MINUTES OF A SPECIAL MEETING OF THE
BOARD OF VISITORS OF
VIRGINIA COMMONWEALTH UNIVERSITY
April 20, 1995
A regular meeting of the Board of Visitors of
Virginia Commonwealth University was held on Thursday,
April 20, 1995, at 8 a.m. in the University Meeting Center.
Present were Messrs. Whitworth, Flippen, Framme,
Meador, Siegel, Townes and Weinberg; Drs. Johnson and
Smith; and Ms. Teig. Absent were Mr. Arenstein; Drs.
Dombalis, Gilmer, Vaughan and Wootton; and Ms. Vaughan.
Also present were Drs. Trani, Dewey, Harris, Jones and
Rhone; Messrs. Bruegman, Ross and Wyeth; and Mesdames
Burnside, Messmer and Price.
Mr. Whitworth called the meeting to order. On
motion made and seconded, the following Resolution was
approved:
WHEREAS, the 1995 Session of the General Assembly
of Virginia passed the Workforce Transition Act of 1995
(hereinafter referred to as the "Act"); and
WHEREAS, Governor Allen signed the Act into law on
March 10, 1995; and
WHEREAS, full-time teaching and research faculty of
institutions of higher education in Virginia are not eligi-
ble under the Act to participate in the incentive programs
established under the second and third enactments of the
Act unless specifically permitted by the Boards of Visitors
of the respective institutions of higher education; and
WHEREAS, enactment nine of the Act empowers Boards
of Visitors of state institutions of higher education in
Virginia, in keeping with the purposes of the Act and as
part of the higher education restructuring plan pursuant to
Item 183 E. 1,2 and 3 of Chapter 966 of the Acts of Assem-
bly of 1994, to permit full-time teaching and research
faculty, including administrative and professional faculty,
to participate in the incentive programs established in the
second and third enactments of the Act; and
WHEREAS, the Board of Visitors of Virginia Common-
wealth University, in keeping with its restructuring plan
developed pursuant to Item 183 E. 1, 2 and 3 of Chapter 966
of the Acts of Assembly, wishes to permit full-time teach-
ing and research faculty, including administrative and
professional faculty, of Virginia Commonwealth University
to participate in the incentive programs established in the
second and third enactments of the Act; and
NOW, THEREFORE, BE IT RESOLVED by the Board of
Visitors of Virginia Commonwealth University that full-time
teaching and research faculty, including administrative and
professional faculty, of Virginia Commonwealth University
are hereby permitted to apply for the incentive programs
established in the second and third enactments of the Act
subject to the following conditions:
1. The President of Virginia Commonwealth Univer-
sity hereby is empowered to develop and implement proce-
dures for receipt and consideration of, as well as the
recommended action to be taken with respect to, applica-
tions submitted by eligible faculty members of Virginia
Commonwealth University. The procedures shall be consis-
tent with the provisions of the Act, as well as any imple-
menting procedures, rules and regulations developed by the
Governor of the Commonwealth of Virginia, and shall be in
keeping with Virginia Commonwealth University's ongoing
restructuring plans and efforts.
2. Written application of a faculty member's
desire to participate in the aforementioned incentive
programs must be received by the appropriate Virginia
Commonwealth University official not later than June 30,
1995, at 5:00 p.m. Separation from employment must occur
not later than June 30, 1996.
The 1995-96 University and Hospitals budgets were
presented. Highlights of the Budget are:
Revenues for the University and the Hospitals will
total $820 million in 1995.
State general funds support for the $820 million
budget will total $118 million, representing only
14% of the budget.
The budget is balanced, with budget surpluses
projected in the University and the Hospitals budg-
ets.
Both budgets include contingency funds for unex-
pected revenue shortfalls, and strategic planning
initiatives.
Highlights of the University budget include:
University revenues are expected to total $440
million and expenditures are budgeted at $439 mil-
lion.
The budget is balanced for all programs and in-
cludes contingency funds totaling $3.9 million.
Tuition revenue is based on revised projected
enrollments for 1995-96, where total fall headcount
is projected to be 21,585 students, an increase of
only 62 students over the fall of 1994.
Due to the planned reduction in tuition revenue and
the need to fund selected University initiatives,
VCU's projected expenditure needs exceeded project-
ed revenues by approximately 1% or $4.5 million
during the budget preparation process. The Univer-
sity developed a plan to balance the budget. The
plan includes reducing the existing library materi-
als budget by $500,000; deferring a planned
$400,000 increase in library materials budget;
requesting the VCU Foundation to provide an addi-
tional 2% distribution from the quasi-endowment
fund for University support as a means of reducing
advancement expenditures by $140,000; reducing
summer school salary costs by $200,000; reducing
E&G travel budgets by 25% to save $200,000; realiz-
ing salary savings from flexible contracts and
vacant positions to save $400,000; and implementing
Phase I of Administrative Restructuring to realize
a savings of $500,000.
