Approve 2021–22 Student Housing Rental and Dining Plan ...

A–12 STANDING COMMITTEES Academic and Student Affairs Committee

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Approve 2021–22 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 2021–2022 student housing and dining rates for the Seattle campus, effective July 1, 2021. BACKGROUND Housing & Food Services (HFS) plays an integral role in supporting the UW’s mission by providing residential communities that support students’ development with a focus on personal and academic success. HFS has capacity to house 9,674 residents (students and family members), and works in partnership with Blanton Turner (a management company) in housing 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. In developing the FY22 budget, HFS used as a base the budget that was established last year in anticipation of a typical 2020–21 academic year. (The exception to this is professional staff salaries, which are reset to current rates.) While typically the current fiscal year budget is used as this base, the FY21 budget has been significantly adjusted in response to the historically low occupancy. At the conclusion of this budget and rate development process, HFS learned of the potential for additional financial assistance through the allocation of HEERF II funds. HFS is currently working closely with the Office of Planning & Budgeting to evaluate the best use of these funds in an effort to reduce the rate increase for 2021–22 without causing unintended negative impacts in regard to the future financial health of the department. Based on what is known at this time, any potential changes would apply to nine and twelve month housing rental rates only and not family housing or dining plan rates. Once a decision is reached, HFS will

STANDING COMMITTEES Academic and Student Affairs Committee Approve 2021–22 Student Housing Rental and Dining Plan Rates at UW Seattle (continued p. 2)

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provide an update to the Board of Regents regarding final 2021–22 rental rates. Approval of the proposed rates as “not to exceed” allows HFS to move forward with the application process for next academic year. OPERATIONAL EXPENSES HFS anticipates a net increase of $1.49 million in normal operating expenses for residence halls and single-student apartments, a $102,900 net increase in normal operating expenses for family housing, and a $1.33 million net increase in normal operating expenses for the residential dining program. (All dollar value increases described in this section are year over year.) 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 FY22 will be $16.69 for the first six months and $17.19 (estimated) for the second six months. All classified staff will receive a 2.0 percent increase, and a majority of classified staff will also receive a two-step increase (approximately 5.0 percent) on their respective work anniversaries. Professional staff salaries are estimated to increase 2.0 percent for 10 months of the fiscal year. Weekend custodial positions will transition from hourly staff to part-time classified staff. UW Dining management will undergo a restructure to align management needs with venue changes beginning in autumn 2021. This contributes to increases in labor expenses in residence halls and single-student apartments by 3.9 percent or $771,100, family housing by 5.1 percent or $22,700, and dining operations by 1.85 percent or $171,400. This accounts for a 0.86 percent increase in the cost of residence hall and single-student apartment housing, a 1.16 percent increase in the cost of family housing, and a 0.70 percent increase in the cost of a dining plan. Utilities In residence halls and single-student apartments, utilities such as power, water, and technology recharge fees will increase on average 4.2 percent or $382,200. This is due to anticipated increasing utility/fee costs. Utilities expense increases account for a 0.43 percent increase in the cost of residence hall and single-student apartment housing.


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Utilities in family housing will increase by $62,300 or 16.9 percent due to increases in service provider rates. This accounts for a 3.20 percent increase in the cost of family housing. Physical Plant Overall physical plant costs are anticipated to increase 4.0 percent or $98,500 in residence halls and single-student apartments for 2021–22. 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 12.2 percent or $25,200 due to growing reactive maintenance needs as the facilities age. This accounts for a 1.29 percent increase in the cost of family housing. Directs Increases in direct expenses (3.4 percent or $215,700) for residence halls and single-student apartments are due primarily to growing merchant fees and routine maintenance costs; other direct expenses are held relatively flat. This accounts for a 0.24 percent increase in the cost of residence hall and single-student apartment housing. Overall family housing expenses are anticipated to decrease 4.1 percent or $12,200 due to reduced insurance premiums, despite growing demand for repair and maintenance activities and supplies. This accounts for a 0.62 percent decrease in the cost of family housing. Direct expenses associated with merchant fees, kitchen supplies, compostable to-go containers, and repair services are expected to increase across residential dining facilities by 29.4 percent or $667,100. This accounts for a 2.72 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. Labor assumptions include annual COLA, merit, benefits and minimum wage increases. Elimination or consolidation of positions results in an overall cost decrease of 0.8 percent or


