ASUCLA suffers heavy loss, incoming funds low

ASUCLA suffers heavy loss, incoming funds low

Association struggles to pay debt, funding for Ackerman Union
expansion project

By Patrick Kerkstra

Five hundred and eighty thousand dollars worth of sweatshirts,
coffee, Treehouse food and other merchandise ­ that’s how much
preliminary reports show the Associated Students of UCLA (ASUCLA)
to be under its projected income for December.

This report comes on the heels of a disappointing November
performance when the association found itself $314,000 below its
expected sales income.

Association officials now concede that the organization is not
financially healthy and is likely to lose money, said Jason Reed,
students association director.

In addition, most officials reported that no scenarios were
likely to reverse the association’s current performance, said Karol
Dean, co-chair of the board’s finance committee said.

"We were unable to come up with any concrete remedies to help
within this fiscal year," she said.

The association, which handles money matters for all student
services and eateries on campus, found their current financial
difficulties compounded by a $1.6 million loss in the 1992-1993
school year, in addition to the costs of the Ackerman Union
expansion.

Association policy requires that the group’s $1.6 million loss
be paid back over four years, making this year’s payment $359,000.
In addition, the association wants to pay the $20 million bill for
Ackerman’s expansion with association revenues over 27 years.

However, if the present trend continues, the association will
face extreme hardships in paying for the current debt and the
construction bill together .

"The impact of this (inability to pay back the debt) could be
huge," Dean said.

"Let’s say ASUCLA ends up in a situation where they can’t pay
back their debt, and let’s say somehow students are successful (in
fighting an additional fee) and don’t let student fees pay for (the
expansion). ASUCLA could become insolvent, and could become
bankrupt. The effect of that could be the university taking over
ASUCLA."

During Friday’s meeting, other board members repeatedly asked
that in light of current budget conditions, future association
budget predictions be more conservative.

"The pressure to not reduce expectations may be high, but we’d
like to encourage departments to be realistic," said board member
Dave Lowenstein.

"I would hate to leave next year’s board with a budget like this
one," Tamara Carr, undergraduate representative said.

Last year, the board raised questions about the wisdom of
embarking on an expensive expansion project given the association’s
financial instability.

"About a year ago, before the earthquake, we were ready to go
with (the Ackerman expansion), but because ASUCLA had a very rough
financial time the last couple of years, there was some concern
about whether we could really afford it," Dean said.

Just before the earthquake, Reed and his staff projected low
revenues for the next five years and suggested that the association
withdraw from the planned expansion and retrofitting projects, Dean
said.

But the board and association management reconsidered their
decision immediately after the Northridge Quake.

"Jason and his staff felt that there was no way we could
continue to delay these projects because of the eminence of the
risk," Dean said.

However, board members questioned the prudence of that
action.

"All that had changed was the earthquake, our financial
earthquake obviously hadn’t changed," Dean continued.

Although it was possible to retrofit Kerckhoff and Ackerman
without building the expansion, the association determined that it
would be less efficient and more expensive to do them both
separately.

The association benefits from doing all its construction work at
one time, officials said.