§ 23-38.88. Eligibility for restructured financial andadministrative operational authority.
A. Public institutions of higher education shall be eligiblefor the following restructured financial and operational authority:
1. To dispose of their surplus materials at the location wherethe surplus materials are held and to retain any proceeds from such disposal asprovided in subdivision B 14 of § 2.2-1124;
2. To have the option, as provided in subsection C of §2.2-1132 and pursuant to the conditions and provisions under such subsection,to contract with a building official of the locality in which construction istaking place and for such official to perform any inspection and certificationsrequired for the purpose of complying with the Uniform Statewide Building Code(§ 36-97 et seq.) pursuant to subsection C of § 36-98.1;
3. For those public institutions of higher education that havein effect a signed memorandum of understanding with the Secretary ofAdministration regarding participation in the nongeneral fund decentralizationprogram as set forth in the appropriation act, as provided in subsection C of §2.2-1132, to enter into contracts for specific construction projects withoutthe preliminary review and approval of the Division of Engineering andBuildings of the Department of General Services, provided such institutions arein compliance with the requirements of the Virginia Public Procurement Act (§2.2-4300 et seq.) and utilize the general terms and conditions for those formsof procurement approved by the Division and the Office of the Attorney General;
4. To acquire easements as provided in subdivision 4 of §2.2-1149;
5. To enter into an operating/income lease or capital leasepursuant to the conditions and provisions provided in subdivision 5 of §2.2-1149;
6. To convey an easement pertaining to any property suchinstitution owns or controls as provided in subsection C of § 2.2-1150;
7. In accordance with the conditions and provisions ofsubdivision C 2 of § 2.2-1153, to sell surplus real property valued at lessthan $5 million, which is possessed and controlled by the institution;
8. For purposes of compliance with § 2.2-4310, to procuregoods, services, and construction from a vendor that the institution hascertified as a small, women-, and minority-owned business enterprise pursuantto the conditions and provisions provided in § 2.2-1404.1;
9. To be exempt from review of their budget request forinformation technology by the CIO as provided in subdivision A 4 of § 2.2-2007;
10. To be allowed to establish policies for the designation ofadministrative and professional faculty positions at the institution pursuantto the conditions and provisions provided in subsection E of § 2.2-2901;
11. To receive the financial benefits described under §2.2-5005 pursuant to the conditions and provisions of such section;
12. To be exempt from reporting its purchases to the Secretaryof Education, provided that all purchases, including sole source purchases, areplaced through the Commonwealth's electronic procurement system using propersystem codes for the methods of procurement;
13. To utilize as methods of procurement a fixed price,design-build or construction management contract notwithstanding the provisionsof § 2.2-4306; and
14. The restructured financial and operational authority setforth in Subchapter 2 (§ 23-38.90) and Subchapter 3 (§ 23-38.91 et seq.) ofthis chapter.
No such authority shall be granted unless the institutionmeets the conditions set forth in this chapter.
B. The Board of Visitors of a public institution of highereducation shall commit to the Governor and the General Assembly by August 1,2005, through formal resolution adopted according to its own bylaws, to meetingthe state goals specified below, and shall be responsible for ensuring thatsuch goals are met, in addition to such other responsibilities as may beprescribed by law. Each such institution shall commit to the Governor and theGeneral Assembly to:
1. Consistent with its institutional mission, provide accessto higher education for all citizens throughout the Commonwealth, includingunderrepresented populations, and, consistent with subdivision 4 of § 23-9.6:1and in accordance with anticipated demand analysis, meet enrollment projectionsand degree estimates as agreed upon with the State Council of Higher Educationfor Virginia. Each such institution shall bear a measure of responsibility forensuring that the statewide demand for enrollment is met;
2. Consistent with § 23-9.2:3.03, ensure that higher educationremains affordable, regardless of individual or family income, and through aperiodic assessment, determine the impact of tuition and fee levels net offinancial aid on applications, enrollment, and student indebtedness incurred forthe payment of tuition and fees;
3. Offer a broad range of undergraduate and, whereappropriate, graduate programs consistent with its mission and assess regularlythe extent to which the institution's curricula and degree programs address theCommonwealth's need for sufficient graduates in particular shortage areas,including specific academic disciplines, professions, and geographic regions;
4. Ensure that the institution's academic programs and courseofferings maintain high academic standards, by undertaking a continuous reviewand improvement of academic programs, course availability, facultyproductivity, and other relevant factors;
5. Improve student retention such that students progress frominitial enrollment to a timely graduation, and that the number of degreesconferred increases as enrollment increases;
6. Consistent with its institutional mission, developarticulation agreements that have uniform application to all Virginia communitycolleges and meet appropriate general education and program requirements at thefour-year institution, provide additional opportunities for associate degreegraduates to be admitted and enrolled, and offer dual enrollment programs incooperation with high schools;
7. Actively contribute to efforts to stimulate the economicdevelopment of the Commonwealth and the area in which the institution islocated, and for those institutions subject to a management agreement set forthin Subchapter 3 (§ 23-38.91 et seq.) of this chapter, in areas that lag theCommonwealth in terms of income, employment, and other factors;
8. Consistent with its institutional mission, increase thelevel of externally funded research conducted at the institution and facilitatethe transfer of technology from university research centers to private sectorcompanies;
9. Work actively and cooperatively with elementary andsecondary school administrators, teachers, and students in public schools andschool divisions to improve student achievement, upgrade the knowledge andskills of teachers, and strengthen leadership skills of school administrators;
10. Prepare a six-year financial plan consistent with §23-9.2:3.03;
11. Conduct the institution's business affairs in a mannerthat maximizes operational efficiencies and economies for the institution,contributes to maximum efficiencies and economies of state government as awhole, and meets the financial and administrative management standards asspecified by the Governor pursuant to § 2.2-5004 and included in theappropriation act that is in effect, which shall include best practices forelectronic procurement and leveraged purchasing, information technology, realestate portfolio management, and diversity of suppliers through fair andreasonable consideration of small, women-, and minority-owned businessenterprises; and
12. Seek to ensure the safety and security of theCommonwealth's students on college and university campuses.
Upon making such commitments to the Governor and the GeneralAssembly by August 1, 2005, the public institution of higher education shall beallowed to exercise the restructured financial and operational authority setforth in subdivisions A 1 through A 13 of § 23-38.88, subject to suchconditions as may be provided under the enabling statutes granting theadditional authority.
