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FINANCIAL PROBLEMS HAMPERING UTEP

One week before athletic department boosters could make a $700,000 sales pitch to City Council, UTEP had the front door slammed in its face.

UTEP officials were told Tuesday that state statutes don't allow city hotel-motel tax dollars to be used for anything other than tourism or promotion, Richard Cane, president of the Hotel-Motel Association, said.That leaves the university with less than three weeks to secure the money from other sources before UTEP President Diana Natalicio addresses the UT Board of Regents on Oct. 9.

If UTEP fails to raise the funds, Natalicio has vowed to reassess the athletic department's future. The department can't continue to run at a deficit, she said.

And the well of university auxiliary funds that has helped support athletics to the tune of $1.5 million over the past three years is running dry, Assistant to the President Richard Adauto III said.

"Dr. Natalicio has to cover that ($700,000) to justify having the program," said Bob Heasley, who has helped raise funds for UTEP for years. Heasley is a financial advisor.

Options for the athletic department include dropping from Division I to lower-class Division I-AA in all sports or axing a football program that has had only two winning seasons in the last quarter of a century.

The deficit - $250,000 more than the 1994-95 athletic budget shows - was discovered during a university audit last summer.

"We have to raise an awful lot of money in a small amount of time," UTEP athletic director John Thompson said. "I wouldn't be very optimistic that we could do that."

Revenue has not kept pace with constant increases in tuition, travel and maintenance costs, Thompson said.

Thompson inherited the decade-old deficit when he was named to replace Brad Hovious in 1993.

Thompson doesn't see dropping to a lower division in all sports as a viable solution to the athletic department's woes. UTEP would lose more than $1 million in NCAA and Western Athletic Conference revenues "and we wouldn't be lowering our expenses," he said. UTEP's isolated geographic location calls for high travel costs in all sports, regardless of the level of competition.

UTEP's football program, despite its losing teams over the past two decades, has paid for itself, mostly because of the school's Division I status and membership in the WAC. The men's basketball and golf programs are also self-sustaining, Adauto said.

Donations and ticket sales must also cover the athletic department's 11 other sports.

The athletic department has an operating budget of $6.5 million for the 1994-95 fiscal year.