The Historic Perspective

In the 1950s, the State University campuses organized and chartered not-forprofit corporations under the “Membership Corporation Law” (Chapter 40 of the Laws of 1909) to administer a fairly small set of campus enterprise activities, later classified as campus auxiliary services. This was done, in part, to further insulate NYS from services with high liability exposure and because NYS agency requirements and systems for accounting, reporting, and budgeting can not effectively accommodate retail and consumer service enterprises. Section 355(6) of the State Education Law specifically authorized the University Board of Trustees to enter into contracts necessary for carrying out the purposes of the University, including contracts “...with non-profit corporations organized by officers, employees, alumni or students...” of the University. This provision was first enacted by Chapter 494 of the Laws of 1958 and it is quite possible that this reference was intended only to authorize contracts with ASCs without competitive bidding. The Not-for-Profit Corporation Law was then enacted by Chapter 1066 of the Laws of 1969, effective September 1, 1970. As such, today’s corporations are organized under the State’s Not-for-Profit Corporation Law, in the same way as any other not-for-profit corporation. Each ASC is independently audited.

Most campuses had created these entities called Faculty Student Associations (FSAs) to provide basic food services, bookstores and limited vending programs. In the ensuing years, the rapid influx of students, faculty and staff to SUNY put new emphasis on the services and products offered by the associations and the increasing important role of FSAs in accommodating the expansion of campuses across the university.

By the mid 60s, the associations were thriving businesses with sizable payrolls, extending a broadening array of services across campus and generating modest profits to be shared with their campus community. Governance of each campus association was largely in the hands of campus administration with minimal participation by faculty and students.

In 1967, the Vice Chancellor for Business and Finance appointed a statewide committee to review FSAs scope, management and Board of Directors structure throughout SUNY state operated campuses, while the SUNY Community College FSAs continue to operate under the procedures of their local county governments. For state operated campuses, the committee recommended a standardized comprehensive contract between SUNY Central for the benefit of each campus administration and the local auxiliary corporation. Under the review of the SUNY Board of Trustees, the contract and guidelines permitted certain basic services, instituted new system-wide financial reporting and audit accountability procedures, and required a more balanced representation among faculty, staff and students on each Board of Directors. The SUNY Board of Trustee Guidelines on Auxiliary Services are attached as EXHIBIT 1. The latter requirement was included to provide new oversight and participation among the primary stakeholders within the campus community. Thus, the rather informal association governance style attendant to campus FSAs gradually gave way to the more structured membership corporation model we have today, collectively referred to as AuxiliaryService Corporations (ASCs).

As a result of those Guidelines, student involvement on the ASC Board of Directors varies from campus to campus from not less than one-third, to not more than one-half of the make-up of the Boards. Many auxiliary service professionals view this student participation as integral in developing policy, including services, budgets and prices. Student participation requires ASC professionals to dedicate the time necessary to educate student participants in their corporate roles,which not only assists each ASCs responsiveness to the largest constituency on most campuses, butalso affords real life educational experience to the student participants in a corporate environment.The vast majority of ASCs have evolved under this model while continuing to respond and meetindividual campus missions.

In the early 1970s, another Vice Chancellor’s taskforce was appointed to review and make recommendations on contract provisions. A group consisting of the principle auxiliary service professional at each SUNY campus was initially organized to conduct a collaborative review of the standard contract format and represent the interests of all the corporations in the continued The Historic Perspective R E A D Y F O R T H E C H A L L E N G E S S U N Y A U X I L I A R I E S 3 system. That group evolved into the SUNY Auxiliary Services Association (SASA). From time to time over decades, some ASCs experienced financial, legal, or organizational crisis. As necessary, and to ensure the interests of SUNY and local campuses, SUNY Central (now System Administration) worked collaboratively with SASA to develop appropriate oversight and control mechanisms to forestall problems and keep the ASCs financially solvent and organizationally stable. The most recent contract formats recognize the localized relationship and accountability of each ASC to its home campus. Since its original charter, SASA has been an effective spokes-group, advocate, and resource for the university’s ASCs.

Paralleling the development of the university, the original mission of the campus ASCs to offer food, books and vending products blossomed into a wide proliferation of other services such as laundry, amusements, resort facilities, faculty/student housing, hair salons, accounting and computer services for campus organizations, check cashing, campus transportation, rubbish removal and cleaning services. The National Association of College Auxiliary Services (NACAS), having amembership of almost 1400 college campuses, identified [94?] campus service functions providedby their members under the general title of “auxiliary services” (see EXHIBIT 2). While no singlecampus ASC provides all services; collectively, they were well represented across the system.

With most ASCs showing modest profits during the later 70s, and when public (tax based) support of SUNY began to shrink, campus administrations sought support and underwriting for (non-educational) development activities and other initiatives that could not be funded through continued S U N Y A U X I L I A R I E S R E A D Y F O R T H E C H A L L E N G E S 4 SUNY’s state budget appropriations. Such assistance from ASCs came forth under the banner of “program funding”. Each ASC, working collaboratively through its Board of Directors, soon developed its own methodology or formula by which it would allocate a portion of excess revenues to these purposes according to each corporation’s resource and asset structure, while maintaining fiscal stability.

The consumer revolution in retail and dining services of the last two decades, and given the demands of service and other marketing dynamics, ASCs have renovated or upgraded their facilities. Whereas the original facilities were provided by the university in its major build-out in the 1960s and 1970s, the cost of new facilities and renovations has been borne largely by the corporations. In particular, campus stakeholders wanted major national franchises represented on their campuses, and services that better reflected the off campus retail consumer environment. Most ASCs responded by integrating national brands into their services, with many of the most popular national franchise operations. ASCs responded to student desires for improvements to dining hall menus, food quality, dining areas and dining plans. ASCs’ marketing and customer service strategies have become much more sophisticated in the recent era, accounting for, if not anticipating demand for convenience, value, flexibility, and choice.

ASCs have also been in the forefront of providing consumer e-services, such as campus electronic ID card systems, debit account services and emerging Internet retail applications that respond to individual campus needs.

Today, the ASCs not only provide a full complement of ancillary services, but also provide substantial funds to each campus. Funds include facility development, utility offsets, and program funds to help mitigate the declines in state support of traditional campus operations as well as enrich the overall quality of campus life for SUNY to better compete in the higher education marketplace.

Clearly the role of the campus ASC has evolved over the years. For most of the years since 1950, the ASCs mission was to offer quality food, books and vending services at the lowest possible price. Focus has more recently been placed on entrepreneurial initiative, managing comprehensive and diversified services, and competitive marketing to maximize customer service and campus financial support.

The future holds many challenges for System Administration, the ASCs and campus administrators as they collaborate on the opportunities that confront them. SASA is a critical partner in the evolution of the ASCs throughout the university. SASA will continue to provide the vision, leadership and professional management resources necessary to assure the best outcomes for the university, campuses, and customers alike.