In this episode of Roompact’s ResEdChat, Crystal sits down with Dr. T.J. Logan, Executive Director at Brailsford & Dunlavey, to break down the financial side of residence life and housing—demystifying common budget terms, sharing best practices, and exploring how financial transparency can strengthen your team. Whether you’re just starting with budgeting or refining your expertise, this episode will provide valuable insights to boost your confidence!
Guest: T. J. Logan (he/him), Executive Director, Brailsford & Dunlavey
Host: Crystal Lay
Listen to the Podcast:
Watch the Video:
Show Notes:
- T.J. Logan on LinkedIn
- The ACUHO-I Professional Standards
- Campus Housing Management Book Series
- National Housing Training Institute
- Senior Housing Officer Institue
About ResEdChat
Roompact’s ResEdChat podcast is a platform to showcase people doing great work and talk about hot topics in residence life and college student housing. If you have a topic idea for an episode, let us know!
Transcript:
Crystal Lay:
Welcome back to to Roompact’s ResEdChat Podcast, a platform to showcase people doing great work and talk about hot topics in residence life and college student housing. I’m your host, Crystal Lay, and I use the she/her series pronouns. So lately, I’ve been trying to think about topics that are important for housing professionals to know. So I’m thinking about skills. I’m thinking about competencies. What are the things that really help folks be successful in our work?
The topic that came to mind for today is budget. The tricky thing about budget is that it’s not always the most exciting topic. So then I had to figure out who do I know that’s engaging and can make things digestible, particularly with this topic. And so I am very excited because I think I found the person who fit the bill, yes, pun intended, as we talk about budgets today. And so with that, I’ll have our guest start off by introducing themself.
T.J. Logan:
Hi, Crystal. Thanks for having me. My name is T.J. Logan. I currently serve as the executive director for our higher education advisory practices at Brailsford & Dunlavey. But prior to doing that work, I was on your side of the table. I was a campus-based practitioner for over 20 years. Most recently, I was the associate vice president for the residential experience at the Ohio State University.
Yes, I still have to say the, because I’m right here in Columbus, Ohio. I had a similar role at Temple University for a number of years. And before that, I oversaw the housing operation at the University of Florida and Kent State University. And so I’ve been around a little bit in terms of different campuses, and now I get to sit in a chair where I get to help lots of campuses think about things just like this. So super excited to join you.
Crystal Lay:
Thank you for making time. I know you’re busy. You have a wealth of experience, so I’m really excited for what you’re going to share with the folks who are going to be tuning into this. So let’s get into the first question. So in residence life, when I think about budget, there are a lot of terms that are thrown around. So for instance, one term is like fiscal year, then there’s reconciliation, operating budget, auxiliary services. What does that mean? Help me out.
T.J. Logan:
Yeah, I’d love to start at a little bit of a higher level because I do think sometimes terminology gets in our way a little bit, and we spend time going, “Well, what does that mean?” Or maybe we say, “I don’t know what that means, so I’m not going to bother with it. Or maybe it’s probably not my job.” Those terms can change quite a bit depending on what kind of campus you’re on and what type of organization you work in.
If you’re a residence life person that works at a large public institution and you’re part of a comprehensive housing system that happens to be an auxiliary, you may have a very different role relative to your budget than what you might have if you were in a residence life operation that is bifurcated at a small private institution as an example. And so the terminology can move around on us as we work our way through the organization.
I think the ones that are really, really important to just get straight, whether it’s from a terminology perspective or a concept perspective, is what side of the ledger does what I’m doing fall on? Does what I’m doing, is it generating revenue? Is it making money? Or is it an expense line? Is it spending money? So sometimes you’ll hear the term P&L or profit and loss, which is just a general revenue and expense statement.
And that essentially is saying, what side of the ledger is this thing on? Is this earning money or is this spending money? And then within that, there’s all kinds of terminology that you’re going to get into. I would be a little bit afraid to say, “Focus on this term over this term, over this term.”
But I think at a high level, there’s a number of things that everybody who’s leading within a housing operation on at least conceptually understand and then figure out, okay, what does this mean in my context specifically? I will just hammer away on context all day long because everyone works in a different world and it does matter.
Crystal Lay:
So I can’t just scale it down to those…
T.J. Logan:
You can’t. I’m sorry.
Crystal Lay:
I love that because you just demonstrated the complexity of budgeting. When you’re getting into millions of dollars and you’re thinking about student money, university funds, you have to make sure that you understand the gravity of this task of managing finances. So I truly do appreciate you talking about that. So for someone who is new to managing a housing budget, and you just shared the complexity, what are the key areas? Where should they start so they can begin to build a solid understanding?
