ANNUAL REPORT
OF THE
SENATE HOUSING POLICY
COMMITTEE
2006-2007
1. The original charge and primary responsibility of the Housing
Policy Committee is to audit the annual rent increases to be imposed on
residential tenants by the university administration. Because of the scheduling
of the university budget process, Columbia University Facilities (CUF) was
unable to provide the committee with budget figures for a full discussion of
this issue until late in the Spring Semester.
In addition to the budget summary, the Executive and Deputy Vice
Presidents provided a detailed breakdown and explanation of the current and
projected costs responsible for the gap between the residential income and
expenditures.
2. The Executive Vice President informed the committee that CUF
intends to impose a 5% increase in rents for faculty, staff, and students for
the 2007/2008 fiscal year – and a projected 5% for at least two years
following. As in previous years, the committee was unable to determine whether
this was a reasonable figure, as the university does not seem to have a clearly
articulated strategy for setting rental increases in the face of escalating
operating costs. However, the previous
5% increase in rents for 2006/2007 exceeded the percentage salary increase of
many officers as well as the 4% salary increase guidelines for Officers of
Research issued by the Provost.
3. The gap between growth of expenses and growth of income from
residential operations has slowed considerably in the past year. Growth of
income from affiliated tenants increased from 2005/2006 to 2006/2007 at an
estimated 7.3% while growth of total operating
expenses increased at an estimated 4.8%.
This increase in expense represents a 4.8% increase in core operating
expenses in addition to a 5.0% increase in debt service and a 2.9% increase in
university overhead charges. As in years
past, the gap between income and expense is financed by debt while the cost of
servicing this debt ($20.9 million in 2006/07) continues to increase. The committee and Executive and Deputy Vice
Presidents agree that the current trend is unsustainable.
4. The committee commends the effort, and success, of CUF management
in holding down controllable costs, In particular, the timely purchase of
a fuel oil contract in October 2006 resulted in a savings of $1.175 million
(22.1% less than budget). Further
efficiencies gained from streamlining the recently merged facilities and real
estate management will help to offset other increased costs for the next
several years but these gains are unlikely to offset projected increases in
costs of utilities, materials, insurance and debt service. In addition to these internal cost savings
achieved by CUF, the university administration provided a one-time $9.0 million
infusion in central funding for residential capital expenditures.
5. The committee discussed numerous strategies for cost reduction
with the Executive and Deputy Vice Presidents.
Increasing energy cost has been one of the primary direct (and indirect)
causes of increased expenses in recent years. Given likely continued increases
in energy costs, the committee recommends that Facilities management, and the
university as a whole, develop and implement aggressive policies for reducing
excess energy consumption and maximizing efficiency of energy intensive
components of the system.
6. The committee recognizes that