 | Board of Visitors minutes May 27, 1988 |  |
EXHIBIT B
REVISED
FEASIBILITY STUDY
FOR
CLINCH VALLEY COLLEGE
OF THE
UNIVERSITY OF VIRGINIA
AGENCY 246
FOR THE
CONSTRUCTION OF STUDENT HOUSING FOR 96
PHASE II
PROJECT CODE 11883
OCTOBER 15, 1987
| PROJECT DESCRIPTION AND JUSTIFICATION | |
| PROJECT COSTS | |
| ATTACHMENT A | ESTIMATED NET REVENUE FOR CVC DORMITORY SYSTEM |
| ATTACHMENT B | DEBT SERVICE SCHEDULE FOR 1973 SERIES B ISSUE FOR CLINCH VALLEY COLLEGE |
| ATTACHMENT C | DEBT SERVICE SCHEDULE FOR 1984 SERIES B ISSUE FOR CLINCH VALLEY COLLEGE |
| CASH FLOW WORKSHEETS | LOTUS FILES "EXPENDITURE OPTION 2" AND "REVENUE OPTION 2" ON FEASIBILITY DISKETTE |
CLINCH VALLEY COLLEGE CONSTRUCTION OF STUDENT HOUSING
FOR 96, PHASE II
PROJECT DESCRIPTION AND JUSTIFICATION
Clinch Valley College of the University of Virginia has recently completed construction of the second phase of a student housing facility. The construction of this housing project for 96 students was originally authorized under Item R-2 for the 1980-82 biennium. The project was to be funded from $1,030,000 in revenue bonds and $888,500 in coal mining royalties. A feasibility study was submitted to the Treasurer and approved. In 1983, however, it was determined that revenues from mining royalties could not support the construction of the 96-bed unit, so the decision was made to construct the housing facility in two phases.
Phase I for 48 beds was constructed using $515,000 in revenue bonds and $629,500 in mining royalties. A revised financial feasibility study was submitted to the Treasurer before the 9(c) bond issue in April, 1984. Debt on this bond issue is currently being serviced by dormitory fees. Clinch Valley College requested retention of the balance of the original revenue bond authorization to use when it became feasible to begin construction of Phase II of the housing project. This $515,000 is reflected as a reappropriation under Item R-13 of the Revenue Bond Bill approved during the 1987 General Assembly Session. Phase II of the facility was completed and occupied in September, 1987, and includes 44 beds and a student lounge area.
Project Description and Justification, cont.
Clinch Valley College student housing is a self-supporting auxiliary enterprise, acting in direct support of the educational mission of the college. Clinch Valley has three goals in providing student housing. One is to furnish students with a variety of housing arrangements at reasonable cost. Another is to provide an environment in which each student may achieve the maximum realization of his or her potential, intellectually, socially and physically. The third is to have the ability to move the students from temporary housing, which may be either small rooms on campus or substandard housing in the town of Wise. The population of Wise is only 3,800 and any off-campus housing is very limited. Many of the students cannot commute because of the mountainous terrain and the long distances to surrounding communities. Therefore, housing must be provided for the majority of the student body. At present, the College has beds for less than half of the FTE student population. Occupancy of this dormitory will enable Clinch Valley to better accommodate this critical need for student housing.
CLINCH VALLEY COLLEGE STUDENT HOUSING PHASE II
(44 BEDS)
PROJECT COSTS
| Building Contracts | $699,295 |
| Architectural and Engineering Fees | 19,213 |
| Architectural and Engineering Reimbursables | 3,600 |
| Landscaping | 8,200 |
| Work by Owner | 100 |
| Preliminary Costs | 5,000 |
| Owner's Project Costs | 86,900 |
| Furnishings & Equipment by Owner | 94,000 |
| Contingencies | 43,056 |
| Total Project Costs | $959,364 |
| Project Cost Funded from Mining Royalties | $444,364 |
| Project Cost Funded from Revenue Bonds | $515,000 |
Reappropriation for this project was included in the Revenue Bond Bill approved during the 1987 General Assembly Session. The Item No. is R-13; Project Code is 11883; and Title is Construction: Student Housing for 96. The University financed the construction with a Treasury Anticipation Loan and intends to repay this loan and permanently finance the project with proceeds from revenue bonds.
There will be no initial outlays other than those financed with revenue bond proceeds. Incremental Annual Operating Expenses for the 44 beds are estimated as follows:
| Personal Services and Fringe Benefits | $ 7,800 |
| Contractual Services | 4,500 |
| Supplies and Equipment | 4,000 |
| Utilities | 2,880 |
| Indirect Costs | 720 |
| Total Operating Expenses | $19,900 |
Student dormitory fees cover all operating expenditures and debt service and contribute to the reserve for renovation and repair of the facilities.
