Tuesday, June 27, 2017

Governor Signs New Budget

Gov. Brown has signed the state budget for 2017-18. It apparently is virtually, if not totally, unchanged from his deal with the Democratic legislative leaders. No line-item vetoes are mentioned in the news release that announced the signing. []

There are now two reserves related to the state's General Fund that have to be considered in examining the health of the budget. The regular reserve for the current budget year shows a deficit of $2.9 billion. The rainy day reserve shows a surplus of $1.8 billion. So there is a combined deficit this year of $1.0 billion. Total reserves at the end of this year are estimated to be about 6.7% of total spending (which is not a lot). It was supposed to reach 7.7% when the current budget was signed a year ago.

For next year, the regular reserve in the General Fund increases and shows a surplus of $0.8 billion. The rainy day fund increases (shows a surplus) and has a surplus of $1.8 billion. So there is a combined surplus of $2.6 billion. The combined reserve as a percent of total spending is 8.7% by the end of the coming fiscal year. That's more than this year, but still not a lot should there be an economic downturn. The table all the way down summarizes the budget data.

As for the UC budget, there are no surprises. Below in italics is the text from the budget summary:

University of California

• General Fund Augmentations—An increase of $136.5 million ongoing, including a base augmentation of $131.2 million proposed in the Governor’s Budget and an increase of $5 million to support 500 additional graduate students in 2017‑18.

• Cost Structure Commitments—A set‑aside of $50 million General Fund from the UC base augmentation. The release of this $50 million is conditioned on certification by the Director of Finance that the UC has: 1) achieved commitments made in the agreement with the Governor related to activity‑based costing and target enrollment of transfer students, 2) adopted recommendations made by the State Auditor to the UC Board of Regents and UC Office of the President, 3) eliminated certain benefits for UC senior managers, and 4) committed to disclose additional information as part
of the annual budget process.

• Office of the President—A separate item of appropriation of $348.8 million for the Office of the President, with a corresponding reduction in UC's base funds, conditioned on the Office of the President certifying in writing to the Director of Finance that there will be no campus assessment for support of its operations in 2017‑18 and that overall campus revenues will be greater in 2017‑18 than in 2016‑17.

• One‑Time Funding—One‑time funds totaling $175.6 million, including $169 million in Proposition 2 debt funds, which will be used for unfunded retirement liabilities; $2 million General Fund for equal employment opportunity programs; $2.5 million General Fund to encourage campuses to become “hunger free campuses;” $2 million General Fund for grants to marine mammal stranding networks; and $100,000 General Fund for grants for whale disentanglement activities.

Budget Summary

$millions                     2016-17           2017-18 
Starting regular   
reserve                        $4,504            $1,622 

Revenue &
transfers                    $118,539          $125,880

Spending                     $121,421          $125,096

Ending regular
reserve                        $1,622            $2,406

 Surplus/deficit              -$2,882             +$784 
Rainy Day reserve
 Starting                     $4,874             $6,713
 Ending                       $6,713             $8,486 
 Surplus/deficit             +$1,839            +$1,773 
Combined reserves             $8,335            $10,852

Combined surplus/
deficit                      -$1,043            +$2,557

Combined reserves
as % of spending                6.7%               8.7%
Source: and
Note: We will await comments from the Legislative Analyst's Office. In July, we will have the cash statement for the current fiscal year from the state controller.

Pension Finance

We generally recommend Harry Shearer's "Le Show" radio program for the comedy and satire. (Available in LA on KCSN, 88.5, Sunday mornings, 10 am.) From time to time, however, he takes up serious topics. This past Sunday, he took up public pension finance issues.

You can hear the broadcast from various sources as a podcast. For the pension broadcast, go to:

The discussion starts around minute 6.

Continued Invasion

Disclosure of UC retirees’ information under the California Public Records Act

Monday, June 26, 2017

The University of California often receives requests for information about former employees under the California Public Records Act. 

Because UC is a public institution, certain information about retirees is considered a public record under the California Public Records Act. In response to a request from a large California newspaper, UC recently released information that included a listing of UC retirees, their former positions and their UC retirement income. Please note that personal information, such as home address, phone number, marital status and email address is considered private, and will never be disclosed to the public...


We continue to challenge the "large California newspaper" to publish its own personnel records - salaries, etc. - by name, since it thinks it's a good idea for UC to do so.

