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Tuesday, May 12, 2020

Tuesday, May 12, 2020

UC Regents Face the Covid Crisis: Program Notes

by Eric Hays, Executive Director, Council of UC Faculty Associations

The UC Regents are meeting May 19-21 via Zoom. Agenda materials are now available online here:

Some highlights follow.

On Tuesday, May 19th, at 11:30 am, there will be a public comment session followed by the Finance and Capital Strategies Committee discussing major capital projects. Then, at 2:30 pm, the Investments Committee will get an update on how hard hit UC's various investment pools are. The pension fund, for example, is down 12.4 percent in the first quarter of 2020, or down 4% from this time last year. Remember, the assumption is that UCRP will earn on average a 6.75% rate of return (already lowered last Octobeer from an assumed 7.25% return).  UC had discussed increasing employee contributions at the time.  What will they discuss in the midst of Covid-19?

Here's the full Investment Committee report. It  includes information about UC's other major funds, like the endowment and the investment pools. You can find links to the Power Point presentations at the end of that document for more details about each fund.

Then, at 4:30 pm, the Special Committee on Basic Needs will meet to discuss the report they were working on before Covid. UC students were already suffering from food and housing insecurity. What is the situation now? They do have a Covid update agendized, but without any real information.

Wednesday, May 20th, starts with a closed session where the Regents will discuss hiring a new Chancellor for UC Merced.  Then it becomes Covid-19 Day. 

At 10 am the Health Service Committee is supposed to hear about the impact of Covid on UC's health services. At least half of UC's projected losses this spring stem from the Medical Centers.  But so far there are no details for this item in the agenda.  In the Academic and Student Affairs Committee that follows, the agenda material says only,
UC campuses are actively involved in scenario planning for the fall, with options ranging from returning to on-campus instruction, continuing remote instruction, or a hybrid of in-person and remote instruction.
Since UC's recovery depends on opening campuses for instruction, we should look for more detailed planning.

This session will be followed by the Finance and Capital Strategies Committee discussing the impact of Covid on UC revenue. There are some interesting figures here:
  • UC campuses and medical centers had over $14 billion in working capital as of March 31, 2020 – an amount roughly equivalent to 155 days’ cash on hand. 
  • Losses to UC in March and April totaled $1.2 billion across the system, including $700 million attributable to the University’s medical centers
Quantitative information peters out quickly.  The agenda describes potential reductions in revenue from tuition or from the state as "uncertain."
There is more detail about the state's finances here:
On May 7, the Department of Finance projected a looming budget deficit of $54.3 billion for the State, including $13.4 billion in the current year and $40.9 billion in 2020-21. (The overall projected deficit is equivalent to nearly 37 percent of budgeted General Fund expenditures in 2019-20.) A report published by the Legislative Analyst’s Office on May 8 projects a deficit ranging from $18 billion to $31 billion... A significant reduction in ongoing State support for UC in 2020-21 is possible. The timeline and prospects for full restoration of any such cuts could be uncertain for some time. (Even today, State support for the University remains below 2007-08 levels after adjusting for inflation, California resident enrollment growth, and other factors.) (emphasis added)
Then (and mind you this is still supposedly before lunch on Wednesday) the full board will gather to discuss "Principles for Responsible Operation of University Locations in Light of COVID-19 Pandemic." You can read a roadmap to reopen campuses.

At 1:00 pm, the Finance and Capital Strategies Committee meets to discuss UCOP's budget for next year.  UC says they will work really hard to get the 2020-21 Office of the President's budget down 5% from the 2019-20 budget.

At 2:00 pm, the Governance Committee has an agenda item about a review of board member misconduct, but the link to background material is currently broken. The committee will also discuss the policy on appointing the Student Regent. That is followed by some closed sessions.

Which brings us to Thursday, the 21st. The full board meets starting at 8:30 am with public comment, followed by further discussion and then finally a vote on an issue that preoccupied the Board during their first remote Covid meeting in March: UC's use of standardized college entrance exams.  The use of the SAT/ACT in admissions has roiled higher education for decades, and UC is no exception.  President Napolitano is recommending that the regents suspend the standardized test requirement through 2024, pending a fully revised or new equivalent test. Read all about it here.

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