President's Budget Advisory Committee

Minutes October 8, 1998

Approved by PBAC, November 5, 1998

Members Present:

• Bernie Goldstein, Interim Provost, Co-Chair
• Larry Furukawa Schlereth, Vice-President, Administration and Finance, Co-Chair
• Jim Meyer, Vice-President, Development
• Rand Link, Vice-President, Student Affairs
• Andy Merrifield*, Chair-Elect of the Faculty
• Tom Cooke, CFA Representative
• Phil McGough, Faculty Representative at Large
• Pat Seda, Staff Representative
• Cara Puccio, President, Associated Students
• Les Adler, AARCC
• Phyllis Fernlund, AARCC
• Katharyn Crabbe, AARCC
• Marty Ruddell, AARCC
• Dennis Harris, CRC
• Gloria Ogg, CRC
• Steve Wilson, CRC

Staff Present:

• Letitia Coate, University Controller
• Bill Ingels, University Treasurer

Members Absent:

• Melinda Barnard, CRC
• Sue Parker, Past Chair of the Faculty
• Vacant Student Seat , Associated Students

Guests Present:

• Diane Brown
• Carol Cinquini
• Gail Goldberg
• Lori Heffernon

Meeting Agenda

• INTRODUCTIONS
• YEAR-END FINANCIAL REPORT 1997-1998
• PRESIDENT'S FINAL BUDGET 1998-1999
• FINANCING THE UNIVERSITY RESERVE
• FINANCING COMMON MANAGEMENT SYSTEMS
• FALL PBAC AGENDA
• ITEMS FOR THE GOOD OF THE ORDER

INTRODUCTIONS

Bernie Goldstein brought the meeting to order at 8:10 AM and asked the Members to introduce themselves and the group they represented. Following introductions, Goldstein welcomed the Members to the PBAC and expressed his appreciation for the anticipated hard work of the Committee in the months ahead.

YEAR-END FINANCIAL REPORT

Larry Furukawa-Schlereth then presented the Year-End Financial Report for 1997-1998 referencing materials contained with the Agenda Packet (Packet) and reproduced below:

* Repaid in three equal annual installments of $61,134 from Academic Affairs.

• Payment 1 due July 1, 1999
• Payment 2 due July 1, 2000
• Payment 3 due July 2, 2001

Informational questions regarding the Year-End Report were answered by Goldstein and Schlereth.

PRESIDENT'S FINAL BUDGET: 1998-1999

Schlereth then outlined the President's Final Budget for fiscal 1998-1999 referencing materials contained in the Packet and reproduced below. He specifically commented on the differences between the budget projection developed in May, 1998 and the final budget approved in September, 1999.

SONOMA STATE UNIVERSITY
FINAL BASE GENERAL FUND BUDGET 1998-1999

Notes

1. Interfund Loan Payments to Parking will be made by Administration and Finance via the Bad Debt Collection Program.
2. Reserve Items will be financed from savings in the University-Wide Budget Category, Revenue Above the Base, and as necessary, allocated to the Divisions based on the marginal cost formula.
3. Risk Pool Deductible Charges and the costs of the Presidential Scholars Program will accrue in the Reserve.
4. Surplus Revenue above the Base will be allocated to the Divisions based on the marginal cost formula once all deficits are financed in the University-Wide budget category.

Schlereth also outlined one-time money the campus had received for fiscal 1998-1999 and the President's allocations in this regard. These allocations were included in the Packet and are reproduced below:

*40,000 of this appropriation is being held for instructional equipment at the SSU Mendocino College site which will be available to each of the schools within Academic Affairs.

Informational questions regarding the Final Budget were answered by Goldstein and Schlereth. Schlereth then outlined a variety of accountability measures established by the President for the 1998-1999 budget (reproduced below) and responded to questions regarding the measures.

FINANCIAL ACCOUNTABILITY MEASURES, 1998-1999

DIRECT INSTRUCTION: The Provost shall allocate at least $450,000 of new resources provided to Academic Affairs for direct instruction above the current base budget provided for this purpose. The Provost shall prepare a report for the President by March 1, 1999 indicating how these funds were utilized in support of direct instructional efforts.

INSTRUCTIONAL EQUIPMENT: The Provost shall prepare a report for the President by March 1, 1999 reflecting the specific purchases made with $200,000 of base budget and $165,000 of one-time budget allocated for instructional equipment.

LIBRARY: The Provost shall prepare a report for the President by March 1, 1999 reflecting how one-time resources of $183,400 provided to the Library are being utilized.

TEACHER PREPARATION: The Provost shall prepare a report for the President by March 1, 1999 illustrating the specific nature of expenditures associated with teacher preparation.

