University of Virginia Library

I am writing you relative to the proposed plan for the construction of a new
dormitory housing approximately 176 students for which we have an appropriation
of $192,500.00.

Should we construct a building housing 176 students, the cost of the building
and equipment would be approximately $704,000.00, leaving $511,500.00 to be
provided from the bond issue. The building would produce revenue, at the current
rate of $153.00 per session, totalling $26,928.00. Should bonds be issued bearing
interest at 3% for 25 years, I estimate that it would cost approximately $29,360.00
to service these bonds exclusive of the maintainence cost of the building. Thus,
before any maintainence is taken into consideration, there would be a deficit of
$2,432.00.

Should we construct a dormitory housing 120 students, it is estimated that
it would require a bond issue of approximately $287,500.00. A dormitory housing
120 students at the current rent of $153.00 would produce revenue totalling
$18,360.00. Should we issue bonds for 25 years bearing interest at 3%, the annual
cost of servicing would require approximately $16,500.00, leaving a surplus of
approximately $1,800.00.

It would appear, therefore, that unless funds would be provided by action
of the Board from other sources, the project could not be sustained if a
dormitory housing 176 students were constructed. However, should the size of
the dormitory be reduced to house approximately 120 students, it is my belief
that such a dormitory would permit the project to be sustained from the revenues
which the building would produce.

I submit this information for your consideration.