There are at least two ways to skin the business school self-sufficiency cat

Inside Higher Ed today has a lengthy article about the Anderson School's self-sufficiency MBA program.  The theme, however, is that the UC-Berkeley Haas School is doing the same thing in different ways that haven't caused a ruckus with the Academic Senate.  Both schools say the object is to put more money in the kitty and gain more "flexibility."

You can read about it at:
http://www.insidehighered.com/news/2013/07/02/uc-business-schools-see-different-levels-resistance-innovation-plans

Changing Demographics

The Sacramento Bee today carries this demographic chart showing the Latino and white/non-Latino populations are roughly equal in California at present and the relative growth in the Latino population is projected to continue.  Due to citizenship and voting propensities, the white/non-Latino group still predominates in elections.  However, the times, they are a'changing - as the song goes - with implications for UC and higher ed in California more generally.

The article that accompanies the chart can be found at:
http://www.sacbee.com/2013/07/01/5536254/latinos-poised-to-catch-up-with.html

In a related article on the impact of Prop 209, the LA Times notes:

...Latinos' presence, after a temporary dip, has grown beyond its pre-1996 peak, partly because of enormous increases in Latino high school graduates. But the numbers have been stark at UCLA and Berkeley, which have the highest admissions standards of UC's nine undergraduate campuses. The Latino share of UCLA's freshmen was 21.5% in 1995, dropped to 10.4% by 1998 and has climbed to 18.1%, UC records show. Berkeley's Latino share of freshmen was 15.5%, dipped to 7.3% after the proposition went fully into effect and then climbed to 13% last fall...

Full story at http://www.latimes.com/news/local/la-me-affirm-action-colleges-20130701,0,141481.story

Berkeley's Grand Project Seems Similar to UCLA's

From the San Francisco Chronicle: UC Berkeley's plan to sell special football seats to pay off nearly half a billion dollars in stadium debt has long inspired skepticism, as if Cal were setting up a lemonade stand to finance a home mortgage. True, each of those chairs at the newly renovated Memorial Stadium costs $40,000 to $250,000 and is yours for 40 or 50 years. But even Cal officials, who had said they would sell all 2,902 pricey seats by this month, grew skeptical of their own claims last fall. The latest figures show sales have stagnated at 1,857 seats. Declined, in fact. Sixteen buyers gave their seats back this winter, stopping payments and cutting short their ownership deal. None of that surprises longtime critics of the stadium renovation...

Full story at
http://www.sfchronicle.com/collegesports/article/Cal-scrambling-to-cover-stadium-bill-4604221.php

Blog readers will see the similarities to UCLA's Grand Hotel project.
It's coming soon to a parking structure near you!  
There is one difference.  
UCLA has blended its project with other enterprises.
So the Grand Hotel will always officially seem to meet its business objectives.  
Berkeley just wasn't creative enough in doing its stadium.

All you need is money - or creativity:

Bumps in Road for Academic Mothers Found at UC

Inside Higher Ed today summarizes findings in a new book based on UC and other data arguing that female academics with children face both career and marital bumps in the road.

...Written by long-term collaborators Mary Anne Mason, professor of law at the University of California at Berkeley; Nicholas Wolfinger, associate professor of sociology at the University of Utah; and Marc Goulden, director of data initiatives at Berkeley, the work also looks at the effects of successful careers in academe on professors’ personal lives...

Concerns about time demands in relation to caretaking, and worries that advisers, future employers and peers would take their work less seriously were all reasons female Ph.D. students, more than male, cited for not having a child or being uncertain about having a child in one survey of graduate students in the University of California system. In another survey of postdoctoral fellows in the system, more than 40 percent of women who had children during their fellowships were considering changing their career plans to those outside academic research, compared to 20 percent of childless women with no plans for children...

