This Preliminary Official Statement and the information contained herein are subject to completion or amendment. Under no circumstances shall this Preliminary Official Statement constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. Paying Agent: Legal Counsel: Settlement: Closing; Redemption: Denominations: Registration: Dates: Payment Interest Security: Purpose and Authority: † * Official StatementDated:______, 2018 Tax Status: Dated: DateofDelivery N N to themakingofaninformedinvestmentdecision. only. Itisnotasummaryofthisissue.InvestorsmustreadtheentireOfficialStatementtoobtaininformationessential its General Revenue Bonds, 2018A (the “2018 Bonds”). This cover page contains certain information for quick reference This OfficialStatementhasbeenpreparedbytheUniversityofOregon(the“University”)toprovideinformationregarding Book-
ot BankQualified ew responsibility fortheaccuracy ofsuchnumbers. CUSIP® numbers areprovidedforconvenienceof referenceonly.NeithertheUniversity, theUnderwriterortheiragents orcounselassume CUSIP GlobalServices. Thisdataisnotintended tocreateadatabaseanddoesnot serveinanywayasasubstitute fortheCGSdatabase. Bankers Association byS&PCapitalIQ.Copyright© 2016CUSIPGlobalServices. Allrightsreserved.CUSIP®data hereinisprovidedby CUSIP® isaregisteredtrademark oftheAmericanBankersAssociation.CUSIPGlobalServices(“CGS”) ismanagedonbehalfoftheAmerican Preliminary, subjecttochange. I ssue E ntry Only
Preliminary Official Statement Date
Due: U.S. BankNationalAssociation. (the “Underwriter”) byitscounsel,HawkinsDelafield&Wood LLP,Portland,Oregon. Certain matterswillbepasseduponforMerrillLynch,Pierce, Fenner&SmithIncorporated opinion of Pacifica Law GroupLLP, Seattle, Washington, BondCounseland DisclosureCounsel. The 2018Bondsareofferedwhen,asandifissued,subject toreceiptoftheapprovinglegal through DTCinNewYork,onoraboutJanuary 24,2018. It isexpectedthatdeliveryofthe2018Bondswillbemadeby FastAutomatedSecuritiesTransfer The 2018Bondsaresubjecttoredemptionpriormaturityas describedinthisOfficialStatement. The 2018Bondswillbeavailableindenominationsof$5,000 eachandintegralmultiplesthereof. the 2018BondswillbemadedirectlytoDTCorsuchnominee.SeeAPPENDIXE. its nominee is the registered owner of the 2018 Bonds, payments of principal of and interest on New York (“DTC”). DTC will act as securities depository for the 2018 Bonds. So long as DTC or registered in the name of Cede &Co., as nominee of The Depository Trust Company, New York, The 2018Bondsareissuableonlyasfullyregisteredobligationsand,whenissued,willbe year untilmaturityorpriorredemption,commencingApril1,2018. Interest onthe2018BondsfromtheirdateofdeliveryispayableApril1andOctobereach PLEDGE, OBLIGATION,ORAGREEMENTOFANYKINDWHATSOEVERTHEUNIVERSITY. PRINCIPAL OFORINTERESTONTHE2018BONDS,FORPERFORMANCEANY OTHER THANTHEUNIVERSITY,SHALLBELIABLEINANYEVENTFORPAYMENTOF Bonds. NEITHERTHESTATEOFOREGONNORANYPOLITICALSUBDIVISIONTHEREOF, Bonds (as defined herein) issued on a parity with the 2015 Bonds, the 2016 Bonds and 2018 (the “2015Bonds”),GeneralRevenueBonds,2016A“2016Bonds”)andanyAdditional are tobeissuedonaparitywiththeUniversity’soutstandingGeneralRevenueBonds,2015A extent suchfundsarenotrestrictedintheirusebylaw,regulation,orcontract.The2018Bonds receipts, andotherincome(includinginterestdividends)oftheUniversityifto Revenues, asdefinedherein.GeneralRevenuesincludealltuition,fees,charges,rents,revenues, The 2018BondsaregeneralrevenueobligationsoftheUniversity,payablefromGeneral Treasurer. of theBoardTrusteesUniversity,andaDeclarationtobeexecutedbyUniversity pursuant toOregonRevisedStatutes352.087(1)(b),352.408(1)andchapter287A,aresolution projects and to pay costs of issuancefor the 2018 Bonds.The 2018 Bondsarebeing issued The Universityisissuingthe2018Bondstopayaportionofcost of approvedUniversity is exemptfromOregonpersonalincometaxes.See “TAXMATTERS.” imposed onindividuals.InthefurtheropinionofBondCounsel,underexistinglaw,suchinterest 2018 Bondsisnotanitemoftaxpreferenceforpurposesthefederalalternativeminimum excludable fromgrossincomeforfederaltaxpurposes.Inaddition,interestonthe law andsubjecttocertainqualificationsdescribedherein,theintereston2018Bondsis In theopinionofPacificaLawGroupLLP,Seattle,Washington,BondCounsel,underexisting A pril 1,2048 General UNI i nterest Bof V ER R A $60,000,000* S evenue Bonds,2018
M R ITY ate: ___% errill O F O L y ynch RE (See “O ield: ___% GO d N T January 3, 2018 A H
ER BO Price: ___% N Standard & Poor’s D INF cu O RMATI M oody’s S I P O †
N N R — o. 914767___ R ating: ating: R atings”) A AA a2 -
UNIVERSITY OF OREGON 1585 E. 13th Avenue Eugene, Oregon 97403 Telephone: (541) 346-1000 Website: (1)
BOARD OF TRUSTEES Trustee Title Term Expiration Charles M. Lillis Chair June 30, 2021 Ginevra Ralph Vice Chair June 30, 2019 Connie Ballmer Trustee June 30, 2019 Peter Bragdon Trustee June 30, 2021 Rodolfo (Rudy) Chapa, Jr. Trustee June 30, 2021 Andrew Colas Trustee June 30, 2021 Ann Curry Trustee June 30, 2019 Allyn Ford Trustee June 30, 2021 Joseph Gonyea III Trustee June 30, 2021 Ross Kari Trustee June 30, 2019 Laura Lee McIntyre Trustee June 30, 2019 Jimmy Murray Trustee June 30, 2019 William Paustian Trustee June 30, 2019 Michael H. Schill(2) Trustee (Ex Officio) N/A Mary Wilcox Trustee June 30, 2019
BOARD OFFICERS Michael H. Schill President Kevin Reed General Counsel (Vice President and General Counsel) Jamie Moffitt Treasurer (Vice President for Finance and Administration/CFO) Angela Wilhelms Secretary (University Secretary)
OTHER EXECUTIVE OFFICERS Jayanth Banavar Senior Vice President and Provost Yvette Alex-Assensoh Vice President for Equity and Inclusion Michael Andreasen Vice President for Advancement Kyle Henley Vice President for University Communications Kevin Marbury Vice President for Student Life Rob Mullens Director of Intercollegiate Athletics David Conover Vice President for Research and Innovation Roger J. Thompson Vice President for Student Services and Enrollment Management
BOND COUNSEL FINANCIAL ADVISOR Pacifica Law Group LLP Public Financial Management, Inc. Seattle, Washington Boston, Massachusetts
BOND REGISTRAR U.S. Bank National Association Portland, Oregon ______(1) The University’s website and other websites referenced herein are not part of this Official Statement, and investors should not rely on information presented on the University’s or other websites in determining whether to purchase the 2018 Bonds. This inactive textual reference to the University’s website and other website references herein are not hyperlinks and do not incorporate the University’s or other websites by reference. (2) The President of the University serves as an ex officio, non-voting member of the Board of Trustees.
-i- No dealer, broker, salesperson or any other person has been authorized to give any information or to make any representation, other than the information and representations contained in this Official Statement, in connection with the sale of the 2018 Bonds and, if given or made, such information or representations must not be relied upon as having been authorized by the University. This Official Statement does not constitute an offer to sell or a solicitation or sale of the 2018 Bonds. The University has “deemed final” this Preliminary Official Statement as of its date, except for the omission of information as to offering prices, interest rates, selling compensation, aggregate principal amount, principal amount per maturity, maturity dates, delivery dates, and other terms of the 2018 Bonds dependent on such matters. Certain statements contained in this Official Statement do not reflect historical facts but are forecasts and “forward-looking statements.” No assurance can be given that the future results discussed herein will be achieved, and actual results may differ materially from the forecasts described herein. In this respect, words such as “estimate,” “project,” “anticipate,” “expect,” “intend,” “forecast,” “plan,” “believe” and similar expressions are intended to identify forward- looking statements. All projections, forecasts, assumptions and other forward-looking statements are expressly qualified in their entirety by the cautionary statements set forth in this Official Statement. The Underwriter has provided the following three sentences for inclusion in this Official Statement. The Underwriter has reviewed the information in this Official Statement in accordance with, and as part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information. In connection with this offering, the Underwriter may over-allot or effect transactions that stabilize or maintain the market price of the 2018 Bonds at levels above those which might otherwise prevail in the open market. Such stabilizing, if commenced, may be discontinued at any time. CUSIP numbers are included in this Official Statement for convenience of the holders and potential holders of the 2018 Bonds. The CUSIP numbers were provided by CUSIP Global Services. No assurance can be given that the CUSIP numbers for the 2018 Bonds will remain the same after the date of issuance and delivery of the 2018 Bonds. The University does not take any responsibility for the accuracy of such CUSIP numbers. This Official Statement is not to be construed as a contract or agreement between the University and purchasers or owners of any of the 2018 Bonds.
-ii-
TABLE OF CONTENTS
Page INTRODUCTORY STATEMENT ...... 1 Bonds ...... 7 PUBLIC UNIVERSITY; AUTHORITY OUTSTANDING UNIVERSITY FOR ISSUANCE ...... 2 OBLIGATIONS ...... 7 THE 2018 BONDS ...... 2 State Treasurer Approval of Cash Flow General ...... 2 Sufficiency ...... 9 Optional Redemption ...... 2 Bond Payments and University-Paid State Bond Partial Redemption; Notice of Redemption; Payments ...... 9 Conditional Redemption ...... 3 LIMITATIONS ON REMEDIES ...... 9 Purchase of 2018 Bonds by the University ...... 3 LEGISLATION, INITIATIVES AND Defeasance ...... 3 REFERENDA ...... 10 SOURCES AND USES OF 2018 BOND LEGAL INFORMATION ...... 11 PROCEEDS ...... 4 No Litigation Concerning the 2018 Bonds ...... 11 Use of Proceeds ...... 4 Other Litigation ...... 11 Sources and Uses of Funds ...... 4 Approval of Counsel ...... 11 SECURITY FOR THE BONDS ...... 4 TAX MATTERS ...... 11 University General Revenue Obligations ...... 4 CONTINUING DISCLOSURE Not a State Obligation...... 5 UNDERTAKING ...... 12 Additions to General Revenues ...... 5 OTHER 2018 BOND INFORMATION ...... 13 Deletions from General Revenues ...... 6 Ratings ...... 13 Additional Bonds ...... 6 Financial Advisor ...... 13 Payment Covenant ...... 6 Underwriting ...... 13 Interest Rate Swap Agreements ...... 6 Potential Conflicts ...... 13 Debt Service Schedule on General Revenue Independent Auditor ...... 14 Official Statement ...... 14 APPENDIX A – THE UNIVERSITY OF OREGON APPENDIX B – COPY OF THE RESOLUTION AND FORM OF THE DECLARATION APPENDIX C – UNIVERSITY OF OREGON 2017 ANNUAL FINANCIAL REPORT APPENDIX D – FORM OF BOND COUNSEL OPINION APPENDIX E – BOOK-ENTRY ONLY SYSTEM APPENDIX F – FORM OF CONTINUING DISCLOSURE CERTIFICATE
-iii-
OFFICIAL STATEMENT
UNIVERSITY OF OREGON $60,000,000* General Revenue Bonds, 2018A
INTRODUCTORY STATEMENT
This Official Statement, including the cover page, table of contents and appendices, provides information regarding the University of Oregon (the “University”) and its General Revenue Bonds, 2018A (the “2018 Bonds”).
The University is the flagship university of the State of Oregon (the “State”) and a comprehensive research university with a commitment to exceptional teaching, research and service. The University started offering classes in 1876 and now offers more than 300 academic programs and has more than 25 research centers and institutes. The University is designated a Carnegie Doctoral University: Highest Research Activity, and is one of 62 members of the Association of American Universities (AAU). The University’s primary campus is in Eugene, but programs are also offered in Portland, Oregon; at the Oregon Institute of Marine Biology in Charleston, Oregon; and at the Pine Mountain Observatory outside of Bend, Oregon.
The University is issuing the 2018 Bonds pursuant to Oregon Revised Statutes (“ORS”) 352.087(1)(b), 352.408(1) and chapter 287A, a resolution of the Board of Trustees of the University (the “Board”) adopted on September 8, 2017 (the “Resolution”), and a Declaration (the “Declaration” and together with the Resolution, the “Bond Authorization”) to be executed by the Treasurer of the University (the “Treasurer”).
The University is issuing the 2018 Bonds to finance approved University capital projects and to pay costs of issuance for the 2018 Bonds. See “SOURCES AND USES OF 2018 BOND PROCEEDS.”
The 2018 Bonds are general revenue obligations of the University, payable from General Revenues, as defined herein. General Revenues include all tuition, fees, charges, rents, revenues, receipts, and other income of the University if and to the extent such funds are not restricted in their use by law, regulation, or contract. The 2018 Bonds are to be issued on a parity with the University’s outstanding 2015 Bonds, 2016 Bonds and any additional General Revenue bonds issued on a parity with the 2015 Bonds, 2016 Bonds and 2018 Bonds (collectively with the 2015 Bonds, 2016 Bonds and the 2018 Bonds, the “Bonds”). The University has no taxing power. The 2018 Bonds are not an indebtedness or obligation of the State, and are not a charge upon any revenue or property of the State.
U.S. Bank National Association has been appointed as Bond Registrar, Paying Agent and Fiscal Agent (together, the “Bond Registrar”).
Brief descriptions of the 2018 Bonds, the University, the Bond Authorization, and certain statutes and agreements are included in this Official Statement. Such descriptions do not purport to be comprehensive or definitive. All references to the statutes, agreements, or other instruments described herein are qualified in their entirety by reference to each such document, statute, or other instrument. The information in this Official Statement is subject to change without notice, and neither the delivery of this Official Statement nor any sale of the 2018 Bonds shall under any circumstances create any implication that there has been no change in the affairs of the University since the date of this Official Statement. Capitalized terms used in this Official Statement but not defined herein have the meanings set forth in the Bond Authorization, a copy of which is included in this Official Statement as Appendix B.
* Preliminary, subject to change.
PUBLIC UNIVERSITY; AUTHORITY FOR ISSUANCE
The University is established as an “independent public body with statewide purposes and missions and without territorial boundaries.” The Board is granted all of the powers, rights and duties expressly conferred upon it by law, or that are implied by law or incident to such powers. The Board appoints and employs the University president, who is both the executive and governing officer of the University and the president of the University faculty.
The University is authorized to borrow money for the needs of the University pursuant to ORS 352.087(1)(b), issue revenue bonds, including the 2018 Bonds, for any lawful purpose of the University pursuant to ORS 352.408(1)(a) in accordance with ORS chapter 287A, issue refunding bonds pursuant to ORS 352.408(1)(b), by reference to ORS 287A.360 to 287A.380 of the same character and tenor as the revenue bonds replaced, and enter into financing agreements and certificates of participation pursuant to ORS 352.408(2) and ORS 271.390. The 2018 Bonds will be issued pursuant to the Bond Authorization. Previously part of the Oregon University System (“OUS”), the University became a public university with its own governing board on July 1, 2014, pursuant to Senate Bill 270 (Chapter 768, Oregon Laws 2013), as amended. The University, along with Oregon’s other public universities, is no longer governed by OUS. The State Legislature dissolved OUS effective July 1, 2015.
THE 2018 BONDS
General
The 2018 Bonds will be dated their date of delivery and will bear interest at the rate set forth on the front cover of this Official Statement. The 2018 Bonds will mature on April 1, 2048, subject to prior redemption. Interest on the 2018 Bonds will be calculated on the basis of a 360-day year consisting of twelve 30-day months. Interest on the 2018 Bonds is payable on each April 1 and October 1 until maturity or prior redemption, commencing April 1, 2018. The “Record Date” is the 15th day of the month preceding an Interest Payment Date.
The 2018 Bonds will be issued as fully registered bonds in denominations of $5,000 each or any integral multiple of $5,000 within a maturity (each an “Authorized Denomination”). The 2018 Bonds will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York (“DTC”), pursuant to DTC’s book-entry only system (the “Book-Entry Only System”). Purchases of beneficial interests in the 2018 Bonds will be made in book-entry form only. If at any time the Book-Entry Only System is discontinued for the 2018 Bonds, the 2018 Bonds will be exchangeable for other fully registered certificated 2018 Bonds of the same maturity in Authorized Denominations. See Appendices B and E.
“Registered Owner” means the person in whose name a 2018 Bond is registered on the Bond Register. For so long as the University utilizes the book-entry system for the 2018 Bonds, DTC shall be deemed to be the Registered Owner. For so long as Cede & Co. (as nominee of DTC) is the Registered Owner of the 2018 Bonds, interest and principal will be paid and delivery will be made as described in the operational arrangements referred to in the Letter of Representations and pursuant to DTC’s standard procedures. See Appendices B and E.
The interest due on any 2018 Bond on any Interest Payment Date will be paid to the Registered Owner of such 2018 Bond as shown on the Bond Register as of the Record Date. If the 2018 Bonds are no longer held in book-entry only form, the interest on the 2018 Bonds will be payable by check, provided that any Registered Owner of $1,000,000 or more in aggregate principal amount of the 2018 Bonds, upon written request given to the Bond Registrar at least five business days prior to the Record Date designating an account in a domestic bank, may be paid by wire transfer of immediately available funds. If the 2018 Bonds are no longer held in book-entry only form, all payments of principal will be made solely upon presentation of the 2018 Bond to the Bond Registrar.
Optional Redemption
The 2018 Bonds are subject to redemption at the option of the University, as a whole or in part on any date on or after ______1, ______, at a redemption price equal to ___% of the principal amount thereof, plus interest accrued to the date fixed for redemption.
-2- Partial Redemption; Notice of Redemption; Conditional Redemption
Selection of 2018 Bonds for Redemption. If the University elects to redeem fewer than all of the outstanding 2018 Bonds for optional redemption, the University will select the amount and maturities to be redeemed. In no event will any 2018 Bond be outstanding in a principal amount that is not an Authorized Denomination. If less than all the outstanding 2018 Bonds within a maturity are to be redeemed, the 2018 Bonds to be redeemed will be selected in accordance with the then effective operational arrangements of DTC referred to in the Letter of Representations. If less than all the outstanding 2018 Bonds within a maturity are to be redeemed and the 2018 Bonds are no longer in book-entry only form, the 2018 Bonds to be redeemed will be selected by lot by the Bond Registrar.
Notice of Redemption. For so long as the Book-Entry Only System is in effect, notice of redemption will be provided in accordance with the operational arrangements of DTC as then in effect, and neither the University nor the Bond Registrar will provide any notice of redemption to any Beneficial Owners. Thereafter (if the 2018 Bonds are no longer held in book-entry only form), notice of redemption will be given as follows: unless waived by any owner of 2018 Bonds to be redeemed, official notice of any such redemption will be given by the Bond Registrar on behalf of the University by mailing a copy of an official redemption notice by first class mail at least 20 days and not more than 60 days prior to the date fixed for redemption to the Registered Owner of the 2018 Bond or 2018 Bonds to be redeemed at the address shown on the Bond Register or at such other address as is furnished in writing by such Registered Owner to the Bond Registrar.
Conditional Redemption; Rescission. Notice of redemption may be conditional. Unless the University has revoked a conditional notice of optional redemption (or unless the University provided a conditional notice of optional redemption and the conditions for the optional redemption set forth therein are not satisfied), the University will transfer to the Bond Registrar amounts that, in addition to other money, if any, held by the Bond Registrar for such purpose, will be sufficient to redeem, on the date fixed for redemption, all of the 2018 Bonds to be redeemed. If and to the extent that funds have been provided to the Bond Registrar for the redemption of the 2018 Bonds, then from and after the date fixed for redemption for such 2018 Bond or portion thereof, interest on each such 2018 Bond will cease to accrue and such 2018 Bond or portion thereof will cease to be outstanding.
The University has retained the right to rescind any redemption notice and the related optional redemption of 2018 Bonds by giving notice of rescission to the affected Registered Owners at any time on or prior to the scheduled redemption date. Any notice of optional redemption that is so rescinded will be of no effect, and the 2018 Bonds for which the notice of optional redemption has been rescinded will remain outstanding.
Effect of Redemption. If notice of redemption has been duly given and money for the payment of the redemption price of the 2018 Bonds or portions thereof to be redeemed is held by the Bond Registrar, then on the redemption date the 2018 Bonds or portions thereof so called for redemption will become payable at the redemption price specified in such notice; and from and after the redemption date, interest thereon or on portions thereof so called for redemption will cease to accrue, such 2018 Bonds or portions thereof will cease to be outstanding and to be entitled to any benefit, protection or security of the Bond Authorization. The Registered Owners of such 2018 Bonds or portions thereof will thereafter have no rights in respect thereof except to receive payment of the redemption price upon delivery of such 2018 Bonds to the Bond Registrar.
Any notice mailed will be conclusively presumed to have been given, whether or not actually received by any owner of a 2018 Bond. The failure to mail notice with respect to any 2018 Bond will not affect the validity of the proceedings for the redemption of any other 2018 Bond with respect to which notice was so mailed.
Purchase of 2018 Bonds by the University
The University may acquire 2018 Bonds by purchase of 2018 Bonds offered to the University at any time at such purchase price as the University deems appropriate, or by gift at any time on terms as the University deems appropriate. The Bond Authorization does not require that 2018 Bonds so acquired be cancelled.
Defeasance
In the event that the University, in order to effect the payment, retirement or redemption of any 2018 Bond, sets aside in the Bond Fund or in another special account, cash or noncallable Government Obligations (defined below),
-3- or any combination of cash and/or noncallable Government Obligations, in amounts and maturities which, together with the known earned income therefrom, are sufficient to redeem or pay and retire such 2018 Bond in accordance with its terms and to pay when due the interest and redemption premium, if any, thereon (as verified in a report of an independent certified public accountant), and such cash and/or noncallable Government Obligations are irrevocably set aside and pledged for such purpose, and receives an opinion of Bond Counsel that such 2018 Bonds have been legally defeased, then no further payments need be made into the Bond Fund for the payment of the principal of and interest on such 2018 Bond. The owner of a 2018 Bond so provided for will cease to be entitled to any lien, benefit or security of the Bond Authorization except the right to receive payment of principal, premium, if any, and interest from the Bond Fund or such special account, and such 2018 Bond will be deemed to be not outstanding under the Bond Authorization.
As defined in the Declaration, “Government Obligations” means direct obligations of the United States of America or obligations the principal of and interest on which are unconditionally guaranteed by the United States of America and bank certificates of deposit secured by the obligations; and bonds, debentures, notes, certificates of participation or other obligations issued by a federal agency or other instrumentality of the federal government.
SOURCES AND USES OF 2018 BOND PROCEEDS
Use of Proceeds
The proceeds from the sale of the 2018 Bonds will be used to finance capital projects of the University as identified by the Treasurer of the University, or a designee, from time to time and to pay costs of issuance.
Sources and Uses of Funds
The proceeds of the 2018 Bonds are expected to be applied as follows (amounts rounded to the nearest dollar):
Sources of Funds Par Amount of the 2018 Bonds $ 60,000,000(1) [Net] Original Issue Premium Total Sources of Funds $ Uses of Funds Project Fund Deposit $ Issuance Costs(2) Total Uses of Funds $ ______(1) Preliminary, subject to change. (2) Issuance costs include Underwriter’s discount, legal fees, financial advisor’s fees, rating agency fees, contingency and other costs incurred in connection with the issuance of the 2018 Bonds.
SECURITY FOR THE BONDS
University General Revenue Obligations
The 2018 Bonds are general revenue obligations of the University, payable solely from and secured by a pledge of General Revenues. The University is obligated to pay the principal of and interest on the 2018 Bonds from all General Revenues.
General Revenues consist of all legally available revenue of the University. Legally available revenues include all tuition, fees, charges, rents, revenues, receipts, and other income (including interest and dividends) of the University, if and to the extent such funds are not restricted in their use by law, regulation, or contract.
Certain income is restricted by law, regulation, or contract and therefore is excluded from General Revenues. For example, the following items are restricted and, therefore, excluded:
• Moneys received by the University from taxes collected by the State (e.g., most State appropriations);
-4- • Gifts or grants, the purpose of which has been restricted in writing by the terms of a gift or grant, or by the donor or grantor; and
• Amounts required to be transferred to the State Treasurer for deposit for University-Paid State Bonds (defined below) when due, and without duplication, amounts required to be paid to the State Treasurer for University-Paid State Bonds when due, as further described under the heading “OUTSTANDING UNIVERSITY OBLIGATIONS.”
The following table shows General Revenues received in Fiscal Years 2013-2017. In addition, unrestricted fund balances, to the extent that they were accumulated from tuition, fees, charges, rents, revenues, receipts, and other income (including interest and dividends) received as General Revenues, also are available to pay obligations secured by General Revenues. See “General Revenues” in APPENDIX A—UNIVERSITY OF OREGON. Accumulated unrestricted fund balances are not reflected in the following table.
UNIVERSITY GENERAL REVENUES RECEIVED (000’s)(1) 2017 2016 2015 2014 2013 Available Revenues Student Tuition and Fees $381,434 $378,536 $359,287 $360,951 $344,313 Auxiliary Enterprise Revenues 190,759 174,989 171,950 155,512 145,106 Education Department Sales and Services 15,751 16,452 16,514 15,761 15,494 Facilities and Administration Cost Recoveries included in Grant and Contract Revenues 21,956 20,494 20,498 20,693 19,163 Other 18,834 10,361 9,435 10,303 10,818 Subtotal of Available Revenues $628,734 $600,832 $577,684 $563,220 $534,894 Less: Amounts required for University-Paid State Bonds(2) (43,846) (44,404) (44,141) (40,524) (40,734) Net Funds Available $584,888 $556,428 $533,543 $522,696 $494,160
(1) The pledge of General Revenues also includes unrestricted fund balances, to the extent that they were accumulated from amounts received as General Revenues. (2) Approximately two-thirds of these amounts are paid on the first day of the fiscal year. See “OUTSTANDING UNIVERSITY OBLIGATIONS.” Payments are shown prior to any Build America Bond interest expense subsidies received by the University. See “LEGISLATION, INITIATIVES AND REFERENDA.” Source: The University.
Not a State Obligation
PURSUANT TO ORS 352.408(5), THE 2018 BONDS SHALL NOT BE DEEMED TO CONSTITUTE A DEBT OR LIABILITY OF THE STATE OF OREGON OR OF ANY SUBDIVISION THEREOF, OTHER THAN THE UNIVERSITY, OR A PLEDGE OF THE FAITH AND CREDIT OF THE STATE OF OREGON OR ANY SUCH POLITICAL SUBDIVISION, OTHER THAN THE UNIVERSITY, BUT SHALL BE PAYABLE SOLELY FROM THE FUNDS PROVIDED THEREFOR UNDER THE BOND AUTHORIZATION. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF OREGON OR ANY POLITICAL SUBDIVISION THEREOF IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR THE INTEREST ON THE BONDS. THE ISSUANCE OF THE 2018 BONDS SHALL NOT DIRECTLY OR INDIRECTLY OR CONTINGENTLY OBLIGATE THE STATE OF OREGON OR ANY POLITICAL SUBDIVISION THEREOF TO LEVY OR TO PLEDGE ANY FORM OF TAXATION WHATEVER THEREFOR OR TO MAKE ANY APPROPRIATION FOR THEIR PAYMENT. THE UNIVERSITY HAS NO TAXING POWER.
Additions to General Revenues
The University reserves the right to include in General Revenues, at its sole option, in the future, other sources of revenue or income currently excluded from the definition of General Revenues. The future addition of General
-5- Revenues is to be evidenced by a certificate executed by the Treasurer identifying the items to be added. The University is not required to meet any coverage or other test prior to adding revenues to General Revenues.
Deletions from General Revenues
The University reserves the right to remove, at its sole option, in the future, revenues from General Revenues, so long as no more than 10% of General Revenues (based on the University’s most recent audited financial statements) are removed in any fiscal year. The removal of General Revenues is to be evidenced by a certificate executed by the Treasurer identifying the items to be deleted and confirming that this requirement is met.
Additional Bonds
The University has reserved the right to issue one or more series of Additional Bonds for University purposes as permitted by law. “Additional Bonds” means bonds, leases, interest rate swaps, and other contractual obligations issued by the University and secured by a pledge of General Revenues on a parity with the pledge securing the payment of the principal of and interest on the 2015 Bonds, the 2016 Bonds and 2018 Bonds. There are no limitations, either statutory or contractual, that would prevent the University from incurring any such additional obligations.
The University also reserves the right to issue obligations payable from or secured by a pledge of General Revenues on a basis subordinate to the 2015 Bonds, the 2016 Bonds, the 2018 Bonds and any Additional Bonds, without notice to or consent of Bondholders, as permitted by law.
Payment Covenant
The University will covenant in the Bond Authorization to pay or cause to be paid the principal of and the interest on all outstanding 2018 Bonds on the dates, at the places, from the sources of funds and in the manner, all as provided in the Bond Authorization.
Interest Rate Swap Agreements
The University may enter into interest rate swap agreements payable from General Revenues. Pursuant to ORS 287A.335, the University is authorized to enter into agreements for exchange of interest rates with a counterparty. An agreement for exchange of interest rates may be made to manage payment, interest rate, spread or similar exposure undertaken in connection with related bonds.
[Remainder of Page Intentionally Left Blank]
-6- Debt Service Schedule on General Revenue Bonds
The table below displays debt service payments on University obligations secured by a parity lien pledge of General Revenues, including the 2015 Bonds, the 2016 Bonds and the 2018 Bonds. See “OUTSTANDING UNIVERSITY OBLIGATIONS” below for a description of other obligations of the University.
DEBT SERVICE SCHEDULE ON THE BONDS (as of ______, 2018)
Total General Revenue Bond Debt 2015 Bonds and 2016 Bonds 2018 Bonds Service(2) Fiscal Total Total Year(1) Principal Interest Debt Service(2) Principal Interest Debt Service(2) 2018 - $5,500,000 $5,500,000 2019 - 5,500,000 5,500,000 2020 - 5,500,000 5,500,000 2021 - 5,500,000 5,500,000 2022 - 5,500,000 5,500,000 2023 - 5,500,000 5,500,000 2024 - 5,500,000 5,500,000 2025 - 5,500,000 5,500,000 2026 - 5,500,000 5,500,000 2027 - 5,500,000 5,500,000 2028 - 5,500,000 5,500,000 2029 - 5,500,000 5,500,000 2030 - 5,500,000 5,500,000 2031 - 5,500,000 5,500,000 2032 - 5,500,000 5,500,000 2033 - 5,500,000 5,500,000 2034 - 5,500,000 5,500,000 2035 - 5,500,000 5,500,000 2036 - 5,500,000 5,500,000 2037 - 5,500,000 5,500,000 2038 - 5,500,000 5,500,000 2039 - 5,500,000 5,500,000 2040 - 5,500,000 5,500,000 2041 - 5,500,000 5,500,000 2042 - 5,500,000 5,500,000 2043 - 5,500,000 5,500,000 2044 - 5,500,000 5,500,000 2045 $50,000,000 5,500,000 55,500,000 2046 60,000,000 3,000,000 63,000,000 2047 - - - 2048 - - - Total(2) $110,000,000 $157,000,000 $267,000,000 $ $ $ $
(1) Fiscal year ending June 30. (2) Totals may not foot due to rounding. Source: The University.
OUTSTANDING UNIVERSITY OBLIGATIONS
The State previously issued bonds and other obligations for the benefit of the University, including bonds issued under Article XI-G, Article XI-F(1) and Article XI-Q of the State constitution and certain State lottery revenue bonds and certificates of participation (“COPs”). The State is responsible for paying the debt service on certain State bonds issued for the University’s benefit from State appropriated revenues (“State-Paid Bonds”). The University is responsible for paying the debt service on certain State bonds issued for the University’s benefit (“University-Paid State Bonds”) pursuant to ORS 352.415.
-7- The University entered into a Restated and Amended Agreement for Debt Management, effective July 1, 2017, by and among the University and the State, acting by and through its Office of the State Treasurer (the “State Treasurer”), Higher Education Coordinating Commission (“HECC”), and Department of Administrative Services (“DAS”) with respect to certain State-Paid Bonds and University-Paid State Bonds (the “Debt Management Agreement”). Pursuant to ORS 352.415, the State Treasurer has provided a schedule of outstanding University-Paid State Bonds and other obligations that the University must pay. The schedule must be periodically updated as State bonds are retired and new State bonds are issued.
University-Paid State Bonds are to be paid from the University’s legally available revenues. The Debt Management Agreement provides that the University is obligated to make payments with respect to University-Paid State Bonds from legally available revenues and authorizes the State to withhold appropriations to the University as a remedy for nonpayment. State appropriations are excluded from General Revenues pledged to pay the Bonds.
As of June 30, 2017, the University had outstanding $501,837,000 aggregate principal amount of University-Paid State Bonds, $110,000,000 aggregate principal amount of General Revenue Bonds, $38,423,000 aggregate principal amount of State Energy Loan Program (“SELP”) loans and $49,783,000 aggregate principal amount of capital lease obligations. See Note 8 in “APPENDIX C–UNIVERSITY OF OREGON 2017 ANNUAL FINANCIAL REPORT.”
UNIVERSITY-PAID OBLIGATIONS (as of June 30, 2017) (000’s) University- General Fiscal Paid State Revenue Capital Total Year Bonds(1) Bonds SELP(2) Leases Payments 2018 $43,362 $5,500 $3,548 $3,336 $55,746 2019 42,725 5,500 3,549 3,335 55,109 2020 42,380 5,500 3,548 3,336 54,764 2021 41,027 5,500 3,549 3,336 53,412 2022 39,596 5,500 3,548 3,320 51,964 2023-2027 194,904 27,500 17,743 16,545 256,692 2028-2032 174,505 27,500 14,905 16,546 233,456 2033-2037 152,851 27,500 2,228 14,097 196,676 2038-2042 81,079 27,500 -- 12,465 121,044 2043-2047 10,790 129,500 -- 8,518 148,808 $823,219 $267,000 $52,618 $84,834 $1,227,671
(1) The schedule for University-Paid State Bonds will be amended from time to time to reflect the results of refundings, if any, and to reflect University obligations in connection with future University-Paid State Bonds, if any, requested by the University. The University has reserved the right to defease these obligations at any time. Payments are shown prior to any Build America Bond interest expense subsidies received by the University. See “LEGISLATION, INITIATIVES AND REFERENDA.” (2) Excludes subsidy from State for payment of a portion of the debt service on SELP obligations. Source: The University.
In addition to amounts shown in the table above, the University makes contributions to the State to pay debt service related to the State’s pension obligation bonds that were issued in 2003 and are scheduled to be fully paid in 2027. In 2003, the State Legislature authorized State general obligation bonds of $2 billion, to offset the State’s portion of the retirement system’s unfunded pension liability. The Oregon Department of Administrative Services coordinates the debt service assessments to PERS employers to cover the bond debt service payments. PERS employers, including the University, are assessed a percentage of their PERS-covered payroll to fund the payments. The assessment rate is adjusted biennially over the life of the 24-year debt repayment schedule. The payroll assessment for the pension obligation bonds began in May 2004 and is currently at an assessment rate of 6.33%. Payroll assessments for the University for the fiscal years ended June 30, 2017 and 2016 were $12.7 million and $12.8 million, respectively.
-8- Under the Debt Management Agreement, the University is required to submit funding requests to the HECC for biennial budget appropriations sufficient to pay debt service on State-Paid Bonds issued for the benefit of the University. Debt service on State-Paid Bonds is payable from State appropriated revenues, and the University has no further obligation with respect to payment on State-Paid Bonds beyond submitting such appropriations requests.
State Treasurer Approval of Cash Flow Sufficiency If the University desires to remain eligible to receive proceeds of State-issued Article XI-F(1) or XI-Q bonds intended to be repaid in whole or part with University revenues or other money under the control of the University (e.g. future University-Paid State Bonds), the State Treasurer must review and approve all plans of the University to issue revenue bonds including the 2018 Bonds. The scope of the State Treasurer’s approval is limited by statute to consideration of periodic cash flow projections and other information necessary to determine the sufficiency of the cash flow of the University to pay University-Paid State Bonds and to pay debt service on the University’s revenue bonds. The University has received confirmation that the State Treasurer, pursuant to ORS 352.402, has reviewed and approved the University’s plans to issue the 2018 Bonds. As part of that review, the State Treasurer considered the periodic cash flow projections and other information submitted by the University to the State Treasurer to determine that the University will have sufficient cash flow to pay: (i) loans from State agencies to the University of Oregon that were funded with State Bonds (as defined in ORS 352.408); (ii) State Bonds issued for the benefit of the University pursuant to Articles XI-F(1) and XI-Q of the Oregon Constitution and ORS 283.085 to 283.092; and (iii) the 2018 Bonds as well as other series of General Revenue bonds outstanding that have already been issued by the University.
In the event that the University requests additional University-Paid State Bonds, the University’s obligations to pay debt service to the State may increase to amounts greater than those described in the table under the heading “University-Paid Obligations” to reflect such additional University-Paid State Bonds.
In the future, if the University opts to issue revenue bonds without State Treasurer approval, the University will thereupon lose its eligibility to receive proceeds of bonds issued by the State under Articles XI-F(1) or XI-Q that are intended to be repaid in whole or part with University revenues or other money under the control of the University.
Bond Payments and University-Paid State Bond Payments
As described above the University is obligated to make payments with respect to University-Paid State Bonds when due from legally available revenues of the University. ORS 352.415(3) provides that payments with respect to University-Paid State Bonds are to be paid on or before the dates specified from legally available revenues on a pari passu basis with the payment of the Bonds. The Oregon Attorney General issued an opinion on October 1, 2014 concluding that there is no parity of liens under ORS 352.415 because the University may not include in any pledge to bondholders any of the amounts required to pay University-Paid State Bonds. The opinion states that the pari passu language relates only to the timing of bond payments and requires universities to time payments to the State Treasurer for University-Paid State Bonds and payments of University revenue bonds roughly equally within a fiscal period to prohibit universities from achieving a “de facto” payment priority.
The Bond Authorization excludes from the definition of General Revenues amounts required to be transferred to the State Treasurer for deposit for University-Paid State Bonds when due, and without duplication, amounts required to be paid to the State Treasurer for University-Paid State Bonds when due, and establishes principal and interest payment dates for the Bonds so that payments to the State Treasurer with respect to University-Paid State Bonds and payments to Bondholders are disbursed roughly equally within a fiscal period.
LIMITATIONS ON REMEDIES
Pursuant to ORS 287A.310 and 352.087(1)(h), the pledge of General Revenues creates a lien that is to be valid and binding from the time the pledge is made, without physical delivery, filing or any other act, and with the priority and subject to the limitations set forth in the Bond Authorization. A 2018 Bond owner may commence an action in a court of competent jurisdiction to foreclose the lien of the pledge and exercise the rights and remedies as provided under the Bond Authorization.
-9- If the University were to default on the payment of principal or interest on the 2018 Bonds, payment of the principal and accrued interest on the 2018 Bonds is not subject to acceleration. The University is liable for principal and interest payments only as they become due. In the event of multiple defaults in payment of principal of or interest on the 2018 Bonds, the 2018 Bondholders would be required to bring a separate action for each such payment not made. Any such action to compel payment or for money damages would be subject to the limitations on legal claims and remedies against public bodies under State law.
Any remedies available to the Registered Owners of the 2018 Bonds upon the occurrence of an event of default under the Bond Authorization are in many respects dependent upon judicial actions which are in turn often subject to discretion and delay and could be both expensive and time-consuming to obtain. If the University fails to pay principal of or interest on the 2018 Bonds, there can be no assurance that available remedies will be adequate to fully protect the interests of the Registered Owners of the 2018 Bonds.
In addition to the limitations on remedies contained in the Bond Authorization, the rights and obligations under the 2018 Bonds and the Bond Authorization may be limited by and are subject to bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium and other laws relating to or affecting creditors’ rights, to the application of equitable principles, and to the exercise of judicial discretion in appropriate cases. The opinion to be delivered by Pacifica Law Group LLP, as Bond Counsel, concurrently with the issuance of the 2018 Bonds, will be subject to limitations regarding bankruptcy, insolvency and other laws relating to or affecting creditors’ rights. A complete copy of the proposed forms of opinion of Bond Counsel is set forth in APPENDIX D—“FORM OF BOND COUNSEL OPINION.”
LEGISLATION, INITIATIVES AND REFERENDA
State Legislation, Initiatives and Referenda. The Legislative Assembly considers legislation from time to time that may affect the University, including without limitation legislation appropriating funds for higher education, legislation authorizing State bonds for the benefit of the University, and legislation regarding public employees, benefits, tuition, academic standards, public procurement and contracting, and other matters. The 80th Legislative Assembly is scheduled to convene its Legislative Session on February 5, 2018 and adjourn on March 9, 2018 (the “2018 Legislative Session”).
The Oregon Constitution, Article IV, Section 1, reserves to the people of the State (1) the initiative power to amend the Oregon Constitution or to enact State legislation by placing measures on the statewide general election ballot for consideration by the voters and (2) the referendum power to approve or reject at an election any act passed by the Legislative Assembly that does not become effective earlier than 90 days after the end of the legislative session. The Legislative Assembly may also refer an act to the voters for approval or rejection.
Federal Legislation. The University receives grants and other federal funding (either directly or indirectly through the State or local governmental agencies, or private foundations and other private entities). In Fiscal Year 2017, the University received $86.6 million in federal grants and contracts. In Fiscal Year 2017, the University also benefitted from $1.24 million in federal interest subsidy payments in connection with University-Paid State Bonds. The University may be adversely impacted by federal legislative and executive or regulatory actions, including cuts to federal spending, changes to financial aid programs, tax reform legislation (H.R. 1, 115th Congress (1st sess. 2017) (“H.R. 1”), and actions affecting international student enrollment. Federal immigration policies may affect international student enrollment. Budgetary acts, including the sequestration provisions of the Budget Control Act of 2011 and Statutory Pay-As-You-Go Act of 2010 (together “Sequestration”), could continue to affect the availability of federal funds. Payments made by the federal government in connection with interest payments on taxable bonds eligible for federal interest subsidies between October 1, 2017 and September 30, 2018, were reduced through Sequestration by 6.6%, resulting in a reduction in subsidy payments related to certain direct pay University- Paid State Bonds. Sequestration of such interest payments has been extended by Congress and is scheduled to remain in effect through federal fiscal year 2024. H.R. 1’s changes to deductions from taxable income and estate taxes could affect philanthropy.
-10- LEGAL INFORMATION
No Litigation Concerning the 2018 Bonds
There is no litigation pending or, to the actual knowledge of the University, threatened questioning the validity of the 2018 Bonds or the power and authority of the University to issue the 2018 Bonds or seeking to enjoin the issuance of the 2018 Bonds.
Other Litigation
The University is a party to lawsuits arising out of its normal course of business. There is no pending or threatened controversy or litigation matter that the University believes individually or in combination, will have a material adverse effect upon the University’s overall financial condition. Some claims are covered by insurance. See “Note 14. Risk Management in APPENDIX C—UNIVERSITY OF OREGON 2017 ANNUAL FINANCIAL REPORT.”
Approval of Counsel
Legal matters incident to the authorization, issuance and sale of the 2018 Bonds by the University are subject to the approving legal opinion of Pacifica Law Group LLP, Seattle, Washington, “Bond Counsel.” The form of opinion of Bond Counsel is attached hereto as APPENDIX D. Pacifica Law Group LLP, Seattle, Washington, also is serving as Disclosure Counsel to the University.
Certain legal matters will be passed on for the Underwriter by Hawkins Delafield & Wood LLP, Portland, Oregon, counsel to the Underwriter. Any opinion of such firm will be addressed solely to the Underwriter, will be limited in scope, and cannot be relied upon by investors.
TAX MATTERS
General. In the opinion of Bond Counsel, under existing law and subject to certain qualifications described below, interest on the 2018 Bonds is excludable from gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986, as amended (the “Tax Code”), and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals. Interest on the 2018 Bonds is exempt from State of Oregon personal income taxes. The proposed form of opinion of Bond Counsel with respect to the 2018 Bonds to be delivered on the date of issuance of the 2018 Bonds is set forth in APPENDIX D. The Tax Code contains a number of requirements that apply to the 2018 Bonds, and the University has made certain representations and has covenanted to comply with each such requirement. Bond Counsel’s opinion assumes the accuracy of the representations made by the University and is subject to the condition that the University complies with the above-referenced covenants. If the University fails to comply with such covenants or if the University’s representations are inaccurate or incomplete, interest on the 2018 Bonds could be included in gross income for federal income tax purposes retroactively to the date of issuance of the 2018 Bonds. Except as expressly stated herein, Bond Counsel expresses no opinion regarding any tax consequences related to the ownership, sale or disposition of the 2018 Bonds, or the amount, accrual or receipt of interest on, the 2018 Bonds. Owners of the 2018 Bonds should consult their tax advisors regarding the applicability of any collateral tax consequences of owning the 2018 Bonds. Original Issue Premium and Discount. If the initial offering price to the public (excluding bond houses and brokers) at which a 2018 Bond is sold is less than the amount payable at maturity thereof, then such difference constitutes “original issue discount” for purposes of federal income taxes. If the initial offering price to the public (excluding bond houses and brokers) at which a 2018 Bond is sold is greater than the amount payable at maturity thereof, then such difference constitutes “original issue premium” for purposes of federal income taxes. De minimis original issue discount and original issue premium is disregarded.
Under the Tax Code, original issue discount is treated as interest excluded from federal gross income to the extent properly allocable to each owner thereof subject to the limitations described in the first paragraph of this section. The original issue discount accrues over the term to maturity of the 2018 Bond on the basis of a constant interest rate compounded on each interest or principal payment date (with straight-line interpolations between compounding
-11- dates). The amount of original issue discount accruing during each period is added to the adjusted basis of such 2018 Bonds to determine taxable gain upon disposition (including sale, redemption, or payment on maturity) of such 2018 Bond. The Tax Code contains certain provisions relating to the accrual of original issue discount in the case of purchasers of the 2018 Bonds who purchase the 2018 Bonds after the initial offering of a substantial amount of such maturity. Owners of such 2018 Bonds should consult their own tax advisors with respect to the tax consequences of ownership of 2018 Bonds with original issue discount, including the treatment of purchasers who do not purchase in the original offering, the allowance of a deduction for any loss on a sale or other disposition, and the treatment of accrued original issue discount on such 2018 Bonds under federal individual and corporate alternative minimum taxes.
Under the Tax Code, original issue premium is amortized on an annual basis over the term of the 2018 Bond (said term being the shorter of the 2018 Bond’s maturity date or its call date). The amount of original issue premium amortized each year reduces the adjusted basis of the owner of the 2018 Bond for purposes of determining taxable gain or loss upon disposition. The amount of original issue premium on a 2018 Bond is amortized each year over the term to maturity of the 2018 Bond on the basis of a constant interest rate compounded on each interest or principal payment date (with straight-line interpolations between compounding dates). Amortized 2018 Bond premium is not deductible for federal income tax purposes. Owners of premium 2018 Bonds, including purchasers who do not purchase in the original offering, should consult their own tax advisors with respect to federal income tax consequences of owning such 2018 Bonds.
Post Issuance Matters. The opinion of Bond Counsel is based on current legal authority, covers certain matters not directly addressed by such authorities, and represents Bond Counsel’s judgment as to the proper treatment of the 2018 Bonds for federal income tax purposes. It is not binding on the Internal Revenue Service (“IRS”) or the courts. Furthermore, Bond Counsel cannot give and has not given any opinion or assurance about the future activities of the University, or about the effect of future changes in the Tax Code, the applicable regulations, the interpretation thereof or the enforcement thereof by the IRS.
Bond Counsel’s engagement with respect to the 2018 Bonds ends with the issuance of the 2018 Bonds, and, unless separately engaged, Bond Counsel is not obligated to defend the University or the Owners regarding the tax-exempt status of the 2018 Bonds in the event of an audit examination by the IRS. Under current procedures, parties other than the University and its appointed counsel, including the Owners, would have little, if any, right to participate in the audit examination process. Moreover, because achieving judicial review in connection with an audit examination of tax-exempt bonds is difficult, obtaining an independent review of IRS positions with which the University legitimately disagrees, may not be practicable. Any action of the IRS, including but not limited to selection of the 2018 Bonds for audit, or the course or result of such audit, or an audit of bonds presenting similar tax issues may affect the market price for, or the marketability of, the 2018 Bonds, and may cause the University or the owners to incur significant expense.
