Each year, the Tufts Community Union Senate is given the arduous task of funding student organizations through allocation of the student activities fee, and most groups clamor for far more of the almost $1 million than they actually end up needing. At the end of the year, the money that groups failed to spend comes back to the Senate to create a budgetary surplus, which in recent years has been in excess of $100,000.
In recent years, and the Senate Treasury moved these funds to Citizens Bank this fall in hopes of increasing the amount of money available to the various student organizations on campus.
The surplus funds were recently switched from a standard University account at Fleet Bank to an interest-bearing one at Citizens Bank. The extra interest earned will increase various funds made up of money coming from the surplus, and will help enhance the financial resources available to various clubs and organizations.
The switch in banks will have an impact on student organizations because it will increase the pool of money set aside for uses and situations not anticipated during the budgeting process. These include Capital Expenditures, a fund for "one-time-only" purchases of major items with a value of over $100.
"This is used if a group needs something like a computer, or a printer, or a storage closet," Senate Treasurer Michelle Shelton said.
The Buffer Fund will also benefit from the newly gained interest. This fund comes from money set aside out of surplus, and is used as an emergency reserve for unexpected expenses that student organizations may have during the fiscal year, as well as for the funding of new organizations. A separate New Group Fund gives the opportunity to apply for a start-up fund of $1,000 in order to give them a chance to launch a group and gain membership.
When clubs need to use this extra money, they make a proposal to the Allocations Board (ALBO). Appointed signatories in organizations meet with ALBO council chairs, and they negotiate and review the case until a final decision is reached.
Because the newly earned interest will go to surplus funds like the New Group Fund, this switch in bank accounts could alleviate the difficulties in budgeting money for new groups. This will help to make the process of allocating money to various clubs and organizations much easier.
The Senate Allocations Board (ALBO) is responsible for distributing the pool of money created by the student activities fee, which was $188 this year. There are nine ALBO councils, each of which is in charge of budget for different types of clubs on campus, such as religious groups or sports groups. At the beginning of the second semester, organizations create their own budgets and submit them to their ALBO chairs. ALBO then negotiates with each club, and the two design a final budget that is voted upon by the Senate.
Student organizations have had extraordinary spending in the past two years, a fact that Shelton noted in her Oct. 5 State of the Treasury Address. "For this reason, our surplus has not grown from last year. However, with last year's budgeting being nearly perfect, the surplus now has the potential to grow," she said.
The surplus currently amounts to approximately $65,000, and because the return on the account is a substantial 5.3 percent, this figure will be able to grow by nearly $3,000 a month just by sitting in the bank. The new bank account is known as a sweep account, which has become popular because it maximizes returns for the account holder, while also giving the banks an advantage.
"We wanted to move our surplus into an interest-bearing account because it previously just sat in a university account without doing anything. In this new account, it has the ability to move," Shelton said.
Since the change has only been in effect for about two months, there have not been any major increases in the amount of money that has become available. However, Shelton did note that the account records show that the TCU treasury has been earning more in interest. "There really aren't any major short- term effects, but I think it will help students in the long-run," she said.
Shelton hopes that the switch in banks will help the Senate to budget exactly the Student Activities Fee in order to permanently eliminate deficit spending. Because of this, the Senate is being very cautious about how much money it allocates to the many organizations through the various mechanisms of surplus.
The vote to provide funding for the new group Paragon during the Nov. 5 Senate meetingis an example of this vigilance in action. "They argued for two hours over 40 bucks, which is nothingin the scope of $900,000," one observer said.
The student activities fee, paid annually by each student, increases by an average of four percent per year to account for general inflation, but even with this increase, the Senate still must compensate for the growing needs of the students. The Arts and Sciences administration decides the amount each student must pay towards student activities.
