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$20 million going to athletics deficit, facilities

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East Carolina University Chancellor Cecil Staton looks on during a news conference Tuesday for new Pirate football coach Mike Houston.

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By RONNIE WOODWARD
The Daily Reflector

Thursday, December 6, 2018

East Carolina University has designated $20 million in university money to settle a deficit in its athletics budget and to make significant capital improvements to athletics facilities, officials said Wednesday.

The funds are available immediately, with one $10 million transfer intended to nullify a deficit created in part by poor attendance and fees associated with joining the American Athletic Conference in 2014. The other $10 million allocation is designated for facility improvements including a long-sought training table, which is a nutrition and dining facility that caters specifically to student-athletes.

ECU chief communications officer Tom Eppes said Wednesday the first $10 million comes from a pool of $149 million in non-state auxiliary funds to cover a deficit projected to be $4,223,699 at the end of this fiscal year. What remains of the $10 million will be available for potential future athletics debt.

The second $10 million transfer comes from an ECU Physicians accrued fund balance worth $95 million.

The revenue is generated through a variety of sources by every university department, Eppes said. Examples include student fees, money paid to rent university facilities and, in the case of ECU Physicians, money paid during patient visits to clinics.

ECU’s decision to move the funds stems in part from the “deep dive” into athletics performed by Dave Hart, who has served as special athletics adviser to Chancellor Cecil Staton since March 15.

The Pirates have posted four straight losing seasons in football, which led to the dismissals of coaches Ruffin McNeill in 2015 and Scottie Montgomery last week. ECU hired James Madison University coach Mike Houston on Monday. ECU coaches in many sports have for years stated the need for a full athletics nutritional facility on campus.

“I think if there is anything that is clear, it is that everybody wants this team to be competitive, and they are not too happy when they are not,” Eppes said of ECU football. “The university is clearly doing what needs to be done with the hiring and funding to get us where we need to be. A lot of (athletics programs at other schools) get state money and we are not able to use state money, so we are operating with far less money than they have, but we have a lot of the same needs.

“Things like the training table are things that Dave has said we have to do. That is to get the athletes as competitive as they can be, and also for recruiting because people are going to see that everywhere else they go.”

The athletics department is not required to return money back to those funds, Eppes said.

He added that the even with the $10 million transfer from ECU Physicians to athletics, its reserve fund is still “well within guidelines” set by the Government Finance Officers Association, which require having a balance of two months of revenue or two months of expenses, whichever is largest.

The transfer leaves $46 million in cash and $39 million in billings in the Physicians account, he said. Operational expenses at ECU Physicians for two months total $35.2 million.

He also said similar transfers have been made in the past from other university accounts to support ECU Physicians when clinic revenues were not able to support operations or build reserves.

“It was a natural decision that if we needed to put some money in (athletics), that was the place to pull it from,” Eppes said. “It is important to realize that this is all university money. ... Where we have money like this that can be used to serve the most pressing need at the time, ultimately the chancellor and senior leadership gets to make that call and athletics was considered to be the need.”

In addition to Hart suggesting ideas for the Pirates and their teams as a special adviser for most of this year, he recently led the school’s search for a new athletics director, which landed Jon Gilbert from Southern Miss, and the subsequent hire of Houston. Fans have greeted those hires with approval and optimism.

The Pirates had been without an AD since Jeff Compher accepted a $1.26 million buyout from the university in March.

Hart and Eppes said Gilbert was aware of ECU’s finances before he accepted the position with the Pirates.

“I could sense as Jon met the staff, that was an uplifting moment,” Hart said. “There has been a lot of challenges and Jon knew about that and there was full disclosure with Jon and then full disclosure with Mike about our challenges and where we are financially. There is a lot of good, and there are significant challenges.

“Jon will weigh into them in a very professional manner, and I think this is the beginning of us turning the corner.”

Gilbert said Monday during his introductory news conference that he is not ready to put a timeline on a training table for the Pirates, but it is viewed now as a necessity in college athletics.

(LINK: Eating is better in Power Five conferences)

He and Houston both have roots in North Carolina and have moved to the forefront of Pirate athletics this week, each vowing to produce success at East Carolina.

“It is not about me, but it is about East Carolina as an institution and about this department of athletics and our coaches and our student-athletes,” said Gilbert, who at Southern Miss hired the first full-time nutritionist at a Conference USA school. “I am a servant leader and am able to make the decisions that leaders need to make, but I want to support our coaches and our student-athletes and our fan base through the success that we all expect.”

Pirate Club Executive Director Phillip Wood said Gilbert already has shown an ability and a desire to reach all fans and to be visible and accessible in the community. Houston comes with an 80-25 career record as a head coach after successful stints at Lenior-Rhyne, The Citadel and James Madison.

“I think anytime there is uncertainty, that creates anxiety, and certainly this is a passionate fan base that is excited about East Carolina athletics,” Wood said Wednesday afternoon. “To be able to not only just fill the role of AD and head football coach, but to fill those positions with two outstanding people and two people who understand our culture certainly excites me, but I also know that it excites all East Carolina fans.”

Contact Ronnie Woodward at rwoodward@reflector.com, 252-329-9592 and follow @RonnieW11 on Twitter. Bobby Burns and Nathan Summers contributed to this report.

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