MINUTES OF A REGULAR MEETING OF THE
BOARD OF VISITORS OF
VIRGINIA COMMONWEALTH UNIVERSITY
August 2, 2002
A regular meeting of the Board of Visitors of Virginia Commonwealth
University was held on Friday, August 2, 2002, at 9 a.m. in the University
Meeting Center located at 101 North Harrison Street.
Present were Drs. Perkinson (Rector), Bersoff, Long and Romano;
Messrs. Axselle, Markel, Plymale, Pyon, Rigsby, Rosenthal, Slater and
Thompson; and Mesdames McMichael, Petera and Riddick. Mr. Baldacci was
absent. Also present were Drs. Trani, Andrews, Brodd, Huff, Kontos, McDavis,
Rhone, Self and Turner; Messrs. Broadway, Bunce, Burke, Gehring, Jez,
Ohlinger, Ross and Timmreck; and Mesdames Balmer, Chinnici, Lepley and
Messmer.
The Report of the President was presented.
The four new members of the Board of Visitors were introduced.
Dr. Bersoff is the Managing Director of Quarterdeck Investment Properties, a Los
Angeles-based investment bank providing knowledge-driven investment banking
services to the aerospace, defense, information technology, space, and technical
services marketplaces. Dr. Bersoff was Chairman, President, and CEO of BTG,
Inc., an information-technology firm Dr. Bersoff founded in 1982. Dr. Bersoff was
the first Chairman of the Virginia Economic Development Partnership and
currently is a member of the Board of Directors and past Chairman of the Fairfax
County Chamber of Commerce. Dr. Bersoff holds a Ph.D. in mathematics from
New York University. Dr. Bersoff was selected as Virginia's Outstanding
Industrialist for 1999 by the Commonwealth of Virginia and the Science Museum
of Virginia.
Dr. Romano is a physician in private practice in Fairfax, Virginia. Dr. Romano
also is serving as an Associate Clinical Professor in VCU's Department of Family
Practice. Dr. Romano is a member of the national, state, and local chapters of
the American Academy of Family Practice and the Fairfax County Medical
Society. Dr. Romano earned a M.D. from VCU.
Mr. Thomas Rosenthal is Chief Executive Officer of Med Outcomes, Inc. and co-
founder of MunRo Partners, a company bringing a new concept to pharmacy.
Before founding MunRo Partners, Mr. Rosenthal was President and Chief
Operating Officer of Standard Drug Company. Mr. Rosenthal currently serves on
the School of Pharmacy's Advisory Board and is a former member of the MCV
Foundation's Board of Trustees and the VCU Health System's Board of
Directors. Mr. Rosenthal earned a B.S. in entrepreneurial management from the
University of Pennsylvania's Wharton School of Business.
Mr. Philip Thompson, Sr. is President and Chief Financial Officer of One Number
Information Systems, Inc. of Virginia. Mr. Thompson was previously with C&P
Telephone Company and a teacher with Norfolk Public Schools. Mr. Thompson
has been actively involved in providing computer support for Second Baptist
Church and for Cross-Over Ministries, supporting efforts to provide health care
for indigent patients and the working poor. A member of the Metropolitan
Business League and the Executive Board of Richmond Renaissance, Mr.
Thompson earned a bachelor's degree in education from St. Paul's College in
Lawrenceville, Virginia.
An enrollment update was presented. VCU has received more than 11,700
undergraduate applications. Undergraduate applications have increased 8
percent over 2001 and by 90 percent since 1995. Based on offers accepted by
students, VCU has already achieved the goal of 2,900 freshmen and an
anticipated freshman class size for Fall 2002 is between 3,050 and 3,100
students. Currently, the average SAT score of the incoming freshman is up 13
points from 2001. The average SAT for the incoming freshman class is expected
to be 1050, up from the Fall 2001 freshman class average of 1037 and up from
1002 in 1996. The number of incoming out-of-state undergraduate students is up
67 students, a 20 percent increase over 2001. The state showing the largest
increase is New York, increasing from 26 to 40 students from 2001. The
headcount for 2001 was 25,001, the projected headcount enrollment for 2002 is
25,415.
A budget update was presented. Highlights are:
• On July 23, 2002, Governor Mark Warner reported to the General
Assembly that state revenue collections for the fiscal year ending June 30,
2002, were $237 million short of the forecast and 3.8 percent below
revenues from the prior fiscal year.
• In view of the shortfall, the Governor has directed the Secretary of Finance
to re-forecast the general fund revenues for the 2002-04 biennium.
