oard meets at regular m

1.1/204-19

4/5/19

April 5, 2019

TO: Members of the Board of Regents

Designated Representatives to the Board of Regents

FROM: Tyler Lange, Secretary of the Board of Regents

RE: Schedule of Meetings

WEDNESDAY, APRIL 10, 2019 4:00 p.m. 142 Gerberding Hall SPECIAL MEETING OF THE FINANCE AND

ASSET MANAGEMENT COMMITTEE: Regents

Benoliel (Chair), Ayer, Harrell, Jaech, MacPhee, Rice,

Riojas, Tamaki, Zeeck, Zhou*

5:30 p.m. 142 Gerberding Hall MEETING OF THE FULL BOARD OF REGENTS: Regents Rice (Chair), Ayer, Benoliel,

Harrell, Jaech, MacPhee, Riojas, Tamaki, Zeeck, Zhou

THURSDAY, APRIL 11, 2019

THE BOARD MEETS AT

FRIDAY HARBOR LABORATORIES,

620 UNIVERSITY RD., FRIDAY HARBOR, WA 98250

REGULAR MEETING OF THE BOARD OF REGENTS: The Regular Meeting of the Board of

Regents will begin at 9:30 a.m.

8:40 a.m. Academic Presentation to Regents and Invited Guests*

9:30 a.m. Commons Room, Friday

Harbor Laboratories

MEETING OF THE FULL BOARD OF REGENTS: Regents Rice (Chair), Ayer, Benoliel,

Harrell, Jaech, MacPhee, Riojas, Tamaki, Zeeck, Zhou

11:30 a.m. Academic Presentation to Regents and Invited Guests*

12:30 p.m.** Dining Hall, Friday

Harbor Laboratories

MEETING OF THE FULL BOARD OF REGENTS (continued); Lunch for Regents and Invited Guests

1:30 p.m. Academic Presentation to Regents and Invited Guests*

2:20 p.m.** Commons Room, Friday

Harbor Laboratories MEETING OF THE FULL BOARD OF REGENTS (continued)

*see agenda for details.

**or later as announced at the conclusion of the preceding session.

To request disability accommodation, contact the Disability Services Office at: 206.543.6450 (voice), 206.543.6452 (TTY), 206.685.7264 (fax), or email at [email protected]. The University of Washington makes every effort to honor disability accommodation requests. Requests can be responded to most effectively if

received as far in advance of the event as possible.

mailto:[email protected]

1.2.1/204-19 4/10/19

UNIVERSITY OF WASHINGTON

BOARD OF REGENTS

Special Meeting of the Finance and Asset Management Committee

Regents Benoliel (Chair), Ayer, Harrell, Jaech, MacPhee, Rice, Riojas, Tamaki, Zeeck, Zhou

Wednesday, April 10, 2019 4:00 p.m.

142 Gerberding Hall

Consent Agenda

Approval of Minutes of Committee Meeting on March 14, 2019

COMMITTEE ACTION

1. Finance, Budget, and Capital Report Brian McCartan, Vice President, Finance Sarah N. Hall, Vice Provost, Planning & Budgeting Lou Cariello, Vice President, Facilities

INFORMATION F–1

2. Approve Workday HR/Payroll Contract Renewal Brian McCartan, Vice President, Finance Ann Anderson, Associate Vice President, Enterprise Services

ACTION F–2

3. Kincaid Hall Renovation: Stage 2 Approval Lou Cariello, Vice President, Facilities Mike McCormick, Associate Vice President, Capital Planning and Development Annette Sommer, Associate Treasurer Steve Majeski, Associate Dean, Research Administration and Infrastructure, College of Arts and Sciences

ACTION F–4

4. Parrington Hall Renovation: Stage 2 Approval Lou Cariello, Vice President, Facilities Mike McCormick, Associate Vice President, Capital Planning and Development Annette Sommer, Associate Treasurer Sandra Archibald, Dean, Evans School of Public Policy

ACTION F–3

5. Approve Internal Lending Program Distribution for Down-Payment Assistance to Faculty Members

Mark Richards, Provost and Executive Vice President Chris Malins, Associate Vice President, Treasury Aaron Hoard, Deputy Director, Regional and Community Relations

ACTION F–5

1.1.1/204-19 4/10/19

AGENDA

UNIVERSITY OF WASHINGTON BOARD OF REGENTS

Wednesday, April 10, 2019

5:30 p.m. Gerberding Hall, Room 142

(Item No.) I. CALL TO ORDER II. ROLL CALL III. CONFIRM AGENDA IV. PUBLIC COMMENT PERIOD To provide public comment at this meeting, sign up at the meeting before the start of

the meeting. V. BOARD ITEMS Long-Term Planning Assumptions: Finance, Facilities, Budget, and Enrollment

(Information only) Brian McCartan, Vice President, Finance Sarah N. Hall, Vice Provost, Planning & Budgeting Lou Cariello, Vice President, Facilities Phil Reid, Vice Provost, Academic and Student Affairs

1. Finance (McCartan, Hall) What are the primary financial risks to and opportunities for the University? 2. Facilities (Cariello, McCartan) How should the UW think strategically about long-term capital planning? 3. Budget and Enrollment (Hall, Reid) Enrollment and Tuition Demand for and Supply of Courses of Study

B–1

Panel: Student Perspectives on Long-Term Planning (Information only) Ritika Jain, President, ASUW Giuliana Conti, President, GPSS Leah Shin, President, ASUW Bothell Armen Papyan, President, ASUW Tacoma

B–2

VI. ADJOURN

1.1.1/204-19 4/11/19

AGENDA

UNIVERSITY OF WASHINGTON

BOARD OF REGENTS

April 11, 2019 9:30 a.m.

Friday Harbor Laboratories,

620 University Road Friday Harbor, Washington 98250

Prior to the meeting, the Board will attend an academic presentation. (Item No.) I. CALL TO ORDER II. ROLL CALL III. CONFIRM AGENDA IV. PUBLIC COMMENT PERIOD V. BOARD RETREAT B–3 Session 1: Access to Excellence under Constraints (Information only)

Ana Mari Cauce, University President Mark Richards, Provost and Executive Vice President

Following this session, the Board will recess for an academic presentation. The following session will include lunch for Regents and invited guests, and will be held in the Dining Hall.

Session 2: Key Strategic Issues – Curriculum (Information only) Ana Mari Cauce, University President Mark Richards, Provost and Executive Vice President

Following this session, the Board will recess for an academic presentation.

Session 3: Facilitating Change, Removing Barriers (Information only) Ana Mari Cauce, University President Mark Richards, Provost and Executive Vice President

VI. CONSENT AGENDA Approval of Minutes of the Meetings on March 13 and 14, 2019 Report of the CEO, UW Medicine

UWM

Approve Workday HR/Payroll Contract Renewal F–2

AGENDA – Board of Regents Meeting on April 11, 2019 Page 2

1.1.1/204-19 4/11/19

Parrington Hall Renovation: Stage 2 Approval

F–3

Kincaid Hall Renovation: Stage 2 Approval

F–4

Approve Internal Lending Program Distribution for Down-Payment Assistance to Faculty Members

F–5

Academic and Administrative Appointments B–4 VII. STANDING COMMITTEE

Finance and Asset Management Committee: Regent Benoliel – Chair Finance, Budget, and Capital Report (Information only) F–1

VIII. DATE FOR NEXT REGULAR MEETINGS: Wednesday, May 8, and Thursday, May 9,

2019 IX. ADJOURN

OFFICIAL MINUTES approved at the meeting of the Board on May 9, 2019.

M I N U T E S

BOARD OF REGENTS University of Washington

April 11, 2019

The Board of Regents its held its regular meeting on Thursday, April 11, 2019, beginning

at 9:40 a.m. in the Commons Room at Friday Harbor Laboratories. Notice of the meeting

was appropriately provided to the public and the media. Delay of meeting notices from

the previously published time of 9:30 a.m. were duly posted.

CALL TO ORDER

Board Chair Regent Rice called the meeting to order at 9:40 a.m.

ROLL CALL

The Secretary called the roll. Present were the Chair, Regent Rice, Regents Ayer,

Benoliel, Jaech, MacPhee, Riojas, Tamaki, Zeeck, Zhou; President Cauce, Provost

Richards.

Regent Harrell was absent.

CONFIRM AGENDA

Regent Rice announced that the agenda was confirmed, as distributed.

PUBLIC COMMENT PERIOD

Regent Rice announced that the Board would receive comments from the public. This

segment of the meeting provides an opportunity for the Board to hear directly from the

public new concerns and new perspectives on current issues.

No one signed up for public comment.

BOARD RETREAT (Agenda No. B–3) (Information only)

Session 1: Access to Excellence under Constraints

Regent Rice again thanked the planning team of Regent Ayer, Regent Harrell, Tyler

Lange, and Margaret Shepherd. Yesterday’s presentations demonstrate the excellence of

President Cauce’s executive team.

President Cauce introduced a discussion of the UW’s financial model, focusing on how it

might continue to deliver access to excellence in the future. She noted how much the

UW’s excellence had increased since she arrived in 1986. Many departments and schools

BOARD OF REGENTS Page 2

April 11, 2019

are now of global stature. The challenge is now to adequate the UW’s aspirations to its

resources through strategic prioritization.

Provost Richards said that he will soon no longer be able to plead that he is new. He

remains impressed by the UW’s flexible, thin, and agile administration and by its

positive, efficient campus culture. That culture is likely more efficient than many

corporations, and more efficient than the public may acknowledge: the UW provides a

top-notch education at a cost of $30,000 to $35,000 per student; Harvard University

likely spends upwards of $100,000 per student.

Regents then discussed the state’s responsibility to fund the UW adequately in exchange

for low tuition, how to right-size the UW’s state funding to its student body, or vice

versa, and possibilities for reaching new markets.

Provost Richards explored possibilities for funding expanded financial aid to middle-

class families presented in the attached slides. Discussion ensued of how the current

burden of tuition amounts to a per-child tax on middle-class families. It was suggested

that the conversation is more accurately, given financial assistance, not “what should

tuition be?” but “who pays tuition?”

Hearing no objections, Regent Rice recessed the meeting at 11:30 a.m. for an academic

presentation. In the interim, Regent Zeeck departed.

Session 2: Key Strategic Issues -- Curriculum

Calling the meeting to order in the Dining Hall at 12:20 p.m., Regent Rice adjourned the

meeting to the Commons Room for discussion, after the Regents had lunched.

Regent Rice called the meeting to order in the Commons Room at 12:55 p.m. President

Cauce initiated discussion. Earlier sessions focused on external financial pressures with

respect state funding and tuition levels. Internal financial pressures derive from shifting

student demands. Because science and engineering courses are more expensive, and

because the UW has as high a percentage of students majoring in those fields as a

technology school, recent shifts away from the humanities and social sciences move

instruction away from relatively low-cost, high-capacity fields to relatively expensive,

capacity-constrained fields. In addition, as students enter or transfer with considerable

Running Start, International Baccalaureate, or Advanced Placement credit, instruction

shifts further away from relatively low-cost, high-capacity introductory courses to

relatively high-cost, capacity-constrained upper-division and laboratory courses. The

challenge is deciding how to meet this demand, whether to meet this demand, and in

which ways to meet this demand. Possible responses include expanding minors that can

serve as a technical platform for humanities and social science students such as the data

science minor, changing disciplinary hiring habits so as to encourage the hire of new

faculty members better equipped to teach courses that integrate with potential new

minors, and developing alternatives to the major such as a cluster of minors in a

concentrated area. The first response is underway. The second requires faculty buy-in.

The third requires more robust advising.


April 11, 2019

Discussion ensued. There was agreement that habits of mind gained from study of the

humanities and social sciences are crucial to long-term career success and to leadership,

but that the focus should be on equipping students for a successful transition from college

to a career. It was suggested that both data science and ethics might best be taught like

writing, in courses intimately tied to subject-area problems and approaches.

Regents then discussed the balance of autonomous evolution and central, intentional

strategy in the successes of the Bothell and Tacoma campuses. When the Bothell and

Tacoma campuses were founded thirty years ago, they were intended to be transfer

campuses at which community-college students could transfer to complete a four-year

degree. They have since begun to admit first- and second-year students at the same time

as community colleges have begun to offer four-year degrees. The state ecosystem of

higher education is changing. Enrollments on the Bothell and Tacoma campuses are

approaching those of Washington’s regional comprehensive universities. In addition, if

the UW as a whole is capacity-constrained, there is capacity at the regional

comprehensives. It was suggested that how students differentiate the Bothell and Tacoma

campuses guide strategic planning.

Hearing no objections, Regent Rice recessed the meeting for a final academic

presentation at 1:40 p.m.

Session 3: Facilitating Change, Removing Barriers

Calling the meeting to order at 2:30 p.m., Regent Rice opened the last session of the day.

Regents discussed how their meetings might provide a site for discussing the President’s

strategic initiatives and how they might better act as advocates for and facilitators of

change.

In conclusion, Regent Ayer stated that the day’s discussions should be the model for

future meanings. The Board has two roles: to act as the fiduciaries of the people of

Washington and to act as a sounding board for the management it hires. Many routine

items can go on consent agendas, and detailed reports and analyses can be pre-distributed

so as to leave greater time for the discussion of key strategic issues.

It was suggested that the Board make a habit of holding an annual retreat. It was also

suggested that the format of reports to the Board be reexamined, or that reports to as

currently constituted be dispensed with. It was further suggested that, while current

meeting items focus on inputs (e.g. enrollment reports), future items might also focus

more on outputs and outcomes (e.g. alumni success or the financial impact of the UW).

Regent Rice concluded by thanking every Regent for actively participating in each

segment of the Retreat. She asked that the Board consider holding a retreat each year and

requested that Regents Benoliel and Riojas, with the aid of Tyler Lange and Margaret

Shepherd, create sample agendas reflecting the Board’s wishes.

See Attachment B–3.


April 11, 2019

CONSENT AGENDA

Regent Rice noted there were seven items for approval on the consent agenda, and asked

if any items should be removed. She called for a motion.

MOTION: Upon the recommendation of Chair and the motion made by Regent

Benoliel, seconded by a Regent, the Board voted to approve the seven

items on the consent agenda below. Regent Zhou abstained from the vote.

