MINUTES OF A REGULAR MEETING OF THE
BOARD OF VISITORS OF
VIRGINIA COMMONWEALTH UNIVERSITY
January 20, 1994
A regular meeting of the Board of Visitors of Virginia Com-
monwealth University was held on Thursday, January 20, 1994, at 9
a.m. in the University Meeting Center.
Present were Messrs. Whitworth (Rector), Arenstein,
Framme, Meador, Siegel, Townes, and Weinberg; Drs. Berenguer,
Dombalis, Gilmer, Johnson and Peay; and Mesdames Epps and Teig.
Ms. Vaughan and Dr. Holland were absent. Also present were Drs.
Trani, Costanzo, Dewey, Harris, Jones, Rhone and Schexnider;
Messrs. Bruegman, Bunce, Ross and Wyeth; and Mesdames Messmer
and Price.
Mr. Whitworth called the meeting to order. The President's
Report followed:
Introduced to the Board were: Dr_ Linda S. Costanzo,
Administrative Associate for the spring 1994; and the Commu-
nity Service Associates for the spring: 1994 Dr. Molly Brunk,
Dr. Reuben Farley, Dr. Margot Garcia, Mr. Mark Hill, Dr.
Robert Godwin-Jones, Dr. Elizabeth Kuhn, Dr. Michael Sher-
idan and Mr. Camden Whitehead.
The Governor's budget recommendations include salary
increases of 2.25% on December 1 of each year of the bienni-
um for faculty and classified staff. In addition, the budget
recommends a performance pay plan which will provide one-
time bonus payments of one, two or four percent for classi-
fied staff with an equivalent amount of 1.72% provided for
full-time faculty. These bonuses also are effective on
December 1 of each fiscal year.
For VCU, the budget recommendations include general fund
reductions of $458,000 in 1994-95 and $3.9 million in
1995-96. However, these reductions are offset with tuition
revenue authority. Specific general fund addenda in the
budget include funds for expansion of the rural-based oncolo-
gy services provided by the Massey Cancer Center; a communi-
ty policing program and additional uniformed guards; fund-
ing for the family practice centers; funding for technology
related to U21 initiatives -- funds to create a television
facility to link rural clinical students to the health sci-
ences' faculty and staff and planning funds for technology
infrastructure; additional support in 1995-96 for the Brain
Injury Center; and funding related to the SCHEV virtual
library addenda.
The Governor's budget also includes targeted general fund
reductions for research and public service centers and com-
monwealth centers. For VCU, this includes the elimination of
State funding for the Center on Aging and the Common-
wealth Center for Drug Abuse.
VCU's general funds increased by 1.4% in 1994-95 and de-
creased by 1.4% in 1995-96.
Governor Wilder's budget limits tuition and fee increases in
both years of the biennium. The budget authorizes tuition
and fee rate increases of up to 5% for in-state students in
1994-95 and an additional 4% in 1995-96. Nonresident tuition
is increased by 7.5% per year for VCU.
The budget also calls for restructuring to effect long-term
changes in higher education with plans to be submitted by
each institution to the Council of Higher Education, the
Governor and the General Assembly. One and one-half
percent of each institution's E&G appropriation will be
withheld pending approval of a plan.
For the hospitals division, the Governor's budget continues
the shifting of general funds to the Medicaid Disproportion-
ate Share program leaving general fund support at $4.1
million in 1994-95 and $2.3 million in 1995-96. The budget
does include $1.6 million of general funds in each year for
the Virginia Treatment Center for Children. The budget
funds indigent care at 89.4% and 82.9% of full projected
costs in 1994-95 and 1995-96, respectively. In addition,
funding for substance abuse support from the Department of
Mental Health and Mental Retardation will be reduced thereby
reducing the hospitals' indigent care support.
The hospitals had requested general fund support for Gradu-
ate Medical Education and physician malpractice but these
initiatives were not funded.