C. As provided in § 23-9.6:1.01, the State Council of HigherEducation shall in consultation with the respective chairmen of the HouseCommittees on Education and Appropriations and the Senate Committees on Financeand Education and Health or their designees, representatives of publicinstitutions of higher education, and such other state officials as may bedesignated by the Governor, develop objective measures of educational-relatedperformance and institutional performance benchmarks for such objectivemeasures. At a minimum, the State Council shall develop such objective measuresand institutional performance benchmarks for the goals and objectives set forthin subdivisions B 1 through B 10 and B 12. In addition, the Governor shalldevelop objective measures of financial and administrative managementperformance and related institutional performance benchmarks for the goals andobjectives set forth in subdivision B 11.
As provided in subsection C of § 23-9.6:1.01, any publicinstitution of higher education that has been certified during the fiscal yearby the State Council of Higher Education for Virginia as meeting theinstitutional performance benchmarks in effect for the fiscal year as set forthin the general appropriation act shall be provided the financial benefits under§ 2.2-5005. Such benefits shall first be provided as determined under suchsection.
D. 1. The restructured financial and operational authority setforth in Subchapter 3 (§ 23-38.91 et seq.) of this chapter shall only begranted in accordance with the expressed terms of a management agreementbetween the public institution of higher education and the Commonwealth.
No restructured financial or operational authority set forthin Subchapter 3 (§ 23-38.91 et seq.) of this chapter shall be granted to apublic institution of higher education unless such authority is expresslyincluded in the management agreement. In addition, the only implied authoritythat shall be granted from entering into a management agreement is that impliedauthority that is actually necessary to carry out the expressed grant ofrestructured financial or operational authority. As a matter of law, theinitial presumption shall be that any restructured financial or operationalauthority set forth in Subchapter 3 is not included in the managementagreement. These requirements shall also apply to any other provision includedin Subchapter 3.
2. No public institution of higher education shall enter intoa management agreement unless:
a. (i) Its most current and unenhanced bond rating receivedfrom (a) Moody's Investors Service, Inc., (b) Standard & Poor's, Inc., or(c) Fitch Investor's Services, Inc. is at least AA- (i.e., AA minus) or itsequivalent, provided that such bond rating has been received within the lastthree years of the date that the initial agreement is entered into or (ii) theinstitution has (a) participated in decentralization pilot programs in theareas of finance and capital outlay, (b) demonstrated management competency inthose two areas as evidenced by a written certification from the CabinetSecretary or Secretaries designated by the Governor, (c) received additionaloperational authority under a memorandum of understanding pursuant to §23-38.90 in at least one functional area, and (d) demonstrated managementcompetency in that area for a period of at least two years. In submitting"The Budget Bill" for calendar year 2005 pursuant to subsection A of§ 2.2-1509, the Governor shall include criteria for determining whether or notan institution has demonstrated the management competency required by clause(ii) of this subdivision;
b. An absolute two-thirds, or more, of the institution'sgoverning body shall have voted in the affirmative for a resolution expressingthe sense of the body that the institution is qualified to be, and should be,governed by the provisions of Subchapter 3 (§ 23-38.91 et seq.) of thischapter, which resolution shall be included in the initial managementagreement;
c. The institution agrees to reimburse the Commonwealth forany additional costs to the Commonwealth in providing health or other groupinsurance benefits to employees, and in undertaking any risk managementprogram, that are attributable to the institution's exercise of anyrestructured financial or operational authority set forth in Subchapter 3. Theinstitution's agreement to reimburse the Commonwealth for such additional costsshall be expressly included in each management agreement with the institution.The Secretary of Finance and the Secretary of Administration, in consultationwith the Virginia Retirement System and the affected institutions, shallestablish procedures for determining any amounts to be paid by each institutionand a mechanism for transferring the appropriate amounts directly and solely tothe programs whose costs have been affected.
In developing management agreements, public institutions ofhigher education shall give consideration to potential future impacts oftuition increases on the Virginia College Savings Plan (§ 23-38.75) and shalldiscuss such potential impacts with parties participating in development ofsuch agreements. The chief executive officer of the Virginia College SavingsPlan shall provide to the institution and such parties the Plan's assumptionsunderlying the contract pricing of the program; and
d. Before executing a management agreement with theCommonwealth that affects insurance or benefit programs administered by theVirginia Retirement System, the Governor shall transmit a draft of the relevantprovisions to the Board of Trustees of the Virginia Retirement System, whichshall review the relevant provisions in order to ensure compliance with theapplicable provisions of Title 51.1, administrative policies and procedures andfederal regulations governing retirement plans. The Board shall advise theGovernor and appropriate Cabinet Secretaries of any conflicts.
3. Each initial management agreement with an institution shallremain in effect for a period of three years. Subsequent management agreementswith the institution shall remain in effect for a period of five years.
If an existing agreement is not renewed or a new agreementexecuted prior to the expiration of the three-year or five-year term, asapplicable, the existing agreement shall remain in effect on a provisionalbasis for a period not to exceed one year. If, after the expiration of theprovisional one-year period, the management agreement has not been renewed or anew agreement executed, the institution shall no longer be granted any of thefinancial or operational authority set forth in Subchapter 3 (§ 23-38.91 etseq.) of this chapter, unless and until such time as a new management agreementis entered into between the institution and the Commonwealth.
