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June 6 -- The Board
of Visitors’ Finance
Committee
approved the 2006-2007 University budget on May 16.
Overall, University spending will be
up 6.7 percent to $1.97 billion. Academic
Division spending will increase 6
percent to $1.07 billion; Medical Center
spending will rise 7.4 percent to $866
million; and U.Va.-Wise will see an 11.7
percent bump to $30.4 million. The
budget must be approved by the full
board at its June meeting, and will take
effect July 1, the beginning of the University’s
fiscal year.
Administrators felt secure about their
numbers, despite “the big question
mark in the budget” at the time of the
meeting — the General Assembly’s failure
so far to pass a state budget for the
2006-2007 fiscal year. [At press time, a
budget still hadn’t been passed.] “I’m
confident that the budget I’m bringing
to you is sustainable regardless of what
happens at the General Assembly,” said
Leonard W. Sandridge, executive
vice president and chief operating officer.
The new budget allows for state funding
at the low end of the competing state
budget proposals, making state funding
about 8.5 percent of the total, similar to
the proportion in the past two fiscal
years, said Colette Sheehy, vice president
for management and budget.
Health System patient revenue is the
largest source of University income,
accounting for 44.1 percent of the University’s
projected total income in 2006-2007. Tuition and fees will
be the second
largest revenue source (at 15.5 percent
of the budget), edging past the value of
grants and contracts (at 14.1 percent). The
rest of projected revenue will come from
state taxpayers (8.5 percent), endowment
income and gifts (7.8 percent) and auxiliary
enterprises (7.5 percent), with other
sources providing 2.5 percent.
Sandridge said that he expects Gov. Tim
Kaine to sign the 2005 Higher Education
Restructuring Act in the coming days.
[Kaine signed the bill on May 19.] To be
implemented on July 1, the plan will provide
new institutional flexibility. Sandridge
predicted that U.Va. would look back on
2006 as an historic year that started a new
era here. [Inside UVA will report on the
Restructuring Act in its June 16 issue.]
The new budget fully funds the four
priorities set by the board: deferred maintenance;
the Access UVA financial aid program;
competitive compensation; and
research enhancement. For the second
year of a 10-year plan, spending on
deferred infrastructure maintenance will
rise to $3 million, double last year’s level.
AccessUVa funding will be $16.2 million, up
$3.2 million from last year, and only about
$4 million shy of the projected full implementation
cost of $20 million.
In 2002, the board set a five-year goal of
raising the average faculty compensation
into the top 20 among the 61 peer institutions
of the American Association of Universities.
U.Va.’s steady rise in the rankings,
from 30th in 2002-2003 to 23rd in 2004-2005, will continue
in the coming year,
when the ranking will rise to 22nd with the
new budget of $8.9 million for faculty salary
supplements, up $1.8 million from last
year. The gap between U.Va.’s average faculty
salary and the average at the 19th ranked
institution, will be cut in half, from
$2,900 this year to within $1,400 next year,
thanks to a 1 percent increase in faculty
salaries on top of the expected 4 percent
increase from the state. Also, the board
approved $250,000 for classified staff inband
adjustments on the basis of merit or
market rates.
An additional $6 million is budgeted for
the hiring of the second and third of 10
national academies-level researchers, to be
hired by the University during a five-year
plan. The first scientist, electrical engineer
Joe C. Campbell, was hired in June 2005.
The board also increased the base operating
budget for the Virginia Quarterly
Review by $117,000. VQR shook up the
magazine world with a David-versus-Goliath win of two national “Ellie” magazine
awards on May 9.
NEW DIVERSITY
COMMUNICATIONS PLAN
William Harvey, vice
president and chief officer for diversity and equity, unveiled a
new diversity communications strategy
that includes two new programs. Beginning
this Nov. 2-4, the University will host
an annual “Symposium on Race and Society.”
The inaugural symposium will explore: “
In Katrina’s Wake: Racial Implications of
the New Orleans Disaster.” Possible future
topics include national health disparities
and the achievement gap. U.Va. will also
sponsor a first-of-its-kind annual national
survey of high school students on “how the
world looks” regarding issues of diversity
and opportunity.
Recognizing the success of the student sponsored “
De-Stereotype Day” that drew
more than 1,000 participants on April 26,
Harvey hopes to make it an annual event,
remaining student-sponsored.
CAPITAL CAMPAIGN ON
TRACK
The Capital Campaign “is continuing to
show very positive momentum,” said campaign
chairman Gordon Rainey, explaining
that unofficial commitments totaled $930
million at the end of April. The commitments
officially “on the books” as of April 30
totaled $879.9 million, or 29.3 percent of
the $3 billion campaign goal, which Robert
Sweeney, senior vice president for development
and public affairs, characterized as “
the largest campaign ever conceived by a
public university … within the top five
largest fundraising campaigns, not just in
education, but anywhere.”
Reaching the target of $1 billion by the
official kickoff on Sept. 30, 2006, will require
raising $14.2 million per month, which is
less than recent monthly yields, Rainey
said.
UVIMCO GETS BIG RETURNS
ON ENDOWMENT
For the fiscal year to date, from July 1, 2005,
to April 30, 2006, endowment investments
have produced an outstanding 17.1
percent annual return rate, Sandridge
noted. But such enviable performance is
nothing new for the University of Virginia
Investment Management Co. (UVIMCO),
which has averaged a 16.7 percent annual
return over the three years prior to April 30,
2006, bringing the endowment’s value to
$3.5 billion.
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