ASSOCIATED STUDENTS UCLA
BOARD OF DIRECTORS
FINANCE COMMITTEE MEETING
July 18, 2008 9:00 a.m. Kerckhoff Hall 152
PRESENT:
Richard Delia, ASUCLA Finance Director; Bob Williams, ASUCLA Executive
Director; Monroe Gorden; Chris Recht, Chair; Jesse Rogel; Jennifer WillisGraves (recorder); and Amanda York.
ABSENT:
Dave Lowenstein
GUESTS:
Shelley Sorger ASUCLA Board of Directors Graduate Student Representative
(incoming Finance Committee Chair), Jan Griwach-Ronci (UCLA Store General
Manager/Director of Computers/Supply Division & Hilltop Shop); Patrick Healey
(UCLA Store General Manager/Director, Apparel/Accessories/LuValle
Commons/Health Sciences Store); Karen Noh (ASUCLA Director, Special
Projects); Neil Yamaguchi (UCLA Store General Manager/Director Academic
Support)
CALL TO ORDER
This meeting was called to order at 9:06 a.m.
APPROVAL OF AGENDA
Mr. Williams requested that item VII.C. “Approval of Proposed Use of vacated Shoe City Space in
Ackerman Union” be changed from an action item to an informational item that would be discussed
during his report. Mr. Rogel moved, seconded by Ms. York to approve the agenda as revised. As there
were no objections, these minutes were approved by consent.
APPROVAL OF MINUTES FROM FINANCE COMMITTEE MEETING
HELD ON MAY 9, 2008
Ms. York moved, seconded by Mr. Rogel, to approve these minutes. As there were no objections, these
minutes were approved by consent.
APPROVAL OF MINUTES FROM FINANCE COMMITTEE MEETING
HELD ON MAY 16, 2008
Mr. Rogel moved, seconded by Ms. York, to approve these minutes. As there were no objections, these
minutes were approved by consent.
EXECUTIVE DIRECTOR’S REPORT
Finance Committee Meeting
July 18, 2008
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FY 08/09 Budget & Five Year Forecast
Mr. Williams reported that management received a letter from Chancellor Block approving the
ASUCLA Services & Enterprises FY 08/09 Budget & Five Year Forecast. This letter offered
congratulations for the Association’s strong financial performance in FY 07/08 and raised no concerns
regarding either the FY 08/09 budget or outer year forecasts.
Financial Overview
Mr. Williams reported that net income results for May exceeded plan by $236,000 and positive
variances in contribution were seen in most divisions.
Mr. Williams indicated that June results also exceeded plan by $110,000 in terms of net income
primarily as the result of strong sales in Apparel, the Computer Store and the Academic Publishing
Service. He noted negative variances in the sales in New Text and General Books, and explained that
management has anticipated this given recent down turns in the national economy.
Mr. Williams cautioned the committee that July results will most likely fall short of those seen during
the same period in the prior year, as last year the Association received two annual payments related to a
beverage contract and also a reduction in its principal amount on its long term debt.
Upcoming Events
Countrywide Tennis Tournament. The annual Countrywide Tennis Tournament is scheduled to take
place August 4-10, 2008. As in previous years the Association would provide the Champion’s Club
dining facility for attendees. Mr. Williams indicated that management anticipated that financial results
from this event would be less positive than those in prior years given that this year’s tournament
coincides with the opening of the 2008 Beijing Olympics. Event organizers attempted to increase
attendance by featuring several “Legends Events” where matches would be held between historically
notable players including Jim Courier, Wayne Ferreira, Aaron Krickstein, John McEnroe, Mikael
Pernfors and Mats Wilander.
Proposed Use of B-level Space (formerly Shoe City). Effective July 1, 2008 Shoe City vacated a large
retail space located on the B-Level of the Ackerman Union. Rather than engaging another 3rd party
vendor in a lease, management has proposed that this space be used by in-house operations. Under this
plan the space would be separated into two, where the northern portion would be used to supplement the
existing Bearwear stockroom and back of house operations and the southern portion would be used as
retail space to sell cards, plush products, and small novelty items currently located at the periphery of
the Market. In addition, a portion of the retail area would be used to offer photographs, matted prints and
postcards featuring images from the UCLA Photography historical archive. Open space created by this
re-organization would be used to provide wider aisles and increased product offerings in the Market, and
space formerly used for the sale of plush products and novelties would be used to highlight “green” and
environmentally sustainable products.
At the time of this meeting detailed cost estimates for this renovation were not available however
management was confident that the total cost including both the retail and stockroom areas would be
significantly less than a $365,000 capital project to renovate the existing Bearwear stockroom that is
included in the FY 08/09 budget. Mr. Williams indicated that management intended to provide a more
detailed presentation of this proposal to the Board of Directors at its July 25, 2008 meeting.
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July 18, 2008
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CampusLink. CampusLink, the firm that provides a back-lit advertising display board which offers free
internet access on the A-Level of Ackerman Union, renewed its existing operating agreement with the
Association and promised to upgrade its service by replacing the existing kiosk with several new,
smaller, and more modern terminals. At the time of this meeting, CampusLink was behind schedule on
the installation of these terminals but had expressed its intent to complete installation the following
Thursday.
A-Level Ackerman - Available Lease Space (formerly STA Travel). On Friday June 27July 7, 2008 STA
Travel closed 43 locations nationally, one of which was located on the A-level of Ackerman Union. At
the time of this meeting management was in the process of seeking tenants to replace STA, and was
considering Kaplan testing service, a blood donation center operated by the UCLA Blood and Platelet
Center, or a Campus Welcome Center in partnership with either Student Affairs or the Alumni Center.
