The San Jose State Student Union, Inc. Finance Committee decided on pulling $4 million from the university trust fund to pay for the nonprofit’s operations, passing with a 3-1-1 vote in its hybrid meeting Monday.
The Student Union, Inc. is a nonprofit organization that oversees the Spartan Recreation and Aquatic Center, Event Center, the Student Union and ATM facility, according to its website.
David Alves, the nonprofit’s associate accounting director, said there will only be $9,801 left in the Student Union, Inc. checking account by Friday.
The organization needs at least $4 million to maintain its operating budget, Alves said.
Charlie Faas, SJSU vice president for administration and finance, differed in opinion from the rest of the nonprofit’s finance committee, which is composed of student chair Hoon Cho, student chair Soumya Trivedi, student chair Aarushi Sharma and university Associate Vice President Sonja Daniels.
Faas, who voted against taking out $4 million from the university trust fund to operate the nonprofit’s facilities, vied for dipping into Student Union, Inc. reserves instead.
Faas said the board of directors should spend the nearly $8 million of reserves before tapping into SJSU’s trust-fund money.
“The Student Union, [Inc.] is flush with cash,” Faas said during the meeting. “There will be absolutely no shortage of funding [for] those activities and events.”
The organization’s board is made up of 11 members including five students, five student at-large representatives and the Associated Students president.
Board chair Isaiah Andrews said the finance committee’s majority pushed for trust-fund use instead of the reserves because all of the student fees are in the trust fund along with about $450,000 of revenue.
The nonprofit’s reserves are usually only used for three categories: major maintenance and repairs, catastrophic events and capital development of new projects, Andrews said in an email.
The money used to operate Student Union, Inc. facilities typically comes from a $381 fee every student pays with tuition, according to the SJSU Bursar’s Office website.
The nonprofit’s executive director Tamsen Burke asked Faas if these student fees, which fund Student Union, Inc. facilities, are being withheld until the nonprofit and the university finish negotiating their operating agreement. Faas confirmed.
“Why are we limited to the funds that we have now and we're resorting to reserves when a lot of our student fees are in a trust [fund] that we're not able to touch?” Hoon Cho asked Faas before the committee finalized their votes.
As the Student Union, Inc. is undergoing an organizational turnover with the university, the organization voted on the transition of financial resources Monday, passing the SJSU trust fund use, but has not completed the totality of the operating agreement.
Burke said some of the remaining negotiations relate to the transition of other resources and employees between the Student Union, Inc. and the university, which include configuring differences in benefits and salaries.
She said the operating agreement will settle whether the Student Union, Inc. employees will remain with the nonprofit or transition to university employment.
After Burke mentioned the organizational transition, Faas warned her: “You cannot have that type of conversation in this open forum with staff here and present because you're talking about a [potential] layoff of staff or rehiring of staff.”
Burke said she wants to ensure that all employees are taken care of in terms of benefits and retirement.
Faas said there hasn’t been any discussion regarding finishing the operating agreement for the past two months despite the end-of-September deadline set by him and Patrick Day, director of student affairs.
The hybrid meeting that streamed through Zoom Monday was rescheduled from Sept. 20.
Day said the university and the Student Union, Inc. need to consider providing more financial support for students, which makes it likely that the overall budget has to increase.
“I would suggest that part of the story needs to be: How we can provide additional support for students but is [also] supporting student programs and so again, as I've said before, I think it is likely that the budget needs to increase,” Day said.
While Day suggested an increase in programs, Burke said she was concerned student fees will consequently be increased.
“You'll never hear me say increase fees, alright. I don't want that to be the headline in the Spartan Daily.” Faas said. “We have fees and we have the ability to expand our operation and we want to make sure we're offering the programs that our students need.”
