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<p class="MsoNormal"><span style="font-family:"Arial",sans-serif;color:black">FYI…<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-family:"Arial",sans-serif;color:black"><o:p> </o:p></span></p>
<div>
<p class="MsoNormal"><span style="font-size:11.0pt;color:black">Jeffrey C. Silvertooth, Ph.D.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;color:black">Associate Dean<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;color:black">Director for Extension & Economic Development<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;color:black">Division of Agriculture, Life, & Veterinary Sciences, and Cooperative Extension<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;color:black">Forbes 301, Bldg. #36<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;color:black">University of Arizona<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;color:black">Tucson, AZ 85721-0036<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;color:black">520-621-7205<o:p></o:p></span></p>
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<p class="MsoNormal"><span style="font-family:"Arial",sans-serif;color:black"><o:p> </o:p></span></p>
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<div style="border:none;border-top:solid #E1E1E1 1.0pt;padding:3.0pt 0in 0in 0in">
<p class="MsoNormal"><b><span style="font-size:11.0pt">From:</span></b><span style="font-size:11.0pt"> prov_heads_2-request@list.arizona.edu <prov_heads_2-request@list.arizona.edu>
<b>On Behalf Of </b>Miller, Robert J - (millerr)<br>
<b>Sent:</b> Wednesday, August 5, 2020 4:47 PM<br>
<b>To:</b> heads@list.arizona.edu<br>
<b>Cc:</b> Helm, Sabrina V - (helm) <helm@arizona.edu>; Brummund, Barry T - (brummund) <brummund@arizona.edu><br>
<b>Subject:</b> [heads] subject: HEADSUP | action: DIGEST: SPBAC + PROVOST'S COUNCIL | time: 2020.08.05 | priority: NORMAL<o:p></o:p></span></p>
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<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal"><b><span style="font-size:24.0pt;color:#7F7F7F">digest</span></b><br>
<span style="font-size:14.0pt;color:#7F7F7F">Strategic Planning and Budget Advisory Committee (SPBAC)<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:14.0pt;color:#7F7F7F">and<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:14.0pt;color:#7F7F7F">Provost’s Council</span><br>
2020.08.05<br>
<br>
<b><span style="font-size:14.0pt">General Faculty Financial Advisory Committee (GFFAC)
<span style="color:#7F7F7F">| subject at SPBAC</span></span></b><span style="color:#7F7F7F"><br>
</span>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:<o:p></o:p></p>
<ol style="margin-top:0in" start="1" type="1">
<li class="MsoNormal" style="mso-list:l1 level1 lfo3">LONG-TERM: get approval from the AZ Legislature and ABOR to allow the UA to borrow to pay operations;<o:p></o:p></li><li class="MsoNormal" style="mso-list:l1 level1 lfo3">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.<o:p></o:p></li></ol>
<p class="MsoNormal">The Committee’s presentation is attached.<o:p></o:p></p>
<p class="MsoNormal"><br>
<b><span style="font-size:14.0pt">UA Global Campus <span style="color:#7F7F7F">| subject at SPBAC and Provost’s Council</span></span></b><br>
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.
<o:p></o:p></p>
<p class="MsoNormal">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.<o:p></o:p></p>
<p class="MsoNormal"><a href="https://news.arizona.edu/story/university-arizona-announces-expanded-access-through-university-arizona-global-campus">https://news.arizona.edu/story/university-arizona-announces-expanded-access-through-university-arizona-global-campus</a>
<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">A SEPARATE UNIVERSITY<o:p></o:p></p>
<p class="MsoNormal">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).<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">BENEFITS<o:p></o:p></p>
<p class="MsoNormal">ASHFORD: Ashford stands to benefit by reverting to a non-profit institution and coming under UA branding.<o:p></o:p></p>
<p class="MsoNormal">ZOVIO: Zovio’s stands to benefit by expanding services as an Online Program manager (OPM) to multiple universities. <o:p></o:p></p>
<p class="MsoNormal">UA: The UA stands to benefit in several ways:<o:p></o:p></p>
<p class="MsoNormal" style="margin-left:.5in">>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.)<o:p></o:p></p>
<p class="MsoNormal" style="margin-left:.5in">>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.
