Board of Visitors Finance Committee February 19, 2016 BOARD OF - - PowerPoint PPT Presentation

Board of Visitors Finance Committee

February 19, 2016

BOARD OF VISITORS STRATEGIC INVESTMENT FUND

P AT H O G A N E X E C U T I V E V I C E P R E S I D E N T A N D C H I E F O P E R AT I N G O F F I C E R

Board of Visitors Strategic Investment Fund

• Establishment of a fund for strategic investments

that support the vision and aspirations of the highest levels of excellence in the University’s academic, research and healthcare missions.

• The Strategic Investment Fund would be carefully

managed and designed to grow and provide the means to fund future strategic investments.

3

FACULTY, STAFF AND STUDENT HOUSING RATES 2016-2017

C O L E T T E S H E E H Y S E N I O R V I C E P R E S I D E N T F O R O P E R AT I O N S

Rents reflect market rate 86 Units 3.75% Average Increase

UVa Faculty and Staff Property Rents

5

Student Housing Rates

2016-2017 Academic Year Academic Division College at Wise Number of Beds 6,868 760 Occupancy rate (fall 2015) 97% 75% Average increase $195 (3.4%) $90 (1.5%) Average double room charge (nine-month lease) $5,876 $6,243

6

2015-2016 UVa Student Housing Rates

VA Public, Peer & Selected Other Institutions Double Room Rate

7

$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000 $10,000 UVa = $5,681

Average "Peer" & Selected Others = $7,647 Average VA Public Schools = $5,630

Sources: SCHEV 2014-2015 Public Institutions survey & Business Operations web-based survey

2015-2016 UVa-Wise Student Housing Rates

VA Public, Peer & Selected Other Institutions Double Room Rate

8

$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 UVa-Wise = $6,144

• - - - Average "Peer" & Selected Others(UMW) = $4,950

.... Average VA Public Schools = $5,630

Sources: SCHEV 2014-2015 Public Institutions survey & Business Operations web-based survey

DINING SERVICES RATES 2016-2017

C O L E T T E S H E E H Y S E N I O R V I C E P R E S I D E N T F O R O P E R AT I O N S

2016-2017 Dining Service Rates

2016-2017 Academic Year Academic Division College at Wise Average increase/(decrease) 2.76% (3.4%) Meal Plan Rate Range $200 - $5,190 $165 - $4,112

10

2015-2016 UVa Dining Meal Plan Rates

VA Public, Peer & Selected Other Institutions Full Meal Plan Rate

11

$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 UVa = $4,720

Average "Peer" & Selected Others = $5,221 Average VA Public Schools = $4,421

Sources: SCHEV 2014-2015 Public Institutions survey & Business Operations web-based survey

2015-2016 UVa-Wise Dining Meal Plan Rates

VA Public, Peer & Selected Other Institutions Full Meal Plan Rate

12

Sources: SCHEV 2014-2015 Public Institutions survey & Business Operations web-based survey

$0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 UVa-Wise = $4,322

• - - - Average "Peer" & Selected Others = $3,460

.... Average VA Public Schools = $4,421

2016-2017 TUITION AND FEES FOR THE UNIVERSITY OF VIRGINIA AND THE COLLEGE AT WISE

M E L O D Y B I A N C H E T T O V I C E P R E S I D E N T F O R F I N A N C E

2016-2017 University of Virginia Tuition and Fee Proposal

14

Tuition Setting Context University of Virginia

• In 2016-17, the University will continue to build on the

sustainable, multi-year financial plan which features:

– Investing in Quality – Improving Affordability and Predictability – Pursuing Organizational Excellence – Leveraging Financial Resources

• Continual investment in:

– Title IX and Compliance – Student Health, Safety, and Security – IT Security Enhancement

15

Multi-Year (FY17-FY23) Financial Plan Assumptions

16

Category Assumption

Inflation

• 2.5% (modified HEPI) for the period FY 2106-2023

Tuition

• Undergrad tuition: HEPI inflation + 1%; establish optional fixed rate guarantee; reduce need-

based debt for Virginians

• Grad and SOM tuition: 1.5% - 3.5% annual increase
• Law & Darden tuition: 3% annual increase

State Appropriations

• Maintain approved previously appropriation (i.e. no increase, no cut)

