The Post-Graduate Students’ Society (PGSS) of McGill University eliminated two management positions this month, part of a larger restructuring effort to cope with its $112,000 budget deficit.
The Society’s Board of Directors permanently laid off Linda Susnik, the Executive Director of Thomson House, in late October.
“We can’t afford to have everybody around, so we have to reduce,” said VP Finance Eric Pollanen. “We can reduce managers more easily because the managers have no contact with the customer.”
PGSS President John Ashley Burgoyne explained that the Executive Director received the highest salary in the Society, and that laying-off Susnik had nothing to do with her performance. “Her last performance review was in fact positive,” he said.
Though the VP Finance doesn’t typically revise budgets, Pollanen recognized PGSS was in serious financial trouble, and drew up a second budget, which he presented to the Board of Directors last Wednesday.
“We would have been facing an insolvency situation if we didn’t change,” Pollanen said.
Restructuring will involve re-delegating duties, more self-management on the part of staff, menu adjustments, reevaluating who’s eligible for discounted membership, and whether Thomson House’s meals will be subsidized by student fees in the future.
“The bigger question of restructuring is, ‘Do we want Thomson House to be subsidized?’” Pollanen said, adding that he will consult with graduate students on the issue.
The Board is also consolidating the two current chef management positions – Executive Chef and Head Chef – after the Head Chef resigned approximately two weeks ago, Pollanen said. PGSS will need the approval of Council to make these changes.
The Society incurred an unusually large deficit this year because graduate student enrollment was lower than it was last year, reducing income from membership fees and insurance revenue, according to Burgoyne.
“The PGSS has not had a history of over-spending,” Burgoyne said. “Even two years ago, there was no excess of expenditure. It was a one-off thing.”
Burgoyne does not expect the economic downturn to have a dramatic impact on the Society.
The most volatile part of the Society’s income comes from operations at the Thomson House bar and restaurant, which comprise roughly a third of their revenue. “Two-thirds are essentially guaranteed,” Pollanen said.
Pollanen is confident that the new budget and structural changes will balance the budget. “With the new plan in place there’s no danger that Thomson House could become insolvent,” he said. “Thomson House is not going to go bankrupt.”
Operations Manager André Pierzchala assumed that many of the former Executive Director’s responsibilities fall under the new title of Acting Business Manager.
“There’s very little change from the operational point of view,” Pierzchala said. “There’s nothing wrong with looking at a different model or being progressive about things.”
The restructuring effort was in part a response to pressure from Council, where members were frustrated and concerned about the deficit.
Pollanen added that he wants to foster a culture of transparency, having himself been frustrated by the lack of accessibility to financial information in the past. “Managers didn’t have a good sense of the financial performance of Thomson House, and they weren’t expected to,” he said.
Now the Society has set up a restructuring web site with an FAQ for councillors, and last year’s budget is available on the site.
Jessica, a Thomson House server and bartender who declined to give her last name, is unconcerned about the restructuring. “It didn’t really affect me,” she said of the Executive Director position being eliminated. “I think it affected management more.”
Another bartender expressed enthusiasm about Pierzchala taking on much of the Executive Director’s responsibilities as Acting Business Manager.
“There’s a lot going on, and it affects things all the way down to the bottom, though in a different way,” he said, adding he was optimistic about the restructuring overall.
“It’s gonna save the place.”