UO Matters cuts athletics subsidy by $555,227 a year

11/9/2012: Forgive me for bragging a bit: I want this in my service report for post-tenure review. Starting last fall I posted a series of stories on the UO athletic department’s overhead rate, using documents obtained with public records requests and petitions.

While athletics had originally been scheduled to pay 7%, instead they were only paying 3%. Eventually I traced this to a secret agreement between Dave Frohnmayer and his athletic director Pat Kilkenny, signed 2 weeks before Frohnmayer stepped down as Pres. Steve Duin had a good column about it in the Oregonian. Jamie Moffitt knew about this deal, but she and AD Rob Mullens kept the Senate IAC in the dark until the public records requests made her reveal it.

I started digging into overhead after hearing Mullens and Moffitt (at the time in charge of athletics finances) tell the IAC that the athletic department is “self-supporting” – and then finding out their math depended on sticking the academic side with the bill for the Jock Box and the NCAA lawyers. Made me wonder what other crawly things were hiding under that rock. Overhead turned out to be one, though there are plenty of others. 

Bob Berdahl tried to shut down the IAC over these sorts of questions. But now UO has a new president, Mike Gottfredson, who has as of today gone up several points in my book, though not a full letter grade. OUS rules forbid overhead subsidies and require that overhead rates be established using an “auditable” procedure. So Moffitt had no choice but to revisit the calculations – especially with a president who wouldn’t look the other way. Today her report came out, here:

Athletics will have to pay $555,227 in new money to UO every year – funds now available for the university’s other functions. Yippee. Of course, this means that they owe us $1,665,681 for the past three years. Not to mention the other millions in subsidies we have paid them and are still paying them. The Mac Court deal, for example, is costing us $467,000 a year. Jock Box tutoring $1,830,000. And there are some other expensive problems with how the new rates are calculated, and what they exclude – mostly things that benefit athletics and cost other units.

But this is a start. And a big payoff for UO’s academic side. So next time you hear Dave Hubin complaining about the $50,000 that my public records requests have supposedly cost UO – he still won’t let me see that list – ask him about the benefits. 

Berdahl and Mullens approved 21.3% raises for coaches

They got bonuses too. A correspondent points out I missed this report from Rob Moseley in the RG, July 20:

The UO football team’s nine assistant coaches each received a $40,000 raise as of July 1, bringing their guaranteed salaries for 2012 to a combined $2,759,500. … Under the amended contracts, all nine received a $40,000 bump this month, and will get another increase of $16,750 on Jan. 1, 2013, for a total combined raise of 21.3 percent in a year…. Also this month, Oregon’s six longest-tenured assistants — those retained by Kelly when he replaced Mike Bellotti as head coach — earned previously negotiated retention bonuses, totalling $450,000 among them.

Just a few months earlier Rob Mullens was telling the UO Senate Intercollegiate Athletics Committee that his department did not have the money to follow recommendation #1 of the 2004 UO Athletic Task Force and begin helping UO fund academic scholarships. And interim UO President Bob Berdhal was telling the IAC to stop asking questions about Duck finances – or else.

And shortly after the press found out about these raises for the coaches, UO’s interim provost Jim Bean told the faculty they would not be getting raises, unless their new union could negotiate them from the administration with a collective bargaining agreement. I’m not opposed to UO paying market wages. But our administration seems to think the market is just for the faculty – while crony capitalism is for themselves and the jocks. Even Bloomberg Financial News is now calling for university presidents to take control and institute salary reform for coaches.

But in the meantime we should insist on an end to the use of general UO funds to subsidize the athletic department. They should pay a reasonable overhead, pay for the Jock Box, pay for Jim O’Fallon, pay for their own skybox, maybe even – god forbid – pay all the costs of their NCAA lawyers? 8/13/2012.

UO needs a new Provost

Read Interim Provost Jim Bean’s 2010 op-ed in the Oregonian, defending the decision to spend $1.83 million a year of regular students’s tuition money on the athlete only Jacqua Center for Student Athletes – or as the NY Times calls it, the Jock Box. Then read about how Duck AD Rob Mullens was allowed to use all the earnings from a $5 million donation to UO to replace the tiny bit the athletic department was paying – nothing toward the academic side’s costs.

