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.

Listen to Regents Meeting of Nov. 15, 2012

Now that the audio file has arrived, we are catching up with the parts of the mid-November Regents meeting not previously posted (not to be confused with the special meeting held yesterday).  Below is a link to the final day of the mid-November meeting.

During the public comment period, there were complaints about tuition increases and budget cuts.  There was more about the swap deals - see earlier posts on this matter - in which UC swapped a variable interest rate for a fixed one.  As it turned out, interest rates fell so that the "insurance" against a rise in rates provided by the fixed rate swap would have been better in hindsight not to have taken out.  But - as we have pointed out and the university pointed out in response to the student report - insurance is often a bad deal in the sense that the contingency insured against does not occur.  (My life insurance over the years has been costly and - as it turned out - a bad deal for me since I am here typing this message.)  The lasting effect of the student swap report is that it has disappeared from the media (as of this writing) except from the Howard Jarvis Taxpayers Assn. website (see the screenshot below):

There is some irony in the report ultimately appealing only to those on the political right.

My sense is that by Nov. 15, the authors realized the report had a "problem" so the complaint during the public comment period was mainly that the Regents should litigate to try and recover some of the lost money.  It would be nice if the university did respond to the litigation issue, although it may be that legal counsel doesn't think there would be a case.  (I would have little chance through litigation in getting my life insurance premiums refunded because I am still here.)  But why not say so, if that is the reason?

There were also complaints about an actuarial report on the pension indicating that the expected return should be raised to 8% from the current 7.5% (which would lower the unfunded liability).  It was noted in subsequent regental discussion that pension funds presently are dropping their expected future returns if they are above 7.5% and that the governor and others think 7.5% may be too high. Since the report was done for AFSCME, the university reps said they would look at it in the context of collective bargaining on the pension.

In any event, some time after the public comment period ended (about an hour and ten minutes into the meeting), a demonstration over the various complaints erupted and the room was cleared. 

There were reports on student health centers and a proposed Davis med center partnership with a local nonprofit hospital which was said to be a way to lower costs.  A DOE lab report featured a presentation with a video on the Mars landing.  (It was after we landed on Mars that the demonstration reported above erupted.  The timing was unclear to yours truly; such demonstrations usually occur after the public comment period. Regents are from Mars; demonstrators are from Venus?)

The Haas management school at Berkeley asked for approval of a plan to spin off its extension-style (non-credit) executive ed programs into a separate entity which would be more flexible than allowed under university rules, make a profit, and contribute its profits to the academic side of the school.  Apparently, the Berkeley academic senate approved the plan.  There were some questions by regents as to what exactly the flexibility (in hiring and pay, apparently) entailed but the plan was approved.

Reports on the retirement program followed.  The pension was reported to be 77% funded on a market basis.  The totally-unfunded retiree health program's unfunded liability was reported to be unchanged from last year.  Finally, there appears to be a push at the Regents to get more money out of technology transfers.  A regental committee is being set up to pursue that goal.

A link to the the audio is below: