As the level of higher education funding the University receives from the Virginia General Assembly continues to decline, the Board of Visitors Finance Committee met Friday to consider the state of the University's finances and make decisions regarding its financial future.
While the University's endowment fund is growing at its highest rate ever -- three times the rate of the market, according to University President John T. Casteen, III -- alumni gifts and donations to the University currently are down compared to the same time last year.
Vice President for Finance Yoke San L. Reynolds said the endowment fund increase was the result of a strong return on investments and alumni gifts and donations. Last year, according to Reynolds, the increase was 9.2 percent, which was the second highest in the country.
"I would say that, compared with other schools of our size, we have done extremely well in the last couple of years," Reynolds said.
The Committee was "ecstatic" over the endowment's return, Board Secretary Alexander "Sandy" Gilliam Jr. said.
While gifts to the University were lower this year, Gilliam said that gift totals in the past several years had been inflated by a small number of large individual donations.
"The figures over the last couple of years for annual giving were way out of proportion to what they normally are," Gilliam said. "We're back down to probably a more normal figure for U.Va."
At its meeting last weekend, the Board also approved an above-normal raise in 2004-2005 student housing rates in order to pay for major renovations to University housing.
In the past few years, Reynolds said the University has encountered a major need to renovate student housing.
"The Board said that we really needed to set aside enough to be able to do that kind of major renovation," Reynolds said.
As a result, the Board approved an 8.8 percent increase in student housing rates for next year. Of the increase, 4 percent is a standard yearly increase that covers rising operation costs, and the other 4.8 percent consists of a $150 fee that would pay for the major housing renovations.
The University has had the $150 fee for the past three years and received permission from the Board to continue it for the next four. Because of the method by which the Commonwealth defines housing, the University cannot use tuition money or state funds for housing renovations and must rely on student housing fees, Reynolds said.
The increase is lower than last year's, which was set at 10.6 percent, and similar to the increase of two years ago, 8.5 percent.
In addition, according to a formula provided by the Commonwealth, the University's average double room rate for this year was $2,711, lower than all but two other Virginia public universities and much lower than the Virginia average of $3,217. The proposed changes would raise the University's average rate to $2,970 for 2004-2005.
The uncertainty over higher education funding in the General Assembly continues to affect the University's financial operations, Gilliam said.
"It's a constant worry and that's why fundraising and development campaigns are so important," he said.
Reynolds said the University has been aware of the declining level of financial support from the Virginia legislature.
"We know that increasingly, we are going to have to look for other sources of revenues if we are going to maintain the quality of our education," Reynolds said.
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