UNIVERSITY OF VIRGINIA
BOARD OF VISITORS
MEETING OF THE
FINANCE COMMITTEE
FEBRUARY 6, 2004
FINANCE COMMITTEE
Friday, February 6, 2004
8:45 – 10:15 a.m.
Board Room, The Rotunda
Committee Members:
William H. Goodwin, Jr., Chair
Thomas F. Farrell, II
Charles L. Glazer
Mark J. Kington
Thomas A. Saunders, III
AGENDA
I.
II.
Warren M. Thompson
Georgia M. Willis
John O. Wynne
CONSENT AGENDA (Mr. Sandridge)
A.
Acquisition and Issuance of Debt Financing of
the Fontaine Clinics Building
•
Fiscal Impact Statement
B.
Ratification of Legislative Amendments
ACTION ITEMS (Mr. Sandridge)
A.
Student Housing Rates, 2004-2005 (Mr. Sandridge to
introduce Ms. Yoke San L. Reynolds; Ms. Reynolds
to report)
1.
University of Virginia
2.
University of Virginia’s College at Wise
3.
Mountain Lake Biological Station
B.
2004-2005 Tuition and Fees for Executive Programs
Tuition
III. REPORTS BY THE EXECUTIVE VICE PRESIDENT AND CHIEF
OPERATING OFFICER (Mr. Sandridge)
A.
Vice President’s Remarks
B.
State Budget and Legislation (Ms. Sheehy to report)
1.
Governor’s Budget
2.
2004 Legislative and Budget Amendments
3.
Preliminary 2004-2005 Budget Assumptions
C.
Tuition Planning (Ms. Sheehy to report)
D.
Investment Matters
1.
Endowment Report – Market Value and
Performance as of December 31, 2003
2.
Report on Actions of the Board of the
Investment Management Company, December 15,
2003 (UVIMCO Chair to report)
E. Miscellaneous Financial Reports
PAGE
1
7
9
12
18
20
21
26
29
32
PAGE
1.
2.
3.
4.
5.
6.
IV.
Academic Division Accounts and Loans
Receivable
Internal Loans to University Departments
and Activities
Summary of Quasi-Endowment Actions
Quarterly Budget Report
Summary of Sponsored Programs Restricted
Grants and Contracts
Endowment/Investments for UVa and Related
Foundations
APPENDIX
•
Summary of Budget Requests and Governor’s Budget
Bill
33
35
36
38
43
45
47
BOARD OF VISITORS CONSENT AGENDA
I.A. Acquisition and Issuance of Debt Financing of the Fontaine
Clinics Building: Ratifies the acquisition of a clinical
operations building and approves the issuance of debt financing
for the transaction.
The University Medical Center’s need for additional space
to house clinical operations launched a process in fiscal year
2001 to assess alternatives and to determine a suitable
solution. This analysis concluded that the quickest, most costeffective approach involved the construction by the University
of Virginia Foundation of a building at the Fontaine Research
Park and the subsequent acquisition of the facility by the
University upon completion. In January 2002 a budget amendment
for this transaction was presented to the General Assembly for
approval, which was granted. The Commonwealth authorized the
use of bonds to fund this project at an amount not to exceed
$17,325,000. This resolution requests that the Board ratify the
subject acquisition and approve the required debt financing.
In accordance with the state’s authorization, the
University expects to issue debt in order to acquire the clinics
building, referred to as Medical Office Building II, on behalf
of the Medical Center from the University of Virginia
Foundation. Substantial completion and occupancy of the
building occurred in the fall of 2003. Remaining fit-out and
construction of additional clinical spaces will continue through
March 2004, at which time the University intends to take
possession of the facility.
Issuance of bonds for this acquisition, when it occurs,
will likely happen in conjunction with bond issuance for several
other projects. The timing for such an action will be
determined by individual project funding needs, scale of the
total intended issuance, market conditions, economic factors,
and other considerations. In the interim, by approving this
resolution the Board permits the acquisition of the clinics
building to be financed on a short-term basis via the
University’s commercial paper program approved by the Board of
Visitors at its January 31, 2003 meeting.
ACTION REQUIRED: Approval by the Finance Committee and by the
Board of Visitors
1
AUTHORIZATION OF ACQUISITION AND ISSUANCE OF DEBT FINANCING OF
THE FONTAINE CLINICS BUILDING
WHEREAS, Chapter 9, Title 23 of the Code of Virginia of
1950, as amended (the "Virginia Code"), establishes a public
corporation under the name and style of The Rector and Visitors
of the University of Virginia (the "University") which is
governed by a Board of Visitors (the "Board"); and
WHEREAS, Chapter 3, Title 23 of the Virginia Code (the
"Act") classifies the University as an educational institution,
declares it to be a public body and constitutes it a
governmental instrumentality for the dissemination of education;
and
WHEREAS, the Act empowers the University, with the consent
and approval of the General Assembly of the Commonwealth of
Virginia (the "Commonwealth") and the Governor of the
Commonwealth to acquire, build, construct, reconstruct, erect,
extend, better, equip and improve any building, facility,
addition, extension or improvement of a capital nature required
by or convenient for the purposes of the University and to
borrow money and make, issue and sell bonds of the University
for any such purposes, including the refinancing of any such
facilities; and
WHEREAS, the Act further authorizes the University to
pledge to the payment of the principal of and the interest on
such bonds any monies available for the use of the University
including, but not limited to, and subject to guidelines
promulgated by the Secretary of Finance of the Commonwealth (the
"Secretary of Finance"), monies appropriated to the University
from the general funds of the Commonwealth or from nongeneral
funds, without regard to the source of such monies, and which
are not required by law or by previous binding contract to be
devoted to some other purpose; and
WHEREAS, the University, on behalf of the Medical Center,
intends to acquire a building for clinical operations, known as
Medical Office Building II (“the Project”) at the Fontaine
Research Park from the University of Virginia Foundation; and
WHEREAS, the University intends to fund the acquisition
with proceeds from debt issuance; and
WHEREAS, the Commonwealth has authorized the Project and
the issuance of bonds for it at an amount not to exceed
2
$17,325,000, exclusive of costs of issuance, capitalized
interest, original issue discount and other expenses relating
thereto; and
WHEREAS, the Board anticipates that the bonds will be
secured by a general revenue pledge of the University and not be
in any way a debt of the Commonwealth and shall not create or
constitute any indebtedness or obligation of the Commonwealth,
either legal, moral or otherwise; and
WHEREAS, pursuant to Board guidelines adopted January 31,
2003, Finance Committee meeting, Item II.C., the University may
provide short-term financing via its commercial paper program
(“Commercial Paper”)for the Project prior to issuing long-term
debt; and
WHEREAS, the Medical Center will service any and all debt
payments with income from operations;
RESOLVED that the Board of Visitors authorizes the
acquisition of the clinics building at the Fontaine Research
Park known as Medical Office Building II from the University of
Virginia Foundation at a cost not to exceed the state-authorized
amount; and
RESOLVED FURTHER that Board of Visitors authorizes the
issuance of Commercial Paper and/or long-term debt (such longterm debt is referred to hereinafter as the “Bonds”) for the
purpose of financing the Project and providing for the terms
thereof, as required by Section 23-19 of the Virginia Code; and
RESOLVED FURTHER that pursuant to the Regulations and prior
Board actions, the University of Virginia may utilize its
existing authorities and capabilities to provide funding to the
Project under the following conditions:
1.
The Board recognizes that this resolution constitutes
“official action” by the Board and evidences the
Board’s “official intent” to reimburse itself from the
proceeds of bonds for any expenditures paid by the
University with respect to the Project before the
issuance of any such bonds, all within the meaning of
Internal Revenue Service regulations issued pursuant
to Sections 103 and 141 through 150 and related
sections of the Internal Revenue Code;
2.
The Commonwealth of Virginia has authorized this
project in the following legislation:
3
Submittal:
Project Number:
Chapter Date:
Chapter Number:
Item Number:
Legislative Budget Amendment
209-16756
2002-2004
899
C-53.60
3.
The Medical Center has submitted a
detailed financial plan acceptable
Vice President and Chief Operating
President of Finance, and the Vice
Management and Budget;
comprehensive and
to the Executive
Officer, the Vice
President of
4.
The Medical Center remains responsible for any debt
obligation incurred regardless of the status of the
capital project;
5.
Irrespective of the external funding arrangements made
by the University on its behalf, the Medical Center
agrees to make its obligatory debt service payments
through the University’s internal funding mechanisms
in accordance with debt management policies and
practices as outlined by the Vice President for
Finance (Report to the Finance Committee, January 31,
2003, Item III.C. Debt Structure and Policy);
RESOLVED FURTHER that the Executive Committee is authorized
to approve the final terms of each series of the Bonds,
including, without limitation, their original principal amounts,
maturity dates and amounts, redemption provisions and prices and
interest rates (which may be either fixed or variable), provided
that (i) the maximum aggregate principal amount of all of the
Bonds funding the Project shall not exceed $17,325,000; (ii) the
maximum true interest cost of any series of the Bonds bearing
interest at a fixed rate shall not exceed six percent (6%) per
annum; (iii) the maximum initial true interest cost of any
series of the Bonds bearing interest at a variable rate shall
not exceed five percent (5%) per annum; (iv) the final maturity
of all of the Bonds shall not extend beyond June 30, 2040; (v)
call protection on the Bonds shall not exceed eleven (11) years;
and (vi) no optional redemption premium for the Bonds shall
exceed two percent; and
RESOLVED FURTHER that the Executive Committee is authorized
to approve the discount payable to the underwriters selected by
4
the Executive Committee (the "Underwriters") on account of the
sale of the Bonds and to approve the terms of a contract for the
sale of the Bonds to the Underwriters, provided that the
discount payable to the Underwriters shall not exceed 0.5
percent of the original aggregate principal amount of the Bonds;
and
RESOLVED FURTHER that the Executive Committee or all
officers of the University are authorized and directed to take
all such further actions, including without limitation the
designation of Underwriters, paying agents, remarketing agents,
trustees and liquidity providers for the Bonds, and to execute
all such instruments, agreements, documents and certificates as
they shall deem necessary or desirable to carry out the terms of
the financing plans presented to this meeting, including without
limitation any liquidity facilities, swap or other interest rate
management agreements associated with the Bonds; and
RESOLVED FURTHER, pursuant to the Section 147(f) of the
Internal Revenue Code of 1986, as amended, and applicable
regulations thereunder, the University designates Yoke San L.
