REPORT OF THE
DIVISION III BUDGET
COMMITTEE
1. ACTION ITEMS.
a. 2001-02 Budget --
September 11 Funds.
(1) Recommendation. Approve the allocation of $150,000 from
the excess 2000-01 Initiatives Task Force budget to be used to fund the
Division III contribution to the September 11 fund and the remainder be
allocated to funds available for contingency.
(2) Rationale. No funds were allocated to the
September 11 fund in the original 2001-02 budget.
(3) Budget Impact. $150,000 in excess 2000-01 funds
allocated to 2001-02 program expenses.
b. 2001-02 Division
III Mandated Reserve.
(1) Recommendation. Approve a Division III mandated reserve
of 20 percent of the revenue allocation for the 2001-02 fiscal year rather than
the mandated reserve of 35 percent approved previously.
(2) Rationale. The funds released by reducing the
level of mandated reserve will be used to address the 2000-01 championships
deficit and provide a contingency fund for championship expenses in 2001-02.
(3)
Budget Impact. Increased funds available for
contingency.
c.
2002-03 Division III Proposed Budget.
(1)
Recommendation. Approve the proposed
Division III 2002-03 budget with $13,454,421 in revenue and $14,158,915 in
expenses.
(2)
Rationale. The proposed
budget provides for base budget adjustments and travel/officials fees
initiatives for championships and student-athlete initiatives.
(3)
Budget Impact. $14,158,915
in total expenses.
d.
2003-04 Division III Proposed Budget.
(1)
Recommendation. Approved the
proposed Division III 2003-04 budget with $14,459,078 in revenue and
$14,855,019 in expenses.
(2)
Rationale. The proposed
budget provides for inflationary/enhancement increases to championships and
accommodates the proposed financial aid audit initiative.
(3)
Budget Impact. $14,855,019
in total expenses.
e.
Short-Term Reserve Levels.
(1)
Recommendation. Approve that
the Division III reserve balance should not fall below 15 percent during the
2002-04 and 2004-06 budget cycles.
If the reserve is higher than 15 percent, the excess will be used to
increase reserves.
(2)
Rationale. During 2004-06,
funds from the reserve will be needed to continue programs/championships
already in place. However, if
results are such that the reserve is greater than 15 percent, those funds
should be used to increase the reserves.
(3)
Budget Impact. Not applicable.
f.
Long-Term Reserve Levels.
(1)
Recommendation. Approve the
committee exploring the establishment of the possibility of determining a
specific dollar amount for the minimum Division III reserve level (e.g., $2
million plus annual inflation factor) as opposed to a percentage of the annual
revenue allocation.
(2)
Rationale. As the
revenue allocation increases, it will not be necessary for the minimum reserve
level to increase in the same increments.
(3)
Budget Impact. Not
applicable.
2.
INFORMATIONAL
ITEMS.
a.
2000-01 Division III Expenditures.
The committee reviewed the financial results for the 2000-01 fiscal year
of $10,066,000 in revenue and $9,832,399 in expenses resulting in a total
increase in the fund balance of approximately $233,601. It was noted that the championships
expenses were over budget by approximately $770,000 while the program
initiatives were under budget by approximately $200,000. A review of expenses by sport for the
past three years noted that three have consistently been over budget: baseball,
football and women’s volleyball. It was noted that the
commonality between sports that have been consistently over budget might be predetermined sites. Football has also experienced increase travel expenses due to the success of West Coast teams. Additionally, cross country was over budget in 2000-01 primarily due to the championship site being located in Spokane, Washington, and the travel expenses related to a West Coast site. Generally, significantly increased travel expenses occurred in 2000-01 due to increased fuel prices.
b. 2001-02 Championship Expenses. It was noted that the championship budget for 2001-02 is very close to the 2000-01 expenses, and therefore, championship expenses could possibly exceed the budgeted amount in 2001-02. The amount of funding released by reducing the level of mandated reserve could be used as a contingency fund for championship expenses in 2001-02. Eight suggested procedural improvements were identified that could decrease championship expenses or provide improved championship budget management: 1) earlier bid and host selection process with hosts selected two years in advance; 2) limit the number of predetermined sites located west of the Mississippi in any given year, in accordance with budget priorities and available resources; 3) increase budgets during the planning process, when possible (based on prediction of which teams are most likely to be eligible for championships); 4) finance, championships and governance staff commit to greater communication including meetings after each championships season (February, May, August) to monitor budget-to-actual expenses on a sport-by-sport basis; 5) better plan “one-time” budget implications for specific host sites (e.g., located west of the Mississippi); 6) require that institutions fly into a major hub airport within 150 miles of a championship site, effective immediately (requires approval of Councils in January); 7) change minimum flight distance from 400 to 500 miles effective immediately (requires approval of Councils in January); and 8) establish deadline by which championship hosts must submit final budget numbers/expenses for reimbursement.