The Associated Students of UCLA could face a strained financial
future or bankruptcy if a fee referendum does not gain approval
from students in the spring elections, according to financial
projections made by the association.
The referendum, named SAFE for its relevance to students,
activities, facilities and employees, would increase the fees
students pay toward the association.
The association’s finance director Rich Delia confirmed
that ASUCLA could be in financial jeopardy if SAFE does not
pass.
“SAFE allows us to be financially viable,” Delia
said.
In a model forecast that shows what ASUCLA’s financial
situation would be like if the association went on with planned
capital expenditures, such as the renovation of the Cooperage and
the construction of the South Campus Student Center, it would go
bankrupt in 2013-2014 without a fee increase.
ASUCLA is the umbrella organization that includes the
undergraduate and graduate student governments, Student Media and
most of the retail and food operations on campus.
Even without the capital projects, the costs of running an
association, including utility costs, maintenance and wages, become
increasingly higher while the association is limited in its
growth.
Also, capital supplies like food service equipment depreciate in
value as they get older, and this is reflected in the
association’s accounting, Delia said.
“We need to generate more sales to cover those additional
costs,” he said. “In outside retail, they can open up
new stores, but we don’t have that ability.”
The forecast predicts that the association will start losing
$17,000 in net income starting in the 2006-2007 school year without
SAFE.
As the maintenance of the association becomes more difficult,
ASUCLA also has to renovate facilities, like the Bombshelter and
the Cooperage, that have gone decades without it.
Construction and renovation projects are necessary or ASUCLA
facilities will start to “fall apart,” Delia said.
“The Bombshelter’s a project we can’t really
afford not to do,” he said.
The referendum, which will first be tested by graduate students
in their elections April 27 to May 3, would allocate additional
funds to construction and renovation projects, student wage
increases and additional funding to the interaction fund and the
waiver pool.
The fee increase would start 2006-2007, making the yearly
association fee $19.50.
The association fee would increase each year by $12 until
2009-2010, when it would be $55.50.
After then, the fee would be adjusted for inflation every three
years starting in the 2012-2013 school year.
The interaction fund is divided among the undergraduate and
graduate student governments, while the waiver pool is available to
student groups registered by the Center for Student
Programming.
If the fee passes, ASUCLA estimates it will still lose about
$366,000 in income next year because of additional funding to the
waiver pool and the interaction fund stipulated by the fee
increase.
According to ASUCLA’s 10-year forecast, the association
will spend over $22 million on construction and renovation projects
as a part of its Food Services Master Plan if SAFE passes.
The association has not planned how it can scale back on
construction projects if SAFE does not get student approval and
could discuss a plan after student elections, said the
association’s interim executive director, Bob Williams.
“I’m highly confident that the students on campus
will (pass SAFE),” Williams said.
If SAFE is passed, the fees it generates are expected to make up
a larger portion of the association’s gross income.
Currently, the student association fee is $7.50 a year for each
student, totalling to about $300,000, which makes up less than 1
percent of the association’s total income. In 2009-2010, when
the total association fees would be almost $2 million annually,
student fees will make up about 2 percent of the
association’s gross income.
More information about SAFE can be found at
www.safe.asucla.ucla.edu.