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Copyright 2018 Albuquerque Journal

Albuquerque Journal (New Mexico)


Now, Garnett Stokes steps up to the plate.

According to an agenda notice posted Friday for Tuesday's Board of Regents Finance and Facilities Committee meeting, the new University of New Mexico president will present a fiscal year 2019 budget proposal for an embattled Lobos athletics department.

In past years, the athletics budget has been presented by an athletics department official.

On the agenda for Tuesday's meeting, the line about Stokes' presentation of the athletics budget proposal includes a reference to "overall elimination of deficit and satisfying the NM Higher Education Department (HED) Enhanced Fiscal Oversight Program."

Whether that means forgiveness of past deficits or a plan to pay back those deficits remains uncertain, and UNM has said not to expect any comment on that until Tuesday's meeting.

The department's accumulated deficit had grown to $4.7 million at the beginning of the current fiscal year, and recently a memo from Athletic Director Eddie Nuñez indicated that the department will likely overspend its current fiscal year budget by about $3.3 million. The fiscal year ends June 30.

In the fall, regents, granted the department $1.3 million for the deficit that it is not asking be paid back.

Numbers presented by the department last month would indicate that the accumulated deficit this year will grow to $6.7 million.

About $4 million of that total comes from the past three fiscal years alone. Campus officials have told the Journal each of the last three years that athletics was expected to balance its budget and failure to do so would no longer be tolerated.

Athletics has failed to post a balanced budget in eight of 10 fiscal years between 2008 and 2017. The current fiscal year would make it nine of 11.

Last month, Regents President Rob Doughty said he felt like he had been lied to one year ago when athletics presented a budget proposal and assured him it would balance.

"I want to know right now, in front of everybody, why are we $3.3 million in the hole when I was promised last year that we had a balanced budget?" Doughty asked Deputy Athletic Director Brad Hutchins.

Doughty later said, "I demand a transparent, financially sound and balanced budget for next year. It has to be done."

In January, Doughty had said he wanted to forgive what he then thought was a $4.7 million athletics deficit.

In recent weeks, Stokes and other main campus officials have been hands-on to make sure the athletics budget is completed by Tuesday's meeting. Stokes attended a closed meeting with campus academic leaders this week to inform them about some of what might come out on Tuesday.

At stake during Tuesday's committee meeting, which is technically only a precursor to a potential full Board of Regents vote the following week, are two major points that will likely draw close attention:

Will the department put together realistic projections for both revenue and expenses? For years, the department has made ticket revenue projections for sports that have not been consistently met, if ever. And personnel cost projections have rarely been accurate over the past decade, even as salaries for the department's two highest-profile employees - football coach Bob Davie, the state's highest paid public employee, and men's basketball coach Paul Weir - have dropped below the average salaries of their peers in the Mountain West Conference.

Is the department still asking for forgiveness of any or all of the $5.6 million owed to main campus reserve funds that covered past deficits, as Nuñez proposed in a memo to the regents in March? If so, does that satisfy the state Higher Education Department's demand to see a written plan from athletics to pay back its accumulated deficits? New Mexico State University has been abiding by an HED plan for several years to pay back what was once more than $9 million in accumulated deficit.

In an interview during her first week on the job, the Journal asked Stokes about forgiving deficits for the department.

"That's a tough one for me to answer right now, because I don't know what all the options are going to be," she said. "I'm recognizing this is a really big issue to be resolved, but I will say again, I'm not a big believer in simply forgiving debt that's been accumulated in any unit, academic or otherwise."

In recent years UNM's athletics budget has been in the ballpark of $32 to $33 million. However, UNM officials have recently acknowledged the amount budgeted has not always been a very accurate projection of actual spending.

Executive Vice President David Harris has had oversight over past budgets, and they are ultimately approved by the Board of Regents.

The use of main campus reserves to cover athletics shortfalls came at a time when tuition and student fees were rising and main campus staff and faculty were told there was no money available for raises. Continued use of reserves has created a skeptical, if not antagonistic, relationship between athletics and main campus, even for those outside of athletics who see value in intercollegiate sports in higher education.

The Journal has reported over several years that the athletics department was projecting ticket revenues for football, men's basketball and women's basketball that either had never been met or were met only during record-setting seasons.

Last May, for instance, athletics estimated football ticket revenue of $1.9 million, which it missed last fall by nearly $400,000; men's basketball ticket revenue of $4.2 million, which it missed by nearly $550,000; and women's basketball ticket revenue of $330,000, which it surpassed by nearly $70,000.

The Journal asked athletics department officials and regents last spring if it was appropriate to project such optimistic numbers. Hutchins defended the projections to the regents and the Journal by saying football coming off a bowl game in the 2016 season and the hiring of Weir as the new basketball coach were factored into their projections.

Doughty, who had also questioned ticket revenue projections last May, ultimately told the Journal, "I'm very optimistic that athletics can hit the 2018 projection and have a balanced budget next year."

UNM won three football games last season and had an average home attendance of 21,194. Men's basketball attendance was 10,833 per home game, the lowest since the Pit opened.

In August 2016, when the Journal asked regents a similar question about using optimistic projections shortly after what was then announced as a $1.54 million deficit (it was later determined to be $1.58 million), Regent Marron Lee said, "I'd say it's optimism with accountability. Obviously, we have concerns. We have the fiduciary responsibility of the entire university."

Since Nuñez started at UNM, he has maintained that he is evaluating all financial aspects of the department, including how realistic revenue projections have been.

In November, he told the Journal, "First of all, we're going to look a lot more into history - the historical data - and we're going to gauge fan interest and everything else when we make our projections."

He told the regents last month, "We're going to try and make this right. ... I do think some projections and other things probably were not done as they should have been."

Nuñez added that since he has been athletics director, "we've used factual information that we gauge from the previous year to be able to determine our numbers. But why the differential between that and what was placed (on past budget projections), I can't answer because I wasn't in the room."

Other budget items that appear to have contributed to the fiscal year 2018 shortfall include coming up $600,000 short on fundraising; overspending a line called "supplies" by $480,000; and overspending on grant-in-aid (including scholarships and aid to student athletes) by almost $800,000.

How UNM Athletics got here

UNM entered this fiscal year (FY18) $4.7M in the red. Figures in parentheses are losses.

Fiscal Year 2008: ($16,639) Fiscal Year 2009: ($545,699) Fiscal Year 2010: $17,748 Fiscal Year 2011: ($546,028) Fiscal Year 2012: ($693,577) Fiscal Year 2013: ($719,500) Fiscal Year 2014: ($173,192) Fiscal Year 2015: $3,554 Fiscal Year 2016: ($1,584,256) Fiscal Year 2017: ($371,576) Fiscal Year 2018: ($2,016,825)*

* A projection. This doesn't count the $1.3 million gift the regents gave athletics in the fall. That is not being counted as money owed, but as a one-time gift regarded as revenue.

The accumulated deficit from the eight of those 10 years that did not balance was $4,650,467. It appears the surplus from the two years the budget did balance, $21,302, was not paid back to reserves. If it had been, the accumulated deficit over the past decade would have been modestly lower at $4,629,165.

All numbers used were provided by UNM through Inspection of Public Records Act requests, documents regularly posted on the university website or through interviews. Salary trend reverses

UNM's top coaches aren't at the top of the heap any longer, Journal review shows D1, D7

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April 9, 2018


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