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UC Regents discuss fossil fuel divestment, revised state budget

By Jeong Park

May 15, 2014 5:19 p.m.

SACRAMENTO — The University of California Board of Regents discussed fossil fuel divestment, the latest state budget proposal and the financial health of UC medical centers, among other things, at its bimonthly board meeting Thursday.

During a public comment session, the board heard from pro-Israel groups urging the UC to take action against Students for Justice in Palestine at UCLA, which asked Undergraduate Students Association Council candidates to sign a joint ethics statement to not take free trips with pro-Israel lobbying organizations. The board also heard from UC Student Association President Kareem Aref, who urged the UC to have a more uniform policy on sexual assault across different campuses.

Fossil Free UC

Aref also briefly talked with regents about Fossil Free UC, a UCSA-supported student organization calling for the UC to divest from the fossil fuel industry. Aref said a student team has been meeting with regents and different UC officials. Ophir Bruck, a student organizer with Fossil Free UC and a UC Berkeley student, said the group is meeting with Chief Investment Officer Jagdeep Singh Bachher and other officials Wednesday.

Regent Hadi Makarechian said there has to be a lot of discussion on how to reach the ultimate goal of reducing fossil fuel usage.

“It can’t be a singular approach. I’m not sure if this (initiative) will get you there,” Makarechian said.

Gov. Jerry Brown said it is more important to curb the demand for oil, saying the way that this initiative and the proposed oil extraction tax are approaching the fossil fuel industry resembles a “drug war.”

Brown also urged the UC to think about its institutional capacity in shaping policy, saying the UC does not have the power to control the entire global economy.

UC President Janet Napolitano said she will ask Bachher over the next two months to examine the UC’s investment practices. Last month, Napolitano told The Bruin that divestment is a tool that should be used “rarely, if at all,” only to divest from foreign governments that are committing genocide.

The Committee on Investments is convening on May 22.

Budget

The board heard from Patrick Lenz, vice president of UC budget and capital resources, and Nathan Brostrom, executive vice president of UC business operations, on Brown’s revised state budget. The budget gives no additional funding for the UC compared to what Brown proposed in his January budget.

Lenz said it’s concerning to see the state is still not providing any funding based on enrollment, saying 7,500 in-state students still remain unfunded by the state. Lenz also said he heard from legislators who said they want the UC to utilize more funding for its outreach programs.

Brostrom also made a presentation on the next year’s budget for the UC Office of the President. Brostrom said although the budget for the office increased by 5.3 percent over last year, it is due to the inclusion of the Education Abroad Program, which was not included as part of the office’s budget last year.

Brown said he was surprised by the relatively large budget for the office, which has a budget of about $600 million. He asked for documents from Brostrom that analyze different elements of the office.

Health

The board heard a presentation from Dr. John Stobo, UC senior vice president for health sciences and services, updating regents on the UC’s plan to cut costs at the UC’s five medical centers. While UC medical centers generate $7.5 billion in annual revenue, Stobo said the UC needs to cut $900 million from medical centers by 2020.

While annual expense has been growing at a consistent rate, the revenue is growing slower now because of causes such as declining government reimbursement from Medicare and Medi-Cal, Stobo said. This causes the cost to outgrow the revenue, leading to the UC losing money by 2017 if this continues, he said.

“We have to pick up the pace. Health care environment isn’t waiting for us to feel comfortable,” Stobo said.

Brown urged Stobo to come up with a more definitive plan, saying it’s “not comforting” to have a highly fluid budget.

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Jeong Park | Alumnus
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