The Regents Are Coming; The Regents Are Coming

The Regents will be meeting next week, May 17-18. By way of a preview, here are some excerpts from background documents for the Regents Committee on Finance, slated for May 18.

Excerpt 1: Full document at http://www.universityofcalifornia.edu/regents/regmeet/may11/f6.pdf

Compensation. The baseline model assumes annual compensation cost increases of three percent for both represented and non-represented staff and faculty, in addition to the regular academic merit salary increase program, totaling $533 million by 2015-16. While compensation likely will continue to lag substantially behind the market, three percent increases are critical to retain and recruit the faculty and staff needed to maintain UC’s continued quality and competitiveness as a teaching and research university, especially after three years without range adjustments. The three percent increases are not expected to reduce the current lag in UC salaries but should keep the lag from growing beyond a point from which future restoration would be very difficult.

Post-Employment Benefits. The baseline model assumes that UC’s employer contributions to the UC Retirement Plan (UCRP) will increase from four percent in 2010-11 to seven percent in 2011-12, and to ten percent in 2012-13, as approved by the Regents in September 2010 (employee contributions to UCRP are being increased over this period as well). Furthermore, the model assumes employer contribution increases to 12, 14, and 16 percent in 2013-14, 2014-15, and 2015-16, respectively. Employer contributions from core fund sources to UCRP will grow from about $195 million in 2011-12 to more than $550 million by 2015-16. For retiree health benefits, the baseline model includes increased costs of $40 million by 2015-16.

Other Employee Benefits. In keeping with the rapid rise of benefits rates over the last several years, the baseline scenario assumes annual employer contribution increases of seven percent for employee health benefits, totaling $114 million by 2015-16.

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Excerpt 2: From same document as above

Nonresident Enrollment Increases. The baseline scenario includes ten percent annual growth in nonresident undergraduates (approximately 860 students per year), yielding $92 million in additional revenue in 2015-16. Over the past 10 years, only about five to seven percent of UC’s undergraduates have been nonresidents, as compared to many other public universities across the country that may enroll as much as a third of their classes from out of state. The international stature of UC campuses suggests room for nonresident growth, but campuses will need to pursue strategies to increase nonresident enrollments. Recently released data show many UC campuses admitting more nonresident undergraduates. The baseline assumes revenue associated with nonresident students is net of instructional costs.

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And Excerpt 3 from another document dealing with aid to lower and middle income students:

FUNDING THE UNIVERSITY’S FINANCIAL AID COMMITMENTS

UC projects that over time, the initiatives described (in the full document) will require additional funding beyond the University’s traditional practice of setting aside 33 percent of new tuition and fee revenue for undergraduate student aid. To generate these funds, the University is exploring a combination of new corporate fundraising and balance sheet strategies that, combined with a portion of new tuition and fee revenue, will support the cost of these initiatives.

Full document at http://www.universityofcalifornia.edu/regents/regmeet/may11/f7.pdf