T.J. Logan:
Yeah, if I were to wake up and it was my first day as a leader within a housing operation, whether that was a residence life leader or a housing operations leader, or maybe I’m the director of the department or an AVP, and I’m asking myself, what do I have to understand to get this all figured out? Because you’re right, at the end of the day, housing operations, whether they’re auxiliary or not, they’re businesses and they’re big businesses in many contexts.
We’re talking about 10, 20, 30, $40 million, sometimes even more. When I was at Ohio State, we’re talking over $200 million in some of the auxiliaries. So if I were in that chair, and I was in that chair once, I think there are just some big concepts I’d want to familiarize myself with on campus. And the way I think about this is if I were interviewing for a job to be the director of housing at an organization, what kinds of questions should I be asking? What should I say, hey, level set me on these things?
And the first thing I think I would focus on would be that P&L, that profit/loss. What are the revenues and expenses in a given year that this housing operation has coming in and has going out? And what are those big categories of expenses? Where are those dollars going? And then I’d break it down a little bit further, the terms OPEX and CapEx might come up for me where I’m looking at what is my operational expense and what is my capital expense?
The operational expense are those things that are on a daily basis. They’re your staffing costs. They’re your programming costs. They’re your utilities. It’s what does it cost us to operate? And then I want to look at what are my capital expenses? What are the things that are getting reinvested into my facilities? Another big topic and category that I think people may not spend enough time on is something called your debt coverage ratio. So what is your debt service?
Meaning have I taken out or has my institution or has my department taken out some debt in order to build a facility, to renovate a facility, to do something? How much do I owe on that debt every year? It’s a loan just like you would take out for a mortgage. And then how does what I owe compare to what I earn on an annual basis? And when you do the math on that, the actual math is your net operating income.
So your total operating income minus all those OPEX, the operating expenses, and you should come up with a number, hopefully it’s a positive number. You come up with that positive number, and then you divide that by the annual debt service. That is a good thing if it comes up above one. A 1.25 or so is considered usually okay. And all it does is tell you internally from a temperature check and it tells your organization and tells others, rating agencies, I operate a business that can responsibly pay for my debt over time.
I’m in a position to be able to do that. And a lot of folks don’t understand that concept and they don’t understand what role debt plays in their daily operating budget. I think people look at these budgets and say, “Well, we have $40 million. That’s a lot of money.” Maybe. How much do you have an operating expense? How much do you have in your capital planning? And then how much debt do you have out there? And is there anything left over? And the answer is probably not a whole lot.
And so I think it’s really, really important to understand some of those big concepts. I also think it’s super important to understand that housing is an ecosystem. People have this weird tendency of looking at one building on campus or one area and saying, “We need to spend more here, or we need to invest more here.” And what I always encourage folks to do is let’s take a look at the whole puzzle as often as we can.
Let’s look at all of our buildings. Let’s look at what those buildings cost to operate. Let’s look at how much deferred maintenance is on those buildings. Let’s look at what the value of those buildings are over time. Let’s look at our occupancy. It is one big puzzle piece. This is a special business. Take a look at the whole puzzle as often as you can and understand how those puzzle pieces go together.
Crystal Lay:
So as you were speaking, I’m thinking about a pie chart, right?
T.J. Logan:
That’s perfect.
Crystal Lay:
The percentage that I’m spending in these areas, and then who do I have to give money to, and that includes maybe the student affairs division. There’s bills that needs to be paid. I think also that pie chart could maybe tell you what you value as a departmental organization, because where the money goes, that speaks to the values piece, I think. And so I just think that’s really fascinating of like what are maybe some visuals people can really think about?
What do we stand for or what are we about? The stewardship piece, right? How are we making sure this money goes to the important things? And I like that you talked about there might not be much left. 40 million in the scheme of things is a lot of money to the average human. But when we’re talking about a large organization, that’s not a ton.
T.J. Logan:
No. And the thing about housing operations, they’re one of the few things on campus that have a physical liability. Buildings are liabilities. They’re these huge, large square footage with utilities tied to them, with maintenance stacking up over time that are going to cost money over the life of the building. And so while they make money, they also cost a lot of money.
It’s not like you’re running a website. You have these physical assets that are liabilities. And that’s a really special responsibility that housing officers have that they have to get their arms wrapped around. I love your visual of that pie chart. That idea of like, where do we spend money and where does it all go? And then the other mention you made that I don’t think everybody clearly has their arms wrapped around all the time is what is my overhead?
