Sec. 1 Impact of Spending.
Any staff recommendation to appropriate funds from the Available University Fund (AUF) or from Permanent University Fund (PUF) Bond Proceeds will be presented in the context of that appropriation's impact on: (a) AUF funding for the support and maintenance of U. T. Austin, (b) bond ratings, and (c) projected AUF balances. These impacts will be considered to provide a consistent and dependable level of funding.
Sec. 2 Required Reports.
To determine the appropriate level of spending of the AUF, the following reports will be provided to the Board of Regents:
A forecast of at least six years of the income and expenditures of the AUF will be presented as needed to the Board of Regents’ Finance and Planning Committee. The University Lands Office shall provide to The University of Texas/Texas A&M Investment Management Company (UTIMCO) a forecast of revenue expected to be derived from PUF lands and deposited into the PUF. UTIMCO shall provide to the Office of Finance a forecast of PUF distributions to the AUF, based on expected PUF land contributions and investment returns, which will serve as the basis of the AUF forecast. Included as part of the AUF forecast will be the projected amount of remaining PUF debt capacity as calculated by the Office of Finance.
In May of each year, the Board of Regents shall determine an amount to be distributed to the AUF during the next fiscal year. The default annual distribution shall be an amount equal to 4.75% of the trailing 12-quarter average of the net asset value of the PUF for the quarter ending February of each year unless the average annual rate of return of the PUF investments over the trailing 12 quarters exceeds the Expected Return by 25 basis points or more, in which case the distribution shall be 5.0% of the trailing 12-quarter average. “Expected Return” is the Expected Annual Return or Benchmark set out in the Permanent University Fund Investment Policy Statement.
The CIP will be updated quarterly and reviewed with the Board of Regents every year. The updated CIP will include an estimated start date for each project, which will be based on the criteria set forth in Section 3.2 below, project readiness, projected fund availability, and relative urgency of need for the completed project.
Sec. 3 Individual Projects.
The following items will be done when preparing requests of AUF expenditures:
As a part of each agenda item requesting approval of AUF expenditures or PUF funded projects, a statement indicating compliance with this policy shall be included.
In preparing recommendations for projects to be approved, the staff will be guided by the following justification criteria:
(a) consistency with institution’s mission;
(b) project need;
(c) unique opportunity;
(d) matching funds/leverage;
(e) cost effectiveness;
(f) state of existing facility condition; and
(g) other available funding sources.
No project will be recommended for approval, if in any of the forecasted years the required appropriations from the AUF or PUF bond proceeds would cause:
(a) the forecasted AUF expenditures for program enrichment at U. T. Austin to fall below 45% of the sum of the projected U. T. System share of the net divisible AUF annual income and interest income on AUF balances [subject to the limits imposed by (b) and (c) below];
(b) debt service coverage to be less than 1.50:1.00; and
(c) the forecasted end of year AUF balance to be less than $30 million.
Sec. 4 System Administration Budget.
Operating expenditures of the U. T. System Administration will be carefully controlled to maximize the opportunity to meet the capital needs of the institutions of the U. T. System and the operating budget needs of U. T. Austin. Wherever possible, alternate funding from institutions, State funds, or other sources will be sought. Programs for which alternative funding cannot be obtained will be evaluated for possible reductions or phase-out.
Editorial amendment made May 25, 2017, per Board action on May 10, 2017
Editorial amendments to Sec. 2.1 and 2.2 made September 18, 2014
August 14, 2008
May 15, 2008 (effective July 1, 2008)
December 10, 2004