Then read today’s Register Guard story on the crunch in classroom space for regular UO students. I’m no economist, but the $1.83 million per year the students are paying the athletic department would have financed a $35,599,612.29 classroom building, with 30 year tax exempt bonds at 3.125%.

UO needs a new provost. 8/12/2012.

Update: In the comments, The Dog analyzes Chris Ramey’s statement in the article:

However, over the past two decades, spending on academic buildings and sports facilities — not counting housing and other student-focused buildings — has been roughly equal, according to Ramey’s analysis, although it doesn’t include the football operations center that’s under construction. 

I don’t see how Ramey’s math works here either – and even if it does, is it really OK that 50% of all new construction over the past 20 years has been for the jocks? Amazing. UO needs to tax contributions to the Ducks.

Why Bob Berdahl hates public records access

Not sure why this took me so long to find. The San Francisco Chronicle, 2005:

UC’S PAID LEAVES CALLED ‘BETRAYAL’ – REGENTS’ EDICT IGNORED – 3 top managers were given lucrative furloughs in violation of university policy:

Former UC Berkeley Chancellor Robert Berdahl received a 13 1/2-month leave at $315,600 a year. … UC granted the leaves despite a policy approved by the university’s governing Board of Regents in 1994 limiting paid administrative leaves for senior managers to a maximum of three months. The regents reaffirmed the limit in September.

“It’s a betrayal,” said former state Sen. Quentin Kopp, who helped push UC to declare an end to the paid leaves in 1994. “You can’t depend on the probity of university leaders.” … Both the state Assembly and Senate have scheduled hearings in the wake of stories in The Chronicle reporting that UC quietly paid hundreds of millions of dollars to employees in bonuses, relocation allowances, administrative stipends and other compensation.

The revelations come at a time when the university has said budget constraints have forced it to boost student fees, cut services, increase class sizes and freeze pay for thousands of lower-paid workers.

Sounds familiar. Another headline on Berdahl from 2006:

Ex-chancellor to leave UC, pocket cash – He won’t need to return salary he was paid during year’s leave:

At the time, UC said all three executives were faculty members who otherwise would have qualified for yearlong academic sabbaticals to do research in their fields of expertise. But because of their administrative service, UC said it decided instead to grant them “administrative leaves in lieu of sabbaticals” at their full executive salaries. Berdahl, for instance, received his chancellor’s salary of $315,600 a year, instead of his faculty salary of $130,900, while on leave. 

Sounds remarkably similar to the sabbatical deal Pernsteiner gave Frohnmayer, or what Lariviere gave Bean.

In reaction to these and other similar scandals the CA legislature appointed a “Task Force on UC Compensation, Accountability, and Transparency”. Their report here calls for an end to these sweetheart deals for administrators, controls on income from corporate boards, and for improved transparency and public records access. UC-Irvine seems to have implemented a pretty reasonable process to do this – and UO had one, until Berdahl took it away. 6/12/2012.

Pernsteiner demands more croissants

3/5/2012: That’s the latest from Bill Graves at the Oregonian, buried at end of his gun story. More as we get the docs – and there’s some scandalous stuff here.

The board also voted to extend Pernsteiner’s contract through June 30, 2014, but is still negotiating terms. Pernsteiner, who has not had a pay raise in four years, earns $280,900 a year plus $12,720 in deferred compensation.

Three months ago he fired Lariviere for giving out unauthorized raises. Now he wants a raise too. Graves leaves off a few of Pernsteiner’s other perks and hiring peculiarities:

Bellotti’s $490,000 PERS

12/11/2011: Under the NCAA cartel, none of his players will get a dime. Fascinating, carefully researched story by Ted Sickinger in the Oregonian on how Mike Bellotti came to be collecting $490,000 a year in PERS, most of which will ultimately be paid by Oregon taxpayers:

The statutes governing PERS include a loose definition of what constitutes “salary”: “the remuneration paid an employee in cash out of the funds of a public employer in return for services to the employer.” For employees hired after 1995, federal tax rules have limited the final salary reportable to PERS — $245,000 in 2011. But that doesn’t apply to Tier One PERS members such as Bellotti.

