Maroon

              The Loyola MAROON Volume 70 No. 24 Loyola University New Orleans, Louisiana 70118 May 1/1992 Analyst says LU finances are fine By Tina Bergeron Associate News editor Loyola University is in "excellent financial condition" according to a recent analysis of the university's budget by economic consultant Dr. Richard E. Weber. The finding did not come as a shock to many members of the Loyola faculty. Others called Weber's analysis incomplete or misleading. Weber, who lectured on the university's financial condition on April 23 in Nunemaker Hall by invitation of the University Senate, examined the university's finances from the 1987 to 1991 fiscal years. In a written summary of his analysis, he states that "were we to consider the educational mission of the university only, the outcome seems to be quite satisfactory." The Rev. James C. Carter, S.J., university president, felt that Weber's analysis was, for the most part, accurate. He added that the financial condition of the university is good, but "only if we are able to reduce the rate of growth of spending of the last several years." John Eckholdt, vice president for Business and Finance took issue with the wording of the flyer. In a statement published in the April 24 faculty and staff newsletter Campus News, Eckholdt said that the flier's allegation that the university "usually" showed an annual operating deficit while it grows "wealthier year after year" was untrue, and that the university examines the budget from more aspects than simply an operating one, as the flier implied. Neither Carter nor Eckholdt attended Weber's lecture. According to faculty members. Carter did meet with Weber briefly that morning before a doctor's appointment. Weber's report used substantial financial data to support his findings. At the end of the 1991 fiscal year, Loyola's total net assets, which Weber says are perhaps the most significant indicator of university financial health, were $204 million, including $153 million of "endowment and similar funds." Of this endowment, $ 143 million were "unrestricted quasi-endowments [funds resembling, but not indentical to, endowments] giving considerable financial security and flexibility." The report also shows that subtracting money coming into the university (inflows) from money going out of the university (outflows) for 1991 gives the university a gain of $2 million for that year, and expendable balances .the differences between debts and credits that are used, were $150 million. "The bottom line," Weber writes, "is a university that has a healthy financial position based on its educational activities alone and a substantial endowment totaling $153 million to help insulate it from potential variations in student enrollments." Weber used "financial performance ratios" to give an overall evaluation of university finances. These ratios compared net infows to total inflows, expendible balances to both long-term debt and operating expenditures, and total liabilities, or obligations to creditors, to total assets. Using these ratios, he found that "on the average the university is living well within its means." He also found that "expendable balances are sufficient to repay 280 percent of long-term debt, or 235 percent of annual current expenditures..." and that total liabilities are equal to 24 percent of total assets, a decrease from 42 percent in the 1987 fiscal year. Weber's analysis did not account for appreciation or depreciation in the property that the university holds for sale. Weber's exclusion of the appreciation and depreciation values in the report caused Dr. William Bamett, associate professor of business | Last Maroon I ) With this issue, the Maroon ceases publication for the spring semester. Publication will resume in the fall. 1991-1992: The Year in Review Loyola reaches for confidence in vain By Chris Raphael News editor For the Rev. James C. Carter, S.J., university president, one of the best things that happened this year was the increasing number of qualified students who have applied for admission to the university next year. At first glance, a jump in enrollment would seem to solve some of the university's financial difficulties; but judging from the events of this academic year, to pretend that the university's problems are all economic — and that they are all the administration's fault — may be a misunderstanding. Loyola's hardest task this year has not been to balance a budget sheet; rather, it has been to restore confidence among faculty, staff, students and administration, many of whom clearly distrust one another. Layoffs and Lawsuits Loyola began the year the same way it ended it; by laying off several staff members. Seventeen positions were eliminated last summer in an attempt to balance the budget, and before the beginning of next year, approximately 40 Loyola staff members will be fired due to a half-million dollar budget shortfall. But some staff and faculty would not leave quietly. Robert Miller, a former counselor"Look mom, no hand..."— Even the statue of Jesus in front of Marquette Hall, shown here sans left hand, isn't safe from harm's way. /Photo by Greer Gattuso Carter approves bookstore franchise Committee recommends to lease by 3-2; year-long debate ends By Kevin Patton Staff writer favorable. One SGA president wrote back saying there were no problems," Laragy said. Upset by the apparently drastic financial concern of Loyola, Watson said, "It's just another example of educational decisions becoming pure business decisions. "The people who voted for franchising took the financial crisis as a given, while those who voted against it viewed it as created," he said. Follett has guaranteed a monetary rebate to the university which exceeds the bookstore's projections. The numbers would not be disclosed. "Either the students would have to make it [the money deficit] up, or more people would be fired," Bamett said. Vincent Knipflng, vice president for Student Affairs, stated that Follett would still make a profit beyond the rebate. "They are in business to make a profit," he said. But he added that franchising is best for Loyola. "Loyola won't put up the money to bankroll the bookstore. It won't work," Laragy said. "If the university would have put up the money, I wouldn't have voted for franchising," he said. When the question of student service was raised, Laragy and Barnett both said that there would be no problem. Service would. Based on Monday's 3-2 decision in favorof franchising by the bookstore committee, the Rev. James C. Carter, S.J., university president, said Wednesday he'd franchise the bookstore, according to Carter's administrative assistant The committee that voted consisted of Charles W. "Dusty" Miller, Danna Center director, Dr. William Bamett, associate professor of Business Administration; Dr. James R. Watson, associate professor of philosophy; Dr. Earl Richard, religious studies professor, and Scott Laragy, incoming Student Government Association president. Watson and Richard voted against franchising. "I am very unhappy about the recommendation. It was total money consideration," Richard said Bamett, however, said "There was no reason to think that the treatment of employees would change or there would be a decline in service. The university would be much better off financially." Amid allegations that the service would decline, and/or employees would be treated more harshly, Laragy and Bamett both cited the responses they received from other universities with Follett "None of the responses from five diffeient schools were un- 'A lot of students will have something tangible, something to hold on to saying the university did something for us.' — Scott Laragy, SGA President See Year/ page 6 See Weber/ page 4 See Bookstore/ page 4 || Inside this week: Final resting places iKgl See page 13. ||