Reynolds, Vice President for Finance of the University, as the
public hearing officer to hold any public hearings required in
order to ensure the tax-exempt status of interest on the bonds;
and
RESOLVED FURTHER that all acts of all officers of the
University which are in conformity with the purposes and intent
of this Resolution and in carrying out the financing plans
presented to this meeting are ratified, approved, and affirmed.
5
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UNIVERSITY OF VIRGINIA
FISCAL IMPACT STATEMENT
PROJECT/PROPOSED BOARD OF VISITORS ACTION: Ratify the
acquisition of a clinical operations building and approve the
issuance of debt financing for the transaction.
DESCRIPTION: The University’s Medical Center seeks to acquire a
building at the Fontaine Research Park devoted to clinical needs
from the University of Virginia Foundation. Referred to by the
Medical Center as Medical Office Building II, the General
Assembly authorized the transaction at a cost not to exceed
$17,325,000 and bond financing of the same amount.
If the Board of Visitors approves the attached resolution,
this project will also then have the authority to participate in
the University’s commercial paper program to address short-term
funding needs. This is particularly relevant to this project
because should the purchase occur in March 2004, as anticipated,
the University will not likely have long-term bond proceeds
available at that time. A bond issuance encompassing the funding
needs of several projects, including the subject acquisition, is
possible during calendar year 2004. While it is indeed
premature to discuss the size and parameters of the next
expected bond issuance, preliminary analyses suggest that the
University may issue approximately $100,000,000 in net new debt
sometime in fiscal year 2005, of which the clinics building
acquisition would represent but one piece. With the adoption of
the commercial paper program the University enjoys the inherent
financial advantages and flexibility to fund projects on an
interim basis until market conditions and economic factors
suggest a switch to permanent financing.
FISCAL IMPACT: Since March 2003 the University has employed a
pooled debt mechanism to fund projects internally. Under this
concept, projects and units are assessed standard debt service
payments at fixed rates, typically over a term of twenty years.
External funding arrangements are then made by the University on
a collective basis at the most advantageous rates and terms
available. These arrangements (which may include both fixed and
variable rate financing) will often differ markedly from the
internal terms charged to projects, but overall the pool of
funds will benefit. The outcome of this strategy is that over
the long term all units and projects will enjoy relatively
stable payments of debt service, at the lowest average cost,
insulated from swings in the external interest rate environment.
7
Thus, no individual project is unfairly benefited or penalized
simply due to the timing of its construction and the prevailing
external conditions.
At the present time the internal interest rate charged on
pooled funds equals 4.75 percent annually (an amount equal to
the weighted-average cost of the underlying principal balances
plus a 10 basis point administrative fee); debt service payments
are payable monthly by each unit. At this rate, the Medical
Office Building II acquisition can expect annual debt service
payments of approximately $1.344 million (or twelve monthly
payments of $112,000) over twenty years with a principal amount
equal to the state authorization.
The Medical Center intends to service debt payments with
incremental revenues generated from clinical operations housed
at the facility. Key tenants include UVa Imaging, LLC, as well
as NT and endocrinology units. A detailed business plan and
fiscal impact statement for UVa Imaging were submitted in
Executive Session at the April 4, 2002 meeting of the Board of
Visitors. Financial indicators presented at the time suggested
that this unit alone could service the building’s entire debt
service payments with net income from operations receivable from
the University’s equity position in the venture. Actual results
from UVa Imaging are well above initial projections. Financial
results from other units in the facility are also positive to
date.
CONCLUSION: The Board of Visitors should approve both the
acquisition of the project and the necessary issuance of debt
for the transaction.
RECOMMEND APPROVAL OF BOARD ACTION:
Leonard W. Sandridge
February 6, 2004
8
I.B. Ratification of Legislative Amendments: Authorizes the
Executive Vice President and Chief Operating Officer to transmit
the final proposed legislative and budget amendments to the
General Assembly.
Every two years, the University submits its biennial budget
requests to the Department of Planning and Budget for review by
the Governor for inclusion in his budget proposal, which was
presented to the General Assembly on December 17, 2003. The
2004-2010 Capital Plan, approved by the Board on April 4, 2003,
was submitted to the Commonwealth on May 24, 2003. The 20042006 operating budget requests were submitted to the
Commonwealth by October 15, 2003.
At this time, the University would like to submit proposed
legislative actions and amendments to the Governor’s Budget
Bill. The University must submit these to the General Assembly
by January 22, 2004. The action taken by the Board in October
to approve our amendments to the Governor permitted the
resubmission of any requests not addressed by the Budget Bill to
the legislature for its consideration. The items listed below
have been identified since our discussion in October.
AGENCY 207 – Academic Division
Operating:
•
Eliminate Rouss Hall operation and maintenance (O&M)
language restriction (language only) – The language
authorizing the Rouss Hall addition in the 2002-2004
Appropriations Act included a restriction that all O&M must
be funded from non-general funds. This request removes
that language to provide the potential for general fund
support of the O&M costs for this instructional facility.
Capital:
1)
Campbell Hall Addition ($3.5 million NGF) – Supplement the
existing Campbell Hall project authorization. The original
authorization received in 1995 for $5 million needs to be
increased by $3.5 million, funded with private monies, to
offset the impact of inflation and to meet current cost
estimates.
2)
Varsity Hall ($2.2 million NGF) – Authorize renovations,
funded with private monies, to Varsity Hall which will be
relocated as part of the Rouss Hall addition project.
9
3)
Advanced Research Technology Facility ($15 million NGF) –
Authorize the acquisition, funded by bonds, or capital
lease for a facility to provide multi-disciplinary research
centers and swing space labs. This is the facility
discussed in the Policy Discussion on Research Initiatives
in October 2003 when the Board of Visitors approved $5
million of institutional funding towards the project.
4)
Medical
funding
gifts.
million
of this
5)
Cocke Hall ($1 million NGF) – Supplement the current $6
million authorization for the project to capture additional
space and provide enhancements, to be funded from a gift.
6)
Blanket Authorizations (language only) – Amend language to
allow the Academic Division and the Medical Center to
quickly and efficiently address unanticipated renovation
projects, emergencies and projects funded by gifts and
grants received between General Assembly sessions. The
language change will also reduce the number of capital
budget proposals and emergency authorization requests.
Research Building #6 (fund switch) – Modify the
for the MR-6 facility by substituting bonds for
In October 2003, the Board of Visitors approved $25
of institutional funding to expedite the completion
project.
AGENCY 209 – Medical Center
Capital:
•
Hospital Expansion ($24 million NGF) – Supplement the
existing Hospital Expansion project to fund, using bonds,
the purchase of two modular operating rooms and hospital
equipment. This equipment will provide greater access to
minimally invasive lifesaving procedures and support
telemedicine initiatives.
AGENCY 246 – University of Virginia’s College at Wise
Operating:
•
New faculty for Southwest Virginia economic and educational
development ($336,100 GF and 5 FTEs in year one; $353,905
GF and 5 FTEs in year two) – Fund additional faculty
members to aid in developing economic and educational
benefits in Southwest Virginia.
10
Legislative:
•
Provide reduced tuition rates for certain Tennessee
residents – Amend Section 23-7.4:2 of the Virginia Code to
allow reduced tuition for certain Tennessee residents
within 50 miles of the University of Virginia’s College at
Wise, consistent with reduced tuition rates currently
allowed for certain Kentucky residents. The legislation
would also allow Partner Institutions at the Southwest
Virginia Higher Education Center to provide reduced tuition
to students from the same Tennessee Counties.
ACTION REQUIRED: Approval by the Finance Committee and by the
Board of Visitors
RATIFICATION OF ADDITIONAL 2004-2006 LEGISLATIVE AMENDMENTS FOR
THE ACADEMIC DIVISION, THE MEDICAL CENTER AND THE UNIVERSITY OF
VIRGINIA’S COLLEGE AT WISE
WHEREAS, the additional 2004-2006 legislative proposal and
budget amendments have been carefully reviewed; and
WHEREAS, the legislative proposal and budget amendments
represent additional high priority initiatives and are aligned
with the mission of the institution;
WHEREAS, the Board of Visitors authorized the Executive
Vice President and Chief Operating Officer to transmit to the
General Assembly any request not funded by the Governor as long
as there are no material differences from the items already
endorsed by the Board of Visitors.