<o:p></o:p></p>
<p class="MsoNormal" style="margin-left:.5in">>SUBJECT AND TEACHING DIVERSITY: It will expand the subject areas and nature of degrees offered--only a dozen degrees overlap in current offerings.<o:p></o:p></p>
<p class="MsoNormal" style="margin-left:.5in">>STUDENT DIVERSITY: It will increase the diversity of students we serve.<o:p></o:p></p>
<p class="MsoNormal" style="margin-left:.5in"><img border="0" width="709" height="399" style="width:7.3854in;height:4.1562in" id="Picture_x0020_1" src="cid:image003.png@01D66B4A.DFAB3660" alt="A screenshot of a cell phone
Description automatically generated"><o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">ONLINE DIFFERENTIATION<o:p></o:p></p>
<p class="MsoNormal">We currently offer online content through Arizona Online and the UA Global microcampus program.<o:p></o:p></p>
<p class="MsoNormal">UA Global Campus will add a third completely different program type with different content serving different markets with a different tuition structure.<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">ONLINE CULTURE<o:p></o:p></p>
<p class="MsoNormal">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.<o:p></o:p></p>
<p class="MsoNormal" style="margin-left:.5in"><img border="0" width="711" height="405" style="width:7.4062in;height:4.2187in" id="Picture_x0020_2" src="cid:image004.png@01D66B4A.DFAB3660" alt="A screenshot of a cell phone
Description automatically generated"><o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">FINANCIALS<o:p></o:p></p>
<p class="MsoNormal">The UA has signed a commitment to this deal which will be finalized in December 2020 if approved by WASC.
<o:p></o:p></p>
<p class="MsoNormal" style="margin-left:.5in">>If the deal is executed the UA will purchase the assets of Ashford for $1.<o:p></o:p></p>
<p class="MsoNormal" style="margin-left:.5in">>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.)<o:p></o:p></p>
<p class="MsoNormal" style="margin-left:.5in">>In years 1-5, UA Global Campus is guaranteed $25M/year minimum operating capital
<br>
($37.5M of this, or 1.5 years of revenue, will be paid at closing as part of the $54M payment).
<o:p></o:p></p>
<p class="MsoNormal" style="margin-left:.5in">>In years 6-15, UA Global Campus is guaranteed $10M/year minimum operating capital.<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">LIABILITY<o:p></o:p></p>
<p class="MsoNormal">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.<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">DUE DILIGENCE<br>
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. <o:p></o:p></p>
<p class="MsoNormal">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.*<o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">*IMPROVING THE ARRANGEMENT<o:p></o:p></p>
<p class="MsoNormal">UA Global welcomes input on the creation of UA Global Campus.<o:p></o:p></p>
<p class="MsoNormal">send inqueries/comments to: <o:p></o:p></p>
<p class="MsoNormal">Brent White, Vice Provost of Global Affairs, <a href="mailto:brentwhite@arizona.edu">
brentwhite@arizona.edu</a><o:p></o:p></p>
<p class="MsoNormal"><o:p> </o:p></p>
<p class="MsoNormal">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.<o:p></o:p></p>
<p class="MsoNormal"> <o:p></o:p></p>
<p class="MsoNormal">UA Global Campus will be a subject in one of this year’s HeadsUP programs.<o:p></o:p></p>
<p class="MsoNormal"> <br>
<b>Robert Miller, AIA</b><br>
<span style="font-size:10.0pt">Executive Director, HeadsUp</span><br>
<a href="mailto:millerR@u.arizona.edu"><span style="font-size:10.0pt">millerR@u.arizona.edu</span></a><br>
<br>
<span style="font-size:8.0pt">copy</span><br>
<span style="font-size:8.0pt">Sabrina Helm, Co-Chair SPBAC</span><br>
<span style="font-size:8.0pt">Barry Brummond, Co-Chair SPBAC</span><b><span style="font-size:14.0pt"><o:p></o:p></span></b></p>
<p class="MsoNormal"><span style="font-size:11.0pt"><o:p> </o:p></span></p>
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