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Meetin eting g of th the Bo Board d of Visit itor

• rs

s Fina nance nce Commi mmitt ttee ee Ju June 12, 2015

Agenda

I. CONSENT AGENDA

• A. 2015-2016 School of Continuing and Professional Studies Out-of-

State Tuition B. Compliance with Veterans Access, Choice and Accountability Act of 2014 C. Property Disposition – Luttrell Estate II. ACTION ITEMS

• A. 2015-2016 Operating Budget

B. Multi-Year Capital Program Update, 2016-2022

• III. REPORTS
• A. Six-Year Plan

2

Slides 4 6 8 10-74 75-81 82-92

PAT H O G AN 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

2015-2016 SCHOOL OF CONTINUING AND

PROFESSIONAL STUDIES OUT-OF-STATE TUITION

2015-2016 School of Continuing and Professional Studies Tuition

Program 2015-16 Proposed Tuition & Fees Rates Virginians Non- Virginians 2015-2016 $ Change from FY15 % Change from FY15 2015-2016 $ Change from FY15 % Change from FY15 Undergraduate (per credit hour) $362 $13 3.7% $864 $29 3.5% Community Scholars (per credit hour) $361 $12 3.4% $1,292 $45 3.6% National Criminal Justice Command College Program (total program cost) $5,760 $242 4.4% $13,306 $661 5.2%

4

• The 2015-2016 fees rates for non-Virginians in the School of Continuing

and Professional Studies were incorrectly recorded in the resolution approved by the Board in March as the same rate as Virginian students.

• The corrected rates are as follows:

PAT H O G AN 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

COMPLIANCE WITH VETERANS ACCESS, CHOICE AND ACCOUNTABILITY ACT OF 2014

Compliance with Veterans Access, Choice and Accountability Act of 2014

6

• The Veterans Access, Choice, and Accountability Act of 2014

provides greater access to higher education by granting in- state tuition rates to certain veterans and their eligible dependent family members.

• Required by the U.S. Department of Veterans Affairs to verify
• ur intent to comply with the law in order to continue

participation in veterans’ benefits programs (e.g., Post-9/11 GI Bill, the Montgomery GI Bill).

PAT H O G AN 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

PROPERTY DISPOSITION – LUTTRELL ESTATE

Property Disposition – Luttrell Estate

Five parcels of land totaling approximately 148 acres in Tishomingo County, Mississippi

• Mr. Luttrell’s estate has obtained five contracts to sell the parcels for a

cumulative gross sales price of $290,500 The sale of these properties allows the University to comply with the donor’s wishes to establish an endowment to fund an annual scholarship to be awarded to a ROTC cadet

8

2015-2016 OPERATING BUDGET

10

UNIVERSITY OF VIRGINIA 2015-2016 Operating Budget Overview

University of Virginia 2015-2016 Operating Budget

(expenditures in millions)

11

2014-15 Annual Budget 2014-15 Projection 2015-16 Annual Budget Increase $ Increase % Academic Division $ 1,423.5 $ 1,409.5 $ 1,519.8 $ 110.3 7.8% Medical Center* 1,280.7 1,381.6 1,510.5 128.9 9.3% UVa-Wise 41.4 42.6 41.3 (1.3) (3.0%) Total $ 2,745.6 $ 2,833.7 $ 3,071.6 $ 237.9 8.4%

*Includes Culpeper Regional Hospital.

2015-2016 Operating Budgets

Academic Division College at Wise Medical Center

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ACADEMIC DIVISION 2015-2016 Operating Budget

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FY 2015-16 Operating Budget

14

(in 000s) 2014-15 Annual Budget 2015-16 Annual Budget Increase $ Increase % Sources Tuition & Fees $ 493,815 $ 505,129 $ 11,314 2.3% State Appropriations 144,822 144,737 (85) (0.1%) Sponsored Programs 224,877 221,571 (3,306) (1.5%) Facilities & Administrative Cost Recoveries 59,600 59,585 (15) 0.0% Endowment Distribution 157,126 173,122 15,996 10.2% Expendable Gifts 127,706 129,480 1,774 1.4% Sales & Services and Other 222,722 244,751 22,029 9.9% Total $ 1,430,668 $ 1,478,375 47,707 3.3% Uses Instruction $ 380,067 $ 415,635 $ 35,568 9.4% Research & Public Serv. 291,292 295,656 4,364 1.5% Academic Support 146,868 149,100 2,232 1.5% Student Services 45,763 46,208 445 1.0% General Administration 95,320 95,433 113 0.1% O&M of Physical Plant 108,734 110,653 1,919 1.8% Financial Aid 106,285 106,335 50 0.0% Auxiliaries 167,289 172,383 5,094 3.0% Internal Debt Service/Transfer 81,841 83,475 1,634 2.0% Total $ 1,423,459 $ 1,474,878 $ 51,419 3.6% Net Sources in Excess of Uses (Before Strategic Priorities) $ 7,209 $ 3,497 ($ 3,712) (51.5%) Strategic Priorities $ 18,370 $ 44,900