You talked about paying the bills. Sometimes money almost always goes centrally to the university, whether you’re an auxiliary or non-auxiliary. It’s going there. And sometimes to the student affairs, sometimes to fund some other positions. All of that is overhead. And oftentimes people forget to put that into the equation of where does my money go on an annual basis.
Crystal Lay:
Thank you. So now I’m thinking about, because we’re talking a little bit more senior level, what about entry level? Because when I walk into my office, T.J., when I turn on the light, that’s a bill.
T.J. Logan:
Sure.
Crystal Lay:
Using the internet, or for our entry level folks, program shopping. So it’s really thinking about we’re all engaging with the budget or spending in some aspect, but are there ways that you can talk about how it might differ at the varying levels of the organization?
T.J. Logan:
Yeah. I think you articulated that really well. What is somebody’s professional role within the organization and what does that mean relative to their relationship with the budget? I tend to think of buckets of people relative to the budget. There are budget leaders, there are budget managers, and then there are budget spenders. And people take very, very different approaches relative to who they are in that.
We’ve all seen budget leaders sit there and try to save as much or reallocate or make sure that they have good oversight of the budget. We’ve seen budget managers sit between that spender and that leader and just making sure that they’re relating the right information. But on the spending side, and that’s the side you’re really talking about, I always ask myself, what are you incentivized to do?
And sometimes budget spenders are incentivized to do two things. One is spend as much as they can to make sure they don’t lose it, or two, advocate for more resource. Those two things. And that’s unfortunate because for me, that represents a real disconnect between budget leadership and budget management and budget spending. And so when you think about how does it vary at different levels, in my ideal world, it doesn’t.
I come from a world where when I was leading housing operations on campus, one of the things I would always do is get in front of the entire staff with that pie chart and say, “Here’s where we spend our money, and here’s what we believe in, and here’s how our practice is relative to how we spend our money connect to that.” And that helped to inform the budget spenders on why the practices are what they are and where the allocation is.
I know that this notion of advocating for more resources is always going to come up. And one of the ways that I like to turn that a little bit is to say, “We don’t want you to do more with less. We don’t want you to always be advocating for resource. What we want to do is set up a culture where you’re doing the right amount with the right amount of resource.” And what does that mean? What does it mean to be doing the right amount with the right amount of resource?
Unless we’re transparent, unless we connect those dots, then people are going to be incentivized to do those things I talked about in the beginning of this conversation, which is I’m either going to spend all my money so I don’t lose it, or I’m going to continue to fight for more and more and more and more. And if everyone does that, the math just will not math anymore. We’ve got to figure out ways to connect those dots.
Crystal Lay:
You started getting into this idea of some misconceptions about budget. How do you overcome those? And I think one of the things you just mentioned, T.J., was the training or getting in front of folks and really helping them understand where the money goes. I worked in one organization where we would have a chair and we would say, “This is Steward.” An empty chair. Be a good steward of our resources, whether that’s time, money, et cetera. But what are some other misconceptions and then maybe some tips that you have on how to overcome those?
T.J. Logan:
Yeah. Well, I think the first one is that idea that these auxiliaries, though they do make a lot of money relative to maybe who we are as individuals, there’s not a lot of money in the net. There’s just not. In fact, there’s lots of buildings that are racking up deferred maintenance. There’s lots of housing operations, particularly in the wake of COVID that are struggling a little bit financially to figure it out and are just now getting back on their feet.
Again, I think transparency is really, really important. Because if I’m a frontline housekeeping or custodial staff member, I’m a hall director and I hear that we… Or I do the quick math. I know what my room rates are and I know how many beds we have. And I go, “Wow, we make $40 million a year. Surely there’s enough money to do X, Y, or Z.” When you work in a world where that transparency is there, that misconception can exist.
And so I think that’s one of the biggest ones is that there’s lots and lots of money to go around. I think campuses feel that way too. I think campuses often look at housing as the “piggy bank” or the cash cow. And that’s a misconception at the campus level, not just at some of that frontline staff level. I think that other one is I’ll go back to this notion that everybody should be advocating for more resource.
One of the things I like to say and share with folks is every dollar that is spent in area A is a dollar that can’t be spent in area B, C, or D. And so that doesn’t mean it shouldn’t be spent in A, but I would love the folks who are overseeing A to at least know that every dollar I spend in A doesn’t get spent in B, C, or D. And what are the implications for the things that we value in terms of serving students?
