Correction Appended
With enrollment decreasing, student fees increasing, and a
variety of other issues influencing university finances, fiscal
year 2004-2005 is looking to be a trying one for on-campus
businesses run by the Associated Students of UCLA.
The association, a non-profit organization which manages
services including Ackerman Union, on-campus eateries and textbook
sales, has been busy over the past several months crafting its
budget for next year.
The budgets for the respective divisions of ASUCLA were
submitted to its finance division the first week of March, and will
be formally presented to the organization’s board of
directors on May 1.
Everything from sky-high gasoline prices to foreign tourism to
competition from alternative textbook retailers is being
considered.
Rich Delia, director of finance for ASUCLA, said a projected
decrease in enrollment next year causes some concern for the
association, as fewer customers make turning a profit more
difficult.
“There are not a lot of areas in our businesses that look
like there are significant opportunities for growth,” Delia
said, adding that ASUCLA is planning promotions and ways to combat
decreasing revenue.
As a result of California’s budget crisis, the University
of California will admit 10 percent fewer students than last year,
a decrease that translates to roughly 1,000 fewer admits for fall
quarter 2004 at UCLA.
This decreased customer base was a major factor when planning
for next year, Delia said.
While losing 1,000 students may not seem like much at a
university with an enrollment of more than 35,000, Delia said it
could have serious consequences.
If an average student spends $500 per year on textbooks, that
translates to a loss of $500,000 without those 1,000 students. This
figure doesn’t even take food, clothing and other retail
purchases into account.
Keith Schoen, director of retail operations for ASUCLA, said
budget cuts will affect sales indirectly, as UCLA departments that
typically buy computers and supplies from the store will have less
money from the state.
A similar financial dilemma exists for students.
Both Schoen and Delia said a student dealing with increasing
tuition, expensive textbooks and high gasoline and transportation
costs will not have much disposable income to spend on BearWear and
food.
“Everything out there has an impact,” Schoen said.
“Usually students who go to a university like this
don’t have an overabundance of money to begin
with.”
Textbook sales are a steady revenue stream for the association,
but Schoen said increasing numbers of students are seeking
alternative retailers for their books or not buying them at all,
partly as a result of recent media coverage surrounding the
books’ high prices.
But there are also positive predictions built into next
year’s budget.
Schoen said foreign tourism is starting to bounce back,
returning to higher levels than in the years immediately following
Sept. 11, 2001.
As a result, on-campus foot traffic has increased, and sales at
the UCLA Store at Universal Studios’ City Walk, a tourism hot
spot, have also jumped.
The computer store has been a particularly profitable enterprise
for the association, Schoen said, mostly because Apple Computer has
offered merchandise to UCLA’s store at prices lower than
Apple’s own retail stores.
In addition, ASUCLA had a net income of $223,000 last fiscal
year, and Delia projects about $200,000 for 2003-2004 when the year
ends in July.
That money goes into the association’s bank account as
both an emergency reserve fund and as funding for future projects,
such as renovating Ackerman Union.
ASUCLA is just hoping to keep next year’s numbers out of
the red.
“If the customer has less money to spend, it will affect
our business,” Delia said.
Jerry Mann, director of the student union, said students today
have other options for services the association formerly had a
monopoly on, creating a renewed competition for customers.
“Every year for ASUCLA will be a tough year in the
future,” Mann said.
After each division of ASUCLA ““ including the student
union, UCLA Store and UCLA Restaurants ““ presents its budget
on May 1, the board will make recommendations to the various
divisions on possible adjustments to their existing plan.
Then, on May 23, the board will vote on whether to pass the
budget. If it passes, the plan will be forwarded to Chancellor
Albert Carnesale for final approval.
The board will also vote on a five-year plan for ASUCLA, which
is based on the budget for 2004-2005 along with other factors.
Correction: Projected income for ASUCLA’s
2003-2004 fiscal year is $423,000, which would be $200,000 over the
year’s $223,000 budget.