Current and future legislative proposals, if enacted into law, clarification of the Tax Code or court decisions may cause interest on the 2018 Bonds to be subject, directly or indirectly, to federal income taxation, or otherwise prevent Beneficial Owners from realizing the full current benefit of the tax status of such interest. The introduction or enactment of any such legislative proposals, clarification of the Tax Code or court decisions may also affect the market price for, or marketability of, the 2018 Bonds. Prospective purchasers of the 2018 Bonds should consult their own tax advisors regarding any pending or proposed legislation, regulations or litigation, as to which Bond Counsel expresses no opinion.
Not Bank Qualified. The University has not designated the 2018 Bonds as “qualified tax-exempt obligations” within the meaning of Section 265(b)(3)(B) of the Tax Code.
CONTINUING DISCLOSURE UNDERTAKING
The University is covenanting for the benefit of the holders and beneficial owners of the 2018 Bonds to provide certain financial information and operating data (the “Annual Disclosure Report”) no later than nine months following the end of the University’s fiscal year (which currently would be March 31, 2019, for the report for the 2018 Fiscal Year), and to provide notices of the occurrence of certain enumerated events. The Annual Disclosure Report and notices of enumerated events are to be filed with the Municipal Securities Rulemaking Board. The
-12- nature of the information to be contained in the Annual Disclosure Report and in notices of enumerated events is set forth in “APPENDIX F—FORM OF CONTINUING DISCLOSURE CERTIFICATE.” These covenants are made by the University to assist the purchasers of the 2018 Bonds in complying with Securities and Exchange Commission Rule 15c2-12(b)(5).
The University has complied in all material respects with its prior continuing disclosure undertakings.
OTHER 2018 BOND INFORMATION
Ratings
Ratings of “Aa2” and “AA-” have been assigned to the 2018 Bonds by Moody’s Investors Service and Standard & Poor’s Ratings Services, respectively. Such ratings reflect only the views of the rating organizations and an explanation of the significance of the ratings may be obtained from the rating agencies. There is no assurance that the ratings will continue for any given period of time or that they will not be revised downward or withdrawn entirely by the rating agencies if, in the judgment of the agencies, circumstances so warrant. Any such downward revision or withdrawal of any of the ratings could have an adverse effect on the market price of the 2018 Bonds.
Financial Advisor
Public Financial Management, Inc. of Boston, Massachusetts (the “Financial Advisor”), has acted as financial advisor to the University in connection with the issuance of the 2018 Bonds. The Financial Advisor is not obliged to undertake, and has not undertaken, an independent verification of, nor has assumed responsibility for the accuracy, completeness or fairness of the information obtained in this Official Statement. The Financial Advisor is an independent advisory firm and is not engaged in the business of underwriting, trading or distributing municipal securities or other public securities.
Underwriting
The 2018 Bonds are being purchased by the Underwriter at an aggregate price of $______(the principal amount of the 2018 Bonds, plus [net] original issue premium of $_____, and less an Underwriter’s discount of $_____).
The Underwriter and its affiliates are full service financial institutions engaged in various activities, which may include sales and trading, commercial and investment banking, advisory, investment management, investment research, principal investment, hedging, market making, brokerage and other financial and non-financial activities and services. Under certain circumstances, the Underwriter and its affiliates may have certain creditor and/or other rights against the University and its affiliates in connection with such activities. In the various course of their various business activities, the Underwriter and its affiliates, officers, directors and employees may purchase, sell or hold a broad array of investments and actively trade securities, derivatives, loans, commodities, currencies, credit default swaps and other financial instruments for their own account and for the accounts of their customers, and such investment and trading activities may involve or relate to assets, securities and/or instruments of the University (directly, as collateral securing other obligations or otherwise) and/or persons and entities with relationships with the University. The Underwriter and its affiliates may also communicate independent investment recommendations, market color or trading ideas and/or publish or express independent research views in respect of such assets, securities or instruments and may at any time hold, or recommend to clients that they should acquire, long and/or short positions in such assets, securities and instruments.
Potential Conflicts
Some or all of the fees of the Financial Advisor, Bond Counsel, Disclosure Counsel and Underwriter’s Counsel are contingent upon the sale of the 2018 Bonds. Pacifica Law Group LLP is serving as Bond Counsel and Disclosure Counsel to the University with respect to the 2018 Bonds. From time to time, Bond Counsel and Disclosure Counsel may serve as counsel to the Underwriter, and to other parties involved with the 2018 Bonds with respect to transactions other than the issuance of the 2018 Bonds.
-13- Independent Auditor
The financial statements of the University for the fiscal year ended June 30, 2017 and included as APPENDIX C to this Official Statement have been audited by Moss Adams LLP, independent auditors, as stated in its report appearing herein. The audited financial statements of the University are public documents. The University has not requested that Moss Adams LLP provide consent for inclusion of the audit report in this Official Statement, and Moss Adams has not performed, since the date of its report included herein, any procedures on the financial statements addressed in that report. Further, Moss Adams LLP has not participated in any way in the preparation or review of this Official Statement.
Official Statement
All forecasts, estimates and other statements in this Official Statement involving matters of opinion, whether or not expressly so stated, are intended as such and not as representations of fact. This Official Statement is not intended to be construed as a contract or agreement between the University and the purchasers or holders of any of the 2018 Bonds.
At the time of the delivery of the 2018 Bonds, one or more officials of the University will furnish a certificate stating that, to the best of his or her knowledge and belief at the time of the sale or delivery of the 2018 Bonds, this Official Statement and information furnished by the University supplemental thereto did not and do not contain any untrue statements of material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading in any material respect.
The University has authorized the execution and delivery of this Official Statement.
UNIVERSITY OF OREGON
By: Treasurer
-14-
APPENDIX A
THE UNIVERSITY OF OREGON Mission and History The University’s mission is to be a comprehensive public research university committed to exceptional teaching, research, and service. Its vision is to aspire to be a preeminent and innovative public research university encompassing the humanities and arts, the natural and social sciences, and the professions.
The University is the State’s flagship university. The University’s primary campus is in Eugene with programs also offered in Portland, Oregon; at the Oregon Institute of Marine Biology in Charleston, Oregon; and at the Pine Mountain Observatory outside of Bend, Oregon.
The University’s academic programs are organized into nine degree-granting schools and colleges: the College of Arts and Sciences, the College of Education, the Graduate School, the Charles H. Lundquist College of Business, the Robert D. Clark Honors College, the College of Design, the School of Law, the School of Journalism and Communication, and the School of Music and Dance.
These units offer more than 300 academic programs. The University has particular strength in the natural and physical sciences, psychology and neuroscience, environment and sustainability, education, sustainable design, journalism, entrepreneurship and sports business, environmental law, fine and creative arts, music, and interdisciplinary programs such as environmental studies and alternative dispute resolution. The Robert D. Clark Honors College is the oldest four-year public honors college in the country. The nation’s first Institute of Molecular Biology was founded at the University in 1959 and continues to engage in world-class research.
Powers The University is a public university of the State and an “independent public body with statewide purposes and missions and without territorial boundaries.” The Board is granted all of the powers, rights and duties expressly conferred upon it by law, or that are implied by law or incident to such powers. As stated in ORS 352.033, a university with a governing board, such as the University, is a governmental entity performing governmental functions and exercising governmental powers, but is not considered a unit of local or municipal government or a State agency, board, commission or institution for purposes of State statutes, unless ORS chapter 352 or other law expressly provides otherwise.
The Board of the University is vested with broad powers and specific duties and rights, including establishing a process for determining tuition and enrollment fees. However, if the proposed total resident undergraduate tuition and mandatory enrollment fees increase more than five percent from the prior year, this increase must also be approved by HECC or the Legislative Assembly. All other tuition categories are not subject to external approvals. The Board is authorized to spend all available moneys without appropriation or expenditure limitation approval from the Legislative Assembly, except for moneys received pursuant to ORS 352.089 (generally referred to as State appropriations) or the proceeds of State-issued bonds. Pursuant to ORS 352.113, the Board has custody and control of all real property used for University purposes, subject to certain statutory limitations. Legal title to all real property is held in the name of the State, acting by and through the Board. Equipment and fixtures purchased with State-issued and State-Paid Bonds are also property held in the name of the State, acting through the Board, until such time as the bonds are fully repaid.
Governance The University is governed by a 15-member Board. With the exception of the President of the University, who serves as an ex-officio nonvoting member of the Board, Trustees are appointed by the Governor of the State (the “Governor”) with the consent of the State Senate. Except for the student, faculty, and non-faculty staff members of the Board, each Trustee holds his/her office for a four-year term. The term of office of each student, faculty, and non-faculty staff member of the Board is two years. Trustees may not serve more than two consecutive full terms.
A-1 The following briefly identifies Board members (other than ex officio members). Brief biographies of Board officers and the Senior Vice President and Provost are included under the heading “Board Officers; Certain Executive Officers.”
Charles M. Lillis, Ph.D., Chair (Co-founder of LoneTree Capital and Castle Pines Capital).
Ginevra Ralph, M.A., Vice Chair (Co-founder and Director, John G. Shedd Institute for the Arts).
Connie Ballmer (Philanthropist; Community Volunteer).
Peter Bragdon, J.D. (Senior Vice President of Legal and Corporate Affairs, Secretary, and General Counsel, Columbia Sportswear Company).
Rodolfo (Rudy) Chapa Jr., J.D. (Founder, Quixote Investment).
Andrew Colas (President, Colas Construction).
Ann Curry (Journalist).
Allyn Ford, MBA (Chairman and retired CEO, Roseburg Forest Products).
Joseph Gonyea III (Partner and CEO, Timber Products Company).
Ross Kari, MBA (Retired financial services executive; former CFO of The Federal Home Loan Mortgage Corporation).
Laura Lee McIntyre, Ph.D. (Professor, University of Oregon, College of Education).*
Jimmy Murray, (Library Technician, University of Oregon, Libraries).*
William Paustian, (Student, Robert D. Clark Honors College, University of Oregon).*
Mary Wilcox, J.D. (Vice President and Director, Capital Realty Corp.).
Board Officers; Certain Executive Officers Michael H. Schill President. Mr. Schill is the 18th president of the University. He began his tenure on July 1, 2015 and previously served as the dean and Harry N. Wyatt Professor of Law at the University of Chicago Law School. Prior to joining the University of Chicago in 2010, Mr. Schill served as the dean of the University of California, Los Angeles School of Law from 2004 to 2009. His other faculty appointments include tenured positions as professor of law and urban planning at New York University and professor of law and real estate at the University of Pennsylvania. Mr. Schill is the author or co-author of three books and more than 40 scholarly articles. In 2004, Mr. Schill founded the Furman Center for Real Estate and Urban Policy at New York University. In addition to serving as the president of the University, Mr. Schill is a member of the Board of Governors of Argonne National Laboratory, a member of the Board of Trustees of Ithaka, the nonprofit organization that owns JSTOR, a digital library, and is a Fellow of the American Academy of Arts and Sciences. Mr. Schill graduated with an AB in public policy from Princeton University in 1980 and a JD from the Yale Law School in 1984. Mr. Schill also holds a tenured faculty appointment in the University’s School of Law.
Jayanth Banavar, Senior Vice President and Provost. On July 1, 2017 Dr. Banavar began serving as provost and senior vice president of the University. Dr. Banavar joined the University from the University of Maryland, where he served as dean of the College of Computer, Mathematical, and Natural Sciences. Before working at the
* Serves a two-year term.
A-2 University of Maryland, Dr. Banavar worked at the Department of Physics at Pennsylvania State University for 12 years. He received his bachelor of science and master of science in physics from Bangalore University and his Ph.D. in physics from University of Pittsburgh.
Kevin Reed, Vice President and General Counsel. As vice president and general counsel, Mr. Reed provides legal guidance and advice to all the University units, schools and colleges. He is responsible for managing the University’s legal matters including academic freedom, intellectual property, equal protection in admissions, athletics compliance, research compliance, criminal law, and other litigation. Mr. Reed previously served as vice chancellor, legal affairs and associate general counsel at University of California, Los Angeles; general counsel for the Los Angeles Unified School District; and as a litigator with the NAACP Legal Defense and Education Fund. He earned a bachelor’s degree from the University of Virginia in 1986 and his law degree from Harvard Law School in 1989.
Jamie Moffitt, Vice President for Finance and Administration/CFO and Treasurer. As VPFA/CFO and Treasurer, Ms. Moffitt works with the University community to strengthen and further align central administrative and financial functions with the University’s core mission of teaching, research and service. Ms. Moffitt was previously the executive senior associate athletic director for finance and administration from May 2010 to December 2011. Prior to that, she was the associate dean for finance and operations at the University’s School of Law from 2003 to 2010. In both positions, she reorganized budgeting and financial reporting processes and managed human resources and infrastructure improvements. Before coming to the University, Ms. Moffitt was a senior executive at a venture- backed technology company in Boston and a consultant with McKinsey & Company, a global management consulting firm. Ms. Moffitt received her Bachelor of Arts degree (economics) from Harvard, her Master of Arts in Law and Diplomacy degree at Tufts University (international business) from The Fletcher School of Law and Diplomacy, and her Juris Doctor degree from Harvard Law School.
Angela Wilhelms, University Secretary. As Secretary of the University, Ms. Wilhelms works closely with the Board and the Office of the President to help govern the University. Ms. Wilhelms previously specialized in government affairs services at the Portland law firm Dunn Carney. Prior to joining Dunn Carney, she was chief of staff in the House Minority Office and the House Co-Speaker’s Office in the Oregon State Legislature. Ms. Wilhelms has also served as a press secretary in Washington D.C. and an independent consultant on policy, strategy and communications. She has a Bachelor of Finance Degree from Santa Clara University and, a Master of Business Administration, and a Juris Doctor degree from Willamette University.
Accreditation The University is accredited by the Northwest Commission on Colleges and Universities (“NWCCU”) and has specialized accreditation for certain professional schools and individual educational programs from a number of national organizations. The University has been continuously accredited by NWCCU, its regional higher education authority, since 1918. The University is on a seven-year accreditation cycle; the prior cycle began in 2011 and ended in 2017. The University was reaffirmed in July 2017 based on the Spring 2017 Demonstration Project Year Seven Mission Fulfillment and Sustainability Evaluation.
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A-3
Admissions and Student Enrollment The University’s enrollment strategy over the last several years has been to increase academic quality and diversity of the incoming classes while building faculty and physical infrastructure to support the student enrollment growth that occurred between 2007 and 2012. In September 2017, University leadership presented to the Board of Trustees a plan to start increasing the size of the incoming class supported by new investments in recruitment. The following tables show the number of applicants to the University’s undergraduate, graduate and professional schools, the number of applicants accepted, and the number of students enrolled in autumn quarter 2013-2017. For 2017 incoming freshmen, the mean freshman GPA was 3.55 and the mean freshman SAT score was 1,195. The 2017 undergraduate retention rate from first to second year was 86.1%.
Student Enrollment Fall Quarter 2017 2016 2015 2014 2013
University FTE Undergraduate 18,165 18,631 18,610 18,800 19,042 Graduate 3,434 3,378 3,305 3,365 3,449 Professional 385 355 390 383 446 Non-traditional 233 205 227 221 220 Total FTE Enrollment 22,217 22,570 22,532 22,769 23,157
Undergraduate
Freshmen 2017 2016 2015 2014 2013 Applicants 20,190 21,649 21,795 21,145 21,938 Acceptances 16,738 16,892 16,232 15,908 16,206 Matriculants 3,863 3,949 4,060 3,895 3,881
Transfers Applicants 3,407 3,285 3,718 3,651 3,793 Acceptances 2,160 2,008 2,268 2,256 2,231 Matriculants 1,196 1,181 1,310 1,289 1,358
Graduate Applicants 6,907 7,098 6,546 6,658 7,010 Acceptances 2,468 2,416 1,849 1,938 2,065 Matriculants 1,019 960 944 955 957
Source: The University.
Facilities and Campus Life The University’s main campus consists of 295 acres along the Willamette River in Eugene, Oregon. In addition to the main campus in Eugene, the University operates other programs and facilities across the State, including: the Pine Mountain Observatory in Central Oregon; the Oregon Institute of Marine Biology on the Oregon coast; and other undergraduate academic outreach and service learning experiences. In addition, the White Stag Block serves as the University’s hub of activity in Portland. The total land holdings of the University are approximately 565 acres.
The University is expanding its Eugene footprint. A $500 million lead gift from Phil and Penny Knight has launched the Knight Campus for Accelerating Scientific Impact. The campus is a $1 billion initiative to fast-track scientific discoveries into innovations. The campus is expected to be constructed and developed over the next decade and it will be adjacent to other University research facilities. The construction of the campus is expected to be funded completely through dedicated gifts and State-paid bonds. Ground breaking for the first phase of construction is scheduled for February 2018.
A-4 As a member of the Association of Research Libraries, the University’s libraries consist of a main library facility, five campus branches, and two off-campus branches.
The University operates two museums (the Jordan Schnitzer Museum of Art and the Museum of Natural and Cultural History) and numerous additional galleries, a Cinema Pacific Film Festival, and an Arts Council. Each summer, the University hosts the Oregon Bach Festival, which draws participants from around the world. The University provides three venues for dramatic arts on campus that offer a range of stage productions from classical works to modern musicals. More than 200 concerts and recitals are presented on campus throughout the year by visiting artists, by faculty members of the School of Music and Dance, and music students.
The University has a broad-based NCAA Division I intercollegiate athletics program and competes as a member of the Pac-12 Conference. Nearly 500 student-athletes participate in 20 Division I sports while pursuing their degree, and collectively participate in over 3,000 hours of community service annually. The University has achieved broad- based competitive excellence across these 20 sport programs and has developed a strong national brand highlighting innovation and excellence. In particular, the University’s football and basketball programs have become recognized among the nation’s elite and the track and field programs have consistently won national championships. Eugene is known as “Track Town USA” and the University hosts many nationally and internationally prominent track and field events at Historic Hayward Field.
Faculty and Staff The University employs tenure-related and non-tenure-track faculty as shown on the table below. There are more than 150 fully- or partially-endowed faculty positions, including deans, nearly 40 chairs, and more than 100 professorships. The following tables show selected faculty data for fall quarter for the past five years. FACULTY DATA
2017 2016 2015 2014 2013 Faculty Headcount 2,041 2,081 2,154 2,064 2,031 Faculty full-time 1,634 1,617 1,387 1,358 1,295 Faculty part-time 407 464 767 706 736 % Tenured (of full-time faculty) 37% 36% 37% 37% 37% % Doctorates (of full-time faculty) 67% 66% 66% 66% 66%
Source: The University.
The University has approximately 3,450 staff including, officers of administration, classified staff and librarians (excluding student employees).
Represented Units
A majority of University employees are represented by a bargaining unit. There are approximately 1,650 classified staff employees represented by the Service Employees International Union (SEIU) Local 085, who work under a collective bargaining agreement. The Teamsters Local 206 represents employees in the University’s printing and mailing services. The University also maintains its own sworn police officer unit, which is represented by the University of Oregon Police Association. Much of the University’s faculty, including officers of instruction, officers of research, post-doctoral fellows, and librarians, are represented by United Academics, AAUP/AFT, Local 3209, AFL-CIO. Graduate employees (GEs) who work for the university are represented by the Graduate Teaching Fellows Federation.
Union contracts with the University expire and are renegotiated regularly. The University has experienced work stoppages in the past, but all stoppages have been resolved to date.
A-5 HISTORICAL FINANCIAL RESULTS Statement of Revenues, Expenses and Changes in Net Position The table on the following page provides the historical statement of revenues, expenses, and changes in net position of the University based on the University’s audited financial statements for the fiscal years ended June 30, 2013 through June 30, 2017. Statement of Revenues, Expenses and Changes in Net Position For the Fiscal Years Ending June 30 (000’s) 2017 2016 2015 2014 2013 OPERATING REVENUES Student Tuition and Fees(1) $381,434 $378,536 $359,287 $360,951 $344,313 Federal Grants and Contracts 86,575 92,664 93,846 95,089 95,157 State and Local Grants and Contracts 2,748 3,951 3,816 2,110 1,821 Nongovernmental Grants and Contracts 17,590 5,929 5,897 6,840 7,909 Educational Department Sales and Services 15,751 16,452 16,514 15,761 15,494 Auxiliary Enterprises Revenues(2) 190,759 174,989 171,950 155,512 145,106 Other Operating Revenues 18,834 10,361 9,435 10,303 10,818 Total Operating Revenues 713,691 682,882 660,745 646,566 620,618 OPERATING EXPENSES Instruction $274,772 $274,697 $270,122 $253,585 $239,858 Research 66,711 62,277 67,877 70,607 71,234 Public Service 43,282 42,035 41,943 37,895 37,674 Academic Support 59,242 56,810 53,983 51,418 47,211 Student Services 42,042 40,770 36,125 35,593 32,294 Auxiliary Programs 200,141 171,230 175,720 175,486 164,860 Institutional Support 67,894 64,157 61,937 52,937 50,636 Operation and Maintenance of Plant 52,109 53,288 53,375 49,660 47,417 Student Aid 34,433 36,710 27,574 16,486 15,902 Other Operating Expenses 39,228 36,051 35,458 45,600 31,589 Change in Pension Liability, Net(3) 41,084 72,643 (47,444) — — Total Operating Expenses 920,938 910,668 776,670 789,267 738,675 Operating Income (Loss) $(207,247) $(227,786) $(115,925) $(142,701) $(118,057) NONOPERATING REVENUES (EXPENSES) Government Appropriations 66,515 64,545 55,862 49,431 47,342 Financial Aid Grants 31,576 31,869 31,908 31,852 31,758 Investment Activity 16,154 15,989 14,096 20,491 17,228 Gain (Loss) on Sale of Assets, Net 22 (3,144) (3,284) (295) 54 Interest Expense (24,341) (28,793) (34,190) (34,971) (34,351) Other Nonoperating Items 71,108 58,347 67,672 66,460 58,077 Net Nonoperating Revenues 161,034 138,813 132,064 132,968 120,108 Income (Loss) Before Capital Additions and Special Items (46,213) (88,973) $16,139 $(9,733) $2,051 CAPITAL ADDITIONS (DEDUCTIONS) AND SPECIAL ITEMS Debt Service Appropriations 2,017 2,017 1,997 12,363 13,600 Capital Grants and Gifts 76,095 38,701 30,207 106,627 32,767 Changes to Permanent Endowments — — — 10 2 Transfers within OUS — — — (3,678) 937 Special Items(4) — — (31,406) — — Total Capital Additions (Deductions) and Special Items 78,112 40,718 798 115,322 47,306 Increase in Net Position $31,899 $(48,255) $16,937 $105,589 $49,357 NET POSITION Beginning Balance (previously reported) 840,407 888,662 775,432 669,843 620,486 Adjustments to Beginning Balance(5) — — 96,293 — — Beginning Balance (Restated) — — 871,725 — — Ending Balance $872,306 $840,407 $888,662 $775,432 $669,843
Footnotes to table begin on the following page.
A-6 FOOTNOTES TO TABLE ON PREVIOUS PAGE
(1) Net of Allowances of $70,701, $65,192, $62,361 and $60,505, for 2017, 2016, 2015 and 2014 respectively. (2) Net of Allowances of $8,490, $6,889, $4,324 and $3,391, for 2017, 2016, 2015 and 2014 respectively. (3) See Note 11, APPENDIX C—UNIVERSITY OF OREGON 2017 ANNUAL FINANCIAL REPORT. (4) In October 2014, the University entered into an agreement with University of Oregon Foundation (“UOF”) to manage its endowments in the same manner as the University, including honoring the original restrictions that were placed on the endowments by the donors. As a result of this agreement, the University conveyed the $31,406 cash value of its endowments to UOF. The amount represented the permanently restricted endowments and the restricted accumulated earnings that had not been distributed. (5) The University legally separated from OUS effective July 1, 2014, and became an independent public entity. The effect of the separation resulted in the University increasing its beginning net position by a total of $164,699. Of this increase, $159,228 resulted from the State assuming certain State-Paid debt obligations. Additionally, OUS transferred $4,002 of assets to the University that was being held on the University’s behalf. The remaining increase is net position of $1,469 resulted from other changes. Data also reflects an adjustment in deferred outflows of resources, contributions made after the measurement date, of $15,943, and a restatement of net pension liability of $84,349, due to changes in accounting principles. Source: The University, 2014-2017Annual Financial Reports.
Overview of University Revenues Funding for the major activities of the University comes from a variety of sources including student tuition and fees, financial aid programs, federal and state appropriations, grants, private and government contracts, donor gifts, and investment earnings. Revenues are also generated through recovery of costs associated with federal grants and contract activities, which serve to offset related administrative and facilities costs at the University.
For the year ended June 30, 2017, the University had $713.7 million in operating revenue, and $161.0 million in nonoperating revenue. Operating revenues consisted of student tuition and fees ($381.4 million in fiscal year 2017), grants and contracts ($106.9 million), auxiliary enterprise revenues ($190.8 million) and educational department sales and services ($15.8 million) and other ($18.8 million). Nonoperating income consisted of appropriations ($66.5 million, in fiscal year 2017), financial aid grants ($31.6 million), investment activity ($16.2 million), interest expense of ($24.3 million), and other nonoperating items $71.1 million. Capital additions included $2.0 million in debt service appropriations and $76.1 million of capital grants and gifts.
General Revenues As described under the heading “SECURITY FOR THE BONDS—General Revenues,” General Revenues include legally available revenue of the University defined as follows: all tuition, fees, charges, rents, revenues, receipts, and other income of the University if and to the extent such funds are not restricted in their use by law, regulation, or contract. Student tuition and fees comprise the largest component of General Revenues, followed by auxiliary enterprise revenues. Certain University revenues are restricted by law, regulation or contract and are therefore excluded from General Revenues. Moneys received by the University from taxes collected by the State (e.g. most State appropriations) are excluded from General Revenues by statute, as are amounts required to be transferred or paid to the State Treasurer for University-Paid State Bonds. Restricted gift and grant revenues are also excluded from General Revenues.
Student Tuition and Fees. As noted above, student tuition and fees represent the largest component of General Revenues. The University received $381.4 million in student tuition and fees in fiscal year 2017. Student tuition and fees increased $2.9 million, or 0.77%, in 2017 compared to 2016.
A-7 The University’s undergraduate tuition and fees for the past five years were as follows:
Tuition and Fees – Full Academic Year 2017 2016 2015 2014 2013 Resident $9,495 $8,910 $8,505 $8,190 $8,220 Non-Resident 32,535 31,590 30,240 29,160 28,305 Room and Board 11,450 11,583 11,430 11,097 10,774 Other annual Fees and Charges 2,076 1,852 1,784 1,728 1,483
Source: The University.
A low level of State financial support, combined with rising expenses, particularly labor costs, has put increasing pressure on the University to raise tuition, particularly for non-residents. State funding to the University has increased over the last few years; however, it is still significantly lower than the level of State contributions prior to the last recession.
ORS 352.102 grants the University governing authority with respect to student tuition and fees. The governing board of each public university is vested with broad powers and specific duties and rights, including establishing a process for determining tuition and enrollment fees, and the collection, management and expenditure of revenues derived from tuition and enrollment fees. However, any increase in total tuition and mandatory enrollment fees for resident undergraduate students at a public university may not exceed five percent annually unless the governing board of the university receives approval from the HECC or the Legislative Assembly.
The Board approved a $13-per-credit-hour increase (6.56%) in undergraduate tuition for in-state students at its July 2017 meeting and a $21-per-credit-hour increase (3.0%) in undergraduate tuition for out-of-state students at its March 2017 meeting. Consistent with University practice, the University will set aside 10% of the increased revenues to provide additional financial aid.
Auxiliary Enterprises Revenues. Auxiliary enterprises revenue is the second largest component of General Revenues. Auxiliary operations include revenues of the University’s housing and food services, parking services, sports programs, and other auxiliary enterprises. The University received $190.8 million in auxiliary enterprise revenues in fiscal year 2017. Auxiliary enterprise revenues increased $15.8 million, or 9.01%, in fiscal year 2017 compared to the prior year.
Grant and Contract Revenues. The unrestricted portion of the University’s grant and contract revenues are included in General Revenues; restricted portions are excluded. Indirect cost recovery funds are paid to the University by the granting agencies as reimbursement for indirect support provided to the grants and contracts.
Total grant and contract revenue increased in fiscal year 2017, but the mix among sources changed. Federal grant and contract revenues decreased by $6.1 million or 6.57% from 2016 to 2017. State grant activity also decreased from $4.0 million 2016 to $2.7 million 2017. Nongovernmental grant activity increased from $5.9 million to $17.6 million. A table showing historical grant and contract revenues, as well as amounts received as facilities and administrative indirect cost recovery is provided on the following page.
A-8 Grants and Contracts For the Fiscal Years Ending June 30 (000’s) 2017 2016 2015 2014 2013 Federal $86,575 $92,664 $93,846 $95,089 $95,157 State and Local 2,748 3,951 3,816 2,110 1,821 Nongovernmental 17,590 5,929 5,897 6,840 7,909 Subtotal Grants and Contracts $106,913 $102,544 $103,559 $104,039 $104,887 Indirect Cost Recovery 21,956 20,494 20,498 20,693 19,163 Total $128,869 $123,038 $124,057 $124,732 $124,050
Source: The University.
University Budget Each spring, all units at the University put together budgets for the following year that either allocate distributed funds or balance projected revenue and expenses. Many large units use multi-year financial projections to plan their budgets. On an institutional level, the University uses several budgeting processes to allocate funds. Currently, distributions to the Schools and Colleges are based upon a Responsibility Center Management model that distributes funds based on activity levels related to student credit hours, degrees, and majors of undergraduate students. Graduate tuition is allocated based on the program of study of each student. Next year, the institution will be moving to an academic budget model that provides the Provost’s office, with appropriate input from the academic deans and the faculty, greater strategic control over academic investments. On the administrative side, the annual budget process generally includes meetings with each vice president and analysis of historical revenue and expense data. A Budget Advisory Group comprised of faculty, students and staff reviews annual proposals for new funding and makes recommendations to the President and Provost. After receiving feedback on the advisory group recommendations from senior leadership, the President and Provost make the final budget decisions. Over the past several years, the institution has implemented spending cuts (over $6 million in Fiscal Year 2017 and $4.5 million in Fiscal Year 2018) in order to balance the budget and provide funds for strategic reinvestment.
For the last several years, the University has budgeted at a central level for certain institutional expenses related to the General Fund of the University. These include: (1) strategic initiative funds for new investment (allocated through the Budget Advisory Group process), (2) funds for new Clusters of Excellence faculty hiring, (3) classified and unclassified salary increases, and (4) benefits increases (retirement/health). For each of these areas, funds are set aside that can be allocated to departments to cover expected costs. Due to labor contracts, annual benefit cost pressures, and annual tuition cycles, multi-year estimates often involve scenario analysis.
With respect to capital budgeting, the University evaluates funding options for potential projects for auxiliary and student needs. Historically, the University has requested capital appropriations from the State for academic buildings but the State generally (with certain exceptions such as for some XI-Q and deferred maintenance funds) limits its contribution to 50% of the total cost of such capital projects. The University funds the remaining 50% through fundraising or other means.
University Expenditures The University’s operating expenses increased in fiscal year 2017, by 1.13% over fiscal year 2016, to $920.9 million. See APPENDIX C—UNIVERSITY OF OREGON 2017 ANNUAL FINANCIAL REPORT.
University Capital Assets; Capital Projects At June 30, 2017, the University had $2.23 billion in capital assets, less accumulated depreciation of $753.3 million, for net capital assets of $1.48 billion. During fiscal year 2017, $163.9 million in construction projects were completed and placed into service, compared to $43.8 million in 2016.
A-9 Future Debt The University expects to issue debt from time to time, and may establish an operating line or revolving facility, but has no current plans to issue long-term debt in addition to the 2018 Bonds within the next 12 months. The University currently has no interest rate swaps and no variable rate debt. The Legislature has approved the issuance of State-Paid Bonds to provide $50 million to the University for the Campus for Accelerating Scientific Impact. Debt service will be paid by the State. The University will be required to contribute $50 million in matching funds, which will come from donated gift funds.
Relationship with the State As a public university with a governing board, the University was established as an entity separate from the State and OUS. The University prepares separate financial statements and may be treated as a component unit of the State for certain financial reporting purposes. ORS 352.089 sets forth a process by which the University may request State appropriations, as described below.
State Funding; HECC Coordination. State appropriations (to the extent that appropriations consist of taxes collected by the State) are excluded from the University’s General Revenues. The State has reduced its relative support for higher education over the last three decades, leading the University to become increasingly self- sustaining through tuition and fee revenues, auxiliary enterprise revenue, revenue from sponsored research and commercialization, and philanthropic support.
The University submits requests for State appropriations through HECC. The HECC is responsible for submitting a comprehensive biennial funding request to the Governor for all public post-secondary institutions, which includes the University. The HECC is also responsible for allocating and distributing the appropriations that the Legislative Assembly makes to Oregon’s public institutions of higher education.
Pursuant to ORS 352.089 each public university must submit its biennial funding request to the office designated by HECC, which is to coordinate the requests and submit to HECC a consolidated funding request that HECC submits to the Governor on behalf of all public universities. ORS 352.089(4) provides that a funding request submitted by a public university and appropriations from the Legislative Assembly to a public university may include: funding for education and general operations, statewide public services, state-funded debt service, capital improvements, deferred maintenance, special initiatives and investments; provided, however, that any moneys appropriated to pay debt service for State bonds must be held by the State Treasurer pursuant to an agreement entered into by the State Treasurer and a university with a governing board under ORS 352.135(2) (the Debt Management Agreement).
University Foundation The University of Oregon Foundation (“UOF”) is a nonprofit corporation that has been supporting the University since 1922. The UOF is a separate entity from the University. UOF funds are not included in General Revenues and UOF is not obligated with respect to the Bonds.
UOF is responsible for the management, investment, and dispersal each year of private gifts to the University to help fund student scholarships, faculty support, academic programs, and building improvements according to each gift’s specific donor intent. Governed by UOF’s board of trustees, UOF manages these assets with the goal of providing stable financial support to the University today while maintaining the purchasing power for future generations. As of June 30, 2017, the annualized returns of UOF endowment were 9.7% (one year), 6.4% (three years), 9.6% (five years), and 5.5% (10 years).
Endowed gifts to UOF are placed in the Willamette Investment Pool (“WIP”). As of June 30, 2017, the WIP was valued at approximately $882 million. As of June 30, 2017, UOF distributions by purpose were as follows: 52% for facilities and equipment, 15% for student scholarships, 20% for faculty and research, and 14% for other university advancement and student support.
Gifts and Fundraising; the $2 Billion Fundraising Campaign The University is currently engaged in a comprehensive and multi-faceted $2 billion fundraising campaign. It is expected to support graduate and undergraduate students and fund scholarships, faculty fellowships and chairs,
A-10 expand programs and research, and provide for capital construction. A $500 million gift from Phil and Penny Knight launched the Knight Campus for Accelerating Scientific Impact and, with that gift, the University has more than $1.7 billion in hand or pledged from almost 88,000 donors towards achieving the campaign goal.
Treasury Management The Board adopted its Treasury Management Policy on June 12, 2014, which provides that assets and liabilities are to be managed in concert to further the mission of the University. The Treasury Management Policy provides that risks are analyzed and managed within the context of the asset and liability portfolios using a central bank framework. The University’s Cash and Investment Pool is managed by tier. The Tier 1 portfolio is used to meet the expected day-to-day obligations of the University including payroll, routine obligations, and debt service as due. The Tier 2 portfolio is used to hold funds that, while not needed to meet immediate obligations, could be readily accessed for additional liquidity. The Tier 3 portfolio holds funds that are invested for an indefinite period of time much like a quasi-endowment for the general benefit of the University.
Under the policy, new liabilities exceeding $5 million must be approved by the Board, and a report is to be made to the Board annually that contains both quantitative and qualitative information. The Board also receives quarterly updates on treasury-related activities.
PENSION AND RETIREMENT BENEFITS State-Operated Retirement Plans The University offers various retirement plans to qualified employees as described below.
Oregon Public Employees Retirement System. The University is one of many participants in the statewide Oregon Public Employees’ Retirement System (“PERS” or “System”). The Public Employees Retirement Board (the “Retirement Board”) administers PERS and is responsible for setting policies and for providing administrative direction to PERS as required by Chapters 238 and 238A of the ORS. The three PERS pension programs are composed of two defined benefit programs and one program that is similar to a defined contribution plan.
Employees hired before January 1, 1996 are known as “Tier 1” participants. The retirement benefits applicable to Tier 1 participants are based primarily on a defined benefit model. Employees hired on or after January 1, 1996 and before August 29, 2003 are known as “Tier 2” participants. The Tier 2 program also provides a defined benefit but with lower expected costs to employers than under the Tier 1 benefit. Employees hired on or after August 29, 2003 are participants in a successor retirement program to the Tier 1 and Tier 2 retirement programs (the “T1/T2 Pension Programs”) known as Oregon Public Service Retirement Plan (“OPSRP”). OPSRP’s defined benefit component is part of the single cost-sharing defined benefit plan administered by PERS. See Note 11 in APPENDIX C— UNIVERSITY OF OREGON 2017 ANNUAL FINANCIAL REPORT.
Oregon statutes require an actuarial valuation of PERS by a competent actuary at least once every two years. Under the State’s current practice, actuarial valuations are performed annually, but only valuations as of the end of each odd-numbered year are used to determine annual required employer contribution rates. Valuations are released approximately one year after the valuation date. The current PERS actuary is Milliman, Inc. (“Milliman”).
For purposes of participation in PERS, University employees are considered employees of the State. In connection with the Tier 1/Tier 2 Pension Programs, the State is pooled with certain local governments and community college districts (the “State and Local Government Rate Pool” or “SLGRP”). Because OPSRP’s assets and liabilities are pooled on a program-wide basis, the State is pooled with all Oregon local governments in connection with OPSRP. Milliman released the State’s individual valuation report as of December 31, 2014 (the “2014 State Report”) on November 12, 2015, the State’s individual valuation report as of December 31, 2015 (the “2015 State Report”) on September 27, 2016, and the State’s individual valuation report as of December 31, 2016 (the “2016 State Report”) in December 2017. December 31, 2016 results are advisory in nature and are used by the PERS Board to indicate what 2019 – 2021 contribution rates would be, if set based on the advisory valuation, and to assess program funded status and unfunded actuarial liability.
A-11 The following table provides the summary information regarding the System’s, and the State’s portion of, the market value of assets and actuarial value of liabilities, Unfunded Actuarial Liabilities (UALs), and funded ratios of PERS pension plans for the past 10 years.
SUMMARY OF SYSTEM AND STATE FUNDING LEVELS ($ In Millions) SYSTEM(1) STATE Market Actuarial Unfunded Market Actuarial Unfunded Calendar Value of Value of Actuarial Funded Value of Value of Actuarial Funded (2) (3) Year Assets Liability Liability Ratio Assets Liability Liability Ratio 2016 $61,059.0 $80,970.3 $19,911.3 75.4% $16,696.4 $21,995.0 $5,298.6 75.9% 2015 60,000.1 76,196.6 16,196.5 78.7 16,497.3 20,845.5 4,348.2 79.0 2014(4) 61,395.1 73,458.9 12,063.8 83.6 16,889.9 19,978.2 3,088.2 84.5 2013(5) 60,014.1 62,593.6 2,579.5 95.9 16,212.3 16,699.9 487.6 97.1 2012() 54,784.1 60,405.2 5,621.1 90.7 14,532.1 15,713.6 1,181.5 92.5 2011 50,168.2 61,198.4 11,030.2 82.0 13,208.2 15,660.0 2,451.8 84.3 2010 51,583.6 59,329.5 7,745.9 86.9 13,529.8 15,116.4 1,586.5 89.5 2009 48,729.2 56,810.6 8,081.4 85.8 13,014.7 14,771.7 1,757.0 88.1 2008 43,520.6 54,259.5 10,738.9 80.2 11,600.1 14,036.0 2,435.9 82.6 2007 59,327.8 52,871.2 (6,456.6) 112.2 15,769.3 13,611.1 (2,158.2) 115.9 ______(1) System funding levels composed of Tier 1 and Tier 2 and OPSRP pensions but excluding retiree healthcare subsidies. (2) Includes proceeds of pension bonds issued by Oregon local governments and the State. (3) Includes State pension bonds proceeds. (4) Reflects the Oregon Supreme Court decision discussed below. (5) Reflects the 2013 legislative changes described below, showing savings that were anticipated, but will not be realized because of the 2015 PERS Ruling discussed below. Source: The State; PERS.
The funded status of the System and the State as reported by Milliman will change over time depending on a variety of factors, including the market performance of the securities in which the Oregon Public Employees Retirement Fund is invested, future changes in compensation and benefits of covered employees, demographic characteristics of members, methodologies and assumptions used by the actuary in estimating the assets and liabilities of PERS, and other actions taken by the Retirement Board and the Legislative Assembly.
In 2013, the Legislative Assembly enacted legislation (the “2013 PERS Bills”) that was expected to: reduce the amount of future benefit payments from the System and reduce the unfunded actuarial liability of the System by approximately $5 billion. Lawsuits were filed challenging provisions of the 2013 PERS Bills. In April 2015, the Oregon Supreme Court announced a decision (the “2015 PERS Ruling”) that upheld the elimination of a benefit increase for out-of-state retirees but declared other benefit reductions unconstitutional as applied to benefits earned prior to the June 1, 2013 effective date of the 2013 PERS Bills.
As reported by the Office of the State Treasurer, actual investment returns for the Oregon Public Employees Retirement Fund (“OPERF”) for calendar year 2016 were 6.9%, below the 7.5% assumed earnings rate. At its July 28, 2017 meeting, the PERS Board made a number of changes to the actuarial assumptions and methods, including lowered the assumed earnings rate of the investment fund to 7.2%
The PERS Board has issued advisory 2019-2021 contribution rates based on actuarial valuations of the System as of December 31, 2016 (the “2016 System Valuation”). The Advisory Net Employer Contribution Rate for 2019-2021 for State agencies is 23.83% for Tier 1/Tier 2 payroll and 16.25% for OPSRP general services payroll. These advisory rates would represent an increase in rates compared to the Net Employer Contribution Rates for State agencies for 2017-2019 of 18.67% and 10.78%, respectively. The PERS Board indicates that it expects to issue the System-wide actuarial valuation results as of December 31, 2017 at its July 2018 meeting, and expects to disclose and adopt employer-specific 2019-2021 contribution rates in September 2018. Based on the 2016 System Valuation summary valuation, rates are expected to increase.
A-12 PERS issues a separate, publicly available financial report that contains audited financial statements and required supplementary information. The report includes 10-year historical trend information showing the progress made in accumulating sufficient assets to pay benefits when due. That report may be obtained by writing to Fiscal Services Division, PERS, 11410 SW 68th Parkway, Tigard, OR 97223, or by linking to:
*.
Summary of Pension Payments. The University’s total payroll for the year ended June 30, 2017 was $390.6 million of which $303.7 million was subject to retirement contributions. The following schedule lists pension payments made by the University for fiscal year ending June 30, 2017. These contributions exclude the assessment for the State’s pension obligation bonds.
June 30, 2017 (000’s) As a % of Employer As a % of Employee Covered Contribution Covered Payroll Contribution Payroll PERS/OPSRP $19,886 10.73% $12,750 4.20% ORP 12,290 4.05 5,450 1.79 TIAA-CREF 45 0.01 45 0.01 Total $32,221 14.80% $18,245 6.01%
Source: The University.
GASB 68/71. As described in Note 11 in APPENDIX C—UNIVERSITY OF OREGON 2017 ANNUAL FINANCIAL REPORT, implementing Governmental Accounting Standards Board Statement No. 68 (“GASB 68”) and No. 71 (“GASB 71”), at June 30, 2017, the University reported a liability of $286.2 million for its proportionate share of the net pension liability and a pension expense of $60.9 million. The University’s net pension liability was measured as of June 30, 2016, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of December 31, 2014 and rolled forward to June 30, 2016. The University’s proportion of the net pension liability was based on its projected long-term contribution effort as compared to the total projected long-term contribution effort of all employers. At June 30, 2017, the University’s proportion was 1.91%. See “Required Supplementary Information for the Year Ended June 30, 2017” at Appendix C.
OPSRP Individual Account Program (“IAP”) and Oregon Growth Savings Plan. Participants in PERS’ defined benefit pension plans also participate in the IAP defined contribution plan. The University has chosen to pay the employees’ contributions to the plan. Six percent of covered payroll is paid for general service and police and fire employees. See Note 11 in APPENDIX C—UNIVERSITY OF OREGON 2017 ANNUAL FINANCIAL REPORT. University employees may also participate in the Oregon Savings Growth 457 Plan, a deferred compensation account managed by PERS.
Joint University Retirement Plans
Oregon Public Universities Optional Retirement Plan. The State Legislature has authorized the public universities to jointly offer administrative and faculty employees a defined contribution retirement plan as an optional alternative to PERS. The University, through its Retirement Plans Management office and Board-appointed Retirement Plans Committee, operates the Oregon Public Universities Optional Retirement Plan (“ORP”) on behalf of all the public
* This website is not incorporated by reference.
A-13 universities. Board-appointed trustees maintain any employee-contributed assets. Employees choosing the ORP may invest the employee and employer contributions in one or multiple investment companies. See Note 11 in APPENDIX C – UNIVERSITY OF OREGON 2017 ANNUAL FINANCIAL REPORT.
Oregon Public Universities Tax-Deferred Investment 403(b) Plan. The State Legislature has authorized the public universities to jointly offer employees a defined contribution retirement plan as an optional supplement to either PERS or ORP retirement benefits. The University, through its Retirement Plans Management office and Board- appointed Retirement Plans Committee, operates the Oregon Public Universities Tax-Deferred Investment 403(b) Plan (“TDI”) on behalf of all the public universities. The TDI only maintains voluntary employee elective contributions, and does not maintain any employer contributions from the public universities. Employees participating in the TDI may invest their contributions with one or multiple investment companies. See Note 11 in APPENDIX C – UNIVERSITY OF OREGON 2017 ANNUAL FINANCIAL REPORT.
Oregon Public Universities Supplemental Retirement Plan (“SRP”). The University previously maintained the SRP, a cash balance defined benefit plan qualified under Section 401(a) of the Tax Code, as a supplemental retirement benefit available to any president of the State’s public universities, if their institution chose to fund it. With the support of the public universities, the Board terminated the SRP effective September 8, 2017 with final distributions made to the remaining participants.
University Retirement Plan
University of Oregon Supplemental Retirement Plan (“UO SRP”) and Qualified Governmental Excess Benefit Arrangement (“EBA”). The University operates the UO SRP, a Section 403(b)-qualified retirement plan, as an additional retirement benefit supplement for a small group of employees. The UO SRP is paired with the EBA, authorized under Section 415(m) of the Tax Code, which is an unfunded deferred compensation arrangement that provides additional post-retirement benefits in excess of the annual contribution limitations imposed on PERS, the ORP, the TDI, and the UO SRP. See Note 8 in APPENDIX C – UNIVERSITY OF OREGON 2017 ANNUAL FINANCIAL REPORT.
Other Post-Employment Benefits Plan Description. The University participates in a defined benefit post-employment healthcare plan, administered by the Public Employees Benefit Board (“PEBB”), which offers medical, dental and vision benefits to eligible retired State employees and their beneficiaries. The PEBB plan is an agent multiple-employer postemployment healthcare plan. Chapter 243 of the ORS assigns PEBB the authority to establish and amend the benefit provisions of the PEBB plan. As the administrator of the PEBB plan, PEBB has the authority to determine postretirement benefit increases and decreases. PEBB does not issue a separate, publicly available financial report.
Funding Policy. The PEBB plan allows the University employees retiring under PERS or OPSRP to continue their healthcare on a self-pay basis until eligible for Medicare, usually at age 65. This plan creates an “implicit rate subsidy” because the healthcare insurance premiums paid by the University for its employees is based on a blended premium of both employees and retirees combined, which is a higher premium than would have been paid for employees alone.
The University’s current policy is to pay the implicit rate subsidy on a pay-as-you-go basis. For fiscal years 2017 and 2016, the University paid healthcare insurance premiums of $74.5 million and $72.4 million, respectively. The portion of the insurance premiums attributable to the implicit rate subsidy was estimated to be $0.5 million and $0.4 million for the fiscal years ended 2017 and 2016, respectively.
Annual OPEB Cost and Net OPEB Obligation. The University’s annual OPEB expense is calculated based on the University’s annual required contribution (“ARC”), an amount actuarially determined in accordance with the parameters of GASB statement No. 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover the normal cost each year and to amortize any UAL over a period not to exceed 30 years. See Note 12 in APPENDIX C—UNIVERSITY OF OREGON 2017 ANNUAL FINANCIAL REPORT.
