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BUDGETING 201

BUDGETING 201. Presented by: Richard DeShields , Central Washington University. Mid-Level Drive In Conference (November 2012) Portland State University. LEARNING OUTCOMES. Identify six financial principles within University Housing budgeting

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BUDGETING 201

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  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 healthy operating fund balance is important to ensure adequate funds are available to respond to extraordinary expenses. • 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. • Annual, planned, major maintenance expenditures are necessary to ensure quality living environments and protection of plant assets. • Planning for the short term and long term is necessary in order to most effectively use the system’s capital. • Adequate revenues must be available to fund ongoing operations and System debt service. • 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) Institution Required Budgeted 2011-2012 CWU 1.0 1.0 1.47 Evergreen 1.25 3.17 3.28 UW 1.25 1.31 1.70 WSU 1.25 2.75 3.2 WWU 1.25 2.0 2.33

  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?

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