RESOLVED that the Board of Visitors of the University of
Virginia endorses and supports the additional 2004-2006
legislative proposal and budget amendments; and
RESOLVED FURTHER that the Executive Vice President and
Chief Operating Officer is authorized to transmit the final
proposed legislative proposal and budget amendments to the
General Assembly.
11
UNIVERSITY OF VIRGINIA
BOARD OF VISITORS AGENDA ITEM SUMMARY
BOARD MEETING:
February 6, 2004
COMMITTEE:
Finance
AGENDA ITEM:
II.A.
Student Housing Rates, 2004-2005
BACKGROUND: The Board considers student housing rates at this
time each year. The University’s student housing rates were
increased by approximately 10.6 percent in 2003-2004 (4.5
percent base plus 6.1 percent for a $150 fee for maintenance
reserve), and by 8.5 percent in 2002-2003. The University of
Virginia’s College at Wise student housing rates were increased
3.0 percent in 2003-2004 and 2.8 percent in 2002-2003.
For the current fiscal year (2003-2004), the average double
room rate at Virginia public colleges and universities is
$3,217. The comparable average at the University is $2,711.
The College at Wise charges an average of $2,951. Historically,
the University has strived to keep the University’s and the
College’s charges for room and board under the average of
amounts charged at other Virginia public institutions.
DISCUSSION: The University proposes housing rates to increase
by approximately 8.8 percent in 2004-2005, as compared to 10.6
percent in 2003-2004. This proposed increase would raise the
University’s average housing rate to $2,970 for 2004-2005, below
the statewide average of $3,217 for 2003-2004. Of the proposed
8.8 percent, 4.8 percent is proposed as a $150 fee specifically
to fund replacement and renovation reserves for anticipated
major renovations. The proposed rate reflects Bice House
returning to service for 2004-2005.
The remaining 4.0 percent of the 8.8 percent increase will,
similar to last year’s increase, cover rising operating costs.
The University of Virginia’s College at Wise proposes a 4.5
percent room rate increase.
The proposed resolution also addresses summer 2004 housing
and dining rates for the Mountain Lake Biological Station.
12
ACTION REQUIRED: Approval by the Finance Committee and by the
Board of Visitors
APPROVAL OF STUDENT HOUSING RATES FOR 2004-2005
RESOLVED that rental increases for student housing facilities be
approved as shown below, effective beginning with the 2004-2005 session:
Actual
2003-2004
Per
Student
Per
Session
Amount
of
Increase
% Increase
Before
Improvement
Fee
Student
Housing
Improvement
Fund Fee
Total
Percent
Increase
Proposed
2004-2005
Per
Student
Per
Session
Alderman/Observatory
Houses
Double Room
$2,670
$110
4.12%
$150
9.74%
$2,930
Brown College
Double Room
$3,270
$130
3.98%
$150
8.56%
$3,550
McCormick Road
Double Room
Small Double Room
Single
$2,560
$2,360
$2,680
$100
$90
$110
3.91%
3.81%
4.10%
$150
$150
$150
9.77%
10.17%
9.70%
$2,810
$2,600
$2,940
$3,120
$3,120
$130
$130
4.17%
4.17%
$150
$150
8.97%
8.97%
$3,400
$3,400
$3,040
$120
3.95%
$150
8.88%
$3,310
Range
Regular Single
$3,120
$130
4.17%
$150
8.97%
$3,400
Crackerbox
Single Room
$3,120
$130
4.17%
$150
8.97%
$3,400
Mary Munford/
Roberta Gwathmey
Double Room
Single Room
$2,670
$3,120
$110
$130
4.12%
4.17%
$150
$150
9.74%
8.97%
$2,930
$3,400
Facility
Academic Division
DORMITORIES
Lawn
Small Single
Regular Single
Small Single (no
fireplace)
13
Actual
2003-2004
Per
Student
Per
Session
Amount
of
Increase
% Increase
Before
Improvement
Fee
Student
Housing
Improvement
Fund Fee
Total
Percent
Increase
Proposed
2004-2005
Per
Student
Per
Session
$2,830
$3,000
$3,310
$110
$120
$130
3.89%
4.00%
3.93%
$150
$150
$150
9.19%
9.00%
8.46%
$3,090
$3,270
$3,590
$3,470
$140
4.03%
$150
8.36%
$3,760
$3,000
$3,310
$120
$130
4.00%
3.93%
$150
$150
9.00%
8.46%
$3,270
$3,590
$4,570
$180
3.94%
$150
7.22%
$4,900
Hereford College
Double Room
Single Room
$3,000
$3,270
$120
$130
4.00%
3.98%
$150
$150
9.00%
8.56%
$3,270
$3,550
French House
Triple Room
Double Room
Single Room
$2,850
$3,000
$3,370
$110
$120
$140
3.86%
4.00%
4.15%
$150
$150
$150
9.12%
9.00%
8.61%
$3,110
$3,270
$3,660
Russia House
Double Room
Single Room
$2,950
$3,300
$150
$150
5.08%
4.55%
$150
$150
10.17%
9.09%
$3,250
$3,600
Spanish House
Double Room
Single Room
$3,000
$3,370
$120
$140
4.00%
4.15%
$150
$150
9.00%
8.61%
$3,270
$3,660
Shea House
Double Room
Single Room
$3,000
$3,370
$120
$140
4.00%
4.15%
$150
$150
9.00%
8.61%
$3,270
$3,660
Copeley Hill III, IV, Lambeth Field
Two Bedroom
(double occupancy)
$3,030
$120
3.96%
$150
8.91%
$3,300
Facility
Sprigg (Lewis/Hoxton)
Small Double Room
Double Room
Single Room
Single Room
(w/bath)
Gooch/Dillard
Double Room
Single Room
Twelve Month Rate:
Single Room
APARTMENTS - SINGLE STUDENT
14
Facility
Three Bedroom
(double occupancy)
Actual
2003-2004
Per
Student
Per
Session
Amount
of
Increase
% Increase
Before
Improvement
Fee
Student
Housing
Improvement
Fund Fee
Total
Percent
Increase
Proposed
2004-2005
Per
Student
Per
Session
$2,930
$120
4.10%
$150
9.22%
$3,200
Bice House
Two Bedroom
(double occupancy)
Three Bedroom
(double occupancy)
$3,030
$120
3.96%
$150
8.91%
$3,300
$2,930
$120
4.10%
$150
9.22%
$3,200
Faulkner (Hench,
Mitchell, Younger)
Single
Large Single
$3,360
$4,040
$130
$160
3.87%
3.96%
$150
$150
8.33%
7.67%
$3,640
$4,350
$611
$24
4.00%
$15
6.45%
$650
$579
$23
4.00%
$15
6.59%
$617
$670
$27
4.00%
$15
6.24%
$712
$639
$26
4.00%
$15
6.35%
$680
$724
$29
4.00%
$15
6.07%
$768
$693
$28
4.00%
$15
6.16%
$736
$594
$25
4.21%
$15
6.73%
$634
$563
$24
4.26%
$15
6.93%
$602
$640
$27
4.22%
$15
6.56%
$682
$609
$25
4.11%
$15
6.57%
$649
$2,687
$121
4.50%
$0
4.50%
$2,808
$3,104
$140
4.50%
$0
4.50%
$3,244
Apartments - Family (per month)
Copeley Hill I & II
One Bedroom
(furnished)
One Bedroom
(unfurnished)
Two Bedroom
(furnished)
Two Bedroom
(unfurnished)
Three Bedroom
(furnished)
Three Bedroom
(unfurnished)
University Gardens
One Bedroom
(furnished)
One Bedroom
(unfurnished)
Two Bedroom
(furnished)
Two Bedroom
(unfurnished)
College At Wise
McCraray
Asbury, Thompson,
Henson, Martha
Randolph,
Townhouses, Theme
Housing
15
Notes:
1. The rates for Copeley Hill I & II and University Gardens include utility charges and
cable TV.
2. A new rate for furnished apartments will go into effect as the units turn over.
3. The rate for a double room used as a single is 135 percent of the double rate.
4. The rate for a double room used as a triple is 85 percent of the double rate.
16
MOUNTAIN LAKE BIOLOGICAL STATION PROPOSED RATES
BOARD RATES PER TERM (4 weeks)
Persons 17 years & older
Persons 10-16 years old
Persons 9 yrs & younger
Actual
2003
Proposed
2004 Rate
Percent
Increase
$513.00
$308.00
$164.00
$531.00
$319.00
$170.00
3.51%
3.57%
3.66%
$176.00
$134.00
$97.00
2.33%
2.29%
2.11%
$155.00
$49.00
$110.00
2.65%
2.08%
2.80%
$11.00
$55.00
$220.00
$11.50
$56.50
$225.50
4.55%
2.73%
2.50%
$15.00
$74.00
$294.00
$15.50
$76.00
$301.50
3.33%
2.70%
2.55%
$32.00
$57.50
$32.00
$32.00
3.23%
2.68%
3.23%
3.23%
$52.50
2.94%
SUMMER HOUSING RATES PER TERM (4 weeks)
CABINS
$172.00
LAING APTS
$131.00
DORMS/SINGLES
$95.00
NEW DORM:
Apts (2 rooms)
$151.00
2nd bedroom (family)
$48.00
Singles
$107.00
OFF SEASON RATES
Singles/Guests:
Night
Week
Month
Family:
Night
Week
Month
GROUP USE FEES (OFF-SEASON)
Classroom/day
Dining Hall/day
New Dorm Kitchen/day
Auditorium/day
Pavilion only
Computer Lab/day
Cabins:
$31.00
$56.00
$31.00
$31.00
No charge
$51.00
Hariot, Leconte, Catesby, Banister, Gattinger, Holbrook, Mitchell, Maphis, Schoew,
Rafinesque, Burns, Michaux, Clayton, Hentz-Mohr and Washington.
