BUDGET PRESENTATION. Penn State Housing and Food Services. Budget Proposal. Housing Capacities. Academic Year Occupancy Percentages
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1 BUDGET PRESENTATION Penn State Housing and Food Services Housing Capacities Academic Year Occupancy Percentages Comparison Room and Board Rates Academic Year Budget Proposal Budget Planning Factors Expense Increases Double Room and Meal Plan 3 Rate 2004 through 2009 Proposed Room and Board Rates
2 Housing Capacities for Fall 2009 Single Undergraduate Student University Halls Apts. Subtotal Apts. TOTAL University Park 13, , ,647 Erie 1, ,642 1,642 Harrisburg Altoona Beaver Berks Hazleton Greater Allegheny Mont Alto TOTAL 17, , ,632 Academic Year Occupancy Percentages (est.) University Park Single Student Housing Apartments Erie Harrisburg Altoona Beaver * Berks Hazleton Greater Allegheny Mont Alto * Beaver capacity was reduced by 100 spaces due to demolition of Lion s Court residence hall during summer
3 COMPARISON ROOM AND BOARD RATES ACADEMIC YEAR Double Room and Board -3-
4 Budget Planning Factors Summary of Budget Planning Factors for Housing and Food Services is a selfsupporting Auxiliary Enterprise. As such, monies paid by students and guests for food and lodging are the only funds available to pay all operating expenses, building loans, and interest payments, as well as major maintenance and renewal. State funds are not used for construction, maintenance of facilities, or for the operations of the housing and dining program. The room and board rate proposal takes into account routine changes in annual operating expenses such as increases in food costs as well as the expenses associated with the overall maintenance and upkeep of the facilities. As noted in previous rate increase requests, the need to address the deferred maintenance of our aging buildings remains a high priority for the program. Projects such as the upgrade of electrical wiring, the renovation of bathrooms, and the replacement of elevators and windows are essential for safe, comfortable, efficient and attractive housing and dining facilities. All of these are multi-year initiatives, requiring significant financial commitment. Additional residential capacity will be in place for Fall of 2009 with the renovation of Beam Hall, providing 202 spaces, and the conversion of McElwain Dining Hall into 76 residential spaces. These spaces at University Park are needed to provide necessary capacity for relocating students when South Halls is renovated, a project still in the planning phase. Renovation of Dobbins, the dining commons at the Behrend College, will begin in the spring of 2009 and will be fully completed by Fall Plans are in place for 100 additional spaces for freshmen students at the Harrisburg campus, which will be ready for Fall
5 Expenses Food Costs Food costs for are expected to rise by 7.0 percent, reflecting estimated rising costs of 5.5 percent. The additional increase of 1.5 percent is a result of providing meal plans for students in McElwain and Beam Halls. Salaries, Wages, and Employee Benefits Monies are included for anticipated inflationary increases for staff and technical service employees. Utilities Overall utility expenses are estimated to increase by $2,835,300 for housing and dining facilities, an increase of 15.4 percent. This increase reflects the rising costs of energy, and includes the additional utility charges associated with the new residential space in McElwain and Beam Halls. Rate caps on the price of electricity have been in effect throughout Pennsylvania since late in 1996 when the deregulation of electricity generation was approved. The rate caps that have kept the price of electricity relatively low are expiring. Penn State has appealed the timing of the lifting of the rate cap. The Housing & Food Service utility budget line includes an amount for inflationary increases, but does not include an amount for the extraordinary expense that will result with the lifting of the rate cap in the 2009/2010 fiscal year. If the rate cap is lifted, we are requesting approval to charge students an additional $25 per semester to cover the resulting increase in electric costs. This surcharge is over and above the increase reflected in this proposal and would only be assessed if the cap is not restored. This represents an additional.65% increase on the current room and board rate. Other Operating Expenses Increases are planned for maintenance (6.0 percent), supplies (5.8 percent), and services (7.5 percent). The increase includes inflationary increases and provides for the new residential space at McElwain and Beam Halls. Residence Life The Office of Residence Life is requesting that the counseling fee be increased by 4.0 percent, from $ to $ per student per semester. This increase will generate an additional $461,600 to compensate for increases in operating costs, employee benefits, and room and board for resident assistants at all campuses. -5-
6 Overhead Expenses Administration Monies are provided to cover anticipated salary and employee benefit increases. University Overhead The budget provides a total of $4,937,300 for central administrative costs. Property Expenses Debt Service The annual debt service for will total $28,444,700, an increase of $259,000. Facility Renewal and Deferred Maintenance Each year, aging residence halls and dining commons require more funds for major maintenance which includes roof replacement, elevator repair, heating, plumbing, electrical repairs, and technology upgrades. The budget provides $20,063,784 for facility renewal and deferred maintenance of our buildings. In Lieu of Taxes A total of $101,500 is budgeted for the estimated In Lieu of Taxes, which is payable to the State College Area School District for our family housing provided at White Course apartments. Income Meal Plan 3 provides about twelve to thirteen meals per week and most closely approximates the average board plan selected. A student living in a standard double room selecting Meal Plan 3 will pay 5.87 percent more for room and board in The recommended rate increases for housing and food services and conferences will generate the required $11,257,600 in additional income. -6-
7 Expense Increases * * * Budget Budget Budget Increase Proposed Food Costs 14.12% 14.09% $21,809,400 $1,537,600 $23,347,000 Payroll, Related 23.80% 23.00% 36,768,300 1,355,900 38,124,200 Utilities, Telephone 11.92% *12.82% 18,416,900 *2,835,300 *21,252,200 Other 14.95% 14.79% 23,100,016 1,408,900 24,508,916 Overhead 5.98% 5.96% 9,230, ,700 9,882,600 Property 29.23% 29.34% 45,141,784 3,468,200 48,609,984 Total Expense % % $154,467,300 $11,257,600 $165,724,900 Double Room and Meal Plan 3 Rate Year Semester Semester Percent Rate Increase Increase , % , % , % , % , % 2009 *4,060 *225 *5.87% *Does not reflect the increase of $25 per semester due to the removal of electric rate cap. (See Utilities in Expenses section.) -7-
8 MONTHLY RENTAL RATE COMPARISON UNIVERSITY MANOR vs. PRIVATE APARTMENT COMPLEXES The rental rates that follow are the proposed University Manor rental rates as compared to the current rates for private apartment complexes in the Hershey area. The average private rental rate has been adjusted to include utility expenses where none previously existed in the rental rate. This then provides an apples-to-apples rate comparison. The average difference between the proposed University Manor rates and the current private apartment rates are: DIFFERENCES BETWEEN UNIVERSITY MANOR AND PRIVATE APARTMENT RENTAL RATES Average University Manor Private Rates Proposed Rates Difference 1 Bedroom $ 835 $ 808 $ 27 2 Bedroom $ 985 $ 954 $ 31 3 Bedroom $ 1,184 $ 1,045 $ Bedroom No Comparison $ 1,864 N/A All University Manor Apartments have air-conditioning, modern kitchen appliances, wall-to-wall carpeting, draperies/mini-blinds, and washers and dryers. Additionally, high-speed Internet service and sprinklers have been provided in all University Manor East apartments. The 31 four-bedroom apartments are completely furnished. All utilities are included in the rent except Cable TV and longdistance telephone service. -8-
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