More info on the book - Do Babies Matter? - can be found at http://www.insidehighered.com/news/2013/06/06/new-book-gender-family-and-academe-shows-how-kids-affect-careers-higher-education

I'm Outta Here

An earlier post on this blog noted that there were concerns about caps on total payouts under the health insurance plan for students at UC.*  Now, apparently, there are also big premium jumps coming. UC-Berkeley has announced it will pull out of the UC-wide plan and run its own.  From the San Francisco Business Times: Following intense pressure from students, UC Berkeley is pulling the plug on participation in a controversial, deficit-plagued student health plan run by the University of California system, Chancellor Robert Birgeneau said Thursday. Birgeneau said the system's flagship Berkeley campus will jump ship effective Aug. 15, when it will leave the UC Student Health Insurance Plan and return to a campus-specific plan. As of that date, health coverage for UC Berkeley students will revert to the former Berkeley campus-run program...

Full story at http://www.bizjournals.com/sanfrancisco/blog/2013/05/uc-berkeley-jumps-ship-will-leave.html

*Our earlier post is at http://uclafacultyassociation.blogspot.com/2013/01/issue-of-uc-health-cap-for-students.html

What Happened to LA Law?

Some readers of this blog may recall the popular TV series from the late 1980s and early 1990s: LA Law.  Folk wisdom at the time was that applications to the UCLA law school went up during the show’s run and dropped when it was cancelled.  In any case, things are not what they were according to some data – shown below - that appear today in the LA Times in connection with a story on the jobs problems of recent law school grads.

Here are percentages of California law school graduates in 2011 who had found full-time, long-term jobs as lawyers nine months after graduation:

School     Percentage (%)

= = = = = = = = = = = = =

Stanford             91.1

UC Berkeley          80.0

USC                  64.7

UCLA                 61.3

UC Davis             56.4

UC Hastings          46.5

= = = = = = = = = = = = =

Source: American Bar Assn.

Full article at http://www.latimes.com/news/local/la-me-law-grads-20130402,0,1312864.story

Things were better back in the day:

For whatever it means...

Above are the world rankings of universities from the British Times Higher Education magazine based on "academic reputation." [Click on the image to make it clearer.] The full list and info on the survey methodology is at:
http://www.timeshighereducation.co.uk/world-university-rankings/2013/reputation-ranking

Regents Meeting Coming Next Week

The Regents are meeting March 13-14 – Wednesday-Thursday of next week.  The agenda is only partly online.  At this point it just lists topics without the supporting materials.  One March 13 item is the UCLA Health Sciences Teaching and Learning Center which we are assured won’t cost the campus a penny.  Of course, we know the Regents will carefully undertake a review of the business plan using outside independent expertise and will be monitoring the project after it is built to ensure it is a total success, just as they did, and surely will do, with the Grand Hotel:

http://regents.universityofcalifornia.edu/regmeet/mar13/gb.pdf

They will also be Working Smarter – or at least reviewing plans of the administration to do so:

http://regents.universityofcalifornia.edu/regmeet/mar13/fin.pdf

There will be a review of something called systemwide “social fundraising.”  Yours truly is not exactly sure what that is but Googling suggests it has to do with raising money on the web:

http://regents.universityofcalifornia.edu/regmeet/mar13/edpol.pdf

In the afternoon of March 13, there is a lot of closed activity - including the search for a new UC president and collective bargaining issues.*  Behind the closed doors, there will some discussion of legal actions:  (selection below of cases that have been mentioned in earlier postings on this blog)

• AIME, et al. v. REGENTS – Case Settled and Judgment in Favor of Regents Entered – Challenge to Streaming of Copyrighted Videos for Classes – Los Angeles

• AUTHORS GUILD, et al. v. HATHITRUST, et al. – Appeal and Motion for Fees Denied – Copyright Infringement – Systemwide 

• BAKER, et al. v. KATEHI, et al. – Settlement Approved by Court – Constitutional and State Law Claims Arising from Pepper Spraying Incident – Davis

• CALDWELL, et al. v. REGENTS – Motion to Stay Trial Court Proceedings Granted – Challenge to Sale of Japanese Garden – Los Angeles

• FELARCA, et al. v. BIRGENEAU, et al. – Motions to Dismiss Granted in Part – First and Fourth Amendment and Conspiracy Claims Arising from Police Response to Campus Protests – Berkeley

• PEOPLE OF THE STATE OF CALIFORNIA v. PATRICK HARRAN – Preliminary Hearing Concluded – Felony Criminal Charges for Willful Violation of Cal-OSHA Regulations – Los Angeles [This is the lab fire case.]

