The $2 million deficit will be covered by reserve funds in the proposed 199900 budget Goss brought before the Board. That budget projects an $880,000 surplus.
We thought we were immune to escalating expenses, said Goss, the Donald R. Shepherd Director of Intercollegiate Athletics, but there were no windfalls this past year. Windfalls in the recent past included increased royalty incomethe most volatile piece of the budgetas a result of highly visible national championships. That income this past year is projected to be $3.7 million against a budgeted $5 million. Corporate sponsorship income also is projected to be lower than anticipated.
Goss noted that in spring 1997, when he took a look at a strategic plan that emphasized revenue, we were a prime candidate for optimism. It would have been better if we had focused on cost controls. I take full responsibility for those decisions.
Gosss goals for this year and the future include better communication about the departments activities and financial status, more efficient and effective operations, contingency funding that will allow for mid-year adjustmentspreviously, any mid-year adjustments resulted in decreased funding of spring activitiesand establishment of a capital replacement fund, a line item in the budget for the first time.
Gosss balanced budget with a surplus didnt insulate him from a request by Regent S. Martin Taylor to seriously consider allocating more money to the capital fund and sharp questions from Andrea Fischer Newman. These comments were tempered by comments on the business of budget-making and impact of choices by Regent Laurence B. Deitch, and the costs of gender equity by Regent Katherine White.
The trends of rapidly increasing expenses and practice of spending more than is made are disturbing, she said. When she tried to find out more about the football ticket increase, it took me a long time to get answers and they were no good.
The issue is that we need to review decisions, she said.
The questions I want answered, she said, are Why will tomorrow be different? What controls are in place to monitor the budget? What is the long term plan?
|Athletic Director Tom Goss (left) and President Lee C. Bollinger at the July 15 Regents meeting. Photos this page by Bob Kalmbach|
Goss noted in his opening remarks that the U-M is within 1 percent of gender equity compared with the student population, a major change from 1992s 32.5 percent. The NCAAs strictest requirement with respect to gender equity is that the proportion of male and female student-athletes be within 1 percent of the overall student population.
White commended Goss on the departments commitment to gender equity and the progress made. She noted, however, that since womens sports for the most part do not generate significant revenues that we may be seeing the result [of these expenses] in the budget.
Responding to a question by Regent Olivia P. Maynard, Goss said thatcontrary to a Detroit News articlecoaches for mens soccer and water polo will be on board in January 2000 and the sports will begin in fall 2000 and January 2001, respectively.
Returning to the issue of revenues, Deitch noted that over the past decade, decisions were made that were designed to uphold the Universitys values. There were a number of projects that Athletic Department could have undertaken to reduce its exposure to volatile revenues, and it chose not to.
These were good decisions, Deitch said, but they had [financial] consequences. They include:
We need to ask ourselves what business were in and how the department fits in the University, Deitch stated. The current state of affairs, he added, reflects choices we madesome were good, some were not.