Q&A: Robert Joseph, Adam Kochman on 2016 TCU budget

This January, TCU senate announced that it was removing funding for off-campus travel from next year’s budget. The treasury said that a gradual depletion of its surplus fund, which, in addition to money from the student activities fee, has been supplying clubs with supplementary (i.e. not budgeted for) funding, made budgeting for national travel — and possibly regional travel — unsustainable.

The Daily sat down with TCU treasurer Adam Kochman and TCU President Robert Joseph to discuss the mechanics and recent history of TCU’s budget, the origins of its surplus and the reasons for its depletion.

The following is an abridged version of the interview.

Tufts Daily: To the extent that you can, talk about how the surplus came to be, and why it’s running out.

Robert Joseph: Around 2007, 2008 there was an embezzlement of the student activities fund. Essentially, a school administrator embezzled hundreds of thousands of dollars from the student activities fund, and several hundred thousand dollars of that were recovered, and the treasury had a large surplus of well over half a million dollars beginning around 2008, 2009, and around that time there was so much extra money that there was a survey put out to find out what to do with it.

$230,000 [were] spent on a trips cabin at the Loj, and $100,000 [were] spent for renovations at the Rez, and those were big ticket items, but there were still several hundred thousand dollars left … that essentially led into 2009, 2010, 2011 when spending habits started to change. Around that time we started to spend more money, because we saw, and students saw, there was a lot of money in this pot that was being left there and not being used for student activities … We started funding travel to places that were further away than we had in the past … airfare travel really began around 2011, and essentially we’ve been funding it ever since, but since then the amount of money we’ve had in the surplus has been gradually spent down.

TD: How close are we to being completely spent right now?

Adam Kochman: So the surplus, in around 2011 … was over $600,000. It’s currently under $250,000 … We’ve spent it down, and rightfully so, because there’s no need to have a surplus that massive. Students at Tufts should be able to spend the surplus money that we have, but now it’s gotten to the point where we’ve spent too much and what we want to do is just kind of reassess once the new fiscal year resets, and that starts July 1 … Then, depending on how much money comes back in from the existing budgets currently for this fiscal year, we can have a much better judgement as to how much more money we have to spend.

TD: But the main source of money for the budget is the student activities fee: what is this, and why does it matter?

AK: The money that initially gets budgeted is all from the student activities fee. The student activities fee is built into your tuition … this year it’s $315 … 315 times however many students there are… is the money that goes towards all of that activity.

Within that is… the supplementary fund, that I budgeted for $100,000 at the start of this fiscal year from the student activities fee. This supplementary fund, when you see groups applying for money and getting money throughout the year… half of that came from the student activities fee, and the other half came from the surplus.

TD: Has the student activities fee increased with groups’ increased spending?

AK: [The student activities fee was] $288, in fiscal year ’11. In fiscal year 12, which was when the surplus was over $600,000 [and] neither of us were here… the climate was, on campus, “tuition fees are rising rapidly, really really high,” and the treasurer wanted to find a way to kind of help out with tuition costs. So the treasurer at that time … just lowered the student activities fee. So it went from $296 back down to $288, so over a two year period the increase was zero percent.

Now the university wants the fee to increase at the same rate as tuition, which is increasing at four percent … What I wanted to do for next fiscal year was to do a one-time fix [by increasing the fee by a higher percentage], and then continuously after fiscal year ’16, a 4 percent [annual increase], just like the university wants.

TD: If the student activities fee were to go up, you’d be able to fund travel.

AK: Regional. National travel is just unsustainable … National-related travel — that includes registration, and lodging and airfare — [and] $65,000 of [this year’s] $200,000 funding just went exclusively to that … If the student activities fee were to get increased to where I wanted it to be — [which would have been the] the one time fix — and then continuously going 4 percent, I’d have to crunch more numbers, but I don’t think this change would have happened like this.

TD: So when we’re talking about who makes those decisions and who vetoes those decisions, is that the administration?

AK: [The change] hasn’t been voted on yet, ultimately, at the very top, the board of trustees have to approve tuition … it has not been voted on, but it doesn’t look good for us to get this one-time increase.

RJ: We don’t have an answer to how much the student activities fee will be, when we’re budgeting for next year, right now. We realized that we were running out of funding to do this kind of stuff in December, and we let groups know at the end of January, pretty much a week or so after we came back to school, as soon as we possibly could — so that they can adjust for this budgeting season — and [to] ultimately give them seven months’ advance notice until the budget’s going into effect for next fiscal year.

AK: As soon as I started to see that the student activities fee dialogue was not going well, I immediately — we met as an executive board and this was what we came up with. Like Robert said, this is all about waiting and seeing how much money rolls back into the surplus on July 1.

TD: Why do you suspect that previous years’ senates didn’t see national travel as unsustainable from the start?

RJ: I think a large portion of that is due to the fact that we really started doing this in 2011, and back then most groups did not realize that you could come in for this kind of funding … I think this year we’ve seen more groups coming in for funding for national travel than we’ve seen in any other year prior to this, so I think it’s sort of the information that’s spread…

There were a number of other expenses that kind of added up very quickly … Two years ago, because Winter Bash had to get re-modified into Winter Ball, and we had to do Fall Gala instead of Fall Ball, those events are much more expensive now than they were in the past because they have to be a little more upscale … in the attempt of stemming drinking culture.

AK: Major events like this got a major bump in the amount of money they cost, and student activities fee did not go up with them at the same rate.

TD: So in terms of the spending requests you got this semester, would you say that quite a few more groups requested funding from the supplementary fund than you expected?

AK: It got to the point where the majority of supplementary funding requests we heard every Wednesday night was for someone to travel off campus. That was not the case my freshman year, two years ago, that was not the case last year, my first year as treasurer…

[Supplementary funding request] meetings used to be from 8 to 9:30, at least when I was a freshman, [and] they now go from 8 to 11:30. So there’s just been an increase in requests in general, and travel, specifically national travel, has gone through the roof.

TD: So you’d say with greater student awareness of this large supplementary fund and the surplus that’s available, more clubs have said “Hey, we need to capitalize on this.”

AK: Exactly, so clubs start seeing … a group got $5,000 to fly to Seattle — “oh, we can do that,” or “oh we can do this for something else, not related to travel.”And so it was just sort of like a ripple effect, like a can of worms … everyone wants it.

And everyone has a right to [it] in the current format. The way we’ve been going, people should have been able to do this because we had the money to do it. If we always have the money to do this, I would love to be able to financially support people to fly across the country to a competition, that’s awesome, but it’s not something that is sustainable and it’s not something that we’ve always done, it’s something that we did because we had the means to do so.

RJ: It’s really easy to say yes to groups when we have the money, but it’s really, really hard to say, we can’t do this anymore.

TD: Were there discussions among the senate or members [of] the allocations board about curbing these requests? If so, when did that start working itself into the conversation?

RJ: So this was really something that we noticed in December, and one of the things that we discussed was that we can’t change the rules for this year in the middle of the year, we have to keep the rules consistent and keep them fair for all the groups that are coming in this year.

So in order to affect the rules for next year, we started it before the budgeting process, so we started it before budgets happened and that’s what we did in January, when we told all the groups, “we’re not going to be putting travel in budgets for now and that will get figured out down the road,” and so that way next year’s rules are consistent for everyone. People coming in at the end of this year still have the same opportunity to get funding as people coming in at the beginning of this year.