Board considers new business model

By Rachel Makabi
DAILY BRUIN SENIOR STAFF
[email protected]

Student services may be enhanced at a high cost to students if
the Associated Students of UCLA decides to change the way it does
business.

A looming fiscal crisis is leading some ASUCLA board members to
ask whether the association should abandon or alter its traditional
structure in which businesses ““ like those housed in Ackerman
Union ““ support student services. Members are considering
reverting to a model used by other associations that rely more on
student fees.

The association currently charges $51 ““ a fee that will go
down to $7.50 next year ““ which is far less than the hundreds
of dollars charged at other campuses.

As ASUCLA board members figure out how to maintain the
association, and reorganization arises as an option, the definition
of a student service will be a linchpin in the process.

Fundamentally, students may have to decide between Panda bowls
and sporting goods, or pool tables, arcades and college bowls.

Other services, like student media and governments, do not need
to be supported by the business model, said ASUCLA Executive
Director Patricia Eastman.

“The board and the students on the board need to step up
and decide if the model is working and if the university community
is being served the way it was intended to be served,” said
Bob Naples, administrative representative for the board of
directors.

Most student unions operate under a simple, low-risk model of
financing, where fairly high student fees directly support student
services.

At UCLA, the student union operates under a business model where
revenues from companies in the union help support student services
to keep fees low.

Like every investment, it’s a risk. If the business
operates well, money for student services surges. But in hard
economic times, student services suffer alongside the businesses
created to support them.

“My priorities are certainly financial stability, and
also, and in no rank order, improving the student union,”
Eastman said. “I would challenge anyone to come up with any
evidence that that hasn’t been my priority.”

But with increased expenses, including a potential $1 million
cost of hiring non-student ASUCLA workers as permanent employees
with higher wages and benefits, the association is searching for
methods to maintain a positive net income.

“The board should and will look at student union
fees,” said undergraduate BOD representative Reem Salahi.
“Before we agree to raise fees, we need to question why
it’s necessary when the business model doesn’t call for
a fee.”

But raising fees may turn out to be a financial necessity.

BOD graduate representative Darrel Menthe said raising fees is
necessary to make the association financially stable. The business
model cannot completely support student services, but the model
helps keep fees lower, he said.

“A small fee may be necessary; there are financial
realities,” Eastman said. “But I am not prepared to say
how much, if at all.”

The ’80s were the last time the association experienced a
steady increase in revenues.

The recession of the early ’90s, the decision to expand
the Ackerman store and the Northridge earthquake shook up the
association’s finances, leaving it in the red for many
years.

ASUCLA’s economic troubles climaxed in 1996, when it had
to take a $2 million emergency loan from the university, under the
condition that it would remain financially stable, or possibly lose
its student majority on the board.

These harsh financial realities cumulated in 1997, when the UC
Regents approved raising the $7.50 Student Union fee to $51 for
five years.

The financial situation was so bad, the fees had to go toward
ASUCLA’s debts instead of going directly to student
services.

To remain financially solvent, ASUCLA underwent several
structural changes, including amending its mission statement, the
way it charged governments and businesses for office space and
contracting out its workers to a temp agency that would give them
lower wages and benefits.

“It created all these stipulations where student services
have been forsaken for the bottom line,” Salahi said.

When ASUCLA opened as a student association in 1919, it held
control over all non-academic aspects of the university, which soon
included food services, the athletic department and parking
services.

But with time, the university took control of parking services
and the athletic department, leaving only food services under the
association’s control.

ASUCLA’s food services are one of the last remnants of the
early association. But since they now affect the entire community,
instead of just students, some question whether financially tying
them to student services is fair and whether the university might
do a better job managing them.

“It is hard to think what the university would be like if
I could just swipe a dorm card in the restaurants,” said
undergraduate BOD member Joe Manko. “One part of me says it
would be better, another part says I really don’t
know.”

Also, while the association promotes having student jobs and
placing students in leadership positions in the restaurants and
union, many of those positions have been left unfilled for several
years.

Salahi said even though she applauds the association’s
commitment to promoting student jobs, the university probably
attracts more students because it gives higher wages and lighter
workloads.

In addition, Naples said the association should promote what
students want, but if students lose confidence in the fact that it
makes sense to provide food and retail on campus, then the board
should look into it.

If the university did take over food services, students would no
longer be able to promote student interest in the decisions made,
Menthe said.

He pointed out several instances within the university where
fees increased without student input, like the $1 increase in
parking fees and the 7.5 percent hike in on-campus housing costs.
With a student majority board, student input isn’t just
inherent in ASUCLA, it’s what the association is based
on.

As discussions continue and board members reevaluate their
business model, one thing remains clear for board members ““
student priorities must remain ASUCLA’s priority.