Soft-drink contract to bring UCA millions

Officials, faculty split over how best to spent the money

A contract for beverage services at the University of Central Arkansas will bring in about $2.2 million, but some academic faculty want the money to fund academic needs — not athletics.

 

“Everybody should have a chance for a piece of the pie,” professor Don Bradley III said at the Faculty Senate meeting Thursday. “In my opinion, in the past, we haven’t gotten things because we haven’t asked for them.”

The athletics department has likely already asked for money from the new contract, Bradley said. The $2 million from a previous contract with Pepsi also went to athletics.

The beverage services contract was awarded to Pepsi 10 years ago for about $2 million. That money went to athletics needs, faculty said. The contract came up for renewal this year, but UCA has awarded the contract to the Coca-Cola Refreshment Company.

Some faculty said they want some of the $2.2 million the company has pledged to go toward academic needs, like scholarships, but the UCA Foundation, Inc., a private corporation nonprofit benefitting UCA, owes about $1.5 million on the strength and conditioning facility.

“We borrowed the money to pay for the weight room,” said Brad Teague, Athletics Department director. “We got a loan for the facility, it’s how we pay the loan — that’s the question.”

The Foundation took out a loan with a total principal of $1.7 million for the 7,500-square-foot weight room UCA built onto the Pepsi Americas Center, according to UCA documents. That loan was supposed to be paid by a private donor, but the donor dropped out leaving the Foundation holding the debt, Teague said.

The weight center opened last year. Teague said about 400 student athletes use the facility.

Vice President for Advancement and Foundation President Shelley Mehl did not return a message left at her office late Monday afternoon. President Tom Courtway did not return a phone message.

The university has not decided whether to help the Foundation pay for the loan, Vice President for Finance and Administration Diane Newton said. The loan to the Foundation is similar to a construction loan, she said. Teague said the terms were about $100,000 for 15 years.

“We have to pay our bills,” Teague said. “We have to use some money from somewhere.”

But a report from the UCA Purchasing Office in October of last year notes the UCA Foundation “donated” the weight room.

“UCA Weight Training Room completed in January 2012. It was donated to UCA from the UCA Foundation. Current debt is $125,000-$150,000 for fifteen (15) years. Estimated amount owed is $1,875,000- $2,250,000.”

UCA administrators provided faculty looking into the funding of the athletics department with documents that partly address the weight room last fall. The debt for the weight room was to be “funded with surplus on suit leases and NCAA revenue,” according to the document.

NCAA revenue was $525,137 in 2011, according to UCA documents.

Courtway said Thursday some of the money from the soft-drink service contract would defray the cost of the weight room.

“It will pay for itself over time,” Courtway told faculty members Thursday. “We’ve got some obstacles in the short term.”

But for now, the Foundation owes for the weight room, and UCA owes $202,151 on the Pepsi center, Newton said.

During the Faculty Senate meeting associate professor Brian Bolter pointed out other universities use some of their “pouring” revenue for scholarships. Teague said giving the athletic department money from the Coke contract will mean no impact to the budget because that money had previously gone to the department. Bradley said UCA had built a building the university didn’t have the money for.

“It’s becoming real evident that we are building a lot of athletic facilities without having the money for it,” Bradley said.

Bradley sat on the university’s Evaluation Committee that reviewed the proposals from Coca-Cola and Pepsi. He said Thursday he had to sign a letter of confidentiality and couldn’t talk to the media about the details.

The committee decided Friday Coca-Cola is a better deal for UCA. Among the reasons to choose Coca-Cola was that Coke did not specify how the money would be spent, according to UCA documents.

“Pepsi’s proposal earmarks the signing bonus and the pouring rights for debt service on the weight room facility for which they expect naming rights,” according to a report UCA released to The Log Cabin Democrat under the Freedom of Information Act. “This represents useful cash to retire approximately 50-60 percent of the debt on that facility over the 10 year period for exclusive naming rights to the facility. Coke has not designated specific uses for the sponsorship funds for UCA. This allows for more flexibility in the use of these funds since they would not be earmarked for capital expenditure debt service and could go into the general fund instead.”

Letters announcing UCA picked Coca-Cola over Pepsi went out Monday, documents show. UCA will begin contract negotiations with Coca-Cola on Feb. 11, according to the letters.

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