Government, Social Media, UNC

GO’s Ascent with Carolina Plott Hound

Carolina Plott Hound, the top NC conservative news aggregator, has published three of Greensboro Observer’s stories in the last week.  Today CPH’s top story is Obamacare (ACA) to Cost UNC $47 Million.  Last week they linked to stories about UNC Financials and UNC Foundation Financials – both stories contain Excel spreadsheets and detailed numbers in an effort to provide greater transparency to the people of our State.

Carolina Plott Hound - NC Conservative News Aggregator

Carolina Plott Hound – NC Conservative News Aggregator

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Government, UNC

$156 Million Project vs. Teachers of Pitt County

The UNC Board of Governors approved a $156 million student center at ECU.  I spoke and voted against the measure in both Thursday’s UNC BOG Budget & Finance Committee and the Friday’s main UNC BOG meeting.  In both instances, I was the lone vote to deny.  It was Item 10 – Authorization of Non-Appropriated Capital Improvement Projects.  The ECU vote was split out in the B&F meeting because of the number of ECU officials attending the committee meeting.    I voted against the ECU item, but voted to approve the other items in a separate vote.

My concerns included:

  • $425 estimated student fee increase.  Approximately $10-11 million per year.
  • Raising fees, but taking credit for holding tuition flat is disingenuous.  
  • Construction costs of $156 million for 280,0000sf of buildings and parking deck.  A thorough review of construction costs for all projects across all campuses should be done.  In addition, those costs should be compared to private sector costs.
  • It is important to note that the instructional budget for Pitt County schools is $25 million per year.  This ECU student fee increase is $10-11 million per year by comparison.

On the same day as the UNC BOG vote for the ECU Student Center, Pitt County Schools announced that it would have to cut teachers’ hours because of ACA (Obamacare).  The impact of ACA (Obamacare) to the UNC System is $47 million per year.  We are going to struggle to deal with all these unanticipated costs.

Financial resources are not unlimited.  We must consider the financial impact of our decisions on students, teachers, taxpayers, and the area.

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Government, UNC

My Invocation at UNC Board of Governors February Meeting

Rev. Dr. McCorkle – at the laying of the University’s cornerstone in 1793 (slightly paraphrased)
He talks about the absolute importance of God in all our endeavors, the need  for and benefits of public education.

Psalm 127:1
Unless the Lord Builds the House
A Song of Ascents. Of Solomon.
Unless the Lord builds the house,
those who build it, labor in vain.
Unless the Lord watches over the city,
the watchman stays awake in vain.
It is in vain that you rise up early
and go late to rest,
eating the bread of anxious toil;
for he gives to His beloved sleep.

Behold, children are a heritage from the Lord,
the fruit of the womb, a reward.
Like arrows in the hand of a warrior
are the children of one’s youth.
Blessed is the man
who fills his quiver with them!
He shall not be put to shame
when he speaks with his enemies in the gate.

Rev Dr. McCorkle continues

For my own part, I feel myself penetrated with a sense of these truths; and this I feel not only as a citizen of the State, as a member of civil as well as religious society.

To diffuse the greatest possible degree of happiness in North Carolina is the aim of our government and God’s will.
The happiness of a nation depends on national wealth, success, just laws, and liberty.
Those objectives require an educated populace.
Help us educate the people of this State.
Help us create public places of education that give our citizens the means to live a happy and productive life.
This in turn we hope will lead to a more successful and productive nation.
Help us use our universities to encourage industry to provide careers for our citizens.
All these successes depend on dissemination of knowledge.

Knowledge is wealth, it is glory —whether among philosophers, ministers of state or of religion, or among the great mass of the people.
We celebrate our thought leaders as kings.
Uncivilized people cannot have, or rather cannot educate such leaders, though many capable children with unlimited potential are born and buried among them.
Knowledge is liberty and law.
When the clouds of ignorance are dispelled by the radiance of knowledge, power trembles, but the authority of the laws remains inviolable;
and how this knowledge, productive of so many advantages to mankind, can be acquired without public places of instruction, I know not.

May this hill be for religion as the ancient hill of Zion; and for literature and the Muses, may it surpass the ancient Parnassus! We this day enjoy the pleasure of seeing the corner-stone of the University, its foundations, its materials, and the architects of the buildings, and we hope ever long to see its stately walls and spire ascending to their summit.

Guide us Lord and help us serve the People of this State.