• REUTERS AMERICA LLC v. REGENTS – Petition Granted in Part – Petition under California Public Records Act to Compel Release of Performance Records for Private Equity Funds – Office of the President

The full list of cases can be found at:

http://regents.universityofcalifornia.edu/regmeet/mar13/finx.pdf

In an open session, there will be a review of UCPath– the new payroll system that is being implemented.

http://regents.universityofcalifornia.edu/regmeet/mar13/audit.pdf

Moving on to March 14...  There is an item entitled “Change to Appointment Terms for Employees Subject to Mandatory Retirement Age Requirements."  Mandatory retirement is not allowed under law except for certain top manager types.  This item: http://regents.universityofcalifornia.edu/regmeet/mar13/comp.pdf  appears to be a holdover from the January meeting at which an end to mandatory retirement was proposed: http://regents.universityofcalifornia.edu/regmeet/jan13/g2.pdf

 

There will be a recommendation on “Continuation of Tuition Surcharge” which I assume involves no change in tuition since it is listed as a consent item:**

http://regents.universityofcalifornia.edu/regmeet/mar13/fin1.pdf

The full agenda is at:

http://regents.universityofcalifornia.edu/regmeet/mar13.html

*UPDATE: The search process for the new UC president is described in a UC press release:
http://www.universityofcalifornia.edu/news/article/29127

**UPDATE: The continuation of the surcharge refers to a surcharge imposed when the Regents lost some litigation relating to professional school fees.
http://regents.universityofcalifornia.edu/regmeet/mar13/f6.pdf

Debt Roll

Slow seat sales have prompted UC Berkeley to launch a fresh marketing campaign and look for other revenue in an effort to keep pace with the $18 million a year in debt it will soon owe for the Memorial Stadium makeover and athletic center construction. The redone stadium opened last season, but only about 1,900 of the 2,900 premium club seats - lifetime spots that cost anywhere from $40,000 to $225,000 each - have been sold. And not everyone who bought a seat has fully paid up. That has left UC some $121 million short on the $474 million project. Now, Cal's athletic department is shelling out another half a million dollars on a new sales team that will push the unsold premium seats...

"Athletics is keenly aware that we can't let this debt roll onto campus," (Vice Chancellor John) Wilton said...

Full story at http://www.sfgate.com/bayarea/matier-ross/article/UC-Berkeley-pushes-stadium-seat-sales-4304947.php

Oh well!  A little rollover never hurts:

The Pen is Mightier (at the Berkeley B-School)

...Handwritten thank-you notes are apparently in vogue at the UC Berkeley's Haas School of Business, and not just for recruiters who hold a student's fate in their hands.

Recently, the school set up tables and invited students, faculty and staff to pen personalized notes to Haas donors... Hundreds of Haas students and staff participated in the note-writing effort, with many sharing specifics on how donors' money directly influenced their education or work... Some of the notes included stories about accomplishments that would not have been possible without funding, such as research projects. Others included drawings...

Full story at http://www.sfgate.com/business/article/UC-Berkeley-s-Haas-school-minds-its-manners-4267136.php

It's not known how anxiously donors are awaiting these letters. Hopefully, they will arrive before Saturday delivery disappears.

What about the Disney Hypothesis?

An interesting article appears today in the San Francisco Chronicle about debate at UC-Berkeley over the cause of the extinction of the dinosaurs.  Was it caused by a comet striking the Earth?  Or something else?  A more precise estimate of the timing of the strike has been produced.

