Board of Visitors minutes :: May 30, 2003 :: University of Virginia Library

		PAGE
I.	Preamble	1
II.	Definitions	3
III.	Scope of Policy	4
IV.	Project Management System	5
V.	Project Size and Scope	7
VI.	Project Cost	8
VII.	Acquisition of Land for Capital Projects	10
VIII.	Capital Project Compliance with the Code of Virginia	14
IX.	Environmental Impact Reports	15
X.	Project Inspections and Certification for Occupancy	16
XI.	Reporting Requirements	17

THE RECTOR AND VISITORS OF THE UNIVERSITY OF VIRGINIA
POLICY STATEMENT GOVERNING EXERCISE OF POST-APPROPRIATION
AUTONOMY FOR GENERAL FUND AND NON-GENERAL FUND CAPITAL
PROJECTS

I. Preamble

Chapters 995 and 933 of the 1996 Acts of Assembly (House Bill No. 884 and Senate Bill No. 389, respectively) delegated limited but significant autonomy to the University of Virginia to establish its own postappropriation system for undertaking the implementation of non-general fund capital projects for the University of Virginia Medical Center. In general, the autonomy is designed to replace the traditional post appropriations system of reviews, approvals, policies and procedures carried out by a variety of central State agencies identified in the enabling legislation. The University's system for carrying out the post-appropriation capital outlay process for non-general fund capital projects of the Medical Center is to be governed by policies adopted by the Board of Visitors. Similarly, § 4-5.08 of the 1996 Appropriation Act delegated nearly identical limited autonomy to the University as a whole for non-general fund capital projects authorized for the 1996-1998 biennium.

This authority has since been continued through 2002-2004 by subsequent legislative action. This latter delegation of autonomy is subject to certain conditions, the foremost of which is that the Board of Visitors must adopt a system of reviews and approvals for University non-general fund capital projects and submit the proposed system for prior approval to the Secretaries of Finance and Administration prior to September 1, 1996. More recently § 4-5.08 of the 2003 Appropriation Act extended the delegated authority approved in § 4-5.08 of the 1996 Appropriation Act by creating a pilot program delegating post-appropriation review and approval to the University for selected state general fund or state-supported debt capital projects as defined in Section 4-5.08f of Chapter 1042-2003 Acts of Assembly. This latest delegation of autonomy is subject to certain conditions, the foremost of which is that the Board of Visitors must adopt a system of reviews and approvals for University state general fund and statesupported debt capital projects and submit the proposed system for approval to the Secretaries of Finance and Administration prior to August 1, 2003.

The following provisions of this policy statement are based on the 1996 policy statement for non-general fund projects with modifications added that extend the policy to include state general fund and state-supported debt projects as provided in Section 4-5.08f.1. of Chapter 1042 -2003 Acts of Assembly. This statement constitutes the adopted Board of Visitors policies regarding both Medical Center state general fund, statesupported debt, and non-general fund capital projects and other University state general fund, state-supported debt, and non-general fund capital projects.

II. Definitions

The following words and terms, when used in this policy statement, shall have the following meaning unless the context clearly indicates otherwise:

"Board of Visitors" means the Rector and Visitors of the University of Virginia.

"Capital project" and "project" mean Medical Center state general fund, state-supported debt, and non-general fund capital projects and University-wide state general fund, state-supported debt, and non-general fund capital projects unless the text expressly differentiates between

Medical Center projects and projects involving the remainder of the University.

"Enabling legislation" means Chapters 995 and 933 of the 1996 Virginia Acts of Assembly (House Bill No. 884 and Senate Bill No. 389, respectively), § 4-5.08 of the 1996- 1998 Appropriations Act, and § 4-5.08 of the 2003 Appropriations Act.

"University" means the University of Virginia, including the Medical Center unless otherwise expressly stated.

"University of Virginia Medical Center" or the "Medical Center" means that part of the University of Virginia Health Sciences Center consisting of the University of Virginia Hospital, referenced in the 1996-98 Appropriation Act as Agency 209, and related health care and health maintenance facilities.

III. Scope of Policy

The current pre-planning process and budget development process for capital projects has not been altered by the enabling legislation. Consequently, this policy statement will only apply to post-appropriation implementation of capital projects which are funded

entirely or in part by a state general fund, state supported debt, or non-general fund appropriation made by the General Assembly. Specifically, this policy applies to items identified as authorized capital projects for the University of Virginia or the University of Virginia Medical Center in an Appropriation Act enacted by the General Assembly and approved by the Governor. For non- Medical Center projects at the University, this policy is applicable only during the 1996-1998 biennium unless extended or continued by a subsequent act of the General Assembly. In accordance with the 2003 Appropriations Act new construction projects costing less than $750,000 and non-general fund renovation projects costing less than $1,000,000 are exempt from this policy, except that the provisions of Section IX shall apply to any project costing in excess of $100,000. The terms and structure of any financing of any capital project shall remain subject to other provisions of law including, but not limited to, § 2.2-2416 of the Code of Virginia.

