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The Rotunda at the University of Virginia. Documents state that the university's five-year strategic plan could cost more than a half-billion dollars, much of the money going to faculty.

Implementing the University of Virginia’s five-year strategic plan could cost more than a half-billion dollars, much of the money going to faculty, according to school estimates.

UVa’s administration has avoided publicly discussing the plan’s cost, calling it a fluid and unpredictable figure. But a 44-page analysis obtained in an open records request put the estimate at $564 million, almost a fourth of that amount covering faculty pay raises and net salaries for more than 400 new professors, mostly to cover an anticipated wave of retirements. Faculty startup packages — or research seed money — would total almost $200 million.

Other records obtained by The Daily Progress show that officials originally listed the analysis in the agenda for the Board of Visitors’ mid-November meeting but later opted against including it. Vice Rector William H. Goodwin Jr. wrote in an email, “I strongly suggest … that we don’t include numbers of any kind.”

UVa President Teresa A. Sullivan wrote the board a four-page letter shortly before the meeting responding to questions such as, “Why do we need so many faculty” and “Are our faculty productive?”

Board member Helen E. Dragas, the former rector, wrote her colleagues a day later, calling approval of the blueprint without considering its cost “tantamount to the board signing a blank check.”

“Piecemeal approval of the plan now is like agreeing to jump off a cliff without knowing what’s ahead, what’s below or if our parachute works,” Dragas wrote.

The board voted 15-0 to approve the core elements of the so-called Cornerstone Plan. Dragas and Marvin W. Gilliam both abstained.

Much of the cost of the plan would be covered through philanthropy and increased enrollment, but $115.5 million would be “unfunded” — meaning administrators don’t yet know where the money would come from.

Patrick D. Hogan, UVa’s executive vice president and chief operating officer, said the administration is continually modifying and refining the estimates and will present a more definitive figure to the board in February. He called the current estimate preliminary.

“We expect that there will be significant changes to the figures contained in the analysis,” Hogan said.

The analysis said about $330 million would go toward faculty. The university expects to replace 295 retiring faculty with 425 new hires. Additional faculty is needed to account for projected enrollment growth, Sullivan wrote in her letter to the board. Enrollment is expected to increase by 1,089 over the five years of the plan, starting next fall and ending in 2019, according to the analysis.

“As we have worked on the strategic plan, it has become clear that faculty recruitment and retention will be our critical — and most expensive — investment over the next five years,” Sullivan wrote.

About $91.4 million would go toward new faculty pay, with about $193 million set aside for research seed money. The seed money, also known as “startup packages,” would cover hiring research assistants and buying the equipment needed to start research projects, all critical to luring research faculty, officials have said.

The university also would spend an estimated $46 million on faculty pay increases. The board approved a plan in February for 4.75-percent merit-based raises, expected to vault UVa into the top 20 Association of American Universities institutions nationwide, according to the analysis. UVa currently ranks 34th among AAU schools.

Sullivan described the situation as urgent in her letter, writing that UVa salaries “stagnated” during the recession. “The picture is getting worse,” she wrote.

 As baby boomers retire, she said, other universities also are scrambling for new faculty.

“We might have a slight competitive edge if we move quickly,” Sullivan wrote.

Another $206 million would be channeled into research, including the creation of several interdisciplinary institutes. The university already has begun working on a data research institute hoping to attract faculty and collaboration with technology companies.

Other big expenditures include about $86 million for new, more hands-on learning experiences for undergraduates —service learning and international programs and a new emphasis on research.

Improvements to the school’s research infrastructure, including updated computer and wireless systems, would cost about $81 million.

The Board of Visitors still must sign off on funding for each measure carried out under the plan. Sullivan said this would allow the board freedom to scale back, modify or cancel parts of the plan if funding wasn’t available.

The university has begun mapping out a funding plan. The administration estimates, for example, that it can raise about $138 million through philanthropy and net about $47 million from enrollment growth.

But Dragas said she worried the remaining money would come from tuition hikes.

“It appears that, including expected annual operational increases, as much as 15 [percent] annual tuition increases will be required to cover these costs,” she wrote.

Hogan said the university doesn’t intend to use tuition exclusively to cover the shortfall. For one, he said, administrators expect a return on the plan. Early estimates show it could generate about $66 million in new revenue, largely from research dollars, thanks to the new faculty and improved research infrastructure, he said.

The administration also will look to increase the money it raises through other channels, such as philanthropy, Hogan said.

Administrators haven’t ruled out tuition increases. Sullivan said last month that parts of the plan, including new research opportunities for undergraduates, would improve students’ education.

“At the end of five years, the educational experience will be even better than it is now,” she said. “And I think parents are willing to pay for a great experience, which is the reason they send their students here.”

A separate financial plan approved in September calls for about $11 million in incremental tuition increases to help pay for faculty raises. It’s not clear how exactly the increases might break down for in-state and out-of-state students at different schools.

The prospect of tuition hikes worries some students and alumni, including Bill Walker, a UVa graduate and former administrator at The College of William & Mary.

Walker said the university has moved too far toward a private funding model, driving up tuition, which could discourage many low-income students from attending.

He also criticized the board-approved changes to AccessUVa, the school’s financial aid program. In August, the board voted to replace up to $7,000 in annual grant aid to low-income students with loans.

More tuition increases will lock out even more low-income students, Walker said.

“I really think they should examine every possible option before raising tuition too high,” he said. “Over the last 10 years or so, it’s just moved up tremendously.”

UVa is the second-most expensive public university for out-of-state students, according to the latest U.S. News & World Report rankings. Two other Virginia universities — William & Mary and Virginia Military Institute — also cracked the top 10.

But the university also has seen dramatic reductions in state money.

State funding per full-time equivalent student has declined from $15,243 in 2000 to $8,566 last year, according to the university’s website. That’s significantly lower than comparable public institutions, such as the University of North Carolina, which receives $22,105 per student.

Walker traces the trend of increasing tuition to 2005, when the General Assembly passed a law allowing the state’s public universities more autonomy in a number of ways — including raising tuition.

“In agreeing with the state in 2005, I think we gave up our birthright,” Walker said. “We are a state institution. Let’s press the state and continue to press the state on funding.”

Hogan said the administration is working on the assumption that more money won’t be flowing from Richmond.

The university is seeking to start a $50 million AccessUVa endowment. Hogan said any tuition increases would be accompanied by additional investment in financial aid.

“The university is committed to meeting 100 percent of demonstrated need for all undergraduate students,” Hogan said.

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