Board urges stable funding for athletics

Staff Report

The University will likely increase student fees and step up marketing and private fund-raising efforts to ensure the long-term financial stability of U.Va. athletics without tiering or eliminating any sports.

“We’re not prepared to make recommendations about specific sports” today, Leonard W. Sandridge, executive vice president and chief operating officer, told the Board of Visitors at its July 13 meeting in Richmond. However, “we do plan to get to that point.”

The conclusions reached, to date, based on a task force report and further analysis by the board’s Finance and Student Affairs and Athletics committees and University staff, are as follows: U.Va. athletics has not seen the financial crises experienced by many institutions; academic performance requires ongoing attention; NCAA compliance requires a consistent and continuing focus; U.Va. has the means to address resource needs; and sound financial management is essential.

“Athletic excellence means different things to different people,” Sandridge said. Nevertheless, “we agree about the importance of having appropriate benchmarks.”

Grade point averages and graduation rates at Division I-A schools are indicators, as well as Sears Cup standings. A preliminary review of the eight-year-old ranking revealed that 10 schools consistently perform well: Stanford, UCLA, Penn State, and the universities of Florida, Arizona, Michigan, North Carolina, Southern California, Texas and Nebraska.

Using the Sears Cup as a general goal — though many schools mentioned above would fail to meet the standards U.Va. has set, Sandridge noted — the average operating budget for a top athletics program ranges from $34 million to $36 million annually. U.Va.’s budget is about $26 million, and its average rank in this standing is 16th.

The University is spending about $4 million less per year on Olympic sports than other Sears top 10 schools, Sandridge said. “We are substantially under-funding our coaches and assistants, especially in [these] sports.” Incremental resources should go to compensating coaching staff, academic asdvising, equipment for Olympic sports, and major renovation of facilities, he said, adding that the Virginia Student Aid Foundation’s role in providing financial support is essential, and that consistent financial oversight is critical.

Sandridge also noted that a number of Sears top 10 schools don’t have flat student fees. They charge admission, and some get state appropriations. At about $240 per year, “our student athletics fee is one of the lowest in the state,” he said; it entitles students to free admission to games and access to sports facilities, such as the track.

Potential funding sources for U.Va. athletics include increasing student fees; tickets and ticket packaging; private gifts and the University’s endowment; and licensing, marketing and TV revenues.

The board asked Sandridge to proceed with analysis and produce a five-year plan for athletics that shows expenses, funding sources, key success factors and a balanced budget.

Asked about prospects of endowing minor sports, President John T. Casteen III said there might be 10 donors capable of endowing a sport.

Health affairs

With weekend nurses and a professional recruiter, the Medical Center is addressing a labor shortage.

Chief Clinical Officer Pamela Cipriano explained to the board July 13 that while the Medical Center’s turnover is higher than the national levels, its rate of hiring registered nurses has improved.

The Medical Center’s human resources department has also hired a relocation specialist to attract nurses from other areas. The Medical Center is currently interviewing 60 to 65 registered nurses a month, up from 30 to 32 a month the same period last year.

At the same time, the hospital’s use of traveling, or temporary, nurses has increased from 35 in December to 57 in July. The Medical Center is paying lodging expenses for nurses to come to Charlottesville and work Friday, Saturday and Sunday shifts.

While the Medical Center is still experiencing a 22 percent turnover rate in registered nurses, only nine hospital beds are closed now.

Board member William H. Goodwin Jr. complimented Cipriano on her work.
“You’re doing a great job,” he said. “You make sense when you talk. You’re making good progress. Keep it up.”

Filling the slots strains the budget, but the hospital is still operating with a surplus. Overtime in 2001 is 38 percent ($1.6 million) more than in 2000 and contract labor is 32 percent ($4.6 million) more than budgeted, primarily for traveling nurses, which Larry Fitzgerald, chief financial officer for the Medical Center, said were used to keep beds open. At the same time, income is down $10 million through May 2001, linked to a shortage of available beds.

The reduced income and increased costs leave the hospital with an actual operating margin of 2.2 percent. Fitzgerald noted that this is less than the 3 percent level needed to sustain the hospital over time. He said while the operating margin was strong in the hospital’s peer group, it was below the budgeted 4.7 percent margin.

In other business, the board:

• approved the general concepts in the proposals to boost University programs in the arts, international activities, public service and science and technology, developed by four long-range planning commissions as part of the Virginia 2020 initiatives.

• named two architectural firms, one of which helped design the acclaimed Conseco Fieldhouse in Indianapolis, to work on the basketball arena. VMDO Architects of Charlottesville will be the lead firm on the project. Ellerbe Beckett of Minneapolis will serve as a design consultant.