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• Governor Warner will brief members of the General Assembly on
Virginia's financial condition and actions required to balance the state
budget on August 19, 2002.
• In the meantime, the Governor has directed agencies and institutions to
limit discretionary spending and ensure that only the most essential items
are funded.
• Additional state budget cuts for both the current fiscal year and the next
year are expected.
• The University has already implemented general fund reductions of $5.3
million in 2001-02, $18.2 million in 2002-03 and $24.7 million in 2003-04.
• To help mitigate state funding reductions for 2002-04, the University's
budget already assumes tuition increases of 9 percent for resident
undergraduates and 8 percent for all other students in both years of the
biennium.
• Budget reduction actions have been implemented across all areas of the
University and include:
• Eliminating faculty and classified positions
• Redirecting turnover and vacancy savings
• Increasing class size
• Increasing full-time faculty teaching loads
• Delaying full classroom implementation of the student computer
initiative
• Reducing much needed equipment purchases
• Privatizing housekeeping services
• Reducing facilities maintenance
• Minimizing operating expenses, such as supplies, materials,
postage, and travel
• With additional budget reductions anticipated for the current year and the
unlikelihood of a mid-year tuition increase, the University's budget will be
severely stressed.
• Another round of budget cuts also will delay the development of VCU's
six-year financial plan until the University is reasonably assured of a stable
state funding base.
Copies of Dr. Trani's book The First Cold War were distributed to the Board
members.
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The Report of the Rector was presented. A slide presentation featuring the
first commencement ceremony in Qatar in June 2002, in which Dr. Perkinson and
Dr. Smith participated, was presented. Also included were slides of a visit to the
Rice Property in Charles City, Virginia. Dr. Perkinson encouraged Board
members to visit the Rice Property to observe the VCU's life sciences initiative at
work.
Mrs. Petera reported for the Academic and Health Affairs Policy
Committee. A brief overview of the responsibilities of the Academic and Health
Affairs Policy Committee was presented. The revision to the VCU Faculty Early
Retirement Incentive Program was presented. The VCU Faculty Early
Retirement Incentive Program was approved by the Board of Visitors in 1999.
The purpose of the Faculty Early Retirement Incentive Program is to provide a
financial early retirement incentive for certain tenured faculty that will facilitate the
release of tenured faculty resources for budget reallocation or reduction in
accordance with the University Strategic Plan goals, changes in enrollment, and
other University needs. The program is not designed to be a faculty fringe
benefit program, but a management tool. The revision to the Incentive Program
would provide that the total annual costs for the program shall not exceed three
percent (rather than one percent) of the University's general fund appropriation
for faculty salaries and associated benefits. The Academic and Health Affairs
Policy Committee recommended to the full Board the approval of the revision to
the VCU Faculty Early Retirement Incentive Program. A report on the Degrees
Awarded was presented. Virginia Commonwealth University awarded 4,159
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degrees and certificates during 2001-02, an increase of 77 degrees and
certificates from 2000-2001. In 2001-02, baccalaureates were awarded in 66
disciplines, master's degrees in 83 disciplines, doctorates in 22 disciplines, first
professional degrees in three disciplines and post-baccalaureate certificates in
20 disciplines. During 2001-02, 2,198 baccalaureates were awarded; 1,318
master's degrees were awarded and 108 doctorates were awarded. Also during
2001-02, 79 first professional degrees in Dentistry, 168 first professional degrees
in Medicine, and 95 first professional degrees in Pharmacy were awarded. The
off-campus Comprehensive Services for Personnel Development program
graduated the first off-campus class in December 2001, awarding 85 master's
degrees in Rehabilitation Counseling.
The Southern Association of Colleges and Schools (SACS) Reaffirmation
of Accreditation Update was presented for information. Mrs. Anne Petera was
asked and agreed to serve on the University's SACS Leadership Team.
A report on VCU's Writing and Technology Competency Results, a Report
on the College of Humanities and Sciences, a Report on Grants, Contracts and
Intellectual Property, and the VCU Health System Financial Statement Summary
Fiscal Year 2002 - Eleven Months ending May 31, 2002, were presented for
information.
Mr. Plymale reported for the Advancement and External Relations
Committee. The Marketing and Media Relations Report was presented. The
Federal, State, Local and Community Relations Report was presented. The
General Obligation Bond legislation contains almost $77 million worth of new
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construction and renovation projects for the University. The Government and
Community Relations web site has information regarding the overall higher
education bond campaign as well as VCU-specific information. The University
and the VCU Health System are working to educate constituencies and insure a
strong turnout on November 5.