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$62,400. Directs are increasing by 3.0 percent or $44,800, largely as a result of technology and software increases. Administrative expenses are shared among the operating units within HFS. For the coming year, increases in administrative expenses result in a 0.02 percent increase in residence hall and single-student apartment housing, a 0.25 percent rate increase in family housing, and a 0.29 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 the cost of those items and resulted in an estimated increase of 5.1 percent. This accounts for a 2.5 percent increase in the cost of a dining plan. Capital for UW Dining The first of the large-scale residential dining facilities constructed under the Housing Master Plan are nearing 10 years of age. At this point in the facilities’ life cycle, larger and more pervasive capital investment in refurbishment, repair, replacement, and maintenance is required. The UW Dining rate request includes a $100,000 or 0.41 percent rate increase for these purposes. Offset for UW Dining UW Dining will continue implementation of a food service information system that is expected to result in expense savings due to more efficient inventory control, procurement, and food production. The anticipated savings of $288,282 results in a 1.17 percent offset to the dining plan proposed rate increase. ADDITIONAL DEBT SERVICE In May 2020, HFS borrowed $19.6 million through the UW’s FAST loan program to complete the Housing Master Plan, specifically construction of Oak Hall. This debt allowed HFS to preserve cash on-hand as revenues dramatically declined beginning in spring 2020 due to the pandemic. The proposed rate increase of 0.73 percent for debt service will generate $657,300 in additional revenue for HFS.


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FINANCIAL HEALTH ADJUSTMENT Through a range of scenario models, HFS concluded that a financial health adjustment of 2.06 percent, generating $1.84 million, would be required to ensure HFS’ solvency should average annual occupancy fall to 85 percent. Under current operating capacity, UW Environmental Health & Safety has endorsed a capacity of two students per room (with an in-room bathroom), reducing overall operating capacity to 90 percent. Although there are numerous events and conditions that may affect HFS’ ability to generate revenue in 2021–22, HFS is optimistic that occupancy will reach 85 percent. Current average occupancy of the residence halls and single student apartments is approximately 50 percent. This additional revenue will help maintain a small but positive cash reserve for HFS at the conclusion of FY22. Internal Lending Program (ILP) covenants will not be met as debt service coverage (DSC) and required reserves will continue to fall below target in 2021–22. HFS is working diligently to improve the financial health of the Department while providing excellent Student Life offerings. Recovery to HFS’ previous strong financial standing will be a multiyear process. PROPOSED RATES Overview of Housing Rate Proposal

Residence

Halls

Single- Student

Apartments Family

Housing Labor 0.86% 0.86% 1.16% Utilities 0.43% 0.43% 3.20% Physical Plant 0.11% 0.11% 1.29% Directs 0.24% 0.24% (0.62%) HFS Admin 0.02% 0.02% 0.25% Subtotal Expenses 1.66% 1.66% 5.28% Additional Debt Payment 0.73% 0.73% 0.00% Financial Health Adjustment 2.06% 2.06% 0.00% Proposed Rate Increase 4.45% 4.45 percent 5.28%


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Overview of Dining Rate Proposal Food 2.50% Labor 0.70% Directs 2.72% Capital Expenditures 0.41% HFS Admin 0.29% Subtotal Expenses 6.62% Offset (due to systems efficiency) -1.17% Proposed Rate Increase 5.45%

Residence Halls and Single-Student Apartments The proposed room rates for 2021–22 reflect a 4.45 percent increase for residence halls and single-student apartments (Attachments 3 and 4). Family Housing The proposed rates for family housing apartments reflect an increase of 5.28 percent. For family housing, the increase ranges from $50–62 per month, depending on unit size and location (Attachment 5). Dining Plans The proposed dining plan rates for 2021–22 reflect an increase of 5.45 percent for all dining levels. Apartment dining plans, which are optional, will be held at the 2020–21 levels (Attachment 6). 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.


