Fall Dialogue with the Chancellor

November 30, 2009

Remaining Student Questions

• I am aware that sustainability is the theme of the University this year.  I chose to attend Davis over UC Berkeley and UCLA because of the College of Agricultural and Environmental Sciences with sustainability in mind.
  • Q: Why is it that the most ecologically sustainable affordable housing on campus, the Tri-Cooperatives, are being closed as business decisions by Student Housing?  Student Housing decided to close the Davis Student Co-op, my home, amidst the touting that sustainability was the theme of the year.
  • Q: What is the university actually doing to provide more sustainable housing options?  Affordable housing options amidst tuition hikes?

Chancellor Katehi: Thank you for the question regarding cooperative living options and our commitment to sustainable, affordable housing. I appreciate your strong support for cooperative housing and understand your concerns about its continued presence and success on our campus. In responding to your question, I have consolidated all of the related questions that I received regarding the Davis Student Cooperative and have prepared a single response that I trust addresses your question and provides some additional context that may be helpful.

It is my understanding that the decision by Student Housing to consolidate the Cooperative Program from three houses to two houses was made based upon a financial and operational review of the facilities. Student Housing has been delegated the authority as the entity on campus that has responsibility for managing these properties, along with all residence halls and family apartments. As part of this responsibility, Student Housing manages the financial administration, maintenance oversight, inspections and policy adherence related to residential facilities. It also conducts regular meetings with student liaisons from each of the Cooperatives and works with residents of the houses to support an established level of autonomy for the programming aspects associated with living in these properties.

As you may know, a letter was sent to each of the residents of these properties on October 7th, 2009, outlining the reasons for Student Housing’s decision to consolidate the Cooperatives into a smaller number of properties.  The rationale for the decision broadly included the need for the houses to be financially solvent and self-sustaining (without subsidy from other funding sources), to retain affordable rents with minimal increases, and to meet the significant maintenance needs which have arisen, both from the age of the facilities (now over 90 years) and from current building code regulations that concern building systems, access, and safety.

Among these, a primary financial issue involved in this situation concerns the ability of the Cooperatives to meet the loan obligations on the properties. Student Housing indicates that an internal loan was approved by the UC Office of the President in 2006, which provided funding from Student Housing reserves for deferred maintenance, including replacement of central heating furnaces, flooring, kitchen cabinetry, roofing, selected windows and painting of the exterior of the three buildings. The loan was augmented in 2007 to install smoke detectors, fund additional costs related to roofing, and make improvements in disability access that is required by federal law. As indicated in the letter to the residents, the loan repayment obligations, increasing utilities cost, concerns about occupancy levels, and the current budgetary climate have all resulted in a very real and substantial budget deficit for the houses.

In consideration of all of these issues, as well as the competing desire to prevent major escalations in the price of rent,  Student Housing believed it prudent to reduce the scope of the properties. While far from an ideal solution to the problems at-hand, Student Housing felt that a reduction in scope would be preferable to the alternative of dramatically increasing the cost of rent.  In this way, it was felt that a reasonable amount of highly affordable Cooperative Housing could be sustained, and could continue to reflect the programmatic autonomy and interests of residents.

Clearly, this decision has resulted in student concerns and I appreciate the strength of the perspectives that were expressed at the Dialogue on November 30 and in the e-mail questions that I have since received.  As a consequence, it is my understanding that renewed discussions with representatives from the Vice Chancellor’s Office of Student Affairs and student representatives from the Cooperatives have already been initiated.  Indeed a meeting of students and Vice Chancellor Fred Wood and Associate Vice Chancellor Janet Gong was held on December 9^th, during which specific issues were identified and a process for on-going, timely discussions was agreed upon.  Consistent with this process, additional formative discussions will commence in early January and every effort will be made to develop mutually advantageous resolutions before the next cycle of lease agreement decisions by students would normally begin.

There are certainly challenging financial and operational questions to be addressed before a final resolution can be determined.  But I remain optimistic that these additional discussions between Student Housing, Student Affairs and our student representatives will provide an effective forum for dialogue and constructive problem solving, and produce a viable and sustainable solution for both Student Housing and our Student Cooperatives.

I trust this information is helpful to you and once again, thank you for taking the time to share your views with me.

• The Tri-Cooperatives are such a small resource for affordable housing already.  Closing Davis Student Co-op leaves room for only around 20 students to have access to affordable housing.  This is not enough.  We need extra houses, not less.  What will you do to increase affordable housing?

Chancellor Katehi: Please see comprehensive response to related question above.

• Do you support Student Housing’s decision to close Davis Student Cooperative in order to take on more administrators?  Do you think it wise that Galindo would cut affordable housing even when it costs Student Housing money?
  • Darach Miller, dchmiller@ucdavis.edu

Chancellor Katehi: Please see comprehensive response to related question above.

• Are you aware of the history of the Tri Co-Ops?  Are you aware of Student Housing’s history of Co-Op budgetary mismanagement?

Chancellor Katehi: Please see comprehensive response to related question above.

• Will you push for alternative affordable housing for UC Davis students?  Also, will you meet with residents of Davis student Co-op to talk about the decisions made to close down the house?

Chancellor Katehi: Please see comprehensive response to related question above.

