[CED/CD/EAT] FW: subject: HEADSUP | action: DIGEST: SPBAC + PROVOST'S COUNCIL | time: 2020.08.05 | priority: NORMAL

Wed Aug 5 17:07:23 MST 2020

FYI…

Jeffrey C. Silvertooth, Ph.D.
Associate Dean
Director for Extension & Economic Development
Division of Agriculture, Life, & Veterinary Sciences, and Cooperative Extension
Forbes 301, Bldg. #36
University of Arizona
Tucson, AZ       85721-0036
520-621-7205

From: prov_heads_2-request at list.arizona.edu <prov_heads_2-request at list.arizona.edu> On Behalf Of Miller, Robert J - (millerr)
Sent: Wednesday, August 5, 2020 4:47 PM
To: heads at list.arizona.edu
Cc: Helm, Sabrina V - (helm) <helm at arizona.edu>; Brummund, Barry T - (brummund) <brummund at arizona.edu>
Subject: [heads] subject: HEADSUP | action: DIGEST: SPBAC + PROVOST'S COUNCIL | time: 2020.08.05 | priority: NORMAL

digest
Strategic Planning and Budget Advisory Committee (SPBAC)
and
Provost’s Council
2020.08.05

General Faculty Financial Advisory Committee (GFFAC) | subject at SPBAC
Scott Cederburg, Associate Professor and Co-Chair of GFFAC (a committee of the Faculty Senate), summarized his Committee’s recommendations. The Committee advocates the use of debt to augment or replace the furlough program in order to spread the COVID-related deficit over a longer period of time and provide relief to current employees. It advocates a two-step approach:

  1.  LONG-TERM: get approval from the AZ Legislature and ABOR to allow the UA to borrow to pay operations;
  2.  SHORT-TERM: get a line of credit or other short term note that will provide time to change current law and secure long term bonds to fund operations.
The Committee’s presentation is attached.

UA Global Campus | subject at SPBAC and Provost’s Council
The UA recently signed an agreement to form a new online educational entity in partnership with Zonio and Ashford University to be called UA Global Campus. Ashford is currently owned by Zovio, an education technology services company based in Chandler, Arizona. If approved by Ashford’s accrediting agency, the WASC Senior College and University Commission, the agreement will closed December 2020. UA Global Campus would then launch in Jan-Feb 2021.
This is one of a multi-part strategy intended to secure the UA’s financial future and overcome the threats posed by pandemic impacts while expanding the UA mission.
https://news.arizona.edu/story/university-arizona-announces-expanded-access-through-university-arizona-global-campus

A SEPARATE UNIVERSITY
This agreement would create a new, separate, non-profit university, named UA Global Campus, with its own administration and faculty. The program will be evaluated annually by a joint academic advisory committee comprised of faculty from UA and UA Global Campus. Zonio would continue to operate independently as the program’s Online Program manager (OPM).

BENEFITS
ASHFORD: Ashford stands to benefit by reverting to a non-profit institution and coming under UA branding.
ZOVIO: Zovio’s stands to benefit by expanding services as an Online Program manager (OPM) to multiple universities.
UA: The UA stands to benefit in several ways:
>MARKETS: It will expand our impact to other US and International markets and our appeal to different kinds of students. (Currently, 80% of Arizona Online is in Arizona and California. Ashford is 50% in the southeast and 25% northeast US.)
>GROWTH: It will allow us to grow quickly enough to impact our financial future and capture market share in a quickly changing online educational space.
>SUBJECT AND TEACHING DIVERSITY: It will expand the subject areas and nature of degrees offered--only a dozen degrees overlap in current offerings.
>STUDENT DIVERSITY: It will increase the diversity of students we serve.
[A screenshot of a cell phone  Description automatically generated]

ONLINE DIFFERENTIATION
We currently offer online content through Arizona Online and the UA Global microcampus program.
UA Global Campus will add a third completely different program type with different content serving different markets with a different tuition structure.

ONLINE CULTURE
Other universities that have quickly developed significant online programs have made arrangements with OPMs to service the online markets. By immediately adding 35,000 students to the 5,000 we currently serve through Arizona Online, we are in striking range of ASU with the possibility of quickly becoming a global provider. Because the online educational market is changing quickly and because there are many established programs, UA could not grow organically and still have a chance of significant impact without this merger.
[A screenshot of a cell phone  Description automatically generated]

FINANCIALS
The UA has signed a commitment to this deal which will be finalized in December 2020 if approved by WASC.
>If the deal is executed the UA will purchase the assets of Ashford for $1.
>At closing, the UA will receive $54M at closing in working capital and in pre-payment toward a 15-year income guarantee. (A current draft proposal would have $20M to come directly to the UA with $34M left in UA Global Campus for working capital, curricular improvement, and to support student success. The $20M may be used for furlough relief, scholarships, or other pressing needs.)
>In years 1-5, UA Global Campus is guaranteed $25M/year minimum operating capital
($37.5M of this, or 1.5 years of revenue, will be paid at closing as part of the $54M payment).
>In years 6-15, UA Global Campus is guaranteed $10M/year minimum operating capital.

LIABILITY
Liability over past acts does not transfer with this deal. Should the new entity fail, UA has no liability. Should there be new legal impacts within UA Global Campus, UA has no liability.

DUE DILIGENCE
The analysis of this deal was overseen by former Provost Jeff Goldberg and was reviewed by a range of UA faculty members and administrators. The proposal could not legally be made public in advance of commitment; all UA reviewers were bound by non-disclosure agreements.
While the UA’s assessment uncovered potential concerns, those were either deemed issues of the past that had been corrected or issues that can be corrected under the new model. These were itemized in the presentation and UA Global is available to consider improvements and answer questions.*

*IMPROVING THE ARRANGEMENT
UA Global welcomes input on the creation of UA Global Campus.
send inqueries/comments to:
Brent White, Vice Provost of Global Affairs, brentwhite at arizona.edu<mailto:brentwhite at arizona.edu>

A Faculty Senate Memo was sent to Brent White and Lisa Rulney regarding the proposed acquisition after being consulted on June 9, 2020. This memo was sent on behalf of the SPBAC Faculty (appointed and elected), not the entire SPBAC committee. That document has recently been made public.

UA Global Campus will be a subject in one of this year’s HeadsUP programs.

Robert Miller, AIA
Executive Director, HeadsUp
millerR at u.arizona.edu<mailto:millerR at u.arizona.edu>

copy
Sabrina Helm, Co-Chair SPBAC
Barry Brummond, Co-Chair SPBAC

-------------- next part --------------
An HTML attachment was scrubbed...
URL: <https://list.cals.arizona.edu/pipermail/ced/attachments/20200806/c81e8a32/attachment.htm>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image003.png
Type: image/png
Size: 147480 bytes
Desc: image003.png
URL: <https://list.cals.arizona.edu/pipermail/ced/attachments/20200806/c81e8a32/attachment.png>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: image004.png
Type: image/png
Size: 197538 bytes
Desc: image004.png
URL: <https://list.cals.arizona.edu/pipermail/ced/attachments/20200806/c81e8a32/attachment-0001.png>
-------------- next part --------------
A non-text attachment was scrubbed...
Name: 2020.08.05_GFFAC presentation to SPBAC.pdf
Type: application/pdf
Size: 1934390 bytes
Desc: 2020.08.05_GFFAC presentation to SPBAC.pdf
URL: <https://list.cals.arizona.edu/pipermail/ced/attachments/20200806/c81e8a32/attachment.pdf>