So if I’m putting all my eggs in this basket and I can’t do this very well, or this very well, or this very well, as an example, I need more money in residence life and I’m going to do it at the cost of maintaining our facilities, that could be a real problem. Because even if you have the greatest programs on earth, if the plumbing doesn’t work in the building, it doesn’t matter.
So we’ve got to think like a big three-legged stool and recognize that all those pieces and parts are important and they work together, and so have line of sight in those other things. I don’t think that everybody should always be advocating for more resource. They should be trying to do the right amount with the right amount as much as possible. The other misconception I think we already talked about is this notion of overhead.
What is it and what is it not? I talk to universities, lots of them every day, and if I ask a hundred universities this week what they pay in overhead, they will all give me different ways that they get to that number. For some people, it is a straightforward percentage of revenue annually. For some people, it’s a percentage of expenses after cost of goods sold. For some people, it’s a flat amount year over year over year.
For some people, it’s caught up in positions. There’s all different ways that overhead happens. And I think that’s the new frontier for us as an industry is we’ve got to get better at coming to some common definitions of how we manage our operations so that we have a good basis of comparison and a good basis of understanding of what’s a good business and what’s not a good business, and how do we start to move the needle a little bit.
Crystal Lay:
Yes. You made me think of at a former campus when I got into the budget, so it was a $10 million budget, and I thought at the time, this is a lot of money. And then you start digging through like, oh, we pay 2 million for the campus bus, and then, oh, we don’t just pay salary, we also pay benefits.
T.J. Logan:
Yeah, everybody’s 1.3 times, right? Not just 1X. Yes.
Crystal Lay:
So I like this transparency piece of what are all the pieces that come up. So you talked about the transparency piece several times. What does that look like when you’re talking to residents or students or maybe student staff when they do say, “Well, you make all this money, or I pay all this room and board. I need XYZ.”
I know some opportunities are working with RHA and working with other platforms you might have on your particular institution to talk about how we spend money. But are there ways that you have seen that have worked to foster trust between students and student staff levels?
T.J. Logan:
Yeah. I mean, the first is that example that I shared with you with the pie chart. I’m a huge advocate of first informing the staff that work within the housing operation of how many dollars are earned and then how do those dollars get spent. What’s the revenue side look like and what’s the expenditure side look like for the housing operation? What of those costs are fixed and which of those are variable?
And just that really, really simple overview helps people understand, oh, this is how we… I always say, if you want to know what people care about, look at how they spend their money. And that goes for us as individuals. Some people want to travel. Some people like their cars. If you want to know what people care about, look at how they spend their resource.
And we haven’t done a good job as an industry of creating that layer of transparency, even within our own staff. Now, let’s get into the student piece and the parent piece and pieces like that. In some of the best housing operations in the country, and usually these are going to be the auxiliaries at public institutions because there’s just different culture around that relative to transparency, what I’ve seen is having some advisory committee at the table.
When I worked at the University of Florida, RHA was a component of our budget development process. So each year, RHA and representation would sit in meetings with us. We would say, “This is how our budget looks. This is what that P&L statement looks. This is how we earn money, this is how we spend money. Nothing hidden. If you have something to hide, you’re probably not doing something right.
So this is where those dollars come from and this is where those dollars go. And this is the rate structure we need next year in order for this math to math its way out and for us to continue to do the things that we think are important. What do you think about that?” And when you do that, not only do you gain valuable insight and input and trust from those individuals, but they become your champions.
They become the people that are sitting at the RHA leadership meeting or sitting with students who are saying, “I can’t believe you’re going to increase your rates by 3%.” And they’re saying, “Yeah, but hold on. Do you realize that if they don’t, they can’t do this renovation of X Hall, or they can’t have dedicated housekeepers for each of our floors.” There’s all these things that can’t happen.
And we sat in this meeting and we just didn’t think those things were worth cutting for what equates to an extra five or $10 a semester per room? We felt like that was worth it relative to the value proposition. So I think that what you’re saying makes a lot of sense. I think getting in front of staff is critically important. I think having a transparent process relative to students. And then the extension of parents is being able to say that the things that you do make a lot of sense because that process that you underwent to get the budget out in front of things.
Being able to say to a parent, “Yes, we’re increasing our rates by 3%. Let me tell you about our budget process and how we got there. This isn’t me sitting in my basement making up a number. This is me sitting in a collaborative space with students, with faculty, with staff, with others to say, ‘This is the rate change that we are pursuing. This is how it impacts the cost of attendance, and this is the value that it brings with you. And we collectively as a community believe it makes the most sense to do that.'”
But you got to make sure you know your story. You got to make sure you can then tell your story in order for all that to work its way out. I don’t think people invest enough time in that. I really don’t.
