Saturday, August 1, 2015

Listen to the Regents Meeting of July 21, 2015

The official agenda for this meeting says the open component starts with a public comment period. But there is none on the recording. Was there one that didn’t get recorded? Was the agenda altered? Not clear. The first part on the recording deals with compliance and audit and the plan for such auditing in the coming year. It was noted that construction is one of the areas to be audited. There is some suggestion that construction is a new area. If that is correct, it would be an important addition. As we have noted, the big bucks that get approved at Regents meetings are capital projects. Indeed, the audit session was followed by approvals of various capital projects.

The final component of the meeting dealt with the proposed UC-Merced 2020 project which is supported by the Merced chancellor (naturally) and UC prez Napolitano. Napolitano wants the project approved at the September and November meetings. As we have noted in a prior post, there is a creative financing involved in this proposal. Basically, a developer is selected and that developer, not the campus or UC, finances the project at commercial rates (rather than cheaper financing available to a public entity), puts up the buildings, and then maintains them over an extended period. The argument made is that UC will somehow guarantee the borrowing which will reduce borrowing costs to the developer and UC will own the properties so it isn’t technically a lease. (There will also be some borrowing directly by the university for certain elements such as dorms.) Regent Makarechian raised difficult questions about the financing. He also asked why there has to be one developer. Why not divide up the project so that the developers can be compared as the project goes forward? Regent Oakley asked how come Merced has to do creative financing whereas older campuses are getting projects built using more conventional means. Other questions were asked about what happens if things go wrong, i.e., buildings are not up to appropriate standards or are not maintained properly or the developer defaults. It was said that the contract would require certain benefits to the Merced area such as local hiring.

You can hear the meeting at the link below:

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