Laing Apartments:
Dorms/Singles:
Laing South, North, Center, Northwest and West.
Chapman, Elliott, DeSchweinitz, Audubon, Laing Singles, Laundry and other
cottages when used as dorms.
17
UNIVERSITY OF VIRGINIA
BOARD OF VISITORS AGENDA ITEM SUMMARY
BOARD MEETING:
February 6, 2004
COMMITTEE:
Finance
AGENDA ITEM:
II.B. 2004-2005 Tuition and Fees for
Executive Programs Tuition
BACKGROUND: The University has three executive-style master’s
programs whose academic year begins on May 1st rather than in
August. For that reason, we will bring their tuition proposals
each year at this meeting.
DISCUSSION: These graduate degree programs are priced according
to program cost, market rates, and program demand. Tuition and
fees for the Management of Information Technology program will
increase 7.7 percent for Virginians and 6.2 percent for nonVirginians due to rising program demand and increased costs.
Total tuition and fees for the Accounting program will decrease
by 9.3 percent for Virginians and 8.2 percent for nonVirginians. The decrease is entirely due to a $2,443 decrease
in fees as charges for books and computer leasing have been
eliminated. Due to market conditions, tuition for the
Accounting program will increase less than one percent for both
Virginians and non-Virginians. Also due to market factors,
tuition and fees for the Systems Engineering program will remain
the same in 2004-2005.
ACTION REQUIRED: Approval by the Finance Committee and by the
Board of Visitors
18
APPROVAL OF 2004-2005 TUITION AND FEES FOR EXECUTIVE PROGRAMS TUITION
RESOLVED that the tuition and fees applicable to the following graduate
degree programs be approved as shown below, effective May 1, 2004:
Virginian
Amount Percent
2004-05
of
of
2003-04
Approved Increase Increase Proposed
Non-Virginian
Percent
Amount
2004-05
of
of
2003-04
Approved Increase Increase Proposed
McIntire School of Commerce Executive Masters of Science
MIT
$30,874
$2,387
7.7% $33,261
$36,024
$2,237
6.2%
$38,261
Price includes fees of $10,261 for special session mandatory fee, books, materials,
computer leasing, software licenses, group meals, and lodging.
Accounting
$24,828 ($2,317)
(9.3%) $22,511
$29,978 ($2,467)
(8.2%)
Price includes fees of $1,511 for special session mandatory fee, materials,
software licenses, group meals, and lodging.
$27,511
School of Engineering and Applied Science Executive Master of Science
Systems
$29,500
$0
0.0% $29,500
$29,500
$0
0.0%
$29,500
Engineering
Price includes fees of $7,200 for special session mandatory fee, books, materials,
technology, group meals, and lodging.
19
UNIVERSITY OF VIRGINIA
BOARD OF VISITORS AGENDA ITEM SUMMARY
BOARD MEETING:
February 6, 2004
COMMITTEE:
Finance
AGENDA ITEM:
III.A.
ACTION REQUIRED:
None
Vice President’s Remarks
BACKGROUND: The Executive Vice President and Chief Operating
Officer will inform the Board of recent events that do not
require formal action, but of which it should be made aware.
20
UNIVERSITY OF VIRGINIA
BOARD OF VISITORS AGENDA ITEM SUMMARY
BOARD MEETING:
February 6, 2004
COMMITTEE:
Finance
AGENDA ITEM:
III.B.
ACTION REQUIRED:
None
State Budget and Legislation
Governor’s Budget
BACKGROUND: On December 17, 2003, Governor Warner presented to
the legislature his 2004-2006 biennial budget. The General
Assembly will consider the Governor’s Budget Bill during its 60day session, which began January 14, 2004. The Academic
Division and the Medical Center submitted requests for the
Governor’s consideration in October 2003. The University of
Virginia’s College at Wise (Wise) did not have any items
approved by the Secretary of Education for submittal to the
Governor.
DISCUSSION: Governor Warner's operating budget for higher
education includes $100 million in new general funds for the
biennium, of which $82.2 million is contingent upon passage of
the Governor’s tax reform package. Included in this amount is
funding for base operating budgets, enrollment increases,
research initiatives, faculty salaries (in the second year
only), operations and maintenance for new facilities, and the
virtual library. The Governor also allocated additional funds
over the 2003-2004 appropriation for Equipment Trust Fund and
for maintenance reserve. For capital outlay, the Governor’s
budget includes $135.9 million in tax-supported debt for new
projects, and he plans a separate Tax Reform Capital Outlay bill
which will allocate an additional $213.8 million in taxsupported debt.
For the Academic Division, the Governor allocated $6.26
million in general fund operating dollars for the biennium,
along with a nearly $8 million increase in Equipment Trust Fund
allocations. The budget also authorized all nongeneral fund
operating requests. This is exclusive of funding for faculty
salary increases, because we do not yet have the breakdown by
institution. For Wise, the Governor allocated $558,000 in
general fund operating dollars for the biennium, along with an
increase of $208,000 in Equipment Trust Fund allocations. All
21
nongeneral fund operating requests from the Medical Center were
authorized. The Medical Center also received an assurance that
indigent healthcare costs would be fully funded in both years of
the biennium. The Governor reinserted language in the Budget
Bill that requires the Medical Center to remit to the
Commonwealth the interest earned on its operating cash balances
in 2004-2006. We had assurances from the legislature that this
provision would be dropped in the new biennium. An amendment
has been submitted to the General Assembly that would strike
this requirement. Specific actions can be found in Appendix A.
The Governor’s Budget Bill includes the Academic Division’s
requested language change concerning the use of commercial paper
for short-term financing on capital projects and the
establishment of maintenance and repair reserves for nongeneral
fund educational and general buildings. The Governor has
eliminated restraints on the setting of tuition and all
mandatory fees, leaving this authority with the Board of
Visitors.
For capital outlay, the Governor’s budget and the planned
tax reform capital outlay bill included tax-supported debt of
$38.66 million for the Academic Division, $20 million for the
Medical Center, and $9.4 million for Wise. The Governor also
approved the nongeneral fund capital projects submitted.
Specific actions can be found in Appendix A.
2004 Legislative Amendments
BACKGROUND: Operating and capital budget requests were
submitted to the legislature on January 22, 2004. The Board of
Visitors authorized the Executive Vice President and Chief
Operating Officer to submit amendments to the General Assembly
for items not funded by the Governor as long as they did not
materially differ from those items approved by the Board in
October 2003. The final list of amendments is outlined in
Appendix B.
DISCUSSION: In addition to requests that impact the budget
bill, the University has submitted a legislative proposal to
amend Section 2.2-2001 of the Virginia Code to exempt the
Medical Center from the Virginia Information Technology Agency’s
(VITA) centralized information technology planning, oversight
and procurement process in accordance with the original intent
of the General Assembly under Section 23-77.4. Under this new
law effective July 1, 2003, VITA has the power to modify,
22
suspend or cancel projects and proposed procurements. These
restrictions on the Medical Center are not placed on any forprofit, community, or private hospitals in the Commonwealth,
thereby placing the Medical Center at a competitive
disadvantage.
Wise has also submitted a legislative proposal to amend
Section 23-7.4:2 of the Virginia Code to allow reduced tuition
for certain Tennessee students within 50 miles of the College.
Currently Wise provides a reduced tuition rate for certain
residents of Kentucky. The legislation would also allow Partner
Institutions at the Southwest Virginia Higher Education Center
to provide reduced tuition to students from the same Tennessee
Counties. If the legislation were approved, the College would be
able to provide service to students within the geographic
service area at a competitive rate. The program would not
displace Virginia students and would provide fiscal resources.
In addition, the group appointed by the Rector has been
working with the University on autonomy legislation. We will
report on the status of this legislation at the February 6, 2004
meeting.
Preliminary 2004-2005 Budget Assumptions
BACKGROUND: Each year at this time, we develop preliminary
budget assumptions that will be used to formulate the target
budget for the subsequent fiscal year.
DISCUSSION: The following budget assumptions will be used in
the development of the 2004-2005 budget, which will be presented
to the Board of Visitors for action in June 2004:
1.
The 2004-2005 state appropriation will reflect any budget
increases or reductions as approved by the Governor and the
2004 General Assembly. The impact of these actions on the
Academic Division’s state appropriation will be reflected
in the budget presented to the Board of Visitors in June.
Any partial year amounts are annualized, and the targets
are adjusted accordingly.
2.
Anticipated tuition increases will reflect direction from
the Board received at both the October 2003 and February
2004 meetings.
23
3.
The 2004-2005 state educational and general budget will
reflect the following:
•
Faculty salary, faculty wage, classified salary, and
graduate teaching assistant base budgets (including
fringe benefits) will be increased to fund the annual
cost of the salary increases granted November 25, 2003.
•
New available resources will be allocated to meet
institutional priorities and benchmarks, such as base
operating needs, faculty and staff compensation,
financial aid programs, and research initiatives.
•
Vice presidents may reallocate existing funding and
positions among units within their areas of
responsibility.
