1997-98 was 'good year' financially for University

University administrators presented members of the Board of Trustees with the 28th consecutive financially successful year-end report at the Board's meeting Oct. 1 and 2 at the General Electric headquarters in Fairfield.

According to Financial Vice President William Lucas, the University enjoyed a "good year" that resulted in an increase in operating net assets of $2.7 million and an increase in non-operating net assets of $10.5 million.

"The increase in net assets from operations reflects substantially all of the revenues and expenses which support the current operations of the University's educational and research activities - the operating budget," said Lucas. "Activities which reflect transactions of a longer-term investment of capital nature and which are expected to support Fairfield's future operations are classified as non-operating activities."

Recent Federal Accounting Standards Board regulations for financial reporting require a breakdown of operating and non-operating activity, he said.

Lucas noted that non-operating activities consist primarily of gifts for the acquisition of capital assets, realized gains and losses on investments, endowment investment income in excess of the University's established spending policy, and any other extraordinary transactions.

For the year just ended, Lucas said University operating revenues were $81.4 million. Of that total, $51.3 million was net tuition and fees (total tuition and fees minus financial aid), and room and board revenue was $14.9 million. The combined total represents 81 percent of all revenues, with the balance consisting primarily of government grants, contributions and investment return for operations.

Total expenditures for the period were $78.7 million, which included $66.6 million for educational and general activities and $12.1 million for auxiliary services - primarily room and board. Of the $66.6 million, 60 percent was expended for instruction, research and academic support, 21 percent for institutional support and 18 percent for student service activities.

According to Lucas, the $2.7 million increase in unrestricted net assets from operations was primarily the result of overall student enrollment being higher than budgeted.

Consistent with past practices, a Board of Trustees resolution directed that $1.5 million of the increase be utilized for plant reserves and the remaining $1.2 million be designated for quasi endowment.

Regarding the $10.5 million increase in non-operating net assets, Lucas said $1.7 million of it was the gain as the result of the sale of 13 acres of land north of the Townhouses. That money has been designated by the Board for future, anticipated capital campaign expenses. Two million dollars is a combination of investment income on plant reserves as well as realized and unrealized gains on investments. This non-operating revenue represents investment return in excess of amounts designated for current operations. The $2 million will be reinvested in plant reserves and quasi endowment funds.

The remaining $6.8 million represents the release of temporarily restricted gifts for the purchase of the former Center for Financial Studies for the School of Business and toward the cost of the new athletic center.

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Media Contact: Nancy Habetz, (203) 254-4000, ext. 2647, nhabetz@fairfield.edu

Posted on November 1, 1998

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