FY 2015-16 Operating Budget

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(in 000s) 2014-15 Forecast 2015-16 Annual Budget Increase $ Increase % Sources Tuition & Fees $ 494,706 $ 505,129 $ 10,423 2.1% State Appropriations 136,275 144,737 8,462 6.2% Sponsored Programs 226,308 221,571 (4,737) (2.1%) Facilities & Administrative Cost Recoveries 60,871 59,585 (1,286) (2.1%) Endowment Distribution 164,007 173,122 9,115 5.6% Expendable Gifts 129,194 129,480 286 0.2% Sales & Services and Other 228,494 244,751 16,257 7.1% Total $ 1,439,855 $ 1,478,375 $ 38,520 2.7% Uses Instruction $ 366,394 $ 415,635 $ 49,241 13.4% Research & Public Serv. 303,212 295,656 (7,556) (2.5%) Academic Support 150,906 149,100 (1,806) (1.2%) Student Services 42,041 46,208 4,167 9.9% General Administration 88,203 95,433 7,230 8.2% O&M of Physical Plant 106,324 110,653 4,329 4.1% Financial Aid 103,568 106,335 2,767 2.7% Auxiliaries 167,529 172,383 4,854 2.9% Internal Debt Service/Transfer 81,319 83,475 2,156 2.7% Total $ 1,409,496 $ 1,474,878 $ 65,382 4.6% Net Sources in Excess of Uses (Before Strategic Priorities) $ 30,359 $ 3,497 $ (26,862) Strategic Priorities $ 18,370 $ 44,900

Key Budget Elements

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Budget Element Previously Approved by/ Reviewed with BOV General Assembly Action Total state appropriations of $144.7 million   Accelerated VRS employer rate from 12.33% to 14.22%   Classified staff salary increases of 2%   University Staff salary increases of 2% (+1% market adjustment)   Faculty salary increases of 2% (+2.5% from internal reallocations)   Tuition, fees, housing, and dining rates  Reset endowment distribution rate to 4.62% (+40 bps)  Enrollment levels for 2015-2022  Incremental funding of $8.2 million for enhanced safety and support services, library

• perations, student life, compliance, and other contractual obligations

 Reduced loan caps for in-state students and financial aid contingency  Organizational Excellence Target Savings of $12.7 million  Sponsored research growth of 1% (based on known awards)  Sales and services increase of 2.5%  Expendable gift growth of 2.5%; new gifts to endowment of $25 million  OTPS increase of 2.0% 

Multi-Year Financial Plan Assumptions: Sources

(As of March 23, unchanged and consistent with operating budget)

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Category Assumption

Inflation

• 2.5% (modified HEPI)

Enrollment

• BOV approved, no growth after FY17-18

Undergraduate Tuition

• After FY15-16, increase by inflation + 1% (equivalent to 3.5%); assumes no extraordinary General

Assembly actions which require institutional funding to implement. The one exception is in FY18-19, assumes 4.65% increase to fund planned state-mandated VRS rate increase. Graduate, Professional School Tuition, and Special programs

• Grad and SOM tuition: FY15-16, 0.2-3.8% annual increase; average 3.5% growth thereafter
• Law & Darden tuition: FY15-16, 3%-6% annual increase; 3% annual growth thereafter. (Self-sufficiency

status is maintained.) State Appropriations

• FY15-16 reflects state appropriation approved by General Assembly
• Increases will fund state share of authorized salary and benefit changes

Research Funds

• Federal funding for grants and contracts remains at current rate
• Federal F&A rate remains at 58%

Endowment Distribution

• 40 basis point spending increase from 4.22% to 4.62% balances market risk and stays within BOV-

approved band

• Assumes 7.5% rate of return

Gifts

• Expected 2.5% annual growth resulting from alignment with the Cornerstone Plan
• Assumes annual new gifts to endowment of $25 million

Other

• Auxiliary Enterprises Revenue: annual growth rate of 2.5%
• $10 million per year in SOM/Medical Center gainsharing

FOR REFERENCE ONLY

Multi-Year Financial Plan Assumptions: Uses

(As of March 23, unchanged and consistent with operating budget)

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Category Assumption T&R Faculty Salary and Benefits

• Annual merit pool of 3%
• Base adjusted for anticipated Resignations/Tenure Denial/Retirements
• Increases in research-funded salaries to come from research funds
• Fringe rate at 27.5% of salary

Staff/A&P Faculty Salary and Benefits

• No increase in headcount
• University staff and A&P: annual merit pool of 3% from 2015-22
• Classified staff: 2% increase
• Increases in research funded salaries to come from research funds
• Fringe rate at 38.9% of salary

Wage and Other Employees

• No increase in headcount
• Annual fringe rate between 6%-7%

Other Than Personnel Services

• Annual increase at inflation rate of 2.0%

Transfers to Debt Service, Capital, and Reserves

• No increase

Savings from Organizational Excellence

• $16-23 million/year; targeted goal of $150 million over FY16-22, including reallocations

necessary to absorb annual increases in OTPS Risks Considered

• Unexpected revenue cycles
• Ongoing declines in state revenues and mandated cost contributions
• Changes in federal research support
• Market corrections
• General economic downturn, rising interest, and hyper inflation
• Elimination of Perkins Loans ($3.5 million annual decrease)

Safety, Student Counseling & Compliance Improvements

• Increase of $4.4 million in FY16 and inflation rate of 2.5% thereafter, as discussed with

Finance Committee

FOR REFERENCE ONLY

2015-2016 Tuition + E&G Fees for In-State Students

Continuing Entering $ % increase $ % increase Norfolk State $5,162 13.80% $5,162 13.80% Christopher Newport $7,642 9.77% $7,642 9.77% Virginia Military Institute $8,136 8.51% $8,136 8.51% Mary Washington $7,716 7.98% $7,716 7.98% Old Dominion $6,193 6.54% $6,193 6.54% Radford $6,842 6.24% $6,842 6.24% James Madison $5,724 5.88% $5,724 5.88% George Mason $7,976 5.47% $7,976 5.47% Virginia Tech $10,628 4.23% $10,628 4.23% UVa – Wise $5,210 3.95% $5,210 3.95% University of Virginia $11,347 3.80% $12,347 12.94% Virginia Commonwealth $10,719 3.51% $10,719 3.51% Longwood $7,170 3.46% $7,170 3.46% Virginia State $5,230 2.99% $5,230 2.99% William & Mary* $10,842 0.67% $14,114 12.34%

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* Continuing rate is the average rate for all three classes ($9,400 for 4th years, $10,564 for 3rd years, and $12,564 for 2nd years),

2015-2016 Tuition + ALL Fees for In-State Students

Continuing Entering Virginia Military Institute $16,536 $16,536 William & Mary* $16,100 $19,372 University of Virginia $13,468 $14,468 Christopher Newport $12,526 $12,526 Virginia Commonwealth $12,772 $12,772 Virginia Tech $12,485 $12,485 Longwood $11,910 $11,910 Mary Washington $11,070 $11,070 George Mason $10,952 $10,952 James Madison $10,066 $10,066 Radford $9,809 $9,809 Old Dominion $9,768 $9,768 UVa – Wise $9,220 $9,220 Norfolk State $8,366 $8,366 Virginia State $8,226 $8,226

20

* Continuing rate is the average rate for all three classes ($14,658 for 4th years, $15,822 for 3rd years, and $17,822 for 2nd years).

Strategic Priorities in 2015-16

Continue implementation of Cornerstone Plan Pursue top 20 ranking of faculty compensation Hire faculty Pursue Organizational Excellence Continue development of Managerial Reporting System Transform Human Resources service delivery

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Investment in 000s

$17,578 In Cornerstone Plan $10,500 In Cornerstone Plan $14,322 $2,500 $44,900 TOTAL

These strategic priorities will be funded through earnings on operating cash and investments.

Continue Implementation of the Cornerstone Plan

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Cornerstone Plan 2014-15 Progress

Strategy Progress Student Leadership Development

– Meriwether Lewis Institute for Citizen Leadership: enrolled first cohort of 25 students.

Total Advising

– Expanded College Advising Seminars from 45 to 61 sections. – New classes to link learning with career advising: “Collect, Select and Reflect” to build e-portfolios “Liberal Arts and the World of Work” – 4th Year Career Summits help new graduates hone skills for career success.

Pan-University Research

– Data Science Institute: ‘14-’15: 44 students earned M. S. in Data Science ‘15-’16: 52 new students from pool of about 400 applicants.

23

Cornerstone Plan 2014-15 Progress

Strategy Progress Research Infrastructure & Services – Improved delivery of electrical power to support critical research – New super computing cluster ”Rivanna” for big data research – Library has new data services programming support and services High Impact Student Experiences

– New Internship programs – Enhanced support for student entrepreneurship, including social entrepreneurship – New undergrad. research program linked to work study—USOAR ‘14-’15: 36 students; ‘15-’16 50 students

Global Experiences

– Awarded 2015 Paul Simon Award for Comprehensive Internationalization – Global Studies major debuted: ‘14-’15: 150 students; ‘15-’16 expect 225-250 students – Global Internships program: 60 students in global internships this summer in at least 13 foreign countries

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Cornerstone Plan 2014-15 Progress

Strategy Progress Evidence-Based Teaching & Learning

– “Innovation in Pedagogy Summit” for faculty from UVA & institutions across Virginia. – Expanded Course Design Institute. – Sponsored design thinking workshop for faculty and students

Faculty Leadership Development

– Created “Academic Search Portal” for faculty search committees: best practice resources to enhance hiring and mitigate bias used by UVa faculty, across US and internationally – Created specialized “Faculty Search Seminars” for department chairs

Continuous Active Recruiting to Secure Leading Faculty

– “Tournament of Ideas” to address issues on: dual faculty hiring hiring and retaining women in STEM/SBS – Safer Grounds Initiative: enhanced lighting and access for women faculty and students who access labs after dark

25

Cornerstone Plan 2014-15 Progress

Strategy Progress Affordable Excellence – BOV approved the Affordable Excellence model, a long-range financial plan that addresses affordability and predictability. Staff Leadership Development – Established the Center for Leadership Development introduced new programs increased participation from all levels of leadership Organizational Excellence – Completed projects that yielded efficiencies, enhancements and/or cost savings: travel and expense redesign sponsored research administration strategic sourcing (phase 1) internal communications – Achieved $19.5 of cost savings, $8 million more than budgeted. (Details on slides 36-37.)

