Editor’s note: This is the third in a five-part series examining how the University raises money and where it spends those dollars. Today we look at increasing fees associated with the Tate Student Center expansion. Thursday we’ll report on trips University President Michael Adams took overseas during the summer.

Though students already contribute $25 per semester in fees to finance the Tate Student Center expansion, the Department of Campus Life is asking for more money to make up for a $388,000 shortfall – and students’ wallets might take a hit.

The department has proposed a $2 increase in the student activity fee, bringing the fee to $77 if the request is approved, documents obtained by The Red & Black state.

The Tate Student Center Advisory Board supported the fee increase with a majority vote and three abstentions, said Stephen Dorner, chair of the board.

“I would personally like to see that the fee does not increase,” Dorner said. “But I understand that there is a need for expansion of the resources to cover the operating costs.”

If approved, the fee increase would be used to partially fund the operation of the Tate Student Center – providing for salaries, staff benefits and the costs associated with managing offices such as the Business Office and the Administrative Office.

“It takes a lot of people to keep this facility running and open,” said Willie Banks, director of Campus Life and the Tate Student Center. “So that’s what the majority of our expenses are related to.”

And an expanded building means an expanded staff, Banks said.

The department created seven new professional positions and several new jobs for student workers, he said.

But the $4.6 million operating budget – which provides for workers’ salaries and benefits – didn’t grow with the student center.

“For instance we added another information desk with seven or eight more people in total staffing it, with no extra money coming in to cover those extra salaries,” said Jerry Anthony, assistant director of Campus Life.

Banks said the department had to dip into its reserve funds this fiscal year in order to cover some of the additional expenses related to the operation of the center.

However, the reserve funds – which Anthony likened to a savings account – are supposed to be used for unexpected costs, such as repairs to furniture and equipment, not routine operating costs, he said.

Normally, the department can finance its budget through the $2.6 million in student activity fees it receives. Revenue from other entities housed in Tate – such as Print & Copy and the UGACard Office – also helps offset the costs associated with the center’s operation.

“We try to operate the department based on the activity fee and the revenue that’s generated through some of these operations,” Anthony said. “And there comes a time when you add all of that up and the cost to do business is more than the generated income.”

So the department went $388,000 into its reserve fund to make up the difference.

“It was either cut out a lot of things or dip into the savings account,” Anthony said. “So we had to dip into the savings account.”

But the reserve fund has been depleted to $116,000 – making another $388,000 shortfall unsustainable.

“We could not go another year and run into a deficit like we did this year. It just wouldn’t be practical,” Anthony said. “Hence, occasionally we have to go forward with an activity fee increase and say that we can’t do business without some form of revenue, and the activity fee is part of that.”

However, the revenue generated by the activity fee increase – which is projected to be $155,520 – would only partially make up for the added expenses in the Campus Life operating budget.

And there’s always the chance that the increase won’t be approved.

The Mandatory Fee Committee will make a recommendation about the increase to University President Michael Adams, and the ultimate decision lies in the hands of the Board of Regents, Banks said.

That means Campus Life is going to have to start looking for other sources of revenue, Anthony said.

“We are constantly challenged to come up with some creative and some new ways [to generate revenue] that also, in my opinion, fit what students need and want,” he said.

Both Anthony and Banks said the Grand Hall could be one big source of income for the department.

“I have a feeling that the income and the business that we’re generating through the Grand Hall will be enough revenue to help cover some of the shortfall that we have experienced,” Banks said.

However, the department can’t be sure of Grand Hall’s profitability until the end of the fiscal year.

“We’ve never had a Grand Hall before, so we don’t know,” Banks said.

The department might be expanding the services Grand Hall can provide – to include events such as weddings and wedding receptions – in order to make more money. They could also consider raising the fees some groups pay to rent out the spaces in the building, Banks said.

“Honestly, we don’t want to [increase fees for reserving space],” Banks said. “We’re going to have to take a look at it, but I am hesitant to say that we are going to.”

Banks said making sure the fee structure benefits students would continue to be a priority. Student groups can now reserve most meeting rooms free of charge for the first three hours.

Money could also flow into the department from the expanded services of the new Tate center – such as the new passport agency in the UGACard office, Anthony said.

But there is one potential revenue stream that is still untapped – profits from food services.

“It’s not uncommon at other schools that the food operation shares in the cost either by paying rent or so much per square foot or something,” Anthony said. “So that’s not an uncommon practice. That’s just not been the practice here.”

At the University of Tennessee, the Starbucks housed in the University Center pays a lease in order to use the space, said James Dittrich, the center’s director.

The University of Florida’s student center receives a commission from the dining services offered in the space, said Eddie Daniels, executive director of Florida’s student union.

“That’s the compensation for the space that dining services uses in our union,” Daniels said in a phone interview last week.

Instead of paying a commission or a lease to Campus Life, the University’s food services paid more than $2 million to outfit their space in the building, said J. Michael Floyd, executive director of Food Services.

“Basically, we got a shell,” Floyd said. “When the new building came on line, we received that space, and we paid to build it out and to operate it for the students.”

Food Services filled the “shell” with the counters, light fixtures, machinery and signs needed to operate the new Taste of Home Café and the Tate Café food court.

But Food Services did not pay to obtain the “shell,” and they do not contribute to the student center’s operating budget, Floyd said.

Floyd said that by not paying a leasing fee to the Tate Center operation, Food Services could keep their prices lower for students.

“If you have to build a space out and then pay a lease fee, then the cost is more expensive for the students to eat,” he said. “You’ve got to pass that cost along.”

Nevertheless, the lease would be an additional source of revenue for the center.

“I think we’d be open to any streams of revenue,” Banks said.

But he did say he recognized the contribution Food Services has already made to the center’s operation – such as providing an additional custodian to the facility.

“Food Services has been a great partner for Campus Life and Student Affairs in trying to make sure that they are helping us in every way that they can,” Banks said.

And as for looking toward a future with a depleted savings account and student fee increases on the horizon, Banks still isn’t sure about what will happen.

“I think opening a building, especially a building of this size, we’re going to run into some issues,” he said. “And we’re still trying to figure out what’s the best way to handle things.”