Developing a Housing Operational Budget - 705 Kay Sisco, Budget Director, University of Tennessee- Knoxville Stina Schoneck, Assoc. Dir. Of Finance, University of Florida

Types of Budgets Operating Capital Auxiliary Special Funds/ Restricted Budget Type Definition Operating Institution’s core budget representing all revenues & expenses (unrestricted, restricted, endowments, sponsored programs) Capital Budget established for the sole purpose of managing revenues and expenses of a specified capital project such as the construction or major renovation of a facility Auxiliary Self-supporting unit that is expected to stand on its own with respect to revenues and expenses. Receives little (if any) support from institutional budget. Income is usually from student fees. Special Funds/ Restricted Budget established for monitoring designated programs or services Service Center Support units that operate within an institution. Revenues are transfers from other departments as a payment for services rendered. Source: Barr, M. J., & McClellan, G.S.  (2011) Budgets and financial management in higher education. San Francisco: Jossey-Bass.  

Purpose of Budgets Put Business Strategy into Operation Allocate Resources Provide Incentives Provide a Framework for Control Provide a means of communicating to internal and external constituents Source: Maddox, D. C.,  (1999) Budgeting for not-for profit organizations. New York: Wiley.

BUILDING A BUDGET

Revenue The income generated from the sale of goods or services before any expenses are deducted. Types of Revenue Residence Hall Income Work with your Occupancy Management Team on their predictions for Fall/Spring/Summer Occupancy Rates impact revenue. Summer Conference Income Work with Conference Team on their forecast for summer season and number of secured camps/conferences

Expenses Money spent or cost incurred in effort to generate revenue, representing the cost of doing business. Types: Operating and Non-Operating Examples of Operating Expenses – Payroll, Utilities, Maintenance and Repairs, Depreciation, and Administrative Overhead Examples of Non-Operating Expenses – Debt Service Payment, Transfers, and Loss on equipment and disposals Work on with on-campus/contracted partners to determine any increases or decrease in rates. Examples: physical plant, finance and accounting, cable, phone, etc.

Let’s Create a Budget

Assumptions Revenue Expenses Proposed rental rate increase was denied. Rental Rates will remain flat. Conference income anticipated to increase by 10% Expenses Debt Service Payment will be $2,000,000 University President announced a 5% living wage increase effective July 1, 2017 Part-time employees pay will remain the same Facilities anticipates a decrease of $1,000,000 from FY16-17 budget Physical Plant anticipates an 5% increase in Utilities

Can a Renovation Occur Next Year? Director of Housing would like to renovate one building including adding new furniture. Reserve Renovation Account Balance currently $1,000,000. On track to add additional $510,000 at then end of the fiscal year Capital Renovations estimated to cost $2,500,000. Furniture to cost $500,000.

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