•
State and local targets will be adjusted to reflect any
changes in the fringe benefit rates for 2004-2005.
•
Reserves will be budgeted to fund any classified and
faculty salary increases for the 2004-2005 fiscal year
that may be granted through amendments to the 2004-2005
Budget Bill in the 2004 General Assembly session.
•
Base budgets for non-personnel costs will not be
increased for inflation.
•
Recoveries and transfer budgets will be adjusted as
needed.
•
The Darden School and Law School financial selfsufficiency models will continue in 2004-2005.
8.
Revenue from endowment income is budgeted based upon the
2004-2005 distribution rates as calculated per the
Endowment Income Distribution and Spending Policy approved
by the Board of Visitors. Related expenditures are based
upon historical spending patterns and will emphasize
institutional and school priorities.
9.
Revenue and related expenditures from private gifts and
other sales and services are budgeted based upon historical
spending patterns and emphasize institutional and school
priorities.
24
10.
Revenue and related expenditures from sponsored programs
are budgeted based upon prior year sponsored program
awards.
11.
Revenue and related expenditures from auxiliaries are
budgeted based on fees approved by the Board in February
(housing) and April (dining and mandatory student fees) and
anticipated activity.
25
UNIVERSITY OF VIRGINIA
BOARD OF VISITORS AGENDA ITEM SUMMARY
BOARD MEETING:
February 6, 2004
COMMITTEE:
Finance
AGENDA ITEM:
III.C.
ACTION REQUIRED:
None
Tuition Planning
BACKGROUND: The Board normally approves tuition and required
fees at its April meeting. Members of the Board have emphasized
that it is important to review pricing policy and outlook prior
to the meeting at which action is taken.
The Governor’s budget and General Assembly actions set the
criteria and framework for the establishment of tuition and
fees. Board policy and Board response to institutional
requirements determine the specific tuition structure within the
state-proscribed framework.
In October 2003 we presented a discussion of undergraduate,
graduate and professional school charges and the outlook for
2004-2005. For this meeting the Board requested an update on
that outlook prior to reviewing the proposal at the April
meeting. The outcome of the discussions will determine the
direction taken in the development of the tuition structure for
2004-2005 and will impact the resources available for the
development of the 2004-2005 budget.
DISCUSSION: The 2004-2006 biennial budget presented by the
Governor on December 17, 2003 has authorized each institution’s
board of visitors to approve all tuition and fees, without
restriction. The Governor’s language advises boards to
“continue to eliminate factors that increase the cost of higher
education without increasing its quality and effectiveness.”
The House and Senate are considering the Governor’s Budget Bill
at this time and will report on their respective amendments on
February 22nd.
The Governor’s proposed budget has included only minimal
new general fund support to address base operating needs and has
no provision for faculty or staff salary increases in the first
year of the biennium. If the University is to meet unavoidable
commitments and progress toward the goals of operating at a
level that the General Assembly recognizes as an adequate base
26
operating budget while compensating its faculty and staff at
competitive levels, tuition will be the primary source of funds
to accomplish those goals. The 2004-2005 revenue requirements
for the University will include the funding of several
unavoidable cost increases, such as:
•
the University’s annualized share of the 2.25 percent
increase in the base salaries of faculty and classified
employees that was effective November 25, 2003;
•
the Board’s supplemental increase in the base salaries of
faculty and classified employees that was effective
November 25, 2003;
•
the University’s share of the healthcare premium increase,
effective January 1, 2004;
•
the University’s share of the operations and maintenance of
new educational and general facilities opening in 20042005;
•
and the expected increase in 2004-2005 utilities
expenditures.
This is an appropriate time to consider a pricing structure
for undergraduate tuition that recognizes the University’s
quality education, the resources necessary to sustain that
quality, and the relationship of tuition to peer institutions,
both public and private. The policy must consider the impact of
tuition increases on continuing students versus those who are
making the decision to attend the University for the first time.
Any proposed rate increase must also take into consideration
additional financial aid that will be required in order to
continue to offer 100 percent of demonstrated need and to
provide funding for a possible new financial aid program
presented as item II.C. in the Finance Committee material.
We expect to bring to the Board a tuition structure for
graduates that will move to a set differential between in-state
and out-of-state students. This relationship is related to the
overall general fund support provided for in-state students and
will be accomplished by keeping out-of-state increases at a
minimum level while in-state tuition will increase
significantly. Once the differential is attained, it will be
maintained annually. We will continue to address graduate
financial aid issues as we have in the past.
27
We anticipate bringing to the Board a tuition structure for
the School of Medicine that will move to a set differential,
probably $10,000, between in-state and out-of-state students.
We expect to set this differential for all classes immediately,
using financial aid resources to minimize the impact on the
students who entered the school in the previous three fall
semesters.
In keeping with the respective financial self-sufficiency
agreements, Darden will maintain the existing $5,000
differential for all students. The Law School will move to a
$5,000 differential for its first year class, while maintaining
the existing surcharges for the second and third year classes.
28
UNIVERSITY OF VIRGINIA
BOARD OF VISITORS AGENDA ITEM SUMMARY
BOARD MEETING:
February 6, 2004
COMMITTEE:
Finance
AGENDA ITEM:
III.D.
ACTION REQUIRED:
None
Endowment Report
Market Value and Performance as of December 31, 2003
BACKGROUND: The Rector and Visitors of the University,
particularly the University of Virginia Investment Management
Company (UVIMCO), oversees the major component of the endowment
that benefits the University. A report on the endowment is made
at each Board of Visitors meeting.
DISCUSSION: December 31 marks the halfway point of fiscal year
2004. For the six-month period, the total return on the
endowment was 7.9 percent. During the same period, equity
markets were up significantly, with domestic stocks (Russell
3000) up 16.3 percent and international stocks (MSCI All Country
World ex. United States) up 27 percent. The markets seem to be
pricing in all of the good news -- corporations are reporting
good profits and the US is reporting success in the war on
terrorism. In the wake of the optimism, the bond market
(Merrill Lynch 7-10 Year Government) has struggled, down 2.1
percent. With 60 percent in hedge funds, a portfolio that is
little influenced by the direction of the market, the endowment
did not fully participate in the equity market rally. The hedge
fund portfolio returned 5.8 percent, about in line with the
lower end of the 12 to 15 percent annual return expectation.
The fund’s more modest allocations to domestic and international
equities outpaced their markets with returns of 17.3 percent and
37.9 percent, respectively. The outstanding international
equity performance is primarily due to the decision to place
those assets with emerging markets managers. The allocation to
private equity, up 6.6 percent for the period, also served as a
drag on performance. The robust public equity market
performance is a positive for the private equity portfolio, but
this positive impact is not reflected immediately in valuations.
The UVIMCO Board met in early December to review
performance and to confirm asset allocation targets. The
29
targets remained the same as those set in September, but a
number of details were clarified. The Board expressed their
commitment to achieving a good absolute return for the
endowment.
30
31
Report on Actions of the Board of the
Investment Management Company
BACKGROUND: The University of Virginia Investment Management
Company (UVIMCO) Board meets regularly and reports all of its
activities at the following meeting of the Finance Committee.
DISCUSSION: Since the last Board meeting, the UVIMCO Board
approved the following investments: $30 million in TIFF
Secondary Partners I, $25 million in Japan Real Estate
Recovery Fund, LP through Japan Real Estate Recovery
Partners, Ltd., $20 million in Lubert-Adler Group, $10
million in The Children’s Investment Fund, $5 million in
Highside Capital Partner, LP, and $5 million in NEA 11;
additional investments of $35 million to Tudor BVI, and an
increase of commitment to Sequoia XI of $182,000.
The UVIMCO Board also approved the Blue Ridge Lock-up, in
principle.
32
MISCELLANEOUS FINANCIAL REPORTS
Finance Committee
University of Virginia
February 6, 2004
UNIVERSITY OF VIRGINIA ACADEMIC DIVISION
FINANCIAL REPORT
ACCOUNTS AND LOANS RECEIVABLE AS OF SEPTEMBER 30, 2003
Summary of Accounts Receivable:
The University’s Academic Division’s total accounts
receivable as of September 30, 2003, were $24,926,000 as
compared to $15,067,000 at June 30, 2003. The major sources of
receivables at September 30, 2003, were sponsored programs of
$13,278,000 and student accounts of $6,404,000.
The past due receivables over 120 days old at September 30,
2003 were $1,619,006 or 6.5 percent of total receivables, well
below the Commonwealth’s management standard of ten percent.
Student
Accounts
Gross Accounts
Receivable
Less: Allowance
for Doubtful
Accounts
Net Accounts
Receivable
$6,404,000
Sponsored
Programs
$13,278,000
30,000
$6,374,000
650,000
$12,628,000
Other
Receivables
Total
$5,244,000
$24,926,000
265,000
945,000
$4,979,000
$23,981,000
$316,000
$1,619,000
Accounts Receivable
Greater than 120
Days Past Due
$31,000
$1,272,000
SOURCE:
DATE:
33
Student Financial Services
December 26, 2003
UNIVERSITY OF VIRGINIA ACADEMIC DIVISION
FINANCIAL REPORT
ACCOUNTS AND LOANS RECEIVABLE AS OF SEPTEMBER 30, 2003
Summary of Loans Receivable:
The default rate for the Perkins Student Loan Program
decreased by 4.34 percent to 2.33 percent. This is based on the
cohort default rate calculation and is well below the 15 percent
threshold set by federal regulations. The Health Professions
Loan Program default rate remained the same at zero percent.
