Board of Visitors Finance Committee Meeting March 1, 2018
Agenda AC ACTION ITE ITEMS 1. 2018-2019 Faculty, Staff and Student Housing Rates 2. 2018-2019 Contract Rates for Dining Services 3. Disposition of Real Property – Barnes Estate 4. Capital Project Financial Plans REP REPORTS 1. Endowment Report as of December 31, 2017 2. Designing the Future of Human Resources 3. Information Technology Strategic Plan 4. Executive Vice President’s Remarks
2018-2019 Faculty , Staff, and Student Housing Rates
UV UVa a Fac aculty an and Staf aff Prope perty Rent nts Rents reflect market rate 79 units 2.98% average increase 4
Stude tudent Ho Hous using Rat ates 2018-2019 Academic Year Academic Division College at Wise Number of beds 6,884 695 Occupancy rate (fall 2017) 99% 67% Average increase $210 or 3.5% $196 or 3% Average double room charge $6,252 $6,398 (nine-month lease) 5 5
Breakdown of Stude Bre tudent Ho Hous using Rate ate Inc Increase Average Per- Percent of Total Dollars Category Student (3.5% overall) Generated Increase Increase Debt Service Expense 1 $143 68% $790,000 Capital Renewal and Replacement 2 63 30% 350,000 Other Costs 3 4 2% 14,000 Total $210 100% $1,154,000 1. Includes increases in debt service for McCormick Road Residence Halls Phase 1 2. Consistent with Board of Visitors’ policy on capital renewal and replacement which requires maintaining 1.5% of replacement value The proposed increase also reflects additional investments in major maintenance and repairs of existing facilities 3. Other Costs include a net increase of $14,000 6
2017 17-2018 UV UVa a Stude tudent Ho Hous using Rate ates VA A Pu Public lic, Peer Peer, & Selec Selected Other er Instit itutio ions Dou ouble le Room oom Rate e $10,000 UVa = $6,042 $9,000 Average "Peer" & Selected Others = $7,872 $8,000 $7,000 Average VA Public Schools = $6,007 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 7 7 Sources: SCHEV 2017-2018 Public Institutions survey & Business Operations web-based survey
2017 17-20 2018 18 UVa-Wise Stude tudent Ho Hous using Rat ates VA A Pu Public lic, Peer Peer, & Selec Selected Other er Instit itutio ions Dou ouble le Room oom Rate e $8,000 UVa-Wise = $6,202 $7,000 ....... Average VA Public Schools = $6,007 - - - - Average "Peer" & Selected Others(UMW) = $5,582 $6,000 $5,000 $4,000 $3,000 $2,000 $1,000 $0 8 8 Sources: SCHEV 2017-2018 Public Institutions survey & Business Operations web-based survey
2018-2019 CONTRACT RATES FOR DINING SERVICES
20 2018 18-20 2019 9 Din inin ing Ser ervic vice Rates tes Academic College at Wise 2018-2019 Academic Year Division Average increase 3.0% 3.0% Meal plan rate range $100 - $5,480 $170 - $4,236 10 10
2017 17-2018 UVa a Di Dini ning ng Meal al Plan an Rat ates VA A Publ Public, Pe Peer & Se Selected Ot d Othe her Ins nstitut utions ns F Ful ull M Meal al Pl Plan an Rat Rate $8,000 UVa = $4,950 $7,000 - - - - Average "Peer" & Selected Others = $5,453 $6,000 .... Average VA Public Schools = $4,685 $5,000 $4,000 $3,000 $2,000 $1,000 $0 1 1 Sources: SCHEV 2017-2018 Public Institutions survey & Business Operations web-based survey
2017 17-20 2018 18 UVa-Wi Wise Dini ning ng Meal al Pl Plan an Rat ates VA A Publ Public, Pe Peer & Se Selected Ot d Othe her Ins nstitut utions ns F Ful ull M Meal al Pl Plan an Rat Rate $7,000 UVa-Wise = $4,112 $6,000 .... Average VA Public Schools = $4,685 - - - - Average "Peer" & Selected Others = $4,241 $5,000 $4,000 $3,000 $2,000 $1,000 $0 12 Sources: SCHEV 2017-2018 Public Institutions survey & Business Operations web-based survey
DISPOSITION OF REAL PROPERTY: BARNES ESTATE
Di Dispo position of Real Prope perty – Barnes rnes Estate ate • Real property located on Keith Valley Road in Charlottesville, VA – 2,600 square foot residence on .68 acres plus adjacent 1.4 acre lot – Total assessment (for tax purposes): $776,700 • Proceeds from sale of property plus additional assets to be split evenly between UVA and UNC to support students traveling and studying abroad 14
Capital PROJECT financial plans