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• 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. History of Rate Changes and Mitigation Efforts

Rate Increase With Offsets 2017–18 2018–19 2019–20

2020–21 Proposed 2021–22

Residence Halls, Apts. 1.82% 5.21% 4.67% 4.58% 4.45% Family Housing 1.96% 2.91% 4.50% 3.73% 5.28% Dining Plan 2.00% 2.50% 3.84% 5.34% 5.45% Rate Increase Without Offsets 2017–18 2018–19 2019–20

2020–21

Proposed 2020–21

Residence Halls, Apts. 4.97% 5.25% 4.88% 4.76% 4.45% Family Housing 1.96% 2.91% 4.50% 3.73% 5.28% Dining Plan 3.35% 5.33% 3.84% 6.67% 6.62% Offsets in previous years have included such things as ILP interest rate reductions, savings realized through renegotiated contracts, and increasing the expected 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 14 students met for 10 one-hour sessions (October 2020–January 2021) and was provided detailed materials for review and use in consulting other students. Members then served as advisors to RCSA and Community Councils during the rate proposal review process.


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On January 13, 2021, the BAC Chair presented to the RCSA General Council an overview of the HFS budget development process. On January 15, 2021, letters were sent to all family housing residents informing them of the proposed rates and inviting them to a community meeting on January 27, 2021. On January 27, 2021, a community meeting was held for all residents of family housing. On January 27, 2021, the proposed housing and dining rates were discussed with the RCSA General Council, which includes representatives from residence halls and single-student apartments. Letters detailing the rate proposal were sent to all residence hall and single-student apartment residents on January 28, 2021, inviting them to Community Council meetings on February 1, 2021. On February 1, 2021, the proposal was discussed and voted upon at Community Council meetings. On February 3, 2021, the RCSA General Council confirmed the results of the Community Council voting, with the majority concluding that the proposed rate changes were justified. This proposal has also been discussed with the president of the UW Graduate and Professional Student Senate, Board members of the Associated Students of the UW, and the UW Student Regent. The Vice President for Student Life has reviewed and approved this proposal. Attachments 1. Room and Board Rates of Comparable Universities, Traditional Double: (A)

PAC-12 and Washington Peer Universities; and (B) Select Office of Financial Management and Global Challenge State Peer Institutions

2. Room and Board Rates of Comparable Universities, Double With Bathroom 3. Proposed 2021–22 Residence Hall Academic Year Rates Including Dining

Alternatives 4. Proposed 2021–22 Single-Student Apartment Rental Rates


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5. Proposed 2021–22 Family Housing Apartment Monthly Rental Rates 6. Proposed 2021–22 Academic Year Dining Rates 7. Presenters’ Biographical Information

UNIVERSITY OF WASHINGTON Department of Housing & Food Services

ROOM AND BOARD RATES OF COMPARABLE UNIVERSITIES TRADITIONAL DOUBLE

(A) PAC-12 AND WASHINGTON PEER UNIVERSITIES

For comparative purposes, board plans vary depending on the types of programs offered. The board costs included 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, $2,973 for 2020–21. Where responses for 2021–22 rates were received, they are reflected in the graph. 12020–21 approved rate prior to any COVID adjustments to capacity or space use 22020–21 preliminary rate—unapproved; final rates are not available or unknown 32020–21 adjusted rate due to COVID revised configurations or timelines, etc. 4No planned rate increase for 2021–22

