                                 CODE OF VIRGINIA

MANAGEMENT AGREEMENT; ELIGIBILITY AND APPLICATION (§ 23.1-1004)

A. The governing board and administration of each public institution of higher
education that meets the state goals set forth in subsection A of &#xA7;
23.1-1002 and meets the requirements of this article to demonstrate the ability
to manage successfully the administrative and financial operations of the
institution without jeopardizing the financial integrity and stability of the
institution may negotiate with the Governor to develop a management agreement
with the Commonwealth to exercise restructured financial and administrative
authority.

B. No public institution of higher education shall enter into a management
agreement unless:

   1. a. Its most current and unenhanced bond rating received from Moody&#8217;s
   Investors Service, Inc., Standard &amp; Poor&#8217;s, Inc., or Fitch
   Investor&#8217;s Services, Inc., is at least AA- (i.e., AA minus) or its
   equivalent, provided that such bond rating has been received within the last
   three years of the date that the initial management agreement is entered into;
   or
   				b. The institution has participated in decentralization pilot programs in
   the areas of finance and capital outlay, demonstrated management competency in
   those two areas as evidenced by a written certification from the Cabinet
   Secretary designated by the Governor, received restructured operational
   authority under a memorandum of understanding pursuant to Article 3 (&#xA7;
   23.1-1003 et seq.) in at least one functional area, and demonstrated
   management competency in that area for a period of at least two years;

   2. At least an absolute two-thirds of the institution&#8217;s governing board
   has voted in the affirmative for a resolution in support of a request for
   restructured operational authority under a management agreement;

   3. The institution submits to the Governor a written request for his approval
   of the management agreement that contains evidence that (i) the institution
   possesses the necessary administrative infrastructure, experience, and
   expertise to perform successfully its public educational mission as a covered
   institution; (ii) the institution is financially able to operate as a covered
   institution without jeopardizing the financial integrity and stability of the
   institution; (iii) the institution consistently meets the financial and
   administrative management standards pursuant to &#xA7; 23.1-1001; and (iv) the
   institution&#8217;s governing board has adopted performance and accountability
   standards, in addition to any institutional performance benchmarks included in
   the general appropriation act and developed pursuant to &#xA7; 23.1-206,
   against which its implementation of the restructured operational authority
   under the management agreement can be measured;

   4. The institution provides a copy of the written request to the Chairmen of
   the House Committee on Appropriations, the House Committee on Education, the
   Senate Committee on Finance and Appropriations, and the Senate Committee on
   Education and Health;

   5. The institution agrees to reimburse the Commonwealth for any additional
   costs that the Commonwealth incurs to provide health or other group insurance
   benefits to employees and undertake any risk management program that are
   attributable to the institution&#8217;s exercise of restructured operational
   authority. The Secretary of Finance and the Secretary of Administration, in
   consultation with the Virginia Retirement System and the affected
   institutions, shall establish procedures for determining any amounts to be
   paid by each institution and a mechanism for transferring the appropriate
   amounts directly and solely to the affected programs;

   6. The institution considers potential future impacts of tuition increases on
   the Commonwealth Savers Plan and discusses such potential impacts with parties
   participating in the development of the management agreement. The chief
   executive officer of the Commonwealth Savers Plan shall provide to the
   institution and such parties the Plan&#8217;s assumptions underlying the
   contract pricing of the program; and

   7. The Governor transmits a draft of any management agreement that affects
   insurance or benefit programs administered by the Virginia Retirement System
   to the Board of Trustees of the Virginia Retirement System, which shall review
   the relevant provisions of the management agreement to ensure compliance with
   the applicable provisions of Title 51.1, administrative policies and
   procedures, and federal regulations governing retirement plans and advise the
   Governor and appropriate Cabinet Secretaries of any conflicts.

HISTORY: 2005, cc. 933, 945, §§ 23-38.88, 23-38.91, 23-38.97; 2006, c. 775;
2009, cc. 827, 845; 2011, cc. 828, 869; 2013, c. 482; 2014, c. 628; 2016, c.
588; 2017, c. 314; 2024, c. 217.