The Joint Legislative Audit and Review Commission, incooperation with the Auditor of Public Accounts, shall conduct a reviewrelating to the initial management agreement with each public institution ofhigher education. The review shall cover a period of at least the first 24months from the effective date of the management agreement. The review shallinclude, but shall not be limited to, the degree of compliance with theexpressed terms of the management agreement, the degree to which theinstitution has demonstrated its ability to manage successfully theadministrative and financial operations of the institution without jeopardizingthe financial integrity and stability of the institution, the degree to whichthe institution is meeting the objectives described in subsection B, and anyrelated impact on students and employees of the institution from execution ofthe management agreement. The Joint Legislative Audit and Review Commissionshall make a written report of its review no later than June 30 of the third yearof the management agreement. The Joint Legislative Audit and Review Commissionis authorized, but not required, to conduct a similar review of any managementagreement entered into subsequent to the initial agreement.
4. The right and power by the Governor to void a managementagreement shall be expressly included in each management agreement. Themanagement agreement shall provide that if the Governor makes a writtendetermination that a public institution of higher education that has enteredinto a management agreement with the Commonwealth is not in substantialcompliance with the terms of the agreement or with the requirements of thischapter in general, (i) the Governor shall provide a copy of that writtendetermination to the chairmen of the Board of Visitors or other governing bodyof the public institution of higher education and to the members of the GeneralAssembly, and (ii) the institution shall develop and implement a plan ofcorrective action, satisfactory to the Governor, for purposes of coming intosubstantial compliance with the terms of the management agreement and with therequirements of this chapter, as soon as practicable, and shall provide a copyof such corrective action plan to the members of the General Assembly. If aftera reasonable period of time after the corrective action plan has beenimplemented by the institution, the Governor determines that the institution isnot yet in substantial compliance with the management agreement or therequirements of this chapter, the Governor may void the management agreement.Upon the Governor voiding a management agreement, the affected publicinstitution of higher education shall not be allowed to exercise anyrestructured financial or operational authority pursuant to the provisions of Subchapter3 (§ 23-38.91 et seq.) unless and until the institution enters into asubsequent management agreement with the Secretary or Secretaries designated bythe Governor or the void management agreement is reinstated by the GeneralAssembly.
5. A management agreement with a public institution of highereducation shall not grant any of the restructured financial or operationalauthority set forth in Subchapter 3 (§ 23-38.91 et seq.) of this chapter to theVirginia Cooperative Extension and Agricultural Experiment Station, theUniversity of Virginia College at Wise, or the Virginia Institute of MarineSciences or to an affiliated entity of the institution unless such intent, aswell as the degree of the restructured financial or operational authority to begranted, is expressly included in the management agreement.
6. Following the execution of each management agreement with apublic institution of higher education and submission of that managementagreement to the Chairmen of the House Committee on Appropriations, the HouseCommittee on Education, the Senate Committee on Finance, and the SenateCommittee on Education and Health pursuant to § 23-38.97, the Governor shallinclude a recommendation for approval of the management agreement in "TheBudget Bill" submitted pursuant to subsection A of § 2.2-1509 or in hisgubernatorial amendments submitted pursuant to subsection E of § 2.2-1509 dueby the December 20 that immediately follows the date of submission of themanagement agreement to such Committees. Following the General Assembly'sconsideration of whether to approve or disapprove the management agreement asrecommended, if the management agreement is approved as part of the generalappropriation act, it shall become effective on the effective date of such generalappropriation act. However, no management agreement shall be entered into by apublic institution of higher education and the Secretary or Secretariesdesignated by the Governor after November 15 of a calendar year.
E. A covered institution and the members of its governingbody, officers, directors, employees, and agents shall be entitled to the samesovereign immunity to which they would be entitled if the institution were notgoverned by this chapter; provided further, that the Virginia Tort Claims Act(§ 8.01-195.1 et seq.) and its limitations on recoveries shall remainapplicable with respect to institutions governed by this chapter.
(2005, cc. 933, 945; 2006, c. 775; 2009, cc. 827, 845.)
§ 23-38.88. Eligibility for restructured financial andadministrative operational authority.
A. Public institutions of higher education shall be eligiblefor the following restructured financial and operational authority:
1. To dispose of their surplus materials at the location wherethe surplus materials are held and to retain any proceeds from such disposal asprovided in subdivision B 14 of § 2.2-1124;
2. To have the option, as provided in subsection C of §2.2-1132 and pursuant to the conditions and provisions under such subsection,to contract with a building official of the locality in which construction istaking place and for such official to perform any inspection and certificationsrequired for the purpose of complying with the Uniform Statewide Building Code(§ 36-97 et seq.) pursuant to subsection C of § 36-98.1;
3. For those public institutions of higher education that havein effect a signed memorandum of understanding with the Secretary ofAdministration regarding participation in the nongeneral fund decentralizationprogram as set forth in the appropriation act, as provided in subsection C of §2.2-1132, to enter into contracts for specific construction projects withoutthe preliminary review and approval of the Division of Engineering andBuildings of the Department of General Services, provided such institutions arein compliance with the requirements of the Virginia Public Procurement Act (§2.2-4300 et seq.) and utilize the general terms and conditions for those formsof procurement approved by the Division and the Office of the Attorney General;
4. To acquire easements as provided in subdivision 4 of §2.2-1149;
5. To enter into an operating/income lease or capital leasepursuant to the conditions and provisions provided in subdivision 5 of §2.2-1149;
6. To convey an easement pertaining to any property suchinstitution owns or controls as provided in subsection C of § 2.2-1150;
7. In accordance with the conditions and provisions ofsubdivision C 2 of § 2.2-1153, to sell surplus real property valued at lessthan $5 million, which is possessed and controlled by the institution;
8. For purposes of compliance with § 2.2-4310, to procuregoods, services, and construction from a vendor that the institution hascertified as a small, women-, and minority-owned business enterprise pursuantto the conditions and provisions provided in § 2.2-1404.1;
9. To be exempt from review of their budget request forinformation technology by the CIO as provided in subdivision A 4 of § 2.2-2007;
10. To be allowed to establish policies for the designation ofadministrative and professional faculty positions at the institution pursuantto the conditions and provisions provided in subsection E of § 2.2-2901;
11. To receive the financial benefits described under §2.2-5005 pursuant to the conditions and provisions of such section;
12. To be exempt from reporting its purchases to the Secretaryof Education, provided that all purchases, including sole source purchases, areplaced through the Commonwealth's electronic procurement system using propersystem codes for the methods of procurement;
13. To utilize as methods of procurement a fixed price,design-build or construction management contract notwithstanding the provisionsof § 2.2-4306; and
14. The restructured financial and operational authority setforth in Subchapter 2 (§ 23-38.90) and Subchapter 3 (§ 23-38.91 et seq.) ofthis chapter.
