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JOINT MEETING Powered By Docstoc
					                       FINANCE & LAND USE COMMITTEE
                               January 27, 2010

                                                  Mason Hall

                                                    AGENDA

I.     Call to Order


II.    Operational Issues – Finance & Land Use


       A.     Approval of Minutes - Meeting of December 9, 2009 (ACTION) .................... D-3


       B.     Room and Board Rates, FY 2011 (ACTION).................................................. D-15


       C.     Budget Update .................................................................................................. D-23
              1. Governor’s Budget Bill
              2. George Mason University Amendments
              3. Budget Model, 2000 - 2014


       D.     Financial Snapshot, 12/31/09 (Information) ..................................................... D-25


       E.     Project Review – Stop Light Chart (Information) ............................................ D-29


III.   Strategic Discussions – Finance & Land Use


       A.     Financial Aid Update (Visitor Soza) (20 Minutes) ........................................... D-35


       B.     Update on Masonvale ....................................................................................... D-37


       C.     Update on New Net Income Opportunities (Strategic Committee C) .............. D-43


IV.    Adjournment


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                D-2
                         FINANCE & LAND USE COMMITTEE
                            OF THE BOARD OF VISITORS

                                         MINUTES

                                      December 9, 2009

PRESENT:      Chairman Mills; Rector Volgenau; Visitors Altman, Cofer-Beirne, Dunn, Garcia,
              Kirby, Singleton, Soza; Student Representative Lieu; Senior Vice President
              Scherrens; Vice President for Facilities Calhoun; Faculty Representatives Houck,
              Coffinberger

I. Call to Order

Chairman Mills convened the meeting at 10:10 a.m.

II. Operational Issues – Finance & Land Use

A. Approval of Minutes – September 20, 2009; November 4, 2009 (Special Meeting)

Mr. Houck pointed out an error under Item I on Page C-3, “Rector Dewberry” should be “Rector
Volgenau.”

With this change, Visitor Kirby made a MOTION to approve the minutes of both the September
20 and the November 4, 2009 meetings. Visitor Beirne SECONDED the motion. MOTION
CARRIED.

B. Investment Policy Statement (ACTION)

Ms. Linda Harber, Associate VP & CHRO, presented an annual update on the Investment Policy
Statement. She introduced Ms. Rizna Ahmed, Head of Benefits at Mason, and Mr. Barry
Schmidt, Senior VP, Cap Trust Investment Firm & the actuary to the Investment Policy
Committee. The Investment Policy Committee is authorized to oversee both the Optional
Retirement Plan as well as the Cash Match Plan. Approximately 2,000 salaried faculty members
and about 82% are enrolled in the Optional Retirement Plan with 2/3 in TIAA-Cref and 1/3 in
Fidelity. The other 18% are enrolled in VRS, the State benefit plan. TIAA-Cref holds about
$174 Million and Fidelity holds about $30 Million in our Optional Retirement Plan.

Ms. Harber referred to a handout, the Revised Investment Policy Statement, and explained the
two major revisions to the plan. The first change allows the Investment Policy Committee to be
able to make fund changes as necessary in order to be more flexible in a volatile economic
market without the need to wait for Board approval. The second revision updates our
benchmarks to be more appropriate to the market. These changes make our Optional Retirement
Plan more similar to those of Virginia Tech and VCU.




                                             D-3
Ms. Harber said she will continue to update the Board annually as has been done in the past. The
Committee meets regularly at least three times a year and more often if necessary. A website has
been set up so faculty members can track their funds. The two vendors, TIAA-Cref and Fidelity,
send representatives to campus on a regular basis to meet with employees, as well as phone call
consultations – last year there were over 10,000 phone calls from Mason faculty and staff. Our
online activity is very high with over 100,000 online interactions between our faculty and staff
and our two vendors. The vendors are also available for lunch seminars, new faculty orientation
and University Enrichment Day.

Visitor Singleton asked whether the two vendors do some sort of analysis to determine if the
clients’ needs are being met. Ms. Harber answered that she is not sure if the vendors send out a
survey, but the University does conduct its own surveys. She indicated that she is not aware of
any problems, but if made aware of any, the committee would work to resolve them
immediately.

Chairman Mills said that it is important for the Board to see any changes made by the Committee
and suggested that they be brought to the Board at the following meeting.

Visitor Beirne made a MOTION that the Finance & Land Use Committee recommends approval
by the Board of Visitors of the Investment Policy Statement as shown in Page C-17. Visitor
Soza SECONDED the motion. MOTION CARRIED.

D. Retirement Plan Information (Information)

Ms. Harber referred to a handout which shows the status of all our funds and their performance.
She explained that the last review, which was dated from the end of September, shows nothing of
a “red light” concern.

Mr. Schmidt Barry, Senior VP, Cap Trust Investment Firm & the actuary to the Investment
Policy Committee, explained the scoring system used in evaluating funds. A fund meeting all
the policy guidelines gets a green light. A fund with an issue on a particular item gets a yellow
light. A fund that scores poorly overall and is under consideration for termination is given a red
light and monitored very closely.

Ms. Harber pointed out that this year, because none of the funds were in red, no changes have
been made. She said this is the first year with no changes.

C. Administration Building Ground & Operating Leases (ACTION)

Mr. Calhoun, Vice President of Facilities, explained that the University is building an
administration building through the GMU Foundation that will require two leases. He referred to
Page C-19 which explains the ground lease for the land under which the building will sit—the
footprint. This land will be leased to the Foundation so construction can begin. There will also
be a construction easement on the rest of the land. The term of the lease is until the debt is
retired or 40 years, whichever comes first. There will be no exchange on the ground lease; this
just allows access to the land to build the building.



                                               D-4
Visitor Soza asked about parking for the facility. Mr. Calhoun explained that there will be some
parking along the side of the building, but for the most part, parking is provided in the new
parking garage that was constructed this past year. An oversized deck was built specifically for
this purpose.

Mr. Calhoun referred to an overhead showing a picture of the proposed building. He explained
that the University will rent the entire building (145,000 sq. ft., five stories) from the Foundation.
This should eliminate the University’s need for rental space in Fairfax. Some space on the
bottom floor may be subleased for retail stores. The exact price of the building is not known
right now and will be determined based on the Foundation’s sale of the debt and the final
construction costs.

Mr. David Roe, President of the Foundation, said they will work hard to get the lowest financing
rate possible and will control the total project costs.

Visitor Soza asked what we project the rent to be. Mr. Calhoun answered that we are projecting
between $25 and $26.50 per square foot.

Mr. Coffinberger asked whether the projected rent will save the University money from what
they are currently paying in rent. Mr. Calhoun answered that this building will cost more than
we are currently paying for rent, but it is a bigger building with more room for more tenants.

Visitor Soza made a MOTION that the Finance & Land Use Committee recommends approval
by the Board of Visitors of the Administration Building Ground and Operating Leases as shown
on Page C-19. Visitor Kirby SECONDED the motion. MOTION CARRIED.

E. Accounts Receivable Write-Off (Information)

Ms. Beth Brock, University Controller, commented that this year’s proposed write-off is the
largest ever brought to the Board. She explained that these are old student accounts that are
written off the books, but not written off in terms of collections. She pointed out that the amount
is small in relation to our revenues, less that 3/10ths of a percent.

