Search
Archives
Categories

Coborn’s Redux
by Silence Dogood

At the Budget Advisory Group meeting on November 13, 2014, Vice President for Finance and Administration Tammy L.H. McGee presented information in a PowerPoint presentation about the occupancy of the on campus dorms and the Coborn’s Plaza apartments. The figure below comes from Vice President McGee’s presentation:

The figure breaks out the occupancy by category. From FY14 to FY15, the breakdown shows fewer freshmen, sophomores, and juniors residing in Coborn’s Plaza apartments. At the same time, there are more seniors, graduate students and ‘other’.

The following plot shows the sum of all of the categories.

From this plot, it is clear that the occupancy increased in years 2, 3, and 4 were followed by a decline in year 5. The original projection for FY15 was an increase in occupancy but the data provided shows that the projected occupancy will not be met and a decline will occur.

For FY13, Coborn’s Plaza cost SCSU $1,300,000. The loss for FY14 decreased to $1,200,0000 as a result of increasing occupancy. For FY15, it is likely that the loss will again approach $1,300,000 as a result of the decrease in occupancy. Complicating this further is that the Wedum Foundation lease has a 2% annual increase in payments, which, unless passed along to the residents, will result in even greater losses.

As part of the ‘bigger picture,’ SCSU’s annual loss on Coborn’s Plaza represents 13.6% of the projected $9,542,000 budget shortfall for FY15.

From the data for the three categories of increasing occupancy in the Coborn’s Plaza Occupancy by Student Composition, the figure below has been created:

Unfortunately, despite significant growth in these categories in the first five years, these three categories are all smaller than the Freshmen, Sophomore, and Junior categories, which are all declining. For FY15, the declines were greater than the increases resulting in an overall decline in occupancy.

It’s easy to figure out what is meant by the categories:  freshmen, sophomores, juniors, seniors and grads. However, what is this category “Other?” Clearly, the category is increasing as a percentage of the total occupancy as shown in the following Figure.

While non-students have been living in the Coborn’s Plaza apartments from the very start, it has recently been learned that administrators, and perhaps others, have been housed in the Coborn’s Plaza apartments. Interim Provost Richard Green and Dean of the Undergraduate College Bruce Busby are current residents. While this may seem an expedient way to find housing for new or interim administrators, it probably wasn’t a part of the original business plan for Coborn’s Plaza. Further, it is not known if using the Coborn’s Plaza apartments as housing for non-students (i.e., other) puts the Wedum Foundation’s tax-exempt status at risk. If the tax-free bonds for Coborn’s Plaza were sold based on being used for student housing, having 10.8% of the residents as ‘other’ than students might not be a good idea. Conventional wisdom generally recognizes that involving lawyers is rarely a good idea!

It has also be recently been discovered that the latest guests from Turkey, which was over twenty individuals, were housed in the Coborn’s Plaza Apartments. While administrators at the University and ‘guests’ certainly have a direct affiliation with SCSU and it might seem like an appropriate use of the excess capacity, I’m sure the local real estate moguls would not see it the same way. To them, it might seem that SCSU is in direct competition and in the market where there has been a 20% decline in enrollment at SCSU it might be viewed with hostility. However, even if it is ok to use the Coborn’s Plaza apartments as a hotel for university administrators and ‘guests,’ it is difficult to understand how, when the newly appointed Chief of Police in St. Cloud came to the community, he stayed in the Coborn’s Plaza. Clearly, this individual is not an SCSU employee so, other than getting the experience of ‘dorm life’ and President Potter doing a favor for Mayor Kleis, it might be hard to justify.

While all of the 10.8% of the ‘other’ residents of the Coborn’s Plaza apartments are probably not be in this same category as the Chief of Police, it is an eye catching concern to see this category grow 289% in three years. I only wish my 401K was able to grow in three years by the same amount! Come to think of it, I wish my 401K had grown by 289% in ten years!

Perhaps this strategy of utilizing the empty rooms in the Coborn’s Plaza apartments as essentially extended stay hotel rooms will allow SCSU to begin to fully recover its’ Coborn’s Plaza costs. We’ll know this is a truly successful strategy when students are moved out of Coborn’s Plaza and back into the empty dorm rooms on campus to make way for more well heeled paying customers.

Consider the advertising promising a true dorm experience without the students at the “SCSU Inn and Suites”! Believe it or not, this idea actually has some merit! The most expensive studio room in Coborn’s Plaza is $4,075 per semester. For a fifteen-week semester this translates into only $38.81 per night! This rate is considerably lower than the current area motels and hotels! Perhaps the university could even start a hotel management/hospitality degree, which would boost enrollment while giving students in the program internships and providing them with some ‘real world experience’ and further reduce costs. Even all of the visiting athletic teams could stay there and save some money on their travel expenses. The possibilities are almost endless!

Back to reality, without realistic plans to eliminate the $1,300,000 plus per year loss on the Coborn’s Plaza apartments, the university really needs to get out of the Wedum lease or at least raise the rates to brake even with a 71% occupancy rate. Another option might be to hire 130 more ‘adjunct’ administrators to fill the empty rooms. The recent trend to hire adjunct faculty might be extended to administrators. Currently, the yearly pay for an adjunct teaching 24 credits would be 86.4% of the lowest step on the instructor schedule, which amounts to an annual salary of $30,201. Since these individuals would be administrators, the 86.4% might be more appropriately applied to the lowest level on the administrator’s schedule. Either way, this would significantly lower the salary costs of administration AND fill the empty rooms in Coborn’s Plaza essentially killing two birds with one stone! What could possible go wrong with an additional 130 administrators?

One Response to “Potter’s apartment fiasco redux”

Leave a Reply