Monday, June 26, 2017

Broken Rules

...except if I am elected governor.
From the Daily Bruin:

Several student leaders and professors said they were concerned that the governor did not follow proper procedure when nominating new regents last month, and felt the nominees were out of touch with California’s diversity.
The Council of University of California Faculty Associations wrote a letter to California state Sen. Kevin de León last week asking the state senate to reject the four regents Gov. Jerry Brown appointed last month. The CUCFA said Brown did not consult an advisory committee when selecting the regents, as specified by the California Constitution.
The California Constitution states that the advisory committee is supposed to make sure regent nominees are reflective of the economic, cultural and social diversity of California.
Stanton Glantz, a professor at the UC San Francisco School of Medicine and member of the CUCFA, said the association is mainly opposing the way Brown nominated the regents.
“In the case of these particular regents, we’re objecting to the hearing process that was used,” Glantz said. “(We were) careful in writing the letter to not oppose (the regents) as individuals.”
Glantz added that he thinks the governor should have used the advisory committee because he thinks the regents in general are not representative of California’s demographics.
“They’re a bunch of mostly millionaires,” he said. “If you just look at demographics, do you see any working-class people on there? It’s not a group of people you would see that resembles those walking on a UC campus.”
Michael Skiles, president of the Graduate Students Association at UCLA, said he thinks recent audits of the UC system have shown that the regents are out of touch with students...

Sunday, June 25, 2017

Rent from her position

Yours truly is just catching up with this sign-of-the-times item from the Daily Bruin of June 20:

A member of the Westwood Neighborhood Council recently resigned after moving out of the Village.
Shelby Kretz, a UCLA doctoral student in urban schooling, announced her resignation at the council meeting on June 14. The council selected Kretz to fill a vacant seat in January after two council members announced their resignations.
Kretz said she can no longer serve on the council because members on renter seats must actually rent within the council’s boundaries, which are Sunset, Santa Monica, Beverly Glen and Sepulveda boulevards. She said she is moving to Culver City because she felt she could not afford the rent in Westwood.
“Finding (an affordable) place in Westwood can be very challenging,” she said...

Feinstein - UC-SD - China - Dalai Lama

Sen. Dianne Feinstein Slams Chinese Paper for 'Threatening' UCSD Chancellor Pradeep Khosla

LALIT K. JHA, PTI   June 23, 2017

WASHINGTON — California’s Sen. Dianne Feinstein has slammed a Chinese newspaper for "threatening" Pradeep Khosla, the Indian American chancellor of the University of California-San Diego, for hosting the Dalai Lama. The Tibetan spiritual leader delivered the commencement address at UCSD June 17.

"I find it unconscionable that a reporter for the Global Times, a mouthpiece of the Chinese Communist Party, would threaten UC San Diego and its chancellor and students for inviting the Dalai Lama to speak," Feinstein said.

In a statement released June 23, the top senator demanded that the newspaper should "immediately apologize and retract" the article that not only threatens to withhold visas from Chancellor Khosla but also suggests the university would be punished by withholding students.

"The newspaper's portrayal of the Dalai Lama as an anti-China separatist is also patently false," Feinstein said.

"I've known the Dalai Lama for more than 25 years and was directly involved in the latest discussions between him and the Chinese government.

The Dalai Lama is not in favor of separating Tibet from China. Rather, he strives for greater autonomy so Tibetans may freely practice their faith," Feinstein said.

"The Dalai Lama's desire to end religious persecution for his people doesn't make him a separatist, it makes him a peaceful leader who should serve as an inspiration to all students. The Chinese government and the media outlets it directly controls should recognize this and not threaten Americans or American institutions," said the senator.

In its editorial on June 20, Global Times threatened the university chancellor, saying: "Khosla must bear the consequences for this." It went on to say: "His support for Tibet independence will affect his personal and the university's exchanges with China. Chinese universities will take cooperative programs with it into prudent reconsideration.

"It's suggested that relevant Chinese authorities not issue visas to the chancellor and not recognize diplomas or degree certificates issued by the university in China."

The International Campaign for Tibet has also condemned the Chinese newspaper. It said there is no evidence to suggest that Chancellor Khosla has been involved in any action supporting Tibetan independence. 


Saturday, June 24, 2017


UCLA Investment Co. dropped support of venture capital firm tied to harassment accusations

The group that manages $2 billion of UCLA’s endowment had invested in a venture capital firm whose co-founder has come under scrutiny this week for allegedly unprofessional behavior toward women.

Six women, three of whom allowed their names to be used, came forward in a story in the Information saying that Justin Caldbeck of Binary Capital made unwanted sexual advances as they tried to seek investment from his firm. On Friday, Caldbeck went on an indefinite leave of absence from the firm and apologized for “mistakes” over the years.

UCLA Investment was among many contributors to the $125 million in Binary Capital’s inaugural fund in 2014. But over undisclosed concerns with the management style of Caldbeck and his partner Jonathan Teo, UCLA Investment decided not to invest in the San Francisco firm’s second fund, which was raised last year. And it has no intentions of putting money into Binary Capital’s newest fund.

Joe Bryant, associate investment director for UCLA Investment, said her team had stepped up the amount of research it does before investing in venture capital firms. After this week’s revelations, among the questions she plans to bring up are whether venture capital firm founders have faced sexual harassment allegations.

“Folks should be a lot more careful when committing to first-time funds,” Bryant said.

Binary Capital didn’t respond to a request to comment.

Source: [scroll down]