June 11, 2010 — The University of Virginia Board of Visitors on Friday unanimously approved an operating budget for the coming fiscal year that the University's chief operating officer described as "sound," but austere.
"I would say that this is a sound budget," said Leonard W. Sandridge, U.Va. executive vice president and chief operating officer. "I would be misrepresenting it if I said it met all of the needs of the University."
The total projected expenditures in the Health System, Academic Division and College at Wise are $2.38 billion, about 4.2 percent higher than the current fiscal year, which ends June 30.
Most of the increase will be funded through Health System patient revenues, tuition and fees, and research income, said Colette Sheehy, U.Va.'s vice president for management and budget.
In the Academic Division, the budget reflects the continued replacement of state funding with tuition and fees. State appropriations make up just 10.2 percent of expected revenues, compared to 23.5 percent in the 1999-2000 fiscal year. By contrast, tuition and fees will account for 30.8 percent of this year's budget, compared to 21 percent in the 1999-2000 fiscal year.
Just under half of the spending increase in the Academic Division, $22.4 million, is allocated to unavoidable or prior commitments, including financial aid, the operation and maintenance of new facilities, maintenance and support of the new Student Information System, and employee benefits.
Another $21.9 million, backed by state and federal stimulus funding, will go toward the AccessUVa financial aid program. That will free up money for one-time expenditures, including a potential 3 percent end-of-year bonus for employees.
Stimulus money will dry up at the end of the coming fiscal year, Sheehy noted, and the University was careful to avoid using it for ongoing commitments.
"We dealt with it earlier than we thought we would be able to," she said. "I would say we are probably in a better position than any other public institution in the state right now" to adapt to the loss of stimulus funding.
Nonetheless, the University is bracing for another state funding cut of at least $14.7 million in 2011-12, she warned.
The new budget anticipates only about a 1 percent increase in the University's total workforce. The majority of the new positions will be backed by research funding. Most of the 12 new state positions will be for maintenance and custodial operations in new buildings, Sheehy said.
The budget includes no funding for salary increases, as the state has frozen salaries since November 2007. The budget does set aside $7.7 million for a one-time, 3 percent bonus – but the state must meet specified revenue targets before it authorizes them, Sheehy said.
She noted that as a result of the salary freeze, the University has given back all of the gains it made in faculty salary rankings since the Board of Visitors identified faculty compensation as a critical issue.
"It's important that we try to do something," Sandridge said of the bonuses. Once the economy improves and the freeze is lifted, the University will likely need to embark on a five-year recovery program for faculty and staff salaries, he said.
The Finance Committee also approved the parameters of a new bond issue, not to exceed $250 million, to back a long list of new construction and renovations in both the Academic Division and Medical Center.
Yoke San Reynolds, U.Va.'s vice president and chief financial officer, said the University will likely issue between $180 million and $190 million in Build America Bonds in the coming months.
She assured the board that the new debt issue will leave the University well within its debt capacity, based upon its "conservative" debt ratio parameters, and is unlikely to damage the University's AAA ratings through all three major bond-rating services. U.Va. is one of only two public institutions in the country with the coveted "triple-triple" rating.
New Child Care Center Approved
The board approved a new child-care venture to serve U.Va. faculty, staff and students that will be backed by the U.Va. Health Services Foundation and Piedmont Virginia Community College.
The University currently operates two child-care centers: the Child Development Center, overseen by the Academic Division, and the Medical Center's Malcolm W. Cole Child Care Center. Combined, they offer about 300 spaces for children – which does not meet the demand for high-quality, affordable day care, said Dr. Sharon Hostler, a U.Va. pediatrician who recently served as interim vice provost for faculty development.
It is not unusual for expectant parents to encounter an 18-month wait for spaces in the current centers, Hostler said. The lack of available child care is a major factor in prospective faculty and staff declining U.Va. job offers, she added.
The new venture – to be built by the Health Services Foundation on PVCC's grounds – will care for about 230 children of U.Va. and PVCC faculty, staff and students, she said.
New Faculty Rank Created for Non-Academic Experts
The University will have a new tool to recruit "real world" experts to its faculty after the board voted to approve the creation of a "professor of practice" rank.
Such positions will be offered to "eminently qualified leaders who have made major impacts on fields and disciplines important to our academic programs," according to board materials.
Professors of practice will be appointed to annual, renewable terms with a maximum limit of perhaps four years, and will be expected to return to their fields after serving at the University, said Dr. Arthur Garson Jr., executive vice president and provost. Schools will be expected to hire no more than five at a time.
Twenty-two of the University's peer institutions in the American Association of Universities offer similar ranks, Garson said.
Harry Harding, the new dean of the Frank Batten School of Leadership and Public Policy, was the driving force behind establishing the rank at U.Va., and the Batten School is expected to bring in the first professors of practice – though other schools are "welcome" to join in, Garson said.
Engineering Students Get Workshop; Board Pans Newcomb Hall Design
A utilitarian building designed to be shared by engineering students and Facilities Management workers earned a quick endorsement from the Buildings and Grounds Committee, but preliminary plans for a major new edifice on Newcomb Hall were sent back to the drawing board.
The difference? Location, location, location.
The former building will be tucked into a hillside across from the Slaughter Recreation Center, at the end of series of Facilities Management buildings and near its recycling facility. Visual impact? Near zero.