Ms. Brock referred to Page C-23, explaining that the Code of Virginia Management Standards
require the University to meet certain benchmarks in order to stay decentralized and to receive
the interest on our auxiliary revenues. One of these benchmarks is to keep 90% of our
receivables younger than 120 days. With the present economy as well as with the tightening of
lending, we are seeing our receivables lag. Not wanting to fail the management standards, we
have accelerated the write-off of one quarter. Ms. Brock explained that by doing the write-off on
September 30th, we were able to lower our projected percentage to around seven percent. This
was a strategic move to position ourselves so we do not have to worry about failing the
management standards.

Chairman Mills asked if we can assume that next year we can expect a lower than typical write-
off. Ms. Brock answered that it will be lower than this year, but she does not believe it will be
lower than typical. She referred to Page C-23 which shows that without this move, the write-off



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for this year would have approached $700,000; last year it was a little over $500,000. Ms Brock
said that because of tuition increases and other environmental factors, she cannot say with
certainty that next year’s amount will be lower than $678,000, but they will work hard to keep
the number down.

Chairman Mills clarified that next year will show three semesters as opposed to having this extra
semester. Ms. Brock said that is correct.

Mr. Coffinberger commented that there has been a lot of publicity recently about debt collection
agencies. He asked whether we monitor the collection agencies used by the University. Ms.
Brock answered that we have a long-time agency that many other Virginia institutions use, and
we have a very good relationship with them. Ms. Brock said she can only remember one
complaint in the last three years that has come to her attention.

Ms. Brock reviewed the collections process which includes a tremendous number of
communications to folks before they are sent to collections. She introduced Mr. Pat Quinn,
Director of Student Fiscal Services. She said Mr. Quinn and his staff have held back a large
number of accounts where we have gotten promises and good faith attempts, and they have
worked with those students. We have collected hundreds of thousands of dollars this way, and
that achieves two things. 1) It keeps these students out of collections; and 2) it saves them
collection costs. Hopefully, this is a win-win because these students are in school.

Dr. Scherrens reintroduced Mr. Quinn. Several months ago Mr. Quinn asked if he could work
with a group of about 180 students to collect payment rather than sending them to collections.
Because of his efforts, about 150 of those students paid without being sent to collections. Dr.
Scherrens pointed out that Mr. Quinn took a risk and felt these students were worth the extra
effort. Mr. Quinn was a big part of personalizing the process.

Visitor Soza asked that future presentations show the percentage of write-offs as well as a five-
year history of these write-offs.

F. Financial Snapshot, 10/31/09 (Information)

Dr. Scherrens introduced Ms. Donna Kidd , AVP and Budget Director. Ms. Kidd referred to
Page C-28 which covers the budget reduction the University incurred in September. All units
across campus are operating with less funding than originally planned. Ms. Kidd explained that
her staff monitors the revenue and expense monthly. She said the good news is that things are
going smoothly within Educational and General Operations, and to date we have slightly less
percentage of funds spent as compared to last year. For other funds, auxiliary, sponsored funds,
etc., there is approximately the same percentage of funds available, so overall we are in good
shape to continue through the year. Ms. Kidd pointed out that we are now monitoring spring
enrollment because that drives a lot of our revenue for the overall budget, and spring enrollment
looks strong. The University is in good shape fiscally.

Dr. Scherrens explained that Ms. Kidd and her staff perform a red flag system for the University
budget. Each month they review the actual budget versus prior year spending, and any issues are



                                               D-6
brought to the attention of the department. Ms. Kidd is also responsible for the revenue side
which shows strong performance.

Ms. Kidd reported that the Governor’s Budget will be released on December 18, and mid-
January the new Governor’s Budget will be released. The Budget & Planning Team is preparing
several scenarios and reviewing information in order to be ready when the Governor’s budget is
released.

G. Project Review – Stop Light Chart (Information)

Mr. Tom Calhoun reviewed the “Stop Light Chart” shown on Page C-32.
 Five major projects have been completed over the summer
 Belmont Bay has been added as a new project
 The Aquia Building – Data Center – was showing yellow for Budget Status, but is now red
     for this one time only. The project is over budget due to the removal of an old greenhouse
     and the construction of a new greenhouse that will be funded through interest earnings
     from bond sales. The project will go back into the yellow category at the end of this
     month.
 Masonvale has changed from yellow to green – we are now actually ahead of schedule as
     all the housing units were completed about six weeks earlier than projected.
 Housing VIIC, which is Eastern Shore and Hampton Roads, had showed up as yellow in
     the past but is now completely green. The first building was behind schedule but has now
     been delivered. The second building is actually ahead of schedule, so that that stoplight is
     now green.
 The rest of the projects remain the same as at the last meeting.

Mr. Calhoun referred to an overhead showing a total of nearly $900M in active projects over the
last year including projects that are just finished or authorized. The pie chart shows the sources
of capital funding for all of these projects.
 27% comes from the State in some form whether general funds, cash or state debt
 57% is University debt – 9C or 9D revenue bond projects
 The balance comes mostly from private financing and private gifts

Mr. Calhoun said he is continually asked when the construction is going to stop. He said the
answer is that it is not going to stop, but it will slow down a little bit. In 2009 the major projects
were the Arts Building, the conference center, and Masonvale – mostly around the perimeter of
campus – with smaller projects in the center of campus. In 2010 we will have about the same
amount of work but the location shifts to the north end of campus - the Administration Building,
University Hall, and Housing VIII.

Rector Volgenau asked if we can afford all this new construction in terms of Operating &
Maintenance for the buildings in view of declining state budgets. Mr. Calhoun responded that
many of the projects are in fact renovation projects and will help reduce our operational and
maintenance costs. In 2011 and beyond, some of the building activity on campus begins to die
down with the major exception of Fenwick and Science & Tech II, which are two very big jobs
both in the $60 million range.



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Visitor Soza asked if some of the projects are coming in under budget because the economy is
calming down or if other factors are involved. Mr. Calhoun answered that the economy is part of
it, but also the market for both labor and materials is significantly better than when we started.
He explained that our contracts have a contingency that allows the University to recoup some of
those savings, unlike in years past when we had hard bids and any savings would go to the
contractor.

III. Strategic Discussions – Finance & Land Use

A. Tuition Increase (Mid-Year: January 2010) Update

Dr. Scherrens reported that at the last Board meeting there was a conversation about a mid-year
tuition increase, and the Board asked for further discussion. Since that meeting the following
schools have announced and will implement a mid-year tuition increase in January:
 William & Mary, $300
 Christopher Newport, $200
 Mary Washington, $100
 VCCS

Dr. Scherrens said the University Budget & Planning Group has reviewed both the pros and cons
of a mid-year tuition increase.

Pros:
 Help cover any additional budget reduction in FY10
 Carry forward the funds to help cover budget for FY11
 Lessen the tuition increase for FY11
 Reduce political impact of FY11 increases
 Add temporarily to financial aid/scholarship funds

Cons:
 Lets the State know we would have some resources to cover additional reduction
 University did not include this as strategy in the 10% budget reduction plan
 Hard for students and families to have to pay more
 Hard to justify given no additional announced budget reduction

Dr. Scherrens reviewed our current tuition which is $5,800. A 2% tuition increase for in-state
would be about $116. A 2% tuition increase for out-of-state would be about $436. The revenue
from a 2% tuition increase would be worth $4 Million annually, and $1.7 Million on a semester
basis. Dr. Scherrens explained that we do not believe we have much elasticity in out-of-state
rates. We are within hundreds of dollars of what the University of Maryland charges out-of-state
students. So we would definitely not recommend an out-of-state mid-year tuition increase.