A-14 The following table shows the components of the University’s annual OPEB expense for the year, the amount actually contributed to the plan, and changes in the University’s net OPEB obligation:
June 30 (000’s) 2017 2016 Annual Required Contribution $7,189 $7,206 Interest on Net OPEB Obligation 231 264 Adjustment to Annual Required Contribution (6,827) (7,798) Prior Year Adjustment -- 12 Annual OPEB Cost 593 (316) Contributions Made (377) (438) Increase in Net OPEB Obligation 216 (754) Net OPEB Obligation – Beginning of Year 6,256 7,010 Net OPEB Obligation – End of Year $6,472 $6,256
Source: The University.
The funded status of the University’s OPEB plan for June 30, 2017 and 2016 were as follows:
June 30 (000’s) 2017 2016 Actuarial Accrued Liabilities $6,447 $6,616 Actuarial Value of Plan Assets -- -- Unfunded Actuarial Accrued Liability $6,447 $6,616
Funded Ratio 0.00% 0.00% Covered Payroll (active plan members) 303,658 302,093 Unfunded Actuarial Accrued Liability as a 2.12% 2.19% Percentage of Covered Payroll
Source: The University.
Actuarial valuations, prepared biennially, involve estimates of the value of reported amounts and assumptions about the probability of events in the future. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared to past expectations and new estimates are made about the future. See Note 12 in APPENDIX C—UNIVERSITY OF OREGON 2017 ANNUAL FINANCIAL REPORT.
A-15 June 30 2017 2016 Actuarial Valuation Date 7/1/2015 7/1/2015 Actuarial Cost Method Entry Age Normal Entry Age Normal Amortization Method Level Dollar Level Dollar Amortization Period 1 Year (open) 1 Year (open) Investment Rate of Return 3.5% 3.5% Projected Salary Increases 3.5% 3.5% Initial Healthcare Inflation Rates 5.1% (medical) 5.1% (medical) 2.3% (dental) 2.3% (dental) Ultimate Healthcare Inflation Rates 5.0% (medical) 5.0% (medical) 5.0% (dental) 5.0% (dental)
Source: The University.
OTHER UNIVERSITY INFORMATION Risk Management Effective July 1, 2015, the University implemented its first independent insurance portfolio as it withdrew from the Public University Risk Management and Insurance Trust (“PURMIT”) for insurance coverages. The following coverages were secured: general liability, excess liability, licensed professional liability, and educators’ legal liability, fiduciary, crime, cyber and multimedia, nonowned aircraft, workers’ compensation and employer’s liability, foreign liability, fine art, intercollegiate athletes, international travel, and allied health, day care, cheerleading, property (as of October 15, 2016), and camps and clinics.
The University has established a risk insurance portfolio to manage costs within the respective policy deductibles. The insurance renewal process focused on broadening coverage and reducing portfolio costs, and continuing to monitor campus activities for potential gaps in coverage. The Enterprise Risk Services unit works with campus partners to increase risk awareness and safety and reduce injuries and losses. The independent program has allowed direct relationships with the broker and carriers to facilitate access to resources. Claims are managed by the Office of Risk Management and the General Counsel’s Office, using outside counsel as necessary. The University’s workers’ compensation losses have been trending down since fiscal year 2013.
A-16
APPENDIX B
COPY OF THE RESOLUTION AND FORM OF THE DECLARATION
(SEE ATTACHED)
[THIS PAGE INTENTIONALLY LEFT BLANK] Board of Trustees of the University of Oregon
Seconded Motion: Authorization of 2018 General Revenue Bonds
WHEREAS, ORS 352.087(1)(b) authorizes the University of Oregon (the “University”) to borrow money for the needs of the University in such amounts, at such times, and upon such terms as may be determined by the University acting through its Board of Trustees (the “Board”);
WHEREAS, ORS 352.408(1) authorizes the University to issue revenue bonds for any lawful purpose of the University in accordance with ORS chapter 287A, and to issue refunding bonds under ORS 287A.360 to ORS 287A.380 of the same character and tenor as the revenue bonds replaced;
WHEREAS, Section 3.1 of the University Treasury Management Policy provides that the University may use debt or other financing agreements to meet its strategic objectives and, pursuant to Section 3.2 of the Treasury Management Policy, the Board, or its designated Committee, must authorize debt transactions, financing agreements, hedging instruments, and other derivatives when the par or notional amount is greater than $5,000,000;
WHEREAS, Section 3.4.2 of the University Treasury Management Policy authorizes the Treasurer to enter into financing transactions for the purpose of mitigating the risk of existing obligations and/or reducing the overall cost of debt;
WHEREAS, the University now desires to authorize the issuance of one or more series of general revenue bonds in an aggregate principal amount not to exceed $60,000,000;
WHEREAS, ORS 352.087(1)(t) authorizes the University to delegate any and all powers and duties, subject to the limitations expressly set forth in law;
WHEREAS, the Board has considered the impact of the general revenue bonds authorized by this resolution on the University’s ability to achieve its mission and strategic objectives, the cost of issuing and paying the bonds, and how the bonds will affect the University’s ability to meet its existing obligations, and has determined that it is in the best interests of the University to approve the issuance of the bonds as set forth in this resolution, and to delegate the powers of the Board related to the bonds to the Treasurer of the University, and her designee, to approve the sale of the bonds and certain terms of the bonds; and,
WHEREAS, the Finance and Facilities Committee has referred this matter to the full Board of Trustees as a seconded motion, recommending adoption;
NOW, THEREFORE, the Board of Trustees hereby adopts the following:
1. Appointment of Authorized Representative. The Board hereby authorizes the Treasurer of the University, and her designee, each acting individually and on behalf of the University and not in his or her personal capacity (the “Authorized Representative”), to act as the authorized representative for and on behalf of the University in connection with the issuance and sale of general revenue bonds (the “New Money Revenue Bonds”) and general revenue refunding bonds (the “Refunding Revenue
Board of Trustees Seconded Motion: 2018 Issuance of General Revenue Bonds September 8, 2017 Page 1 Bonds” and, together with the New Money Revenue Bonds, the “Revenue Bonds”) to carry out the purposes and intent of this resolution. Subject to any limitations of this resolution, the signature of the Authorized Representative or his or her designee shall be sufficient to bind the University with respect to any Revenue Bonds, certificate, agreement or instrument related thereto, and shall be sufficient to evidence the Authorized Representative’s approval of the terms thereof.
2. New Money Revenue Bonds Authorized. The Board hereby authorizes the issuance of not more than Sixty Million Dollars ($60,000,000) in aggregate principal amount of New Money Revenue Bonds under ORS 352.087(1)(b) and/or ORS 352.408 for University purposes, to fund debt service reserves, if any, and to finance other costs related to issuing a series of New Money Revenue Bonds, including but not limited to capitalizing interest.
3. Special Obligations of the University. The Revenue Bonds shall be special obligations of the University that are payable solely from legally available revenues of the University that the University pledges to pay the Revenue Bonds.
4. Bond Sale Authorized. The Authorized Representative is hereby authorized, on behalf of the Board and without further action by the Board, to take any of the following actions that may be required if needed in connection with the issuance and sale of Revenue Bonds authorized herein:
(a) Issue the Revenue Bonds in one or more series and at different times; provided that any series of Revenue Bonds under this resolution shall be issued on or before June 30, 2018.
(b) Pledge all or any portion of the legally available revenues of the University to pay and secure the payment of the principal of and interest on each series of Revenue Bonds, and determine the lien status of each pledge.
(c) Apply the proceeds of any series of New Money Revenue Bonds to pay or reimburse costs of the University, to fund debt service reserves, if any, and to pay other costs related to issuing a series of Revenue Bonds, including but not limited to capitalizing interest.
(d) Determine whether to pay or refinance short‐term or interim financing or to defease, refund or prepay University obligations including any or all of the payments to be made by the University in connection with bonds issued by the State of Oregon for the benefit of the University.
(e) Apply the proceeds of any series of Refunding Revenue Bonds to pay or refinance short‐term or interim financing, to defease, refund or prepay University obligations including any or all of the payments to be made by the University in connection with bonds issued by the State of Oregon for the benefit of the University, to pay costs of issuance, and to pay defeasance, prepayment and refunding costs.
Board of Trustees Seconded Motion: 2018 Issuance of General Revenue Bonds September 8, 2017 Page 2 (f) Participate in the preparation of, authorize the distribution of, and deem final the preliminary and final official statements and any other disclosure documents for any series of Revenue Bonds.
(g) Establish the final principal amount, maturity schedule, interest payment dates, interest rates, denominations and all other terms for each series of Revenue Bonds; provided, that the true interest cost of any New Money Revenue Bonds shall not exceed eight percent per annum, and the final maturity date for any New Money Revenue Bond shall be on or before October 1, 2048.
(h) Select one or more underwriters or lenders and negotiate the sale of that series of Revenue Bonds to those underwriters or lenders, and execute and deliver one or more bond purchase agreements.
(i) Undertake to provide continuing disclosure for any series of Revenue Bonds in accordance with Rule 15c2‐12 of the United States Securities and Exchange Commission.
(j) Apply for rating(s) for any series of Revenue Bonds.
(k) Draft and approve the terms of, and execute and deliver, one or more bond declarations which pledge all or a portion of the legally available revenues of the University to particular series of Revenue Bonds, make covenants for the benefit of owners of the Revenue Bonds, describe the terms of the Revenue Bonds that are issued under that bond declaration, and describe the terms under which future obligations may be issued on a parity with those Revenue Bonds.
(l) Appoint and enter into agreements with paying agents, escrow agents, bond trustees, verification agents, and other professionals and service providers.
(m) Issue any series of Revenue Bonds as taxable bonds, including taxable bonds that are eligible for federal interest subsidies or tax credits.
(n) Issue any series of Revenue Bonds as governmental and/or 501(c)(3) tax‐ exempt bonds, hold public hearings, take actions and enter into covenants to maintain the tax status of that series of Revenue Bonds under the Internal Revenue Code of 1986, as amended (the "Code").
(o) Provide for the Revenue Bonds to be held in certificated or uncertificated form.
(p) Execute and deliver any agreements or certificates and take any other action in connection with the Revenue Bonds that an Authorized Representative finds will be advantageous to sell and issue the Revenue Bonds and carry out this resolution.
5. Ratification and Approval of Actions. The Board hereby ratifies and approves all prior actions taken on behalf of the Board or University related to such Revenue Bonds. The Board hereby authorizes, empowers, and directs the Authorized
Board of Trustees Seconded Motion: 2018 Issuance of General Revenue Bonds September 8, 2017 Page 3 Representative to take further actions as may be necessary or desirable related to such Revenue Bonds, including, without limitation, the execution and delivery of agreements necessary or desirable to carry out such actions or arrangements, and to take such other actions as are necessary or desirable for the purposes and intent of this resolution. Notwithstanding the above, the Treasurer shall obtain approval from the chair of the Board and the chair of the Finance and Facilities Committee prior to executing final agreements necessary to issue such Revenue Bonds.
6. Effective Date. This resolution shall take effect immediately upon adoption by the Board.
VOTE: Voice Vote Recorded – Ayes carried (no dissention)
DATE: September 8, 2017
Recorded by the University Secretary:
Board of Trustees Seconded Motion: 2018 Issuance of General Revenue Bonds September 8, 2017 Page 4
BOND DECLARATION
UNIVERSITY OF OREGON GENERAL REVENUE BONDS, 2018A
EXECUTED BY THE TREASURER OF THE UNIVERSITY OF OREGON AS OF THIS ___ DAY OF JANUARY, 2018
TABLE OF CONTENTS*
Page
Section 1. Findings ...... 1 Section 2. Definitions and Interpretation of Terms ...... 1 Section 3. Authorization of 2018 Bonds and Description of 2018 Bonds ...... 5 Section 4. Registration, Transfer and Payment of 2018 Bonds ...... 5 Section 5. Redemption and Purchase ...... 8 Section 6. Form of the 2018 Bonds ...... 10 Section 7. Execution of the 2018 Bonds ...... 10 Section 8. Disposition of 2018 Bond Proceeds ...... 10 Section 9. Tax Covenants ...... 11 Section 10. Bond Fund ...... 12 Section 11. Sources of Security ...... 12 Section 12. Covenants of the University ...... 13 Section 13. Defeasance ...... 13
Exhibit A: 2018 Bond Form
* This Table of Contents is provided for reference only and does not constitute a part of this Declaration for which it is provided. BOND DECLARATION
UNIVERSITY OF OREGON GENERAL REVENUE BONDS, 2018A
This Bond Declaration (this “Declaration”) is executed as of January __, 2018 by the Treasurer of the University of Oregon (the “University”) pursuant to authority granted to the Treasurer, as the Authorized Representative of the University, by Resolution adopted by the Board of Trustees of the University (the “Board”) on September 8, 2017 (the “Authorizing Resolution”) to establish the terms under which the University’s General Revenue Bonds, 2018A and future general revenue bonds may be issued.
Section 1. Findings.
(a) The Board adopted the Authorizing Resolution authorizing the University to issue up to $60,000,000 in aggregate principal amount of revenue bonds under ORS 352.087(1)(b) and ORS 352.408(1) for University purposes and to finance other costs related to issuing a series of such bonds, including but not limited to capitalizing interest.
(b) Section 4(k) of the Authorizing Resolution authorized the Treasurer of the University, as the Authorized Representative, to draft and approve the terms of, and execute and deliver, one or more bond declarations that pledge all or a portion of the legally available revenues of the University to particular series of revenue bonds, make covenants for the benefit of owners of the revenue bonds, describe the terms of the revenue bonds that are issued under that bond declaration, and describe the terms under which future obligations may be issued on a parity with those revenue bonds.
(c) This Declaration is executed pursuant to the Authorizing Resolution, describes the terms under which the University’s General Revenue Bonds, 2018A are issued, and describes the terms under which future general revenue obligations may be issued.
Section 2. Definitions and Interpretation of Terms. Terms not otherwise defined herein shall have the meanings set forth in the Authorizing Resolution. As used in this Declaration, the following words shall have the following meanings, unless a different meaning clearly appears from the context:
2015 Bonds means the University of Oregon General Revenue Bonds, 2015A, issued on April 1, 2015, pursuant to a resolution of the Board adopted on December 11, 2014.
2016 Bonds means the University of Oregon General Revenue Bonds, 2016A, issued on May 19, 2016, pursuant to a resolution the Board adopted on March 4, 2016.
2018 Bonds means the University of Oregon General Revenue Bonds, 2018A, authorized to be issued pursuant to a resolution the Board adopted on September 8, 2017.
Additional Bonds means bonds, leases, interest rate swaps, and other contractual obligations issued by the University and secured by a pledge of General Revenues on a parity with the pledge securing the payment of the principal of and interest on the 2015 Bonds, the 2016 Bonds and the 2018 Bonds.
Authorized Denominations means $5,000 and integral multiples thereof within a maturity.
Authorized Representative means the Treasurer of the University, or her designee.
Authorizing Resolution means the Resolution adopted by the Board on September 8, 2017 authorizing the 2018 Bonds.
Beneficial Owner means any person that has or shares the power, directly or indirectly, to make investment decisions concerning ownership of any 2018 Bonds (including persons holding 2018 Bonds through nominees, depositories or other intermediary).
Board means the Board of Trustees of the University.
Bond Act means, together, chapters 287A and 352 ORS, in each case as amended from time to time.
Bond Authorization means together the Authorizing Resolution and this Declaration.
Bond Fund means the special fund consisting of one or more funds or accounts pursuant to Section 10 hereof.
Bond Purchase Contract means the purchase contract relating to the 2018 Bonds between the University and the Underwriter.
Bond Register means the registration records for the 2018 Bonds maintained by the Bond Registrar.
Bond Registrar means, initially, U.S. Bank National Association, for the purposes of registering and authenticating the 2018 Bonds, maintaining the Bond Register, effecting transfer of ownership of the 2018 Bonds and paying interest on and principal of the 2018 Bonds.
Code means the Internal Revenue Code of 1986 as in effect on the date of issuance of the 2018 Bonds or (except as otherwise referenced herein) as it may be amended to apply to obligations issued on the date of issuance of the 2018 Bonds, together with applicable proposed, temporary and final regulations promulgated, and applicable official public guidance published, under the Code.
Commission means the Securities and Exchange Commission.
Continuing Disclosure Certificate means the certificate of the University undertaking entered into in connection with the 2018 Bonds to provide ongoing disclosure to assist the Underwriter in complying with the Rule.
Debt Management Agreement means the Restated and Amended Agreement for Debt Management among the University, the State, acting by and through the State Treasurer, the Higher Education Coordinating Commission, and Department of Administrative Services dated as of July 1, 2017, as it may be amended from time to time.
DTC means The Depository Trust Company of New York, as depository for the 2018 Bonds, or any successor or substitute depository for the 2018 Bonds.
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Fair Market Value means the price at which a willing buyer would purchase the investment from a willing seller in a bona fide, arm's length transaction (determined as of the date the contract to purchase or sell the investment becomes binding) if the investment is traded on an established securities market (within the meaning of Section 1273 of the Code) and, otherwise, the term “Fair Market Value” means the acquisition price in a bona fide arm's length transaction (as referenced above) if (i) the investment is a certificate of deposit that is acquired in accordance with applicable regulations under the Code, (ii) the investment is an agreement with specifically negotiated withdrawal or reinvestment provisions and a specifically negotiated interest rate (for example, a guaranteed investment contract, a forward supply contract or other investment agreement) that is acquired in accordance with applicable regulations under the Code, (iii) the investment is a United States Treasury Security--State and Local Government Series that is acquired in accordance with applicable regulations of the United States Bureau of Public Debt, or (iv) any commingled investment fund in which the University and related parties do not own more than a 10% beneficial interest therein if the return paid by the fund is without regard to the source of the investment. To the extent required by the applicable regulations under the Code, the term “investment” will include a hedge.
Federal Tax Certificate means the certification of the University executed and delivered in connection with the issuance of the 2018 Bonds.
General Revenues means all tuition, fees, charges, rents, revenues, receipts, and other income (including interest and dividends) of the University, if and to the extent such funds are not restricted in their use by law, regulation, or contract. The following items are restricted by law, regulation, or contract and therefore are excluded:
(a) Moneys received by the University from taxes collected by the State;
(b) Gifts or grants, the purpose of which has been restricted in writing by the terms of a gift or grant, or by the donor or grantor; and
(c) Amounts required to be transferred to the State Treasurer for deposit for Revenue Payments (as defined in the Debt Management Agreement) next coming due, and without duplication, amounts required to be paid to the State Treasurer for Revenue Payments next coming due.
Unrestricted fund balances, to the extent that they were accumulated from tuition, fees, charges, rents, revenues, interest, dividends, receipts, and other income received as General Revenues, also would be available to pay obligations secured by General Revenues. Upon the addition or deletion of any income, revenues, or receipts from General Revenues pursuant to Section 11, this definition of General Revenues shall be deemed to be amended accordingly without further action by the University.
Government Obligations means direct obligations of the United States of America or obligations the principal of and interest on which are unconditionally guaranteed by the United States of America and bank certificates of deposit secured by the obligations; and bonds, debentures, notes, certificates of participation or other obligations issued by a federal agency or other instrumentality of the federal government.
Letter of Representations means the Blanket Letter of Representations from the University to DTC.
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ORS means the Oregon Revised Statutes, as now in existence or hereafter amended, or any successor codification of the laws of the State.
Permitted Investments means any legally permissible investment for University funds, but only to the extent that the same are acquired at Fair Market Value.
Projects mean projects of the University as identified by the Authorized Representative from time to time.
Registered Owner means the person in whose name a 2018 Bond is registered on the Bond Register. For so long as the University utilizes the book-entry system for the 2018 Bonds, DTC shall be deemed to be the Registered Owner.
Rule means the Commission’s Rule 15c2-12 under the Securities Exchange Act of 1934, as the same may be amended from time to time.
State means the State of Oregon.
State Treasurer means the Treasurer of the State.
Treasurer means the Treasurer of the University or the successor to such officer.
Underwriter means Merrill Lynch, Pierce, Fenner & Smith Incorporated.
University means the University of Oregon, a public university of the State.
University-Paid State Bonds means the payments to be made by the University representing its share of debt service to be paid when due on bonds or other obligations issued by the State for the benefit of the University established by the schedule of outstanding state bonds prepared under ORS 352.415(3)
Interpretation. In this Declaration, unless the context otherwise requires:
(a) The terms “hereby,” “hereof,” “hereto,” “herein, “hereunder” and any similar terms, as used in this Declaration, refer to this Declaration as a whole and not to any particular article, section, subdivision or clause hereof, and the term “hereafter” shall mean after, and the term “heretofore” shall mean before, the date of this Declaration;
(b) Words of any gender shall mean and include correlative words of any other gender and words importing the singular number shall mean and include the plural number and vice versa;
(c) Words importing persons shall include firms, associations, partnerships (including limited partnerships), trusts, corporations and other legal entities, including public bodies, as well as natural persons;
(d) Any headings preceding the text of the several articles and sections of this Declaration, and any table of contents or marginal notes appended to copies hereof, shall be solely for convenience of reference and shall not constitute a part of this Declaration, nor shall they affect its meaning, construction or effect; and
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(e) All references herein to “articles,” “sections” and other subdivisions or clauses are to the corresponding articles, sections, subdivisions or clauses hereof.
Section 3. Authorization of 2018 Bonds and Description of 2018 Bonds. Pursuant to the Bond Authorization, the University is issuing its General Revenue Bonds, 2018A, on this date for the purpose of paying and/or reimbursing the University for all or a portion of the costs of the Projects and paying costs of issuing the 2018 Bonds. The 2018 Bonds have been issued and delivered to the Underwriter as provided in the Bond Purchase Contract
The 2018 Bonds are dated as of their date of delivery; are fully registered as to both principal and interest; are in Authorized Denominations, provided that no 2018 Bond shall represent more than one maturity; and have been numbered separately in such manner and with any additional designation as the Bond Registrar deems necessary for purposes of identification. The 2018 Bonds bear interest from their date until such interest has been paid or its payment duly provided for, payable each October 1 and April 1, commencing on April 1, 2018, at such rates and shall mature on April 1 in such years and amounts as are set forth below:
Years (April 1) Amount Interest Rate 2048
Section 4. Registration, Transfer and Payment of 2018 Bonds.
(a) Bond Registrar/Bond Register. The University shall cause a Bond Register to be maintained by the Bond Registrar. The University hereby appoints U.S. Bank National Association as the Bond Registrar for the 2018 Bonds. So long as any 2018 Bonds remain outstanding, the Bond Registrar shall make all necessary provisions to permit the exchange or registration or transfer of 2018 Bonds at its principal corporate trust office. The Bond Registrar may be removed at any time at the option of the Authorized Representative upon prior notice to the Bond Registrar and a successor Bond Registrar appointed by the Authorized Representative. No resignation or removal of the Bond Registrar shall be effective until a successor shall have been appointed and until the successor Bond Registrar shall have accepted the duties of the Bond Registrar hereunder. The Bond Registrar is authorized and directed, on behalf of the University, to authenticate and deliver 2018 Bonds transferred or exchanged in accordance with the provisions of such 2018 Bonds and this Declaration and to carry out all of the Bond Registrar’s powers and duties under this Declaration. The Bond Registrar shall be responsible for its representations contained in the Certificate of Authentication of the 2018 Bonds.
(b) Registered Ownership. The University and the Bond Registrar, each in its discretion, may deem and treat the Registered Owner of each 2018 Bond as the absolute owner thereof for all purposes (except as provided in the Continuing Disclosure Certificate), and neither the University nor the Bond Registrar shall be affected by any notice to the contrary. Payment of any such 2018 Bond shall be made only as described in Section 4(g) hereof, but such 2018 Bond may be transferred as herein provided. All such payments made as described in Section 4(g) shall be valid and shall satisfy and discharge the liability of the University upon such 2018 Bond to the extent of the amount or amounts so paid.
(c) DTC Acceptance/Letters of Representations. The 2018 Bonds initially shall be held in fully immobilized form by DTC acting as depository. To induce DTC to accept the 2018 Bonds as eligible
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for deposit at DTC, the University has executed and delivered to DTC a Blanket Issuer Letter of Representations. Neither the University nor the Bond Registrar will have any responsibility or obligation to DTC participants or the persons for whom they act as nominees (or any successor depository) with respect to the 2018 Bonds in respect of the accuracy of any records maintained by DTC (or any successor depository) or any DTC participant, the payment by DTC (or any successor depository) or any DTC participant of any amount in respect of the principal of or interest on 2018 Bonds, any notice which is permitted or required to be given to Registered Owners under this Declaration (except such notices as shall be required to be given by the University to the Bond Registrar or to DTC (or any successor depository)), or any consent given or other action taken by DTC (or any successor depository) as the Registered Owner. For so long as any 2018 Bonds are held in fully-immobilized form hereunder, DTC, its nominee or its successor depository shall be deemed to be the Registered Owner for all purposes hereunder, and all references herein to the Registered Owners shall mean DTC (or any successor depository) or its nominee and shall not mean the owners of any beneficial interest in such 2018 Bonds.
If any 2018 Bond shall be duly presented for payment and funds have not been duly provided by the University on such applicable date, then interest shall continue to accrue thereafter on the unpaid principal thereof at the rate stated on such 2018 Bond until it is paid.
(d) Use of Depository.
(1) The 2018 Bonds shall be registered initially in the name of “Cede & Co.”, as nominee of DTC, with one 2018 Bond maturing on each of the maturity dates for the 2018 Bonds in a principal amount corresponding to the total principal therein designated to mature on such date. Registered ownership of such immobilized 2018 Bonds, or any portions thereof, may not thereafter be transferred except (A) to any successor of DTC or its nominee, provided that any such successor shall be qualified under any applicable laws to provide the service proposed to be provided by it; (B) to any substitute depository appointed by the Authorized Representative pursuant to subsection (2) below or such substitute depository’s successor; or (C) to any person as provided in subsection (4) below.
(2) Upon the resignation of DTC or its successor (or any substitute depository or its successor) from its functions as depository or a determination by the Authorized Representative to discontinue the system of book entry transfers through DTC or its successor (or any substitute depository or its successor), the Authorized Representative may hereafter appoint a substitute depository. Any such substitute depository shall be qualified under any applicable laws to provide the services proposed to be provided by it.
(3) In the case of any transfer pursuant to clause (A) or (B) of subsection (1) above, the Bond Registrar shall, upon receipt of all outstanding 2018 Bonds, together with a written request on behalf of the Authorized Representative, issue a single new 2018 Bond for each maturity then outstanding, registered in the name of such successor or such substitute depository, or their nominees, as the case may be, all as specified in such written request of the Authorized Representative.
(4) In the event that (A) DTC or its successor (or substitute depository or its successor) resigns from its functions as depository, and no substitute depository can be obtained, or (B) the Authorized Representative determines that it is in the best interest of the Beneficial Owners of the 2018 Bonds that such owners be able to obtain such bonds in the form of 2018 Bond certificates, the ownership of such 2018 Bonds may then be transferred to any person or entity as herein provided, and shall no longer be held in fully-immobilized form. The Authorized Representative shall deliver a written
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request to the Bond Registrar, together with a supply of definitive 2018 Bonds, to issue 2018 Bonds as herein provided in any Authorized Denomination. Upon receipt by the Bond Registrar of all then outstanding 2018 Bonds together with a written request on behalf of the Authorized Representative to the Bond Registrar, the 2018 Bonds will be exchangeable for other fully registered certificated 2018 Bonds of the same maturity in Authorized Denominations.
(e) Registration of Transfer of Ownership or Exchange; Change in Denominations. The transfer of any 2018 Bond may be registered and 2018 Bonds may be exchanged, but no transfer of any such 2018 Bond shall be valid unless it is surrendered to the Bond Registrar with the assignment form appearing on such 2018 Bond duly executed by the Registered Owner or such Registered Owner’s duly authorized agent in a manner satisfactory to the Bond Registrar. Upon such surrender, the Bond Registrar shall cancel the surrendered 2018 Bond and shall authenticate and deliver, without charge to the Registered Owner or transferee therefor, a new 2018 Bond (or 2018 Bonds at the option of the new Registered Owner) of the same date, maturity, and interest rate and for the same aggregate principal amount in any Authorized Denomination, naming as Registered Owner the person or persons listed as the assignee on the assignment form appearing on the surrendered 2018 Bond, in exchange for such surrendered and cancelled 2018 Bond. Any 2018 Bond may be surrendered to the Bond Registrar and exchanged, without charge, for an equal aggregate principal amount of 2018 Bonds of the same date, maturity, and interest rate, in any authorized denomination. The Bond Registrar shall not be obligated to register the transfer or to exchange any 2018 Bond during the 15 days preceding any interest payment or principal payment date any such 2018 Bond is to be redeemed.
(f) Bond Registrar’s Ownership of Bonds. The Bond Registrar may become the Registered Owner of any 2018 Bond with the same rights it would have if it were not the Bond Registrar, and to the extent permitted by law, may act as depository for and permit any of its officers or directors to act as member of, or in any other capacity with respect to, any committee formed to protect the right of the Registered Owners of 2018 Bonds.
(g) Place and Medium of Payment. Both principal of and interest on the 2018 Bonds shall be payable in lawful money of the United States of America. Interest on the 2018 Bonds shall be calculated on the basis of a year of 360 days and twelve 30-day months. For so long as all 2018 Bonds are in fully immobilized form, payments of principal and interest thereon shall be made in accordance with the operational arrangements of DTC referred to in the Letter of Representations. In the event that the 2018 Bonds are no longer in fully immobilized form, the interest due on any 2018 Bond on any interest payment date (each an “Interest Payment Date”) shall be paid to the Registered Owner of such 2018 Bond as shown on the Bond Register as of the fifteenth day of the month preceding the Interest Payment Date (the “Record Date”). If the 2018 Bonds are no longer held in book-entry only form, the interest on the 2018 Bonds shall be payable by check, provided that any Registered Owner of $1,000,000 or more in aggregate principal amount of the 2018 Bonds, upon written request given to the Registrar at least five business days prior to the Record Date designating an account in a domestic bank, may be paid by wire transfer of immediately available funds. If the 2018 Bonds are no longer held in book-entry only form, all payments of principal shall be made solely upon presentation of the 2018 Bond to the Registrar.
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Section 5. Redemption and Purchase.
(a) Optional Redemption. The 2018 Bonds are subject to redemption at the option of the University, as a whole or in part on any date on or after ______, at a redemption price equal to ___ percent of the principal amount thereof, plus interest accrued to the date fixed for redemption.
(b) Purchase of 2018 Bonds. The University reserves the right to acquire 2018 Bonds by purchase of 2018 Bonds offered to the University at any time at such purchase price as the University deems appropriate, or by gift at any time on terms as the University deems appropriate. Such 2018 Bonds so acquired are not required to be cancelled.
(c) Selection of 2018 Bonds for Redemption. For as long as the 2018 Bonds are held in book-entry only form, the selection of particular 2018 Bonds within a maturity to be redeemed shall be made in accordance with the operational arrangements then in effect at DTC. If the 2018 Bonds are no longer held in book-entry only form, the selection of such 2018 Bonds to be redeemed and the surrender and reissuance thereof, as applicable, shall be made as provided in the following provisions of this subsection (d) or otherwise as provided in the Bond Purchase Contract. In no event shall any 2018 Bond be outstanding in a principal amount that is not an Authorized Denomination. If less than all the outstanding 2018 Bonds within a maturity are to be redeemed and the 2018 Bonds are no longer in book-entry only form, the 2018 Bonds to be redeemed shall be selected by lot by the Bond Registrar
(d) Notice of Redemption.
(1) Official Notice. For so long as the 2018 Bonds are held in book-entry only form, notice of redemption shall be given in accordance with the operational arrangements of DTC as then in effect, and neither the University nor the Bond Registrar will provide any notice of redemption to any Beneficial Owners. Thereafter (if the 2018 Bonds are no longer held in book-entry only form), notice of redemption shall be given in the manner hereinafter provided. Unless waived by any owner of 2018 Bonds to be redeemed, official notice of any such redemption shall be given by the Bond Registrar on behalf of the University by mailing a copy of an official redemption notice by first class mail at least 20 days and not more than 60 days prior to the date fixed for redemption to the Registered Owner of the 2018 Bond or 2018 Bonds to be redeemed at the address shown on the Bond Register or at such other address as is furnished in writing by such Registered Owner to the Bond Registrar.
All official notices of redemption shall be dated and shall state:
(A) the redemption date;
(B) the redemption price;
(C) if fewer than all outstanding 2018 Bonds are to be redeemed, the identification by maturity (and, in the case of partial redemption, the respective principal amounts) of the 2018 Bonds to be redeemed;
(D) that on the redemption date the redemption price will become due and payable upon each such 2018 Bond or portion thereof called for redemption, and that interest thereon shall cease to accrue from and after said date;
(E) any conditions to redemption; and
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(F) the place where such 2018 Bonds are to be surrendered for payment of the redemption price, which place of payment shall be the principal office of the Bond Registrar.
Unless the University has revoked a conditional notice of optional redemption (or unless the University provided a conditional notice of optional redemption and the conditions for the optional redemption set forth therein are not satisfied), the University shall transfer to the Bond Registrar amounts that, in addition to other money, if any, held by the Bond Registrar for such purpose, will be sufficient to redeem, on the date fixed for redemption, all of the 2018 Bonds to be redeemed. If and to the extent that funds have been provided to the Bond Registrar for the redemption of the 2018 Bonds, then from and after the date fixed for redemption for such 2018 Bond or portion thereof, interest on each such 2018 Bond shall cease to accrue and such 2018 Bond or portion thereof shall cease to be outstanding
The University retains the right to rescind any redemption notice and the related optional redemption of 2018 Bonds by giving notice of rescission to the affected Registered Owners at any time on or prior to the scheduled redemption date. Any notice of optional redemption that is so rescinded shall be of no effect, and the 2018 Bonds for which the notice of optional redemption has been rescinded shall remain outstanding.
(2) Effect of Notice; 2018 Bonds Due. If notice of redemption has been duly given and money for the payment of the redemption price of the 2018 Bonds or portions thereof to be redeemed is held by the Bond Registrar, then on the redemption date the 2018 Bonds or portions thereof so called for redemption shall become payable at the redemption price specified in such notice; and from and after the redemption date, interest thereon or on portions thereof so called for redemption shall cease to accrue, such 2018 Bonds or portions thereof shall cease to be outstanding and to be entitled to any benefit, protection or security of the Bond Authorization. The Registered Owners of such 2018 Bonds or portions thereof shall thereafter have no rights in respect thereof except to receive payment of the redemption price upon delivery of such 2018 Bonds to the Bond Registrar.
Any notice mailed will be conclusively presumed to have been given, whether or not actually received by any owner of a 2018 Bond. The failure to mail notice with respect to any 2018 Bond will not affect the validity of the proceedings for the redemption of any other 2018 Bond with respect to which notice was so mailed.
(3) Additional Notice. In addition to the foregoing notice, further notice shall be given by the University as set out below, but no defect in said further notice nor any failure to give all or any portion of such further notice shall in any manner defeat the effectiveness of a call for redemption if notice thereof is given as above prescribed. Each further notice of redemption given hereunder shall contain the information required above for an official notice of redemption plus (A) the CUSIP numbers of all 2018 Bonds being redeemed; (B) the date of issue of the 2018 Bonds as originally issued; (C) the rate of interest borne by each 2018 Bond being redeemed; (D) the maturity date of each 2018 Bond being redeemed; and (E) any other descriptive information needed to identify accurately the 2018 Bonds being redeemed. Each further notice of redemption may be sent at least 20 days before the redemption date to each party entitled to receive notice pursuant to any Continuing Disclosure Certificate and to the Underwriter and with such additional information as the University shall deem appropriate, but such mailings shall not be a condition precedent to the redemption of such 2018 Bonds.
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(4) Amendment of Notice Provisions. The foregoing notice provisions of this Section 5, including but not limited to the information to be included in redemption notices and the persons designated to receive notices, may be amended without the consent of owners of the 2018 Bonds in order to maintain compliance with duly promulgated regulations and recommendations regarding notices of redemption of municipal securities.
Section 6. Form of the 2018 Bonds. The 2018 Bonds shall be in substantially the form provided in Exhibit A, with appropriate or necessary insertions, depending upon the omissions and variations as permitted or required in this Declaration.
Section 7. Execution of the 2018 Bonds. The 2018 Bonds shall be executed on behalf of the University with the manual or facsimile signature of the Treasurer, shall be attested by the manual or facsimile signature of the Secretary of the Board and shall have the seal of the University impressed or a facsimile thereof imprinted thereon.
Only 2018 Bonds that bear a Certificate of Authentication in the form set forth in Exhibit A, manually executed by the Bond Registrar, shall be valid or obligatory for any purpose or entitled to the benefits of this Declaration. Such Certificate of Authentication shall be conclusive evidence that the 2018 Bonds so authenticated have been duly executed, authenticated and delivered and are entitled to the benefits of this Declaration.
In case either of the officers of the University who shall have executed the 2018 Bonds shall cease to be such officer or officers of the University before the 2018 Bonds so signed shall have been authenticated or delivered by the Bond Registrar, or issued by the University, such 2018 Bonds may nevertheless be authenticated, delivered and issued and upon such authentication, delivery and issuance, shall be as binding upon the University as though those who signed the same had continued to be such officers of the University. Any 2018 Bond may also be signed and attested on behalf of the University by such persons as at the actual date of execution of such 2018 Bond shall be the proper officers of the University although at the original date of such 2018 Bond any such person shall not have been such officer.
Section 8. Disposition of 2018 Bond Proceeds. The proceeds of the 2018 Bonds shall utilized to pay or reimburse the University for costs of the Projects and costs incidental thereto, and costs of issuance for the 2018 Bonds, to the extent designated by the Authorized Representative.
All or part of the proceeds of the 2018 Bonds may be temporarily invested in Permitted Investments. Except as otherwise provided in the Federal Tax Certificate, the University covenants that all investments of amounts deposited in the Project Fund, or otherwise containing gross proceeds of the 2018 Bonds (within the meaning of Section 148 of the Code) will be acquired, disposed of, and valued (as of the date that valuation is required by the Code) at Fair Market Value.
In the event that it shall not be possible or practicable to accomplish all of the Projects, the University may apply the proceeds of the 2018 Bonds to pay the costs of such portion thereof or such other projects as the Authorized Representative shall determine to be in the best interests of the University.
Any part of the proceeds of the 2018 Bonds remaining in the Project Fund after all costs referred to in this section have been paid may be used to acquire, construct, equip and make other
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improvements to the facilities of the University subject to the limitations of this Declaration or may be transferred to the Bond Fund for the uses and purposes therein provided, subject to any applicable limitations set forth in the Federal Tax Certificate.
Section 9. Tax Covenants. The University will take all actions necessary to assure the exclusion of interest on the 2018 Bonds from the gross income of the owners of the 2018 Bonds to the same extent as such interest is permitted to be excluded from gross income under the Code as in effect on the date of issuance of the 2018 Bonds, including but not limited to the following:
(a) Private Activity Bond Limitation. The University will assure that the proceeds of the 2018 Bonds are not so used as to cause the 2018 Bonds to satisfy the private business tests of Section 141(b) of the Code or the private loan financing test of Section 141(c) of the Code.
(b) Limitations on Disposition of Projects. The University will not sell or otherwise transfer or dispose of (i) any personal property components of the Projects other than in the ordinary course of an established government program under Treasury Regulation 1.141-2(d)(4) or (ii) any real property components of the Project, unless it has received an opinion of nationally recognized bond counsel to the effect that such disposition will not adversely affect the treatment of interest on the 2018 Bonds as excludable from gross income for federal income tax purposes.
(c) Federal Guarantee Prohibition. The University will not take any action or permit or suffer any action to be taken if the result of such action would be to cause any of the 2018 Bonds to be "federally guaranteed" within the meaning of Section 149(b) of the Code.
(d) Rebate Requirement. The University will take any and all actions necessary to assure compliance with Section 148(f) of the Code, relating to the rebate of excess investment earnings, if any, to the federal government, to the extent that such section is applicable to the 2018 Bonds.
(e) No Arbitrage. The University will not take, or permit or suffer to be taken, any action with respect to the proceeds of the 2018 Bonds which, if such action had been reasonably expected to have been taken, or had been deliberately and intentionally taken, on the date of issuance of the 2018 Bonds would have caused the 2018 Bonds to be “arbitrage bonds” within the meaning of Section 148 of the Code.
(f) Registration Covenant. The University will maintain a system for recording the ownership of each 2018 Bond that complies with the provisions of Section 149 of the Code until all 2018 Bonds have been surrendered and canceled.
(g) Record Retention. The University will retain its records of all accounting and monitoring it carries out with respect to the 2018 Bonds for at least three years after the 2018 Bonds mature or are redeemed (whichever is earlier); however, if the 2018 Bonds are redeemed and refunded, the University will retain its records of accounting and monitoring at least three years after the earlier of the maturity or redemption of the obligations that refunded the 2018 Bonds.
(h) Compliance with Tax Certificate. The University will comply with the provisions of the Federal Tax Certificate with respect to the 2018 Bonds, which are incorporated herein as if fully set forth herein. In the event of any conflict between this Section and the Federal Tax Certificate, the provisions of the Federal Tax Certificate will prevail.
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(i) No Designation under Section 265(b). The University does not designate the 2018 Bonds issued pursuant to this Declaration as “qualified tax-exempt obligations” for investment by financial institutions under Section 265(b) of the Code.
The covenants of this Section will survive payment in full or defeasance of the 2018 Bonds.
Section 10. Bond Fund. The 2018 Bonds are general revenue obligations of the University, payable from General Revenues and secured as provided herein. The University has previously established a special fund of the University designated as the “Bond Fund”, which may consist of one or more funds or accounts. The University covenants to deposit into the Bond Fund from General Revenues, taking into account amounts on deposit therein, on or prior to each interest payment date, redemption date and maturity date an amount sufficient to pay the interest on the 2018 Bonds then coming due and the principal of the 2018 Bonds maturing or subject to redemption and redemption premium, if any. Such payments shall be made in sufficient time to enable the Bond Registrar to pay interest on and/or principal of and redemption price of the 2018 Bonds to the Registered Owners, when due.
Net income earned on investments in the Bond Fund, if any, shall be deposited in the Bond Fund. Amounts on deposit in the Bond Fund may be temporarily invested in Permitted Investments. Except as otherwise provided in the Federal Tax Certificate, the University covenants that all investments of amounts deposited in the Bond Fund, or otherwise containing gross proceeds of the 2018 Bonds (within the meaning of Section 148 of the Code) will be acquired, disposed of, and valued (as of the date that valuation is required by the Code) at Fair Market Value.
The University may deposit other amounts legally available for this purpose to the Bond Fund in its sole discretion and without obligation.
Section 11. Sources of Security.
(a) Pledge of General Revenues. The 2018 Bonds are payable solely from and secured by a pledge of General Revenues and the money and investments deposited into the Bond Fund. The 2018 Bonds shall not constitute an indebtedness or obligation of the State, and are not a charge upon revenue or property of the State. The Registered Owners of the 2018 Bonds shall have no right to require the State, nor has the State any obligation or legal authorization, to levy any taxes or appropriate or expend any of its funds for the payment of the principal thereof or the interest or any premium thereon. The University has no taxing power.
The University hereby pledges General Revenues, and the money and investments deposited into the Bond Fund, to the payment of the principal of and interest on the 2018 Bonds when due. The 2015 Bonds, the 2016 Bonds, the 2018 Bonds and any Additional Bonds shall be equally and ratably payable from and secured by a pledge of General Revenue, and the money and investments deposited into the Bond Fund, without preference, priority or distinction because of date of issue or otherwise.
Pursuant to ORS 287A.310 and 352.087(1)(h), this pledge shall be valid and binding from the time of the execution of this Declaration. The amounts so pledged including pledged amounts hereafter received by the University shall immediately be subject to the lien of this pledge without any physical delivery, filing or any other act. Except as provided in the Bond Authorization, the lien of this pledge
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shall be superior to all other claims and liens whatsoever to the fullest extent permitted by ORS 287A.310 and 352.087(1)(h).
(b) Pari Passu with University-Paid State Bond Payments. The Bond Act provides for full payment of State debt obligations evidenced by the University’s obligations to make University-Paid State Bonds from legally available funds. On and after the date that amounts are transferred to the State Treasurer for deposit to be credited against the University-Paid State Bonds next coming due, and on and after the date amounts, if any, are paid to the State Treasurer to pay without duplication University-Paid State Bonds next coming due, such amounts are no longer part of the definition of General Revenues available to pay the principal of and interest on the 2018 Bonds. Until such date, the University-Paid State Bonds are payable on a pari passu basis with the 2015 Bonds, 2016 Bonds and 2018 Bonds subject to and to the extent provided in the Bond Act.
(c) All Bonds Have Equal Claim on General Revenues. The 2015 Bonds, the 2016 Bonds, the 2018 Bonds and any Additional Bonds shall be equally and ratably payable, without preference, priority or distinction because of date of issue or otherwise from General Revenues.
(d) Additions to General Revenues. The University reserves the right to include in General Revenues, at its sole option, in the future, other sources of revenue or income currently excluded from the definition of General Revenues. The future addition of General Revenues shall be evidenced by a certificate executed by the Authorized Representative identifying the items to be added.
(e) Deletions from General Revenues. The University reserves the right to remove, at its sole option, in the future, any revenues from General Revenues, so long as no more than 10% of General Revenues (based on the University’s most recent audited financial statements) are removed in any fiscal year. The removal of General Revenues shall be evidenced by a certificate executed by the Authorized Representative identifying the items to be deleted.
(f) Additional Bonds and Other Obligations. The University shall have the right to issue one or more series of Additional Bonds for University purposes as permitted under the Bond Act or otherwise under State law. In addition, nothing herein shall restrict the University’s right to enter into obligations in connection with University-Paid State Bonds or any other obligations that are not secured by a pledge of General Revenues. The University also reserves the right to issue obligations payable from or secured by a pledge of General Revenues subordinate to the pledge for the Bonds to the extent permitted under the Bond Act or otherwise under State law.
Section 12. Covenant of the University. So long as any 2018 Bonds are Outstanding, the University covenants to pay or cause to be paid the principal of and the interest on all outstanding 2018 Bonds on the dates, at the places, from the sources of funds and in the manner, all as provided herein.
Section 13. Defeasance. In the event that the University, in order to effect the payment, retirement or redemption of any 2018 Bond, sets aside in the Bond Fund or in another special account, cash or noncallable Government Obligations, or any combination of cash and/or noncallable Government Obligations, in amounts and maturities which, together with the known earned income therefrom, are sufficient to redeem or pay and retire such 2018 Bond in accordance with its terms and to pay when due the interest and redemption premium, if any, thereon (as verified in a report of an independent certified public accountant), and such cash and/or noncallable Government Obligations are irrevocably set aside and pledged for such purpose, and receives an opinion of nationally-recognized
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bond counsel that such 2018 Bonds have been legally defeased, then no further payments need be made into the Bond Fund for the payment of the principal of and interest on such 2018 Bond. The owner of a 2018 Bond so provided for will cease to be entitled to any lien, benefit or security of the Bond Authorization except the right to receive payment of principal, premium, if any, and interest from the Bond Fund or such special account, and such 2018 Bond will be deemed to be not outstanding under the Bond Authorization.
The University shall give written notice of defeasance to the owners of the 2018 Bonds in accordance with the Continuing Disclosure Certificate.
Section 14. Amendments. The Bond Authorization may be amended or supplemented by a supplemental resolution without the consent of any Beneficial Owner or Registered Owner for any one or more of the following purposes:
A. To cure any ambiguity or formal defect or omission in the Bond Authorization;
B. To add to the covenants and agreements of the University in the Bond Authorization, other covenants and agreements to be observed by the Bond Authorization that are not contrary to or inconsistent with the Bond Authorization as in effect;
C. To authorize issuance of Additional Bonds or subordinate obligations payable from General Revenues;
D. To modify, amend or supplement the Bond Authorization or any supplemental resolution to qualify under the Trust Indenture Act of 1939, as amended, or any similar federal statute hereafter in effect or to permit the qualification of any 2018 Bonds for sale under the securities laws of any of the states of the United States of America;
E. To confirm, as further assurance, any pledge or lien created under the Bond Authorization;
F. To make any change that, in the reasonable judgment of the University, does not materially and adversely affect the rights of the Beneficial Owners or Registered Owners of any outstanding 2018 Bonds; or
G. To make such additions, deletions or modifications as may be necessary or desirable to assure exemption from federal income taxation of interest on the 2018 Bonds; or
H. To modify any of the provisions of the Bond Authorization or any supplemental resolution in any other respect whatever, as long as the modification shall take effect only after all affected outstanding 2018 Bonds cease to be outstanding.
The Bond Authorization may be amended for any other purpose only upon consent of the Registered Owners of not less than fifty one percent (51%) in aggregate principal amount of the 2018 Bonds outstanding; provided, however, that no amendment shall be valid without the consent of the Registered Owners of 100 percent (100%) of the aggregate principal amount of the 2018 Bonds outstanding that: extends the maturity of any 2018 Bond, reduces the rate of interest upon any 2018 Bond, extends the time of payment of interest on any 2018 Bond, reduces the amount of principal payable on any 2018 Bond, or reduces any premium payable on any 2018 Bond, without the consent of
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the affected Registered Owner; or reduces the percent of Registered Owners required to approve amendments to the Bond Authorization.