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Strategy Planned Activities Required Funding in 000s Student Leadership Development – Support for student diversity-related activities – Meriwether Lewis Institute for Citizen Leadership $25 Total Advising – Expand COLA classes (collaborate with library, study abroad, and contemplative sciences) – Continue growing University Career Services – Support for national scholarships/fellowships $1,655 Lifelong Alumni Engagement – Support creation of UVa Lifelong University $28 Strategic Research – Support new research institute(s) – Research core support $3,606 Research Infrastructure – Technology commercialization – Seed fund to support new start-ups – Expand digital materials collection – Academic Preservation Trust $4,345

Cornerstone Plan 2015-16 Priorities

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Strategy Planned Activities Required Funding in 000s High Impact Educational Experiences – Expand undergraduate student research

• pportunities

– Continue to expand internship opportunities $100 Global Experiences – Center for Global Inquiry & Innovation – Global Studies program – Global internships – China office $1,750 Evidence-based Teaching & Learning – Curriculum design – Pilot new technology to improve student engagement – Innovation in pedagogy – Studio Rethink – Big data and cyber security academic programs $1,101

Cornerstone Plan 2015-16 Priorities

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Cornerstone Plan 2015-16 Priorities

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Strategy Planned Activities Required Funding in 000s Faculty Leadership Development – Expand leadership programs for faculty $100 Continuous Active Recruiting to Secure Leading Faculty – Establish postdoc “Teaching Residents” – BOV approved incremental faculty salary increase to achieve “Top 20” goal $2,501 Overall Cornerstone Plan Support – Strategic marketing and communications $952 Philanthropy in Service to Strategic Priorities – Jefferson Grounds Initiative – Hire additional fundraising staff to focus on need-based aid $554 Organizational Excellence – Support ongoing operations $861 TOTAL $17,578

Pursue Top 20 Ranking of Faculty Compensation

30

Instructional Faculty Compensation Compared to AAU Peers

31 29 32 27 28 5 10 15 20 25 30 35 2010-11 2011-12 2012-13 2013-14 2014-15 Goal of Top 20 AAU Ranking of Faculty Compensation

31

NOTE: 4.75% merit pool was available in 2013-14 and 2014-15. Our relative position in 2014-15 was impacted by the compensation strategies employed by our AAU peers.

Hire Faculty

32

Generational Turnover of Faculty FY 2015-16 Budget

New Hires Retirements/Resignations Full Professor 5 22 Associate Professor 7 10 Assistant Professor 38 18 TOTAL 50 50

33

New Hires College of Arts & Sciences 28 SEAS 14 All Other Undergraduate Schools 8 TOTAL 50 New Hires STEM 18 Other 32 TOTAL 50

The FY2015-16 budget reflects an estimated 50 retirements, resignations or tenure denials and 50 new hires across the undergraduate schools.

Generational Turnover of Faculty FY 2015-16 Budget

(in 000s) FY15-16 Projected (as of Nov. 2014) FY15-16 Budgeted Projected Total New Faculty: 82 FTE 50 FTE Salaries - Avg. Full & Assoc.: $127,697; Avg. Asst.: $93,398 $8,362 $5,210 Fringe 2,316 1,443 Projected Total New Faculty Compensation $10,678 $6,653 Anticipated Resignations/Tenure Denial/ Retirements: 61 FTE 50 FTE Salaries - All Faculty (Projected $91,532; Revised $109,298) $5,583 $5,356 Fringe $1,547 $1,483 Anticipated Total Savings $7,130 $6,839 Projected Net New Faculty Compensation $3,548 ($186) Start Up Packages: Number of STEM Packages 27 17 Total amount $47,800 $21,100 Impact to FY15-16 Budget (50% of start up packages) $10,500

34

Pursue Organizational Excellence

35

Organizational Excellence 2014-15 Progress Highlights

36

Research Administration: web-based portal to manage submissions and awards; other process automations IT: replacing land lines with Voice over Internet Protocol Procurement: Implement strategic sourcing of office supplies; developed multi-year strategic sourcing roadmap Energy Conservation: Reduce energy consumption, retro-commissioning of existing infrastructure Health Plan: Revisions to spousal coverage, dependent audit, and plan design changes School and Unit Level: various process and functional improvements

Achieved savings of $19.5 million ($11.5 million budgeted in 2014-15).