I pulled most of the quotes from Sketches of North Carolina by William Henry Foote (http://docsouth.unc.edu/nc/foote/foote.html).  Rev Dr. McCorkle’s quotes start on page 532.
I included the entire Psalm 127:1 – the book doesn’t quote the whole psalm, but it appears to have only a portion of his speech.  I also paraphrased some parts of the speech for brevity and modern reference.
The relevant text from Sketches of North Carolina is:
Page 532
On the 12th of October, 1793, the first lots in the village were sold, and the corner-stone of the first building was laid, with masonic procession and ceremonies, by William Richardson Davie. The Rev. Dr. McCorkle, of the Presbyterian church, the only clergyman then in the corporation, addressed the assembly at length. From his speech the following are extracts:–“It is our duty to acknowledge that sacred scriptural truth, Except the Lord build the house, they labor in vain that build it; except the Lord keepeth the city, the watchman waketh but in vain. For my own part, I feel myself penetrated with a sense of these truths; and this I feel not only as a minister of religion, but also as a citizen of the State, as a member of civil as well as religious society. These unaffected feelings of my heart give me leave to express, with that plainness and honesty which becomes a preacher of the Gospel and a minister of Jesus Christ.””To diffuse the greatest possible degree of happiness in a given territory is the aim of good government and religion. Now the happiness of a nation depends upon national wealth and national glory, and cannot be gained without them. They in like manner depend upon liberty and laws. Liberty and laws call for general knowledge in the people, and extensive knowledge in matters ofPage 533
State; and these, in fine, demand public places of education. * * * * How can any nation be happy without national wealth? How can that nation, or man, be happy that is not procuring the necessary conveniences and accommodations of life? How can glory or wealth be procured or preserved without liberty and laws, as they must check luxury, encourage industry and protect wealth. They must secure me the glory of my actions, and save from a bowstring or a bastile; and how are these objects to be gained without general knowledge? Knowledge is wealth,–it is glory–whether among philosophers, ministers of state or of religion, or among the great mass of the people. Britons glory in the name of a Newton, and honor him with a place among the sepulchres of her kings. Americans glory in the name of a Franklin; and every nation which has them boasts her great men. Savages cannot have, rathercannot educate them, though many a Newton has been born and buried among them. Knowledge is liberty and law. When the clouds of ignorance are dispelled by the radiance of knowledge, power trembles, but the authority of the laws remains inviolable; and how this knowledge, productive of so many advantages to mankind, can be acquired without public places of instruction, I know not. * * * * “May this hill be for religion as the ancient hill of Zion; and for literature and the Muses, may it surpass the ancient Parnassus! We this day enjoy the pleasure of seeing the corner-stone of the University, its foundations, its materials, and the architects of the buildings, and we hope ere long to see its stately walls and spire ascending to their summit.” The discourse was followed by a short but animated prayer, closed with the united Amen of an immense concourse of people.

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Government, UNC

Obamacare (ACA) to Cost UNC $47 Million per Year

Obamacare will cost the University of North Carolina System $47 million per year starting in 2015 for its 8,586 employees that exceed 30 hours per week that don’t have State insurance.  This is a recurring annual expense.  The workers include temporary/visiting faculty, graduate or teaching assistants, post-doctoral employees and student employees.  This group is in addition to the primary UNC workforce that is already covered by the State Health Plan.

Under the Affordable Care Act (ACA) employers are required to provide qualified health insurance plans to much of their workforce or face hefty fines.  Due to this mandate, the University of North Carolina and other State government agencies, as employers, must provide healthcare coverage for certain non-permanent employees or face significant fines.

The University’s existing health plan is currently administered by the State Health Plan.  At $5,435 per employee annually, this is an Unfunded mandate that will have a significant impact on the UNC system and state agency budgets.  With approximately 8,586 qualifying employees (that exceed 30 hours but aren’t currently insured) in the University, UNC will have to find approximately $47 million to comply with the Affordable Care Act mandate (based on 2014 rates of $5,435 per employee – however costs may be higher in 2015).

State Health Care Costs History:

2012-13: $5,192
2013-14: $5,285
2014-15: $5,435  ($1,400 increase, +34% over last seven years)

The University is responding by seeking lower cost insurance and asking for approval to provide these workers a cheaper plan.  It is also exploring cutting the hours of 50-75% these 8,586 employees to keep them under 30 hours per week.

The University hopes that by reducing the number of qualified employees’ hours (similar to Darden restaurants pilot program that it later reversed) and offering a lower cost plan – the cost impact could be reduced to $11-22 million per year.  I would brace for a $30-50 million impact.

The implementation date is 1/1/2015 – so campuses has already started setting aside money to deal with the impact.  Learn more by reading the UNC Board of Governors February 2014 meeting materials.

$47,000,000 per Year

$47 Million Impact to UNC from Obamacare

$47 Million Impact to UNC from Obamacare

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Government, UNC

Spreadsheet of all UNC Foundations Activity Statements and Balance Sheets

In an effort to provide greater transparency and encourage active participation in the financial analysis of the UNC System – here is a link to another dropbox folder with UNC Foundations’ Activity Statements and Balance Sheets.  These are set up in a side by side comparison format similar to the other UNC System Financial Statement Analysis.

https://www.dropbox.com/sh/05g25ok1itx9kh5/JZ-F-mdasJ

As with the other post, this is public information that my office has formatted for ease of comparison.  Feel free to share and comment below.  Corrections are welcome.

