Department fee calculations outdated and complex

By Catie Hall
On April 11, 2014

The University of New Hampshire's increased mandatory student fees for the 2014-15 academic year fit inside a Responsibility Centered Management (RCM) budget model. But not every department that pays towards the RCM model is on the same page about what the model includes or what the benefit is. 

"RCM is a complex accounting model for allocating the cost of operation and maintenance to the responsible unit," Paul Chamberlin, associate vice president of facilities, said in an email. "For a central service provider such as Facilities, that means that the total cost to operate and maintain the campus buildings, grounds, utilities and other infrastructure is allocated through a model of the various responsibility centered units." 

Essentially, a specific department-such as Memorial Union, Athletics, Student Recreation-are responsible for their own fees. Academic buildings are not.

"For many costs," Chamberlin said, "the model allocates costs based on the Net Assignable Square Feet [NASF] of area in the buildings that a unit is assigned. Another way to think of NASF includes offices, classrooms and labs, but not bathrooms, halls or stairs."

MaryAnne Lustgraaf, director of the Memorial Union Building, said her budget for the MUB is $4.5 million; comprised almost 100 percent by graduate and undergraduate student fees. 

The RCM budget model doesn't seem to work well for Lustgraaf

"Those of us in student academic services are part of a model called RCM," Lustgraaf said. "And it's being looked at again. It is a model that has not been used by anybody else in higher education for a good long time, including Harvard, where it was developed."

Lustgraaf said that the model assumes everyone is responsible for their own cost center. The MUB manages its own budget. Sometimes you contribute to the greater good, she said.

"We pay a square-foot charge to the university," Lustgraaf said during an interview for The New Hampshire's story, published April 4, "Crunching the Numbers." "[It's] about 38 percent of our budget, so right off the top, we never see it here in the MUB. It goes right to the university."

Lustgraaf said the fee covers housekeeping, grounds and roads, utilities-little things like that. Basic upkeep. But if major things go wrong, the MUB budget covers it. As a result, she said she has to plan three to five years in the future for repairs she thinks she will need.

Lustgraaf said she pays over $27 per square foot of space for the MUB under the RCM model. If she were to get more square footage, she said she wouldn't be able to afford it. 

"If the bookstore were to move out [as was discussed by the town of Durham before] ... we could use the space so much for general purpose and meeting rooms and all sorts of things," Lustgraaf said. "I'm not sure I could afford to absorb it. I couldn't." 

Lustgraaf said she'd like a more transparent budget. She suggested taking the energy costs and facilities costs and putting them into their own budget; the money that goes to the 'greater good' and gets distributed into other areas of UNH's budget as a whole should be in its own category. 

Stacey Hall, director of campus recreation, also allocates a portion of her budget to the RCM model.

Out of the current $492 fee per undergraduate students, Hall said $255.84 goes to the RCM model.

"There is 125 [dollars] that goes towards the loan that is for what I think of as for both buildings - for the ice arena and the recreation center because they [were] built at the same time, essentially," Hall said. "Then there is 18 dollars that goes towards a different loan that covers renovations to the indoor pool and the construction of the student rec fields. And then about 52 percent goes towards RCM-related fees."

Hall has worked at other institutions that use the RCM model. While she has only been at UNH for two years, she tried to describe the differences between how UNH and other institutions use RCM

"What's unique here is that usually, an RCM model is based on credit hour production," she said. "So it's a very academic-focused model, which encourages faculty to recruit more students to take a class. It recognizes that if you have a really popular class, you should get more money."

Though Hall understands how the academic-focused model works at other institutions, she said it is difficult to understand how RCM is applied at UNH. She added in an email on Thursday,  April 10 that she doesn't know of any other institution that use RCM the same way UNH does.

"So, what's awkward about it here is that [certain] units ... don't produce credit hours," Hall said. "So it's puzzling to me how that came about. It's challenging here because the buildings that we manage are very different than an academic building."

While doing interviews about mandatory student fees, not every department complained - or even mentioned - the RCM model.

"All units are covered by the RCM model, but the model does not allocate all costs the same way," Chamberlin said.

Student auxiliary units - MUB, campus recreation, and student health - do not pay towards a repair fund, Chamberlin said. As a result, if something goes wrong, those auxiliary units are responsible for coming up with the money. 

Breaking down numbers is just part of the job. But Chamberlin clarified that there's a bigger picture. 

"Remember that RCM is a comprehensive approach to both revenue and cost allocation," Chamberlin said. "The way the cost for campus facility operation and maintenance is handled is only one part of a much larger model."

Among some departments, there are circulating rumors that RCM might not be around for much longer. Instead, some hope for a new budget model to take its place.

Chamberlin said switching from RCM would "simplify some of the accounting efforts," but the downsides would be that "we would lose visibility of the cost to own and operate our facilities."  

While large portions of students fees pay towards the RCM model, Chamberlin said students wouldn't see much of a difference if the budget model changed. 

"The specific MUB fees might go down if, say, the MUB wasn't charged for its NASF, but the costs for operating and maintaining the MUB building don't [go] away," he said. "They would have to be reallocated some other way and probably in a way that isn't as transparent." 

Marty Scarano, director of UNH Athletics, doesn't seem to worry about the budget model. However, he said he struggles with not getting all the services he needs through RCM.   

"The RCM budget model is complex and doesn't work the same for every unit," Scarano said in an email. "Athletics has worked with the model, though it can be challenging and needs to be addressed in every budget iteration. Athletics has a lot of space which is charged as part of the RCM component and that creates unique challenges for us."

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