Loyola University Chicago

searchform
This siteLUC.edu

Meeting Minutes

Loyola University Chicago

Budget and Finance University Policy Committee

November 5, 2007

Meeting Minutes

Members Present: Raymond Catania, Thomas Hickey, William Honig, Wayne Magdziarz, Tim McGuriman, Loretta Morales, Alan Raphael (Chairman), Kyle Welborn

Members Absent: Jennifer Clark, Michael Gemma, John Pelissero, David Slavsky,

  1. Approval of minutes from July 12, 2007 meeting
    Minutes are approved as written and will be posted on the web site.

  2. Review of final budget results for 06/07 year
    Mr. Hickey presented the Loyola University Chicago annual financial report for the fiscal year ended June 30, 2007. The University Academic segment of the University generated a $120.0m increase in net assets. This increase included 19.5% earnings on investments. In addition, returns on investments exceeded the prior year. Operational earnings for the segment were $48.7m. The principal drivers for this earnings figure were, lapsed salaries, favorable fringe benefit expenses, excess enrollment, and under spending of non-salary items.

    The Loyola University Health Science System had a decline in net assets of $4.0m. Operational earnings for this segment were $32.4m, and were largely offset by the effects of a cumulative change in the accounting for pension plans. The system also refinanced debt and issued new debt to finance the building of a new hospital.

    Consolidated increase in net assets was $116.0m as compared to $104.4m in the prior year.

    Net assets grew because of the results of operations and investment in plant and equipment. Cash balances remain adequate to support university activities.

    The operating earnings, in excess of those needed for debt repayment and incentives, are distributed to endowments and capital projects. This distribution has been the largest source of contributions to the University’s endowment fund.

  3. Review of FY2008 Forecast
    The early forecast for FY 2008 was reviewed and it reflects a shortfall in net tuition revenue of $1.8m. This shortfall is not large enough to require the University to take action. Gifts and improved auxiliary performance cause the variance from the budget.

    At this early date, we are expecting to earn operating profit of $22.4m, which is 4.8% down from the budget, principally related to the decline in enrollment.

  4. Status of FY 2009 budget preparation
    Mr. Hickey also provided an explanation of the status of the current budget process for Lakeside campuses. SSOM’s budget has not yet been received but it is expected to contain a 3% tuition increase proposal. The University will present a proposal to the Board of Trustees that tuition be increased 5.5%. This proposal will be supported with appropriate statements of activity. The university expects enrollment to remain constant in FY 2009 as capacity was reached in FY 2008. This will reduce the amount of spending that can be funded by revenue increase over the prior year to approximately $10.0m from the $28.0m to $30.0m that has been provided the last three years. The budget is planned to continue the conservative practices that have been used in the past and provide for agreed upon incentives and debt repayment activities.

  5. Update on the potential joint effort on Research Stimulation
    Dr. Honig presented a report on his activities to enhance the research environment at the University through the provision of incentives. He is attempting to establish collaboration between the Research UPC and the Budget UPC to establish an environment that will be more research friendly. This will provide an additional way for the University to increase revenue in a period of constant enrollments. He is going to seek interested participants to work to this initiative.

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

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