 | Board of Visitors minutes April 12, 1958 |  |
DEBT AMORTIZATION, RESTORATION OF FUNDS
The Chancellor reminded the Board of the unhappy circumstances (set forth in
the Board minutes of 15 September and 8 December 1956) of the summer of 1956, when
the Governor by an executive order dated 8 August 1956 denied the College the right
to use its accumulated surplus to reduce its large debt. By this order the Governor
had transferred $351,389.78 from the College's surplus to the General Fund of the
Commonwealth, leaving only $100,000 to reduce the debt to a balance of $844,606.33.
The Governor's subsequent promise on 21 November 1956 to request legislative
restoration of the debt retirement fund had been duly carried out, Dr. Simpson
noted. Unfortunately, however, retrieving of the funds for retiring the debt is
complicated by a last-minute amendment to the 1958-1960 budget inserted by the
Senate Finance Committee, as follows
| Item 488 | First Year | Second Year |
| For restoring funds previously available to reduce local loans |
$351,390 |
It is provided, however, that this appropriation of $351,390
shall not become available for expenditure until all indebtedness of
the said Mary Washington College to the State Treasury, in excess of
$351,390, has been paid in full by funds obtained from sources other
than the general fund of the State Treasury, including as far as
necessary proceeds from the sale of revenue bonds issued in accordance
with law.
Dr. Simpson and Mr. Woodward also laid before the Poard the following summary
| AUTHORIZED DEFICIT | DEBIT | CREDIT | BALANCE |
| Dining Hall addition | $184,112.05 | ||
| Infirmary | 91,907.23 | ||
| Fine Arts Building | 666,958.36 | ||
| New Dormitories | 184,189.27 | ||
| Student Activities Bldg. | 229,348.66 | $1,356,515.57 |
| APPLICATION TOWARD REDUCTION IN INDEBTEDNESS |
CREDIT | BALANCE |
| M & O surplus of 6-30-55 | $411,909.24 | $944,606.33 |
| M & O surplus of 6-30-56 (actual surplus was $451,389.78; however, only $100,000.00 allowed toward debt reduction) |
100,000.00 | 844,606.33 |
| M & O surplus of 6-30-57 | 205,346.84 | 639,259.49 |
| Estimated surplus at 6-30-58 | 150,000.00 | 489,259.49 |
| Amount in 1958-1960 Budget for reduction in indebtedness |
351,390.00 | 137,869.49 |
N. B.: The balance shown here, $137,869.49, MUST BE paid before the
1958-1960 appropriation of $351,390.00 can be applied.
Dr. Simpson reported that he and Mr. Woodward had been discouraged to learn
during a recent conference in Richmond that Governor Almond feels that his authority
to release the $351,390 is restricted by the amendment until all other portion of
the debt has been paid. Upon reconsidering the matter after the interview, Mr.
Woodward had persuaded Chancellor Simpson to the view that the amendment would in
no way restrict the Governor's present freedom to permit the payment on the debt of
the surplus of June 30, 1957, amounting to $205,346.84 and the surplus at June 30,
1958, estimated at $150,000, prior to July 1, since the Senate amendment to the
item from the General Fund in the amount of $351,390, is a part of the 1958-1960
Appropriation Act, which does not become law until July 1, 1958.
Judge Smith and other members of the Board strongly supported Mr. Woodward's
interpretation of the law. President Darden and others deplored the waste of taxpayers'
funds that would result from the unnecessary issuing of bonds; but the
Visitors were of the opinion that bonds must be issued at once if executive
approval could not be obtained for what appeared to them to be the legal,
economical, and obvious solution of the problem.
The Rector and President Darden were requested to call upon the Governor at
the earliest possible date, accompanied if practicable by Judge Smith, the
Chairman of the Committee on the College, and press upon him the views of the Board.
| Board of Visitors minutes April 12, 1958 | |