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Meeting Information

UNIVERSITY OF VIRGINIA
BOARD OF VISITORS EXECUTIVE SUMMARY
FINANCE COMMITTEE
February 7, 1997
10:30-11:30 a.m., East Oval Room


I. CONSENT AGENDA

Items A, B, and C require action by the Finance Committee and the Board of Visitors.

A. AMENDMENT OF MEDICAL CENTER 1996-97 BUDGET -- The Health Affairs Committee has recommended an amendment to the 1996-97 Medical Center budget. The proposed amendment will yield a total margin of $21 million, compared with $4 million in the budget approved by the Board of Visitors in June.

B. VIRGINIA COLLEGE BUILDING AUTHORITY POOLED BOND PROGRAM -- In the 1996 Session, the General Assembly approved the Virginia College Building Authority's Pooled Bond Program. The Pooled Bond Program authorizes 26 projects at higher education institutions in Virginia, including the Clinch Valley College Library, Clinch Valley College Zehmer Education Center, the Chemistry Building Chillers and the Health Sciences Library basement renovation and addition.

C. PARKING REVENUE BONDS -- The Finance Committee will consider a resolution declaring the University's official intent to issue bonds for the construction of a 600-vehicle parking deck with infrastructure improvements in the Health Sciences precinct.

Items D and E require action by the Finance Committee.

D. DAVENPORT QUASI-ENDOWMENT -- An unrestricted quasi- endowment of $10 million is proposed, exceeding the amount of the establishment authority delegated to the Executive Vice President. The establishment of this quasi-endowment thus must be approved by the Finance Committee. The funds for the quasi-endowment were received from the estate of Marjorie C. Davenport of Charleston, West Virginia.

E. DEPARTMENT OF SURGERY QUASI-ENDOWMENT -- The establishment of a quasi-endowment with an initial value of $5.6 million is proposed for the Department of Surgery. The funds are a residual from a contract with the Government of Saudi Arabia. Because the amount of the proposed quasi-endowment exceeds the establishment authority delegated to the Executive Vice President, the Finance Committee must approve the establishment of this quasi-endowment.

II. ACTION ITEMS

The following items require action by the Finance Committee and the Board of Visitors.

A. SUMMER SESSION TUITION AND FEE RATES, 1997-98 -- The required fees for the next Summer Session are customarily set at the February Board meeting. The proposed resolution calls for no tuition increase for in-state students and a three-percent increase for non-resident students. The resolution also includes an increase in the summer session comprehensive fee of $23, or 34.3 percent, to go toward Newcomb Hall, Student Health, and Transportation. Mountain Lake laboratory use fees and room rates are proposed to increase by 2.8 percent and an average of three percent, respectively.

B. STUDENT HOUSING RATES, 1997-98 -- Student housing rates for the Academic Division and Clinch Valley College for the following academic year are set at the February Board meeting. The proposal calls for average housing rate increases of approximately two percent for the University Academic Division and three percent for Clinch Valley College.

C. TRANSFER OF CURRIE ESTATE PROPERTY TO UNIVERSITY OF VIRGINIA FOUNDATION -- The proposed resolution calls for the transfer to the University of Virginia Foundation of the 207-acre Currie Property in Prince William County, Virginia. The action would afford the University greater flexibility in planning for the future use of the property. In January 1997 the Governor approved the transfer of the Currie property from the endowment under the control of the Rector and Visitors of the University of Virginia to the University of Virginia Foundation.

III. REPORTS BY THE EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER

A. BUDGET UPDATE -- The Vice President for Management and Budget will report on the Governor's 1997-98 budget and the 1997 legislative amendments submitted by the University. The Governor's budget yielded only $116,000 in additional funds for higher education. The Council of Presidents submitted a unified budget amendment on behalf of all higher education institutions in the state. The amendment targets faculty salary increases, student financial aid, technology needs and institution-specific requests. Ms. Capone's report will also outline the preliminary budget assumptions that will be used to develop the University's 1997-98 educational and general budget. December 1, 1996 salary increases will be annualized in the targets for 1997-98. Other adjustments will be made to conform to the revised Appropriations Act as passed by the legislature.

B. THE YEAR 2000 IMPACT AND PLAN -- At its November meeting, Vice President for Information Technologies provided the Finance Committee with initial assumptions about the impact of the Year 2000 century change on University systems. Since that meeting, the University has completed the initial phase of analysis of the extent to which its information systems will be impacted by the Year 2000 century change. Ms. McClure will report that the plan for responding to the issues calls for all repair and replacement to be completed before December 31, 1998. Although we continue to refine our estimates, the predicted out-of-pocket cost for the current fiscal year is $2 million, and the cost for 1997-98 is $4.6 million. A request has been submitted to the state to secure financial support for the project.

C. ENDOWMENT REPORT -- As of December 31, 1996, the endowment under the control of the Rector and Visitors totaled approximately $885.5 million, compared with $823.3 million in June 1996. The $62.2 million increase is attributable to approximately $47.6 million in market appreciation and $14.6 million in gifts and transfers.

The Finance Committee will hear a report on the Investment Subcommittee's December 4, 1996, meeting. During this meeting, which also brought together the Finance Committee as a whole, the Committee authorized the Executive Vice President to implement the financial plan for faculty salary increases, consistent with action taken by the Board of Visitors on November 9, 1996.


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