ASSOCIATED STUDENTS UCLA BOARD OF DIRECTORS FINANCE COMMITTEE MEETING April 15, 2011 10:00 a.m. Kerckhoff Hall 152

PRESENT: Rich Delia, ASUCLA Finance Director; Karleen Giannitrapani; Dave Lowenstein; Mark Reyes (Chair); Mike Soderberg; Bob Williams, ASUCLA Executive Director; and Jennifer Willis-Graves, (recorder)

CALL TO ORDER

This meeting was called to order at 10:03 a.m.

APPROVAL OF AGENDA

As there were no objections the agenda for this meeting was approved as distributed.

APPROVAL OF MINUTES FROM FINANCE COMMITTEE MEETING HELD ON MARCH 4, 2011

These minutes were approved as distributed without objection.

EXECUTIVE DIRECTOR’S REPORT

Financial Results Mr. Williams reported that March 2011 Financial results were $162,000 better than planned and $449,000 greater than the prior year in terms of net income. This result raised the year-to-date positive variance to plan to $661,000. He cautioned the committee that these positive variances may be partially offset in the coming months due to calendaring issues.

Festival of Books While Festival of Books did not take place on the UCLA campus this year, the UCLA Store will have two booths at the event, one of which is a major author signing location.

Capital Projects & Expenditures Solar Panels. Mr. Williams reported that a project to install solar panels on the roof of Ackerman Union was in progress at the time of this meeting. He noted that this project is anticipated to reduce utilities expenses by roughly $12,000 annually.

Anderson School Cart Program. The coffee carts serving the Anderson School of Management at the time of this meeting were scheduled to be removed within two weeks, as the permanent restaurant operation that will not be managed or operated by ASUCLA would be ready to open. Mr. Williams explained that this change would have a negative financial impact on UCLA Restaurants, both as a result of the lost revenue from these carts and from customer attrition from North Campus facilities.

Finance Committee Meeting Page 1 April 15, 2011 Court of Sciences Student Center. Mr. Williams reminded the committee that the Board of Directors would take a hard-hat tour of the Court of Sciences Student Center building site on Friday April 29, 2011.

Westwood Room Conversion/Casual Dining. Mr. Williams reported that the Faculty Center Board of Governors has expressed its appreciation to ASUCLA and the ASUCLA Board of Directors for its willingness to assist in their efforts to establish a new faculty dining area during the Faculty Center renovation. A brief discussion followed regarding various political aspects of this project as well as the current status of discussions surrounding the use of the Westwood Room located on the First Floor of Ackerman Union for this purpose.

Young Research Library Café. Mr. Williams reported that this coffeehouse is scheduled to open in May 2011.

Loading Dock. Mr. Williams informed the committee that Engineering 1, the closest building to the ASUCLA loading dock will be renovated beginning this summer. He explained that this construction will impact the loading dock by blocking current ingress and egress truck routes, and further, the designers of the new building have raised aesthetic concerns about trucks queuing for the loading dock in front of the new building. Several possible solutions have been raised by the University that involve the relocation of the loading dock. Mr. Williams emphasized that any such change will be paid for by the University and that the UCLA Store group was examining logistical requirements and preferences at the time of this meeting.

FINANCE DIRECTOR’S REPORT

Preliminary FY 2011-2012 Budget & Five Year Forecast Information Mr. Delia briefly reviewed preliminary FY 2011-2012 Budget & Five Year Forecast Information including an income statement, cash flow and cash reserve analysis, noting the impact of the FY 11-12 Ackerman Union Store redesign project and the FY 13-14 North Campus remodel on these latter two reports. In all years of the forecast the Association shows positive net income.

FY 2011-2012 Budget & Five Year Forecast Capital Expenditures Mr. Delia briefly reviewed FY 2011-2012 Budget & Five Year Forecast capital expenditures highlighting planned expenditures related to the Ackerman Union and Pauley Pavilion remodels in FY 11-12.

Communications Board February Financial Statements Mr. Delia reported that in February the Communications Board reported a $9,541 positive variance to plan in terms of net income, a result that helped reduce the negative variance reported in year-to-date net income to $54,345. He noted that these results were significantly better than those from the same period in the prior year, but he cautioned the committee to expect negative variances resulting from calendaring of publication days as Spring Quarter continues.

Services & Enterprises March Preliminary Results As March Financial Statements were in progress at the time of this meeting, Mr. Delia reported on March Preliminary financial results.

