WLUSU runs up over $4 million in debt to Laurier

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(File photo).

According to the 2012 Wilfrid Laurier University Studentsโ€™ Union auditorโ€™s report โ€” which compares their financial data from April 30, 2011 to April 30, 2012 โ€” the Studentsโ€™ Union, without the current liabilities included, owes a debt load of $4,250,156 to the university.
WLUSU currently owes the university one loan of $1, 902, 855 while also still owing the university a figure of $2, 347, 301 for a different loan. In addition, the Studentsโ€™ Union has two external non-revolving long-term loans that total about $2.4 million in 2012, which are secured through a guarantee of $3 million from the university.

The report outlines that WLUSU will have to make a payment of $233, 979 for their long-term debt in 2013 โ€” which includes the $1.9 million loan from WLU โ€” and will also make a payment of $118,000 this year towards the other loan from the university, which totals $2.3 million.

According to the report, WLUSU was โ€œnot in compliance with certain of its lending covenants with the universityโ€ as of April 30, 2012 for the loan of around $2.3 million and the university and the union then โ€œreached an agreement to waive the covenant breach.โ€ As a result, the Studentsโ€™ Union makes annual payments on that particular loan.

However, according to Jim Butler, the vice-president of finance at WLU, the loan agreement that the university has with WLUSU has a cap of $5 million. This number includes both money the university loans to the Studentsโ€™ Union and the $3-million guarantee on outside loans.

According to Butler, WLUSU has exceeded that limit.

โ€œThey are in excess of the $5 million agreement,โ€ Butler confirmed. โ€œWeโ€™re working with them to bring it back downโ€ฆ. Weโ€™re working with them to help them with their cash flow on that.โ€

2012-13 WLUSU president and CEO, Michael Onabolu, addressed some of the questions asked by The Cord in regards to the public auditorโ€™s report. The report was signed off by the auditors on Jan. 31,2013, and subsequently uploaded onto WLUSUโ€™s website.

โ€œWe always monitor our financial situation, constantly, especially this year. We obviously have a plan to mitigate be within that cap,โ€ he explained. โ€œWeโ€™re at a point where we donโ€™t have a lot of wiggle room before the cap. So when youโ€™re in a position like that, youโ€™re not able to take on things like capital projects and different things that we wouldโ€™ve done in the past.โ€

Onabolu, however, did not speak about many specifics since itโ€™s an on-going discussion WLUSU is having within their administration through in-camera, private meetings within their board meetings. When asked if WLUSU โ€“ of which all undergraduates are members โ€“ is going to be communicating any information with the students in the near future Onabolu said, โ€œThereโ€™s definitely an intention to communicate with students.โ€

Onabolu declined to comment when asked if this forthcoming information had to do with finances.

While the in-camera sessions arenโ€™t entirely always financial matters, WLUSU board chair and chief governance officer, Jon Pryce, confirmed the board and management team have been discussing financial matters within in-camera sessions for 2012-13.

โ€œWeโ€™ve been dealing with a lot of stuff in camera because there has been a lot of confidential stuff in terms of finances,โ€ Pryce said. โ€œWe couldnโ€™t have that outside of in camera because the problem is if you discuss something outside of in camera, and itโ€™s not confirmed or hasnโ€™t been established fully yet, problems could arise.โ€

Pryce noted that the increase of in-camera sessions during board meetings this year has also been due to the weekly board evaluations as an attempt to create a more comfortable environment for the directors.

When asked if financial matters are typically dealt within in camera, Pryce responded by saying, โ€œNot really, this was more so with the auditors and some of the financial conditions that we have, and the university. Weโ€™re just trying to get those terms sorted out. A lot of them are basic updates, [such as] getting the boardโ€™s opinion.โ€

โ€œIt was not unexpected, and thatโ€™s what I can say,โ€ said Jordan Epstein, the vice-chair for this yearโ€™s board and the incoming chair and CGO for next yearโ€™s board, about the auditorโ€™s report. Part of his mandate for next year is making the board more transparent.

โ€œThatโ€™s sort of what Iโ€™m getting at with the transparency thing. Thatโ€™s not a human resource situation, itโ€™s not a contract [issue],โ€ Epstein said about discussing finances in camera. Epstein, because of the confidentially of the financial matters and the in-camera sessions, declined to discuss any specifics in regards to the financial matters.

The recently released report, which was audited by KPMG Chartered Accountants, also outlined a drop in total revenue of 54 per cent. 2012 saw WLUSUโ€™s total revenues fall from $14,497,956 in 2011 to $7,890,159 in 2012, something that Onabolu attributes to the closing of Wilfโ€™s due to flooding in late 2011 and the separation of the Student Life Levy fees that used to flow through WLUSUโ€™s operating dollars.

Roly Webster WLUSUโ€™s executive director, who started in his position in December, expressed some concern with the 2012 auditorโ€™s statement.

โ€œI want them [the numbers] to be better than that, [but] Iโ€™m not concerned that theyโ€™re going to impact the organization,โ€ he explained. โ€œLetโ€™s better those numbers faster so weโ€™re be able to do some other things.โ€

โ€œWeโ€™re going through a budget process right now, and where we can tighten up is on the budget side,โ€ Webster said, noting that this situation should not impact the services they annually provide students.

Pryce, Onabolu and Webster all claimed that the point of the in-camera sessions this year was not to hide important information for the students. Instead the sessions have been used as a precaution taken by WLUSU.

โ€œWe wouldnโ€™t go into in camera if it wasnโ€™t absolutely necessary,โ€ said Onabolu.
Webster echoed Onaboluโ€™s remarks, โ€œOur goal is to always be transparent with the studentsโ€ฆand in-camera sessions doesnโ€™t mean we donโ€™t want to communicate with students.โ€


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