Dr. Scherrens referred to an overhead showing tuition & fees for all Virginia doctoral
institutions. The average is $8,600 and Mason is about $8,000, so we are in the mix. He said
that he believes we may see both William & Mary and UVA begin to distances themselves from
the other schools. Dr. Scherrens said the Board has asked whether we have elasticity, and we



                                              D-8
believe we do have some in-state elasticity, but that does not argue for a mid-year tuition
increase.

Dr. Scherrens said the administration is not recommending a mid-year tuition increase. What we
are making known today is that we are looking at about a minimum 10 % tuition increase for Fall
2010. He pointed out that about one-half of our federal funding goes away next fiscal year and
the other half goes away the following year. That is $19-$20 Million of funding that will go
away in two years. So, we are recommending no mid-year tuition increase, but we are
recommending that early next year we will make it well known that we are looking at a
significant tuition increase for Fall 2010. We hope there is not another budget reduction coming
on top of the loss of the federal money.

Mr. Houck asked if fees would also raise 10% when the tuition increases. Dr. Scherrens
answered that he should have said tuition & fee increase because they are both going to go up
about the same amount.

B. Review of Bond Indebtedness Status

Dr. Scherrens gave an overview of University debt, explaining that we plan to give our annual
report with much more detail to the Board in the spring. He reported that our debt service
payments have grown from $23M in FY 2009 to $31M this year to $43M next year. This debt is
for facilities that are not paid for by the state such as housing, recreation athletic complex,
student union buildings, and research facilities.

Mr. Calhoun referred to an overhead and explained that our total debt it a little bit less than we
had projected. The guidelines established by the Board authorize our total debt service (the ratio
of debt service against total spending) to be under 10%. We are currently a little bit over 8%, so
we are within the established guidelines.

Chairman Mills suggested that this would be a good chart to update every couple of meetings.

C. E&G Budget Modeling (2010 – 2015)

Dr. Scherrens referred to Pages C-42 and C-43, and gave an overview of the budget model
assumptions for the years 2010 – 2015.

FY 2011
 Lose $8.5M of ARRA Funds
 Tuition/Fee Increase (I/S) 9.3%; (O/S) 7.3%
 Enrollment Growth: 200 FTES
 New Buildings, Operating: $3.7M
 Capital Campaign Costs Increase: $400,000
 Auxiliary Enterprises Contribution: $1.75M
 Program Enhancement: $2.0M




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FY 2012
 Lose $10.9M of ARRA Funds
 Tuition & Fee Increase: (I/S) 9.5%; (O/S) 7.5%
 Enrollment Growth: 500 FTES
 GF Support ($5K/FTES) for Growth
 Private Fund Support ($500,000)
 New Building, Operating: $6.9M
 Auxiliary Enterprises Contribution: $2.0M
 Program Enhancement: $1.0M
 Capital Campaign Cost Increase ($400,000)

FY 2013 – FY 2015
 Student Enrollment Growth: 400 - 500 FTES
 Tuition/Fee Increases: 6-7%
 Private Fund Support ($500,000)
 GF Support for Growth: $5,000 per FTE
 Salary Increases: 3%
 New Building, Operating: $8.5M (Over 3 Years)
 Program Enhancement: $1.0M
 Auxiliary Enterprise Contribution: $3.0M
 Capital Campaign Cost Increase: $400,000

Dr. Scherrens commented that the take away from this overview would be:
 There is limited enrollment growth.
 There is the loss of federal funding.
 There will be tuition increases.
 A lot of money will be required to operate and maintain the new buildings.
 There is a significant contribution from auxiliary enterprises and a growing support from
     private contributions.

Chairman Mills asked if we are assuming a zero growth policy, because we just don’t have the
support for it. He said that from his perspective we cannot continue to take on students when we
are not getting base budget adequacy for them. He asked how much state funding we need per
student – would that magical number be $5,000?

Dr. Scherrens answered that the Budget & Planning Group, although not comfortable with this
number, believes that the magical number would be about $6,000 of GF support per student. He
explained that $15,000 is the average cost to us per FTE student. Since our in-state students pay
more than $6,000 in tuition per year, we are making a statement that $11,000 - $12,000 of total
E&G funds per FTE student could be an incentive for nominal enrollment growth.

Visitor Dunn commented that the Board has a chance to discuss the implications for the
individual faculty compensation, but not the total compensation. We know that we rank quite
below where we would like to rank in faculty compensation. The implication that we can have
more faculty with the same inadequate compensation - we never really addressed this as a Board



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to fully understand the implications of some of our choices on faculty compensation. Chairman
Mills made a recommendation that Visitor Dunn’s subcommittee study this issue further.

Mr. Houck commented that there is differential growth on campus with students switching from
one program to another. For instance, the number of students in his program has more than
doubled over the last eight years. It is anticipated that this growth will continue, but the number
of faculty assigned to the program is exactly the same and has not changed. Because the number
of students overall is staying the same, there must be some programs where the number of
students are declining. The $2M for special funding for special programs seems highly
inadequate in terms of addressing that issue of differential growth.

Mr. Coffinberger said class size is another important issue. His school has the largest average
size class in the university. Those classes may be expensive, but they are also covering a lot of
the cost of tuition.

D. Biennium Budget Priorities (2010 – 2012)

Dr. Scherrens reported that on December 18 Governor Kaine’s outgoing budget will be released.
We hope to be able to report back to the Board early the following week with the highlights of
that report. The Governor-elect will release his budget in mid-January. Dr. Scherrens
commented that this budget is important because there are so many things at risk in the next year
on both the capital and the operating side.

Dr. Scherrens reviewed the University’s anticipated capital priorities for the upcoming session.
 Health and Human Services Building (Fairfax)
 Bio-med Life Science Building (Prince William)
 Loudoun Campus Planning

Dr. Scherrens reported that Senator Colgan has indicated that there most likely will not be
construction funding available for these kinds of facilities in the upcoming session, but he asked
what we would need for planning purposes. The answer would be about $3 million per project –
about 4-5% of the project costs. Senator Colgan did not say he can deliver that, but at least it
gives him a number to work with.

Dr. Scherrens said there are also several infrastructure projects that we hope will be funded.
They have lower price tags, and they speak to institutional capacity to grow and innovate.

Dr. Scherrens reported that we are also asking for enrollment growth funding for the additional
1,000 students enrolled last fall. Since this was not planned enrollment growth, the state really
had no way to provide more funds to us. But we have stepped up, and the state knows we
stepped up in terms of enrollment growth. So we hope that during the session the state will send
us some message and provide some additional funding for stepping up and admitting those
highly qualified Virginia high school graduates. We would hope to get $5,000 - $6,000 per
student. If we receive no additional funding, we would not be in a position to take additional
students again.




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Dr. Scherrens completed his overview, commenting that a very high priority in this session
would be that the institutions retain their Board of Visitor authority to set tuition. To get out of
this economic turmoil, schools need the flexibility to set tuition rates.

