SENATE HOUSING POLICY COMMITTEE
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