Associated Students is forecasting a tighter budget with the opening of the Aztec Student Union because of lower-than-expected enrollment numbers.
Operations of the Aztec Student Union are funded by a $94 fee increase, which took effect this semester. However, A.S. overestimated student enrollment numbers in preparing its budget.
“When we did the projections before we built the union we thought we were going to be at about 35,000 students right now and we’re at (approximately 30,000),” A.S. Executive Director Christina Brown told the Board of Directors at its Sept. 9 meeting.
Brown said favorable terms on the student union bond will aid in balancing the budget. A.S. secured a more manageable bond by putting funds from a 2006 referendum for a $56 fee increase to renovate the Aztec Center toward construction of the new student union.
“The $56 that’s been collected for many years now since the first referendum—that was all saved and then the cash was put toward the project,” Brown said. “So A.S. contributed a little over $12 million in cash to build the building from those fees that were accumulated.”
A subsequent 2010 referendum increased fees by an additional $94 and authorized the construction of a completely new student union when it was found that renovating the old student union would not be the preferred solution because of increased bond rates following the economic turndown, according to the Aztec Student Union website.
Brown said A.S. must pay the $8 million a year in the bonds it currently holds, regardless of student enrollment, including $6 million a year for the student union bond and $2 million a year in bonds on Aztec Recreation Center and Viejas Arena.
That $8 million comes off the top of revenue generated by the $237 Student Body Center Fee, the remainder of which goes toward operations of A.S. facilities, including the student union, ARC, Viejas Arena, Aztec Aquaplex, Mission Bay Aquatic Center and the Children’s Center.
“I think we’ll still be OK, and we’ll just see how it goes in the next few years, but it’s going to be—it’s going to be a little tight,” Brown told the board.
A.S. has reserve funds that can be used to subsidize its operations in the event that it starts to operate at a loss. Current reserve funds are $10.3 million, A.S. Vice President of Financial Affairs Mariah Kelly said.
“Right now enrollment has been flat, and we didn’t expect that,” Kelly said. “But, just say for example, enrollment goes down, our budget would go down, but we would need to operate everything at its highest potential, the same way … and that’s why it’s important that we have reserves.”
Kelly explained that reserves have specific uses, but not all reserves can be used for any given project.