Organizational Excellence Major Areas of Focus, 2015-16

Human Resources: Strategic workforce development and span of control and begin implementation of new HR service delivery model Procurement: Implement additional strategic sourcing contracts (inbound freight, housekeeping supplies, office furniture, computer peripherals); Implement fully integrated, automated travel and expense management solution Research Administration: Additional process and technological improvements, including electronic proposal and budget tool Treasury: Savings from debt restructuring; Develop gift processing as a Center of Excellence IT: Server and email consolidation Support school and unit-level efficiency improvements Staffing: Early Retirement Incentive Program

37

Targeted Academic Division savings of $12.7 million.

Continue Development of Managerial Reporting System

38

Purpose: Develop an Electronic Data Warehouse to Transform Data to Insight

39

Develop and implement a “tuned for reporting” data environment Sunset the current

• perational data store

Expand data environment (space, research, gifts,

• ther)

Focus efforts on definition and data quality Elevate transparency of data element definitions Establish and

• perationalize a

governance framework Implement a robust reporting toolset Transition operational reporting from Oracle Discoverer Expand capabilities in support of a more analytical, information driven culture

Data Information Insight

Investing: With a Strategic View in People, Tools, and an Information-Intelligent Environment

40

FY16 (in millions) Temporary project staffing $ 4.34 Business intelligence software licenses 4.71 Implementation support 3.77 Data environment expansion 1.50 Total Investment $ 14.32

Remaining costs estimated to be $4 million/year for four additional years.

What Do We Get in Return?

One source of consistent, reliable, and accessible data – financial, student, people, research, space Enhanced ability to make effective, data-driven decisions Revenue and cost-knowledgeable environment, improved understanding of financial implications Robust standard reporting, ad hoc analysis capability, and targeted executive dashboards Reduce manual transactional efforts; identify and reduce redundant systems

41

Transform Human Resources Service Delivery

42

Human Resources Strategic Design Initiative

To create a strategic vision and high-performing, efficient service model for human resources to advance the University’s goals and aspirations (includes the Academic Division, Health System and University Physicians Group).

Phase 1/FY15: Design a Future State HR Model Phase 2/FY16: Begin Year-One Implementation

43

FY16 Activities and Estimated Budget

• 1. Establish project infrastructure, assemble cost baseline and build

detailed business case

• 2. Complete detailed design of the future state HR service delivery

model

• 3. Define technology requirements, evaluate solutions and select vendor

partner(s) Total Estimated FY16 Investment: $2.5 million

44

Anticipated Primary Benefits of HR Transformation

Operational

• Improve accuracy, timeliness, quality of HR transactions
• Reduce duplication and increase automation
• Optimize staffing levels and competencies
• Drive 15-20% reduction in HR related costs

HR Service Experience

• Deliver seamless, consistent, high-quality service
• Reduce time faculty, staff, and managers spend on HR-related tasks
• Increase support for schools/units from reactional (managing issues)

to proactive (anticipating and addressing emerging needs, increased analytical capacity)

45

Pratt Fund and Annual Renovation and Infrastructure Project Plan

46

2015-2016 Pratt Fund Allocation

• In 1976 the University received a bequest from John Lee Pratt that has a market

value today of $142.3 million. The funds were designated for the School of Medicine and for four departments in the College of Arts and Sciences – Biology, Chemistry, Physics and Math.

• Each year the budget includes the allocation from the Pratt Fund for the purposes
• f faculty salaries, scholarships, and equipment in the Departments of Biology,

Chemistry, Physics, and Math in the College and Graduate School of Arts and Sciences and for research and scholarships in the School of Medicine.

• FY16 budget includes $6.5 million for research and $1.3 million for fellowships in

the SOM; and $0.7 million for fellowships, $1.1 million for faculty salaries, and $1.8 million for equipment in A&S.

47

Annual Renovation and Infrastructure Projects Plan (ARIP)

• Annually, Board of Visitors considers a master plan of renovation and

infrastructure projects: – Between $2 million and $5 million – Funded with 100% cash (no debt)

• Allows a shorter time-frame to expedite these types of projects
• 2015-2016 Academic Division ARIP = $28.15 million
• 2015-2016 Medical Center ARIP = $15.1 million

48

2015-16 Annual Renovation and Infrastructure Projects Plan

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ACADEMIC DIVISION 2015-2016 Operating Budget Supporting Data

50

$- $100 $200 $300 $400 2010 2011 2012 2013 2014 2015 projected Millions Awards Expenditures (direct and indirect)