Minutes of the meetings on March 13 and 14, 2019

Report of the CEO, UW Medicine (Agenda No. UWM)

See Attachment UWM. Approve Workday HR/Payroll Contract Renewal (Agenda No. F–2)

It was the recommendation of the administration and the Finance and Asset Management

Committee that the Board of Regents:

1. Delegate authority to the President or her designee to execute a five-year renewal

of the Workday Human Capital Management Software-as-a-Service Solution

(a.k.a. HR/Payroll Modernization Project) in accordance with the Workday

Master Subscription Agreement for $18,035,274 plus applicable Washington

State Sales Tax; and

2. Delegate authority to the President or her designee to execute future renewals of

the HR/Payroll Modernization Project subscription, provided that these renewals

are reported to the Board with other actions under delegated authority and in

accordance with any existing or future provisions in Board of Regents

Governance, Standing Orders, Chapter 1, as presented.

See Attachment F–2.

Parrington Hall Renovation: Stage 2 Approval (Agenda No. F–3)


Committee that the Board of Regents, by granting Stage 2 approval to the Parrington Hall

Renovation project (the “Project”):

1) Approve the Project budget of $23.8 million;

2) Approve the financing plan including use of:

a) up to $2.42 million of funding from the Internal Lending Program (ILP)

for a portion of the construction costs; and


April 11, 2019

b) the Bridge Program to fund expenditures relating to unfulfilled gifts with a

maximum borrowing of $2.6 million and a term not to exceed five years

from the date of Board approval; and

3) Delegate authority to the President or her designee to execute contract

amendments for construction, as presented.


Kincaid Hall Renovation: Stage 2 Approval (Agenda No. F–4)


Committee that the Board of Regents, by granting Stage 2 Approval to the Kincaid Hall

Renovation project (the “Project”):


2) Approve use of up to $31.217 million (including financing costs) of Internal

Lending Program (ILP) funding; and

3) Delegate authority to the President or her designee to execute contract

amendments for construction, as presented.


Approve Internal Lending Program Distribution for Down-Payment Assistance to Faculty Members (Agenda No. F–5)


Committee that the Board of Regents approve an annual distribution from the Internal

Lending Program (ILP) Program Fund of $1 million per year from Fiscal Year (FY) 2020

to FY 2022 to fund a pilot Down-Payment Assistance Program to support recruitment

and retention of members of the Faculty, as presented.


Academic and Administrative Appointments (Agenda No. B–4)

It was the recommendation of the administration that the Board of Regents approve the

academic and administrative appointments, as presented.

See Attachment B–4.


April 11, 2019

STANDING COMMITTEE FINANCE AND ASSET MANAGEMENT COMMITTEE: Regent Benoliel, Chair

The following items were presented for information during the special meeting of the

Finance and Asset Management Committee.

Finance, Budget, and Capital Report (Agenda No. F–1) (Information only)

See Attachment F–1

DATE FOR NEXT REGULAR MEETINGS

Regent Rice announced that the next regular meetings of the Board will be on

Wednesday, May 8, in 142 Gerberding Hall and on Thursday, May 9, 2019, in the

Petersen Room of the Allen Library.

ADJOURNMENT

The regular meeting was adjourned at 4:18 p.m.

___________________________

Tyler Lange

Secretary of the Board of Regents

Approved at the meeting of the Board on May 9, 2018.

F–1 STANDING COMMITTEES Finance and Asset Management Committee

F–1/204-19 4/10/19

Finance, Budget, and Capital Report INFORMATION This item is being presented for information only. BACKGROUND This item is a standing monthly agenda item. No reports will be discussed this month. The Active Capital Projects Summary shows four projects that are behind schedule. Lou Cariello, Vice President, Facilities, will be presenting two of these (the Parrington and Kinkaid Renovations) to the Board for Stage 2 approval this month. The two other projects (the Northwest Hospital Childbirth Center and the Foster School expansion) require additional time in project definition to align budget and scope. The delay will not adversely impact the projects. Attachments 1. Monthly Debt Report – April 2019 2. Monthly Budget Report: April 2019 3. Active Capital Projects Summary as of March 21, 2019

100$

154

Remaining Debt Capacity (FY 2020-2023) 246

Total Debt Funding 500$

(1) 80/20 weighting between tax-exempt (assumes 5% coupons and a 10-year par call) and taxable 30-year interest rates to illustrate the University's portfolio (2) Due to commercial paper timing differences, project costs incurred in FY18 were refinanced with long-term debt in FY19

FY 2019-2023 (in millions)

Authorized FY 2019 Issuance (A)

Board Approved Projects (B)

Long-Term Credit Rating: Aaa/AA+Internal Lending Rate: 4.50%

Weighted Average Cost of Debt: 3.53%

Recent Events As of March 28th, the University's estimated borrowing cost was 3.65%(1), down 23 basis points from the beginning of March. Market

expectations for any increase in the Federal Funds rate are very low

Currently, there is no outstanding commercial paper. Through June 2019, the University estimates it will issue $25 million incommercial paper to fund Destination One and Kincaid Hall (Kincaid subject to Board approval in April)

Through December 2019, the University plans to issue an additional $50 million in commercial paper to fund Board approved projects

In early 2020, the University anticipates issuing $100 million in General Revenue Bonds to pay off commercial paper and fund project cash flows

Estimated Future Funding

A revised estimate of debt capacity was presented to the Board in May 2018. This analysis indicated $500 million in debt capacity through 2023 (roughly equal to principal expected to be repaid FY19-23)

Debt capacity estimates will be revised and presented to the Board in June 2019

Additional capacity from the Capital Assets Pool is recalculated quarterly as the value of the Invested Funds (IF) changes and principal owed to the CAP is repaid. As of 12/31/2018, the available capacity was $109 million

Short-term equipment financing has minimal impact on capacity

External Debt Portfolio (as of 2/28/2019)

ILP Debt, 76%

Non-ILP Debt, 24%

Variable, 4%

Fixed, 96%

Debt Activity (in millions)

The University has $2,375 million of external debt outstanding

The weighted average cost of debt is 3.53%

Between 2008 and 2014 outstanding debt grew by 13% annually. From 2015 through 2018, the annual growth rate slowed to 5%. Debt has not materially grown since 2017 and outstanding debt is projected to remain stable through 2023

$135 million of internal funding from the CAP is excluded from the external debt portfolio

Monthly Debt ReportApril 2019

(A) Authorized projects include HFS Phase 4a and Life Sciences(B) Estimated. Authorized projects include Destination One and NWH Childbirth Center

68 47

378

188 262

122 78

142 117

63

(67)(2)

17 11 9 8

950

2,348 2,393

($500)

$0

$500

$1,000

$1,500

$2,000

$2,500

($100)($50)

$0$50

$100$150$200$250$300$350$400$450

FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23

Out

stan

ding

Deb

t

Net

Cha

nge

Fiscal Years

Net Change Outstanding Debt

ATTACHMENT 1F-1.1/204-19 4/10/19

Page 1 of 2

Project Purpose Balance (1) Final Maturity

Life Sciences Building Instruction and Research $109.8 2049

Animal Research and Care Facilities Instruction and Research 88.5 2047

Molecular Engineering Building Instruction and Research 69.3 2043

Dempsey Hall Instruction and Research 36.1 2041

Foege Building Instruction and Research 25.7 2031

UW Bothell Phase 3 Instruction and Research 24.0 2043

William H. Gates Law School Instruction and Research 18.6 2028

AAALAC Instruction and Research 20.1 2035

Ben Hall Instruction and Research 14.7 2037

Denny Hall Instruction and Research 14.3 2046

Ocean Sciences Instruction and Research 8.8 2024

Other Instruction and Research Instruction and Research 14.9 various

Subtotal Instruction and Research $444.0

South Lake Union (Ph I, II, 3.1, & 3.2) UW Medicine 343.0 2048

UWMC Expansion UW Medicine 198.8 2046

NW Hospital UW Medicine 63.7 2033

UWMC Surgery Pavilion UW Medicine 32.5 2028

Other UW Medicine UW Medicine 18.4 various

Subtotal UW Medicine $663.0

HFS Expansion Student Life 557.0 2045

Husky Union Building Student Life 96.8 2043

IMA Building Student Life 27.2 2030

Radford Court Apartments Student Life 27.7 2032

Nordheim Court Student Life 18.2 2033

Bothell Student Center Student Life 16.3 2046

Ethnic Cultural Center Student Life 12.1 2043

UW Tacoma YMCA Student Life 11.1 2046

Other Student Life Student Life 25.4 various

Subtotal Student Life $797.2

UW Tower Academic Support 94.5 2037

HR Payroll Modernization Academic Support 31.2 2027

Cobb Building Academic Support 30.6 2045

West Campus Utility Plant Academic Support 25.6 2047

4225 Roosevelt Academic Support 13.8 2029

4545 Building Academic Support 12.7 2024

Other Academic Support Academic Support 32.1 various

Subtotal Academic Support $245.6

Husky Stadium Athletics 214.1 2045

Husky Ballpark Athletics 11.2 2045

Other Athletics Athletics 4.1 various

Subtotal Athletics $231.4

Available Proceeds Unallocated 15.9

Total University Outstanding Debt $2,397.1

(1) Will not exactly match ILP balances reflected in the Semi-Annual ILP report due to bond premiums and use of the CAP

Projects still drawing on ILP loans

% by Purpose

100%

Outstanding External Debt (in millions)

Long-Term Credit Rating: Aaa/AA+Internal Lending Rate: 4.50%

Weighted Average Cost of Capital: 3.53%

Unallocated, 0.7%

Athletics, 9.5%

Academic Support,

10%

Student Life, 33%

UW Medicine, 27.4%

Instruction and

Research, 18.6%

Monthly Debt ReportApril 2019

F-1.1/204-19 4/10/19

Page 2 of 2

OFFICE OF PLANNING & BUDGETING

MONTHLY BUDGET REPORT: April 2019

The Annual Review process is a nine-month budget development and holistic assessment effort that involves deans, faculty,

staff, and students. Through this process, the Provost and President work to identify and fund institutional and unit-specific

strategic goals and address resource constraints. This process also serves as an early warning system to identify and address

potential deficits within units (i.e. schools, colleges, campuses, and major Seattle administrative offices).

During March and April, the Provost and OPB leadership meet with each unit to discuss Annual Review submissions.

Conversations focus on strategic use of scarce resources, plans to address obstacles and improve financial health,

expectations for growth, and requests for tuition increases and central funding.

Meanwhile, OPB is working to incorporate variety of information into interactive models that will form the basis of

the University’s FY20 Operating Budget.

One of the major sources of information that will feed those models and, ultimately inform the FY20 Operating

Budget, is the state’s 2019-21 biennial operating budget. The state’s 2019-21 budget will not be finalized until April

28, 2019, or later. A brief concerning budget proposals will soon be posted at http://www.washington.edu/opb/opb-

briefs/.

Sept/Oct:Templates Developed

Nov 16: Templates

Sent

Feb 1:Responses Due

Feb/Mar: OPB Analysis

Mar/Apr: Unit Meetings w/

Provost

May/Jun:Presentation of UW Operating Budget

WE ARE HERE

ATTACHMENT 2F-1.2/204-19 4/10/19

Page 1 of 1

http://www.washington.edu/opb/opb-briefs/

http://www.washington.edu/opb/opb-briefs/

Monthly Active Capital Projects Summary

Project Name Financial Details Schedule Project Health Trending

Budget Forecast Funding Committed Target Forecast Budget Funding Schedule Safety

Seismic Improvements - Phase 1 Schacht/Aslani Architects/CLARKCONS $17.60 $17.60 $17.60 9/19 9/19

*

*

*

*

New Burke Museum Olson Kundig/Skanska $82.80 $82.80 $82.80 10/19 10/19

*

*

*

*

NCH Phase IV(b): Denny Field, Haggett & Oak Halls Kieran Timberlake/Absher $65.50 $65.50 $65.50 7/21 7/20

*

*

*

*

Population Health Facility Miller Hull Partnership/LCL $230.84 $229.71 $230.84 8/20 8/20

*

*

*

(1)

Parrington Hall Renovation INTEGRUS Architecture, PS/Absher $20.00 $23.80 $10.10 5/20 8/20

(2)

*

(3)

*

HFS Stevens Court Exterior Enclosure Rehabilitation Phase 2 RDH Building Sciences Inc./ $9.30 $9.31 $9.30 9/20 9/20

*

*

*

*

Kincaid Hall Psychology Renovation 2017-2023 Perkins+Will/Skanska $30.00 $43.22 $30.00 6/20 3/21

(4)

*

(3)*

*

Northwest Hospital Childbirth Center Zimmer Gunsul Frasca Architects/ABBOTT $25.00 $25.00 $25.00 3/21 5/21

*

*

(5)

*

Foster School Expansion LMN Architects/Hoffman $70.00 $70.00 $55.00 3/21 5/21

*

*

(5)*

*

Health Sciences Education Building Miller Hull Partnership/LCL $80.62 $80.62 $10.62 3/22 3/22

*

(6)

*

*

Totals $652.36 $647.35 $536.76

$ All Dollars in Millions

Targets Legend Budget: Budget is equal to or greater than Forecast (1% Tolerance) Meeting Target

Funding: Funding and cashflow as planned Not Meeting Target, Plan in Place

Schedule: Forecast is equal to or sooner than Target Not Meeting Target, No recovery Plan in Place Safety: Total Recordable Incident Rate of 2 or lower Notes:

(1) The project has experienced minor safety incidents and is above the safety metric goal. A recovery plan is in place to achieve the safety goal.

(2) Project budget and funding reconciled at $23.8M. Stage 2 approval is planned for April, 2019.

(3) Project definition duration and permitting schedule have been extended. Stage 2 approval with new completion date planned for April, 2019.

(4) Project budget forecast is revised based on strategies that renovate the entire Kincaid building. Stage 2 approval planned for April, 2019.

(5) Project definition phase has been extended to reconcile scope and budget. There are no expected programmatic impact.

(6) Funding request for $70M being considered by State Legislature.

ATTACHMENT 3F-1.3/204-19 4/10/19

Page 1 of 1

F–2 STANDING COMMITTEES Special Meeting of the Finance and Asset Management Committee

F–2/204-19 4/10/19

Approve Workday HR/Payroll Contract Renewal RECOMMENDED ACTION It is the recommendation of the administration and the Finance and Asset Management Committee that the Board of Regents:

1. delegate authority to the President or her designee to execute a five-year renewal of the Workday Human Capital Management Software-as-a-Service Solution (a.k.a. HR/Payroll Modernization Project) in accordance with the Workday Master Subscription Agreement for $18,035,274 plus applicable Washington State Sales Tax; and

2. delegate authority to the President or her designee to execute future

renewals of the HR/Payroll Modernization Project subscription, provided that these renewals are reported to the Board with other actions under delegated authority and in accordance with any existing or future provisions in Board of Regents Governance, Standing Orders, Chapter 1.