The Nursing Undergraduate Student Loan Program default rate
remained the same at 1.94 percent. All medical loan programs
are well below the five percent federal threshold. The
University Loan Program default rate increased by 0.717 percent
to 4.09 percent.
Gross Loans
Receivable
Perkins Student
Loans
Current
Default Rate
Inc./(Dec)
From Last Quarter
$16,725,000
2.33%
(4.34)%
400,000
0.00%
0.00%
570,000
1.94%
0.04%
9,300,000
4.09%
(0.17)%
Health Professions
Loans
Undergraduate
Nursing Loans
University Loans
Total Student Loan
Outstanding
$26,995,000
SOURCE:
DATE:
34
Student Financial Services
December 26, 2003
UNIVERSITY OF VIRGINIA
INTERNAL LOANS TO UNIVERSITY DEPARTMENTS AND ACTIVITIES
As of November 30, 2003
(Per January 1990 Board of Visitors resolution changing Current Funds Guidelines to include investments in internal
loans and the June 1994 Board of Visitors resolution authorizing internal loans to be made in the discretionary
collateral account lending program [security lending program], both subject to approval by the Executive Vice
President and Chief Operating Officer)
PROJECT PURPOSE (INT PROJECT)
103812/ Wise Student Center
118780
103792
Clark Hall
35
118600
Columbarium
115024
115608
115567
107202
Baseball Stadium
ITC-Disk Hardware
ITC-Cincom
Keck Center
103869
Gilmer Hall
103947
WTJU
UVA Medical Center
CVC Football Facility
103807
Total Internal Loans Subject to
$15M Limit Established by BOV1
Other Internal Loans:
103482
Scott Stadium Internal
Construction Loan2
NOTES: 1.
2.
PRINCIPAL
DATE OF
INTEREST
ORIGINAL
PAYMENTS MADE
LOAN
RATE
LOAN AMOUNT
TO DATE
11/30/03 Blended borrowing
2,000,000.00
rate (4.75%)
11/01/03 Blended borrowing
2,575,000.00
rate (4.75%)
10/30/03 Blended borrowing
85,000.00
rate (4.75%)
06/14/02 Fed. Funds+60 pts. 1,525,000.00
1,194,394.87
02/01/02 Fed. Funds+60 pts.
130,000.00
86,666.00
02/01/02 Fed. Funds+60 pts.
950,000.00
475,000.00
06/22/01 Fed. Funds+60 pts.
50,000.00
12,500.00
06/22/01 Fed. Funds+60 pts.
45,147.96
12,500.00
06/01/00 Fed. Funds+60 pts.
120,000.00
72,000.00
07/10/02 Fed. Funds+60 pts. 3,960,809.02
992,206.48
12/22/98 Fed. Funds+60 pts. 3,000,000.00
1,285,772.18
$14,440,956.98
04/26/01 Fed. Funds+60 pts. 10,338,494.75
OUTSTANDING
PRINCIPAL
2,000,000.00
APPROXIMATE
FINAL
PAYMENT
Jun 2007
2,575,000.00
Jan 2008
85,000.00
Oct 2008
330,605.13
43,334.00
475,000.00
37,500.00
Jun
Jul
Jul
Jun
2005
2004
2005
2005
32,647.96
Jun 2005
48,000.00
2,968,602.54
1,714,227.82
May 2005
Jun 2006
Jun 2009
$4,131,039.53 $10,309,917.45
179,176.62
10,159,318.13
Apr 2006
Per April 2003 Board of Visitors resolution approving the expansion of the internal loan pool from $10 million to $15 million.
Per April 2001 Board of Visitors resolution approving short-term construction loans of up to $13 million.
SOURCE:
DATE:
Investment and Tax Services
December 12, 2003
UNIVERSITY OF VIRGINIA
QUASI-ENDOWMENT ACTIONS
July 1, 2003 – November 30, 2003
(Per October 1990 and June 1996 Board of Visitors resolutions
granting the Executive Vice President and Chief Operating Officer
authority to approve selected quasi-endowment transactions,
including establishments and disinvestments, less than $2,000,000.)
Per the delegated authority from the Executive Vice President and
Chief Operating Officer, the Vice President for Management and
Budget has approved the additions, divestments and capitalizations
of the quasi-endowments listed below.
Additions
Difazio, Cosmo A. Professorship in Anesthesiology
Quasi-Endowment
Howland, Benjamin C. Memorial Lecture Fund
Kelly, Jane Lewis and John Jackson Kelly Scholarship
Fund(1)
Larner, Joseph and Frances Fellowship in Pharmacology
Fund(1)
Larner, Joseph and Frances Professorship in
Pharmacology Quasi-Endowment
Marching Band Quasi-Endowment
Pristo, Lori Ann Award
Swortzel, Thelma R. Research Quasi-Endowment(1)
UVA Bookstore Quasi-Endowment for Excellence
University Quasi-Endowment Fund(2)
Total Additions to Quasi-Endowments
Divestments
GKSA Quasi-Unrestricted Endowment Income
McIntyre, Howard Quasi-Endowment in Neurology
Ohrstrom Family Foundation Scholarship QuasiEndowment Fund(1)
Pathology Academic Enrichment Fund Income
Pratt Bequest – School of Medicine
Psychiatric Medicine Research Quasi-Endowment Fund
Ross, William and Harriet Diabetes Research
Quasi-Endowment
School of Medicine Research Fund Quasi-Endowment
Scott, Fred Endowment for Behavioral Medicine and
Psychiatry
36
Amount
$
9,000.00
95.00
100,000.00
100,000.00
314,585.90
500,000.00
2,930.00
486,500.00
50,000.00
15,132.99
$1,578,243.89
$700,000.00
60,000.00
35,000.00
445,977.00
3,688,363.26
147,666.35
83,695.99
225,671.53
200,000.00
Thaler, Myles H. Quasi-Endowment for HIV Research
Total Divestments from Quasi-Endowments
$5,595,431.13
Endowment Income Capitalizations
Pratt Bequest – Arts and Sciences
Honor System Quasi-Unrestricted Endowment Fund
Total Endowment Income Capitalizations
9,057.00
$
72,806.84
10,598.34
$83,405.18
NOTES:
1. Quasi-endowment newly established or originally funded since
July 1, 2003.
2. Includes current unrestricted gifts to the University that,
under a standing Board of Visitors resolution, are required to
be added to the University's Unrestricted Endowment Fund.
SOURCE:
DATE:
37
Financial Administration
December 26, 2003
QUARTERLY BUDGET REPORT
As of September 30, 2003
This report compares, on a quarterly basis, the approved
annual budget with year-to-date actual revenues and expenditures
for the Academic Division. Enclosed are the reports as of the
first quarter ended September 30, 2003.
At the end of the first quarter of fiscal year 2003-04,
revenues collected totaled 47.9 percent of budgeted revenues;
actual expenditures totaled 30.9 percent of budgeted expenditures.
It is important to note that revenue collections and expenditures
are not evenly distributed throughout the year.
A definition of terms is included to explain the sources of
revenues and the purposes of expenditures.
