The Associated Students, Inc. budget will improve during the upcoming semester due to increased enrollment and a new program that deals with employee benefit costs.
Treasurer Jameson Nyeholt said the university expects to enroll 1,531 more students in spring 2011, providing ASI with an additional income of $63,053. Each Cal State Long Beach student pays a $44 ASI fee and a $168 University Student Union fee per semester. The payments add up to more than $8 million in total annually.
The fees fund ASI programs, ranging from the Student Recreation and Wellness Center to the Isabel Patterson Child Development Center.
ASI has a projected annual operating budget of about $12 million. Nyeholt said the additional funds are allocated by the Board of Control if necessary.
ASI’s budget will also be improving soon due to a new program. On Wednesday, the ASI Senate passed a resolution allowing it to reduce a $2 million blemish on its balance sheet.
A new regulation required ASI to disclose the expected cost of retirement benefits for its employees. Although the corporation did not have to actually fund this amount, it made it look like ASI was in the red.
Nyeholt said the Statement of Financial Accounting Standards 158 required the new record keeping. As a result, ASI’s balance sheet showed a liability of $5.8 million, giving the appearance that ASI has a negative net asset of $1,972,320.
“This disclosure has no effect on ASI’s operations,” Nyeholt said in an e-mail. “Of course, it doesn’t look good and it could impact our ability to borrow money if we ever did so. But we have no plans to borrow any money.”
The Resolution Authorizing Participation of Associated Students allows an alternative way to fund health benefits for future retired ASI employees.
Executive Director Richard Haller said ASI now has about 60 full-time employees that may qualify for retirement benefits one day. It also has 15 employees that are already retired and collecting benefits.
Under Voluntary Employees’ Beneficiary Association, or VEBA, ASI will place funds for future retirees within a trust fund that is not included in the balance sheet. ASI is entering an auxiliaries multiple employer trust fund with 40 other organizations. With multiple groups pooling in, costs are reduced.
“There is a higher earnings potential and lower risk with a large diversified investment portfolio,” Haller said in an e-mail.
As the funds grow, benefits will be paid for by the interest from the fund, rather than the annual operating budget. However, accumulating funds will take time.
“It’s no quick fix,” Haller said.
The ASI Board of Control approved ASI participation in VEBA on Sept. 7.
The cost to join the VEBA trust fund is $5,000. After that, ASI will delegate how much money is placed into the fund annually.
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