Faculty out of the loop on new UO borrowing

10/14/13 update: Gottfredson is now hiring a full time “Director of Treasury Operations” to deal with the upcoming bond sales that he hasn’t told the faculty anything about:

The University of Oregon Business Affairs Office (BAO) invites applicants for a full-time Director of Treasury Operations. This position is a fixed-term appointment for one year with annual renewals. This recruitment is open to any applicant who meets the qualifications listed below.

The University of Oregon (UO) has recently been granted legislative authority to establish its own governing board and manage its own treasury functions. We are looking for an experienced and dynamic leader to guide the institution in assuming management of the university’s cash and debt portfolio, establish an institution-wide Internal Bank, and collaborate with the new governing board to develop and implement new policies related to debt and investment management.

10/12/13 update: It turns out the football team’s ranking doesn’t matter to Moody’s.

The Oregon Treasury Department just sent me a copy of the July 2012 report from the PRM consultants on the consequences of UO independence for OUS, and the likely bond ratings for UO and PSU when separated from OUS. Full report here. A concise summary:

The cocktail party version is that PFM forecasts a respectable but not excellent Moody’s rating of Aa2 or Aa3. A rather remarkable third of our outstanding bonds are for Mac Court, (before the EMU and Straub) but it’s not clear how much of a hit that made to the rating forecast.

I’m still waiting to get the docs on the meeting with Goldman Sachs, which Gottfredson and Moffitt hid from the faculty during the union negotiations, and which yielded more promising results, or at least that’s the rumor.

9/14/2013: Would you buy a used car from this man?

If the dealer showed you an odometer reading and repair records like this, you’d give him the wave, and say no thanks:

But that’s about all VPFA Jamie Moffitt will show the UO faculty, and it’s the basis on which President Gottfredson expects us to trust his administration when it comes to UO’s finances. Pretty disrespectful, and un-civil.

SB 270 gives the new UO Board the power to issue its own bonds. The investment bankers aren’t going to sell them without seeing some credible data and forecasts. Why shouldn’t the faculty be able to see that same information? And why would President Gottfredson think that his faculty union should cut a deal with him without first seeing the same information his finance people are showing Goldman Sachs?

So here’s a public records request to Oregon Treasurer Ted Wheeler, asking to see what information UO has shared with his office and the bond rating agencies:

Dear Treasurer Wheeler:

This is a public records request for documents related to discussions between the Oregon Treasury Department, UO administrators, and bond rating or lending firms regarding the potential sale of bonds by UO, or by other state agencies for UO and UO’s bond rating.

Specifically, I am asking for any documents shared with your office or these firms showing UO’s financial situation, including;

a) current data and projections of enrollment, tuition, state funding, grant revenue, athletics revenue, licensing revenue, donations, and other significant revenue streams.

b) current data and projections of cost items such as salary, benefits, facilities services, athletics, etc;

c) discussions and analyses of potential upside and downside risk for UO involving changes in revenue or costs or potential legal liabilities.

d) data on current UO debt and assets and analyses of the impact of the recent changes in higher education on debt and assets.

e) reports from bond rating firms and investment banks analyzing these data and or providing advice to the Treasury Department, UO, OUS, OIEB and or HECC on bond ratings and projections and estimates of borrowing capacity

For universities, the bond rating agencies such as Moody’s and S&P look pretty carefully at these factors, and the consequences of holding back information are substantial. Here are a few examples of their reports, from universities that practice transparency:

9/13/2013 update: The most recent Oregon Higher Ed bond sale was rated Aa1, the second highest rating after AAA. UO’s financial reserves are the highest in the system. UO’s enrollment, tuition, and student quality are all growing too, and SB 270 will soon give UO the ability to issue its own bonds. I’m thinking UO’s well will be able to handle quite a bit more flow than what Rudnick and Moffitt have been telling the faculty.

9/11/2013: Maybe President Gottfredson’s chief negotiator Sharon Rudnick wasn’t kidding when she told the UO faculty on Tuesday that

“The well is dry. Hear me please. The well is dry.”

Or maybe there’s a very different explanation for the 8/27/2013 meeting between the UO administration, Oregon Treasurer Ted Wheeler, and representatives of Wall Street’s respected Goldman Sachs financiers?

The UO Matters surveillance cameras capture some interesting stuff in the Johnson Hall lot. I’ll make a public records request for the details on the meeting. Hubin’s office won’t release anything until the union negotiations are over, but Wheeler faces some different incentives.

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13 Responses to Faculty out of the loop on new UO borrowing

  1. Anonymous says:

    August 27? you need to check those tapes more frequently.

  2. Anonymous says:

    I put my money is on “very different explanation.” They have buckets of money and are bringing in the professionals to help them hide it.

  3. Anonymous says:

    Wasn’t Phil Knight going to donate $2B when we got a UO board? So why is UO going to the bond markets now? Or is this another Knight Arena revenue bond scheme?

  4. Anonymous says:

    They’re lying to someone, and it’s probably not Moody’s.

  5. Anonymous says:

    What is the evidence that the student quality is rising?

    • Anonymous says:

      Over 15+ years we’ve been pulling in out-of-state students with higher than average SAT/GPA measures, while also increasing out-of-state tuition. Most of the credit goes to some admins who have since moved on and a couple econ profs they had running numbers for them. Lately, with the macro economy tanking and California schools hitting capacity, we’ve had even more out-of-state students to pick over which has masked that our now-largely-enumerate enrollment people are flying by the seat of their pants. So, there’s no telling where we go from here. It should test their abilities, though. (It’s been a while since I’ve placed a wager on how far off Rodger Thompson will be on his guessing games. Are those markets still active?)

    • Anonymous says:

      Am skeptical that the SAT scores have changed significantly at all in decades here. I don’t put much stock in high school GPA’s (or college either) with grade inflation.

      Do you have any data that show there is an upward trend in SAT scores?

      Again, what I’ve seen shows nothing, unless there’s been a recent upswing.

    • Anonymous says:

      It would be interesting to see data over the last several decades on the percentage of UO BA/BS graduates going on to earn graduate degrees. Has this stayed steady, gone up, or gone down? A breakdown by discipline over time would also be interesting to see…

  6. Anonymous says:

    Sharon needs to seek the symbolism in this old Kingston Trio song with respect to the well being dry….

    http://www.youtube.com/watch?v=OPkALvJkWpg

  7. Anonymous says:

    In the car picture he looks like a cross between FDR and JFK!

  8. awesome0 says:

    I’m no macro economist, but locking in a credit card rate when interest rates are at record lows, or taking out a mortgage to build infrastructure seems like a remarkably sound idea. Will the funds and bonds be used appropriately is the key question. While I think the union is a net win for most faculty, I do worry a bit that we will be viewed as unionized employees and not equal partners as faculty and students make up the UO. That means we might be increasingly left out of the loop of strategic decisions and plans.

    I think using the bonding to build more infrastructure and expand enrollment and hire more faculty all are sound investments and reasons for excitement. Or if we are going to use the bonds to match donors to encourage donations, that would be totally awesome. These are things that would encourage all of us to have more excitement about the UO and investing in the university’s future.

    So admins that are reading this, share with us the good news. Some of us have important life decisions to make with a deadline and reasons for optimism here would be very helpful in making decisions.

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