But what happened to the Disney hypothesis - which Southern Californians can relate to - that it was all due to too much sunshine and not enough water?


Anyway, you can read the article at:
http://www.sfgate.com/science/article/Dinosaur-extinction-battle-flares-4261978.php

Will Help Be On the Way?

From today's LA Times: After he retires as chancellor of UC Berkeley in June, Robert J. Birgeneau will head up a national effort to study and help public universities in an era of reduced tax support, new technology and changing student demographics. Birgeneau, a physicist, is to lead the American Academy of Arts and Sciences' new initiative that will propose ways for the federal government, private industry and foundations to better aid state institutions, along with developing reforms the schools could undertake. It is being called "The Lincoln Project: Excellence and Access in Public Higher Education" — named for President Lincoln, who in 1862 signed the Morrill Act granting federal lands for the establishment of public universities. ...Birgeneau, who is 70 and has led UC Berkeley since 2004, said he wanted to help develop "workable plans that will help reverse the progressive disinvestment we have seen in public higher education across the country." ...

Full story at http://www.latimes.com/news/local/la-me-berkeley-20130128,0,5439346.story

We could use the help:

Help Wanted

When UC-Berkeley looks for someone to hire, it isn't just a matter of putting up a sign, even though it is "financially secure."  From a recent email:

Our client, the University of California, Berkeley, is seeking a Human Resources Leader that desires a blank slate opportunity to develop and drive the HR Policy and Practice function in a brand new direction, advancing the legacy of success on behalf of an institution that has been ranked as high as third in the world, a premier, internationally renowned, financially secure teaching and research university that is consistently rated among the best in the U.S. and abroad. 

We are looking for a true leader with a strategic mindset and a demonstrated record as an innovative HR professional, who would enjoy a leadership role with broad autonomy and support within an organization that views the HR Policy and Practice function as one of the most essential foundational elements for long-term success and advancement of the institution. Here you will find a progressive, mission-oriented, student-focused institution and team with broad vision and a depth of passion to match your own.

You may wish to share meaningful referrals whom you feel are professionally prepared to step up to a role at this level. If so, your referrals are warmly welcomed, and we thank you in advance for forwarding this email on to your colleagues.

Or, if you have personal interest in the role... It's a given that you are likely "not looking" and "happy" where you are. Yet, as an intelligent capable performer you discerned long ago from your own experiences that the best candidates are those who are "not looking". Recall, too, that in all likelihood, you were "productive", "happy" and "not looking" when you departed your previous role to be in the chair in which you sit today. You and I both know and understand this. This is precisely among the key reasons this missive is in your hands.

One of the Best in the Nation and the World Become part of a University ranked with and measured by the nation's -- and the world’s -- best in scope of scholarship, research, undergraduate and graduate level programs. The institution is home to multiple academic schools, premier graduate programs, and one of the foremost Research Centers in the world where breakthrough research happens every day.

Key Indicators of a Unique Career-Making Opportunity Perform as a key, strategic leader on behalf of a positively viewed, market-leading, diverse, financially solid organization with worldwide recognition and extensive international affiliations.

Help design, engineer and build a new approach to HR Policy and Practice on behalf of a premier, globally ranked, financially sound university and renowned research institution with distinguished post graduate and top-ranked undergraduate programs.

•Enjoy the autonomy to bring your best ideas and create the ideal model within an environment where you will be listened to, heard and affirmed. Make a major positive contribution to the advancement of university initiatives and employee relations by helping in the restructuring of central HR units to align with a brand new shared services center currently under development.

Join a comprehensive university offering over 7,000 courses in nearly 300 degree programs. The university awards over 5,500 bachelor's degrees, 2,000 master's degrees, 900 doctorates, and 200 law degrees each year.

The institution’s current faculty includes 221 American Academy of Arts and Sciences Fellows, 2 Fields Medal winners, 83 Fulbright Scholars, 139 Guggenheim Fellows, 87 members of the National Academy of Engineering, 132 members of the National Academy of Sciences, 8 Nobel Prize winners, 3 Pulitzer Prize winners, 84 Sloan Fellows, and 7 Wolf Prize winners.

• 61 Nobel Laureates are associated with the university, the sixth most of any university in the world; twenty have served on its faculty.

In a National Research Council analysis of 212 doctoral programs at American universities, 48 of the university’s programs place among the top 10 nationwide. Also according to the National Research Council, the institution ranks first nationally in the number of graduate programs in the top ten in their fields (97%, 35 of 36 programs) and first nationally in the number of "distinguished" programs for the scholarship of the faculty (32 programs).

Here you will find the only university in the nation to achieve top 5 rankings for all of its PhD programs in those disciplines covered by the U.S. News and World Report graduate school survey.

• In addition to its distinguished post-graduate programs, U.S. News also consistently ranks the university as the nation’s top undergraduate public university and within the top three overall for both Undergraduate Business and Undergraduate Engineering. U.S. News & World Report recently ranked the undergraduate program twenty-first nationally in terms of "academic excellence."

In its 2007 annual college rankings, The Washington Monthly ranks the university third nationally with criteria based on research, community service, and social mobility.

The THES-QS World University Rankings ranked the institution eighth in the world in 2006, and the Shanghai Jiao Tong University Institute for Higher Education ranked it third in the world in its 2007 rankings. In the 2006 international edition of Newsweek, the institution was the fifth-ranked global university.  

A Truly Distinctive Locale 
Chosen candidate will discover a progressive professional environment where career achievement, advancement and satisfaction are matched by an optimal quality of life in a favored bayside city recognized for academic achievement, scientific exploration, the arts, beautiful locale, and Mediterranean climate. This is a conscientious city with a focus on greenery and the environment, with renowned botanical gardens and easy access to myriad forms of outdoor recreation and entertainment. Outstanding opportunities for active or spectator sports; cultural opportunities include museums, collections, music, art, dance, historical sites. Excellent public and private schools—kindergarten through post-graduate. Amenities of value for all ages.

It's all here for the strong, ambitious human resources leader professionally prepared to embrace this superb opportunity.

Next Steps
As a seasoned leader, you are accustomed to gathering sufficient data and conducting your due diligence to make an informed intelligent decision when significant opportunities arise. From a career perspective, this is one of those opportunities and times.My office can discreetly contact your AA to compare calendars for a confidential conversation.
Let's talk about this unique opportunity and next steps. Go ahead and enter a confidential and personal process of due diligence today. Pick up the phone, dial 1-817-236-2207and speak with Senior Search Consultant Stephanie Franklin. It's the only way to truly determine if this is right for you. If necessary, leave a message with times when you can receive a call during the workday.

Yes, it’s confidential and we are retained.
Be sure to give a direct or mobile number where we may reach you easily. Then, go ahead and send your resume to Policy&Practice@WhelessPartners.com.

Having your information in hand is always conducive to a more meaningful exploratory conversation.

Anticipate advancing our discussions regarding this prized opportunity.

May we chat.... what do you suggest...?

Best regards,

Gene
Gene Head, Managing Partner & Division President
Stephanie Franklin, Senior Search Consultant | 817.236.2207

Wheless Partners | The Catalyst for Extraordinary Leadership
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Wheless Partners provides an array of leadership consulting services, Succession Planning, Talent Mapping and Board, Executive and Management search services to include Board of Directors, Chancellor, President, Chief Executive, Chief Officers, and other executive, senior and mid-level management roles. The firm's contributions include executive and management leadership to internationally known and Fortune 100 organizations, mid-size corporations, and advancing small enterprises. Additionally, Wheless Partners has demonstrated expertise in conducting assignments on behalf of foundations, governmental agencies, and non-profit organizations. According to the sentinel guide of the leadership and search industry, John Lucht's Rites of Passage At $100,000 to $1 Million+, these efforts have resulted in the firm being continuously ranked among the top search and leadership consulting firms.

