REPORT OF THE
1. ACTION
ITEMS.
a. Division III Loss of Revenue Recovery Plan and Insurance. [Attachment A]
(1) Recommendation. Approve the financial recovery plan and insurance summary to obtain $10,000,000 in insurance coverage for Division III in the event of a catastrophe causing a loss of revenue.
(2) Rationale. The Division III Budget Committee has prepared a financial recovery plan highlighting the options of continued operations in the event that a catastrophic event occurs, causing the Association to lose substantial revenue. Based on this plan, Division III would receive a percentage of the Association’s insurance payout, as well as use existing reserve balances. Additional budget reductions would be required in some years to bridge the gap caused by the lost revenue. The committee felt it important to further protect the Division III Budget in light of the increasing budget resulting from championship enhancements and the need to maintain a balance between championship programs and non-championship programs. Because the financial recovery plan is meant to provide recovery options for one year only, the Budget Committee recommends obtaining additional insurance coverage that would allow the division to maintain a portion of the reserve balance to operate in the second year of financial recovery. The search for an insurer would begin this fall and the premium would be due around the beginning of 2006 when the policy would be finalized. The policy would be up for renewal each year along with the Association’s policy.
(3) Budget Impact. $200,000
b. 2005-06 Budget Allocations and Reallocations. [Attachment B]
(1) Recommendation. Approve the new allocations and reallocations for the 2005-06 budget.
(2) Rationale. New initiatives for 2005-06 include $110,000 for championship enhancements and $200,000 for the Division III Financial Recovery Insurance premium, both to be funded from the Division III Reserve. The Association’s Corporate Alliance group will support an additional $55,000 of Division III championships enhancements outside of the Division III Budget. The Management and Presidents Councils
previously approved $188,000 in reallocations to fund new programs including the NAD3AA Partnership, Division-wide Sportsmanship Initiative, and CSA/CAO Education Grants as well as increases to the Initiative Grant for Student-Athlete Welfare and Conference Technology Grant.
(3) Budget Impact. $110,000
2. INFORMATIONAL
ITEMS.
a. 2004-05 Budget-to-Actual. [Attachment C]
The third quarter results include $15,445,000 in revenue and $9,440,226 in expenses. Please note that the Financial Aid Education expenses for this year will also reflect the delayed honorarium payments from 2003-04. This is the first year for the new mandated reserve level of $1,500,000.
b. Six-year Revenue and Expense Projections. [Attachment D]
This schedule includes the results and projections from 2004 through 2010. The projected reserve balance in 2010 is $8,145,479. The Championships Committee is working on initiatives to enhance the quality of championships, including enhancements to the student-athlete experience that may reduce that reserve level over the next several years.
c. Future Meeting.
The committee will hold a conference call in the fall to review the new 2006-08 fiscal year budget.
Committee Chair: Ivory Nelson,
Staff Liaison: Beth Altstadt Barnett, Finance