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California public universities tap student fees for unintended projects

UCLA is using some student money for Pauley Pavilion; Cal State Sacramento is using such money to cover a bad investment.

April 04, 2010|By Jack Dolan

Reporting from Sacramento — While California universities have faced round after round of crippling budget cuts and protests against increased fees have flared on campuses, administrators have tapped funds meant for classrooms and students to cover some extraordinary costs: losses on ill-timed real estate deals, loans to high-ranking officials and an ambitious construction project.

Experts say the moves, made without wide student knowledge or public oversight, show that administrators have put aggressive business plans ahead of the teaching mission. When things go wrong, they're dipping into student fees, scholarship funds and money meant for classes to pick up the tab.


FOR THE RECORD:
University spending: An article in Sunday's Section A about California universities' use of money meant for classrooms and student services said a building purchased by a foundation affiliated with Cal State Sacramento was empty. According to a school spokeswoman, about a dozen events including lectures and a faculty retreat have been held in the 188,000-square-foot building since January. The article also misstated Jesse Bernal's title. He is the University of California student regent, not UCLA student regent. In addition, former UCLA fundraiser Richard Bergman's name was misspelled as Berman in one reference, and Cal State Sacramento President Alexander Gonzalez's name was misspelled as Gonzales in one reference. —

"It's almost like they kind of lose sight of the core purpose of what they're there to do, and get excited by the opportunity to speculate with other people's money," said Steve Boilard, director of higher education for the state's nonpartisan Legislative Analyst's Office.

At UCLA, student fees are being used to save a plan to renovate Pauley Pavilion, home of the school's legendary basketball team.

In 2006, administrators launched a campaign to raise $100 million from private contributors to pay for the $185-million upgrade, which includes cushier seats, a high-definition scoreboard and expanded locker rooms. But when the fundraising effort fell victim to the recession, administrators changed the finance plan to include $25 million from student fees.

"Students really weren't involved in the process, beyond maybe some rubber-stamp committee," said UCLA Student Regent Jesse Bernal. "I don't think they know enough about it."

Most of the student money, $15 million, will come from fees approved by a student referendum in 2000 to maintain two older campus buildings that house gyms and student centers. The remaining $10 million had been set aside for seismic repair of student facilities.

Using that money to renovate the arena "seems like a strange priority," said long-time UCLA fundraiser Richard Bergman, who originally chaired the Pauley Pavilion campaign. He said he was summarily dismissed last year after complaining about several aspects of the project, including the dip into student pockets.

UCLA Athletics Director Dan Guerrero told reporters last fall that Bergman "was very committed to the project, but along the way we had some disagreements -- reasonable people have disagreements -- on how we should proceed, and it was just felt that it was better to part ways."

Bergman said that when money got tight, administrators should have scaled back their ambitions.

Steve Olsen, UCLA's chief operating officer, acknowledged that the referendum approving the fee included nothing about Pauley Pavilion. But "it was always clearly understood that as the revenues grew, additional projects could be appropriately funded by those fees," he said.

Cindy Mosqueda, who was a UCLA sophomore in 2000 and a leader of the campaign for the fee, said there was no such understanding.

"We . . . thought we needed additional space and the asbestos out of the basement," said Mosqueda, now a PhD. candidate. "If we knew it would be used in the future for Pauley Pavilion, we wouldn't have worked so hard."

Few students will be able to afford a good view at the renovated Pauley, where seats between the baskets are expected to cost more than Lakers tickets, Berman said. Season tickets will require a one-time fee in the tens of thousands of dollars.

At Cal State Sacramento, administrators used general fund money to cover an investment that went bad.

University Enterprises Inc., an independent foundation affiliated with the school, paid more than $35 million raised from private donors to buy a commercial office building near campus in 2007. Administrators said they planned to hold classes in half of the building's 188,000 square feet and lease the rest to generate revenue.

Then the real estate bubble burst.

The building is empty, and university President Alexander Gonzalez said he paid $5.6 million last year to prevent the foundation from falling into foreclosure on it.

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