BACKGROUND The Workday Human Capital Management solution was selected as the result of a request for proposals conducted by UW Procurement Services in 2012, which resulted in the Master Subscription Agreement and initial purchase. This was executed on February 20, 2014 under the delegated authority approved by the Board of Regents on February 13, 2014 (https://www.washington.edu/regents/files/2014/02/2014-02-f-4.pdf). The Board approved a revised timeline for the HR/Payroll Modernization in May 2016 (https://s3-us-west-2.amazonaws.com/uw-s3-cdn/wp-content/uploads/sites/12/2018/07/23173036/2016-05-F-9.pdf) and received a status update just prior to “go-live” in June 2017 (https://s3-us-west-2.amazonaws.com/uw-s3-cdn/wp-content/uploads/sites/12/2018/07/23172252/2017-06-F-4.pdf). The HR/Payroll Modernization Project went live on July 26, 2017 and is now a major component of the UW’s Enterprise Resource and Planning system infrastructure and the system of record for all of the UW’s human resource and payroll information. The original term and value of the approved contract was five years at $16 million. The current agreement expired on February 17, 2019. Workday extended the terms of the agreement for a two-month period through April 17, 2019, to permit the Board to approve the new agreement, at a cost of $517,000.

https://www.washington.edu/regents/files/2014/02/2014-02-f-4.pdf

https://s3-us-west-2.amazonaws.com/uw-s3-cdn/wp-content/uploads/sites/12/2018/07/23173036/2016-05-F-9.pdf





STANDING COMMITTEES Special Meeting of the Finance and Asset Management Committee Approve Workday HR/Payroll Contract Renewal (continued p. 2)

F–2/204-19 4/10/19

The total renewal value of $18,035,274 plus applicable Washington State Sales Tax represents a 14-percent increase over the total value of the pre-negotiated annual renewal rate included in the original instrument executed on Feb 20, 2014. The increase is due to an increase in the total number of Full-Service Equivalent Workers (“FSE”) over the previous five-year term, including employees added as a result of the planned integration of Northwest Hospital into the University of Washington Medical Center on January 1, 2020. Execution of this renewal will allow the UW to utilize the Workday Human Capital Management solution through February 17, 2024. The Board must approve this renewal per Board of Regents Governance, Standing Orders, Chapter 1:

“The President of the University or the President's designee is authorized to act for the Board of Regents regarding the execution and administration of instruments and the general business and financial affairs of the University which occur in the usual course of business except the following: … G. The execution of any other instruments, including but not limited

to instruments related to acquisitions of goods and services, where the anticipated cost or value to the University exceeds $5 million. However, when the cost or value to the University exceeds $5 million and is less than $15 million, the President or the President's designee may approve and execute the instruments and report all such actions to the Board of Regents no less often than quarterly.”

The Board will revisit its delegations of authority at the July meeting of the Governance Committee to account for the launch and planned launch of cloud-based, software-as-a-service human resources and payroll, and financial reporting systems. In the interim, the Board delegates authority to the President or her designee to execute future renewals of the Workday HR/Payroll Contract, subject to reporting to the Board as it shall determine. FUNDING Consistent with the original funding plan for the HR/Payroll Modernization Project approved by the Board in February 2014, ongoing Workday subscription fees are funded by distributing the costs to campus organizational units across the campuses and Medical Centers on an full-time equivalent (FTE) basis.


F–3/204-19 4/10/19

Parrington Hall Renovation: Stage 2 Approval RECOMMENDED ACTION It is the recommendation of the administration and the Finance and Asset Management Committee that the Board of Regents, by granting Stage 2 approval to the Parrington Hall Renovation project (the “Project”):


2) Approve the financing plan including use of:

a) up to $2.42 million of funding from the Internal Lending Program (ILP) for a portion of the construction costs; and

b) the Bridge Program to fund expenditures relating to unfulfilled gifts with a maximum borrowing of $2.6 million and a term not to exceed five years from the date of Board approval; and

3) Delegate authority to the President or her designee to execute contract amendments for construction.

BACKGROUND In January 2018, the Board approved a Five-Year Capital Budget that includes the the Project. In April 2018, the Board granted Stage 1 approval to the Project, authorizing a pre-construction budget of $1.4 million and delegating authority to award the design-build contract. Stage 2 approval authorizes the full financial plan for the Project. Since 1998, enrollment in the Evans School of Public Policy and Governance (“Evans School”) has grown from 223 students to over 500 in 2018 with a core faculty growing from 13 to 40 during the same period. US News & World Report ranks the school fourth in the nation, second among public institutions, out of 266 schools of public affairs and policy. The Evans School has managed growth within the limitations of its existing space in Parrington Hall for the past ten years. The Project will renovate the Parrington Hall interior to meet program needs. This includes the demolition and replacement of existing general assignment classrooms with flexible classrooms that support active learning. Additionally, the Project will create more open staff and graduate student offices and provide increased collaboration areas across the building.

STANDING COMMITTEES Finance and Asset Management Committee Parrington Hall Renovation: Stage 2 Approval (continued p. 2)

F–3/204-19 4/10/19

Attachments 1. Parrington Hall Project Summary 2. Parrington Hall Project Background 3. Parrington Hall Financing Plan and Credit Analysis

Approve Project Budget and Funding Plan

Proposed Budget Proposed FundingConstruction Cost $ 18,231,211 77% State Funds $ 10,000,000 42%Consultant Services $ 2,865,725 12% Donor Funds $ 9,488,849 40%Equipment and Furniture $ 1,012,920 4% ILP Loan * $ 2,411,151 10%Project Management $ 883,632 4% UW Capital Funds $ 1,900,000 8%Other Costs $ 806,512 3%Total Project Cost $ 23,800,000 100% Total Funds $ 23,800,000 100%

UW Denny Hall Renovation: $367/GSF* Rice University Rayzor Hall $340/SF* Denny benchmark data adjusted to align with Parrington scope.

Current Targets Current TargetsNet Assignable SF 27,162 25,776 Construction Cost/GSF $311 $277 Gross SF 58,755 58,755 Project Cost / GSF $405 $340 Efficiency (NASF/GSF) 46% 44% Operating Costs/GSF* $6.99 $6.99

Objectives• Create learning environments that support collaboration, active learning, and faculty innovation• Create space that fosters student engagement, and builds academic community• Reflect the school’s commitment to sustainability and stewardship for one of the oldest, most iconic buildings on the Seattle campus• Create a building that will be useful well into the future, accommodating emerging campus standards for flexibility and density

Approve Pre-construction Budget ($1.4M)Delegated Authority to Award Design Build Contract

* excludes $2,500 issuance fee to be paid from School reserves at closing.

Project Cost Benchmarks

Metrics & Indicators

Schedule

Description

Regent Actions

The Project will renovate the Parrington Hall interior aligning the building to meet the Evans School's program needs for flexible learning and office space. This includes demolition of existing general assignment classrooms and replacing them with flexible classrooms that support active learning, creating more open staff and graduate student offices, and providing more collaboration areas across the building. This project includes upgrades to modernize systems and improve accessibility to better provide for consistent user comfort and flexibility.

Financials

*utility costs within operation budget will be less

Benchmarks are total project costs escalated to 2019

*estimated debt service on ILP is $288.5K/yr

Parrington Hall Project Summary

Stage 1 Actions: April 2018


2018

Jan March June Sept

2019

Jan March June Sept

2020

Jan March June Sept

Planning

Stage 1 Approval Move In

2017

June Sept

Design/Permitting

ConstructionStage 2 Approval

ATTACHMENT 1F-3.1/204-19 4/10/19

Page 1 of 1

Parrington Hall Project Background

Project Background

For the past decade the Evans School of Public Policy and Governance (“Evans School”) has

managed student and faculty growth within the limitations of Parrington Hall. The Parrington Hall

renovation will modernize outdated building programs and infrastructure creating flexible

classrooms to support creative learning classrooms and open offices to increase collaboration.

The April 2018 Stage 1 approval by the Board of Regents set a target budget of $20 million. The

Design Build contract was subsequently executed according to this budget. However, due to new

permit requirements which defined the Project as substantial alteration, the original budget was

altered in order to meet both program and building Code requirements.

An increased budget recommendation of $23.8 million aligns project scope with both City

permitting and Evans School program requirements. The revised budget follows the original 50-

percent funding participation by the Evans School which will be strategically allocated to achieve

balanced program and building renewal project goals. The project team continues to work with

the City of Seattle to determine the most appropriate ways to address a variety of Code

interpretation issues while maximizing funds available for academic program enhancements.

Project Schedule

This is a Design-Build (D-B) project, with Absher Construction-Integrus Architecture as the selected

D-B team. The design started in summer 2018 and construction will begin in May 2019 with

substantial completion in August 2020. City permitting negotiations have extended the project

completion date by three months.

ATTACHMENT 2F-3.2/204-19 4/10/19

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Parrington Hall Financing Plan and Credit Analysis

SCOPE OF FINANCIAL DUE DILIGENCE

Prior to the Administration’s recommending a debt-funded project for Board approval,

the Treasury Office conducts a financial due diligence. The process for due diligence is

well-defined but not exhaustive. It involves a financial risk assessment based on

conversations with the borrower, an in-depth review of provided data, and an

evaluation of the impact of a series of stress tests on the proforma. It is not intended

to replace the work of the management team, and offers no assurance of financial

performance.

Specific due diligence tasks, in partnership with the Evans School and the Office of Planning

and Budgeting, included the following:

Developed a FY2019 - FY2029 project proforma

Identified key risks

Conducted critical stress tests

Identified mitigation plans

Provided guidance on loan structuring

Financing Plan and Credit Analysis

The Parrington Hall is a $23.8 million renovation to the infrastructure and interior of

Parrington Hall (the “Project”), which will help meet the Evans School of Public Policy and

Governance’s (the “Evans School”) needs for flexible learning and office space.

In partnership with the Office of Planning and Budgeting (OPB), the Treasury Office worked

closely with the Evans School to perform a credit analysis to assess the ability of the

department to fully fund the Project through a combination of (a) State funds, (b) a

University capital contribution, (c) donor funds, and (d) an Internal Lending Program (ILP)

loan. The ILP loan will be repaid from net income of the Evans School, followed by available

reserves. Ultimately, the Provost backstops all ILP loans.

Due to the donor funding component of the Project, the University’s Bridge program will

also be used to address the timing gap between project expenditures and the receipt of gift

funds in order to accelerate project construction.

Treasury believes the Evans School has demonstrated the ability to fully fund the Project

and adequately service related debt. While the loan is relatively small in size, it is important

to note that the Evans School’s ability to service the debt is largely due to growth in fee-

based revenue and limited increases in salaries and benefits. Further, the Evans School has

thin reserves to mitigate declines in financial performance. In the event of declining

ATTACHMENT 3F-3.3/204-19 4/10/19

Page 1 of 6


financing performance, the Evans School will work with OPB to evaluate various

mitigations.

Project Scope and Funding

The Project includes the demolition and replacement of existing general assignment

classrooms with flexible spaces that support active learning, create open staff and

graduate student offices, and provide collaboration areas across the building. This Project

also includes significant structural work as well as infrastructure upgrades to modernize

systems and improve accessibility to provide for consistent user comfort and flexibility.

As shown in the following table, the total cost of the Project is $23.8 million:

Proposed Budget

Proposed Funding

Construction Cost $ 18,231,211 State Funds $ 10,000,000

Consultant Services 2,865,725 Donor Funds 9,488,849

Equipment and Furniture 1,012,920 ILP Loan* 2,411,151

Project Management 883,632 UW Capital Funds 1,900,000

Other Costs 806,512

Total Project Cost $ 23,800,000 Total Funds $ 23,800,000

* Excludes $2,500 issuance fee to be paid from School reserves at closing. Estimated debt service on the

ILP loan after completion is expected to be approximately $288,500/year

Key Assumptions

Two key assumptions behind the financial proforma are the Evans School’s forecast that (1)

fee-based programs will grow at a higher rate than in recent years and (2) salaries and

benefits will grow modestly going forward. Proforma assumptions were vetted with OPB

and align with the Evans School’s budget.

Revenues (FY19-FY29):

Tuition: An average growth rate of 2.2%/year, reflecting expected tuition increases

Self-Sustaining Units: An average growth rate of 8%/year, reflecting growth in actual

and planned programs

Fee-Based Programs: The growth rate for FY20 and FY21 is assumed to be 32% and

21% respectively due to the launch of the Global MPA fee-based program in FY20.

Thereafter the Evans School projects a growth rate of 5%/year, reflecting sustained

enrollment and tuition growth

F-3.3/204-19 4/10/19

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Expenses (FY19-FY29):

Salary Expenses: A growth rate of 2%/year

Benefit Expense: A growth rate of 2%/year

FTE Growth: 1 faculty added in FY22, 2 faculty and 2 professional staff added in FY23

Loan Provisions:

10-year loan (useful life of tenant improvements is > 10 years)

Interest is accrued and paid through construction

Estimated debt service on the 10-year loan (after construction) is expected to be

approximately $288,500/year

The Bridge loan will accrue interest at a fixed short-term market rate, and will be

paid monthly (see Bridge Financing Strategy below)

Base Case Proforma (see Appendix A)

The Base Case proforma shows that the Evans School can service the debt related to their

ILP and Bridge loans:

The relative size of the ILP loan is small compared to net income resulting in Debt

Service Coverage (DSC) well above the standard 1.25x. The minimum Debt Service

Coverage (DSC) is 6.2x in FY23 and the maximum is 155.5x in FY20

Unrestricted reserves are well above 1-year of debt service (approximately

$288,500) and are projected to grow from a minimum of $1.9 million in FY20 to a

maximum of $20.7 million in FY29

Stress Tests & Sensitivity Analysis (see Appendix B)

Three stress tests were performed. For illustrative purposes, the stress tests assume no

mitigation is taken by the Evans School or OPB.

1. Revenue Stressor: Fee-based revenues remain equal to FY19 levels (0% growth)

If fee-based revenues remain at FY19 levels, the Evans School is still

projected to generate positive cash flow in all years

Reserves would remain positive in all years

2. Expense Stressor: Salary and benefit expenses grow 5%/year and 4%/year

respectively

If salary and benefits grow at higher rates than in the Base Case proforma,

the Evans School is projected to generate negative cash flow beginning in

FY27

Reserves would remain positive in all years

F-3.3/204-19 4/10/19

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3. Combined stress case (both conditions described above)

If both conditions described above occur simultaneously, cash flow will

become negative beginning in FY23 and thereafter and reserves will be

exhausted in FY24

Risk Mitigation Plan

Potential mitigations of evaluated stressors include:

Expense reductions;

Increased philanthropy;

Curtail other capital expenditures and School initiatives; and

Increased support by Central

Bridge Financing Strategy

As of March 15, 2019, the Evans School has received $9.5 million in pledges relating to the

Project, with $6.9 million on hand. The Evans School expects to collect an additional $2.6

million through the construction of the Project. When combined with the other funding

sources, these funds are expected to cover Project expenditures through June 2020.