Research Funds

• Federal funding for grants and contracts remains at current rate

Endowment Distribution

• 40 basis point spending increase; 7.5% rate of return

T&R Faculty Salary and Benefits

• Includes estimates to manage intergenerational turnover ($30.6 for FY17) and faculty to support

revenue growth

• Annual merit pool of 3% ; Base adjusted for anticipated Resignations/Retirements
• Fringe rate at 27% of salary, includes funding of VRS at state proposed rates

Staff/A&P Faculty Salary and Benefits

• University staff and A&P: Annual merit pool of 3% from 2015-22
• Classified staff: 0% in 2015-16; 2% thereafter
• Fringe rate at ~38% of salary, includes funding of VRS at state proposed rates

Other Than Personnel Services

• Annual increase at inflation rate

Savings from Organizational Excellence

• $9-19 million/year; targeted goal of $120 million over FY16-22

Safety Improvements

• Safety improvements of $2.6 million in FY16 + inflation thereafter

Cornerstone Plan

• Identified funding for implementation ($24.88 for FY17)

2016-2017 Tuition and Fees University of Virginia

Tuition

• In-State Undergraduates entering Fall 2016: $13,220

– Optional Guarantee: $14,378

• Continuing In-State Undergraduates: $328 or 3% increase
• All Out-of-State Undergraduates: $1,216 or 3% increase
• All Graduate Rates: 0.3% - 3.9% increase
• SOM: 0.1% - 0.2% increase
• Law and Darden: 2.1% - 4.3% increases

Mandatory Fee

• $78 increase (3.1% for in-state, 2.4% for out-of-state)

17

18

.

2015-2016 Undergraduate Tuition & Fee

First Year Undergraduate Tuition Peer Comparison

$- $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 Out of State In state

In State Average - $11,554 Out of State Average - $37,424 $14,678 / $43,974

19

2015-2016 Undergraduate Tuition & Fee

Average Undergraduate Tuition In State Comparison

$0 $5,000 $10,000 $15,000 $20,000 $25,000 Non-E&G Fees Tuition

$12,347 Average - $11,836

2016 - 2017 Proposed Price of Attendance

First Year, UVa College of Arts & Sciences

20

In-State Out-of-State

Tuition & Fees $15,874 $45,058 Orientation Fee $210 $210 Room $5,876 $5,876 Board $4,850 $4,850 Books, Travel, Others $3,914 $5,200 Total Price of Attendance $30,724 $61,194 Expected % Students on Aid 35% 30% For Students on Aid Average Grants $10,174 $16,914 Average Net Price before loans $20,550 $44,280

2016-2017 Tuition Resolution University of Virginia

• If the University’s 2016-2017 unrestricted

state appropriation increases beyond what is assumed in the multi-year financial plan, the proposed 2016-2017 in-state undergraduate tuition rates would be revised downward accordingly.

21

2016-2017 College at Wise Undergraduate Tuition Proposal

22

Tuition Setting Context College at Wise

• In 2016-17, continued development of initiatives outlined in

Six Year Plan leading to long-term growth and sustainability:

• Implementing the Wise Writes Program, the cornerstone of SACSCOC

Quality Enhancement Plan

• Enhancing the quality and stability of academic faculty
• Addressing affordability and debt burden of our students
• Cultivating the marketability of the College
• Continual investment in:
• Title IX and Compliance
• Regional Economic Development
• STEM-H Initiatives through accreditation

23

2016-2017 Tuition and Fees College at Wise

Tuition

• In-State Undergraduates: 3% increase to $5,210
• Out-of-State Undergraduates: 3% increase to $21,288

Mandatory Fee

• $165 increase (4.0% for in-state, 3.4% for out-of-state)

24

2016 - 2017 Proposed Price of Attendance

First Year, College at Wise

25

In-State Out-of-State

Tuition & Fees $9,539 $26,249 Room $6,243 $6,243 Board $4,112 $4,112 Total $19,894 $36,604

