University of Virginia Library

EXHIBIT A
REVISED
FEASIBILITY STUDY
FOR
CLINCH VALLEY COLLEGE
OF THE
UNIVERSITY OF VIRGINIA
AGENCY 246
FOR THE
ACQUISITION OF TOWNHOUSES FOR STUDENT HOUSING
PROJECT CODE 13843
OCTOBER 15, 1987

TABLE OF CONTENTS

      

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 1" AND "REVENUE OPTION 1" ON FEASIBILITY DISKETTE

CLINCH VALLEY COLLEGE ACQUISITION OF TOWNHOUSES
FOR STUDENT HOUSING
PROJECT DESCRIPTION AND JUSTIFICATION

Clinch Valley College of the University of Virginia has recently acquired an apartment building and 2.24 acres of land located across the road from the campus. The ten-unit apartment complex includes 8,708 square feet and will be used to house 36 students. The building was constructed in 1978 and is in good repair. Clinch Valley requested and received approval for this acquisition during the 1987 General Assembly Session.

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. The acquisition of this apartment complex will enable Clinch Valley to better accommodate this critical need for student housing.

CLINCH VALLEY COLLEGE ACQUISITION OF TOWNHOUSES
FOR STUDENT HOUSING
PROJECT COSTS

   

Acquisition of Building and Land	$300,000
Improvements and Furnishings	60,000
Total Amount of Debt	$360,000

Appropriation for this project was included in the Revenue Bond Bill approved during the 1987 General Assembly Session. The Item No. is R-13.1; Project Code is 13843; and Title is Acquisition: Student Housing. The University financed the purchase with a Treasury Anticipation Loan and intends to repay this loan and permanently finance the project with proceeds from revenue bonds. CVC expects to occupy the facility in 1988.

There will be no initial outlays other than those financed with revenue bond proceeds. The $60,000 shown above for improvements and furnishings will be used to sprinkler the facility and purchase dormitory furniture. This expenditure is included in the total amount proposed for the bond issue.

Incremental Annual Operating Expenses for the 36 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:

      

36 Beds x $1260 x .98 (regular session)	$44,452
36 Beds x $450 x .70 (summer session)	11,340
	$55,792
Revenues Generated from 36 Beds	$55,792
Annual Operating Expenditures for 36 Beds	19,900
Net Available for Debt Service	$35,892

The table above, together with the worksheets that follow, indicate the net revenue generated from this new housing facility will not be sufficient to cover the annual principal and interest payment of $43,351, 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 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" in 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.

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 approximately $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.