Please summarize what you have completed, and what you still have left to complete, and your status on the incomplete recommendations.

Recommendation #1:  BUILDING RESERVE DEFICIENCY: 

The MU continually analyzes anticipated needs of the facilities we manage and the resources to accomplish them.  Reconciling the differences between project expense projections and resources is a matter of keeping all options open.  As an example, some of the anticipated needs can be taken care of by transferring surplus cash above the State and SIFC guidelines for cash reserves to the Building Reserve.  However, because of the uncertainties of the current construction project, we are holding off on doing so, because some project expenses may not qualify for a reserve account transaction, and would be better coming from an operating account.  Once we are beyond the construction period, we can more safely transfer any remaining cash to meet future obligations on our capital list.  If the list is still deficient in cash, then requests to adjust the reserve contribution can be made to the MU Board and SIFC at that time.  We can also adjust the timing of the work to coincide with sufficient cash to accomplish the project.

Recommendation #2:  FUND BALANCE IN FORMER SI FUND:

Below is a chart showing the distribution of the old Student Involvement fund balance.  Approximately 43% will be used to cover some large upfront cost for Student Leadership and Involvement (SLI) and 57% will go to Furniture, Fixtures and Equipment (FF&E) in the new Student Experience Center (SEC).

Student Involvement FF&E Contribution
Fund 110118 Balance as of 11.30.2012	$        520,143
Funds Reserve by SLI
Club/Org/Leadership/Civic Engagement & service database program development	$          75,000
Transfer to MUNPUB for Media Salary	$          50,200
Strength Quest Payment (10 yrs at $5K)	$          50,000
MU Cultural Programs Coordinator	$          50,000
Total	$        225,200
Total to SEC FF&E	$        294,943

Recommendation #3:  MU AGREEMENT WITH MURFS:  Proposed changes to the MURFS Rental Agreements

Goal:  Analyze current model in comparison to other campus partnerships

Current Practice:

• Java II pays 5% of gross sales to Valley Library.  This agreement started five years after the partnership came into affect.  Rent was waived for the first five years in lieu of furnishing the Java II seating area.  After the five years were up, the furnishing became the property of Java II.  Rent has remained unchanged since the inception of the M.O.U.
• Dixon Café pays $5,000 annually to Recreational Sports.  This was re-negotiated from a higher amount after Recreational Sports payment exceeded return to the Memorial Union.
• E.Cafe and Ava’s Café do not pay any rent.  MU Retail Food Service will not enter into any additional contracts where rent is expected.

MU Retail Food Service Pricing Model

• Retail pricing is set to compete with UHDS and the Corvallis market.
• The current pricing is set to capture roughly $50,000 annually
• 2011/2012 fell short of that goal due to not raising prices to offset costs
• Money that MURFS earns affords the department the opportunity to re-invest in equipment, re-models, and new locations.
• University assessments are increasing between 3 – 6% every year, directly affecting the bottom line
• Credit card fees have increased from 2% to 4.5%
• Orange Rewards is costing 2-3% of gross sales

MU Retail Food Service Proposal

• Instead of the flat fee of $59,000 annually, have the four Memorial Union locations (Java Stop, Pangea, Buenos Burritos and Bites) and pay 3% of net sales to the Memorial Union (after Orange Rewards) and have the out of building locations (Java II, Dixon Cafe, Ava’s Cafe, and E.Cafe) and pay 1.5% of net sales.
• Projection for 2013-2014 based on this figure:  $62,580 (6% increase)
• If sales are higher than projected, net to the Memorial Union will increase proportionately

Recommendation #4:  CULTURAL MEAL KITCHEN RATES: 

The fee structure of the Cultural Meals Kitchen is reviewed annually as part of the Fee book structure.  Rates are approved through the Fee book process.  Rates for use of equipment are comparable to costs from local rental agencies, i.e.: Special Occasions, and Corvallis Rental.

The hourly and day of event fees are categorized with student organizations receiving the lowest cost point.  At this time, only student organizations have accessed the program.

The current fee structure of the Cultural Meals Program provides affordable access to student organizations for preparation of food and beverage as part of campus activities.  On average, the rental fee of the kitchen adds $1.00 cost per meal served making the average meal cost $3.50. These organizations also provide sweat equity in the development, production and serving of these meals.

Currently, 99% of users pay rental fees with student fee funded budgets.  Increasing rates for access to this program could increase revenue, but it could also negatively impact the revenue by creating less perceived value of choosing self- production over catering. If catering were chosen the average cost of a meal would raise substantially, $12 on average. Student organization could seek to cover these costs through request of higher budgets from SIFC or moving towards a fee for attendance.  A ticket fee then would trigger higher cost for space use, marketing, etc., which could then also impact the Student Fee request.

The loop of impact to the student fees continues through University assessments, etc.  The value of maintaining a low cost access to this program far outweighs the cost of annual cost of business increase of 2-3%, which may be seen through the CMP budget request annually.   Actual growth of the program will provide new revenue to support the growth of the program. Currently we do not anticipate an increased budget request to cover expansion through the MUNCMS budget.

Increasing the fee structure of the kitchen could potentially drive students to choosing a higher cost caterer to facilitate meal and beverage service.