SOURCE:
DATE:
38
Budget Office
January 7, 2004
University of Virginia Academic Division
2003-2004 Revenue Budget Summary
As of September 30, 2003
2003-2004
Original
Budget
Revenue Projections
Educational & General
Tuition & Fees
State General Fund Appropriation
Sponsored Programs & Indirect Cost
Endowment Income
Gifts
Sales, Services & Other
Total Educational and General
39
Student Financial Assistance
Transfer from Tuition
State General Fund Appropriation
Grants, Contracts and Indirect Cost
Endowment Income
Gifts
Investment Income and Other
Total Student Financial Assistance
Auxiliary Enterprises
Athletics
University Bookstores
Housing and Conference Services
Parking & Transportation
Voice Communications
Student Health
Intramural/Recreational Sports
Printing Services
Newcomb Hall & Related Activities
Dining Services
Other Auxiliary Activities
Total Auxiliary Enterprises
Total Revenues
09/30/03
Actual
Revenues
Variance Actual
(Over)/Under
Budget
09/30/03
Percentage
Collected
$209,868,915
115,565,302
228,670,040
52,811,127
51,410,141
22,485,802
680,811,327
$106,407,146
111,249,654
81,448,474
7,909,562
15,393,819
7,042,999
329,451,654
$103,461,769
4,315,648
147,221,566
44,901,565
36,016,322
15,442,803
351,359,673
50.7%
96.3%
35.6%
15.0%
29.9%
31.3%
48.4%
28,771,500
5,526,064
15,489,200
15,247,388
14,500,000
598,462
80,132,614
13,457,174
2,342,735
7,554,145
7,265,998
7,635,601
328,121
38,583,774
15,314,326
3,183,329
7,935,055
7,981,390
6,864,399
270,341
41,548,840
46.8%
42.4%
48.8%
47.7%
52.7%
54.8%
48.1%
26,832,167
30,139,800
22,729,000
12,033,200
10,743,764
6,457,197
5,199,400
4,395,700
4,334,967
3,225,700
8,475,707
134,566,602
7,070,070
12,052,716
10,456,204
3,840,109
8,919,645
3,160,580
2,213,278
1,160,244
1,971,815
6,394,909
3,461,578
60,701,148
19,762,097
18,087,084
12,272,796
8,193,091
1,824,119
3,296,617
2,986,122
3,235,456
2,363,152
(3,169,209)
5,014,129
73,865,454
$895,510,543
$428,736,576
$466,773,967
26.3%
40.0%
46.0%
31.9%
83.0%
48.9%
42.6%
26.4%
45.5%
198.2%
40.8%
45.1%
47.9%
University of Virginia Academic Division
2003-2004 Expenditure Budget Summary
As of September 30, 2003
2003-2004
Original
Budget
Expenditure Projections
Educational & General
Instruction
Research
Public Service
Academic Support
Student Services
Institutional Support
Operation & Maintenance of Plant
Sponsored Programs
Total Educational and General
Student Financial Assistance
40
Auxiliary Enterprises
Athletics
University Bookstores
Housing
Parking & Transportation
Voice Communications
Student Health
Intramural/Recreation Sports
Printing Services
Newcomb Hall & Related Activities
Dining Services
Other Auxiliary Activities
Total Auxiliary Enterprises
Total Expenditures
09/30/03
Variance Actual
Actual
(Over)/Under
Expenditures
Budget
09/30/03
Percentage
Expended
$234,500,759
39,044,450
13,462,280
99,851,006
19,188,978
48,424,421
50,639,433
175,700,000
680,811,327
$48,792,497
9,970,333
4,717,513
29,414,393
6,787,992
19,834,056
14,948,456
63,576,871
198,042,111
$185,708,262
29,074,117
8,744,767
70,436,613
12,400,986
28,590,365
35,690,977
112,123,129
482,769,216
20.8%
25.5%
35.0%
29.5%
35.4%
41.0%
29.5%
36.2%
29.1%
80,132,614
38,207,049
41,925,565
47.7%
26,832,167
30,009,100
22,631,400
12,033,200
10,743,764
6,457,197
5,175,400
4,395,700
4,411,400
3,178,135
8,242,134
134,109,597
7,213,892
13,903,100
6,406,237
2,549,806
2,398,991
1,810,303
1,597,076
1,242,517
1,338,917
1,011,457
968,304
40,440,600
19,618,275
16,106,000
16,225,163
9,483,394
8,344,773
4,646,894
3,578,324
3,153,183
3,072,483
2,166,678
7,273,830
93,668,997
26.9%
46.3%
28.3%
21.2%
22.3%
28.0%
30.9%
28.3%
30.4%
31.8%
11.7%
30.2%
$895,053,538
$276,689,760
$618,363,778
30.9%
DEFINITION OF TERMS
Educational and General - those activities which embrace the three
programs directly related to the higher education mission: (1)
instruction, (2) research, and (3) public service. These
activities also encompass the support programs: academic support,
institutional support, and maintenance and operation of physical
plant; and sponsored programs associated with instruction,
research, and public service.
Student Financial Assistance - those activities which promote
student accessibility to the University through scholarships and
fellowships. Student loans, student wages and aid from third
parties are not included.
Auxiliary Enterprises - those activities which are supported
entirely through fees charged to users, such as housing,
athletics, dining services, the telephone system and the
bookstore.
Sponsored Programs and Indirect Cost Recoveries -- primarily
research projects, but also includes activities restricted to
institutional and service programs.
Instruction -- expenditures for the primary mission of the
University, which includes teaching faculty, support staff,
instructional equipment, and related routine operating costs.
Research -- includes expenditures for activities such as support
for research faculty, but does not include sponsored research.
Activities include the Center for Public Service, the State
Climatologist, and the Center for Liberal Arts.
Public Service -- includes activities such as the Miller Center of
Public Affairs, the Virginia Foundation for the Humanities and
Public Policy, and that portion of the medical school's clinical
physicians salaries and fringe benefits related to patient care.
Academic Support -- the program which encompasses the libraries,
the activities of the deans of the schools, and other related
expenditures.
Student Services -- activities whose primary purpose is to
contribute to the students' emotional and physical well-being and
to their intellectual, cultural, and social development outside
the classroom.
41
Institutional Support -- primarily includes the financial,
administrative, logistical, and development activities of the
University.
Operation and Maintenance of Plant -- includes expenditures for
activities related to the operation and maintenance of the
physical plant, net of amounts charged to auxiliary enterprises
and the Medical Center.
42
UNIVERSITY OF VIRGINIA
SUMMARY OF SPONSORED PROGRAMS RESTRICTED GRANTS & CONTRACTS
July 1, 2003 – December 31, 2003
During the first six months of fiscal year 2004, the
University received sponsored program awards totaling $170.34
million dollars. This was an approximate increase of 17 percent
over the fiscal year 2003 number of $145.91 million dollars. This
year’s numbers include $36.7 million for indirect costs. This
increase, which is somewhat larger than seen at a similar point in
previous years, is likely due to NIH support arriving earlier in
the fiscal year than in past fiscal years.
The Department of Health and Human Services continues to be
the University’s largest sponsor of awards, accounting for 56
percent of the total. The Medical School was awarded 59 percent
of the award dollars, followed by Arts & Sciences with 16 percent,
and the School of Engineering with 15 percent of the funds. The
remaining ten percent was distributed among various areas within
the University.
While these numbers are certainly encouraging, one should not
assume a 17 percent rate of growth for the entire fiscal year,
since the rate of funding fluctuates over the course of any given
year.
SOURCE:
DATE:
43
Office of Sponsored Programs
January 8, 2004
RESTRICTED GRANTS & CONTRACTS FOR THE PERIOD
7/1/03-12/31/03
In Millions
SCHOOL
DHHS
Architecture
Arts & Scs.
10.07
Education
1.01
Engineering
2.68
Law
Medicine
78.72
Nursing
2.67
Other*
0.15
DOD
0.25
3.83
1.30
NonFederal
0.03
2.41
0.81
6.57
0.89
17.44
0.21
0.73
DE
DOE
NASA
NSF
1.15
1.10
0.43
2.19
0.93
0.49
0.40
6.14
0.05
8.54
0.26
0.07
0.80
2.85
0.04
0.00
Other
Federal State
0.06
4.02
0.11
0.01
1.41
0.93
1.14
FY 2003
0.49
23.65
4.45
22.40
0.80
83.39
1.43
9.30
%
Increase/
Decrease
-82%
15%
-1%
12%
11%
20%
102%
4%
145.91
17%
0.01
1.52
0.35
5.58
170.34
44
95.30
5.37
29.09
5.52
2.98
1.40
15.52
5.32
9.82
Mid-Year
Total FY03
78.07
2.86
29.30
7.68
1.41
1.75
12.21
3.97
8.66
18%
47%
-1%
-39%
53%
-25%
21%
25%
12%
Note:
Mid-Year
Total
FY 2004
0.09
27.25
4.39
25.00
0.89
100.13
2.89
9.70
Mid-Year
Total FY04
% Increase/
Decrease
Mid-Year
Total
Totals may be off slightly due to rounding.
*Includes University Librarian, Vice President for Research and Graduate Studies, Miller Center, Vice
President and Provost, School of Continuing and Professional Studies, Center for Public Service, Financial
Administration, Student Health, Health Sciences Library, UVa’s College at Wise, Virginia Foundation for the
Humanities, and Vice President for Student Affairs.
SOURCE:
DATE:
Office of Sponsored Programs
January 7, 2004
ENDOWMENT/INVESTMENTS FOR UVA AND RELATED FOUNDATIONS*
June 30, 2002
(In Thousands)
Related
Foundation Funds
Invested by
UVIMCO
Related
Foundation
Funds Invested
by Direction of
Foundation
Board
$437,766
74,609
$6,622
32,832
$16,723
131,728
$4,062
$465,173
239,169
205,594
6,605
6,290
11,107
229,596
29,035
50,881
75,059
78,500
2,479
182,594
53,360
R & V Funds
Invested by
UVIMCO
45
The University of Virginia Medical School and
related foundations
Darden School and related foundation
The College of Arts and Sciences and related
foundations
The University of Virginia Law School and
related foundation
School of Engineering and related foundation
The McIntire School of Commerce and related
foundation
Graduate School of Arts and Sciences
School of Nursing
University of Virginia's College at Wise and
related foundation
Curry School of Education and related foundation
School of Architecture
School of Continuing and Professional Studies
Alumni Association**
Athletics and related foundation
Miller Center and related foundation
Alumni Board of Trustees
University of Virginia Foundation and UVa Real
Estate Foundation
All Other
*
**
24,999
27,982
21,775
17,572
8,018
9,734
49
27,320
35,722
Funds Invested
by
Alumni Assoc
23,900
1,492
421
4,893
17,552
1,830
167
63
18,579
21,214
13,742
3
$1,832,866
$180,770
Excludes security lending.
Includes funds on deposit for other areas/schools not individually listed.
$284,259
SOURCE:
DATE:
48,899
27,982
23,267
1,679
17
335
19,839
12,991
10,069
49
197,745
277
197,745
63,728
37,552
32,206
32,206
861,810
Total
21,217
875,552
$243,093
$2,540,988
Financial Administration
August 30, 2003
This page intentionally left blank.