No such authority shall be granted unless the institutionmeets the conditions set forth in this chapter.
B. The Board of Visitors of a public institution of highereducation shall commit to the Governor and the General Assembly by August 1,2005, through formal resolution adopted according to its own bylaws, to meetingthe state goals specified below, and shall be responsible for ensuring thatsuch goals are met, in addition to such other responsibilities as may beprescribed by law. Each such institution shall commit to the Governor and theGeneral Assembly to:
1. Consistent with its institutional mission, provide accessto higher education for all citizens throughout the Commonwealth, includingunderrepresented populations, and, consistent with subdivision 4 of § 23-9.6:1and in accordance with anticipated demand analysis, meet enrollment projectionsand degree estimates as agreed upon with the State Council of Higher Educationfor Virginia. Each such institution shall bear a measure of responsibility forensuring that the statewide demand for enrollment is met;
2. Consistent with § 23-9.2:3.03, ensure that higher educationremains affordable, regardless of individual or family income, and through aperiodic assessment, determine the impact of tuition and fee levels net offinancial aid on applications, enrollment, and student indebtedness incurred forthe payment of tuition and fees;
3. Offer a broad range of undergraduate and, whereappropriate, graduate programs consistent with its mission and assess regularlythe extent to which the institution's curricula and degree programs address theCommonwealth's need for sufficient graduates in particular shortage areas,including specific academic disciplines, professions, and geographic regions;
4. Ensure that the institution's academic programs and courseofferings maintain high academic standards, by undertaking a continuous reviewand improvement of academic programs, course availability, facultyproductivity, and other relevant factors;
5. Improve student retention such that students progress frominitial enrollment to a timely graduation, and that the number of degreesconferred increases as enrollment increases;
6. Consistent with its institutional mission, developarticulation agreements that have uniform application to all Virginia communitycolleges and meet appropriate general education and program requirements at thefour-year institution, provide additional opportunities for associate degreegraduates to be admitted and enrolled, and offer dual enrollment programs incooperation with high schools;
7. Actively contribute to efforts to stimulate the economicdevelopment of the Commonwealth and the area in which the institution islocated, and for those institutions subject to a management agreement set forthin Subchapter 3 (§ 23-38.91 et seq.) of this chapter, in areas that lag theCommonwealth in terms of income, employment, and other factors;
8. Consistent with its institutional mission, increase thelevel of externally funded research conducted at the institution and facilitatethe transfer of technology from university research centers to private sectorcompanies;
9. Work actively and cooperatively with elementary andsecondary school administrators, teachers, and students in public schools andschool divisions to improve student achievement, upgrade the knowledge andskills of teachers, and strengthen leadership skills of school administrators;
10. Prepare a six-year financial plan consistent with §23-9.2:3.03;
11. Conduct the institution's business affairs in a mannerthat maximizes operational efficiencies and economies for the institution,contributes to maximum efficiencies and economies of state government as awhole, and meets the financial and administrative management standards asspecified by the Governor pursuant to § 2.2-5004 and included in theappropriation act that is in effect, which shall include best practices forelectronic procurement and leveraged purchasing, information technology, realestate portfolio management, and diversity of suppliers through fair andreasonable consideration of small, women-, and minority-owned businessenterprises; and
12. Seek to ensure the safety and security of theCommonwealth's students on college and university campuses.
Upon making such commitments to the Governor and the GeneralAssembly by August 1, 2005, the public institution of higher education shall beallowed to exercise the restructured financial and operational authority setforth in subdivisions A 1 through A 13 of § 23-38.88, subject to suchconditions as may be provided under the enabling statutes granting theadditional authority.
C. As provided in § 23-9.6:1.01, the State Council of HigherEducation shall in consultation with the respective chairmen of the HouseCommittees on Education and Appropriations and the Senate Committees on Financeand Education and Health or their designees, representatives of publicinstitutions of higher education, and such other state officials as may bedesignated by the Governor, develop objective measures of educational-relatedperformance and institutional performance benchmarks for such objectivemeasures. At a minimum, the State Council shall develop such objective measuresand institutional performance benchmarks for the goals and objectives set forthin subdivisions B 1 through B 10 and B 12. In addition, the Governor shalldevelop objective measures of financial and administrative managementperformance and related institutional performance benchmarks for the goals andobjectives set forth in subdivision B 11.
As provided in subsection C of § 23-9.6:1.01, any publicinstitution of higher education that has been certified during the fiscal yearby the State Council of Higher Education for Virginia as meeting theinstitutional performance benchmarks in effect for the fiscal year as set forthin the general appropriation act shall be provided the financial benefits under§ 2.2-5005. Such benefits shall first be provided as determined under suchsection.
D. 1. The restructured financial and operational authority setforth in Subchapter 3 (§ 23-38.91 et seq.) of this chapter shall only begranted in accordance with the expressed terms of a management agreementbetween the public institution of higher education and the Commonwealth.
