Watch the Regents Morning Meetings of July 19, 2023

The morning meetings of the Regents last Wednesday began with public comments. These comments touched on co-generation at UC-Berkeley, the current hotel strike and UC investment in hotels via Blackstone, hiring by UC of undocumented students, the UAW dispute related to arrests at UC-San Diego, acquisition of St. Mary's hospital by UC-San Francisco, voting rights of students at UC-Merced if the campus is annexed by the City of Merced, transfer student issues, the Hawaiian telescope, repatriation of human remains, delays in receiving medical licenses, and a minimum wage at UC. Members of the Board of Supervisors of San Francisco appeared at the public comment session.

President Drake then spoke about the various U.S. Supreme Court decisions, notably on affirmative action and student aid. On the former, he offered UC's expertise in operating under Prop 209's ban on affirmative action. The new student regent-designate was introduced: Josiah Beharry of UC-Merced. 

At Finance and Capital Strategies, there was discussion of plans for the City of Merced to annex the campus. The discussion with city officials focused on charges for city services.

As we noted when the Regents' agenda was first announced, there was discussion of new actuarial assumptions of the pension plan was announced. In fact, about an hour was spent on this matter, even  though the real action item is to occur in November when the discussion will turn to funding the pension and its estimated unfunded liability. As we previously noted, the big drivers of the estimate of the unfunded liability - projected inflation and assumed rate of return over the long run - were unchanged. There was a small increases - relative to the size of the fund - in the unfunded liability, due it seems to assumed behavioral changes in employee retirement, etc. On the other hand, the normal cost of the plan - the amount of liability attributed to each year's operation - declined. (It appears that the decline is occurring because there are more people in the less-generous new tiers and fewer in the older tiers.)

The discussion of the pension assumptions was disappointing, in part because the discussion was siloed from the larger issue of total compensation. Regent Pérez went on about it being unfair that the people under the old tier had a contribution holiday and the more recent folks don't. But economic analysis would suggest that other elements of compensation would tend to adjust for that effect. 

Regent Makarechian seemed to want a "fix" for the unfunded liability (100% funding?) by November. That isn't going to happen. Regent Matosantos wanted a sensitivity analysis with higher rates of inflation. When it was pointed out to her that if you vary the assumption of inflation, you presumbably would want to account for inflation's effects on the long run rate of return and on assumed nominal salary growth. She seemed to want just a higher assumption of inflation with no effect on other variables. And Regent Pérez wanted an undefined discussion of fairness in November. In short, I am not looking forward to the November session.

When the discussion turned to the state budget, everything was said to be great. Now you could say that UC got as much as could be expected during a period of budget tightening. But that is not the same as great.

Finally, there was discussionn of UCPath. Both Pérez and Makarechian were unhappy with the report. The staff representative to the Regents noted that while increased measures of "satisfaction" were cited, that measure seemed to refer to individual employees who, say, were requesting a W-2 form. Middle managers who have to work with the system are still reporting "frictions." There was no clear answer given to the question as to whether UCPath is saving the promised amounts of money that were originally projected. Makarechian suggested looking at commercial payroll firms such as ADP that do payrolls for large employers for benchmarks. But there was no promise to do so. There was some clarifying discussion that pension administration was handled in another unit separate from RASC and a hint that RASC had problems. But it went no further than that.

Academic and Student Affairs began with discussion of various research institutes at UC, such as the California Policy Lab at UCLA and Berkeley. Basically, it was a show-and-tell session. The discussion then turned to the need to get out offers of financial aid quickly to accepted students. Finally, there was discussion of transfer students. It was noted that the decline in enrollment in community colleges resulting from the pandemic has made it more challenging for UC to admit and enroll targeted numbers of transfer students. 

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We continue to preserve recordings of the Regents since the Regents have no policy in place concerning length of preservation. The general web address for the morning of July 19 can be found at:

https://archive.org/details/board-finance-and-capital-strategies-committee-7-19-23-am.

The board and finance and capital strategies is at:

https://ia802709.us.archive.org/2/items/board-finance-and-capital-strategies-committee-7-19-23-am/Board%2C%20Finance%20and%20Capital%20Strategies%20Committee%207-19-23%20am.mp4.

Academic and Student Affairs is at:

https://ia802709.us.archive.org/2/items/board-finance-and-capital-strategies-committee-7-19-23-am/Academic%20and%20Student%20Affairs%20Committee%207-19-23%20AM.mp4.