ST. SIMONS ISLAND — UGA athletics directory Greg McGarity, in response to stories and criticism about UGA’s reluctance to use its reserve funds, is planning a presentation about the issue at Thursday’s board meeting.
What will be said? McGarity offered a preview last week, saying the presentation will “go into great detail,” and try to prevent people from having “numbers out there that are inaccurate.” He also said last March that the Athletic Board has put restrictions on how much UGA can leave in reserves, as part of a sound fiduciary policy.
“It’s a good practice to have at least six months of operating expenses just in case the unforeseen happens, that we don’t know about,” McGarity said in March. “That’s the financial strength that our Athletic Board has basically mandated, long before I arrived. So it’s a philosophy that’s been in place for decades, thank the Lord.”
But Ryan Scates, a former student board member, feels the policy can be amended, if the board wishes.
“It’s a convenience excuse when something isn’t going right to say that they’re limited by the athletic board. That’s absolutely not true,” said Scates, who was on the board during the 2012-13 school year. “I mean the athletic director has total discretion to make any reasonable decision. The board is not going to get in his way.”
At the last board meeting, in February, UGA listed just over $67 million in reserves available at the end of fiscal year 2016. Out of that, $21.6 million was put towards previously approved facility projects. Then $41.7 million was invested in the UGA Foundation at the end of Dec. 2016, according to a document passed out at the board meeting, leaving $4.7 million in remaining reserves available for the ongoing fiscal year. That reserve money adds up to $46.4 million.
In addition to that, according to the UGA athletic association’s audited financial statement, there was just over $32 million set aside in the UGA Foundation for “general support of athletic programs and awards.” That figure was separate from the other $46.4 million, UGA athletic association CFO Stephanie Ransom confirmed in an interview in March, thus leaving a figure of just over $77 million in reserves.
UGA athletics does have debt, just under $100 million annually, according to documents, which dates back to bonds that were taken out years ago. But the interest rate on those bonds is fairly low, as are interest rates in general these days.
UGA is also set to present a budget of $127 million to the full athletic board. The budget was approved by the finance committee last week, in a brief meeting. The budget is a rough estimate of what the school can spend based on projected revenues, though in actuality revenue tends to come in several million over expenses.
That leads to a fairly healthy reserve fund, and the criticism that not enough of it is being spent.
Several longtime board members support the prevailing financial policy. One former board member, who did not want to be quoted for this story, said he likes that UGA isn’t spending money like other schools. McGarity has also pointed to the need to have a “rainy day fund,” for any number of issues that could come up.
But critics such as Scates – who is far from alone – have wondered if it wouldn’t be better to use the reserve money immediately, especially in light of the fundraising effort underway for the Sanford Stadium west end zone project. The school is seeking to raise $53 million of the $63 million price tag through fundraising.