RESOLUTIONS ADOPTED BY THE BOARD OF VISITORS

JULY 25-26, 2008

PAGE

Approval of Architect/Engineer Selection for the New 7703

Cabell Hall Renovation

Approval of Architect/Engineer Selection for the 7703

McLeod Hall Renovation

Approval of Architect/Engineer Selection for the 7703

University Hospital Renovations in the Radiology

Department, the Heart Center, Two Operating Rooms

and the MRI Room, and the Surgical Pathology Laboratory

Approval of Legislative Proposal – Amending the 7704

Government Data Collection and Dissemination Practices

Act as it Pertains to the Collection of Driver’s License

Numbers

Approval of Legislative Proposal – Repealing the 7705

Requirement that the Board of Visitors Report Annually

On the University of Virginia’s Progress

Approval of The University of Virginia’s College at 7706

Wise’s Policy and Procedures to Comply with House Bill

1058

Election of Mr. Billy K. Cannady, Jr., to the Faculty 7707

Appointment of Mr. Billy K. Cannady, Jr., as Dean, 7708

School of Continuing and Professional Studies

SUBJECT TO

THE APPROVAL

OF THE BOARD

OF VISITORS

July 25-26, 2008

The Board of Visitors of the University of Virginia met, in Retreat and in Open Session, at the Hotel Jefferson in Richmond on Friday, July 25, 2008, and Saturday, July 26, 2008; W. Heywood Fralin, Rector, presided.

Daniel R. Abramson, A. Macdonald Caputo, The Honorable Alan A. Diamonstein, Ms. Susan Y. Dorsey, Ms. Helen E. Dragas, Thomas F. Farrell, II, Robert D. Hardie, Ms. Glynn D. Key, Austin Ligon, Vincent J. Mastracco, Jr., The Honorable Lewis F. Payne, Don R. Pippin, Warren M. Thompson, and E. Darracott Vaughan, Jr., M.D., were

present.

The Student Member, Ms. Adom Getachew, was unable to be present as she was defending a thesis that weekend in a summer program at Yale University.

Dr. Vaughan was not present on July 26^th.

Also present were John T. Casteen, III, Leonard W. Sandridge, Alexander G. Gilliam, Jr., Paul J. Forch, Arthur Garson, Jr., M.D., Ms. Carol Wood, Ms. Nancy Rivers, and Ms. Jeanne Flippo Bailes.

Present as well for the session on July 25^th, were R. Edward Howell, Larry Fitzgerald, and Ms. Sally N. Barber.

Present for the session on July 26^th were Ms. Colette Sheehy, David J. Neuman, Tim R. Rose, and Donald E. Sundgren.

Friday, July 25 – Session on the Medical Center

The session on Friday, July 25^th, began at 12:45 p.m., and was led by Dr. Vaughan.

After approving the following motion, the Board went into Executive Session at 12:47 p.m.

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That the Board of Visitors go into Closed Session to discuss proprietary business-related information pertaining to operations of the Medical Center in connection with strategic personnel, financial, market and resource considerations, fund-raising activities, and efforts regarding the Medical Center - including capacity planning and potential strategic joint ventures, affiliations or other competitive efforts, where public disclosure would adversely affect the bargaining and competitive positions of the Medical Center.  The foregoing motion is authorized by Sections 2.2-3711 (A) (6),(8) and (23) of the Code of Virginia.

- - - - - - - - -

The Board resumed its meeting in Open Session at 3:16 p.m., and adopted the following resolution certifying that its discussions in Executive Session had been conducted in accordance with the exemptions permitted by the Virginia Freedom of Information Act:

That we vote on and record our certification that, to the best of each Board member’s knowledge, only public business matters lawfully exempted from open meeting requirements and which were identified in the motion(s) authorizing the closed session, were heard, discussed or considered in closed session.

The Board recessed at 3:16 p.m., and resumed its meeting, in Open Session, at 3:30 p.m.

Friday, July 25 – Annual Reports by the President and by the Executive Vice President and Chief Operating Officer

The President and Mr. Sandridge, the Executive Vice President and Chief Operating Officer, then gave their Annual Reports, as is customary at the Retreat. Copies of both Reports are appended as Attachment 1.

The Rector handed around a letter from Ms. Getachew, the Student Member; a copy is appended to these Minutes as Attachment 2.

7702

Mr. Farrell and Mr. Sandridge gave a brief status report on the Memoranda of Understanding being signed with the University-related Foundations.

Friday, July 25 – Business Session:

The Board then considered and approved seven resolutions.

APPROVAL OF ARCHITECT/ENGINEER SELECTION FOR THE NEW CABELL HALL RENOVATION

RESOLVED, Goody Clancy of Boston is approved for the performance of architectural and engineering services for the New Cabell Hall Renovation.

APPROVAL OF ARCHITECT/ENGINEER SELECTION FOR THE MCLEOD HALL RENOVATION

RESOLVED, Bowie Gridley Architects of Washington, D.C. is approved for the performance of architectural and engineering services for the McLeod Hall Renovation.

APPROVAL OF ARCHITECT/ENGINEER SELECTION FOR THE UNIVERSITY HOSPITAL RENOVATIONS IN THE RADIOLOGY DEPARTMENT, THE HEART CENTER, TWO OPERATING ROOMS AND THE MRI ROOM, AND THE SURGICAL PATHOLOGY LABORATORY

RESOLVED, Perkins Eastman of Charlotte, is approved for the performance of architectural and engineering services for the University Hospital Renovations in the Radiology Department; and

RESOLVED FURTHER, HKS of Richmond, is approved for the performance of architectural and engineering services for the University Hospital Renovations in the Heart Center, two Operating Rooms and the MRI Room, and the Surgical Pathology Laboratory.

7703

APPROVAL OF LEGISLATIVE PROPOSAL – AMENDING THE GOVERNMENT DATA COLLECTION AND DISSEMINATION PRACTICES ACT AS IT PERTAINS TO THE COLLECTION OF DRIVER’S LICENSE NUMBERS

RESOLVED, the Board of Visitors approves and endorses the proposed legislation to allow for the collection of driver’s license numbers from faculty, staff, and students.

The proposed legislation, which follows, would amend § 2.2-3808 of the Code of Virginia:

§ 2.2-3808. Collection, disclosure, or display of social security number.

A. No agency shall require an individual to furnish or disclose his social security number or driver's license number unless the furnishing or disclosure of such number is (i) authorized or required by state or federal law and (ii) essential for the performance of that agency's duties. Nor shall any agency require an individual to disclose or furnish his social security account number not previously disclosed or furnished, for any purpose in connection with any activity, or to refuse any service, privilege or right to an individual wholly or partly because the individual does not disclose or furnish such number, unless the disclosure or furnishing of such number is specifically required by federal or state law.

B. Agency-issued identification cards, student identification cards, or license certificates issued or replaced on or after July 1, 2003, shall not display an individual's entire social security number except as provided in § 46.2-703.

C. Any agency-issued identification card, student identification card, or license certificate that was issued prior to July 1, 2003, and that displays an individual's entire social security number shall be replaced no later than July 1, 2006, except that voter registration cards issued with a social security number and not previously replaced shall be replaced no later than the December 31st following the completion by the state and all localities of the decennial redistricting following the 2010 census.

7704

This subsection shall not apply to (i) driver's licenses and special identification cards issued by the Department of Motor Vehicles pursuant to Chapter 3 (§ 46.2-300 et seq.) of Title 46.2 and (ii) road tax registrations issued pursuant to § 46.2-703.

D. The provisions of subsections A and C shall not be applicable to licenses issued by the State Corporation Commission's Bureau of Insurance until such time as a national insurance producer identification number has been created and implemented in all states. Commencing with the date of such implementation, the licenses issued by the State Corporation Commission's Bureau of Insurance shall be issued in compliance with subsection A of this section. Further, all licenses issued prior to the date of such implementation shall be replaced no later than 12 months following the date of such implementation.

APPROVAL OF LEGISLATIVE PROPOSAL – REPEALING THE REQUIREMENT THAT THE BOARD OF VISITORS REPORT ANNUALLY ON THE UNIVERSITY OF VIRGINIA’S PROGRESS

RESOLVED, the Board of Visitors approves and endorses the proposed legislation to repeal the requirement that the Board of Visitors report annually on the progress of the University of Virginia.

The proposed legislation, which follows, would repeal § 23-80 of the Code of Virginia:

§ 23-80. Annual report of board.

The board shall, before the first day of October, annually, deliver to the Comptroller a report to the General Assembly of the progress of the University, its receipts and disbursements during the year ending on the first day of July preceding, and the amount of salary received by each professor, including fees received from the students.

7705

APPROVAL OF THE UNIVERSITY OF VIRGINIA’S COLLEGE AT WISE’S POLICY AND PROCEDURES TO COMPLY WITH HOUSE BILL 1058

RESOLVED, the Board of Visitors approves The University of Virginia’s College at Wise policy and procedures to comply with House Bill 1058, adopted by the Executive Committee of the Wise Board on July 8, 2008. The policy and procedures follow.

WHEREAS, House Bill 1058 was passed during the 2008 General Assembly Session to require the release of the educational record of a dependent student, as defined by 20 U.S.C. § 1232g, to a parent at his/her request; and

WHEREAS, 20 U.S.C. § 1232g, the Family Educational Rights and Privacy Act (“FERPA”), generally defines “dependent student,” consistent with the Internal Revenue Code, as a student who does not provide over one-half of his/her own support for the calendar year in which the taxable year of the taxpayer begins; and

WHEREAS, the bill requires that the governing boards of each institution shall establish the policies and procedures necessary to comply with the legislation;

RESOLVED, in accordance with HB 1058 and commencing the effective date thereof on July 1, 2008, The University of Virginia’s College at Wise Board hereby affirms as College policy the aforesaid requirement to release the educational records of dependent students to their parents upon request, which shall be implemented as follows:

1. The University of Virginia’s College at Wise Office of Information Technology shall electronically solicit dependency status from all incoming and returning students and shall store such data on the College’s central student system of record; and

2. A parent also may provide his/her tax records to the College to demonstrate a student’s dependent status to ensure that such status is accurately recorded in the central student system of record; and

7706

3. The College’s Provost and Senior Vice Chancellor shall designate the office within his/her division as being primarily responsible for collecting and responding to requests from parents of dependent students for academic records; and

4. The Vice Chancellor for Administration shall designate the office within his/her division as being primarily responsible for collecting and responding to requests from parents of dependent students for non-academic records; and

5. Appropriate personnel in the offices charged hereunder shall consult the College’s central student system of record to confirm a student’s dependent status prior to furnishing educational records to parents under this policy; and

6. The foregoing is subject at all times to the authority and direction of the College officials charged hereunder to develop and implement specific procedures as may be desirable or necessary including designating other College offices or personnel to respond to requests for records under this policy as may be necessary or appropriate under the circumstances.

ELECTION OF MR. BILLY K. CANNADAY, JR. TO THE FACULTY

RESOLVED that the following person is elected to

the faculty:

Mr. Billy K. Cannaday, Jr. as Professor of Continuing and Professional Studies, for the period October 1, 2008 through May 31, 2014, at an annual salary of $250,000.

Sketch: Virginia Polytechnic Institute and State University: B.A., 1972; Hampton University: M.Ed., 1980; Virginia Polytechnic Institute

and State University: Ed.D., 1990; State Superintendent of Public Instruction, 2006-2008; Distinguished Leader in Residence, University of Richmond Jepson School of Leadership, 2004-05; Superintendent of Chesterfield Public Schools, 2000-2006; Superintendent of Hampton Public Schools, 1994-2000.

7707

APPOINTMENT

Mr. Billy K. Cannaday, Jr. as Dean, School of Continuing and Professional Studies, for the period October 1, 2008 through May 31, 2014.

The Board recessed for the day at 4:40 p.m.

Saturday, July 26 – Session on University Facilities

The Board resumed its Retreat, in Open Session, at 9:05 a.m. The Hon. Lewis F. Payne, Chair of the Buildings and Grounds Committee, opened the session and asked Ms. Sheehy, Vice President for Management and Budget, to lead the discussion. Ms. Sheehy was assisted by David Neuman, Architect for the University; Tim Rose, Chief Executive Officer of the University of Virginia Foundation, and Donald Sundgren, Chief Facilities Officer for the University.

The discussion was centered on a thorough review of the University’s facilities – their location and condition, operation and maintenance, considerations of new construction versus renovation, maximizing current space, addressing future space needs, and so on. The role of the UVa Foundation was considered and there was a discussion of the use of the University’s historic structures.

In summary, the several schools of the University in general will have adequate space by 2011, though future growth will require more space and special facilities are needed (as, for example, a new museum, concert hall, drama and music facility). The condition of current space generally is acceptable in many areas and renovations already planned will address conditions elsewhere. The Medical School and the Alderman Library will require some attention, however. Emphasis should be placed on renovating existing facilities and there is room to grow within the existing Grounds if space is utilized properly. Parking, however, will continue to be an issue.

7708

Mr. Wynne and Mr. Payne commended the presenters on their work, and Mr. Payne singled out Mr. Neuman for his work not only on the presentation, but on his work as Architect since he has been at the University.

- - - - - - - - - -

On motion, the Board adjourned at 11:40 a.m.

Respectfully submitted,

AGG:jb

These minutes have been posted to the University of Virginia’s

Board of Visitors website. http://www.virginia.edu/bov/publicminutes.html

7709

ATTACHMENT I

(The President’s

Annual Report)

John T. Casteen III
Annual Report, 2007-2008
Prepared for the Board of Visitors

This report should be read alongside Mr. Sandridge’s annual report on the University’s financial condition and the University’s annual report (www.virginia.edu/president/report07). 

Introduction

             FY08 was a year of (1) returns on several long-term undertakings; (2) following several years when searches often did not go well, seamless successions in several key leadership positions, particularly in core academic functions; (3) completion of needed facilities following sustained effort over several years; (4) improvements in our financial condition because of implementation of restructuring and other new financial freedoms enacted by the General Assembly; (5) continuing growth in available non-state revenues from both endowment income and vigorous progress in annual and other cash giving; (6) a successful capital campaign now beyond its mid-point and (perhaps counter-intuitively) gaining momentum despite a tough economy; and (7) completion of several major building projects, with others now commencing.  This report deals with each of these topics in greater detail, and with some of my own activities in other areas.

  The broad leadership transition of FY08 may prove to be the most significant of these mile marks. Dr. Garson became provost in July 2007. In the year since he assumed his new duties, we have found, thoroughly vetted, and appointed five new deans: Paul Mahoney, Law; Meredith Woo, College; Dorrie Fontaine, Nursing; Steven DeKosky, Medicine; and Billy Cannaday, Continuing and Professional Studies. Tom Skalak has become vice president for research. He has added considerable stature to that function and accepted broad new responsibilities, not least among them responsibility for fund-raising for the sciences and for graduate education. We will soon appoint a new vice provost for international programs, this officer also to assume considerably greater responsibility. We hope to appoint the first dean of the Batten School in the fall. By the time these appointments are completed, we will have installed nine new academic leaders—or 10, if we include Bob Pianta, who was named dean of the Curry School in May 2007, just prior to Dr. Garson’s appointment. Assuming their new duties almost simultaneously, these persons have brought fresh perspectives, bold ideas, and strong visions to the University—all necessary components of growth and progress within the academic enterprise. These searches and the planning that preceded them and occurred during them went forward with awareness of Mr. Sandridge’s and my own eventual departures from our offices. This new generation of leaders will guide the University into the next decade and beyond. Mr. Sandridge and I have been meeting with Mr. Fralin and Mr. Wynne at regular intervals throughout the year to ensure that we meet the Board’s expectations for orderly, planned transitions.

Dr. Garson and Mr. Sandridge assumed responsibility in the spring of 2007 for completing a broad academic plan.  The Commission on the Future of the University presented preliminary findings at the February 2008 Board meeting, and the Board passed a resolution supporting the broad strategies at that meeting. This spring and summer, commission members are refining initiatives, preparing budgets, and proposing metrics to measure progress. Commission chairs will make final recommendations at the Board’s October 2008 meeting.

The commission’s report is published online at www.virginia.edu/planningdocuments/commission. Assuming that we use it consistently, this document will be a blueprint for work done during the next decade and beyond. Like any good plan, it will require regular assessment and retuning. No doubt some parts of it will change, and other parts will turn out to have missed some point as future events change the landscape. Those things said, the driver of progress in a collegial environment is constant attention to planning and consensus—a quality embedded as deeply in this plan as in the VA2020 plans whose life spans are now winding down. We learned in the school of hard knocks of the early 1990s that the University cannot be all things to all people—that leaders must acknowledge hard choices and stand accountable for hard decisions. Our strategy is to strengthen core resources while funding selected new efforts that will further distinguish the University. To the extent that we plan and choose well, we will build a strong foundation for future excellence.

During FY08 we made additional commitments to science and engineering. The Board has endorsed three major research buildings —one for Medicine, one for Engineering, and one for the College and Graduate School.  Together, these buildings add more than 195,000 square feet of research space to lab buildings already planned for Engineering and Medicine, bringing the total capacity now in design or construction to some 300,000 square feet.  These new buildings will support and sustain ongoing faculty work and attract new talent at all levels. Among other recommendations, the planning commission has identified science and technology as critical areas for building strength and further distinguishing the University from its competitors. In these uncommonly expensive and important fields, we have good motives to use scarce resources efficiently and to adopt or adapt best practices from elsewhere as we build new strength here.  

The restructuring legislation brought new responsibilities of several kinds.  These include promoting economic development, particularly in SW Virginia, improving public schools whose performance has declined in recent years, an perhaps most notably meeting students’ need for financial aid to bridge the gap between demonstrated need and whatever state and federal sources may provide. 

AccessUVa, the Board’s successful strategy to meet financial need that state and federal providers previously covered, has become a national model of success, albeit it a costly one. AccessUVa enabled some 848 students to enter in 2007.  The total cost of the program this year was $53.8 million. Our agreement with VCCS guarantees admission, based on satisfactory grades in specified required courses, to graduates of Virginia’s 23 community colleges. The agreement is having a measurable effect:  in 2005-06, we had 193 new VCCS transfers; in 2006-07, we had 234; in 2007-08, we had 300.  As we have gained new freedoms because of restructuring, we have recommitted ourselves to ensuring access and affordability for all students who are academically qualified to come to the University. The Board’s initiative in creating AccessUVa was ahead of the field. National media frequently acknowledge that, and rank us with the nation’s best.

During FY08, an unusual concurrence of factors has shaped for us a moment of great opportunity. A rising generation of new University leaders; priorities and recommendations from the planning commission; the restructured relationship with the state; a stable financial base and renewal of our triple-A bond ratings; excellent returns on investments from the last capital campaign, and strengthening of the endowment—these events of the current moment have energized the community and provided momentum for the second half of the capital campaign.

University Finances

Tuition.  In-state undergraduate students will pay 9.9% higher tuition and fees in the fall of 2008 than they did last fall.  Out-of-state undergraduate students will pay 6.6% more; in-state graduate students, 8% more; and out-of-state graduate students, 4.2%. These increases track the long-term plan adopted by the Board in 2005. They are roughly in the middle of increases in competitive universities.

Endowment.  Although UVIMCO’s performance continues to compare well against its peers, results have not been as strong this year as in previous years. As of May 31, 2008, UVIMCO oversaw the investment of $5.2 billion, which includes the University’s endowment and foundation assets as well as current funds invested in the long-term pool. (These totals do not include other assets such as the Boar’s Head Inn properties and the unsold Kluge lands.)  Total return for the eleven months ended May 31, 2008, was 7.8%.

Medical Center Finances.  The Medical Center’s budget is 44% of our total budget.  The hospital’s operating margin for FY08 is expected to be 3.3% to 4.0%, which falls short of the budget target.  Predicted average operating margins of 4.2% are in the financial plans for the next six years.  In addition, the Medical Center continues to be recognized nationally for its leadership in operational, clinical, and quality performance.

Debt and AAA Ratings.  In May 2008, in connection with our issuance of $235 million of bonds for construction projects, the three major rating agencies (Standard & Poors, Moodys, and Fitch) confirmed our long-term debt rating of AAA or the equivalent.  Among public universities, only the University of Texas System has the same profile. The University of Michigan has AAA ratings from two of the major rating agencies. The rating agencies’ commentaries highlight the University’s “prestigious academic reputation,” “impressive” student demand, “substantial balance sheet resources” (including a sizable endowment and historically low levels of debt), “strong record of fund-raising,” “historically good financial performance” including healthy operating performance at the University’s medical center, and “reduced dependence on state support” for general operations and capital projects.

In 2003, when we exited the state’s VCBA program for debt financing, we implemented a new debt portfolio program.  VCBA’s bonds are 20-year fixed-rate bonds.  Our new debt program uses a portfolio of floating-rate and fixed-rate bonds of varying maturities and repayment structures, as well as commercial paper (CP).   After five years, we have the only CP program among Commonwealth agencies.  This debt-portfolio approach has enabled us to reduce interest costs significantly.  For example, our 2003 floating-rate bonds alone have generated $8.3 million of savings when compared with the cost if the same amount had been issued as fixed-rate bonds.  If we had received approval to structure the entire 2003 issue as variable-rate bonds, we would have saved another $11.7 million over the last five years. To manage the greater market risk, we have built a reserve against floating rates. Ultimately, excess funds in these reserves can be recommitted for University priorities. 

Impact of the 2007 Investment Legislation. A 2007 Code amendment, effective July 1, 2007, allows us to invest University funds generally in equities and long-term corporate bonds.  Previously, investment of funds that were not gifts or investment income was dictated by the Investment of Public Funds Act (IPFA).  During this first year, we moved several large reserves that traditionally had been invested in UVIMCO’s IPFA-compliant Aggregate Cash Pool into equity funds, such as the UVIMCO Long-Term Pool.  The higher return on these investments has had the anticipated effects:  investing our Health Insurance Reserves for a higher return will moderate next year’s (and succeeding years’) increases in employer and employee premiums, providing a financial benefit to employees and freeing up University funds for other purposes.  Similarly, higher returns on our Capital Renewal Pool has allowed us to attain more quickly our targeted reserves to buffer interest-rate volatility, with the surplus available to be released for other University uses.   The third large pool that we now invest for higher return is the Medical Center’s depreciation reserve.  Bond counsel approved the transfer of this reserve from the state to the University in May 2005, but there was no financial advantage to transferring it without the ability to invest beyond the constraints of the IPFA.  With the new investment legislation, we began in the spring of this year to transfer an amount from this trust into UVIMCO’s Long-Term Pool. Over the next three years, we expect to recoup $300 million to be invested as a quasi-endowment.

Ongoing Financial Effects of Restructuring. The restructuring legislation allows us to invest certain non-general-fund reserves that were previously invested by the State Treasurer, who distributed the earned interest to us and other state agencies. Ms. Reynolds has developed a vehicle to (1) provide higher investment returns to the units that hold these reserves, and (2) generate new revenues to fund central University priorities. Called the Internal Bank, this new vehicle gives our constituent units access to liquidity when it is needed, and to short- and medium-term market rates on their reserves. In turn, the Internal Bank pools the liquidity requirements, thereby reducing the necessity of holding all these reserves in overnight funds. Using our new computer system and cash models, we can now invest some of these reserves for an extended period in higher-return vehicles, as the 2007 investment legislation allows. Using this mechanism, we expect to earn considerable new revenues to fund central University priorities.

Facilities and Administrative (F&A) Rate Negotiation.  Ms. Reynolds negotiates our facilities and administrative (F&A) rate (i.e., overhead rate) with the Department of Health and Human Services (DHHS), which is our cognizant federal agency for government-sponsored research awards.  (Each university that receives federal R&D funding is assigned a cognizant agency as a means of verifying consistent treatment of multiple supported programs.) Through 2003, our F&A rate was 48%, the national average for state universities.  In 2001, we changed our approach to the negotiations and finalized a three-year agreement, followed by a two-year extension through 2008.  This agreement increased our F&A rate from 48% to between 51.5% and 52.5% each year.  Assuming no growth in the research base expenditure, each 1% increase in the F&A rate nets $1.3 million to the University. With assumptions of modest research growth and phased-in changes in the rate, we expected the new agreement to yield cumulative incremental recoveries of $36 million for the five years FY04 - FY08, but after four years the actual additional F&A revenue totals $42.6 million. This revised estimate means that over five years we should receive cumulative increased revenues of $53 million instead of the $36 million originally calculated.