The Marketing and Media Report was presented. Ms. Pam Lepley, VCU's
new Director of News Services, was introduced. With the hiring of Ms. Lepley,
VCU has a professional marketing, media relations, public relations,
communications and publications team, dedicated to enhancing the recruitment
of students and VCU's national visibility. The marketing and media relations
report highlighted recent marketing efforts which have resulted in new
recruitment videos for the School of Nursing and the Department of Psychiatry.
The videos were produced in-house. New student recruitment pieces and ad
campaigns are being produced and will be shown at the November, 2002,
meeting. Academic programs and administrative offices are taking advantage of
VCU's in-house Creative Services' offices with over 600 design jobs completed
over the past academic year. VCU is attracting greater national visibility. The
syndicated column about the CEO's for Cities report and the articles about the
VCU-Qatar graduation appeared in newspapers and online publications all
across the country. The news organization continues to focus on and pitch
research stories in the life sciences and had considerable success with the story
about Dr. Kendler's research on schizophrenia that appeared in the national and
international press, including the New York Times.
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Mr. Rigsby reported for the Audit Committee. The Status Report on
Financial, Operational, and Administrative Practices Framework was presented
for information.
Mr. Markel reported for the Finance, Investment and Property Committee.
The Lease for the School of Social Work (NOVA) was presented. The lease is
for approximately 9,500 square feet of office and classroom space at 6295 Edsall
Road, Alexandria, Virginia. The School of Social Work, Northern Virginia
Program, received notification the current lease will be terminated mid-July,
2002, due to an expansion of George Mason University's existing programs. In
February, 2002, an advertisement was placed in Virginia Business Opportunities
requesting information on alternative locations. Four brokers responded with
proposals. The lease is with First Potomac Management. The anticipated initial
term is August 25, 2002, to August 31, 2007, with year-to-year renewals. The
rent is $223,250 for the first year of the initial term of the lease. The Finance,
Investment and Property Committee recommended to the full Board the approval
of the lease for the School of Social Work located at 6295 Edsall Road in
Alexandria, Virginia.
The VCU Qatar Financial and Administrative Policies and Procedures
were presented. The 2002 General Assembly authorized the Virginia
Commonwealth University Board of Visitors to establish, operate, and govern a
branch campus of Virginia Commonwealth University in the Arab State of Qatar.
In general, all State and University policies and procedures apply to the VCU
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Qatar Campus. However, the General Assembly authorized VCU to maintain a
local bank account in Qatar and to modify procurements in Qatar and
surrounding Arab states to comply with local custom, laws and regulations. In
addition, Qatar citizens and other residents employed solely to support the VCU
Qatar Campus are not considered employees of the Commonwealth of Virginia.
Because of modifications related to an overseas campus, the University is
required to develop policies and procedures related to the Qatar Campus. As
per Chapter 899, 2002 Virginia Acts of the Assembly, the policies and
procedures are to be approved by the Board of Visitors. The Finance,
Investment and Property Committee recommended to the full Board the approval
of the VCU Qatar Financial and Administrative Policies and Procedures, the
following resolution and the Tuition and Fee Charges for the 2002-03 Academic
Term for Full-time Undergraduate Students:
RESOLUTION
AUTHORIZING MODIFICATIONS TO
VIRGINIA COMMONWEALTH UNIVERSITY
QATAR FINANCIAL AND ADMINISTRATIVE POLICIES AND PROCEDURES
WHEREAS, by action of the General Assembly, in Code of Virginia §23-
50.16:36, Virginia Commonwealth University ("VCU") has been authorized to
establish, operate and govern a branch campus of Virginia Commonwealth
University in the State of Qatar; and
WHEREAS, VCU is in the process of negotiating a final agreement with
the Qatar Foundation for Education, Science, and Community Development to
Establish and Operate the Virginia Commonwealth University in Qatar
("Agreement"); and
WHEREAS, by action of the General Assembly, in Chapter 899 of the
Appropriations Act of 2002, §1-67 227 T.2 -4., VCU has been authorized to
maintain a local bank account in Qatar and to modify procurements in Qatar and
surrounding Arab states to comply with local custom, laws and regulations; and
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WHEREAS, pursuant to the cited provisions of the Appropriations Act, the
VCU Board of Visitors has been authorized to approve policies and procedures
related to the VCU Qatar Campus with the understanding that, prior to approval,
the University is to seek the guidance of the Secretaries of Administration,
Education, and Finance; and
WHEREAS, a draft form of the policies and procedures has been
submitted to the Secretaries of Administration, Education, and Finance for their
guidance and reflects guidance received to date; and
WHEREAS, a draft form of the policies and procedures has been
presented to the Board for its consideration, which policies and procedures are
acceptable to the Board; and
WHEREAS, the form of the policies and procedures may require
modification from time to time to conform to and comply with the terms of the final
Agreement, additional guidance from the Secretaries of Administration,
Education, and Finance, and/or changes to State and University policies and
procedures;
NOW THEREFORE, BE IT RESOLVED by the Board of Visitors of
Virginia Commonwealth University, that the VCU Qatar Financial and
Administrative Policies and Procedures are approved in substantially the form as
presented to the Board but subject to such changes as may be deemed
necessary by the President, who hereby is delegated authority to approve any
modifications to these Policies and Procedures.
