With the Student Commons set to open in September 2018, the University of Toronto Students’ Union (UTSU) is releasing an updated projection of its overall finances, including details of the revenue and expenses attached to the building.
Principal costs of the Student Commons include maintenance expenses, beginning at $144,926.88 in 2018–2019, and operating expenses, including programming, security, signage, and IT systems, totalling $299,926.88 in the first year of occupancy.
There are also costs tied to administration and office, salaries and wages, governance of the building, and occupancy. In total, the Student Commons is forecasted to accumulate $1,198,161.17 in expenses in its first year.
The Student Commons does have some avenues for income. Advertising revenue is projected to consistently bring in $25,000 per year, until 2023, when that revenue is projected to increase to $35,000. Similarly, conferencing revenue is projected to earn $40,000 in 2018–2019, increasing annually. The UTSU has also leased space to university units and external tenants who will provide services to students and occupy less than 20 per cent of the building.
In total, revenue is projected to begin at $1,170,536.79 and increases each year.
For the first two years of occupancy, the Student Commons will post deficits of $27,624.38 and $10,459.97, respectively. In the third year, 2020–2021, the building forecasts a $4,307.14 surplus, and it does not dip for the rest of the forecasted years until 2029–2030.
In April 2017, the Student Commons was projected to post a deficit of $300,000 in its first year and more deficits for the next 10 years.
The surpluses would avoid triggering Article 7.7(f) of the revised Student Commons Agreement between the UTSU and the university, which stipulates that, should the Student Commons run deficits in two consecutive fiscal years after its third year of occupancy, and no fiscal solution is reached in two years after the deficits, the university would have the right to terminate the UTSU’s management of the building and take possession.
UTSU President Mathias Memmel explained that the Student Commons budget posts a surplus because it will be receiving money from the UTSU’s operating budget. “The fact that the Student Commons will post a surplus doesn’t mean that the organization as a whole will post a surplus (in this case, it won’t),” he wrote in an email to .
In a letter to U of T’s Vice-President and Provost Cheryl Regehr, dated August 30, 2017, Memmel expressed that the UTSU must, “to the greatest extent possible, transform the Student Commons into a source of revenue.”
“We also eliminated non-essential services and reduced our HR expenses accordingly, which will save us $250,000 per year going forward,” which allows them to remain afloat and operate the Student Commons, wrote Memmel of the UTSU’s overall budget.
Memmel indicated that the Student Commons financial plan must be followed with little to no variation. “If you look at where the UTSU was three years ago, it’s hard not to be worried. We’ve done our best to mitigate the risk of any future mismanagement, but there’s no guarantee that the UTSU won’t revert to — for example — nepotistic overspending on salaries,” he added.
In September 2018, the union will begin charging members an Operating Cost Levy of $6.50 per semester. This is on top of the already existing Capital Cost Levy, which will increase to $14.25 per semester next year.