Approve 2019-20 Student Housing Rental And Dining Plan Rates At UW Seattle
A–4 STANDING COMMITTEES Academic and Student Affairs Committee Approve 2019–20 Student Housing Rental and Dining Plan Rates at UW Seattle RECOMMENDED ACTION It is the recommendation of the administration and the Academic and Student Affairs Committee that the Board of Regents approve the proposed 2019–20 student housing and dining rates for the University of Washington Seattle, making the proposed rates effective July 1, 2019. BACKGROUND Housing & Food Services (HFS) plays an integral role in supporting the University’s mission by providing residential communities that support students’ development with a focus on personal and academic success. HFS currently houses 9,562 residents (students and family members), and works in partnership with management company Blanton Turner to house an additional 538 residents. HFS also operates residential dining centers, restaurants, espresso bars, and markets across campus. Students who live in most nine-month residences are required to have a dining plan that can be used at any HFS dining location. Proposed changes in the rental and dining plan rates are the result of budget development for the upcoming fiscal year based on the current facilities, programs and services offered. The budget development process does not assume a rate increase. Rather, staff seek opportunities to reduce expenses and identify new revenues from sources other than students before proposing a rate increase. OPERATIONAL EXPENSES HFS anticipates a net increase of 2.36 million in normal operating expenses for residence halls and single-student apartments, an 84,500 net increase in normal operating expenses for family housing, and an 854,000 net increase in normal operating expenses for the residential dining program. Labor Labor cost increases include mandated steps, regrades and cost-of-living increases (contract classified staff), minimum wage increases, merit increases, and estimated benefit load changes. More specifically, the minimum wage for Fiscal Year (FY) 2020 will be 16.00 for the first six months and 16.50 (estimated) for the second six months. All classified staff will receive a 3.0 percent increase, and A–4/203-19 3/14/19
STANDING COMMITTEES Academic and Student Affairs Committee Approve 2019–20 Student Housing Rental and Dining Plan Rates at UW Seattle (continued p. 2) a majority of classified staff will also receive a two-step increase (approximately 5 percent) on their respective work anniversary. Professional staff salaries are estimated to increase 3.0 percent for ten months of the fiscal year. This contributes to increases in labor expenses in residence halls and singlestudent apartments by 4.5 percent or 811,2001, family housing by 11.2 percent or 44,4001, and dining operations by 6.8 percent or 498,7001. This accounts for a 0.99 percent increase in the cost of residence hall and single-student apartment housing, a 2.36 percent increase in the cost of family housing, and a 2.24 percent increase in the cost of a dining plan. Utilities In residence halls and single-student apartments, utilities such as power, water, and data (Ethernet, HuskyTV, and technology recharge fees) will increase on average 5.9 percent or 510,300 1. This is due to anticipated increasing utility/fee costs and additional sewer recharge fees of 180,000 annually for new North Campus construction; there is no estimated change in consumption for 2019–20. This accounts for a 0.62 percent increase in the cost of residence hall and singlestudent apartment housing. Overall utilities expenses in family housing are anticipated to decrease due to a renegotiated garbage service contract with UW Facilities resulting in a rate reduction of 0.10 percent or 400. There is no estimated change in consumption per resident for 2019–20. This accounts for a 0.02 percent decrease in the cost of family housing. Physical Plant Overall physical plant costs are anticipated to increase 3.8 percent or 87,400 in residence halls and single-student apartments for 2019–20. This is due to anticipated increases of centralized UW skilled trade shops recharge rates and increasing maintenance needs. This accounts for a 0.11 percent increase in the cost of residence hall and single-student apartment housing. Physical plant expenses will increase for family housing facilities by 7.7 percent or 14,800 due to growing reactive maintenance needs as the facilities age. This accounts for a 0.79 percent increase in the cost of family housing. 1 Year over year increase A–4/203-19 3/14/19