E. Financial Aid Subcommittee Report (Visitor Soza)

Visitor Soza reported that he and Visitor Kirby met on October 30 with Dr. Linda Schwartzstein,
Mr. Andrew Flagel and Ms. Jevita Rogers. He reviewed the highlights of that meeting. $173
Million of financial aid has been set aside and is available for the current fiscal year. This
money is distributed as follows:
 Need Based Gifts
       Free monies from federal or state grants
       Scholarships
 Non-need Based Self-Help
       Parent contribution
       Student loans
       Federal Work Study
 Merit Self-Help
       Private scholarships
       Athletic scholarships
       Merit-based scholarships

Ms. Rogers commented that the self-help categories are our biggest concerns because our
students are borrowing, although below the national average as far as loan indebtedness, we still
have a large portion of students who are borrowing. Our loan, scholarship and grant funds are
not as high as we would like them to be.

Ms. Rogers reported that last year our average student indebtedness in graduating seniors was
approximately $15,000 while the national average last year was $17,500. She said that we have
always been below average in our loan borrowing as well as with our default rate.

Visitor Dunn asked if there is a trend towards higher indebtedness and if we are seeing a
significant rise. Ms. Rogers answered that we have not seen a significant rise over the last two
fiscal years. However, the federal government has increased the allowable amount of loan
borrowing by an additional $2,000 per year. The majority of our students have taken that extra
money.

Visitor Soza reviewed the distribution of students receiving financial aid and the distribution of
financial aid by source. He pointed out that there has been a steady increase in the amount of
money available for student aid, but more is needed. About 52% of in-state students and 46% of
out-of-state students receive some kind of financial aid. Visitor Soza reviewed student need met
by institution. At UVA, every student who needs financial aid receives it. He suggested that this
would be a good goal to aim for. He pointed out that ODU is a little bit ahead of us at 85% and
87%, but they have been around a lot longer than Mason.




                                                D-12
Visitor Soza commented that future opportunities to enhance student aid through additional
federal and state aid programs are uncertain and based on budgets. There are opportunities
through Mason development efforts, scholarship money from private foundations, and
institutional work study programs for on-campus jobs.

Visitor Singleton asked if we could match the other state schools on this chart, does this chart
speak to the percentage of students that are physically receiving financial aid. He said he would
like to see that percentage compared with the other schools. That would give us a better sense of
how we compare, because right now about one- half of the students that come here need aid,
about one-half are meeting it, and that is about the same as the other schools.

F. Base Budget Adequacy Subcommittee Report (Visitor Beirne)

Visitor Beirne reported that she is waiting for the December 18 release of the Governor’s budget
to do an analysis. As soon as possible, talking points will be made available for Board members
to keep with them and use during any interaction with legislators.

G. Strategic Committee C Report (Visitor Altman)

Visitor Altman reported that Committee C has been meeting to develop a sustainable process for
the business development of new ideas that will provide a source of incremental funding to the
university. A 90-day checkpoint meeting was held this past week to discuss our progress, which
includes the formation of GGIP (Gold and Green Integration Process). The committee agreed to
move forward and test the application of parking fees for special events– this will happen in
January and February. The Synergy Team recommended the creation of a university-wide
marketing team that would share ideas to create and generate revenues. There is also a
recommendation regarding the distribution of these funds. The idea was to capture these sources
of revenue and apply to strategic initiatives in the best interest of the university use, but still
reward the organizations that created these new business opportunities by giving them some
funds back.

Visitor Altman explained that the intent of this committee is cultural change. She does not think
we are quite where we should expect to be after 90 days or six months, but progress is being
made.

Chairman Mills said that the idea behind this initial concept was to specifically target ideas and
strategic initial funds, as opposed to throwing it into the mix of things and cross pollinate the
entire university, but try and focus on whatever we deem to be strategic.

Visitor Altman reported that real estate development was not discussed today. At the last
meeting, NEWCO, or a Patriot Services Corporation, was discussed as the place to aggregate
these funds and manage them in the future.




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H. Schematic Designs

Mr. Calhoun introduced Ms. Cathy Wolfe, Director of Campus Planning, who presented an
overview of both the Science & Tech II addition and Housing VIII-A.

Science & Tech II:
Ms. Wolfe discussed plans for the Science & Tech II addition:
 Location in the center of campus. The addition will be a connection to both S&T I and II
     with the hopes of creating a community of science on campus which does not really exist
     today. S&T II was recently vacated with the completion of the new engineering building
     where the College of Information Technology and Engineering resides, and is now being
     used for swing space.
 50,000 sq. ft. addition located between the two existing S&T buildings with infrastructure
     for wet science labs, creating sustainable concepts in the building that can showcase
     Mason’s commitment to sustainability and the climate action plan.
 Creating an outdoor educational venue
 Building will have bio, chemistry, and environmental science labs;
 Collaborative learning-style classrooms – 81 seat classrooms with round tables for group
     work and learning

Housing VIIIA:
Ms. Wolfe discussed plans for housing VIIIA, including the infrastructure requirements for the
project.
 Building will be located on the north end of campus on the corner of University Blvd and
     Route 123.
 Project is conceived in two phases. Housing VIII was a 1,200 bed project as originally
     conceived, so this is the first phase of the project with 600 beds and 300 parking spaces.
 300 apartment style units - not a type of unit we have on campus currently. These have an
     expanded living area, a kitchen, and two single bedroom units in each of the units.
 The second building will have suite style units which are similar to the recently completed
     units in Housing VIIA, B, C.
 This brings total beds on campus to 6,200.
 Parking will be in the new Rappahannock Deck.

Mr. Houck asked how the students living in this building will cross the busy roads. Ms. Wolfe
pointed out intersections and a walking path as well as raised intersections on Patriot Circle. A
Parking & Transportation Management Plan is being written, and will also address this issue.

IV. Adjournment

Visitor Singleton made a MOTION to adjourn. Visitor Soza SECONDED the motion.
MOTION CARRIED. Meeting adjourned at 12:10 p.m.

Respectfully submitted,



Janice Gouch
Secretary pro tem

                                              D-14
ITEM NUMBER: II.B.       Room and Board Rates, FY 2011 (ACTION)


PURPOSE OF ITEM:         To review and approve the proposed academic year
                         2010-2011 room and board rates and the proposed
                         Student Housing plan.


APPROPRIATE COMMITTEE:   FINANCE AND LAND USE COMMITTEE


BRIEF NARRATIVE:         The      University    Administration     will     be
                         recommending a final student housing budget as
                         part of the University Administration budget
                         submission at the May, 2010 Board of Visitors
                         meeting (a preliminary plan is presented here).
                         Approval of rates for FY 2010-11 is requested to
                         update marketing materials for distribution to new
                         and returning students. The double room rate
                         increases by $220 per year, or 4.9% (students will
                         also continue to be charged the $50 facility fee that
                         was implemented in FY10).           The board rate
                         proposed for a 15-meal plan (with 100 food bonus
                         points) increases by $90 per year or 2.22%.

                         The expected increase for most incoming first-
                         year students living on campus will be $290, or
                         3.82%, compared to the prior year.

                         These proposed rates are necessary to cover the
                         increased costs of staffing, utilities, and rising
                         construction costs. The proposed rates will also
                         generate the revenue necessary to make a
                         contribution to the E&G program and the
                         institutional enhancement fund.

STAFF RECOMMENDATION:    Staff recommends Board of Visitor approval of
                         rates and preliminary budget as presented. It should
                         be noted that the revenue from the new rate
                         increases for room & board will also assist the
                         University in making an Auxiliary Enterprise
                         contribution to E&G to help absorb the increasing
                         level of General Fund budget reductions.




