New fee: it’s complicated

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In an effort to close a multimillion-dollar shortfall in the university’s budget, the McGill administration has introduced a small charge on all revenues received by the university’s self-funding units.

These units, which include Students Services, Athletics, Food & Dining Services, and the residence system, operate semi-autonomously from the rest of the university, at least in a financial sense. Student Services, for example, receives funding from a combination of student fees, sales to students, and other smaller sources.

The new charge, known as the Overhead Recovery Fee, redirects 1.5 per cent of revenues generated by these units to McGill’s central administration. Every time students buy beer at Redmen hockey games, for instance, or condoms at the Shag Shop, 1.5 per cent of the profits from those purchases are funnelled toward the McGill administration.

According to Deputy Provost (Student Life and Learning) Morton Mendelson, the income generated by the new fee goes toward paying for services provided to the self-funding units by the central administration. Units such as Student Services, he argues, make use of the university’s human resources staff, the accounting department, the McGill website, and other assets. The new fee helps to pay for those operations.

“There is work that is done for those units, and that is part of the cost of business of those units, but up until now the units haven’t been contributing to that cost,” Mendelson said.

Because the administration has exempted students fees – which make up the majority of the revenue of Student Services – from the charge as part of a phasing-in period, the Overhead Recovery Fee is only projected to bring in about $15,000 from Student Services this fiscal year.

Student Services, said Jana Luker, the unit’s executive director, hasn’t been negatively affected by the new fee.

“We haven’t reduced any services,” she said. “We’ve been able to hold our own.”

According to preliminary budget estimates, however, the charge will redirect approximately $183,000 from Student Services to the administration next year when the exemption is removed.

Rebecca Dooley, the Students’ Society’s vice-president university affairs, said SSMU is currently taking “a cautious line” on the issue.

“We want students to understand where their money’s going,” Dooley said. “And if students think that it’s going directly toward hiring somebody in Mental Health Services, for example, that’s where we want to see it going.”

According to Mendelson, however, this misrepresents the way that the university manages its finances. If Mental Health Services hires a new counsellor, he said, students expect their money to go towards paying that counsellor’s salary, benefits, and perhaps the cost of the building she works in. But the central administration must also pay for the cost of hiring the counsellor and issuing her a paycheque each week, which students often fail to realize.

“It’s all part of the cost of having the extra person in the position,” he said.

Still, SSMU President Ivan Neilson shares Dooley’s scepticism about the fairness of the Overhead Recovery Fee.

“The position of the Students’ Society [is] that these departments are providing fundamental services to the university and to the students and should not be charged, similar to any other department at McGill,” he said.

Though there is a possibility that the fee could go up in the future, Luker said that is probably an unlikely scenario.

“I can’t imagine that happening,” she said. “It’s not in anybody’s best interest.”