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Regent says UNM should forgive athletics debt

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The University of New Mexico is grappling with how to handle the $4.7 million deficit accrued over years by its athletics department, with one regent suggesting it should be forgiven if the department can balance its budget. Pictured is Lobo player Troy Simons during a recent home game against Boise State. (Roberto E. Rosales/Journal)

Copyright © 2018 Albuquerque Journal

University of New Mexico budget officials have been formulating a plan for how the athletics department should repay its $4.7 million debt to the university.

But one regent is questioning whether it should have to repay it at all.

The president of UNM’s Board of Regents says he thinks the school should consider forgiving the deficit and allow the department to move forward unencumbered if it demonstrates it has successfully aligned spending with revenue.

The athletics department has finished in the red eight of the past 10 years, and the university has repeatedly used reserves to cover the department’s year-end shortfalls. The persistent financial problems prompted New Mexico Higher Education Secretary Barbara Damron to place UNM under her agency’s “enhanced fiscal oversight program” last fall. In doing so, she directed the university to have an athletics deficit payment plan and submit regular status updates to her office.

Although more options are expected next month, UNM budget office staff aired one plan to the regents’ Finance and Facilities Committee this week. It called for athletics to make $350,000 annual payments on its deficit.

But Rob Doughty, president of the Board of Regents, said in an interview that he’s opposed to such a plan, viewing it as counterproductive.

“My central focus is getting athletics in line so they won’t have this problem again,” Doughty said in an interview. “If we agree with this repayment plan … it seems like continuing to dig ourselves in a hole when we’re trying to balance the budget.”

Doughty asked staff to research how the university has historically handled athletics deficits and said he thinks UNM may have forgiven them in the past. He said he does not consider athletics’ deficit a true debt, but rather an internal accounting decision. He said he would treat the deficit-prone UNM Press – which carries a $7 million debt to the university – the same way as athletics.

Doughty said any official plan to address athletics’ deficit would have to go through the full Board of Regents. He said the university would continue to work with Damron’s department and “keep them apprised of our approach.”

Faculty Senate President Pamela Pyle said she wants more information before UNM would forgive the athletics debt, including practices at other universities.

She said she also wants to know UNM is holding athletics to the same “stringent (fiscal) measures” as its academic departments.

“I think more open dialogue about that would make some sense rather than a blanket forgiveness,” she said.

The plan discussed briefly during this week’s committee meeting indicated athletics would make $350,000 annual payments on its deficit starting this fiscal year.

Budget officer Vahid Staples said athletics could cover it with savings achieved through reduced expenses.

But the department also recently benefited from a $1.3 million infusion from UNM’s reserves. Regents approved the allocation in November to help avoid a projected at the end of the fiscal year, on June 30.

It’s money UNM officials say athletics will not have to pay back. The university will not add the $1.3 million to the department’s tab, saying its intent was to make sure the deficit did not grow.

Asked why UNM wouldn’t always handle athletics’ deficit that way, Staples said, “Because we don’t have the money.”

Athletics has achieved some savings this year, according to athletics director Eddie Nuñez. It has come partly through staff vacancies – though some are positions Nuñez plans to eventually fill. That leaves him and other officials, including the department’s new chief financial officer, Rob Robinson, trying to find ways to implement long-term savings in a budget of approximately $35 million a year.

“We need to digest the whole budget and figure out what areas we can (get) some potential savings and try to figure out as much as we can … without putting our sports at a disadvantage,” he said. “I want our teams to continue to compete at the highest level; I don’t want to cut just to cut.”

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