ASSOCIATED STUDENTS UCLA
BOARD OF DIRECTORS
Finance Committee Meeting
November 18, 2005 9:00 a.m. Kerckhoff Hall 152
PRESENT:
Richard Delia (ASUCLA Finance Director), Bob Williams (ASUCLA
Executive Director), Natalie Nguyen (Chair), Matt Bukirin, Andy Green,
Dave Lowenstein, Richard Orgell and Jennifer Willis-Graves (Recording
Secretary)
GUESTS:
Arvli Ward (Director UCLA Student Media), Ty Tosdale (Chair,
Communications Board of Directors), Rick Wentzel, (Price Waterhouse
Coopers Partner), Dianne Duncan (Price Waterhouse Coopers Engagement
Manager), Jenny Winchell, (Price Waterhouse Coopers Senior Associate in
Charge of Field Work)
CALL TO ORDER
This meeting was called to order at 9:01 AM.
APPROVAL OF MINUTES FROM FINANCE COMMITTEE MEETING
HELD ON OCTOBER 21, 2005.
As there were no changes, minutes were approved by consent.
STUDENT MEDIA FINANCIAL RECOVERY PLAN
Mr. Arvli Ward, Director of Student Media, distributed a memo that provided background
information about market factors that exert pressure on Student Media advertising, as well as
several strategies for long term change.
Market Pressures:
 Declining print circulation
 More readers online delivery of editorial content
 Proliferation of online competitors for readers
 Classified ads online competition
 Dominance of regional and national business in Westwood market
 New structure for student group funding
 Fee hikes and state and university budget issues
 National advertisers turning away from print
Measures to address declining revenues:
 Give all Daily Bruin print advertisers exposure to online audience
 Position the Daily Bruin as a full-service marketing partner for local clients
 Develop new clients
Finance Committee Meeting
November 18, 2005
Page 1






Collect and share business data with clients
Create multiple sales channels, including online
Redesign Daily Bruin and student media advertising and sales training
Have campus advertising departments work to educate student groups
Raise funds for capital items, scholarships, training and banquets.
Professionalize the Daily Bruin sales staff
Mr. Ward also discussed several strategies for expense reduction. He noted that since 1998,
Student Media expenses have decreased 24.3% overall (a reduction of $495,696), including
decreases in printing expenses ($171,291, down 24.9%), student wages ($86,807, down 13.0%),
and accounting fees ($71,489, down 31.3%). Mr. Ward listed several strategies for continued
expense control going forward.
Expense Reduction:
 Fully outsource accounting function
 Reduce press run/eliminate Daily Bruin magazine
 Reduce stipends 10%
 Eliminate year-end banquets
 Eliminate UCLAtv
Mr. Lowenstein requested that supporting materials for future presentations be distributed to
committee members along with other agenda items or meeting materials a week before the
meeting.
After a detailed discussion of the information provided, including a discussion of the relative
merits of the continued circulation of the summer issues of the Daily Bruin, the committee
scheduled a special Finance Committee meeting (Friday December 9, 2005, at 9:00 AM) where
Mr. Ward and Mr. Tosdale would report in detail on short range strategies for recovery.
EXTERNAL AUDITOR’S REPORT
Mr. Rick Wentzel, Partner at Price Waterhouse Coopers, the independent auditing firm that
conducts an annual review of ASUCLA’s financial statements, introduced Ms. Dianne Duncan,
Engagement Manager, and Ms. Jenny Winchell, Senior Associate in Charge of Field Work. Mr.
Wentzel explained that field work for the audit of FY 04/05 financial statements has been
completed, and that the audit team intends to have preliminary audited financial statements for
management review by the middle of December, in time for distribution before the January
Finance Committee meeting. Mr. Wentzel indicated that he would not be attending this January
Finance Committee meeting, and that Ms. Duncan and Ms. Winchell would present audit results
in his absence.
Finance Committee Meeting
November 18, 2005
Page 2
EXECUTIVE DIRECTOR’S REPORT
October Financial Overview
Mr. Williams reported that financial results were excellent in October despite several factors
including decreased enrollment and increased population in the residence halls that usually result
in decreased customer counts.
Capital Expenditures:
Broad Arts Café: Despite a strong constituency requesting the development of this space as a
café, Broad Arts architects have rejected plans as presented, and suggested the development of a
cart program instead. Management will develop a new plan once issues regarding the intent for
this space have been resolved.
Jamba Juice Lounge:
Despite the advanced stage of lease development, representatives from Jamba Juice have
expressed reservations about the cost effectiveness of the juice bar/lounge concept as originally
agreed. In an effort to preserve the original vision for this space, management has offered to
partially fund the lounge. A meeting with senior project-related personnel from Jamba Juice was
scheduled to take place one week after the date of this Finance Committee meeting.
Healthy Food Bar:
After extended discussion with the architect, management has decided to bid equipment
separately from construction. UCLA Facilities will execute most of the renovation; however a
third party will provide equipment and installation. The architect on this project will facilitate by
coordinating these efforts.
