United Faculty of Florida -- USF System Chapter
21 November 2013
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It's Getting to be That Time of Year
The Winter Solstice and its great retinue of holidays are now upon us. The USF Chapter of the UFF will continue its tradition of participating in the West Central Florida Central Labor Council Holiday Toy Drive. New, unwrapped toys will be collected at the November 22 Chapter meeting tomorrow. In addition, new, unwrapped toys may be delivered to the office of the Department of Mathematics and Statistics, CMC 342, for Gregory McColm (UFF USF Chapter Secretary) before December 3.
All toys collected will be delivered to the Central Labor Council on December 3 at the Council's Holiday Social at 7:00 pm in the union hall of the International Brotherhood of Electrical Workers local # 824, at 6603 E. Chelsea Street in Tampa (0.9 miles east of N. 56th Street). The Holiday Social is open to all union members bringing toys.
$ 500 Travel Grants for New UFF Members - and for UFF Members Who Recruit New Members
The USF Chapter of the UFF will award four $ 500 Travel Scholarships for next spring and summer.
Non-members wishing to be eligible must have their membership forms in our hands by December 31. Proposals must also be in our hands by December 31. Two proposals from new members will be randomly selected for funding.
- UFF USF employees who join UFF this fall between August 25 and December 31 are eligible for one of two scholarships to be randomly selected at the January 10 UFF USF Chapter Meeting. For information on how new members (or non-members who would like to join UFF) may apply, see the flyer for new and prospective members.
There is no competition between recruiters and new members. If a new member is recruited, the new member is eligible for one of the scholarships for new members and the recruiter is eligible for one of the scholarships for current members. Again, membership forms and proposals must be in our hands by December 31, and two proposals by recruiters will be randomly selected for funding.
- Current UFF members who recruit at least one new UFF member are eligible for for one of two scholarships to be randomly selected at the January 10 UFF USF Chapter Meeting. For information on how UFF members may apply, see the flyer for UFF members who would like to recruit new members. Notice that recruiters should put their name on the membership form for the new member.
This initiative is part of our membership campaign. If you would like to become active in the UFF USF Membership Drive, contact the Membership Chair, Art Shapiro.
Chapter Meeting Tomorrow Noon on USF Tampa in EDU 161
The Chapter will meet tomorrow Friday at 12 noon on USF Tampa in EDU 161. This will be the last meeting of the semester. As always, there will be sandwiches, chips, and soda. All USF UFF employees, members and non-members, are invited: come and bring a friend!
Mark your calendars. UFF USF Chapter meetings next semester will be on alternate Fridays, at noon, as follows:
There will be sandwiches, soda, and chips. All UFF USF employees - UFF members and non-members alike - are invited.
- On January 10 in USF Tampa and on January 24 in USF St. Petersburg.
- On February 7 in USF Tampa and on February 21 in USF Sarasota / Manatee.
- On March 7 in USF Tampa and on March 21 in USF St. Petersburg.
- On April 4 in USF Tampa and on April 18 in USF Sarasota / Manatee.
- On May 2 in USF Tampa.
Speaking of next spring, the UFF USF Chapter will hold its elections next spring. All UFF members - and only UFF members - will be eligible to vote. We will elect our Election Committee at the November 22 UFF USF Chapter Meeting tomorrow.
Join UFF Today!
Download, fill in, and mail the membership form. Benefits of membership include the right to run and vote in UFF chapter and statewide elections; representation in grievances (UFF cannot represent a non-member in a grievance or litigation); special deals in insurance, travel, legal advice, and other packages provided by our affiliates; free insurance coverage for job-related liability; and the knowledge you are supporting education in Florida. AND YOU CAN JOIN NOW AND AS A DUES PAYING MEMBER, YOU WILL RECEIVE A $ 100 REBATE LATE NEXT SPRING. Come and join the movement.
UFF USF Chapter President Terry Hospitalized
UFF USF Chapter President Paul Terry suffered a stroke on Monday. While the prognosis is optimistic, he faces a long road. We all pray for a strong recovery.
Art Shapiro is now acting president of the Chapter, and the business and operations of the Chapter will continue. The business of the Chapter will be the primary agendum at tomorrow’s Chapter meeting.
IN THIS ISSUE
MOODY'S RATING OF USF IS "AA2"
For the last few months, USF's financial standing was a public issue. The USF Administration began cutting and reorganizing to try to protect USF's bond rating. But after the United Faculty of Florida and the Board of Governors were unable to find the crisis, the USF Administration conceded that USF is not in financial trouble. We hope that this means that the USF Administration will review its decisions to cut and reorganize. Meanwhile, here is the promised look at USF's bond rating.
This is the last regular Biweekly of the semester, although there may be an Extra or two during the next few weeks. The Biweekly did not get to salaries this fall, so unless something comes up, the Biweekly will review salaries in spring. Coincidentally, the UFF (representing faculty and professionals) and the Administration (representing the Board of Trustees) are bargaining a successor to the current Collective Bargaining Agreement; until a new contract is bargained and ratified, the terms and conditions in the current contract remain in force.
- Moody's and Academia. Moody's is the credit rating agency making most of the noise about colleges and universities in trouble, so we start with a look at Moody's and what they've been saying about higher education. For more, see below or click here.
- So What Does Moody's Think of USF? At the September USF Tampa Faculty Senate Meeting, Chief Operating Officer John Long warned that a cut in USF's credit rating could raise costs. For what Moody's says about USF, see below or click here.
