That the MSU’s finances ended up in the black this year has got to be a relief.
The students union is only a few years removed from deep operating losses. The 2007-08 and 2008-09 financial statements combined for what were then record shortfalls of more than $500,000. That included a campus bar – called Quarters before it underwent an approximately $400,000 facelift to become TwelvEighty in 2009 – that lost a total of almost $780,000.
The following year, the deficit skyrocketed to a loss of $958,190, roughly two-thirds of which was the responsibility of a failing student health insurance plan.
But the 2011-12 audited financial statements, which were passed and made public at the Sept. 30 Student Representative Assembly meeting, showed an issue of another kind. The not-for-profit MSU collected close to a million dollars more in student fees than it spent last year.
What is supposed to be a break-even organization wasn’t intended to make near that amount of money. A $150,000 loss in 2010-11 was budgeted to improve to a modest surplus of just over $120,000 in the year that followed.
“If we’re continuously posting profits, that’s an issue. Obviously, the larger they are, the more of an issue it is,” said Jeff Wyngaarden, Vice-President (Finance) of the MSU.
A few things went right. TwelvEighty cut its losses down to roughly $71,000 from $200,000 the year before. Underground Media & Design boosted its profits by more than a hundred thousand dollars. Losses on MSU services decreased in a few departments, and the health and dental plans went from being budgetary burdens to small sources of extra cash.
“In any one given year, breaking even may not be a good thing. Coming off of four years of substantial losses, posting a profit isn’t a major concern,” said Wyngaarden.
But now that a portion of the losses have been recuperated, there are areas of the budget where student fees are, at least for now, unnecessarily high.
CFMU posted a profit of more than $150,000. The campus radio station receives a set levy via the MSU annually, and has consistently spent well below their allotment in recent years.
The plan, according to Wyngaarden, is to increase spending in order to bring expenditures closer to revenues in the CFMU Fund. An expansion of programming and more emphasis on community outreach are in store.
The MSU has also switched providers for its student health insurance plan. The student fee for the plan now exceeds the actual cost by about ten dollars per student. That money will stockpile into a reserve fund for the time being.
Wyngaarden also hopes to work with the SRA’s finance committee to establish a strategic reserve fund, into which future surpluses would go.
“Right now, when we make money, it just gets put in the bank, more or less, and it sits there for a rainy day. What I’d like to do is earmark that money as a strategic reserve, and that’s mostly putting a name to what we already have,” he said.
“We’d have that set aside, and then set a policy-based plan for making profit if we’ve had a loss in previous year or having a loss if we’ve made a profit in previous years.”
The MSU spent a total of over $12.5 million last year on its operations. Almost half of that amount came from fees charged to full-time undergraduate students.