Crystal Lay:
Yes. And I love how you keep talking about staff and students as key stakeholders. And so really thinking about what are the implications of the folks we invite to the table and those we don’t as we’re talking about things that do impact them. And so I really appreciate the advocacy for having those folks be engaged where it makes sense for the organization.
And then you talked about telling your story, because that’s often how we do get to advocate and help people understand who we are and what we do, like sitting down and taking the time to build out your story. I talk to my staff about your elevator speech, like how do you talk about what we do and who we are so we can advocate for what we need, whether it be budget or other items to support the student experience. Okay, so I want to talk about challenges, T.J.
T.J. Logan:
Sure. There’s lots of them.
Crystal Lay:
So managing budgets, I remember when I was a director at a different campus during COVID and we had to go through an exercise of cutting the budget by 10, 20 and 30% while not sacrificing the student experience. That was a challenge, and to tell folks whether or not they were going to be furloughed.
Hopefully that is not a thing that we have to do often, whether that be furloughing folks, et cetera. It just really depends on state and then national things that are happening. But what are some other challenges that you think professionals face? And then how do you navigate those obstacles that come up?
T.J. Logan:
The first thing I’ll say is I hate that exercise of 10, 20, 30%.
Crystal Lay:
Me too.
T.J. Logan:
But here’s why I say that, because it often comes from a place where the institution has a financial struggle, which is not uncommon relative to the landscape that we’re working in. And the response to that financial struggle is to say, “You know what? We need 10% or we need 20%. And so across the board, we’re going to put the edict out to cut by 20%.” What I hate about that premise is it assumes all things add equal value.
That a dollar in this area is worth the same as a dollar in this area. And that’s just not true, right? And so what I would rather see folks do is say, “Here’s the thing that we aspire to be as a university. Here are the things that we aspire to achieve relative to our students’ experience on campus. Can you come to us and tell us what that looks like financially to fulfill that to the best of your ability?” And what that’s called, there’s an actual process for that, it’s called zero-based budgeting.
Crystal Lay:
Yes.
T.J. Logan:
And zero-based budgeting is something that I would highly recommend that a housing operation and really lots of operations, including the full auxiliaries or student affairs or lots of others, actually go through every once in a while. You don’t do that every year, but every once in a while, that zero-based budgeting exercise gives you a little bit of what I would call a palate cleanser where you’re not… So every year, what do we do right now?
We say, “What did I spend last year and how much more do I need? What percentage more? I want to do a percentage increase,” whatever it is. And so it assumes everything that you’ve done up to this point makes a whole lot of sense and is super well aligned with where your institution is going. Zero-based budgeting says, let’s start with nothing and ask ourselves what would it take to fund the thing that we’re trying to accomplish?
And for some areas that might mean more money, and for other areas that might mean less money, and for other areas that might mean no money. And I know that that’s a scary proposition, but I think if we do a better job of being transparent and connecting the dots, that there’s an opportunity to do that. I always used to say on campus, I think everyone comes to work wanting to and believing they’re doing a good job of moving us forward. I think everybody has that intention.
If for some reason we’re spending money in an area that doesn’t return the value that it should be returning or it could return a relatively higher value, you know whose fault that is? That’s my fault because I haven’t informed people on what’s important to be focused on. And so if somebody has one sliver that they’re just really exceptional at and they spend a lot of money doing it, and I haven’t said, “Well, I know we’re exceptional at that, but that’s not the thing we’re trying to do as an institution,” that’s on me.
And that’s about transparency and it’s about leadership. That’s where budget leadership comes in versus the spenders. So I go back to your original question, it’s like what are the challenges? I think it’s a lack of understanding and a lack of transparency. And more than that, maybe a misalignment with institutional goals. We have this weird, weird habit of separating our budgeting practices from our strategic and our goal alignment practices.
We don’t start with, here’s who we aspire to be. Now, how do we make the money work to do that? Instead, we start with, how much money do we need? And let’s just do cuts across the board. So that’s the problem. So I’m gainfully employed because of this, that campuses have a hard… When I come work on a campus, oftentimes it’s because within the context of the campus, leaders aren’t necessarily communicating with each other.
Higher education is hierarchical. It is often siloed. And what that leads to is a place where people don’t communicate on a level playing field about what are we trying to accomplish as an institution and how do we align our resources to do that? Instead, everybody’s incentivized to try to advocate and keep as much as they can.
Crystal Lay:
I like this idea of who are we? Again, who are we about? What are we trying to achieve? How does that align with institutional goals? If you’re a part of a system, system goals? And then what have we promised to our students? What do we stand for? So I do have a question. So you mentioned zero-based budgeting.