                         D-15
       PROPOSED ACADEMIC YEAR ROOM AND BOARD RATES
                         2010-2011
PROPOSED ROOM RATES                                                 $         %
(Do not include $50 Facility Fee Per Bed)   2009-10    2010-11   CHANGE     CHANGE
Traditional Halls
   Double                                    $4,450      4,670      $220     4.94%
   Singles                                    6,000      6,300       300     5.00%
   Triple                                     3,600      3,780       180     5.00%
   Quad                                       3,850      4,050       200     5.19%
Suites
   Single                                     6,100      6,710       610     10.00%
   Double                                     5,900      6,170       270      4.58%
   Triple                                     5,000      5,250       250      5.00%
   Triple w/Kitchen                           6,200      6,510       310      5.00%
Apartments
   Super Single                               8,200      8,610       410     5.00%
   East Single                                7,800      8,190       390     5.00%
   West Single                                6,100      6,410       310     5.08%
   East Double                                7,050      7,400       350     4.96%
   West Double                                5,650      5,930       280     4.96%
                                                                    $         %
PROPOSED BOARD RATES                        2009-10    2010-11   CHANGE     CHANGE
Declining Balance Plans Cost
Freedom Rings                                 3,200      3,300       100     3.13%
Freedom Rings II                                 ---     4,000        ---      ---
Traditional Plans
10 Meals w/ No Points                        $2,550     $2,650       100     3.92%
10 Meals w/ 100 Points                        2,750      2,850       100     3.64%
15 Meals w/ 100 Points                        3,150      3,220        70     2.22%
19 Meals w/ 100 Points                           ---     3,500        ---      ---
Ultimate w/ 100 Points                        3,520      3,600        80     2.27%
Flex Plans
Flex 100 w/ 400 Points                           ---     3,200        ---      ---
Flex 130 w/ 100 Points                        2,600      2,700       100     3.85%
Flex 150 w/ 100 Points                        2,700      2,800       100     3.70%
Flex 175 w/ 100 Points                        2,850      2,920        70     2.46%
Flex 200 w/ 100 Points                        2,970      3,040        70     2.36%
Flex 230 w/ 100 Points                           ---     3,200        ---      ---




                                            D-16
                                RATE ASSUMPTIONS
1. The completion of Hampton Roads (402 beds available for fall ‘10) and Eastern Shore (192
   beds made available during late fall ‘09) represents the end of the second phase of the NE
   sector campus housing project. Eastern Shore and Hampton Roads are suite style facilities
   developed with a mix of double occupancy and private room options. Building amenities
   include community lounges, study spaces and laundry facilities. Hampton Roads includes
   and adjacent dining facility that will help serve the needs of this area of campus.

2. In 2009 the University determined that it was strategically appropriate to convert to self-
   operated management of Housing and Residential Life in order to most effectively manage
   current and future student and institutional needs. The University ended its contract with
   Campus Living Villages in January of 2010. Extensive effort has been made to anticipate all
   benefits and costs related to this conversion, however, as the new management process
   evolves it is possible that there will be unanticipated challenges and opportunities that will
   emerge that may warrant the need for flexibility in the FY11 budget.

3. The development of optimal room pricing continues to be an area of focus for Housing and
   Residential Life. As residential student demographics shift and the complexity of the
   available housing stock increases, it will continue to be important to make strategic
   adjustments that reflect responsiveness to the institutional and economic context. While
   increases are necessary to cover debt serve related to new construction and renovation and
   increased operating expenses (utilities, contracts, etc.) the University maintains an effort to
   develop housing pricing approaches that are sensitive to access and affordability
   considerations.

4. Since Southside Dining opened there has been a shift in what students are looking for in their
   meal plans. Mason Dining continues to work with the Food Committee and Student
   Government to adapt and develop new meal plan options. Changes are intended to provide
   variety and flexibility for the students and allow for economical choices.

5. In both Housing and Dining, new construction and renovations are planned throughout the
   next two biennia to accommodate the demand for on-campus housing and dining, and
   improve the quality of student life on campus. In Housing, these plans encompass upgrading
   existing buildings to meet current demands for power; mechanical systems; life safety
   upgrades; finishes such as carpet, paint, and furniture; as well as construction of new
   facilities to accommodate underserved populations.

6. Proposed rates for on-campus housing and meal plans (board rates) are advanced to increase
   the financial profitability of the enterprises as well as make a financial contribution to both
   E&G and the institutional enhancement fund.




                                              D-17
                                       HOUSING PROJECTION
                                             FY 2010
Facility Reserve Balance at 6/30/09                                                                         $3,993,875

Revenue
   Rental Fees Summer                                    $ 460,000
   Rental Fees Fall                                      11,739,900
   Rental Fees Spring                                    11,711,220
   Rental Fees Prior Year                                    99,700
   Conferences                                              485,000
   Other Revenue                                            895,650
Total Revenue                                                                                               $25,391,470

Expense
   Housing Management Expenses                            $7,844,500
   Contracts Security, Mail, Laundry                       1,150,000

Total Operating Expense                                                             $ 8,994,500

   Student Telecommunications                             $ 1,400,000
   Utilities                                                2,750,000
   Lease Property                                             310,000
   Debt Service                                            10,883,180(1)
Total Non-Operating Expense                                                      $ 15,343,180

Expenses Before Capital Improvements                                                                        $24,337,680

Net Available for Capital Improvements                                                                         $1,053,790

Capital Expenses                                                                                             $ 450,000(2)

Facility Reserve Contribution/(Draw)                                                                    $        603,790


Projected Facility Reserve Balance Projected at 6/30/10                                                     $ 4,597,665

Actual Occupancy – Fall                                   5,104 (100.9% of Capacity)
Projected Occupancy – Spring                              4,956 (98.0% of Capacity) (3)
1.   Due to state-initiated debt refinancing a one-time savings of approximately $522,000 will be realized in FY10
2.   Represents non-recurring costs related to furniture replacement and renovations
3.   Based on budget




                                                           D-18
                                         PROPOSED HOUSING PLAN
                                                FY 2011
Projected Facility Reserve Balance at 6/30/10                                                                                  $4,597,665

Revenue
   Rental Fees Summer                                             $ 500,000
   Rental Fees Fall                                               13,728,330
   Rental Fees Spring                                             13,728,330
   Rental Fees Prior Year                                             75,000
   Conferences                                                       400,000
   Other Revenue                                                     550,000
Total Revenue                                                                                                                $28,981,660

Expense
   Housing Management Expenses                                     $8,705,730
   Contracts Security, Mail, Laundry                                1,190,000

Total Operating Expense                                                                          $ 9,895,730

   Student Telecommunications                                      $ 1,650,000
   Utilities                                                         3,160,000
   Lease Property                                                      310,000
   Debt Service                                                    13,300,930
Total Non-Operating Expense                                                                      $ 18,420,930

Expenses Before Capital Improvements                                                                                        $28,316,660

Net Available for Capital Improvements                                                                                           $665,000

Capital Expenses                                                                                                               $ 665,000(1)

Facility Reserve Contribution/(Draw)                                                                                    $                       0


Projected Facility Reserve Balance at 6/30/11                                                                               $4,597,665
Projected Occupancy – Fall                                         5,289 (98.0% of Capacity)(2)
Projected Occupancy – Spring                                       5,289 (98.0% of Capacity)(2)
1.   An increase/decrease in revenues will increase/decrease the amount available for capital expenses or result in the use of reserve funds.
2.   Early occupancy/revenue projection.




