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Meeting Minutes

Loyola University Chicago
Budget and Finance University Policy Committee
July 12, 2007

Meeting Minutes

Members Present: Raymond Catania, Jennifer Clark, Thomas Hickey, William Honig, Wayne Magdziarz, Tim McGuriman, Loretta Morales, John Pelissero, Alan Raphael (Chairman), Christine Wiseman (Guest)

Members Absent: Michael Gemma, Cindy Gonya, Scott Harris, David Slavsky

  1. Approval of minutes from previous meeting
    Minutes of April 25, 2007 are approved as written and will be posted on the web site.

  2. Presentation regarding budget
    Mr. Hickey distributed the written budget presentation presented to the Finance Committee and the Board of Trustees in June 2007. The more detailed Finance Committee presentation was reviewed. An explanation of the two-step budget process was provided. In the fall, a macro process is used to support requests for tuition, fees, room and board rate increases. The spring process develops a budget by accounting unit and account.

    The forecast for FY 2007 was reviewed and it was noted the projected $44m results of operations surplus compares favorably with the actual $43m in FY 2006. The FY 2007 budget for results of operations is expected to be exceeded by $31m or 250%. Expected increases in net assets of $92m for FY 2007 compares to the $104m in FY 2006. Both include an extraordinary pension adjustment that, when excluded, indicates the true performance of FY 2007 exceeds FY 2006 by $27m. Both years’ results of operations were heavily impacted by favorability enrollment trends and the lack of need to draw down budget reserves. Investment returns, which are recorded below results of operations, are projected to be significantly higher for FY 2007 (16.5%) as compared to FY 2006 actual (13.3%).

    The budget for FY 2008 has been prepared on a conservative basis reflecting an increase in enrollment and pricing. Operating profit of $24m is planned with a total increase in net assets of $65m (after non-operating and restricted items). The budget for FY 2008 is substantially improved over the FY 2007 budget. Enrollment information to date indicated that enrollment targets will be achieved and this will allow for a positive year in FY 2008.

    The balance sheet reflects a strengthened position, principally related to the operating and restricted activities performance. The cash flow statement indicated the University will have adequate cash for anticipated expenditures.

    Expenditures in the Capital Budget are supported by identified sources of funds. Expenditures of $97m are projected for FY 2007 and $66m for FY 2008 are expected, as LUC continues its expansion and renovation program.

    A copy of the preliminary budget calendar for FY 2009 planning was distributed to the committee for planning purposes.

  3. Presentation regarding student loan issues
    At the committee’s request, Dr. Pelissero addressed the University’s response to the Illinois Attorney General regarding student loan activities. The practices at the Lakeside campuses are generally sound. Some minor adjustments were identified and corrective action is taking place. Students are assigned to a preferred lender at random by the PeopleSoft system. The student is under no obligation to accept the borrower and is free to use other financial sources.

    LUC operates a School as Lender program for Graduate and Professional students. The revenue realized by the University is returned to students in the form of waived fees with all excess funds being added to the financial aid pool.

    In general, university staff does not have conflicts of interest, but a few activities and participation with some groups have been eliminated. No formal response has been received from the Attorney General.

  4. Discussion of subjects for future meetings
    Research stimulation and a way to increase research participation were suggested as a future meeting topic. Dr. Honig will explore the possibility of a joint meeting with the Research University Policy Committee.

  5. New Business
    There is neither new business nor any old business for discussion.

  6. Adjournment
    With no additional business, the meeting was adjourned.