I'm sure if they keep looking, they'll find someone:

More on the Powers That Be

In an earlier post, we noted the names of state assembly members dealing with higher ed.  The state senate has a more general education committee that does all levels of education.  It will be chaired by Carol Liu who represents a district that runs from the Burbank/Pasadena area all the way east to Claremont and beyond.  Despite representing a southern California district, she has ties to UC Berkeley, especially the School of Education there. Poking around on the web, I find she at one time was on the UC-Berkeley Foundation Board of Trustees and that she and her husband have funded two endowed chairs there.  Liu seems to have an interest in higher ed "accountability."

Other members of the committee are Marty Block, Lou Correa, Loni Hancock, Bob Huff, Hannath-Beth Jackson, Ricardo Lara, Bill Manning, and Mark Wyland (vice chair).  Hancock, it might be noted, represents the Berkeley area. 

See http://blogs.sacbee.com/capitolalertlatest/2013/01/steinberg-announces-ca-senate-committee-assignments.html

UC Recent History: Appalled at the Fed

Lots of news stories are appearing at this time of the year summing up events of 2012.  John Myers, who writes a Capitol Connection blog for a Bay Area TV station, including various photos of such events.  From the presidential campaign, he included a picture of Ron Paul speaking at UC-Berkeley on April 5, 2012 and leading audience chants of "End the Fed."

So maybe the image of UC-Berkeley as exclusively leftist needs some qualification if Paul could have a successful rally there.  Or maybe the photo and event just reflect the fact that there are those on the left and on the right who are suspicious of central banking and the Federal Reserve.

In any case, the photo comes from:
http://www.news10.net/news/california/article/223072/430/California-politics-2012-social-media-style

Dirks' Perks Irk

Much of the news media coverage of the appointment of the new UC-Berkeley chancellor Nicholas Dirks involved the fact that his salary would be $50,000 more than that of his predecessor (albeit an increment paid by private funds).  

You can find the salary comparison used to justify the pay level to the Regents at:

http://regents.universityofcalifornia.edu/regmeet/nov12/c1.pdf

The governor, the lieutenant governor, and one regent was unhappy with the salary and the news media picked up the complaints.  See, for example:

http://www.mercurynews.com/education/ci_22074232/uc-berkeleys-new-chancellor-under-consideration-by-regents

http://www.foxandhoundsdaily.com/2012/11/cost-cutting-wont-come-easy-to-uc/

Probably, however, if there was to be controversy, it might have been over an item in the footnotes (which apparently news media reporters and maybe regents don’t read).  Given all the concerns about unfunded liabilities in the retirement system – including the 100% unfunded retiree health plan – it is a bit surprising (no?) to find this item in the pay package in footnote M:

Item M. As an exception to policy, eligibility to participate in the University’s insured retiree health-care plans on an accelerated eligibility schedule (subject to changes in the law), receiving 50 percent of the maximum University contribution after completing five years of service. For each additional year of service completed, the percentage will be increased by ten percent, thereby making Mr. Dirks eligible for the maximum University contribution upon completing ten years of service.

We’ll eventually get the audio for the special regents meeting at which the pay package was approved.  Did the governor – with his concerns about the “wall of debt” faced by the state – get beyond the $50,000?  We’ll have to wait to hear. [UPDATE: I am told by someone who heard the meeting that there was no discussion/debate concerning the footnoted items.]