No restructured financial or operational authority set forthin Subchapter 3 (§ 23-38.91 et seq.) of this chapter shall be granted to apublic institution of higher education unless such authority is expresslyincluded in the management agreement. In addition, the only implied authoritythat shall be granted from entering into a management agreement is that impliedauthority that is actually necessary to carry out the expressed grant ofrestructured financial or operational authority. As a matter of law, theinitial presumption shall be that any restructured financial or operationalauthority set forth in Subchapter 3 is not included in the managementagreement. These requirements shall also apply to any other provision includedin Subchapter 3.
2. No public institution of higher education shall enter intoa management agreement unless:
a. (i) Its most current and unenhanced bond rating receivedfrom (a) Moody's Investors Service, Inc., (b) Standard & Poor's, Inc., or(c) Fitch Investor's Services, Inc. is at least AA- (i.e., AA minus) or itsequivalent, provided that such bond rating has been received within the lastthree years of the date that the initial agreement is entered into or (ii) theinstitution has (a) participated in decentralization pilot programs in theareas of finance and capital outlay, (b) demonstrated management competency inthose two areas as evidenced by a written certification from the CabinetSecretary or Secretaries designated by the Governor, (c) received additionaloperational authority under a memorandum of understanding pursuant to §23-38.90 in at least one functional area, and (d) demonstrated managementcompetency in that area for a period of at least two years. In submitting"The Budget Bill" for calendar year 2005 pursuant to subsection A of§ 2.2-1509, the Governor shall include criteria for determining whether or notan institution has demonstrated the management competency required by clause(ii) of this subdivision;
b. An absolute two-thirds, or more, of the institution'sgoverning body shall have voted in the affirmative for a resolution expressingthe sense of the body that the institution is qualified to be, and should be,governed by the provisions of Subchapter 3 (§ 23-38.91 et seq.) of thischapter, which resolution shall be included in the initial managementagreement;
c. The institution agrees to reimburse the Commonwealth forany additional costs to the Commonwealth in providing health or other groupinsurance benefits to employees, and in undertaking any risk managementprogram, that are attributable to the institution's exercise of anyrestructured financial or operational authority set forth in Subchapter 3. Theinstitution's agreement to reimburse the Commonwealth for such additional costsshall be expressly included in each management agreement with the institution.The Secretary of Finance and the Secretary of Administration, in consultationwith the Virginia Retirement System and the affected institutions, shallestablish procedures for determining any amounts to be paid by each institutionand a mechanism for transferring the appropriate amounts directly and solely tothe programs whose costs have been affected.
In developing management agreements, public institutions ofhigher education shall give consideration to potential future impacts oftuition increases on the Virginia College Savings Plan (§ 23-38.75) and shalldiscuss such potential impacts with parties participating in development ofsuch agreements. The chief executive officer of the Virginia College SavingsPlan shall provide to the institution and such parties the Plan's assumptionsunderlying the contract pricing of the program; and
d. Before executing a management agreement with theCommonwealth that affects insurance or benefit programs administered by theVirginia Retirement System, the Governor shall transmit a draft of the relevantprovisions to the Board of Trustees of the Virginia Retirement System, whichshall review the relevant provisions in order to ensure compliance with theapplicable provisions of Title 51.1, administrative policies and procedures andfederal regulations governing retirement plans. The Board shall advise theGovernor and appropriate Cabinet Secretaries of any conflicts.
3. Each initial management agreement with an institution shallremain in effect for a period of three years. Subsequent management agreementswith the institution shall remain in effect for a period of five years.
If an existing agreement is not renewed or a new agreementexecuted prior to the expiration of the three-year or five-year term, asapplicable, the existing agreement shall remain in effect on a provisionalbasis for a period not to exceed one year. If, after the expiration of theprovisional one-year period, the management agreement has not been renewed or anew agreement executed, the institution shall no longer be granted any of thefinancial or operational authority set forth in Subchapter 3 (§ 23-38.91 etseq.) of this chapter, unless and until such time as a new management agreementis entered into between the institution and the Commonwealth.
The Joint Legislative Audit and Review Commission, incooperation with the Auditor of Public Accounts, shall conduct a reviewrelating to the initial management agreement with each public institution ofhigher education. The review shall cover a period of at least the first 24months from the effective date of the management agreement. The review shallinclude, but shall not be limited to, the degree of compliance with theexpressed terms of the management agreement, the degree to which theinstitution has demonstrated its ability to manage successfully theadministrative and financial operations of the institution without jeopardizingthe financial integrity and stability of the institution, the degree to whichthe institution is meeting the objectives described in subsection B, and anyrelated impact on students and employees of the institution from execution ofthe management agreement. The Joint Legislative Audit and Review Commissionshall make a written report of its review no later than June 30 of the third yearof the management agreement. The Joint Legislative Audit and Review Commissionis authorized, but not required, to conduct a similar review of any managementagreement entered into subsequent to the initial agreement.
4. The right and power by the Governor to void a managementagreement shall be expressly included in each management agreement. Themanagement agreement shall provide that if the Governor makes a writtendetermination that a public institution of higher education that has enteredinto a management agreement with the Commonwealth is not in substantialcompliance with the terms of the agreement or with the requirements of thischapter in general, (i) the Governor shall provide a copy of that writtendetermination to the chairmen of the Board of Visitors or other governing bodyof the public institution of higher education and to the members of the GeneralAssembly, and (ii) the institution shall develop and implement a plan ofcorrective action, satisfactory to the Governor, for purposes of coming intosubstantial compliance with the terms of the management agreement and with therequirements of this chapter, as soon as practicable, and shall provide a copyof such corrective action plan to the members of the General Assembly. If aftera reasonable period of time after the corrective action plan has beenimplemented by the institution, the Governor determines that the institution isnot yet in substantial compliance with the management agreement or therequirements of this chapter, the Governor may void the management agreement.Upon the Governor voiding a management agreement, the affected publicinstitution of higher education shall not be allowed to exercise anyrestructured financial or operational authority pursuant to the provisions of Subchapter3 (§ 23-38.91 et seq.) unless and until the institution enters into asubsequent management agreement with the Secretary or Secretaries designated bythe Governor or the void management agreement is reinstated by the GeneralAssembly.