The Governor's budget also recommends that $900,000 be
provided in 1995-96 to the University from the general funds
to plan for renovations to the State Library. Also, the
Governor recommends that $22 . 9 million in nongeneral funds
be provided for construction of the 7,500 seat Convocation
and Recreation Center on the Academic campus and $11.6
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million in revenue bonds to finance construction of an 1,100
vehicle parking deck on the academic campus.
The hospital budget includes $3.5 million in nongeneral funds
authorization to renovate North Hospital for the Outpatient
Cancer Center.
Mr. Meador reported for the Academic Policy Committee. A
request that the name of the Department of Medical-Surgical Nursing
in the School of Nursing be renamed the Department of Adult Health
Nursing to more accurately represent the department's mission and
the current roles and responsibilities the department has within the
School as well as within the health professions in general. This
change will neither require additional resources nor have any impact
on the degree programs offered by the School of Nursing.
A report on the Virginia Center on Urban Development was
presented. The Center's primary mission is to enhance the develop-
ment of Virginia's urban areas by providing basic and applied re-
search on areas of critical importance to the future of Virginia's
urban areas; provide assistance, technical support, and training to
community groups, local officials, and State government who are
working on urban development matters; and bring together policy-
makers, business leaders, other institutions of higher education, and
community groups to focus on cooperative approaches to revitalizing
Virginia's urban areas. Funding from the State legislature has been
requested at the level of $200,000 per year for the 1994-96 biennium.
The Center is located in the University's Division of Continuing
Studies and Public Service.
Mr. Siegel reported for the Advancement Committee. A
Legislative Update was presented. Items in Governor Wilder's pro-
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posed 1994-96 budget were outlined. Almost every item on VCU's
priority card was included in one way or another. The challenge,
however, will be to keep the items in Governor Allen's budget.
Governor Allen's proposed amendments are due no later than Friday,
January 21. VCU's two main concerns are: (1) to obtain the
$900,000 for design money for the Virginia State Library renovation;
and (2) to make sure that George Allen's plans for tuition increases
match up with what VCU needs to fund raises proposed in Governor
Wilder's budget. The MCV Hospitals' legislation has been drafted.
Delegate Hall has agreed to carry the biotechnology regulatory stat-
ute, which appears to have broad based support among the numer-
ous groups that would have an interest in this type of legislation.
Development efforts are now heavily focused on planning for
a capital fundraising program for the strategic priority of estab-
lishing a School of Engineering. The consultants' feasibility study
indicated that a major gift is needed in order to achieve overall
success.
Dr. Peay reported for the Finance and Investment Commit-
tee. The Quarterly Investment Report - September 30, 1993 was pre-
sented. The total of all funds under investment management by Vir-
ginia Commonwealth University and its affiliated foundations at Sep-
tember 30, 1993, was $152 million. The figure compares to total
invested funds at September 30, 1992, of $135 million, an increase of
$17 million. The owned assets of Virginia Commonwealth University
increased from $61 million to $67 million while Foundation-owned
assets increased from $74 million to $85 million for the same one-
year period.
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Dr. Johnson reported for the Health Affairs Committee. The
Hospital Finances were presented. Financial statistics for the five
months ending November 30, 1993, were reviewed. Although patient
volume is below budgeted levels, a retroactive contract signed with a
major payer contributes to total operating revenue being above budg-
et by $2.7 million. Expense reduction strategies continued from the
prior year and expense reductions related to the current volume
decrease have resulted in expenses approximating the revised budget
approved in November 1993. For the five month period, there is an
excess of $11.2 million compared to a budget of $8.7 million.
The Hospital has entered into a contract with the Marriott
Corporation for the provision of dietary management services. A
five-year contract was awarded to Marriott with an option to renew
for five additional years. The annual value of the contract is $4.8
million which approximates the current contract amount.
The Hospital has entered into a sole source contract with
Baxter Healthcare for I.V. cassettes valued at approximately
$540,000. The Baxter I.V. cassettes are proprietary to the 900 I.V.
pumps owned by the Hospitals. The sole source was approved by
the Office of the Governor.