There is an interview with the incoming chancellor in the Daily Cal (the Berkeley student newspaper) – which includes an audio recording - at:

http://www.dailycal.org/2012/11/29/chancellor-designate-dirks-discusses-vision-for-uc-berkeley/

Excerpt:

It is unlikely that we’re going to turn the corner and go back to where the great Master Plan started and the kind of funding schemes that were envisioned as fundamental to the success of that Master Plan. It’s a different reality, and we know now that a lot of other things are possible that weren’t even thinkable in those days — from the use of digital technology, online education, to the role that private support will necessarily play in the great public universities. This is certainly something that is not happening only at the University of California … Unless I’m reading the tea leaves wrong, I think we’ll be very happy if we can maintain the level of state support, at least the level of percentage of revenue that we currently have…  (W)e have that same set of challenges in private universities too. We don’t take funding for things that we don’t accord great priority to, that we don’t actually give credence to as part of an academic planning process. So when we go out and engage in a campaign, we map opportunities for fundraising right onto a strategic academic plan that has already been formulated as something that is an organic outgrowth of a whole variety of constituents on campus who have been part of that process … There are all sorts of safeguards, all sorts of protocols that we’ve used in private universities and that are used here to ensure that undue influence from donors doesn’t in fact change the academic mission of the university.

Follow-Up on Today's Special Regents Meeting

 

We noted yesterday that there would be a special Regents meeting today to approve pay packages for the new chancellor of Berkeley and the new acting chancellor at Riverside. Also noted was the fact that yours truly could not record the live-stream of the meeting and so the posting of the audio would have to await our usual public documents request.  However, I am told there were three votes against the Berkeley salary of $486,800: the governor, the lieutenant governor, and Regent Zettel.  We will post updates.  And we again ask why the Regents' office, since it has recordings of the meetings, does not post an archive of them.

UPDATE: http://www.latimes.com/news/local/la-me-uc-pay-20121128,0,1435780.story

Special Regents Meeting Tomorrow

The Regents are having a special meeting tomorrow, apparently to approve pay packages for the new chancellor at Berkeley and the acting chancellor at Riverside.  Yours truly cannot record the meeting due to other commitments.  However, as usual, we will request the audio and post it when it becomes available.  The agenda is at http://regents.universityofcalifornia.edu/regmeet/nov27.html

New Berkeley chancellor bio at:
http://www.universityofcalifornia.edu/news/article/28634

New Riverside acting chancellor bio at:
http://www.universityofcalifornia.edu/news/article/28698

You can guess what grade Peter Taylor gave the Berkeley students for their swap report

From the San Francisco Chronicle op ed by Peter Taylor, UC chief financial officer:

The University of California has come under criticism for its finance decisions - specifically three interest rate "swaps" made on funds borrowed over the past 10 years to expand university medical centers. Swaps exist to insulate borrowers such as UC from volatile interest rates. They work like this: The university borrowed money at a variable interest rate, with the payments rising and falling with interest rates. It then swapped those payments for payments at a fixed rate. Thus, if the interest rate rises, then the university pays less than it would have if it had stayed with the original loan. But if the interest rate drops, as it has, then the university pays more.  Like any public institution, UC must not have too much exposure to rising interest rates or it risks coming up short for expenses. We are not in the business of gambling with funds entrusted to us by taxpayers, students and parents, and patients in our hospitals. But these critics unwittingly advocate that UC do just that...

As much as I love Shakespeare, I don't pretend to be qualified to teach a class on his works. Similarly, the students who have criticized the university's policies should understand that just because they are in graduate school doesn't mean they are experts in everything. Their miscalculations are outrageous. Indeed, if this level of "research" were produced for a class on finance, it would merit an "F."

Full op ed at:
http://www.sfgate.com/opinion/openforum/article/UC-debt-swaps-avoid-risk-save-money-4038641.php

The full op ed is similar to the analysis provided in earlier posts on this blog.  The issue came up also in the Regents meeting yesterday morning (also posted on this blog).  The one point in the Berkeley student swap report not dealt with in the Taylor op ed is the question of litigation.  In the report, it was noted that some entities that engaged in swap transactions are suing over losses.  It may be that UC doesn't think it could win such a case since it has financial experts such as Taylor on staff and it might be hard to prove that UC was somehow hoodwinked.  Litigation costs money so filing a suit likely to lose would not be wise.  However,  no one has given that explanation.