5. A management agreement with a public institution of highereducation shall not grant any of the restructured financial or operationalauthority set forth in Subchapter 3 (§ 23-38.91 et seq.) of this chapter to theVirginia Cooperative Extension and Agricultural Experiment Station, theUniversity of Virginia College at Wise, or the Virginia Institute of MarineSciences or to an affiliated entity of the institution unless such intent, aswell as the degree of the restructured financial or operational authority to begranted, is expressly included in the management agreement.
6. Following the execution of each management agreement with apublic institution of higher education and submission of that managementagreement to the Chairmen of the House Committee on Appropriations, the HouseCommittee on Education, the Senate Committee on Finance, and the SenateCommittee on Education and Health pursuant to § 23-38.97, the Governor shallinclude a recommendation for approval of the management agreement in "TheBudget Bill" submitted pursuant to subsection A of § 2.2-1509 or in hisgubernatorial amendments submitted pursuant to subsection E of § 2.2-1509 dueby the December 20 that immediately follows the date of submission of themanagement agreement to such Committees. Following the General Assembly'sconsideration of whether to approve or disapprove the management agreement asrecommended, if the management agreement is approved as part of the generalappropriation act, it shall become effective on the effective date of such generalappropriation act. However, no management agreement shall be entered into by apublic institution of higher education and the Secretary or Secretariesdesignated by the Governor after November 15 of a calendar year.
E. A covered institution and the members of its governingbody, officers, directors, employees, and agents shall be entitled to the samesovereign immunity to which they would be entitled if the institution were notgoverned by this chapter; provided further, that the Virginia Tort Claims Act(§ 8.01-195.1 et seq.) and its limitations on recoveries shall remainapplicable with respect to institutions governed by this chapter.
(2005, cc. 933, 945; 2006, c. 775; 2009, cc. 827, 845.)
§ 23-38.88. Eligibility for restructured financial andadministrative operational authority.
A. Public institutions of higher education shall be eligiblefor the following restructured financial and operational authority:
1. To dispose of their surplus materials at the location wherethe surplus materials are held and to retain any proceeds from such disposal asprovided in subdivision B 14 of § 2.2-1124;
2. To have the option, as provided in subsection C of §2.2-1132 and pursuant to the conditions and provisions under such subsection,to contract with a building official of the locality in which construction istaking place and for such official to perform any inspection and certificationsrequired for the purpose of complying with the Uniform Statewide Building Code(§ 36-97 et seq.) pursuant to subsection C of § 36-98.1;
3. For those public institutions of higher education that havein effect a signed memorandum of understanding with the Secretary ofAdministration regarding participation in the nongeneral fund decentralizationprogram as set forth in the appropriation act, as provided in subsection C of §2.2-1132, to enter into contracts for specific construction projects withoutthe preliminary review and approval of the Division of Engineering andBuildings of the Department of General Services, provided such institutions arein compliance with the requirements of the Virginia Public Procurement Act (§2.2-4300 et seq.) and utilize the general terms and conditions for those formsof procurement approved by the Division and the Office of the Attorney General;
4. To acquire easements as provided in subdivision 4 of §2.2-1149;
5. To enter into an operating/income lease or capital leasepursuant to the conditions and provisions provided in subdivision 5 of §2.2-1149;
6. To convey an easement pertaining to any property suchinstitution owns or controls as provided in subsection C of § 2.2-1150;
7. In accordance with the conditions and provisions ofsubdivision C 2 of § 2.2-1153, to sell surplus real property valued at lessthan $5 million, which is possessed and controlled by the institution;
8. For purposes of compliance with § 2.2-4310, to procuregoods, services, and construction from a vendor that the institution hascertified as a small, women-, and minority-owned business enterprise pursuantto the conditions and provisions provided in § 2.2-1404.1;
9. To be exempt from review of their budget request forinformation technology by the CIO as provided in subdivision A 4 of § 2.2-2007;
10. To be allowed to establish policies for the designation ofadministrative and professional faculty positions at the institution pursuantto the conditions and provisions provided in subsection E of § 2.2-2901;
11. To receive the financial benefits described under §2.2-5005 pursuant to the conditions and provisions of such section;
12. To be exempt from reporting its purchases to the Secretaryof Education, provided that all purchases, including sole source purchases, areplaced through the Commonwealth's electronic procurement system using propersystem codes for the methods of procurement;
13. To utilize as methods of procurement a fixed price,design-build or construction management contract notwithstanding the provisionsof § 2.2-4306; and
14. The restructured financial and operational authority setforth in Subchapter 2 (§ 23-38.90) and Subchapter 3 (§ 23-38.91 et seq.) ofthis chapter.
No such authority shall be granted unless the institutionmeets the conditions set forth in this chapter.