Sponsored Research Activity

51

Ten-Year Trend of Academic Division Sources and Uses FY 2005-06 vs. FY 2015-16

52

(in 000s) 2005-06 Annual Budget % of Total 2015-16 Annual Budget % of Total Sources Tuition & Fees $ 276,654 26.6% $ 505,129 34.2% State Appropriations 139,559 13.4% 144,737 9.8% Sponsored Programs 299,666 28.8% 281,156 19.0% Endowment Distribution 66,684 6.4% 173,122 11.7% Expendable Gifts 65,548 6.3% 129,480 8.8% Sales & Services and Other 193,064 18.5% 244,751 16.5% Total $ 1,041,175 100.0% $ 1,478,375 100.0% Uses Instruction $ 245,460 23.6% $ 415,635 28.2% Research & Public Serv. 283,432 27.2% 295,656 20.0% Academic Support 103,388 9.9% 149,100 10.1% Student Services 21,825 2.1% 46,208 3.1% General Administration 71,740 6.9% 95,433 6.5% O&M of Physical Plant 52,685 5.1% 110,653 7.5% Financial Aid 101,019 9.7% 106,335 7.2% Auxiliaries 161,223 15.5% 172,383 11.7% Internal Debt Service/Transfer

• 83,475

5.7% Total $ 1,040,772 100.0% $ 1,474,878 100.0% Net Sources in Excess of Uses $ 403 $ 3,497

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2010-11 2011-12 2012-13 2013-14 2014-15 Staff 6,124.4 6,101.1 6,057.2 6,030.4 6,046.4 Faculty 2,327.8 2,330.7 2,329.7 2,369.1 2,481.1 Full Professor 880.9 888.6 865.8 865.9 871.4 Associate Professor 669.3 682.7 684.9 694.9 718.5 Assistant Professor 592.1 566.0 564.5 580.1 617.1 Non-Tenure Track Faculty 185.5 193.4 214.5 228.2 274.1 TOTAL 8,452.2 8,431.8 8,386.9 8,399.5 8,527.5 On-Grounds Enrollment 21,049 21,106 21,095 21,238 21,800

Salaried Faculty & Staff Academic Division FTEs

Fringe Benefit Costs

9.8% 8.7% 11.4% 13.9% 16.1% 14.9% 15.7% 15.4% 6.6% 6.2% 6.2% 6.2% 1.0% 2.8% 3.2% 3.4% 0% 10% 20% 30% 40% 50% FY13 FY14 FY15 FY16 Other Benefits Social Security Health Insurance Retirement

33.5% 32.6% 36.5% 38.9%

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10.4% 8.8% 10.0% 10.4% 8.5% 9.5% 9.6% 9.6% 6.4% 6.6% 6.7% 6.7% 1.0% 1.0% 1.4% 1.1% 0% 10% 20% 30% 40% 50% FY13 FY14 FY15 FY16

27.8% 27.7% 25.9% 26.3%

Full Time Staff Fringe Rate Full Time Faculty Fringe Rate

$129,484 $22,406 $11,167

$- $20,000 $40,000 $60,000 $80,000 $100,000 $120,000 $140,000 Source: IPEDS

SCHEV Peers Academic Spending per FTE Student, FY13

55

(Institutions shaded in light blue have a larger enrollment than UVa.)

$11,799 $3,121 $1,458

$- $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 Source: IPEDS

SCHEV Peers Administrative Spending per FTE Student, FY13

56

(Institutions shaded in light blue have a larger enrollment than UVa.)

AccessUVa

57

(in 000’s) 2015-16 AccessUVa Student Need Total $ 115,000 UVa Funding by Source: Tuition Revenue 55,500 Other Grants 33,000 Work Study 7,200 Loans 19,300 In-State Out-of-State Proportion of Student Body Receiving Financial Aid 34% 32% Average Grant Package for Students Receiving Financial Aid $11,551 $16,802 Average Net Price (including all costs of attendance) $16,412 $42,685

On-Grounds Enrollment Levels Fall Headcount, 2009-2014 (2015-on, projected)

14,297 14,445 14,591 14,641 14,898 15,405 15,400 15,600 15,688 15,688 15,688 15,688 15,688 15,688 6,598 6,604 6,515 6,454 6,340 6,395 6,679 6,768 6,848 6,901 6,958 6,971 6,988 7,006 5,000 10,000 15,000 20,000 25,000 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Undergraduate Graduate

21,049 20,895 21,800 21,238 21,095 21,106 22,079 22,659 22,368 22,536 22,589 22,646 22,676 22,694

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COLLEGE AT WISE

COLLEGE AT WISE 2015-2016 Operating Budget

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FY2014-15 Annual Budget FY2014-15 Projection FY2015-16 Annual Budget Increase $ Increase % Tuition & Fees $ 10,799 $ 10,633 $ 10,918 $ 285 2.7% State Appropriations 15,913 16,077 16,496 419 2.6% Sponsored Programs 848 2,173 1,544 (629) (28.9%) Endowment Distribution 3,372 2,410 2,647 237 9.8% Expendable Gifts 653 952 555 (397) (41.7%) Sales & Services and Other 9,814 10,353 9,147 (1,206) (11.6%) Total $ 41,399 42,598 $ 41,307 $ (1,291) (3.0%) Instruction $ 11,6240 $ 11,569 $ 12,107 $ 538 4.7% Research & Public Serv. 1,055 2,392 1,807 (585) (24.5%) Academic Support 4,149 4,200 4,100 (100) (2.4%) Student Services 1,662 1,640 1,590 (50) (3.0%) General Administration 3,847 4,480 4,361 (119) (2.7%) O&M of Physical Plant 1,640 1,659 1,650 (9) (0.5%) Financial Aid 5,328 4,583 4,411 (172) (3.8%) Auxiliaries 12,095 12,075 11,281 (794) (6.6%) Total $ 41,399 42,598 $ 41,307 $ (1,291) (3.0%) Net Sources in Excess of Uses

