In a letter posted on his website this week, new WSU president Kirk Schulz has criticized the school's recent habit of embarking on expensive capital projects without clearly identified ways to pay for them.
"Over the past two months, I have had the opportunity to review the WSU budget with key members of the senior leadership team," he wrote. "In short, we have been spending more money annually over the past couple of years than has been brought in, which is simply not sustainable. As a University we are spending down central reserves at a significant rate and will need to make some adjustments as to how we budget future building projects and new University initiatives."
In addition to announcing his intention to re-institute a formalized budgeting process for the school (side note: the school wasn't using a formalized budgeting process??), Schulz issued what sounds an awful lot like a 150-word subtweet of the athletics department.
"We can no longer build new buildings without a comprehensive funding plan in place, and we cannot rely on University reserves to 'make up' for funds that haven’t been clearly identified," he wrote. "This will require us to be very strategic in our capital projects, and we will involve the WSU fundraising team much earlier in capital project development. Since we have a 10-year plan for capital projects, we need to integrate anticipated state support with private philanthropy more effectively. The bottom line for the future: if we don’t have all funds accounted for, we can’t break ground and start building new projects.
"We (also) cannot bring items to the Board of Regents for approval on anything without a robust financial analysis accompanying our proposals. I will insist on this internally, which may mean it takes a bit longer to have fully developed proposals and initiatives."
If you recall, athletics director Bill Moos sold the WSU Board of Regents on the idea that the impending renegotiation of media rights fees -- including the establishment of the Pac-12 Network -- would make the bond payments viable for two major capital projects: the expansion of Martin Stadium and construction of the Cougar Football Complex.
Of course, projected revenues -- particularly with regards to the Pac-12 Network -- have fallen short, leading WSU's athletic department to run a $13 million deficit for consecutive years, money that has presumably been covered by cash coming out of WSU's central reserves.
Hence, the subtext: WSU's athletics department spent a crap load of money it didn't have to build these things, that's partially the regents' fault for not applying the sort of rigorous financial analysis to the projects that they should have, and it's really screwing over the rest of campus right now.
On the bright side for sports fans, the buildings are already built, and they're undoubtedly helping to fuel the football renaissance we're witnessing under Mike Leach. Yay!
The downside, though, is significant. First, Moos has been trying to figure out how to improve other athletics facilities around campus to bring those programs up to par with its peer institutions -- most notably, building a baseball clubhouse. I wouldn't expect any of that to happen anytime soon, which is going to make it that much more difficult to attract and retain quality coaches in some of the non-revenue sports that haven't already received an upgrade.
Second, this is the sort of thing that leads to division on a college campus between those who support athletics and academics who believe Big Time Athletics have an outsized position in the university system -- because it's one thing to spend a lot of money on athletics, and it's quite another to have an athletics blunder affect what the rest of campus is able to do. And that appears to be the case here.
"We are continuing discussions with WSU Athletics on ways to reduce our annual deficit," Schulz wrote. "I am working closely with Director of Athletics Bill Moos and his staff to develop a plan that ensures we are balancing revenues and expenses while also ensuring we continue to compete for Pac-12 championships. I will present more details on this to the campus community in the early fall.
"Ultimately, we will have some financial challenges over the next couple of years and I will work to ensure that University leadership is bringing forth reasonable solutions that continue our positive momentum but are fiscally responsible."