At that point, Project expenditures are expected to exceed available funds and the Bridge

program will be used to fund expenditures relating to unfulfilled gifts. Based on currently

uncollected pledges, the maximum Bridge loan will be set at $2.6 million. However, under

current collection projections, the needed Bridge loan is estimated to be $1.4 million.

The Bridge loan will accrue interest at a short-term market rate determined at the time of

the initial draw. The interest rate will be fixed for the life of the loan. The interest will be

paid monthly from Evans School net income. The Bridge program is not an additional

funding source for Project costs, and any outstanding Bridge loan balance will be repaid as

donor funds are received, but no later than five years after Regent approval (April 2024).

Ongoing Communication Plan

On-going requirements and communication include:

Enter into a financing agreement with Treasury

Provide periodic financial information as requested by Treasury, OPB, and/or the

Board of Regents

Contact Compliance and Risk Services to determine the appropriate types and

amounts of coverage, if any

F-3.3/204-19 4/10/19

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Parrington Hall

Appendix A: Base Case Proforma

(1) CAGR = Compound Annual Growth Rate

(2) Majority of negative cash flow was from spend down of reserves unavailable to Evans School. These were ultimately covered by Central, and therefore do not contribute to reserve balances in FY16

and FY17

Annualized

FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029

CAGR (1)

(FY16-FY18)

CAGR

(FY19-FY20)

CAGR

(FY20-FY29)

Beginning Balances -$ -$ -$ 61,316$ 222,039$ 1,890,647$ 3,824,818$ 5,972,441$ 7,582,570$ 9,354,570$ 11,281,829$ 13,374,814$ 15,642,286$ 18,093,240$

REVENUE

Tuition (ABB) 6,750,941$ 6,739,673$ 7,135,073$ 6,985,000$ 7,195,090$ 7,418,500$ 7,559,000$ 7,710,000$ 7,864,200$ 8,021,484$ 8,181,914$ 8,345,552$ 8,512,463$ 8,682,712$ 2.8% 3.0% 2.1%

Research Cost Recovery (RCR) 202,745$ 256,360$ 254,979$ 281,787$ 475,250$ 538,427$ 598,428$ 615,044$ 627,345$ 639,892$ 652,690$ 665,743$ 679,058$ 692,639$ 12.1% 68.7% 4.3%

Self-Sustaining Units 842,835$ 863,620$ 502,768$ 460,156$ 523,164$ 547,322$ 722,688$ 689,222$ 723,843$ 760,203$ 798,390$ 838,494$ 880,613$ 924,848$ -22.8% 13.7% 6.5%

Nonrestricted Annual Gifts 243,691$ 140,600$ 119,930$ 150,000$ 150,000$ 150,000$ 150,000$ 150,000$ 150,000$ 150,000$ 150,000$ 150,000$ 150,000$ 150,000$ -29.8% 0.0% 0.0%

Nonrestricted Endowment Distributions 508,487$ 471,189$ 518,248$ 681,600$ 681,600$ 681,600$ 681,600$ 681,600$ 695,232$ 709,137$ 723,320$ 737,786$ 752,542$ 767,593$ 1.0% 0.0% 1.3%

Fee-Based Revenue 1,246,335$ 1,176,621$ 1,480,310$ 1,806,000$ 2,377,000$ 2,875,031$ 3,018,783$ 3,169,722$ 3,328,208$ 3,494,619$ 3,669,349$ 3,852,817$ 4,045,458$ 4,247,731$ 9.0% 31.6% 6.7%

Total Operating Revenue 9,795,034$ 9,648,063$ 10,011,308$ 10,364,543$ 11,402,104$ 12,210,880$ 12,730,499$ 13,015,588$ 13,388,828$ 13,775,334$ 14,175,662$ 14,590,393$ 15,020,135$ 15,465,524$ 1.1% 10.0% 3.4%

EXPENSES

FTE 57 57 57 53 53 53 54 58 58 58 58 58 58 58

Salaries 6,975,318$ 7,321,583$ 6,996,345$ 6,383,089$ 6,510,751$ 6,640,966$ 6,923,785$ 7,512,261$ 7,662,506$ 7,815,756$ 7,972,071$ 8,131,513$ 8,294,143$ 8,460,026$ 0.2% 2.0% 3.0%

Benefits 1,792,731$ 1,962,143$ 1,826,065$ 1,770,628$ 1,806,041$ 1,842,162$ 1,911,931$ 2,063,582$ 2,104,854$ 2,146,951$ 2,189,890$ 2,233,688$ 2,278,362$ 2,323,929$ 0.9% 2.0% 2.8%Other Operations (e.g. supplies, computers, 1,046,367$ 1,140,945$ 1,127,582$ 2,050,103$ 1,405,902$ 1,528,431$ 1,433,180$ 1,522,126$ 1,552,959$ 1,596,889$ 1,632,237$ 1,669,240$ 1,708,196$ 1,749,377$ 3.8% -31.4% 2.5%

Total Operating Expenses 9,814,416$ 10,424,671$ 9,949,992$ 10,203,820$ 9,722,694$ 10,011,559$ 10,268,897$ 11,097,969$ 11,320,320$ 11,559,596$ 11,794,199$ 12,034,441$ 12,280,701$ 12,533,332$ 0.7% -4.7% 2.9%#DIV/0! #DIV/0!

NET OPERATING INCOME (19,382)$ (776,608)$ 61,316$ 160,723$ 1,679,410$ 2,199,321$ 2,461,602$ 1,917,619$ 2,068,508$ 2,215,738$ 2,381,463$ 2,555,952$ 2,739,434$ 2,932,192$ 944.9% 6.4%

Bridge Loan (Estimated) -$ -$ -$ -$ -$ 31,310$ 25,500$ 19,011$ 8,028$ -$ -$ -$ -$ -$ FAST Loan (Estimated) -$ -$ -$ -$ 10,803$ 233,840$ 288,479$ 288,479$ 288,479$ 288,479$ 288,479$ 288,479$ 288,479$ 288,479$

TOTAL DEBT SERVICE -$ -$ -$ -$ 10,803$ 265,150$ 313,980$ 307,490$ 296,508$ 288,479$ 288,479$ 288,479$ 288,479$ 288,479$

Subtotal: Net Operating Cash Flow (19,382)$ (776,608)$ 61,316$ 160,723$ 1,668,608$ 1,934,171$ 2,147,623$ 1,610,129$ 1,772,001$ 1,927,259$ 2,092,984$ 2,267,472$ 2,450,954$ 2,643,713$

Non-Operating Revenue/Income -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Capital Expenditures -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$

Cash Flow (2) (19,382)$ (776,608)$ 61,316$ 160,723$ 1,668,608$ 1,934,171$ 2,147,623$ 1,610,129$ 1,772,001$ 1,927,259$ 2,092,984$ 2,267,472$ 2,450,954$ 2,643,713$

Ending Balance (Reserves) 61,316$ 222,039$ 1,890,647$ 3,824,818$ 5,972,441$ 7,582,570$ 9,354,570$ 11,281,829$ 13,374,814$ 15,642,286$ 18,093,240$ 20,736,953$

155.5 8.3 7.8 6.2 7.0 7.7 8.3 8.9 9.5 10.2

Actual

Coverage (Net Operating Income / Debt Service)

Projected

F-3.3/204-19 4/10/19

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Parrington Hall

Appendix B: Stress Tests and Sensitivity Analysis

FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029

Net Operating Income 160,723$ 1,679,410$ 2,199,321$ 2,461,602$ 1,917,619$ 2,068,508$ 2,215,738$ 2,381,463$ 2,555,952$ 2,739,434$ 2,932,192$

Cash Flow 160,723$ 1,668,608$ 1,934,171$ 2,147,623$ 1,610,129$ 1,772,001$ 1,927,259$ 2,092,984$ 2,267,472$ 2,450,954$ 2,643,713$

Reserves 222,039$ 1,890,647$ 3,824,818$ 5,972,441$ 7,582,570$ 9,354,570$ 11,281,829$ 13,374,814$ 15,642,286$ 18,093,240$ 20,736,953$


Net Operating Income 160,723$ 1,108,410$ 1,130,290$ 1,248,819$ 553,897$ 546,300$ 527,120$ 518,114$ 509,135$ 499,976$ 490,462$

Cash Flow 160,723$ 1,097,608$ 865,140$ 934,840$ 246,407$ 249,793$ 238,641$ 229,635$ 220,655$ 211,497$ 201,982$

Reserves 222,039$ 1,319,647$ 2,184,787$ 3,119,627$ 3,366,034$ 3,615,826$ 3,854,467$ 4,084,101$ 4,304,757$ 4,516,254$ 4,718,236$


Net Operating Income 160,723$ 1,452,505$ 1,729,982$ 1,733,980$ 910,597$ 746,027$ 557,166$ 365,057$ 158,800$ (62,599)$ (300,148)$

Cash Flow 160,723$ 1,441,703$ 1,464,832$ 1,420,000$ 603,107$ 449,520$ 268,687$ 76,577$ (129,679)$ (351,078)$ (588,627)$

Reserves 222,039$ 1,663,742$ 3,128,574$ 4,548,574$ 5,151,681$ 5,601,201$ 5,869,888$ 5,946,465$ 5,816,786$ 5,465,708$ 4,877,080$


Net Operating Income 160,723$ 881,505$ 660,951$ 521,197$ (453,125)$ (776,181)$ (1,131,453)$ (1,498,293)$ (1,888,017)$ (2,302,057)$ (2,741,879)$

Cash Flow 160,723$ 870,703$ 395,801$ 207,217$ (760,615)$ (1,072,688)$ (1,419,932)$ (1,786,772)$ (2,176,496)$ (2,590,536)$ (3,030,358)$

Reserves 222,039$ 1,092,742$ 1,488,543$ 1,695,760$ 935,145$ (137,543)$ (1,557,475)$ (3,344,247)$ (5,520,743)$ (8,111,279)$ (11,141,637)$

Base Case Proforma

Stress Test 1 - Fee Based Revenue

Stress Test 3 - Combined Scenario

Stress Test 2 - Salaries & Benefits

F-3.3/204-19 4/10/19

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F–4/204-19 4/10/19

Kincaid Hall Renovation: Stage 2 Approval RECOMMENDED ACTION It is the recommendation of the administration and the Finance and Asset Management Committee that the Board of Regents, by granting Stage 2 Approval to the Kincaid Hall Renovation project (the “Project”):


2) Approve use of up to $31.217 million (including financing costs) of

Internal Lending Program (ILP) funding; and

3) Delegate authority to the President or her designee to execute contract amendments for construction.

BACKGROUND In January 2018, the Board approved a Five-Year Capital Budget that includes the Project. In April 2018, the Board granted Stage 1 approval to the Project, authorizing a preconstruction budget of $3 million and delegating authority to award the design-build contract. Stage 2 approval authorizes the full financial plan for the Project. Construction of the new Life Sciences Building enabled Kincaid Hall to be vacated and renovated for the Departments of Psychology and of Biology. The current proposal includes an expanded scope that will save significant money in both capital and operating over the next decade. The recommended debt funding for the Project has been included in the estimates of institutional debt capacity. The new debt service will be repaid centrally from available funds as existing debt service for other centrally funded projects expires. Attachments 1. Kincaid Hall Project Summary 2. Kincaid Hall Project Background 3. Kincaid Hall Financing Plan and Credit Analysis

Approve Full Project Budget and Funding Plan

Proposed Budget Proposed FundingConstruction Cost $ 35,400,000 82% Internal Lending (ILP), original $ 27,189,000 63%Consultant Services $ 3,500,000 8% UW Central Funds $ 5,000,000 12%Equipment and Furniture $ 1,300,000 3% Equity College Arts Sciences $ 4,000,000 9%Other Costs $ 1,300,000 3% Internal Lending (ILP), additional $ 4,028,000 9%Project Management $ 1,500,000 3% UW Central Funds FY 2018/2019 $ 3,000,000 7%Financing Costs $ 217,000 1% Other $ 0 0%Total Project Cost $ 43,217,000 100% Total Funds $ 43,217,000 100%

UW Denny Hall Renovation: $367/GSF Skanska USA 2017 Feasibility Study Cost Estimate $360/GSFUW HSC J-Wing Renovation $349/GSF*Denny/J Wing benchmark aligned with Kincaid project Scope

Current Targets Current TargetsNet Assignable SF 70,000 62,500 Construction Cost/GSF $454 $284 Gross SF 78,000 84,400 Project Cost / GSF $554 $355 Efficiency (NASF/GSF) 90% 74% Operating Costs/GSF** $6.99 $6.99

**there will be no incremental O&M increase with full building renovation

Attachment 1

Schedule

Regent Actions

Delegated Authority to Award Design Build Contract

Objectives· Kincaid Hall renovation project will extend the useful life of a central campus building.· Consolidate and provide a permanent location for Psychology Clinics dislocated by the new Population Health Facility and other capital projects, and create office and dry lab for Biology. · Reduce campus deferred maintenance backlog and improve building energy efficiency creating long term operational cost savings.· Utilize Kincaid Hall as a resource for future growth and programmatic needs for the departments of Psychology and Biology.

Approve Pre-construction Budget of $3,000,000 Funded by UW Central Funds

DescriptionThe original scope is revised to accommodate an investment strategy that better aligns with the institutional goals of the University and the College of Arts and Sciences. Building infrastructure and tenant program improvements were expanded to cover the entire Kincaid Hall. Building improvements include new mechanical systems, energy Code compliant building envelope, life safety Code compliance, and interior program improvements to floors 1-5, plus the basement. Interior program improvements will allow consolidation of satellite Psychology units within Kincaid Hall.

Financials

Metrics & Indicators

Benchmarks

Kincaid Hall Project Summary



2018

Qtr 1 Qtr 2 Qtr 3 Qtr 4

2019


2020


Planning

Stage 1 Approval

Move In

2017

Qtr 3 Qtr 4

Design/Permitting

Construction

Qtr 1 Qtr 2

2021

Stage 2 Budget and Funding Approval

ATTACHMENT 1F-4.1/204-19 4/10/19

Page 1 of 1

Kincaid Hall Project Background

Project Background

Construction of the new Life Sciences Building enabled Kincaid Hall to be vacated and renovated.

