The minutes of the meeting on September 27, 2010 were corrected to read M. Tombak.

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MINUTES OF THE MEETING OF THE RESOURCE PLANNING AND PRIORITIES COMMITTEE of Erindale College Council held on Monday, November 29, 2010 at 1:00 p.m. in 3214 William G. Davis Building Present: L.

1 MINUTES OF THE MEETING OF THE RESOURCE PLANNING AND PRIORITIES COMMITTEE of Erindale College Council held on Monday, November 29, 2010 at 1:00 p.m. in 3214 William G. Davis Building Present: L. Bailey (in the Chair), P. Donoghue, C. Capewell, A. Mulllin, P. Goldsmith, L. Kramer, R. Reisz, H. Miller, B. Schneider, A. Wensley, S. Prosser, U. Krull Regrets: N. Basiliko, L. Kohn, J. Lim, D. Saini, In attendance: B. McFadden, D. Mullings, S. Borg, C. McGrath 1) All in attendance introduced themselves. 2) Approval of Minutes of the Previous Meeting (September 27, 2010) A member asked for verification of the +2.5M recorded on page two of the minutes. C. Capewell will review and provide verification or correction to the dollar figures in the operating budget. The minutes of the meeting on September 27, 2010 were corrected to read M. Tombak. Approval of the September 27, 2010 meeting minutes to be approved at the January 11, 2011 meeting. 3) Reports of Committees and Officers: a) For information: SARG University of Toronto Guidelines and Policy Sonia Borg Ms. Borg provided the members with an overview of the SARG University of Toronto guidelines and policies. She explained that all University of Toronto ancillaries must follow certain budget guidelines as put forth in the Guide to Financial Management. It states that every ancillary must operate without a subsidy from the operating budget, they must have sufficient revenue to support regular capital renewal, once the first two objectives are achieved ancillaries are to create and maintain an operating reserve and where they have met the first three objectives they will could then contribute net revenues to the operating budget. The fifth is a guideline There is an additional item that was added in 2000 but is not part of the objectives but came about as an exception to cover those occasions when an ancillary had to make a major capital investment. The guideline It states that they need to achieve breakeven annually over the first five years after the completion of the new building construction and renovation and achieve a cumulative breakeven position within eight years of completion of the building construction. The Chair opened the floor to questions. In response to a member s question, Mr. Donoghue explained the current relevance of the fifth guideline additional item to the ancillaries. He reiterated that this guideline item is not part of the Page 1

2 policy but is an exception to the policy. It was instituted around the year 2000 to provide for necessary expansion of student residences that would not be possible under the basic policy. There was a subsequent exception to the exception in relation to the building of Oscar Peterson Hall because it was recognized that this project could not achieve the five and eight breakeven mandate. An additional exception was made in that case for five and 13 breakeven. At the moment we are standing at an annual breakeven of four years and nine years to cumulative breakeven. He emphasized that it is important to recognize that this is an exception to the policy and that there cannot be an expectation that the five and 13 exception is a current option. (The above record has been modified to reflect clarifying information submitted by an attendee post meeting.) b) For information: Ancillary services status reports and preliminary figures in preparation for the next meeting in January, when these items appear for approval i. Food services - Bill McFadden, Director of Hospitality and Retail Services Mr. McFadden referred members to the Food Services Statement of Operating Results to , which is attached hereto as Appendix A. Mr. McFadden presented a graph that indicated the transaction volume at food services throughout the campus. He pointed out the heavy volume periods that show how the infrastructure is stressed by campus growth. He reported they are on the brink of 10,000 transactions a day which has taken the existing infrastructure to its capacity. He explained that this tracking is additional data used for planning. They are targeting.45 NASM at 11,000 students as a starting point. Between 2008/09 to 2011/12 there has not been any expansion and they are just keeping up. He noted that the number of meal plans remained fairly static however there has been a significant increase in the average value of the meal plans that are being purchased. Cafeteria sales are right where it was expected they would be. He noted the current trend indicates more discretionary spending as people are recovering from the tighter economic climate. He reported that a very conservative approach was taken to catering sales as it includes only firm contracts. The forecast shows an increase in catering sales as there were additional conference contracts secured after the creation of the budget. At present the budget indicates that Food Services is $415K ahead in total revenue which is about 5%. He noted as sales go up so do the total cost of sales. Direct expenditures are $73K higher than expected due to incremental sales. This is mainly due to occupancy costs and other operating expenses. The net result is $4,825 higher operating result before transfers. Mr. McFadden then discussed the meal plan rates. He stated that on average there is a 2.3% increase for the meal plan rates. The increase has been spread throughout the meal plan offerings to minimize the increase for the minimum commitments within each group and align the costs for the larger plans with the actual spending rates for each of these plans. The Group A plans, which are the smallest plans, will increase less than 1%. The increase for the smallest Group B plan is tied to government legislation pertaining to the number of meals per week (if the rate was less the students would forfeit their tax exemption). Page 2