IV. Project Management System

The President or his designee is authorized to implement a system for the management of University capital

projects. The system may include the delegation of management authority to appropriate University officials, including a grant of authority to such officials to engage in further delegation of authority as the President or his designee deems appropriate.

The management system for capital projects shall be designed to insure that such projects comply with the provisions of this policy statement and other Board of Visitors policies applicable to closely related subjects such as selection of architects or policies applicable to University buildings and grounds.

The management system may include a reporting system applicable to capital projects whereby University officials responsible for the management of such projects provide appropriate and timely reports to the President or his designee on the status of such projects during construction. The project status reporting system adopted by the President or his designee may include requirements for prior consultation with and approval by the President or his designee as are deemed appropriate.

V. Project Size and Scope

It shall be the policy of the University of Virginia that the implementation of capital projects shall be carried out so that the project as completed is the project authorized by the General Assembly. The President or his designee shall insure strict adherence to this requirement.

Accordingly, no Medical Center capital project shall be materially increased in size or materially changed in scope beyond the plans and justifications which were the basis for the project's appropriation, either before or during construction, unless: (i) the President or his designee determines that such increase in size or change in scope is necessary due to an emergency and the Governor concurs in such determination, or (ii) the General Assembly approves such increase or change in a subsequent appropriation.

Similarly, no University capital project other than a Medical Center capital project shall be materially increased in size or materially changed in scope beyond the plans and justifications which were the basis for the project's appropriation, either before or during

construction, unless: (i) such increase in size or change in scope is required because of circumstances determined by the Governor to be an emergency, or (ii) the General Assembly approves such increase or change in a subsequent appropriations. Minor increases in square footage shall be permissible if they are determined by the Director of the Department of General Services to be reasonable based on a written justification submitted by the University stating the necessity for the increases, with the condition that such increases would not increase the cost of the project beyond the amount appropriated.

VI. Project Cost

(a) It shall be the policy of the University of Virginia that capital projects be completed for an amount which is less than or equal to the sum appropriated therefore by the General Assembly. The President or his designee shall ensure strict compliance with this requirement. The President or his designee shall make appropriate periodic reports to the Board of Visitors on the status of projects.

(b) The President or his designee is authorized to include in the project management system implemented

pursuant to Section III of this policy authorization for designated University officials to approve construction contract change orders and to approve professional services contract change orders.

(c) Subject to the limitations set forth elsewhere in this policy regarding change orders and material increases in size or material changes in scope, the President may propose and the Board of Visitors may approve a transfer of funds during any fiscal year in order to supplement funds appropriated for any Medical Center capital project, provided that:

(i) the transferred funds are transferred from a non-general fund appropriation for the Medical Center; and

(ii) the project to which the funds are transferred is a Medical Center non-general fund capital project authorized by the General Assembly; and

(iii) the amount transferred does not exceed 15% of the sum appropriated for the Medical Center project to which the funds are transferred unless the Board of Visitors determines that special circumstances necessitate
10

the transfer of an amount in excess of 15% of that sum in which case the amount transferred shall not exceed the limitations set forth in § 23-77.4(1)(a)(iii) of the Code of Virginia; and

(iv) the Board of Visitors finds that the transfer is necessary to effectuate the intention of the General Assembly in making the original appropriation for the Medical Center project or projects in question.

Should it become necessary for the President or his designee to seek a transfer of funds to supplement amounts appropriated for a University capital project other than a Medical Center capital project, the procedures set forth in the Appropriation Act shall be utilized.

VII. Acquisition of Land for Capital Projects

It is the policy of the University that projects involving land acquisition will be subjected to thorough inquiry and due diligence prior to closing on the acquisition of such land. The President or his designee shall insure that the management system

implemented pursuant to Section III provides for a review and analysis of all pertinent matters relating to the acquisition of land as any prudent purchaser would perform to the end that any land acquired by the University shall be suitable for its intended purpose, that the acquisition can be made without discernable risk of liability to the University and that the cost of the land to be acquired, together with any contemplated development thereof, will be such that compliance with the provisions of Section VI of this policy statement is achieved. In addition, the President or his designee shall insure that, where feasible and appropriate to do so, the following specific policies pertaining to the acquisition of land for capital projects are carried out.

(a) Environmental and Land Use Considerations. While pre-appropriation activities relating to planning and budget development of capital projects are not subject to this policy statement, it is sometimes the case with projects involving land acquisition that certain environmental and land use planning requirements cannot be fulfilled until after the appropriation process has been completed. In such cases, depending on the cost of the

land and any contemplated development thereof, the University may be required, as a matter of law, to file an Environmental Impact Report ("EIR") with the Department of Environmental Quality ("DEQ") in order to perfect its authority to expend funds for a capital project (see Section IX). If an EIR requirement is applicable in the post-appropriation phase of a project involving land acquisition, the project management system implemented by the President or his designee pursuant to Section IX shall assure that no closing on such land acquisition takes place until after the EIR requirement has been fulfilled.