We are entering a new negotiation cycle with DHHS. The first step was to submit a proposal for new F&A rates based on actual costs compiled for our base year, FY07, and allocated using a model mandated by the Office of Management and Budget. We submitted this proposal in March 2008. During the next 12 months and following completion of the DHHS audit, the next negotiation will occur. Since the 2003 negotiation, we have incurred significant capital construction costs for non-research buildings. Consequently we experienced an increased allocation of facilities costs to non-research buildings and a corresponding reduced allocation to research buildings. We were able to justify proposing an F&A rate of only 53.3% for research. It should be noted that the average “haircut” (reduction from proposed to audited/negotiated rates) was 5.3% for our region’s DHHS negotiations in 2006-2007. We expect, however, to negotiate a rate between 49% and 50%. Growth in F&A revenues in the next contract period will have to come primarily from increase in research volume instead of an increase in the rate. Negotiation strategy will be finalized over the next few months.

Fund-raising. Although philanthropic cash flow decreased by 5.24% to $256 million through May 2008, cash flow is up nearly 25% from FY06. This reflects record cash flow in FY07, including substantial gifts from the Ivy Foundation ($45 million), Phillip Morris USA ($25 million), Richard and Sherry Sharp ($10 million) and Frank Batten ($5 million pledge payment on $100 million pledge). We remain on course to increase the base for annual giving to $350 million by the end of the current campaign and to reach our cash-flow goal of $275 million in FY08.

The campaign total is $1.69 billion at the end of May 2008. This figure includes $1.54 billion in gifts and pledges and $150 million in future support. We have met 56.3% of our $3 billion goal in 55% of time elapsed. A good all-in estimate for July 1 is $1.72 billion. 

Recent notable gifts include a $4 million pledge payment from the Claude Moore Charitable Foundation, and a $4 million bequest from the estate of Robert C. Hancock for U.Va.-Wise.

Other notable gifts in FY08 include: $35 million in pledge payments from Batten Foundation and $15 million in pledge payments from Frank Batten, Sr., for the Batten School; $7.92 million gift-in-kind from Albert Small representing residual interest not previous transferred in the Small Library’s First Edition, First Printing of the Declaration of Independence; $6.7 million, associated with longtime donors Mrs. Hunter Smith and the late Carl Smith: the former Amvest headquarters building at the Boar’s Head Inn; and $7,535,954 from Paul T. and Sonia Jones.

A full list of major gifts in FY08 appears in an appendix at the end of the narrative portion of this report.

President’s Fund for Excellence.  Authorized as an emergency measure by the Board as part of our response to the loss of $52 billion in state General Fund in 2002, and subsequently made permanent as a means to provide one-time, unique, and short-term funding when base budget is not available for significant activities, this fund has become an essential tool. We use it to finance the most critical faculty-retention commitments, to finance otherwise unbudgeted but essential expenditures for research technology, to fund development activities when other funds are not available, as necessary to cover operational needs resulting from state budget cuts, and to finance other strategic initiatives while Dr. Garson and Mr. Sandridge develop permanent base funding. Disbursements last year, among other objects, included operating support for the College of Arts and Sciences (funds originally requested for graduate student fellowships but diverted by the interim dean to other objects), and another sum to address deficiencies in budgeting for required modern language courses—a recurring problem; the Miller Center; the Library, including the Clemons Library refurbishment and landscaping, part of the cost of transporting the Weicker papers to Special Collections following Sen. Weicker’s gift of the papers, and a rare, complete series of the Virginia Gazette; and the Virginia Quarterly Review, which Dr. Garson and Mr. Sandridge are phasing to normal base budget support. The fund also provided support for the Academic Chair Leadership Program; a new Faculty Orientation Program; the Southwest Virginia Economic Development Plan (restructuring); and faculty support, including Hunter Rawlings’ appointment as a part-year University Professor, and the Architecture School’s Learning Barge project.

Commitments for 2008-09 include ongoing funding for the Academic Chair Leadership Program; the Faculty Orientation Program; the Southwest Virginia Economic Development Plan; Global Health Scholar Awards; and last-resort scholarships for students in University study-abroad programs. We will provide new support for an archaeological research project and for the Woodson Institute’s fellowships and programs, as well as salary support for various personnel as they move to unfunded lines that will eventually acquire base funding within the budget. I have made a $1 million commitment for the new College dean’s initiatives. 

The State Budget and Salaries.  The 2007 budget bill authorized salary increases of 4% for staff members, administrative and professional faculty members, teaching and research (T&R) faculty members, and graduate teaching assistants, but made no provision for the second year of the biennium.  The Board provided additional funds to address compensation shortfalls for staff. The 2008 budget bill authorizes salary increases of 2% for staff members, administrative and professional and T&R faculty members, and graduate teaching assistants. 

Faculty and Staff Compensation.  In 2003-04, the Board adopted the goal of increasing faculty compensation to market levels by 2006-07.  In FY05, the Board defined market level as a position between the 15^th and 19^th ranks among AAU universities.  Since that time, supplements approved by the Board have allowed us to close the gap between our average T&R faculty salary and the average paid at the university ranked 19^th in salaries among AAU universities from $7,000 in 2002-03 to $700 in 2007-08.

Because the state-authorized increase for FY09 is only 2%, the gap between the 19^th rank in the AAU survey and the University average salary will increase during FY09.  Accordingly, the Board has asked us to further examine our options and bring forward a recommendation of how to address this issue.

For the sixth year, the Board has allocated $250,000 to address staff compensation inequities and deficiencies.  This fund is designated for increases for employees whose salaries fall in the lower third of the salary distribution for similar positions and whose increases are not provided by the state. 

Capital Projects

Building projects completed or substantially completed during FY08:

Sheridan G. Snyder Translational Research Building, 11^th Street Garage, Rouss Hall Renovation and Robertson Hall (addition), Gilmer Teaching Labs Renovation, Varsity Hall Renovation, Culbreth Road Garage, University Hospital Expansion, and the College at Wise Chancellor’s House Renovation and Addition.

Buildings under Construction:

Kellogg House: This 208-bed, $18.8 million dorm will provide swing space as part of an ongoing project to replace and expand student residences on Observatory Hill. In June, the Board named this new dormitory Kellogg House, honoring Robert L. Kellogg, Professor of English, 1957 to 1999. Mr. Kellogg served as dean of the College of Arts and Sciences, and he was the original principal of Brown College. Kellogg House will be completed in July 2008.

Life Sciences Annex (LiSA): Under construction by the UVAF in Fontaine Research Park, this $35.1 million underground vivarium is to be completed in December 2008.

Bavaro Hall ($37.4 million) has begun construction and is to be completed in September 2010.

Campbell Hall Additions ($15.6 million) are scheduled for completion in July 2008.

Carter-Harrison Research Building ($84.1 million) is to be completed in March 2009.

Claude Moore Medical Education Building ($40.7 million) is to be completed in May 2010.

Claude Moore Nursing Education building ($15.55 million) will be completed in July 2008.

Emily Couric Clinical Cancer Center ($74.0 million) is expected to be completed in April 2011.

Main Heating Plant Environmental Compliance ($71.7 million) is expected to be completed in September 2008.

Ruffin Hall for Studio Art ($25.9 million) is to be completed in July 2008.

South Chiller Plant Addition ($22.5 million), to expand capacity for the Health System, is to be completed in November 2008.

South Lawn ($105.0 million) (Phase 1 of 3) is expected to be completed in November 2010.

College at Wise Projects. Current projects in construction include the Arts Center ($14.4 million), Crockett Hall Renovation ($6.9 million), Dining Hall ($9.6 million), Residence Hall ($9.0 million), and the Science Building Renovation ($13.4 million).

Buildings in Planning:

Arts Gateway to the University. Includes a new enlarged museum, a community forum, and a band rehearsal hall. Project cost estimates are ca. $102.7 million.

College of Arts and Sciences Research Building. This $88.9 million project is a 100,000 square foot addition to the Chemistry Building.

Garrett Hall Renovation. This $14.0 million project renovates Garrett Hall and its annex for the Batten School of Leadership and Public Policy.

Hospital Bed Expansion. This $80.2 million project renovates 60,000 square feet and adds nearly 100 new beds in an additional 60,000 square feet.

Information Technology Engineering Building. This $76.3 million project just south of Olsson Hall is a 100,000 square foot teaching and research building for the School of Engineering and Applied Science.

Ivy Translational Research Building. This $93.3 million project is a 110,000 square foot research building in the Fontaine Research Park for the School of Medicine.

New Cabell Hall Renovation. This $80.0 million renovation (Phase 3 of the South Lawn Project) is funded by the State.

Rugby Administrative Building. This $17.7 million project renovates the former faculty apartment building and converts it to administrative offices.

College at Wise Projects. Current projects in planning include the Smiddy Hall renovation and IT expansion ($13.5 million) and the Multi-Purpose Center ($30.0 million).

Carr’s Hill.  Carr’s Hill is our principal venue for fundraising, for recognition events, and for major receptions and public events.  This summer, work crews are working on repairs of age-related deterioration in the house.  These include repair and painting of plaster damage on the third floor; removal of carpet, refinishing of wood floors, and painting on the second floor, and plaster repair and painting throughout the second floor. In 2009, we will celebrate the centennial of Carr’s Hill. More details on these plans appear in the activities section later in this report.

Academic Matters

Faculty Recruitment Status Report by Gender (as of 5/20/08). During academic year 2007-08, 113 offers were made for tenure and tenure-track faculty positions at the University. Of those offers, 70 offers (62%) were extended to men and 43 offers (38%) were extended to women. Sixty-six percent of the offers made to men were accepted, and 62% of the offers made to women were accepted. Ms. Fraser, the vice provost for faculty advancement, has designed and implemented a declination survey to track why offered candidates turn us down. Preliminary findings suggest that one significant factor for many candidates has been a lack of available employment for candidate spouses/partners. This barrier is commonplace in universities not located in major urban areas. As one of several strategies to remedy this problem, we recently became a founding member of the Mid-Atlantic Higher Education Recruitment Consortium (HERC). HERC supports the efforts of member institutions to recruit and retain outstanding faculty administrators and staff through the sharing of information and resources. Membership in HERC will strengthen our competitive edge in hiring and retention, and will give us opportunities to interact with regional colleagues and stay on top of best practices and national trends in faculty development.

AY 07-08 Distribution of Offers by Gender

Faculty Recruitment Status Report by Race/Ethnicity. Most offers of faculty positions in 2007-08 were made to persons who are white (67%). This represents a 9% decline from 2004 when white applicants received 76% of our offers.

AY 07-08 Distribution of Offers by Race/Ethnicity

Separations During the 2007 - 2008 Academic Year (as of 6/13/08). Sixty-three tenured and untenured tenure track faculty separated from the University (21 female, 42 male). This represents an 8% decrease over totals reported for Academic Years 06-07, but this number will climb slightly as final numbers come in over the summer. Of these, one was African-American (female); 2 were Asian-American (one female, one male); 57 were white (17 female, 40 male); one was Hispanic/Latino (male) and two were of unspecified race/ethnicity (both female). These numbers encompass all reasons for separation from tenured/tenure-track faculty positions, including: another job, retirement, resignations, and death.

Distribution of AY 2007-2008 Separations by Tenure status, gender and race/ethnicity.

Faculty Mentoring and Career Development.  During academic year 20007-08, Ms. Fraser offered a variety of programs for new faculty, including a year-long series of activities and for newly hired tenure track faculty called “Getting Started at U.Va.” Ms. Fraser also conducts a year-long development program for department chairs called the Institute for Leadership Excellence in Academic Departments (ILEAD). Participating chairs enhance their leadership and management expertise, increase their knowledge of the organization and fiscal policies, form relationships with other leaders throughout the University, and develop solutions for effective departments. With the Teaching Resource Center, Ms. Fraser developed the Professors as Writers Program that gives faculty members the opportunity to work on their writing skills through workshops, grants for editorial or coaching support, and resources and support for peer writing groups.

Academic Quality Assurance:  Reaffirmation of Accreditation

In December 2007, we successfully completed the decennial reaffirmation of the University’s general (i.e., regional). This process covers all schools and all functions. The Commission approved us with no conditions attached.   This followed significant remedial actions taken during the reaccreditation process to address past non-compliance with the federally-mandated procedures for gaining approval of substantive changes in academic programs.  The Commission reviewed and accepted a new internal monitoring mechanism prepared by Dr. Garson and Ms. Phillips early last fall, as well as a process-management system developed with Ms. Deily’s support.  With regard to substantive changes, the Commissions is tightening oversight of all member institutions in order to comply strictly with federal law.  Although this results in more stringent requirements with which the University must comply, I am comfortable that Dr. Garson and his colleagues will keep us in compliance going forward.  With the reaffirmation now in hand, we must now implement our Quality Enhancement Plan (QEP), which aims to strengthen student-faculty engagement.  Dr. Garson and Mr. Adams will lead this effort. 

