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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