Although union delis earn profits as a whole, some specific locations struggle to break even.[/media-credit]

Just over one month ago, the Student Services Finance Committee recommended the Wisconsin Union’s $39 million budget despite the Union’s refusal to give them budgets for its deli operations.

“We understood that, overall, they were running a positive spread,” SSFC Chair Brandon Williams said. “The question was, do we approve of the fact that some of their campus units are running deficits?”

When the committee considered segregated fees are held in the same account with other Union revenues, including delis, the stakes of approval rose. For clarification, SSFC requested budget information for individual delis, but the Union only provided the group with total profit numbers from all deli units.

Wisconsin Union Associate Director Hank Walter said because delis are not funded with segregated fees, to have SSFC make recommendations about individual food units “doesn’t fit with their charge.”

“They got something that shows that the deli division makes a profit every year, and how much the profit is,” Walter said. “Which should be providing assurance that segregated fees are not subsidizing the deli division.”

The Union currently operates 10 delis across the University of Wisconsin campus, with four more in development, according to deli budget information obtained by The Badger Herald. Among the Open Book Caf? in College Library and the deli in Ingraham Hall, most profitable by far is Daily Scoop on the first floor of Memorial Union, which is projected to make $253,375 in the 2009-10 fiscal year.

The selection also includes more obscure locations, such as Feed Bag, a unit tucked away in the Veterinary Medicine building and Highland Grounds in the Waisman Center, adjacent to UW Hospital. These units, along with Peet’s Coffee and Tea in Memorial Union and the newly renovated ICU deli, now renamed Badger Market, are projected to run at a deficit this fiscal year.

Most often, said Walter, deli budget deficits are commonly incurred by one-time start up costs, including new signage, facility renovations and staff training time.

Revenues from existing delis, Walter added, pay for these and other expenses. Total deli profits for this fiscal year are projected at $505,016.

In most cases, Williams said SSFC was able make a strong argument for some deli budget shortfalls as long as there was an overall profit from all of the units.

“There’s just some places on the campus that the unit operates where there’s no other options for food…and the Union has these places that are right there, where [students] can just conveniently grab something,” Williams said.

Yet there remained questions about why segregated fees are lumped in with other Union revenues, including deli budgets. Williams said he has spoken about separating the accounts with Walter, Union Director Mark Guthier and Chancellor Biddy Martin throughout the semester.

Walter said separate accounts would be far less efficient for Union managers, who would have to differentiate between several different accounts when budgeting, removing focus from their operations. The separation would also require additional work and more funding for the Union’s accounting department, he added.

“I could understand the issue more if our delis were losing money…” Walter said. “Then we would have a major issue, because we don’t want segregated fees to subsidize something that should be generating revenue.”

In a February meeting, SSFC passed a motion recommending that the Union study whether to separate its operations into two accounts: one for segregated fees and one for other revenues. Though Walter said the separation wouldn’t necessarily be in the best interest of students or staff, he said in an e-mail that the Union is open to the consideration of such a study.

Last week Williams was able to view individual deli budgets obtained by The Badger Herald. The document included actual numbers from fiscal 2008-09, projected numbers for 2009-10 and the approved budgets for 2010-11.

Williams said the information didn’t include anything unexpected, noting the Union disclosed several deli units were running budget shortfalls. Still, Williams added, the full information was kept under wraps.

“We wouldn’t be doing our job to the fullest capacity if we didn’t understand every facet of their operation,” Williams said. “We weren’t provided with the opportunity to [understand]. If we’d have seen this we would have.”