A report on the medical center parking was presented. Be-
cause of the need to close the MCV visitor and patient parking deck
for renovations, a valet parking system was implemented in early
January. Numerous problems were uncovered with the valet park-
ing; the system was abandoned. A plan which will allow patients
and visitors to park in the previous employee "N" Deck, with shuttle
service provided, was implemented in mid-January.
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Mr. Townes reported for the Property Committee. The
Lease of Space at 934 West Grace Street was presented. The lease
provides a large lecture hall and performing arts space in the reno-
vated former theater immediately adjacent to the Campus Police and
Internal Audit facilities on the Academic Campus. It is a five-year
lease of approximately 6,412 square feet with a five-year renewal
option. An annual rental rate of $48,090 plus maintenance and an
expenditure of $234,200 in tenant improvements was recommended.
Project plans for the Academic Campus Parking Deck II were
presented to the Committee by Mr. Pete Anderson of Glave, Newman,
and Anderson, the architectural firm engaged to design the facility.
The project is located on the south side of West Broad Street between
Shafer and Harrison Streets. The project includes acquisition of
property and construction of a 1,100 car parking deck for students,
faculty, and staff on the Academic Campus. In addition, first floor
retail space will be available with the Bookstore being considered
the major tenant. The fund source for the project cost of $11,646,536
is Revenue Bonds. The expected date of occupancy is August 1997.
The Convocation and Recreation Center project plans were
presented to the Committee by Mr. Jeff Blanchard of Marcellus,
Wright Cox and Smith, the architectural firm engaged to design the
facility. The project consists of a recreation center with a weight
room, aerobics area, gymnasium and support spaces. Adjacent and
attached to the recreation center is an events component with a
7,500 seat arena and supporting spaces such as administration,
locker rooms, rest rooms, lobby areas, etc. The project is located
on the
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north side of West Broad Street west of Harrison Street. The total
projected budget is $24,802,027.
The Project Plans for the Adaptive Reuse of the State Library
and Archives Building to the Committee was presented by Mr. Andy
Prescott of Einhorn, Yaffee, and Prescott, the architectural firm
engaged to design the facility. The project renovates the old State
Library and Archives Building to allow for the relocation of
Tompkins-McCaw Library and the reconfiguration of services and
resources. The project also allows for the relocation and co-loca-
tion of the programs and offices of the Schools of Allied Health
Professionals and Nursing and the Health Sciences administrative
offices. The building is located between 11th and 12th Streets on
East Broad Street in downtown Richmond. General funds will be the
funding source for the $25,000,000 total budget.
The Governor's Capital Budget Recommendations were pre-
sented for information. Funding is being recommended for the follow-
ing projects:
• State Library Adaptive Reuse Planning $ 900,000
• Convocation and Recreation Center $22,854,000
Academic Parking Deck II $11,587,000
Hospital Renovations $ 3,718,000
Maintenance Reserve, Life and Fire Safety
Compliance, and ADA Compliance $12,425,179
Mr. Arenstein reported for the Student Affairs Committee and
stated that a joint meeting of the Academic Policy and Student Affairs
Committees was held on Wednesday, January 19, 1994. A review of
the status report on the Strategic Plan for the University was present-
ed. Over 20 special implementation committees consisting of faculty,
staff, students, and community leaders have been formed. $500,000
was allocated during the 1993 Fall Semester to fund programs targeted
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for enhancement, Interdisciplinary Centers, and Campus Police Communi-
ty Policing and Police Personnel Expansion.
A presentation on advising, retention, and graduation rates
among undergraduates was presented. Detailed data on retention and
graduation rates were presented showing that VCU had a 77 percent
return rate of freshmen in Fall 1993 and that the overall graduation
rate is at 44 percent over a seven-year period. Retention for Fall
1991 freshmen was 78 percent for those returning in Fall 1992. Various
committees within the University are addressing issues relating to
advising, retention, and graduation; and follow-up reports will be
presented to the Academic Policy and Student Affairs Committees of
the Board of Visitors.