                                                                     D-19
DETAIL OF CHANGES -- PROJECTED FY10 TO PROPOSED FY11
Revenue Changes [$3.590M]:
Increased Revenue related to addition of new beds (Hampton Roads) [$2.490M]
Increased Revenue related to Rate Increases/Occupancy Changes [$1.515M]
Increased Revenue related to estimates in summer rentals [$0.040M]
Decreased Revenue related to one-time conferences [$0.085M]
Decreased Revenue related to estimates in miscellaneous revenue sources
           (due to one-time changes in FY10) [$0.370M]

Expense Changes (Before Capital Improvements) [$3.979M]:
Increased Expenses related to Housing VIIC Debt [$2.369M]
Increased Expenses related to President’s Park Renovation Debt [$0.515M]
Increased Expenses related to Housing Reorganization – Fringe [$0.440M]
Increased Expenses related to Utilities – New Beds/Inflation [$0.410M]
Increased Expenses related to Housing VII Debt [$0.289M]
Increased Personnel related to New Housing [$0.253M]
Increased Expenses related to Telecommunications – New Beds/Rate Changes [$0.250M]
Increased Expenses related to Housing Reorganization – Pay band Issues [$0.200M]
Increased Expenses related to Operating Costs – New Beds/Inflation [$0.198M]
Increased Expenses related to Liberty Square Debt (due to refinancing) [$0.157M]
Increased Expenses related to Living Learning Communities [$0.100M]
Increased Expenses related to Housing Reorganization – FTE Driven Insurance [$0.040M]
Increased Expenses related to Contracts (Security, Mail, etc.) – New Beds/Inflation [$0.040M]
Increased Expenses related to Changes in Existing Debt [$0.004M]
Decreased Expenses related to reduced contractor management fees [$0.370M]
Decreased Expenses related to end of original President’s Park Debt [$0.916M]



     PROJECTED RATE INCREASE AND RESERVE BALANCE INFORMATION
                      FY11       FY12       FY13       FY14

   Rate Increases (1)         5%                5%              5%              5%
   (1)
       Projected; may change based on actual occupancy, environment, comparative rate
   analysis, etc.




                                             D-20
A. Room Rate Benchmarking
I. Absolute Dollar Comparison - Virginia Schools
  (Sorted by FY10 Traditional Double Rate)

                                                        Traditional
                                       Lowest Rate      Double Rate    Highest Rate
Comparison Institution                FY10    FY11    FY10 FY11       FY10 FY11
Christopher Newport Univ. (CNU)      $5,920 $ --      $5,920 $ --     $8,220 $ --
Longwood University (LU)              4,910    --      4,910    --     6,956    --
University of Virginia (UVa)          4,119    --      4,860    --     5,440    --
Norfolk State University (NSU)        4,720    --      4,720    --     6,840    --
Virginia State University (VSU)       4,640    --      4,640    --     6,580    --
Old Dominion University (ODU)         3,096    --      4,552    --     9,200    --
Virginia Commonwealth Univ. (VCU)     4,136    --      4,514    --     8,712    --
GEORGE MASON UNIVERSITY               3,600   3,780    4,450 4,675     8,200 8,610
Univ. of Mary Washington (UMW)        3,990    --      4,418    --     5,422    --
Radford University (RU)               4,000    --      4,000    --     5,700    --
Univ. of Virginia – Wise (UVa-W)      3,994    --      3,994    --     4,604    --
James Madison University (JMU)        3,998    --      3,988    --     3,988    --
Virginia Tech (VT)                    3,636    --      3,636    --     6,058    --
SAMPLE AVERAGE                        4,211    --      4,508    --     6,609    --

II. Absolute Dollar Comparison - Regional Schools
  (Sorted by FY10 Traditional Double Rate)

                                                        Traditional
                                        Lowest Rate     Double Rate     Highest Rate
Comparison Institution                FY10 FY11       FY10 FY11        FY10     FY11
American University (AU)              $8,630 $ --     $8,630 $ --     $10,824 $ --
Georgetown University (GU)             7,858    --     8,598    --      9,364    --
George Washington University (GWU)     6,720    --     8,050    --     14,935    --
University of Maryland (UMD)           5,549    --     5,549    --      5,783    --
GEORGE MASON UNIVERSITY                3,600 3,780     4,450 4,675      8,200 8,610
SAMPLE AVERAGE                         6,471    --     7,055    --      9,821    --




                                         D-21
B. Board Rate Benchmarking
I. Absolute Dollar Comparison - Virginia Schools
  (Sorted by FY10 Traditional 15 Meal Plan [or comparable] Rate)

                                                    Traditional 15
                                     Lowest Rate   (or Comparable)
                                  (Non-Commuter)         Rate             Highest Rate
Comparison Institution             FY10     FY11 FY10        FY11        FY10 FY11
University of Virginia (UVa)       $1,420 $ --     $3,780 $ --           $3,890 $ --
James Madison University (JMU)      1,286     --    3,498    --           3,802    --
Virginia State University (VSU)     3,410     --    3,410    --           3,410    --
Old Dominion University (ODU)         600     --    3,316    --           3,316    --
Virginia Commonwealth Univ. (VCU)   2,976     --    3,300    --           3,542    --
Radford University (RU)             3,186     --    3,186    --           3,272    --
GEORGE MASON UNIVERSITY             2,550    2,630  3,150 3,210           3,520 4,000
Christopher Newport Univ. (CNU)     1,560     --    3,120    --           3,120    --
Univ. of Mary Washington (UMW)      1,108     --    3,044    --           4,358    --
Univ. of Virginia – Wise (UVa-W)    2,993     --    2,993    --           3,329    --
Longwood University (LU)            1,264     --    2,686    --           3,306    --
Norfolk State University (NSU)      2,252     --    2,659    --           2,659    --
Virginia Tech (VT)                  2,524     --    2,524    --           2,724    --
SAMPLE AVERAGE                      2,087     --    3,128    --           3,404    --

II. Absolute Dollar Comparison - Regional Schools
  (Sorted by FY10 Traditional 15 Meal Plan [or comparable] Rate)

                                                        Traditional 15
                                        Lowest Rate    (or Comparable)
                                      (Non-Commuter)         Rate         Highest Rate
Comparison Institution                 FY10    FY11 FY10         FY11    FY10 FY11
American University (AU)              $2,700 $ --     $4,700 $ --        $4,760 $ --
Georgetown University (GU)             1,202     --     3,890    --       4,380    --
University of Maryland (UMD)           3,426     --     3,626    --       4,226    --
George Washington Univ (GWU)           3,400     --     3,400    --       3,400    --
GEORGE MASON UNIVERSITY                2,550    3,780   3,150 3,210       3,520 4,000
SAMPLE AVERAGE                         2,656     --     3,753    --       4,057    --




                                           D-22
ITEM NUMBER: II.C.       Budget Update



PURPOSE OF ITEM:         To summarize for the Board of Visitors the
                         Governor’s Budget Bill, Legislative Amendments
                         submitted to the state for George Mason University,
                         and the current budget model.