STANDING COMMITTEES Academic and Student Affairs Committee Approve 2019–20 Student Housing Rental and Dining Plan Rates at UW Seattle (continued p. 3) Direct Expenses Increases in direct expenses (16.5 percent or 860,800) for residence halls and single-student apartments are due primarily to growing merchant fees and Payment Card Industry (PCI) data security compliance, insurance premiums, and routine maintenance costs; other direct expenses are held relatively flat. This accounts for a 1.05 percent increase in the cost of residence hall and singlestudent apartment housing. Family housing expenses are anticipated to increase 17.9 percent or 36,5001 due to repair and maintenance required in response to aging facilities. This accounts for a 1.95 percent increase in the cost of family housing. Direct expenses associated with merchant fees and kitchen supplies are expected to increase across residential dining facilities by 4.6 percent or 97,900. This accounts for a 0.44 percent increase in the cost of a dining plan. Administration Administration expenses include labor and directs for the central administrative units that provide support and direction to all areas of HFS. Increases are largely due to labor costs (4.9 percent or 346,100). All other expenses in this category— utilities, physical plant, and directs—are decreasing for 2019–20 (-3.1 percent or - 43,900) for a variety of reasons. Administrative expenses are shared between the operating units within HFS. For the coming year, HFS is rebalancing the cost of administration between units with the final impact being a 0.11 percent increase in residence hall and single-student apartment housing, a 0.58 percent rate decrease in family housing, and a 0.43 percent increase in the cost of a dining plan. Cost of Food HFS’ estimate is based on the Consumer Price Index (CPI) as an indicator of movement in the cost of food and collaborative analysis with US Foods, the prime vendor for UW Dining. This analysis considered actual purchases over the past two years and the anticipated changes in cost of those items and resulted in an estimated increase of 2.0 percent. This accounts for a 0.73 percent increase in the cost of a dining plan. A–4/203-19 3/14/19
STANDING COMMITTEES Academic and Student Affairs Committee Approve 2019–20 Student Housing Rental and Dining Plan Rates at UW Seattle (continued p. 4) Housing Master Plan In March 2008, the Board of Regents approved an annual 2.0 percent rate increase for the Housing Master Plan. The increase reflects the amount needed to sustain the new debt load incurred in the development of new student housing. This increase is reviewed annually and will be discontinued at the conclusion of the Housing Master Plan. PROPOSED RATES Overview of Housing Rate Proposal Residence Halls Labor 0.99% Utilities 0.62% Physical Plant 0.11% Other Direct 1.05% HFS Admin 0.11% 2.88% Subtotal Expenses HMP Annual Increase 2.00% Offset (due to rate right-pricing) (0.21%) 4.67% Proposed Rate Increase SingleStudent Apartments 0.99% 0.62% 0.11% 1.05% 0.11% 2.88% 2.00% (0.21%) 4.67% Family Housing 2.36% (0.02%) 0.79% 1.95% (0.58%) 4.50% 0.00% 0.00% 4.50% Overview of Dining Rate Proposal Food Labor Directs HFS Admin Proposed Rate Increase 0.73% 2.24% 0.44% 0.43% 3.84% Residence Halls and Single-Student Apartments The proposed room rates for 2019–20 reflect a 4.67 percent increase for residence halls and single-student apartments (Attachment 3); the exception to this is Stevens Court and studio units. A–4/203-19 3/14/19
STANDING COMMITTEES Academic and Student Affairs Committee Approve 2019–20 Student Housing Rental and Dining Plan Rates at UW Seattle (continued p. 5) Stevens Court Rate Right-Pricing Rate increases of an additional 2.0 percent for six-bedroom units (188 beds) and 2.5 percent for four-bedroom units (319 beds) are proposed for Stevens Court units. This right-pricing effort is to better align Stevens Court units with the HFS housing rate framework. The framework is based on three core value principles: 1) rates are aligned by like-product, 2) rates are higher for privacy (per room and resident-to-bathroom ratio), and 3) nine-month housing is priced 10 percent higher than like-product in 12-month housing. Studio Units Rate Right-Pricing During the housing rate audit conducted in 