The Kincaid Hall project will modernize the space and replace aging infrastructure reducing the

deferred maintenance backlog of this central campus asset and increasing energy efficiency. A key

project goal was consolidation of the Department of Psychology that was scattered throughout

West Campus.

The April 2018 Stage 1 approval by the Board of Regents set a target budget of $30 million. The

Design Build contract was executed and the definition of the project based on the goals and

objectives began. The original $30 million partial building renovation was evaluated and compared

to investment strategies that further aligned the project objectives by increasing scope/funding to

accommodate. Financial comparisons of investment strategies led to the recommendation of a

revised project budget of $43.217 million.

The $43.217 million budget and corresponding scope accommodates a full building renovation,

which includes floors 4 and 5, and provides the best investment value. Including renovations of

floors 4 and 5 consolidates Psychology, reduces future capital and operating costs and decreases

deferred maintenance obligations in Kincaid and satellite occupied Psychology spaces.

Project Schedule

This is a Design-Build (D-B) project, with Skanska Construction-Perkins + Will Architecture as the

selected D-B team. The design started summer 2018. Construction will begin in May 2019 with

substantial completion in March 2021. Increasing the project scope has shifted the project

completion date by three months.

ATTACHMENT 2F-4.2/204-19 4/10/19

Page 1 of 1

Kincaid Hall Financial Plan and Credit Analysis

Scope of Financial Due Diligence

Prior to the Administration’s recommending a debt-funded project for Board approval,

the Treasury Office conducts a financial due diligence. The process for due diligence is

well-defined but not exhaustive. It is not intended to replace the work of the

management team, and offers no assurance of financial performance.

Since debt service of the loan will be paid centrally, specific due diligence tasks, in

partnership with Central Administration, included the following:

Confirmed and identified available funds to pay loan debt service

Confirmed the College of Arts and Sciences available balances

Provided guidance on loan structuring

Financing Plan and Credit Analysis

The $43.217 million renovation of Kincaid Hall (the “Project”) is a critical project for Central

Administration that replaces aged and outdated building infrastructure, reduces deferred

maintenance backlog, and increases space utilization. Debt service will be paid centrally

from available funds as existing debt service for other centrally funded projects expire.

The Office of Planning and Budgeting worked closely with the Treasury Office to perform a

financial and credit analysis to assess the financial viability of the Project:

Project scope included verifying debt service schedules for Physics Astronomy and

the K-Wing with Financial Accounting, and confirming that Central Administration

currently pays debt service on those facilities

Central Administration confirmed that they currently make debt service payments

on those facilities, with the caveat that $600,000/year in DOF budget authority will

be returned to the School of Medicine (beginning in FY19) and is not available to pay

Project debt service

$8 million of Project expenditures will be funded through an equity contribution from

Central Administration. $4 million of Project expenditures will be funded through an equity

contribution from the College of Arts and Sciences. The equity will be spent first. Remaining

funding will come from a $31.217 million loan through the University’s Internal Lending

Program (ILP).

The Treasury office believes financial risk with this Project is low as measured by the

reduction in aggregate debt service paid by Central Administration, the level of reserves

available to pay future costs, and the relatively small project cost in the scope of Central

Administration. It is noteworthy that the $4 million equity contribution from the College of

Arts and Sciences reduces reserves available to mitigate financial stress for the Life

Sciences Building loan, which is paid from Arts and Sciences revenue (primarily tuition

ATTACHMENT 3F-4.3/204-19 4/10/19

Page 1 of 3


operating fee). The College of Arts and Sciences is currently forecast to experience annual

deficits beginning in FY21, given conservative revenue and modest expense growth

assumptions. After accounting for the equity payment, FY19 College of Arts and Sciences

ending reserve balance (GOF) is projected to be $29.3 million (or roughly 14% of FY19 GOF

Permanent Budget Authority). Available reserve balances for the College of Arts and

Sciences are projected by the Department to be sufficient to fund these annual deficits.

Loan Details

Key loan provisions include:

Interest is accrued and paid during construction (substantial completion expected in

March 2021)

The loan will be amortized over 25 years after construction is complete (useful life of

the asset is greater than 30 years, includes rebuild of mechanical, electric and

plumbing systems, seismic and structural work, new roof)

Estimated debt service on the 25 year loan is expected to be $2.1 million/year

beginning in FY22

Base Case Proforma

If the Project is approved, the FY19 debt service payment will be $4.1 million lower than the

current FY18 debt service payment (on an aggregated basis). This is due to the reduction in

current debt service payments related to the Physics Astronomy and K-Wing loans.

Current Payments

FY18 FY19 FY20 FY21 FY22 FY23

Physics Astro Debt

Service $2,859,590 $237,354 $63,929 $65,813 $63,250 $5,250

K-Wing Debt Service 2,300,979 192,500 - - - -

Current Debt Service $5,160,569 $429,854 $63,929 $65,813 $63,250 $5,250

Future Payments

FY18 FY19 FY20 FY21 FY22 FY23

Physics Astronomy Debt

Service $2,859,590 $237,354 $63,929 $65,813 $63,250 $5,250

K-Wing Debt Service 2,300,979 192,500 - - - -

DOF Budget Authority

to Department (1) 600,000 600,000 600,000 600,000 600,000

New Debt Service

(25-year) (2) 0 936,510 1,574,116 2,082,171 2,082,171

Future Debt Service $5,160,569 $1,029,854 $1,600,439 $2,239,929 $2,745,421 $2,687,421

Amount Future

Payment is Below FY18

Payment - ($4,130,715) ($3,560,130) ($2,920,640) ($2,415,148) ($2,473,148)

F-4.3/204-19 4/10/19

Page 2 of 3


(1) Reflects permanent transfer of DOF budget authority to School of Medicine (2) Reflects estimated construction draw schedule and assumes equity is spent first

ILP Loan Requirements

N/A – Centrally funded project

Key Risks


Stress Tests & Sensitivity Analysis


Risk Mitigation Plan


Ongoing Communication Plan


F-4.3/204-19 4/10/19

Page 3 of 3


F–5/204-19 4/10/19

Approve Internal Lending Program Distribution for Down-Payment Assistance to Faculty Members RECOMMENDED ACTION It is the recommendation of the Finance and Asset Management Committee that the Board of Regents approve an annual distribution from the Internal Lending Program (ILP) Program Fund of $1 million per year from Fiscal Year (FY) 2020 to FY 2022 to fund a pilot Down-Payment Assistance Program (Program) to support recruitment and retention of members of the Faculty.

BACKGROUND

Rising housing prices in Seattle make the recruitment and retention of faculty members more difficult. Many peer institutions the University competes with for these faculty offer housing assistance programs or are located in more affordable housing markets. The proposed Program will make the University more competitive with offers to priority faculty hires. Aside from the economic benefits of housing assistance, down payment assistance programs tend to “ground” faculty to the institution and the area and can reduce faculty turnover. This Program is part of a broader effort to improve housing affordability for all employees at the University. Since 1998, the University has participated in the Hometown Home Loan Program that offers employees a series of discounts on mortgages and access to special programs. More than 3,340 employees have taken part in this program. More recently, the University built a workforce housing project in partnership with Children’s Hospital that included 37 affordable units for those making 65 percent to 85 percent of area median income. The University is currently in a partnership with Seattle Housing Authority to build 150 units for those making 60 percent of area median income. The University also committed to building more affordable housing as part of the Campus Master Plan. THE PROGRAM The Program will be available to all faculty upon recommendation from the Provost and the Vice Provost for Academic Personnel. It will provide a cost-effective alternative to a traditional thirty-year mortgage structure with a 90-percent first mortgage and a 10-percent down payment. The Program will allow for up to 10 percent of the price of a home to be borrowed at a below-market interest rate with deferred monthly payments. Based on the current median price

STANDING COMMITTEES Finance and Asset Management Committee Approve Internal Lending Program Distribution for Down-Payment Assistance to Faculty Members (continued p. 2)

F–5/204-19 4/10/19

of a house in Seattle, the Program can save a faculty member nearly $600 per month on his or her mortgage payment. The initial interest rate on the Program will be 3.5 percent, as compared to current market rates for second mortgages of 6 percent. Additionally, the payment of interest on the Program can be deferred for up to seven years. By utilizing the Program, the borrower can also avoid costly Private Mortgage Insurance (PMI). Below is an example of potential savings from using the Program assuming a 10 percent down payment and a $675,000 purchase price:

Years 1-7

Conventional Mortgage (90%/10%)

With UW Down Payment Assistance (80%/10%/10%)

Monthly Savings

1st Mortgage Payment 3,261 2,899 362 Second Mortgage Payment n/a deferred n/a Private Mortgage Insurance 253 0 253 Total Years 1-7 (per month) 3,514 2,899 615 Years 8-30 1st Mortgage Payment 3,261 2,899 362 2nd Mortgage Payment 0 444 (444) Total Years 8-30 (per month) 3,261 3,343 (81) Total Payments (30 years) 1,195,291 1,166,050 29,242

The loan will be payable in full at separation from the University or sale or refinance of the purchased property. If the loan remains outstanding after seven years, the borrowed amount and the accrued interest will amortize for 23 years. The University is partnering with the Washington State Housing Finance Commission (Commission) to service the loans and report on the Program. The Commission is an agency of the State of Washington that is dedicated to increasing housing access and affordability and to expanding the availability of quality community services for the people of Washington. The Commission has extensive experience with managing down payment assistance programs.

STANDING COMMITTEES Finance and Asset Management Committee Approve Internal Lending Program Distribution for Down-Payment Assistance to Faculty Members (continued p. 3)

F–5/204-19 4/10/19

Withdrawals from the ILP Program Fund for this purpose requires the approval of the Board of Regents pursuant to Section 4(f) of the University’s Debt Management Policy. A list of Program Fund withdrawals will be included in the annual Program report to the Board. FUNDING PLAN The Program will initially be funded with ILP reserves in the amount of $1 million per year for FY 2020-2022. These funds will be available each June, and will be used to originate Program loans. As loans are repaid, available funds will be used to make future loans. To create a program that funds ten loans a year in perpetuity, approximately $7 million will need to be contributed, or $1 million per year for seven years. In the seventh year, enough loans will be repaid to allow the program to become self-sustaining. Funding has not yet been identified beyond the first three years. The Treasury Office has evaluated the impact of the initial contribution of $1 million per year for three years and believe that making this investment will not have a material effect on ILP rate stabilization. However, any distributions from the ILP increase the likelihood that the ILP rate will need to be increased for internal borrowers. APPROVALS This item has been reviewed and approved by the Provost, the Vice President for Finance, and the University Treasurer. Attachment Faculty Down Payment Assistance Program

FACULTY DOWN PAYMENT ASSISTANCE PROGRAM

BOARD OF REGENTS

FINANCE AND ASSET MANAGEMENT COMMITTEE

April 10, 2019

ATTACHMENTF-5.1/204-19 4/10/19

Page 1 of 9

Why a Down Payment Assistance (DPA) Program?

Cost of housing is making recruitment of faculty more difficult• Seattle remains in the top-10 most expensive metro areas for housing• Seattle area vs. peer institution areas (average):

Despite existing housing assistance programs, UW’s portfolio of support is lagging other institutions in higher priced areas

DPA Program adds to the portfolio of available options to support housing needs for UW faculty and can “ground” faculty to the UW and the Seattle area

Down payment assistance can provide a meaningful benefit with a relatively small investment

Ho

usi

ng

–Z

illo

w (

20

18

)

$0

$200,000

$400,000

$600,000

$800,000

Median Home Value

$0

$1,000

$2,000

$3,000

Median Rent Price

F-5.1/204-19 4/10/19

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What are UW’s Existing Housing Assistance Programs?

Hometown Home Loan Program offers reduced mortgage costs, assistance programs and education for all UW employees

Partnership with Seattle Children’s to build affordable workforce housing in the U District

Visiting Faculty Office connects people with housing available for temporary use

Whole U promotes affordable housing resources to employees

Partnership with Seattle Housing Authority to build 150 affordable units at 4201 Roosevelt Way

UW commitment to build 300 additional affordable units as part of Seattle Campus Master Plan

F-5.1/204-19 4/10/19

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What Housing Programs do Other Schools Have?

Institution Name

Faculty Housing Inventory?

First MortgageOrigination?

DownPayment Assistance?

Grant or Ongoing Subsidy?

UC Berkeley

UCLA

Stanford

U British Columbia

Columbia

USC

Harvard

Ohio State

F-5.1/204-19 4/10/19

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How will UW’s DPA Program work?

UW’S DPA PROGRAM WILL OFFER LOANS TO FACULTY WITH FAVORABLE TERMS

AT BELOW MARKET INTEREST RATES

The interest rate is initially set at 3.5%

DPA loans are up to 10% of the home price with a maximum loan amount of $90,000

Payments are deferred for 7 years

Loans are payable upon sale/refinance of the house or separation from the UW

If the loan remains outstanding by year 7, the balance plus interest is payable over the next 23 years (maximum term = 30 years)

LOAN AVAILABILITY AND ALLOCATION

10 faculty loans per year

Participants are determined by the Provost’s Office in consultation with Deans and Chairs

Initially, the Program will focus on new assistant and associate faculty hires

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How Much Could the Program Benefit Faculty?

Over the first seven years, a participant could save about $600 per month on their mortgage payment or about $29,000 over the life of the loan when compared to a traditional 90% first mortgage with a 10% down payment and mortgage insurance

Assumptions:• $675,000 home purchase price (current Seattle median)• 30 year overall term• 5% interest rate on 1st mortgage• 3.5% interest rate on UW Down Payment Assistance Program (interest deferred for 7

years, then amortizing for the remaining term of 23 years)

Years 1-7

Conventional Mortgage (90%/10%)

With UW Down Payment

Assistance (80%/10%/10%)

Monthly Savings

1st Mortgage Payment 3,261 2,899 362

Second Mortgage Payment n/a Deferred n/a

Private Mortgage Insurance 253 0 253

Total Years 1-7 (per month) 3,514 2,899 615

Years 8-30

1st Mortgage Payment 3,261 2,899 362

2nd Mortgage Payment 0 444 (444)

Total Years 8-30 (per month) 3,261 3,343 (81)

Total Payments (30 years) 1,195,291 1,166,050 29,242

F-5.1/204-19 4/10/19

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Partnership with Washington State Housing Finance Commission

The Washington State Housing Finance Commission (Commission)• Acts as a bridge between lenders and the University

• Externally administers the program on behalf of the UW

• UW still responsible for managing relationship with the Commission, including operations, Program accounting and Board and UW-wide reporting

The Commission is a State agency with deep experience and expertise in affordable housing lending programs

UW will leverage the Commission’s existing down payment assistance program structure – Community Second Mortgages• Avoids need to get regulatory approval and manage new lending program

Access for UW employees to other Commission programs:• Homebuyer education

• House Key First Loans (Below-market rates)

• Home Advantage Down Payment Assistance (up to 4%)

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How is the Program Funded?