B. The Board of Visitors of a public institution of highereducation shall commit to the Governor and the General Assembly by August 1,2005, through formal resolution adopted according to its own bylaws, to meetingthe state goals specified below, and shall be responsible for ensuring thatsuch goals are met, in addition to such other responsibilities as may beprescribed by law. Each such institution shall commit to the Governor and theGeneral Assembly to:
1. Consistent with its institutional mission, provide accessto higher education for all citizens throughout the Commonwealth, includingunderrepresented populations, and, consistent with subdivision 4 of § 23-9.6:1and in accordance with anticipated demand analysis, meet enrollment projectionsand degree estimates as agreed upon with the State Council of Higher Educationfor Virginia. Each such institution shall bear a measure of responsibility forensuring that the statewide demand for enrollment is met;
2. Consistent with § 23-9.2:3.03, ensure that higher educationremains affordable, regardless of individual or family income, and through aperiodic assessment, determine the impact of tuition and fee levels net offinancial aid on applications, enrollment, and student indebtedness incurred forthe payment of tuition and fees;
3. Offer a broad range of undergraduate and, whereappropriate, graduate programs consistent with its mission and assess regularlythe extent to which the institution's curricula and degree programs address theCommonwealth's need for sufficient graduates in particular shortage areas,including specific academic disciplines, professions, and geographic regions;
4. Ensure that the institution's academic programs and courseofferings maintain high academic standards, by undertaking a continuous reviewand improvement of academic programs, course availability, facultyproductivity, and other relevant factors;
5. Improve student retention such that students progress frominitial enrollment to a timely graduation, and that the number of degreesconferred increases as enrollment increases;
6. Consistent with its institutional mission, developarticulation agreements that have uniform application to all Virginia communitycolleges and meet appropriate general education and program requirements at thefour-year institution, provide additional opportunities for associate degreegraduates to be admitted and enrolled, and offer dual enrollment programs incooperation with high schools;
7. Actively contribute to efforts to stimulate the economicdevelopment of the Commonwealth and the area in which the institution islocated, and for those institutions subject to a management agreement set forthin Subchapter 3 (§ 23-38.91 et seq.) of this chapter, in areas that lag theCommonwealth in terms of income, employment, and other factors;
8. Consistent with its institutional mission, increase thelevel of externally funded research conducted at the institution and facilitatethe transfer of technology from university research centers to private sectorcompanies;
9. Work actively and cooperatively with elementary andsecondary school administrators, teachers, and students in public schools andschool divisions to improve student achievement, upgrade the knowledge andskills of teachers, and strengthen leadership skills of school administrators;
10. Prepare a six-year financial plan consistent with §23-9.2:3.03;
11. Conduct the institution's business affairs in a mannerthat maximizes operational efficiencies and economies for the institution,contributes to maximum efficiencies and economies of state government as awhole, and meets the financial and administrative management standards asspecified by the Governor pursuant to § 2.2-5004 and included in theappropriation act that is in effect, which shall include best practices forelectronic procurement and leveraged purchasing, information technology, realestate portfolio management, and diversity of suppliers through fair andreasonable consideration of small, women-, and minority-owned businessenterprises; and
12. Seek to ensure the safety and security of theCommonwealth's students on college and university campuses.
Upon making such commitments to the Governor and the GeneralAssembly by August 1, 2005, the public institution of higher education shall beallowed to exercise the restructured financial and operational authority setforth in subdivisions A 1 through A 13 of § 23-38.88, subject to suchconditions as may be provided under the enabling statutes granting theadditional authority.
C. As provided in § 23-9.6:1.01, the State Council of HigherEducation shall in consultation with the respective chairmen of the HouseCommittees on Education and Appropriations and the Senate Committees on Financeand Education and Health or their designees, representatives of publicinstitutions of higher education, and such other state officials as may bedesignated by the Governor, develop objective measures of educational-relatedperformance and institutional performance benchmarks for such objectivemeasures. At a minimum, the State Council shall develop such objective measuresand institutional performance benchmarks for the goals and objectives set forthin subdivisions B 1 through B 10 and B 12. In addition, the Governor shalldevelop objective measures of financial and administrative managementperformance and related institutional performance benchmarks for the goals andobjectives set forth in subdivision B 11.
As provided in subsection C of § 23-9.6:1.01, any publicinstitution of higher education that has been certified during the fiscal yearby the State Council of Higher Education for Virginia as meeting theinstitutional performance benchmarks in effect for the fiscal year as set forthin the general appropriation act shall be provided the financial benefits under§ 2.2-5005. Such benefits shall first be provided as determined under suchsection.
D. 1. The restructured financial and operational authority setforth in Subchapter 3 (§ 23-38.91 et seq.) of this chapter shall only begranted in accordance with the expressed terms of a management agreementbetween the public institution of higher education and the Commonwealth.
No restructured financial or operational authority set forthin Subchapter 3 (§ 23-38.91 et seq.) of this chapter shall be granted to apublic institution of higher education unless such authority is expresslyincluded in the management agreement. In addition, the only implied authoritythat shall be granted from entering into a management agreement is that impliedauthority that is actually necessary to carry out the expressed grant ofrestructured financial or operational authority. As a matter of law, theinitial presumption shall be that any restructured financial or operationalauthority set forth in Subchapter 3 is not included in the managementagreement. These requirements shall also apply to any other provision includedin Subchapter 3.
2. No public institution of higher education shall enter intoa management agreement unless:
a. (i) Its most current and unenhanced bond rating receivedfrom (a) Moody's Investors Service, Inc., (b) Standard & Poor's, Inc., or(c) Fitch Investor's Services, Inc. is at least AA- (i.e., AA minus) or itsequivalent, provided that such bond rating has been received within the lastthree years of the date that the initial agreement is entered into or (ii) theinstitution has (a) participated in decentralization pilot programs in theareas of finance and capital outlay, (b) demonstrated management competency inthose two areas as evidenced by a written certification from the CabinetSecretary or Secretaries designated by the Governor, (c) received additionaloperational authority under a memorandum of understanding pursuant to §23-38.90 in at least one functional area, and (d) demonstrated managementcompetency in that area for a period of at least two years. In submitting"The Budget Bill" for calendar year 2005 pursuant to subsection A of§ 2.2-1509, the Governor shall include criteria for determining whether or notan institution has demonstrated the management competency required by clause(ii) of this subdivision;
b. An absolute two-thirds, or more, of the institution'sgoverning body shall have voted in the affirmative for a resolution expressingthe sense of the body that the institution is qualified to be, and should be,governed by the provisions of Subchapter 3 (§ 23-38.91 et seq.) of thischapter, which resolution shall be included in the initial managementagreement;
c. The institution agrees to reimburse the Commonwealth forany additional costs to the Commonwealth in providing health or other groupinsurance benefits to employees, and in undertaking any risk managementprogram, that are attributable to the institution's exercise of anyrestructured financial or operational authority set forth in Subchapter 3. Theinstitution's agreement to reimburse the Commonwealth for such additional costsshall be expressly included in each management agreement with the institution.The Secretary of Finance and the Secretary of Administration, in consultationwith the Virginia Retirement System and the affected institutions, shallestablish procedures for determining any amounts to be paid by each institutionand a mechanism for transferring the appropriate amounts directly and solely tothe programs whose costs have been affected.
