The AMS businesses will rack up an additional $250,000 in deficit this year.
With AMS business deficit announced at $532,000, this number is at $250,000 more than originally forecasted.
The information was announced at the Business and Administration Governance Board (BAGB) meeting on March 19. The committee is responsible for overseeing businesses that are under the AMS’s jurisdiction, such as Pie R Squared and the Gallery Lounge.
According to AMS VP Finance Mateusz Miadlikowski, the two main sources of the increased deficit were a decline in revenue and increased labour costs after construction of the new SUB stretched out for almost a year longer than expected.
“The revenues are down due to construction. There are additional costs due to the delay,” said Miadlikowski.
Miadlikowski also said that the delay associated with the new SUB opening cost the society an additional $10,000.
"Labour levels were re-forecasted using [year-to-date] numbers and actuals from the previous year," said Miadlikowski. "What was not factored in were increases in staffing levels as a result of the anticipated opening of the Nest."
Some of these increases included preparing for the opening as well as staffing new businesses while the ones in the old SUB remained open. The extra deficit incurred through labour-related costs amounts to approximately $240,000.
“Unforeseen HR issues, including maternity leave coverage, extended illnesses, retirements resulted in additional costs," said Miadlikowski.
He also noted that such a large deficit was caused by the extra costs associated with preparing for the opening of the new building while keeping the old one open rather than mismanagement of funds.
"As a forecast for the year, it is important to note that these numbers may change once actuals have been received," said Miadlikowski. "Historically, actuals are usually better than budgeted.”
A motion informing Councillors of the change in the projected contribution from the AMS businesses will be tabled at the upcoming AMS Council meeting on March 25.
CORRECTION: An earlier version of this article suggested that the deficit was an additional $250,000 on top of the $532,000. The article has been update for clarification.