Project Costs, cont.
Revenues generated from this dormitory will be as follows:
| 44 Beds x $1260 x .98 (regular session) | $54,331 |
| 44 Beds x $450 x .70 (summer session) | 13,860 |
| $68,191 | |
| Revenues Generated from 44 Beds | $68,191 |
| Annual Operating Expenditures for 44 Beds | 19,900 |
| Net Available for Debt Service | $48,291 |
The table above, together with the worksheets that follow, indicate that net revenue generated from this new housing facility will not be sufficient to cover the annual principal and interest payment of $62,016, plus 10 percent debt coverage. However, if one considers net revenue generated from the Clinch Valley College dormitory "system", there is sufficient revenue to service all debt without increasing the dorm fees now payed by students at the College.
It should be noted also that the data provided in the accompanying cash flow worksheets reflects net revenue generated by the dormitory system under "Other" revenue. That information is also provided in Attachment A. The bond indenture does not require a reserve fund payment; although as a matter of practice, Clinch Valley College budgets a minimum contribution of 5 percent of the revenue generated by dorm rents for major maintenance, renovation and repair of the facilities. This percentage is identified as "Reserve Contribution" on Attachment A.
Project Costs, cont.
Attachments B and C reflect individual debt payment schedules for existing facilities within the system. The first outstanding bond issue represented in the attachments is the 1973 Series B issue for $500,000 for the CVC Women's Dorm. At the present time, principal payments are made by HUD and interest payments are made from a sinking fund held at the state for this purpose. The balance in this fund as of August 31, 1987, was $31,000. At this time, Clinch Valley does not contribute to the sinking fund; but when the fund is depleted, Clinch Valley College will be responsible for interest payments on this issue. The average amount required over the next fifteen years for this obligation, therefore, would be approximately $17,700 annually.
The second outstanding bond issue represented in the attachments is the 1984 Series B issue for $515,000 for Phase I of the Student Housing for 96 construction. The average amount required for principal and interest payments over the next fifteen years for this obligation would be $56,250 annually. To conclude, the total requirement for existing debt service for the next fifteen years for completed dormitory facilities at Clinch Valley College would be approximately $73,950. This figure is identified in Attachment A as "Existing Debt Service."
The University of Virginia at Clinch Valley College hopes to demonstrate with this revised feasibility study that revenue from the dormitory system can support new bond issues without any significant impact on the fees charged to students.
UNIVERSITY OF VIRGINIA
CLINCH VALLEY COLLEGE
CONSTRUCTION - STUDENT HOUSING FOR 44 STUDENTS
MATURITY SCHEDULE FOR $ 515,000 BONDS
15-YEAR SCHEDULE
| Interest Rate | 8.50% | ||||
| Year | Principal Balance | Interest Payment | Principal Payment | P&I Payment | 110% Coverage |
| 515,000.00 | |||||
| 1988-89 | 496,758.46 | 43,775.00 | 18,241.54 | 62,016.54 | 68,218.19 |
| 1989-90 | 476,966.39 | 42,224.47 | 19,792.07 | 62,016.54 | 68,218.19 |
| 1990-91 | 455,492.00 | 40,542.14 | 21,474.39 | 62,016.54 | 68,218.19 |
| 1991-92 | 432,192.28 | 38,716.82 | 23,299.72 | 62,016.54 | 68,218.19 |
| 1992-93 | 406,912.09 | 36,736.34 | 25,280.19 | 62,016.54 | 68,218.19 |
| 1993-94 | 379,483.08 | 34,587.53 | 27,429.01 | 62,016.54 | 68,218.19 |
| 1994-95 | 349,722.60 | 32,256.06 | 29,760.48 | 62,016.54 | 68,218.19 |
| 1995-96 | 317,432.49 | 29,726.42 | 32,290.12 | 62,016.54 | 68,218.19 |
| 1996-97 | 282,397.71 | 26,981.76 | 35,034.78 | 62,016.54 | 68,218.19 |
| 1997-98 | 244,384.98 | 24,003.81 | 38,012.73 | 62,016.54 | 68,218.19 |
| 1998-99 | 203,141.16 | 20,772.72 | 41,243.81 | 62,016.54 | 68,218.19 |
| 1999-00 | 158,391.62 | 17,267.00 | 44,749.54 | 62,016.54 | 68,218.19 |
| 2000-01 | 109,838.37 | 13,463.29 | 48,553.25 | 62,016.54 | 68,218.19 |
| 2001-02 | 57,158.10 | 9,336.26 | 52,680.28 | 62,016.54 | 68,218.19 |
| 2002-03 | 0.00 | 4,858.44 | 57,158.10 | 62,016.54 | 68,218.19 |
| Board of Visitors minutes May 27, 1988 | |