Professional School Accreditations in 2007-08.  The Accreditation Board for Engineering and Technology (ABET) has reaccredited the B.S. degree program in Aerospace Engineering and the B.S. degree program in the School of Engineering and Applied Science, both until 2011.  

NRC Rankings.  The Office of the Vice President for Research and Graduate Studies managed our submissions for the National Research Council rankings. These rankings, published approximately every decade, assess research doctorate programs in the United States. The 2007 assessment, representing a substantial increase in the scale and scope of data collection, has been completed. Thirty-nine U.Va. doctoral programs participated in the assessment. More than 800 U.Va. faculty received questionnaires, and 88% responded (2% above the national average). In addition, more than 300 doctoral candidates received questionnaires, and 73% responded (1% above the national average). The NRC is expected to release the final report in late September 2008.

NSF Rankings.  The most recent annual NSF research expenditure rankings (FY06) place us 48th in total federal R&D expenditures. Our countable external federal R&D expenditures have increased from $199 million to $204 million. Our ranking as to scale among all research universities for total research expenditures is 72^nd. Our total research expenditures have increased from $235 million to $239 million.

International Activities.  Our current study-abroad sites include Australia, the Bahamas, Brazil, El Salvador, Egypt, China, Costa Rica, France, Germany, Ghana, Ireland, Italy, Jamaica, Jordan, Morocco, New Zealand, Nicaragua, Peru, South Africa, Spain, Tanzania, Tibet, and the United Kingdom. In addition, we maintain exchange agreements with some 50 universities in 20 countries. Students in these exchange programs pay tuition to U.Va. for credits earned abroad.

Some 1,900 University students studied abroad in 2007-2008. This year saw an increase of undergraduate student participation in semester-long programs. Fall semester saw an increase of 21%, while spring semester participation rose by 17%. Summer and J-term enrollments continue to be strong and steady.

While the top three destinations this year were in Western Europe (Spain, United Kingdom, and Italy), China tied with France as #4, and Peru tied with Ireland as the #5 destination for the first time. The numbers for Latin America continue to increase. Our chief areas of opportunity for the near future appear to be Latin America and Asia.  Our well-established programs, such as the ones in Jordan, Lyon, Peru, and Valencia, are gaining national prestige and are attracting larger numbers of students who are pursuing their degrees elsewhere. The number of non-U.Va. students in our programs increased by 11% in 2007-2008. In 2007-2008, we continued to expand programs with specific academic focus, specifically targeting majors that have been historically underrepresented in study abroad.

Some graduate and professional schools are beginning to add international components to their programs. The McIntire School of Commerce has built an international experience into its masters-level programs. Nursing is developing Global Health Partnerships. Medicine is actively facilitating overseas medical rotations for students and residents. Engineering has launched an Office of International Programs, and has assigned one faculty member in each department to counsel students on international studies. Medicine, Nursing, and Engineering are currently collaborating on an innovative J-term program in Guatemala. These steps acknowledged, we continue to lag behind peer universities in developing programs of this kind. See my annual goals at the end of this report.

Semester at Sea.  Our partnership with the Institute for Shipboard Education and its Semester at Sea program continues to grow.  Nine University faculty members are participating in this summer’s voyage.  Karen Ryan is the academic dean. Future academic deans will include: Len Schoppa (Politics), fall 2008; Reg Garrett (Biology), spring 2009; Michael Smith (Politics), summer 2009; Robert Chapel (Drama), fall 2009; and Mark White (Commerce), spring 2010.

Some 21 U.Va. students are on board this summer, and 10 or so are registered for the fall voyage.  Heretofore, we have not actively encouraged our own students to enroll in this program. We will begin focused efforts to raise these numbers in the fall.  A proposal for flat-tuition for our native or currently enrolled students is in design. This model would permit in-state students who are receiving financial aid to go on voyages.

Universitas 21. U21 celebrated its 10^th anniversary last year, with Delhi University, the newest member, bringing the total number of institutions in the network to 22.  Peter Low continues to serve as the University’s U21 Manager, directing our activities in U21, as he has since we joined the network in August 2001. Tim Garson will soon assume these duties.

I will continue serving as Chair of U21 LBG through the Annual Meeting in May 2009. Universitas 21 LBG is the corporate entity that manages the affairs of the network, Universitas 21.  As chair of the network, I am also chair of the company, Universitas 21.  Universitas 21 LBG manages licensing arrangements between members and U21Global and oversees academic programs offered by U21Global through U21pedagogica Ltd (a wholly-owned subsidiary quality assurance company). At the Annual Meeting in May 2008, I was appointed to the U21 Global Board, and I left the Boards of U21 Equity and U21pedagogica. U21pedagogica has its offices and staff here. Peter Low chairs that Board.

After hosting the 4^th annual U21 Summer Conference on student research here in July 2007 – the most successful program yet, with 80 participants from 17 U21 institutions – we have sent five students and one faculty member to the 2008 Summer School at the University of Birmingham. This is a program for graduate students and their advisors.

U21’s collaborations include OECD (most recently a conference on human capital development with a major presentation by Gerald Baliles); ACCA (the international accountancy organization) which sponsors several U21 events, including the summer conference here; the UN (a second annual symposium on UN Millennium Development Goals, held this year at University College Dublin, on “Strategic Partnerships with the Developing World: A New Direction for Universitas 21 in Research and Education,” with Dr. Garson and several other faculty members participating and making presentations—see the following paragraph); the UN Department of Economic and Social Affairs, AIFOMD (a global organization training trainers for UN MDGs); and the International Association of Humanitarian Medicine (co-sponsoring the “Global Partnership in UN MDG Education and Implementation Workshop” to be held at the University in September in conjunction with the 2008 U21 Health Sciences Annual Meeting here). In addition, U21 cosponsors an innovative low-tech telemedicine program with the Swinfen Charitable Trust. Swinfen links local practitioners in isolated and distressed areas by email and digital imaging with Medical School faculty members who provide consultations but receive no fees.

The UN’s Millennium Development Goals have been endorsed by the US Government and accepted as goals for collaborative work by the AAU, NASULGC, U21, and other NGOs. This set of goals will come up repeatedly during the next several years. The goals are: to eradicate extreme poverty and hunger; to achieve universal primary education; to promote gender equality and empower women; to reduce child mortality; to improve maternal health; to combat HIV/AIDS, malaria, and other diseases; to ensure environmental sustainability; and to develop a global partnership for development. For more information, see www.un.org/millenniumgoals.

U21’s Sustainable Water for Cities project is moving forward on schedule.  We originally proposed this joint venture, and our faculty members are leaders and active participants in it. U21 has ongoing projects in telehealth and e-health. U21 Global, a joint venture, 50% of which is owned by U21, is an online graduate school offering globally recognized graduate degrees in MBA and MMIT. A new corporate partner came aboard this year, and I can report orally and in confidence on this transaction if the Board wishes to know details. As noted above, I am now a member of the Global Board.

Finally, we will host a U21 Digital Humanities Workshop in September to address the use of digital technology in the Humanities research areas, including documentation of special collections and digital reconstruction of historic landscapes and urban sites.

Partial Summary of the Year’s U.Va./U21 Activities

• June 30 – July 12, 2007 – hosted the 4^th annual U21 Summer School at U.Va. The largest Summer School to date, we welcomed 69 students and faculty from 15 U21 institutions. Participants were citizens of 19 different countries and represented 26 different disciplines. Five U.Va. students participated, and more than 20 U.Va. faculty members presented lectures.

• Sent three students and one faculty member to McGill for the 3^rd annual Undergraduate Research Conference (we hosted the inaugural conference in 2005).

• Proceedings from the Undergraduate Research Conference were published here in The Oculus (as they have since 2005).

• John Casteen continued to serve on the Board of U21pedagogica, as he has since 2001.

• John Casteen named Chair of U21 LBG, April 2007.

• John Casteen named Chair of U21 Equity Board, April 2007.

• Peter Low named Chair of U21pedagogica Board, April 2007. Peter has been a member of the Board since 2001.

• Professor Winston Lung, SEAS, appointed to the Advisory Group of the U21 Water for Sustainable Cities project.

• April 2007 – Rae Blumberg gave presentation to jointly sponsored UN-U21 Symposium.

• August 2007 – Gertrude Fraser and Gov. Gerald Baliles addressed U21-OECD Conference, “Supporting Success and Productivity.”

• May 2008 – hosted the U21 Student Mobility Coordinators AGM (annual general meeting).

• September 2008 – co-sponsoring “Global Partnership in UN MDG Education and Implementation Workshop with The UN Department of Economic and Social Affairs, AIFOMD, and the International Association of Humanitarian Medicine, in conjunction with 2008 U21 Health Sciences AGM.

• September 2008 – hosting the U21 Health Sciences AGM.

• Sponsored five students and one faculty member’s participation in the 2008 U21 Summer School at the University of Birmingham.

• Sponsored three students and one faculty member’s participation in the 2008 Undergraduate Research Conference at the National University of Singapore.

• The Oculus will again publish proceedings from the URC being held at NUS.

• Sponsored the participation of one post-graduate student in the U21 PG Conference on Water at the University of Birmingham.

• Provided matching funds to sponsor two graduate students’ work with U21 faculty through the Anniversary Fellowship Scheme.

• Provided $25,000 for undergraduate student scholarships for U21 exchanges .

• Peter Low reappointed Chair of U21pedagogica Board, May 2008.

• John Casteen reappointed Chair of U21 LBG, May 2008.

• John Casteen served on Board of U21pedagogica through May 2008.

• John Casteen served on U21 Equity Board through May 2008.

• John Casteen appointed to U21 Global Board, July 2008.

• March 2008 – Dr. Garson and three faculty members gave presentations on the UN’s MDGs at the U21 Teaching & Learning Conference in Glasgow.

• March 2008 – Lavinia Johns addressed the U21 Forum on International Networking in Education in NYC.

• May 2008 – two faculty members represented U.Va. at the 3^rd annual U21 Symposium.

• Ryan Nelson, McIntire School of Commerce, continues to serve as a reviewer on the MMIT Review Panel, a position he has held since 2005.

U21 Visitors 2007-08

• Nine visiting faculty from five institutions.

• Two post graduate students from two institutions working directly with our faculty for two months each.

U21 Collaborative Groups in which we have had active participants this year

• U21 Directors

• U21 Managers – Mr. Low and Dr. Garson

• U21 Health Sciences Group

• U21 Heads of Administration

• U21 Museums Group

• U21 Deans and Directors of Graduate Studies (DDOGS)

• U21 International Directors

• U21 PVCs Research

The Virginia/Windsor Project in Partnership with St. George’s House (Windsor Castle). We are now in the second year of a successful collaboration with St. George’s House, whose charitable trust is based at Windsor Castle in the United Kingdom and is managed by Prince Philip, Duke of Edinburgh. St. George’s House sponsors and hosts conferences (“consultations,” in British usage) to influence government and society globally. Windsor Castle sought this relationship with us in 2004, and asked me to devise and convene a series of bi-national conferences on actions to address matters of common interest to government and to research-intensive universities with specific attention to defining consensus positions on the roles of research-intensive universities in effecting the public good. By mutual agreement, participation was opened also to Asian and ANZAC governments and university heads.

The first consultation convened at Windsor Castle on November 5-7, 2007. This meeting was very successful, concentrating on white papers that were generated by attendees and circulated in advance and generated by several attendees. The major participants included heads of British, Australian, and American universities, as well as governmental participants from the UK and experts on relevant matters before the meeting.

The second consultation will convene here on November 10-12, 2008, and will focus on three issues identified in the first consultation: 1) access for low-income students to research-intensive universities; 2) capacity-building in Africa through educational partnerships; and 3) sustaining scholarly and other media archives for university libraries with digital technology. Each topic has attracted considerable foundation support (Mellon, Spencer, and Houston Endowment), and the working group on each is headed by a person of appropriate prominence. John Hennessy (President of Stanford University) chairs “Access to Research-Intensive Universities for Underrepresented Groups.” Paul Courant (former Provost and current Dean of Libraries at the University of Michigan) and James Hilton (our Vice President and Chief Information Officer) co-chair “Sustaining Scholarly and Other Media Archives for University Libraries with Digital Technology.” Charles W. Steger (President of Virginia Tech) chairs “Capacity-Building in Africa through Educational Collaborations.”