The Committee reviewed a report on the Center for International
Programs. The Center's mission is to advance the internationalization
of the University, in cooperation with the schools and college, as well
as other administrative units. The presentation included information
on international admissions, the English language program, internation-
al student and scholar services, study abroad, and student exchanges.
On motion made and seconded, the following items from the Con-
sent Agenda were approved:
Board of Visitors
Minutes of a Meeting held November 18, 1993
Minutes of a Special Meeting held December 9, 1993
Academic Policy Committee
Minutes of a Meeting held November 17, 1993
Request for Name Change - From Department of
Medical - Surgical Nursing to Department of Adult
Health Nursing
Advancement Committee
Minutes of a Meeting held November 17, 1993
Audit Committee
Minutes of a Meeting held November 18, 1993
Finance and Investment Committee
Minutes of a Meeting held November 17, 1993
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Health Affairs Committee
Minutes of a Meeting held November 17, 1993
Release of Capital Funds for the Second Quarter of
FY 1993-94
MCV Hospitals' Advertising and Marketing Support
Services RFP
Utilization Management Plan
Property Committee
Minutes of a Meeting held November 17, 1993
Lease of Space at 934 West Grace Street (Lee
Theatre)
Special Awards Committee
Minutes of a Meeting held November 17, 1993
Student Affairs Committee
Minutes of a Meeting held November 17, 1993
The Intellectual Properties Foundation was presented. The prima-
ry motivation for the formation of a technology foundation at VCU is
that it affords the flexibility required to efficiently and effectively
protect and market VCU's technology. The ability to retain patent
counsel or obtain market research is an absolute essential in the tech
transfer process, yet VCU is virtually precluded from this practice due
to the University's status as a State agency. A foundation can be far
more receptive to innovative business arrangements and is a rational
repository for accumulated equity. On motion made and seconded, the
Intellectual Properties Foundation was approved.
The VCU/MCV Hospitals Refunding Analysis - 1977A and 1987C
Revenue Bonds was presented. On motion made and seconded, the
following resolution was approved as amended.
WHEREAS, by Chapter 6.1 Title 23, code of Virginia, 1950, as
amended, there is established a corporation under the style of Virgin-
ia Commonwealth University (the "University"), which University is
governed by its Board of Visitors (the Board); and
WHEREAS, pursuant to Title 23, chapter 3, Code of Virginia of
1950, as amended (the "Act"), the Board adopted a resolution on
September 30, 1977 (the "Original Resolution"), authorizing issuance
of revenue bonds of the University in an aggregate principal amount
not exceeding $99,800,000 for the purpose of paying, together with
any other available funds, the cost of the Project (as defined in the
Original Resolution), and providing for the issuance from time to time
10
of additional revenue bonds of the University for the purpose of
paying all or a part of the cost of constructing improvements or
refunding outstanding bonds issued under the Original Resolution; and
WHEREAS, pursuant to the Original Resolution, the University
issued revenue bonds in aggregate principal amount of $64,400,000,
designated "Medical College of Virginia Hospital Revenue bonds, Series
A" (the "Series A Bonds"), for the purpose of paying, together with
any other available funds, the cost of the First Phase Project (as
defined in the Original Resolution); and
WHEREAS, pursuant to a resolution of the Board on May 19,
1983 (the "1983 Supplemental Resolution"), the University issued
revenue bonds in aggregate principal amount of $37,400,000, designat-
ed "Medical College of Virginia Hospital Revenue Bonds, Series B" (the
"Series B Bonds"), for the purpose of paying, together with any
other available funds, certain costs of the Second Phase Project (as
defined in the 1983 Supplemental Resolution) and reimbursing the State
Treasury for advances made to the University in connection with its
acquisition of the former land and building of Richmond Eye Hospital;
and
WHEREAS, pursuant to a resolution of the Board on February 5,
1987, the University issued revenue bonds in aggregate principal
amount of $24,705,000, designated "Medical College of Virginia Hospi-
tals Revenue Bonds, Series C" (the "Series C Bonds"), for the pur-
pose of providing funds, with other available funds, to finance the
cost of refunding certain Series B Bonds; and
WHEREAS, the Board duly adopted a resolution on February 5,
1987 (the "Master Resolution"), authorizing the issuance of hospital