What pumped up his base pay were contract provisions that gave him a $325,000 share of the university’s endorsement contract with Nike and Oregon Sport Network each year, as well as a piece of the Ducks season ticket sales.

Bellotti’s contract defined endorsement and network deals as “Opportunities to earn outside income.” But because the university handled them as a transfer of its own revenue, the endorsement money is included in his university pay, and his benefit calculation.

Where will this money come from? Oregon taxpayers. Another subsidy for athletics:

… At retirement, Bellotti’s post divorce account balance was only $300,000. The university made its own contributions over the 21 years he was employed. But combined, they won’t come close to covering the $5 million benefit reserve that PERS established to cover his payments. Moreover, that reserve may underestimate the costs, depending on the state’s investment returns and Bellotti’s longevity.

To make up the difference, PERS draws on benefit reserves of its state and local government rate pool, which includes institutions of higher education, community colleges, state agencies and cities. Over time, all members of the pool will pay for the benefits, giving them less money to hire teachers, cops or provide services.

No wonder the rest of the state hates us. So, has Executive Senior Associate Athletic Director for Finance and Administration Jamie Moffitt – soon to be UO’s Chief Financial Officer – been letting this rip-off continue for AD Rob Mullens and for Chip Kelly and the other coaches? Seems like the new federal rules may prohibit it. Or perhaps they’ve figured out a new scam. Go Ducks!

Provost Bean is unacceptable as interim President

12/1/2011: Update: Provost Bean’s 2011 sabbatical contract is here. It’s an academic sabbatical, but we pay him his much higher administrative salary. It also turns out we’ve been making his beemer payments, $775 a month, mostly from student tuition money. In fact, we are also apparently on the hook for “all expenses associated with Jim Bean’s sabbatical.” Because there’s no way the B-School will pay for a shoddy proposal like this. Thanks Russ. Read it all. 

Provost Bean originally said he wanted to go on sabbatical for his health. You take a sick leave for your health. A sabbatical is for research. Sure enough, his sabbatical contract does not mention health – instead it gives two new, conflicting reasons. On page 4 of the pdf, in his cover letter to Lariviere, he says he wants to go back to being Provost:

Jim Bean’s got a point: UO needs a more effective Provost. But that’s not why he wants a sabbatical. On the very next page of our Provost’s sabbatical proposal he’s got a totally different story – now he wants to go back to being a professor, and teach and do research. He’s got a pretty pathetic idea of what that involves:

Bean thinks student tuition should pay for “visiting old friends”? Wait – it gets even more embarrassing:

I’m no economist, so I can’t tell you what $322,140 at a 0.60 FTE plus benefits and a free BMW works out to in dollars but I think it should be enough to find someone willing to actually *read* the literature, not just scan it. (OK, it’s $289,562.) And how much did Bean gain by claiming his Senior VP salary rather than his Professor salary, for what is, at least purportedly, an academic sabbatical? 0.60*(322,140 – 185,733) = $81,844 plus OPE at 45% = $118,674. Where did UO get that money? Mostly from our students, and a bit from Oregon taxpayers.

and here’s the BMW part:

12/1/2011: These are (mostly) my comments, but I think a substantial majority of the faculty agree. The vote of the ~50 CAS heads was unanimous for Berdahl. Sorry Jim, but that’s the way it is.

After a mixed performance as B-School Dean, Jim Bean was appointed interim Provost by Frohnmayer (2008) without a search. Linda Brady had left suddenly and he was available. Then he was promoted to Provost (2009) without a search. Just like Chancellor Pernsteiner’s career.

His tenure as Provost was also mixed, at best. Lots of efforts to make himself look good (his oversold 5 big ideas) and a repeated refusal to engage with the faculty on tough questions (e.g. athletics, Martinez firing, budgets, Bend, …). Unable to attract good administrators to UO. Kept Russ Tomlin and Frances Dyke for 3 years? John Moseley is *still* on the books as Bean’s “special assistant” at $248,941 FTE? Now that’s leadership.