The DPA Program will be initially funded with Internal Lending Program (ILP) reserves

• ILP will contribute $1 million per year for three years

• No fund source has been identified beyond the third year

• The funds identified meet constitutional limitations on lending and the use of funds

Providing 10 loans per year requires an annual contribution of $1 million for about 7 years before the Program becomes self-sustaining

• Actual lending and repayment patterns will determine when the Program is self-sufficient

If less than 10 loans are made in any year, unused Program capacity will be available in the subsequent year

All repaid interest and principal will be used to fund new loans

F-5.1/204-19 4/10/19

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Ongoing Program Management

Continued strong partnership between the Provost’s Office, Treasury and Financial Accounting will assure a successful launch

If action is approved by the Board, expect to make first loans by summer 2019

Hiring season reporting will be made to the Regents by the Provost Office• Number of new faculty assisted

• Benefiting departments

• Recruiting impact

Financial status of DPA Program will be shared with Board as part of annual Debt Management Report each spring and will include:• Program Balance

• New loans made

• Loans repaid

• Changes in interest rates for new loans

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B–1 BOARD OF REGENTS MEETING

B–1/204-19 4/10/19

Long-Term Planning Assumptions: Finance, Facilities, Budget and Enrollment INFORMATION This item is for information only BACKGROUND To prepare the Board for tomorrow’s retreat discussions, the Board will hear presentations from Brian McCartan, Vice President, Finance; Lou Cariello, Vice President, Facilites; Sarah Norris Hall, Vice Provost, Planning & Budgeting; and Phil Reid, Vice Provost, Academic and Student Affairs, on long-term planning assumptions in the areas of finance, facilities, budget, and enrollment. Attachments

1. April 2019 Financial Forecast and Fiscal Year 2020 Budget 2. Deferred Maintenance: Effectively Planning for Life-Cycle Costs 3. Access and Excellence: Enrollment and Budget

APRIL 2019 FINANCIAL FORECAST & FY20 BUDGET

BOARD OF REGENTS

APRIL 10, 2019

ATTACHMENT 1B-1.1/204-19 4/10/19

Page 1 of 10

FORECAST METHODOLOGY

> Covers entire UW, including UW Medicine (UWM)

> FY 2018 Actuals (audited), FY 2019 Estimates

> FY20-24 Forecast

– Based on inputs from across UW, Washington State Economic & Revenue Forecast Council, Congressional Budget Office (CBO) and UW Finance estimates

– UWM financial forecast from Dec 2017 (FIT Plan)

KEY ELEMENTS OF FORECAST

> Slowing economic growth through 2021; slow but steady growth thereafter. No recession included in forecast.

> Continued rising Washington population strong enrollment demand

> Slow student growth limited headcount growth

> Tuition growth consistent with current approach

> Slowing endowment (CEF) return

> UWM

– Assumes UWM stays on track with FIT plan goals through FY24

– Rising share of UW overall enterprise

> Slow growth of research funding declining share of UW enterprise

WHAT FORECAST IS NOT……

APRIL 2019 FINANCIAL FORECAST B-1.1/204-19 4/10/19

Page 2 of 10

APRIL 2019 FINANCIAL FORECAST> Operating deficits widened FY13-17 due to rising salary growth, slowing federal research and deteriorating UWM

financial position

> Deficit narrowed FY18 with heightened expenditure control & progress on UWM FIT Plan

> Deficit is forecast to widen after FY21 as rising compensation costs and deferred maintenance costs outpace growth in key revenue sources (tuition, research) and UWM FIT plan gains plateau.

> Changes in Net Assets remains positive due to gifts and endowment (CEF) returns.

Actual Forecast

B-1.1/204-19 4/10/19

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RECESSION SCENARIO

(600)

(400)

(200)

-

200

400

600

FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24

April 2019 Recession Scenario Forecast$

M

Adjusted Net Income= Operating Revenue + State Approp. - Operating ExpensesChange in Net Assets = Change in All Revenues - All Expenses

Change in Net Assets

Adjusted Net Operating Income

B-1.1/204-19 4/10/19

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KEY FINANCIAL DRIVERS

Does not include gifts, endowment return

UW Salaries47%

Benefits16%

Purchased services14%

Supplies and materials

10%

Depreciation7%

Other6%

2018 OPERATING EXPENDITURES: $5.9 BILLION

UW

B-1.1/204-19 4/10/19

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KEY RISKS & OPPORTUNITIES

OPPORTUNITIES

> Long-term growth in endowment $$

> Increased capital capacity through public private partnerships/innovative finance $

> Improved funding state partnership

> Higher research growth $

> Lower long-term capital spend through life cycle maintenance approach $

> Alternative tuition models $

RISKSInstitutional

> Talent management– Need to attract/retain top talent– Risks of salary & benefit growth

outpacing revenue growth $$$$

> Deferred maintenance backlog $$

Academy/Teaching> Limits on tuition growth $$> Declining state share since 2008 $

UWM> Market risks $$> Sufficient access to capital $$

Research> Limited federal research revenue

growth $> Ability to maintain market share $

$ (low), $$ (medium), $$$(high) financial impact

B-1.1/204-19 4/10/19

Page 6 of 10

> As a diverse, public, state research institution with academic medical center, UW will always face budgetary challenges and tough choices, which will require vigilant, tight fiscal management

> Core institutional strength provides the foundation for financial sustainability

– Academy: Top tier institution in high growth region

– Medicine: Highly rated comprehensive medical system with aging population and rising share of income dedicated to health care

– Research: Long standing strong market share of federal grants; strengths in key areas (engineering, computer science, life sciences, health care)

– Culture: diverse, entrepreneurial, dynamic institution

> Attention to, and development of, underlying institutional strengths can allow UW to continue to evolve to meet its dynamic mission and maintain financial sustainability

KEY FORECAST TAKEAWAYS

The University’s “…main challenge in the future is identical to its main challenge during at least my entire time here, namely, securing the necessary financial support so it can retain and whenever possible enhance its high quality as a research university…” President Gerberding 1994

B-1.1/204-19 4/10/19

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> Improved performance in core operating, and self-sustaining operations

– As of February 2019 month end, self-sustaining operations reflect a FYTD margin of 2.81%, which is slightly positive to February 2018’s FYTD margin of 2.03%

– Core expenditures as a percent of budget are tracking to historical trends, despite revenues trending slightly higher than budgeted+

> Unit budget meetings will conclude April 16, and operating budget targets, based on proposed rates and fees, enrollment targets, and major areas of investment will be presented in May

FY20 BUDGET B-1.1/204-19 4/10/19

Page 8 of 10

FY20 Budget

> Consistent themes of budget meetings include concerns with regard to salary and benefit growth without sufficient new revenues

> These risks are evident in enterprise forecast, and require careful alignment of budget planning

> Primary levers to accomplish this include: – Containing net new FTE growth, tying recruitments to key strategies

within each of the operating units

– Mitigating growth of salaries, contingent upon revenues and budget authority from the state of Washington

– Intentional enrollment, tuition and financial aid strategies

B-1.1/204-19 4/10/19

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B-1.1/204-19 4/10/19

Page 10 of 10

Board of RegentsApril 10, 2019

Deferred MaintenanceEffectively planning for life cycle costs

ATTACHMENT 2B-1.2/204-19 4/10/19

Page 1 of 11

2

I. Reviewing the Challenge

II. Proactive Plan to Address It

III. Utilities Infrastructure

AGENDA

8-inch diametermain water supply pipeMagnuson Health Sciences (2019)

B-1.2/204-19 4/10/19

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langet2

Rectangle

Deferred Maintenance Across UWSeattle Campus Education & General (E&G) - $1.7 Billion

3

Education & General Auxiliaries Bothell & Tacoma

Seattle Campus $1.7B

Housing - $200M UW Bothell - $80M

Utilities* - TBD ICA - $45 MUW Tacoma* - TBD

Medicine* - TBD

* Estimates not yet available

B-1.2/204-19 4/10/19

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langet2

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$5

$-

$1

$2

$3

$4

$5

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2011 2015 2019 2023 2027 2031 2035 2039 2043 2047

Bill

ion

s

Deferred Maintenance BacklogSeattle Campus Education and General

4

$5.4 billionProjected backlog in 2047

Manageable risk = $80 per SF

$2.5 billion

$1.7 billionCurrent deferred

maintenance backlog

B-1.2/204-19 4/10/19

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Total Spending on FacilitiesUW Facilities reorganization optimizes life-cycle decision making

5

• Excludes auxiliaries (e.g. UW Medical Center, HFS, Transportation, and ICA), affiliated units (e.g. Northwest Hospital and Valley Medical Center), and Tacoma and Bothell campuses

• Minimum Target = Capital and PM spend that will keep backlog at “manageable risk” level

Asset ReinvestmentMajor Capital

Annual StewardshipLife Cycle Renewal

Daily ServiceReactive

Utilities + RentEnergy, Water, OPEX

Capital Funds~$300M / yr

Operating Funds~$100M / yr

Fixed Costs~$150M / yr

• Utilities Infrastructure• Modernization• Deferred Maintenance

2018 E&G Actual = $22MMinimum Target = $90MPeer Average = $66M

• Corrective Maintenance• Customer Directed

• Custodial• Grounds

2018 Actual = $53MPeer Average = $56M

• Electricity• Fuel• Water/Sewer• Lease space

2018 Utilities = $39MPeer Average = $46MNo peer data on leases

Minor CapitalPreservationProg. Renewal

2018 E&G Actual = $7M• Target Renewal = $30M• Target PM = $6.5MTotal Min. Target = $36.5MPeer Average = $22M

Preventive Maintenance

B-1.2/204-19 4/10/19

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Total Capital InvestmentMost of capital allocation has been for new space

6

$-

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

$300,000,000

$350,000,000

$400,000,000

$450,000,000

$500,000,000

$550,000,000

2013 2014 2015 2016 2017 2018 2019

Annual Stewardship Operating Budget - PM Asset Reinvestment Capital for New Space/IT Target Reinvestment

Increasing DM Backlog

Annual Reinvestment Target

Increasing DM Backlog

B-1.2/204-19 4/10/19

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UW Compared to Research Peers (2018)

Peer Research Institutions surveyed: Carnegie Mellon, Georgia Tech, Johns Hopkins, MIT, Northwestern, Penn State, University of Florida, University of Georgia, University of Illinois, University of Minnesota

B-1.2/204-19 4/10/19

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8

$0

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$450,000,000

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2013 2014 2015 2016 2017 2018 2019

State UW Equity Debt Donor

Capital FundingFund sources are varied across the portfolio

B-1.2/204-19 4/10/19

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Deferred Maintenance StrategyMajor initiatives for reducing backlog

9

1. Conduct campus-wide Facility Condition Assessment

2. Increase capital reinvestment

– allocate 50% of major capital available to replace/renovate existing space

3. Fully fund annual stewardship for all new buildings

4. Fully fund preventive maintenance

5. Consolidate and optimize utilization of office & support space

6. Reinvest energy savings

7. Other strategies

B-1.2/204-19 4/10/19

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2011 2015 2019 2023 2027 2031 2035 2039 2043 2047

Bill

ion

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Flattening the CurveStrategic approach could reduce backlog to manageable risk in 20 years

10

$5.4 billionprojected backlog in 2047

manageable risk

50% to Replace/Renovate

Space Utilization

Fully Fund O&M for New

Fully Fund PM

$2.1 billion“under manageable risk line”

B-1.2/204-19 4/10/19

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Utilities InfrastructurePreparing for the next 100 years

11

Central steam heating plant• Fossil-fueled system in operation since 1921

• ~$400M required to convert to clean energy (hot water), but state no longer funds major utility infrastructure projects.

• ~$50M in interim capital funding required to maintain reliability of current plant

Electrical infrastructure • Near capacity for U District and UW

• UW & Seattle City Light exploring joint solutions

• SCL may be able to assume significant portion of capital costs within rate design

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langet2

Rectangle

ACCESS AND EXCELLENCE: ENROLLMENT & BUDGET

Sarah Norris Hall and Phil Reid April 2019

ATTACHMENT 3B-1.3/204-19 4/10/19

Page 1 of 20

SNAPSHOT: ENROLLMENT AND TUITION

Fall 2018 Total Enrollment (Headcount)

SEATTLE BOTHELL TACOMA TOTAL

UNDERGRAD 32,594 5,411 4,573 42,578

GRAD/PROF 15,305 578 802 16,685

TOTAL 47,899 5,989 5,375 59,263

• Tuition comprises 64 percent of the UW’s general operating fund

• As projected, undergraduates generate 68 percent of total gross operating fee revenue ($587M out of$859M) and 75 percent of total net operating fee revenue ($495M out of $658M)

• Of undergraduate net operating fee revenue, more than half is derived from nonresident undergraduates

As published in the FY19 operating budget:

0m

250m

500m

750m

FY12 FY13 FY14 FY15 FY16 FY17 FY18 ProjectedFY19

Grad/Prof Nonresident

Grad/Prof Resident

Undergraduate Nonresident

Undergraduate Resident

Projected Tuition by Student Category, All Campuses, Net of Aid – FY19

Note: Tuition figures presented are representative of the operating fee; thus exclusive of building fee

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PRESENTATION ROADMAP

I. Application

II. EnrollmentIII. Outcomes

IV. Looking Ahead: Risks and Opportunities

II. Enrollment

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• Continued increase in number of applications across all applicant categories

• Watching slight decline of grad/prof applications

FRESHMAN APPLICATIONS: 2014 to PRESENTB-1.3/204-19

4/10/19 Page 4 of 20

APPLICANT PROGRAM OF INTERESTSchool Program 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Built Environments 2.44% 2.00% 1.77% 1.43% 1.36% 1.16% 1.17% 1.17% 1.20% 1.09%

College of Arts and Sciences

Arts (A&S) 4.52% 4.10% 3.68% 3.00% 2.97% 3.03% 2.91% 2.70% 2.72% 2.45%

Health Sciences (A&S) 6.08% 5.30% 5.37% 4.87% 3.83% 3.31% 3.32% 3.23% 3.29% 4.48%

Humanities (A&S) 5.03% 4.60% 4.05% 3.21% 2.98% 2.86% 2.51% 2.43% 2.73% 2.13%

Natural Sciences (A&S) 22.18% 21.48% 22.31% 23.23% 24.52% 24.42% 23.82% 24.59% 25.19% 22.20%

Social Sciences (A&S) 18.19% 15.60% 14.79% 14.87% 14.35% 13.51% 13.32% 13.47% 13.62% 11.18%

College of Education 0.77% 0.82% 0.77% 0.78% 0.80% 0.76% 0.78% 0.78% 0.81% 1.05%

College of EngineeringComputer Science 2.41% 2.68% 2.72% 3.68% 4.82% 6.63% 7.97% 9.36% 9.85% 9.34%

Engineering 13.27% 14.42% 14.46% 15.40% 15.92% 16.52% 16.12% 15.42% 14.81% 15.24%

College of the Environment 2.73% 2.30% 2.66% 2.47% 2.37% 2.34% 2.49% 2.51% 2.70% 1.88%

Foster Business School 14.05% 13.84% 13.86% 14.03% 13.33% 13.05% 13.05% 11.88% 11.52% 10.73%

School of Medicine 1.22% 1.18% 1.74% 1.23% 1.32% 1.10% 0.93% 1.06% 1.19% 0.43%

School of Nursing 2.60% 2.87% 2.97% 3.07% 3.06% 2.74% 2.87% 2.70% 2.99% 2.69%

School of Public Health 0.18% 0.18% 0.13% 0.13% 0.57% 0.75% 0.87% 0.98% 0.96% 0.75%

School of Social Work 0.19% 0.23% 0.22% 0.20% 0.20% 0.20% 0.22% 0.22% 0.19% 0.16%

The Information School 0.05% 0.09% 0.09% 0.08% 0.08% 0.10% 0.16% 0.18% 0.27% 0.28%

Undecided 4.07% 8.29% 8.40% 8.32% 7.51% 7.52% 7.47% 7.31% 5.95% 13.91%

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• WA resident enrollments are relatively stable.

