Updated: UWF Faculty Senate Poses Hard Questions To Administration

Feb 11, 2015

WUWF Received a copy of a memo sent to President Judy Bense dated February 6. The Faculty Senate is meeting this Friday, February 13. More information will be made available as it is received.

UWF President Dr. Judy Bense giving her State of the University presentation.
Credit University of West Florida

To:           President Judy Bense
CC:           UWF Board of Trustees

From:     Faculty Senate Executive Committee

Re:           University Park Project and UWF Financial Questions

Date:     February 6, 2014

Based on the concerns raised by the following questions regarding the University’s finances, we suggest that Phase I of University Park be halted until these issues are resolved.  Given the time sensitive nature of some of these questions, we respectfully request your responses at Faculty Senate’s February 13, 2015 meeting.  We also ask that you forward this document to UWF’s Board of Trustees as soon as possible.

As elected faculty representatives, it is our responsibility to address matters that concern the well-being of the University community as a whole and, in particular, issues that could negatively impact our academic mission.  The recent changes in the University’s operating structure, brought about by changes requested by faculty, have created considerably more openness about financial matters.  As a result of these changes, several issues relating to the financial health of UWF have come to our attention. These questions are respectfully submitted in the fulfillment of our representative responsibilities.  These inquiries are made in a bullet format to increase brevity and promote understanding.

University Park Questions 
 

  • It has come to light that Phase I of University Park will be started imminently.  Phase I involves the construction of an athletic training facility and a football training field that will cost the University $14.6 million (or more).  This would be a very large expenditure for the University at a time when our finances are already in a precarious position, in part because of unfunded and uncertain athletic costs.

    The UWF community has been told for quite some time that University Park would be funded by external sources.  Why is UWF money, rather than private funds, now the primary funding source for this project?  In addition, why would the University borrow approximately $10 million of these funds by taking cash reserves from numerous areas across campus, including housing reserves, the parking auxiliary trust fund, disaster residuals, and the capital improvements trust fund, to name a few?
     

  • Given that undertaking this project would likely result in a campus-wide, multiyear, across-the-board moratorium on spending for all academic and support programs, is this a fiscally responsible decision at this time—particularly given the uncertainness of future funding from the legislature and the need to meet state metrics in order to guarantee funding?  Should we be jeopardizing the University’s bond rating for this, or any, project?
     
  • In addition, if Phase I of University Park were to go forward, it would commit the University to unfunded recurring expenses related to both the training field and the building roughly estimated to be $500,000 to $800,000 per year.  What is the best estimate of these new recurring costs?  What is the funding source of these costs?  Is it financially responsible to start on this project if we do not have funding identified?
     
  • UWF engaged in an extensive strategic planning process that involved all of the University’s stakeholders and resulted in the 2012-2017 Strategic Plan that was approved by both the Board of Trustees and the Board of Governors.  Since construction of Phase I of University Park is not aligned with our strategic plan, what justification exists for such a large expenditure at this time? 
     
  • Through the 2013-2014 Strategic Planning and Resource Alignment (SPARA) process, over 80 academic and infrastructure projects were identified for funding, and funding for approximately 60 of these projects was deferred due to a lack of funds.  A SPARA team was not even convened for the 2014-2015 academic year due to a lack of funding for any projects. 

    How and why does the construction of a $14.6+ million facility, to be used primarily for athletes who are not even at UWF yet, rank above the 60+ other academic and infrastructure-related projects identified through the due process of the SPARA committee?  Is this athletic training facility a higher priority than academic initiatives such as hiring new faculty to meet SACS requirements, buying library books, or adding advisors to help with student retention?
     

  • Given that our basketball, baseball, soccer, volleyball, golf, and track and field teams are successfully training in our state-of-the-art student recreation center, couldn’t our football players do the same?  Do we really need such an athletic training facility now? 
     
  • Given that this would be a significant investment of the University’s funds that would involve extreme sacrifice across the entire campus, shouldn’t this project be exposed to the campus community and its ramifications fully considered before we proceed, such as was done with proposals in the SPARA process? 

 

Football Budget Questions
 

  • President Bense has consistently told members of the UWF community that the full costs of football would be covered through student athletic fees.   UWF’s Athletic Department Budget Overview for 2016-17 (dated November 17, 2014), on the other hand, shows roughly $700,000 in first-year football costs that are not covered by student athletic fees.  In addition, the Athletic Department budget does not include roughly $300,000 in annual football costs for the use of Maritime Park.
     

What is the explanation for this first-year deficit (and recurring future deficits) of $1 million or more that will not be covered by student athletic fees?  What is the source of these recurring funds? 

