The decades-long relationship between the campus and the Associated Students of the University of California took on a new light in 1972 when the Board of Regents "affirmed" that associated students on all the UC campuses were "official units" of the university.
The regents also directed the UC president to take measures to "treat the associated students and all of their activities as integral parts of the university."
At Berkeley, where the ASUC had a long history of independent action, particularly the management of business enterprises such as the bookstore, implementation of this resolution was difficult. Over the next several years, the campus and the ASUC were unable to reach an understanding on the ASUC's status.
In 1977, the regents granted an exception to the 1972 resolution and authorized the president "to execute an agreement with the Berkeley Campus Associated Students of the University of California as an independent , non-profit, unincorporated association and would provide for its operation, either directly or through contractors, of certain services, activities and facilities on the Berkeley campus, including the student union building, the ASUC bookstore and Bear's Lair restaurant, selected vending machine operations and the Cal-ASUC box office."
Negotiations to implement this 1977 action were sporadic and unproductive until Aug. 4, 1994, when the campus administration and the ASUC signed a Statement of Understanding (SOU). It had a five-year term and set forth agreements on "major aspects of the existing relationship" between them.
This SOU, among other things:
In particular, the ASUC agreed to abide by all applicable university policies and recognized that its operational authority was constrained by the "chancellor's responsibility to ensure overall fiscal soundness."
The right of the ASUC to operate business activities on campus is subject under the SOU to termination for good cause, including "financial insolvency of the ASUC" and "willful breach of any university policy, rule or regulation."
Over the past several years, the ASUC's business operations have been suffering. In June 1995, liability exceeded assets by nearly $700,000. In the four months of February through May 1996, the ASUC's business operations lost $900,000. In January 1996, the ASUC's line of credit with Bank of the West expired and has not been renewed.
In May, the campus extended a temporary loan of $1.2 million in cash advances and deferred $800,000 in campus receivables. The loan, including the unpaid receivables, was due Aug. 20. The ASUC has still not repaid the loan and the campus is proceeding with actions to recover more than $2.3 million now due it.
Also this summer, in an effort to resuscitate its financial situation, the ASUC attempted to enter into a contract with Barnes & Noble to operate the bookstore, in violation of an SOU prohibition against third-party contractors.
Under these circumstances, the campus determined the ASUC to be effectively insolvent. On June 24, Vice Chancellor Horace Mitchell withdrew the ASUC's authorization to conduct business operations on campus. Following a meeting and unsuccessful negotiations with ASUC leaders, Chancellor Tien on July 12 rejected the ASUC's appeal of Mitchell's decision.
Several weeks of negotiations and discussion between ASUC representatives and campus administrators followed. The campus anticipated operating the bookstore through a self-supporting auxiliary enterprise and offered to:
The campus was also willing to consider a variety of alternatives to the ASUC's maintaining sole control over the bookstore. These included creating a self-supporting auxiliary enterprise with ASUC representation or a newly created separate entity with representatives from both the campus and the ASUC. Further, campus administrators said they would consider the idea that the ASUC could buy back the store after five years, provided the ASUC has the financial and business capacity to do so.
The ASUC was unwilling to accept any arrangement which would place final authority with the chancellor.
At the July 18 regents' meeting, Regents Ward Connerly and Jess Bravin, the student regent attending Boalt Hall, met with Mitchell, ASUC President Grant Harris and other ASUC officers.
The regents were unable to persuade the students to give serious consideration to the various campus-offered options.
The ASUC was given until the end of the business day on Friday, July 19, to cease operations.
However campus representatives continued to meet with the ASUC to reach a workable agreement.
None was reached and the campus administration was notified by ASUC's counsel that they would not vacate the premises without a court order.
The campus then served a three-day "notice to quit" on July 23.
When this expired without action by the ASUC, an unlawful detainer was filed on behalf of the Berkeley campus on July 29 in Alameda County Superior Court to regain the bookstore space.
A motion by the ASUC to halt the proceedings was rejected by the judge and the legal action continues.