Cameron Howell and University Professor Sarah Turner manage the Virginia/Windsor Project. By agreement with St. George’s House and the Castle, the working group itself is known as the “Windsor Group.” We have agreed to sunset the work at the end of each year’s work cycle and to go forward only if participants judge that the work merits continuation. For now, it appears to me that the project will continue for at least one year after November 2008.

Diversity and Equity.  The Office for Diversity and Equity received $5 million in funding from the National Science Foundation to establish the Virginia-North Carolina Alliance for Minority Participation. This eight-institution consortium is attempting to double the number of graduates from underrepresented communities in the areas of science, technology, engineering, and mathematics over the next five years, and includes both predominantly white universities and Historically Black Colleges and Universities. The other participating institutions are Bennett College for Women, Elizabeth City State University, George Mason University, Johnson C. Smith, St. Augustine’s College, Virginia Commonwealth University, and Virginia Tech.

Mr. Harvey was installed as president of the National Association for Diversity Officers in Higher Education, a professional association for college and university chief diversity officers.

Student Matters

Office of the Dean of Students. I appointed Allen Groves Associate Vice President and Dean of Students, effective June 1, 2008. Mr. Groves previously served as interim dean of students. A 1990 graduate of the School of Law, Mr. Groves succeeds Penny Rue, who resigned in August 2007 to become vice chancellor for student affairs at the University of California-San Diego.

Since taking office, Mr. Groves has returned Residence Life to its historical alignment with the dean’s office. He is focusing on increasing outreach and leadership programs throughout the student life program. In June 2008, 37 student leaders attended Leadership 2008, which teaches students skills they will need to manage their respective organizations.

Student Health. Student Health received its fifth reaccreditation from the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) in April. Along with faculty from Hobart and William Smith Colleges, Student Health faculty are publishing a research study in the Journal of American College Health in July documenting 25 to 50% reductions in alcohol-related consequences since the beginning of the social norms marketing campaign. The article is a product of work done in the National Social Norms Institute, which is now headquartered here. Dr. James C. Turner was elected president-elect of the American College Health Association at the annual meeting in Orlando, Florida, on June 6, 2008.

University Career Services. Fourth-year students participate in large numbers in on-Grounds interviewing and career fairs. This year, 8,700 students, an increase of 13% over the past four years, participated in on-Grounds interviews. Some 467 employers participated, an increase of 36% over the four-year period. The 24^th Annual Diversity Career Day was held at the John Paul Jones Arena. Thirty-one colleges and universities from Virginia and Washington, D.C. participated, and some 1,249 students (887 from U.Va.) came to the event.

Orientation 2008. Continued high numbers of students and guests are attending this year’s Summer Orientation program, with about 3,600 first-year and transfer students registered to attend. In response both to survey data and to the increase in Virginia community college transfers as a result of the 2006 articulation agreement, orientation staff redesigned the transfer sessions to shorten them from two days to one and targeted them specifically to the needs of incoming second- and third-year students, respectively. This is the second year in which we have offered this alternative arrangement for transfer students.

Athletics. Virginia finished 17^th in the Division I U.S. Sports Academy Director’s Cup standings—the 15^th consecutive year we have placed in the top 30. Our teams won six Atlantic Coast Conference championships in 2007-08, the most of any league member. Men’s cross country, women’ lacrosse, women’s rowing, men’s swimming and diving, women’s swimming and diving, and men’s tennis won ACC titles. Eight U.Va. coaches were named ACC Coach of the year for their respective sports this season: Kim Lewellen, women’s golf; Jason Dunn, men’s cross country; Al Groh, football; Mark Bernardino, men’s swimming and diving, and women’s swimming and diving; Kevin Sauer, rowing; Brian Boland, men’s tennis; and Julie Myers, women’s lacrosse. Men’s tennis player Somdev Devvarman repeated as the NCAA individual champion. He became the 13^th player in the 124-year history of the event to win consecutive titles. The men’s tennis team went 32-1, winning the national indoor championship and not losing until the semifinals of the NCAA Championship. The football team played in the fourth January 1 bowl game (Gator Bowl) in U.Va. history, and set an NCAA record by winning five game by two or fewer points. Football player Chris Long became just the third consensus All-American in school history, and won the Ted Hendricks Award as the nation’s best defensive end. He was the second overall pick in the 2008 NFL draft, taken by the St. Louis Rams. Twenty-one of U.Va.’s 25 teams participated in postseason competition, and 19 teams advanced to NCAA postseason competition.

Activities Report, 2007-08

Public Service.  I serve on the AAU Institutional Data Committee.  I chair U21 LBG, U21 Equity, and U21 Global Pte. Ltd.  I serve on these boards:  Foundation for Virginia; Leifur Eiriksson Foundation; Mariners’ Museum; Council on Competitiveness; Chesapeake Bay Foundation; (chair) Jefferson Science Associates, LLC (i.e., J-Lab in Newport News); and the Hovey S. Dabney Foundation for Elders.  I have agreed to join the Higher Education Cabinet of the Chronicle of Higher Education and the New York Times. I chaired the decennial visiting committee for the University of Texas in Austin in April as well as the special visiting committee charged with recommending actions to the taken by the Regents of the University of California in response to criticisms contained in audits related to executive compensation.  Next spring, I will chair the review of Duke University.

Corporate Service.  I am a director of the Wachovia Corporation.

Development-related travel and representation.  In FY08, I traveled to 28 cities to address gatherings of alumni and friends and to call on donors and prospects.  I made repeated visits to several cities where large numbers of donors reside (New York, Washington, D.C., etc.). I led five regional campaign events (Dallas, Houston, Boston, Palm Beach, and San Francisco) and two VA2020 retreats, one in Charleston and one in Carlsbad, CA. In addition, Betsy and I went on a Virginia Voyages walking trip in Ireland with alumni and donors.  This September, Betsy and Suzan Garson will co-host the first “Women in Leadership” conference in Charlottesville, as part of their work in Women in Leadership and Philanthropy.

Carr’s Hill.  This year, 14,042 guests, an increase of 6%, attended events at Carr’s Hill. We held some 94 events during FY08.  The capital campaign continues to be a large part of the business conducted in the house, and continuing construction around the house remains the single most significant problem involved in using it.  We increased the number of community-oriented events as part of an ongoing effort to maintain sound town/gown relations and to include PVCC in University activities. This year, Carr’s Hill hosted more dinners and lunches and fewer receptions than last year.  Some variation from year to year is normal. The changes this year generally have to do with the requirements of the capital campaign. The most important internal events are receptions for school faculties, for faculty and student groups, for persons who receive various recognitions, for deans ending or beginning their terms, and for community leaders.  The number of these events is growing, and the number of persons attending each one is also growing.  The number of overnight guests (i.e., official guests of the University who are housed at Carr’s Hill) is growing slowly, a consequence of campaign cultivation.  University overnight guests were at Carr’s Hill a total of 67 nights this year compared to 63 the prior year.

During 2009, we will celebrate Carr’s Hill’s centennial with publications and programs about Stanford White’s work at the University and about the completion of the second great period of construction here with Stanford White’s death and the end of McKim, Mead & White’s engagement here. Meg Klosko’s new book about Carr’s Hill, an illustrated history of the house prepared for use in the historic preservation phase of the capital campaign, will appear in the fall under sponsorship of the Alumni Board of Trustees of the University of Virginia Endowment Fund, Inc. Special tours of the house will be offered during 2009. Exhibits explaining and celebrating McKim, Mead & White’s work here will occur in the Special Collections Library and the University Art Museum. At some time after this year of celebration, Carr’s Hill is scheduled for modernization and systems and structural work. The assessment of what will eventually be done appears at www.virginia.edu/architectoffice/pdf/CarrsHill_FinalReport.pdf.

Speeches/publications.   I have written my regular quarterly column for the alumni magazine.  I delivered formal or informal remarks to some 40 external groups as well as the customary speeches or reports on Grounds to Faculty Senate and school faculty meetings, and to other groups in other venues.  The published supplement to the State of the University address continues to be the University’s most-requested publication. 

Continuing Priorities

Planning.  Ultimately, much of what presidents do is planning, but with the qualification that in a collegial system of governance that work involves designating the right people, provoking dialogue among them, engaging qualified external experts when needed, reconciling recommendations to reality, and providing funding or directions toward funding as priorities ripen. This is long-term work. Much of it is managerial. One assigns specific functions to vice presidents, et al. Much of it has to do with financing new initiatives. Sometimes this work overlaps with Board planning initiatives. At other times, it does not because it must conform to state, regulatory, and other external clocks.

The Board approved the following goals at the completion of the four academic plans that originally comprised VA2020. Notes on the current condition of each goal appear in Italics after each one.

International Activities

• Have 80% of undergraduates involved in study abroad by 2020; develop fifth-year abroad programs that integrate international experience with disciplinary training and career objectives. With 1900 students abroad this year, we are approaching 60%participation. Our rate is reportedly third among public AAU institutions. When we began this effort our rate was ca. 20%, and we were not ranked. The beginning of aggressive recruitment for Semester at Sea in the fall and the coming of a new vice provost charged with meeting this goal will be next steps. No progress has been made on the fifth-year programs, which are now discussed in the context of the proposed Jefferson Track.

• Develop adequate faculty resources, flexible language programming and use of new technology; integrate international aspects of academic life with the rest of university people and activities; implement pilot programs that go beyond the boundaries of normal language work. Latin American Studies and in some regards Asian studies have developed in this direction. Development of undergraduate and graduate business programs consistent with this goal is behind schedule. That said, both the McIntire and the Darden School have had their hands full with construction, turnover among deans, and similar matters. The most promising available strategies involve use of U21’s digital delivery platform in Singapore. Dr. Garson and I have met with both deans within the month to discuss that option. Peter Low is actively involved.

• Transform the International Studies Office into the central and visible symbol of U.Va.’s commitment to international studies; develop an Institute of American Language and Culture to focus on advanced professional fluency in language and culture; begin planning an International Summer Institute in American Studies. This office is in the middle of a leadership transition. Some parts of this job have been done. Others have not. The flow of incoming international students was interrupted following 9/11. It is coming back now, and the larger purposes here remain sound. But these have not been top issues during a period when visas were hard to get and in general international exchanges diminished.

• Begin systematic worldwide development of institutional relationships; create an International Institute of American Studies; formalize procedures and standards for international liaisons. The first priority is ahead of schedule. Current work has to do with collaborative and independent Africa initiatives involving research and teaching, the U21 water project, and a new U21 global health project related to the UN’s MDGs. We have begun using the MDGs as topics for faculty workshops and similar events. After an initial conference, the College did no further work on the proposed International Institute for American Studies. The work on procedures and standards is on time and on track.

• Create position of Vice Provost for International Activities, an Advisory Council on International Activities, and an incentive budget for encouraging and coordinating international activities; develop an all-university integrated approach to international activities; the Interim Vice-Provost for International Activities should lead an International Activities Committee. The first section, down to “coordinating international activities,” has been accomplished. The integrated approach is in process, and the new vice provost will be charged with completing it. The final item is redundant because this interim completed the assignment and moved to other duties when Dr. Grossman was appointed.

Fine and Performing Arts

• Expand and improve facilities for the arts, providing students and faculty with the tools they need to create outstanding work, including works in digital media and other new technologies. Art History occupied its restored and modernized building in 2006. The new studio art building is scheduled for completion this month. Two new Architecture annexes are scheduled to be occupied this month. Studio Art has been separately organized under a unified Art department. Architectural planning for expansion of Drama is in progress. Fund-raising is moving less rapidly than I would like, but major gifts have been committed, particularly for innovation. The Caplan gift for Dance is the best example. Music initially wanted not to be included in the arts project. Last spring, the current chair and senior faculty members notified me that they now want to be included and that they have come to consider musical performance important to their departmental mission. Consequently, we are again working on a concert facility. Dr. Garson has made University Professor Beth Turner vice provost for the fine and performing arts. I believe that her leadership will advance our work on all of these projects and especially on a new art museum.