2018, HFS identified that studio units are significantly misaligned with the housing rate framework. To correct this, HFS is proposing corrections over two years where an additional 10.0 percent and 4.75 percent increase would be applied to nine-month (75 beds) and 12-month studio units (45 beds), respectively. Students serving on the Budget Advisory Committee were actively involved in determining whether right-pricing should proceed and, if so, to what degree. Family Housing The proposed rates for family housing apartments reflect an increase of 4.50 percent 2. For family housing, the increase ranges from 39–50 per month, depending on unit size and location (Attachment 5). Dining Plans The proposed dining plan rates for 2019–20 reflect an increase of 3.84 percent for all dining levels. Apartment dining plans, which are optional, will be held at the 2018–19 rates (Attachment 6). 2 The practice of maintaining family housing rates below those of the private market is reflected in this recommendation (Attachment 5). A–4/203-19 3/14/19
STANDING COMMITTEES Academic and Student Affairs Committee Approve 2019–20 Student Housing Rental and Dining Plan Rates at UW Seattle (continued p. 6) Reserve Requirements and Debt Service Coverage Ratios The budget supported by the proposed rates allows HFS to: Remain financially stable and meet its Internal Lending Plan (ILP) obligations to maintain a ratio of net revenues to annual debt service of at least 1.25:1; and Meet minimum reserve requirements under the ILP financing agreement. STRATEGY FOR DETERMINING NECESSITY OF RATE CHANGE HFS begins budget development in October under the following assumptions: Budget development for the upcoming fiscal year presumes no particular percent increase in rates/revenue. To the extent possible, we will not increase funds for any program or service that cannot be tied to a documented increase in the cost of the materials or resources needed to deliver that program or service as it exists today. Without justification, we will not add any programs or services without eliminating something of equal or greater cost. This process includes careful review of trend and historical data, analysis of current fiscal year revenues and expenditures, research into future expense levels, and evaluation of other variables that may or will impact the budget. HFS staff participate in an ongoing effort aimed at identifying expense reductions and these are incorporated into budget development. Proposed changes in rental and dining plan rates are the result of determining the final budget for the upcoming fiscal year. This budget maintains programs and services as they currently exist. Based on feedback from students, demand for on-campus housing, and the current health of the Department, the existing operating structure, philosophy, and processes are considered appropriate and on target. A–4/203-19 3/14/19
STANDING COMMITTEES Academic and Student Affairs Committee Approve 2019–20 Student Housing Rental and Dining Plan Rates at UW Seattle (continued p. 7) History of Rate Changes and Mitigation Efforts Rate Increase With Offsets Residence Halls & Apts. Family Housing Dining Plan 2015–16 0.0% 1.0% 0.0% 2016–17 4.1% 1.0% 5.0% 2017–18 1.82% 1.96% 2.00% 2018–19 5.21% 2.91% 2.50% Proposed 2019–20 4.67% 4.50% 3.84% Rate Increase Without Offsets Residence Halls & Apts. Family Housing Dining Plan 2015–16 2.3% 1.0% 4.7% 2016–17 4.4% 1.0% 7.9% 2017–18 4.97% 1.96% 3.35% 2018–19 5.25% 2.91% 5.33% Proposed 2019–20 4.88% 4.50% 3.84% Offsets in previous years have included such things as ILP interest rate reductions, savings realized through renegotiated contracts, and increasing the expected net operating income (NOI) contributions from summer conferences and catering operations. These offsets are typically one-time occurrences and therefore are not available every year. REVIEW AND APPROVAL In partnership with the Residential Community Student Association (RCSA), HFS once again hosted the student committee, the Budget Advisory Committee (BAC), in an effort to better inform students about the status of HFS as self-sustaining, expenses, sources of revenue, organizational structure, and key financial drivers. The committee of 20 students met for ten two-hour sessions (October 2018– January 2019) and was provided detailed materials for review and use in consulting other students. Members then served as advisors to RCSA and Hall Councils during the rate proposal review process. On January 16, 2019, the BAC Chair presented to the RCSA General Council an overview of the Department’s budget development process. On January 18, 2019, letters were sent to all family housing residents informing them of the proposed rates and inviting them to a community meeting on January 30, 2019. On January 30, 2019, a community meeting was held at Blakeley Village for all residents of family housing. A–4/203-19 3/14/19
