President's Budget Advisory Committee

Minutes May 7, 1998

Approved by PBAC, 14 May 1998

Members Present:

Staff Present:

Members Absent:

Meeting Agenda

APPROVAL OF THE AGENDA

Don Farish brought the meeting to order at 8:10 AM and asked for a motion to approve the Agenda A motion was made by Dennis Harris. A second was obtained from Sue Parker. The Agenda was approved unanimously.

APPROVAL OF THE MINUTES 4-23-98 and 4-30-98

Farish then asked to a motion to approve the minutes of 4-23-98. A motion was made by Dennis Harris. A second was obtained from Gloria Ogg. Harris requested that the recording of abstention votes be deleted, (unless requested by the one abstaining) in order to comply with Robert's Rules of Order. With this modification, the minutes were approved unanimously. Farish then asked for a motion to approve the minutes of 4-30-98. A motion was made by Dennis Harris. A second was obtained from Marty Ruddell. Harris again requested that the recording of abstention votes be deleted, (unless requested by the one abstaining) in order to comply with Robert's Rules of Order. With this modification, the minutes were approved unanimously. Aaron Pava requested that his vote abstaining from voting on the Minutes be recorded since he was absent from the 4-30-98 meeting.

LAND ACQUISITION UPDATE

Schlereth then referenced materials contained with the Agenda Packet (Packet) and reproduced below, illustrating projected costs and a proposed financing model for land acquisition.


LAND ACQUISITION

Land acquisition Estimate (Eastern Parcels)
Item Amount
Traffic Light - South Entrance $200,000
Parking Lot Schulz Center $200,000
Cost of Issuance $90,000
Capitalized Interest $150,000
TOTAL $4,640,000
25 Year Amortization @ 6.5% equals $380,000

 

Potential Funds to Meet Debt Service
Item Amount Note
VPBAC, CRC, Cabinet Recommendation, 1998-1999 $60,000  
Interfund Loan Payment to Parking $200,000 *
Projected Risk Pool Savings $120,000 **
TOTAL $380,000  

* Interfund loan payment to $120,000 in 1999--2000 ($60,000) and 2000-2001 ($60,000) via via CRC, Cabinet and CRC Recommendations regarding land acquisition for those fiscal years.

**Risk Pool premium likely to rise in 1999-2000 due to actuarial projections regarding System-Wide unfunded prior-year liabilities. The premium could also increase based on the campus experience factor in workers compensation and general liability.

FINANCING MECHANISM

Parking Program initiates long-term debt and purchases land. ***

Campus allocates $380,000 to Administration and Finance permitting Administration and Finance to reduce overhead charges to Parking by $380,000.

$380,000 is created to finance debt service associated with land acquisition.

*** Bridge financing via the Foundation may be utilized in order to acquire the land prior to the June election.


Clarifying questions of a technical nature where then answered by Schlereth and Meyer, including whether the possibility of having the land gifted to the campus had been explored.

Harris then moved that the PBAC recommend to the President that the campus acquire the land north of campus to the Rohnert Park Expressway and east of land currently owned by the Trustees. A second was obtained from Bill Barnier. Discussion then ensued on the motion.

Comments made regarding the motion included:

Sue Parker then called the question. By unanimous consent, Members agreed to vote on the Harris motion. A vote was taken and the motion passed unanimously, with one abstention from Victor Garlin who requested that his abstention be recorded.

Harris then moved that the PBAC recommend to the President that the campus adopt the financing mechanism to fund the land acquisition strategy outlined by Schlereth and contained in the Packet. A second was obtained from Ruddell. Discussion then ensued on the motion. The following points were made:

Garlin then moved that the PBAC recommend to the President that no more than one-sixth of the resources identified for land acquisition be obtained from the General Fund. A second was obtained from Sue Parker. Steve Wilson indicated that the motion was impossible to implement since all the funds identified in the Model were from the General Fund. With this information, Garlin, with the consent of Parker and the Body, withdrew the motion.

Wilson then called the question. By unanimous consent, Members agreed to vote on the Harris motion. A vote was taken and the motion passed unanimously, with one abstention from Victor Garlin who requested that his abstention be recorded.