Tuition charges for all student groups, except
first professional students, are being increased by
3% for residents and 5% for nonresidents. The
resident rate is increased to the maximum level
authorized by the General Assembly. Although the
General Assembly authorized a maximum 7.5% increase
in the nonresident rate, the University is recom-
mending an increase of 5%.
The University is initiating a course overload fee
for full-time students. Undergraduates who take
more than 18 credit hours a semester and graduate
students who take more than 15 credit hours a
semester will be charged on a per credit hour basis
for each credit hour above the full-time maximum.
Mandatory fees and other charges are being held to
a 3% increase.
Tuition charges for medical students are being in-
creased by 1% for residents and 2% for nonresi-
dents.
Tuition for the new PharmD program has been set at
$7,500 for resident students and $15,000 for non-
residents.
There is a tuition and fee increase of 21.1% for
the Fast Track MBA program. Beginning with the
Fall 1995 class, students will pay $23,000 for the
thirteen course program.
In 1994-95, off-campus tuition rates did not in-
crease. For 1995-96, off-campus tuition will in-
crease to the on-campus rates for resident stu-
dents.
The expenditure budget includes general fund sup-
port for legislative initiatives relating to:
the School of Engineering ($547,000);
the Generalist Medicine Initiative ($388,000);
the School of Dentistry ($250,000);
Restructuring ($500,000);
an Offset to the Tuition Loss ($250,000); and
the Economic Education Program ($25,000).
The budget includes a State-authorized December 1,
1995 2.25% salary increase for classified staff and
faculty.
Of the $3.9 million in contingency funds, $1.2
million is dedicated to a Strategic Plan Realloca-
tion Pool.
Highlights from the Hospital Budget include:
The fiscal 1995-96 VCU/MCV Hospitals' budget is
balanced, and will provide an excess of $4.3 mil-
lion for reinvestment in needed capital equipment,
renovations, and required debt service payments.
The Hospitals has been able to balance the budget
with the implementation of reengineering/restruc-
turing which was embarked upon over one year ago.
The efforts have reduced positions at the Hospitals
by 645 or over 10% since April of 1994.
The total profitability of the Hospitals is depen-
dent upon commercial and related payers. The
5
insurers are unwilling to recognize expenses asso-
ciated with graduate medical education, unreim-
bursed indigent care, and medical school support.
Reduction in hospital and medical school expenses,
state or national recognition of expenses associat-
ed with graduate medical education, and full state
funding of indigent care are essential if long term
financial viability is to be maintained. Only
11.3% of the Hospitals' payers pay what is billed,
so increasing rates is not a solution.
The Hospitals budget is based on the following
statistics:
patient admissions are projected to decrease
by 701 or 2.20%
patient days are projected to decrease by
2,814 or 1.45%
outpatient visits are projected to increase by
5,703 or 2.96%
emergency visits are projected to decrease by
1,900 or 1.73%
Medicaid and indigent care reimbursement will be
capped at a total of $147.3 million.
The Hospitals' budget assumes State mandated clas-
sified and faculty salary increases of 2.25% on
December 1, 1995 and provides for Health Care
Provider increases of 3.0% and house staff increas-
es of 3.5% on July 1, 1995.
The Hospitals restructuring/reengineering efforts
will save approximately $11.8 million in operating
expenses in 1996.
The Hospitals will fully open the new Ambulatory
Care building in 1996, will assume responsibility
for all operating expenses, and will rent approxi-
mately 52,000 square feet to Associated Physicians.
Associated Physicians will assume responsibility
for approximately 26,000 patient visits now seen in
the A.D. Williams Clinic.
The Hospitals' Emergency Services will be transi-
tioned to full-time attending coverage during
1995-96 with assistance of an outside consultant.
The Hospitals provides support that is not normally
required from competitor community hospitals. The
support amounts to approximately 10.8% of the
Hospitals' budget and is the primary reason VCU/MCV
Hospitals' costs exceed that of the competitors.
On motion made and seconded, the 1995-96 University
Budget and Tuition and Fees were approved.
On motion made and seconded, a report to the Board
of Visitors on tuition is to be prepared over the next 12
months (by the March 1996 Board of Visitors' meeting)
relative to how restructuring can be used to lower tuition
rates.
On motion made and seconded, the Hospitals' 1995-96
budget was approved.
The meeting was adjourned at 9:30 a.m.
