Downturn hits A.S. too

Word has it in some circles that Chico State’s Associated Students is doing well financially, owing to its nonreliance upon state funding in a time of dire budget cuts.

The A.S. is the large, student-governed “auxiliary” organization that, in addition to operating several large businesses, including the A.S. Bookstore and Dining Services, supports such entities as the university’s Child Development Lab, KCSC radio station, Community Action Volunteers in Education (CAVE) and Adventure Outings.

As an auxiliary, the A.S. is “separate, but related to the university system,” said Executive Director David Buckley. “It’s a separate, not-for-profit corporation within the system. Since we don’t rely on any general-fund money from the state, I think the perception is that we are doing well.

“A.S. didn’t have furloughs when university employees did,” he added, so some people see that as evidence of superior financial health.

Truth is, said Buckley, that while the organization’s separateness from the university provides somewhat of a financial safety net, changes to the university, such as declining enrollment and budget cuts, are bound to affect the A.S.—and have.

The A.S. relies upon student activity fees and student-union fees, as well as revenue from the A.S. Bookstore and Dining Services, which are “truly a business,” as Buckley put it. “When a student pays his fees, none of that goes to support the bookstore and Dining Services.”

Student-union and activity fees, he explained, go directly to help support the A.S.’ many projects, such as the new Wildcat Recreation Center (WREC), that are created through a partnership between the A.S. and the university. Partnerships between the A.S. and the university on projects are increasingly common, Buckley said, as the economy worsens.

“Everything is funded by those fees,” said Buckley, “so we pay close attention to enrollment. When enrollment drops, it’s been affecting us negatively.”

The activity-fee fund pot, which is managed by the A.S. Government Affairs Committee, is “not as financially healthy as the student-union fee,” which is governed by the A.S. BMU Committee, said Buckley, “but they have [both] done very well without having to go into their reserves.

“In certain areas, we’re doing well, considering the economy,” he said. “In other areas, such as the bookstore, we have significant challenges.”

Across the United States, university bookstore sales are declining at a significant rate, said Buckley, and the A.S. Bookstore is no exception. He said the combination of the recession and the persistently high price of textbooks has contributed to a “paradigm shift” in the way students acquire books. Increasingly, college students are buying cheap books online—through such outlets as Amazon Marketplace, where students sell books to one another for a fraction of the original price—as well as renting textbooks, copying books, waiting to see if they really are going to need a particular book before purchasing it, or just plain doing without.

On Amazon Marketplace, said Buckley, “a used book that we would sell for $30—and retail was $100—they can buy that book peer-to-peer for, let’s say, $5. You can’t compete with that.”

While the A.S. Bookstore showed a profit last year—approximately $200,000—it has lost almost $2.5 million in sales in the last two years.

“Just this last fall alone, we were $800,000 down in sales,” Buckley said. “And this spring we could easily be down another $300,000 or $400,000.”

The bookstore’s dropping sales forced the elimination of five full-time bookstore positions last year. Fortunately, he said, three of the bookstore employees could be relocated to other jobs within the A.S.

“We cut way back,” he said. “And their operating budget has never been fat.

“That’s the reason we made money last year,” he continued, somewhat gravely. “If we hadn’t done that, we might have been close to zero.”

In an attempt to survive, the bookstore began a book-rental program this past fall, and has increasingly diversified its merchandise over recent years. For instance, Chico State sweatshirts, T-shirts and ball caps fill the shelves of the store, and a Clinique cosmetics counter was added after the closing of Gottschalk’s department store in the Chico Mall, which had been the sole purveyor in town of Clinique products.

“I wouldn’t say the bookstore is doing well,” Buckley reiterated. “But I have confidence that the bookstore staff will weather the storm. We have to reinvent ourselves, like every other college bookstore across the country.”

The A.S. Bookstore will have a name change in the not-too-distant future, Buckley said, similar to the way the University of Oregon bookstore recently changed its name to The Duck Store.

“You can’t count on books. We can’t count on them being our primary bread and butter,” said Buckley. “In the near future, we’ll be called something different—maybe The Wildcat Store.”

Buckley doesn’t see much future profit from the increased popularity of such digital-book devices as Kindle and the iPad, either. The manufacturer, rather than the store, is the profit-maker in these cases, he said.

“There’s no silver bullet, but we need to diversify,” even to the point of functioning as a convenience store, he said. Additionally, the bookstore “may focus more on Chico-centric, ‘buy-local,’ sustainability-focused products.”

“If we lose another $3 million in sales, I’m concerned about our staff,” Buckley said. “We’re already thin as it is. And they are working as hard as they can to address these challenges.”

Meanwhile, Gov. Jerry Brown has proposed a $500 million cut to the CSU system, which would dramatically reduce the number of students.

“The governor’s cut will not directly affect us,” said Buckley “but it will indirectly affect us.”