board of visitors - george mason...

Board of Visitors

FINANCE and LAND USE COMMITTEEOctober 13, 2016Jennifer (J.J.) Wagner DavisSenior Vice President for Administration and Finance

AGENDAI. Call to OrderII. Approval of MinutesIII. New Business

A. FY 2017 State and University Operating and Capital Budget UpdateB. Bond Proceeds Reimbursement (ACTION)

i. Robinson Capital Projectii. Utility Capital Project

C. 2011 Prince William Bonds Refunding (ACTION)i. Prince William Lab ‐ Taxable Advance Refundingii. Prince William Housing – Tax‐Exempt Advance Refunding

D. Land Use Certification (ACTION)E. Capital Projects Approval (ACTION)

IV. Strategic MattersA. Modifications to State Six‐Year Operational and Capital Plan (ACTION)B. Commonwealth Enhanced Financial Flexibility Pilot Program Update

i. Financial and Administrative Authority Resolution (ACTION)ii. Enhanced Capital Authority Introduction

V. Adjournment

GEORGE MASON UNIVERSITY 2

George Mason UniversityVirginia's Largest Public Research University

Ranked #5 in the U.S. in Times Higher Education Best 100 under 50“A rising star with great potential”

No Disparity in Outcomes

Pell Grant Students Outperform

Diverse, Entrepreneurial and Innovative

Affordable, Accessible and High Quality


MASON ON THE WIRE


George Mason placed 44th overall in the country for graduating minorities with doctoral, master’s and bachelor's degrees

#14 in Most Innovative Schools

#95 Best Colleges for Veterans

#143 in National Universities


FY 2017 Operating and Capital Budget Update


Increased Demand for Student Services

Rapid Enrollment Growth

Base Budget Cuts?

Tuition Strategy

Healthcare & Pension

Compensation and Benefits

Regulatory Landscape: Federal, State, Local

REVENUES

FINANCIAL FRAMEWORK

NET RESOURCES

Tuition & Fees

Retention & Enrollment Mix

Philanthropy

State Appropriations

New Programs

Physical PlantCapital Infrastructure

Operating and Capital Reserves

Mandatory Cost Increases and Regulatory Environment

Academic & Administrative Enterprise

Debt Service

EXPENSES

7

8

Cumulative Budget Shortfall

Fiscal Year Carryforward

FY 2016 ‐$268.9M

FY 2017 ‐$268.9M

FY 2018 ‐$268.9M

Additional Projected Shortage ‐$393.3M

Cumulative Biennium Budget Deficit ‐$1.2B

GEORGE MASON UNIVERSITY

*Primarily due to poor performance in Withholding and Sales Tax Collections*

9

Impact on Mason (as of today)Compensation

• Commonwealth will not provide portion of 3% salary adjustment• Mason compensation is a critical issue

Budget Cuts• Budget savings target issued for all agencies at 5%• K‐12 and Higher Education excluded…to date

Capital• Formulated alternative funding scenarios• Robinson Hall• Utility Infrastructure

GEORGE MASON UNIVERSITY

FY 2017 REVENUE BUDGET $1.0B

pie chart in millions


*State imposed 20% tuition reduction for in-state undergraduate students in FY2000 and rates were held flat through FY2001 and FY2002.** ARRA included in General FundData Source: FY1985-FY2013 Institutional Research Fact Book, FY2014-FY2016 Budget Office

LONG TERM FINANCIAL SHIFT FROM TAXPAYER TO STUDENT

67%

28%33%

72%

0%

10%

20%

30%

40%

50%

60%

70%

80%

George Mason UniversityGeneral Fund vs. Tuition and Other as a Percent of the Educational and General Budget

State Appropriations Tuition & Other67%

33%

1985

57%43%

2000

28%

72%

2017


Tuition Pricing Strategy

Faster Farther Campaign and the Future of Fundraising

FY 2018 Early Line Commonwealth Funding and Impact on Mason

Capital Infrastructure and Investments

Looking Forward

DECEMBER

FEBRUARY

FINANCIAL INITIATIVES TIME LINE

2 Provost/SVP Budget Town Hall

November 2016

8 Full BOV Meeting16 Governor presents changes to budget21 Winter Graduation

December 2016

Mason Financial Plan for FY 2018

Spring 2017

TBD Legislative session starts23 Classes resume

January 2017

NOVEMBER

JANUARY



New Business ‐ Capital


Revenue Shortfall – Impact on Capital Projects

Commonwealth requested alternate funding scenarios to keep critical projects

funded

Federal tax law requires a reimbursement resolution,

authorizes Mason to repay itself for funds advanced to cover costs prior to bond issuance


Robinson Hall, New Academic & Research Facility

Total Budgeted Project Cost: $111.8

Mason: $2.6M

Previously, the BOV approved bond financing as a source of funds to support a portion of related design and construction expenses. The majority of the project funding will be provided by the Commonwealth.

17GEORGE MASON UNIVERSITY

Recommendation

The Finance & Land Use Committee acknowledgesthe requirement for partial debt funding, andrecommends approval by the Board of Visitors ofthe tax‐exempt bond reimbursement resolution forRobinson Hall, New Academic and Research Facilityand Harris Theater found on page E‐11:

MOTION:

SECOND:


Utilities Distribution Infrastructure

Total Budgeted Project Cost $49M

Mason $28M

Mason’s share of the project costs results from the Department of Planning and Budget requirement for institutions to fund infrastructure for Auxiliary Enterprise facilities.