 

  • A review of UWF’s internal finances (initiated since changes were made in the President’s Office) indicates that an attempt was made to create the appearance that student athletic fees would be sufficient to fully fund the costs of football.  The lack of explanation for this accounting irregularity provokes concern about the transparency and stability of the University’s finances.

    Who was responsible for the intentionally altered internal financial reporting?  Was Dr. Bense aware of the internal accounting irregularities?  If not, why not?  If so, why were they allowed?
     

BEI Questions

  • President Bense has consistently told members of the UWF community that no UWF funds would be used on the East Gate Argo Village project.  (See, for example, minutes of the September 12, 2014 Faculty Senate meeting.)   The Pensacola News Journal recently revealed that, contrary to what we have been told, $600,000 of UWF parking fund money would be going to fund Argo Village.  (PNJ, “UWF’s Entrepreneurial Effort is a Work in Progress,” December 27, 2014.)

    What is the explanation for this $600,000 expenditure?  What is the anticipated return from this investment?  Who are the tenants for this project?  As 20%+ partners in this venture, shouldn’t we have more answers than those that have been revealed thus far?
     

  • The rationale given to the BOT and the University community for increasing UWF’s parking fees for students, faculty and staff was to provide for convenient parking lots, improved shuttle service, repairs to existing roads, and possibly a future parking garage.  (See, for example, minutes of the June 12, 2012 BOT meeting and the May 11, 2012 Faculty Senate meeting.)

 

What is the justification for spending $600,000 of student, faculty, and staff parking fees on public parking for an uncertain commercial venture on the outskirts of campus?  Since the revenue from Parking Services is being used to cover other losses in BEI, how will the University pay for needed future parking expenditures?

 

  • Management of Scenic Hills Country Club reported that the golf course suffered about $1.5 million in uninsured damage as a result of the April 2014 flooding in Pensacola.  (See May 22, 2014 letter to Scenic Hill’s members and homeowners from Rick Gorman.)  $1.1 million of the damage was reportedly related to a failed dam structure.  Mr. Gorman, the club’s general manager, said that grant applications were being made to request funds to help with the repairs.  (Scenic Hills also reported a net accounting loss in excess of $200,000 for the fiscal year ending June 30, 2014.)
     

What is the current estimate of the cost of needed repairs at Scenic Hills?  What is the status of the repairs?  What is the status of grant requests for funding?  What potential liability does the University face if the dam structure is not repaired in a timely fashion?  What is the likelihood that Scenic Hills will generate positive cash flow in the future?  How will the current shortfalls and any future shortfalls be covered? 

 

  • As noted above, Scenic Hills Country Club is reported to have suffered roughly $1.5 million in storm damage in April 2014.  In BEI’s audited financial statements for the year ended June 30, 2014, Note 12 relates to Risk Management and losses from events such as natural disasters.  It is stated that “BEI is not aware of any liabilities related to these risks as of June 30, 2014.”  Given that the total assets of BEI are under $5 million and the purchase price of the golf course was about $2.2 million, this is certainly a material amount, and BEI was obviously aware of it.

    Why wasn’t the $1.5 million in storm damage noted in BEI’s June 30, 2014, financial statements?
    Were BEI’s auditors notified of the storm damage?  If not, why not?   If not, when will the auditors be notified?  If so, how did the amount of such an apparently material loss escape being noted in the financial statements?
     

  • BEI’s audited financial statements for the year ended June 30, 2014, note that the Food Service operation also lost money for the year.  The University is locked in to a 20-year, no-bid food service contract that BEI arranged in return for $1.1 million that went toward the Scenic Hills purchase.

    Given the long-term nature of the food service contract, what are the implications of annual operating losses in this area to the University?  How will the shortfalls be covered?

 

  • Given the fact that the sole purpose for BEI’S existence is to produce funding for “the things [UWF] wants and needs”, how can the constant drain of the University’s resources to prop up BEI be further justified?  The University is spending the money it currently has to offset the negative returns generated by BEI thus far.  These were funds that were already in-hand and which could have been spent on the very “things [UWF] wants and needs.”  When can we expect this trend to be reversed?  If there is no such expectation, is BEI’s continued existence in the best interests of the University of West Florida?

We appreciate that we are all united in concern for the best interest and future health of the University of West Florida. We look forward to candid and forthright answers to all concerns noted above in the best interest of continuing to achieve our academic mission through sound fiscal decisions.

 

Related to this story the Pensacola News Journal is reporting that the Business Enterprise Institute, the economic development arm of the University of West Florida, has canceled plans to develop a retirement community as well as a proposal to provide students with an electric car share program.