Hot Dog Cart Concept:
Talks continue with a hot dog vendor towards the development of a cart based program to
provide hot dogs and related products on campus.
Patio Furniture Refurbishment:
Given strong financial performance for the first three months of this year, management has opted
to execute many maintenance projects that were postponed in prior years. Currently, patio
furniture is in the process of being painted and refurbished, however management is considering
the employment of an outside contractor to assist Association personnel.
FINANCE DIRECTOR’S REPORT
October Financial Statements
Mr. Delia reported that in October, the Association as a whole exceeded plan in terms of net
income by $278,000, and year to date $187,000.
Gross income exceeded plan by $708,000 due primarily to increased sales of Bearwear (which
was $322,000 ahead of plan) in the Store (which was $640,000 ahead of plan overall). Gross
income in the Restaurants division exceeded plan by $43,000 primarily as the result of increased
Finance Committee Meeting
November 18, 2005
Page 3
sales from the Kerckhoff Coffee House, and LuValle Commons, but also due to the fact that
several operations that were scheduled to be closed (namely Tropix and the Cooperage salad bar)
remain open. The Services division exceeded plan in terms of gross income by $27,000 due to
increased income from Licensing (due to improved athletic performance which drove increased
interest in UCLA merchandise), despite negative variances that resulted from delays in finalizing
agreements with the new licensee in Mexico. Although gross income from the Student Union
was $2,000 off plan due to a decrease in the number of events booked by USAC, expense
reductions in this area provided for a positive variance in contribution of $2,000.
Contribution for the Association exceeded plan by $217,000 due primarily to increases in gross
income from the Store and Restaurants. Cost control efforts in Administrative & Support
Services (which was $19,000 better than plan) bolstered this positive variance as well.
Mr. Delia called the committee’s attention to a pending shrinkage adjustment in textbooks that
would affect November Financial Statements. He explained that the most recent cycle count,
which calibrates inventory system unit counts against actual units on hand, revealed a significant
discrepancy. Management in this area is currently conducting an analysis and results were
scheduled to be available during the week following this Finance Committee meeting.
Mr. Delia reminded the committee that the Association’s overarching goal has been to achieve
net income as 1% of sales, and in prior years, this seemed unattainable. At present however, the
Association is reporting net income levels as 3.4% of sales YTD. He remains cautiously
optimistic that this trend will continue throughout the year despite projected utility increases.
Interest expenses decreased in October ($74,000 less than plan) due to the fact that the University
refinanced a bond related to the Association’s loan (taken in 1995 to fund the renovation of the
Ackerman Union).
In October, cash increased by $2.1 million, raising the total amount of cash generated by
operating activities for the year to $4.2 million. At the end of the month, the Association’s book
balance was $14,780,000, an increase of $4,223 over the same period last year. Despite the fact
that $9,004,000 is currently committed to capital projects, the Association exceeded the Board of
Directors Required Cash Reserve ($4,922,000) by $854,000. Management cautioned the
committee that financial statements will most likely show deficits in this area in coming months;
however, the fact that the Association is fully reserved at this point is yet another indication of
strong financial performance.
Staffing issues are currently delaying the execution of several capital projects however
management plans to address this in coming months.
In October past due accounts receivable were very low, at 1% of the total.
Inventory at cost was just over $7 million, slightly higher than the prior year; however, inventory
turns were also higher, just over 5.0.
Finance Committee Meeting
November 18, 2005
Page 4
November Preliminary Sales
To date in November sales in the Store exceeded plan by $155,000 due primarily to increased
sales in the apparel division (which was $83,099 ahead of plan), and in the Supply division
(which was $27,901 ahead of plan). Mr. Delia noted that $60,000 in concessions sales from the
previous Saturday had not yet been posted, and as such, the actual positive variance from the
Store was closer to $215,000. This will partially offset negative variances in the Academic
Publishing Service (which was $17,967 off plan). Sales in the LuValle Commons store exceeded
plan by $14,298, and sales from the Health Sciences Store and the Hilltop Shop exceeded plan by
$9,223 and $10,255, respectively. Sales from Mail Telephone and Web orders exceeded plan by
$16,487 due to increased interest fueled by improved athletic performance.
Management anticipates that these sales will generate a positive variance of roughly $60,000 in
terms of gross margin, not factoring the concessions income alluded to above. With the addition
of these sales, it is anticipated that the gross margin positive variance in November will exceed
$90,000.
At this point the committee paused to discuss the recent UCLA catalog distribution and the
accompanying Distinctively UCLA insert.
Restaurant sales to date in November exceeded play by $48,223; however, discrepancies between
those operations that were budgeted to be open or closed, and those that are actually open or
closed masked trends to some degree. Although sales from Tropix, North Campus, LuValle
Commons, and the Bombshelter were behind last year, sales in the Kerckhoff Coffee House,
Jimmy’s, The Cooperage and Café Synapse were ahead.
The Finance Committee Meeting adjourned at 10:45 AM.
Finance Committee Meeting
November 18, 2005
Page 5