Which of the following is an operating expense in a property management budget?

Security deposit reimbursements are not considered operating expenses; instead, they are liabilities that a property manager must return to tenants at the end of their lease if there are no damages. This transaction does not reflect the ongoing costs of property management and therefore does not qualify as an operating expense.

Debt service refers to the payments made on borrowed funds, including interest and principal repayments for loans taken to purchase or improve a property. While significant, these costs are not classified as operating expenses since they relate to financing rather than the property's operational costs.

Capital expenditures involve significant investments in property improvements or renovations that enhance the value or extend the life of the asset. These are not considered operating expenses as they are not recurring costs incurred through regular property management, but rather one-time costs aimed at long-term value.