Recommendation

The Finance & Land Use Committee acknowledgesthe requirement for partial debt funding, andrecommends approval by the Board of Visitors ofthe tax‐exempt bond reimbursement resolution forthe Utilities Distribution Infrastructure found onpage E‐15:

MOTION:

SECOND:


SciTech Campus in Prince William The GMU Foundation is refunding the 2011 Prince William Life Sciences Lab Tax‐exempt Revenue Bonds to taxable bonds for private business use considerations.

This requires a change in the lease with George Mason University, and approval from the Board.

The GMU Foundation will refinance the 2011 Prince William Tax‐exempt Student Housing Revenue Bonds to lower their debt service payments.

This requires a change in the lease with George Mason University, and approval from the Board.

Institute for Advanced Biomedical Research Beacon Hall


Recommendation

The Finance & Land Use Committee recommendsapproval by the Board of Visitors of the resolution toapprove the amendment of the 2011 capital leasewith the George Mason University FoundationPrince William Life Sciences Lab LLC found on pageE‐19:

MOTION:

SECOND:


Recommendation

The Finance & Land Use Committee recommendsapproval by the Board of Visitors of the resolution toapprove the amendment of the 2011 capital leasewith George Mason University Foundation PrinceWilliam Housing LLC found on page E‐21:

MOTION:

SECOND:


Annual Land Use Certification


Recommendation

The Finance & Land Use Committee recommendssubmission approval by the Board of Visitors of thespreadsheet found on page E‐27:

MOTION:

SECOND:


Capital Project AuthorizationRenovate Bull Run Hall for Science & Engineering Labs

*Funded locally and eligible for management under additional delegated authority

Converts existing Wet Lab space to:

Mechanical Engineering Labs & OfficesCompletes Fall 2017

Biology & Chemistry LabsCompletes Spring 2018

Total Project Cost: $3.1MVolgenau School of Engineering ‐ $1.7MCollege of Science ‐ $1.4M


Capital Project AuthorizationRenovate INTO Mason Global Center BallroomsConvert two ballrooms within the Global Center to 13 classrooms

Total Project Cost: $3.4M

Funding Source: Other Sponsored Funds (INTO)

Large Ballroom: Converts into 8 classroomsCompletes Summer 2017

Small Ballroom: Converts into 5 classroomsCompletes Spring 2018

*Funded locally and eligible for management under additional delegated authority


Recommendation

The Finance & Land Use Committee recommendsapproval by the Board of Visitors of the addition tothe University’s Capital Plan of the two projectsfound on page E‐31 – E‐34:

MOTION:

SECOND:


Strategic Matters

Increase Student Financial Aid: ~$4.0M FY17, $4.8M FY18

MASON Priority 1

MASON Priority 4

MASON Priority 2

Career‐Ready Graduates:Equitable Resources for Enrollment Growth $3.3M FY17, $17.6M FY18

Attract and Retain Top Talent:Base Pay & Incentive Increases $6.0M FY17, $29.2M FY18

MASON Priority 3 Multidisciplinary Research: Institute for Biomedical Innovation $1.25M FY17, $4.0M FY18

Mason Modified Six‐Year Plan



Recommendation

The Finance & Land Use Committee recommendssubmission approval by the Board of Visitors of themodifications to the Six‐Year Operating Plandescribed on page E‐36 of the Board Book.

MOTION:

SECOND:

As part of a five‐year pilot program, George Mason University is authorized, for a period of five years, to exercise additional financial and administrative authority.

Today, we are asking the Board for a resolution to expand our financial authority. We will also preview expanded capital authority.

At the December 8th Board of Visitors meeting, the resolution for expanded capital authority will be presented.

Commonwealth Enhanced Financial Flexibility

31


History of Higher Education Restructuring

Mason granted Tier I status

Mason granted Tier II status for Information Technology and

Procurement

Effective November 1, 2016 (subsequent to BOV Resolution of

October 13th) Mason to be granted expanded financial activities

2005

2008

2016


Benefits of Additional Operating AuthorityPromotes University’s ability to manage its financial activities more efficiently and effectively.

Expands autonomy from Commonwealth of Virginia, Department of Accounts.

Ability to develop accounts receivable and collections policies as guided by the Virginia Debt Collection Act.

Ability to develop disbursement policies which must be submitted to the state Comptroller for comment.

Implementation of new policies governing the management of university financial resources effective Spring, 2017.


Recommendation

The Finance & Land Use Committee recommendsapproval by the Board of Visitors of the resolutiongranting additional financial authority found onpage E‐39:

MOTION:

SECOND:


Benefits of Additional Capital Authority

Ability to react quickly to emerging requirements or identification of funds

Internal approval for many processes increases efficiency

Selection of procurement methods: • Invitation for bids• Construction Manager at Risk• Design‐Build• Job Order Contracts

Funds allocation – Asking authority to spend our own money adds unnecessary bureaucratic steps

Ability to establish local standard operating procedures for construction and professional services procurement


“LIGHT TOMORROW WITH TODAY”

ELIZABETH BARRETT BROWNING


Appendices


CAPITAL PROJECTS REVIEW

board of visitors - george mason...

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