• Significant “bump” in domestic non-resident enrollment.

FIRST YEAR ENROLLMENT: 2014 to PRESENTB-1.3/204-19

4/10/19 Page 6 of 20

ENROLLMENT TRENDS FOR SELECT UNDERGRADUATE MAJORS

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

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ANNUAL % CHANGE OF UNDERGRAD. MAJOR ENROLLMENTS (SELECT MAJORS)

-20%

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

2010 2011 2012 2013 2014 2015 2016 2017 2018

Arts Humanities Natural Sciences Social Sciences Computer Science Engineering

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DEMAND FOR HIGHER EDUCATION

• Changes in college-going populations will vary by region and institution type

• Northeast and Midwest will feel decreases most acutely

• Will be spared from ‘birth dearth’ to some extent, the PNW may face increased competition from institutions in these regions

• As such, grow cautiously:

• Focus on WA residents

• Closely attend to interplay between tuition, enrollment and aid policies

• Ensure that our students have access to excellence

United States College-Going Forecast (Grawe, D.)

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RESIDENT UNDERGRADUATE TUITION AMONG TOP PUBLICS

$18,454

$17,641

$16,004

$15,730

$15,262

$14,974

$14,970

$14,402

$14,391

$14,184

$13,961

$13,678

$13,201

$12,424

$11,830

$11,207

$10,968

$10,726

$10,606

$10,595

$10,556

$9,992

$8,987

$6,381

Penn State

U Virgina

U Illinois-Urbana-Champaign

UConn

U Michigan-Ann Arbor

Rutgers U-New Brunswick

Clemson

UC-Davis

UC-Santa Barbara

UC-Berkeley

UCSD

UC-Irvine

UCLA

Georgia Tech

U Georgia

UW-Seattle

Texas A&M

Ohio State

U Texas-Austin

U Maryland-College Park

U Wisconsin-Madison

Purdue

UNC-Chapel Hill

U Florida

Source: 2018-19 AAUDE, U. of Virginia system survey, and institution websitesPeer Set: U.S. News 2019 Top 25 Publics

Median: $13,678

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NON-RESIDENT UNDERGRADUATE TUITION AMONG TOP PUBLICS


$49,350

$49,020

$43,394

$43,383

$43,176

$42,953

$42,670

$42,193

$38,098

$37,480

$36,805

$36,724

$36,636

$36,588

$35,216

$35,170

$34,858

$33,020

$30,404

$32,574

$31,282

$30,742

$28,794

$28,658


U Virginia

UC-Davis

UC-Santa Barbara

UC-Berkeley

UC-San Diego

UC-Irvine

UCLA

U Conn

U Texas-Austin

U Wisconsin-Madison

Clemson

Texas A&M

UW

U Maryland

UNC-Chapel Hill

Penn State-University Park

Georgia Institute of Technology

U Georgia


Rutgers-State U of New Jersey

The Ohio State U

Purdue U

U Florida

Median: $36,724

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RESIDENT UNDERGRADUATE TUITION OVER TIME

$7,125

$8,122

$9,746

$11,305 $11,305 $11,305$10,768

$9,694 $9,909 $10,127

+14.0%

+20.0%

+16.0% 0% 0%

-5%

-10%

+2.2%+2.2%

$k

$2k

$4k

$6k

$8k

$10k

$12k

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

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NON-RESIDENT UNDERGRADUATE TUITION OVER TIME

$23,800 $24,750$27,230

$28,860$30,879

$32,424 $33,072 $33,732 $34,473$35,508

+4.0%

+10.0%

+6.0%

+7.0%+5.0%

+2.0%+2.0%

+2.2%+3.0%

$k

$5k

$10k

$15k

$20k

$25k

$30k

$35k

$40k

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

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RISKS/OPPORTUNITIES OPPORTUNITIES

Tri-campus enrollment shifts and changes

Intentional work admitting exceptional students into pathways for success

Alignment of recruitment strategies and financial aid decisions will improve our planning (less reactive)

Facilitate student understanding of academic opportunities

Continue focus on exceptional WA resident students

RISKS

Strain on housing, classroom demand and student support services

Maintain current course with regard to enrollment and intended major

Some tuition rate increases may have an impact on yield

Resident undergraduate tuition rate policy

International student enrollment

National ‘birth dearth’

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ENROLLMENT MANAGEMENT: CURRENT WORK

Admission and Enrollment

Communications and Outreach

Journey to Major

Curricular/Co-Curricular

• Improving how we describe opportunities to prospective students.

• Revisiting holistic review.

• Developing services to support student journey from admission to major (e.g., tracking preferred major, common internal application portal).

• Curricular innovation (e.g., data science initiative).

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APPENDIX

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Page 16 of 20

Source: Migration Policy Institute

U.S. INTERNATIONAL STUDENT ENROLLMENTS: 2007–2017*

17B-1.3/204-19

4/10/19 Page 17 of 20

Federal Support State Support UW Support Total

2010-2011 $32,217,000 49% $25,988,000 39% $7,618,000 12% $ 65,823,000

2011-2012 $35,583,000 41% $32,378,000 37% $18,654,000 22% $ 86,615,000

2012-2013 $25,304,000 36% $29,900,000 40% $31.420.000 24% $106,454,000

2013-2014 $42,300,000 37% $40,500,000 36% $29,900,000 27% $112,100,000

2014-2015 $37,259,000 33% $41,276,000 37% $32,876,000 30% $111,411,000

2015-2016 $38,425,000 36% $42,479,000 39% $26,855,000 25% $107,758,000

2016-2017 $36,801,000 38% $38,650,000 40% $21,082,000 22% $ 96,533,000

2017-2018 $41,533,000 41% $37,577,000 37% $21,936,000 22% $101,046,000

2018-2019 $43,847,000 42% $47,301,000 45% 14,227,000 14% $105,375,000*

*estimated

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LOAN DEBT: UW UNDERGRADUATES-TRI-CAMPUS

# of Graduates

# of Graduates w/ Debt

Total LoanVolume

Average

2017-18 10,803 4,319 $95,727,524 $22,164

2016-17 10,351 4,280 $95,944,268 $22,417

2015-16 10,315 4,489 $98,994,539 $22,053

2014-15 9,881 4,581 $104,400,716 $22,790

2013-14 9,629 4,707 $101,459,945 $21,555

2012-13 9,461 4,713 $101,193,043 $21,471

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UNDERGRADUATE DEBT LEVEL BY INCOME LEVEL- TRI-CAMPUS

2017-2018 Resident Undergraduates

Family Income # of Students Average Income Average Debt

$0 – 24,999 1,220 $10,360 $24,399

$25,000 – 49,999 731 $36,239 $20,882

$50,000 – 74,999 456 $62,440 $19,938

$75,000 and above 1,492 $150,193 $19,803

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B–2/204-19 4/10/19

Panel: Student Perspectives on Long-Term Planning INFORMATION This item is for information only BACKGROUND To prepare the Board for tomorrow’s retreat discussions, the Chair of the Board asked student leaders to prepare responses to the following questions:

1. Given funding constraints, what value must be delivered to convince students that tuition expenses are justified? (e.g. curricular offerings, career transition help including internships and alumni networking integrated into courses of study, student services…)

2. What is most successful about the University’s current operations from the student perspective?

3. Which are the most important areas of improvement, from the student perspective?

4. What would students like the Board, the administration, and the faculty to take into consideration as they plan for the next thirty years?

The Board will hear from ASUW President Ritika Jain, GPSS President Giuliana Conti, ASUW Bothell President Leah Shin, and ASUW Tacoma President Armen Papyan.

Student Leader Long-Term Planning Recommendations

The following information presented to the Board of Regents during April, 2019, represents a joint set of recommendations and feedback on behalf of the of the tri-campus student government Presidents toward the university’s long-term financial and academic planning. This information is intended to inform and encourage the UW administration’s progress toward these topics and serve as a benchmark in the coming years for both UW administration as well as incoming student leaders.

Common Recommendations Between the Boards

Given funding constraints, what value must be delivered to convince students that tuition expenses are justified? ● Career preparation and professional development opportunities ● Resources for maintaining personal well-being (food, mental health)

What is most successful about the University’s current operations from the student perspective? ● Extracurricular activities ● Individualized resources for diverse populations and interests

Which are the most important areas of improvement from the student perspective? ● Funding, funding, funding! With regard to even allocation across campuses and notoriously underfunded programs ● Increased mental health and wellness resources ● Career and professional development resources and training

What would students like the Board, administration, and faculty take into consideration as they plan for the next thirty years? ● Diversifying the student, staff, and faculty populations ● Transparency and inclusion of students within decision-making processes ● Affordability of educational and living expenses ● Accommodation of and support for the tri-campus growth beyond the minimum, especially with regard to space ● The availability of personal and professional student resources increase the likelihood of success ● Student safety, health, and well-being are pivotal for academic and post-graduation success ● We will carry this University’s name and legacy, we need to be cared for now so that we may adequately care for the next

generations

ASUWS Priorities GPSS Priorities

● Humanities emphasis for non-humanities majors ● Providing the capacity for all students to explore their

academic interests ● Ability to build a network of professional connections ● Greater support for long-term career planning ● Critically assessing the balance that the University must

maintain between its world-class ranking and its commitment to the community as a public university

● Mental health resources and training across campus ● Funding availability for Master’s programs ● Work and communication boundaries for grad students ● Faculty advising standards and training ● Involvement of grad students in decision making processes ● Match cost of living with job/funding/TA/RA opportunities ● Caregiver/child care practical and financial needs ● Arts and Humanities funding availability

ASUWT Priorities ASUWB Priorities

● Career workshops, Internship opportunities, integrate training/internships into courses

● Alumni networking in students prefered field ● Need for increase number of career fairs and more

employers ● Transportation services, getting in and around UW

Tacoma ● Increasing student life on campus

○ Building a HUB/student recreation center ● Maintain 24/7 access to the library ● Affordable and accessible childcare for student parents ● Defining the student experience at UW Tacoma

● Long term Health & Wellness Resources and Food Services. ● Increase support in funding for clubs on-campus. ● Student Services with a focus on mentorship and career

readiness ● Diversity, Disability, and Mental Health resources for students. ● Locating information and opportunities on-campus; on our

website and main communication channels. ● Financial Aid & Scholarship Communication; cost of living and

not paying for resources we already have. ● The funding distribution across the three campuses. ● Providing more student space for students on-campus. ● Defining the student experience at UW Bothell.

B-2.1/204-19 | 4/10/19 Page 1 of 1

ATTACHMENT


B–3/204-19 4/11/19

Board Retreat INFORMATION This item is for information only BACKGROUND The Board of Regents last met in retreat in April 2015. That retreat focused on Board functioning and best governance practices. The last time the Board broadly discussed ongoing trends was in December 1992, closing out implementation reports on the UW 2000 strategic planning exercise begun in September 1985. At this meeting, the Board plans to surface discussion of long-term issues at the Board level. It expects to make no conclusions, but to open lines of questioning and discussion to shape the agendas of future meetings. President Cauce and Provost Richards will lead discussion on the basis of attached reading assignments and yesterday evening’s presentations. The meeting will recess for visits to laboratories and discussions of research and teaching at Friday Harbor Laboratories. SCHEDULE 8:40 a.m. Welcome and First Academic Presentation: Scan All Fishes** 9:30 a.m. Session 1: Access to Excellence under Constraints 11:30 a.m.* Second Academic Presentation:

The College of the Environment and Friday Harbor Labs** 12:30 p.m.* Session 2: Key Strategic Issues – Curriculum 1:30 p.m.* Third Academic Presentation:

ZooBots (Marine Invertebrates and Marine Algae)** 2:20 p.m.* Session 3: Facilitating Change, Removing Barriers *or later as announced at the conclusion of the preceding session. **not part of the open public meeting; a quorum of Regents may be present, but no action as defined by RCW 42.30.020 will be taken. Attachments April Retreat: List of Assigned and Recommended Readings Letter from W. P. Gerberding

April Retreat: List of Assigned and Recommended Readings

UW DOCUMENTS

• RCW 28B.20.020, Purpose of the University of Washington: https://apps.leg.wa.gov/RCW/default.aspx?cite=28B.20.020• Regent Policy No. 5, Role and Mission of the University: http://www.washington.edu/admin/rules/policies/BRG/RP5.html

• ‘About the UW’ and ‘Funding the UW’ slide decks: https://s3-us-west-2.amazonaws.com/uw-s3-cdn/wp-content/uploads/sites/98/2019/01/07121711/About_the_UW_12-24-18.pptx and https://s3-us-west-2.amazonaws.com/uw-s3-cdn/wp-content/uploads/sites/98/2018/10/26173601/Funding_the_UW_presentation-10-26-18.pptx

• 2019 Operating and Capital Budgets: https://s3-us-west-2.amazonaws.com/uw-s3-cdn/wp-content/uploads/sites/12/2018/07/23171317/2018-06-B-2.pdf and https://s3-us-west-2.amazonaws.com/uw-s3-cdn/wp-content/uploads/sites/12/2018/07/13092627/2018-07-B-3.pdf