One reason for the Lariviere firing was the faculty and administrative raises. Bean took one of the largest ones for himself – $15,340. Imagine if he could have gone out to the press defending Lariviere, saying “I believed these were so important to retention that I pushed them through and did not take a dime for myself.” Bean couldn’t do that, because $306,800 was not enough for him. He wanted $322,140 (and a BMW 7 series) – regardless of what it cost UO in the end.

Then this September he stepped down at the last minute as Provost – literally a few days before classes started. President Lariviere had to rummage through the Johnson Hall recycling bins for an interim replacement. I’ve never heard of someone taking a sabbatical for medical reasons – we do them for research, right? Weird. I wonder what his sabbatical contract looks like. I will find out. See link to contract above.

Now – 2 months after saying he was physically unable to be provost, he’s suddenly willing and able to take on the President’s job. I don’t trust him or his relationship with Pernsteiner and the board. I think this is a set up. So do many others. Show us the medical records Jim.

He’s been a toady for Chancellor Pernsteiner before: Watch this 2009 video of the infamous “furlough meeting” where Bean claimed that UO was in the black on our Bend satellite, that we had a lean top administration, spending 38% of what our peer institutions spend, and that we should go along with Pernsteiner’s call for voluntary faculty furloughs:

Lies and more lies.

Why Dave Frohnmayer is not an acceptable interim President

Update: Frohnmayer is now out and I’m not going to waste my time finishing this post. If you still care, links to all the documents mentioned below are available on this site, just click on the labels below. Email me if you want a copy of his email threatening me with a “defamation per se” lawsuit over the state audit of his contracts.

12/4/2011: Rumor is that Jim Bean has withdrawn his candidacy or will as soon as he checks his email. That leaves Frohnmayer as the Board’s leading potential insider alternative to Berdahl.

Here is Frohnmayer’s 2009 golden parachute sabbatical contract, negotiated with his pal George Pernsteiner. It took me three months and two petitions to the DOJ to force OUS lawyer Ryan Hagemann to produce this contract. It’s not hard to see why. Here’s a video clip of Frohnmayer trying to convince the UO faculty to go along with Pernsteiner’s plan for “voluntary furloughs.”

This was right after Pernsteiner had given Frohnmayer a $150,000 bonus, and taken a raise for himself – which OUS spokesperson Di Saunders then tried to hide from the Oregonian, just as they’d tried to hide Frohnmayer’s previous raises, and who paid for them.

Frohnmayer spent his sabbatical restarting his legal career, not doing the research he claimed he would do. Here’s the state audits division investigation report. He had to write a check refunding UO money.

He was paid for retroactive summer contracts Russ Tomlin set up for him, after the lack of written contracts had been reported. Shades of Mike Bellotti.

Frohnmayer never accepted responsibility for Bellotti, but blamed it all on his scapegoat, Melinda Grier. That’s leadership for you.

He appointed Pat Kilkenny AD, after Kilkenny started making large donations to his Fanconi Foundation. Two weeks before stepping down as President he signed a secret deal with Kilkenny, giving the athletic department half off on overhead and requiring the academic side to pay them $375,000 for using the Autzen skybox.

Here’s his current 600 hours contract with the Law School. Michael Moffitt is now keeping him on a short leash, spelling out what research he (or more likely his former special assistant, Jungian psychologist, and current “leadership” co-teacher Barbara West) must accomplish this year:
Dave’s first 5 years at UO were pretty good for UO. Then came the WRC, Pat Kilkenny, the post-heart-surgery personality changes, the anger, the contempt for the faculty, the sell-outs, and the special deals for his friends in the central administration: John Moseley, Lorraine Davis, Dan Williams.

Rumor is that Frohnmayer’s former secretary Carol Rydbom spent a year combing through his presidential papers (while on the UO payroll, of course) before transferring them to the UO archives. I wonder what was in the parts that didn’t make the cut? I wonder what she missed, and what is in those letters and emails that did make it into the archives.

No more of Frohnmayer’s old guard. No more Frohnmayer. Unacceptable.

Administrators gone wild

11/2/2011: Greg Bolt’s story 2 weeks ago in the RG gave the short version of the last 10 years of UO spending priorities: 26% more students, 9% more faculty, 36% more administrators.