• You said that you will address the issues that happened on Thursday Nov. 19, 2009 on campus when the time was appropriate.  However, a group of us were able to talk to you on Friday night and were able to talk to you.  It seems like, and I don’t want to quote you, but you seem to support the 32% increase and believe it was a great idea.
  • dennisnguyen510@gmail.com

Chancellor Katehi: I fervently wish the fee increases were not necessary as one part of the university’s plan to make up for drastic cuts in state funding.  As well, employees are being furloughed or laid off, faculty hiring has been dramatically slowed, and programs are being cut.  And those measures are not enough to close UC Davis’ two-year funding gap of almost $150 million.  I understand that the current situation with student fees poses a hardship for our students and their families and I agree that the state’s steady disinvestment in public higher education puts at risk the Master Plan’s promise of high quality, accessible and affordable higher education to all Californians. Measures have been put in place by the University of California to mitigate the fees’ impact, including expanding financial aid and initiating a $1 billion scholarship campaign.  In addition, we continue to look for ways to ensure access to a high quality and affordable UC education and to reduce administrative costs.

• Why does the Chancellor not pay attention in her own Dialogue?

Chancellor Katehi: I was intently interested in the stories shared by student speakers at the Dialogue and talked further with students after the Dialogue ended.

• If and when there is a student march to Sacramento, will you come with us to demand more support from California?

Chancellor Katehi: I am committed to continuing to advocate strongly at the State Capitol for UC and intend to participate in the march that’s being planned by the Office of the President in collaboration with UC student leaders.

• How will you bring more affordable housing to UC Davis and keep the Davis Student Co-op open on campus?

Chancellor Katehi: Please see comprehensive response to related question above.

• Retirement is a huge draw of UC and UCD funds.  With that, do UC employees such as UCB head coach retire at a % of their pay (i.e. 90% of 2.8 million!)?

Chancellor Katehi: Retirement benefits are generally paid from the assets of the UC Retirement Plan (UCRP).  Because of the health of our retirement system, employees and the University (including UC Davis) have not needed to contribute to UCRP since 1990.  Contributions are planned to begin again as of April 15, 2010.  So while we as an employer need to begin making contributions to maintain the health of our retirement system, it is important to note that this has not been part of our budget for twenty years.  In addition, we are working with the state of California to have this included as part of our base budget as is done with other the community college and CSU systems.

To answer the other part of your question, the UCRP formula percentage is only applied to covered compensation, which does not include items such as bonuses.  The IRS also limits the amount of annual covered compensation that can be used in the defined benefit calculation.  In 2010, that limit is $245,000 for most employees, or $360,000 for employees who were part of the plan prior to July 1, 1994.  So the maximum annual pension payable would be the pension % (based on age and years of service) multiplied times $245,000 (or times $360,000 for a pre-July 1, 1994 employee).  In summary, the coach example you provide would not have his/her retirement pay based on $2.8 million in income.

• What actions can be taken to ensure that affordable housing such as the Davis-student co-ops are not continuously being shut down?  Moreover, what can you do to continue the operation of the Davis Student co-ops?
  • Bryan Ramirez-Corana, 2nd year Genetics major

Chancellor Katehi: Please see comprehensive response to related question above.

• In the last decade, student enrollment has increased 39%, faculty employment 25%, but management employment by 118%: 4x the rate of the rest of the university.  (keepcaliforniaspromise.org)  Are there plans to stall administrative growth or downsize it?
  • Catherine Fung, cmfung@ucdavis.edu

Chancellor Katehi: Yes.  The Provost and I have formed a small team to lead the Administrative Process Redesign Initiative.  The new initiative will work to streamline and consolidate the campus’s administrative infrastructure in ways that cut costs, simplify our organization and improve efficiencies, to support and strengthen the campus’s academic mission. The initiative will first look for ways to eliminate unnecessary functions and establish, when practical, shared service centers in areas such as human resources, information technology, finance, payroll and purchasing throughout administrative units.  We anticipate that our administrative infrastructure will become smaller and we will redirect these staff resources to directly support our academic mission.

• To justify your own salary, you say, “In this society, people want respect from their employer as expressed by wages.”  This is very telling, given that those who do the bulk of the teaching at this university–adjunct faculty, graduate students–make as little as $15,000 a year.  Are we to surmise that the university does not respect our work?  What respect do you have for the teachers in this institution? Catherine Fung

Chancellor Katehi: I have great respect and appreciation for all of our faculty, students and staff who teach, conduct research and serve the public in a broader sense both within the university and in our greater community. Annual salary rates are set by the Office of the President system-wide. For TAs and non-Academic Senate Lecturers (“adjunct faculty”) these annual salary rates/scales are set by the contract that the Office of the President and the union representing each title agreed upon. In general, salary scales vary according to position responsibilities, experience, and market conditions. An individual’s salary is also based on the percent of time of the position held. For example, TAs are paid a salary pro-rated for the percent time of their appointment, which, because they are students, cannot exceed 50% time. Similarly a number of our lecturers are part-time faculty and, in fact, may  teach at other institutions at the same time they work for UC Davis.  The current annual salary rates start at $44,636 (plus full benefits) for a 100% time academic year (9 month) lecturer and go as high as ~$125,920 for 100% academic year Senior Lecturers (http://www.ucop.edu/acadadv/acadpers/0910/table17.pdf).

Event Program:

5:00-5:20 Reception and Light Refreshments
5:20-5:30 Welcome – Student Assistants to the Chancellor
5:30-5:50 Remarks by Chancellor Katehi, Provost and Executive Vice Chancellor Lavernia
5:50-6:30 Student Remarks/Dialogue
6:30 Formal program ends
6:30-7:00 Informal Mingling