3 The Chair opened the floor to questions. A member asked for confirmation that UTM still has significantly fewer services than St. George. Mr. McFadden explained that St. George does not have the same needs because of external offerings. The member noted that he was trying to emphasize the fact that UTM has more pressure on it to provide meal services. A member asked if we reach the target of.45 NASMs would we have sufficient space to accommodate student needs. Mr. McFadden explained that we benchmark our NASM and revenue per FTE against comparable institutions that are sitting at the He feels confident at.45 NASMs. He further explained that the master plan identifies the difference between experiential and task-focused dining. Current expansion and building construction, along with changing the North Building will open more opportunities. He stated that any more than three dining facilities on the campus would put a strain on the institution. In response to a member s question concerning the expectation of student opposition when this matter is presented at Council, Mr. McFadden stated that while people do not like cost increases, he has had extensive discussions at the Resident Student Dining Subcommittee to review the rates and there were no concerns. He believes that keeping the low entry point as reasonable as possible and providing flexible add-ons has mitigated opposition. He also noted that UTM plans are reviewed against comparable institutions and fall in the middle to low end of that comparison for the entry level. Further, when the full plan is taken into consideration it drops UTM to the second lowest meal plan in the province. ii. Conference services Bill McFadden, Director of Hospitality and Retail Services Mr. McFadden stated that there has been a change in the way the Conference budget treats the provision for accommodation on campus. A Conference and Housing Operating agreement has been negotiated. Housing provides the Conference ancillary at a wholesale rate. They then market and sell rooms in the same fashion as a hotel would operate. That change has led to significant differences in the budget from previous years. The approach that has been taken is to only budget for firm commitments. Positive variances are explained by bookings that came after the budget was finalized. With respect to expenses, there is a direct correlation to increased sales. As sales increase the cost of food, facilities and space rental also rise. Some of the line items associated with repair and maintenance are also a direct result of the same agreement. The charges still impact the budget when they are charged back for accommodation. It is merely a change in where the costs are recorded and net out to zero. Mr. McFadden advised the members that as per the SARG guidelines the ancillary shows a $100K commitment to the operating budget. The Chair opened the floor to questions. There were no questions for Mr. McFadden. Page 3

4 iii. Parking services Christine Capewell, Director of Business Services Ms. Capewell referred members to the Parking Statement of Operating Results to , which is attached hereto as Appendix B. She began by reviewing the number of parking spaces available. She noted that we are in a more positive position now that the parking deck is open than we were in September. We currently have 2,374 spaces and anticipate opening more spots between now and next September as construction equipment is removed. She noted that as anticipated and planned for next year, there will be a 3% increase in permit prices for the academic year. Ms. Capewell reviewed the operating results in Schedule 1. She noted there was a lower amount for parking permit revenue because the budget was set anticipating the deck opening in September and the lower revenue reflects the delay. The number of permits made available for sale was limited to reflect the limited number of spots available as of September. She further explained that the highest demand is in August and September and then there is a big drop in November so there was not as much demand when the parking deck actually opened. They did make an effort to sell additional permits when the deck opened by contacting individuals on the waiting list and did manage to increase sales somewhat through that initiative. The net result is a $126K loss in revenue in September and should not occur next year. The pay and display revenue is up and she felt it was due to the delay in the deck opening. Total revenue should be down about $100K. She explained the variance in the Direct Expenditures portion of the budget. She noted that a larger expense than normal in the furniture equipment and repair line item is anticipated and it is directly related to equipment maintenance which is the cost to maintain the pay and display meters. The contract with the provider is connected to usage. Therefore as use of the meters goes up, the cost of maintenance increases. Therefore it is anticipated that the expense line will be more than was originally budgeted. The other significant variance is the Loan Principal & Interest Expense line item. When the budget was set it was anticipated that there would be two loans. One is the existing loan on the CCT garage which, like the 2009/10 actuals, the amount is set at $1 million per year. It was also anticipated that we would add a mortgage or loan for the parking deck however we did not get an external loan. UTM financed the project which explains the $630K variance. She directed members to Schedule 2 that includes a transfer out of the ancillary operation and into the UTM operating budget. Because it will not be a full year rather than the full $630K she anticipates the transfer will amount to $420K this year. The final item she mentioned was a small positive result of $119K in net operating after transfers. This will be followed by a small negative result over the next couple of years that the ancillary will have no problem covering. The Chair opened the floor to questions. A member remarked that it looked like pay and display maintenance was budgeted at 30% but is actually closer to 40% and asked if it was because an unexpected expense had been incurred. Ms. Capewell explained that there were no unexpected expenses but rather she felt that the budget was Page 4