COLLEGE AT WISE Strategic Priorities

• Enrollment
• Retention and Graduation
• Federal Mandates
• Outreach
• High Need Degrees: STEM-H
• Summer Programs
• Undergraduate Research

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COLLEGE AT WISE 2015-2016 Operating Budget Supporting Data

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COLLEGE AT WISE Profile

• 1,569 Fall 2014 FTE Students
• 142 Faculty
• 200 Support Staff

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COLLEGE AT WISE Student Enrollment Levels

1651 1707 1636 1569 1478 2067 2420 2291 2182 2055

35 17 17

500 1000 1500 2000 2500 Fall 2011 Fall 2012 Fall 2013 Fall 2014 Fall 2015 (proj.)

Full-time & Total Enrollment Provisionally Admitted Students

FTE Headcount Provisional

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COLLEGE AT WISE Full-time Position Levels

141 139 136 136 142 92 96 96 98 104 165 176 188 194 200 50 100 150 200 250 2011-2012 2012-2013 2013-2014 2014-2015 2015-2016

Faculty and Staff

Total Faculty - Including T&R T&R Only Faculty Total Staff

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MEDICAL CENTER

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UVA MEDICAL CENTER FY16 Budget Themes

I. Growth in volume

Admissions 1.6% Adjusted discharges 4.5%

II. Continued investment in Strategic Plan

Centers of Excellence $10 million

III. Investment in Infrastructure

EPIC $4 million Population Health $3 million ICD – 10 $3 million

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UVA MEDICAL CENTER Financial Objectives

• Continue to improve quality to become the safest health system to

provide and receive care – zero harm to providers and patients

• Continue support for the education mission of the School of Medicine

and the School of Nursing

• Fund Strategic Initiative Pool to grow the tri-mission of clinical care,

education, and research

• Maintain financial stability with a view toward the financing of the

Emergency Department expansion

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UVA MEDICAL CENTER FY16 Challenges

• Provide care to patients without insurance or an alternative payment source
• Impact of Federal Healthcare Reform and Medicare payment reductions
• Changes in market dynamics
• Managing length of stay and costs associated with treating sicker (higher acuity)

patients (pharmaceuticals, medical supplies, nurse ratios)

• Implementation of EPIC Phase II and ICD-10 conversion

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UVA MEDICAL CENTER FY16 Opportunities

• Maturation of Be Safe deeper into the Health System
• Benefits from partnership strategies – expanded catchment area/volume growth
• pportunities, enhanced regional reputation, new revenue opportunities
• Shift towards service line management – resource economies of scale, more

aligned continuum of care and better patient progression, increased quality and patient satisfaction

• Leveraging enhanced analytic capabilities and access to data to support

decision-making and quality improvement efforts

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UVA MEDICAL CENTER (without CRH) FY 2016 Operating Budget

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Actual 2014 Projected 2015 Budget 2016 Discharges – Medical Center 28,160 27,851 28,300 Discharges – Transitional Care Hospital 316 358 450 Outpatient Visits & ER 853,971 887,649 918,504 Average Length of Stay – Medical Center 5.75 5.92 5.80 Average Length of Stay – Transitional Care Hospital 29.80 31.08 30.00 Net Operating Revenue ($ millions) $ 1,286 $ 1,387 $ 1,475 Operating Expenses 1,213 1,325 1,423 Operating Income $ 73 $ 62 $ 52 Operating Income Margin 5.7% 4.5% 3.5% Earnings Before Interest, Depreciation and Investment Returns $ 171 $ 172 $ 174

UVA MEDICAL CENTER FY 16 Budget vs. Benchmark for Selected Indicators

FY 16 Budget Benchmark Median* All Payor Case Mix Index (CMI) 2.04 1.84 Average Length of Stay (Hospital Only) 5.80 5.83 Net Revenue per CMI Weighted Adjusted Discharge $11,720 $11,494 FTE per CMI Weighted Adjusted Discharge 22.84 21.39 Total Labor Expense as a % of Net Operating Revenue 44.5% 46.7% Total Supply Expense as a % of Net Operating Revenue 22.1% 20.8% Total Expense per CMI Weighted Adjusted Discharge $11,358 $10,616 Operating Margin 3.1% 6.3%

* Benchmark is 50th percentile for peers from Action OI data projected with 3% growth compounded 2 years to project to 2016. FY16 Budget data excludes Transitional Care Hospital, UVA HOPE Cancer Care and Culpeper Regional Hospital.