STANDING COMMITTEES Academic and Student Affairs Committee Approve 2019–20 Student Housing Rental and Dining Plan Rates at UW Seattle (continued p. 8) On January 30, 2019, the proposed housing and dining rates were discussed with the RCSA General Council, including representatives from residence halls and single-student apartments. Letters detailing the rate proposal were sent to all residence hall and singlestudent apartment residents on January 31, 2019, inviting them to Hall Council meetings on February 4, 2019. (The meetings were subsequently held on February 11 due to University closure.) On February 11, 2019, the proposal was discussed and voted upon at Hall Council meetings. On February 13, 2019, the RCSA General Council confirmed the results of the Hall Council voting, with the majority concluding that the proposed rate changes were justified. This proposal has also been discussed with the presidents of the UW Graduate and Professional Student Senate and the Associated Students of the UW as well as the UW Student Regent. The UW Vice President for Student Life has reviewed and approved this proposal. Attachments 1. Room and Board Rates of Comparable Universities, Traditional Double – Pac-12 and Washington Peer Universities (A) and Room and Board Rates of Comparable Universities, Traditional Double – OFM and Global Challenge Universities (B) 2. Room and Board Rates of Comparable Universities, Double With Bathroom 3. Proposed 2019–20 Residence Hall Academic Year Rates Including Dining Alternatives 4. Proposed 2019–20 Single-Student Apartment Rental Rates 5. Proposed 2019–20 Family Housing Apartment Monthly Rental Rates 6. Proposed 2019–20 Academic Year Dining Rates 7. Student Presenters’ Biographical Information A–4/203-19 3/14/19
UNIVERSITY OF WASHINGTON Department of Housing & Food Services ROOM AND BOARD RATES OF COMPARABLE UNIVERSITIES TRADITIONAL DOUBLE PAC-12 AND WASHINGTON PEER UNIVERSITIES 2018-19 Prelim 2019-20 9,050 9,050 9,110 9,383 9,165 9,570 University of Utah 9,413 9,791 Washington State University 10,394 10,602 Central Washington University 10,570 10,993 Western Washington University 10,383 10,902 Eastern Washington University 10,693 11,067 College Board 2018-19* 11,140 11,140 University of Oregon 10,853 11,287 Oregon State University 11,235 11,684 University of California, Los Angeles 14,182 14,607 University of Colorado 14,418 14,995 University of Southern California 15,400 15,930 Stanford University 15,763 16,551 University of California, Berkeley ** 16,670 16,670 Arizona State University 2018-19 University of Arizona Prelim 2019-20 University of Washington 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 Many of the universities on this chart are in preliminary stages of setting rates for 2019–20, and these rates should not be viewed as final. For comparative purposes, room costs for the schools named above are shown at the double room rate. Board plans vary depending on the types of programs offered. The board costs shown above reflect fixed dining plans ranging from approximately 7–16 meals per week (or an equivalent level on a point system) unless a higher minimum dining plan is required. The amount of board included for new residents at the University of Washington is the Level 1 Dining Plan, 2,823, for 2019–20. * Trends in College Pricing Autumn 2018, College Board ** Proposed rates for 2019–20 not available at time of survey. Graph reflects 2018–19 final rates. ATTACHMENT 1 A-4.1/203-19 3/14/19 Page 1 of 2
