By Mason Stockstill Daily Bruin Senior Staff After several years
of disappointing financial performance, the Associated Students of
UCLA is expecting to fall more than $1 million short of its budget
projections on the year. That’s the situation facing ASUCLA
now, as it attempts to reconcile its goal of serving students with
its need to remain financially solvent. But it’s also the
situation the association faced in 1995, when years of mounting
losses and financial mismanagement caused ASUCLA’s Board of
Directors to force out its longtime executive director and take out
a massive loan from the university. The near-bankruptcy five years
ago set the stage for ASUCLA’s recent history, changing the
way the association worked and prefiguring its future. “We
are at a crossroads and we can fail,” said then-executive
director Charles Mack in 1995. “We have failed for the past
few years, and unless we do something differently, we will continue
to fail.” Mack’s dire warning did not go unheeded. As
part of their loan agreement with the university in 1996, ASUCLA
began creating five-year budget projections as an attempt to bring
more austerity to the association’s finances. Also as a
condition of the university’s loan, the association
restructured its board of directors, removing elected student
government representatives and replacing them with students
appointed by those representatives. “(Restructuring) is a
sound decision,” said then-Chancellor Charles Young.
“It will help buffer the board from political
interests.” To pay off the unforeseen expenses that came with
remodeling Ackerman Union, the student union fee was raised in 1997
from $7.50 to $51 annually. These measures were designed to help
the association turn around its losses and become a thriving
organization by roughly the year 2000. But the picture today is not
as rosy as ASUCLA had hoped it would be back in 1995. The first
five-year plan that came about in 1995 projected the association
would be back in the black by the 1998-99 school year. By 1997,
that had changed to 1999-2000; and by 1998 ASUCLA’s five-year
plan didn’t expect a surplus until 2000-01. “The
finance committee felt that the sales projections … were a little
on the aggressive side,” said Rich Delia, ASUCLA’s
finance director, in 1998. But the biggest setback the association
has faced is the staggering deficit between budgeted and actual
income this school year. Lower-than-expected sales in BearWear and
other areas have caused ASUCLA’s finances to fall an
estimated $1.3 million below budget this year. “We thought
this would be the first year we were in the black in every
way,” said ASUCLA board member Lance Menthe earlier this
year. “We were ready to pop the champagne corks, but now
we’re quietly putting the bottles away.” This financial
downturn comes at a difficult time for the association. The student
union fee is scheduled to roll back to $7.50 in 2002, which will
knock down ASUCLA’s income by $1.5 million. If the
association can’t turn things around soon, there’s a
chance that Chancellor Albert Carnesale could step in and assume
indirect control of the Board of Directors ““ though neither
Carnesale or ASUCLA officials say such a drastic step is likely.
“We are eager, if it is at all possible … for the current
arrangement to continue, whereby ASUCLA is fundamentally a
responsibility of the students,” said Carnesale in a recent
news conference. Under the Advance Agreement entered into by the
association and the university in 1996, the chancellor has the
discretion to add voting members to the Board of Directors until
his appointed representatives constitute a majority of the
board’s voting members. This year’s board, however,
hopes its projected income of $2 million for next year will
preclude action by the chancellor to take over the board.
“We’re confident that after they see this budget (the
university) won’t need to do that,” said ASUCLA board
member Randy Hall. That budget, like many before it, has high
expectations for the UCLA Store, the association’s flagship
enterprise and the entity within ASUCLA that has changed the most
since 1995. After a two-year relocation to the temporary Towell
building, the newly renovated Ackerman Union location ““ which
opened in December 1996 ““ gave the store a new look that the
association hoped would translate into more sales. But sales
haven’t been as stellar as the association would have liked.
Without a championship season from either football or men’s
basketball, BearWear sales have stagnated. Next year, ASUCLA hopes
to turn things around by giving the store another makeover. Instead
of a physical renovation, though, the store’s inventory will
undergo changes, as the association plans to sell CDs in Ackerman.
Additionally, the association will begin to aggressively market
online sales of BearWear to alumni. “Our online sales make up
5 percent of overall BearWear sales,” said ASUCLA Executive
Director Patricia Eastman, adding that the outside company that
will be handling ASUCLA’s online sales is excited to work
with the association because of its high online sales volume.
Though the association is still having to make serious changes to
the way it does business ““ including wide-ranging layoffs
““ officials are confident that ASUCLA will pull through based
on the most recent budget projections. “We want the
association to be sufficiently successful so that we can continue
in the way we have in the past,” Carnesale said. “Our
efforts (to remedy the situation) are going quite well.”
ASUCLA’S PAST FIVE YEARS
ASUCLA’s financial picture, while growing steadily better in the
last five years, has yet to see a surplus despite consistent
projections of a rosy future just around the corner.
* estimated amount SOURCE: ASUCLA Original Graphic by ADAM
BROWN/Daily Bruin Web Adaptation by HERNANE TABAY/Daily Bruin
Senior Staff