OVERNOR OF PUERTO RICO icardo Rossellé Nevares March 208, 2017 Me tose 1. Canin Chairman Financial Oversight and Management Board RE: UNIVERSITY OF PUERTO RICO ear Me, Caen | wantto thank you and all he members of te Board for your vote of confidence and support to out Fiscal Plan. We both share a common interest in addressing Puerto Rico's seal and economic crisis while Securing adequste funding and resources to provide essential services for our citizens. Our Fiscal Plan allows us to comply with requirements set frth in PROMESA and promote the much needed economic ‘evelopment to boost government revenues and secur essential services, Having acceso higher education is Key element to ennce economie and social development. Thus, it is important to responsibly address the University of Puerto Rico's (UPR) fiscal situation, as it has been done wih all the other governmental enti unde the juristition oF the Board kis importantto not thatthe University of Puerto Rico's budget has seen a cumulative reduction in budget ‘of $348,000,000.00 from FY2014 through FY2016. Understanding the already die fiscal situation ofthe ‘UPR while maintaining our commitment o respect ts autonomy, we submit for your approval the following ‘measures in order mitigate futher budget cuts established in the Certified Fiscal Plan. ‘+ Astequested by the interim Presiden ofthe UPR, we have made available the central government's fiscal technical team to evaluate and devise the institution's Fiscal Plan reducing the costs associated with sud process. We hereby request suppor from the Board's tohnical eam in onder to identify addtional sources ofineome and federal funding to substitute udget ents. ‘+ Inaccordance with Exceutive Order No, 2017-02, the central government and the UPR will enter nto agreements to provide technical training for pubic employees. Through these agreements, the UPR will receive $50,000,000 during the FY2018 and said amount shal increase to $100,000,000 by FY2021 + The Certified Fseal Plan requires a reduction of $750,000,000 in healthcare costs by F202. ‘Through our New Healthcare Model, we have identified cost reducing measures that wil total $800, 00,000 for FV2021. Werecommend that ny additional savings above the 750 millon mark, ‘which may total $50,000,000 by F202, be trasfered tothe UPR inorder Yo secure compliance ‘with PROMESA,GOVERNOR OF PUERTO RICO Ricardo Rossellé Nevares +The Department of Education isin the process of retaining the services ofthe UPR to provide both teanings to teachers as well a tuoring for students. Said agreement wll provide atleast an ‘uitional $20,000,000 tothe UPR annually. Our estimates indicate that through the procurement fof such services, the UPR may receive up 10 $25,000,000 per year. + Werwillrequot all munisipalitio to enter into technial taining agreement, similar to those with the central government, fo their employees. This will present an addtional $30,000,000 for Fv2018. ‘+ Through an agrocment with the Puerto Rico's Science and Technology Trust (ST, the UPR will, beable toefoctvely monetize thei approved patents. The STT has technical resources to monetize already approved patents, leaving the students and professors with more time to embark in researl, ‘and development projects that wil result in more income. This ntatve may produce an additonal $4,000,000 by F202. “The outlined measures provide addtional resourses forthe University of Puerto Rica which were not contemplated when the Board issued is ost reduction requirements. Hence, according to our estimates, implementing said efforts with only require reductions tothe UPR budget of $241 milion by FY2021, instead of the $450 million orginally requested by the Board. This umber does not include ational cficiencies and resources thatthe UPR may identily during the development ofits Fiseal Pla. Ustongly believe that the measures set fr for your consideration and approval would comply withthe requirements ‘sot forth in PROMESA, while improving the acces to higher education in Puerto Rico. Our technical tem looks forward fo further inguvies andor meetings to discuss in deal the proposed roadmap to address the UUPRYs seal ris. Sincerely, FREE — Governor Ce, Mr Carlos M. Garcia Mr, Arthur J, Gonzalez Mr. Jose Ramin Gonzater Ms, Ana J Matosantos Mr, David Skee! Mr. Andeew Biggs Mr. Raméa Ruiz Coma, Executive Director la Fortaleza, Sen Juan, PR 00901 + FO Box 9020082, San Juan, PR 00902-0082 » 787.721.7000