UM regents OK $1 billion in credit lines amid pandemic
The University of Michigan Regents met virtually on Thursday amid the global COVID-19 pandemic and approved establishing stand-by lines of credit for up to $1 billion for general operating purposes in the event of a financial emergency.
Kevin Hegarty, UM executive vice president and chief financial officer, said the university would first look to balance sheet reserves to fund its operations.
"To be clear, the university would hope to not have to draw on these lines," said Hegarty. "But in the event of a financial emergency, having $1 billion in standby lines would be a highly-valued addition to our safety net."
In a letter outlining the purpose of the lines of credit, Hegarty wrote: "Having standby lines of credit available for general operating purposes will reinforce the overall liquidity position of the University, help support the University’s credit ratings, and hedge the impact of potential catastrophic events, such as a pandemic, global financial crisis, or federal government shutdown."
The approval came as COVID-19 prompted Gov. Gretchen Whitmer to require most Michigan residents to stay home to mitigate the spread of the highly-contagious, sometimes deadly coronavirus, which has no cure or vaccine. UM and other colleges and universities have shut down their campuses in the face of the virus, which had infected nearly 3,000 residents and killed 60 people in Michigan as of Thursday.
At Michigan Medicine, UM's hospital system, 48 patients with COVID-19 are getting care and an additional 24 patients are under investigation for possible infection, said Marschall Runge, executive vice president for medical affairs at UM.
Contingency planning has been underway for the past week, Runge said, forecasting scenarios including a growing need for intensive care beds and general isolation rooms.
"(We) predict the likelihood that the need for patient beds will exceed the capacity of our hospitals in coming weeks," Runge said.
Planning has included identifying campus buildings that can be used for care of non-critical COVID-19 patients.
"The COVID-19 pandemic has presented an array of challenges, some of which are virtually unprecedented for our university," President Mark Schlissel said.
The community has been affected professionally, personally and sometimes tragically by the virus.
"They also don't know how long the pandemic will last, which adds to the uncertainties we must face," he said.
But the university has risen to address the challenges, Schlissel said, by working to protect the health of the UM community and making a contribution to slowing the spread of the virus while continuing UM's mission of teaching, research and caring for patients.
The hospital launched in-house testing of COVID-19, expanding the number of patients who can be quickly diagnosed, the president said. The lab is processing 60 specimens daily, with same-day results, and developing the potential to do more.
Faculty members have shared their expertise with state and national leaders to help make better decisions; pharmacy students have made a hand sanitizer.
"Our wonderful donors have responded as well," said Schlissel.
The president also commented on UM's decision to hire WilmerHale to conduct an investigation of the late Dr. Robert Anderson, who has been accused by many men of sexual misconduct while serving from 1968-2003 as the head of University Health Service and team doctor for the Athletic Department.
UM recently severed ties with Steptoe and Johnson, the firm it initially hired to conduct the Anderson investigation, because the firm had defended two prominent men accused of sexual abuse: the late financier Jeffrey Epstein and film director Roman Polanski.
Critics have questioned the university's decision to have WilmerHale work under attorney-client privilege but issue a "non-privileged report."
Schlissel addressed the concerns.
"WilmerHale will produce a full accounting of the harms to former patients by Anderson, as well as any institutional failings that allowed him to keep practicing," he said, "and that report will be issued to the public and the university simultaneously."
In other actions, the regents approved Susan M. Collins as interim provost and executive vice president for academic affairs, as one of three new executive leaders. Collins was appointed acting provost in January when Philbert went on leave. She will continue in her role as interim provost until UM hires a new provost.
The Regents also approved the firing of music Professor David Daniels, a renowned opera singer, making him the first UM faculty member to be stripped of tenure in 60 years.
The dismissal comes after an internal UM investigation showed that Daniels harassed nearly two dozen students, solicited some for sex, sent them nude photos and more, according to the university. Former graduate student Andrew Lipian also filed a federal lawsuit against UM, alleging that Daniels sexually assaulted and harassed him and that the university failed to enforce its policies against such conduct.
A Texas grand jury indicted Daniels and his husband, William Scott Walters, last summer in the sexual assault of an incapacitated man in 2010.
Before the board approved his firing, several people spoke out in support of him, including one who didn't believe the allegations and another who said Daniels was targeted because he is gay.
Morgan McCaul, a UM student who was sexually abused by former Michigan State University physician Larry Nassar, tweeted that she couldn't believe those who had rallied behind Daniels in a last-ditch effort to save his position.
"Hearing speakers exalt former @UMich professor David Daniels and call the allegations against him 'manufactured' during a Board of Regents meeting," McCaul tweeted. "I am horrified."