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I. REFERENCES
A. Group A Housing System Indenture - Sections 4.11 and 6.01 (c).
B. Group A Housing System Rate Structure Policy - Regents' Item 502,
March 16 1967.
C. Haskins and Sells Cost Accounting Study - Part III.
II. INTRODUCTION
Under the provisions of the Housing System Rate Structure Policy,
student rates are established at levels sufficient to cover net revenue
requirements (Part A), and operating expenses (Part B). Part A consists
of funding requirements for the system's financial obligations (debt
service), and for the need of the system for funds to cover
extraordinary maintenance, replacement, and improvement of facilities
(major maintenance). This bulletin sets forth the procedures necessary
to implement the University's rate structure policy and the
recommendations of Haskins and Sells with respect to the genetation,
allocation, and utilization of major maintenance funds.
III. PROCEDURES:
A. Campus net revenue assessments are subject to annual determination
by the Vice President - Business and Finance. Net revenue
assessments shall include the amounts necessary:
1. To meet debt service requirements and other direct charges to
the net revenue fund, and
2. To provide funds required for current and future major
maintenance expenditures.
B. The portion of the annual net revenue assessment authorized for
major maintenance at each campus is subject to determination by
the Vice President - Business and Finance. Major maintenance
requirements shall be based on the total capital investment in
Group A facilities in operation on each campus, and on a moving
average of system-wide experience in the utilization of major
maintenance funds.
C. Of the total amount of net revenues derived from assessments for
major maintenance, the Vice President - Business and Finance will
authorize annually for expenditure a portion of these funds to each
campus.
1. Itemization of planned major maintenance expenditures
(pre-audit) is not required for expenditures within the limits
of the annual authorizations.
2. Two copies of annual reports of actual major maintenance
expenditures made during a fiscal year (post audit) shall be
submitted to the Vice President - Business and Finance,
Attention: Director of Business Services. These should be
submitted as early as possible after the end of the fiscal year.
3. Responsibility for complying with the provisions of the Group
A Housing System Indenture covering the expenditure of major
maintenance funds rests with each campus Chancellor or his
designated representative.
D. Of the total amount of net revenues derived from assessments for
major maintenance, the balances not subject to annual allocation in
accordance with (C.) above shall be identified by campus.
1. Upon applications by campuses, and approval thereof by the Vice
President - Business and Finance, funds retained as major
maintenance reserves may be made available for specified
purposes. (To conserve these reserves, campuses must
demonstrate inability to meet specific and unanticipated needs
from the funds allocated annually in accordance with
(C.) above.)
2. Until funds retained as major maintenance reserves have
accumulated to a level insuring system-wide security, campuses
receiving approval to expend such funds may also be required
to replace them by means of a surcharge added to their regular
net avenue assessments.
3. Unencumbered balances of annual allocations pertaining to major
maintenance funds in accordance with (C.) above shall expire
at the end of each fiscal year.
E. The procedures outlined in this bulletin are subject to higher
authority. The provisions of the Group A Housing System Indenture
and the policies and directives of The Regents and of the
President are governing in all cases.
IV. RESPONSIBILITIES:
A. The Office of the President has the responsibility for:
1. Determining annual net revenue assessments.
2. Determining annual expenditure authorizations of major
maintenance funds.
3. Maintaining major maintenance reserve sub-accounts.
4. Controlling major maintenance reserve funds.
B. Chancellors, or their designated representatives, have the
responsibility for:
1. Complying with Group A Housing System Indenture provisions.
2. Reporting major maintenance expenditures annually.
3. Maximizing the efficient utilization of major maintenance funds.
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