revenue bonds and the pledging to the payment of the principal and
the interest on such bonds the Net Revenues of Medical College of
Virginia Hospitals, and operating division of the University, as
provided therein, and setting forth the rights and remedies of the
holders of such bonds, which Master Resolution takes effect upon its
approval by a specified percentage of the holders of all outstanding
hospital revenue bonds of the University; and
WHEREAS, there have been presented to the Board (a) a plan to
refund part or all of the outstanding Series A Bonds and part or all
of the Series C Bonds (collectively, the "Bonds To Be Refunded"),
and (b) documents related thereto, all of which have been filed in the
records of the Board; and
WHEREAS, the Board has determined to refund the Bonds To Be
Refunded by issuing hospital revenue bonds in the aggregate princi-
pal amount not to exceed $65,000,000, to be designated "Medical Col-
lege of Virginia Hospital Revenue Refunding Bonds, Series D" (the
"Bonds"); and
WHEREAS, the Master Resolution will take effect upon compliance
with conditions precedent set forth therein, which conditions prece-
dent will be met upon the issuance of the Bonds;
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NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF VISITORS
OF VIRGINIA COMMONWEALTH UNIVERSITY:
1. AUTHORIZATION OF BONDS. The Board hereby authorizes
the issuance, execution and sale of the Bonds, in one or more series
to finance, together with other available funds, the costs of refund-
ing the Bonds To Be Refunded (including, if and to the extent pro-
vided in the series resolution or series resolutions providing for the
issuance of the Bonds, the funding of interest, reserves and costs of
issuance) and, pursuant to Section 23-19 of the Act, hereby provides
that all terms and conditions of the bonds and the obligations of the
University with respect thereto shall be specified by the Executive
Committee of the Board (the "Executive Committee"), subject to the
following limitations:
a . Maximum principal amount : $65,000,000 .
b. Final Maturity: Not later than July 1, 2009.
c. Interest Rate: Any rate not to exceed 6.5% per annum.
d. Date of Bonds: Any date not earlier than January 15, 1994.
e . Denominations : Any multiple of $5,000 .
f. Redemption: On any date approved by the Executive
Committee with a premium not to exceed 2.0%.
g. Sale price: At least par minus (1) a bond discount to
underwriters not to exceed 1.50% of the principal amount of
the Bonds, plus (2) if deemed advisable in connection with
the marketing of the Bonds, a discount to investors in an
amount to be determined by the Executive Committee.
h. Amount of bond proceeds used to purchase bond insurance,
letters of credit and other credit enhancements: Not more
than 2.0% of original principal amount of Bonds.
Security: The Bonds, together with any Series A Bonds and
Series C bonds not being refunded and any additional bonds
issued pursuant to the Master Resolution, will be secured by
a pledge of the Net Revenues (as defined in the Master
Resolution). A debt service reserve fund may be included.
2. AUTHORIZATION OF RESOLUTIONS. The Board hereby
authorizes the Executive Committee (a) to adopt one or more appropri-
ate series resolutions in substantially the form submitted to the
Board at this meeting or such other forms approved by the Executive
Committee consistent with the terms and conditions set forth in Para-
graph 1 and (b) to execute and deliver such other documents, includ-
ing reimbursement agreements with one or more foreign or domestic
banking institutions, agreements with one or more bond insurers, and
an escrow deposit agreement with Crestar Bank and/or the Treasurer
of the Commonwealth of Virginia (and, if applicable, a forward pur-
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chase agreement in connection therewith), and take such action as
may be necessary or desirable in connection with the issuance and sale
of the Bonds, including adoption of a resolution amending the Master
Resolution, as permitted by Section 507 (d) thereof, to provide that
(i) the percentage of Depreciation Reserve Fund Requirement (as
defined in the Master Resolution) to be deposited in the Depreciation
Reserve Fund (as defined in the Master Resolution) be reduced to
zero and (ii) amounts in the Depreciation Reserve Fund be trans-
ferred to the Medical College of Virginia Hospitals for capital expen-
ditures approved by the Executive Committee. Excess amounts in the
Debt Service Reserve Account associated with the Bonds To Be Re-
funded may be used to reduce the amount of Bonds issued or for
capital expenditures, as determined by the Executive Committee.