In March the UCLA Store reported a $167,000 positive variance to plan and a $1,876,000 positive variance to March 2010 in terms of gross income; and the Student Union Division Finance Committee Meeting Page 2 April 15, 2011 reported a $32,000 positive variance to plan but a $5,000 negative variance to the prior year in terms of gross income. Conversely, UCLA Restaurants reported a $25,000 negative variance to plan but a $45,000 positive variance compared to the prior year in terms of gross income; while the Services Division reported a $5,000 negative variance to plan and a $26,000 negative variance compared to the prior year, in terms of gross income.

Together these results raised the year-to-date positive variance to plan in gross income for the Association as a whole to $832,000, and the positive variance compared to the prior year to $2,154,000 or 4.7%.

In terms of contribution, the Store reported a positive variance of $71,000 compared to plan and a positive variance of $501,000 compared to the prior year, while both the Services Division and the Student Union Division reported positive variances to plan, of $3,000 and $6,000 respectively, but negative variances compared to the prior year ($18,000 and $26,000 respectively). Despite the aforementioned negative variance in gross income, the Restaurants Division reported a positive variance to both plan and the prior year ($20,000 and $11,000 respectively) in terms of contribution, as the result of savings in wages and benefits and other controllable expenses.

Year-to-date contribution for the Association as a whole was $260,000 greater than planned and $897,000 greater than the prior year, with the strongest positive variance year-to-date appearing in the Store, which was $168,000 ahead of plan and $690,000 better than the prior year.

Mr. Delia reported that allocated expenses for March were $49,000 less than planned and $10,000 less than the prior year, with significant savings appearing in Administrative & Support Service expenses, which were $17,000 less than planned and $6,000 less than the prior year; utilities, which were $18,000 less than planned and $7,000 less than the prior year; and depreciation, which was $15,000 less than planned.

Year-to-date allocated expenses were $290,000 less than planned but $100,000 greater than the prior year and year-to-date Administrative & Support Services were $70,000 less than planned but $160,000 greater than the prior year.

Together these results allowed for a $162,000 positive variance to plan and a $449,000 positive variance to the prior year in terms of net income for March. Year-to-date this positive budget variance was $661,000 and the year over year positive variance in net income was $667,000.

Services & Enterprises April Month-to-Date Preliminary Sales To date in April the Store reported a $61,203 positive budget variance and a $113,236 positive variance compared to the prior year primarily due to sales in the Ackerman Supply Division which was $120,215 ahead of plan due to a $116,435 positive variance in sales of computer hardware. This result helped to offset a $13,015 negative variance in Ackerman Union Apparel; a $13,924 negative variance in the LuValle Commons store; and a $10,757 negative variance in the Health Sciences Store.

Despite this positive sales variance, management projects that the Store will report a negative budget variance of about $13,000 in terms of gross margin by month end, as computer hardware yields a comparatively lower margin than apparel or other classes of merchandise.

Finance Committee Meeting Page 3 April 15, 2011 The Restaurants Division reported a $93,744 positive variance to plan and a $100,601 positive variance compared to the prior year, month-to-date in April. Positive variances appeared in several areas:

1. Sales in Catering were $28,293 better than planned and $10,765 greater than the prior year; 2. Sales from the South Campus catering trucks were $9,037 better than planned and $8,031 greater than the prior year; 3. Sales in LuValle Commons were $7,164 better than planned and $7,396 greater than the prior year; and 4. Sales in the Kerckhoff Coffeehouse were $6,085 greater than planned and $10,889 greater than the prior year.

Also, sales from third party vendors were greater than planned month-to-date, with the strongest positive variances appearing in Rubio’s Baja Grill, which was $14,122 ahead of plan; Jamba Juice, which was $8,819 ahead of plan; and Panda Express, which was $7,705 ahead of plan.

ACTION & DISCUSSION ITEMS

Approval of Capital Expenditure for Ackerman Store Redesign Study After a short discussion, Mr. Lowenstein moved, seconded by Ms. Giannitrapani to postpone the Finance Committee vote on this item until more detailed financial information was received. As there were no objections, this motion passed unanimously.

Executive Session Ms. Giannitrapani moved, seconded by Mr. Soderberg to enter executive session. As there were no objections, the committee entered executive session at 10:44 AM.

Ms. Giannitrapani moved, seconded by Mr. Lowenstein to exit executive session. As there were no objections, the committee left executive session at 10:46 AM.

Mr. Soderberg moved, seconded by Ms. Giannitrapani to approve all actions taken in executive session. This motion passed unanimously.

ADJOURNMENT

As there were no objections, this Finance Committee meeting adjourned at 11:06 a.m.

Finance Committee Meeting Page 4 April 15, 2011