1. BUDGETING 201 Presented by: Richard DeShields, Central Washington University Mid-Level Drive In Conference (November 2012) Portland State University

2. LEARNING OUTCOMES Identify six financial principles within University Housing budgeting Understand impacts of short and long term planning and funding needs Discuss housing professionals as enrollment leaders Review Comprehensive Financial Plan of Central Washington University

3. Financial Principles A.A healthy operating fund balance is important to ensure adequate funds are available to respond to extraordinary expenses. B.The repair and replacement reserve balance shall serve two purposes: First, to meet the expectation of the bond covenants, and second, to increase the system’s flexibility for funding future building. C.Annual, planned, major maintenance expenditures are necessary to ensure quality living environments and protection of plant assets. D.Planning for the short term and long term is necessary in order to most effectively use the system’s capital. E.Adequate revenues must be available to fund ongoing operations and System debt service. F.Consistent room occupancy is necessary for a financially healthy housing and dining system.

4. Healthy Operating Fund Balance Revenues: --Rentals (bed count/occupancy) --Proceeds of Sale of Assets --Investment Earnings Expenses: --Salaries/Benefits --Goods and Services --Non-Operating Costs (Bonds/Debt/Preservation) --Preservation/Capital Improvements --Reserve Requirements --Promote mission of department and strategic goals of the University

5. Reserves for Repair or Replacement Reserves --future planning needs/rainy day funds/etc. --additional to any debt coverage ratio requirements --some Universities have reserve requirements Replacement Costs --different than routine or annual maintenance Bond Covenants

6. Annual, Major, and Planned Maintenance General Maintenance and Custodial --physical plants/in-house maintenance --typically considered break and fix model Replacement --life-cycle (ex. Detectors, signs, carpet, furniture) --code change requirements (city, county, state, federal) Planned Maintenance --cash funded renovation/construction --sometimes called capital improvements or preservation

7. Short-term and Long-term Planning to effectively use capital Understanding annual trends (live on requirements vs. no live in requirements) Comprehensive Goal Planning Decisions for cash funding vs. borrowing money vs. privatized or partially privatized housing options (institutional involvement)

8. System Debt Debt Service Ratio Requirements --Example for 2012-2013 (Information taken from the Washington Inter-Institutional Officers Meeting Fall 2012) InstitutionRequiredBudgeted2011-2012 CWU1.01.01.47 Evergreen1.253.173.28 UW1.251.311.70 WSU1.252.753.2 WWU1.252.02.33

9. Occupancy Planning University Enrollment Plan (ask to be included in the conversation if the University does not already have you in the discussion). Understand how enrollment impacts budget (ex. CWU enrollment goal vs. freshman goal) Using occupancy during enrollment downturns

10. Questions?