The Board of Visitors’ Finance Committee approved three action items and announced its delay in discussion of potential tuition and fees increases during their meeting Friday morning. Tuition discussion was delayed due to unfinalized aspects of Virginia’s 2020-2022 budget.
The three action items that the Board motioned to pass gave funding to four projects — HVAC improvements for Lambeth Field Apartments, the construction of a University Hotel and Conference Center, acquisition of the Monticello Community Surgery Center by the University Medical Center and an establishment of unrestricted quasi-endowment funds for the Carter G. Woodson Institute for African American and African Studies.
As of now, construction for the hotel and conference center will begin in Nov. 2021 and is projected to be completed by June 2024, Colette Sheehy, senior vice president of operations, said. The estimated total cost of the project that the Finance Committee approved was $130.5 million for the building, furnishing and pre-opening costs. The University will contribute approximately $20 million to the project through a cash investment and the remaining $110.5 million will be debt-financed, meaning that the University is borrowing money with the promise of repaying it with interest at a later time. Debt service, capital reserves and annual operating costs will all be covered by revenues from the hotel operations, Sheehy said.
For the Lambeth Field renovations that will start in May and continue through the summer of 2022, the estimated project budget will be about $14.5 million dollars and will be funded via debt. The renovations will attempt to resolve the negative pressure and humidity issues that have resulted from the outdated packaged terminal air conditioning units installed when Lambeth was first built in the 1970s.
In regards to the two quasi-endowment funds, the first is $7 million for the Woodson Institute’s postdoctoral fellowship program — a two year residential fellowship for students whose work focuses on Africa or the African dysphoria. The second is $3 million that will be used to create a new endowed professorship for the Institute, which will provide salary and non-salary support costs for the incumbent professor. These investments are part of the $16 million that the University previously announced would go towards supporting the Woodson Institute.
Prior to Friday’s board meeting, the Virginia General Assembly met to pass amendments to the 2020-2022 budget, but the Board saw “significant differences” between Governor Ralph Northam’s proposed budget and the final conference report, Sheehy said.
Among those amendments is the higher education unified amendment, which would provide additional funding for universities and colleges across the Commonwealth. This would create $73.5 million in funding to maintain affordable access, with $3 million for the University and $1 million for the College at Wise. It also provides a one-time funding of $40 million for unavoidable cost increases and required spending — the University will receive $3.5 million and the College at Wise will receive $316,700. The amendment introduces a one-time funding of $22 million for undergraduate need-based financial aid, but the University is still waiting to hear of their allocated amounts. In addition, the amendment will provide $34.5 million for COVID-19 testing in FY21 from federal funds — 2.25 million for the University and $180,000 for the College at Wise.
However, in terms of rumored budget cuts and pay cuts, the current conference report states that the University is to provide a 5 percent base salary increase for classified staff only and that institutions could then provide compensation increases between zero and 5 percent for all other staff and faculty at their own discretion, effective in July.
The problem with facilitating this is that this compensation is typically funded, in essence, by tuition, Sheehy said. As the governor has until March 31 to propose other amendments, the Board cannot discuss what that means for tuition until the budget is finalized.
“Right now we don't have a total picture of the Commonwealth's budget situation,” Board Member Robert Blue said. “The budget passed by the General Assembly just a few days ago is complex. As a result, we want to give management more time to work on its implications for U.Va. … so, the Vice Rector [and] the administration will be working hard in the coming days and weeks to get resolution on Commonwealth funding and to be able to bring this committee, and ultimately the full board, a tuition and fee package that's balanced and appropriate for 2021-2022.”
The General Assembly will reconvene on April 7 to consider the rest of the Governor’s potential amendments.
“Overall this budget is favorable to higher education, especially considering where we started a sheer eight months ago, where there was talk of significant based budget cut reductions,” Sheehy said. “It is complicated, and we really thank you all for your patience and understanding as we're working through.”
At a public comment meeting Feb. 17, students shared data and personal stories about financial hardships during the pandemic and urged the Board to hold off on a tuition increase. The Board’s current proposed tuition increase ranges from 0 to 3.1 percent.
Following the Finance Committee meeting, the Advancement Committee met to discuss fundraising and philanthropy.
University President Jim Ryan announced an anonymous donation of $5 million that will go towards supporting students at Piedmont Virginia Community College who wish to transfer to the University. $4.5 million will go towards creating scholarships through the Piedmont Scholars Program, with the remainder being used to help students successfully integrate into University life. The University will match $4.5 million of the gift through a dollar-for-dollar match, creating a $9 million endowment.
“One of the reasons I’m so excited about this program is that I think the Piedmont Scholars Program will benefit the University not just in bringing the best and brightest students to Grounds, but it’s also going to benefit the entire Charlottesville community by strengthening our partnership between U.Va. and PVCC,” Ryan said.
The first cohort of scholarship recipients will be selected this spring for students attending in fall 2021. Each year, around 150 students transfer from PVCC to the University — through this scholarship program, 25 scholarships are expected to be awarded annually.
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