T.J. Logan:
Yeah.
Crystal Lay:
Are there other budget models?
T.J. Logan:
There are. So you might see a budget model where RCM is really, really popular on many college campuses, resource centered management, and it’s a little bit of a misleading title. It took off really in the late ’90s and early 2000s where they started to look around the institution and say, “What entities make money? What entities don’t make money?” And we should start to consider programs essentially as a tub on their own bottom. They’ve got to be able to build a budget that sustains itself.
And so we can’t have an organization or operation functioning at a deficit that’s being subsidized by another operation. In reality that very infrequently actually plays out that way. But we certainly got a lot of RCM models out there. A lot of folks will set up cost centers. So in the context of a housing budget, you might see that each residential facility is situated as a cost center against one big revenue source as an example.
And that helps you understand which of my buildings perform well financially, which my buildings don’t perform well financially. That’s another example of what folks do. But most people, the overwhelming majority, do a pretty traditional carryover model. They’re going to look and say, “Where did I spend money last year? How much of that do I need this year? If I have to make a cut, in your example, what are the areas I can cut in? Meaning what’s fixed and what’s variable?”
I can’t cut utilities. I can cut staff. Actually, huge portions of university budgets are made up of staff. And so that’s often the first place people look. I can cut my programming budget a little bit, but I can’t cut my debt service. I’ve got to pay my bills. So you got to look at like, where do I have variability that I can actually cut? There aren’t that many categories, believe it or not.
And so that’s why we get into these places where it becomes about staff cuts and program cuts. And again, I think it’s a little bit unfortunate because it doesn’t consider the whole puzzle and where everything’s going and an alignment of making sure that you’re spending your dollars on the things you value.
Crystal Lay:
So I like how you explain the different models, and it almost sounds like you have to think about what are the long-term planning, budgetary decisions, but then also short-term. Are there other pieces you want to offer up when you think about budget decisions that impact the long-term planning? Because you talked about debt service and aging facilities, just things you need to be mindful of. But how do you decide what’s a long-term budgetary decision versus a short-term?
T.J. Logan:
That’s hard, right? I will admittedly say I’m a long-term guy, and I always have been. I’m somebody who wants to look at the long-term sustainable future of a program and make sure that the decisions and the actions that are taking place under my leadership are helping to advance that long-term thing. I’ve always said, if I do my job right, nobody’s going to remember I did it right because we set the thing up for success.
The people you remember are somebody who does something really fast or somebody that does something wrong. I really don’t want to be in either of those, but I want to do something that is sustainable and that is good, and that leaves a legacy that folks can be a part of. So that said, it is difficult. Because as I said earlier, every dollar you spend in one category is a dollar that you’re not spending in another category.
And placing value on where you spend dollars is really, really hard. Zero-based budgeting helps on that, by the way. Zero-based budgeting, if you go through that exercise. Actually right now we’re working with an institution on that right now where they’ve said, “Help us understand how we map our dollars to our values and our goals and help us rebuild our budget from scratch knowing that we’ve got some financial challenges in front of us.”
That’s been a lot of fun because it’s helped to have… It’s really a leadership conversation that happens to have a math problem behind it. It’s not a math problem, it’s a leadership conversation. The other challenging part of that long-term/short-term comes in with facilities. So every time that you do a project today, you’re putting your flag in the ground and saying, “I’m going to invest in this building, and I’ve got to invest in a way that makes sure that I’m maximizing the value of that dollar.”
So a good example of a facility project like that is we can afford to do the floors in this building. We’re going to change them over from an old asbestos tile, and we’re going to put in here an LVT that we can just do a quick mop on. It’s going to save us time and energy. We’re upgrading the look, the whole nine. But what we really need to do is the whole HVAC.
So then the question becomes, if I pull all this flooring out and I put new flooring in or I put flooring over top, will I have to redo that when I do the HVAC that I can’t afford to do today? And so now I’m stuck because what is the value of that dollar today versus undoing it maybe in a couple of years or redoing it in a couple of years at least in those sections? That stuff comes up all the time.
The opposite side of that coin is that every project you don’t do today is going to cost you more tomorrow. A dollar is worth more today than it’s ever going to be again because project costs are going to go up. And so that’s another thing that we find ourselves in from a budgetary perspective. We’ve got to have some intellectual honesty. I remember I worked on a campus where we were doing our first major residence hall renovation ever in the history of the campus.
Crystal Lay:
Oh, wow!
