As state legislators in the House of Delegates and Senate work
to finalize the state budget in the face of a $3.8 billion revenue
shortfall, members of the University community continue to have
questions about the impact cuts in state money will have on U.Va.
W. Sandridge, executive
vice president and chief operating officer, and Colette Sheehy,
vice president for management
and budget, fielded this weeks questions.
Q. Can the University tap into its endowment in order to
supplement salaries or support immediate needs? Can you explain
exactly what the endowment is used for?
Approximately 70 percent of the Universitys $1.7 billion
endowment is restricted for particular purposes so the University
must expend the income from those endowments according to prescribed
guidelines. However, a portion of the endowment is already designated
for faculty salaries. It is also possible to use the endowment
for hiring or retention of key faculty.
classified employees are part of the state personnel system, we
cannot fund across-the-board raises on our own. However, the new
performance pay plan does allow bonuses and other one-time salary
endowment is also used to support faculty research, scholarships
and fellowships, fund raising, and residential improvements.
clearly are opportunities to do some one-time funding initiatives
from these sources; however, it becomes problematic to use the
endowment to solve ongoing funding needs.
What is the status of present building projects at the University
the South Lawn Project, the new library, and the athletic
complex that are all going forward?
Perhaps one of the brightest spots in the whole budget picture
is the capital budget. The House of Delegates and Senate have
a joint capital program that addresses many of the Universitys
highest priority projects new construction, renovation
and infrastructure. In addition to state-funded projects, we always
have a number of significant building projects that are funded
with revenue we generate ourselves either from private gifts,
indirect cost recoveries on grants and contracts, or student and
South Lawn Project, which includes construction of a new building
and parking structure on JPA, renovation of Cocke and Rouss halls,
and demolition and reconstruction of New Cabell Hall, is in the
initial design stages. The state bond package includes funding
to renovate Cocke Hall and about 40 percent of the cost of the
new building for Arts & Sciences. It is likely that the remainder
of the funds will need to come from private gifts.
Special Collections Library will break ground in the next few
months, starting with the demolition of Miller Hall. It is a $26
million project with $10 million coming from the state and the
remainder from private gifts.
arena is also under design and will be funded from a combination
of private gifts, student fees, and sales of premium seating and
on how the balance of the South Lawn project is financed, we do
not anticipate that funding for these projects will take away
from resources available for salaries or other University needs.
Weve just gone through a lengthy planning process
Virginia 2020 and are now embarked on University Envision
to set the course for the Universitys future. Can we afford
to follow through on these plans?
The expectations resulting from the 2020 planning effort call
for a commitment of existing and future resources and an emphasis
on specific areas of the University that have been identified
for improvement. The current state budget problems complicate
the short-term outlook, but they must not be allowed to dim our
recently completed capital campaign and ongoing donor support
at unprecedented levels will contribute significantly to our 2020
efforts. External funding for research projects continues to grow.
We have a strong financial base that can support the use of debt
also will play a greater role in the support of the improvements
to our instructional programs over the next several years. These
resources, coupled with an unrelenting focus on our priorities,
will allow us to achieve substantial progress on 2020 initiatives
even in this time of serious budget shortfalls.
Is there some concern that if we raise tuition too much there
will be a negative impact on admission, recruitment and retention
of the best students?
Both the House and Senate amendments to the introduced budget
contemplate a tuition increase of some proportion for all students
at public institutions in Virginia. The incremental tuition revenue
generated by whatever rate increases the Board of Visitors approves
will be used to partially offset the reduction in tax support
over the next two years.
the tuition freeze and rollback of the last five years, we believe
we have substantial leeway in our rate structure for in-state
undergraduate students. Our tuition for out-of-state undergraduates
remains well below peer private institutions with whom we compete
for students, so we do not think the contemplated increases will
have an adverse impact on admission, recruitment, or retention
We do have a concern about graduate student tuition. We will look
to limit the increases to the out-of-state graduate students,
excluding law, Darden and medicine.
we have tuition increases that substantially exceed the rate of
inflation we consider the impact on financial aid and make plans
to add funds to the financial aid budget. I would anticipate this
action in fiscal year 2002-03.
Should employees whose retirements are invested in the states
VRS program be worried about the Senates suggestion of tapping
into the fund to give state workers a onetime bonus?
The VRS has sent clear messages to the Senate that VRS funds should
not be touched.
is a defined benefit program. That means that the
obligations to retirees can be calculated and future demands on
the funds can be reasonably projected. Over the last several years,
the investments that support the long-term obligations to current
and future retirees have performed well. While investments have
suffered in recent months, the five-year performance has been
regularly compare future demands with the assets in the VRS funds
to make sure the projected needs can be met. History reflects
the fact that VRS is a well-managed retirement system. Employees
should be confident that their retirements are secure and that
their benefits will be paid as promised.
Is there any possibility that when the salary freeze is lifted
that the lowest paid employees might receive higher percentage
raises than the higher salaried employees?
The proposals being considered by the General Assembly suggest
that there will be standard percentage increases regardless of
whether base salary increases or bonuses are ultimately approved.
Are there incremental things that the University can do to soften
the blow for its employees during these tough times?
The University is exploring a variety of means of easing the burdens
on employees in case compensation adjustments are limited or non-existent.
Already steps have been taken to hold health insurance premiums
for U.Va. employees below the statewide rates. It is not realistic
to anticipate a rollback of parking or health fees without cutting
health benefits or abandoning plans to meet future parking needs.
However, future increases will be held to a minimum during this
difficult time for our employees.
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