Copyright 2018 Albuquerque Journal
Albuquerque Journal (New Mexico)
The University of New Mexico's messy athletics department financial situation could have major consequences for the entire institution, with the state's higher education chief warning that it could potentially endanger the flow of state funds into the university.
Higher Education Secretary Barbara Damron — who placed UNM under her department's "enhanced fiscal oversight program" last October — wrote to UNM President Garnett Stokes that the university must submit a plan for correcting the athletic department's deficit by May 1. Otherwise, she cautioned, the Higher Education Department could reject UNM's entire budget, delaying state funding approved by the Legislature.
Furthermore, Damron said her department could recommend withholding up to 10 percent of UNM's appropriation until the university has satisfied requirements imposed under the fiscal oversight program — requirements that go beyond just submitting a plan.
Damron said she does not want to have to take such action.
"I want them to be healthy and do well and succeed and I want to help them get to that point, but they have to address" the athletics issues, Damron told the Journal.
UNM as a whole is supposed to get about $300 million in general fund appropriations for fiscal year 2019.
In imposing oversight last October, Damron had directed the university to have an athletics deficit reduction payment plan and submit regular status updates to her office.
She told the Journal Tuesday that UNM representatives had informally communicated their intent to submit such documents on multiple dates. But those all passed without a formal submission to her office.
"Folks are frustrated with this can being kicked down the road," Damron said. "I sent that (enhanced fiscal oversight program) letter Oct. 3. It's been several months. I have to hold UNM accountable, and I will hold them accountable."
UNM's administration had written Damron last fall saying the university already had an athletics repayment plan in place. When the Journal sought that plan via a public records request, UNM acknowledged it had no plan in writing.
President Stokes told the Journal she received Damron's letter Tuesday and she understands the urgency. Stokes, who started as president on March 1, said that she recently convened a group of budget experts from across campus to work on athletics' finances.
"I want the best minds thinking through what our options will be," she said.
She said the goal was to have a presentation ready for the regents' Finance and Facilities Committee meeting on April 10.
"But understanding this problem has been years in the making, and there needs to be real thought in how we best do this going forward," she added.
UNM's athletics department has had chronic financial problems, having missed its budget eight of the past 10 years. This year could be worse than any of those, as new figures project a total fiscal year 2018 shortfall of $3.3 million. UNM's Board of Regents attempted to mitigate that by allocating the use of $1.3 million in reserves in November.
Not including that sum — which officials say athletics will not have to repay — athletics should have an accumulated deficit to the university of about $6.7 million by June 30.
In a proposal made public last week, athletic director Eddie Nuñez asked regents to cover $5.6 million of that amount with regents' funding. He indicated that the department would repay the remaining $1.1 million over 10 years.
But regents tabled that proposal during their budget summit last Thursday following a fiery one-hour discussion about athletics' continued problems balancing the budget.
Regents said they wanted to see a fiscally sound budget proposal for 2019 before they considered any forgiveness.
Among the most obvious concerns is ticket sales revenue projections. Athletics has consistently built budgets around ticket forecasts not supported by historic sales -- and then failed to meet the projections.
Damron said in her letter to Stokes that she was pleased UNM had begun budget conversations, but she remained concerned that UNM had not submitted to her office documents showing a "sustainable, long-term plan" to resolve the existing deficit and operate within budget moving forward.
Stokes said her newly assembled team is working on such a plan.
"I think the regents expect it, the public expects it, our faculty expect it and I expect it," she said.
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