• Give departments the faculty they need to meet a greater share of student demand for courses in the arts, to collaborate across disciplines, to foster professional development, and to strengthen their programs. Also, give the arts libraries and the University Art Museum the human resources necessary to achieve and sustain excellence. In order to aggressively recruit students with exceptional artistic talent, give greater weight to artistic ability in the admissions process. Also, acquire and develop the means to recruit superb graduate students. Faculty numbers have increased as enrollments have, but I doubt that anyone thinks we have enough. Several of the complaints embedded in this recommendation turned out to be valid. For example, we learned on investigation that positions had been removed from the Museum of Art in short times and then moved to other departments in better times. Dr. Garson and Mr. Sandridge have worked on this issue for the future, and I have supplied interim funds to meet the most urgent needs. We are not done with this. The admissions committee found no basis for the complaints about admission policy. As the departments have redirected their entry-level courses to emphasize performance and similar experiences, enrollments have risen. A concern now is that the Studio Art building may not be large enough to accommodate demand that appeared after this report.

• Establish an undergraduate program in dance; launch the Digital Arts Initiative; create new graduate programs that will enrich the study, performance, and creation of the arts at the University; and establish new Centers of Excellence in the School of Architecture. The Dance program now exists as a minor, and is scheduled to become a major as demand develops. Digital arts is a component of Media Studies in the College. I am not aware of progress in either the College or Architecture on new graduate programs consistent with these recommendations. Both schools are undergoing decanal turnover. These and similar initiatives will be early topics for work done jointly by Dr. Garson and the new dean. Develop new and effective communications vehicles to promote the University’s arts programs to the community, to peer institutions, to alumni and friends, to current and potential donors, and to prospective students, especially in the Commonwealth. Done.

Public Service and Outreach

• Focus and apply our expertise in high-priority areas of public interest.  Related detail had to do with K-12 education. This initiative was built into the restructuring plans, and it has progressed as recommended. The Mellon Foundation and the Darden School have both participated.

• Establish regional and local structures to facilitate outreach partnerships, such as regional outreach councils, the proposed comprehensive NEH South Atlantic Regional Center for the Humanities, and the collaborative Connected Community. Projects of this kind have developed. They generally come and go as funding comes and goes and as faculty interests and local needs evolve. The undergraduate engineering initiative in Lynchburg, the BIS program in Tidewater and this fall in northern Virginia, and the approved but not yet offered MIS program are more durable inventions of this kind.

• Demonstrate institutional commitment by elevating public service in U.Va.’s academic culture.  The Batten School and the proposed Jefferson Track fit here.

• Demonstrate institutional commitment by integrating service-learning into student academic life.  Service learning programs have come to exist in several schools. None is a major, durable venture. The Jefferson Track is the next step in this direction.

• Demonstrate institutional commitment and increase visibility through better coordination and support for student, staff, and faculty volunteer service.  Current data suggest that we have the greatest degree of volunteerism per person of any University in this country, and that the many community volunteer activities undertaken by U.Va. students, staff, faculty and alumni are defining features of our University's culture.  Additional resources and administrative support are recommended for Madison House and other community volunteer activities. These ventures continue to grow and excel. The report’s authors were not aware that Madison House is not a University enterprise. It is self-endowed with funds transferred by the Rector and Visitors when Madison Hall ceased to be the University YMCA. Generally speaking, University General Fund moneys are not transferred to community organizations. We have provided surplus computers for community-service projects, and students, faculty, and staff regularly volunteer in these organizations.

• Increase visibility by aligning administrative and financial resources to reflect the University’s commitment to public service and outreach.  Sondra Stallard, the former Continuing and Professional Studies dean, took responsibility for this one. The BIS and licensed MIS programs, the expanded law enforcement training centers in Quantico and Budapest, and expanded offerings in the regional centers, including several developed as part of restructuring, are products of her work.

• Demonstrate institutional commitment by increasing visibility of and access to outreach at U.Va.  This has to do generally with Outreach Virginia, a web portal that is alive and well, and with ongoing series of summits on public service held by Continuing and Professional Studies. In addition, we have partnered with Longwood University and Virginia Tech in a series of economic development conferences in the Southside.

Science and Technology

Short-Term

• A University-wide information initiative to build excellence in computer and information science and in engineering, as well as to create new approaches to scholarship in the humanities and other disciplines. This is the recently funded and expanded ITE facility, now in final design. Donor, University, and state financed.

• An initiative in Quantum and Nanoscale Science and Engineering that will investigate the behavior of materials, macromolecules, biosystems and devices at the atomic scale. This is Wilsdorf Hall, which opened last year. Donor- and state-financed.

• Biodifferentiation, in which researchers will study both how cells and organisms acquire and maintain their characteristic form and function as well as the application of such knowledge in preserving human health. This is more diffuse, but the related structure is Carter-Harrison Research Building, now in construction.

Long-Term

• Provide an endowment to recruit additional excellent faculty and furnish properly equipped laboratory space for them to work. This is a campaign initiative assigned to the relevant deans. Mr. Skalak will now take responsibility for central coordination and direction.

• Recruit and support higher quality graduate students. I know no measure of progress here, and the commission provided no base line. Graduate enrollment here is 40% of the total—the highest among the AAU public universities, and it is growing. This may suggest progress.

• Provide seed funding to support emerging research directions. Done regularly. The issue here is scale, and the deans have been responsible to raise these funds. Mr. Skalak will lead going forward.

• Create a strengthened central strategic management with coordination both horizontally and vertically in the University. The commission’s intent here is not clear, but Dr. Garson has redefined several senior managers’ responsibilities in his area. Mr. Skalak’s new duties come as near as anything I can imagine to addressing this issue.

Comment: By any standard, this is good progress, although the planning commission’s work now supersedes most of this. That the historic reduction of $52 million/year in state General Fund occurred after this report was approved and the programs moved ahead regardless perhaps suggests the importance of defining goals constantly and working always to use three fund sources (recycled current fund, philanthropy, and state funds as they are available). When one source dries up, one always has other irons in the fire. The starkest departures from the plan (the abandonment of the proposed International Summer Institute in American Studies, for example) generally reflect revised priorities in the schools or in the provost’s planning. Few ventures have failed, but when work load or internal politics or other priorities force choices, plans often either await another life (as has happened with service learning) or die for want of deep support.

State relations, support, service.  Two forces (an effective business coalition that Mr. Fralin leads on behalf of all public universities, and seasoned, respected staff whom state officials know and treat well because of prior experience) have given us another good year in state relations.  The Rolls-Royce project, which Gordon Rainey, deans Zeithaml and Aylor, and as appropriate others of us developed in collaboration with the Governor and the company is a major breakthrough for Virginia. Following some 18 years of failure in efforts to win interstate contests for new ventures of this kind, Virginia won. That UVaF, our former Rector, and University personnel played central roles bodes well for the future. Similarly, the announcement of the Batten School has had a significant effect, both for its demonstration that we can find major support and that we can generate great concepts for the future—both in the context of restructuring.

Fund-raising.  Despite an increasingly uncertain economy, we continue to exceed targets. The year’s round of regional kickoff events went uncommonly well, not least because of Mr. Rainey’s role in them as chair of the Campaign Executive Committee, and crowds continue to exceed prior records in all of our campaign events. The new series of VA2020 retreat weekends has both energized participants and triggered substantial new gifts from sources previously thought improbable. One has to adjust constantly, but for now all of our event formats are working well.

Capital projects.  Essentially all projects are on time and on budget.  The major successes are obvious, and state funding for South Lawn III is a major boost because it frees the College Foundation to redirect its energies to the College’s need for endowments and to engage a larger percentage of College alumni than it has previously. The Arts Gateway and museum project are moving slowly. We have made progress on both personnel and planning problems that have slowed the work, but we are far from done. I mentioned a core problem last year: like libraries, museums and concert halls receive little support from deans and other academic fundraisers, whose chief concerns are their own projects.  Consequently, these most fundamental common projects tend to take a very long time and to involve far more work than other projects do. 

Diversity.  The Carter G. Woodson Center now has a permanent and very active head.  The College and provost are on notice that they must provide base funding for expansion and improvement as needs develop. Julian Bond’s second Virginia Voyagers’ program on the Civil Rights South was even more successful than the first such program, and it continues to draw serious and favorable attention in the media.  The most substantive work on diversity in the workplace this year has been Ms. Fraser’s and Ms. Carkeek’s. The remarkable diversity of backgrounds in the current round of senior administrative appointments perhaps says more than any other evidence might say about the range of talents possessed by persons who want to take responsibilities here, and also about our attractiveness as a place to work and live for persons whose qualities would let them find similar positions anywhere.

Student Life and Conduct.  Most indicators showed improvement this year. New faculty residents on the Lawn appear to have established good relationships with their student neighbors. The Sweeneys have been particularly effective as leaders for the students, and several newer residents, including those in the apartments in Pavilion VIII, have joined the Zeithamls and others as mentors for the students. Perhaps one always sees somewhat more drunkenness among young adults than seems appropriate, but the University Police and the substance-abuse counselors handle their cases effectively.  Our numbers are not going up. Some indicators show improvement. Ambient, generally minor confrontations continue to occur on the boundaries of the student neighborhoods where settlement zones overlap, but this was not a year of serious problems in that regard. It was a year for uncommonly effective student leadership in essentially all student organizations. An effective vice president and an effective dean with deep attachments to the student community deserve much of the credit for that.

Large academic priorities for the coming year.  Dr. Garson is making solid, deliberative progress toward opening the curriculum to global perspectives and issues, to the more rigorous approach to mathematics that will be necessary to remedy the nation’s deficiencies in science, and to what will be our first comprehensive and sustained academic commitments to the fine and performing arts—undertakings in which student demand continues to challenge some elements of our faculty and departmental cultures. Whatever contest exists seems wholesome to me: a university can confront more troublesome issues than how best to instill rigor to curricula, how best to build bridges between traditional disciplines, how best to build environmental science, issues, and policy considerations into a broad cross-section of our work.

International prominence. We will continue solidifying the University’s position as a world leader among universities. Our niche is an unusual one in that we are neither a private university known for its wealth and history of educating leadership for the entire world nor a Land Grant university known for providing services funded by the federal government for developing regions. The success of the Virginia Windsor Program is important. So is our emergence as a leader within U21 and as a preferred partner in such diverse activities as developing sustainable water sources for cities, providing global health leadership, and educating leaders for the public arena as we have for a half-century educated leaders for business. Building strength in science remains our largest single challenge in both domestic and global affairs, and one that we confront in a time of declining federal means or willpower to support research and without significant state support.

Expand applications of digital technology. We are no stronger than the bottom third among AAU universities in adaptations of digital technologies for classroom and distant education, and we lag behind peers in Virginia in some respects. Virginia Tech’s Math Emporium has been a state-of-the-art means to teach essentially all entering undergraduate students math at a suitably sophisticated level to support success in subsequent science courses. It is widely used among AAU universities, and it has been supplanted in some by locally made software that is directly appropriate to their curricula. Our faculty has chosen not to adopt this or a similar technology. Other commonplace applications include real-time courses offered for our own students while they are studying abroad so that they can keep pace with requirements here while also enriching their programs abroad, on-site applications, some real-time and others not, for industry and government, and all or part of the coursework required for programs like our BIS, and for virtual research seminars in which researchers use interactive web systems to carry on discussions of common work or of work that is similar enough to make conferral desirable if cost barriers associated with travel can be addressed. We will work in the coming year to learn from other universities and to make our own work more effective in ways that digital technologies can facilitate.

International centers. We lag behind virtually all peers in developing foreign sites for research and instructional use. Virginia Tech has had a campus in Switzerland for several years, and it is opening its India campus, with support from Tata, this fall. The University of Georgia owns two facilities at Oxford and runs degree-granting programs in them. Georgia Tech is at Metz. Rice has an engineering research center in Germany. MIT runs a graduate school in Malaysia. Harvard, Chicago, Penn, and others run MBA or similar programs in Singapore, India, and other places where we are absent. Limited information suggests that provosts elsewhere have commanded resources that here belong to the schools individually and that school priorities tend to be driven more by current faculty preferences and intent than by long-range visions that serve entire universities. We will work this year on our own version of the visions that have propelled other universities in this direction and on ways to achieve it.

