SUBMITTED AGENDA ITEMS:

Spectrum Financial Presentation
Spectrum representatives attended the committee meeting to present the year-end financial review.
· Restricted assets were increased as the earnest money for the purchase of the annex became restricted. Previously only half was restricted.
· There needs to be a continual increase of operation income to offset larger cash expenditures. There were lots of capital purchases and some debt reduction that caused the cash decline.
o The loss of gross margin directly affects the loss of cash.
· There are ten-year owner loans that will be coming due in five years.
o The finance manager is preparing a payment schedule to manage the payments of these loans.
· You should keep an eye on our year-end projections because you may have Federal taxes due.
o We will begin preparation and analysis of potential tax liability.
· The transition between finance managers seems to be going smoothly. There was support and documentation for everything that we wanted to look at.
· Discussed cost benefits from conducting audits more or less frequently.
o It really depends upon the level of comfort that management, the board, and the owners have with the financials.
o Another possibility would be to only look at internal controls rather than conduct a full audit. This would not need to be done at any specific time of the year and can also be customized to look at specific control systems.
o Because different companies have different needs, there are no norms for audit schedules or internal control review.

Review of Feb. Financial statements
· If the Feast Alternative margin is really this bad, isn't it likely that it was this bad last year as well?
o That is true. Last year, there was an allocated labor cost that went directly into COGS. Because of this, it was difficult to see exactly how much expense the kitchen and deli were incurring.
o The reason we went to this new accounting model is so that we could more clearly look at the deli and kitchen expenses with the hope of better controlling them.
o We are also conducting an inventory each month of deli and kitchen goods to aid in controlling their expenses.
o Additionally, we have made staff structural changes to address these concerns.

Non-Operations Spending Plan
· Kevin talked with Ken concerning the plan he presented at the finance committee. He agreed that the plan would not strengthen the income statement beyond the three years in which money was saved.
o He seemed receptive to the idea of establishing a foundation to fund outreach expenses. This would allow the expense to not be recorded on the income statement.
§ This is something that we will have to look into further before proceeding.
o Kevin will prepare a handout to demonstrate how the balance sheet and income statement would interact under this proposal.

Meeting adjourned: 6:25pm