Section 15. Benefit of Bond Authorization. The covenants and agreements in the Bond Authorization regarding the 2018 Bonds are made for the benefit of the Beneficial Owners of the 2018 Bonds and shall be enforceable by those Beneficial Owners.
Section 16. No Recourse Against Individuals. No Registered Owner shall have any recourse for the payment of any part of the principal of, premium, if any, or redemption price, if any, of or interest on the 2018 Bonds, or for the satisfaction of any liability arising from, founded upon, or existing by reason of, the issuance or ownership of such 2018 Bonds against any past, present or future officer, director, trustee, employee or agent of the officers of the University or any past, present or future officers, director, trustee or members of the Board in their individual capacities.
EXECUTED ON BEHALF OF THE UNIVERSITY OF OREGON BY ITS AUTHORIZED REPRESENTATIVE AS OF THE ____ DAY OF JANUARY, 2018.
UNIVERSITY OF OREGON
By: Treasurer
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EXHIBIT A
BOND FORM
[DTC LANGUAGE]
UNITED STATES OF AMERICA
NO. ______$______
UNIVERSITY OF OREGON GENERAL REVENUE BONDS, 2018A
INTEREST RATE: % MATURITY DATE: CUSIP NO.:
REGISTERED OWNER: CEDE & CO.
PRINCIPAL AMOUNT:
University of Oregon (the “University”), hereby acknowledges itself to owe and for value received promises to pay to the Registered Owner identified above, or registered assigns, on the Maturity Date identified above, the Principal Amount specified above, unless redeemed prior thereto as provided herein, together with interest on such Principal Amount from ______, or the most recent date to which interest has been paid or duly provided for, at the Interest Rate set forth above payable April 1, 2018, and semiannually thereafter on each October 1 and April 1 until payment of the principal sum has been made or duly provided for. Both principal of and interest on this bond are payable in lawful money of the United States of America. For so long as the bonds of this issue are held in fully immobilized form, payments of principal and interest thereon shall be made as provided in accordance with the operational arrangements of The Depository Trust Company (“DTC”) referred to in the Blanket Issuer Letter of Representations (the “Letter of Representations”) from the University to DTC.
This bond is one of an authorized issue of general revenue bonds of the University of like date and tenor, except as to number, interest rate and date of maturity, in the aggregate principal amount of $[______], issued pursuant to a Resolution of the Board of Trustees of the University, adopted on September 8, 2017 and a Declaration of the University dated January ___, 2018 (together, the “Bond Authorization”), to finance University projects and to pay costs of issuance of the Bonds, as further provided in the Bond Authorization.
The bonds of this issue are subject to redemption prior to their stated maturities as provided in the Bond Resolution.
This bond is payable solely from and secured by a pledge of General Revenues and the money and investments deposited into the Bond Fund, and the University does hereby pledge and bind itself to set aside from such General Revenues, the various amounts required by the Bond Authorization, all within the times provided by the Bond Authorization. Bonds issued pursuant to the Bond Authorization, the University’s General Revenue Bonds, 2015A, General Revenue Bonds, 2016A and additional bonds issued on a parity therewith, shall be equally and ratably payable from and secured by a pledge of General Revenue, and the money and investments deposited into the Bond Fund, without preference, priority or distinction because of date of issue or otherwise.
A-1
The issuance of the Bonds has been authorized by the Bond Authorization duly adopted by the University pursuant to the laws of the State of Oregon. This Bond shall not constitute or become an indebtedness, or a debt or liability of the State of Oregon, the Legislative Assembly of the State of Oregon, or any county or city, or other subdivision of the State of Oregon or of any other political subdivision or body corporate and politic within the State of Oregon (other than the University, but only to the extent provided in the Bond Authorization) and neither the State of Oregon, the Legislative Assembly of the State of Oregon, nor any county or city or other subdivision of the State of Oregon (other than the University, but only to the extent provided in the Bond Authorization), shall be liable hereon; nor shall this Bond constitute the giving, pledging or loaning of the faith and credit of the State of Oregon, the Legislative Assembly of the State of Oregon, or any county or city, or other subdivision of the State of Oregon or of any other political subdivision or body corporate and politic within the State of Oregon but shall be payable solely from the funds pledged herefor. Neither the State of Oregon, the Legislative Assembly of the State of Oregon, any political subdivision or body corporate and politic within the State of Oregon other than the University shall in any event be liable for the payment of the principal of, premium, if any, or interest on this Bond or for the performance of any pledge, mortgage, obligation or agreement of any kind whatsoever undertaken by the University. No breach of any such pledge, obligation or agreement shall impose any pecuniary liability upon the State of Oregon or any charge upon its general credit or against its taxing power. The University has no taxing powers. The issuance of this Bond shall not, directly or indirectly or contingently, obligate the State of Oregon, or any political subdivision of the State of Oregon, nor empower the University to levy or collect any form of taxes or assessments therefor or to create any indebtedness payable out of taxes or assessments or make any appropriation for the payment of this Bond and such appropriation or levy is prohibited. Nothing in the Bond Authorization shall be construed to authorize the University to create a debt of the State of Oregon within the meaning of the Constitution or statutes of the State of Oregon.
The bonds of this issue are not “qualified tax exempt obligations” eligible for investment by financial institutions within the meaning of Section 265(b) of the Internal Revenue Code of 1986, as amended.
Reference is made to the Bond Authorization as more fully describing the covenants with and the rights of Registered Owners of the bonds or registered assigns and the meanings of capitalized terms appearing on this bond which are defined in such resolution.
This bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Bond Authorization until the Certificate of Authentication hereon shall have been manually signed by the Bond Registrar.
It is hereby certified, recited and represented that the issuance of this bond and the bonds of this issue is duly authorized by law; that all acts, conditions and things required to exist and necessary to be done or performed precedent to and in the issuance of this bond and the bonds of this issue to render the same lawful, valid and binding have been properly done and performed and have happened in regular and due time, form and manner as required by law; that all acts, conditions and things necessary to be done or performed by the University or to have happened precedent to and in the execution and delivery of the Bond Authorization have been done and performed and have happened in regular and due form as required by law; that due provision has been made for the payment of the principal of and premium, if any, and interest on this bond and the bonds of this issue and that the issuance of this bond and the bonds of this issue does not contravene or violate any constitutional or statutory limitation.
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IN WITNESS WHEREOF, University of Oregon has caused this bond to be executed with the manual or facsimile signatures of the Treasurer and Secretary of the Board of Trustees and caused a facsimile of the official seal of the University to be reproduced hereon.
UNIVERSITY OF OREGON
(SEAL) By Treasurer
By ______Secretary, Board of Trustees
The Certificate of Authentication for the Bonds shall be in substantially the following form and shall appear on each Bond: AUTHENTICATION CERTIFICATE
This bond is one of the University of Oregon General Revenue Bonds, 2018A described in the within-mentioned Bond Authorization.
Registrar
By Authorized Signatory
Date:______
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APPENDIX C
UNIVERSITY OF OREGON 2017 ANNUAL FINANCIAL REPORT
(SEE ATTACHED)
[THIS PAGE INTENTIONALLY LEFT BLANK] UNIVERSITY OF OREGON 2017 ANNUAL FINANCIAL REPORT University of Oregon 2017 Annual Report
Table of Contents
UO Board of Trustees and Executive Officers 1
Report of Independent Auditors 5
Management’s Discussion and Analysis 8
Statement of Net Position—University 16
Statement of Financial Position—Foundation 17
Statement of Revenues, Expenses, and Changes in Net Position—University 18
Statement of Activities—Foundation 19
Statement of Cash Flows—University 20
Notes to the Financial Statements 22
Required Supplementary Information 45
Report of Independent Auditors on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards 46
Report of Independent Auditors on Compliance for the Major Federal Program and Report on Internal Control Over Compliance Required by the Uniform Guidance 48
Schedule of Findings and Questioned Costs 50
Schedule of Expenditures of Federal Awards— Year Ended June 30, 2017, Notes to Schedule of Expenditures of Federal Awards 51 University of Oregon Board of Trustees Chuck Lillis, PhD ’72, Chair Ginevra Ralph ’83, MA ’85, Vice Chair Connie Ballmer ’84 Peter Bragdon Rodolfo “Rudy” Chapa ’81 Andrew Colas ’04 Ann Curry ’78 Allyn Ford Susan Gary, Faculty Member Joseph Gonyea III Ross Kari ’80, MBA ’83 William Paustian, Student Michael Schill, Ex Officio Mary Wilcox ’76, JD ’80 Kurt Willcox, Nonfaculty Staff Member
University of Oregon Executive Officers as of June 30, 2017
Michael Schill President Scott Coltrane Senior Vice President and Provost Yvette Alex-Assensoh Vice President for Equity and Inclusion Michael Andreasen Vice President for Advancement David Conover Vice President for Research and Innovation Kyle Henley Vice President for University Communications R. Kevin Marbury Interim Vice President for Student Life Jamie Moffitt Vice President for Finance and Administration, Board Treasurer, and CFO Rob Mullens Director of Intercollegiate Athletics Kevin Reed Vice President and General Counsel Roger J. Thompson Vice President for Student Services and Enrollment Management Angela Wilhelms Board Secretary University of Oregon
ounded in 1876 in Eugene, the University of Oregon (UO) is the state’s flagship public research institution. The 295-acre campus houses 220 buildings, including two museums—the Jordan Schnitzer Museum of Art and the Museum of Natural Fand Cultural History—more than 25 research centers and institutes, and nine schools and colleges, including School of Architecture and Allied Arts, College of Arts and Sciences, Charles H. Lundquist College of Business, College of Education, Robert D. Clark Honors College, School of Journalism and Communication, School of Music and Dance, School of Law, and the Graduate School.
The UO is one of just 62 schools with membership in the prestigious Association of American Universities—and is the only member in Oregon. Within its schools and departments, the UO offers more than 300 academic programs, 77 undergraduate majors, 81 graduate and professional majors, and 200 study-abroad programs in 90 countries.
The Oregon Institute of Marine Biology (OIMB) in Charleston is a living classroom where undergraduate and graduate students studying biology, marine biology, general science, and environmental science experience marine organisms in their natural habitats.
Perched on a remote mountaintop 6,300 feet above sea level in central Oregon, the Pine Mountain Observatory is ideal for observing the high desert’s night skies. The observatory, which is operated by the UO’s Department of Physics, provides basic and advanced scientific research opportunities.
Students at the UO in Portland are working toward master’s degrees in architecture, strategic communication, business administration, sports product management, law, and multimedia journalism. Fifth-year programs are also offered in product design and digital arts, as well as courses geared to professional continuing education.
The UO is also home to Matthew Knight Arena, legendary Hayward Field, and Autzen Stadium, where it ostensibly “never rains.” In addition to its storied football program and reputation as Track Town USA, university Ducks teams include men’s baseball, basketball, cross country, football, golf, tennis, and track and field. Women’s sports teams include acrobatics and tumbling, basketball, cross country, golf, lacrosse, sand volleyball, soccer, softball, tennis, track and field, and volleyball. Clubs devoted to sports include everything from badminton to wushu.
2 | University of Oregon University of Oregon
MISSION Serving students, the state, nation, and world since 1876 The University of Oregon is a comprehensive public research university committed to exceptional teaching, discovery, and service. We work at a human scale to generate big ideas. As a community of scholars, we help individuals question critically, think logically, reason effectively, communicate clearly, act creatively, and live ethically. Purpose We strive for excellence in teaching, research, artistic expression, and the generation, dissemination, preservation, and application of knowledge. We are devoted to educating the whole person, and to fostering the next generation of transformational leaders and informed participants in the global community. Through these pursuits, we enhance the social, cultural, physical, and economic wellbeing of our students, Oregon, the nation, and the world. Vision We aspire to be a preeminent and innovative public research university encompassing the humanities and arts, the natural and social sciences, and the professions. We seek to enrich the human condition through collaboration, teaching, mentoring, scholarship, experiential learning, creative inquiry, scientific discovery, outreach, and public service. Values We value the passions, aspirations, individuality, and success of the students, faculty, and staff who work and learn here. We value academic freedom, creative expression, and intellectual discourse. We value our diversity and seek to foster equity and inclusion in a welcoming, safe, and respectful community. We value the unique geography, history, and culture of Oregon that shapes our identity and spirit. We value our shared charge to steward resources sustainably and responsibly.
2017 | Annual Financial Report | 3 Top University Accomplishments
A sampling of the UO’s 2017 top accomplishments include the following:
• A $500 million gift from Phil and Penny Knight has launched the Knight Campus for Accelerating Scientific Impact and propelled the university’s ambitious $2 billion fundraising campaign beyond $1.7 billion. In addition, the Oregon legislature authorized $50 million in general obligation bonds toward construction of the Knight Campus.
• We kicked off fundraising for a new Black Cultural enterC and renamed Dunn residence hall for DeNorval Unthank Jr., the UO’s first African American graduate of the School of Architecture and Allied Arts. The UO is planning installations in Deady and Unthank Halls about our history and the continuing inclusion and diversity initiatives.
• The provost announced a name change for the School of Architecture and Allied Arts, which will be known as the College of Design starting July 1, 2017.
• Our beautiful Allan Price Science Commons and Research Library opened to rave reviews. It is among only seven projects worldwide honored with an award for design excellence by the American Institute of Architects and the American Library Association.
• The UO welcomed 23,358 students in fall 2016. Of these, 25 percent were students of color, 51 percent were Oregonians, 36 percent came from other states, and 13 percent were international. The freshman class, with 31 percent ethnic or racial minorities, had an average GPA of 3.58. Nearly 40 percent of the freshman students from Oregon received federal Pell grants.
• The UO was awarded $114.9 million from external funding sources during the fiscal year ending June 30, 2017, and funding from non-federal sources increased by 15.7 percent from the previous year.
• Among many noteworthy achievements, UO scholars discovered the 14,000-year-old remains of an extinct horse in Oregon’s Paisley Caves, marine researchers proved that teamwork helps jellyfish jet around the ocean, and a team of senior UO scientists, united in a quest to reverse blindness, worked on developing a novel retinal implant powered by patented fractal electronics.
• Leading an outstanding list of faculty hires are Nobel laureate David Wineland, the newest member of our physics faculty, and David McCormick, who left Yale to head our Institute of Neuroscience.
• The UO welcomed new leaders including Jayanth Banavar as provost, Marcilynn Burke as law school dean, and Jessie Minton as the new chief information officer.
• The Oregon women’s cross country and track and field teams became the first in the nation to sweep all NCAA championships in their sports in one year. The Ducks also enjoyed great success in men’s track and field, men’s golf, men’s basketball, and women’s softball, reaching the UO’s highest-ever level of ninth place in the Learfield Directors’ Cup, an annual ranking of NCAA athletic departments.
4 | University of Oregon Report of Independent Auditors
Members of the Board of Trustees University of Oregon Report on the Financial Statements
We have audited the accompanying financial statements of the University of Oregon (“UO”), and its discretely presented component unit, the University of Oregon Foundation (“the Foundation”), as of and for the years ended June 30, 2017 and 2016, and the related notes to the financial statements, which collectively comprise UO’s basic financial statements as listed in the table of contents. Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express opinions on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. The financial statements of the Foundation were not audited in accordance with Government Auditing Standards.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
2017 | Annual Financial Report | 5 Opinions
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of UO and its discretely presented component unit, as of June 30, 2017 and 2016, and the respective changes in financial position and, where applicable, cash flows thereof for the years then ended in accordance with accounting principles generally accepted in the United States of America.
Other Matters
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 8 through 14, and the schedule of UO’s proportionate share of net pension liability – PERS, UO contributions – PERS, and UO’s funding status of other postemployment benefits on page 45 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise UO's basic financial statements. The schedule of expenditures of federal awards, as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) is presented for purposes of additional analysis and is not a required part of the basic financial statements.
The schedule of expenditures of federal awards is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of federal awards is fairly stated, in all material respects, in relation to the basic financial statements as a whole.
The UO Board of Trustees and Executive Officers section on page 1 and the information on pages 2 through 4 has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it.
6 | University of Oregon Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated October 27, 2017 on our consideration of the UO's internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering UO's internal control over financial reporting and compliance.
Portland, Oregon October 27, 2017
2017 | Annual Financial Report | 7 Management’s Discussion and Analysis For the Year Ended June 30, 2017 (dollars in thousands)
INTRODUCTION Notes to the Financial Statements (Notes) provide additional information to clarify and expand on the financial The following Management’s Discussion and Analysis (MD&A) statements. provides an overview of the financial position and activities of the University of Oregon for the fiscal years ended June 30, The Component Unit, comprising a supporting foundation, 2017, 2016, and 2015. The UO’s primary campus is in Eugene, but the University of Oregon Foundation, is discretely presented programs are also offered in Portland, at the Oregon Institute in the UO financial statements and in Notes 2 and 16. of Marine Biology in Charleston, and at the Pine Mountain The MD&A provides an objective analysis of the UO’s Observatory outside of Bend, all in the state of Oregon. financial activities based on currently known facts, decisions, Annual Full Time Equivalent (FTE) Student and conditions. The MD&A discusses the current results in Enrollment Summary comparison to the two previous fiscal years. Unless otherwise 2017 2016 2015 2014 2013 stated, all years refer to the fiscal year ended June 30. Annual FTE 23,358 23,596 23,728 24,268 24,418 Statement of Net Position UNDERSTANDING THE The term “net position” refers to the difference between (a) combined assets and deferred outflows of resources and (b) FINANCIAL STATEMENTS combined liabilities and deferred inflows of resources, and is The MD&A is intended to foster a greater understanding an indicator of the UO’s current financial condition. Changes of the UO’s financial activities. Because this presentation in net position that occur over time indicate improvement includes summarized formats, it should be read in conjunction or deterioration in this condition. The following summarizes with the financial statements, which have the following six UO assets and deferred outflows of resources, liabilities and components: deferred inflows of resources, and net position: The Report of Independent Auditors presents an unmodified Condensed Statement of Net Position opinion rendered by an independent certified public accounting As of June 30, 2017 2016 2015 firm, Moss Adams LLP, on the fairness in presentation (in all Assets: material respects) of the financial statements. Current Assets $ 321,703 $ 403,216 $ 380,511 Noncurrent Assets 151,767 76,557 156,021 Capital Assets, Net 1,478,446 1,406,449 1,292,393 Statement of Net Position (SNP) presents a snapshot of Total Assets $ 1,951,916 $ 1,886,222 $ 1,828,925 Deferred Ouflows of Resources $ 154,389 $ 24,615 $ 14,023 UO assets, deferred outflows, liabilities, deferred inflows, Total Assets and Deferred Outflows and net position under the accrual basis of accounting at the of Resources $ 2,106,305 $ 1,910,837 $ 1,842,948 end of each fiscal year presented. The SNP helps the reader Liabilities: Current Liabilities $ 202,110 $ 176,344 $ 207,539 understand the types and amounts of assets available to Noncurrent Liabilities 1,029,169 870,964 672,997 Total Liabilities $ 1,231,279 $ 1,047,308 $ 880,536 support operations, how much the UO owes to vendors and bondholders, and net position delineated based upon its Deferred Inflows of Resources $ 2,720 $ 23,122 $ 73,750 Net Investment in Capital Assets $ 787,970 $ 761,354 $ 710,044 availability for future expenditures. Changes in net position Restricted - Expendable 76,196 55,602 91,998 Unrestricted 8,140 23,451 86,620 that occur over time indicate improvement or deterioration in Total Net Position $ 872,306 $ 840,407 $ 888,662 UO’s financial condition. Total Liabilities, Deferred Inflows and Net Position $ 2,106,305 $ 1,910,837 $ 1,842,948 Statement of Revenues, Expenses, and Changes in Net Position (SRE) presents UO revenues and expenses Total Assets and Liabilities categorized among operating, nonoperating, and other related activities. The SRE reports the UO results for each Total assets increased $65,694, or 3 percent, and total fiscal year presented. liabilities increased $183,971, or 18 percent, during fiscal year 2017. Total assets increased $57,297, or 3 percent, and total Statement of Cash Flows (SCF) provides information about liabilities increased $166,772, or 19 percent, during fiscal year the UO’s sources (receipts) and uses (payments) of cash 2016. Current assets exceed current obligations. during the fiscal year. The SCF classifies sources and uses of cash into four categories, and assists in determining whether the UO has the ability to generate future net cash flows to meet its obligations as they come due.
8 | University of Oregon Management’s Discussion and Analysis For the Year Ended June 30, 2017 (dollars in thousands)
Comparison of fiscal year 2017 to fiscal year 2016 Comparison of fiscal year 2016 to fiscal year 2015
• Current assets decreased $81,513, or 20 percent. Current • Current assets increased $22,705 or 6 percent. Current cash and cash equivalents decreased $77,357, or 25 percent, cash and cash equivalents increased $29,146 or 10 percent due to the conversion of cash to investments prior to June due to the conversion of some investments to cash prior 30, 2017. Collateral from securities lending decreased by to June 30, 2016. This was offset by a decrease in accounts $9,540, or 84 percent. This was offset by an increase in receivable of $6,181, or 9 percent. accounts receivable of $4,681, or 7 percent. • Noncurrent assets, excluding capital assets, decreased • Noncurrent assets, excluding capital assets, increased $79,464, or 51 percent. Noncurrent cash and cash $75,210, or 50 percent. Noncurrent cash and cash equivalents (cash reserved for capital projects) decreased equivalents (cash reserved for capital projects) increased by $16,728, or 39 percent, and investments decreased by by $26,943, or 86 percent, and investments increased by $26,697, or 48 percent, due to the conversion of some $47,975, or 169 percent, due to the conversion of some cash investments to cash, as described above. Net pension asset to investments, as described above. decreased from $37,466 to zero as a net pension liability was recognized in 2016. • Capital assets, net increased $71,997, or 5 percent. Capitalized acquisitions, net of disposals and adjustments, included • Capital assets, net increased $114,056, or 9 percent. $120,106 in real property and $10,291 in personal property. Capitalized acquisitions net of disposals and adjustments Real property acquisitions included $31,675 for a new residence included $150,359 in real property and $10,951 in personal hall, $24,796 for the Marcus Mariota Sports Performance property. Real property acquisitions during fiscal year Center, and $7,673 for Berwick Hall, the new home of the 2016 included $37,428 for the capital lease of the White Oregon Bach Festival. Accumulated depreciation increased by Stag building and land in Portland. Construction in $58,400 or 8 percent. See “Capital Assets” in this MD&A for progress increased by $74,571, of which $47,878 was for the additional information relating to these variances. expansion of the EMU. Accumulated depreciation increased by $51,434, or 8 percent. See “Capital Assets” in this MD&A • Current liabilities increased $25,766, or 15 percent, due to for additional information relating to these variances. an increase in the current portion of long-term liabilities. • Deferred outflows increased by $10,592, or 76 percent, • Noncurrent liabilities increased $158,205, or 18 percent. and deferred inflows decreased by $50,628, or 69 An increase of $191,275, due to the impact of recording percent, mainly due to the impact of GASB 68. Refer to the increase in the University’s share of the net pension Note 11. Employee Retirement Plans and the Required liability, was offset by a decrease in long-term liabilities Supplementary Information for additional information. of $33,070. This decrease was due to principal payments made on long-term obligations, and the remainder was • Current liabilities decreased $31,195, or 15 percent due to a related to an increase in capital leases. Refer to Note 8.A. decrease in the current portion of long-term liabilities. Long-Term Liabilities, Agreement for Debt Management (ADM) for additional information relating to these • Noncurrent liabilities increased $197,967, or 29 percent. variances. $94,966 of this increase was due to the impact of GASB 68. Refer to Note 11. Employee Retirement Plans and • Deferred outflows increased by $129,774, or 527 percent, the Required Supplementary Information for additional and deferred inflows decreased by $20,402, or 88 percent, information. $72,285 was due to the issuance of revenue mainly due to the impact of Governmental Accounting bonds for the construction of capital assets, and the Standards Board (GASB) Statement No. 68, Accounting and remainder was related to an increase in capital leases. Refer Financial Reporting for Pensions—An Amendment of GASB to Note 8.A. Long-Term Liabilities, Agreement for Debt Statement No. 27. Refer to Note 11. Employee Retirement Management (ADM) for additional information relating to Plans and the Required Supplementary Information for these variances. additional information.
2017 | Annual Financial Report | 9 Management’s Discussion and Analysis For the Year Ended June 30, 2017 (dollars in thousands)
Total Net Position STATEMENT OF REVENUES, EXPENSES, As illustrated by the following graph, the makeup of net AND CHANGES IN NET POSITION (SRE) position changed between fiscal years 2017, 2016, and 2015. Due to the classification of certain revenues as nonoperating $900,000 revenue, the UO shows a net operating loss. State general fund appropriations, nonexchange grants, and noncapital $800,000 Unrestricted gifts, although considered nonoperating revenue under $700,000 GASB Statement No. 35, Basic Financial Statements—and
$600,000 Management’s Discussion and Analysis—for Public Colleges and Restricted - Universities—An Amendment of GASB Statement No. 34 and $500,000 Expendable reflected accordingly in the nonoperating section of the SRE, $400,000 are used solely for operating purposes. Nonexpendable Endowments $300,000 The following summarizes the revenue and expense activity $200,000 of the UO: Net Investment in Capital Assets $100,000 Condensed Statement of Revenues, Expenses and $- Changes in Net Position 2017 2016 2015
For the Year Ended June 30, 2017 2016 2015 Comparison of fiscal year 2017 to fiscal year 2016 Operating Revenues $ 713,691 $ 682,882 $ 660,745 Operating Expenses 920,938 910,668 776,670 • Net investment in capital assets increased $26,616, or 3 Operating Loss (207,247) (227,786) (115,925) Nonoperating Revenues, percent. Net capital asset increases of $71,997 were offset Net of Expenses 161,034 138,813 132,064 predominantly by a utilization of bond proceeds of $45,381. Capital Additions 78,112 40,718 32,204 Special Items (31,406) • Restricted expendable net assets increased by $20,594, Increase (Decrease) in Net Position 31,899 (48,255) 16,937 or 27 percent. Net assets relating to the funding of capital Net Position, Beginning of Year 840,407 888,662 775,432 Adjustments to Beginning Net Position 96,293 projects increased by $16,370, or 61 percent, as a result of a Net Position, Beginning of Year (Restated) 871,725 number of new construction and improvement projects in Net Position, End of Year $ 872,306 $ 840,407 $ 888,662 fiscal year 2017. For fiscal year 2017, net position increased by $31,899, or • Unrestricted net assets decreased $15,311, or 65 percent. A 4 percent, to $872,306. For fiscal year 2016, net position decrease due to the impact of GASB 68 was partially offset decreased by $48,255, or 5 percent, to $840,407. by an increase in other unrestricted assets. Total Operating and Nonoperating Revenues Comparison of fiscal year 2016 to fiscal year 2015 For the Year Ended June 30, 2017 2016 2015 • Net investment in capital assets increased $51,310, or 7 Student Tuition and Fees $ 381,434 $ 378,536 $ 359,287 Grants and Contracts 106,913 102,544 103,559 percent. Capital asset increases of $165,490 were offset Auxiliary Enterprises 190,759 174,989 171,950 by a $51,434 increase to accumulated depreciation and Educational and Other 34,585 26,813 25,949 Total Operating Revenues 713,691 682,882 660,745 a $62,748 increase to long-term debt outstanding, net of Appropriations 68,532 66,562 57,859 unspent bond proceeds, attributable to the capital assets. Grants 31,576 31,869 31,908 Investment Activity 16,154 15,989 14,096 Capital Grants and Gifts 76,095 38,701 30,207 • Restricted expendable net assets decreased by $36,396, Other Nonoperating Items 71,108 58,347 67,672 Total Nonoperating Revenues 263,465 211,468 201,742 or 65 percent. Net assets relating to the funding of capital Total Revenues $ 977,156 $ 894,350 $ 862,487 projects decreased by $24,897, or 48 percent, as a result of a completion of a number of new construction and improvement projects in fiscal year 2016. $8,952 of the remaining decrease was due to the impact of GASB 68. • Unrestricted net assets decreased $63,169, or 73 percent. A decrease of $63,690, due to the impact of GASB 68, was offset by small increases in other unrestricted assets.
10 | University of Oregon Management’s Discussion and Analysis For the Year Ended June 30, 2017 (dollars in thousands)
Total Operating and Nonoperating Revenues Comparison of fiscal year 2016 to fiscal year 2015 Student tuition and fees increased $19,249, or 5 percent. Other Non- 100% Operating Nonresident undergraduate tuition increased by $20,780, or Revenues 90% 9 percent, as a result of increased tuition and fee rates and Appropriations 80% change in enrollment mix. Resident undergraduate tuition
70% Educational and increased by $2,578, or 3 percent. These increases were Other Revenues 60% partially offset by an increase in allowances.
50% Auxiliary Enterprises Auxiliary enterprises revenues increased $3,039, or 2 percent. 40% Operating Grants 30% and Contracts Educational and other operating revenues increased $864, or
20% 3 percent. Student Tuition 10% and Fees Nonoperating Revenues 0% 2017 2016 2015 Comparison of fiscal year 2017 to fiscal year 2016 Revenues Capital grants and gifts increased $37,394, or 97 percent, primarily due to a one-time individual donation. Operating Revenues increased $12,761, or 22 percent, Operating revenues increased $30,809, or 5 percent, to Other nonoperating items of which $5,268 was an increase in gifts. The remaining $713,691 in fiscal year 2017 as compared to fiscal year 2016. difference was attributable to a one-time non-cash The majority of the 2017 change was due to an increase in adjustment to the state note payable in fiscal year 2016. auxiliary enterprises revenue and educational and other revenues. Operating revenues increased $22,137, or 3 percent, Comparison of fiscal year 2016 to fiscal year 2015 to $682,882 in fiscal year 2016 as compared to fiscal year Government appropriations increased $8,703, or 15 percent, 2015. The 2016 change was due to increases in student tuition primarily due to increased state appropriations for UO operations. and fees and auxiliary enterprises revenue. Investment activity revenues increased $1,893, or 13 percent. Comparison of fiscal year 2017 to fiscal year 2016 See Note 9. Investment Activity for additional information Student tuition and fees increased $2,898, or 1 percent. relating to these changes. Resident undergraduate tuition increased by $2,780, or 3 percent. Nonresident undergraduate tuition increased by Capital grants and gifts increased $8,494, or 28 percent, $8,082, or 3 percent. These increases were partially offset by primarily due to a one-time individual donation. an increase in allowances. Expenses Total grants and contracts (federal, state and local, and nongovernmental) increased $4,369 or 4 percent, but the Operating Expenses mix between sources changed. Nongovernmental grants Operating expenses increased $10,270, or 1 percent, to $920,938 and contracts increased by $11,661, or 197 percent, and was in fiscal year 2017 as compared to fiscal year 2016. A $31,559 offset by a decrease in federal grants and contracts of $6,089, decrease in the change in the components of net pension or 7 percent, as well as a drop in state and local grants and liability, from $72,643 in fiscal year 2016 to $41,084 in fiscal year contracts of $1,203, or 30 percent. 2017 was offset by an increase in auxiliary programs expense of $28,911 or 17 percent, and smaller increases in most of the other Auxiliary enterprises revenues increased $15,770, or 9 percent. expense categories. Operating expenses increased $133,998, or The implementation of a new student health insurance 17 percent, to $910,668 in fiscal year 2016 as compared to fiscal program in fiscal year 2017 increased health center revenues year 2015. This increase was primarily the result of a $120,087 by $6,171. Athletics revenues increased by $7,796, and EMU net change in the components of net pension liability, from a revenues increased by $2,905. These increases were offset by negative expense of $47,444 in fiscal year 2015 to a positive decreases in various other areas. expense of $72,643 in fiscal year 2016. Excluding the pension Educational and other revenues increased by $7,772, or 29 adjustment, operating expenses increased $13,911, or 2 percent, percent, due to a one time settlement. in fiscal year 2016.
2017 | Annual Financial Report | 11 Management’s Discussion and Analysis For the Year Ended June 30, 2017 (dollars in thousands)
2015 with Operating Expense by Function 2015 as GASB 68 GASB 68 For the Year Ended June 30, shown on effect effect Operating Expense by Function the SRE allocated For the Year Ended June 30, 2017 2016 2015 Instruction $ 274,772 $ 274,697 $ 270,122 Instruction $ 270,122 $ (16,616) $ 253,506 Auxiliary Programs 200,141 171,230 175,720 Auxiliary Programs 175,720 (7,597) 168,123 Research 66,711 62,277 67,877 Research 67,877 (3,528) 64,349 Institutional Support 67,894 64,157 61,937 Institutional Support 61,937 (5,636) 56,301 Academic Support 59,242 56,810 53,983 Academic Support 53,983 (4,107) 49,876 Public Service 43,282 42,035 41,943 Public Service 41,943 (2,824) 39,119 Student Aid 34,433 36,710 27,574 Student Aid 27,574 - 27,574 Other Operating Expenses 133,379 130,109 124,958 Other Operating Expenses 124,958 (7,136) 117,822 Change in Pension Liability, Net 41,084 72,643 (47,444) Change in Pension Liability, Net (47,444) 47,444 - Total Operating Expenses $ 920,938 $ 910,668 $ 776,670 Total Operating Expenses $ 776,670 $ - $ 776,670
2017 Operating Expense by Function Due to the way in which expenses are incurred by the UO, variances are presented and explained by analyzing changes Change in Components of Net Pension Liability Research 7% in the natural classification of expenses. Each natural 4% Other Operating Expenses Public Service 14% 5% classification analysis can be applied to many of the functional expense caption items.
Institutional Support Instruction 30% 7% The following summarizes operating expenses by natural classification:
Auxiliary Programs 22% Operating Expenses by Natural Classification Student Aid For the Year Ended June 30, 2017 2016 2015 Academic Support 6% 4% Compensation and Benefits $ 602,594 $ 576,568 $ 558,759 Change in Components of Net Pension Liability 41,084 72,643 (47,444) Beginning with fiscal year 2015, the implementation of GASB Services and Supplies 171,873 157,898 166,582 68 had a profound impact on the operating expenses reported Scholarships and Fellowships 33,675 36,737 35,523 Depreciation and Amortization 62,155 57,370 54,482 by UO. Other Expenses 9,557 9,453 8,768 Total Operating Expenses $ 920,938 $ 910,668 $ 776,670 The following shows the effect of GASB 68 on operating expenses across the functional classifications: 2017 Operating Expenses by Natural Classification 2017 with 2017 as GASB 68 GASB 68 For the Year Ended June 30, shown on effect effect Depreciation and Amortization the SRE 7% Other Expenses allocated Scholarships and Fellowships 1% 4%
Instruction $ 274,772 $ 13,836 $ 288,608 Services and Supplies 19% Auxiliary Programs 200,141 6,535 206,676 Research 66,711 3,013 69,724 Institutional Support 67,894 5,250 73,144 Change in Components of Net Academic Support 59,242 4,034 63,276 Pension Liability 4% Compensation and Benefits Public Service 43,282 2,413 45,695 65% Student Aid 34,433 - 34,433 Other Operating Expenses 133,379 6,003 139,382 Comparison of fiscal year 2017 to fiscal year 2016 Change in Pension Liability, Net 41,084 (41,084) - Total Operating Expenses $ 920,938 $ - $ 920,938 Compensation and benefits costs increased $26,026, or 5 2016 with 2016 as GASB 68 GASB 68 percent, due to the following: For the Year Ended June 30, shown on effect effect the SRE allocated • Increased FTE and higher average salaries resulted in higher wage costs in unclassified, classified, and graduate teaching Instruction $ 274,697 $ 25,275 $ 299,972 Auxiliary Programs $ 171,230 11,570 182,800 fellow employee categories (approximately $10,173, or 3 Research $ 62,277 5,074 67,351 percent). Institutional Support $ 64,157 8,763 72,920 Academic Support $ 56,810 6,747 63,557 • Other payroll expenses, which include retirement, health Public Service $ 42,035 4,186 46,221 insurance, and employee termination agreements, Student Aid $ 36,710 - 36,710 Other Operating Expenses $ 130,109 11,028 141,137 increased by approximately $14,948, or 8 percent. Change in Pension Liability, Net $ 72,643 (72,643) - Total Operating Expenses $ 910,668 $ - $ 910,668
12 | University of Oregon Management’s Discussion and Analysis For the Year Ended June 30, 2017 (dollars in thousands)
Change in components of net pension liability decreased CAPITAL ASSETS AND RELATED $31,559, or 43 percent, due to the impact of state pension FINANCING ACTIVITIES obligations. Capital Assets Services and supplies expense increased $13,974, or At June 30, 2017, the UO had $2,231,722 in capital assets, 9 percent. $2,962 of this increase was related to the less accumulated depreciation of $753,276, for net capital implementation of the UO student health insurance program assets of $1,478,446. During fiscal year 2017, $163,860 in in fiscal year 2017. In addition, supplies expense increased construction projects were completed and placed into service, $3,362, or 11 percent, and travel increased $2,190, or 13 compared to $43,795 in fiscal year 2016. The UO is committed percent. The remaining difference was comprised of increases to a comprehensive program of capital investment and facility in the following categories: conferences, fees & services, maintenance that includes addressing current maintenance maintenance and repairs, rentals, and utilities. needs and minimizing the UO’s deferred maintenance Scholarships and fellowships expenses decreased $3,062, backlog. State, federal, private, debt, and internal UO funding or 8 percent. This expense category does not include fee were all used to accomplish the UO’s capital objectives. remissions, which are reported as reductions to student Equipment & Other Construction in 2.2% tuition and fee revenues. Progress Library 5.8% Materials Depreciation and amortization increased $4,785, or 8 Capitalized 0.8% Collections Intangibles percent, due to the impact of new buildings placed in service 2.9% 0.4% in fiscal year 2017. Land and Improvements Buildings Comparison of fiscal year 2016 to fiscal year 2015 7.0% 80.9%
Compensation and benefits costs increased $17,809, or 3 percent, due to the following: Changes to Capital Assets
2017 2016 2015 • Increased FTE and higher average salaries resulted in higher Capital Assets, Beginning of Year $ 2,101,325 $ 1,935,835 $ 1,839,630 wage costs in unclassified, classified, and graduate teaching Add: Purchases/Construction 134,349 174,737 109,706 Less: Retirements/Disposals/Adjustments (3,952) (9,247) (13,501) fellow employee categories (approximately $12,186, or 3 Total Capital Assets, End of Year 2,231,722 2,101,325 1,935,835 percent). Accum. Depreciation, Beginning of Year (694,876) (643,442) (598,823) Add: Depreciation Expense (62,155) (57,370) (54,483) Less: Retirements/Disposals/Adjustments 3,755 5,936 9,864 • Other payroll expenses, which include retirement and Total Accum. Depreciation, End of Year (753,276) (694,876) (643,442) health insurance, increased by approximately $5,632, or 3 Total Capital Assets, Net, End of Year $ 1,478,446 $ 1,406,449 $ 1,292,393 percent. Capital additions totaled $134,349 for fiscal year 2017, $174,737 Change in components of net pension liability increased by for fiscal year 2016, and $109,706 for fiscal year 2015. $120,087, or 253 percent due to the impact of state pension obligations. Accumulated depreciation at June 30, 2017, increased $58,400, or 8 percent, which represented $62,155 in Services and supplies expense decreased $8,684, or 5 percent. depreciation and amortization expense offset by $3,755 in asset retirements and adjustments. Accumulated Scholarships and fellowships expenses increased $1,214, depreciation at June 30, 2016, increased $51,434, or 8 or 3 percent. This expense category does not include fee percent, which represented $57,370 in depreciation and remissions, which are reported as reductions to student amortization expense offset by $5,936 in asset retirements tuition and fee revenues. and adjustments. Capital Commitments Outstanding commitments on construction projects that are in the planning phase but not yet initiated, as well as partially completed construction projects authorized by the Oregon legislature, and/or the Board of Trustees totaled approximately $244,250 and $201,833, at June 30, 2017 and 2016, respectively.
2017 | Annual Financial Report | 13 Management’s Discussion and Analysis For the Year Ended June 30, 2017 (dollars in thousands)
See Note 15. Commitments and Contingent Liabilities for Economic Outlook additional information relating to capital construction Funding for the major activities of the UO comes from a variety commitments. of sources, including tuition and fees, financial aid programs, Debt Administration state appropriations, grants, private and government contracts, donor gifts, and investment earnings. Revenues are also During fiscal year 2016, the UO received $72,285 due to the generated through recovery of costs associated with federal issuance of revenue bonds, for which the Moody’s bond rating grants and contract activities, which serve to offset related was Aa2. During fiscal year 2015, the UO received $57,743 administrative and facilities costs. due to the issuance of revenue bonds, for which the Moody’s bond rating was Aa2. The proceeds of both issuances were Overall, Oregon’s economy has been among the ten fastest- earmarked for construction and acquisition of capital assets. growing nationwide, although it is expected that job growth will slow considerably in the next two years. More than two Long-Term Debt decades of significant underinvestment in Oregon public higher education, combined with large, state-mandated cost increases have created challenges in fully achieving the UO’s mission of excellence in access, academia, research, and service. More " 0 % * R
; < = G broadly, underinvestment has hampered the state’s ability to support its trajectory toward educational attainment goals. Nevertheless, as a premier public residential research institution,
UO continues to provide immense economic development opportunities for the state and region.
Fortunately, the trend of disinvestment has begun to reverse. In the fiscal year 2015 legislative session, increased investment improved Oregon’s national ranking for educational appropriations per student by 10 places, from 47th in 2015 to 37th in 2016. In the fiscal year 2017 legislative session, the UO, in conjunction with Oregon’s six other public universities, received an additional $72 million in operating funds—a 10.8 percent increase over the previous biennium. These funds ensured that proposed large resident tuition increases were partially mitigated at the UO for the 2017-18 academic year. Nevertheless, mandated cost drivers will continue to test the UO’s ability to balance its budget without cuts to staffing and services for students and/or significant tuition increases.
Oregon’s public universities have achieved substantial progress in securing capital appropriations for new and deferred maintenance infrastructure projects. It is expected, however, that state bonding capacity allocated to public universities will come under scrutiny in the coming years. The 2017 legislature authorized $50 million in general obligation bonds for the Phil and Penny Knight Campus for Accelerating Scientific Impact, a critical regional research and economic development project.
In a new era of institutional governance, financial einvestment,r and inter-institutional collaboration, the UO will remain committed to meeting the challenges ahead, ensuring the institution’s long-term financial health, and carrying out its core mission of providing an affordable and excellent education for all students.
14 | University of Oregon 2017 | Annual Financial Report | 15 Statement of Net Position
University As of June 30, 2017 2016 (In thousands) ASSETS Current Assets Cash and Cash Equivalents $ 234,324 $ 311,681 Collateral from Securities Lending 1,877 11,417 Accounts Receivable, Net 68,715 64,034 Notes Receivable, Net 4,410 4,685 Inventories 4,160 4,008 Prepaid Expenses 8,217 7,391 Total Current Assets 321,703 403,216 Noncurrent Assets Cash and Cash Equivalents 58,274 31,331 Investments 76,357 28,382 Notes Receivable, Net 17,136 16,844 Non-Depreciable Capital Assets 185,903 228,431 Capital Assets, Net of Accumulated Depreciation 1,292,543 1,178,018 Total Noncurrent Assets 1,630,213 1,483,006 Total Assets 1,951,916 1,886,222
Deferred Outflows of Resources 154,389 24,615
Total Assets and Deferred Outflows of Resources 2,106,305 1,910,837
LIABILITIES Current Liabilities Accounts Payable and Accrued Liabilities 44,633 35,438 Accrued Payroll Related Liabilities 44,709 43,532 Deposits 5,114 4,896 Obligations Under Securities Lending 1,877 11,417 Current Portion of Long-Term Liabilities 45,364 21,565 Unearned Revenues 60,413 59,496 Total Current Liabilities 202,110 176,344 Noncurrent Liabilities Long-Term Liabilities 742,928 775,998 Net Pension Liability 286,241 94,966 Total Noncurrent Liabilities 1,029,169 870,964 Total Liabilities 1,231,279 1,047,308
Deferred Inflows of Resources 2,720 23,122
NET POSITION Net Investment in Capital Assets 787,970 761,354 Restricted For: Expendable: Gifts, Grants and Contracts 6,842 2,683 Student Loans 26,169 26,104 Capital Projects 43,185 26,815 Unrestricted 8,140 23,451 Total Net Position $ 872,306 $ 840,407
Total Liabilities, Deferred Inflows and Net Position $ 2,106,305 $ 1,910,837
The accompanying notes are an integral part of these financial statements.
16 | University of Oregon Statement of Financial Position
UO Foundation As of June 30, 2017 2016 (In thousands) Assets Cash and Cash Equivalents $ 49,235 $ 54,886 Contributions, Pledges and Grants Receivable, Net 505,762 110,732 Investments (Note 2) 1,083,563 910,747 Other Assets 19,686 14,581 Capital Lease Receivable, Net 41,627 42,435 Property and Equipment, Net 17,374 18,162 Total Assets 1,717,247 1,151,543
Liabilities Accounts Payable and Accrued Liabilities 751 619 Accounts Payable to University 17 24 Obligations to Beneficiaries of Split-Interest Agreements 53,174 51,726 Deposits Held in Custody 76,574 15,781 Long-Term Liabilities 54,289 63,036 Total Liabilities 184,805 131,186
Net Assets Unrestricted 15,644 11,545 Temporarily Restricted 700,399 489,983 Permanently Restricted 816,399 518,829 Total Net Assets $ 1,532,442 $ 1,020,357 The accompanying notes are an integral part of these financial statements.
2017 | Annual Financial Report | 17 Statement of Revenues, Expenses, and Changes in Net Position
University For the Year Ended June 30, 2017 2016 (In thousands) OPERATING REVENUES Student Tuition and Fees (Net of Allowances of $70,701 and $65,192, respectively) $ 381,434 $ 378,536 Federal Grants and Contracts 86,575 92,664 State and Local Grants and Contracts 2,748 3,951 Nongovernmental Grants and Contracts 17,590 5,929 Educational Department Sales and Services 15,751 16,452 Auxiliary Enterprises Revenues (Net of Allowances of $8,490 and $6,889, respectively) 190,759 174,989 Other Operating Revenues 18,834 10,361 Total Operating Revenues 713,691 682,882
OPERATING EXPENSES Instruction 274,772 274,697 Research 66,711 62,277 Public Service 43,282 42,035 Academic Support 59,242 56,810 Student Services 42,042 40,770 Auxiliary Programs 200,141 171,230 Institutional Support 67,894 64,157 Operation and Maintenance of Plant 52,109 53,288 Student Aid 34,433 36,710 Other Operating Expenses 39,228 36,051 Change in Components of Net Pension Liability (Note 11) 41,084 72,643 Total Operating Expenses 920,938 910,668 Operating Loss (207,247) (227,786)
NONOPERATING REVENUES (EXPENSES) Government Appropriations 66,515 64,545 Financial Aid Grants 31,576 31,869 Investment Activity 16,154 15,989 Gain (Loss) on Sale of Assets, Net 22 (3,144) Interest Expense (24,341) (28,793) Other Nonoperating Items 71,108 58,347 Net Nonoperating Revenues 161,034 138,813 Loss Before Capital Additions (46,213) (88,973)
CAPITAL ADDITIONS Debt Service Appropriations 2,017 2,017 Capital Grants and Gifts 76,095 38,701 Total Capital Additions 78,112 40,718 Increase (Decrease) In Net Position 31,899 (48,255)
NET POSITION Beginning Balance 840,407 888,662 Ending Balance $ 872,306 $ 840,407
The accompanying notes are an integral part of these financial statements.
18 | University of Oregon Statement of Activities
UO Foundation For The Year Ended June 30, 2017 2016 (In thousands) Revenues Grants, Bequests and Gifts $ 568,101 $ 126,382 Investment Income, Net 73,753 20,235 Change in Value of Life Income Agreements 3,703 (7,410) Other Revenues 1,650 1,732 Total Revenues 647,207 140,939
Expenses University Support 127,614 110,250 General and Administrative 7,508 6,842 Total Expenses 135,122 117,092 Increase In Net Assets 512,085 23,847 Net Assets Beginning Balance 1,020,357 996,510 Ending Balance $ 1,532,442 $ 1,020,357 The accompanying notes are an integral part of these financial statements.
