Wednesday, November 25, 2009

UC's Fiscal Health

At the same time that UC President Mark Yudof declared a fiscal emergency this summer, the UC was reviewed for a new set of bonds by Moodys, and the bond raters told a very different story than the one the Office of the President was presenting to the public and its own employees. According to recent reports from Moodys, the university generates billions of dollars of profits and has billions of dollars of funds that it can use for any purpose. Here are some of the highlights from recent bond reports, which detail UC’s fiscal health:

1. “Excess of $4 billion of net patient revenue at its five academic medical centers”; [net revenues equals profits]

2. “Healthy and highly consistent operating performance, with operating cash flow in excess of $2 billion driven by a highly diversified revenue stream with no single revenue source exceeding 26% of total revenues”;

3.” Sizeable balance sheet that remains highly liquid, with $5.9 billion of unrestricted financial resources and active treasury management monitoring a short-term investment pool approaching $8 billion in recent years”; [a total of $14 billion that can be used for any purpose]

4. “UC's financial resources have grown from approximately $11 billion in FY2002 to over $15.5 billion in FY2006. Expendable financial resources have grown from less than $8 billion to over $13 billion over the same time period”. [more total revenue and more unrestricted funds]

5. “Resource growth has partially been driven by fundraising success across the campuses. The University reports total private giving in FY2006 approached $1.3 billion with over $10 billion raised in the last decade”. [the endowment funds allows for borrowing and flexible funds]

6. “With expendable financial resources covering pro-forma debt by 1.4 times, and debt service consuming only 3.6% of operating expenses, we believe the University retains significant additional debt capacity”. [UC can borrow more money at a low cost]

It is clear that the medical facilities generate a huge profit that can be shared with the other units. It is also evident that the UC has billions of dollars of unrestricted funds that can be used to deal with the current state budget crisis. Moreover, the UC is able to borrow money at a very low interest rate because it has so much unrestricted funds in its multiple revenue streams. In other words, everything Yudof and the Regents have said about the dire state of the UC’s finances is simply untrue.

13 comments:

  1. This comment has been removed by a blog administrator.

    ReplyDelete
  2. Could you post the link to the report? I can't find it online. Thanks

    ReplyDelete
  3. I personally believe the medical profits should be used on new facilities, improvements, and helping fund the medical school. Regardless, it seems evident that in a state of fiscal emergency, there are plenty of funds that can be tapped into and borrowed from with little to no costs. True, this will slow down the growth of parts of the university, but in times when the whole economy's growth slows, it is logical that the university will also experience some side effects. But it certainly should not be called an emergency that must be rememdied with extreme measures.

    ReplyDelete
  4. With a home-value line of credit, you'll likely have prepayment punishments and a lien on your home until it is paid. In a lien, the lien holder (the loan specialist) has first right to that benefit until the lien is fulfilled. Cash Advance

    ReplyDelete
  5. Just couple of hours are taken by the banks to issue you these credits. Further, you can likewise make the arrangement more financially savvy. In this manner, you can purchase the second-hand vehicle effectively. Cash Advance

    ReplyDelete
  6. To cover the dangers, moneylenders charge higher premium rate on awful credit utilized auto advances. However, an advance seeker can take the advance at similarly lower interest rate in the event that he comparers distinctive advance bundles as every bank has own rate of enthusiasm on the credit. car title loans in fresno

    ReplyDelete
  7. Car advances for understudies can likewise be procured at a sensible rate by making a tremendous up front installment as the moneylenders will then be persuaded that since the understudy has effectively separated with an immense lump of cash from their end they will reconsider before defaulting on the advance. There are other novel alternatives offered to understudies, for example, no initial installment automobile advance and pre affirmed car credit. payday loans

    ReplyDelete
  8. Great publish! I simply submitted this particular on to the college that has already been doing just a little investigation about this. Right now click here cash advance carson I truly appreciate reading through inside your weblog!

    ReplyDelete
  9. Spot on with this write-up, I actually feel this website needs far more attention. I’ll probably be back again to see more, thanks for the advice!
    무료야설
    립카페
    외국인출장
    마사지
    바카라사이트

    ReplyDelete