5 calculated a little low and it may be related to the timing of payments to the vendor from the previous year that may not have been captured when calculating the budget. In response to the member s inquiry into the competitiveness of the percentage in relation to the industry as a whole Ms. Capewell said that the percentage is comparable and that thorough analysis was conducted before the decision was made on which option and vendor to contract. iv. Residence Dale Mullings, Director of Residence Mr. Mullings referred members to the Residence Statement of Operating Results to , which is attached hereto as Appendix C. He reported that the department provides over 1,500 beds which is the largest residence operation at the university. He reported that undergraduate demand has remained consistent over the past two years and has been at around 96% since opening Oscar Peterson Hall. Prior to that they ran at 100% occupancy but overbuilt in anticipation of continued growth. Family and Graduate occupancy has been projected at 71% which is lower than last year. The combined demand will be consistent at 95%. We are consistent with local market demands and within the range when compared to the Ontario vacancy rate. He directed members to Schedule 1 and spoke to the forecast. He pointed out that the fall revenues are projected to be lower than anticipated due to the lower occupancy rate however summer revenues are higher due to the conversion of family graduate units to undergraduate units which has allowed for an expanded summer operation. Mr. Mullings reported that supplies and cleaning costs are projected to be higher and are associated with the conference services agreement. The annual and major maintenance costs are projected to be higher than planned by approximately $80K due to ongoing construction issues particularly in Erindale Hall. They have done some contingency planning this year to mitigate this. He advised members that there will be significant costs this summer, in the range of $ K to complete the required repairs. He noted that the forecast should come in over $26K less than budget and the total fund balance coming in over $350K better than plan. On the budget he advised that the fall/winter rates will increase by an average of 5%. Related expenses will be higher to reflect the costs associated with the Conference Services agreement. Mr. Mullings summarized the annual and major maintenance projects as follows: Completion of the Erindale Hall brick remediation Complete painting of Roy Ivor Hall units Bathroom countertop replacement in Roy Ivor Hall Townhouse roof anchors installation New roof for SW row Mr. Mullings concluded by reporting that the current plan will continue to allow the department to come out of Operating Debt in year 4 of opening Oscar Peterson Hall, and Fund Debt in year 9, as previously planned. Page 5

7 Appendix A Page 7

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11 Appendix B University of Toronto Mississauga - Parking Schedule 1 Statement of Operating Results to in $'s Actual Budget Forecast Variance Budget Revenue: Parking Permits 1,685,126 1,830,000 1,703,637 (126,363) 1,754,746 Cash Fees 32,725 31,000 30,000 (1,000) 30,000 Pay & Display Meter Revenue 960, ,000 1,000,000 25,000 1,050,000 Investment Income 988 2,000 1,800 (200) 2,000 Other Income 1,894 - (83) (83) - Total Revenue 2,681,085 2,838,000 2,735,354 (102,646) 2,836,746 Direct Expenditures Salaries, Wages & Benefits 317, , ,498 (6,003) 410,274 Supplies 51,063 54,384 52,140 2,244 48,836 Furniture & Equipment Repair 342, , ,255 (39,255) 362,000 Annual Maintenance Expenses 54,080 20,000 20,000-20,000 Major Maintenance Expenses 681, Furniture & Equipment Depreciation 12,060 6,374 14,103 (7,729) 5,489 Replacement of Non-Depreciable assets 1,546-1,200 (1,200) 1,000 Snow Removal 30,000 30,000-30,000 Utilities 67,947 67,856 81,311 (13,455) 82,676 Loan Principal & Interest Expense 1,042,157 1,673,061 1,042, ,904 1,042,157 Finance Charges Occupancy/Space Costs Insurance 9,828 10,023 10,121 (98) 10,323 Telecommunication cost 8,404 9,838 8,144 1,694 8,120 Other Miscellaneous Expenditures 143,183 94, ,435 (8,415) 90,023 Total Direct Expenditures 2,732,616 2,611,051 2,052,364 (558,687) 2,110,898 Indirect Expenditures Central Overhead Charges 8,688 9,015 8,655 (360) 8,923 Departmental/College Overhead Charges 58,141 60,301 61, ,449 Facilities & Services Overhead Charges 62,676 64,396 64, ,665 Total Indirect Expenditures 129, , , ,037 Total Expenditures 2,862,121 2,744,763 2,186,976 (557,787) 2,279,935 Operating Results Before Transfers (181,036) 93, ,378 (455,141) 556,811 Page 11