Moody's and Academia
At the September 18 USF Tampa Faculty Senate meeting, Chief Operating Officer John Long told the USF Tampa Faculty Senate that if USF's bond rating was cut, it could cost USF millions annually. Long is not alone in his concern. Institutions across the nation have heard the steady stream of warnings from Moody's Corporation about the financial soundness of colleges and universities. Just in 2013...
Downgraded institutions include
Alabama State University,
six of the Universities of Illinois (and some of its system bonds),
the Pennsylvania State University system (including Pennyslvania's flagship Penn State, partly because of the Sandusky scandal),
Rutgers University (partly because of the new medical school it bought),
Temple University Health System, and
Moody's even gave a negative credit outlook to the NCAA and last year, worried about Harvard's endowment.
- In January, Moody's warned that most institutions will be unable to raise revenues by raising tuition, and in fact, looking at all revenue streams, Moody's predicted that academic finances will not return to the pre-2008 situation in the near future; considering that pre-2008 was in the midst of nationwide declines in state funding, this was pessimism indeed.
- In February, Moody's downgraded ratings of 34 institutions, while upgrading only three. (Private institutions also have problems.)
- In August, Moody's announced that in the past year, in public institutions, revenues grew by 1.7 % while expenses grew by 3.3 %, and warned that "Future expense reductions will likely need to be more significant and include re-evaluation of existing business models to maintain long-term financial health." In September, Moody's warned of the financial consequences of declining enrollment. And last month, Moody's announced that this year it had downgraded the ratings of 21 public institutions and upgraded none.
Moody's sometimes got into academic specifics. In an era when the marketability of graduate degrees is a major topic in the journals, Moody's warned last year that declining graduate student enrollment could hit institutions in the pocketbook. This summer, Moody's said that MOOCs were good for an institution's pocketbook. And one study concluded that financial rating agencies like Moody’s explicitly give better bond ratings to universities they believe can increase tuition and enrollment from higher-paying out of state students.
Not everyone is impressed, considering Moody's contribution to the 2008 financial meltdown. Warren Buffett may have come to Moody's defense, stating that Berkshire-Hathaway relied on Moody's ratings to make investments, but Buffett was speaking as a major stockholder in Moody's. As an example of a Moodyism subject to a variety of interpretations, Moody's recently praised Wesleyan College for dropping its need-blind admissions policy, and suggested that other colleges follow Wesleyan's lead.
So What Does Moody's Think of USF?
It is probably true that USF would lose millions if Moody's cut our bond rating. Like many institutions, USF does not liquidate assets whenever it needs to buy something; finances are an elaborate dance of buying on credit, investing with interest, all to maintain USF's operations while minimizing transactional costs. Many institutional investors -- from whom USF might seek credit -- determine what investments to make mechanically from the ratings (or, as Buffett claims Berkshire-Hathaway does, with Moody's assessments in front of them). A low rating would lead an investor to demand more interest as a low rating implies greater risk. Higher interest means USF has to pay more money. With that in mind, let's take a brief look at USF's rating.
In 2011, Moody's affirmed USF's Aa2 bond rating, stating that "The Aa2 issuer rating reflects the university's strong student demand in light of positive demographic trends in the State of Florida (rated Aa1) and relatively low net tuition per student. USF also has a history of generating balanced operations and has a healthy amount of liquid funds available within one month to cover operations, with 241 monthly days cash on hand." The "Aa" means "judged to be of high quality and are subject to very low credit risk" (see page 8 of Moody's Symbols and Definitions); Wikipedia's list of credit ranking tiers puts "Aa2" as third of the four "Prime" and "High Grade" ratings.
Moody's listed as "strengths":
Moody's listed as "challenges":
- "Strong student demand as a large regional public research institution with four campuses that has experienced stable enrollment growth and has produced favorable student demand measures."
- "The university benefits from a diversified revenue base and in FY 2010, USF's primary revenue streams were government appropriations at 34% and grants and contracts at 33%, followed by student charges and other revenue (tuition, fees, and auxiliaries) which represent 30% of its revenue base."
- "Adequate amount of liquid unrestricted funds available within one month to cover operations."
Moody's then projected:
- "Risks associated with variable rate debt structure, as approximately 56% ($269.3 million) of the university and affiliate's total outstanding debt is in a variable rate mode backed by letter of credit facilities with renewal and termination risk, leading to potential calls on liquidity."
- "Budget pressures at the State level (Aa1 general obligation rating with a stable outlook) have led to reduced state operating support. ... The reduced state operating support is offset somewhat by the university's ability to raise tuition from current levels ...."
In other words, Moody's was concerned about USF's debt load and the state's credibility, Moody's thought USF's position would improve with more (funded) research and more students (possibly with tuition hikes), but in general Moody's is optimistic.
- What Could Change the Rating - UP. "Significant revenue and financial resource growth, increased research profile, and continued improvement in student demand and pricing flexibility."
- What Could Change the Rating - DOWN. "Additional variable rate debt with a tender option backed by letter of credit facilities without significant growth of unrestricted financial resources at the university; material decline in unrestricted financial resources at the university; deterioration of the state's credit profile and prolonged declines in state operating support without growth in alternative revenue streams."
Highly Reliable Sources inform UFF that Moody's has not shown any recent sign of revisiting USF's rating.
Chapter Meeting tomorrow Friday, November 22, at 12 noon in EDU 161 on USF Tampa.
There will be free sandwiches, chips, and soda pop. All UFF members are invited to attend. Non-members are also invited to come and check us out. Come and join the movement.
Membership: Everyone in the UFF USF System Bargaining unit is eligible for UFF membership: to join, simply fill out and send in the membership form.
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