Today Bolt has a detailed story about the recent UO raises. The short version? The money for the raises comes from all the new students the faculty are teaching. But nearly 40% of the $5 million in raises went to administrators. Apparently the next story will deal with the DPS budget, also now bloated with another million or so in new tuition money.

Today’s story includes lists of those faculty and administrators getting the largest raises. Fun reading. (And probably not completely accurate – though the table labels are now corrected.). A surprisingly large amount of the money went to a select group of administrators – or maybe not so surprising, given that those administrators make the rules:

In the documents, the UO listed special equity raises for 743 active faculty members and 417 administrators. Faculty received almost $3.1 million in total raises compared to almost $1.8 million for administrators.

Jim Bean is at the top. Dude just couldn’t keep his hand out of the cookie jar. Think how much easier this would have been if Lariviere could have said “Our top administrator believed this was so important for the faculty and the future of UO that he did not take an increase for himself.” Bolt discusses Lariviere’s report to Pernsteiner:

In that report, Lariviere said UO faculty pay was about 23 percent below the average for peer universities despite a decade-long effort to raise them. Following the equity raises, faculty pay was only about 3 percent below average, the report said.

But the average faculty raise was 7%. Explain that math again, Russ Tomlin? Then there’s this:

The report made a similar case for administrative raises, saying the UO was losing some of its best managers to other schools. But it did not say how far behind average administrator pay was before the raises nor how much of the gap was erased after them.

They don’t say that because the UO administrators were already at or above their comparators. Case in point, our new $270,000 a year CFO Jamie Moffit. The Chronicle database reports the median salary for CFO’s at doctoral institutions (for 2008-09) was $191,981. We top that by $78,000 for someone without a day of experience in the job?

UO is, of course, still a member of the prestigious AAU, but we have no Med school or engineering, and our budget is about 25% of most other public AAU’s. Go down the list of UO administrators and compare them to the Doctoral column from the Chronicle database:

"loss of institutional control" of athletic budget

10/17/2011: (revised) Two weeks ago we wrote how Duck athletics pays just half what other UO units pay towards UO’s administrative costs. How did this happen? In late 2007 a UO task force chaired by AVP Laura Hubbard recommended all “Auxiliary” units (a term which is explicitly defined to include athletics) pay according to this schedule: (Full report here.)

This policy was announced and posted on the BAO website. Then suddenly the numbers got changed. They added two new categories, one for incidental fees students pay to fund the EMU, etc. The new policy is here, and the chart below from it makes it explicit the students will pay the 7% rate as other auxiliaries. 

The other new category is Athletics. They get a permanent 3% rate. This one special subsidy for athletics costs the rest of UO about $3.2 million a year. For comparison, the recent faculty raises cost $2.8 million. 

We started digging into this after hearing Jamie Moffitt and Rob Mullens claim that the athletic department is “self-supporting” – and then finding out their math depended on sticking the academic side with the bill for the Jock Box and the NCAA lawyers. Made me wonder what other crawly things are hiding under that rock.  
As it turns out there’s an OUS policy on overhead rates. A very specific policy, which I’m guessing came down because of some IRS ruling:

Allocation of indirect costs should be based on a process that is reasonable relative to the activity and the related costs. OUS institutions will each develop their own methodologies for allocating indirect costs within the guiding principles listed below:

  • Reasonable – costs which are applicable to the overall operation of the activity
  • Properly allocable – costs are allocated in accordance with the relative benefits received by the auxiliary enterprise
  • Simple and easy to understand
  • Auditable – recalcuable based on documented principles and procedures
  • Objective – Based on relevant and reliable financial and other information …
I love that word “Auditable”. As usual, we got the brushoff from the athletic department’s Executive Senior Associate Athletic Director for Finance and Administration Jamie Moffitt when we asked for an explanation for why athletics gets a break. The administration is claiming there are no public records explaining the change from 7% to 3%. This could only be true if it was some sort of verbal backroom tit-for-tat deal. Between whom, and for what?
We’ll keep poking around, and post whatever comes crawling out. Probably not going to be pretty though.