Revised SSMU budget defers projected 2014 deficit

The Students’ Society of McGill University’s (SSMU) Council has approved a revised 2013-2014 budget that broke even after initial projections forecasted a $90,000 deficit from last fiscal year.

According to the budget presented at Council last Thursday, SSMU currently projects a surplus of $50,000 for fiscal year 2014. The $50,000 surplus will be transfered into the Capital Expenses Reserve Fund (CERF).

The approved budget does not account for capital expenditures—long-term expenses such as software and equipment. According to Vice-President Finance and Operations Tyler Hofmeister, SSMU will be spending more than the $50,000 on capital expenditures this year, which means there is a potential risk of deficit in future years.

SSMU President Katie Larson told the Tribune that SSMU will have to take  measures to address the potential future deficit.

“The rent [of the SSMU Building] is increasing while tenant revenue is decreasing, allowing for more student space, but at a cost,” she said. “This indicates that the SSMU base fee will be raised to reflect the situation, because at its current state it is dire and unsustainable.”

Hofmeister said another option is to change the SSMU investment portfolio into an endowment fund.

“This means that a certain amount [….] will be taken from the investment portfolio each year to help pay for capital expenditures,” he said.

Last year’s projected deficit is largely a result of ongoing negotiations with the McGill administration regarding the SSMU Building lease, which has been under negotiation since Fall 2011.

Other increased building costs include rent for the building and lost revenue from tenants who have terminated their leases, such as Lola Rosa and Voyage Campus. The building budget, which comprises all expenses and revenues generated by the SSMU Building, has a deficit of $437,360.

To account for the incoming projected deficit from last year, the various categories of SSMU’s overall budget, including the personal executive committee budget, the building budget, and the club fund has been drastically reduced from the initial version of the budget. These include expenses involving general administration, information technology (IT), office supplies, travelling and conference fees, and telephone bills.

“As we knew we were beginning with a deficit, preliminary cuts were made during the revision process where departmental officers were asked to analyze their budgets, reduce excess spending, and improve the overall accuracy of their budgets,” the budget report reads.

The general administration budget, overseen by SSMU General Manager Pauline Gervais, represents the largest portion of the budget. It includes all salaries for SSMU staff, bank fees, and legal fees. Salaries, which represent the largest expense of SSMU, underwent large cuts.

“Student salaries have been reduced by 10 per cent to reflect the fact that only 90 per cent of budgeted hours for student staff are worked,” Hofmeister said.

In addition, each executive’s budget has been reduced by $1,000 from last year.

The IT budget includes expenses related to the SSMU website, computer software, repairs and maintenance, contract services, hardware purchases, and the Old McGill yearbook.

“It is worth noting that in the initial budget, the IT department was budgeted at over $70,000 and has since been cut to […] about $17,300.” Hofmeister said.

In addition, this year’s frosh ran a $21,000 deficit, mainly due to SSMU’s failure to account for taxes in their sponsors’ quotes.

“The most significant changes between the [frosh] budget that was used and the actuals come from an over-estimation of sponsorship,” Hofmeister said. “[Sponsors] didn’t include the taxes we were charged on sponsorship commission, which over-inflated this figure by about $10,000.”

 

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