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University of North Florida
Board of Trustees
Finance and Audit Committee

  • Meeting
February 21, 2002
University Center at 1:00 p.m.

Members Present

Mr. Steve Halverson (Chair), Mr. T. O’Neal Douglas, Ms. Donna Harper Gibbs, Mr. Wilfredo J. Gonzalez, Ms. Joan Wellhouse Newton, Mr. James Stallings, and Ms. Carol Thompson.

Call to Order/Approval of Minutes

Chair Halverson convened the meeting at 1:07 p.m.   He began the meeting by asking for a motion to approve the minutes from the November 28 meeting.  Trustee Newton moved the acceptance of the minutes and Trustee Gonzalez seconded the motion.  The motion carried unanimously.


Chair Halverson welcomed and introduced Mr. Richard L. Crosby, Acting Vice President for the Division of Administration and Finance.

Approval of Housing Fees for 2002-2003

Provost Kline requested that Mauricio Gonzalez, Vice President for Student Affairs, explain the rational for the proposed 4.74% housing rental rate increase.  Dr. Gonzalez introduced Mr. Paul Riel, University Housing Director, who reviewed the rental rate increases.  Mr. Riel then called on Ms. Linda H. Anderson, Associate Vice President for Administration and Finance, to explain UNF’s revenue bonds as they relate to the University’s Housing operations. 


Ms. Anderson explained:

  • The State, with rare exceptions, does not appropriate construction funds for Auxiliary buildings (e.g. housing and parking facilities).
  • UNF’s housing and parking facilities are financed via the UNF Foundation using revenue bonds, which are variable rate multi-modal bonds that are traded weekly.
  • The State of Florida and the Foundation executes grounds and operating leases for the University to actually operate and maintain the facilities.
  • The housings fees must be sufficient to cover the housing operations and bonds debt coverage ratio, which for housing is a 1.2 debt coverage ratio.  This means that housing must generate enough revenue to cover 100% of their operating expenses and 120% of their debt services expenses, which includes principal, interest, trustee fees, rating fees, remarketing fees, etc.
  • The bond coverage ratio is reported quarterly for the past 12 months, which equals an annual rate.  If at any time the funds are not sufficient to fund the debt service, the bond documents require an adjustment of the rate and a withdrawal from fund balance to meet the coverage ratio, which is the reason the housing fee must be sufficient to cover housing operations and debt service.
  • For the life of the bonds, UNF has been very fortunate in terms of interest rates, which have been 3% or a little below compared to the 9% - 11% that other institutions were paying.


The following points were made during discussion:

  • The Revenue Bonds are actually issued by the UNF Foundation via a non-recourse Letter of Credit, which means that the revenue stream (all related revenue) is pledged to repay the bonds.  This means that if something catastrophic should prevent UNF from making the bond payment the bank could not move against the Foundation’s assets.
  • The requested 4.74% housing fee increase is in line with requests for previous years.  The fee is derived from the student housing pro forma listing the key assumptions that provide the formula for housing operational and debt service payment needs.
  • It was explained that not having full housing occupancy does affect the revenue.  Information was reviewed that showed the housing occupancy and capacity from 1991 through the present.  For Fall 2002, the occupancy rate was 98%, Spring 2002 the occupancy rate was 95%, and it is estimated to be 35% for Summer 2002.
  • Students pay for housing with financial aid (85-87%), cash (8-10%), and/or prepaid college funds (5%).
  • The housing fee requests throughout the SUS are 4% - 5% for FY 2002 - 2003.
  • The current assessment for housing needs is that the goal should be 50% of the student population.  New housing should not be built before the enrollment is increased.  The target population is freshmen.
  • The housing attrition rate is approximately 10%.  It is expected that 1,000 current student housing residents will return, the remaining 1,100 – 1,200 beds will accommodate freshmen and transfer students.
  • The students are aware of the proposed housing fee increased.  The anticipated rates are currently on the UNF webpage and other published brochures.
  • It was noted that the schedule for submitting housing fee increases needs to be reviewed.  The current submission date was a Board of Regents requirement.


Chair Halverson summarized the discussion as follows:  there is general consensus that the quality of housing is satisfactory; at the present time, there is not an occupancy issue/concern; there is a sensitivity by the University to rate increases; and the current proposed rate increases are designed to meet the needs of housing operating expenses and debt service.


Ms. Newton made a motion to approve the housing rental rate increase as proposed by the University.  Mr. Stallings seconded the motion.  The motion carried unanimously. 

Overview/Discussion of Student Fees 

Chair Halverson asked Karen Stone to provide information regarding the various fees that are charged by the University. 


Ms. Stone provided the Committee with a matrix of student fees.  The matrix listed the fee name, authority, and parameters.  She explained that this document was developed to assist the Board in its understanding of legally authorized fees.  She indicated that the information will need to be reviewed and updated following the legislative session. Chair Thompson indicated that there would likely be changes in fees this legislative session and further consideration of fees by the legislative task force charged with examining higher education funding.


Chair Halverson stated that there are many issues about which the Board will lack clarity for a while.  He explained that the Board will have to have some flexibility but needs to know what their responsibilities are.  Dr. Kline stated that historically the Legislature/Board of Regents were very tight about fee increases because they did not want to have back door tuition increases.  Chair Halverson thanked Ms. Stone for providing the fee report.

Organizational Issues 

Finance and Audit Committee Responsibilities Discussion Paper - At the last committee meeting, Chair Halverson offered to prepare a draft discussion paper concerning the committee’s structure and function.  Mr. Van Vleck helped prepare the paper and Mr. Halverson has shared it with President Hopkins.


Chair Halverson asked the committee if they have any recommended changes and or comments about the discussion paper.  Mr. Douglas complimented Chair Halverson for his outstanding work and commended him for all his effort.  Board Chair Thompson also commended Chair Halverson for his leadership.


Chair Halverson stressed that is important for the Finance and Audit Committee to be proactive and have responsibility to the Legislature in helping to review and set policies and to partner with the University’s staff, the President, and the President’s staff.


Chair Halverson will meet with President Hopkins to further discuss the draft paper.  He added that the Committee has a lot of learning to do as a board to gain understanding of the University and its processes.


Board Chair Thompson stated that conflicts of interest might be appropriate within the category of “other responsibilities” of the Board, and that the Board might wish to formally adopt a policy concerning conflicts of interest.


There being no further business to discuss, the meeting was adjourned at 2:15 p.m.