The Resolution for the Virginia College Building Authority (VCBA) bonds
for the Bowe Street Parking Deck, Gladding Residence Hall and West Grace
Street Housing was presented. The Finance, Investment and Property
Committee recommended to the full Board the approval of the following
resolution:
VIRGINIA COMMONWEALTH UNIVERSITY
Resolution of the Board of Visitors
WHEREAS, pursuant to Chapter 3.2, Title 23 of the Code of
Virginia of 1950, as amended (the "Act"), the General Assembly of Virginia has
authorized the Virginia College Building Authority (the "Authority") to develop a
pooled bond program (the "Program") to purchase bonds and other debt
instruments issued by public institutions of higher education in the
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Commonwealth of Virginia (the "Institutions") to finance or refinance the
construction of projects of capital improvement specifically included in a bill
passed by a majority of those elected to each house of the General Assembly of
Virginia (the "Projects");
WHEREAS, the Authority intends to issue from time to time under
the Program its Educational Facilities Revenue Bonds (Public Higher Education
Financing Program) (the "Bonds") to finance the purchase of bonds and other
debt instruments issued by the Institutions to finance or refinance the Projects, all
in the furtherance of the purposes of the Act and the Program;
WHEREAS, the Board of Visitors of Virginia Commonwealth
University (the "Board") may from time to time wish to finance or refinance
Projects of Virginia Commonwealth University (the "Institution") through the
Program;
WHEREAS, if the Institution wishes to finance or refinance a
Project through the Program, it will be necessary for the Institution to enter into a
Loan Agreement (a "Loan Agreement") between the Authority and the Institution
and to evidence the loan to be made by the Authority to the Institution pursuant
to the Loan Agreement by issuing the Institution's promissory note (the "Note")
pursuant to Section 23-19 of the Code of Virginia of 1950, as amended, and
pursuant to the Loan Agreement, the Authority will agree to issue its Bonds and
to use certain proceeds of the Bonds to purchase the Note issued by the
Institution and the Institution will agree to use the proceeds received from the
Authority to finance or refinance the construction of the Project and to make
payments under the Loan Agreement and the Note in sums sufficient to pay,
together with certain administrative and arbitrage rebate payments, the principal
of, premium, if any, and interest due on that portion of the Bonds issued to
purchase the Note;
WHEREAS, the Institution now proposes to sell to the Authority the
Institution's Note (the "2002A Note") to be issued under a Loan Agreement (the
"2002A Loan Agreement") to finance or refinance from all or a portion of the
proceeds of certain Bonds issued by the Authority in 2002 (the "2002A Bonds")
all or a portion of the costs of construction and improvement of the Bowe Street
parking, arts laboratory and athletic facility, the construction and acquisition of
housing (the Capitol Medical Building) for the Academic Campus and
construction of Gladding Residence Hall, all located on the Institution's Academic
Campus (collectively, the "2002A Project"), and each of which has been
authorized for bond financing by the General Assembly and, subsequently, has
received temporary financing through a Treasury Loan from the Commonwealth's
Department of Treasury to be fully repaid with a portion of the Institution's share
of the proceeds of the 2002A Bonds; and
WHEREAS, it is the desire of the Board to delegate to such
Authorized Officers (as hereinafter defined) of the Institution the authority to
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approve, on behalf of the Board, the forms of the 2002A Loan Agreement and the
2002A Note and, similarly, to authorize such Authorized Officers of the Institution
to execute, deliver and issue in the name of and on behalf of the Institution, the
2002A Loan Agreement, the 2002A Note and any and all documents necessary
or desirable to effectuate the financing or refinancing of all or a portion of the
costs of the 2002A Project through the Program with the Authority and to
facilitate the purchase of the 2002A Note by the Authority.