APPROPRIATE COMMITTEE:   FINANCE AND LAND USE COMMITTEE



BRIEF NARRATIVE:         The following documents summarize the
                         Governor’s Budget Bill for FY 2010 – 2012
                         Biennium, which was made available on December
                         18, 2009, as well as the Legislative Amendments
                         submitted by George Mason University.
                         Adjustments are identified within the Governor’s
                         Budget for specific items for George Mason
                         University for both the Operating and Capital
                         Budgets. It should be noted that the Governor-elect
                         will submit amendments to the Governor’s Budget
                         and that updated information should be available at
                         the Board of Visitors meeting.



STAFF RECOMMENDATION:    For Board information only.




                         D-23
            GEORGE MASON UNIVERSITY AMENDMENTS
                      FY 2010 SESSION


OPERATING AMENDMENTS
    E&G Interest
    Auxiliary Enterprises Interest and Cash Balance
    Equipment Trust Fund
    Maintenance Reserve


CAPITAL AMENDMENTS

      General Fund Support

         $3.2M Planning; - Health and Human Services Building, Fairfax Campus
         $3.2M Planning - Life Sciences Building, Prince William Campus
         $1.1M Planning - Campus Planning; Loudoun Campus
         $1.5M Fenwick Library – Continue design through Working Drawings
          $0.78M Fine Arts – Continue design through Working Drawings
         $0.50M Thompson Hall Renovation – FF&E
         $5.0M Potomac Science Center Transfer GOB authority from Science Museum to
          George Mason University


      NGF Authority/Language

       Aquatic Center – Inclusion of $2.5M authority in Caboose Bill
       Founders Hall - Conversion of NGF authority to NGF Revenue Bond authority
       Prince William Labs Renovation – Authority if NIH grant Recovery Act funding is
        approved

      PPEA Language

       Satellite Heating and Cooling Plant - Amendment to request PPEA authority to
        construct plant
       Immunology PPEA language - Language for public private partnership that may
        result in construction of pilot manufacturing plant
       Potomac Science Center - Language to allow innovative financing for 50,000 SF
        facility at Belmont Bay




                                          D-24
ITEM NUMBER: II.D.       Financial Snapshot, 12/31/09 (Information)



PURPOSE OF ITEM:         To provide the Board of Visitors with a financial
                         update for the fiscal year 2009-10.



APPROPRIATE COMMITTEE:   FINANCE AND LAND USE COMMITTEE



BRIEF NARRATIVE:         During September, 2009 the University was notified
                         of an additional general fund budget reduction for
                         the FY 2009 - 2010 fiscal year. The general fund
                         reduction of approximately $17.6M (15%) is being
                         offset during FY 2010 by additional General Fund
                         and ARRA support, with a net general fund
                         reduction of $9.0M, or approximately 8%. The
                         following pages provide highlights for how the
                         budget reduction will be covered within Educational
                         & General operations, as well as a financial
                         snapshot through 12/31/09.



STAFF RECOMMENDATION:    For Board information only.




                         D-25
                        GEORGE MASON UNIVERSITY
                        FINANCIAL SNAPSHOT, FY 2010


In early September 2009, George Mason University was notified that the University’s general
fund budget for FY 10 would be permanently reduced by 15%. To partially cover this reduction
in FY 2010, the governor has provided additional general fund and ARRA support to offset a
portion of this reduction in FY 2010. With the one-time offset, the net additional reduction for
FY 2010 will be approximately $9.0M, or approximately 8%. The university has determined
that the budget reduction will covered as follows:


                                                      FY 10                    AMOUNT
                                                 APPROPRIATION                    OF
                                                    AMOUNT                    REDUCTION
15% of E&G GF                                       $118,213,867                $17,732,080
One-time Additional GF & ARRA Support                                             8,900,000
15% of Research GF                                        $956,250                 $143,438

TOTAL                                                 $119,170,117                $8,975,518


   In order to cover this reduction the following actions were implemented immediately:

           Additional Tuition Revenue from Increased Enrollment        $ 2,535,000
           Additional Revenue from Other Sources                           500,000
           Reduce All Units E&G (1.0 – 2.0%)                             5,500,000
           Reduce Research Funds                                           143,438
           Utilities Reduction/Savings                                     700,000

For the FY 2010 fiscal year, with a budget lower than was originally allocated, units are
operating with less resources than originally allocated to support their activities. Each unit has
determined the most appropriate actions to take to stay within the lower budget. During FY
2010 units are covering budget reductions through salary savings on vacant positions with the
delay of hiring, or abolishment of positions; allocating less funds for professional development
and training; deferring equipment purchases; reducing library acquisitions; delaying facility
upgrades; reducing levels of housekeeping and grounds maintenance. While all units within the
Educational & General operations were given a budget reduction, only a few units with
Auxiliary Enterprises were impacted by budget reductions.

The following table highlights the general fund budget reductions imposed by the state from FY
2008 through FY 2010 thus far.



                                              D-26
                        GEORGE MASON UNIVERSITY
                             GENERAL FUND
                        BUDGET REDUCTION HISTORY
                      DATE                GF REDUCTION            PERCENT
                       FY08                   $6.8M                  5%
                       FY09                    9.7M                  7%
                       FY10                   11.2M                  8%
                FY10 September 2009           17.6M                 15%
                       Total                  45.3M                 35%


During the Board of Visitors Planning Retreat in August, 2009 the University’s budget model
was shared. With the latest general fund reduction the projected general fund support in FY
2014 is decreased by approximately $7.2M, with offsets from other revenues and reductions in
expense budgets. The University administration is currently reviewing additional strategies and
developing alternative scenarios within the 2014 Model.

For FY 10 enrollment is projected to be 24,480 ftes, approximately 1,000 ftes greater than the
original target. This level compares to the FY 09 actual enrollment of 23,454, and the actual FY
08 enrollment level of 22,985 ftes. Through December 2009, units appear to be working within
the budgeted funds as revised.




                                             D-27
              (See Page D-28
E&G Snapshot Of The Budget December 31, 2009)




                   D-28
ITEM NUMBER: II.E.       Capital Projects Review



PURPOSE OF ITEM:         This item provides update on ongoing capital
                         projects.



APPROPRIATE COMMITTEE:   FINANCE AND LAND USE COMMITTEE



BRIEF NARRATIVE:         This section provides the regular report on the status
                         of capital construction projects on all three
                         university campuses. The project “stop light” chart
                         provides a summary review.           More complete
                         information follows. Staff will present the chart in
                         the meeting.



STAFF RECOMMENDATION:    None. Provided for information only.




                         D-29
D-30
D-31
D-32
D-33
D-34
ITEM NUMBER: III.A.      Financial Aid Update (Visitor Soza)



PURPOSE OF ITEM:         To provide an update to the BOV on financial aid –
                         current situation, predictions for future, strategies to
                         meet needs of students and alternative solutions.



APPROPRIATE COMMITTEE:   FINANCE AND LAND USE COMMITTEE



BRIEF NARRATIVE:         Visitor Soza has been working with university staff
                         to investigate increasing the student financial aid,
                         maximizing the use of available student financial
                         aid, and advancing strategies to improve the
                         institution’s capacity to meet a greater percentage of
                         student unmet need.



STAFF RECOMMENDATION:    For Board information only.




                          D-35
(This page left intentionally blank)




                D-36
ITEM NUMBER: III.B.      Strategic Discussion: Update on Masonvale


PURPOSE OF ITEM:         Status update on construction, leasing and financing
                         of Masonvale, George Mason University faculty
                         and staff housing project.


