UNC pays to settle open meetings lawsuit over Board of Trustees' athletics budget talk

The University of North Carolina-Chapel Hill must pay $25,000 and its Board of Trustees must reaffirm its commitment to the state's open meetings laws as part of a settlement agreement over allegations that the university violated those laws.

Lawyer David McKenzie filed a complaint in Orange County May 15 against the university and its board members after they indicated that they would discuss UNC's athletic budget in closed session at a subsequent meeting.

McKenzie’s complaint sought to block the closed meeting, saying budget discussions should be open to the public under state law.

An Orange County judge issued five temporary restraining orders that stopped the board from going into closed session to discuss UNC Athletics' financials, budgeting, deficit, or ongoing or future conference realignment and related strategic planning.

McKenzie agreed to dismiss the suit after the university agreed to follow open meeting rules. The University agreed to pay $25,000 to cover McKenzie's expenses, costs and attorney's fees, according to a copy of the settlement obtained by WRAL.

In addition, the university will request that board chairman John Preyer issue the following statement at the board's next meeting, currently scheduled for September.

"In May 2024, a legal complaint was filed against the Board of Trustees of the University of North Carolina at Chapel Hill alleging violations of the North Carolina Open Meetings Act," the statement says.

"The Board disputes the lawsuit, but the lawsuit has been resolved. The Board is committed to compliance with the North Carolina Open Meetings Act and will continue to meet in closed session only for the purposes enumerated in state law."

Preyer and attorney Philip Isley, who represented the board, declined comment when contacted by WRAL.

McKenzie said he was "satisfied" with the outcome.

"I settled this case because, in reality, this is an activist board with extremely limited powers under North Carolina law," McKenzie said in a statement. "Bubba Cunningham answers to [Interim] Chancellor [Lee] Roberts, who, in turn, answers to the UNC System Board of Governors. Nevertheless, the Board of Trustees is a public body that must operate in public if it is going to take the public's money."

Public bodies can go into closed session for specific reasons under North Carolina law, including attorney consultations and economic development.

Dispute over athletics

At a May 13 meeting, Preyer and other board members said they had concerns about UNC's athletic budget, suggesting there had been a deficit.

Board members made several statements indicating they would discuss the athletics budget in closed session. They also made comments that indicated they had previously talked about the athletics budget in closed session.

"It is imperative that we carve athletics out of the approval today, and we have an extended discussion in closed session at our meeting on Thursday [May 16], so that we can all hear just how bad it is and what needs to be done to remedy it, and I think that’s best to accomplish Thursday in a closed session," Preyer told the board.

Trustee Jennifer Lloyd said the board was in closed session in November discussing the athletics budget and athletic director Bubba Cunningham.

"We were in closed session, so let's be thoughtful about how we characterize it," she told trustee Ralph Meekins.

At the May 16 meeting — the day after McKenzie filed the lawsuit — Preyer said the board wouldn’t discuss the athletics budget in closed session. He read a statement "to correct and clarify" previous comments.

"I want to clarify comments made during that meeting that made a suggestion that we planned a separate budget presentation for athletics in an upcoming closed session,” Preyer said. “We do not schedule budget presentations and discussions for closed session. And we did not do that this week."