UC Workers and Students: UC System Seeking “Bailout,” Squandering Tens of Millions of Dollars Annually

FOR IMMEDIATE RELEASE: November 19, 2014

CONTACT: Todd Stenhouse, (916) 397-1131, [email protected]

Without real transparency on spending and Cost Controls around Executive Pay, Pensions and Outsourcing—tuition hikes and more state funding only “kicks the can down the road.”

San Francisco: UC’s largest employee union—AFSCME 3299—together with current and former UC student leaders called for the UC Regents to postpone their scheduled vote on a 25% tuition hike Wednesday until UC complies with a new state law (AB 94) requiring disclosure of expenditures and enacts structural reforms to address skyrocketing executive compensation and staffing practices that are costing the system tens of millions of dollars annually.

“Across the country, public university administrators are facing a choice—either change the way you do business, or demand that students and taxpayers pay for your mistakes,” said AFSCME 3299 President Kathryn Lybarger. “Absent the former, UC’s reliance on the latter only kicks the can down the road. UC has already tripled tuition and dramatically increased enrollment of out of state students who pay full freight—and it is still stuck in the same place. It’s time for a new approach, and that must start with an examination of how UC is spending the public’s money.”
Specifically, Lybarger highlighted four areas where cost controls could yield huge savings to UC:

• 1. Executive Pay: In 2013, 793 UC Employees (or .02% of all UC workers in 2013) received salaries totaling $450 million. If those salaries were capped at $500,000 (and this doesn’t include the generous housing, car, moving and other allowances these employees receive), UC would save $80 million per year.ⁱ
• 2. Pensions: UC’s Administrators and Executives receive more generous pension benefits than any other public employees in California,ⁱⁱ as well as their public and private university peers across the country.ⁱⁱⁱ If the 8,851 UC employees in the Senior Management and Management personnel groupings were limited to the very generous packages received by their peers at CSU and the California Community College System, UC would save at least $37 million per year.^iv
• 3. Outsourcing: Since 2011, UC has paid more than $4 million to outsource custodial work at UCSF and UCD Medical Center. Had they hired these workers as UC employees instead, they would have saved $1 million. There are dozens of similar contracts system-wide, which Lybarger discussed in a recent Sacramento Bee Op-Ed.
• 4. Staffing: By refusing to properly staff its medical centers and campuses, UC has seen an explosion in government safety fines,^v court ordered settlements ^vi and workplace injuries ^vii—totaling millions of dollars.

Both current and former UC Student leaders have joined AFSCME 3299 in their opposition to more tuition hikes and calls for greater transparency and reform of UC spending practices.

“The fact is, none of these spending excesses contribute to UC’s core mission of affordability and quality,” said UC Student Association (UCSA) Board Chair Kevin Sabo. “Instead, they undermine both. Asking students and taxpayers to subsidize this kind of mismanagement is like asking us to ignore the fox that’s destroying the henhouse. We won’t.”

“By trying to avoid disclosure of UC expenditures, shift the blame and sidestep a long overdue conversation about how much money UC is squandering on its growing executive class, President Napolitano and the Regents are holding students hostage to their demand for a bailout,” said UCSA Board Member Caitlin Quinn. “It’s time for UC to stop the brinksmanship and address the epidemic of waste and excess at the heart of its financial problems.”

“UC alumni know that the missteps and wrong-headed priorities that brought about UC’s current financial problems began long before Janet Napolitano took the job as UC President,” said UC Alumni and Former UCSA Executive Director Matt Haney. “If we are going to sustain and strengthen UC for future generations, we need President Napolitano and the Regents to learn from and correct these mistakes—not perpetuate them. Absent real scrutiny of how UC spends its money, we risk losing the affordable college guarantee that built California into an economic powerhouse to the dustbin of history.”

^{i) Analysis of UC salary and payroll data, “University of California Data Analysis,” http://ucpay.globl.org/ (accessed November 12, 2014)}

^{ii) State Pension Reform (PEPRA): Under state pension reform signed into law by Governor Jerry Brown in 2012, the pensionable compensation cap for State of California employees –including CSU and CCC – was reduced to $110,000 in 2012. On the other hand, UC’s pension cap remains substantially higher– $380,000 for employees hired before 1994, and $255,000 for employees hired since.}

^{iii) College and University Professional Association for Human Resources, “Administrators in Higher Education Salary Survey — for the 2013-14 Academic Year,” February 2014, http://www.cupahr.org/surveys/files/salary2014/AHE14-Executive-Summary.pdf}

^{iv) 2012 analysis of UC actuarial data, by William F. Fornia, FSA, obtained through a Request for Information received by the University of California Office of the President on or around June 2012. In addition to the standard benefit that UC provides to its employees, approximately 160 UC senior executives participate in the Senior Management Supplemental Program whereby UC pays an additional 3 to 5 percent of their salary towards their pension benefit. http://ucnet.universityofcalifornia.edu/compensation-and-benefits/retirement-benefits/senior-management-supplemental-benefits-program.html}

^{v) California Health and Human Services Agency, Statement of Deficiencies . . . for University of California, Irvine Medical Center and University of California, San Francisco Medical Center, October 25, 2008; June 17, 2009; July 15, 2009; March 3, 2010; March 4, 2010; July 22, 2010; October 21, 2010; January 18, 2011; April 5, 2011; May 11, 2011; and June 30, 2011.}

^{vi) Jeff Gottlieb, “UC to Pay $1.2 Million to Settle Suit Targeting UCI Medical Center,” Los Angeles Times, March 28, 2013, http://articles.latimes.com/2013/mar/28/local/la-me-uci-medical-20130328.}

^{vii) U.S. Department of Labor, Occupational Health & Safety Administration, Log of Work-Related Injuries and Illnesses, OSHA’s Form 300s for years 2009, 2010, 2011 & 2012.}