In developing management agreements, public institutions ofhigher education shall give consideration to potential future impacts oftuition increases on the Virginia College Savings Plan (§ 23-38.75) and shalldiscuss such potential impacts with parties participating in development ofsuch agreements. The chief executive officer of the Virginia College SavingsPlan shall provide to the institution and such parties the Plan's assumptionsunderlying the contract pricing of the program; and
d. Before executing a management agreement with theCommonwealth that affects insurance or benefit programs administered by theVirginia Retirement System, the Governor shall transmit a draft of the relevantprovisions to the Board of Trustees of the Virginia Retirement System, whichshall review the relevant provisions in order to ensure compliance with theapplicable provisions of Title 51.1, administrative policies and procedures andfederal regulations governing retirement plans. The Board shall advise theGovernor and appropriate Cabinet Secretaries of any conflicts.
3. Each initial management agreement with an institution shallremain in effect for a period of three years. Subsequent management agreementswith the institution shall remain in effect for a period of five years.
If an existing agreement is not renewed or a new agreementexecuted prior to the expiration of the three-year or five-year term, asapplicable, the existing agreement shall remain in effect on a provisionalbasis for a period not to exceed one year. If, after the expiration of theprovisional one-year period, the management agreement has not been renewed or anew agreement executed, the institution shall no longer be granted any of thefinancial or operational authority set forth in Subchapter 3 (§ 23-38.91 etseq.) of this chapter, unless and until such time as a new management agreementis entered into between the institution and the Commonwealth.
The Joint Legislative Audit and Review Commission, incooperation with the Auditor of Public Accounts, shall conduct a reviewrelating to the initial management agreement with each public institution ofhigher education. The review shall cover a period of at least the first 24months from the effective date of the management agreement. The review shallinclude, but shall not be limited to, the degree of compliance with theexpressed terms of the management agreement, the degree to which theinstitution has demonstrated its ability to manage successfully theadministrative and financial operations of the institution without jeopardizingthe financial integrity and stability of the institution, the degree to whichthe institution is meeting the objectives described in subsection B, and anyrelated impact on students and employees of the institution from execution ofthe management agreement. The Joint Legislative Audit and Review Commissionshall make a written report of its review no later than June 30 of the third yearof the management agreement. The Joint Legislative Audit and Review Commissionis authorized, but not required, to conduct a similar review of any managementagreement entered into subsequent to the initial agreement.
4. The right and power by the Governor to void a managementagreement shall be expressly included in each management agreement. Themanagement agreement shall provide that if the Governor makes a writtendetermination that a public institution of higher education that has enteredinto a management agreement with the Commonwealth is not in substantialcompliance with the terms of the agreement or with the requirements of thischapter in general, (i) the Governor shall provide a copy of that writtendetermination to the chairmen of the Board of Visitors or other governing bodyof the public institution of higher education and to the members of the GeneralAssembly, and (ii) the institution shall develop and implement a plan ofcorrective action, satisfactory to the Governor, for purposes of coming intosubstantial compliance with the terms of the management agreement and with therequirements of this chapter, as soon as practicable, and shall provide a copyof such corrective action plan to the members of the General Assembly. If aftera reasonable period of time after the corrective action plan has beenimplemented by the institution, the Governor determines that the institution isnot yet in substantial compliance with the management agreement or therequirements of this chapter, the Governor may void the management agreement.Upon the Governor voiding a management agreement, the affected publicinstitution of higher education shall not be allowed to exercise anyrestructured financial or operational authority pursuant to the provisions of Subchapter3 (§ 23-38.91 et seq.) unless and until the institution enters into asubsequent management agreement with the Secretary or Secretaries designated bythe Governor or the void management agreement is reinstated by the GeneralAssembly.
5. A management agreement with a public institution of highereducation shall not grant any of the restructured financial or operationalauthority set forth in Subchapter 3 (§ 23-38.91 et seq.) of this chapter to theVirginia Cooperative Extension and Agricultural Experiment Station, theUniversity of Virginia College at Wise, or the Virginia Institute of MarineSciences or to an affiliated entity of the institution unless such intent, aswell as the degree of the restructured financial or operational authority to begranted, is expressly included in the management agreement.
6. Following the execution of each management agreement with apublic institution of higher education and submission of that managementagreement to the Chairmen of the House Committee on Appropriations, the HouseCommittee on Education, the Senate Committee on Finance, and the SenateCommittee on Education and Health pursuant to § 23-38.97, the Governor shallinclude a recommendation for approval of the management agreement in "TheBudget Bill" submitted pursuant to subsection A of § 2.2-1509 or in hisgubernatorial amendments submitted pursuant to subsection E of § 2.2-1509 dueby the December 20 that immediately follows the date of submission of themanagement agreement to such Committees. Following the General Assembly'sconsideration of whether to approve or disapprove the management agreement asrecommended, if the management agreement is approved as part of the generalappropriation act, it shall become effective on the effective date of such generalappropriation act. However, no management agreement shall be entered into by apublic institution of higher education and the Secretary or Secretariesdesignated by the Governor after November 15 of a calendar year.
E. A covered institution and the members of its governingbody, officers, directors, employees, and agents shall be entitled to the samesovereign immunity to which they would be entitled if the institution were notgoverned by this chapter; provided further, that the Virginia Tort Claims Act(§ 8.01-195.1 et seq.) and its limitations on recoveries shall remainapplicable with respect to institutions governed by this chapter.
(2005, cc. 933, 945; 2006, c. 775; 2009, cc. 827, 845.)