UNIVERSITY OF WASHINGTON Department of Housing & Food Services ROOM AND BOARD RATES OF COMPARABLE UNIVERSITIES TRADITIONAL DOUBLE OFM AND GLOBAL CHALLENGE UNIVERSITIES University of Arizona University of Washington 2018-19 University of Iowa 2018-19 Prelim 2019-20 9,110 9,383 9,165 9,570 9,396 9,575 University of North Carolina at Chapel Hill 9,454 9,672 University of Illinois at Urbana-Champaign 10,628 10,790 2019-20 Prelim University of Oregon 10,853 11,287 University of Virginia * 11,470 11,470 University of Michigan 11,198 11,534 University of Maryland, College Park 11,906 12,274 University of California, San Diego 12,362 12,671 University of Connecticut * 12,874 12,874 University of Massachusetts, Amherst 12,626 13,005 Rutgers University * 13,536 13,536 University of California, Los Angeles 14,182 14,607 University of Colorado 14,418 14,995 University of California, Davis 14,701 15,179 University of California, Irvine * 15,329 15,329 16,670 16,670 University of California, Berkeley * 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 Many of the universities on this chart are in preliminary stages of setting rates for 2019–20, and these rates should not be viewed as final. For comparative purposes, room costs for the schools named above are shown at the double room rate. Board plans vary depending on the types of programs offered. The board costs shown above reflect fixed dining plans ranging from approximately 7–16 meals per week (or an equivalent level on a point system) unless a higher minimum dining plan is required. The amount of board included for new residents at the University of Washington is the Level 1 Dining Plan, 2,823, for 2019–20. * Proposed rates for 2019–20 not available at time of survey. Graph reflects 2018–19 final rates. A-4.1/203-19 3/14/19 Page 2 of 2
UNIVERSITY OF WASHINGTON Department of Housing & Food Services ROOM AND BOARD RATES OF COMPARABLE UNIVERSITIES DOUBLE WITH BATHROOM Prelim 2019-20 10,836 University of Arizona Prelim 2019-20 Room Arizona State University (Tempe) * Prelim 2019-20 Board Arizona State University (Downtown) * 11,020 12,140 University of Washington 12,915 Washington State University 13,588 Oregon State University 14,414 University of Oregon (Barnhart) 14,834 University of Colorado 16,561 University of Southern California 17,764 University of California, Los Angeles 17,944 University of Oregon (Global Scholars) 18,315 University of California, Berkeley * 18,440 0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 Many of the universities on this chart are in preliminary stages of setting rates for 2019–20, and these rates should not be viewed as final. For comparative purposes, board plans vary depending on the types of programs offered. The board costs shown above reflect fixed dining plans ranging from approximately 7–16 meals per week (or an equivalent level on a point system) unless a higher minimum dining plan is required. The amount of board included for new residents at the University of Washington is the Level 1 Dining Plan, 2,823, for 2019–20. * Proposed rates for 2019–20 not available at time of survey. Graph reflects 2018–19 final rates. ATTACHMENT 2 A-4.2/203-19 3/14/19 Page 1 of 1
UNIVERSITY OF WASHINGTON Department of Housing & Food Services PROPOSED 2019–20 RESIDENCE HALL ACADEMIC YEAR RATES INCLUDING DINING ALTERNATIVES Room Type1 Traditional Double Academic Year Room Rate Husky Card Deposit2 Dining Level RR Deposit Total Room, Husky Card and Dining Level RR Deposit Dining Level 1 Deposit Total Room, Husky Card and Dining Level 1 Deposit Dining Level 2 Deposit Total Room, Husky Card and Dining Level 2 Deposit Dining Level 3 Deposit Total Room, Husky Card and Dining Level 3 Deposit Dining Level 4 Deposit Total Room, Husky Card and Dining Level 4 Deposit Dining Level 5 Deposit Total Room, Husky Card and Dining Level 5 Deposit Dining Level 6 Deposit Total Room, Husky Card and Dining Level 6 Deposit 1 2 Traditional Single 6,747 108 8,262 108 10,071 108 2,667 2,667 2,667 9,522 11,037 12,846 2,823 2,823 2,823 9,678 11,193 13,002 3,207 3,207 3,207 10,062 11,577 13,386 3,591 3,591 3,591 10,446 11,961 13,770 3,975 3,975 3,975 10,830 12,345 14,154 4,743 4,743 4,743 11,598 13,113 14,922 6,318 6,318 6,318 13,173 14,688 16,497 Fifty-four percent of residence hall rooms are included in these room types. A 108 Husky Card deposit for laundry is required of all residents and is refundable if not used. ATTACHMENT 3 A-4.3/203-19 3/14/19 Page 1 of 1 Double w/ Private Bathroom