2017 | Annual Financial Report | 19 Statement of Cash Flows
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&\ ^# &" * * H 5 1 $ _ C H $ 5
?. HH . H 8
20 | University of Oregon Statement of Cash Flows—Continued
10 1 7 ^^ . % R _ & # # "# & ! "#&' " & " \ _ ! "#&' "##"# $ ^ _ ^ 5 _ WR=% " H H < . = 0 R R ^ R_ G WH 0 7 H 6 5 . W R G 7 WHH % " H 0 G ^ _ 5 < " H 0 G ^ _ ^ 5 _ ^ 0 ^ _ ^ _ = R 6 ^ _ ^ 5 _ . R % 1 . < = G 5 WHH % = G R WHH % R G ^ _ 5 ? G ^ 5 _ R " 0 % ^ _ & " \ _ ! "#&' "##"# $ ^ _ ^ 5 _
& & #& "#&' & & !#" #& & #&' &\ !#" &\ " \ #& & #&' " & "# & W WH_% R G ^ H% G $ 5 W WH_% R G Q ~ R 5 ^ H @ % ^ 0 " H < R ^ 0 WH 0 ^ _ ^ _ < H . . ; < = G ^ _ 5 @ 1 R % H 6H. H Q L^ _
2017 | Annual Financial Report | 21 Notes to the Financial Statements For the Year Ended June 30, 2017 (dollars in thousands)
1. ORGANIZATION AND SUMMARY OF The UO has also adopted GASB Statement No. 35, Basic Financial SIGNIFICANT ACCOUNTING POLICIES Statements - and Management’s Discussion and Analysis - for Public Colleges and Universities - an amendment of GASB Statement No. A. Reporting Entity 34, as well as GASB Statement 63, Financial Reporting of Deferred The UO financial reporting entity is reported under the heading Outlfows of Resources, Deferred Inflows of Resources, and Net of University in the Basic Financial Statements. The UO reporting Position. These statements establish accounting and financial entity also includes one university foundation (UO Foundation), reporting standards for public colleges and universities within which is reported as a discretely presented component unit in the financial reporting guidelines of GASB 34. the UO Financial Statements. See Note 16. University Foundation In preparing the financial statements, significant interfund for additional information relating to this component unit. transactions and balances between university funds have Organizations that are not financially accountable to the UO, been eliminated. Unless otherwise stated, dollars are such as booster and alumni organizations, are not included in the presented in thousands. reporting entity. Financial statements of the UO Foundation are presented Previously a member institution of the Oregon University in accordance with GAAP prescribed by the Financial System (OUS), the UO became an independent public entity, Accounting Standards Board (FASB). with statewide purposes and missions, effective July 1, 2014. The OUS ceased operations effective June 30, 2015. The UO has NEWLY IMPLEMENTED ACCOUNTING STANDARDS separate legal standing and possesses the corporate powers that UO implemented GASB Statement No. 73, Accounting distinguish it as being legally separate from the State of Oregon. and Financial Reporting for Pensions and Related Assets The UO is included as a discretely presented component unit in That Are Not within the Scope of GASB Statement 68, and the Comprehensive Annual Financial Report issued by the state Amendments to Certain Provisions of GASB Statements 67 and starting with the fiscal year 2015 financial report. 68. The Statement addresses employers and governmental nonemployer contributing entities for pensions that are not The Board of Trustees (BOT) of the University of Oregon is within the scope of Statement 68. GASB 73 requirements the UO’s governing body. The broad responsibilities of this are effective for fiscal years beginning after June 15, 2016. 15-member group are to supervise, coordinate, manage, and The adoption of GASB Statement 73 did not have a material regulate the UO, as provided by state statute. The trustees impact on the UO financial statements. may exercise all powers, rights, duties, and privileges expressly granted by law or that are incidental to their responsibilities. In January 2016, GASB issued Statement No. 80, Blending The membership of the BOT is established by law. With the Requirements for Certain Component Units – an amendment exception of the UO president, the trustees are appointed by of GASB Statement No. 14, which is effective for reporting the state governor and are subject to confirmation by the state periods beginning after June 15, 2016. This Statement amends senate in the manner prescribed by law. To assist the governor in the blending requirements for the financial statement presentation of component units of all state and local appointing trustees, the BOT may submit a list of nominees to governments. The additional criterion requires blending of a the governor for consideration whenever there is a vacancy. component unit incorporated as a not-for-profit corporation B. Financial Statement Presentation in which the primary government is the sole corporate member. This Statement does not impact the UO. The UO financial accounting records are maintained in accordance with US Generally Accepted Accounting Principles In March 2016, GASB issued Statement No. 82, Pension Issues (GAAP) as prescribed in applicable pronouncements of the – an amendment of GASB Statements No. 67, No. 68, and No. Governmental Accounting Standards Board (GASB). 73. The objective of this Statement is to address certain issues that have been raised with respect to Statements No. The UO prepares and presents its financial information in 67, Financial Reporting for Pension Plans, No. 68, Accounting accordance with GASB Statement No. 34, Basic Financial and Financial Reporting for Pensions, and No. 73, Accounting Statements - and Management’s Discussion and Analysis - for and Financial Reporting for Pensions and Related Assets State and Local Governments (GASB 34). GASB 34 established That Are Not within the Scope of GASB Statement 68, and the requirements and reporting model for annual financial Amendments to Certain Provisions of GASB Statements 67 and statements. GASB 34 requires that financial statements be 68. Specifically, this Statement addresses issues regarding accompanied by a narrative introduction and analytical overview (1) the presentation of payroll-related measures in required of the reporting entity in the form of an MD&A. supplementary information, (2) the selection of assumptions and the treatment of deviations from the guidance in
22 | University of Oregon Notes to the Financial Statements For the Year Ended June 30, 2017 (dollars in thousands) an actuarial standard of practice for financial reporting In March 2017, GASB issued Statement No. 85, Omnibus 2017, purposes, and (3) the classification of payments made by to enhance consistency in the application of government employers to satisfy employee (plan member) contribution accounting and financial reporting standards. This Statement requirements. The majority of the requirements of this is effective for reporting periods beginning after June 15, 2017. Statement are effective for reporting periods beginning after UO is analyzing the effects of the adoption of GASB 85 and June 15, 2016. See the Required Supplementary Information is uncertain of the impact on the financial statements and for disclosures related to this Statement. related reporting requirements at this time. UPCOMING ACCOUNTING STANDARDS In May 2017, GASB issued Statement No. 86, Certain Debt In June 2015, GASB issued Statement No. 75, Accounting and Extinguishment Issues, to improve consistency in accounting Financial Reporting for Postemployment Benefits Other Than and financial reporting for in-substance defeasance of debt. Pensions. GASB 75 establishes new accounting and financial This Statement also improves accounting and financial reporting requirements for governments whose employees reporting for prepaid insurance on debt that is extinguished are provided with other postemployment benefits (OPEB). and notes to financial statements for debt that is defeased in GASB 75 requirements are effective for fiscal years beginning substance. This Statement is effective for reporting periods after June 15, 2017. UO is analyzing the effects of the adoption beginning after June 15, 2017. UO is analyzing the effects of of GASB 75 and is uncertain of the impact on the financial the adoption of GASB 86 and is uncertain of the impact on statements and related reporting requirements at this time. the financial statements and related reporting requirements In March 2016, GASB issued Statement No. 81, Irrevocable at this time. Split-Interest Agreements. The objective of this Statement is In June 2017, GASB issued Statement No. 87, Leases. The to improve accounting and financial reporting for irrevocable objective of this Statement is to better meet the information split-interest agreements by providing recognition and needs of financial statement users by improving accounting measurement guidance for situations in which a government and financial reporting for leases by governments. This is a beneficiary of the agreement. The requirements of this Statement is effective for reporting periods beginning Statement are effective for reporting periods beginning after December 15, 2019. UO is analyzing the effects of the after December 15, 2016. This Statement is not expected to adoption of GASB 87 and is uncertain of the impact on the materially impact UO. financial statements and related reporting requirements at In November 2016, GASB issued Statement No. 83, Certain this time. Asset Retirement Obligations. This Statement establishes C. Basis of Accounting criteria for determining the timing and pattern of recognition For financial reporting purposes, the UO is considered a of a liability and a corresponding deferred outflow of special-purpose government engaged only in business-type resources for AROs, which are legally enforceable liabilities activities. Accordingly, the UO financial statements are associated with the retirement of tangible capital assets. The presented using the economic resources measurement focus requirements of this Statement are effective for reporting and the accrual basis of accounting. Under the accrual basis, periods beginning after June 15, 2018. UO is analyzing the revenues are recognized when earned and expenses are effects of the adoption of GASB 83 and is uncertain of the recorded when incurred. impact on the financial statements and related reporting requirements at this time. D. Cash and Cash Equivalents Cash and cash equivalents includes highly liquid investments In January 2017, GASB issued Statement No. 84, Fiduciary with original maturities of three months or less. Cash and Activities. This Statement establishes criteria for identifying cash equivalents consists of cash and investments held by the fiduciary activities of all state and local governments for UO and cash held in the Oregon Short Term Fund (OSTF). accounting and financial reporting purposes and how those activities should be reported. The requirements of this Cash and cash equivalents restricted for capital construction Statement are effective for reporting periods beginning and agency funds are classified as noncurrent assets in the after December 15, 2018. UO is analyzing the effects of the Statement of Net Position. adoption of GASB 84 and is uncertain of the impact on the financial statements and related reporting requirements at this time.
2017 | Annual Financial Report | 23 Notes to the Financial Statements For the Year Ended June 30, 2017 (dollars in thousands)
E. Investments Security pricing is provided by a third-party, and is reported Investments are reported at fair value as determined by market monthly to the University by its custodian bank. Assets prices. Unrealized gains or losses on investments are reported are categorized by asset type, which is a key component of as investment activity in the Statement of Revenues, Expenses, determining hierarchy levels. and Changes in Net Position. F. Inventories Investments restricted for capital construction and agency Inventories are recorded at the lower of average cost or market funds are classified as noncurrent assets in the Statement of and consist primarily of supplies in storerooms and physical Net Position. plant stores. Various inputs are used in determining the fair value of G. Capital Assets investments. These inputs to valuation techniques are Capital assets are recorded at cost on the date acquired or categorized into a fair value hierarchy consisting of three broad at fair market value on the date donated. The UO capitalizes levels for financial statement purposes as follows: equipment with unit cost of $5 or greater and an estimated Level 1 - unadjusted price quotations in active markets/ useful life of greater than one year. Real property acquisitions exchanges for identical assets or liabilities, that each fund has are capitalized if they meet the capitalization threshold the ability to access. of $50 to $100 depending on the type. Expenditures that increase the functionality and/or extend the useful life of real Level 2 - other observable inputs (including, but not limited to, property are capitalized if they meet thresholds of $50 to quoted prices for similar assets or liabilities in markets that are $100. Intangible assets with a value of $100 are capitalized. active, quoted prices for identical or similar assets or liabilities Expenditures below the capitalization thresholds, including in markets that are not active, inputs other than quoted prices repairs and maintenance, are charged to operating expense in that are observable for the assets or liabilities (such as interest the year in which the expense is incurred. rates, yield curves, volatilities, loss severities, credit risks and default rates) or other market-corroborated inputs). As an institute of higher education in existence for over 140 years, the University has acquired significant collections Level 3 - unobservable inputs based on the best information of art, rare books, historical treasures, and other special available in the circumstances, to the extent observable inputs collections. The purpose of these collections is for public are not available (including each fund’s own assumptions used exhibition, education, or research in furtherance of public in determining the fair value of investments). service rather than financial gain. However, because of their The hierarchy gives the highest priority to unadjusted quoted invaluable and irreplaceable nature, these collections are prices in active markets for identical assets or liabilities (Level 1 not depreciated and are reported as non-depreciable capital measurements) and the lowest priority to unobservable inputs assets in the Statement of Net Position. (Level 3 measurements). Accordingly, the degree of judgment The UO capitalizes interest expense on projects exceeding exercised in determining fair value is greatest for instruments $1,000 that are partially or fully funded by debt or internally categorized in Level 3. The inputs used to measure fair value generated funds. Total interest costs of $26,907 and may fall into different levels of the fair value hierarchy. In $31,407 were incurred on debt, of which $2,566 and $2,614 such cases, for disclosure purposes, the fair value hierarchy were capitalized for the fiscal years ended 2017 and 2016, classification is determined based on the lowest level input that respectively. is significant to the fair value measurement in its entirety. Depreciation is computed using the straight line method The categorization of a value determined for investments is over the estimated useful lives of the assets, generally 15 to based on the pricing transparency of the investments and is not 50 years for buildings, 10 to 20 years for infrastructure, land necessarily an indication of the risks associated with investing improvements, and improvements other than buildings, 10 in those securities. years for library materials, and 5 to 11 years for equipment. The University categorizes its fair value measurements Amortization terms of intangible assets vary depending on within the fair value hierarchy established by generally the factors relating to the specific asset. Depreciation is not accepted accounting principles. The University has recorded applied to land, construction in progress, museum collections, its investments at fair value, and primarily uses the market works of art, historical treasures, or library special collections. approach to valuing each security. The University applies fair market value updates to its securities on a monthly basis.
24 | University of Oregon Notes to the Financial Statements For the Year Ended June 30, 2017 (dollars in thousands)
H. Unearned Revenues with restrictions imposed by external parties. The three types Unearned revenues include amounts received for tuition of restricted expendable net position are: gifts, grants, and and fees, grants and contracts, lease income, and auxiliary contracts; student loans; and capital projects. enterprises activities in which cash has been received but UNRESTRICTED revenues will be earned in subsequent fiscal year(s). Unrestricted net assets are resources that may be used at the I. Compensated Absences discretion of UO management and the BOT. The UO accrues a liability for vacation leave and other When an expense is incurred that can be paid using either compensated absences that were earned but not used restricted or unrestricted resources, restricted resources are during the current or prior fiscal year, for which employees generally applied first. can receive compensation in a future period. Sick leave is recorded as an expense when paid. There is no payout M. Income Taxes provision for unused sick leave and no liability exists for The UO is considered to be a governmental entity for tax purposes. terminated employees. As such, the UO is generally not subject to federal and state income J. Deferred Outflows and Inflows of Resources taxes. However, the UO remains subject to income taxes on any income that is derived from a trade or business regularly carried In addition to assets, the Statement of Net Position reports a on and not in furtherance of the purpose for which it was granted separate section for deferred outflows of resources. Deferred exemption from income taxes. No income tax is payable because outflows of resources epresentsr a consumption of net position there is no net unrelated business income for the UO. that applies to a future reporting period and thus will not be recognized as an outflow of resources (expense) until then. N. Revenue and Expenses The UO has classified its revenues and expenses as either In addition to liabilities, the Statement of Net Position reports operating or nonoperating according to the following criteria: a separate section for deferred inflows of resources. Deferred inflows of resources epresentsr acquisitions of net position Operating revenues and expenses generally have the that apply to a future reporting period and thus will not be characteristics of exchange transactions. These transactions can recognized as an inflow of resources (revenue) until then. be defined as an exchange in which two or more entities both receive and sacrifice value, such as purchases and sales of goods K. Pensions or services. Examples of operating revenues include student For purposes of measuring the net pension liability, deferred tuition and fees, sales and services associated with auxiliary outflows of resources and deferred inflows of resources enterprises, most federal, state, and local grants and contracts, related to pensions, and pension expense, information about and other operating revenues. Examples of operating expenses the fiduciary net position of the Oregon Public Employees include employee compensation, benefits and related expense, Retirement System (PERS) and additions to or deductions from scholarships and fellowships, utilities, supplies and other services, PERS’s fiduciary net position have been determined on the same professional fees, and depreciation expense of capital assets. basis as they are reported by PERS. For this purpose, benefit payments (including refunds of employee contributions) are Nonoperating revenues generally have the characteristics of recognized when due and payable in accordance with the benefit nonexchange transactions. In a nonexchange transaction, the UO terms. Investments are reported at fair value. receives value without directly giving equal value in exchange. Examples of nonoperating revenues include state appropriations, L. Net Position nonexchange grants, gifts, and contributions. Nonoperating UO’s net position is classified as follows: expenses are defined in GASB Statement No. 9, Reporting Cash Flows of Proprietary and Nonexpendable Trust Funds and NET INVESTMENT IN CAPITAL ASSETS Governmental Entities That Use Proprietary Fund Accounting, and Net investment in capital assets represents the total investment GASB Statement No. 34. Examples of nonoperating expenses in capital assets, net of accumulated depreciation and include interest on capital asset related debt. amortization and outstanding debt obligations related to those capital assets. O. Allowances Student tuition and fees and campus housing revenues RESTRICTED—EXPENDABLE included in auxiliary enterprises revenues are reported net Restricted expendable includes resources which the UO is of scholarship allowances. A scholarship allowance is the legally or contractually obligated to spend in accordance
2017 | Annual Financial Report | 25 Notes to the Financial Statements For the Year Ended June 30, 2017 (dollars in thousands) difference between the amounts charged to students and the cash equivalents in the basic financial statements. The OSTF amounts actually paid. The UO has two types of scholarship is administered by the Oregon State Treasury. The OSTF is an allowances that net into tuition and fees. Tuition and housing open-ended no-load diversified portfolio offered to any agency, waivers, provided directly by the UO, amounted to $45,072 and political subdivision or public corporation of the State who by law $35,325 for the fiscal years ended 2017 and 2016, respectively. is made the custodian of, or has control of, any fund. The OSTF Revenues from financial aid programs (e.g., Pell Grants, is commingled with the State’s short-term funds. In seeking to Supplemental Educational Opportunity Grants, and Oregon best serve local governments of Oregon, the Oregon Legislature Opportunity Grants) used for paying student tuition and fees established the Oregon Short-Term Fund Board, which is not and campus housing were estimated to be $32,174 and $25,531 registered with the US Securities and Exchange Commission as for the fiscal years ended 2017 and 2016, respectively. Bad debt an investment company. The purpose of the Board is to advise expense is included as an allowance to operating revenues and is the Oregon State Treasury in the management and investment estimated to be $2,838 and $2,416 for the fiscal years ended 2017 of the OSTF. At the fiscal years ended June 30, 2017 and 2016, UO and 2016, respectively. cash and cash equivalents on deposit at the state treasury were $241,515 and $286,181, respectively. For the fiscal years ended June P. Federal Student Loan Programs 30, 2017 and 2016, the UO also had $51,688 and $51,230 on deposit The UO receives proceeds from the Federal Direct Student Loan in financial depositories, respectively. Program. The UO transmits these grantor-supplied monies without having administrative or direct financial involvement in Cash and cash equivalents are classified as current and the program. Federal student loans received by UO students, but noncurrent. Cash that is restricted in purpose from an external not reported in operations, were $142,598 and $139,242 for the source is reported on the financial statements as restricted cash fiscal years ended 2017 and 2016, respectively. and as a non-current asset. The 2017 current portion, $234,324, includes $32,166 designated for payroll liabilities. The noncurrent Q. Use of Estimates portion, $58,274, includes $3,246 designated for UO student The preparation of financial statements in conformity with US groups and campus organizations. GAAP requires management to make estimates and assumptions The 2016 current portion, $311,681, includes $31,290 designated that could affect the reported amounts of assets, liabilities, for payroll liabilities. The noncurrent portion, $31,331, includes revenues, and expenses, and the disclosure of contingent assets, $3,996 designated for UO student groups and campus liabilities, revenues, and expenses at the date of the financial organizations. statements. Actual results could differ from those estimates. A copy of the state treasury audited annual financial report may R. Reclassification be obtained by writing to the Oregon State Treasury, 350 Winter Certain items previously reported in the financial statements Street NE, Suite 100, Salem, Oregon 97301-3896 or at oregon.gov/ have been reclassified to conform to the current financial treasury/Reports/Pages/Annual-Reports.aspx. statement presentation, but do not alter the reported change in net position. CUSTODIAL CREDIT RISK—DEPOSITS Custodial credit risk is the risk that, in the event of a financial 2. CASH AND INVESTMENTS institution failure, cash balances will not be returned to a Deposits and investment securities as described below are depositor. UO cash balances not deposited with the state exposed to various risks such as credit, concentration of credit, treasury are held in accounts that are fully collateralized. custodial credit, interest rate, and foreign currency. FOREIGN CURRENCY RISK—DEPOSITS It is likely that the value of the investment securities will fluctuate Deposits in foreign currency run the risk of changing value due to and such changes might affect the amounts reported in the fluctuations in foreign exchange rates. State treasury deposits are financial statements. in US currency and therefore not exposed to foreign currency risk. A. Cash and Cash Equivalents To mitigate foreign currency risks for prospective study abroad DEPOSITS WITH STATE TREASURY activities, the UO periodically enters into forward foreign currency contracts. At June 30, 2017 and 2016, respectively, these The UO maintains the majority of its cash balances on deposit contracts totaled $3,909 and $2,291 and had a net fair value loss with the state treasury in the OSTF. Deposits in the OSTF of $117 and $131. The net fair value loss is reported as deferred are reported at fair value, which approximates cost and its outflows on the Statement of Net Position. share value. The pool’s fair value is presented within cash and
26 | University of Oregon Notes to the Financial Statements For the Year Ended June 30, 2017 (dollars in thousands)
June 30, 2017 for capital projects and to meet unanticipated liquidity needs. This Notional Principal Effective Maturity Contract Fair Currency Amount Amount Date Date Rate Value Adj portfolio can be invested over a somewhat longer time horizon than the Tier 1 portfolio and should, typically, provide better EUR € 355 $ 408 5/1/2017 9/29/2017$ 1.1500 $ (3) investment returns. EUR 300 352 1/2/2017 12/29/2017 1.1731 (10) EUR 500 592 4/2/2018 6/29/2018 1.1841 (22) Tier 3: Remaining cash balances will be allocated to the Tier 3 EUR 300 354 1/1/2018 3/29/2018 1.1784 (11) EUR 200 228 7/3/2017 9/28/2018 1.1400 0 portfolio. The primary objective of this tier is to maximize long-term EUR 200 232 10/2/2017 12/31/2018 1.1600 (4) real return commensurate with the risk tolerance of the university. EUR 200 233 5/1/2018 4/30/2019 1.1650 (5) $ (55) Because of the level of risk associated with certain investment GBP £ 141 $ 192 5/1/2017 9/29/2017$ 1.3600 $ (9) securities, it is possible that changes in the values of investment GBP 150 202 10/2/2017 12/29/2017 1.3490 (8) securities could occur in the near term and such changes might GBP 150 203 1/1/2018 3/29/2018 1.3501 (8) GBP 300 406 4/2/2018 6/29/2018 1.3534 (17) affect the amounts reported in the Statement of Net Position. GBP 125 168 7/3/2017 9/28/2018 1.3400 (5) GBP 125 168 10/2/2017 12/31/2018 1.3475 (6) Significant events in domestic and international investment GBP 125 171 5/1/2018 4/30/2019 1.3650 (9) markets, or actions by the Federal Open Market Committee to $ (62) influence both short and long-term interest rates contribute to June 30, 2016 price volatility. Consequently, the fair value of the UO’s investments Notional Principal Effective Maturity Contract Fair Currency Amount Amount Date Date Rate Value Adj is exposed to price volatility, which could result in a change in the fair value of certain investments from the amounts reported as of EUR € 800 $ 892 1/2/2017 4/28/2017$ 1.1083 $ (5) EUR 544 626 6/16/2016 12/30/2016 1.1083 (23) June 30, 2017. $ (28) As of June 30, 2017, the UO’s total investments consisted of $44,968 GBP £ 150 $ 232 1/2/2017 4/28/2017 1.3395 $ (31) in individually held investments, plus $31,389 invested in alternative GBP 350 541 6/1/2016 12/30/2016 1.3395 (72) asset classes. As of June 30, 2016, the UO’s total investments $ (103) consisted of $24,005 in individually held investments, plus $4,377 OTHER DEPOSITS invested in alternative asset classes. As of June 30, 2017 and 2016, the UO had vault and petty cash Investment Type: balances of $186 and $192, respectively. In addition, the UO had small amounts of cash relating to debt issuances invested % of Total Fair Value Investments with a fiscal agent. US Government Issues $ 5,219 7 B. Investments Money Market Funds 31,049 41 Corporate Issues 4,852 6 The UO funds are invested by the university’s treasurer, Equity Securities 2,604 3 through the university’s treasury operations division. The Municipal Issues 1,100 1 UO’s treasury operations is governed by the BOT’s treasury Accrued Income 143 0 management policy and its accompanying procedures. In Fixed Income Investments 44,968 59 addition, the UO’s investment policies adhere to applicable Alternative Equities 31,389 41 laws and assets are managed as a prudent investor would do, exercising reasonable care, skill, and caution. The UO Total Investments $ 76,357 100 manages investments as a part of its overall cash and investment pool, which is designed to provide adequate liquidity to meet the cash needs of the UO. Funds are Investments of the UO Foundation are summarized at June allocated among tiers, as follows: 30, 2017 as follows: UO Foundation Investments Tier 1: The Tier 1 portfolio is used to meet the expected day- to-day obligations of the UO, and is invested in such a way to Fair Value at June 30, 2017 2016 Investment Type: ensure that adequate liquidity exists to meet these obligations. Corporate Stocks, Bonds, Securities and Safety and liquidity are the primary objectives of this tier. Mutual Funds $ 224,070 $ 218,044 Investment in Common Stock, Voting Tier 2: The Tier 2 portfolio is used to hold funds that, while not Trust and Partnerships 773,799 644,099 Money Market Funds and Certificates of Deposit 81,415 43,023 needed to meet immediate obligations, are expected to be needed Other 4,279 5,581 during the annual cash cycle. This portfolio may also contain funds Total Investments $ 1,083,563 $ 910,747
2017 | Annual Financial Report | 27 Notes to the Financial Statements For the Year Ended June 30, 2017 (dollars in thousands)
CREDIT RISK FOREIGN CURRENCY RISK Credit risk is the risk that the issuer of a debt security fails to Foreign currency risk is the risk that investments may lose value fulfill its obligations. The UO has separate credit criteria for due to fluctuations in foreign exchange rates. At June 30, 2017, the each segment of the cash and investment pool. See the table UO had no securities denominated in any foreign currency. below for UO investment credit quality ratings at June 30, 2017. INTEREST RATE RISK Investment Rating by Type: Quality Rating (S&P) Investments in fixed income securities are subject to the risk that
Fair Value AAA AA A BBB Unrated changes in interest rates will adversely affect the fair value of the US Government Issues $ 5,219 $ - $ 4,354 $ - $ - $ 865 Money Market Funds 31,049 31,049 investments. UO policies and procedures permit Tier 1 cash and Corporate Issues 4,852 98 - 2,444 2,311 - investments a maximum duration of nine months and a maximum Equity Securities 2,604 2,604 Municipal Issues 1,100 - 1,100 - - - maturity of three years. Tier 2 of the cash and investment pool Fair Value at June 30, 2017: $ 44,825 98$ $ 5,454 2,444$ $ 2,311 $ 34,518 permits a maximum duration of three years and a maximum CUSTODIAL CREDIT RISK maturity of five years. Tier 3 of the cash and investment pool is Custodial credit risk refers to UO investments that are held by invested as a quasi-endowment, and consequently has no duration others and not registered in the UO’s or the state treasury’s or maturity limits. name. All investments are held by the UO and in the UO’s As of June 30, 2017, the UO held $11,315 in fixed income securities, name. Custodial credit risk typically occurs in repurchase including accrued interest of $143. agreements or securities lending transactions where one transfers cash to a broker-dealer in exchange for securities, Investment Maturity by Type: but a separate trustee in the name of the broker-dealer Average holds the securities. The UO does not directly participate in Fair Value Duration securities lending transactions, however, any funds on deposit US Government Issues $ 5,219 2.23 with the state treasury may be included in their securities Corporate Issues 4,852 2.42 lending program. The state treasury and the Oregon Municipal Issues 1,100 1.64 Fixed Income Investments$ 11,172 Investment Council have established policy provisions around securities lending to control this risk. See section C. Fixed Income Weighted Average Duration: 2.25 Securities Lending in this note for additional information. UO investment policy and procedures permit repurchase FAIR VALUE agreements but none existed as of June 30, 2017. The UO had the following recurring fair value measurements as of June 30, 2017: CONCENTRATION OF CREDIT RISK Fair Value Measurements Using Concentration of credit risk refers to potential losses if total Quoted investments are concentrated with one or few issuers. Prices in Active Significant For the year ended June 30, 2017 the UO held investments Markets for Other Significant Identical Observable Unobservable greater than or equal to 5 percent of total investments with Assets Inputs Inputs June 30, 2017 (Level 1) (Level 2) (Level 3) the following issuers: Investments by Fair Value Level US Treasury Securities $ 5,279 865$ $ 4,414 $ - Money Market Funds 31,049 31,049 - - Corporate bonds 4,923 - 4,923 - Issuer Amount % Equity Securities 2,604 - 2,604 - Municipal Obligations 1,113 - 1,113 - T3 LLC $ 60,946 80% Private Equity Securities 4,068 - - 4,068 Total Investments by Fair Value Level 49,036 31,914 13,054 4,068
Investments Measured at Net Asset Value (NAV) For the year ended June 30, 2016 the UO held investments Limited Partnerships 27,321 greater than or equal to 5 percent of total investments with Total Investments Measured at Fair Value $ 76,357 the following issuers:
Issuer Amount % Agribank FBC $ 2,104 7 FHLMC 2,016 7 FNMA 1,451 5 Federal Home Loan Banks 2,429 9 John Deere Capital Corp 1,849 7 Province of Quebec 2,171 8 JP Morgan Venture Captial IV 2,804 10
28 | University of Oregon Notes to the Financial Statements For the Year Ended June 30, 2017 (dollars in thousands)
The UO had the following recurring fair value measurements the bank equal to 25 percent of the Certificates of Participation as of June 30, 2016: provided by the bank. Fair Value Measurements Using
Quoted The cash collateral of OSTF securities on loan was invested in a Prices in Active Significant Short-Term Investment Fund (STIF) maintained by the custodial Markets for Other Significant Identical Observable Unobservable agent, into US agency securities and corporate notes. The Assets Inputs Inputs June 30, 2016 (Level 1) (Level 2) (Level 3) investments were held by a third-party custodian in the state’s Investments by Fair Value Level US Treasury Securities $ 7,984 901$ 7,083 $ - name. The STIF is not rated by a nationally recognized statistical Corporate bonds 9,945 - 9,945 - Municipal Obligations 1,968 - 1,968 - rating organization, although the STIF’s portfolio rules provide Foreign Issues 4,108 - 4,108 - minimum requirements with respect to the credit quality of the STIF. Private Equity Securities 4,377 - - 4,377 Total Investments Measured at Fair Value $ 28,382 901$ $ 23,104 $ 4,377 The state treasurer and borrowers maintain the right to terminate Investments classified in Level 1 of the fair value hierarchy all securities lending transactions on demand. As a consequence, are valued using prices quoted in active markets for those the maturities of investments made with the cash collateral investments. Investments classified in Level 2 of the fair value generally do not match the maturities of the securities loans. hierarchy are valued using a matrix pricing technique. Matrix pricing is used to value securities based on the securities’ 3. ACCOUNTS RECEIVABLE relationship to benchmark quoted prices. Investments Accounts receivable, including amounts due from the UO classified in Level 3 are valued using a market comparable Foundation, comprised the following: companies techniques. Limited partnerships are valued using June 30, June 30, the net asset value practical expedient. 2017 2016 C. Securities Lending Student Tuition and Fees $ 28,155 $ 25,853 In accordance with the state treasury investment policies, the Auxiliary Enterprises and Other 9,892 10,554 Operating Activities state treasurer participates in securities lending transactions. The Federal Grants and Contracts 7,192 7,898 state treasurer has authorized its custodian to act as its agent in Component Unit 11,229 10,428 the lending of UO and OSTF securities pursuant to a form of loan State, Other Government, and Private 5,275 2,848 agreement, in accordance with OSTF investment policies. There Gifts, Grants and Contracts have been no significant violations of the provisions of securities Other 17,405 16,647 lending agreements during fiscal years 2017 and 2016. 79,148 74,228 Less: Allowance for Doubtful Accounts (10,433) (10,194) The state treasurer’s securities lending agent lent short-term Accounts Receivable, Net $ 68,715 $ 64,034 and fixed income securities and received as collateral US dollar- denominated cash. Borrowers were required to deliver cash 4. NOTES RECEIVABLE collateral for each loan equal to not less than 102 percent of the Student loans made through the Federal Perkins Loan market value of the loaned security. The state treasurer did not Program comprise substantially all of the federal student loans impose any restrictions during the year on the amount of the loans receivable at June 30, 2017. The program is primarily funded that the securities lending agent made on its behalf. The state through interest earnings and repayment of loans. Under treasurer is fully indemnified by its securities lending agent against certain conditions, the repayment of loans can be forgiven at losses due to borrower default. There were no losses during the differing annual rates ranging from 10 to 100 percent. year from the failure of borrowers to return loaned securities. Federal Perkins loans deemed uncollectible are assigned to the The custodian is authorized by the securities lending agreement US Department of Education for collection. The UO has provided to invest cash collateral received for UO securities on loan in the an allowance for uncollectible loans, which in management’s OSTF. At June 30, 2017, and 2016, the OSTF comprised commercial opinion will absorb loans that will ultimately be written off. paper, US agency securities, time certificates of deposit (TCDs), and corporate notes. The fund’s rules provide that broker-dealers Notes receivable comprised the following: June 30, 2017 June 30, 2016 meet certain qualifications, and that investments are delivered Current Noncurrent Total Current Noncurrent Total to and held by a third-party custodian, which holds the funds’ Institutional and Other Student Loans $-1,593 $ $ 1,593 $-1,903 $ $ 1,903 securities in the state’s name. The TCDs, comprising approximately Federal Student Loans 3,205 18,017 21,222 3,209 17,785 20,994 4,798 18,017 22,815 5,112 17,785 22,897 one percent of total OSTF investments, are exposed to custodial Less: Allowance for Doubtful Accounts (388) (881) (1,270) (427) (941) (1,368) credit risk. The TCDs are collateralized by securities pledged by Notes Receivable, Net 4,410$ 17,136$ $ 21,545 4,685$ 16,844$ $ 21,529
2017 | Annual Financial Report | 29 Notes to the Financial Statements For the Year Ended June 30, 2017 (dollars in thousands)
5. CAPITAL ASSETS The following schedule reflects the changes in capital assets:
Balance Transfer Retire. Balance Transfer Retire. Balance June 30, Completed and June 30, Completed and June 30, 2015 Additions Assets Adjust. 2016 Additions Assets Adjust. 2017
Capital Assets, Non-depreciable/Non-amortizable: Land $ 51,000 $ 4,130 $ - $ - $ 55,130 $ - $ 3,150 $ - $ 58,280 Capitalized Collections 39,926 1,490 - (44) 41,372 1,247 - (26) 42,593 Construction in Progress 57,358 118,221 (43,650) - 131,929 119,658 (167,010) (26) 84,551 Intangible Assets in Progress 95 50 (145) - - 479 - - 479 Total Capital Assets, Non-depreciable/Non-amortizable 148,379 123,891 (43,795) (44) 228,431 121,384 (163,860) (52) 185,903
Capital Assets, Depreciable/ Amortizable: Equipment 112,166 9,738 1,332 (3,404) 119,832 10,827 5 (3,179) 127,485 Library Materials 128,621 2,347 - (508) 130,460 2,138 - (721) 131,877 Buildings 1,433,258 38,469 36,855 (5,291) 1,503,291 - 162,441 - 1,665,732 Land Improvements 37,312 - 4,519 - 41,831 - 76 - 41,907 Improvements Other Than Buildings 11,220 - - - 11,220 - - - 11,220 Infrastructure 49,660 292 944 - 50,896 - 1,338 - 52,234 Intangible Assets 15,219 - 145 - 15,364 - - - 15,364 Total Capital Assets, Depreciable/Amortizable 1,787,456 50,846 43,795 (9,203) 1,872,894 12,965 163,860 (3,900) 2,045,819
Less Accumulated Depreciation/ Amortization for: Equipment (83,944) (8,856) - 3,153 (89,647) (9,004) - 3,075 (95,576) Library Materials (115,341) (2,814) - 504 (117,651) (2,699) - 686 (119,664) Buildings (386,076) (40,311) - 2,279 (424,108) (44,844) - (6) (468,958) Land Improvements (15,817) (2,402) - - (18,219) (2,617) - - (20,836) Improvements Other Than Buildings (9,082) (376) - - (9,458) (337) - - (9,795) Infrastructure (25,264) (1,992) - - (27,256) (2,043) - - (29,299) Intangible Assets (7,918) (619) - - (8,537) (611) - - (9,148) Total Accumulated Depreciation/ Amortization (643,442) (57,370) - 5,936 (694,876) (62,155) - 3,755 (753,276) Total Capital Assets, Net $ 1,292,393 $ 117,367 $ - $ (3,311) $ 1,406,449 $ 72,194 $ - $ (197) $ 1,478,446
Capital Assets Summary Capital Assets, Non-depreciable/ Non-amortizable $ 148,379 $ 123,891 $ (43,795) $ (44) $ 228,431 $ 121,384 $ (163,860) $ (52) $ 185,903 Capital Assets, Depreciable/ Amortizable 1,787,456 50,846 43,795 (9,203) 1,872,894 12,965 163,860 (3,900) 2,045,819 Total Cost of Capital Assets 1,935,835 174,737 - (9,247) 2,101,325 134,349 - (3,952) 2,231,722 Less Accumulated Depreciation/ Amortization (643,442) (57,370) - 5,936 (694,876) (62,155) - 3,755 (753,276) Total Capital Assets, Net $ 1,292,393 $ 117,367 $ - $ (3,311) $ 1,406,449 $ 72,194 $ - $ (197) $ 1,478,446
6. ACCOUNTS PAYABLE AND ACCRUED 7. OPERATING LEASES LIABILITIES A. Receivables—Revenues Accounts payable and accrued liabilities comprised the The UO receives income for land, property, and equipment following: that is leased to external entities. Rental income received June 30, June 30, from leases was $2,766 and $2,393 for fiscal years 2017 and 2017 2016 2016, respectively. The original cost of assets leased, net of Services and Supplies $ 26,061 $ 29,679 depreciation, was $31,483 and $26,532 for fiscal years 2017 Accrued Interest 14,870 1,371 and 2016, respectively. Minimum future lease revenues for noncancelable operating leases at June 30, 2017, were: Contract Retainage Payable 3,702 4,388 $ 44,633 $ 35,438
30 | University of Oregon Notes to the Financial Statements For the Year Ended June 30, 2017 (dollars in thousands)
For the year ending June 30, B. Payables—Expenses 2018 $ 1,516 The UO leases building and office facilities and other 2019 1,219 equipment under operating leases. Total costs for such leases 2020 791 and rents were $7,518 and $6,292 for fiscal years 2017 and 2021 636 2016, respectively. At June 30, 2017, minimum future lease 2022 529 payments for noncancelable operating leases were: 2023-2027 1,729 2028-2032 1,181 For the year ending June 30, 2033-2037 805 2018 $ 4,458 2038-2042 731 2019 3,181 2043-2047 834 2020 2,955 2048-2052 208 2021 2,593 2053-2057 83 2022 2,088 2058-2062 83 2023-2027 8,417 2063 and After 75 2028-2032 3,082 Total Minimum Operating Lease Revenues$ 10,420 Total Minimum Operating Lease Payments$ 26,776
2017 | Annual Financial Report | 31 Notes to the Financial Statements For the Year Ended June 30, 2017 (dollars in thousands)
8. LONG-TERM LIABILITIES Long-term liability activity was as follows:
Balance Balance July 1, June 30, Amount Due Long-Term 2016 Additions Reductions 2017 Within One Year Portion Long-Term Payment Obligations State of Oregon Note Payable $ 507,839 $ - $ (6,002) $ 501,837 $ 18,420 $ 483,417 University of Oregon Revenue Bonds 129,770 - (612) 129,158 669 128,489 Oregon Department of Energy Loans (SELP) 40,190 - (1,767) 38,423 1,882 36,541 Capital Leases 50,691 112 (1,020) 49,783 1,066 48,717 Total Long-Term Payment Obligations 728,490 112 (9,401) 719,201 22,037 697,164
Other Noncurrent Liabilities PERS re-SLGRP Pooled Liability 28,691 - (1,334) 27,357 1,334 26,023 Compensated Absences 20,157 6,940 (5,279) 21,818 19,263 2,555 Other Postemployment Benefits 6,256 216 - 6,472 -6,472 Employee Deferred Compensation 11,159 1,567 (2,253) 10,473 1,746 8,727 Employee Termination Liabilities 589 13,747 (13,469) 867 867 - Unearned Revenue 2,221 - (117) 2,104 117 1,987 Total Other Noncurrent Liabilities 69,073 22,470 (22,452) 69,091 23,327 45,764 Total Long-Term Liabilities $ 797,563 $ 22,582 $ (31,853) $ 788,292 $ 45,364 $ 742,928
Balance Balance July 1, June 30, Amount Due Long-Term 2015 Additions Reductions 2016 Within One Year Portion Long-Term Payment Obligations State of Oregon Note Payable $ 535,325 $ 7,699 $ (35,185) $ 507,839 $ 2,362 $ 505,477 University of Oregon Revenue Bonds 57,743 72,285 (258) 129,770 612 129,158 Oregon Department of Energy Loans (SELP) 41,844 - (1,654) 40,190 1,749 38,441 Capital Leases 8,604 43,512 (1,425) 50,691 1,004 49,687 Total Long-Term Payment Obligations 643,516 123,496 (38,522) 728,490 5,727 722,763
Other Noncurrent Liabilities PERS re-SLGRP Pooled Liability 29,718 - (1,027) 28,691 1,026 27,665 Compensated Absences 19,022 13,732 (12,597) 20,157 12,365 7,792 Other Postemployment Benefits 7,010 - (754) 6,256 -6,256 Employee Deferred Compensation 12,096 1,655 (2,592) 11,159 2,015 9,144 Employee Termination Liabilities 919 - (330) 589 315 274 Unearned Revenue 2,343 - (122) 2,221 117 2,104 Total Other Noncurrent Liabilities 71,108 15,387 (17,422) 69,073 15,838 53,235 Total Long-Term Liabilities $ 714,624 $ 138,883 $ (55,944) $ 797,563 $ 21,565 $ 775,998
32 | University of Oregon Notes to the Financial Statements For the Year Ended June 30, 2017 (dollars in thousands)
The schedule of principal and interest payments for UO long-term payment obligations is as follows:
Revenue Total For the Year Ending June 30, State Note Bonds SELP Capital Leases Payments Principal Interest 2018 $ 43,362 $ 5,500 $ 3,548 $ 3,336 $ 55,746 $ 21,366 $ 34,380 2019 42,725 5,500 3,549 3,335 55,109 21,428 33,681 2020 42,380 5,500 3,548 3,336 54,764 21,797 32,967 2021 41,027 5,500 3,549 3,336 53,412 22,193 31,219 2022 39,596 5,500 3,548 3,320 51,964 21,894 30,070 2023-2027 194,904 27,500 17,743 16,545 256,692 123,088 133,604 2028-2032 174,505 27,500 14,905 16,546 233,456 131,404 102,052 2033-2037 152,851 27,500 2,228 14,097 196,676 127,002 69,674 2038-2042 81,079 27,500 - 12,465 121,044 81,672 39,372 2043-2047 10,790 129,500 - 8,518 148,808 128,199 20,609
Total Future Payment Obligations 823,219 267,000 52,618 84,834 1,227,671 $ 700,043 $ 527,628 Less: Interest Component of Future Payments (321,382) (157,000) (14,195) (35,051) (527,628) Principal Portion of Future Payments 501,837 110,000 38,423 49,783 700,043 Adjusted by: Unamortized Bond Premiums - 19,158 - - 19,158 Total Long-Term Payment Obligations $ 501,837 $ 129,158 $ 38,423 $ 49,783 $ 719,201
The State of Oregon has issued various debt instruments to UO’s portion of the 2017 I bond sale was used for refunding fund capital projects at the UO. These debt instruments include previously held debt within the ADM and reduced the state note general obligation bonds under articles XI-F(1), XI-G, and XI-Q payable by $3,640. See section D. Defeased Debt in this note. of the Oregon Constitution, certificates of participation (COPs), and lottery bonds. As of July 1, 2014, all of the state • XI-G tax-exempt bonds series 2017 L of $149,220, with effective debt instruments became part of a new Agreement for Debt rates ranging from 0.90 to 3.08 percent, are due serially through Management (ADM). The UO also borrows funds from the August 1, 2042, for capital construction. The UO’s expected Oregon Department of Energy. Principal and interest amounts portion of the 2017 L bond sale was $2,500 for Chapman Hall due relating to the UO’s share of these debt issuances are renovation, $6,250 for Klamath Hall renovation, and $17,000 for payable to the state. In addition, the UO has independently Tykeson Hall construction. The UO will receive these amounts issued general revenue bonds to fund capital projects. on a reimbursement basis as capital grants, and the state will be responsible for all principal and interest payments. A. Agreement for Debt Management (ADM) • XI-Q tax-exempt bonds series 2017 A of $238,415, with In connection with the UO becoming an independent public effective rates ranging from 0.90 to 3.11 percent, are due entity with statewide purposes and missions, the UO entered serially through 2037 for capital construction. The UO’s into an ADM dated July 1, 2014, with the state and amended expected portion of the 2017 A bond sale was $5,500 for and restated it July 1, 2015. It stipulates that all of the principal Chapman Hall and $6,000 for Klamath Hall renovation. The and interest associated with general obligation bonds under UO will receive these amounts on a reimbursement basis as article XI-F(1) bonds, XI-Q bonds, and COPs, that were deemed capital grants and the state will be responsible for all principal university-paid as of July 1, 2014, are to be paid to the state from and interest payments. UO revenues and are displayed as State of Oregon Note Payable. B. General Revenue Bonds During the fiscal year ended June 30, 2017, the state issued bonded indebtedness applicable to the UO as follows: No new general revenue bonds were issued during fiscal year 2017. During the fiscal year ended June 30, 2016, the UO issued • XI-F(1) tax exempt bond series 2017 I of $125,835, with tax exempt general revenue bond series 2016 A of $60,000, with effective rates ranging from 0.94 to 3.38 percent, are due net proceeds of $72,485, due April 1, 2046, with an effective rate serially through 2037 for refunding. The ADM indicates that of 2.63 percent, for capital construction. These bonds have been any savings due to refunding of outstanding bonds that were rated Aa2 by Moody’s. Interest payments are due semiannually. consolidated into the ADM will be allocated to the UO. The
2017 | Annual Financial Report | 33 Notes to the Financial Statements For the Year Ended June 30, 2017 (dollars in thousands)
General revenue bonds are payable solely from and secured contracts. The future payout of this liability extends for less by a pledge of general revenues, less amounts required when than one fiscal year and is paid monthly. These liabilities due under the ADM. The amounts pledged were $632,964 and were calculated using a discounted present value of expected $613,915 as of June 30, 2017 and 2016, respectively. Pledged future benefit payments, with an annual discount rate ranging revenues include all tuition, fees, charges, rents, revenues, from 0.60 to 0.69 percent. and other income (including interest and dividends) of the H. Capital Leases university, if and to the extent such funds are not restricted in their use by law, regulation, or contract. The UO has acquired assets under capital lease agreements. The cost of UO assets held under capital leases totaled C. Oregon Department of Energy Loans $52,301 and $52,226 as of June 30, 2017 and 2016, The UO has entered into loan agreements with the State of respectively. Accumulated depreciation of leased equipment Oregon Department of Energy (DOE) Small Scale Energy and buildings totaled $2,758 and $1,517 for June 30, 2017 and Loan Program (SELP) for energy conservation projects at the 2016, respectively. UO. The UO makes monthly loan payments (principal and The lease purchase (capital lease) contracts run through fiscal interest) to the DOE in accordance with the loan agreements. year 2046. The capital leases are recorded at the present SELP loans, with effective rates ranging from 3.90 percent to value of the minimum future lease payments at the inception 5.03 percent, are due through 2034. date. The weighted average of interest rates on capitalized D. Defeased Debt leases is 4.60 percent. The UO participates in a debt portfolio managed by the state I. State and Local Government Rate Pool and subject to the ADM. When fiscally appropriate, the state Prior to the formation of the PERS State and Local will sell bonds and use the proceeds to defease other debt. Government Rate Pool (SLGRP), the state and community During the year ended June 30, 2017, the state issued $125,835 colleges were pooled together in the State and Community in XI-F(1) bonds to refund $136,105 of XI-F(1) bonds. The UO’s College Pool (SCCP), and local government employers portion of the refunding resulted in a difference between the participated in the Local Government Rate Pool (LGRP). These reacquisition price and the net carrying value of the state two pools combined to form the SLGRP effective January 1, note payable of $3,640. The refunding was undertaken to 2002, at which time a transitional, pre-SLGRP liability was reduce total debt service payments (principal and interest) created. The pre-SLGRP liability is essentially a debt owed over the next 27 years by $5,652 and resulted in an economic to the SLGRP by the SCCP employers. The balance of the gain of $3,659. pre-SLGRP pooled liability attributable to the state is being amortized over the period ending December 31, 2027. The E. Financial Guarantees liability is allocated by the state, based on salaries and wages, The UO is a state governmental entity, engaged only in to all proprietary funds and the government-wide reporting business-type activities. As of June 30, 2017, no amounts fund in the Oregon Comprehensive Annual Financial Report. have directly been paid by the state for the UO’s financial obligations, both cumulatively and during the current Interest expense was paid in the amount of $2,031 and $2,016 reporting period. for June 30, 2017 and 2016, respectively. Principal payments of $1,334 and $1,026 were applied to the liability for June 30, F. Employee Deferred Compensation 2017 and 2016, respectively. The UO has a Section 415(m) excess benefit plan. Section 415(m) plans are unfunded plans and used as a means of 9. INVESTMENT ACTIVITY deferring taxation on regular pension plan contributions Investment activity detail is as follows: by public employees in excess of the limitations otherwise imposed on the Oregon Public Universities Tax-Deferred 2017 2016 Investment 403(b) plan. The 415(m) plan is offered to Net Appreciation of Investments $ (126) $ (209) highly compensated employees whose contributions would Royalties and Technology Transfer Income 12,050 12,932 otherwise be limited by Internal Revenue Code Section 415. Gain (Loss) on Sale of Investment 626 273 Investment Earnings 3,604 2,993 G. Employee Termination Liabilities Total Investment Activity $ 16,154 $ 15,989 The UO is making liquidated damages payments to former employees relating to early termination of their employment
34 | University of Oregon Notes to the Financial Statements For the Year Ended June 30, 2017 (dollars in thousands)
10. GOVERNMENT APPROPRIATIONS A member is considered vested and will be eligible at Government appropriations comprised the following: minimum retirement age for a service retirement allowance June 30, 2017 if he or she has had a contribution in each of five calendar years or has reached at least 50 years of age before ceasing General Debt employment with a participating employer (age 45 for police Operations Service Total and fire members). General service employees may retire State General Fund $ 66,000 $ 2,017 $ 68,017 after reaching age 55. Police and fire members are eligible State Lottery Funding 515 - 515 Total Appropriations $ 66,515 $ 2,017 $ 68,532 after reaching age 50. Tier One general service employee benefits are reduced if retirement occurs prior to age 58
June 30, 2016 with fewer than 30 years of service. Police and fire member benefits are reduced if retirement occurs prior to age 55 with General Debt fewer than 25 years of service. Tier Two members are eligible Operations Service Total for full benefits at age 60. State General Fund $ 64,030 $ 2,017 $ 66,047 State Lottery Funding 515 - 515 2. Death Benefits. Upon the death of a nonretired member, Total Appropriations $ 64,545 $ 2,017 $ 66,562 the beneficiary receives a lump-sum payout of the member’s account balance (accumulated contributions and interest). 11. EMPLOYEE RETIREMENT PLANS In addition, the beneficiary will receive a lump-sum payment The University of Oregon offers various retirement plans to from employer funds equal to the account balance, provided qualified employees as described below. one or more of the following conditions are met:
OREGON PUBLIC EMPLOYEES RETIREMENT SYSTEM– • Member was employed by a PERS employer at the time of OREGON PUBLIC SERVICE RETIREMENT PLAN death,
General information about the Pension Plan • Member died within 120 days after termination of Name of the pension plan: The Oregon Public Employees PERS-covered employment, Retirement System (PERS) is a cost-sharing multiple-employer • Member died as a result of injury sustained while employed in defined benefit plan. a PERS-covered job, or Plan description: Eligible employees of the UO, except those who select the Optional Retirement Plan (ORP), are provided • Member was on an official leave of absence from a with pensions through PERS. All the benefits of PERS are PERS-covered job at the time of death. established by the Oregon Legislative Assembly pursuant to 3. Disability Benefits. A member with 10 or more years of Oregon Revised Statute (ORS) Chapters 238 and 238A. The creditable service who becomes disabled from other than ORS Chapter 238 Defined Benefit Pension Plan is closed to duty-connected causes may receive a non-duty disability new members hired on or after August 29, 2003. PERS issues benefit. A disability resulting from a job-incurred injury or a publicly available financial report that can be obtained at illness qualifies a member for disability benefits regardless of http://www.oregon.gov/pers/Pages/Financials/Actuarial- the length of PERS-covered service. Upon qualifying for either Financial-Information.aspx. a non-duty or duty disability, service time is computed to age Benefits provided under Chapter 238—Tier One/Tier Two 58 (55 for police and fire members) when determining the monthly benefit. 1. Pension Benefits. The PERS retirement allowance is payable monthly for life. It may be selected from 13 retirement 4. Benefit Changes After Retirement. Members may choose benefit options. These options include survivorship benefits and to continue participation in a variable equities investment account lump-sum payouts. The basic benefit is based on years of service after retiring and may experience annual benefit fluctuations due and final average salary. A percentage (2.0 percent for police and to changes in the market value of equity investments. fire employees, 1.67 percent for general service employees) is Under ORS 238.360 monthly benefits are adjusted annually multiplied by the number of years of service and the final average through cost-of-living adjustments (COLA). The COLA is capped at salary. Benefits may also be calculated under either a formula plus 2.0 percent. annuity (for members who were contributing before August 21, 1981) or a money match computation if a greater benefit results.