2020-21 Prelim

2021-22

University of Arizona4 9,500 9,500

Arizona State University 9,550 9,550

University of Utah 10,148 10,250

University of Washington 10,029 10,505

Washington State University4 10,780 10,780

College Board 2020-21 11,620 11,620

Central Washington University1 11,472 12,046

Western Washington University 11,544 12,063

Eastern Washington University1 11,845 12,200

Oregon State University 12,360 12,360

University of Oregon 12,898 13,285

University of California, Los Angeles 2 15,335 15,335

University of Colorado1 15,220 15,677

Stanford University 16,614 16,614

University of Southern California 1 16,393 16,721

University of California, Berkeley3 18,165 18,165

0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000

2020-21

Prelim 2021-22

ATTACHMENT 1A-12.1/203-21 3/11/21

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ROOM AND BOARD RATES OF COMPARABLE UNIVERSITIES TRADITIONAL DOUBLE

(B) SELECT OFFICE OF FINANCIAL MANAGEMENT5 AND GLOBAL

CHALLENGE STATE PEER INSTITUTIONS6

For comparative purposes, board plans vary depending on the types of programs offered. The board costs included 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, $2,973 for 2020–21. Where responses for 2021–22 rates were received, they are reflected in the graph. 12020–21 approved rate prior to any COVID adjustments to capacity or space use 22020–21 preliminary rate—unapproved; final rates not available or unknown 32020–21 adjusted rate due to COVID revised configurations or timelines, etc. 4No planned rate increase for 2021–22 5State of Washington Office of Financial Management (OFM) peer institution listing: https://www.washington.edu/opb/tuition-fees/peer-comparisons/ofm-peers/

6 Global Challenge State Peer Institutions listing: https://www.washington.edu/opb/tuition-fees/peer-comparisons/gcs-peers/

2020-21 Prelim

2021-22


University of North Carolina, Chapel Hill 4 9,876 9,876


University of Iowa 10,469 10,757

University of Il l inois, Urbana-Champaign 11,184 11,184

University of Virginia 12,070 12,070

University of Michigan1 12,176 12,176

University of Maryland - College Park1 12,324 12,828

University of Connecticut4 13,258 13,258

University of Oregon 12,898 13,285

University of Massachusetts, Amherst 13,432 13,432

University of California - San Diego 13,579 13,918

Rutgers University1 13,925 14,342



University of California - Irvine3 16,020 16,020

University of California - Davis 15,714 16,343


0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000

2020-21

Prelim 2021-22

A-12.1/203-21 3/11/21

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ROOM AND BOARD RATES OF COMPARABLE UNIVERSITIES DOUBLE WITH BATHROOM

For comparative purposes, board plans vary depending on the types of programs offered. The board costs included 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, $2,973 for 2020–21. Where responses for 2021–22 rates were received, they are reflected in the graph. 12020–21 approved rate prior to any COVID adjustments to capacity or space use 22020–21 preliminary rate—unapproved; final rates are not available or unknown 32020–21 adjusted rate due to COVID revised configurations or timelines, etc. 4No planned rate increase for 2021–22

2020-21 Prelim

2021-22

University of Utah 10,148$ 10,717


Arizona State (Tempe) 11,690 11,690

Arizona State University (Downtown) 12,720 12,720


Washington State University4 14,236 14,236

Oregon State University 15,240 15,240

University of Oregon (Global Scholars) 15,427 15,890



University of Southern California 1 18,035 18,396


0 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 18,000 20,000 22,000

2020-21

Prelim 2021-22

ATTACHMENT 2A-12.2/203-21 3/11/21

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PROPOSED 2021–22 RESIDENCE HALL ACADEMIC YEAR RATES INCLUDING DINING ALTERNATIVES

Room Type1

Traditional

Double

Triple w/ Private

Bathroom

Double w/ Private

Bathroom Academic Year Room Rate $7,371 $8,832 $11,001

Husky Card Deposit2 108 108 108 Dining Level RR Deposit 2,961 2,961 2,961

Total Room, Husky Card and Dining Level RR Deposit 10,440 11,901 14,070 Dining Level 1 Deposit 3,135 3,135 3,135

Total Room, Husky Card and Dining Level 1 Deposit 10,614 12,075 14,244 Dining Level 2 Deposit 3,562 3,562 3,562





Total Room, Husky Card and Dining Level 6 Deposit 14,496 15,957 18,126

1Sixty-five percent of residence hall rooms are included in these room types. 2A $108 Husky Card deposit for laundry is required of all residents and is refundable if not used.

