Faculty out of the loop on new UO borrowing

Last updated on 05/05/2014

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:

• University of Washington
• American University
• President Gottfredson’s former employer
• President Gottfredson’s employer before that

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.