2017 | Annual Financial Report | 35 Notes to the Financial Statements For the Year Ended June 30, 2017 (dollars in thousands)
Benefits provided under Chapter 238A—OPSRP Pension Employer contribution rates during fiscal years 2017 and 2016 were Program (OPSRP DB) based on the December 31, 2013, actuarial valuation. The rates, based on a percentage of payroll, first became effective July 1, 2015. 1. Pension Benefits. The ORS 238A Defined Benefit Pension Program provides benefits to members hired on or after ACTUARIAL VALUATIONS August 29, 2003. This portion of the OPSRP provides a life The employer contribution rates effective July 1, 2015, through pension funded by employer contributions. Benefits are June 30, 2017, were set using the entry age normal actuarial calculated with the following formula for members who attain cost method. For the Tier One/Tier Two component of the normal retirement age: PERS Defined Benefit Plan, this method produced an employer Police and fire: 1.8 percent is multiplied by the number contribution rate consisting of (1) an amount for normal cost of years of service and the final average salary. Normal (the estimated amount necessary to finance benefits earned retirement age for police and fire members is age 60 or age 53 by the employees during the current service year), and (2) an with 25 years of retirement credit. To be classified as a police amount for the amortization of unfunded actuarial accrued and fire member, the individual must have been employed liabilities, which are being amortized over a fixed period with continuously as a police and fire member for at least five new unfunded actuarial accrued liabilities being amortized over years immediately preceding retirement. 20 years. For the OPSRP Pension Program component of the PERS Defined Benefit Plan, this method produced an employer General service: 1.5 percent is multiplied by the number contribution rate consisting of (a) an amount for normal cost (the of years of service and the final average salary. Normal estimated amount necessary to finance benefits earned by the retirement age for general service members is age 65, or age employees during the current service year), (b) an amount for the 58 with 30 years of retirement credit. amortization of unfunded actuarial accrued liabilities, which are A member of the OPSRP pension program becomes vested being amortized over a fixed period with new unfunded actuarial on the earliest of the following dates: the date the member accrued liabilities being amortized over 16 years. completes 600 hours of service in each of five calendar years, the date the member reaches normal retirement age, or, if the pension program is terminated, the date on which termination becomes effective. 2. Death Benefits. Upon the death of a nonretired member, the spouse or other person who is constitutionally required to be treated in the same manner as the spouse, receives for life 50 percent of the pension that would otherwise have been paid to the deceased member. 3. Disability Benefits. A member who has accrued 10 or more years of retirement credits before the member becomes disabled, or a member who becomes disabled due to job- related injury shall receive a disability benefit of 45 percent of the member’s salary determined as of the last full month of employment before the disability occurred. 4. Benefit Changes after Retirement. Under ORS 238A.210 monthly benefits are adjusted annually through cost-of-living adjustments. The COLA is capped at 2.0 percent.
CONTRIBUTIONS PERS funding policy provides for monthly employer contributions at actuarially-determined rates. These contributions, expressed as a percentage of covered payroll, are intended to accumulate sufficient assets to pay benefits when due. This funding policy applies to the PERS Defined Benefit Plan and the Other Postemployment Benefit Plans.
36 | University of Oregon Notes to the Financial Statements For the Year Ended June 30, 2017 (dollars in thousands)
Valuation Date December 31, 201 Measurement Date June 30, 2016 Experience Study Report 2014, published September 2015 Actuarial Cost Method Entry Age Normal Asset Valuation Method Market value of assets Actuarial Assumptions: Inflation Rate 2.50 percent Long-term Expected Rate of Return 7.50 percent Discount Rate 7.50 percent Projected Salary Increases 3.50 percent Blend of 2.00% COLA and graded COLA (1.25%/0.15%) in accordance with Moro decision; blend based on Cost of Living Adjustments (COLA) service. Healthy retirees and beneficiaries: RP-2000 Sex-distinct, generational per Scale BB, with collar adjustments and set-backs as described in the valuation. Active members: Mortality Mortality rates are a percentage of healthy retiree rates that vary by group, as described in the valuation. Disabled retirees: Mortality rates are a percentage (70% for males, 95% for females) of the RP-2000 Sex-distinct, generational per Scale BB, disabled mortality table.
Actuarial Methods and Assumptions Discount Rate Actuarial valuations of an ongoing plan involve estimates The discount rate used to measure the total pension liability was of the value of projected benefits and assumptions about 7.50 percent for the defined benefit pension plan. The projection the probability of events far into the future. Actuarially- of cash flows used to determine the discount rate assumed that determined amounts are subject to continual revision as contributions from plan members and those of the contributing actual results are compared to past expectations and new employers are made at the contractually required rates, as estimates are made about the future. Experience studies are actuarially determined. Based on those assumptions, the pension performed as of December 31 of even numbered years. The plan’s fiduciary net position was projected to be available to methods and assumptions shown above are based on the make all projected future benefit payments of current plan 2014 experience study, which reviewed experience for the members. Therefore, the long-term expected rate of return on four-year period ending on December 31, 2014. pension plan investments for the defined benefit pension plan was applied to all periods of projected benefit payments to An actuarial valuation of the system is performed every two determine the total pension liability. years to determine the level of employer contributions. The most recently completed valuation was performed as of Depletion Date Projection December 31, 2015. The valuation included projected payroll GASB Statement No. 67, Financial Reporting for Pension growth at 3.50 percent. The pension benefit obligation is Plans—An Amendment of GASB Statement No. 25, generally a standardized disclosure measure of the present value of requires that a blended discount rate be used to measure the pension benefits. It is adjusted for the effects of projected total pension liability (the actuarial accrued liability calculated salary increases estimated to be payable in the future as a using the individual entry age normal cost method). The result of employee service to date. The actuarial accrued long-term expected return on plan investments may be liability at December 31, 2015, for PERS and OPSRP, used to discount liabilities to the extent that the plan’s determined through an actuarial valuation performed as fiduciary net position is projected to cover benefit payments of that date, was $77.1 billion. PERS and OPSRP net assets and administrative expenses. A 20-year high quality (AA/ available for benefits on that date (valued at market) were Aa or higher) municipal bond rate must be used for periods $62.0 billion. Following the completion of the December 31, where the fiduciary net position is not projected to cover 2015 actuarial valuation, the PERS Board adopted several benefit payments and administrative expenses. Determining assumption changes, including lowering the investment the discount rate under GASB 67 will often require that return assumption from 7.75 to 7.50 percent. the actuary perform complex projections of future benefit Information for the UO as a standalone entity is not payments and asset values. GASB 67 (paragraph 43) does available.
2017 | Annual Financial Report | 37 Notes to the Financial Statements For the Year Ended June 30, 2017 (dollars in thousands) allow for alternative evaluations of projected solvency, if the asset classes in which the plan was invested at that time such evaluation can reliably be made. GASB 67 does not based on the OIC long-term target asset allocation. The contemplate a specific method for making an alternative OIC’s description of each asset class was used to map the evaluation of sufficiency; it is left to professional judgment. target allocation to the asset classes shown below. Each asset class assumption is based on a consistent set of underlying The following circumstances justify an alternative evaluation assumptions, and includes adjustment for the inflation of sufficiency for PERS: assumption. These assumptions are not based on historical • PERS has a formal written policy to calculate an Actuarially returns, but instead are based on a forward-looking capital Determined Contribution (ADC), which is articulated in the market economic model. actuarial valuation report.
• The ADC is based on a closed, layered amortization period, Compound Annual which means that payment of the full ADC each year will Asset Class Target (Geometric) Return bring the plan to a 100 percent funded position by the end Core Fixed Income 8.00% 4.00% of the amortization period if future experience follows Short-Term Bonds 8.00 3.61 Bank/Leveraged Loans 3.00 5.42 assumption. High Yield Bonds 1.00 6.20 • GASB 67 specifies that the projections regarding future Large/Mid Cap US Equities 15.75 6.70 Small Cap US Equities 1.31 6.99 solvency assume that plan assets earn the assumed rate Micro Cap US Equities 1.31 7.01 of return and there are no future changes in the plan Developed Foreign Equities 13.13 6.73 provisions or actuarial methods and assumptions, which Emerging Market Equities 4.12 7.25 means that the projections would not reflect any adverse Non-US Small Cap Equities 1.88 7.22 Private Equity 17.50 7.97 future experience which might impact the plan’s funded Real Estate (Property) 10.00 5.84 position. Real Estate (REITS) 2.50 6.69 Based on these circumstances, it is the PERS independent Hedge Fund of Funds - Diversified 2.50 4.64 actuary’s opinion that the detailed depletion date projections Hedge Fund - Event-driven 0.63 6.72 Timber 1.88 5.85 outlined in GASB 67 would clearly indicate that the fiduciary Farmland 1.88 6.37 net position is always projected to be sufficient to cover Infrastructure 3.75 7.13 benefit payments and administrative expenses. Commodities 1.88 4.58
Assumed Asset Allocation Assumed Inflation - Mean 2.50%
Asset Low High OIC Sensitivity of the UO’s Proportionate Share of the Net Class/Strategy Range Range Target Pension Liability to Changes in the Discount Rate Cash 0.0 % 3.0 % 0.0 % The following presents the UO’s proportionate share of the Debt Securities 15.0 % 25.0 % 20.0 % Public Equity 32.5 % 42.5 % 37.5 % net pension liability calculated using the discount rate of 7.50 Private Equity 13.5 % 21.5 % 17.5 % percent, as well as what the UO’s proportionate share of the Real Estate 9.5 % 15.5 % 12.5 % net pension liability would be if it were calculated using a discount rate that is 1-percentage-point lower (6.50 percent) or Alternative Equity 0.0 % 12.5 % 12.5 % 1-percentage-point higher (8.50 percent) than the current rate: Opportunity 0.0 % 3.0 % 0.0 % Portfolio 1% Decrease Discount Rate 1% Increase (6.50%) (7.50%) (8.50%) Total 100.0 % Proportionate share of $ 462,184 $ 286,241 $ 139,184 the net pension liability Long-Term Expected Rate of Return To develop an analytical basis for the selection of the long- Pension Plan Fiduciary Net Position term expected rate of return assumption, in July 2015 the Detailed information about the pension plan’s fiduciary net PERS Board reviewed long-term assumptions developed by position is available in the separately issued PERS financial both Milliman’s capital market assumptions team and the report. Oregon Investment Council’s (OIC) investment advisors. The table below shows Milliman’s assumptions for each of
38 | University of Oregon Notes to the Financial Statements For the Year Ended June 30, 2017 (dollars in thousands)
Pension Liabilities, Pension Expense, Deferred Outflows Rates of every employer have at least two major components: of Resources, and Deferred Inflows of Resources Related 1. Normal Cost Rate: The economic value is stated as a to Pensions percent of payroll for the portion of each active member’s At June 30, 2017, the UO reported a liability of $286,241 total projected retirement benefit that is allocated to the for its proportionate share of the net pension liability, and upcoming year of service. The rate is in effect for as long pension expense of $60,969. The net pension liability was as each member continues in PERS-covered employment. measured as of June 30, 2016, and the total pension liability The current value of all projected future Normal Cost Rate used to calculate the net pension liability was determined contributions is the Present Value of Future Normal Costs by an actuarial valuation as of December 31, 2014, and rolled (PVFNC). The PVFNC represents the portion of the projected forward to June 30, 2016. At June 30, 2016, the UO reported long-term contribution effort related to future service. a liability of $94,966 for its proportionate share of the net pension liability, and pension expense of $89,573. The net 2. UAL Rate: If system assets are less than the actuarial pension liability was measured as of June 30, 2015, and the liability, an Unfunded Actuarial Liability (UAL) exists. UAL can total pension liability used to calculate the net pension arise in a biennium when an event such as experience differing liability was determined by an actuarial valuation as of from the assumptions used in the actuarial valuation occurs. An December 31, 2013, and rolled forward to June 30, 2015. The amortization schedule is established to eliminate the UAL that UO’s proportion of the net pension liability was based on its arises in a given biennium over a fixed period of time if future projected long-term contribution effort as compared to the experience follows assumption. The UAL rate is the upcoming total projected long-term contribution effort of all employers. year’s component of the cumulative amortization schedules, At June 30, 2017 and 2016, the university’s proportion was stated as a percent of payroll. The present value of all projected 1.907 percent and 1.654 percent, respectively. Since the prior UAL rate contributions is simply the UAL itself. The UAL measurement date the UO’s proportion of the collective net represents the portion of the projected long-term contribution pension liability increased by 0.253 percent. effort related to past service. Deferred Outflows Deferred Inflows of Looking at both rate components, the projected long-term of Resources Resources contribution effort is just the sum of the PVFNC and the Differences between expected and actual $ 9,470 $ - experience UAL. The PVFNC part of the contribution effort pays for the Changes of assumptions 61,048 - value of future service while the UAL part of the contribution Net difference between projected and actual 56,549 - earnings on investments effort pays for the value of past service not already funded by Changes in proportion and differences accumulated contributions and investment earnings. between employer contributions and 7,320 2,720 proportionate share of contributions The UAL has Tier One/Tier Two and OPSRP pieces. The Tier Total (prior to post-measurement date 134,387 2,720 One/Tier Two piece is based on the employer’s Tier One/Tier contributions) Contributions made subsequent to Two pooling arrangement. The UO participates in the SLGRP. 19,886 - measurement date As a result, its Tier One/Tier Two UAL is the university’s pro- Net Deferred Outflows/(Inflows) of Resources $ 154,273 $ 2,720 rata share of the pool’s UAL. The pro-rata calculation is based on the employer’s payroll in proportion to the pool’s total Of the $154,273 reported as deferred outflows of resources, payroll. For example, if the employer’s payroll is one percent $19,886 related to pensions resulting from UO contributions of the pool’s total payroll, the employer will be allocated subsequent to the measurement date will be recognized 1 percent of the pool’s UAL. The OPSRP piece of the UAL as a reduction of the net pension liability in the year ended follows a parallel pro-rata approach, as OPSRP experience is June 30, 2018. Other amounts reported as deferred outflows mandatorily pooled at a statewide level. of resources and deferred inflows of resources related to An employer’s PVFNC depends on both the normal cost rates pensions will be recognized in pension expense (revenue) as charged on the employer’s payrolls, and on the underlying follows: demographics of the respective payrolls. For PERS funding, Pension Expense Pension Expense Pension Expense (Revenue) (Revenue) (Revenue) employers have up to three different payrolls, each with a Year Ended Due to FY15 Due to FY16 Due to FY17 Net Pension June 30 Amortizations Amortizations Amortizations Expense (Revenue) different normal cost rate: (1) Tier One/Tier Two payroll, (2) 2018 $ 17,928 $ (9,445) $ (33,446) $ (24,963) 2019 17,928 (9,445) (33,446) (24,963) OPSRP general service payroll, and (3) OPSRP police and fire 2020 (87) (9,445) (33,446) (42,978) payroll. 2021 - (347) (33,446) (33,793) 2022 - - (4,971) (4,971)
2017 | Annual Financial Report | 39 Notes to the Financial Statements For the Year Ended June 30, 2017 (dollars in thousands)
The employer’s Normal Cost Rates for each payroll are 3. Contributions. The UO has chosen to pay the employees’ combined with system-wide present value factors for each contributions to the plan. Six percent of covered payroll is payroll to develop an estimated PVFNC. The present value paid for general service and police and fire employees. factors are actuarially determined at a system level for Retirement Bond Debt Service Assessment simplicity and to allow for the PVFNC calculations to be audited in a timely, cost-effective manner. In 2003, the state legislature authorized the state to sell general obligation bonds in the amount of $2 billion to pay Because many governments in Oregon have sold pension a PERS unfunded actuarial liability. This action reduced the obligation bonds and deposited the proceeds with PERS PERS contribution rate for PERS covered employers in the (referred to as side accounts or transitional liability or state actuarial pool in November, 2003. surplus), adjustments are required. After each employer’s projected long-term contribution effort is calculated, that The Oregon Department of Administrative Services amount is reduced by the value of the employer’s side coordinates the debt service assessments to PERS employers account, transitional liability or surplus, and pre-SLGRP to cover the bond debt service payments. PERS employers liability or surplus (if any). This is done as those balances are assessed a percentage of PERS-subject payroll to fund the increase or decrease the employer’s projected long-term payments. The assessment rate is adjusted biennially over the contribution effort because side accounts are effectively life of the 24-year debt repayment schedule. prepaid contributions. The payroll assessment for the pension obligation bond began Each of the two contribution effort components are May, 2004, and is currently at a rate of 6.33 percent. The rate calculated at the employer-specific level. The sum of these is contractually required by PERS. Payroll assessments for the components across all employers is the total projected long- fiscal years ended June 30, 2017 and 2016, were $12,706 and term contribution effort. $12,808 respectively, scheduled to be paid off in 2027.
OPSRP INDIVIDUAL ACCOUNT PROGRAM (IAP) OPTIONAL RETIREMENT PLAN The 1995 Oregon Legislature enacted legislation that 1. Pension Benefits. Participants in PERS defined benefit authorized the OUS to offer a defined contribution retirement pension plans also participate in their defined contribution plan as an alternative to PERS. The state Board of Higher plan. An IAP member becomes vested on the date the Education appointed a Retirement Plan Committee to serve employee account is established or on the date the rollover as plan fiduciaries and administer the Optional Retirement account was established. If the employer makes optional Plan (ORP) and established trustees to manage plan assets employer contributions for a member, the member becomes placed with mutual funds and insurance companies. The UO vested on the earliest of the following dates: the date manages the ORP on behalf of Oregon’s public universities the member completes 600 hours of service in each of under a shared services agreement. Beginning April 1, 1996, five calendar years, the date the member reaches normal the ORP was made available to UO unclassified faculty and retirement age, the date the IAP is terminated, the date the staff who are eligible for PERS membership. Employees active member becomes disabled, or the date the active choosing the ORP may invest the employee and employer member dies. contributions in one of multiple investment companies. Upon retirement, a member of the OPSRP IAP may receive The ORP consists of four tiers. Membership under ORP Tier the amounts in his or her employee account, rollover account, One/Tier Two is determined using the same criteria as PERS. and vested employer account as a lump-sum payment or in The third tier is determined by membership under the OPSRP. equal installments over a 5-, 10-, 15-, 20-year period, or an Under the ORP tiers equivalent to PERS Tier One/Tier Two, anticipated lifespan option. Each distribution option has a two and OPSRP, the employee’s contribution rate is 6.00 percent hundred dollar minimum distribution limit. and is paid by the employer. Beginning July 1, 2014, new 2. Death Benefits. Upon the death of a nonretired member, members of ORP are members of the plan’s fourth tier. Under the beneficiary receives in a lump sum the member’s account Tier Four, the employee’s contributions to a tax deferred balance, rollover account balance, and vested employer investment account are matched by the UO up to 4.00 optional contribution account balance. If a retired member percent. Employees become fully vested in the ORP after five dies before the installment payments are completed, the years of participation in the plan. beneficiary may receive the remaining installment payments or choose a lump-sum payment.
40 | University of Oregon Notes to the Financial Statements For the Year Ended June 30, 2017 (dollars in thousands)
ORP participants who leave employment before vesting in the SUMMARY OF PENSION PAYMENTS ORP forfeit their employer share of the ORP contributions, The UO total payroll for the year ended June 30, 2017, was along with the associated investment income (losses) on $390,642 of which $303,658 was subject to retirement those contributions. The UO applies the forfeited funds in contributions. sequential order to: (1) reinstate a participant’s employer share when a participant returns to employment, (2) The following schedule lists payments made by the UO for the reimburse ORP administrative expenses, and (3) offset future fiscal year: ORP employer contributions. The employer contribution rates June 30, 2017 for the ORP are as follows: As a % of As a % of Employer Covered Employee Covered 2017 2016 Contribution Payroll Contribution Payroll ORP Tier One 23.68% 20.45% PERS/OPSRP $ 19,886 10.73% $ 12,750 4.20% ORP Tier Two 23.68% 20.45% ORP 12,290 4.05% 5,450 1.79% OPSRP Equivalent 9.29% 7.49% TIAA 45 0.01% 45 0.01% ORP Tier Four 8.00% 8.00% Total $ 32,221 14.80% $ 18,245 6.01%
The UO total payroll for the year ended June 30, 2016, was $380,325 TEACHERS INSURANCE AND ANNUITY ASSOCIATION of which $298,008 was subject to retirement contributions. PLAN (TIAA) June 30, 2016 Eligible unclassified employees who enrolled prior to 1996 As a % of As a % of may participate in the TIAA retirement program, a defined Employer Covered Employee Covered Contribution Payroll Contribution Payroll contribution plan, on all salary in excess of $4.8 per calendar year. Employee contributions are directed to PERS on the PERS/OPSRP $ 19,845 6.66% $ 12,413 4.16% first $4.8. The employer contribution to TIAA is an amount ORP 12,158 4.08% 5,359 1.80% TIAA 54 0.02% 54 0.02% sufficient to provide an annuity pension equal to the Total $ 32,057 10.76% $ 17,826 5.98% employee’s contributions. To participate in this retirement option, employees must have been hired on or before September 9, 1995. This plan was closed to new enrollment at 12. OTHER POSTEMPLOYMENT BENEFITS the time the ORP started in 1996. The UO manages the TIAA Plan Description. The UO participates in a defined benefit plan on behalf of Oregon’s public universities under a shared postemployment healthcare plan, administered by the Public services agreement. All participants of TIAA are fully vested Employees Benefit Board (PEBB), which offers medical, and there will not be any forfeitures in the future. dental, and vision benefits to eligible retired state employees and their beneficiaries. The PEBB plan is an agent multiple- SUPPLEMENTAL RETIREMENT PLAN (SRP) employer postemployment healthcare plan. Chapter 243 of The UO participates in a Section 414(d) cash balance defined the ORS assigns PEBB the authority to establish and amend benefit plan to provide, upon separation of employment, a the benefit provisions of the PEBB plan. As the administrator specific benefit value to participating presidents of Oregon’s of the PEBB plan, PEBB has the authority to determine public universities. The 414(d) plan is qualified under IRC postemployment benefit increases and decreases. PEBB does Section 401(a) as a governmental plan. As of June 30, 2017, not issue a separate, publicly available financial report. the plan was fully funded. The UO did not make contributions The PEBB plan allows UO employees retiring under PERS or to this plan for the years ended June 30, 2017 and June 30, OPSRP to continue their healthcare on a self-pay basis until 2016, respectively. The SRP has trustees who serve as plan eligible for Medicare, usually at age 65. This plan creates an fiduciaries. The UO manages the SRP on behalf of Oregon’s “implicit rate subsidy” because the healthcare insurance public universities under a shared services agreement. premiums paid by the UO for its employees is based on a blended premium of both employees and retirees combined, which is a higher premium than would have been paid for employees alone.
2017 | Annual Financial Report | 41 Notes to the Financial Statements For the Year Ended June 30, 2017 (dollars in thousands)
The PEBB plan is also offered to retirees of other Oregon state Funding Status and Funding Progress. The funded status of agencies. Therefore, the amounts presented in this note are the UO OPEB plan for June 30, 2017 and 2016, was as follows: limited to the UO’s share, estimated at 8.78 percent of the June 30, June 30, total PEBB plan costs attributable to the State of Oregon. This 2017 2016 allocation was based on health insurance premiums paid by Actuarial Accrued Liabilities $ 6,447 $ 6,616 Actuarial Value of Plan Assets - - state agencies during fiscal year 2017. Unfunded Actuarial Accrued Liability $ 6,447 $ 6,616
Funding Policy. The UO’s current policy is to pay the implicit Funded Ratio 0.00% 0.00% Covered Payroll (active plan members) $ 303,658 $ 302,093 rate subsidy on a pay-as-you-go basis. For fiscal years 2017 Unfunded Actuarial Accrued Liability as a and 2016, the UO paid healthcare insurance premiums Percentage of Covered Payroll 2.12% 2.19% of $74,457 and $72,412, respectively. The portion of the Actuarial valuations, prepared biennially, involve estimates of insurance premiums attributable to the implicit rate subsidy the value of reported amounts and assumptions about the was estimated to be $547 and $438 for the fiscal years ended probability of events in the future. Amounts determined 2017 and 2016, respectively. regarding the funded status of the plan and the annual required contributions of the employer are subject to Annual OPEB Cost and Net OPEB Obligation. The UO’s continual revision as actual results are compared to past annual OPEB expense is calculated based on the UO’s expectations and new estimates are made about the future. Annual Required Contribution (ARC), an amount actuarially determined in accordance with the parameters of GASB Accrual Methods and Assumptions. Projections of benefits Statement No. 45, Accounting and Financial Reporting by are based on the substantive plan (the plan as understood Employers for Postemployment Benefits Other Than Pensions. by the employer and plan members) and include the types The ARC represents a level of funding that, if paid on an of benefits in force at the valuation date and the pattern of ongoing basis, is projected to cover the normal cost each sharing benefit costs between the UO and the plan members year and to amortize any unfunded actuarial liabilities over a to that point. Actuarial calculations reflect a long-term period not to exceed 30 years. perspective and employ methods and assumptions that are designed to reduce short-term volatility in actuarial accrued The following table shows the components of the UO’s annual liabilities and the actuarial value of assets. In 2016, PEBB OPEB expense for the year, the amount actually contributed chose to use a one-year amortization period instead of the to the plan, and changes in the UO’s net OPEB obligation: 15-year amortization period which had been used in prior June 30, June 30, 2017 2016 valuations in order to report a June 30, 2016, Net OPEB Obligation that is more in line with the expected actuarial Annual Required Contribution $ 7,189 $ 7,206 Interest on Net OPEB Obligation 231 264 liability as of that date. Adjustment to Annual Required Contribution (6,827) (7,798) Prior Year Adjustment - 12 Significant methods and assumptions were as follows: Annual OPEB Cost 593 (316) Contributions Made (377) (438) June 30, 2017 June 30, 2016 Increase (decrease) in Net OPEB Obligation 216 (754) Actuarial Valuation Date 7/1/2015 7/1/2015 Net OPEB Obligation - Beginning of Year 6,256 7,010 Actuarial Cost Method Entry Age Normal Entry Age Normal Net OPEB Obligation - End of Year $ 6,472 $ 6,256 Amortization Method Level Dollar Level Dollar Amortization Period 1 Year (open) 1 Year (open) Investment Rate of Return 3.5% 3.5% The UO annual OPEB cost, the percentage of annual OPEB Projected Salary Increases 3.5% 3.5% Initial Healthcare Inflation Rates 5.1% (medical), 5.1% (medical), cost contributed to the plan, and the net OPEB obligation for 2.3% (dental) 2.3% (dental) the fiscal years ended June 30, 2017, 2016, and 2015 were as Ultimate Healthcare Inflation Rates 5.0% (medical), 5.0% (medical), follows: 5.0% (dental) 5.0% (dental) Annual OPEB Percentage of Annual Net OPEB Year Ended Cost OPEB Cost Contributed Obligation 13. FUNDS HELD IN TRUST BY OTHERS 2017 $ 588 9% $ 6,472 Funds held in trust by others, for which the UO is an income 2016 (316) -5% 6,256 beneficiary, are not recorded in the financial records. The 2015 971 14% 7,010 approximate value of such trust funds at June 30, 2017 and 2016, was $743 and $720, respectively.
42 | University of Oregon Notes to the Financial Statements For the Year Ended June 30, 2017 (dollars in thousands)
14. RISK MANAGEMENT and Risk Services unit works strategically with campus Effective July 1, 2015, the UO implemented its first partners to increase risk awareness and safety and reduce independent insurance portfolio as it withdrew from injuries and losses. Workers’ Compensation claims costs the Public University Risk Management Insurance Trust have been trending down for the past four years. Workers’ (PURMIT). Thus, the UO procured its own insurance and had Compensation claims are administered by the State Accident self-insured retentions that flowed directly into the private Insurance Fund (SAIF). insurer level. In addition to selecting an insurance broker and securing 23 lines of insurance, there was considerable 15. COMMITMENTS AND CONTINGENT time spent reviewing exposures and confirming appropriate LIABILITIES coverage limits through benchmarking. Outstanding commitments on construction projects that are in the planning phase but not yet initiated, as The following coverages were secured: well as partially completed construction projects totaled • General Liability, Excess Liability approximately $250,032 and $201,833, at June 30, 2017 and • Licensed Professional Liability 2016, respectively. These commitments will be funded from • Educators’ Legal Liability gifts and grants, bond proceeds, and other UO funds. Refer • Workers’ Compensation and Employers Liability to the table accompanying this note for projects relating to construction commitments as of June 30, 2017. Multiple and • Property (As of October 15, 2016) distinct projects within a single building (e.g., Knight Campus • Fine Art for Accelerating Scientific Impact) are combined into a single • Crime line item for this table. • Fiduciary The UO is contingently liable in connection with certain other • Allied Health claims and contracts, including those currently in litigation, • Foreign Liability arising in the normal course of its activities. Management is • Student Medical Professional of the opinion that the outcome of such matters will not have • Cyber and Multimedia Liability a material effect on the financial statements. • Non-owned Aircraft The UO participates in certain federal grant programs. These • Intercollegiate Athletes programs are subject to financial and compliance audits by • Cheerleading the grantor or its representative. Such audits could lead to • Camps and Clinics requests for reimbursement to the grantor for expenditures • Day Care disallowed under terms of the grant. Management believes that disallowances, if any, will not have a material effect on • International Travel the financial statements. Effective October 16, 2016, the UO increased its property Unemployment compensation claims are administered by insurance coverage from $100,000 shared by seven Oregon the Oregon Employment Division pursuant to ORS 657. universities to $1,000,000 in coverage for the UO only. The The UO reimburses the Oregon Employment Division on a total insurable value of property was assessed at $3,300,000 quarterly basis for actual benefits paid. Each year, resources with a self-insured retention of $250. The earth movement are budgeted to pay current charges. The amount of future and flood damage sublimit is $100,000, with a self-insured benefit payments to claimants and the resulting liability to retention of $500. The casualty program covers general tort the UO cannot be reasonably determined at June 30, 2017. claims as well as directors and officers, errors and omissions, and employment liability. The UO’s self-insured retention is The UO participates in a student health insurance plan which $500 for general liability. During the last four fiscal years, no is controlled and administered by PacificSource Health Plans settled claims have exceeded the insurance coverage levels. (Pacificsource). This plan was implemented in fiscal year 2017. The limit of self-insurance is $200 per claim, with an The UO has established a risk management program to additional $3,000 of coverage above 125 percent of expected manage any costs within the respective policy deductibles. claims. The provisions for estimated health insurance claims The insurance renewal process focused on broadening include estimates of the ultimate costs for both reported coverage, reducing portfolio costs, and continuing to monitor claims and claims incurred but not reported. campus activities for potential gaps in coverage. The Safety
2017 | Annual Financial Report | 43 Notes to the Financial Statements For the Year Ended June 30, 2017 (dollars in thousands)
Such claim reserves are based on the best data available to PacificSource; however, these estimates are subject to a significant degree of inherent variability. Accordingly, there is at least a reasonable possibility that a material change to the estimated reserves will occur in the near term. Such estimates are continually monitored and reviewed and reserves are adjusted; the differences are reflected in current operations. The UOpaid $2,522 in claims during 2017. The total paid through the inter- company account with PacificSource, which represents the estimate of a claims reserve, was $240 for 2017. CONSTRUCTION COMMITMENTS AS OF June 30, 2017
Outstanding Project Description Total Commitment Completed to Date Commitment 510 Oak Street $ 3,850 $ 54 $ 3,796 Bean Hall Renovations 48,777 3,783 44,994 Chapman Hall 10,573 4,508 6,065 Huestis Hall 2,345 511 1,834 Jane Sanders Stadium 1,980 115 1,865 Klamath Hall 18,506 510 17,996 Knight Campus for Accelerating Scientific Impact 100,000 1,596 98,404 New Residence Hall 45,536 40,019 5,517 Oregon Hall Renovations 10,223 522 9,701 Pacific Hall 15,846 3,388 12,459 Tykeson Hall 34,063 2,364 31,699 Volcanology Exterior Restoration 1,506 58 1,448 Projects with < $500 thousand remaining to be spent 24,722 22,420 2,301 Project Budgets <$1 million 10,460 4,290 6,170 $ 328,387 $ 84,138 $ 244,250
16. UNIVERSITY FOUNDATION During the fiscal years 2017 and 2016, gifts of $98,742 and $78,458, respectively, were transferred from the UO Foundation Under policies approved by the BOT, the UO Foundation has to the UO. The foundation also reimbursed the University been recognized by the president to provide assistance in $28,872 for development costs, administrative support, and fundraising, public outreach, and other support for the mission various other items in fiscal year 2017. In fiscal year 2016, this of the UO. The UO Foundation is a legally separate, tax-exempt amount was $31,792. The UO Foundation is audited annually entity with an independent governing board. The majority of and received an unmodified audit opinion in 2017 and 2016. resources, or income thereon, which the foundation holds and invests are restricted to the activities of the UO by the donors Please see the financial statements for the UO Foundation on and not controlled directly by the UO. Because these restricted pages 17 and 19 of this report. resources held by the UO Foundation can only be used by, or Complete financial statements for the UO Foundation may be for the benefit of the UO, the UO Foundation is considered a obtained by writing to the following: component unit of the UO and is discretely presented in the financial statements. University of Oregon Foundation 1720 E. 13th Avenue, Suite 410 The financial activity is reported for the year ended June 30, 2017. Eugene, Oregon 97403-2253 or at www.UO Foundationoundation.org/s/1540/foundation/ index.aspx?sid+1540&gid=1&pgid+1037.
44 | University of Oregon Required Supplementary Information For the Year Ended June 30, 2017 (dollars in thousands)
Schedule of UO's Proportionate Share of Net Pension Liability - PERS
2017 2016 2015 UO's portion of net pension liability 1.907% 1.654% 1.653% UO's proportionate share of the net pension liability(asset) $ 286,241 $ 94,966 (37,466) UO's covered employee payroll 198,619 201,223 188,099 UO's proportional share of the net pension liability(asset) as a percentage of its covered employee payroll 144.12% 47.19% (19.92)% Plan fiduciary net position as a percentage of the total pension liability 80.53% 91.88% 103.59%
Data reported is measured as of June 30, 2016 (measurement date)
Schedule of UO Contributions - PERS
2017 2016 2015 Statutorily-required contribution $ 19,886 $ 19,845 $ 17,662 Contributions made 19,886 19,845 17,662 Contribution (deficiency) excess $-- $-$ UO's covered-employee payroll 213,982 198,619 201,223 Contributions as a percentage of covered-employee payroll 9.99% 9.99% 8.78%
Funding Status of Other Postemployment Benefits
Actuarial Actuarial Accrued Unfunded UAAL as a Value of Liability (AAL)- AAL Funded Covered Percentage of Fiscal Year Assets Entry Age (UAAL) Ratio Payroll Covered Payroll Ended (a) (b) (b-a) (a/b) (c) ((b-a)/c) 6/30/2017 - $ 6,447 $ 6,447 0.0% $2303,658 .1% 6/30/2016 - 6,616 6,616 0.0% 302,093 2.2% 6/30/2015 - 9,414 9,414 0.0% 298,058 3.2% 6/30/2014 - 9,539 9,539 0.0% 278,740 3.4% 6/30/2013 - 14,231 14,231 0.0% 259,314 5.5% 6/30/2012 - 13,662 13,662 0.0% 248,948 5.5%
2017 | Annual Financial Report | 45 Report of Independent Auditors on Internal Control Over Financial Reporting and on Compliance and other Matters Based on an Audit of Financial Statements in Accordance with Government Auditing Standards
Members of the Board of Trustees University of Oregon
We have audited the financial statements of the University of Oregon (“UO”) and the University of Oregon Foundation (“the Foundation”), its discretely presented component unit, as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise UO's basic financial statements and have issued our report thereon dated October 27 2017. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. The financial statements of the Foundation were not audited in accordance with Government Auditing Standards, and accordingly, this report does not include reporting on internal control over financial reporting or instances of reportable noncompliance associated with the Foundation Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered UO’s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of UO’s internal control. Accordingly, we do not express an opinion on the effectiveness of UO’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity's financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
46 | University of Oregon Compliance and Other Matters As part of obtaining reasonable assurance about whether UO’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.
Portland, Oregon October 27, 2017
2017 | Annual Financial Report | 47
Report of Independent Auditors on Compliance for the Major Federal Program and Report on Internal Control Over Compliance
Members of the Board of Trustees University of Oregon
Report on Compliance for the Major Federal Program We have audited the University of Oregon’s (“UO”) compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on the UO's major federal program for the year ended June 30, 2017. UO's major federal program is identified in the summary of auditor's results section of the accompanying schedule of findings and questioned costs.
Management’s Responsibility Management is responsible for compliance with federal statutes, regulations, and the terms and conditions of its federal awards applicable to its federal programs.
Auditor’s Responsibility Our responsibility is to express an opinion on compliance for UO's major federal program based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and the Uniform Guidance require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about UO's compliance with those requirements and performing such other procedures as we considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion on compliance for the major federal program. However, our audit does not provide a legal determination of UO's compliance.
Opinion on the Major Federal Program In our opinion, the University of Oregon complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on its major federal program for the year ended June 30, 2017.
48 | University of Oregon Report on Internal Control Over Compliance Management of UO is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered UO's internal control over compliance with the types of requirements that could have a direct and material effect on the major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for the major federal program and to test and report on internal control over compliance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of UO's internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.
Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.
Portland, Oregon October 27, 2017
2017 | Annual Financial Report | 49 Schedule of Findings and Questioned Costs For the Year Ended June 30, 2017
UNIVERSITY OF OREGON SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED JUNE 30, 2017 Section I Summary of Auditor’s Results
Financial Statements 7.#-$0#.-022&# 3"'2-0'113#"-,5�2&#$', ,!' * 12 2#+#,21 3"'2#"5#0#.0#. 0#"', !!-0" ,!#5'2&S Unmodified ,2#0, *!-,20-*-4#0$', ,!' *0#.-02',%S
2#0' *5# ),#11#1'"#,2'$'#"[ "#1 #- $'%,'$'! ,2"#$'!'#,!7'#1'"#,2'$'#"[ "#1 #-,#0#.-02#" #-,!-+.*' ,!#+ 2#0' *2-$', ,!' *12 2#+#,21,-2#"[ "#1 #- Federal Awards ,2#0, *!-,20-*-4#0+ (-0$#"#0 *.0-%0 +1S
2#0' *5# ),#11#1'"#,2'$'#"[ "#1 #- $'%,'$'! ,2"#$'!'#,!7'#1'"#,2'$'#"[ "#1 #-,#0#.-02#" ,7 3"'2$',"',%1"'1!*-1#"2& 2 0#0#/3'0#"2- #0#.-02#" ', !!-0" ,!#5'2&T)*+TRRTWSX [ "#1 #- "#,2'$'! 2'-,-$+ (-0$#"#0 *.0-%0 +1 ,"27.#-$ 3"'2-0_10#.-02'113#"-,!-+.*' ,!#$-0+ (-0 $#"#0 *.0-%0 +1S
Type of Auditor’s Report Issued on Compliance for CFDA Numbers Name of Federal Program or Cluster Major Federal Programs 2 0'-31 $23"#,2*', ,!' *11'12 ,!#)*312#0 Unmodified
3-** 02&0#1&-*"31#"2-"'12',%3'1& #25##,27.# ,"27.# 4.0-%0 +1S $ UQRRRQRRR 3"'2##/3 *'$'#" 1*-5V0'1) 3"'2##[ "#1 #-
Section II Financial Statement Findings #-,#0#.-02#" Section III Federal Award Findings and Questioned Costs #-,#0#.-02#"
50 | University of Oregon Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2017
Federal Grantor/Program Title / Pass-through Grantor and Contract Number Direct Subrecipients Total Direct Award Pass-through Expenditures Award Student Financial Assistance Cluster Department of Education 84.007 Federal Supplemental Educational Opportunity Grants P007A163518 1,268,884 - 1,268,884 1,268,884 - 84.007 Federal Supplemental Educational Opportunity Grants Total 1,268,884 - 1,268,884 1,268,884 - 84.033 Federal Work-Study Program P033A143518 1,417,942 - 1,417,942 1,417,942 - 84.033 Federal Work-Study Program Total 1,417,942 - 1,417,942 1,417,942 - 84.038 Perkins Loans Perkins Loans 22,622,495 - 22,622,495 22,622,495 - 84.038 Perkins Loans Total 22,622,495 - 22,622,495 22,622,495 - 84.063 Federal Pell Grant Program P063P150365 121,670 - 121,670 121,670 - P063P160365 20,548,735 - 20,548,735 20,548,735 - 84.063 Federal Pell Grant Program Total 20,670,405 - 20,670,405 20,670,405 - 84.268 Federal Direct Student Loans Federal Direct Student Loans 142,598,442 - 142,598,442 142,598,442 - 84.268 Federal Direct Student Loans Total 142,598,442 - 142,598,442 142,598,442 - 84.379 Teacher Education Assistance for College and Higher Education Grants (TEACH Grants) P379T160365 1,242 - 1,242 1,242 - P379T170365 49,672 - 49,672 49,672 - 84.379 Teacher Education Assistance for College and Higher Education Grants (TEACH Grants) Total 50,914 - 50,914 50,914 - Department of Education Total 188,629,082 - 188,629,082 188,629,082 - Student Financial Assistance Cluster Total 188,580,739 188,580,739 188,580,739 188,580,739 188,580,739 Research and Development Cluster Department of Agriculture 10.001 Agricultural Research_Basic and Applied Research R0649D-B 23,042 - 23,042 - 23,042 10.001 Agricultural Research_Basic and Applied Research Total 23,042 - 23,042 - 23,042 10.310 Agriculture and Food Research Initiative (AFRI) 2011-67023-30111 AMEND #3 77,805 7,887 85,692 85,692 - 2014-67013-21600 75,499 8,490 83,988 83,988 - H003346401 AMEND. #1 42,368 - 42,368 - 42,368 10.310 Agriculture and Food Research Initiative (AFRI) Total 195,671 16,376 212,048 169,680 42,368 Department of Agriculture Total 218,713 16,376 235,090 169,680 65,409 Department of Commerce 11.417 Sea Grant Support NA270C-B 9,990 - 9,990 - 9,990 NA270M-J 48,776 48,115 96,891 - 96,891 NA270P-D AMEND. #2 10,114 - 10,114 - 10,114 11.417 Sea Grant Support Total 68,879 48,115 116,994 - 116,994 11.419 Coastal Zone Management Administration Awards 3004232334 6,595 12,232 18,827 - 18,827 11.419 Coastal Zone Management Administration Awards Total 6,595 12,232 18,827 - 18,827 11.431 Climate and Atmospheric Research NA291A-C AMEND #1 15,530 - 15,530 - 15,530 11.431 Climate and Atmospheric Research Total 15,530 - 15,530 - 15,530 Department of Commerce Total 91,005 60,347 151,352 - 151,352 Department of Defense 12.300 Basic and Applied Scientific Research FP061077-B MOD 1 124,210 - 124,210 - 124,210 N00014-15-1-2022 48,139 - 48,139 48,139 - N00014-15-1-2148 MOD #2 334,042 247,919 581,961 581,961 - N00014-16-1-3154 MOD 3 172,571 - 172,571 172,571 - 12.300 Basic and Applied Scientific Research Total 678,962 247,919 926,881 802,671 124,210 12.420 Military Medical Research and Development A003728701-2 44,108 - 44,108 - 44,108 A005539402 22,190 - 22,190 - 22,190 KG112-UO-3 MOD. #1 41,764 - 41,764 - 41,764 12.420 Military Medical Research and Development Total 108,062 - 108,062 - 108,062 12.431 Basic Scientific Research PO#9500012247 MOD #11 147,877 - 147,877 - 147,877 W911NF-17-1-0267 9,023 - 9,023 9,023 - 12.431 Basic Scientific Research Total 156,900 - 156,900 9,023 147,877 12.550 English for Heritage Language Speakers Scholarships 0054-UO-17-CHN-280-PO1 325,307 186,253 511,560 511,560 - 2340-UO-16-LINK-103-P01 152,236 157,522 309,758 - 309,758 PO#0054-UO-17-SSC-280-PO3 116,051 - 116,051 - 116,051 12.550 English for Heritage Language Speakers Scholarships Total 593,594 343,775 937,369 511,560 425,809 12.800 Air Force Defense Research Sciences Program FA8650-05-1-5041 MOD. 7 - (141) (141) (141) - FA9550-16-1-0424 97,105 - 97,105 97,105 - 12.800 Air Force Defense Research Sciences Program Total 97,105 (141) 96,964 96,964 - Department of Defense Total 1,634,624 591,552 2,226,176 1,420,218 805,958 Department of Education
The notes to the Schedule of Expenditures of Federal Awards are an integral part of this schedule.
