West
Virginia University is financially sound.
Its
investments have performed well despite a difficult economy. In addition, lower
interest rates have enabled the university to refinance several notes, freeing
up money for other improvements and operations, the Board of Governors learned
Friday at its first meeting of 2013.
Despite the
performance, Vice President for Administration and Finance Narvel Weese said
the university is still evaluating how it will absorb a $13.3 million cut in
state expenditures for the fiscal year beginning July 1.
"Certainly
the university is very concerned about this pending budget reduction and
recognizes that a budget cut at this level would impact the university's
delivery of quality services to our students and the residents of West
Virginia," Weese said.
"With
this in mind, the university is actively seeking ways to navigate through these
problems and continues to engage legislative leaders and state officials in
meaningful dialogue to mitigate the financial budget loss and to explore ways
the state might help the university operate more flexibly and efficiently in
these challenging financial times.
The
university is working with legislative leaders and state officials to find ways
to mitigate and manage the loss, he said.
"While
the university is mindful that the state's economy is not performing at a level
needed to support the current level of budget expenditures, we are very
optimistic that state leadership will work with the university to find creative
solutions, which allow the University to grow and succeed into the next decade,"
he said.
The board
had previously approved the issuance of $210.5 million in bonds, with the
proceeds to pay off an earlier bond sale, and generate new funds. Weese
reported that the new bond issue on Jan. 29 enabled the University to save
$17.5 million in interest payments. Additionally, the sale netted $15 million
for improvements in the PRT transit system and $14.5 million for the previous
acquisition of property for the University Place development in Sunnyside and
financed a part of the construction of the Animal Facility Annex.
A separate
refinancing of Health Sciences Center notes from 2005 also freed up $1.4
million annually for HSC operations.
Additionally,
Weese noted that bids received for the previously announced construction of new
buildings for the College of Physical Activity and Sports Sciences and Student
Health are $4.9 million lower than anticipated.
Separately,
Rick Kraich, vice president for investments at the WVU Foundation, reported foundation
investment assets totaled nearly $1.1 billion as of Dec. 31, 2012. That
includes the long-term investment pool which saw a return of 10.5 percent for
the calendar year 2012. The value of the endowment investment pool stood at $444
million as of December, Kraich added. The foundation acts as an investment
agent for WVU and WVU Hospitals.
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