12 University of Toronto Mississauga - Parking Schedule 2 Statement of Reserves to in $'s Actual Budget Forecast Variance Budget Total Fund Balance - Opening 474, , ,704 (250,661) 413,264 Net Operating Results before Transfers (Schedule 1) (181,036) 93, , , ,811 Transfers in (out) of Ancillary operations - - (428,818) - (630,000) Net Operating Results after Transfers (181,036) 93, ,560 26,323 (73,189) Total Fund Balance - Closing 293, , ,264 (224,338) 340,075 Closing Fund balance is made up of: Investments in Capital Assets 27,496 13,656 13,393 (263) 7,904 Internally Restricted Capital Renewal Reserve Operating Reserve 177, , ,242 (60,597) 189,145 New Construction Reserve Unrestricted Surplus/(Deficit) 89, , ,629 (163,478) 143,026 Page 12

13 Appendix C University of Toronto Mississauga - Residence Schedule 1 Revenue Statement of Operating Results to in $'s Actual Budget Forecast Variance Budget Residence Fees - Fall/Winter Session 8,382,743 8,717,217 8,447,736 (269,481) 9,054,850 Residence Fees - Summer Session 302, , , , ,000 Laundry Income 152, , ,000 4, ,500 Commissions & Other Income 602, , ,467 95, ,521 Value of Dean's & Don's Rooms 432, , ,511 13, ,946 Total Revenues 9,873,023 10,086,395 10,032,233 (54,162) 10,536,817 Direct Expenditures Salaries, Wages & Benefits 1,347,989 1,468,168 1,482,842 (14,674) 1,605,360 Supplies 30,099 36,400 63,242 (26,842) 75,000 Utilities 965,382 1,103,773 1,115,219 (11,446) 1,140,542 Garbage 17,049 26,383 28,400 (2,017) 26,000 Snow Removal, Grounds Maintenance 170, , ,970 (13,118) 212,123 Insurance 54,849 55,746 56,292 (546) 57,418 Telephone, Cable & Internet 247, , ,400 (5,416) 303,754 Furniture & Equipment Repair 1,054 8,000 3,000 5,000 5,000 Annual Maintenance Expenses 781, , ,000 57, ,686 Major Maintenance Expenses 327, , ,863 (138,007) 358,722 Furniture & Equipment Depreciation 25,975 8,000 18,411 (10,411) 30,777 Replacement of Non-Depreciable Assets 36, ,100 23, ,100 40,451 Loan Principal & Interest Expense 4,955,088 4,775,818 4,656, ,278 4,589,509 Finance Charges 8,812 52,090 25,000 27,090 25,750 Value of Dean's & Don's Rooms 432, , ,511 (13,704) 478,946 Cleaning Costs 46,862 45,000 87,492 (42,492) 71,797 Residence Life Expenses 107, , ,522 (19,762) 138,626 Other Miscellaneous Expenditures 155, , ,000 10, ,520 Total Direct Expenditures 9,712,784 9,795,128 9,767,704 27,423 9,917,981 Indirect Expenditures Central Overhead Charges 31,332 34,979 34,979-36,628 Departmental/College Overhead Charges 179, , , ,632 Facilities & Services Overhead Charges 4,997 5,203 5,203-5,185 Total Indirect Expenditures 215, , , ,445 Total Expenditures 9,928,428 9,996,348 9,968,924 27,423 10,189,426 Operating Results Before Transfers (55,406) 90,047 63,309 (26,738) 347,391 Page 13

14 University of Toronto Mississauga - Residence Schedule 2 Statement of Operating Results to in $'s Actual Budget Forecast Variance Budget Total Fund Balance - Opening (5,020,048) (5,456,750) (5,075,454) 381,297 (5,012,145) Net Operating Results before Transfers (55,406) 90,047 63,309 (26,738) 347,391 Transfers in (out) of Ancillary operations Net Operating Results after Transfers (55,406) 90,047 63,309 (26,738) 347,391 Total Fund Balance - Closing (5,075,454) (5,366,704) (5,012,145) 354,558 (4,664,754) Closing Fund balance is made up of: Investments in Capital Assets 78,416 Internally Restricted Capital Renewal Reserve 526, , , , , , ,528 Operating Reserve 832, , ,214 (2,055) 872,584 New Construction Reserve Unrestricted Surplus/(Deficit) (6,512,714) (6,746,501) (6,565,216) 181,285 (6,274,419) Page 14

U of T Mississauga Food Service Ancillary Operating Plan to Management Report

U of T Mississauga Food Service Ancillary Operating Plan 2010-11 to 2011-12 Management Report (a) Overview of Objectives, Issues and Services Objectives To serve a variety of quality products in well maintained,