AIA surprises schools with new fees to reduce shortfall

• The Arizona Interscholastic Association ran a %24519%2C000 shortfall in fiscal year 2012-13.
• To eliminate the shortfall%2C the AIA has implemented a series of new fees for this year.
• The new fees caught many schools off guard%2C and they must find a means to pay for them.

Addressing a half-million-dollar shortfall from 2012-13, the state's high-school sports governing body has unveiled a series of fees that has surprised school administrators and, in some cases, drawn their ire.

The Arizona Interscholastic Association, citing a budget shortfall of $519,000 in the most recent fiscal year, unveiled the new charges for the coming school year in a memo it sent to its 272 member schools June 11.

The new structure, which took effect Tuesday, is the AIA Executive Board's response to rapidly rising costs, particularly those associated with maintaining its stable of game officials and running annual state-championship tournaments.

"We're just seeing an increase in cost," AIA Associate Executive Director Chuck Schmidt said in a lengthy interview conducted Thursday at the AIA's offices in Phoenix.

However, the late notice on the new fees, coming after school districts had adopted their own budgets for the coming year, left districts scrambling to figure out how they would cover the new costs coming from the AIA.

"I think it caught most of us by surprise," said Steve Hogen, athletics director for Mesa Public Schools. "None of us had any idea it was coming."

The fees and charges, which do not involve increases in annual member dues, include:

• Fees ranging from $50 to $350 for qualifying teams wishing to enter sectional or state tournaments. For example, cross-country teams must pay $50 to enter a sectional meet and $100 to enter the state meet, if qualified.

• A fee of $100 for all out-of-state teams participating in invitational tournaments, to be collected or paid by the host member school.

• A service charge of $10 for each cancellation or game-change request, as long as the request is not related to "things beyond the school's control," such as weather or transportation issues.

• A per-game charge of $3 for the assignment of officials for regular-season and invitational tournaments.

• A charge of $15 for a day pass and $25 for an all-tournament pass for fan admission to the two-day state golf tournament.

Part of the concern for the AIA and district officials is how quickly the deficit has ballooned.

As reported by the AIA, the budget shortfall was $180,000 for the business calendar year from July 1, 2011, to June 30, 2012, and increased to $519,000 for the same period the following year.

"It was becoming very apparent that in the tournament department and in the officials department, over the past three years, that we had to identify ways of ensuring that we weren't going in the hole anymore," Schmidt said.

Hogen wondered how the shortfall could nearly triple in one calendar year.

"I'm kind of curious: How did this go up $400,000?" Hogen said. "I don't understand that."

Schmidt said the cost of officials, which accounted for more than $350,000 in losses, has grown considerably because of things like increased litigation and background checks.

He said a task force was formed to determine if it would be beneficial for the AIA to outsource the handling of officials, as other state associations do, but it was found that this was not a practical option. Arizona has the lone state association that handles officiating assignments for its member schools.

Schmidt also dismissed the notion that the AIA is passing off its costs onto the member schools or changing policies behind the schools' backs.

"We're not punishing anybody," Schmidt said. "There wasn't time to form a committee (of administrators to consult regarding the changes). Our board looks at the budget in April; they have their last meeting in May. Everybody goes away in June, with our fiscal year beginning July 1. I don't know how you, in that timeline, seek redress."

The AIA did take measures of its own to offset its costs, releasing three employees and reassigning another, according to Schmidt.

Other options suggested by some school or district officials, such as changes to or the elimination of AIA365, wouldn't help, as AIA365 actually turned a profit of roughly $50,000 over the past fiscal year, Schmidt said.

The AIA does list $2.3 million in net assets, but this includes physical and liquid assets and is not, as Schmidt put it, "cash in hand" or a reserve fund.

District administrators now must account for the additional charges, as their own budgets already are finalized or must be soon, creating a time and cash pinch for the districts.

"I need to be prepared for budget items before the end of the school year so I can plan appropriately for the following year," Corey Newland, the Paradise Valley Unified School District athletics director, said in an e-mail.

"I felt like we could look at other options to generate the needed funds for the shortfall. It's going to be difficult to gauge the impact of adding potentially another $10,000 plus to my already stretched budget."

Some are left to wonder if they will be required to drop sports in order to make ends meet, or if this signals the end of some of Arizona's prominent annual tournaments.

Dave Shapiro, who retired as Chandler High's athletics director last year, still remains involved in running the Nike Tournament of Champions, a national girls basketball tournament conducted every December in Chandler. He also runs the Chandler Rotary Track Invitational, the state's largest invitational meet, in the spring.

Shapiro said about 50 to 60 out-of-state teams participate in the Nike TOC each year. It is one of the largest girls basketball invitationals in the country. Last year, each out-of-state school paid a $480 entry fee that covers three games, Shapiro said.

Since 2007, Shapiro said the invitational has been "break even at best."

Now, with an additional $100 fee for out-of-state schools, Shapiro wonders if the days are numbered for Chandler to host the event.

"It's not my decision, but I would say if the Tournament of Champions (doesn't) come back, this could be a nail in the coffin," Shapiro said. "It's not going to help. The entry fees are expensive already.

"I don't see us passing that on to out-of-state teams. We're going to lose some initial money on the tournament. We'll have to decide where the tournament goes next or if it goes anywhere."

A few of the district administrators contacted said they likely will gather their athletics directors and other officials in the coming days to discuss the fees and how to deal with them.

In a document provided by the AIA, the association's projected budget for the 2014-15 fiscal year includes $489,675 in net income.

"Our goal is to break even," Schmidt said. "It takes some time to turn the Titanic around."

azcentral sports' Scott Bordow and Richard Obert contributed to this report.