T.J. Logan:
It was a commuter campus that had become residential. I came in to lead some of the housing aspects as well as some other things. And this building needed renovation, and it was going to be expensive. It was going to be several tens of millions of dollars to do this renovation. And leadership said, “The board has never seen a price tag like this, so we would like to break it up into multiple years.” And I said, “That’s okay.”
I said, “But what you’re saying is because we’re afraid of showing the board the truth, we’re actually going to cost ourselves more because I’m going to show you the math. This is going to cost us nearly double to do over a three year period based on the way you’re stretching this out.” And so we have to have a pretty courageous conversation here about what is our fiduciary responsibility to our institution and to our students.
And I think it’s to get in front of the board and be truthful and say, “Hey, I know you’ve never seen a number like this. Let me help you understand why I think this number makes sense and whose advice I have sought out to make it make sense. If we don’t want to do this, we don’t have to, but my job is to make sure you fully understand the repercussions instead of hiding them from you in an effort to make sure I don’t shock you.” Those are the long-term/short-term kind of conversations that I think people need to be having every single day around budgets.
Crystal Lay:
I agree with you. I also think that sometimes those quick fixes are needed to appease students. Years ago, I was at a smaller campus where every bed counted. I’m talking under 200 beds. And you’re doing these occupancy reports, and you have to do everything possible to make sure that you’re really showing the students that you value their dollar. And so I went into this one community. When I first arrived, there were holes in the floor.
There was no decoration, no cable, no internet. And so I actually took the CFO, I walked this human through the building. It’s like, “I just need you to be in the space.” I was at a big box store buying rugs and buying paintings to just… I called it put in lipstick on a pig and trying to make it work. So I think know sometimes if you’re at a smaller campus or you have a limited budget and your heart goes out to these students, it’s like, what do students deserve?
I have not come across that often, but I just offer that up as sometimes you have to do some things to make sure that students feel like it’s home while you plan out and chart for how do we make these improvements because this is not acceptable, right?
T.J. Logan:
Well, and you’ve just touched on what I think is a really, really important piece of the puzzle that maybe folks have a hard time with, particularly you talked about the CFO. My colleagues who are CFOs are really great at the math and really great at looking at the value of the dollar and the value proposition and the net operating and all that other fun stuff. But you just touched on the value of the student experience. And there is real value to be assigned to that relative to…
I actually just had a conversation with a campus last week. It was about facility standards, very, very similar conversation, where we said, “What does it cost to lose a student? Because the dollars we’re talking about relative to some of these standards play out in that way. And let me show you the number,” and we were talking about the numbers there. And so what you’ve touched on is something really, really important.
I think as you think about the ways that we lead, housing professionals understand their profession in ways that non-housing professionals just don’t, but we’re not always great at telling the story. And so you’ve just touched on a way where you can say, “Look, I know it doesn’t make sense for us to invest a million dollars into this building that’s going to come down in two years. Let me tell you why it does,” and start to hit on the value of the student experience.
Not just the value of the good reputation, because I think we are a little too risk-averse on that side, but more so on the what is the lived experience of the student and what will it mean if we lose 10% of these folks or 20% of these folks? That’s an important point.
Crystal Lay:
Thank you. Thank you. Yes, the student experience. And again, it’s telling your story so people understand and get it why it’s important. So now I want to think about, if you could maybe cliff notes, T.J. notes. Why is it important for professionals or these budget leaders to create a culture of fiscal responsibility and financial literacy within teams?
T.J. Logan:
I think it’s foundational and fundamental. And part of it is just my own personal experience and personal dream. Somebody at some point invested in me. Somebody said, “You should get exposure to this thing, or I’m willing to give you exposure to this thing,” and it made me a better professional.
And so part of it is we have a responsibility to those folks who work in our organizations to give them access to this so that they can be the leaders that the field deserves in that next generation. So that’s part one. I know that’s a little mushy, but it is very real to me, right?
Crystal Lay:
Yes.
T.J. Logan:
The other is, again, connecting those dots, I believe fervently that people will always do what they are incentivized to do. That’s just a foundational psychological principle for human beings. And if I follow that premise, I believe that if we put people in the bucket of spenders and say, “You stay in your bucket. I’m not going to give you line of sight into how we make money or where money goes or debt service or our strategic plan or our facilities plan, because that’s not your job.”
We always will say, “You do your job. Don’t worry about this thing.” We are limiting their ability to make good decisions on our behalf. I’ve seen countless residence life folks say, “Well, if I don’t spend this, I’m going to lose it next year.” And so they make the decision to spend not because they need to spend, but because they feel as though if they don’t spend, they are not going to be able to do as well in their job, which is what they’re incentivized to do in that next year.