46
APPENDIX
APPENDIX A
UNIVERSITY OF VIRGINIA – ACADEMIC DIVISION
Summary of Budget Requests and Governor’s Budget Bill
2004-2005
Governor's
Request
Budget
2005-2006
Governor's
Request
Budget
Academic Division: Operating
Maintain New Facilities (GF)
$
841,727
$
271,101
$ 1,973,988
$
272,291
Maintain New Facilities (NGF)
-
454,298
-
456,327
Increase Base Operating Budget (GF)
-
221,675
-
443,349
Increase Base Operating Budget (NGF)
-
377,892
-
755,783
Fund Research Initiatives (GF)
-
2,907,875
-
500,000
1,429,024
1,429,000
1,429,024
1,429,000
Insurance Premium Changes and VITA
Savings (GF)
-
(14,629)
-
(14,150)
Increase Financial Aid (GF)
-
235,563
-
235,563
25,200,000
25,200,000
37,000,000
37,000,000
8,000,000
8,000,000
9,500,000
9,500,000
33,800,000
33,800,000
72,300,000
72,300,000
Subtotal Academic Division - GF
2,270,751
4,221,585
3,403,012
2,037,053
Subtotal Academic Division - NGF
67,000,000
68,661,190
118,800,000
120,841,110
Fund UVa Health Plan ($1.4 mill. GF
requested; $600,000 GF & $829,000
NGF funded)
NGF Appropriation (NGF)
NGF for Financial Aid (NGF)
NGF for Sponsored Programs (NGF)
TOTAL Academic Division
$ 69,270,751 $ 72,882,775 $122,203,012 $122,878,163
47
APPENDIX A (continued)
UNIVERSITY OF VIRGINIA – ACADEMIC DIVISION
Summary of Budget Requests and Governor’s Budget Bill
2004-2006
Governor's
Request
Budget
Academic Division:
Capital
Maintenance Reserve ($15 mill. GF and $3 mill. NGF
requested; $6.3 mill. GF funded)
$ 18,000,000
$ 6,264,644
Heating Plant Modification ($30 mill. GF & $19.8 mill. NGF
requested; $17.5 mill. GF & $19.8 million NGF funded)
49,800,000
37,300,000
McLeod Hall Addition ($6 mill. GF & $6 mill. NGF requested;
$6 mill. GF included in Tax Reform Capital Outlay Bill)
12,000,000
6,000,000
New Cabell Hall Replacement ($4.5 mill. GF & $4.5 mill. NGF)
9,000,000
-
Ivy Stacks (GF – included in Tax Reform Capital Outlay Bill)
8,900,000
8,900,000
Jordan Hall HVAC Infrastructure ($7 mill. GF & $7 mill. NGF)
14,000,000
-
Research Stations & Support Facilities ($4.5 mill. GF & $1.5
mill. NGF)
6,000,000
-
Alderman Road Substation Upgrade(GF)
2,400,000
-
Fire, Life Safety, & Accessibility (GF)
1,000,000
-
Medical Education Building (NGF)
25,000,000
20,700,000
Arts & Sciences Building (NGF)
37,816,000
37,816,000
Maywood Connector (NGF)
20,000,000
20,000,000
School of Medicine Laboratories (NGF)
4,000,000
4,000,000
Suhling Research Laboratories (NGF)
4,000,000
4,000,000
22,500,000
22,500,000
Newcomb Hall Dining Renovation (NGF)
3,000,000
3,000,000
New Residence Hall (NGF)
3,100,000
3,100,000
14,000,000
14,000,000
3,000,000
3,000,000
Subtotal Academic Division – GF
79,300,000
38,664,644
Subtotal Academic Division - NGF
178,216,000
151,916,000
Alderman Road Housing (NGF – 9(c) Debt)
Academic/Research Facilities (NGF)
Auxiliary Facilities (NGF)
TOTAL Academic Division Capital
$257,516,000 $190,580,644
48
APPENDIX A (continued)
UNIVERSITY OF VIRGINIA – MEDICAL CENTER
Summary of Budget Requests and Governor’s Budget Bill
2004-2005
Governor's
Request
Budget
2005-2006
Governor's
Request
Budget
Medical Center: Operating
NGF Increase for Operations (NGF)
Reimbursement of Indigent Care (GF)
TOTAL Medical Center Operating
$10,000,000
$10,000,000
$31,270,000 $31,270,000
(fully funded
15,822,212 through NGF)
(fully funded
12,826,287 through NGF)
$ 25,822,212 $ 10,000,000
$44,096,287
$31,270,000
2004-2006
Governor's
Request
Budget
Medical Center: Capital
Cancer Center ($20 mill. GF and $80 mill NGF requested; $20
mill. GF included in Tax Reform Capital Outlay Bill)
$100,000,000 $20,000,000
Children’s Medical Center (NGF)
48,000,000
48,000,000
Property Acquisition and Related Site Improvements (NGF)
30,000,000
30,000,000
Clinical Laboratory Building (supplement) (NGF)
10,000,000
10,000,000
Medical Center Facilities (NGF)
20,000,000
20,000,000
TOTAL Medical Center Capital
$208,000,000 $128,000,000
49
APPENDIX A (continued)
UNIVERSITY OF VIRGINIA’S COLLEGE AT WISE
Summary of Budget Requests and Governor’s Budget Bill
2004-2005
Governor's
Request
Budget
2005-2006
Governor's
Request
Budget
College at Wise: Operating
Enrollment Growth and Degree
Completion (GF)
-
$221,112
Insurance Premium Changes and VITA
savings (GF)
-
Increase Financial Aid (GF)
TOTAL College at Wise Operating
$
$
$
-
$221,112
(5,815)
-
(8,594)
-
65,128
-
65,128
-
$280,425
-
$277,646
$
2004-2006
Governor's
Request
Budget
College at Wise: Capital
Maintenance Reserve (GF)
$
Acquire Buffer Property (GF)
600,000
$
252,812
-
799,000
Smiddy Hall Renovation & IT Building (GF included in Tax Reform
Capital Outlay Bill)
6,700,000
6,700,000
Science Building Renovation (GF)
5,800,000
-
23,000,000
-
600,000
-
2,350,000
2,350,000
550,000
-
New Residence Hall II (NGF - from cash to 9(c) debt)
6,400,000
6,400,000
Relocate Baseball & Softball Fields (NGF)
1,500,000
1,500,000
Subtotal Wise – GF
39,600,000
9,396,812
Subtotal Wise - NGF
7,900,000
8,605,000
Convocation Center (GF)
Accessibility (GF)
Water & Sewer Line Replacement and Metering ($2.35 mill. GF
requested; $1.645 mill. GF and $705,000 NGF funded)
Install Building Electric Meters, Phase 1 (GF)
TOTAL College at Wise Capital
$47,500,000 $18,001,812
50
UNIVERSITY OF VIRGINIA - ACADEMIC DIVISION
2004-2006 PROPOSED AMENDMENTS TO THE BUDGET BILL
2004-2005
GF
NGF
2005-2006
GF
TOTAL REQUEST
GF
NGF
NGF
Operating
1. O&M for New
Facilities
$570,396
$0
$1,701,467
$0
$2,271,863
$1,000,000
Language Only - Remove language requiring all operations and maintenance for Rouss Hall will be provided
from non-general funds.
Language Only – Revise language to make the proposed E&G reserve funds more similar to auxiliary reserve
funds by increasing the amount that may be credited and by allowing the funds to earn interest.
Subtotal Operating
$570,396
$0
$1,701,467
$0
$2,271,863
$1,000,000
Campbell Hall
$0
$3,500,000
$0
Varsity Hall
$0
$2,200,000
$0
ART Building
$0 $15,000,000
$0
MR-6 (switch funding authorization from gifts to debt)
Cocke Hall
$0
$1,000,000
$0
Blanket Authorizations (expand authority)
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$3,500,000
$2,200,000
$15,000,000
$0
$1,000,000
$0
Capital
51
1.
2.
3.
4.
5.
6.
Subtotal Capital
TOTAL
Patrons:
$0
$21,700,000
$0
$0
$0
$21,700,000
$570,396
$21,700,000
$1,701,467
$0
$2,271,863
$21,700,000
Senator John H. Chichester
Delegate Lacey E. Putney
APPENDIX B
UNIVERSITY OF VIRGINIA – MEDICAL CENTER
2004-2006 PROPOSED AMENDMENTS TO THE BUDGET BILL
2004-2005
GF
NGF
2005-2006
GF
TOTAL REQUEST
GF
NGF
NGF
Operating
Language Only - Remove language that extends the arrangement that the Medical Center transfer interest
earnings back to the general fund for two additional years.
Capital
1. Hospital
$0 $24,000,000
Expansion
2. Blanket Authorizations (expand authority)
$0
$0
$0
$24,000,000
$0
$0
$0
$0
Subtotal Capital
$0
$24,000,000
$0
$0
$0
$24,000,000
TOTAL
$0
$24,000,000
$0
$0
$0
$24,000,000
Patrons:
52
Senator John H. Chichester
Delegate Lacey E. Putney
APPENDIX B (continued)
UNIVERSITY OF VIRGINIA'S COLLEGE AT WISE
2004-2006 PROPOSED AMENDMENTS TO THE BUDGET BILL
2004-2005
GF
NGF
Operating
New Faculty for SW
Va. Economic &
Educational
Development
2005-2006
GF
NGF
TOTAL REQUEST
GF
NGF
$336,100
$0
$353,905
$0
$690,005
$0
$336,100
$0
$353,905
$0
$690,005
$0
Capital - None
TOTAL
Patrons:
Senator Phillip Puckett
Delegate Terry G. Kilgore
Senator William C. Wampler
Delegate Clarence E. Phillips
53
APPENDIX B (continued)