UNIVERSITY OF WASHINGTON Department of Housing & Food Services PROPOSED 2019–20 SINGLE-STUDENT APARTMENT RENTAL RATES Contract Period Current Rate Proposed 2019–20 Rate 12 Month 12 Month 12 Month 1,276 1,234 1,213 1,396 1,292 1,270 Mercer Court A, B, C Studio Two Bedroom Three and Four Bedroom Five and Six Bedroom Academic Year Academic Year Academic Year Academic Year 11,532 12,261 12,015 12,417 13,224 12,834 12,576 12,996 Mercer Court D, E Studio Two Bedroom Three and Four Bedroom Six Bedroom 12 Month 12 Month 12 Month 12 Month 1,276 1,234 1,213 1,253 1,396 1,292 1,270 1,312 Nordheim Court Studio One Bedroom Two Bedroom Three and Four Bedroom 12 Month 12 Month 12 Month 12 Month 1,477 1,667 1,221 1,032 1,546 1,745 1,278 1,080 Academic Year Academic Year 8,808 8,808 9,441 9,396 Unit Cedar Apartments Studio Two Bedroom Four Bedroom Stevens Court Four Bedroom Six Bedroom ATTACHMENT 4 A-4.4/203-19 3/14/19 Page 1 of 1
UNIVERSITY OF WASHINGTON Department of Housing & Food Services PROPOSED 2019–20 FAMILY HOUSING APARTMENT MONTHLY RENTAL RATES Current Rate Proposed 2019–20 Rate 2019 Private Market Rent1 Percentage Below Market Two Bedroom 1,002 1,047 1,863 44% Three Bedroom 1,102 1,152 No Identical Product 66% Below 3 BR/1 Bath One Bedroom 967 1,011 1,700 41% Small One Bedroom 867 906 No Identical Product 39% Below Studio Unit Laurel/Blakeley Village Stevens Court 1 Source for private market rent: Apartment Insights Washington, fourth quarter, 2018. Average rents for University District area. ATTACHMENT 5 A-4.5/203-19 3/14/19 Page 1 of 1
UNIVERSITY OF WASHINGTON Department of Housing & Food Services PROPOSED 2019–20 ACADEMIC YEAR DINING RATES1 2018–19 Cost Proposed 2019–20 Cost 2,568 2,667 99 Level 1 2,718 2,823 105 Level 2 3,087 3,207 120 Level 3 3,459 3,591 132 Level 4 3,828 3,975 147 Level 5 4,569 4,743 174 Level 6 6,084 6,318 234 Apt. Level 13 600 600 0 Apt. Level 23 1,200 1,200 0 Apt. Level 33 1,800 1,800 0 Residential Dining Plan Level RR2 Annual Increase 1 Academic year refers to the residence hall agreement period (September–June). Twelve-month apartment residents should add one quarter’s quarterly charge to the amount in this column to reflect the full term’s charge (September–August). 2 Available only to returning residents and residents of 12-month apartments, residence hall diningoptional areas, and studio apartments. 3 Available only to residents of 12-month apartments, residence hall dining-optional areas, and studio apartments. ATTACHMENT 6 A-4.6/203-19 3/14/19 Page 1 of 1
Student Presenters’ Biographical Information Lucas Cauthen President, Residential Community Student Association (RCSA) Lucas is a senior pursuing a B.S. in electrical engineering with a focus on embedded systems and software. Lucas has also completed the upper-division Chinese language courses along with taking several trips to China. Lucas grew up in Nashville, Tennessee, and is now considering job opportunities in both the Pacific Northwest and the Bay Area. Lucas started in RCSA serving as a volunteer representative for Terry Hall as a freshman and for Stevens Court as a sophomore. Lucas went on to serve on the RCSA Executive Board as the Director of External Affairs as a junior. In this role, Lucas worked with residential students, HFS staff and the Associated Students of the University of Washington (ASUW) on issues related to sustainable dining and campus safety. Lucas now serves as the RCSA President, tackling issues of increased mental health resources for students, equitable dining options for all types of students, gender-inclusive housing spaces across campus and much more. As a four-year participant in student leadership and RCSA, Lucas has advocated for progressive changes throughout the residential community and worked to prepare the next generation of student leaders for success. Kennedy Cameron Director of Administration and Finance, RCSA Kennedy is a sophomore pursuing a B.S. in oceanography with a minor in climate science. Kennedy grew up in the town of Port Angeles, Washington, and still resides there. When home, Kennedy works at an independent bookstore. Kennedy started working with RCSA as a Hall Representative in 2017 and became the current Director of Administration and Finance in autumn 2018. Kennedy has chaired the third year of the Budget Advisory Committee and has worked to increase participation and commitment within the committee. Kennedy works to connect individual residential communities to RCSA resources that best fit their needs. ATTACHMENT 7 A-4.7/203-19 3/14/19 Page 1 of 1
Dining Plans . The proposed dining plan rates for 2019-20 reflect an increase of 3.84 percent for all dining levels. Apartment dining plans, which are optional, will be held at the 2018-19 rates (Attachment 6). 2. The practice of maintaining family housing rates below those of the private market is
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