It is the policy of the University to cooperate with each locality to whom an EIR is furnished by DEQ during the post-appropriation phase of a project involving land acquisition. Such cooperation shall include but not be limited to furnishing any information which the locality may reasonably request and reviewing any requests by the locality with regard to any such capital project. The University will assure examination of the zoning and comprehensive plan designation of the land and surrounding parcels by the locality, as well as any designation of

historically or archeologically significant areas on the land by state or federal agencies.

(b) Infrastructure and Site Condition. The President or his designee shall insure that, in the case of projects involving the acquisition of land, the management system implemented under Section III provides for a review of the following matters prior to acquisition of the land: that the land can be developed for its intended purpose without extraordinary cost; that an environmental engineer has been engaged by the University to provide an assessment of any environmental conditions on the land; that there is adequate vehicular ingress and egress to serve the contemplated use of the land; that utilities and other services to the land are adequate; and that the condition and grade of the soils have been examined to determine if any conditions exist which would require extraordinary site work or foundation systems.

(c) Title and Survey. An ALTA survey shall be prepared for the land and an examination of title to the land shall be conducted by a licensed attorney or, in the alternative, a commitment for title insurance shall be procured from a title insurance company authorized to do

business in the Commonwealth of Virginia. Based upon the survey and title examination or report, the President or his designee shall conclude, prior to acquisition of the land, that title to the land will be conveyed to the University in fee simple, free and clear of all liens, encumbrances, covenants, restrictions, easements or other matters which may have a significant adverse effect upon the University's ability to own, occupy, convey or develop the land.

(d) Appraisal. An appraisal shall be conducted of the land to determine its fair market value and the consistency of the fair market value with the price agreed upon by the University.

VIII. Capital Project Compliance With The Code Of
Virginia

Among the requirements of the enabling legislation is that, notwithstanding the delegation of limited, postappropriation autonomy to the University regarding University-wide and Medical Center capital projects, all such projects must nevertheless comply with the provisions of the Code of Virginia regarding capital projects, excluding only the review, approval, policy and procedure

functions of central State agencies which are referenced in the enabling legislation.

It therefore shall be the policy of the University that capital projects shall be implemented so as to comply with the requirements of the Code of Virginia and the Appropriation Act applicable to capital projects, including those enacted in the future, except to the extent the Code of Virginia or the Appropriation Act exempts such projects from those requirements. The President or his designee shall take all necessary and reasonable steps to assure (i) that University officials responsible for the implementation of capital projects are knowledgeable regarding the requirements of the Code of Virginia and the Appropriation Act regarding capital projects, and (ii) that compliance is achieved.

IX. Environmental Impact Reports

The Board is cognizant that the Department of Environmental Quality is authorized pursuant to provisions of Title 10.1 of the Code of Virginia to require all state agencies to submit an environmental impact report ("EIR") for any state project which involves (i) the acquisition of any interest in land for any state facility

construction or (ii) the construction of any facility or the expansion of any facility if such acquisition or construction costs $100,000 or more. Accordingly, it is the policy of the University of Virginia that, in all cases in which an EIR is required but has not been filed with DEQ during budget development, no land acquisition shall take place and no construction on such land or previously acquired land shall be commenced for any capital project until the University has complied with the EIR requirements as set forth in the Code of Virginia and the DEQ guidelines and has done so in a timely manner so as not to adversely affect the project.

X. Project Inspections and Certification For Occupancy

(a) Medical Center Projects. Building Code and fire safety inspections shall be conducted for all Medical Center capital projects, and the State Fire Marshal or his designee shall inspect projects prior to certification for occupancy by the University's Assistant State Building Official ("ASBO"). The ASBO will be responsible to the Board of Visitors for insuring that necessary plan reviews and inspections are conducted prior to certification for occupancy. The Chief Facilities Officer will be the

University ASBO as long as the incumbent is a registered professional engineer or architect; the ASBO shall maintain a staff of registered professionals in the major engineering disciplines and architecture who will perform the required reviews and inspections.

(b) Non-Medical Center Capital Projects. For any University capital project other than a Medical Center capital project, the Department of General Services, acting through the Division of Engineering and Buildings, shall continue to function as the State Building Official pursuant to § 36-98.1 of the Code of Virginia.

XI. Reporting Requirements

The President or his designee shall report to the Department of General Services on the status of any capital project at the initiation of the project, prior to the commencement of construction, and at the time of acceptance of any such capital project. In addition, the President or his designee shall promptly comply with any request for a report on the status of any capital project made by the Governor or the General Assembly pursuant to § 2.2-1513 of the Code of Virginia, respectively.

University of Virginia Library

ATTACHMENT B

POLICY STATEMENT GOVERNING EXERCISE OF POST-APPROPRIATION AUTONOMY FOR GENERAL FUND AND NON-GENERAL FUND CAPITAL PROJECTS

THE RECTOR AND VISITORS OF THE UNIVERSITY OF VIRGINIA POLICY STATEMENT GOVERNING EXERCISE OF POST-APPROPRIATION AUTONOMY FOR GENERAL FUND AND NON-GENERAL FUND CAPITAL PROJECTS