Row dues lead to confusion

Feb. 4, 2011, 3:04 a.m.

According to several financial managers, Row residents are no longer refunded their houses’ unspent social and board dues. A changed Residential Education policy requires that houses deposit their budget surpluses in restricted-use accounts called “Capital Reserve Funds” (CRF).

Money funneled into these accounts is used for unforeseen expenses and purchases that will remain in a given house for more than a year, such as speakers and furniture. Once the money is deposited, it can no longer be used to pay for parties, day trips, cable television or kitchen expenses.

Though Row financial managers (FMs) were informed of the new policy during training, Residential Education (ResEd) has not made an administrative announcement. In an e-mail to The Daily, associate dean of Residential Education Nate Boswell wrote that “no official change has been implemented at this time.”

“Residential Education continues to explore policies related to spending social dues allocation in Row houses, specifically as it relates to maximizing consistent spending habits from quarter to quarter,” he said.

Official or not, many financial managers are operating under the policy. According to Roth FM Lyn Mehe’ula ’11, Student Organized Services (SOS) director Nick Peters ’94 told financial managers to try to spend the entirety of their income each quarter. SOS manages Row house accounts, including CRF funds. When contacted, Peters declined to comment.

Announcing the change

When current Roth residents met last spring, Mehe’ula told them that she would budget as carefully as possible in hopes of refunding the money back to them.

“The mark of a good financial manager last year was to budget wisely, so that at the end of the year, you had the opportunity to give money back to your residents,” Mehe’ula said.

But at training in August, FMs were told that unspent money would not be refunded. Mehe’ula broke the news to Roth’s residents at the first house meeting of the year.

“There were groans,” Mehe’ula said. “No one was really happy about it, especially since it was different from what I had told them in the spring, but no one’s really complained beyond groaning at the meeting.”

Casa Italiana FM Jack Jorgensen ’12 also informed his residents of the change at the beginning of fall quarter.

“I sent an e-mail, especially to residents who had lived in a Row house the last year, saying, ‘Just a heads-up, due to a policy change this year, we will not be able to grant refunds this year,'” Jorgensen said. “I also reiterated that we would do our best to keep costs down and make the most out of their money.”

Purpose of change unclear to many

Officially, the intent behind the change aims to encourage houses to spend their entire budgets each quarter. But among financial managers, the purpose is less clear.

“I’ve asked [ResEd] a few times, and I’ve never gotten a definitive answer,” Mehe’ula said.

She speculated that it might have been instituted to make sure that all houses had money in their CRFs.

“I remember during training at the beginning of the year, multiple houses didn’t have a CRF fund,” Mehe’ula said.

“If you don’t have a CRF fund, it’s hard to get a lot of things for the house, especially if the house needs new furniture or something that’s necessary,” she added.

Mehe’ula said that she views the CRF as “incredibly important” and was initially happy about the change. Being the first group to experience the change, however, is difficult.

“When you are in the first group, you don’t have previous years to benefit from, so we are paying into something that we won’t ever see,” Mehe’ula said.

Jorgensen, however, stated that the change was implemented by ResEd to encourage financial managers to spend all the money they collect in social dues.

“The Row Office wants us to actually spend [the social dues] on the residents [and] use it to provide services in terms of social events and activities that all residents can use to relax and de-stress,” Jorgensen said.

He added that the change was made to bridge a gap between large Row houses and small ones. Jorgensen said that economies of scale allow larger Row houses to run high end-of-year budget surpluses. Smaller Row houses have not demonstrated this trend.

Under the former policy, this meant that those living in the bigger houses would, on average, be refunded more money than those living in smaller houses.

“[ResEd] viewed it as a little bit unfair that these small houses were struggling to make their budgets while these large houses were having large surpluses,” Jorgensen said.

Slavianskii Dom FM Chris Kucharczyk ’11 said he had not heard of a policy change concerning social dues, but agreed that such a change was probably made to even out the financial gap between houses. He hypothesized that the change was implemented to “equalize the pay for housing.”

At least one house last quarter had a significant budget surplus that was directed to its CRF fund. The house’s financial manager, who requested anonymity due to his ongoing efforts to work out the issue with ResEd, said that he was not aware of the policy change until it “became relevant” to him.

He added that ResEd has tried to keep residents’ best interests in mind.

“I think if there’s a big surplus, they’ll work with you to figure out how to move those funds,” he said. “They’ll be flexible about how to resolve the situation.”

He said one of the difficult parts of the change is that it’s harder to save up for big events because surpluses are deposited into the CRF on a quarterly basis.

“You can’t have a long-term budget where you spend a little bit less this quarter, and save up for a big event in the spring,” he said. “Everything has to be spent in that quarter or else you lose access to it. That’s sort of the surprise.”

Budgeting the ‘spirit of the Row’

Jorgensen said that the change has, in some ways, made his responsibilities as a financial manager more difficult.

“We typically have a set number of events that we like to do, so this forces us to budget how much we actually plan on spending for those events beforehand,” Jorgensen said. “Because if we budget too little, then we aren’t going to be able to have those events.”

“But if we budget too much,” he added, “then what’s going to happen is all that money is going to be rolled into CRF.”

Overall, Jorgensen thought that the change was designed to contribute positively to student life on the Row and maintain its distinct social atmosphere.

“ResEd, the Row Office and the managers that work here are trying to preserve the spirit of the Row as much as possible, and, ultimately, I think the policy is designed to enhance that,” he said. “Whether it’s the most effective policy or whether all the kinks have been worked out of it, I don’t know. But I think that’s still the overall goal that this policy is trying to meet.”

Tyler Brown contributed to this report.

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