CMS UPDATE

Schlereth then updated members on the status of the Collaborative Management Systems Project (CMS). He noted that financial information regarding the initiative was still evolving as discussions at the System level continued along with negotiations with the various vendors. He did indicate that the initial General Fund cost estimate for CMS for fiscal 98-99 had been revised upward to $190,000 consistent with PBAC recommendations regarding Assured Access funding and Chancellor Reed's actions in this regard. Schlereth concluded his comments by suggesting that he estimated the CMS General Fund need for the upcoming year to be between $190,000 and $250,000.

POTENTIAL METHOD TO ALLOCATE NEW UNIVERSITY WIDE EXPENSE

Farish then referenced and explained materials contained in the Packet and reproduced below:


POTENTIAL METHOD TO ALLOCATE NEW UNIVERSITY-WIDE EXPENSE

New Revenues and Expenses
Item Amount
Projected New Revenue - Enrollment Growth $1,073,000
Projected New Marginal Revenue - Reimbursements $308,000
TOTAL $1,381,000
Un-Funded University Wide Items
Item Amount Note
Direct Instruction $-450,000  
Land Acquisition $-60,000  
Collaborative Management Systems $-190,000 *
Foundation Overhead $-325,000  
Disability Resources $-120,000  
Risk Management $- 75,000  
President's Operating Expense $- 50,000  
Executive Compensation $- 20,000  
Scholarship Coordinator $-45,000  
AVAILABLE FOR DISTRIBUTION $46, 00  

* Actual cost estimates for CMS in fiscal 98-99 are still being analyzed by PBAC staff in concert with the CMS Task Force and Senior Director Sam Scalise.

Projected Divisional Impact
Division Percent Revenue Direct Instruction Overhead Savings Total
Executive Office 2.18 $1,002 $0 $0 $1,002
Academic Affairs 86.22 $39,664 $450,000 $298,000 $787,664
Student Affairs 2.14 $984 $0 $0 $984
Administration/Finance 9.46 $4,350 $0 $0 $4,350
TOTAL   $46,000 $450,000 $298,000 $794,000

** Assumes Presidential Scholars program will be funded, at least on a temporary basis, with prior year adjustment revenue.

The impact of CMS costs for Division-Based self sustaining funds is not reflected nor is the impact of the Reimbursement Model.


Harris then raised several points regarding the temporary utilization of University Wide funds allocated to both the Library and Information Technology in prior years for obligations in those units that had since liquidated. Specifically Harris noted that PBAC had allocated $198,000 a year for ten-years from University-Wide to pay for the Centrix phone switch replacement. That obligation ended on July 31, 1996, and the money should now be returned to PBAC for other University-Wide expenditures or for distribution to the divisions. Similarly, PBAC in 1989 made a seven-year allocation from University-Wide to pay for the On-Line Public Access Catalog (OLPAC). That obligation also ended with the 1995/96 budget. Copies of (1) a table showing phone switch payments between 12/5/86 and 7/31/96, and (2) a 2/1/91 memorandum to PBAC from the Dean of Administrative Services (Karas) and Library Director (Susan Harris), confirming the OLPAC allocation, were distributed to members. Melinda Barnard concurred with Harris' point that the money should return to PBAC for reallocation, noting it was important to establish accountability for University-Wide resources.

Katharyn Crabbe noted that most items on the current un-funded University-Wide list represented adjustments to the base budgets of the units in question. Harris concurred with Crabbe, indicating that it was not unusual for the PBAC to make permanent adjustments to base budgets but it was also not unusual for the Committee to recommend one-time and temporary adjustments for specific items. He noted that the PBAC intent with respect to the Library OLPAC funds and the Information Technology phone-switch money was clear. Harris complained of the University's "lack of an institutional memory" and of the "ahistorical presentism" which appeared to afflict some of the members.

Farish indicted that removal of the resources in question from the Library and Information Technology would pose serious operational challenges. Barnard disagreed with Farish, indicating that the challenges presented would require a change in operational methods but would not necessarily bring unit operations to a standstill.

ADJOURNMENT

As the time for adjournment was approaching, Farish indicated that the PBAC would continue discussion regarding the 1998-1999 budget recommendation at its May 14, 1998 meeting and adjourned the Committee at 9:55 AM.

Minutes prepared by Larry Furukawa-Schlereth.


PBAC minutes 1997-1998
Updated 2007-12-14
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