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Gerlach: No funds moved from ECU Physicians

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East Carolina University interim chancellor Dan Gerlach talks to the Board of Trustees as ECU athletics administrators J.J. McLamb and Jon Gilbert, right, stand in the background Friday at the ECU Main Campus Student Center.

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By RONNIE WOODWARD
The Daily Reflector

Saturday, July 13, 2019

East Carolina University changed its plans to transfer $10 million from ECU Physicians to East Carolina's athletics department to cover years of debt and for other expenses, interim chancellor Dan Gerlach emphasized on Friday during ECU Board of Trustees meetings.

No money was transferred from ECU Physicians, Gerlach said. Instead, the university's transfer of about $13.2 million came from various university reserve and auxiliary funds.

A plan from last year, under previous administrators, called for ECU to designate a total of $20 million — $10 million from a pool of non-state auxiliary funds and $10 million from an ECU Physicians accrued fund balance — to settle a running deficit in the athletics budget and to make significant capital improvements to athletics facilities.

Gerlach, who began his job on May 6 as interim chancellor and last month instituted a university hiring freeze to help address ongoing financial challenges, met with Pirate athletics director Jon Gilbert and other athletics and financial representatives to alter the plan.

"The university found alternatives to using the ECU Physicians fund balance to support athletics and to give people rightful confidence that if you give money over here for this purpose, then it is going for that purpose," Gerlach said.

The $13.2 million transfer covered the athletic department's running budget deficit and account for other expenses.

ECU suffered in recent years through losing football seasons and declining attendance at Dowdy-Ficklen Stadium. The Pirates' last winning season was in 2014.

The coach in 2014 was Ruffin McNeill, who was fired a year later by then-AD Jeff Compher after a 5-7 record and replaced by Scottie Montgomery for three straight 3-9 seasons before he was fired.

ECU hired Gilbert from Southern Miss and football coach Mike Houston, who has an 80-25 career record, from James Madison, both on Dec. 3.

"I anticipate that we are going to have to have a long-term plan to figure out how to solve (budget issues)," Gerlach said. "We have to solve through next year but then we have to figure out where to go from there. If we go 7-5 or 8-4, then all of the sudden that is a different scenario than if you go 3-9.

"I am saying that we have a plan for this fiscal year and does that plan involve using some money from investment income and other places? It does," Gerlach said. "From there on out, we are going to have to look at our university budget comprehensively because athletics is not the only place that needs resources."

Gilbert also said on Friday that the Pirates made their final entrance payment to the American Athletic Conference in June, thus making the transition from Conference USA to the AAC complete. The Pirate began competing in the AAC in 2014 and faced a series of fees for leaving C-USA for the more competitive and more lucrative American conference.

On Thursday, Gilbert said the Pirates have earned $566,000 in parking revenue in the first year of selling premium passes and have seen a Pirate Club donation uptick of $260,000 compared to this point last summer.

"We still need to generate revenue on our own and move the department in a forward manner, but I do feel like the chancellor and the campus has helped stabilize us," Gilbert said Friday. "We were at a high-water mark of 22,000 season tickets in football and we were at 12,500 last year. You don't recover from that overnight but I am extremely encouraged about our fan base and we are already past last year's (total) with about a month and a half left to sell.

"I am encouraged and we do have some financial challenges that have been a part of East Carolina for a very long time," he said. "That is not going to change and it is not going to preclude us from being competitive."

Many teams in the AAC and other non-Power Five leagues use university money to support athletics. It was reported this year that Connecticut, for example, faced a $40 million budget deficit in 2018 despite receiving more than $8.5 million in student fees and $30 million in additional university support.

Gilbert reiterated Gerlach's statement that there was no $10 million transfer from ECU Physicians to athletics.

"We are in 100 percent alignment with campus, and the chancellor has been very helpful during this process," he said. "I think the underlying theme is the money is not coming from ECU Physicians. It is coming from other accounts that the chancellor has identified.”

Contact Ronnie Woodward at rwoodward@reflector.com, 252-329-9592 and follow @RonnieW11 on Twitter.

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