ENDOWMENT REPORT: MARKET VALUE AND PERFORMANCE AS OF DECEMBER 31, 2015

L A R R Y K O C H A R D C H I E F E X E C U T I V E O F F I C E R , U V I M C O

Outline

• Performance Review
• Asset Allocation
• Current Environment
• Going Forward

27

Performance Review

As o

• f D

Decem ecember er 3 31, 2 2015 FYTD $ Millions % 1 YR 3 YR 5 YR 10 YR 20 YR Dec-15 Long Term Pool 7,448 100.0 6.0 11.0 10.9 9.1 11.7 (0.7) Policy Benchmark 100.0 (0.4) 6.5 6.2 5.5 6.6 (1.8) Equity Public 1,750 23.5 1.1 11.9 12.4 10.3 11.5 (5.4) Long / Short 1,676 22.5 6.3 10.5 9.8 8.5 11.1 2.2 Private 1,362 18.3 23.6 22.9 20.4 14.2 20.6 1.3 Total Equity 4,788 64.3 9.0 14.4 13.7 11.0 14.1 (0.8) MSCI All Country World Equity 60.0 (1.8) 8.3 6.7 5.3 6.4 (4.7) Real Assets Real Estate 490 6.6 24.4 16.3 13.1 (2.5) 4.0 4.7 Resources 285 3.8 (25.2) (2.4) 5.4 12.1

• (8.0)

Total Real Assets 775 10.4 2.7 8.8 10.9 6.5 11.0 0.1 MSCI Real Estate 10.0 2.5 7.6 9.4 5.6 8.3 6.1 Fixed Income, Cash & MAC Marketable Alternatives and Credit 741 9.9 (2.2) 6.2 6.3 6.2 6.8 (1.9) Government Bonds 877 11.8 0.4 0.3 0.3 3.8 5.9 (0.2) Cash & Currency 267 3.6 0.0 0.0 0.0

• (0.0)

Total Fixed Income, Cash & MAC 1,885 25.3 (0.7) 3.1 3.2 5.0 6.3 (0.9) Barclays Aggregate Bond 30.0 0.8 2.1 3.6 4.4 5.4 1.0 Market Value Annualized

28

Asset Allocation

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

As of December 31, 2015

Public Equity Long/Short Equity Private Equity Real Estate Resources Marketable Alternatives & Credit Bonds & Cash

23.5% 22.5% 18.3% 6.6% 3.8% 9.9% 15.4% 30% Fixed Income 10% Real Assets 60% Equity Policy Portfolio

29

Current Environment

• Macroeconomic challenges
• Deflation, global growth
• Commodities
• Emerging markets
• Interest rates
• Elections
• Valuations
• Competing pools of capital
• Opportunities?

30

Going Forward

• Constantly reassess the current portfolio
• Recent analyses include marketable alternatives & credit
• Manage risk and rebalance
• Use market weakness as an opportunity to add to high conviction

managers

• Continue to co-invest with our managers
• Be opportunistic
• Most importantly, understand our edge

31

DECEMBER 31, 2015 QUARTERLY FINANCIAL REPORT

M E L O D Y B I A N C H E T T O V I C E P R E S I D E N T F O R F I N A N C E

December 31, 2015 Financial Report Key Take-Aways

• Change in Net Position
• Planned vs. Actual Performance
• Key Drivers

– Endowment – Health System – Research – Treasury – Investments in Strategic Priorities

33

MANAGERIAL REPORTING PROJECT – UPDATE

M E L O D Y B I A N C H E T T O V I C E P R E S I D E N T F O R F I N A N C E

Purpose: Transform Data to Insight

Operational data is not integrated or accessible from a single source Data is managed and manipulated across many platforms (shadow systems), making it difficult to aggregate, verify, and consistently report on data Data sources do not have common definitions Establishing data definitions and data governance, which improve data quality Designing and populating data warehouse to link data for 1st time Developing a modern- day business intelligence tool (Qlik) Will deploy expenditure data by June 2015 Single source for finance, employee, student, space, and

• ther data

Accessible and robust toolset with capability to summarize and drill- down, perform Google- like search, and develop high quality decision-support Transformation to an analytical, information-driven culture

Where We Were Where We Are Where We Will Be

35

36

Timeline

Jan-16 Apr-16 initial pilot launch Jul-16 1st data release Oct-16 2nd data release Jan-17 3rd and 4th data releases Apr-17 5th data release Jul 17 6th data release, Discoverer phase-out Jul 18 Jul 19

Expenditure Detail Income Statement, Balance Sheet Employee Labor and Benefits Charging Student Financial Detail - billing and collections, financial aid Student Academic Detail - enrollment and degree information Other Employee Employment Detail Advanced Analytics, Other Data Sources (space, fixed assets, research, fundraising, admissions, etc.)

37

Prototype of Expenditure Dashboard