Union hopes to improve financial situation

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Take a moment and think about the K-State Student Union. Think of all the times you’ve stopped by Caribou Coffee, Subway or the Cat’s Den for a snack on campus or a meal between evening classes. Now, imagine if those readily available food and drink privileges were taken away. Imagine pulling a long night in studio and not being able to stop by the Union for an energy drink, power bar or cup of coffee – the image becomes much more bleak.

The Union – a non-profit organization – is in debt and has been for a while. However, to confidently get out of the red, the Union would need to completely operate as a business, said Bernard Pitts, Union assistant vice president. But in doing so, Pitts said all the afternoon and late-night food privileges would be taken away – food would only be offered during peak hours.

“Can you envision a university that has students here in the late afternoon and evening and they don’t have the ability to get food somewhere?” Pitts asked. “It’s not business savvy to have the food court open between 2:00 and 6:00 p.m. and have other [food services] open in the late evenings. The numbers that we serve at those times do not even come close to paying the bill to having that service open … but you gotta understand; we’re not a profit organization. Our mission is to operate and provide service to the university, even if it’s not in our best financial interest.”

Though the Union has not been turning a profit, Pitts said it isn’t fair to use the term “debt” to describe the facility’s financial situation. He said the word connotes that the organization is not financially viable and owes people or organizations substantial amounts of money.

“But this is the real world,” he said. “If we were in the red and we didn’t pay our debts, we’d be closed a long time ago.”

Pitts said the Union generates enough funds through student and community Union purchases to pay its expenses each year – just like a business. However, because the Union is constantly working on renovations and equipment updates and improvements, it has only turned a profit a few times since it opened in 1956.

Pitts said K-State students decided to donate $5 each year to go toward the operation of a Union facility in the early 1940s. Enough was raised in ’56 to open the Union, and since then, its upkeep has been funded almost solely by students.

Jackie Thoman, assistant director of Business Affairs for the Union, said 26-27 percent of semesterly student privilege fees are allocated for the Union, which go toward repairs, replacements and preservation. Only 1 percent of its operating budget comes from the university, and none of it comes from the state. Because of this, Thoman said the Union is not accounted for Consumer Price Index (CPI), which averages a 3 percent inflation rate each year.

Businesses funded by the state receive CPI and, as a result, have a funding increase based on inflation rates.

“You go to the grocery store; you go to the gas station,” Thoman said. “You know how inflation is effecting your pocket book. It’s affecting our pocketbook the same way, but we’re not getting recognition of that in our fee structure. So, consequently, we have to solve that additional [inflation] cost of $60,000-78,000 somehow – either reduce our services, or increase retail pricing to the consumer.”

Pitts said if the Union was able to keep up with CPI through privilege fees, it wouldn’t have a problem. But because both the possibility of decreased Union services and increased student fees are bleak, Pitts said they are trying a new route to help pay for improvements.

Nick Piper, student senate chairman, has worked with both Pitts and Thoman as well as Pat Bosco, associate vice president, the Student Governing Association and numerous others to research the Union’s revenue for the past five years and design a proposal to help its financial situation. What resulted was the “Proposal of The Special Committee to Review the Kansas State Student Union Funding Structure.”

In the proposal, Piper, senior in financial management, said the Union’s biggest financial problem was identified as its food services. He said for the past 11 years, the facility has had a $3.2 million deficit. To adjust this, Piper said the proposal has outlined eight solutions for the Union.

“The biggest step is the creation of a partnership with Housing and Dining,” he said.

This partnership, which was recently established, includes the creation of a student Kat Cash Card – a card students will be able to put money on for Union meals, much like the student I.D., that will give students a 10-percent discount off all food outlets in the facility including those independently owned like Subway and Caribou Coffee. It will also eliminate the seven-cent bank service fee, which is charged to students each time they purchase in the Union with a debit or credit card.

“What it will do is generate more foot traffic,” Piper said. “We hope to bring in more students, help eliminate that bank service fee and allow students more flexibility in the Union with the card.”

Though the details of the Kat Cash Card are still being worked out, Piper said he is optimistic of the financial benefits and the future improvement of the Union’s financial situation as a whole.

“To watch [the card] go from paper to actual reality has been awesome,” he said. “Once one of the solutions happens, then [we hope] three or four others will also be put into place, and we will have a more financially stable Union.”

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