President's Budget Advisory Committee

Minutes February 20, 1997

Approved by PBAC, 25 February 1997

Members Present:

Staff Present:

Members Absent:

Guests Present:

Meeting Agenda

Materials Distributed with Agenda Packet

Approval of the Agenda

Larry Schlereth convened the meeting at 8:11 AM by asking for a motion to approve the Agenda. A motion was made by Dennis Harris with a second from Melinda Barnard. The Agenda was approved unanimously.

Distribution of the Minutes of 2-13-97

Schlereth then asked for a motion to approve the Minutes of February 13, 1997. Harris moved to approve the Minutes. A second was obtained from Larry Clark. The Minutes were approved unanimously.

Victor Garlin then questioned whether the Financial Policies discussed on 2-13 were approved by the PBAC. Schlereth noted that no formal action was taken by the PBAC on 2-13 and that this was reflected in the 2-13 Minutes. Barnard noted that she felt the Policies would be discussed again as the PBAC considered options and recommendations. Schlereth concurred with Barnard's assessment.

STATUS OF THE 1996-1997 BUDGET

Schlereth then asked Steve Wilson to take the Committee through Agenda Item III, the Status of the 1996-1997 General Fund Budget. Wilson referred to data distributed with the Agenda packet and explained that largely due to increases in costs of employee benefits and inadequate resources provided to the campus to meet mandated salary adjustments, the general fund budget contained a structural deficit of $422,000. He noted that agreement had been reached between Academic Affairs and Administration and Finance to fund this deficit for 96-97 only with a 7 year interfund loan. Repayment of this loan would be made by the two Divisions on a 66% (Academic Affairs) 34% (Administration and Finance) split.

Harris questioned why non-appropriation revenue was reflected at $11,900,000 when it actually would be $12,200,000. Wilson noted that the $11,900,000 was the established benchmark with non-appropriation revenue above this amount directed to the instructional program. Harris asked for clarification on how this policy was established. Schlereth noted that the policy was created by the President, the Provost and the Vice-President for Administration and Finance in August, 1996. The rationale for the policy, he noted, was that Academic Affairs was entitled to this revenue since it was created by enrollment above the established target and the resources were needed to teach additional students derived from exceeding the target enrollment. Bill Barnier asked the source of the $422,000 interfund loan. Wilson indicated the Health Center Deferred Maintenance Reserve would be utilized and further noted that this action would deplete that campus Reserve.

Clark questioned why the PBAC was not convened to discuss the structural deficit when it was discovered. Schlereth explained that at the time the deficit was known, it was thought the campus would receive a base augmentation from the CSU in recognition of teaching above the target enrollment. In late Fall, it was determined that this would not take place and the decision was made by the Cabinet to hold the item until the PBAC met in early Spring. Harris noted that he felt the PBAC should formalize a recommendation calling for the PBAC to meet not only during the Spring semester but also after the May Revision of the Governor's Budget and also in early Fall when the final aspects of the approved State budget were known.

ANALYSIS OF THE 1997-1998 GOVERNOR'S BUDGET

Schlereth then turned to Agenda Item IV, an Analysis of the Governor's Budget for the CSU for Fiscal Year 1997-1998. For the purposes of the presentation, he referred to documents prepared for the CSU Trustees and included with the PBAC Agenda packet.

Garlin asked if the $13,500,000 targeted for Information Technology was equal to the difference between a 3.4% and 4.0% salary increase pool for employees. Schlereth indicated that he could not be precise but he believed the difference between a 3.4 and 4.0% salary increase was close to $13,500,000.

Schlereth then asked Wilson to clarify what the Governor's Budget for CSU in 1997-1998 could potentially mean for SSU. Wilson referred to data included with the Agenda packet and reproduced below:

 

ANALYSIS OF THE GOVERNOR'S BUDGET FOR CSU 1997-1998
PROJECTED
NEW RESTRICTED
REVENUE
Increase in Target Enrollment, (5550 - 5600 FTES) $288,000
Fee Revenue above Benchmark, Increased Enrollment $300,000
Salary Increase Resources $1,369,000
Technology Improvements $488,000
Deferred Maintenance $178,000
State University Grants-Increased Enrollment $24,000
New Space $68,000
TOTAL $2,715,000
UTILIZATION OF
NEW RESTRICTED
REVENUE
Academic Affairs -- Increased Enrollment $288,000
Academic Affairs -- Revenue above Benchmark, Increased Enrollment $300,000
Employee Salary Increases $1,369,000
Assured Access Requirement $488,000
Campus Deferred Maintenance $178,000
State University Grant Budget $24,000
Utilities and Custodians -- New ITC Facility $68,000
TOTAL $2,715,000
PROJECTED
NEW DISCRETIONARY
REVENUE
Inflationary Increase $90,000
TOTAL $90,000
UTILIZATION OF
NEW DISCRETIONARY
REVENUE
Risk Pool (Removed from Base in 96-97) $70,000
Needed Resources, COLA, 97-98 $20,000
TOTAL $90,000

Wilson then explained that a variety of unfunded items existed or were projected at the University-Wide level for 1997-1998. These items, he noted included the following:

University -Wide Unfunded Items 1997-1998
Structural Deficit from Fiscal 96-97 $420,000
Increase in Risk Pool Premium, Historical $130,000
Increase in Risk Pool, Osborne Preserve $50,000
CSEA/MSA Settlement, On-Going Base Adjustments $137,000
CSEA/MSA Settlement, Back Pay - Annual Installment to CSU $133,000
University Reserve $300,000
TOTAL $1,170,000

Schlereth noted that a significant number of additional unfunded items existed in the four operating Divisions of the University and indicated that the President has asked each Vice-President to prepare a list for presentation to PBAC. Barnard asked that this information be provided in a timely way. Schlereth indicated that he had targeted March 6, 1997 for the data but wished to confer with Don Farish prior to committing to that date.

Clark asked whether the $288,000 in appropriation revenue for enrollment growth and $300,000 in non-appropritation revenue above the benchmark would go to Academic Affairs. Schlereth noted that in his and Farish's mind it would. Harris indicated that he believed a policy of the utilization of enrollment growth resources needed to be developed and recommended by the PBAC. Schlereth asked Harris to hold this item until the PBAC developed its overall recommendations later in the Spring semester.

DISCUSSION OF AUXILIARY CORPORATIONS -- INTRODUCTION

Schlereth then turned to Agenda Item V, an Introduction to the Auxiliary Corporations at SSU noting that PBAC Members had received copies of the various Corporations' by-laws and Board Member rosters. He also noted that the four Boards were legally responsible for the development of their respective budgets and while the PBAC could make recommendations to the President or the various Boards, the budgets for the auxiliaries would be formulated an approved by the Board of Directors for each auxiliary entity Garlin noted the campus auxiliary corporations existed for the sole purpose of supporting SSU.

SONOMA STATE ENTERPRISES INCORPORATED

Schlereth then moved to Agenda Item VI and asked Letitia Coate to take the Committee through financial information distributed with the packet related to the Sonoma State Enterprises. Garlin asked if it would be possible to have detail on how the President's discretionary revenue allocated by the Enterprises was spent. Several members noted that they did not believe this was appropriate. Schlereth noted that he did not sense there was consensus on the Garlin request and urged Garlin to speak with him outside the meeting regarding the request.

ADJOURNMENT

As it was approaching the agreed upon time for adjournment, Schlereth noted that discussion of the Enterprises would continue on February 25 and adjourned the meeting at 9:50 AM.

Minutes prepared by Larry Furukawa-Schlereth


PBAC minutes 1996-1997
Updated 2007-12-14
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