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF THE
INSTITUTION:
Section 1. The 2002A Project is hereby designated a Project to
be undertaken and financed or refinanced by the Authority and, accordingly, the
President, the Senior Vice President for Finance and Administration and the
Assistant Vice President for Business Services and Treasurer of the Institution
(the "Authorized Officers"), are each hereby delegated and invested with full
power and authority to approve the forms of the 2002A Loan Agreement and
2002A Note, and any pledge to the payment of the 2002A Note of the Institution's
total gross university sponsored overhead, unrestricted endowment income,
tuition and fees, indirect cost recoveries, auxiliary enterprise revenues, general
and nongeneral fund appropriations and other revenues not required by law or
restricted by a gift instrument to be used for another purpose, any of which are
not required by law or by binding contract entered into on or prior to the date of
issuance of the 2002A Bonds to be devoted to some other purpose on a basis
that is senior in priority to the 2002A Bonds, as may be provided in the 2002A
Loan Agreement, and such approval is hereby authorized, subject to the
provisions of Section 3 hereof.
Section 2. Subject to the provisions of Section 3 hereof, the
Authorized Officers are each hereby individually delegated and invested with full
power and authority to execute, deliver and issue, on behalf of the Board, (a) the
2002A Loan Agreement and the 2002A Note with the approval of such
documents in accordance with Section 1 hereof by any such officer evidenced
conclusively by the execution and delivery of the 2002A Loan Agreement and
2002A Note, respectively, and (b) any and all other documents, instruments or
certificates as may be deemed necessary or desirable to consummate the
financing or refinancing of all or a portion of the costs of the 2002A Project
through the Program, the construction of the 2002A Project and the Institution's
participation in the Program, and to further carry out the purposes and intent of
this Resolution. The Authorized Officers are directed to take such steps and
deliver such certificates prior to the delivery of the 2002A Note as may be
required under existing obligations of the Institution, including bond resolutions
relating to the Institution's outstanding general revenue pledge bonds.
Section 3. The authorizations given above as to the approval,
execution, delivery and issuance of the 2002A Loan Agreement and the 2002A
Note are subject to the following parameters: (a) that the principal amount to be
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paid under the 2002A Note shall not be greater than the aggregate amount
authorized for the 2002A Project by the General Assembly of Virginia, including
any adjustments required or permitted by law, and in no event shall exceed
$30,000,000, (b) that the interest rate payable under the 2002A Note shall not
exceed a "true" or "Canadian" interest cost more than 50 basis points higher than
the interest rate for "AA" rated securities with comparable maturities, as reported
by Delphis-Hanover, or another comparable service or index, on the date that the
interest rates on the 2002A Note are determined, taking into account original
issue discount or premium, if any, (c) that the weighted average maturity of the
principal payments due under the 2002A Note shall not be in excess of 20 years,
(d) that the last principal payment date under the 2002A Note shall not extend
beyond the period of the reasonably expected economic life of the 2002A
Project, (e) that the financing of the 2002A Project and the terms and provisions
of the 2002A Loan Agreement and the 2002A Note will comply with the
Alternative Construction and Financing Guidelines issued by the
Commonwealth's Secretary of Finance, and (f) that the actual interest rates,
maturities, and date of the 2002A Note shall be approved by an Authorized
Officer, which approval will be evidenced by the execution of the 2002A Note.
Section 4. The Board acknowledges, on behalf of the Institution,
that if the Institution fails to make any payments of debt service due under any
Loan Agreement or Note, including the 2002A Loan Agreement and the 2002A
Note, the Program authorizes the State Comptroller to charge against the
appropriations available to the Institution all future payments of debt service on
that Loan Agreement and Note when due and payable and to make such
payments to the Authority or its designee, so as to ensure that no future default
will occur on such Loan Agreement or Note.
Section 5. The Board agrees that if the Authority determines that
the Institution is an "obligated person" under Rule 15c2-12 of the Securities and
Exchange Commission with respect to any issue of Bonds, the Institution will
enter into a continuing disclosure undertaking in form and substance reasonably
satisfactory to the Authority and the Institution and will comply with the provisions
and disclosure obligations contained therein.
Section 6. This resolution shall take effect immediately upon its
adoption.
The revision to the Statement of Investment Objectives, Policies and
Guidelines for the Operating Pool was presented. The Finance, Investment and
Property Committee recommended to the full Board the approval of the revision
to the Statement of Investment Objectives Policies and Guidelines for the
Operating Pool.
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