Imagine a world where that’s turned on its head and that residence life professional can come forward and say, “Hey, I haven’t spent X amount of dollars this year. I really think it’s important to return that back into the facilities because we’re struggling with some of our master planning work. That doesn’t mean I don’t need it next year, here’s my plan for next year, but I think this is the right way for our operation to go.” That is a totally different conversation.
And it can only happen in a world where we have given people a place to be engaged in the culture of fiscal responsibility and financial literacy. If we keep everybody in their little bucket, we keep them in their corner, we keep them in their silo, we will incentivize people to make decisions that don’t align with the outcomes that we want to achieve as an organization.
Crystal Lay:
I feel so inspired, like I want to pull out my wallet.
T.J. Logan:
I don’t want your money.
Crystal Lay:
Okay. So we’re coming to the end of our time.
T.J. Logan:
Okay.
Crystal Lay:
You have shared some amazing things. And I’m just wondering if folks want to learn more or add to their toolkit, where do you think they should start? Do you have any resources that you recommend?
T.J. Logan:
Yeah, I think there’s a bunch of things. So first of all, I’m a staunch ACUHO-I guy. I believe in the association. I believe in the resources the association has available to professionals. If I was a housing professional at any level, I think you should have access to a copy of the Campus Housing Management book series, which has a chapter in there about budgeting, of course. It’s got chapters on public-private partnership. It’s got chapters on auxiliaries, those types of things.
I think that is a really critical resource for anybody. Now, it’s a little old now. It is still super relevant. I promise you. So that would be one place. The other place would be probably the ACUHO-I Competencies, which will just give you some guideposts on what do I need to be figuring out and learning? Maybe what are some good questions I ought to be asking?
What are the events that ACUHO-I holds that would be super helpful for me, whether that be a certification program? If you’re at a level where the Senior Housing Officer Institute makes sense for you, go to that. If you’re at a level where NHTI makes sense to you, go to that. Go to these events where part of the curriculum is about seeing the big ecosystem, seeing the big puzzle, and become a better professional.
That’s all on the national scale. I think there’s a ton that can happen on the local scale. As I said earlier, somebody invested in me once upon a time, and I would have not gotten anywhere within my career without the investment of those people. You would be shocked at how many people are willing to talk about what they do if you ask. And so my best advice to anybody, regardless of your level, is if you feel like you have a deficiency, if I want to learn about…
And I actually did it. When I was a young professional, I wanted to know more about facilities because I was in the operations side. I knew occupancy management, those pieces. I understood budget. I had my MBA, but I didn’t know about facilities. And so I went to our director of facilities and I said, “Hey, Mark, I know I’m probably going to be annoying to you or whatever it is, but I would love to just sit in your staff meeting and listen, or I’d love if I can just pick your brain once a week.”
And he put me on what was called an owner-architect-contractor meeting, an OAC meeting, for a new building delivery. And I just sat there and I learned how the university ownership acts as the owner of the asset and what kind of questions get asked, and what the standards are, and what a commissioning agent is, and all those things. And it was invaluable for me as I moved my way.
So my advice is go talk. If you’re not the director, go talk to the director and say, “Hey, I want to learn these things. And I’m seeking to either sit with you or to sit maybe with somebody else in the division or to sit with our business officer and just ask questions.” And you’ll be shocked at what people are willing to show you if you just ask. And then the last one is call me. And I’m not kidding about that.
I talk to people all the time that say, “Hey, I want to learn more about this. I’m going to go interview for this job, or I’m applying for this job. And what should I be thinking about? What questions should I be asking?” Connect with me on LinkedIn. Send me a message. Because people invested in me, I have the ultimate responsibility to invest in others as well. And so if I can ever be helpful to any of your listeners or anyone else, I’m happy to do that as well.
Crystal Lay:
T.J., thank you for offering those. I’m going to add those to the show notes so that way folks have access to them. And I just think you’re brilliant. I am so happy that you were able to share this information. I learned a ton. I know folks who view this or listen to this will also learn a lot. This was just a ton of great information. So thank you for joining me today.
T.J. Logan:
I was very happy to be here. Thank you for having me. A reminder to everybody, you can do anything, you can’t do everything. Figure out what your things are and focus on them.
Crystal Lay:
Yes. Look at this wisdom. We can just end there. And everyone, thank you so much for joining us on this episode of ResEdChat. If you have an idea of a topic or a person that you would like us to have on the show, please let us know by reaching out to Roompact. Take care.
