FSS/PPS 03.06 - Utilities Budgeting and Allocation
Utilities Budgeting and Allocation
FSS/PPS No. 03.06 (03.01.09)
Issue No. 4
Effective Date: 5/01/2018
Next Review Date: 5/01/2022 (E4Y)
Sr. Reviewer: Assistant Vice President for Budgeting, Financial Planning, and Analysis
The purpose of this document is to provide policies and procedures for the allocation of utilities costs among facilities funded by Texas State University’s core method of finance (funded by appropriations and tuition) and non-method sources.
Texas State’s central utilities operation functions as a “service center.” As such, the costs incurred in this service center are allocated among various users funded by method and non-method sources. Some buildings are not connected to the Utilities Service Center and purchase their utilities from third parties such as the City of San Marcos.
Utility Costs – costs incurred for the provision of electricity, natural gas, water, steam, chilled water, sanitary sewer, solid waste, as well as fire suppression and building management systems. Utility costs are categorized and allocated in one of three ways, depending upon the nature and source:
Distributed Utilities – costs associated with generating and distributing utilities on campus by the university’s Utilities Service Center. These include:
costs of operating and managing the plant facilities, including salaries, wages, and benefits for employees employed in these areas;
major repairs, renewals replacements to the utility system;
debt service on bonds for utilities facilities and infrastructure; and
utility reserve contributions (amounts being set aside for future utility projects).
Distributed utilities costs are allocated to buildings served by the university’s Utilities Service Center on a square footage basis.
Utilities Services – costs administered by university’s Facilities Department for all university buildings (except the Round Rock Campus, which is budgeted separately). Those costs include:
fire systems monitoring, maintenance, and repair; and
Utilities services costs are allocated to all university buildings (except Round Rock Campus) on a square footage basis.
Purchased Utilities – Some buildings receive their electricity, natural gas, water and wastewater directly from off-campus vendors (such as the City of San Marcos) instead of receiving distributed utilities from the university’s Utilities Service Center. The metered purchased utility costs for those facilities are charged to the appropriate account for that operation.
Types of Facilities – buildings to which utilities costs are allocated include:
The university’s core method of finance (funded by appropriations and tuition) pays for the utilities for most of the university’s facilities.
Non-method facilities refers to auxiliary enterprises, service departments, and other income-generating operations that are expected to pay for their own utilities.
Residence halls and Texas State-owned apartments
Student Health Center
LBJ Student Center
Print Shop/Duplicating Services
PROCEDURES FOR ALLOCATION PARAMETERS AND METHODOLOGY
Distributed utilities and utilities services costs are allocated among various users based on gross square footage. The coordinator of Facilities Inventory maintains the official university inventory of buildings featuring gross and assignable square footage.
The Office of Budgeting, Financial Planning and Analysis (OBFPA) maintains the square footage models used for allocating distributed utilities and utilities services costs based on the gross and assignable square footage allocated in the Facilities Inventory.
“Assignable Square Footage” is utilized to allocate gross square footage for each split-use building (partially E&G and partially non-E&G). For example, 10,000 gross square feet in a split-use building which has 6,000 square feet of assignable E&G space and 2,000 square feet of assignable Athletics space would be allocated as: 7,500 gross feet to E&G and 2,500 gross square feet to Athletics.
Buildings under construction are included in the utility calculations (and allocation) if the building has been connected to any utility owned and operated by the university or other utility costs are being incurred by the university directly and are not being borne by the construction contractor. The assistant vice president for Budgeting, Financial Planning and Analysis will confirm the treatment of those projects.
Although gross square footage is determined at the start of each fiscal year, adjustments to the allocation may be needed throughout that year. Changes to the allocation will be coordinated by the assistant vice president for Budgeting, Financial Planning and Analysis.
Allocation of utility costs will be made monthly in general. The transfers for debt service and initial major repair and rehabilitation are typically spread out evenly over 12 months.
On a monthly basis, designated General Accounting Office (GAO) staff will extract reports from the financial system of actual purchased and Texas State utility expenditures and apply the percentages based on the gross square footage figures. Staff will also verify if any month-end processing adjustments from the prior period exist. These adjusted amounts will be included in current month’s allocation.
The coordinator of Facilities Inventory maintains the official university inventory of buildings. The coordinator will provide the gross and assignable square footage figures to the OBFPA on February 1 for budget development for the following fiscal year and inform the OBFPA when significant square footage changes occur.
The assistant vice president for Budgeting, Financial Planning and Analysis determines the overall budget for distributed utilities and utilities services after consulting with the director of Utilities Operations, the associate vice president for Facilities, and the vice president for Finance and Support Services. Factors include:
changes in the costs (usage and rates) of purchased utilities (including waste disposal);
changes in salaries and benefits;
changes in scheduled debt service;
changes in planned repairs, renewals, and replacements; and
changes in staffing.
The OBFPA maintains a model featuring the square footage of buildings served by the university’s Utilities Service Center and uses the model to allocate the budget for paying for distributed utilities to different users.
The OBFPA maintains another model featuring the square footage of all university buildings (except those on the Round Rock Campus) and uses the model to allocate the budget for paying for utilities services to different users.
The OBFPA also estimates and budgets for purchased utilities for different users.
The OBFPA provides the GAO with the square footage models for the new fiscal year and after any subsequent changes.
The Utilities analyst (Facilities) reviews and approves utilities charges prior to payment and notifies the GAO of any outstanding issues, such as delays in payment processing, which might affect the utility allocation.
The GAO processes the distributed utilities and utilities services allocations to different users on a monthly basis. The GAO also pays metered charges for purchased utilities for different users.
At or near fiscal year end, the assistant vice president for Budgeting, Financial Planning and Analysis may transfer budget surpluses in other Utilities Service Center accounts to Utilities’ Major Renewal & Replacement Reserve 7000121000/1040000031.
At fiscal year end, the GAO will book the final allocation of the Utilities Service Center’s cost so that the utilities service center’s year-end available reserves equal zero.
REVIEWERS OF THIS PPS
Reviewers of this PPS include the following:
Position Date Assistant Vice President for Budgeting, Financial Planning and Analysis May 1 E4Y Director of General Accounting Office May 1 E4Y Director of Utilities Operations May 1 E4Y
This PPS has been approved by the following individuals in their official capacities and represents Texas State Finance and Support Services policy and procedure from the date of this document until superseded.
Assistant Vice President for Budgeting, Financial Planning and Analysis; senior reviewer of this PPS
Vice President for Finance and Support Services