3. AUTHORIZATION TO OFFICERS. The Board hereby author-
izes all officers and employees of the University to take all action
necessary or desirable in connection with the issuance or sale of the
Bonds as may be approved by the Rector, the President or the Se-
nior Vice President of Administration.
On motion made and seconded, the Board convened into execu-
tive session to discuss certain personnel matters involving the per-
formance of identifiable employees or faculty of VCU, and to discuss
the evaluation of performance of departments or schools of VCU where
such matters regarding such individuals might be affected by such
evaluation including the Faculty Appointments and Changes in Status
and other Personnel Actions and Full and Consultative Hospital Privi-
leges, Health Care Provider Compensation for July, 1994, JCAHO
Visit Update, an Update on the Strategic Plan and an Update on
Hospital Flexibility Issues, and Audit Reports of individually identi-
fied departments and/or schools, and to discuss legal matters and
probable litigation with its attorney relating to the aforementioned
Audit Reports as may be necessary, and to discuss the condition,
acquisition or use of real property for public purpose, or of the
disposition of publicly held property, or of plans for the future of a
state institution of higher education which could affect the value of
property owned or desirable for ownership by such institution includ-
13
ing the Transfer of the VCU Foundation Real Estate and MCV Hospi-
tals Fund Transfer to the School of Medicine as authorized by Section
2.1-344 a(l), a(3) and a(7) of the Virginia Freedom of Information
Act.
Following executive session, on motion made and seconded, the
following Resolution was approved by Roll Call vote:
Virginia Commonwealth University hereby certifies that, to the best of
each member's knowledge, (i) only public business matters lawfully
exempted from open meeting requirements by Virginia law were dis-
cussed in the executive session meeting to which this certification
resolution applies, and (ii) only such public business matters as were
identified in the motion convening the executive session meeting were
heard, discussed or considered by the Board of Visitors of Virginia
Commonwealth University.
Roll Call Vote: Ayes Nays
Mr. F. Dixon Whitworth, Jr., Rector X
Mr. Richard A. Arenstein X
Dr. Thomas J. Berenguer Left before voting
Rev. Constantine N. Dombalis X
Mrs. Rozanne G. Epps X
Mr. Lawrence W. Framme, III X
Dr. Robert D. Gilmer X
Dr. William E. Holland Absent
Dr. Harry I. Johnson, Jr. X
Mr. Richard L. Meador X
Dr. Clifton L. Peay X
Mr. Stuart C. Siegel X
Ms. Eva Teig Left before voting
Mr. Clarence L. Townes, Jr. X
Ms. Sandra Adair Vaughan Absent
Mr. Jay M. Weinberg X
VOTE:
Ayes: 12
Nays: 0
ABSENT DURING MEETING: 2
ABSENT DURING VOTING: 4
On motion made and seconded, the Board accepted the Report of
the President; approved Full and Consultative Privileges; approved
Health Care Provider Compensation for July, 1994; approved
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Acquistion of Property at 100-102 South Cherry Street, and 911
Green Alley; approved Faculty Appointments and Changes in Status
and other Personnel Actions; accepted the Report of the General
Counsel; and accepted executive session committee reports.
On motion made and seconded, the Board approved the MCV
Hospitals Fund Transfer to the School of Medicine with Mr. Framme
opposing.
The meeting was adjourned at 12:35 p.m.
