U.Va. board hears grim budget news
Housing rates hiked, grad. student support wanting, Med. Ctr. margin off-target

Staff report

Money matters dominated last weekend’s meeting of the Board of Visitors, as members set housing rates, heard a disappointing financial report from the U.Va. Health System, expressed concern over support for graduate students and learned of the possible impact of Gov. Mark Warner’s budget-cutting proposals on University operations. (See Warner’s plan would cut deep.)

Hospital works to stabilize finances

The Health Affairs Committee on Thursday reviewed the Health System’s budget woes and the steps being taken to correct them.

Photo by Trisha Morrow

Officials of the Medical Center, which is $4.4 million over budget on expenses and well under its admissions target through the first six months of the fiscal year, outlined steps to reduce expenses and increase revenues.

Larry Fitzgerald, associate vice president of finance, presented the committee with tables indicating that patient admissions are down 284 from last year and 635 below budget, which he said represents $10 million in lost revenue at a time when the Medical Center is facing increased operating expenses. Labor costs are 4.9 percent over budget, Fitzgerald said.

William E. “Nick” Carter, vice president of operations, said in response, the administration is reviewing every hiring decision, filling only “mission-critical” positions. The use of temporary nurses has been reduced by half, planned raises have been deferred and turnover has slowed to about 15 percent.

The center must strike a delicate balance, Carter said, noting that while it is still seeking new patients and promoting the hospital, there are days when it is full.
Dr. Thomas Massaro, chief of staff, outlined how changing hospital discharge times, from between 3 and 4 p.m. to late morning or noon, opens beds sooner for new patients, allowing for earlier tests and diagnostic work-ups.

Based on a pilot project, Massaro estimated that earlier admissions would allow for 210 new admissions annually throughout the hospital, bringing in $2.6 million in revenue.

The Medical Center is trying to maximize its resources through steps such as centralizing bed control and adopting new inventory systems that Carter said would keep better track of billable expenses and reduce pharmaceutical costs. More Saturday and evening operations are being scheduled to optimize use of the surgical facilities.

Some of the admissions drop reflects better diagnostic procedures and more outpatient work, Fitzgerald said. For instance, technology advances have led to 600 fewer emergency-room coronary patients being admitted for observation, said Dr. George Beller, chief of the cardiovascular division, adding that insurance companies are now beginning to balk at being asked to pay for observation admissions. He also noted that not admitting coronary observation patients opens beds for referrals and more serious cases.

Employee morale has dipped since the announcement of pay freezes, Carter acknowledged, as many employees had been looking for at least a cost-of-living adjustment. Pam Cipriano, the chief clinical officer, said there have been meetings with staff to vent grievances, but the current state budget situation, which has scotched raises for state employees elsewhere at the University, has lent credence to the hospital’s steps.

Housing rates going up

To speed up the accumulation of funds needed to renovate student dorms, board members on Friday doubled the $50 fee added to housing rates last year for that purpose, increasing the cost of housing by 8.4 percent.

The board raised housing rates for the 2002-03 academic year by 4 percent, or $91, from an average $2,260 to $2,351, plus the $100 fee, for a total average of $2,451. Even with the increase, U.Va.’s housing and dining rates will stay well below the state average of $2,920, which has been the board’s longtime policy.

Leonard W. Sandridge, executive vice president and chief operating officer, said the additional money would allow the University to accelerate some projects. In line for refurbishing are Lambeth Field Apartments, the Alderman Road first-year dorms and Bice House.

U.Va. spends about $3 million to $4 million a year on housing maintenance, according to Yoke San Reynolds, vice president for finance. The 4 percent increase in the housing rates covers the rising costs of services such as utilities, trash collection and insurance. The additional $100 fee will add $620,000 to the reserve fund, Reynolds said, which stood at $5.7 million as of June 30, 2001.

Wanted: Funds for top-quality grad. students

T. Keister Greer, chair of the Educational Policy Committee, led off Friday’s meeting with a brief discussion of the need to address “the predicament of our graduate students.” He and fellow board member Benjamin P.A. Warthen recently met with representatives of the University administration to express concern about the lack of funding needed to attract top-quality graduate students, especially in the humanities.

After a brief discussion, fellow board member Terence P. Ross suggested that Vice President and Provost Gene Block prepare a statistical report for the April board meeting comparing the University’s situation with some peer institutions.

Block, who said this was an issue already on his priority list and one that he has begun working to remedy, agreed that such a report would prove useful.

Block introduced a name change for one of the Arts & Sciences departments. After much departmental discussion, he said, the College has approved renaming the Woodrow Wilson Department of Government and Foreign Affairs as the Woodrow Wilson Department of Politics.

“The change,” Block said, “is being made to more accurately reflect the mission, teaching and research interests of the department.”

Some discussion followed, with department chair Robert Fatton explaining that the new name reflects the evolution of the department and the faculty’s desire to recognize the unified nature of the discipline. “We believe that we have certain analytical tools that can be used to understand any political system, at home or abroad. The name change suggests our common goal.”

The department will continue to offer two undergraduate tracks — government and foreign affairs — with diverse offerings available in political theory, international relations and comparative politics.

Other business

• The board approved the transfer of 7.2 acres along Ivy Road from the University Real Estate Foundation to U.Va. for construction of a five-story parking garage. The Valentine-Massie plot, between Ivy Road and the railroad tracks, just west of the Cavalier Inn, will be the site of 1,180 additional parking spaces. Construction is expected to begin in May.

• The board approved a $1.2 million purchase of property at 120 11th Street in Charlottesville, the site of the present Max-Trax building, from Word Merchants Ltd. The building will be razed so that the land — .4250 acres – can be used as a construction staging area for Medical Center expansion to begin in the spring. In the long term, the property will help address future space needs of the center.

• University Treasurer and U.Va. Investment Management Company President Alice W. Handy reported that the University’s endowment made a modest gain of $6.4 million, and with $58.2 million in gifts, totaled almost $1.77 billion as of Dec. 31.

• The board established the Virginia Microelectronics Consortium Professorship in Engineering, bringing the total number of endowed chairs to 463.

• The board also approved the 2002-04 legislative capital budget amendments for the academic division and the Medical Center, stating that they “endorsed and supported” the legislative budget amendment requests.

• A resolution was passed memorializing the three people murdered Jan. 16 at the Appalachian School of Law in Grundy. Those killed included the school’s dean, a faculty member, and a student. Board member Joseph E. Wolfe co-founded the law school.

• A second resolution was passed to both commend and thank Debbie Ryan for her leadership and success as she celebrates her 25th year as head coach of U.Va. women’s basketball team.

• Herbert Timothy Lovelace Jr., a third-year student in the College, was appointed the new student member of the board.

• The board approved a new pilot program that would make loans available to fraternities and sororities seeking to renovate their existing housing or that wish to consider on-Grounds housing. The $3 million loan program is to be established and administered by Sandridge in consultation with Patricia M. Lampkin, interim vice president for student affairs, and general counsel Paul Forch.

To be eligible, fraternities and sororities will be required to abide by a list of performance standards laid out by the University, including management of social activities, compliance with University policies, oversight of business operations and care of houses and furnishings that is acceptable to the University.