and equipment repair costs remain high, as the old equipment needs to be maintained and repaired. Space costs will increase due to the full operation of the new Colman Commons and Starbucks. The operating result after commitments is a surplus of $78,392 and the closing total fund balance is a negative $336,085 at the end of 2008-09.

It was duly moved and seconded,
THAT the Food Services Operating Plan and Management Report for 2008-09 be recommended to Erindale College Council for approval. (B. McFadden/U. Krull)

The Chair opened the floor to discussion.

Referring to the increase in some meal plan rates, a member asked whether returning students would be discouraged from enrolling in the plan. Mr. McFadden explained that in terms of rates, UTM is among the middle of peer institutions. He emphasized that food supply costs were going up 7% and other costs including utilities and freight were increasing by 12%; therefore if going by a weighted average, the ancillary should really be asking for a 6% instead of a 5% increase.

The motion was carried.

iv. Conference Services - Gale Richter, Manager of Conference Services

The Conference services management report and operating plan are attached hereto as Appendix D.

Ms. Richter explained in addition to the SARG guidelines, the Conference Services ancillary has a number of objectives as follows:

  • To utilize campus resources that might otherwise remain idle to produce income for UTM
  • To maintain and replace campus resources which can be used for both Conference and other uses
  • To further the academic mission and recruiting efforts by providing opportunities for academic conferences and youth conferences

Regarding the 2007-08 budget, revenues are expected to be $152,789 higher than the original budget, due to an increase in food revenue, facilities/space rental and accommodation revenue as a result of higher registrations at a number of conferences as well as two new conference groups.

Salaries, wages and benefits expense will be $45,713 lower than budget. This is offset by cleaning expense which is now shown on a line separate from salaries, wages and benefits. Conference expense related to food is more than budget due to higher than expected conference bookings. Supplies expense is $14,076 more than budget due to the addition of temporary linen cart rentals and laundry services being taken over by a linen supply contractor. Additional expenses are attributable to need to replace linens damaged as a result of a break-in at Thomas Cottage and one additional conference registration & travel expense. Finally, other expenses will be $40,661 lower than budget due to the carpet cleaning contract moving to a cleaning contractor and the laundry services contract moving to a linen supplier. The operating result is expected to be $174,042. The unrestricted surplus balance is expected to be $211,639.

With respect to the 2008-09 budget, Ms. Richter reported that total revenues are projected to decrease to $897,642 due to lower accommodation and food revenues. She noted that this budget was taking a conservative position given that some of UTM's current customers have yet to confirm their intentions to return. Total expenses will decrease by approximately $63,000 due to the decreased customer base. The operating result is forecast at $47,503. The unrestricted surplus balance is expected to be $262,995.

It was duly moved and seconded,
THAT the Conference Services Operating Plan and Management Report for 2008-09 be recommended to Erindale College Council for approval. (G. Richter/ D. Pond)

The Chair opened the floor to discussion.

In response to s member about why UTM may not see the return of some large conference business clients, Ms. Richter explained that prices needed to be increased in order to reflect increased costs. The Chief Administrative Officer also noted that the availability of rooms for conference services business always comes second to providing academic services, meaning that conference services does not always have full access to facilities. Ms. Richter acknowledged that this restriction constitutes a real struggle in that her office often cannot promise to accommodate a client's needs far in advance due to academic conflicts.

In response to a member's question about what is planned with the budget surplus for conference services, the Director of Business Services explained that the ancillary has to be stable for a few years before contributing to the operating budget can be considered, noting that that is the eventual goal of every ancillary.

The motion was carried.

There being no new business, the Chair announced that the next meeting of the Resource Planning & Priorities Committee has been scheduled for Monday, February 25, 2008.

The meeting adjourned at 4:20 p.m.

Secretary ____________________________ Chair ____________________________________