 |
| "I'm shocked, shocked that tapping is going on here." |
By Nanette Asimov, November 3, 2017, San Francisco Chronicle
Cash-strapped UC Berkeley will tap money for academic programs to help pay off a massive debt from the remodeling of Memorial Stadium, Chancellor Carol Christ said Friday. Although the source of the bailout funding hasn’t been identified, it is not expected to come from students’ tuition dollars or taxpayer-supplied state money, said campus spokesman Dan Mogulof.
In exchange for the bailout, which could total nearly $200 million over several decades, the athletics department will have to balance its money-losing budget by 2020. Christ said the rest of the campus has also committed to closing a deficit of $77 million. The athletics department may also have to hand over Edwards Stadium, the 85-year-old field at the west edge of the campus that is used for track meets and soccer matches, Christ said. The campus would turn it into classrooms, student housing, a performance arts center or other use that raises money and addresses campus needs, Christ said.
“While no decision has been made about Edwards Stadium, as the campus moves to assume responsibility for some portion of the stadium debt, I believe it would be rational and equitable for intercollegiate athletics to make a corresponding concession that will help us address pressing needs,” Christ told The Chronicle.
The chancellor said the athletics department would also have to undergo a financial analysis and audit, and create a revenue plan, among other requirements. The deal commits a vast amount of UC Berkeley’s future academic revenue to a nonacademic purpose: stadium debt. Aside from tuition funding and state money, sources of academic revenue can include gifts and grant money.
Cal unveiled its rebuilt and earthquake-retrofitted Memorial Stadium and brand-new Simpson Training Center in September 2012. Total debt on the complex is $438 million — a figure the athletics department doesn’t expect to pay off for more than a century. The campus would help pay off only the retrofit debt on the stadium, Mogulof said. He said officials are still trying to determine what portion of the stadium’s $314 million debt comes from the seismic overhaul. However, the figure is expected to amount to at least 60 percent of the total debt, or $188 million, said one campus source, speaking on condition of anonymity.
Christ said it was not only fair that the campus take on that part of the athletics department’s debt, but practical. Citing a recent report assessing the future of Cal athletics, Christ said it would be impossible for the department alone to pay down its debt while also balancing its budget and maintaining its current size.
Not only that, but “no other (department) on campus has ever been asked to assume financial responsibility for seismic costs,” she said. The idea of taking Edwards Stadium from the athletics department is expected to lessen faculty opposition to a bailout. Still, some faculty members were dismayed.
“My concern is that we cannot afford this,” said Déborah Blocker, associate professor of French who voiced her criticism when Christ informed the UC Berkeley Academic Senate on Thursday. “We’d have to cut academic excellence, and we’d have to cut academic programs and research money. Basically, if we pay this debt, we’ll be left in a hundred years with nothing but a stadium and no university.”
Citing the cuts required to help close the campus budget deficit, Blocker said she doesn’t even have $5,000 to bring speakers in from France. “Or take my students out for dinner after a class — all these things are disappearing.”
Christ has tried to close the campus’ budget deficit as much by raising revenue as by cutting, and said the effort is so far succeeding. Athletics can also find ways to raise more money, she said. “Reducing the size of our intercollegiate program is, and will, remain a last resort.”
As for the campus’ ability to pay the seismic part of the stadium debt, Mogulof, the campus spokesman, said it will be manageable - at least for now.
Until 2032, the athletics department needs to pay only interest on its debt for the stadium complex, or nearly $18 million a year. Of that, $12.5 million is interest on the stadium debt alone. If the seismic portion of that is roughly 60 percent, the amount from campus coffers would be $7.5 million a year — which Mogulof said the campus could absorb.
“It becomes more significant as time goes on, because you start paying principle,” he said. “But the campus budget will be balanced by 2020. So for right now, it’s not a pressing issue.”
Athletics Director Mike Williams said he was pleased with the chancellor’s announcement.
“We believe this decision to be fair, particularly given that the stadium houses multiple academic units, as well as the campus visitor center and a recreational sports facility,” Williams said in a statement, adding that the deal will help the department make ends meet by 2020, as required. Last year, Christ’s predecessor, Nicholas Dirks, gave the athletics department $23 million to close its gap — and Christ said that needs to stop.
Source: http://www.sfchronicle.com/bayarea/article/UC-Berkeley-to-tap-academic-funds-to-help-bail-12330822.php
It's just a little tap, tap, but it can quickly get away from you:
No comments:
Post a Comment