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Wednesday, May 22, 2024

Editorial: Capital Reserve

On March 10, the ASUCD Senate approved a bill allocating $133,000 toward hosting a Kid Cudi concert in the Pavilion. Plans for the concert have since dissolved, but the senate’s decision still points to a problem: of 12 senators, nine approved the bill and were willing to suspend ASUCD bylaws and put student-paid funds at risk.

The senators wanted to take the $133,000 from Capital Reserve, an account restricted to long-term investments, not one-night concerts. According to the ASUCD bylaws, capitol reserve funds are meant for “either expenditure for an asset with a useful life of more than two years or expenditure for construction.” The account usually pays for equipment that will support student safety or education. For example, some recent capital funds have gone toward new buses for Tipsy Taxi, cameras for AggieTV and computers for The California Aggie.

The senate’s justification for the recent bill was that the concert could have made up to $279,750, a potential profit of $146,750. This money would go back to Capital Reserve and thus fund future projects. While the senate had good intentions, they’re not in the business of making profit.

This decision is no different than investing capital reserves in the stock market. But ASUCD is not a bank. The Capital Reserve fund is, by definition, designed to support expenditures that make a lasting impact.

While everyone likes concerts, this kind of decision sets a dangerous precedent. The bylaws should only be suspended in cases of emergency, not because it’s convenient.

1 COMMENT

  1. Your argument doesn’t make much sense to me… How is providing seed money for a concert “no different” than investing in the stock market? While I guess you can disagree with the riskiness of the concert, ASUCD is in the business of providing services for the students (and occasionally making money off of those services), which was the concert’s intention. Also bylaws can be altered at any time by the senate, so I see no moral hazard in suspending them temporarily.

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