The Associated Students UCLA Board of Directors approved its 2015-2016 financial year budget and a five–year forecast, which includes an allocation of $3 million to renovate the first floor and A–level of Ackerman Union.
ASUCLA is a multimillion dollar organization responsible for managing the student union and the undergraduate and graduate student governments. The board has set aside about $10 million to renovate campus facilities despite their continued losses and expected difficulties in generating revenue.
Although the association allocated $3 million for the next two financial years to fund renovations in Ackerman, no specific plans have been approved so far.
Carly Calbreath, the undergraduate representative for the ASUCLA Board of Directors, said no concrete plans have been approved. She said she thinks the approval process will be done in the next year or year and a half.
Calbreath added the board is looking to upgrade dining areas on the first floor and restructure the A-level of Ackerman Union, which includes the textbook store and study spaces. She said she thinks the idea of creating a new staircase linking the first floor and the A-level will not likely be approved.
Whitestone Research, an independent business which specializes in cost benchmarking facilities, recommended the board spend about $5 million over the next five years on upgrading facilities in order to be above the industry standard for maintenance, according to the five-year forecast.
“Our long-term formula is going to be somewhat risky, but we have to show a commitment to maintaining our facilities,” said Bob Williams, ASUCLA’s executive director “We have to recognize that a lot of our space, the 320,000 square feet we maintain, hasn’t been upgraded.”
Williams said the estimated income for the 2014-2015 financial year is a net loss of $639,000. However, he said the loss is not as severe as the initial projected loss of $1,213,000.
Williams attributed the losses to the general performance of the economy, increasing competition from online retailers, the decline in textbook sales and the decline of traffic on the A-level in recent years.
In the future, these problems will continue to limit the association’s growth, Williams said. However, one of the most significant challenges the association will have to overcome is the minimum wage increase, Williams added.
The hourly minimum wage in California will increase $1 every year for the next five years, beginning January 1, 2016. By 2020, the hourly minimum wage will be $15. The association estimates having to fund an additional $380,000 to compensate for the one-dollar increase in minimum wage next January, according to the five-year forecast.
Despite the risk in furthering their losses, several members of the ASUCLA Board of Directors said they think the upgrades will be successful and provide long-term returns.
Calbreath said the ASUCLA Space Initiative Ad-hoc Committee, which manages the layout of campus facilities, supports a redesign of Ackerman Union because it thinks more students will use the facilities.
In the future, the association estimates a continued net loss in its profits. Each year from 2015 to 2020 is estimated to have a net loss averaging $1,050,000, according to the five-year forecast.
“If future losses are not as severe as our projections, the association will come out in good shape,” Williams said.
Contributing reports by Rupan Bharanidaran, Bruin reporter.