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UVA MEDICAL CENTER FY 16 Budget Sources and Uses of Cash

Capital Budget $119M Operating Income $52M Depreciation $107M Debt Payments $17M Non-Operating Income $16M Working Capital $13M

Sources = $ 188 M Uses = $ 188 M

Strategic Investment Pool $52M

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Budget Resolutions Requiring Approval

• 2015-2016 Operating Budget and Annual Renovation and Infrastructure Plan for

the Academic Division

• Pratt Fund Distribution for 2015-2016
• 2015-2016 Operating Budget for the University of Virginia’s College at Wise
• 2015-2016 Operating and Capital Budgets and Annual Renovation and

Infrastructure Plan for the University of Virginia Medical Center

• 2015-2016 Operating and Capital Budgets for the University of Virginia

Transitional Care Hospital

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MULTI-YEAR CAPITAL PROGRAM UPDATE 2016-2022

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

Multi-Year Capital Program Update 2016-2022

• Update required by the State every two years
• Projects in near term to be considered for Governor’s

2016-18 budget

• Long term projects extend through 2022
• Align capital plan with the operating budget

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Historical Capital Program

(in millions)

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$ 696 $ 816 $ 520 $ 999 $ 590 $ 1,042 $ 2,269 $ 970 $ 800 $ 508 $ - $ 500 $ 1,000 $ 1,500 $ 2,000 $ 2,500 $ 3,000 $ 3,500 2008-14 2010-20 2012-22 2014-24 2016-22 Near Term Long Term $1,738 $3,085 $1,490 $1,799 $1,098

Near-Term Capital Programs by Agency

(in millions)

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$ 562 $ 486 $ 443 $ 536 $ 534 $ 44 $ 268 $ 28 $ 453 $ 40 $ 90 $ 62 $ 49 $ 10 $ 16 $ - $ 200 $ 400 $ 600 $ 800 $ 1,000 $ 1,200 2008-14 2010-20 2012-22 2014-24 2016-22 Academic Med Ctr Wise

2016-2022 Capital Program Update New Projects

Academic Division (2016-2018)

• Laboratory Renovations for New Faculty Hires
• McCormick Road Utility Tunnel
• Ductbank for Dominion Virginia Power-UVa Substation

Interconnection

Medical Center (2016-2018)

• Medical Center Data Center
• 545 Ray C. Hunt Drive Renovation
• Emily Couric Clinical Cancer Center 5th Floor Fit-Out

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College at Wise (2016-2018)

• Campus Welcome Center/Public Safety Facility

College at Wise (2018-2022)

• Bowers-Sturgill Renovation
• Darden Hall Renovation
• Zehmer Hall Renovation
• Sandridge Science Center Lab Wing Renovation

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2016-2022 Capital Program Update New Projects

Key Planning Studies

• Frank Batten School of Leadership and Public Policy
• McIntire School of Commerce
• Center for Politics
• Elson Student Health Center
• Football Operations Center

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2016-2022 SIX YEAR PLAN

T E R E S A S U L L I VAN P R E S I D E N T

Approach to Planning

Synthesizing efforts focused on multi-year planning:

Cornerstone Plan Assesses strengths and weaknesses, sets priorities, and charts course for UVa’s future Multi-Year Financial Plan Establishes dynamic, sustainable financial framework and foundation for the Cornerstone Plan and the Six-Year Plan State Six-Year Plan Respond directly to objectives of the Higher Education Opportunity Act and the Statewide Strategic Plan

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Timeline

July 1 Submit draft plan to State August 25 Meeting w/ Op Six* September 1 Receive comments from State September 17/18 Action by Board of Visitors October 1 Submit final plan to State

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* Op Six includes Secretary of Finance, Secretary of Education, Director of the Department of Planning and Budget, Executive Director of the State Council of Higher Education, Staff Director of the House Committee on Appropriations, and Staff Director of the Senate Committee on Finance.

2016-2022 Six-Year Plan

• Aligns with Cornerstone Plan
• Enhances quality of education, research, and service
• Advances objectives in the Higher Education Opportunity

Act and Statewide Strategic Plan

• 16 Strategies/Priorities

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Six-Year Plan Strategies Student Engagement and Success

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Enrollment Growth Total Advising

Six-Year Plan Strategies Student Engagement and Success

87

High-Impact Educational Experiences Technology-Enhanced Learning

Six-Year Plan Strategies Student Engagement and Success

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Collaboration: The Virginia Community College System Serving Virginia’s Veterans and Military

Six-Year Plan Strategies Research and Economic Development

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Pan-University Research Priorities Innovation Ecosystem Medical Translational Research

Six-Year Plan Strategies Research and Economic Development

Southwest Virginia Economic Development Partnership (Appalachian Prosperity Project)

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A Collaborative Model for Advancing Education, Health, and Economic Prosperity in Southwest Virginia

Appalachians Building Capacity (ABC) Healthy Appalachia Appalachian Ventures

Six-Year Plan Strategies Academic Excellence and Affordable Access

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Affordable Excellence Organizational Excellence Self-Supporting Programs

Six-Year Plan Strategies Faculty and Staff Recruitment and Retention

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Staff Development Faculty Recruitment and Retention Faculty Start-up Packages