BASELINE ASSURED TECHNOLOGY: The Provost and the Vice-President for Administration and Finance shall jointly prepare a comprehensive strategic and financial plan associated with campus technology incorporating compliance with BATS, the impact of CMS and the CSU Technology Infrastructure Project on Information Technology, and funding gaps associated with the Schulz Information Center. As part of the report, the Provost and Vice-President for Administration and Finance, in consultation with the campus Information Resource Manager and the Library and Information Technology Committee shall prepare budget allocation recommendations for the President associated with new base and one-time resources provided by the CSU for technology support.

DEFERRED MAINTENANCE: The Vice-President for Administration and Finance shall prepare a report for the President by March 1, 1999 reflecting how $442,000 of base budget and $ 522,000 of one-time budget is being utilized in support of maintenance and repair activities.

LAND ACQUISITION: The Vice-President for Administration and Finance shall provide quarterly reports to the President, the President's Budget Advisory Committee, the Vice-President for Academic Affairs Budget Advisory Committee and the Campus Reengineering Committee regarding the financial status of the campus land acquisition program.

COMMON MANAGEMENT SYSTEMS: The Vice-President for Administration and Finance shall provide quarterly reports to the President, the President's Budget Advisory Committee, the Vice-President for Academic Affairs Budget Advisory Committee and the Campus Reengineering Committee regarding the financial status of the Common Management Systems implementation at SSU.

FINANCIAL CONTROLS: The Vice-President for Administration and Finance shall immediately evaluate and as appropriate, establish appropriate financial, payroll, and human resource control mechanisms that prohibit the campus from encountering a deficit in any campus budget including auxiliary corporations. The Vice-President for Administration and Finance shall prepare a report for the President in this regard by December 1, 1998.

FINANCING THE UNIVERSITY RESERVE

Discussion then turned to a discussion of the University Reserve. Schlereth explained that consistent with past practice, a Reserve was not held at the University level. He noted that as Reserve items were identified and approved by the President, they would be financed with possible savings in the University-Wide budget category, primarily utilities and benefits. If revenue was insufficient from this category, any "revenue above the base" would be tapped. If funds were still needed, the cost of the Reserve would be allocated to the Divisions based on the marginal cost formula.

Schlereth indicated that he did not expect savings to be realized in the University-Wide category in 1998-1999 and that "revenue above the base" was not likely in FY 98-99. Consequently, Reserve items would more than likely be allocated to the Divisions. He also explained that several items had already been funded by the Reserve and that, for planning purposes, the Divisions should be holding resources for this purpose. The following data was provided to the Members in this regard:

Current known reserve obligations for 1998-1999 stand at $169,000 as indicted below:

** Non-General Funds required.

 Un-funded items in the Reserve will more than likely grow by June 30, 1999.

Division Assessments for the Reserve will equal at least $169,000:

Academic Affairs will assess that units within the Division for any Reserve obligations as reflected below:

Discussion regarding the Reserve then ensued with Members and Guests noting the lack of Reserves at the Division level. Schlereth indicated that this was an on-going problem at SSU and urged Division budget managers to follow good business and financial practice and budget for Reserve items.

FINANCING COMMON MANAGEMENT SYSTEMS

Schlereth then provided the members with campus plans with respect to the funding of the CSU mandated Commons Management Systems (CMS). The following information was discussed:

• Implementation of CMS at SSU is estimated to cost between $7 and $10 million over a seven year period beginning in 1998-99.
• The University's Special Funds and Auxiliary Corporations will participate in CMS and provide their appropriate share of funding for the project.
• General Funds of $236,000 have been held for CMS in the 1998-1999 budget.
• Additional General Fund dollars will be needed in the next 6 fiscal years and will be taken "off-the-top" given the mandated nature of the Project and its university-wide implications.
• Division assessments will be required. Division assessment will be based on the marginal cost formula, will begin in the current fiscal year and continue for the next 6 fiscal years.

Schlereth indicated that CMS cost estimates continued to be fluid but that he did expect a final estimate to be available in the near future. He indicated this information would be shared with the PBAC.

FALL PBAC AGENDA

Members then reviewed the preliminary agenda topics for the Fall Semester including:

• Review of the Trustees Budget Request
• New Mandated Costs for Fiscal 1999-2000
• CMS Update
• Land Acquisition Update
• Policy on Campus Consultation and Advice to the President
• Campus Budget Priorities and the development of a multi-year financial plan

ITEMS FOR THE GOOD OF THE ORDER

Several items were raised for the Good of the Order. These included:

• A request to review the marginal cost formula as a method for allocating both new revenue and expense.
• A request for information regarding how University-Wide resources allocated to Information Technology for the phone switch lease purchase were being utilized since the debt service associated with the phone-switch had been liquidated.
• A request for information regarding how $400,000 allocated for instructional equipment were being spent since only $200,000 appeared to be illustrated in the campus expenditure plan for fiscal 1997-1998.

ADJOURNMENT

Goldstein then adjourned the meeting at approximately 9:50 AM, thanked the Members for their attendance and reminded them of the November meeting date.

Minutes prepared by Larry Furukawa-Schlereth.

PBAC minutes 1998-1999
Updated 2007-12-14
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