RCC-FCPresentation_Weiss_02-28-11-corrected_03-17-2011

UCLA Faculty Center Report to Academic Senate Council on Planning and Budget February 25, 2011

Financial Issues These are challenging time for the Faculty Center. The current Faculty Center building was constructed in the 1950s with funds from various founding groups (e.g. Faculty Women’s Club, etc.), the Chancellor, and the Regents. The Faculty Center is run by an independent Board of Governors who oversee the management performed by a Faculty Center Manager, currently Ali Tabrizi. The major goal of the Center is to facilitate interaction between faculty and staff and to provide facilities and programs for this purpose and to host various functions of its members and affiliated Departments.

A number of changes have affected the finances of the Faculty Center under its initial business plan.

(1) A decision was made by the Board of Governors to make its make its staff university employees so that they would enjoy health and retirement benefits. Recent and projected increases in the costs associated with these benefits have substantially increased the Faculty Center expenses.

(2) The Administration, which in the past had provided subsidies to the Center, has ceased doing so.

Charges are now made for routine campus services — e.g. police, utilities, advisory services, etc.

(3) Construction by the University of competing facilities (e.g. Covell and the Anderson School with meeting rooms) has severely affected the use of the Faculty Center.

(4) The recent recession and University budgetary problems has reduced use of the Faculty Center by members, Departments and Staff Organizations. This led to an operating loss (including investment losses in the Faculty Center’s reserve fund) of approximately $400,000 in the past two years. The Faculty Center’s current reserve fund amounts to approximately $900,000.

(5) A Building Assessment Report with regard to required maintenance and component renewal by the University’s Facilities Management in 2009 recommended actions estimated to cost $1,364,230 during a ten year period. Given the current reserve fund, indications of significant support by its membership, and steps initiated to improve its financial health, the Board of Governors is confident of the future viability of a Faculty Center in its current building.

(6) The Faculty Center has initiated a number of steps to bring its expenditures more in line with its income. The Board of Governors has increased membership dues, increased meal costs, and reduced staff. Additional steps are planned to increase and diversify membership, increase income, and reduce expenses.

(7) The Faculty Center projects a balanced budget or a modest loss for 2010-11.

Alternative Plans

Regardless of the final decision on the construction of the proposed Convention Center/Hotel and Faculty Club on the site of the current Faculty Center, the Faculty Center Board of Governors has discussed a number plans to improve the financial status of the Faculty Center Association: Increase and Diversify Membership (1) Promote activities using the Faculty Center facilities that would attract participation by younger faculty and staff (2) Consider expanding membership to additional members of the UCLA community (and possibly nearby residents (3) Continue to provide free and reduced cost membership to new members of the UCLA community

Increase Faculty Center Income (1) Increase membership fees for senior faculty and staff (2) Encourage senior faculty and staff to volunteer to support membership for their junior colleagues (3) Initiate a campaign to generate a substantial endowment for the Faculty Center (4) Increase meal charges (5) Open special events to nearby residents (non-members)

Decrease Faculty Center Expenses (1) Reduce staff as appropriate (or replace with part-time student employees) (2) Eliminate money-losing activities

While all these efforts would be appropriate if the Faculty Center continues in its current building, and many would be appropriate in the proposed Convention Center/Hotel and Faculty Club, the former situation will require more vigorous and immediate action.

The Faculty Center Board of Governors is unable to make detailed plans for the Faculty Club if it is to be a part of the proposed Convention Center/Hotel and Faculty Club. The responsibilities for many of the Faculty Center’s current expenses and the extent of its ability to generate income depend upon the agreement negotiated between the Administration and the Faculty Center.

(1) It appears that the Administration would assume responsibility for the physical facilities in the new Faculty Club. What this means in detail remains to be determined.

(2) It also appears that the employees serving the proposed Faculty Club would be employees of the Convention Center/Hotel. This would relieve the Faculty Center of responsibility for full-time employment of these employees. The allocation of costs under such an arrangement remains to be determined.

(3) It is not clear how the allocation/reservation of rooms in the facility will be handled. It has been suggested that all allocation/reservations would be handled by a central office (i.e. the Faculty Club would have minimal control over the use of its rooms). This remains to be negotiated, but it has been suggested that all reservations and income from room use would be handled centrally – i.e. by the operator of the facility, a subsidiary of the University Administration.

(4) The role of the current Faculty Center staff is not clear. Indications are that most of the office staff would not be retained and many of the kitchen and serving staff are unlikely to be retained.

If the Administration assumes responsibility for the combined Convention Center/Hotel and Faculty Club, the costs of meals, rooms, and services are unclear. The success of the proposed Faculty Club would therefore likely be closely tied to the success of failure of the Convention Center/Hotel.

Faculty Center Membership February 2011

ACADEMIC (Senior Faculty)

946

ACADEMIC (Junior Faculty)

368

VISITING FACULTY

58

Emeriti Faculty Members

498

Chancellor’s Associates & Alumni

116

NON-ACADEMIC

325

Honorary Life Members

7

Total

2,318

Faculty Center Finances (10-Year Summary)

Year 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Total Revenue 2,936,144 3,163,413 3,224,101 3,233,905 3,358,919 3,590,702 3,825,307 4,101,477 3,783,151 3,943,923

Total Expenses

Net Income/Loss1

2,847,872 3,011,639 3,111,112 3,214,516 3,320,670 3,549,951 3,745,422 4,133,197 4,026,750 4,220,270

88,272 151,774 112,988 19,389 38,249 40,751 79,885 -31,720 -243,599 -276,3472

1

Includes Investment Income/Loss and approximately $120,000 in depreciation.

2

Due in part to 20% salary increases for union members.

Investment Income/Loss 64,329 63,779 47,019 34,161 41,551 48,003 49,993 -36,141 -216,091 40,905