UNC Sign

UNC Sign

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Government

Will Inflation and Interest Rates Rise? ACA Impact?

Will the ACA drive up the costs of goods (inflation) and hence nominal interest rates?  I’m concerned that it will.  Frankly, I’m concerned that they will go up anyway, but that ACA could be the trigger.

I commented about it on Ed Cone’s thread about Hagan/ACA and part of his reply was “and our ongoing low-inflation/low-interest-rate era, and the possibility that reform will slow healthcare cost inflation.”

Maybe I’m wrong, but I think we’re at the bottom of historically low interest rates/inflation.  What if ACA marks the end of low-interest rates?

I entered the real estate market in 1991 when the Prime Rate was in the 8’s and 9’s.  The 10-year treasury was around 8.  I’ve watched Prime and Treasuries bump around.  It’s my belief that treasuries are at an all time low and anyone who isn’t locking their rates is gambling.  I believe the Prime Rate could increase from 3.25 to 5.5-8% in the next three years.

US Prime Interest Rate History

US Prime Interest Rate History

http://www.moneycafe.com/personal-finance/prime-rate-history/

Likewise, I’m concerned that 10-year treasuries could reach 6-8% over the next few years.

Historical 10yr US Treasury Rates

Historical 10yr US Treasury Rates –

http://finance.yahoo.com/echarts?s=%5ETNX+Interactive#symbol=%5Etnx;range=my;compare=;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=;

The one-year CMT gives us an indication of the historically low rates:

1yr CMT Index

1yr CMT Index

http://mortgage-x.com/general/indexes/cmt_index_faq.asp

Inflation.  I’m concerned that ACA will result in higher cost of goods sold and inflation. I’ve heard business owners talking about the additional costs they will incur by having to provide health insurance. I’ve also seen estimates and had discussions about premiums going up (which would likely have to in order to cover those with preexisting conditions). I believe those costs will be passed on to consumers in the form of higher prices. A jump in prices means inflation.  A rate of 3-5% inflation is not out of the question – we only need to look back to 2007 to find 4% inflation or 1990 for 6%.  ACA advocates argue that health care costs (which account for 7% of the CPI weight) will decrease, but I haven’t seen any indication of that in the real world.  

CPI only looks at consumer paid health care costs, not employee paid.  Per BLS CPI Notes –  “Since medical care only includes consumers’ out-of-pocket expenditures (and excludes employer provided health care), its share in the CPI is smaller than its share of gross domestic product (GDP) and other national accounts measures.”  

It may make CPI for medical costs look good, but shifting dollars around from the consumers to their employers, medical providers or government – doesn’t make the cost magically disappear.  Those costs will reappear in other areas.  

Historical US Inflation Rates

Historical US Inflation Rates

http://www.inflation.eu/inflation-rates/united-states/historic-inflation/cpi-inflation-united-states.aspx

Interest Rates.  With inflation comes higher nominal interest rates as they are the sum of the real interest rate and inflation. I’m concerned that interest rates will rise over the next few years. As interest rates rise, the cost of products and services will rise as well. That leads to even higher inflation.

Inflation and Interest Rates are Related

Inflation and Interest Rates are Related


Stock Market Adjustment?
 A high interest rate environment would have devastating effects on the economy and stock market.   I’m a bear anyway, but I believe a shift in interest rates could topple the market highs.

In summary, I’m concerned that ACA will increase the cost of goods, drive up inflation, and increase interest rates.

What are your thoughts?  The comments section is at the bottom of the page.

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Government, UNC

UNC System Financial Statements – Detailed Consolidated and by Campus

I started serving on the UNC Board of Governors in August 2013 and was placed on the Budget and Finance Committee as well as the Audit Committee.  The Board oversees the UNC System and its 17 campuses and related entities.

At our first meeting we were presented with a partial budget ($2.6 billion which is the State Appropriations funding/spending, not the full $8.8 billion).  I personally find it difficult to consider a budget without looking at the whole picture, financials, prior spending, impact, etc.  That’s especially trying when hundreds of pages of materials are supplied just a few days before the meeting.

In my business, we compare property by property financials as well as restaurant unit metrics.  I’m a product of the UNC System – Carolina for undergrad Business Admin and UNCG for MBA, so I was surprised to learn that there were no campus by campus comparison financial statements, nor a detailed consolidated financial statement.

I was able to obtain PDFs of the following financial statements:  ASU, ECSU, ECU, FSU, NC A&T, NCCU, NCSU, UNC-CH, UNC-General Admin, UNCA, UNCC, UNCG, UNCP, UNCSA, UNCW, WCU, WSSU and various other entities.  These are public materials, though not easily found.