ATTACHMENT 3A-12.3/203-21 3/11/21

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PROPOSED 2021–22 SINGLE-STUDENT APARTMENT RENTAL RATES

Unit Contract Period Current

Rate

Proposed 2021–22

Rate Cedar Apartments Studio 12 Month $1,528 $1,596 Two Bedroom 12 Month 1,351 1,411 Four Bedroom 12 Month 1,327 1,386 Mercer Court A, B, C Studio Academic Year 15,096 15,768 Two Bedroom Academic Year 13,422 14,019 Three and Four Bedroom Academic Year 13,152 13,737 Five and Six Bedroom Academic Year 13,590 14,195 Mercer Court D, E Studio 12 Month 1,528 1,596 Two Bedroom 12 Month 1,351 1,411 Three and Four Bedroom 12 Month 1,327 1,386 Six Bedroom 12 Month 1,372 1,433 Nordheim Court*

Studio 12 Month 1,617 1,689 One Bedroom 12 Month 1,825 1,906 Two Bedroom 12 Month 1,337 1,396 Three and Four Bedroom 12 Month 1,129 1,179 Studio Academic Year 16,005 16,717 One Bedroom Academic Year 18,872 Two Bedroom Academic Year 13,233 13,822 Three and Four Bedroom Academic Year 11,181 11,679

Stevens Court Four Bedroom, One Bath Academic Year 9,873 10,312 Four Bedroom, Two Bath Academic Year 10,110 10,560 Six Bedroom Academic Year 9,825 10,262

*Some units will be available on a nine-month agreement to accommodate summer renovation activities at this facility.

ATTACHMENT 4A-12.4/203-21 3/11/21

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PROPOSED 2021–22 FAMILY HOUSING APARTMENT MONTHLY RENTAL RATES

Unit Current

Rate

Proposed 2021–22

Rate

2021 Private Market

Rent1

Percentage Below

Market Blakeley/Laurel Village Two Bedroom $1,086 $1,143 $1,743 34% Three Bedroom 1,195 1,257 No

Identical Product

66% Below 3 BR/1+

Bath

Stevens Court

One Bedroom 1,049 1,104 1,647 33% Small One Bedroom 940 990 No

Identical Product

35% Below Studio

1Source for private market rent: Apartment Insights Washington, fourth quarter, 2020. Average rents for University District area.

ATTACHMENT 5A-12.5/203-21 3/11/21

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PROPOSED 2021–22 ACADEMIC YEAR DINING RATES1

Residential Dining Plan 2020–21

Cost

Proposed 2021–22

Cost Annual

Increase Level RR2 $2,808 $2,961 $153

Level 1 2,973 3,135 162

Level 2 3,378 3,562 184

Level 3 3,783 3,989 206

Level 4 4,188 4,416 228

Level 5 4,995 5,267 272

Level 6 6,654 7,017 363

Apt. Level 13 600 600 0

Apt. Level 23 1,200 1,200 0

Apt. Level 33 1,800 1,800 0

1Academic 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).

2Available only to returning residents and residents of apartments and residence hall dining-optional areas.

3Available only to residents of apartments and residence hall dining-optional areas.

ATTACHMENT 6A-12.6/203-21 3/11/21

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Presenters’ Biographical Information

Jared Naik (he/him) President Residential Community Student Association (RCSA)

Jared is a third-year UW student pursuing a double major in biophysics and psychology. Jared is interested in a career in psychiatry, and perhaps clinical psychology or counseling later on. A fun fact about Jared is that the week before training for this job, he sneezed so hard

that he threw out his back!

The RCSA President oversees and provides support to the RCSA Executive Board, while also meeting with administrators and guiding RCSA in its mission. Jared wants to focus on our residents’ relationships with each other and their community so that students can be more connected and involved during this difficult, isolating year.

Danny Casino (they/them) Director of Recognition and Partnerships Residential Community Student Association (RCSA)

Danny is a third-year UW student studying biology and classical studies. They plan to attend medical school after graduation and work in oncology research. The number one place on Danny’s Travel To list is Iceland.

The RCSA Director of Recognition and Partnerships leads efforts to build lasting connections with organizations both inside and outside of Housing & Food Services, while recognizing the contributions of dedicated residents and residential teams. In this position, Danny intends to create an accessible environment for students to build and connect with community, while being appreciated for the work they are doing in advocacy and student leadership to support their community.

ATTACHMENT 7A-12.7/203-21 3/11/21

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