APPROPRIATE COMMITTEE:   LAND USE AND PHYSICAL FACILITIES


BRIEF NARRATIVE:         Construction:
                          Construction is complete on the west side of the
                            project. Eighty-two units are complete and have
                            Certificates of Occupancy from BCOM.
                          Construction on the east side is progressing well
                            ahead of schedule. Exhibit 1 (attached) provides the
                            current timeframes for delivery of the remaining
                            seventy-five units.
                          Road improvements continue on Roberts Road.
                            Unanticipated delays resulting from weather and
                            utility relocations have pushed the final completion
                            for this work back until February 2010. Remaining
                            work includes final utility relocations, completion
                            of the trail and final road paving. The new entrance
                            will be opened at the completion of the job.
                          Final project completion is scheduled for March
                            2010.

                         Leasing:
                          Twenty-eight of the completed and accepted units
                            (82 units) are occupied or reserved for future
                            occupancy (i.e., a lease has already been signed).
                            An additional two applicants have yet to select their
                            unit or their move-in date.
                          Aggressive marketing efforts continue to attract the
                            primary (faculty and staff) market for this housing.
                            Our residents to       date include seven faculty
                            members and twenty staff. Exhibit 2 provides a
                            summary of all marketing efforts.
                          Marketing efforts oriented to the secondary market
                            (full-time graduate students) began in late-fall 2009.
                            This effort is being intensified in cooperation with
                            the university staff.



                         D-37
                           Anticipated leasing to the primary market is
                            expected to increase this spring resulting from new
                            hiring activity and typical “spring market”
                            influences.
                           A summary of the anticipated lease-up is provided
                            as Exhibit 3.

                        Financing:
                         The project continues to track under-budget with
                           ample project and owner reserves to cover any
                           unanticipated changes.


STAFF RECOMMENDATION:   No action required.




                        D-38
D-39
                       EXHIBIT 2
       MASONVALE PRIMARY MARKET LEASING ACTIVITY


Progress with the Implementation of Lincoln’s Marketing Plan (highlights below)

 Faculty & Staff Open House (66 Attendees, 1 new application, 11 interested in future dates,
  54 were “just curious”)
   The Open House has been the most effective marketing event to date.
   Lincoln to schedule second Open House in February (In addition to the standard
       outreach for the Open House, Lincoln will personally invite the 11 interested
       attendees).
 Patriot Center advertisement - courtside banner, prominent program ad, logo in jacket of
  season tickets, and public address advertisements
   Although basketball season only started in mid-November, this package including on-
       site signage, printed marketing and in-game promotions has already proven to be very
       effective as it has already generated traffic to Masonvale. Lincoln expects a continued
       increase of awareness through Masonvale’s visibility at the Patriot Center over the next
       three months.
 Advertisements at 6 bus stops and 2 parking garages
   Large posters advertising Masonvale are displayed in six of the bus stops on campus.
       Large banners were hung in the Sandy Creek and Mason Pond garages on December 4,
       2009. These posters and banners are targeting the commuters and Lincoln expects the
       parking garage banners to be very effective as Lincoln has already received inquiries
       from the bus stop advertisements.
 Kiosks information dissemination at Patriot Center, Faculty/Staff Enrichment Day and
  Johnson Center
   Informational kiosks set-up and staffed with Lincoln’s leasing team has proven to be
       one of the most effective methods of marketing. By making the leasing staff available
       at events, Lincoln is able to quickly introduce the faculty/staff to the Masonvale and
       answer any questions. These interactions have led to over 15 tours at the property.
 Johnson center advertisements on ticker, community board (flyers) and LCD screen
   Lincoln has not had a large response from these marketing efforts, however Lincoln has
       received a few inquiries by phone and email citing these sources. While the marketing
       in the Johnson Center has been one of the less effective marketing items, Lincoln will
       continue to advertise in the high-traffic areas and will keep monitoring its effectiveness
       (inexpensive).
 Updated Masonvale.com with photos (interior and exterior)
   Updated photos of the interiors and exteriors of the homes and of the property are on
       Masonvale.com. A tab marked “photo gallery” was added to the first page of the site so
       that perspective residents can easily view these photos. Lincoln has received many
       positive comments from clients about the updated photos. Lincoln will continue to
       update the photo gallery.



                                             D-40
 Two model units are set up as of October 14, 2009
   Being able to view a furnished home has helped to increase return tours and leases.
      Lincoln will continue to have the two model homes set up.
 Deans and Directors toured October 15th
   The tour was a great opportunity for the Deans and Directors to view the floor plans,
      ask any questions about Masonvale, and to take collateral material. While this was not
      very effective in bringing in additional traffic, Lincoln is hoping that they will now be
      able to convey what Masonvale has to offer and refer future potential residents after
      seeing the actual product.
 Collateral material complete and delivered to HR
   Collateral material has been submitted to HR for relocation packets and for the NEW
      center. With many clients citing the Human Resources team as their marketing source,
      Lincoln will continue to replenish these materials as needed as this has been a very
      effective method of marketing for the property.

Concessions & Incentives (advertised on George's List, flyers, efiles, & responses to email leads)
 Two & three bedroom homes - Lease by 12/15/09 and occupy by 1/31/10 to receive a free
   half month’s rent off your first full month of rent
 One bedroom apartments - Lease by 12/15/09 and occupy by 1/15/10 to receive a Dell mini
   notebook upon move-in (possibly being extended to 1/31/10 move-ins)
 Quick lease incentive - Lease w/in 48hrs of first tour and $150 move-in fee is waived
 Resident referral program - residents receive $250 per referral. Prospects must specify their
   marketing source by name at the time of first contact

Highlights from Marketing Plan Going Forward
 Capture the Market video on Masonvale.com (currently in production)
     Video will include footage and photos of the interiors/exteriors of the homes and the
        property. Amenities, property information and contact information will also be
        featured in the video.
 Community Sherpa Blog – December 15th
     Social media networking through a community blog, Facebook, and Twitter will be set
        up by Community Sherpa. This service will aid in the retention of Masonvale’s current
        and future residents, and will also help increase traffic.
 Roberts Road Banner (December 2009)
     A banner displaying “Now Leasing 703-865-4870” will be hung on the side of an
        unoccupied garage facing Roberts Road. This will target Faculty/Staff who access the
        property through Shenandoah River Lane via Roberts Road.
 Kiosk Table at Patriot Center – January 9th, January 30th , February 20th
     We will have a table set up on the concourse for three home games in January and
        February. Dates chosen were based on expected attendance at the games.




                                             D-41
D-42
ITEM NUMBER: III.C.      Update on New Net Income Opportunities
                         (Strategic Committee C)



PURPOSE OF ITEM:         To keep the Finance & Land Use Committee abreast
                         of the activities of the Strategic Committee C.



APPROPRIATE COMMITTEE:   FINANCE AND LAND USE COMMITTEE



BRIEF NARRATIVE:         Strategic Committee C has met on several
                         occasions. The purpose of the group is to facilitate
                         the generation of additional net income for the
                         University through the leveraging of real estate
                         opportunities and other business opportunities.
                         Since the work of this committee is divided along
                         the lines of facilities/real estate and auxiliary
                         enterprises/business opportunities, both the VP
                         Facilities and the Senior VP will brief the Finance
                         and Land Use Committee.



STAFF RECOMMENDATION:    For Board information only.




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