By SCARLET SIMS
LOG CABIN STAFF WRITER
Administrators at the University of Central Arkansas are considering how to spend at least $93,000 that is expected to be over what a previous beverage-service contract provided, but President Tom Courtway said Tuesday he wanted to spend some of the money from the new Coca-Cola Refreshment Co. contract on academics.
"There’s been no decision made on how to spend that money at this time," Courtway said.
The issue came up after some faculty questioned how about $2.2 million from a new 10-year contract for "pouring" rights with Coke will be used. Much of that money from a previous contract with Pepsi went to fund athletics, including helping to build a weight room and skyboxes on the Pepsi America Center.
Some faculty said during the Faculty Senate meeting Tuesday that they see athletics getting a lot of help, but not a lot of help coming to academics.
"There has to be a balance," said Don Bradley III, professor at the College of Business.
Some faculty also questioned how a large-scale facility could be built, thought to be paid for and end up creating more debt for UCA. By October, UCA’s Foundation, Inc., the nonprofit arm benefitting the university, will owe about $2.9 million in combined debt for the weight room and skyboxes, Coutway said in email. 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 previously released. About $1 million of that loan was supposed to be paid by a private donor, but nothing was officially signed and the donor dropped out leaving the Foundation and UCA holding the debt.
The Foundation and university are linked because UCA and the Foundation signed a Memorandum of Understanding in 2011. Courtway said the university moved forward at the time under the "hope" and "expectation" that the private money would come through.
Generally, universities usually do not move forward on projects without having a signed pledge, Courtway said. Private colleges won’t break ground without being sure of the funding, he said.
"In retrospect, maybe (construction) was started too soon, but maybe not — that’s not my place," Courtway said Tuesday. "I have to pay for it."
The debt is due to be paid off by 2024. UCA has paid what it owes down. Currently, about $14,000 a year goes to pay off the debt, Courtway said.
Should UCA decide to continue its current allocations of money from the beverage-service contract, $70,000 would go to athletics to pay the debt. Housing and the student center would receive another $25,000 each, according to UCA documents. That leaves about $93,000 more not allocated and a sign-on bonus of about $150,000, Courtway said. But he added no decision on the allocation has been made and no contract has been signed yet.
The contract is expected to be finalized within another 45 days.