Here’s a dropbox link those campus financials:  https://www.dropbox.com/sh/4khqoeet1ltpp9i/NoJ2JcPIF8

Two of my company staff worked to prepare the following Detailed Consolidated and by Campus Financial Statements (with numbers per student and per staff).  They had to start with the pdfs rather than spreadsheets (and hand key in the numbers), because those did not exist in the UNC System.  I’ve since found out that the State Auditor’s office has worksheets with the raw numbers – so I plan to request prior years’ numbers from Auditor Wood.

Here’s a dropbox link to our completed Excel spreadsheet and cover page.  I provided this to the BOG in November 2013.  https://www.dropbox.com/sh/dkf253bpqhmlx1z/HiyqLqQHW5

UPDATE 2/18/14 – SPREADSHEET UPDATED TO REFLECT 2012 FULL TIME EQUIVALENT STUDENT NUMBERS – NOTE SECOND SPREADSHEET

Cover Page of the Detailed Consolidated and by Campus Financials

Cover Page of the Detailed Consolidated and by Campus Financials

The Board of Governors meets every month.  The next meeting of the Budget and Finance Committee is Thursday, February 20, 2014 in the Board Room of the Spangler Center in Chapel Hill at 12:45pm.  The topics will include Tuition and Fees for 2014-15, Budget Priorities, Authorization of Non-Appropriated Capital Improvements, and several others.  The meeting is open to the public.  The whole Board meets that Thursday morning at 9:30am with several committee meetings in the same building that day – all of those meetings are open meetings.  On Friday the 21st, the board meets for its formal session at 9am on SAS Campus, Building C, in Cary, NC (also open to the public).  I would encourage any interested parties to attend.  There is not an opportunity for the public to speak, but there are several breaks where attendees can talk with the BOG and University staff.

You can access full meeting materials through the following link (click on Meeting Materials):  https://www.northcarolina.edu/bog/index.php

ADDED 2/18/14 – UNC Foundations Activity Statements and Financials

UPDATE 2/18/14 – SPREADSHEET UPDATED TO REFLECT 2012 FULL TIME EQUIVALENT STUDENT NUMBERS – NOTE SECOND SPREADSHEET – https://www.dropbox.com/sh/dkf253bpqhmlx1z/HiyqLqQHW5

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Government

Former Greensboro Councilwoman Diane Bellamy-Small Runs for County Commissioner

Former Councilwoman Bellamy-Small announced her run for Guilford County Commissioner District 1 on her Facebook page this afternoon:  https://www.facebook.com/DianneBellamySmall

On the move again….

2/10/14
I asked for your support and vote.
Filed for the Guilford County Commission District 1 Race
This district covers part of Greensboro, part of Jamestown and part of High Point
For more information go to
www.votebellamysmall.com
Meet & Greet scheduled for Greensboro and Jamestown Saturday, February 15th and High Point February 16th

Former Councilwoman Bellamy-Small in front of District Map

Former Councilwoman Bellamy-Small in front of District Map

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Government

Our Congressman Howard Coble Sings for Supper

At last night’s “A Tribute to the Honorable Howard Coble” dinner, the crowd’s favorite moment was when the LEADAH took the stage. Congressman Coble’s favorite bluegrass band, Southeast Express, played several songs, but the highlight was Ole Slew Foot.  That’s Howard singing second from the right.

We spent the night talking about his unmatched energy, integrity, wit, charisma, high school mascot knowledge, declining a federal pension, and genuine care for his constituents.  He is a great man that has truly served the people.

“Ole Slew Foot” written by Charlie Daniels

High on the mountain, tell me what you see
Bear tracks, bear tracks lookin’ back at me
Better get your rifle boys, ‘fore it’s too late
‘Cause a bear’s got a little pig and headed thru the gate

He’s big around the middle and he’s broad across the rump
Runnin’ ninety miles an hour takin’ thirty feet a jump
Ain’t never been caught, he ain’t never been tree’d
Some folks say he looks a lot like me

I saved up my money and I bought me some bees
And they started makin’ honey way up in the trees
Cut down the tree but my honey’s all gone
Ole Slew-Foot’s done made himself at home

He’s big around the middle and he’s broad across the rump
Runnin’ ninety miles an hour takin’ thirty feet a jump
Ain’t never been caught, he ain’t never been tree’d
Some folks say he looks a lot like me

Winter’s comin’ on and it’s twenty below
And the river’s froze over so where can he go
We’ll chase him up the gulley then we’ll run him in the well
We’ll shoot him in the bottom just to listen to him yell

He’s big around the middle and he’s broad across the rump
Runnin’ ninety miles an hour takin’ thirty feet a jump
Ain’t never been caught, he ain’t never been tree’d
Some folks say he looks a lot like me

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