Capi apital al Financ nancing Plan: an: Tho hornton Hal Hall Clean an Room • Revised scope: – Integrate a Nano-Bio cleanroom laboratory into the UVA Microfabrication Laboratories (UVML) cleanroom located in Thornton Hall – Creates unique, interdisciplinary facility for transformational collaborations and research in soft materials and hard nano-materials – Combined facility will put UVA on leading edge of academic cleanroom facilities across the country • Project Cost: $15.2 million – $9.1 million operating cash – $6.1 million debt to be repaid by SEAS philanthropy and/or indirect cost recoveries 16
Capi apital al Financ nancing Plan: an: Compr prehens nsive Br Breas ast Cent nter • Scope: – Stand-alone facility in 20,000 SF leased space on Pantops proximate to existing UVA Community Oncology practice – Center will provide comprehensive clinical services; education, support, and survivorship programs; and robust research and clinical trial resources – Co-locating services will enhance patient experience, increase utilization of clinical resources, and preserve existing oncology practice to maintain current infusion capacity • Project Cost: $12.0 million to be funded by operating cash 17
Endowment REPORT: MARKET V ALUE AND PERFORMANCE AS OF DECEMBER 31, 2017
Outl Outline • Current State • Governance and Staffing • Performance Review • Asset Allocation • Risk Management • Looking Ahead 19
Curr urrent State ate UVIMC MCO is is w well-posi sitioned t today • Core investing principles in place for decades and spanning multiple CIOs • Fully invested portfolio that has generated top quartile long-term returns and could not be replicated today • Experienced team with strong ties to UVA and dedication to the mission • Outstanding industry reputation and strong investor network • Solid cash buffer and sufficient liquidity in place to take advantage of future market dislocations • We will continue to use price and valuation to opportunistically rebalance when necessary 20
Gov overnan rnance e and d Staffing ng Board o of Direc rectors 11 members led by David MacFarlane as Chair, three appointed by the Board of Visitors (John Macfarlane, • Timothy O’Hara, and John Harris), and one by the President of UVA (Pat Hogan) Primary responsibilities include investment policy development, portfolio monitoring, and management of • CEO/CIO Meets 4 times a year • St Staff 34 UVIMCO team members • Interim leadership: Kristina Alimard as interim CEO, Sargent McGowan as interim CIO • Investment team comprised of 4 Managing Directors, 1 Director, 1 Senior Investment Associate, 5 • Investment Associates, and 2 Investment Analysts Experienced and stable operations team led by COO, GC/CCO, and 2 Directors • Transition plans • 21
Perform rmanc nce e Review As o of D Decem ecember er 3 31, 2 2017 Market Value Annualized FYTD $ Millions % 1 YR 3 YR 5 YR 10 YR 20 YR Dec-17 Long Term Pool 9,106 100.0 12.5 7.6 10.0 7.0 10.9 5.4 Policy Benchmark 100.0 16.9 7.5 8.5 5.3 6.5 7.9 Equity Public 2,597 28.5 28.7 11.7 14.0 8.8 11.4 11.0 Long / Short 1,753 19.3 6.9 4.3 7.6 4.9 10.2 4.9 Private 1,471 16.2 9.4 9.7 14.7 9.8 18.6 6.4 Total Equity 5,822 63.9 16.3 8.9 12.2 8.1 13.1 7.9 MSCI All Country World Equity 60.0 24.6 9.9 11.4 5.2 6.6 11.5 Real Assets Real Estate 485 5.3 14.1 15.5 14.2 (1.8) 3.0 6.0 Resources 572 6.3 16.6 2.5 6.0 12.0 14.8 (2.3) Total Real Assets 1,057 11.6 15.3 11.3 11.6 6.7 10.3 1.4 MSCI Real Estate 10.0 14.7 6.8 8.2 5.1 7.3 6.4 Fixed Income, Cash & MAC Marketable Alternatives and Credit 1,188 13.0 4.3 3.7 6.4 6.8 6.1 2.1 Fixed Income 785 8.6 0.4 0.6 0.5 2.3 5.1 0.0 Cash & Currency 255 2.8 0.8 0.4 0.2 -- -- 0.5 Total Fixed Income, Cash & MAC 2,228 24.5 2.6 2.5 3.5 4.6 5.7 1.2 Barclays Aggregate Bond 30.0 3.3 2.5 2.6 4.1 5.0 1.4 22
Asse Asset Al Allocation 100% 90% 28.5 % Current Ini niti tiati tives 80% 60% 70% Equity 19.3 % Coordinate with UVA on • 60% assessing risk tolerance 50% 16.2 % Strategic asset allocation • 40% 10% Real 5.3 % Thematic research Assets • 30% 6.3% 20% 13.0% 30% Fixed Income 10% 11.4% 0% Policy Portfolio 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Public Equity Long/Short Equity Private Equity Real Estate Resources Marketable Alternatives & Credit Fixed Income & Cash As of December 31, 2017 23
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