2017 | Annual Financial Report | 51 Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2017
Federal Grantor/Program Title / Pass-through Grantor and Contract Number Direct Subrecipients Total Direct Award Pass-through Expenditures Award 84.022 Overseas Programs - Doctoral Dissertation Research Abroad P022A160066 26,178 - 26,178 26,178 - 84.022 Overseas Programs - Doctoral Dissertation Research Abroad Total 26,178 - 26,178 26,178 - 84.181 Special Education-Grants for Infants and Families 36547 MOD #1 2 - 2 - 2 40354 10,910 - 10,910 - 10,910 84.181 Special Education-Grants for Infants and Families Total 10,911 - 10,911 - 10,911 84.229 Language Resource Centers P229A140004-16 218,148 - 218,148 218,148 - 84.229 Language Resource Centers Total 218,148 - 218,148 218,148 - 84.305 Education Research, Development and Dissemination 16-2920 MOD 1 1,258 - 1,258 - 1,258 3004206307 103,040 - 103,040 - 103,040 A005236501 118,803 - 118,803 - 118,803 ED160B-A AMEND #1 69,723 - 69,723 - 69,723 R305A110398-14 9,408 - 9,408 9,408 - R305A140162-16 388,449 - 388,449 388,449 - R305A140185-16 325,179 127,382 452,561 452,561 - R305A140189-16 MOD 4 856,248 - 856,248 856,248 - R305A140203-17 249,993 73,376 323,370 323,370 - R305A150010-16 442,841 - 442,841 442,841 - R305A150037-16 166,909 92,465 259,373 259,373 - R305A150280-16 ACTION #4 346,758 - 346,758 346,758 - R305E100043-14 5 - 5 5 - (blank) 136,700 - 136,700 - 136,700 84.305 Education Research, Development and Dissemination Total 3,215,315 293,223 3,508,538 3,079,013 429,524 84.305B Education Research, Development and Dissemination R305B110012-14 MOD #15 81,121 - 81,121 81,121 - 84.305B Education Research, Development and Dissemination Total 81,121 - 81,121 81,121 - 84.324 Research in Special Education R324A150145-16 373,798 - 373,798 373,798 - R324A160032-17 229,393 - 229,393 229,393 - R324A160046-17 640,249 43,471 683,720 683,720 - R324A170034 2,232 - 2,232 2,232 - R324C110004-16 876,411 474,263 1,350,674 1,350,674 - UWSC8737 MOD 1 62,674 - 62,674 - 62,674 84.324 Research in Special Education Total 2,184,757 517,734 2,702,491 2,639,817 62,674 84.324A Research in Special Education R324A120041-15 304,125 120,399 424,524 424,524 - R324A120277-14 260,852 - 260,852 260,852 - R324A120278-15 153,971 15,486 169,457 169,457 - R324A120304-15 242,466 101,024 343,489 343,489 - R324A150046-16 714,592 - 714,592 714,592 - R324A150138-16 326,422 61,015 387,438 387,438 - R324A160125 ACTION #4 502,022 74,284 576,306 576,306 - ULRF 15-0169-03 96,575 - 96,575 - 96,575 84.324A Research in Special Education Total 2,601,024 372,208 2,973,232 2,876,657 96,575 84.326 Special Education - Technical Assistance and Dissemination to Improve Services and Results for Children with Disabilities H326M120007-15 ACTION 5 212,498 74,145 286,643 286,643 - H326M140002 ACTION #3 179,832 17,801 197,634 197,634 - H326M160023 16,797 - 16,797 16,797 - 84.326 Special Education - Technical Assistance and Dissemination to Improve Services and Results for Children with Disabilities Total 409,127 91,946 501,074 501,074 - 84.327 Special Education_Educational Technology Media, and Materials for Individuals with Disabilities 14-409 AMEND. #3 130,385 - 130,385 - 130,385 H327H090002-13 MOD #9 12,039 12,266 24,306 24,306 - H327S120017-16 ACTION #14 276,451 - 276,451 276,451 - H327S130031-16 341,373 40,651 382,024 382,024 - H327S140019-17 490,716 51,840 542,556 542,556 - H327S150007-16 438,112 - 438,112 438,112 - H327S160019-17 284,976 - 284,976 284,976 -
84.327 Special Education_Educational Technology Media, and Materials for Individuals with Disabilities Total 1,974,051 104,757 2,078,809 1,948,424 130,385 84.366 Mathematics and Science Partnerships (B) 34673 MOD #1/38038 140,378 80,680 221,058 - 221,058 43183 86,209 - 86,209 - 86,209 84.366 Mathematics and Science Partnerships (B) Total 226,587 80,680 307,266 - 307,266 84.400 Centers for Independent Living, Recovery Act. S00025167.4 23,693 - 23,693 - 23,693 84.400 Centers for Independent Living, Recovery Act. Total 23,693 - 23,693 - 23,693
84.414 Graduate Research Opportunities for Minority Students (Minorities and Retirement Security Program) 146209 MOD #2 22,407 - 22,407 - 22,407 84.414 Graduate Research Opportunities for Minority Students (Minorities and Retirement Security Program) Total 22,407 - 22,407 - 22,407 Department of Education Total 10,993,319 1,460,548 12,453,867 11,370,432 1,083,436
The notes to the Schedule of Expenditures of Federal Awards are an integral part of this schedule.
52 | University of Oregon Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2017
Federal Grantor/Program Title / Pass-through Grantor and Contract Number Direct Subrecipients Total Direct Award Pass-through Expenditures Award Department of Energy 81.049 Office of Science Financial Assistance Program 23770 46,782 - 46,782 - 46,782 24292 128,046 - 128,046 128,046 - 500307-0003 AMEND #2 87,623 - 87,623 - 87,623 DE-FG02-03ER46061 MOD 14 136,641 - 136,641 136,641 - DE-FG02-96ER40969 MOD #39 602,676 - 602,676 602,676 - DE-SC0005360 MOD. #5 284,941 - 284,941 284,941 - DE-SC0006723 194,060 - 194,060 194,060 - DE-SC0008092 MOD #3 7,437 - 7,437 7,437 - DE-SC0008638 MOD #5 32,243 - 32,243 32,243 - DE-SC0010466 MOD #3 179,801 - 179,801 179,801 - DE-SC0010651 124,560 - 124,560 124,560 - DE-SC0010652 MOD. #3 159,402 - 159,402 159,402 - DE-SC0011640 MOD #3 374,446 - 374,446 374,446 - DE-SC0012008 MOD #2 153,562 - 153,562 153,562 - DE-SC0012363 MOD #2 202,619 - 202,619 202,619 - DE-SC0012380 MOD #2 102,236 - 102,236 102,236 - DE-SC0012381 MOD #2 125,926 - 125,926 125,926 - DE-SC0013575 MOD 2 29,007 - 29,007 29,007 - DE-SC0014278 MOD #1 184,484 - 184,484 184,484 - DE-SC0014279 MOD #2 164,863 - 164,863 164,863 - DE-SC0014319 91,657 - 91,657 91,657 - DE-SC0014320 MOD 0001 56,558 - 56,558 56,558 - 81.049 Office of Science Financial Assistance Program Total 3,469,567 - 3,469,567 3,335,162 134,404 81.087 Renewable Energy Research and Development 201403205-01 MOD #2 34,671 - 34,671 - 34,671 60314363-51077-U AMEND #6 95,252 - 95,252 - 95,252 DE-EE0007361 52,976 143,976 196,952 196,952 - 81.087 Renewable Energy Research and Development Total 182,899 143,976 326,875 196,952 129,923 81.121 Nuclear Energy Research, Development and Demonstration (B) OZOG FELLOWSHIP 3,272 - 3,272 - 3,272 81.121 Nuclear Energy Research, Development and Demonstration (B) Total 3,272 - 3,272 - 3,272 Department of Energy Total 3,655,739 143,976 3,799,715 3,532,115 267,600 Department of Health and Human Services 93.060 Sexual Risk Avoidance Education 23125 12,614 - 12,614 - 12,614 93.060 Sexual Risk Avoidance Education Total 12,614 - 12,614 - 12,614 93.110 Maternal and Child Health Federal Consolidated Programs 146209 MOD #2 3,954 - 3,954 - 3,954 93.110 Maternal and Child Health Federal Consolidated Programs Total 3,954 - 3,954 - 3,954 93.121 Oral Diseases and Disorders Research 2-5-A3639 77,782 - 77,782 - 77,782 5 K99 DE024190-02 29,365 - 29,365 29,365 - 5 R01 DE013834-15 (47,438) - (47,438) (47,438) - 93.121 Oral Diseases and Disorders Research Total 59,709 - 59,709 (18,073) 77,782 93.172 Human Genome Research 18B-1097536 189,977 - 189,977 - 189,977 3 U41 HG002659-13S1 (238,328) 64,945 (173,382) (173,382) - 5 U41 HG002659-15 3,588,432 6,813 3,595,245 3,595,245 - 93.172 Human Genome Research Total 3,540,081 71,758 3,611,839 3,421,862 189,977 93.173 Research Related to Deafness and Communication Disorders 1 R01 DC015828-01 545,590 - 545,590 545,590 - 310480 #7 4,492 - 4,492 - 4,492 5 R01 DC010447-05 (49,638) - (49,638) (49,638) - 5 R01 DC011379-05 (19,949) - (19,949) (19,949) - 5 R01 DC015531-02 290,619 - 290,619 290,619 - 93.173 Research Related to Deafness and Communication Disorders Total 771,113 - 771,113 766,622 4,492 93.226 Research on Healthcare Costs, Quality and Outcomes 07406-02-02 20,798 - 20,798 - 20,798 93.226 Research on Healthcare Costs, Quality and Outcomes Total 20,798 - 20,798 - 20,798 93.242 Mental Health Research Grants 1 R01 MH111758-01A1 27,885 - 27,885 27,885 - 1 R21 MH112105-01 112,620 - 112,620 112,620 - 3 R21 MH104188-03S1 51,150 - 51,150 51,150 - 4 R01 MH097130-04 225,709 - 225,709 225,709 - 4880-UO-DHHS-2118 MOD #3 (102) - (102) - (102) 5 R01 MH051383-23 221,936 - 221,936 221,936 - 5 R01 MH108869-02 79,154 301,127 380,281 380,281 - 5 R21 MH106879-02 182,848 - 182,848 182,848 - 5 R33 MH104188-05 334,794 - 334,794 334,794 - 5R01MH107418-03 605,153 - 605,153 605,153 - 7 K01 MH103511-04 90,140 - 90,140 90,140 - 93.242 Mental Health Research Grants Total 1,931,288 301,127 2,232,415 2,232,517 (102) 93.262 Occupational Safety and Health Program GCROE0200A/1005580_UOFO MOD #3 3,542 - 3,542 - 3,542
The notes to the Schedule of Expenditures of Federal Awards are an integral part of this schedule.
2017 | Annual Financial Report | 53 Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2017
Federal Grantor/Program Title / Pass-through Grantor and Contract Number Direct Subrecipients Total Direct Award Pass-through Expenditures Award SR08789 MOD/SR009018 52,620 - 52,620 - 52,620 UWSC9670 430 - 430 - 430 93.262 Occupational Safety and Health Program Total 56,592 - 56,592 - 56,592 93.273 Alcohol Research Programs 1 R34 AA023994-01A1 53,462 24,747 78,209 78,209 - R1035310 344,414 - 344,414 - 344,414 UWSC8858 BPO13034 16,226 - 16,226 - 16,226 93.273 Alcohol Research Programs Total 414,102 24,747 438,849 78,209 360,640 93.279 Drug Abuse and Addiction Research Programs 5 R01 DA035062 370,772 143,807 514,580 514,580 - 5 R01 DA036533-04 721,430 - 721,430 721,430 - 5 R01 DA037628-03S1 664,830 - 664,830 664,830 - 559481 PO#3214597 (32) - (32) - (32) TDAP (SUB NIH-035763) MOD #9 721,182 - 721,182 - 721,182 UWSC8719 MOD 1 8,375 - 8,375 - 8,375 (blank) 274 - 274 - 274 93.279 Drug Abuse and Addiction Research Programs Total 2,486,831 143,807 2,630,638 1,900,840 729,798 93.307 Minority Health and Health Disparities Research 5 R24 MD008039-03 53,022 17,640 70,661 70,661 - UOFO-81 MOD 1 11,920 - 11,920 - 11,920 93.307 Minority Health and Health Disparities Research Total 64,942 17,640 82,582 70,661 11,920 93.310 Trans-NIH Research Support 1 UG3 OD023389-01 291,096 421,331 712,427 712,427 - 1DP2EY023190-01 182,323 - 182,323 182,323 - 5R21GM114438-02 153,082 - 153,082 153,082 - 93.310 Trans-NIH Research Support Total 626,501 421,331 1,047,832 1,047,832 - 93.350 National Center for Advancing Translational Sciences 9006282-047_UOFO 2,900 - 2,900 - 2,900 93.350 National Center for Advancing Translational Sciences Total 2,900 - 2,900 - 2,900 93.351 Office of Research Infrastructure Programs 5 P40 OD011021-19 2,572,672 59,237 2,631,909 2,631,909 - 5 R01 OD011116-09 REVISED (76,012) - (76,012) (76,012) - 5 R01 OD011116-11 363,302 48,069 411,372 411,372 - 5 R24 OD018555-04 452,485 194,499 646,984 646,984 - 75904 MOD #5 (28,892) - (28,892) - (28,892) 93.351 Office of Research Infrastructure Programs Total 3,283,555 301,805 3,585,360 3,614,253 (28,892) 93.389 National Center for Research Resources 5R24OD011199-04 REV 208,680 - 208,680 208,680 - 93.389 National Center for Research Resources Total 208,680 - 208,680 208,680 - 93.393 Cancer Cause and Prevention Research 7 R21 CA175241-03 57,469 - 57,469 57,469 - 93.393 Cancer Cause and Prevention Research Total 57,469 - 57,469 57,469 - 93.396 Cancer Biology Research 160356-02/150450-02/140081-02 102,612 - 102,612 - 102,612 5R01CA176579-04 347,922 50,753 398,675 398,675 - 93.396 Cancer Biology Research Total 450,534 50,753 501,287 398,675 102,612 93.398 Cancer Research Manpower 7 F32 CA180468-03 REVISED 24,576 - 24,576 24,576 - 93.398 Cancer Research Manpower Total 24,576 - 24,576 24,576 - 93.433 National Institute on Disability, Independent Living, and Rehabilitation Research 2016-01548-04-01/7864 14,195 - 14,195 - 14,195 90IF0067-03-00 144,164 - 144,164 144,164 - 90IF0073-03-00 103,407 31,138 134,544 134,544 - 90IF0087-01-02 23,957 - 23,957 23,957 - 90IF0124-01-00 117,017 - 117,017 117,017 - 93.433 National Institute on Disability, Independent Living, and Rehabilitation Research Total 402,739 31,138 433,877 419,682 14,195 93.600 Head Start 90YR0076-04-00 MOD #0 398,099 - 398,099 398,099 - 93.600 Head Start Total 398,099 - 398,099 398,099 - 93.670 Child Abuse and Neglect Discretionary Activities 90CA1818-02-00 5,624 - 5,624 5,624 - 93.670 Child Abuse and Neglect Discretionary Activities Total 5,624 - 5,624 5,624 - 93.837 Cardiovascular Diseases Research 1 F32 HL128082-01A1 REVISED 2,914 - 2,914 2,914 - 5 R01 HL115027-04 242,163 - 242,163 242,163 - 5 R01 HL115294-04 282,202 - 282,202 282,202 - 93.837 Cardiovascular Diseases Research Total 527,279 - 527,279 527,279 - 93.839 Blood Diseases and Resources Research GPEDI0500A/GPEDI0472A (1,170) - (1,170) - (1,170) 93.839 Blood Diseases and Resources Research Total (1,170) - (1,170) - (1,170) 93.846 Arthritis Musculoskeletal and Skin Diseases Research 5 F32 AR063565-03 2,360 - 2,360 2,360 - 5 R01 AR063713-04 REVISED 90,676 122,388 213,064 213,064 - 5R03AR067522-03 57,916 - 57,916 57,916 - 93.846 Arthritis Musculoskeletal and Skin Diseases Research Total 150,953 122,388 273,341 273,341 - 93.847 Diabetes, Digestive, and Kidney Diseases Extramural Research
The notes to the Schedule of Expenditures of Federal Awards are an integral part of this schedule.
54 | University of Oregon Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2017
Federal Grantor/Program Title / Pass-through Grantor and Contract Number Direct Subrecipients Total Direct Award Pass-through Expenditures Award 1 F32 DK107318-01A1 15,049 - 15,049 15,049 - 10040500-02/PO#U000033526 22,941 - 22,941 - 22,941 13-S26 AMEND #5 33,937 - 33,937 - 33,937 3F32DK108591-01S1 53,346 - 53,346 53,346 - 5 R01 DK095926-05 REVISED 320,333 44,845 365,178 365,178 - 5K01DK103737-02 150,451 - 150,451 150,451 - 5R01DK101314-03 211,159 181,943 393,102 393,102 - FY16.346-003 154,387 - 154,387 - 154,387 93.847 Diabetes, Digestive, and Kidney Diseases Extramural Research Total 961,604 226,788 1,188,392 977,127 211,266 93.853 Extramural Research Programs in the Neurosciences and Neurological Disorders 1 R03 NS100027-01 50,747 - 50,747 50,747 - 3 F32 NS098690-01S1 50,123 - 50,123 50,123 - 5R00NS085035-04 288,056 - 288,056 288,056 - 7R01NS089729-03 245,069 - 245,069 245,069 - PO#5601159725 AMEND #2 677,719 - 677,719 - 677,719 93.853 Extramural Research Programs in the Neurosciences and Neurological Disorders Total 1,311,714 - 1,311,714 633,995 677,719 93.855 Allergy and Infectious Diseases Research 127189 G003618 25,060 - 25,060 - 25,060 358K212 MOD 5 24,711 - 24,711 - 24,711 7 F32 AI112094-04 26,458 - 26,458 26,458 - 93.855 Allergy and Infectious Diseases Research Total 76,228 - 76,228 26,458 49,770 93.859 Biomedical Research and Research Training 1 R01 GM117140-01A1 174,391 - 174,391 174,391 - 16-01 36,655 - 36,655 - 36,655 2 R01 GM049869-22 317,442 - 317,442 317,442 - 2 R01 GM087398-06A1 84,070 - 84,070 84,070 - 4 R00 GM115822-03 118,170 - 118,170 118,170 - 5 F32 GM115209-03 54,848 - 54,848 54,848 - 5 R01 GM038006-29 340,572 - 340,572 340,572 - 5 R01 GM085318-07 REVISED 376,423 26,400 402,823 402,823 - 5 R01 GM087398-05 REV 504 - 504 504 - 5 R01 GM093061-04 REV 201,409 - 201,409 201,409 - 5 R01 GM103309-03 142,464 145,002 287,466 287,466 - 5 R01 GM113030-02S1 285,094 - 285,094 285,094 - 5 T32 GM007413-40 422,701 - 422,701 422,701 - 5 T32 GM007759-38 425,450 - 425,450 425,450 - 5P50GM098911-05 2,230,254 - 2,230,254 2,230,254 - 5R01GM068032-13 276,782 - 276,782 276,782 - 5R01GM102511-03 286,040 52,223 338,263 338,263 - 5R01GM114053-03 REVISED 126,804 203,422 330,226 330,226 - 632K472 MOD 2 45,776 - 45,776 - 45,776 7 R01 GM035690-31 510,163 - 510,163 510,163 - 7 R01 GM049869-21 REV 59,065 - 59,065 59,065 - R01GM015792-50 252,579 - 252,579 252,579 - 5 R01 GM092917-08 295,254 53,376 348,630 348,630 - 93.859 Biomedical Research and Research Training Total 7,062,909 480,424 7,543,333 7,460,902 82,431 93.865 Child Health and Human Development Extramural Research 1 R01 HD087452-01A1 65,259 - 65,259 65,259 - 2 R25 HD070817-06 36,901 - 36,901 36,901 - 21622 AMEND #2 4,674 - 4,674 - 4,674 24141 178,971 - 178,971 - 178,971 4 R37 HD027056-25 53,445 - 53,445 53,445 - 5 R01 HD059838-05 158,150 - 158,150 158,150 - 5 R01 HD075150-05 337,676 - 337,676 337,676 - 5 R01 HD075716-05 354,298 91,553 445,851 445,851 - 5 R25 HD070817-05 29,078 - 29,078 29,078 - 5 R56 HD042608-12 131,374 25,037 156,411 156,411 - 5 T32 HD007348-28 341,505 - 341,505 341,505 - 565902 MOD 2 22,303 - 22,303 - 22,303 5R00HD076165-05 REVISED 287,025 - 287,025 287,025 - 7 P01 HD022486-29 1,689,866 - 1,689,866 1,689,866 - 7 R37 HD027056-24 REVISED 151,900 - 151,900 151,900 - 9009028_UOFO AMEND 1 32,589 - 32,589 - 32,589 T-POT MOD #3 259,413 - 259,413 - 259,413 93.865 Child Health and Human Development Extramural Research Total 4,134,427 116,590 4,251,017 3,753,067 497,950 93.866 Aging Research 1 F32 AG054204-01A1 11,961 - 11,961 11,961 - 2 U01 AG045829-04 101,728 - 101,728 101,728 - 23409 20,097 - 20,097 - 20,097 3 U01 AG045829-03S1 270,426 - 270,426 270,426 - 5 R01 AG037564-05 225,297 - 225,297 225,297 - 5 R01 AG046401-04 REVISED 392,572 129,015 521,587 521,587 - 5 R01 AG049396-03 REVISED 393,222 - 393,222 393,222 - 7 R01 AG048840-02 (5,978) - (5,978) (5,978) - 9707SC00 14,003 - 14,003 - 14,003 PO201138011 44,189 - 44,189 - 44,189
The notes to the Schedule of Expenditures of Federal Awards are an integral part of this schedule.
2017 | Annual Financial Report | 55 Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2017
Federal Grantor/Program Title / Pass-through Grantor and Contract Number Direct Subrecipients Total Direct Award Pass-through Expenditures Award 93.866 Aging Research Total 1,467,516 129,015 1,596,531 1,518,242 78,289 93.867 Vision Research 1 F32 EY027696-01 15,397 - 15,397 15,397 - 5 R01 EY019694-05 REVISED 35,596 - 35,596 35,596 - 5 R01 EY023337-05 360,413 - 360,413 360,413 - 5F31EY025459-02 44,243 - 44,243 44,243 - 93.867 Vision Research Total 455,649 - 455,649 455,649 - Department of Health and Human Services Total 30,969,807 2,439,312 33,409,119 30,253,586 3,155,533 Department of Justice 16.560 Justice Research Development and Evaluation Project 21574 90,975 - 90,975 - 90,975 UOFO-80 32,660 - 32,660 - 32,660 16.560 Justice Research Development and Evaluation Project Total 123,635 - 123,635 - 123,635 Department of Justice Total 123,635 - 123,635 - 123,635 Department of State 19.021 Investing in People in The Middle East and North Africa S-EG-300-16-GR064 6,001 - 6,001 6,001 - 19.021 Investing in People in The Middle East and North Africa Total 6,001 - 6,001 6,001 - 19.501 Public Diplomacy Programs for Afghanistan and Pakistan SPK33013CA104 MOD 2 189,994 - 189,994 189,994 - 19.501 Public Diplomacy Programs for Afghanistan and Pakistan Total 189,994 - 189,994 189,994 - Department of State Total 195,995 - 195,995 195,995 - Department of The Interior 15.224 Cultural and Paleontological Resources Management L11AC20361-1 903 - 903 903 - L15AP00002 5,876 - 5,876 5,876 - 15.224 Cultural and Paleontological Resources Management Total 6,780 - 6,780 6,780 - 15.232 Wildland Fire Research and Studies Program G-09347-1 11,945 - 11,945 - 11,945 L0181B-A AMEND #3 54,147 - 54,147 - 54,147 L13AC00014 MOD #1 (1,729) - (1,729) (1,729) - L16AC00214 4,613 3,099 7,712 7,712 - 15.232 Wildland Fire Research and Studies Program Total 68,976 3,099 72,075 5,983 66,092 15.233 Forests and Woodlands Resource Management V2012-A 1,249 - 1,249 - 1,249 15.233 Forests and Woodlands Resource Management Total 1,249 - 1, 249 - 1,249 15.238 Challenge Cost Share L16AC00203 16,155 - 16,155 16,155 - 15.238 Challenge Cost Share Total 16,155 - 16,155 16,155 - 15.423 Bureau of Ocean Energy Management (BOEM) Environmental Studies Program (ESP) SA0000495 2,778 - 2,778 - 2,778 15.423 Bureau of Ocean Energy Management (BOEM) Environmental Studies Program (ESP) Total 2,778 - 2,778 - 2,778 15.669 Cooperative Landscape Conservation F15AC00871 5,669 - 5,669 5,669 - 15.669 Cooperative Landscape Conservation Total 5,669 - 5,669 5,669 - 15.807 Earthquake Hazards Program Assistance G13AP00054 MOD #3 7,041 - 7,041 7,041 - G15AC00053 - MOD#2 125,623 - 125,623 125,623 - G15AC00333 MOD #1 245,154 - 245,154 245,154 - G16AC00354 143,081 - 143,081 143,081 - G16AP00171 22,450 - 22,450 22,450 - 15.807 Earthquake Hazards Program Assistance Total 543,350 - 543,350 543,350 - 15.808 U.S. Geological Survey Research and Data Collection G10AC00681 MOD #9 14,113 - 14,113 14,113 - 15.808 U.S. Geological Survey Research and Data Collection Total 14,113 - 14,113 14,113 - 15.810 National Cooperative Geologic Mapping Program G16AC00139 MOD 1 15,881 - 15,881 15,881 - 15.810 National Cooperative Geologic Mapping Program Total 15,881 - 15,881 15,881 - 15.945 Cooperative Research and Training Programs – Resources of the National Park System P15AC01594/H8W07110001-1 46,536 - 46,536 46,536 - P15AC01828/H8W07110001 6,151 - 6,151 6,151 - P16AC01561 2,445 - 2,445 2,445 - 15.945 Cooperative Research and Training Programs – Resources of the National Park System Total 55,132 - 55,132 55,132 - 15.946 Cultural Resources Management P15AC01820 31,535 - 31,535 31,535 - 15.946 Cultural Resources Management Total 31,535 - 31,535 31,535 - Department of The Interior Total 761,618 3,099 764,716 694,597 70,119 Department of Transportation 20.701 University Transportation Centers Program NITCN-UO-05 3,915 - 3,915 - 3,915 NITCN-UO-08 23,439 - 23,439 - 23,439 NITCN-UO-09 29,110 - 29,110 - 29,110 NITCN-UO-10 46,248 - 46,248 - 46,248 NITCN-UO-11 47,653 - 47,653 - 47,653 NITCN-UO-12 1,844 - 1,844 - 1,844 NITCN-UO-13 3,117 - 3,117 - 3,117
The notes to the Schedule of Expenditures of Federal Awards are an integral part of this schedule.
56 | University of Oregon Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2017
Federal Grantor/Program Title / Pass-through Grantor and Contract Number Direct Subrecipients Total Direct Award Pass-through Expenditures Award NITCN-UO-14 17,594 - 17,594 - 17,594 NITCN-UO-17 3,000 - 3,000 - 3,000 NITCN-UO-18 6,882 - 6,882 - 6,882 NITCN-UO-19 56,839 - 56,839 - 56,839 NITCN-UO-20 5,765 - 5,765 - 5,765 NITC-UO-19 (1,523) - (1,523) - (1,523) NITC-UO-21 MOD #1 1,610 - 1,610 - 1,610 NITC-UO-22 1,949 - 1,949 - 1,949 20.701 University Transportation Centers Program Total 247,444 - 247,444 - 247,444 Department of Transportation Total 247,444 - 247,444 - 247,444 Environmental Protection Agency 66.509 Science To Achieve Results (STAR) Research Program 14-497 AMEND 6 132,493 - 132,493 - 132,493 FELLOW FP91769501 MOD 2 14,995 - 14,995 14,995 - RD83575701 MOD #5 346,362 83,662 430,024 430,024 - 66.509 Science To Achieve Results (STAR) Research Program Total 493,850 83,662 577,513 445,020 132,493 Environmental Protection Agency Total 493,850 83,662 577,513 445,020 132,493 Federal Council on the Arts and the Humanities 45.160 Promotion of the Humanities_Fellowships and Stipends FA-232937-16 36 - 36 36 - FA-58335 (732) - (732) (732) - 45.160 Promotion of the Humanities_Fellowships and Stipends Total (696) - (696) (696) - 45.161 Promotion of the Humanities_Research 173405023/133PRJ88PL 16,571 - 16,571 - 16,571 4112-79895 1,545 - 1,545 - 1,545 RZ-249870-16 1,997 4,437 6,434 6,434 - 45.161 Promotion of the Humanities_Research Total 20,112 4,437 24,549 6,434 18,115 45.162 Promotion of the Humanities_Teaching and Learning Resources and Curriculum Development 23786 2,614 - 2,614 - 2,614
45.162 Promotion of the Humanities_Teaching and Learning Resources and Curriculum Development Total 2,614 - 2,614 - 2,614 45.169 Promotion of the Humanities_Office of Digital Humanities HD-248544 13,194 - 13,194 13,194 - 45.169 Promotion of the Humanities_Office of Digital Humanities Total 13,194 - 13,194 13,194 - 45.312 National Leadership Grants X0159A-D AMEND #6 3,203 - 3,203 - 3,203 45.312 National Leadership Grants Total 3,203 - 3,203 - 3,203 Federal Council on the Arts and the Humanities Total 38,426 4,437 42,863 18,932 23,932 National Aeronautics and Space Administration 43.001 Aerospace Education Services Program NNX12AL93G / NNX15AR59G 65,342 - 65,342 65,342 - NNX15AI68G MOD #4 59,977 - 59,977 59,977 - NNX16AJ59G MOD 1 26,797 - 26,797 26,797 - NNX16AQ56G AMEND #1 59,462 - 59,462 59,462 - 43.001 Aerospace Education Services Program Total 211,578 - 211,578 211,578 - 43.003 Exploration PO# T73067 MOD 1 77,138 - 77,138 - 77,138 43.000 Exploration Total 77,138 - 77,138 - 77,138 National Aeronautics and Space Administration Total 288,717 - 288,717 211,578 77,138 National Science Foundation 47.041 Engineering Grants 16020 95,112 - 95,112 - 95,112 1609679-ECCS 126,515 - 126,515 126,515 - 1640492-IIP 74,887 - 74,887 74,887 - 21035 26,272 - 26,272 - 26,272 S1751A-A 13,771 - 13,771 - 13,771 U1058A-A MOD 5 70,733 - 70,733 - 70,733 47.041 Engineering Grants Total 407,291 - 407,291 201,403 205,888 47.049 Mathematical and Physical Sciences 0950383-DMS 8,959 - 8,959 8,959 - 1161094-DMS AMEND #4 99,627 - 99,627 99,627 - 1205544-PHY 4,445 - 4,445 4,445 - 1206290-DMS 5,100 - 5,100 5,100 - 1213406-CHE 10,306 - 10,306 10,306 - 1255370-DMR MOD #5 86,465 - 86,465 86,465 - 1263431-DMS 41,233 - 41,233 41,233 - 1265711-DMS NCE 4,522 - 4,522 4,522 - 1266217-DMR #2 164,407 - 164,407 164,407 - 1301461-CHE (226) - (226) (226) - 1302986-CHE 304,351 - 304,351 304,351 - 1306441-PHY 43,431 - 43,431 43,431 - 1307272-CHE 528 - 528 528 - 1307401-PHY MOD #3 9,575 - 9,575 9,575 - 1341251-DMS 48,487 - 48,487 48,487 - 1355196-CHE 78,999 - 78,999 78,999 - 1360347-CHE 19,365 - 19,365 19,365 -
The notes to the Schedule of Expenditures of Federal Awards are an integral part of this schedule.
2017 | Annual Financial Report | 57 Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2017
Federal Grantor/Program Title / Pass-through Grantor and Contract Number Direct Subrecipients Total Direct Award Pass-through Expenditures Award 1361431-DMS 58,524 - 58,524 58,524 - 1362500-CHE 122,049 - 122,049 122,049 - 1400390-DMS 52,540 - 52,540 52,540 - 1401410-DMR 98,591 - 98,591 98,591 - 1403527-DMS 45,673 - 45,673 45,673 - 1404676-DMR 68,438 - 68,438 68,438 - 1406354-PHY 121,694 - 121,694 121,694 - 1408933-DMR 134,718 - 134,718 134,718 - 1413677-CHE 57,752 - 57,752 57,752 - 1414462-PHY MOD #2 121,129 - 121,129 121,129 - 1438359-DMS 40,143 - 40,143 40,143 - 1454036-CHE 159,503 - 159,503 159,503 - 1454747-CHE MOD #1 83,789 - 83,789 83,789 - 1461485-CHE 27,700 - 27,700 27,700 - 1501144-DMS 52,370 - 52,370 52,370 - 1503550 - CHE 11,742 - 11,742 11,742 - 1505118 PHY AMEND 1 153,019 - 153,019 153,019 - 1505891-CHE AMEND 1 132,398 - 132,398 132,398 - 1506221 CHE AMEND 1 96,858 - 96,858 96,858 - 1507115-DMR 53,729 - 53,729 53,729 - 1510296-DMS 50,628 - 50,628 50,628 - 1521466-PHY AMEND 001 126,465 - 126,465 126,465 - 1531189-CHE 199 - 199 199 - 1532225 DMR 263,478 - 263,478 263,478 - 1553032-DMS 73,832 - 73,832 73,832 - 1557642 DMS 5,796 - 5,796 5,796 - 1559609-DMS 28,096 - 28,096 28,096 - 1560783-DMS 10,548 - 10,548 10,548 - 1565036-DMS 56,339 - 56,339 56,339 - 1565680-CHE 54,194 - 54,194 54,194 - 1565780-CHE AMEND 2 148,290 - 148,290 148,290 - 1566348-CHE 121,353 - 121,353 121,353 - 1601837-DMS 41,155 - 41,155 41,155 - 1604167-DMR 64,236 - 64,236 64,236 - 1606227-PHY 134,004 - 134,004 134,004 - 1607214-CHE AMEND 1 127,796 - 127,796 127,796 - 1607336-PHY AMEND 1 298,284 - 298,284 298,284 - 1607733-PHY 34,637 - 34,637 34,637 - 1608915-CHE 168,196 - 168,196 168,196 - 1609926-CHE 20,302 - 20,302 20,302 - 1610675-CHE 5,498 - 5,498 5,498 - 1611797-DMS 13,095 - 13,095 13,095 - 1620822-CHE 51,954 - 51,954 51,954 - 1642067-DMS 86,239 - 86,239 86,239 - 1710214-DMR 7,539 - 7,539 7,539 - 2002838643 40,253 - 40,253 - 40,253 75-1096324 MOD 2 81,208 - 81,208 81,208 - 76749/1136652/2 AMEND 1 19,605 - 19,605 - 19,605 QUARKNET 1,214 - 1,214 - 1,214 S1412A-E AMEND #5 71,528 - 71,528 - 71,528 S1891A-B 222,741 - 222,741 - 222,741 47.049 Mathematical and Physical Sciences Total 5,050,634 - 5,050,634 4,695,293 355,341 47.050 Geosciences 0731338-OCE 17,666 - 17,666 17,666 - 1030453-OCE 33,702 - 33,702 33,702 - 1139701-OCE MOD #6 44,901 - 44,901 44,901 - 1249404-EAR 42,879 - 42,879 42,879 - 1252177-EAR 39,862 - 39,862 39,862 - 1259603-NCE 93,402 - 93,402 93,402 - 1333196-OCE 9,584 - 9,584 9,584 - 1414041-DEB 347,574 19,063 366,638 366,638 - 1420898-EAR 23,805 - 23,805 23,805 - 1447337-EAR MOD 2 114,231 - 114,231 114,231 - 1459794-OCE MOD #3 116,088 - 116,088 116,088 - 1460489-EAR 23,492 - 23,492 23,492 - 1504521-PLR 79,865 - 79,865 79,865 - 1520238-EAR 70,328 - 70,328 70,328 - 1520694-EAR 73,129 - 73,129 73,129 - 1524665-EAR AMEND 2 82,465 - 82,465 82,465 - 1524824-EAR 82,961 17,217 100,178 100,178 - 1537201-OCE 72,348 - 72,348 72,348 - 1541015 - ICER 23,847 - 23,847 23,847 - 1541390-ICER 4,452 - 4,452 4,452 - 1543012-PLR 23,774 - 23,774 23,774 - 1543383-PLR 127,719 - 127,719 127,719 - 1546006-EAR 58,638 - 58,638 58,638 -
The notes to the Schedule of Expenditures of Federal Awards are an integral part of this schedule.
58 | University of Oregon Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2017
Federal Grantor/Program Title / Pass-through Grantor and Contract Number Direct Subrecipients Total Direct Award Pass-through Expenditures Award 1547594-EAR MOD 2 88,297 8,611 96,908 96,908 - 1552232-PLR 75,325 - 75,325 75,325 - 1603907-PLR 39,327 - 39,327 39,327 - 1624557-EAR 2,900 - 2,900 2,900 - 1634786-OCE 44,637 - 44,637 44,637 - 1636815-EAR 9,758 - 9,758 9,758 - 1650262-AGS 4,850 - 4,850 4,850 - 1659447-OCE 51,041 - 51,041 51,041 - 72559471 21,615 - 21,615 - 21,615 47.050 Geosciences Total 1,944,462 44,892 1,989,354 1,967,739 21,615 47.070 Computer and Information Science and Engineering 0070 G RC848 MOD #5 289,346 - 289,346 - 289,346 0713688-IIS MOD #9 (2,035) - (2,035) (2,035) - 1013054-IIS (3,779) - (3,779) (3,779) - 1017593-IIS MOD #5 75,904 - 75,904 75,904 - 1118050-IIS (629) - (629) (629) - 1305218-CNS 181,591 - 181,591 181,591 - 1320977-CNS 57,938 - 57,938 57,938 - 1329307-CNS MOD 2 2,100 - 2,100 2,100 - 1339840-ACI 47,494 - 47,494 47,494 - 1423617-CCF 75,869 - 75,869 75,869 - 1450471-ACI 412,590 - 412,590 412,590 - 1451045-ACI 1,020,481 - 1,020,481 1,020,481 - 1451453-IIS 5,005 - 5,005 5,005 - 1550202-CCF 74,299 - 74,299 74,299 - 1551746-IIS (6,611) - (6,611) (6,611) - 1562859-BCS 72,635 - 72,635 72,635 - 1564348-CNS 91,165 - 91,165 91,165 - 1619036-IIS AMEND 1 96,249 - 96,249 96,249 - 1640457-CCF 20,000 - 20,000 20,000 - 1650587-CNS 4,779 - 4,779 4,779 - 1719165-CNS 2,282 - 2,282 2,282 - 47.070 Computer and Information Science and Engineering Total 2,516,673 - 2,516,673 2,227,327 289,346 47.074 Biological Sciences 1120537-IOS 85,804 - 85,804 85,804 - 1227196-DBI MOD #2 22,767 - 22,767 22,767 - 1243641-MCB 127,495 - 127,495 127,495 - 1255628-IOS 159,900 - 159,900 159,900 - 1256897-DEB 55,888 - 55,888 55,888 - 1258199-DEB 140,119 - 140,119 140,119 - 1339130-IOS 594,344 170,599 764,943 764,943 - 1340847-EF 466,541 - 466,541 466,541 - 1400913-DEB 16,148 - 16,148 16,148 - 1427957-DBI 64,079 - 64,079 64,079 - 1442109-DEB 142,046 - 142,046 142,046 - 1455283-DEB MOD 1 28,731 - 28,731 28,731 - 1455506 89,960 - 89,960 89,960 - 1460735-DBI 119,623 - 119,623 119,623 - 1501423-DEB 5,713 - 5,713 5,713 - 1503545-DBI 25,147 - 25,147 25,147 - 1601794-DEB 2,932 - 2,932 2,932 - 1614606-MCB 54,683 - 54,683 54,683 - 1616016-MCB 68,263 - 68,263 68,263 - 1701854-DEB 2,081 - 2,081 2,081 - USD-1201 AMEND. #6 1,704 - 1,704 - 1,704 47.074 Biological Sciences Total 2,273,969 170,599 2,444,567 2,442,863 1,704 47.075 Social Behavioral and Economic Sciences 10031411-OREGON MOD #2 16,635 - 16,635 - 16,635 1064459-BCS AMEND 2 15,102 - 15,102 15,102 - 1253779-SES MOD #4 108,046 - 108,046 108,046 - 1263817-BCS 23,701 - 23,701 23,701 - 1358724-BCS 122,483 8,636 131,120 131,120 - 1359800-BCS 80,159 - 80,159 80,159 - 1360632-BCS 28,435 - 28,435 28,435 - 1435744-BCS 5,614 - 5,614 5,614 - 1451848 116,131 - 116,131 116,131 - 1459374-BCS 29,050 - 29,050 29,050 - 1500674-BCS 12,161 - 12,161 12,161 - 1500694-BCS 5,460 - 5,460 5,460 - 1500714-BCS MOD #1 120,363 - 120,363 120,363 - 1536308 298 - 298 298 - 1539698-BCS 310,027 - 310,027 310,027 - 1540459-BCS 11,331 - 11,331 11,331 - 1548288-SMA 19,148 - 19,148 19,148 - 1551817-BCS 56,923 - 56,923 56,923 - 1559209-SES 83,223 - 83,223 83,223 -
The notes to the Schedule of Expenditures of Federal Awards are an integral part of this schedule.
2017 | Annual Financial Report | 59 Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2017
Federal Grantor/Program Title / Pass-through Grantor and Contract Number Direct Subrecipients Total Direct Award Pass-through Expenditures Award 1561099-BCS 5,423 - 5,423 5,423 - 1627042-BCS 3,927 - 3,927 3,927 - 1628750-BCS 9,570 - 9,570 9,570 - 1632327-BCS 67,220 - 67,220 67,220 - 1632556-SES 35,772 - 35,772 35,772 - 1634029-BCS 15,999 - 15,999 15,999 - 1634086-BCS 4,890 - 4,890 4,890 - 1634140-BCS 14,283 - 14,283 14,283 - 1638786-BCS 122,282 - 122,282 122,282 - 1640937-BCS 948 - 948 948 - 1650674-BCS 593 - 593 593 - 1650923-BCS 2,564 - 2,564 2,564 - 1655038-SES 1,685 - 1,685 1,685 - 1661157-SMA 11 - 11 11 - 2016-3216-01 1,091 - 1,091 - 1,091 47.075 Social Behavioral and Economic Sciences Total 1,450,548 8,636 1,459,184 1,441,458 17,726 47.076 Education and Human Resources 1122640-DUE 2,535 - 2,535 2,535 - 1309047-DGE 656,686 - 656,686 656,686 - 1355971-DUE 95,694 - 95,694 95,694 - 1510725-DRL AMEND 1 14,894 - 14,894 14,894 - 1524623-DUE 56,025 - 56,025 56,025 - 1657015-DRL 4,171 - 4,171 4,171 - 1660724-DUE 2,252 - 2,252 2,252 - 1660840-DRL 275,160 - 275,160 275,160 - SP-10602-12 AMEND #1 20,487 - 20,487 - 20,487 1503161-DRL AMEND 3 655,479 50,412 705,891 705,891 - 47.076 Education and Human Resources Total 1,783,384 50,412 1,833,795 1,813,308 20,487 47.078 Polar Programs 1203868-ARC 18,509 - 18,509 18,509 - 47.078 Polar Programs Total 18,509 - 18,509 18,509 - 47.079 Office of International Science and Engineering 1110090Z7 MOD #3 28,996 - 28,996 - 28,996 47.079 Office of International Science and Engineering Total 28,996 - 28,996 - 28,996 47.080 Office of Cyberinfrastructure 1140205-OCI MOD #3 8,021 - 8,021 8,021 - 1246136-ACI 91,368 - 91,368 91,368 - 47.080 Office of Cyberinfrastructure Total 99,390 - 99,390 99,390 - National Science Foundation Total 15,573,855 274,538 15,848,394 14,907,290 941,104 Research and Development Cluster Total 65,286,747 5,077,848 70,364,595 63,219,442 7,145,153 Corporation for National and Community Service 94.006 AmeriCorps 4301, 13ESHOR001 17,335 - 17,335 - 17,335 4427, 14FXHOR001 172,233 - 172,233 - 172,233 94.006 AmeriCorps Total 189,569 - 189,569 - 189,569 Corporation for National and Community Service Total 189,569 - 189,569 - 189,569 Department of Agriculture 10.558 Child and Adult Care Food Program CACFP 33,876 - 33,876 33,876 - 10.558 Child and Adult Care Food Program Total 33,876 - 33,876 33,876 - 10.608 Food for Education (B) LA-17-SUBAGR-8431-VL145853-01 115,817 - 115,817 - 115,817 V-2013-001 MOD 4 (381) - (381) - (381) 10.608 Food for Education (B) Total 115,436 - 115,436 - 115,436 10.674 Wood Utilization Assistance 13-DG-11062765-723 MOD #5 4,012 - 4,012 4,012 - 15-CR-11062771-029 MOD 2 86,599 - 86,599 86,599 - 10.674 Wood Utilization Assistance Total 90,611 - 90,611 90,611 - Department of Agriculture Total 239,922 - 239,922 124,487 115,436 Department of Commerce 11.303 Economic Development Technical Assistance 07-66-06885-04 133,998 - 133,998 133,998 - 11.303 Economic Development Technical Assistance Total 133,998 - 133,998 133,998 - 11.419 Coastal Zone Management Administration Awards 141-1030-16 19,201 - 19,201 - 19,201 11.419 Coastal Zone Management Administration Awards Total 19,201 - 19,201 - 19,201 11.473 Office for Coastal Management NA14NOS4730153 23,466 - 23,466 23,466 - 11.473 Office for Coastal Management Total 23,466 - 23,466 23,466 - Department of Commerce Total 176,665 - 176,665 157,464 19,201 Department of Defense 12.550 English for Heritage Language Speakers Scholarships NSEP-U631073-UO-CHN-K12 MOD 5 24,689 123,995 148,684 148,684 - 12.550 English for Heritage Language Speakers Scholarships Total 24,689 123,995 148,684 148,684 - 12.630 Basic, Applied, and Advanced Research in Science and Engineering 16-17 JSHS Symposium 6,185 - 6,185 - 6,185
The notes to the Schedule of Expenditures of Federal Awards are an integral part of this schedule.
