REPORT OF THE
DIVISION III BUDGET
COMMITTEE
1. ACTION
ITEMS.
a. 2003-04
Year-To-Date Actual Expenses. [Attachment A]
(1) Recommendation.
Review and approve the year-to-date 2003-04 financial results of $14,391,500 in
revenue and $5,420,736 in expenses.
(2) Rationale. These figures reflect the actual
expenses incurred during the second quarter of 2003-04. Expenses are roughly the same as in the
second quarter of the previous year.
Revenue has increased approximately $660,000 from the previous year.
(3) Budget
Impact. Not applicable.
b. 2004-05
Proposed Budget. [Attachment
B]
(1) Recommendation. Review and approve the proposed budget
for 2004-05.
(2) Rationale.
The Budget Committee recommends approval of the proposed budget for 2004-05
with projected expenses of $15,893,199 and revenue of $15,445,000. The excess of expenses over revenue will
be covered by the Division III Reserve balance. New championships initiatives of
$202,000 include initiatives for
Men’s Baseball, Men’s and Women’s Golf, Women’s
Lacrosse, Rowing, Men’s and Women’s Soccer, Men’s and
Women’s Swimming, Men’s and Women’s Track and Field and
Women’s Volleyball. The
nonchampionships strategic initiatives budget projects a decrease of $225,980.
(3)
Budget Impact. $15,893,199 in expenses.
c.
2005-06
Proposed Budget. [Attachment
B]
(1)
Recommendation. Review and approve the proposed budget
for 2005-06.
(2) Rationale. The Budget Committee recommends approval
of the proposed budget for 2005-06 with projected expenses of $17,701,618 and
revenue of $16,571,000. The excess
of expenses over revenue will be covered by the Division III Reserve balance. New championship initiatives of
$1,528,000 include automatic qualification enhancements to all team sports and
an additional initiative for Men’s Ice Hockey. The projected
nonchampionships
strategic initiatives budget further decreases by $181,220.
(3) Budget
Impact. $17,701,618 in
expenses.
d.
Division
III Reserve. [Attachment
C]
(1)
Recommendation. Review and approve the revised Division
III operating reserve policy.
(2)
Rationale. The committee’s goal was to
determine a mandated reserve level as opposed to tying the reserve level to a percentage
of revenue. The committee
recommends approval of the revised reserve policy, which states that the
reserve shall not fall below $1,500,000 and that the reserve should continue to
be treated as an operating reserve to cover budget shortfalls. The committee is also developing a
disaster recovery plan that would take effect should the Association incur a
catastrophic event that would cause a significant loss of revenue (e.g.,
cancellation of the Division I Men’s Basketball Championship). Given the commitment to deal with a
viable operating reserve and a disaster recovery plan, the committee is very
concerned about the timing and format of the proposed Cross Country automatic
qualification enhancement budget initiative of $928,000, currently under discussion
for 2008-09.
(3)
Budget Impact. Not applicable.
e. Division
III Disaster Recovery Plan. [Attachment D]
(1) Recommendation. Charge the Championships Committee with
the responsibility of defining the championships component of the proposed Division
III disaster recovery plan.
(2) Rationale. The Division III disaster recovery plan
would be based on a catastrophic event (e.g., the cancellation of the Division
I Men’s Basketball Championship) occurring during any one year, with the
focus on the winter and spring championships that likely would be
affected. The proposed prioritized
recovery process would include first, the Division III allocation of remaining
Association revenue; second, the Division III reserve balance; third,
prioritized reductions to the non-championships strategic initiatives; and
fourth, prioritized championships budget reductions. The committee recommends that the
Division III Championships Committee develop a plan that details how to conduct
a viable championships program if such budget reductions are necessary. The Budget Committee will review
the championships recommendations and incorporate them into the overall
recovery plan. The committee also
charged staff to research the cost of insurance to provide additional coverage
for revenue lost, as well as to prioritize funding for the nonchampionships
strategic initiatives. The
committee noted that additional, Association-wide review would be required if
the catastrophic event would carry over into a second year.
(3) Budget
Impact. Not applicable.
2. INFORMATIONAL
ITEMS.
a. Future
Meetings. The committee will conduct a conference
call later this spring or summer to discuss any changes or issues with the 2004-05
and 2005-06 budgets and to further discuss the disaster recovery plan.
b. Association-wide
Budget Planning. The 2004-05 budget process timeline and a summary of
Association-wide committee requests for 2004-05 and 2005-06 are attached. [Attachment E]