Appendix: Major Gifts FY2008    

(Gifts are listed in chronological order from 7/01/07 to 5/31/08)

• Estate of Spencer P. Bass, Jr. M.D., $8,650,000.00 bequest to the Medical School allocated between the Spencer P. Bass, MD Twenty-First Century Professorship in Family Medicine and the Dr. Spencer P. Bass, Jr. Fund for the School of Medicine.

• Amvest Corporation, $6,700,000.00 gift of the Amvest headquarters building to the University Foundation in fulfillment of the Amvest Corporation pledges to Athletics and U.Va.’s College at Wise. Mr. Carl W. Smith and Mrs. Hunter J. Smith are associated with this gift.

• The Batten Foundation, $5,000,000.00 pledge payment to the Frank Batten Fund for the School of Leadership and Public Policy. Mr. Frank Batten, Sr., is associated with this pledge payment.

• Anonymous, $5,000,000.00 gift to the McIntire School of Commerce Foundation for the Building Campaign Fund.

• Claude Moore Charitable Foundation, $4,000,000.00 pledge payment consisting of $3,000,000.00 allocated to the Claude Moore Medical Education Building and $1,000,000.00 for the School of Nursing Building Addition.

• The Batten Foundation, $35,000,000.00 pledge payment to the Frank Batten Fund for the School of Leadership and Public Policy. Mr. Frank Batten, Sr., is associated with this pledge payment.

• Mr. Frank Batten, Sr. $10,000,000.00 pledge payment to the Frank Batten Fund for the School of Leadership and Public Policy.

• Mr. Albert H. Small, $7,920,000.00 gift in kind of his remaining 36% interest in the First Edition of the First Printing of the Declaration of Independence to the Special Collections Library.

• Mr. Paul T. Jones, II and Mrs. Sonia Klein Jones, $7,535,954.00 given to Athletics for the John Paul Jones Arena, the College of Arts & Sciences for environmental sciences, and the Jefferson Scholars Foundation.

• Mr. Michael W. Walters and Mrs. Joan S. Walters, $2,000,000.00 gift to the Bob Olderman Student-Athlete Scholarship at the Virginia Athletics Foundation.

• Mr. Roy Byron Harrill, $1,330,000.00 in deferred giving to ultimately support the Dean’s Fund for Excellence at the McIntire School of Commerce Foundation.

• Estate of David Allen Mayhugh, $1,800,000.00 bequest to the Medical School divided equally between cancer and retinal research.

• Mrs. A. Stuart Robertson, Jr., $1,043,570.00 deferred gift for the benefit of the Law School established to ultimately provide endowed scholarships to law students.

• Smithfield-Luter Foundation, $1,000,000.00 pledge payment towards a $5 million pledge to build an endowment supporting the Medical School. Mr. Joseph W. Luter, III is associated with this gift.

• Estate of Robert C. Hancock, $4,000,000.00 bequest to the University of Virginia’s College at Wise for the Thelma Meade Hancock Endowed Scholarship Fund.

• The Wallace Foundation, $2,000,000.00 private grant to benefit an Executive Leadership Program for Senior Level Educators split equally between the Curry School of Education and the Darden School.

• Mr. John G. Odom, $1,500,000.00 deferred gift for the benefit of the Law School established to ultimately provide endowments for a professorship and discretionary support.

• Mr. John W. Kluge and J.W.K. Properties, Inc., $1,320,000.00 gift in kind of 16 pieces of Aboriginal art to the Kluge-Ruhe Aboriginal Art Collection.

• The Andrew W. Mellon Foundation, $1,203,000.00 private grant for the University Library in support of the Scholarly Communication Institutes.

• Mrs. Miriam W. Burnett and her son, Mr. Charles R. Burnett, III, $1,034,506.04 gift to the Medical School for the use of the Dr. James M. Larner Radiation Oncology Research Fund. Mrs. Burnett has since passed away.

• Smithfield-Luter Foundation, $1,000,000.00 pledge payment to the U.Va. Fund for the Smithfield-Luter Palmer Weber Endowment Fund for the benefit of the Cancer Center. Mr. Joseph W. Luter, III is associated with this pledge payment.

• Claude Moore Charitable Foundation, $4,000,000.00 pledge payment allocated $3,000,000.00 to the School of Medicine for the Medical Education Building and $1,000,000.00 to the School of Nursing for the Building Addition Fund.

• Wallace H. Coulter Foundation, $1,000,000.00 private grant to support translational research split equally between the Schools of Engineering and Medicine.

ATTACHMENT 2

(Annual Report of the

Executive Vice President

and Chief Operating Officer)

University of Virginia

Office of the Executive Vice President and Chief Operating Officer

2007-2008 Annual Report

and

2008-2009 Goals

Prepared for Board of Visitors Retreat

July 25, 2008

Jefferson Hotel

Richmond, Virginia

University of Virginia

Office of the Executive Vice President and Chief Operating Officer (EVP/COO)

Annual Report for 2007-2008¹

1. Support institutional goals through the oversight of athletics, finance, hospital, information technology (until reassigned to Provost in January 2008), management and budget, police, student affairs, human resources, emergency management, and the architect for the University.

2007-2008 Status

Day-to-day operating responsibilities are key duties of the EVP/COO position. Special attention was given by the EVP/COO during 2007-2008 to supporting the following work which was undertaken by the operating units and is not covered in other parts of this report:

• Secured Board of Visitors approval of a new human resources system as allowed under the restructuring legislation for full implementation on January 1, 2009.

• Supported the Medical Center in addressing bed shortage issues, patient safety and responsible financial performance. Assisted in the coordination of the various units of the Health System.

• Devoted special attention to the actions required to accommodate new legislation related to student mental health issues and communications with parents.

• Served as co-chair of the President’s Commission on the Future of the University.

• Identified funding for central development and University priorities by redirecting existing endowment commitments, increasing endowment payouts and instituting an endowment administrative fee.

• Focused planning and police officer/staff training on providing a safe environment for students, employees, patients, and visitors. Hired the University’s first director of emergency preparedness.

• Developed a strengthened long-term financial plan for the Department of Athletics.

• Represented the University in negotiations to bring Rolls-Royce to Prince George County and create a Commonwealth Center for Advanced Manufacturing (CCAM). The CCAM building will be constructed and operated by the U.Va. Foundation and staffed in part by U.Va. researchers.

• Transitioned the Vice President and Chief Information Officer to the oversight of the Executive Vice President and Provost (EVP/Provost) and continued to advise on matters related to operations at the request of the incumbent.

• Advised staff on legislation exempting donors’ personal information from the Virginia Freedom of Information Act.

• Responded to the in-depth inquiry from the United States Senate Committee on Finance regarding the University’s tuition and endowment.

• Participated when requested in support of the Campaign for the University of Virginia.

2. Develop long-term financial strategies to provide resources for basic operations and strategic initiatives through effective and efficient operations, multi-year planning, use of Restructuring legislation, and additional unrestricted resources.

2007-2008 Status

Effective and Efficient Operations:  

• Continued to realize benefits (time and cost savings) from restructuring and the Management Agreement in key areas (procurement, capital outlay, finance, human resources, and information technology).

• Examples of operational improvements resulting in greater effectiveness and efficiency include:

• Applied continuously updated information on parties with which U.Va. is not allowed to transact business under Homeland Security regulations. (Office of Sponsored Programs)

• Installed GPS devices on buses that inform potential passengers of expected arrival times at stops through computers and PDAs. (Parking & Transportation)

• Implemented electronic payment of student bills. (Student Financial Services)

• Used variable-rate debt for capital projects; cumulative savings since 2003 of $8.3 million; and, interest rates for internal borrowers of 4.75 %. (Treasury Operations)

Multi-Year Planning:

• Building on the Board of Visitors’ ten-year planning process and with the EVP/Provost, presented recommendations of the President’s Commission on the Future of the University to the Board in February. Set aside resources in the 2008-2009 operating budget to address the highest priorities. In the fall, the Board will receive recommendations from the EVP/Provost on which priorities should be funded and which priorities will be most effective in distinguishing the University.

• Forecasted a more consistent and predictable range of tuition and fee increases using the Restructuring six-year financial plans, which guided the tuition proposal for FY 2008-2009. These increases were approved by the Board of Visitors and are consistent with the six-year plan.

Use of Restructuring Legislation:

• Received SCHEV certification of the University’s performance under its Management Agreement, allowing the University to receive financial incentives, such as interest on tuition and fees in the approximate amounts of $1.75 million for 2007-2008 and $2 million for 2008-2009.

• Continued to revise various business policies (e.g. travel reimbursement, relocation, etc.) to streamline procedures and simplify the requirements placed on faculty, staff, and students.

• Saved approximately $1 million with local control over capital processes and approval of non-general fund projects.

Additional Unrestricted Resources: 

• Implemented and continued to expand strategies to increase the availability of unrestricted funds to support the University. Examples of successful efforts in 2007-2008 (although we will not realize some of the benefits until 2008-2009) include:

• Increased endowment payout by 0.5 percent or $16 million. Where feasible, the additional distribution will be used to repatriate unrestricted institutional funds.

• Implemented an administrative fee of 0.5 percent of endowment market value to cover expenses of administering the endowment.  The administrative charge represents a total of approximately $16 million for FY 2008-2009 -- $8 million will offset centrally-funded endowment/development administration and $8 million will be distributed directly to schools and other major units that are responsible for endowments.  These steps free-up unrestricted dollars for other purposes.

• Reserved $8 million to address Commission priorities in the 2008-2009 operating budget. 

• Encouraged schools and departments to fully utilize their available resources to meet the priorities that have been identified in the University’s strategic planning efforts.  

• Completed fourth year of a ten-year plan to reserve funds for deferred maintenance – the University as a whole and all but one auxiliary unit have met the reserve requirement.

• Completed first year under investment legislation allowing U.Va. to invest state non-general fund balances in equities, similar to investment rules for private funds. Early results: earned $4.5 million on health insurance reserves; invested Medical Center depreciation reserves in the UVIMCO long-term pool.

• Completed first year of “Internal Bank” operations, which generated additional unrestricted resources through services provided to University units.

3. Implement Board-approved budgets, achieve unqualified audit opinions, maintain appropriate bond ratings, and sustain safe/effective operations in the Medical Center.

2007-2008 Status

• Complied with the FY 2007-2008 Board-approved budgets for the Academic Division, College at Wise, and Medical Center. Met the Board’s financial commitments to AccessUVa, faculty compensation, deferred maintenance, and research.

• Received approval of the balanced 2008-2009 budgets that will meet the Board’s ongoing commitments and provide funding to address the recommendations from the Commission on the Future of the University.  The Board has requested further review of faculty compensation in relation to AAU peers — options will be presented in October 2008.

• Received an unqualified audit opinion from the Auditor of Public Accounts and responded to three management letter comments on behalf of the entire University.

• Reaffirmed the University’s Aaa bond rating from Moody’s, Fitch, and Standard & Poor’s.

• Successfully responded to numerous planned and unannounced reviews by regulatory agencies in the Medical Center.

4. Work with the President and the members of the Board of Visitors named by the Rector to assess the role of the Executive Vice President and Chief Operating Officer and develop and implement a transition plan.

2007-2008 Status

• Mutually agreed with the Board and the President on a revised retirement date.

• Worked with the Rector-appointed Transition Committee to “establish criteria to be used in preparation for choosing successors to retiring senior members of the Administration” with the intent of achieving a seamless transition.

• Provided requested information about the EVP/COO role, structure, duties, relationships, risks and options as requested by the Transition Committee.

5. Provide oversight of the clinical enterprise through the partnership between the vice president and chief executive officer of the Medical Center and the vice president and dean of the School of Medicine with an emphasis on patient safety in a very busy hospital, bed resources, the Decade Plan, and staffing/compensation levels.

2007-2008 Status

• Placed increased emphasis on the effective engagement of the deans of the School of Medicine and Nursing and the faculty in Medical Center matters. Supported allocation of $25 million to the School of Medicine from the Medical Center. Developed a new level of financial transparency between the School of Medicine and the Medical Center to deal with the fiscal challenges faced by both entities. Increased the priority placed on patient safety and strengthened the engagement of the MCOB in review of patient safety initiatives.

• Examples of results of Medical Center operations over the past year include:

• Provided care to a record number of patients (29,969 inpatient admissions, 705,519 outpatient admissions, and 26,151 surgical procedures). 

• Achieved a case mix index for all Medical Center patients of 1.81.

• Ranked 7 specialties in US News and World Report: Endocrinology (8), Gynecology (22), Cancer (27), Neurology/neurosurgery (29), Respiratory diseases (39), Digestive disorders (47) and Urology (49).

