Associated Students Inc. voted Sept. 22 to explore the option of a purchase by Peak Adventures of a whitewater rafting company called River and Rock Adventures. Nothing has been decided.

The legislation, which will be voted on at today’s board meeting, will approve up to a $120,000 loan to Peak Adventures for the purchase.

The loan will come from the ASI general fund, which currently has $650,000 available, and will be paid back by Peak Adventures over a five-year period at an interest rate of 3 percent.

Meika Stoddard, ASI director of engineering and computer science, introduced the legislation and said that if it passes, Peak Adventures will be able to raise their own funding through rafting trips, and they will be less vulnerable to cutbacks like the ones they faced last semester.

Stoddard said that Peak Adventures was undeservedly under scrutiny for not making money, and that last year’s board did not look at the facts.

ASI was seeking ways to cut $233,000 out of this year’s budget, and Peak Adventures had been one of its biggest targets last semester. At one point Peak Adventures was facing up to $100,000 in cutbacks.

The actual cutback was much lower with only $21,000 of their requested $199,031 of funding cut out, but the effects of the loss are evident to Jael Young, director of Peak Adventures.

Randy Morgan, director of finance, said that Peak’s expenditures rose a lot faster than their revenue because of the yearly rise in medical and insurance rates.

“They started off in such a hole,” Morgan said. “But they have been climbing out of it slowly and surely.”

Young said that because of the cutbacks she had to let one of only three full time employees go. The manager who was cut was also helping with advertising for Peak Adventures, which has led to less advertising capabilities for the programs that Peak Adventures offers.

The outdoor program has been the hardest hit by the loss of funding. Young attributes this loss to the lack of advertising they have this year for the outdoor trips.

Young said that the bike shop and the ropes course have both brought increased revenue over last year by about $11,000 and they did it with less expense.

One way that they have cut back is to post their trip dates and descriptions online rather than in the brochures that were used last year. Young said part of the reason was also because they are unsure whether they will be offering more or less trips this year so they do not want to have a lot of brochures printed up that may need to be changed.

Many students have been requesting river rafting, which is currently outsourced by Peak Adventures. Purchasing the river rafting company could add several new dates to Peak’s scheduled trips calendar. By owning their own rafting company they will not have to be the middleman for this section of their business.

The owners of River and Rock Adventures are Sac State alumni and have chosen Peak Adventures as the primary buyer of the $116,800 company.

Morgan said he wants to negotiate the price of this company because there are some parts of the business that Peak will not need.

The vans owned by River and Rock Adventures are 15-passenger vans, which are no longer an option for Peak Adventures, so they will need to be deducted from the price of the company.

Negotiations will start once the ASI board has passed the legislation.

Stoddard said that the rafting program at UC Davis is a strong example of how much money can be generated by this acquisition.

James Shelby, vice president of finance, said that Peak Adventures could expect a revenue increase of between $30,000 and $50,000 per year.River rafting, which was once considered a hobby, has become a million dollar industry. For this reason El Dorado is pushing for a permit requirement on the river.

The permits are, like liquor licenses, an investment because they never expire. They can only be bought from a company who already owns them and they appreciate in value over the years.

River and Rock Adventures already owns permits for the south fork of the American River, which is located approximately 1.5 hours away from campus.Hunter Merritt, a manager at Peak Adventures, said that the American River is the number one commercially guided river in the country.

“(Rafting) offers a really nice venue for leadership development,” Merritt said. “Rafting is an activity that can take higher numbers — you can take a group of 40 at once.”

Many of the groups on campus took rafting trips over the summer. Young said she would like to see those groups coming to Peak Adventures in the future.

The guides for the rafting company would be retained, but Peak Adventures would also like to hire and train Sac State students as guides.River politics deal with the control of river flow by energy companies like PG&E and SMUD.

PG&E and SMUD both control dams that feed into the American River, but the two companies do not talk to each other about when it will be releasing water, so some days the river can be really high and have a lot of rapids and other days have very few rapids. Also, since most of the time the water is released in the middle of the night rafters miss the biggest rapids.

If the legislation does not pass, Peak Adventures is looking into other ways to raise new revenue for the organization, including the possibility of offering youth camps.

Young said that purchasing the rafting company is their first choice for new revenue because it will directly benefit students and would allow Peak Adventures to make a higher profit from trips that they have already been scheduling. The venture would also lower costs for students.

Right now students pay $88 for one of these rafting trips and Peak Adventures only gets about 10 percent of that amount. The rest goes to River and Rafting Adventures.

Young said she would like to lower that cost to about $60 for students, but still keep a higher cost for outside users.

“We don’t want to use student’s money to subsidize the public,” Morgan said at the ASI meeting.

The legislation, if passed, would give permission to Peak Adventures to negotiate with River and Rock Adventures and come back with a real figure for a final vote by the ASI board.

Young said that purchasing River and Rock Adventures would bring in more money than all of Peak Adventures’ outdoor activities combined.

“This is a great opportunity for Peak Adventures,” Stoddard said. “(River rafting) is fun, leadership and team building all rolled into one.”