Photo by Ian Bradshaw

April 12, 2005

The Higher Education Restructuring Bill has been the subject of much discussion this past year here and across the state and even the nation.

Virginia became the focus of national attention as it grappled with how to address necessary changes to its system of higher education.

If you attended one of the six University briefings held through the fall and winter, you perhaps got a good sense of what was happening and of the many voices that were heard throughout the process. You also would know that we are on the brink of changes that can transform higher education and at the same time preserve the character and quality of Jefferson’s great legacy, the University of Virginia.

I am grateful for the work done on the University’s behalf by the many people who helped guide these changes to coincide with the best interests of the commonwealth, its citizens and all members of our own community. You may
have been involved yourself, and many of our colleagues and our Board members worked hard for two years to achieve this result, and their work will have a lasting impact.

Gov. Mark Warner and the General Assembly also are to be thanked for going beyond the call of duty to bring varied perspectives to the table as the details of the bill were hammered out and voted into law. Gov. Warner recently called the
bill “the most sweeping change in our outstanding system of public higher education in decades.” Many have said that it is the most important legislation on higher education in Virginia since 1819.

In summarizing, Gov. Warner said: “In the effort to provide colleges and universities with more predictability and flexibility, we have worked to ensure that Virginians see tangible benefits, like improved access, affordability and quality. And in return for additional autonomy from the state, the institutions must remain
committed to enterprisewide government reforms. … We worked to make sure all employees are treated the same in areas like retirement and health insurance, and that existing employees have an initial choice — and then regular opportunities — to enter a new university personnel system.”

As you know, we plan to make application to become a Level Three institution, a classification that gives the Board of Visitors full responsibility for managing the University’s operations in several key areas that directly affect our capacity to accomplish our mission. These include capital outlay, procurement, information technology and human resources.

This bill reiterates the board’s authority (already stated in the Code, but frequently ignored in recent years) to set tuition and fees and adds specific authority to set salaries at market levels.

Along with this responsibility will come full accountability to be written into a management agreement with the state in the course of this calendar year.

These management agreements, which both the governor and the General Assembly will eventually approve under the new law, expect a good bit of sophistication from school faculties and their deans and of our academic officers
because they require six-year operating plans.

The General Assembly’s intent in setting up this six-year calendar is to introduce discipline into planning for new programs so that both the institutions and the state can reasonably predict what is going to happen. These plans will include financial, academic and enrollment data.

What follows is a brief summary of the bill’s highlights that I believe will interest you.

• The University will remain a state agency.

• We all will remain state employees.

• Faculty employment practices will be unaffected.

• Classified staff employed prior to the effective date of the management agreement will have a choice of whether to participate in the new human resources
system or remain under the current state personnel system.

• Classified employees will get that same choice at least every two years from the
initial effective date of the management agreement.

• There will be no change for classified staff from current retirement plans, workers’ compensation insurance or the grievance process.

• The University will have the ability to develop new human resource programs
governing compensation practices, leave, disability, or life insurance and severance.

• All staff hired after the effective date of the initial management agreement will
fall under the University’s new human resources system.

In addition to what is in this restructuring bill, the state budget for 2005-06 now calls for a special base budget increase to classified salaries.

Academic division [classified] employees who have been rated at least “contributor” on the state’s rating scale, and who have worked for the state for at least five years, are entitled to a $50 increase for each year of service. This is above any other increase to which they may be entitled. (We are awaiting details from the state on how years of service will be calculated, and we will inform you once we receive word.)

The Higher Education Restructuring Bill provides a framework for change. Details will emerge as we develop the management agreement with the state, and as these details are developed, they will be communicated on a regular basis so that we can get advice from members of our community.

I think it is important that this legislation ties our increased autonomy to the state’s goals for higher education. This link brings responsibilities we all share. The goals include the University’s commitment to access and affordability in higher education; a broad range of academic programs; high academic standards; uniform articulation agreements with community colleges; stimulation of economic development; increase in externally funded research; and partnerships with local K-12 schools in order to improve student achievement. The results of these new commitments ought to be felt in every public school in Virginia.

This year’s developments are grounds for optimism about the future of higher education in our state, and especially about the University’s future. We have a lot to do, both within the University and beyond it. Together, with the good work and dedication of all members of the University community, we have the opportunity
to take Jefferson’s early vision and carry it forward for generations to come.

We are in the process of updating the University’s Higher Education Restructuring Web site (www.virginia.edu/restructuring/) to reflect recent changes in the legislation. Please visit the site from time to time for news on the management
agreement as well as to continue to submit your questions as we move forward.
I thank you for your steady support and thoughtful queries over this past year. Your good counsel helped to shape this legislation and to make it better at every step along the way.

Sincerely,

John T. Casteen III
President