USF Tampa Student Housing Rental Request 2016-2018 May 3 , 2016 - PowerPoint PPT Presentation

USF Tampa Student Housing Rental Request 2016-2018 May 3 , 2016

Overview • Without a substantive increase in rental rates for FY16/17, the USF Housing System will breach: – USF BOT Debt Management Policy (1.3) – Board of Governors (1.2) • Moody’s preferred rating coverage (1.4) • USF Housing rents have only increased once in 4 years (1.35% compound average growth rate on primary inventory) • Expenses continue to rise with no offset of new revenue. • Cash flow buildings (Andros) are coming off line regardless of construction/financing method 1

Debt Service Coverage USF has consistently met its debt service coverage ratio by reducing expenses and deferring facilities investments. DSO / Moody’s: 1.4 BOT Guidelines: 1.3 BOG Requirement: 1.2 Potential Budget Shortfall without a rate increase: FYE 2016 FYE 2017 FYE 2018 FYE 2019 Total Operating Revenues 36,844,258 33,067,614 33,542,900 32,970,308 Total Operating Expenses 21,270,319 20,290,890 24,200,864 25,179,132 Net Income 15,573,939 12,776,724 9,342,036 7,791,176 DSO Base Lease 11,124,242 11,116,015 11,094,357 11,075,689 Debt Service Coverage Ratio 1.4 1.15 0.84 0.7 Shortfall NA -2,785,697 -6,190,063 -7,714,788 Assumes $3 million annual deferred maintenance schedule and 1.4 schedule. 2

SUS Student Housing annual rent increase history State University Student Housing Rental Rate History of Increases 2012 2013 2014 2015 FAMU 4.00% 4.00% 4.00% 4.00% FAU NA 2.43% 1.00% 3.39% FGCU 3.50% 0.00% 0.00% 0.00% FIU 0.00% 0.00% 2.71% 0.00% FSU 5.00% 5.00% 3.00% 3.00% NCF 3.00% 0.00% 0.00% 4.00% USF has only raised UCF 1.97% 0.00% 0.00% 0.00% housing rates once UF 4.50% 4.50% 3.00% 3.50% in the last four UNF 3.10% 4.96% 3.29% 4.32% years. UWF 5.98% 5.98% 2.87% 0.00% SUS Average 3.45% 2.69% 1.99% 2.22% (w/o USF) USF 0.00% 3.10% 0.00% 0.00% 3

Compound Annual Growth Rate (CAGR) Apartment Style Comparisons 2012-2015 S TATE U NIVERSITY S YSTEM CAGR L OCAL M ARKET CAGR University of West Florida Avalon Heights 5.31% 7.37% University of Central Florida The Venue at North Campus 4.69% 6.48% University of Florida 42 North 3.74% 5.63% New College of Florida College Court 3.61% 4.00% Florida State University Malibu USF 3.28% 3.20% Florida Atlantic University The Province 3.23% 3.01% University of North Florida Campus Club 1.93% 2.77% Florida A&M Monticello 1.77% 1.84% Florida International University 4050 Lofts 1.61% 1.83% University of South Florida St. Petersburg The Social (Collegiate Hall) 1.43% 1.33% Florida Gulf Coast University Campus Lodge 0.72% 0.00% University of South Florida Average 3.73% -0.66% Average 3.39% 4

Value of Living On-campus Research indicates living on-campus improves student retention and graduation rates • Safety • Convenience (close to classes and resources) • Variety of housing options • Living Learning communities and access to faculty outside the classroom • Academic success (graduation and retention) • Connection to campus life • Flexibility (change rooms or roommates, length of contract, cancellation options) First Year Live on Requirement Removed 5

SUS Comparison by Type (2015-2016) 45% of USF inventory 12% of USF Inventory 30% of USF Inventory Apartment Traditional Suite Double SUS SUS Single 4BR SUS Double Rate Rate Rate UF $3060-$3729 FAU $4200-$5180 FAMU $3275 FAU $3050-$3650 FIU $3900-$4050 UF $2648-$2815 UWF $3000 FSU $3620 NCF $2586 FSU $2995-$3665 NCF $3525 FSU $2550 UNF $2830-$3150 USF $3380-$3448 USF $2386 NCF $2708 UF $3174-$3429 UNF $2250 FIU $2700 UWF $3065-$3300 UCF $2470-$2835 FPU $3040 USF $2200 - $2826 UCF $2985-$4440 FGCU $2715-$2948 6

Cost Pressures • Matching state/university salary & benefit increases Minimum wage, Admin. and Staff wage, Health premiums and other benefits Over past five years, the number of full-time staff in Housing & Residential Education has been reduced by 5%, yet compensation and benefit obligations have increased 23% (64% compensation: $906,407 and 36% benefits: $509,854). • Increased deferred maintenance investment 7

Impact of Andros Demolition • $2 million Net Decrease in cash flow by FYE 2019 • No reduction in annual debt service – Remaining inventory covering larger proportion of debt • Deferred Maintenance backlog is reduced by $52 million 8

Recommendation Approve three year rate schedule Fall 2016: 9.3% average (1.30 ratio) Fall 2017: 9.0% average (1.35 ratio) Fall 2018: 8.0% average (1.40 ratio) USF rates remain competitive with SUS Suite Double Apartment Traditional Double SUS SUS SUS Rate Single 4BR Rate Rate UF $3060-$3729 FAU $4200-$5180 FAMU $3275 FAU $3050-$3650 FIU $3900-$4050 UF $2648-$2815 UWF $3000 USF $3758 NCF $2586 FSU $2995-$3665 FSU $3620 FSU $2550 UNF $2830-$3150 NCF $3525 USF $2481 NCF $2708 UF $3174-$3429 UNF $2250 FIU $2700 UWF $3065-$3300 UCF $2470-$2835 FPU $3040 USF $2288 - $3313 UCF $2985-$4440 FGCU $2715-$2948 9