• Launched certificate program for housestaff.

• Fulfilled all Q-HIP quality requirements, with an overall ranking of 87.44.

• Achieved an overall patient satisfaction rate of 86.3 percent.

• Revised Clinical Staff Committee structure.

• Increased total number of RN caregivers by 89, bringing total to 2,025 with an overall RN vacancy rate of six percent.

• Opened a seven-bed Medical/Surgical Intensive Care Unit in an effort to increase the capacity to care for critically ill patients.

• Opened two additional operating rooms in the main operating room area. 

• Renovated Labor and Delivery Operating Rooms.

• Opened Altavista, Virginia Dialysis unit.

• Completed construction of and opened 11th Street Parking Garage.

• Began construction on the Emily C. Couric Clinical Cancer Center.

• Signed long-term provider contracts (both hospital and physician) with Anthem and Southern Health.

• Updated the Medical Center’s long range financial plan with emphasis on support of the School of Medicine and the Children’s Hospital.

• Concluded Children’s Hospital Planning initiatives focusing on 1) environment of care, 2) organization and structure, and 3) program evaluation and assessment.

6. Collaborate with the appropriate officers of the University to a) preserve the physical excellence of the Grounds, b) improve infrastructure necessary to support our academic, research, and clinical programs, c) implement design guidelines to address security of our buildings, d) release the first version of the Grounds use plan, and e) implement sustainability activities.

2007-2008 Status

• Preserve the physical excellence of the Grounds:  Maintained a systematic inspection program to sustain a high-quality appearance of the Grounds of the University; removed trash, flyers and postings daily; increased landscaping efforts; reseeded areas of turf damaged by excessive foot traffic; and protected trees near construction projects. 

• Improve infrastructure necessary to support our academic, research, and clinical programs:  Continued to improve the facilities condition index as a result of funding approved by the Board and appropriations through the state Maintenance Reserve program.  Received bond funding from the state to replace hot water piping through the Central Grounds and to renovate and upgrade New Cabell Hall. Committed institutional non-general funds to replace the HVAC systems in the School of Medicine’s core research facility, Jordan Hall ($28.9 million); renovate and upgrade the Rugby Road Administration Building ($17.7 million); and renovate Garrett Hall ($14 million – Batten gift).

• Implement design guidelines to address security of our buildings: Adopted “Crime Prevention through Environmental Design” standards as part of University Design Guidelines.

Established new door-hardware standards for exterior and interior doors to both enable and prevent securing of doors as appropriate.

• Release the first version of our Grounds Plan: Presented a twenty-year land use capacity analysis and related benchmarking of areas both within Grounds and at other peer institutions to the Board of Visitors in October 2007. Received approval from the Board for the 2008 Grounds Plan principles and redevelopment sites map.

• Implement sustainability activities:  Began the process of seeking general LEED certification by the U.S. Green Building Council for major capital projects at U.Va. Developed a communications plan about sustainability topics at U.Va. and completed the first Sustainability Projects Evaluation Report (SPEAR). Established collaborative relationships with the City and the County Sustainability Offices and created a website for U.Va. sustainability awareness.

7. Monitor the Arts Gateway, South Lawn, School of Architecture, and Emily C. Couric Clinical Cancer Center projects to ensure compliance with design/construction schedules, budgets and related business plans.

2007-2008 Status

• Engaged directly with specific high-risk capital projects including the Arts Gateway, South Lawn, School of Architecture, West Main Street and the planned research buildings. Specific comments about the individual project that were considered to require special attention follow:

• Arts Gateway:  Project consists of two elements: a new University Museum building and a separate Band Rehearsal facility. 

• Museum Building Status: Design team selected; program verification complete; concept design phase for revised museum program begun and scheduled for completion fall 2008.

• Band Rehearsal Facility Status:  contract with design team for concept phase in progress; concept phase to begin in July 2008 and scheduled for completion fall 2008.

• South Lawn:  Communicated regularly with the College Foundation volunteers regarding the progress of fund raising.  The April 2008 private funding status reports $60.6 million in cash, pledges, and expected pledges.  The College Foundation will raise and pay interest on any temporary loans required to cover the outstanding pledges.  The project is under construction with expected completion in 2010.

• School of Architecture:  Agreement was reached in 2006 for the University to guarantee $3.1 million in order to award contract for the additions.  The School of Architecture and its Foundation are continuing with fundraising efforts. The building is scheduled to be complete in July 2008.

• Emily C. Couric Clinical Cancer Center Building: Construction began in April 2008.  With completion of the replacement 11^th Street Garage, demolished the West Parking Garage to provide Cancer Center’s construction site.  The building is scheduled for completion in 2011. 

8. Comply with federal, state, and other regulatory agency requirements in health, research, athletics, finance, and business functions through existing unit-based and institutional compliance activities.

2007-2008 Status

• Completed fiscal year with no significant compliance failures.

• Complied with new state requirement related to the Agency Risk Management and Internal Controls Standards (ARMICS). Key deliverables included:

• ARMICS Stage 1 certification submitted September 30, 2007 regarding 20 agency-level assessments.

• ARMICS Stage 2 certification submitted June 30, 2008 regarding 85 transaction-level assessments and 30 significant fiscal processes.

• ARMICS Stage 3 Corrective Action Plan will be completed and submitted by the due date of July 31, 2008 for six of the University’s internal controls.

• Responded to (or initiated responses to) eight research-related audits in the past year by federal and industry sponsors. 

• Completed with no adverse findings an audit by IRS of the University’s 2003 general obligation bonds.  After an exhaustive review of the University’s responses to the IRS questionnaire and an on-site visit, the IRS reported that no adjustments were required, and orally cited the compliance program we launched in 2003 as best practice among universities.

9. Implement the recommendations of the Board’s Special Committee on Foundations, co-chair the Commission on the Future of the University and support the Special Committee on Planning.

2007-2008 Status

• The report of the Special Committee on Foundations was approved by the Board in February 2008. The approved recommendations are being implemented, and signed MOUs are being secured from each University-Related Foundation.

• The Commission on the Future of the University’s final report was given conceptual approval by the Board in February. Resources were included in the Board-approved budget for 2008-2009 to fund priorities subject to confirmation of specific initiatives by the Board in October, 2008.

• Special Committee on Planning continued during the year but at a reduced level of intensity pending completion of the work of the Commission on the Future of the University.

• Performance measures were updated for new fiscal year data.

10. Serve on boards including but not limited to the University Investment Management Company (UVIMCO), the U.Va. Foundation, and the Medical Center Operating Board.

2007-2008 Status

• UVIMCO:  Met regularly with the CEO/CIO to assist as appropriate in the daily management of UVIMCO operations and coordination with the University.  Served as the President’s designee on the UVIMCO Board and monitored compliance with the Deposit and Management Agreement between UVIMCO and the University; also served as chair of the audit committee, and as a member of the executive committee and nominating committee.

• University of Virginia Foundation: Assisted the foundation in completing a wide range of projects including:

  • Demolition of 25 buildings at Blue Ridge in preparation for future use as a University of Virginia Research Park (eleven structures were mothballed for potential reuse).

  • Completion of the Snyder Translational Research building at Fontaine; began construction of an underground Life Science Annex project which in part will be a vivarium for U.Va. research and submitted a rezoning request with Albemarle County to add approximately 725,000 square feet of additional development capacity. 

• Full leasing of the Town Center Two building at the U.Va. Research Park, North Fork; located the U.Va. School of Engineering Research Institute in the new facility; began construction of Town Center Three and leased 38 percent of the facility before the end of June 2008.

• Rezoning of the Currie Farm in Prince William County allowing residential development and positioning the property for sale in the future.

• Completion of 11^th Street Garage, a 1,025-car parking garage on West Main Street in support of the Medical Center.

• Initiation of work on the Guest House, Fun Barn, and Main House at Morven in an effort to accommodate U.Va. programming.  Assisted in the hiring of a Director of Morven Programs.

• MCOB: Served as an ex-officio member of the Medical Center Operating Board; advised the CEO of the Medical Center on issues of importance to the University consistent with the EVP/COO’s oversight responsibilities, and participated in preparatory sessions for MCOB meetings.

University of Virginia

Office of the Executive Vice President and Chief Operating Officer

Goals for 2008-2009

1. Support institutional goals through the oversight of athletics, finance, hospital, management and budget, police, student affairs, human resources, emergency management, and the architect for the University.

2. Develop long-term financial strategies to provide resources for basic operations and strategic initiatives through effective and efficient operations, multi-year planning, use of Restructuring legislation, and additional unrestricted resources.

3. Implement Board-approved budgets, achieve unqualified audit opinions, maintain appropriate bond ratings, formalize a process for enterprise risk management, and sustain safe/effective operations in the Medical Center.

4. Continue working with the President and the Board of Visitors Transition Committee to assess the role of the Executive Vice President and Chief Operating Officer and develop and implement a seamless transition plan.

5. Provide oversight of the clinical enterprise through the partnership between the vice president and chief executive officer of the Medical Center and the vice president and dean of the School of Medicine with an emphasis on patient safety in a very busy hospital, bed resources, the Decade Plan, efficient operations, and appropriate staffing/compensation levels.

6. Collaborate with the appropriate officers of the University to a) evaluate recommendations contained in the Physical Resources Subcommittee report of the Commission on the Future of the University and develop an action plan for implementation as appropriate, b) improve infrastructure necessary to support our academic, research, and clinical programs, c) integrate and implement sustainability activities.

7. Monitor at-risk capital projects to ensure compliance with design/construction schedules, budgets and related business plans.

8. Comply with federal, state, and other regulatory agency requirements in health, research, athletics, finance, and business functions through existing unit-based and institutional compliance activities.

9. Complete the implementation of the recommendations of the Board of Visitors’ Special Committee on Foundations and the Commission on the Future of the University, and continue to support the Special Committee on Planning.

10. Serve on boards including but not limited to the U.Va. Investment Management Company (UVIMCO), the U.Va. Foundation, and the Medical Center Operating Board.

ATTACHMENT 3

(LETTER FROM ADOM GETACHEW)

Dear All,

As many of you already know, I am missing the Board Retreat because I am finishing up a research program at Yale. While I am enjoying the experience, I am disappointed that I can not join you in Richmond.

That being said, I wanted to at least share some of my thoughts with you in writing. Particularly, I would like to address my concerns and thoughts on the issue of faculty diversity, an issue raised in the April Board Meeting and one that I understand Mr. Thompson plans on addressing at the retreat.

During the April meeting, we discussed both the challenges and the importance of recruiting and retaining a diverse faculty and administrative body. I believe that this point has been further illuminated during this academic year when UVa lost six tenured or tenured-track African American faculty members. I do not want to reiterate why diversity among our faculty and administration is important as I know that the Board and the University as a whole is already fully committed to this idea. However, I do want to suggest two possible avenues we should carefully consider for increasing the presence of faculty of color.

1. In the last two decades, private and public institutions of higher learning across the United States have recognized and responded to the need for truly globalized curriculums which prepare students to engage in a world that is quickly becoming smaller. As a result, ethnic and area studies programs such as African-American Studies, Latino Studies and East Asian Studies, to name a few common examples, have become important institutional units for providing the kind of holistic and global education needed for the 21^st century. Moreover, these same programs have been used successfully to recruit and retain faculty of color in part because they may have higher representations in these areas than in some other fields. With the Commission of the Future Report citing “international education” as a University priority, developing and strengthening our ethnic and area studies programs should be one of the prominent strategies we take advantage of to reach the interdependent goals of a global curriculum and a diverse world class faculty.

2. Furthermore, in order to address the shortage of tenured faculty of color, we should aim to recruit already established and tenured faculty of color as well as junior faculty. The presence of tenured faculty of color is important as they are more likely to attract stronger graduate students and junior colleagues who would come to work with them. Through such networks, the University would not only achieve a more diverse faculty but it would also develop richer intellectual communities which would facilitate the kind of inter-generational dialogue critical for knowledge production.

Neither of these suggestions is new, but I hope that they will be brought to the forefront of the discussions around diversity at the retreat. I think that these strategies could help UVa avoid the legal challenges of diversity hiring we discussed in April and also allow the University to meet multiple goals simultaneously.

Again, I am very sorry that I will not be at the retreat but I look forward to seeing you in the fall.

Sincerely,

Adom Getachew