The new façade proposed for the west side of Newcomb Hall, however, is at the heart of Central Grounds and is among the first things that many visitors will see when they emerge from the Central Grounds Parking Garage.
The architects, Cole and Denny Inc., proposed to replace 1970s and 1980s additions with a two-story addition that would extend 20 feet onto the existing plaza between Newcomb and the University Bookstore. The heavily windowed façade would be mostly flat, except for a projected, two-story entranceway. The roof would double as a terrace, to be accessed from the Newcomb Hall Ballroom.
Board members criticized the design as austere, "vanilla, institutional-looking," and generally not reflective of the Jeffersonian neo-classical architecture of its Central Grounds neighbors.
"If that's one of the focal entry points of the University of Virginia, I don't think it says 'University of Virginia,'" board member Robert Hardie said.
Fellow board members Helen Dragas and W. Heywood Fralin concurred. The objections soon renewed a long-running discussion about whether U.Va. founder and chief Academical Village architect Thomas Jefferson would approve of deviations from the look he originally designed.
"Let me ask a question," Rector John O. "Dubby" Wynne said. "Haven’t we had this debate a number of times?" He added he believed that the board had reached a consensus to keep new construction within Central Grounds consistent with the character of Jefferson's original designs.
The new Newcomb façade and addition were intended to be consistent with the original core of the building, which was designed in the 1950s by the Richmond firm Eggers and Higgins, explained David Neuman, architect of the University. The firm also designed the McCormick Road residence houses and the Physics Building, which are similar in style, he said.
Neuman said the design would be revised by the time the board sees it again this fall. He said the changes should not delay the two-year project, which is expected to begin next spring.
Meanwhile, interior renovations to Newcomb Hall are already under way.
The roughly $4 million Engineering School-Facilities Management project was the result of two parties doing more together than could have been done separately by either, Sandridge said.
Facilities Management was looking for additional shop space, while the Engineering School needed workspace for student projects like the solar car project.
The joint building will be regarded as an "interim" facility with prefabricated elements, allowing much of it to be relocated if the site is needed for future, higher uses. The top two floors, to be accessed from Edgemont Road, will be allocated to the Engineering School; the bottom two floors, to be accessed from the service road within the Facilities Management compound, will be used by Facilities staffers.
• The board meeting was the last for University President John T. Casteen III, who will step down Aug. 1, and for three board members whose terms expire on July 1: Don R. Pippin, Warren M. Thompson and Dr. E. Darracott Vaughan Jr.
Casteen made low-key mention of the milestone in his remarks during the board's opening session. "We have sustained the University through some bad times," he said, "and we have made some progress."
The board presented him with a resolution commending him for his years of leadership and service, and members gave him a standing ovation.
Casteen's successor, Teresa M. Sullivan, attended the meeting, seated between Casteen and Sandridge.
• Director of Athletics Craig Littlepage told the Student Affairs and Athletics Committee that the University is likely to record its best finish ever in the Directors Cup, a competition that measures NCAA championship success across all sports.
U.Va. ranked third as of June 1, with points yet to be awarded in five sports: women's rowing (in which the Cavaliers won a national championship), men's golf, softball, baseball and track and field – all sports in which Cavalier teams will earn points. Littlepage projected that U.Va. would finish with the most points ever earned by an Atlantic Coast Conference team, and ultimately place somewhere between second and fourth among NCAA Division I programs.
"We've done this in a year where our sport budgets have been frozen and many administrative units have been cut," he noted.
• The University's recession-battered endowment, which fell from $5.1 billion at the end of the 2007-08 fiscal year to just under $4 billion a year later, has rebounded to $4.6 billion, the University of Virginia Investment Management Company reported to the Finance Committee.
A search is under way to replace former UVIMCO head Christopher Brightman, who resigned earlier this year, board member A. MacDonald Caputo reported. A search firm has been retained.
• The $3 billion capital campaign has raised more than $2.1 billion, roughly 72 percent of the goal in 80 percent of the campaign's elapsed time, reported Robert D. Sweeney, senior vice president for development. Several units have surpassed their goals, including the Health System, the Virginia Athletics Foundation, the Curry School of Education and the U.Va. Alumni Association, he said.
• The board approved a number of namings.
Several elements of the $4 million enhancement project at Davenport Field, home of the baseball team, were named for project benefactors or their designees, including the "Ryan Zimmerman Hitting Area," named for the U.Va. alumnus and current Washington Nationals star third baseman; the "OrderTopia Film Room," backed by alumnus John McAllister, an investor in the local company that developed applications to allow people to place food orders through their mobile devices; and the "O'Connor Family Coaches Locker Room," named in honor of head coach Brian O'Connor by current board member Robert Hardie and his wife, Molly.
A courtyard between the nearly complete Bavaro Hall and Ruffner Hall at the Curry School of Education was named in honor of former Curry dean David Breneman.
The Center for Alcohol and Substance Education was renamed the Gordie Center for Alcohol and Substance Education after a gift from the Gordie Foundation. The foundation and the center are named for Lynn Gordon "Gordie" Bailey Jr., a University of Colorado student who died in 2004 from alcohol poisoning. The gift "supports peer education and provides presentations and consultation in order to increase knowledge of alcohol, tobacco and other drug issues, and decrease the negative consequences associated with high-risk drinking and illegal drug use among U.Va. students," according to board materials.