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Investigations, resignation tax UNM athletics

The embattled University of New Mexico athletics department isn’t in clean-up mode yet.

Before it can start stabilizing the department’s finances, it must first try to avoid “sinking” under the weight of two state investigations and a mountain of public records requests scrutinizing the financial management of public money, Associate Vice President Chris Vallejos said at a Board of Regents Finance and Facilities Committee meeting Tuesday.

Now, amid the ongoing turmoil, the department’s Director of Business Operations, Yvonne Otts, has submitted her resignation. Otts, athletics’ top financial administrator, did not respond to Journal inquiries Tuesday seeking comment. Interim Athletic Director Janice Ruggiero said she couldn’t comment as it was a personnel matter.

Otts’ last day is Thursday. Her position and that of a chief financial officer will now be open, though the CFO spot has been vacant for 14 months.

The 2017 Fiscal Year budget shows a $208,264 deficit — the department’s eighth in the past 10 years, bringing the total debt owed to main campus for covering those losses to $4.6 million.

But the resignation and the budget were mere afterthoughts at Tuesday’s meeting.

Instead, Vallejos and Ruggiero tried to lay out groundwork of their plan to stabilize the department that has seemed to have one financial crisis after another revealed since May.

“You’re new to this,” regent Alex Romero, a longtime banker and the former CEO of the Albuquerque Hispano Chamber of Commerce, told Ruggiero. “But I come from the world of no surprises. So I think that part of the challenge is to ensure there’s nothing around the corner that’s going to be the next surprise — that’s really kind of a big deal.”

Ruggiero agreed avoiding the unknown is vital.

“With Chris’ help and a lot of others,” Ruggiero said, “we’re trying to minimize that (so) we don’t go around the corner and get struck by lightning or a car.”

Among recent surprises was the May revelation former athletic director Paul Krebs, who retired in June, spent public money on boosters for a 2015 golf junket to Scotland; a discovery athletics hadn’t paid the UNM hospital for athlete care in 2016; and finding out that more than $430,000 had gone uncollected for use of luxury suites in the Pit since 2010.

Part of the problem is a general vagueness about the relationship between athletics; the UNM Foundation, the university’s fundraising arm; and the Lobo Club. The foundation claims it is independent from the university and not subject to state open record laws. The Lobo Club, the athletic department’s fundraising arm, has its own non-profit status while operating out of the department but under the administrative umbrella of the Foundation.

“To say that this is a confusing relationship is an understatement,” Regent President Rob Doughty said, adding it’s long overdue for clarity on finding out “who answers to whom.”

Vallejos and Ruggiero said they plan to do a sport-by-sport cost analysis to determine exactly how much each sport costs to operate, something that has been done in the past, but apparently not very precisely.

Neither Vallejos, Ruggiero in person on Tuesday, nor Deputy Athletic Director Brad Hutchins, through two emails this week, have explained why the deficit more than doubled since May when Hutchins told Regents it was projected to be $97,000.

A large part of last year’s deficit, as has been the practice for several years, derived from overestimating ticket revenue for football and men’s basketball. Last year, UNM budgeted $2 million in football ticket revenue, but collected just $1.2 million. For men’s basketball, it budgeted $4.8 million and collected $3.9 million.

“The university must balance its budget. While we have internal transfers and subsidies, we expect all units to live within their budgets,” UNM Interim President Chaouki Abdallah said.

“Having said that, a unit may sometime miss its budgeting targets. We are in the midst of evaluating the athletics budget. A part of the internal review will include determining reasons why the department has fallen short on budgetary goals. Potential contributing factors may include optimistic estimates of attendance and revenues.”

Vallejos acknowledged college athletics has many variables that make budgeting  an inexact science, but also noted UNM can do better.

“Our budget methodology has to change,” he said.

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