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LAO report on 2020 Project

February 11, 2016

Dear colleagues,
 
You may have heard about a report issued yesterday by the state’s Legislative Analyst’s Office that raises some questions about our 2020 Project and other University of California matters.
 
Among other things, the report calls for a legislative hearing on the project and raises a number of concerns that range from the project’s DBFOM (design, build, finance, operate and maintain) structure to suggestions that UC Merced should be a general campus without research labs, that distance education be increasingly used across the University of California in lieu of capital expansion and that the Legislature review UC-established enrollment targets.
 
The University of California Board of Regents previously considered the concerns raised by the report regarding our 2020 Project procurement strategy. After months of intensive study, the board unanimously affirmed last November that this strategy is in the best interests of the University of California, and gave us full support to move ahead with the process of securing competitive bids for the project. Thus, I am confident that any questions legislators may have can be successfully addressed.
 
You may be wondering what is the Legislative Analyst’s Office (LAO), and what role does the Legislature have in the approval of our 2020 Project.
 
The LAO provides fiscal and policy advice to the Legislature. Its recommendations, while important, are nonbinding. They are a normal form of due diligence for large projects involving state funds.
 
The role of the Legislature in the approval of our 2020 Project is specified in legislation — passed in 2013 and amended last year — that enables the University of California to pledge its state support appropriation to issue bonds for state-eligible facilities and associated campus infrastructure. In order for the University of California to use this authority, the Department of Finance must first approve project proposals submitted by UC with input and advice from the Legislature’s budget committees.
 
It is unclear at this point if the Legislature will act on the LAO’s recommendation to convene a hearing on our 2020 Project. If it does, I look forward to the opportunity to provide details and insights about this exciting project, its importance in expanding access to UC for thousands of California students and its significant economic impact in the San Joaquin Valley.
 
Sincerely,
 
Dorothy Leland
Chancellor

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