LSU Eunice, others await higher ed budget plan

LSU Eunice and other college/university campuses will learn Friday what they are expected to contribute to Gov. Bobby Jindal’s budget-balancing plan.
Currently in a mid-year spending “freeze” to help balance this fiscal year’s budget, higher education has been told to expect as much as $400 million in cuts for the year beginning July 1. Whether that amount holds true is anybody’s guess until the announcement is made.
Fiscal issues are nothing new to the Eunice school.
Its most recent audit, a report of which was recently issued showed LSU Eunice lost $2 million in the fiscal year that ended June 30, 2014. But auditors noted that that loss is only half as much as the year before.
According to the report, the university had operating revenues of $9.2 million and expenses of $21.5 million.
But the $12 million difference was reduced by non-operating revenues of $9.4 million, then further reduced by $900,000 in capital appropriations.
The year before, the audit reflects, the school lost $4.1 million in its operations.
According to the current audit, the school received $6.7 million in student tuition and fees and had $1.8 million in scholarship allowances, reducing net tuition and fees to $4.9 million.
In the previous year, net tuition and fees totaled $4.8 million.
On the operating expense side, instruction costs were $7.7 million, fully one-third of the year’s operating expense.
Instruction costs in the prior year were essentially the same.
The audit indicates the reduction in net position loss was due more to expense cuts than revenue gains. In fact, revenues were essentially flat from year to year.
But reductions in spending for student services ($600,000), scholarships and fellowships ($700,000) and auxiliary enterprises ($400,000) helped close the gap from year to year.
Auditors note the university has two outstanding revenue bond debts, one maturing in 2018 and the other in 2033, with a total of $7 million outstanding. The bonds were issued in 1998 and 2002.
All union and bookstore revenues ($1.7 million in the most recent fiscal year), the auditors note, are pledged to secure the bonded debt through 2033.
Auditors noted that the Eunice Student Housing Foundation (the ESH Foundation), a nonprofit corporation with an Aug. 31 fiscal year-end, is considered a blended component unit of the university system and is included in the basic financial statements.
The component unit is included in the reporting entity because of the significance of its operational and financial relationships with the System and LSU Eunice, auditors noted.
Although the ESH Foundation is a legally separate, not-for-profit organization, it is reported as a part of Louisiana State University System Notes to the Financial Statements because its purpose is to assist LSU Eunice in carrying out its educational functions.
The ESH Foundation constructed a student apartment complex, known as Bengal Village, on the LSU Eunice campus. Bengal Village consists of 58 units and is managed by Campus Living Villages.
The management agreement between the ESH Foundation and Campus Living Villages commenced August 1, 2002, and ends July 31, 2017. Thereafter, the agreement shall be automatically renewed for one-year periods unless terminated.
All personnel employed in the leasing, management, maintenance, and operations of Bengal Village are employees of Campus Living Villages.
The LSU-Eunice Housing Foundation defeased the Louisiana Local Government Environmental and Community Development Authority Revenue Bonds (Eunice Student Housing Foundation - Bengal Village Project), Series 2002, and entered into a loan with Campus Federal Credit Union.
The loan was issued on July 1, 2014, and is a term balloon loan of $6,750,000 at 4.75% with a five-year balloon and 25-year amortization. The new loan is estimated by the auditors to generate approximately $140,000 in annual debt service savings.
According to the audit, the system’s LSU Foundation holds $2.2 million for the LSUE Foundation.