Former AMS VP Finance Tom Dvorak understands why the AMS has run a large deficit that sets their lifespan at only 1.87 years, and agrees that it means that the student society has to make cuts.

“This isn’t a time to do cosmetic tweaks with a scalpel. This is a time to take out a fireaxe and really chop some things off,” he told The Ubyssey.

In a slide titled “AMS’s Remaining Lifetime,” AMS VP Finance Elin Tayyar outlined at last Wednesday’s Council meeting that the AMS can expect to operate under its current operating structure for another 1.87 years—or a year and ten months.

The structural deficit—or the deficit that exists even when the AMS is operating at its full potential­—is set at $372,000. The AMS has $695,000 in reserve funds, and once all calculations are complete, it places the student society’s lifespan at a concerning number.

Running in the red has not been a concern for the AMS because the student society always had expected surpluses to balance their books each year. However, this did not go according to plan this time around.

“For several years, it’s been normal practice for [the AMS] to run a deficit because every year we’ve actually run a surplus,” explained AMS President Bijan Ahmadian. “Then all of a sudden the economy went south, and, you know, it turns out this is not a good habit to have.”

Other reasons for the financial crisis include unforeseen hardships, such as the recession, low liquor sales and loss of sales during the Olympics.

“February was a really bad month for us,” Ahmadian said.

In addition, the AMS lost thousands because UBC decided no longer to recommend AMS Catering services as an option when booking events with the university, losing business for the student union.

The AMS also increased the wages of its workers to minimum wage, hired an HR manager and increased each executive’s portfolio by $5000, leading to increased spending that contributed to the deficit.

The student society has already taken measures to try to alleviate their financial situation. They have cut their Equity program, merged the Safety Office and Safewalk together. They have reduced hours for Ombuds and SAC employees. And they are having their businesses review their books and operations.

In regards to popular student events such as Block Party, Welcome Back BBQ and the AMS Art Gallery, Ahmadian assured that “those are not on the radar right now.” However, the AMS is looking into either raising their student fees or tying them to the Canadian Consumer Price Index.

“Our services have been getting less and less money effectively with inflation and all…a fee increase is something we’re going to think about,” Tayyar said.

The society is also looking into whether they should increase their prices to compensate for the HST, which comes into effect this July. “The pizza prices [at Pie R Squared] haven’t increased since 1995,” Tayyar explained.

Dvorak feels that the AMS is taking the right steps in repairing their financial situation. He said that Council did not have a mandate last year to make cuts and that the catalyst to put this forward was the change in the executive.

Dvorak spoke candidly about last year’s executive, which was marked with controversy under former AMS President Blake Frederick. “In the political environment that I worked in last year, and the politics of the executive, none of those cuts would have been made,” Dvorak said.

“You need the right political climate to make certain changes.”

Dvorak explained that he would like the AMS to experiment with programs and services, but the resources are not there at the moment. “It’s time to stop experimenting and start going with what works,” he said.

“We [need a model] that is going to take us from 1.8 years to indefinitely.”
—with files from Arshy Mann

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