60 | University of Oregon Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2017
Federal Grantor/Program Title / Pass-through Grantor and Contract Number Direct Subrecipients Total Direct Award Pass-through Expenditures Award 12.630 Basic, Applied, and Advanced Research in Science and Engineering Total 6,185 - 6,185 - 6,185 Department of Defense Total 30,874 123,995 154,869 148,684 6,185 Department of Education 84.015A National Resource Centers Program for Foreign Language and Area Studies or Foreign Language and International Studies Program P015A140135-15 MOD #3 201,578 - 201,578 201,578 - 84.015A National Resource Centers Program for Foreign Language and Area Studies or Foreign Language and International Studies Program Total 201,578 - 201,578 201,578 - 84.015B Foreign Language and Area Studies Fellowship Program P015B140135-16 203,851 - 203,851 203,851 - 84.015B Foreign Language and Area Studies Fellowship Program Total 203,851 - 203,851 203,851 - 84.181 Special Education-Grants for Infants and Families 2402F0 AMEND #3 (70) - (70) - (70) 40155 3,515 - 3,515 - 3,515 84.181 Special Education-Grants for Infants and Families Total 3,444 - 3,444 - 3,444 84.283 Comprehensive Centers S283D160003 343,358 226,163 569,521 569,521 - 84.283 Comprehensive Centers Total 343,358 226,163 569,521 569,521 - 84.299 Indian Education Special Programs S299B120024-15 MOD #7 1,241 - 1,241 1,241 - S299B160020 175,210 - 175,210 175,210 - 84.299 Indian Education Special Programs Total 176,452 - 176,452 176,452 - 84.324 Research in Special Education R324B160034 139,163 - 139,163 139,163 - 84.324 Research in Special Education Total 139,163 - 139,163 139,163 - 84.325 Special Education - Personnel Development to Improve Services and Results for Children with Disabilities H325D100023-13 50,376 - 50,376 50,376 - H325D110045-15 113,416 - 113,416 113,416 - H325D130067-15 MOD #3 239,615 - 239,615 239,615 - H325D150082-16 248,351 - 248,351 248,351 - H325D160047 61,837 - 61,837 61,837 - H325K110164-15 MOD #11 52,599 - 52,599 52,599 - H325K120213-15 MOD #14 327,408 - 327,408 327,408 - H325K150204-16 231,578 - 231,578 231,578 - 84.325 Special Education - Personnel Development to Improve Services and Results for Children with Disabilities To 1,325,180 - 1,325,180 1,325,180 - 84.326 Special Education - Technical Assistance and Dissemination to Improve Services and Results for Children with Disabilities 20150079-01-UOR AMEND #2 548,184 - 548,184 - 548,184 5039294 MOD #4 214,610 - 214,610 - 214,610 FY2013-042-M4 255,906 - 255,906 - 255,906 H326S130004-16I MOD #15 730,106 3,321,444 4,051,550 4,051,550 - 84.326 Special Education - Technical Assistance and Dissemination to Improve Services and Results for Children with Disabilities Total 1,748,806 3,321,444 5,070,250 4,051,550 1,018,700 84.351 Arts in Education (B) 21376 AMEND #2 176,108 - 176,108 - 176,108 84.351 Arts in Education (B) Total 176,108 - 176,108 - 176,108 84.366 Mathematics and Science Partnerships (B) 22566 AMEND #2 19,601 - 19,601 - 19,601 84.366 Mathematics and Science Partnerships (B) Total 19,601 - 19,601 - 19,601 84.367 Supporting Effective Instruction State Grants 92-OR03-SEED2012 MOD #5B 4,256 - 4,256 - 4,256 TRSUB16.11 122,974 - 122,974 - 122,974 TRSUB17.01 69,150 - 69,150 - 69,150 84.367 Supporting Effective Instruction State Grants Total 196,380 - 196,380 - 196,380 84.411 Education Innovation and Research USED01-000-10-UO-00 191,169 - 191,169 - 191,169 84.411 Education Innovation and Research Total 191,169 - 191,169 - 191,169 Department of Education Total 4,725,090 3,547,607 8,272,697 6,667,294 1,605,403 Department of Health and Human Services 93.086 Healthy Marriage Promotion and Responsible Fatherhood Grants K11292 MOD 1 36,345 14,900 51,246 - 51,246 93.086 Healthy Marriage Promotion and Responsible Fatherhood Grants Total 36,345 14,900 51,246 - 51,246 93.587 Promote the Survival and Continuing Vitality of Native 21285/23037/24337 3,951 - 3,951 - 3,951 23190 3,001 - 3,001 - 3,001 24351 13,205 - 13,205 - 13,205 24557 10,832 - 10,832 - 10,832 93.587 Promote the Survival and Continuing Vitality of Native Total 30,989 - 30,989 - 30,989 93.600 Head Start 23899 9,757 - 9,757 - 9,757 24371 41,103 - 41,103 - 41,103 93.600 Head Start Total 50,860 - 50,860 - 50,860 93.632 University Centers for Excellence in Developmental Disabilities Education, Research, and Service 90DD0011-05-00 626,819 - 626,819 626,819 - 93.632 University Centers for Excellence in Developmental Disabilities Education, Research, and Service Total 626,819 - 626,819 626,819 - 93.658 Foster Care Title IV-E 150708 137,914 - 137,914 - 137,914
The notes to the Schedule of Expenditures of Federal Awards are an integral part of this schedule.
2017 | Annual Financial Report | 61 Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2017
Federal Grantor/Program Title / Pass-through Grantor and Contract Number Direct Subrecipients Total Direct Award Pass-through Expenditures Award 93.658 Foster Care Title IV-E Total 137,914 - 137,914 - 137,914 93.910 Family and Community Violence Prevention Program 22270 AMEND #2 41,532 - 41,532 - 41,532 93.910 Family and Community Violence Prevention Program Total 41,532 - 41,532 - 41,532 Department of Health and Human Services Total 924,459 14,900 939,360 626,819 312,541 Department of Homeland Security 97.045 Cooperating Technical Partners (B) 2412B0 17,465 - 17,465 - 17,465 97.045 Cooperating Technical Partners (B) Total 17,465 - 17,465 - 17,465 97.047 Pre-Disaster Mitigation PDMC-PL-10-OR-2013-001 11,471 29,144 40,615 - 40,615 PDMC-PL-10-PR-2015-003 33,225 - 33,225 - 33,225 97.047 Pre-Disaster Mitigation Total 44,696 29,144 73,841 - 73,841 97.067 Homeland Security Grant Program (A) 23506 15,511 - 15,511 - 15,511 97.067 Homeland Security Grant Program (A) Total 15,511 - 15,511 - 15,511 Department of Homeland Security Total 77,673 29,144 106,817 - 106,817 Department of Justice 16.524 Legal Assistance for Victims 2014-WL-AX-0049 102,038 - 102,038 102,038 - 16.524 Legal Assistance for Victims Total 102,038 - 102,038 102,038 - 16.575 Crime Victim Assistance VOCA-C-2014-UOFO-00014 15,976 - 15,976 - 15,976 VOCA-C-2016-UOFO-00063 34,039 - 34,039 - 34,039 VOCA-OT-2016-UOFO-00064 55,300 - 55,300 - 55,300 16.575 Crime Victim Assistance Total 105,315 - 105,315 - 105,315 16.615 Public Safety Officers' Educational Assistance (D) 22978 MOD 3 31,709 - 31,709 - 31,709 16.615 Public Safety Officers' Educational Assistance (D) Total 31,709 - 31,709 - 31,709 Department of Justice Total 239,062 - 239,062 102,038 137,024 Department of Labor 17.270 Reentry Employment Opportunities YF-27297-15-60-A-11 10,570 - 10,570 - 10,570 17.270 Reentry Employment Opportunities Total 10,570 - 10,570 - 10,570 17.277 WIOA National Dislocated Worker Grants/ WIA National Emergency Grants 16-246 366,953 - 366,953 - 366,953 17.277 WIOA National Dislocated Worker Grants/ WIA National Emergency Grants Total 366,953 - 366,953 - 366,953 Department of Labor Total 377,523 - 377,523 - 377,523 Department of State 19.009 Academic Exchange Programs - Undergraduate Programs PO16002480 126,591 - 126,591 - 126,591 PO17002466 47,008 - 47,008 - 47,008 19.009 Academic Exchange Programs - Undergraduate Programs Total 173,599 - 173,599 - 173,599 19.017 Environmental and Scientific Partnerships and Programs S-LMAQM-16-GR-1014 AMEND #1 19,155 - 19,155 19,155 - S-TH200-16-GR-214 33,541 - 33,541 33,541 - 19.017 Environmental and Scientific Partnerships and Programs Total 52,695 - 52,695 52,695 - 19.040 Public Diplomacy Programs SKS700-16-GR-0012 67,200 - 67,200 67,200 - 19.040 Public Diplomacy Programs Total 67,200 - 67,200 67,200 - 19.421 Exchange-English Language Fellow Program (B) PO16002972 112,000 - 112,000 - 112,000 19.421 Exchange-English Language Fellow Program (B) Total 112,000 - 112,000 - 112,000 19.900 AEECA/ESF PD Programs S-RS500-16-CA-191 44,916 39,510 84,426 84,426 - 19.900 AEECA/ESF PD Programs Total 44,916 39,510 84,426 84,426 - Department of State Total 450,410 39,510 489,920 204,321 285,599 Department of The Interior 15.224 Cultural and Paleontological Resources Management L13AC00296 MOD#1 10,450 - 10,450 10,450 - L16AC00285 20,814 - 20,814 20,814 - L16AC00286 21,643 - 21,643 21,643 - L16AC00287 1,206 - 1,206 1,206 - L16AC00288 9,600 - 9,600 9,600 - L16AP00003 3,406 - 3,406 3,406 - 15.224 Cultural and Paleontological Resources Management Total 67,119 - 67,119 67,119 - 15.923 National Center for Preservation Technology and Training P15AP00092 1,987 - 1,987 1,987 - 15.923 National Center for Preservation Technology and Training Total 1,987 - 1,987 1,987 - 15.945 Cooperative Research and Training Programs – Resources of the National Park System P14AC01482 MOD #2 30,111 - 30,111 30,111 - P15AC01669 10,624 - 10,624 10,624 - 15.945 Cooperative Research and Training Programs – Resources of the National Park System Total 40,735 - 40,735 40,735 - 15.946 Cultural Resources Management P15AC01822 MOD 1 13,069 - 13,069 13,069 - P15AC01896 60,000 - 60,000 60,000 -
The notes to the Schedule of Expenditures of Federal Awards are an integral part of this schedule.
62 | University of Oregon Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2017
Federal Grantor/Program Title / Pass-through Grantor and Contract Number Direct Subrecipients Total Direct Award Pass-through Expenditures Award P16AC01468 20,491 - 20,491 20,491 - P16AC01765 422 - 422 422 - 15.946 Cultural Resources Management Total 93,981 - 93,981 93,981 - Department of The Interior Total 203,822 - 203,822 203,822 - Department of Transportation 20.701 University Transportation Centers Program NITCN-UO-15 20,097 - 20,097 - 20,097 NITCN-UO-16 19,083 - 19,083 - 19,083 20.701 University Transportation Centers Program Total 39,180 - 39,180 - 39,180 Department of Transportation Total 39,180 - 39,180 - 39,180 Environmental Protection Agency 66.950 Environmental Education and Training Program EE360 47,196 - 47,196 - 47,196 NPEEE 57,330 - 57,330 - 57,330 66.950 Environmental Education and Training Program Total 104,525 - 104,525 - 104,525 Environmental Protection Agency Total 104,525 - 104,525 - 104,525 Federal Council on the Arts and the Humanities 45.024 Promotion of the Arts_Grants to Organizations and Individuals 15-5500-7067 9,088 - 9,088 9,088 - 16-5500-7065 56,096 - 56,096 56,096 - 16-5500-7137 36,219 - 36,219 36,219 - 17-4200-7004 5,939 - 5,939 5,939 - 45.024 Promotion of the Arts_Grants to Organizations and Individuals Total 107,341 - 107,341 107,341 - 45.025 Promotion of the Arts_Partnership Agreements 22426/FY16-ALG-13515 3 - 3 - 3 FY2017-ABC-14907 1,256 - 1,256 - 1,256 FY2017-OSG-14472 10,017 - 10,017 - 10,017 FY2017-OSG-14473 5,262 - 5,262 - 5,262 45.025 Promotion of the Arts_Partnership Agreements Total 16,538 - 16,538 - 16,538 45.149 Promotion of the Humanities Division of Preservation and PG-233796-16 6,000 - 6,000 6,000 - PG-252857-17 14 - 14 14 - 45.149 Promotion of the Humanities Division of Preservation and Total 6,014 - 6,014 6,014 - 45.163 Promotion of the Humanities_Professional Development ES-50550-14 13,207 - 13,207 13,207 - 45.163 Promotion of the Humanities_Professional Development Total 13,207 - 13,207 13,207 - 45.201 Arts and Artifacts Indemnity FY16-DES-13890 2,746 - 2,746 - 2,746 45.201 Arts and Artifacts Indemnity Total 2,746 - 2,746 - 2,746 45.301 Museum for America Grants MA-31-16-0407-16 1,110 - 1,110 1,110 - 45.301 Museum for America Grants Total 1,110 - 1,110 1,110 - 45.312 National Leadership Grants 116432_G003667 1,950 - 1,950 - 1,950 45.312 National Leadership Grants Total 1,950 - 1,950 - 1,950 Federal Council on the Arts and the Humanities Total 148,907 - 148,907 127,673 21,234 Fish and Wildlife Cluster Department of The Interior 15.605 Sport Fish Restoration Program 104-16 6,865 - 6,865 - 6,865 15.605 Sport Fish Restoration Program Total 6,865 - 6,865 - 6,865 Department of The Interior Total 6,865 - 6,865 - 6,865 Fish and Wildlife Cluster Total 6,865 - 6,865 - 6,865 Highway Planning and Construction Cluster Department of Transportation 20.205 Highway Planning and Construction 2017-00242 2,303 - 2,303 - 2,303 2017-02651 5,224 - 5,224 - 5,224 23256 53,855 - 53,855 - 53,855 20.205 Highway Planning and Construction Total 61,382 - 61,382 - 61,382 Department of Transportation Total 61,382 - 61,382 - 61,382 Highway Planning and Construction Cluster Total 61,382 - 61,382 - 61,382 Special Education Cluster (IDEA) Department of Education 84.027 Special Education Grants to States 1088444/CK0094/CL0136/CL0165 33,402 - 33,402 - 33,402 2402F0 AMEND #3 (133) - (133) - (133) 40151 231,479 - 231,479 - 231,479 43226 68 - 68 - 68 9984 AMEND #3 261,684 - 261,684 - 261,684 (blank) 106,095 - 106,095 - 106,095 84.027 Special Education Grants to States Total 632,596 - 632,596 - 632,596 84.173 Special Education Preschool Grants 2402F0 AMEND #3 (29) - (29) - (29) 36547 MOD #1 396 - 396 - 396 40155 425,374 - 425,374 - 425,374
The notes to the Schedule of Expenditures of Federal Awards are an integral part of this schedule.
2017 | Annual Financial Report | 63 Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2017
Federal Grantor/Program Title / Pass-through Grantor and Contract Number Direct Subrecipients Total Direct Award Pass-through Expenditures Award 40354 23,593 - 23,593 - 23,593 84.173 Special Education Preschool Grants Total 449,333 - 449,333 - 449,333 Department of Education Total 1,081,929 - 1,081,929 - 1,081,929 Special Education Cluster (IDEA) Total 1,081,929 - 1,081,929 - 1,081,929 TRIO Cluster Department of Education 84.042 TRIO Student Support Services P042A100917-14 (1,600) - (1,600) (1,600) - P042A151488-16 534,718 - 534,718 534,718 - 84.042 TRIO Student Support Services Total 533,118 - 533,118 533,118 - 84.217 McNair Post-Baccalaureate Achievement P217A120192-16 MOD #11 234,685 - 234,685 234,685 - 84.217 McNair Post-Baccalaureate Achievement Total 234,685 - 234,685 234,685 - Department of Education Total 767,803 - 767,803 767,803 - TRIO Cluster Total 767,803 - 767,803 767,803 - Medicaid Cluster Department of Health and Human Services 93.778 Medical Assistance Program Medicaid 341,459 - 341,459 341,459 - 93.778 Medical Assistance Program Total 341,459 - 341,459 341,459 - Department of Health and Human Services Total 341,459 - 341,459 341,459 - Medicaid Cluster Total 341,459 - 341,459 341,459 - Total Expenditures of Federal Awards $ 264,102,948 $ 8,833,005 $ 272,935,953 $ 261,320,388 $ 11,615,564
The notes to the Schedule of Expenditures of Federal Awards are an integral part of this schedule.
64 | University of Oregon 2017 | Annual Financial Report | 65 Notes to Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2017
1. Basis of Presentation The accompanying schedule of expenditures of federal awards includes federal grant activity of the University and is presented on the accrual basis of accounting. The information in this schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Therefore, some amounts presented in this schedule may differ from amounts presented in, or used in the preparation of, the basic financial statements.
2. Summary of Significant Accounting Policies Expenditures reported on the schedule of expenditures of federal awards are recognized following the cost principles contained in Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) wherein certain types of expenditures are not allowable or are limited as to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in prior years. Pass-through entity identifying numbers are presented where applicable.
3. University Administered Loan Programs The University administers the Federal Perkins Loan Program (CDFA number 84.038). The outstanding student loan balance was $19,403,468 as of June 30, 2016. The outstanding student loan balance and total loan disbursements were $19,774,013 and $3,219,027 for the twelve months ended June 30, 2017. Loans outstanding at the beginning of the year and loans made during the year are included in the federal expenditures presented in the schedule. The above expenditures for the Federal Perkins Loan Program include loans to students and administrative cost allowances. The expenditures reported in the Schedule of Expenditures of Federal Awards represent the administrative cost allowance for the year reported. The federal capital contribution was discontinued for FY 2006.
4. Election of De Minimis Indirect Rate During the current year end, June 30, 2017, the University did not elect to use the 10 percent de minimis indirect cost rate.
5. Pass-Through Award University of Oregon passed through to subrecipients:
Federal Grantor / Program Title / Subrecipient and Contract Number Payments Department of Agriculture 10.310 Agriculture and Food Research Initiative (AFRI) Oregon State University - 238371B $ 7,887 Rutgers, The State University - 238401A 8,490 10.310 Agriculture and Food Research Initiative (AFRI) Total 16,376 Department of Agriculture Total 16,376 Department of Commerce 11.417 Sea Grant Support Oregon State University - 2409U1A 48,115 11.417 Sea Grant Support Total 48,115 11.419 Coastal Zone Management Administration Awards Oregon State University - 290131B 12,232 11.419 Coastal Zone Management Administration Awards Total 12,232 Department of Commerce Total 60,347 Department of Defense 12.300 Basic and Applied Scientific Research Texas Tech University - 236701A 247,919 12.300 Basic and Applied Scientific Research Total 247,919 12.550 English for Heritage Language Speakers Scholarships Portland Public Schools - 271421A 123,995 Portland Public Schools - 271881A 186,253 Portland State University - 290021A 59,021 Portland State University - 290022A 98,501 12.550 English for Heritage Language Speakers Scholarships Total 467,770 12.800 Air Force Defense Research Sciences Program Battelle Memorial Institute - 23527VC (141) 12.800 Air Force Defense Research Sciences Program Total (141) Department of Defense Total 715,547 Department of Education 84.283 Comprehensive Centers Florida State University - 251501A 154,742 RMC Research Corporation - 251501C 71,421 84.283 Comprehensive Centers Total 226,163 84.305 Education Research, Development and Dissemination Boulder Language Technologies Inc - 224511B 5,696 CSU Chico Research Foundation - 224521B 4,290 Michigan State University - 224001C (25,000) Michigan State University - 224001H 25,000 Michigan State University - 224641A 48,092 Regents of the University of Minnesota - 224521A 95,579 Southern Methodist University - 224001G - Southern Methodist University - 224511A 67,680
66 | University of Oregon Notes to Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2017
Federal Grantor / Program Title / Subrecipient and Contract Number Payments University of Texas at Austin - 224641B 44,372 University of Wisconsin - 224521C 27,513 84.305 Education Research, Development and Dissemination Total 293,223 84.324 Research in Special Education Arizona State University/ASU - 224061A 573,828 Commonweal/dba Visual Thinking Strategies - 224061A (99,565) Oregon Research Institute - 224771A 31,884 University of Texas at Austin - 224771B 11,587 84.324 Research in Special Education Total 517,734 84.324A Research in Special Education Board of Regents of the Nevada Sys of Higher Ed/dba Univ of - 224741B 24,126 Oregon Research Institute - 224381A 67,846 Oregon Research Institute - 224591A 61,015 Oregon Research Institute - 224741A 50,158 University of British Columbia - 224351A 15,486 University of North Carolina at Charlotte - 224311A 120,399 University of Texas at Austin - 224381C 33,178 84.324A Research in Special Education Total 372,208 84.326 Special Education - Technical Assistance and Dissemination to Improve Services and Results for Children with Disabilities Board of Trustees for the University of Alabama - 224441P 39,904 Georgia State University - 224441E 11,580 Lane County School District 4J - 224371C 37,455 Macomb Intermediate School District - 224441G 207,784 May Institute Inc - 224441J 90,068 Multnomah Education Service District No 535 Employee Fund As - 224371A 36,690 Placer County - 224441N 50,000 Regents of the University of Colorado - 224441O 180,036 School Association for Special Ed in DuPage/IL PBIS Network - 224441F 495,903 Sheppard Pratt Health System Inc - 224441H 604,281 University of Connecticut - 224441K 669,544 University of Kansas Center for Research Inc - 224441C 49,306 University of Kansas Center for Research Inc - 224441M 89,191 University of Missouri - 224441A 398,300 University of North Carolina at Charlotte - 224441D 35,957 University of South Carolina - 224441L 36,245 University of South Florida - 224441B 363,344 University of Texas at Austin - 224721A 17,801
84.326 Special Education - Technical Assistance and Dissemination to Improve Services and Results for Children with Disabilities Total 3,413,391 84.327 Special Education_Educational Technology Media, and Materials for Individuals with Disabilities Concentric Sky Inc - 224541B 51,840 Georgia Southern University Research & Service Foundation - 224481A 40,651 RMC Research Corporation - 223811G 9,409 Western Michigan University - 223811L 2,858 84.327 Special Education_Educational Technology Media, and Materials for Individuals with Disabilities Total 104,757 84.366 Mathematics and Science Partnerships (B) Lane County School District 19/Springfield Public Schools - 2406V1B 63,422 Lane County School District 4J - 2406V1C 5,145 Lane Education Service District - 2406V1A 12,113 84.366 Mathematics and Science Partnerships (B) Total 80,680 Department of Education Total 5,008,156 Department of Energy 81.087 Renewable Energy Research and Development Malachite Technologies Inc - 281131B 143,976 81.087 Renewable Energy Research and Development Total 143,976 Department of Energy Total 143,976 Department of Health and Human Services 93.000 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES Stanford University - 215481A 181,943 93.000 U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES Total 181,943 93.086 Healthy Marriage Promotion and Responsible Fatherhood Grants New York University - 290161A 11,364 New York University - 290162A 3,536 93.086 Healthy Marriage Promotion and Responsible Fatherhood Grants Total 14,900 93.172 Human Genome Research Genome Research Ltd - 212844A 64,945 Genome Research Ltd - 215671A 6,813 93.172 Human Genome Research Total 71,758 93.242 Mental Health Research Grants Ohio State University Research Foundation - 215681B 88,852 Oregon Research Institute - 215681A 33,850
2017 | Annual Financial Report | 67 Notes to Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2017
Federal Grantor / Program Title / Subrecipient and Contract Number Payments SRI International - 215681C 178,425 93.242 Mental Health Research Grants Total 301,127 93.273 Alcohol Research Programs University of Miami - 215701A 24,747 93.273 Alcohol Research Programs Total 24,747 93.279 Drug Abuse and Addiction Research Programs Pennsylvania State University - 215351B 57,589 Regents of the University of California/Riverside - 215351A 86,219 93.279 Drug Abuse and Addiction Research Programs Total 143,807 93.307 Minority Health and Health Disparities Research Farmworker Housing Development Corporation - 215261A 17,640 93.307 Minority Health and Health Disparities Research Total 17,640 93.310 Trans-NIH Research Support George Washington University - 281211B 224,300 Pennsylvania State University - 281211C 197,031 93.310 Trans-NIH Research Support Total 421,331 93.351 Office of Research Infrastructure Programs Michigan State University - 215721B 41,819 Nicholls State University - 215721A 6,250 Oregon State University - 215451A 59,237 Texas State University San Marcos - 215421A 165,514 University of Wuerzburg - 215421C 4,596 Washington University - 215421B 24,389 93.351 Office of Research Infrastructure Programs Total 301,805 93.396 Cancer Biology Research Oregon State University - 215371A 50,753 93.396 Cancer Biology Research Total 50,753 93.433 National Institute on Disability, Independent Living, and Rehabilitation Research Eduworks Corporation - 231231A 31,138 93.433 National Institute on Disability, Independent Living, and Rehabilitation Research Total 31,138 93.846 Arthritis Musculoskeletal and Skin Diseases Research Arcadia University - 215411A 100,133 Oregon Research Institute - 215411B 22,255 93.846 Arthritis Musculoskeletal and Skin Diseases Research Total 122,388 93.847 Diabetes, Digestive, and Kidney Diseases Extramural Research Regents of the University of California/San Diego - 215381A 44,873 Regents of the University of Colorado - 215381B (28) 93.847 Diabetes, Digestive, and Kidney Diseases Extramural Research Total 44,845 93.859 Biomedical Research and Research Training Benaroya Research Institute at Virginia Mason - 215551A 26,400 Board of Trustees for the University of Alabama - 215621A 52,223 Kent State University - 215251C 16,799 Scripps Research Institute - 215612A 53,376 Sloan Kettering Institute for Cancer Research - 215531A 203,422 University of Arkansas - 215251E 128,203 93.859 Biomedical Research and Research Training Total 480,424 93.865 Child Health and Human Development Extramural Research Oregon Social Learning Center Inc - 215291A 91,553 Pennsylvania State University - 215441A 25,037 93.865 Child Health and Human Development Extramural Research Total 116,590 93.866 Aging Research Donald B Slocum Research & Education Foundation for Orthoped - 215431A 69,300 Oregon Health & Science University - 215431C 13,056 Oregon Research Institute - 215431B 46,660 93.866 Aging Research Total 129,015 Department of Health and Human Services Total 2,454,212 Department of Homeland Security 97.047 Pre-Disaster Mitigation County of Douglas - 2405T1A 29,144 97.047 Pre-Disaster Mitigation Total 29,144 Department of Homeland Security Total 29,144 Department of State 19.900 AEECA/ESF PD Programs Stavropol Regional Branch of Russian Charitable Foundation - 281261A 39,510 19.900 AEECA/ESF PD Programs Total 39,510 Department of State Total 39,510 Department of The Interior 15.232 Wildland Fire Research and Studies Program Colorado State University - 281192B 2,274 Forest Stewards Guild - 281192A 824
68 | University of Oregon Notes to Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2017
Federal Grantor / Program Title / Subrecipient and Contract Number Payments 15.232 Wildland Fire Research and Studies Program Total 3,099 Department of The Interior Total 3,099 Environmental Protection Agency 66.509 Science To Achieve Results (STAR) Research Program Oregon Research Institute - 239501A 83,662 66.509 Science To Achieve Results (STAR) Research Program Total 83,662 Environmental Protection Agency Total 83,662 Federal Council on the Arts and the Humanities 45.161 Promotion of the Humanities_Research Bucknell University - 237631A 2,068 University of Puget Sound - 237631B 2,369 45.161 Promotion of the Humanities_Research Total 4,437 Federal Council on the Arts and the Humanities Total 4,437 National Science Foundation 47.050 Geosciences Board of Trustees of Whitman College/dba Whitman College - 2003A1A 8,611 James Madison University - 2001S1A 17,217 University of Chicago - 2000J1A 19,063 47.050 Geosciences Total 44,892 47.074 Biological Sciences Donald Danforth Plant Science Center - 209891A 170,599 47.074 Biological Sciences Total 170,599 47.075 Social Behavioral and Economic Sciences Trustees of the University of Pennsylvania - 2000U1A 8,636 47.075 Social Behavioral and Economic Sciences Total 8,636 47.076 Education and Human Resources University of Texas at Austin - 2001X1A 50,412 47.076 Education and Human Resources Total 50,412 National Science Foundation Total 274,538 Grand Total $ 8,833,005
2017 | Annual Financial Report | 69
For information about the financial data included in this report, contact: Jamie Moffitt Vice President for Finance and Administration, Treasurer, and CFO 103 Johnson Hall 1283 University of Oregon Eugene, OR 97403-1283 541-346-3003
70 | University of Oregon
University of Oregon uoregon.edu | 541-346-3003 Office of the Vice President for Finance and Administration, Treasurer, and CFO Eugene, OR 97403-1283 © 2017 University of Oregon
APPENDIX D
FORM OF BOND COUNSEL OPINION
______, 2018
University of Oregon Eugene, Oregon
Merrill Lynch, Pierce, Fenner & Smith Incorporated Seattle, Washington
Re: University of Oregon, General Revenue Bonds, 2018 $______
Ladies and Gentlemen:
We have examined a certified transcript of all of the proceedings taken in the matter of the issuance by the University of Oregon (the “University”) of its General Revenue Bonds, 2018, in the aggregate principal amount of $______(the “2018 Bonds”), issued to finance University capital projects and pay the costs of issuing the 2018 Bonds. The 2018 Bonds are issued pursuant to a resolution of the Board of Trustees of the University adopted on September 8, 2017 (the “Resolution”) and a Declaration of the University Treasurer dated ____ 1, 2018 (the “Declaration” and together with the Resolution the “Bond Authorization”). Capitalized terms used in this opinion which are not otherwise defined shall have the meanings given to such terms in the Bond Authorization.
The 2018 Bonds are subject to redemption as set forth in the Bond Purchase Contract and Official Statement dated ______, 2018. The University has not designated the 2018 Bonds as “qualified tax-exempt obligations” within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the “Code”).
Regarding questions of fact material to our opinion, we have relied on representations of the University in the Bond Authorization and in the certified proceedings and on other certifications of public officials and others furnished to us without undertaking to verify the same by independent investigation.
Based on the foregoing, we are of the opinion that, under existing law:
1. The 2018 Bonds have been legally issued and constitute valid and binding obligations of the University, except to the extent that the enforcement of the rights and remedies of the owners of the 2018 Bonds may be limited by laws relating to bankruptcy, reorganization or other similar laws of general application affecting the rights of creditors.
2. The 2018 Bonds are general revenue obligations of the University. Both principal of and interest on the 2018 Bonds are payable solely from General Revenues. The University has obligated and bound itself to set aside out of General Revenues as a special fund obligation amounts sufficient to pay the principal of and interest on the 2018 Bonds as the same become due. The University’s General Revenue Bonds, 2015A, General Revenue Bonds, 2016A and the 2018 Bonds are equally and ratably payable, without preference, priority or distinction because of date of issue or otherwise from General Revenues. The University has reserved the right to issue Additional Bonds payable from and secured by General Revenues.
D-1 3. Interest on the 2018 Bonds is excludable from gross income for federal income tax purposes and is not an item of tax preference for purposes of the federal alternative minimum tax imposed on individuals. The opinion set forth in the preceding sentence is subject to the condition that the University comply with all requirements of the Code, that must be satisfied subsequent to the issuance of the 2018 Bonds in order that the interest thereon be, and continue to be, excludable from gross income for federal income tax purposes. The University has covenanted to comply with all applicable requirements. Failure to comply with certain of such covenants may cause interest on the 2018 Bonds to be included in gross income for federal income tax purposes retroactively to the date of issuance of the 2018 Bonds.
4. Interest on the 2018 Bonds is exempt from State of Oregon personal income taxes.
Except as expressly stated above, we express no opinion regarding any tax consequences related to the ownership, sale or disposition of the 2018 Bonds, or the amount, accrual or receipt of interest on, the 2018 Bonds. Owners of the 2018 Bonds should consult their tax advisors regarding the applicability of any collateral tax consequences of owning the 2018 Bonds.
We have not been engaged nor have we undertaken to review the accuracy, completeness or sufficiency of the official statement or other offering material related to the 2018 Bonds (except to the extent, if any, stated in the official statement), and we express no opinion relating thereto, or relating to the undertaking by the University to provide ongoing disclosure pursuant to Securities and Exchange Commission Rule 15c2-12.
This opinion is given as of the date hereof, and we assume no obligation to update, revise or supplement this opinion to reflect any facts or circumstances that may hereafter come to our attention or any changes in law that may hereafter occur.
Very truly yours, PACIFICA LAW GROUP LLP
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APPENDIX E
BOOK-ENTRY ONLY SYSTEM
The following information has been provided by DTC. The University makes no representation regarding the accuracy or completeness thereof. Beneficial Owners should therefore confirm the following with DTC or the Direct Participants (as hereinafter defined). Language in [brackets] with strike-through has been deleted as permitted by DTC as it does not pertain to the 2018 Bonds.
1. The Depository Trust Company (“DTC”), New York, NY, will act as securities depository for the securities (the “Securities”). The Securities will be issued as fully-registered securities registered in the name of Cede & Co. (DTC’s partnership nominee) or such other name as may be requested by an authorized representative of DTC. One fully-registered Security certificate will be issued for [each issue of] the Securities, [each] in the aggregate principal amount of such issue, and will be deposited with DTC. [If, however, the aggregate principal amount of [any] issue exceeds $500 million, one certificate will be issued with respect to each $500 million of principal amount, and an additional certificate will be issued with respect to any remaining principal amount of such issue.]
2. DTC, the world’s largest securities depository, is a limited-purpose trust company organized under the New York Banking Law, a “banking organization” within the meaning of the New York Banking Law, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code, and a “clearing agency” registered pursuant to the provisions of Section 17A of the Securities Exchange Act of 1934. DTC holds and provides asset servicing for over 3.5 million issues of U.S. and non-U.S. equity issues, corporate and municipal debt issues, and money market instruments (from over 100 countries) that DTC’s participants (“Direct Participants”) deposit with DTC. DTC also facilitates the post-trade settlement among Direct Participants of sales and other securities transactions in deposited securities, through electronic computerized book-entry transfers and pledges between Direct Participants’ accounts. This eliminates the need for physical movement of securities certificates. Direct Participants include both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, clearing corporations, and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Access to the DTC system is also available to others such as both U.S. and non-U.S. securities brokers and dealers, banks, trust companies, and clearing corporations that clear through or maintain a custodial relationship with a Direct Participant, either directly or indirectly (“Indirect Participants”). DTC has Standard & Poor’s rating of AA+. The DTC Rules applicable to its Participants are on file with the Securities and Exchange Commission. More information about DTC can be found at .
3. Purchases of Securities under the DTC system must be made by or through Direct Participants, which will receive a credit for the Securities on DTC’s records. The ownership interest of each actual purchaser of each Security (“Beneficial Owner”) is in turn to be recorded on the Direct and Indirect Participants’ records. Beneficial Owners will not receive written confirmation from DTC of their purchase. Beneficial Owners are, however, expected to receive written confirmations providing details of the transaction, as well as periodic statements of their holdings, from the Direct or Indirect Participant through which the Beneficial Owner entered into the transaction. Transfers of ownership interests in the Securities are to be accomplished by entries made on the books of Direct and Indirect Participants acting on behalf of Beneficial Owners. Beneficial Owners will not receive certificates representing their ownership interests in Securities, except in the event that use of the book-entry system for the Securities is discontinued.
4. To facilitate subsequent transfers, all Securities deposited by Direct Participants with DTC are registered in the name of DTC’s partnership nominee, Cede & Co., or such other name as may be requested by an authorized representative of DTC. The deposit of Securities with DTC and their registration in the name of Cede & Co. or such other DTC nominee do not effect any change in beneficial ownership. DTC has no knowledge of the actual Beneficial Owners of the Securities; DTC’s records reflect only the identity of the Direct Participants to whose accounts such Securities are credited, which may or may not be the Beneficial Owners. The Direct and Indirect Participants will remain responsible for keeping account of their holdings on behalf of their customers.
E-1 5. Conveyance of notices and other communications by DTC to Direct Participants, by Direct Participants to Indirect Participants, and by Direct Participants and Indirect Participants to Beneficial Owners will be governed by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time. [Beneficial Owners of Securities may wish to take certain steps to augment the transmission to them of notices of significant events with respect to the Securities, such as redemptions, tenders, defaults, and proposed amendments to the Security documents. For example, Beneficial Owners of Securities may wish to ascertain that the nominee holding the Securities for their benefit has agreed to obtain and transmit notices to Beneficial Owners. In the alternative, Beneficial Owners may wish to provide their names and addresses to the Bond Registrar and request that copies of notices be provided directly to them.]
[6. Redemption notices shall be sent to DTC. If less than all of the Securities within an issue are being redeemed, DTC’s practice is to determine by lot the amount of the interest of each Direct Participant in such issue to be redeemed.]
7. Neither DTC nor Cede & Co. (nor any other DTC nominee) will consent or vote with respect to Securities unless authorized by a Direct Participant in accordance with DTC’s MMI Procedures. Under its usual procedures, DTC mails an Omnibus Proxy to Issuer as soon as possible after the record date. The Omnibus Proxy assigns Cede & Co.’s consenting or voting rights to those Direct Participants to whose accounts Securities are credited on the record date (identified in a listing attached to the Omnibus Proxy).
8. Redemption proceeds, distributions, and dividend payments on the Securities will be made to Cede & Co., or such other nominee as may be requested by an authorized representative of DTC. DTC’s practice is to credit Direct Participants’ accounts upon DTC’s receipt of funds and corresponding detail information from Issuer or Agent, on payable date in accordance with their respective holdings shown on DTC’s records. Payments by Participants to Beneficial Owners will be governed by standing instructions and customary practices, as is the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such Participant and not of DTC, Agent, or Issuer, subject to any statutory or regulatory requirements as may be in effect from time to time. Payment of redemption proceeds, distributions, and dividend payments to Cede & Co. (or such other nominee as may be requested by an authorized representative of DTC) is the responsibility of Issuer or Agent, disbursement of such payments to Direct Participants will be the responsibility of DTC, and disbursement of such payments to the Beneficial Owners will be the responsibility of Direct and Indirect Participants.
[9. A Beneficial Owner shall give notice to elect to have its Securities purchased or tendered, through its Participant, to [Tender/Remarketing] Agent, and shall effect delivery of such Securities by causing the Direct Participant to transfer the Participant’s interest in the Securities, on DTC’s records, to [Tender/Remarketing] Agent. The requirement for physical delivery of Securities in connection with an optional tender or a mandatory purchase will be deemed satisfied when the ownership rights in the Securities are transferred by Direct Participants on DTC’s records and followed by a book-entry credit of tendered Securities to [Tender/Remarketing] Agent’s DTC account.]
10. DTC may discontinue providing its services as depository with respect to the Securities at any time by giving reasonable notice to Issuer or Agent. Under such circumstances, in the event that a successor depository is not obtained, Security certificates are required to be printed and delivered.
11. Issuer may decide to discontinue use of the system of book-entry-only transfers through DTC (or a successor securities depository). In that event, Security certificates will be printed and delivered to DTC.
12. The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that Issuer believes to be reliable, but Issuer takes no responsibility for the accuracy thereof.
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APPENDIX F
FORM OF CONTINUING DISCLOSURE CERTIFICATE
This Continuing Disclosure Undertaking (this “Undertaking”) dated as of ___, 2018, is hereby made by the University of Oregon (the “University”) in connection with the issuance of its General Revenue Bonds, 2018 (the “2018 Bonds”). The 2018 Bonds are issued pursuant to a resolution of the Board of Trustees of the University adopted on September 8, 2017 (the “Resolution”) and a Declaration of the University Treasurer dated _____, 2018 (the “Declaration” and together with the Resolution the “Bond Authorization”).
The University covenants and agrees as follows:
SECTION 1. Purpose of the Undertaking. This Undertaking is being executed and delivered by the University for the benefit of the Holders and Beneficial Owners of the 2018 Bonds and in order to assist the Participating Underwriter in complying with Securities and Exchange Commission Rule 15c2-12(b)(5).
SECTION 2. Definitions. In addition to the definitions set forth in the Bond Authorization, which apply to any capitalized term used in this Undertaking unless otherwise defined in this Section, the following capitalized terms shall have the following meanings:
Annual Report shall mean any Annual Report provided by the University pursuant to, and as described in, Sections 3 and 4 of this Undertaking.
Beneficial Owner shall mean any person which (a) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any 2018 Bonds (including persons holding 2018 Bonds through nominees, depositories or other intermediaries), or (b) is treated as the owner of any 2018 Bonds for federal income tax purposes.
Dissemination Agent shall mean the University, or any successor Dissemination Agent designated in writing by the University and which has filed with the University a written acceptance of such designation.
Holders shall mean the registered holders of the 2018 Bonds, as recorded in the registration books of the Bond Registrar.
Notice Event shall mean any of the following events:
1. Principal and interest payment delinquencies; 2. Non-payment related defaults, if material; 3. Unscheduled draws on debt service reserves reflecting financial difficulties; 4. Unscheduled draws on credit enhancements reflecting financial difficulties; 5. Substitution of credit or liquidity providers, or their failure to perform; 6. Adverse tax opinions, the issuance by the Internal Revenue Service of proposed or final determinations of taxability, Notices of Proposed Issue (IRS Form 5701-TEB) or other material notices or determinations with respect to the tax status of the security, or other material events affecting the tax status of the security; 7. Modifications to rights of security holders, if material; 8. Bond calls, if material, and tender offers; 9. Defeasances; 10. Release, substitution, or sale of property securing repayment of the securities, if material; 11. Rating changes;
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12. Bankruptcy, insolvency, receivership or similar event of the University; 13. The consummation of a merger, consolidation, or acquisition involving the University or the sale of all or substantially all of the assets of the University, other than in the ordinary course of business, the entry into a definitive agreement to undertake such an action or the termination of a definitive agreement relating to any such actions, other than pursuant to its terms, if material; and 14. Appointment of a successor or additional trustee or the change of name of the trustee, if material.
MSRB means the Municipal Securities Rulemaking Board or any successors to its functions.
Official Statement shall mean the Official Statement dated January ___, 2018, with respect to the 2018 Bonds.
Participating Underwriter shall mean any of the original underwriters of the 2018 Bonds required to comply with the Rule in connection with offering of the 2018 Bonds.
Rule shall mean Rule 15c2-12(b)(5) adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as the same may be amended from time to time.
State shall mean the State of Oregon.
SECTION 3. Provision of Annual Reports.
(a) The University shall, or shall cause the Dissemination Agent to, not later than nine months after the end of the University’s fiscal year (presently March 31, 2019 for the fiscal year ending June 30, 2018), commencing with the report for the 2018 Fiscal Year, provide to the MSRB an Annual Report which is consistent with the requirements of Section 4 of this Undertaking. The Annual Report may be submitted as a single document or as separate documents comprising a package, and may cross-reference other information as provided in Section 4 of this Undertaking; provided that the audited financial statements of the University may be submitted separately from the balance of the Annual Report and later than the date required above for the filing of the Annual Report if they are not available by that date. The University may adjust such fiscal year by providing written notice of the change of fiscal year to the MSRB.
(b) Not later than fifteen (15) Business Days prior to said date, the University shall provide the Annual Report to the Dissemination Agent (if other than the University). If the University is unable to provide to the MSRB an Annual Report by the date required in subsection (a), the University shall send a notice to the MSRB stating that the University is unable to provide the Annual Report by the date required in subsection (a), and stating when the University expects to provide the Annual Report.
(c) If the Dissemination Agent is not the University, the Dissemination Agent shall file a report with the University certifying that the Annual Report has been provided pursuant to this Undertaking and stating the date it was provided.
SECTION 4. Content of Annual Reports. The University’s Annual Report shall contain or include by reference (without duplication) the following:
1. The audited financial statements of the University for the prior fiscal year, prepared in accordance with generally accepted accounting principles as promulgated to apply to governmental entities from time to time by the Governmental Accounting Standards Board. If the University’s audited financial statements are not available by the time the Annual Report is required to be filed pursuant to Section 3(a), the Annual Report shall contain unaudited financial statements in a format similar to the financial statements contained in the final Official Statement, and the audited financial statements shall be filed in the same manner as the Annual Report when they become available.
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2. Updates to the following financial and operating data of the University to the extent the updates are not included in the audited financial statements provided under subsection 1:
• The amount of University revenue and other debt outstanding in that fiscal year.
• General Revenue, and General Revenue components, received for that fiscal year, generally of the type provided in the table entitled “UNIVERSITY GENERAL REVENUES RECEIVED”.
• Student enrollment information for that fiscal year, generally of the type provided in the table entitled “STUDENT ENROLLMENT” in Appendix A.
• Faculty information for that fiscal year, generally of the type provided in the table entitled “FACULTY DATA” in Appendix A.
• Information regarding tuition and fees for that fiscal year, generally of the type provided in the table entitled “TUITION AND FEES” in Appendix A.
• Grant and contract revenues for that fiscal year, generally of the type provided in the table entitled “GRANTS AND CONTRACTS.”
• Financial results for that fiscal year, generally of the type included in the title entitled “STATEMENT OF REVENUE, EXPENSE, AND CHANGE IN NET POSITION.”
• State operating appropriations to the University for such fiscal year, generally of the type provided in Appendix A.
• Value of investments, including Foundation investments, for that fiscal year, generally of the type provided in Appendix A.
• A narrative description of any material changes to the University’s investment policy during the preceding fiscal year.
• A description of any material changes to the University’s obligations with respect to its pension plans.
• A description of any material changes to the University’s obligations with respect to other post- employment benefits.
Any or all of the items listed above may be included by specific reference to other documents, including official statements of debt issues of the University or related public entities, which are available to the public on the MSRB’s internet website. The University shall clearly identify each such other document so included by reference.
SECTION 5. Reporting of Notice Events. The University shall give, or cause to be given, notice of the occurrence of any Notice Event with respect to the 2018 Bonds not in excess of ten business days after the occurrence of the event.
SECTION 6. Termination of Reporting Obligation. The University’s obligations under this Undertaking shall terminate upon the legal defeasance, prior redemption or payment in full of all of the 2018 Bonds. If such termination occurs prior to the final maturity of the 2018 Bonds, the University shall give notice of such termination in the same manner as for a Notice Event.
SECTION 7. Dissemination Agent. The University may, from time to time, appoint or engage a Dissemination Agent to assist it in carrying out its obligations under this Undertaking, and may discharge any such Agent, with or without appointing a successor Dissemination Agent. The Dissemination Agent shall not be responsible in any manner for the content of any notice or report prepared by the University pursuant to this Undertaking.
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SECTION 8. Amendment; Waiver. Notwithstanding any other provision of this Undertaking, the University may amend this Undertaking, and any provision of this Undertaking may be waived, provided that the following conditions are satisfied:
(a) If the amendment or waiver relates to the provisions of Sections 3(a), 4, or 5, it may only be made in connection with a change in circumstances that arises from a change in legal requirements, change in law, or change in the identity, nature or status of an obligated person with respect to the 2018 Bonds, or the type of business conducted;
(b) The undertaking, as amended or taking into account such waiver, would, in the opinion of nationally recognized bond counsel, have complied with the requirements of the Rule at the time of the original issuance of the 2018 Bonds, after taking into account any amendments or interpretations of the Rule, as well as any change in circumstances; and
(c) The amendment or waiver either (i) is approved by the Holders of the 2018 Bonds in the same manner as provided in the Bond Authorization for amendments to the Bond Authorization with the consent of the Holders, or (ii) does not, in the opinion of nationally recognized bond counsel, materially impair the interests of the Holders or Beneficial Owners of the 2018 Bonds.
In the event of any amendment or waiver of a provision of this Undertaking, the University shall describe such amendment in the next Annual Report, and shall include, as applicable, a narrative explanation of the reason for the amendment or waiver and its impact on the type (or in the case of a change of accounting principles, on the presentation) of financial information or operating data being presented by the University. In addition, if the amendment relates to the accounting principles to be followed in preparing financial statements, the Annual Report for the year in which the change is made should present a comparison (in narrative form and also, if feasible, in quantitative form) between the financial statements as prepared on the basis of the new accounting principles and those prepared on the basis of the former accounting principles.
SECTION 9. Additional Information. Nothing in this Undertaking shall be deemed to prevent the University from disseminating any other information, using the means of dissemination set forth in this Undertaking or any other means of communication, or including any other information in any Annual Report or notice of occurrence of a Notice Event, in addition to that which is required by this Undertaking. If the University chooses to include any information in any Annual Report in addition to that which is specifically required by this Undertaking, the University shall have no obligation under this Undertaking to update such information or include it in any future Annual Report.
SECTION 10. Default. In the event of a failure of the University to comply with any provision of this Undertaking, any Holder or Beneficial Owner of the 2018 Bonds may take such actions as may be necessary and appropriate, including seeking mandate or specific performance by court order, to cause the University to comply with its obligations under this Undertaking. A default under this Undertaking shall not be deemed an Event of Default under the Bond Authorization, and the sole remedy under this Undertaking in the event of any failure of the University to comply with this Undertaking shall be an action to compel performance.
SECTION 11. Duties, Immunities and Liabilities of Dissemination Agent. The Dissemination Agent shall have only such duties as are specifically set forth in this Undertaking, and the University agrees to indemnify and save the Dissemination Agent, its officers, directors, employees and agents harmless against any loss, expense and liabilities which it may incur arising out of or in the exercise or performance of its powers and duties hereunder, including the costs and expenses (including attorney’s fees) of defending against any claim of liability, but excluding liabilities due to the Dissemination Agent’s negligence or willful misconduct. The obligations of the University under this Section shall survive resignation or removal of the Dissemination Agent and payment of the 2018 Bonds.
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SECTION 12. Beneficiaries. This Undertaking shall inure solely to the benefit of the University, the Dissemination Agent, the Participating Underwriter and Holders and Beneficial Owners from time to time of the 2018 Bonds, and shall create no rights in any other person or entity.
SECTION 13. EMMA; Format for Filing with the MSRB. Until otherwise designated by the MSRB or the Securities and Exchange Commission, any filing required to be made with the MSRB under this Undertaking is to be submitted through the MSRB’s Electronic Municipal Market Access system (“EMMA”), currently located at . All notices, financial information and operating data required by this Undertaking to be provided to the MSRB must be in an electronic format as prescribed by the MSRB. All documents provided to the MSRB pursuant to this Undertaking must be accompanied by identifying information as prescribed by the MSRB.
UNIVERSITY OF OREGON
Authorized Signer
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UNIVERSITY OF OREGON • General Revenue Bonds, 2018A