This post was updated Nov. 19 at 3:12 p.m.

SAN FRANCISCO – The UC Board of Regents approved an over $20 million budget increase for a UCLA electricity project Wednesday.

The increase was approved at the UC Board of Regents’ bimonthly meeting, held Tuesday to Thursday at UC San Francisco. The board’s investments, finance and capital strategies, governance and public engagement, and development committees presented reports on the UC’s financial performance, voted to approve salary increases and introduced new spending.

The finance and capital strategies committee voted to approve UCLA’s request for a $20.5 million increase to its budget for the Cogeneration Plant Equipment Replacement project during its Wednesday meeting. The plant contains turbines that generate electricity, steam and water for the UCLA campus and the Ronald Reagan UCLA Medical Center, said Interim Chancellor Darnell Hunt.

The project was initially approved in October 2022 in response to recently imposed South Coast Air Quality Management District emission limits with a total budget of $62 million, Hunt said. UCLA will be subject to fines of up to $50,000 per day if they continue not to comply with the standards, said Peter Hendrickson, the associate vice chancellor for design and construction at UCLA.

However, Hunt added that the project now estimates needing $82.5 million, an increase that requires the regents’ approval. The additional $20.5 million consists of $10.5 million for an increase in the contractors’ guaranteed maximum price, $6.3 million in compliance costs and $3.7 million to address potential cost increases, Hendrickson added.

“The new, more efficient turbines are projected to save roughly $1 million per month in utility costs and will reduce our carbon emissions by 11% by leveraging modern technology,” Hendrickson said.

Regent Hadi Makarechian criticized the plan’s request for additional funds, adding that the proposal does not have enough transparency when it comes to contracting spending.

“The meaning of guaranteed maximum price just goes out the door,” Makarechian said.

Makarechian was the sole “no” vote as the item passed with eight votes in favor and an abstention.

At the meetings, regents also discussed the University’s investments.

Jagdeep Singh Bachher, the UC’s chief investment officer, said that the UC currently has $188 billion in total assets under its management, an $8 billion increase from July 1. He added that this increase was driven by investments in foreign and domestic markets, which make up 62% of the UC’s assets.

[Related: UC Regents disclose investments in weapons manufacturers amid calls to divest]

In addition to the University’s stock holdings, the UC’s assets are made up of 18.5% private holdings, 18.4% fixed income and 1.1% cash, Bachher said.

The UC’s Blue and Gold Endowment, which consists of 80% stocks and 20% bonds, was the UC’s highest-performing portfolio with an 8% return on investment, he added. The UC’s worst-performing portfolio was its endowment of short-term moneymaking instruments, which yielded a 1.9% return, Bachher said.

He added that the UC’s investments have exceeded expectations.

“We expect stocks to do six to seven percent in a year – we’re at 8.7% so far,” he said. “The U.S. economy is strong. It’s resilient. Companies are fine.”

Bachher said he has a previous relationship with Scott Bessent, an investor who is a candidate to become the United States Secretary of the Treasury in President-elect Donald Trump’s administration, from working together at Key Square Management – a hedge fund founded by Bessent.

He added that tariffs – a key platform of the Trump campaign – can have an inflationary effect, but said he is optimistic about Trump’s ability to relax geopolitical tensions.

Heather Kopeck, the executive director for institutional advancement at the UC Office of the President, said during the public engagement and development committee meeting that the University also receives significant private support. In the 2023-2024 academic year, the UC received a record-breaking $3.45 billion from private donors, she said.

The University primarily receives donations from foundations and individuals, Kopeck added. Donors to the UC – like most who give to higher education institutions – restrict the majority of their gifts to departmental support and research, she said.

“Donors usually want to direct those gifts to something that they really want to support,” she said.

The governance committee unanimously approved the appointment and compensation for Meredith Turner as the UC Office of the President senior vice president of external relations and communications. Her salary will be $378,500, which is within the 40th percentile of salaries for this position nationally, said Cheryl Lloyd, the vice president for systemwide human resources at the UC.

Nathan Brostrom, the UC’s chief financial officer, also outlined the University’s capital program to the finance and capital strategies committee in a new consolidated report that will be presented annually in November moving forward.

In the 2023-2024 fiscal year, the UC approved spending nearly $4 billion on 165 projects, 11 of which the regents approved directly. The capital financial plan for 2024-2030 identifies $30.7 billion in funding for UC’s highest priority needs, including medical buildings, student housing and academic centers, said David Phillips, associate vice president of energy and sustainability for the UC.

This report, which the regents approved unanimously, does not approve any projects, but rather the plan that is submitted to the state. The regents must vote on any project that costs more than $70 million, Brostrom said.

Barbara Cevallos, associate vice president and systemwide controller at the UC, presented the University’s annual financial report, which the committee approved unanimously to adopt. The UC had strong investment gains in 2024, Cevallos said. However, revenues only slightly exceeded expenses, she added, mostly due to high employee salary and benefits.

The University could expect to see more increases in costs depending on the results of new contracts made with unions, she said. The UC is currently bargaining with the University Professional and Technical Employees-Communications Workers of America 9119 and the American Federation of State, County and Municipal Employees Local 3299.

“Employee salary and benefits are major expense drivers and will continue to increase in coming years,” Cevallos said. “Future commitments requested by the state and the University’s compact with the governor, as well as the outcomes of collective bargaining agreements, will have significant impacts on UC revenues and expenses.”

[Related: UPTE-CWA 9119 announces plans for 2-day strike at UCSF]

During the meeting, the finance and capital strategies committee also approved the proposed 2025-2026 budget plan. The plan is split into three elements – expenditures, revenue and cost-saving components and one-time funding requests for capital projects.

Expenditures, which go toward sustaining core operations, enrollment growth and student financial aid, add up to $512.5 million, Phillips said. Revenue sources consist of state general funds and alternative revenue sources including procurement savings and asset management and tuition, which total $554.1 million, he added.

The regents’ increase to nonresident tuition would contribute to this number, Phillips said.

[Related: UC Board of Regents recommends tuition increase for out-of-state students]

The University also requested $1.26 billion in state funds for facilities renewal, enrollment growth and clean energy, Brostrom said.

If the state approves a recently proposed $271 million reduction in state support for the University, the UC would face a deficit of $504.7 million, said Caín Díaz, associate vice president for budget analysis and planning at UC Office of the President.

“If state funding consistent with the multi-year compact materializes, the University would generate sufficient revenues to fully cover expected cost increases on core funding,” he said. “However, if the state approves the reduction that was signaled in this year’s budget act, the University would face a gap of over half a billion dollars.”