Capital Projects
Cooperage. At the time of this meeting, flooring in the approaching hallway was in the process of being
replaced and work on the coffee area was nearly completed. Contract negotiations continued with Carl’s
Jr., as well as the design firm engaged for the game room portion of the project.
South Campus Student Center. Mr. Williams reported that the South Campus Student Center Working
Group met with architects and formal plans for this project had been filed with the UC Regents. He
invited committee members to participate in a joint brainstorming session with management on July 22,
2008 to conceptualize food offerings. He explained also that management was in the process of
developing a letter of understanding that delegates operating authority for this student center, a
statement similar to that which protects the Association’s operating authority in North Campus.
Casual Dining Facility. At the time of this meeting requests for proposals to operate a new casual dining
operation that includes beer and wine offerings had been distributed to multiple vendors. Management
had yet to receive responses from these requests however the Finance Director’s Office was scheduled
to make follow-up contact recipients during the last week in July. Mr. Williams indicated
management’s intent to schedule a research trip to UC Davis to review the Silo Café, a pub on the UC
Davis campus that is conceptually similar to the Board’s expressed intent for the casual dining facility in
Ackerman Union.
FINANCE DIRECTOR’S REPORT
May Financial Statements
Mr. Delia reported that in May the Association as a whole exceeded plan by $236,000 in terms of net
income. This allowed for a positive budget variance year to date of $1,262,000, and a positive variance
of $50,000 in comparison with the prior year.
June Financial Statements
In June net income exceeded plan by $110,000 but fell short of the prior year by $92,000. Likewise, year
to date net income exceeded plan by $1,372,000 but was $42,000 behind the prior year.
In terms of gross income, positive budget variances were reported in all divisions. The Store was
$20,000 ahead of plan due to increased sales in Bearwear and the Computer Store; the Restaurants
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July 18, 2008
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Division was $31,000 ahead of plan due to increased sales in Catering, LuValle Commons, and the
Green House; the Services Division was $19,000 ahead of plan due to increased income from
international licensees; and the Student Union Division was $65,000 ahead of plan due to new events.
Given this and positive results in gross margin and strong cost controls in wages and benefits,
contribution for the month was $84,000 ahead of plan in total. Individual positive budget variances were
seen in all divisions as well. The Store was $11,000 ahead of plan; the Restaurants Division was $22,000
ahead of plan; the Services Division was $15,000 ahead of plan; and the Student Union Division was
$36,000 ahead of plan. As in prior months, Administrative and Support Services expenses were less
than planned but maintenance and utilities expenses were higher than planned.
In terms of cash, the Association’s book balance was $18,850,000 at month end, which was an increase
of $874,000 over the same period in the prior year. Mr. Delia noted that in June cash decreased by
$490,000 as the result of inventory purchases made in preparation for Fall Rush. This level of cash
created a $2,635,000 surplus over the $1,758,000 Board required cash reserve at the end of the month.
As of month end in June, management anticipated spending $132,900 less on capital projects by year
end.
Past Due Accounts Receivable rose slightly, to roughly $42,000 or 2% of total accounts due.
Store inventories at cost rose from the prior month but remained below the same period in the prior year,
and inventory turns were healthy, at just below 5.2.
July Month to Date Preliminary Sales
To date in July Store sales were $53,726 ahead of plan, with positive budget variances appearing in:
1. The Computer Store, which was $72,138 ahead of plan;
2. LuValle Commons, which was $17,871 ahead of plan; and
3. Mail Telephone and web sales, which were $2,248 ahead of plan.
These results helped to offset a $15,780 negative variance to plan in the Academic Support Division and
a $22,3617 negative variance to plan in the Apparel division.
Based on these results management anticipates that gross margin will be about $5,000 less than planned
by month end.
Mr. Delia reported that to date in July Restaurant sales exceeded plan by $74,044 with strong positive
variances appearing in the Greenhouse, which was $19,033 ahead of plan; and third party vendor
commissions, which together were more than $21,000 ahead of plan. Several smaller positive variances
scattered across the division also bolstered the overall positive result:
1.
2.
3.
4.
5.
LuValle Commons was $6,529 ahead of plan;
Catering was $5,677 ahead of plan;
Bombshelter was $3,872 ahead of plan;
Kerckhoff Coffee House was $3,687 ahead of plan;
Wetzel’s/Rx was $ 3,289 ahead of plan; and
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July 18, 2008
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6. North Campus was $2,544 ahead of plan.
ACTION & DISCUSSION ITEMS
Approval of the FY 08/09 Finance Committee Calendar.
Mr. Rogel moved, seconded by Ms. York to approve this calendar. As there were no objections this
motion passed with unanimous consent.
Approval of Textbook Pricing Program
After an extended discussion of the relative merits of a price reduction, price matching program, or a
combination thereof, the committee opted to move to executive session.
Mr. Rogel moved, seconded by Mr. Gorden to move to executive session. As there were no objections
this motion passed with unanimous consent.
Mr. Rogel moved, seconded by Ms. York to exit executive session. As there were no objections this
motion passed with unanimous consent.
Ms. York moved, seconded by Mr. Rogel to approve all actions taken in executive session. As there
were no objections this motion passed with unanimous consent.
This Finance Committee meeting adjourned at 11:26 AM
Finance Committee Meeting
July 18, 2008
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