• Deferred Maintenance Presentation, July 2018: https://s3-us-west-2.amazonaws.com/uw-s3-cdn/wp-content/uploads/sites/12/2018/07/05141438/2018-07-F-10.pdf

• Debt Capacity Presentation, May 2018: https://s3-us-west-2.amazonaws.com/uw-s3-cdn/wp-content/uploads/sites/12/2018/07/23171446/2018-05-F-4.pdf

• Recent OPB Briefs (ABB, Demographics): https://s3-us-west-2.amazonaws.com/uw-s3-cdn/wp-content/uploads/sites/162/2018/12/07005440/ABB_Trends_Brief_and_Spreadsheet_FY19.pdf and https://s3-us-west-2.amazonaws.com/uw-s3-cdn/wp-content/uploads/sites/162/2018/12/07005701/Demographics_and_Demand_for_Higher-Ed_-_Book_Summary.pdf

• Diversity Blueprint: https://www.washington.edu/diversity/files/2017/01/17_DiversityBlueprint-010917.pdf• 2018 Research Report: https://www.washington.edu/research/wp/wp-content/uploads/2018/10/Annual-Report-FY-2018.pdf

LOOKING BACK 1. Rita Koganzon, “Who will defend the University? Hanna Holborn Gray and the lost art of academic governance,” Chronicle of

Higher Education (CHE), November 9, 2018: https://www.chronicle.com/article/Who-Will-Defend-the/245052Optional: Hanna Holborn Gray, An Academic Life (Princeton UP, 2018), Chapter 1, pages 1-22:

http://assets.press.princeton.edu/chapters/s11244.pdf 2. William P. Gerberding, Memo to the Board of Regents (1994)

LOOKING LATERALLY 3. Deloitte Insights, The Future(s) of Public Higher Education: Five New Models for State University Success (2018):

https://www2.deloitte.com/content/dam/insights/us/articles/4726_future-of-higher-education/DI_Future-of-public-higher-ed.pdf4. John Aubrey Douglass and Patrick Lapid, “Tuition as a Path for Affordability? The Pursuit of a Progressive Tuition Model at the

University of California”: https://cshe.berkeley.edu/sites/default/files/publications/tuition_as_a_path_for_affordability.pdfOptional: Elisabeth Corey, “The University has no purpose. And that’s a good thing,” CHE (2018):

https://www.chronicle.com/article/The-University-Has-No-Purpose/243185 Michael Crow and William Dabars, Designing the New American University (JHU Press, 2015),

115-150 and 240-303

LOOKING FORWARD 5. Nathan D. Grawe, Demographics and the Demand for Higher Education (Johns Hopkins, 2018), 68-112 and 135-138, optional

(on education policy): 113-1346. Ben Schmidt, “The Humanities Are in Crisis,” The Atlantic, August 23, 2018:

https://www.theatlantic.com/ideas/archive/2018/08/the-humanities-face-a-crisisof-confidence/567565/7. Tables and Figures from Hemelt et al., “Why is Math Cheaper than English? Understanding Cost Differences in Higher

Education,” NBER Working Paper 25314 (2018): https://www.nber.org/papers/w253148. Clayton Rose, Five minutes on the liberal arts: https://www.youtube.com/watch?v=1zm11mYPcfw9. Burning Glass Technologies, “Majors that Matter: Ensuring College Graduates Avoid Underemployment” (2018):

https://www.burning-glass.com/wp-content/uploads/underemployment_majors_that_matter_final.pdf10. Cathy O’Neil, TED talk on Big Data: https://www.ted.com/talks/cathy_o_neil_the_era_of_blind_faith_in_big_data_must_end

Optional: Microsoft, The Future Computed: Artificial Intelligence and its role in society (2018), esp. 110-122:https://3er1viui9wo30pkxh1v2nh4w-wpengine.netdna-ssl.com/wp-content/uploads/2018/02/The-Future-Computed_2.8.18.pdf

American Academic of Arts and Sciences, “The Future of Undergraduate Education: The Future of America”(2017): https://www.amacad.org/sites/default/files/academy/multimedia/pdfs/publications/researchpapersmonographs/CFUE_Final-Report/Future-of-Undergraduate-Education.pdf

ATTACHMENT 1B-3.1/204-19 4/11/19

Page 1 of 1

https://apps.leg.wa.gov/RCW/default.aspx?cite=28B.20.020

http://www.washington.edu/admin/rules/policies/BRG/RP5.html

https://s3-us-west-2.amazonaws.com/uw-s3-cdn/wp-content/uploads/sites/98/2019/01/07121711/About_the_UW_12-24-18.pptx

https://s3-us-west-2.amazonaws.com/uw-s3-cdn/wp-content/uploads/sites/98/2019/01/07121711/About_the_UW_12-24-18.pptx

https://s3-us-west-2.amazonaws.com/uw-s3-cdn/wp-content/uploads/sites/12/2018/07/23171317/2018-06-B-2.pdf








https://s3-us-west-2.amazonaws.com/uw-s3-cdn/wp-content/uploads/sites/162/2018/12/07005440/ABB_Trends_Brief_and_Spreadsheet_FY19.pdf

https://s3-us-west-2.amazonaws.com/uw-s3-cdn/wp-content/uploads/sites/162/2018/12/07005440/ABB_Trends_Brief_and_Spreadsheet_FY19.pdf

https://s3-us-west-2.amazonaws.com/uw-s3-cdn/wp-content/uploads/sites/162/2018/12/07005701/Demographics_and_Demand_for_Higher-Ed_-_Book_Summary.pdf



https://www.washington.edu/diversity/files/2017/01/17_DiversityBlueprint-010917.pdf

https://www.washington.edu/research/wp/wp-content/uploads/2018/10/Annual-Report-FY-2018.pdf

https://www.chronicle.com/article/Who-Will-Defend-the/245052

http://assets.press.princeton.edu/chapters/s11244.pdf

https://www2.deloitte.com/content/dam/insights/us/articles/4726_future-of-higher-education/DI_Future-of-public-higher-ed.pdf

https://cshe.berkeley.edu/sites/default/files/publications/tuition_as_a_path_for_affordability.pdf

https://www.chronicle.com/article/The-University-Has-No-Purpose/243185

https://www.theatlantic.com/ideas/archive/2018/08/the-humanities-face-a-crisisof-confidence/567565/

https://www.nber.org/papers/w25314

https://www.youtube.com/watch?v=1zm11mYPcfw

https://www.burning-glass.com/wp-content/uploads/underemployment_majors_that_matter_final.pdf

https://www.ted.com/talks/cathy_o_neil_the_era_of_blind_faith_in_big_data_must_end

https://3er1viui9wo30pkxh1v2nh4w-wpengine.netdna-ssl.com/wp-content/uploads/2018/02/The-Future-Computed_2.8.18.pdf

https://3er1viui9wo30pkxh1v2nh4w-wpengine.netdna-ssl.com/wp-content/uploads/2018/02/The-Future-Computed_2.8.18.pdf

https://www.amacad.org/sites/default/files/academy/multimedia/pdfs/publications/researchpapersmonographs/CFUE_Final-Report/Future-of-Undergraduate-Education.pdf

https://www.amacad.org/sites/default/files/academy/multimedia/pdfs/publications/researchpapersmonographs/CFUE_Final-Report/Future-of-Undergraduate-Education.pdf

B-3.2/204-19 4/11/19

Page 1 of 3ATTACHMENT 2

B-3.2/204-19 4/11/19

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B-3.2/204-19 4/11/19

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Who pays resident undergraduate tuition at the UW?

ATTACHMENT 3 B-3.3/204-19 4/10/19

Page 1 of 7

State Revenue Per Student Among Top Publics

Source: IPEDS data for FY15 (most recent final year available)Peer Set: U.S. News 2017 Top 25 Publics

$4,240

$4,346

$5,220

$5,663

$6,495

$6,621

$6,921

$7,247

$8,000

$8,224

$8,556

$9,181

$9,629

$10,128

$11,134

$11,283

$11,621

$11,634

$13,673

$14,249

$14,439

$18,684

$24,390

Penn State

U Pittsburgh

UW-Seattle

U Virginia



UT-Austin

Ohio State

Purdue

UC-Santa Barbara

UC-Irvine

UC-Berkeley

Georgia Tech

UCSD

U Wisconsin-Madison

U Georgia

UCLA

UC-Davis

U Florida



UNC-Chapel Hill

UConn

Except the UW, institutions with the lowest state funding have the highest resident undergraduate tuition rates

B-3.3/204-19 4/10/19 Page 2 of 7

State Revenue Per Student Among Top Publics

Source: IPEDS data for FY15 (most recent final year available)Peer Set: U.S. News 2017 Top 25 Publics

$4,240

$4,346

$5,220

$5,663

$6,495

$6,621

$6,921

$7,247

$8,000

$8,224

$8,556

$9,181

$9,629

$10,128

$11,134

$11,283

$11,621

$11,634

$13,673

$14,249

$14,439

$18,684

$24,390

Penn State

U Pittsburgh

UW-Seattle

U Virginia



UT-Austin

Ohio State

Purdue

UC-Santa Barbara

UC-Irvine

UC-Berkeley

Georgia Tech

UCSD

U Wisconsin-Madison

U Georgia

UCLA

UC-Davis

U Florida



UNC-Chapel Hill

UConn

Except the UW, institutions with the lowest state funding have the highest resident undergraduate tuition rates

B-3.3/204-19 4/10/19 Page 3 of 7

Resident Undergraduate Tuition Among Top Publics

$19,080

$18,436

$16,781

$15,868

$14,880

$14,826

$14,638

$14,451

$14,419

$14,170

$14,018

$13,738

$13,261

$12,418

$11,818

$10,974

$10,591

$10,533

$10,452

$10,399

$9,992

$9,005

$6,381

U Pittsburgh

Penn State

U Virginia


UConn



UC-Santa Barbara

UC-Davis

UC-Berkeley

UCSD

UC-Irvine

UCLA

Georgia Tech

U Georgia

UW-Seattle

Ohio State

U Wisconsin-Madison

UT-Austin


Purdue

UNC-Chapel Hill

U Florida


B-3.3/204-19 4/10/19 Page 4 of 7

Resident Undergraduate Tuition Among Top Publics

$19,080

$18,436

$16,781

$15,868

$14,880

$14,826

$14,638

$14,451

$14,419

$14,170

$14,018

$13,738

$13,261

$12,418

$11,818

$10,974

$10,591

$10,533

$10,452

$10,399

$9,992

$9,005

$6,381

U Pittsburgh

Penn State

U Virginia


UConn



UC-Santa Barbara

UC-Davis

UC-Berkeley

UCSD

UC-Irvine

UCLA

Georgia Tech

U Georgia

UW-Seattle

Ohio State

U Wisconsin-Madison

UT-Austin


Purdue

UNC-Chapel Hill

U Florida


B-3.3/204-19 4/10/19 Page 5 of 7

Avg. Tuition & Fees Paid (i.e. Not Covered by

Grants/Scholarships) by Income Level

$-

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

0 $50K $100K $150K $200K $250K

Tu

itio

n &

Fe

es

Pa

id

Family Income

UW Seattle UNC U Michigan UC Berkeley

WA Middle Income

B-3.3/204-19 4/10/19 Page 6 of 7

0%

2%

4%

6%

8%

10%

12%

14%

0 $50K $100K $150K $200K $250K

Family Income

UW Seattle UNC U Michigan UC Berkeley

Percent of Family Income Spent on Tuition & Fees by Family Income

Pe

rce

nt

of

Fa

mil

y I

nco

me

Sp

en

t o

n T

uit

ion

& F

ee

s

WA Middle Income

B-3.3/204-19 4/10/19 Page 7 of 7


B–4/204-19 4/11/19

Academic and Administrative Appointments RECOMMENDED ACTION It is the recommendation of the administration that the Board of Regents approve the appointments to the University faculty and administration as presented on the attached list. BACKGROUND This is a standing monthly item that comes before the full Board this month in the absence of a meeting of the Academic and Student Affairs Committee. Per Board of Regents Governance, Bylaws, Article IV:

“Any matter that would typically fall within the responsibility of one standing committee may be directed by the chair of that committee or the Chair of the Board to any other standing or special committee or the Board itself for consideration.”

Attachment Academic and Administrative Appointments

School/College/Campus Department Worker Last Name Worker First Name

Title Start Date

College of the Environment Atmospheric Sciences Bitz Cecelia Chair 7/1/2019

School of Medicine School of Medicine Sahani Dushyant Chair 3/7/2019

School of Medicine School of Medicine Sherman David Chair 3/1/2019

College of Engineering Mechanical Engineering Aliseda Alberto Paccar Professorship In Engineering 9/16/2018

College of the Environment School of Environmental and Forest Sciences Bakker Jonathan Rachel A. Woods Professorship In Reforestation 1/1/2019

College of Arts and Sciences Germanics Wagner‐Egelhaaf Martina Visiting Professor 3/16/2019

Daniel J. Evans School of Public Policy and

Governance

Daniel J. Evans School of Public Policy and Governance Xu Dafeng Assistant Professor 9/16/2019

School of Medicine Emergency Medicine St. John Alexander Assistant Professor WOT 3/1/2019

School of Medicine Microbiology Sherman David Professor 3/1/2019

School of Medicine Pediatrics ‐ General Pediatrics Chung Esther Professor WOT 4/1/2019

School of Medicine Pediatrics ‐ General Pediatrics Liljenquist Kendra Assistant Professor WOT 1/7/2019

School of Medicine Pediatrics ‐ Infectious Diseases Parsons Marilyn Professor WOT 3/31/2019

School of Medicine Pediatrics ‐ Infectious Diseases Urdahl Kevin Professor WOT 3/31/2019

School of Medicine Psychiatry and Behavioral Sciences Buchholz Jonathan Assistant Professor WOT 3/1/2019

School of Medicine Psychiatry and Behavioral Sciences Sibley Margaret Associate Professor WOT 4/1/2019

School of Medicine Radiology Sahani Dushyant Professor 3/7/2019

School of Nursing Family and Child Nursing Bleil Maria Research Assistant Professor 9/1/2017

School of Public Health Health Services Katon Jodie Research Assistant Professor 12/1/2018

UW Bothell School of Business, Bothell Khanna Sushil Visiting Professor 3/10/2019

Administrative Appointments

Endowments

Academic and Administrative Appointments

Academic Appointments

ATTACHMENTB-4.1/204-19 4/11/19

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oard meets at regular m

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