President's Budget Advisory Committee

Minutes February 4, 1999

Approved by PBAC as corrected, 18 February 1999

Members Present:

• Bernie Goldstein, Interim Provost, Co-Chair
• Larry Furukawa Schlereth, Vice-President, Administration and Finance, Co-Chair
• Les Adler, AARCC
• Melinda Barnard, CRC
• Bill Barnier, Faculty Representative at Large
• Tom Cooke, CFA Representative
• Phyllis Fernlund, AARCC
• Dennis Harris, CRC
• Rand Link, Vice-President, Student Affairs
• Jim Meyer, Vice-President, Development
• Joe Latulippe, Associated Students
• Gloria Ogg, CRC
• Steve Orlick, Chair of the Faculty
• Sue Parker, Past Chair of the Faculty
• Cara Puccio, President, Associated Students
• Pat Seda, Staff Representative

Staff Present:

• Letitia Coate, University Controller
• Bill Ingels, University Treasurer
• Katie Pierce, Academic Affairs Budget Officer
• Neil Markley, Administrative Manager

Members Absent:

• Katharyn Crabbe, AARCC
• Marty Ruddell, AARCC
• Steve Wilson, CRC

Guests Present:

• Drew Calandrella

Meeting Agenda

• APPROVAL OF THE AGENDA
• APPROVAL OF THE MINUTES 12-10-98
• BUDGET UPDATES
• STATUS OF THE CAMPUS RESERVE
• INDIRECT COST RECOVERY ANALYSIS
• UTILIZATION OF INSTRUCTIONAL EQUIPMENT DOLLARS
• UTILIZATION OF TELEPHONE PHONE SWITCH DOLLARS
• MARGINAL COST FORMULA
• ITEMS FOR THE GOOD OF THE ORDER

APPROVAL OF THE AGENDA

Bernie Goldstein brought the meeting to order at 8:20 AM and asked for a motion to approve the Agenda. A motion was made by Sue Parker. A second was obtained from Rand Link. A vote was taken to approve Agenda. The agenda was approved unanimously.

APPROVAL OF THE MINUTES: 12-10-98

Goldstein asked for a motion to approve the Minutes of the December 10, 1998 meeting. A motion was made by Harris. A second was obtained from Ogg. Jim Meyer indicated Sue Parker was spelled incorrectly on the first page of the Minutes. Parker asked to see a table of the number of sections over 48 students be included in Minutes. Larry Schlereth agreed. Melinda Barnard explained she would like to see consistency in name format throughout the minutes, as the Minutes were somewhat confusing. She suggested using the first initial followed by the last name. Dennis Harris indicated it was standard form to use first and last names the first time a name is used and only the last name in subsequent namings. The Minutes as modified were approved unanimously.

BUDGET UPDATES

CMS

Schlereth briefed the Members on the progress of the CMS project. A steering committee has been appointed and will be meeting. For the Sonoma campus, Judith Hunt and Edna Nakamoto are working on the prototype Human Resource module that is expected to be ready in December 1999. Larry Lin has been hired by this campus as CMS Project Manager to implement the system. He previously worked in the Chancellor’s Office and will be joining us on March 1, 1999. Schlereth presented the following budget, which the CMS Steering Committee developed (reproduced below):

BUDGET UPDATES (Cont.)

Schlereth noted Sonoma will receive four $100,000 yearly augmentations beginning in 1999-2000 through 2002-2003. Further, the Associated Students, IRA, and the Foundation (Endowment, and Grants and Contracts) will be subsidized by other self-sustaining funds. Katie Pierce noted that, in the case of the Foundation, this subsidy amounts to 3/10ths of one percent of its total budget.

• Sue Parker inquired whether a desktop and platform requirement had been determined. Schlereth indicated that Peoplesoft has suggested the PC platform would be more appropriate for full functionality. Schlereth noted Peoplesoft is still somewhat vague on specifics regarding the Macintosh platform. He reminded the Committee that while the Faculty Desktop Replacement Program money will pay for any needed PC conversions for the Faculty, no money has been set aside for the Staff and Administrative conversions.
• Katie Pierce asked for more information on the Grants and Contracts subsidy. Schlereth indicated Grants and Contracts will still pay a portion of the CMS cost, however not its full amount.
• Phyllis Fernlund asked what the CMS Project Manager’s salary is. Schlereth responded that it was budgeted at $130,000; however some cost savings have been realized as the Project Manager was hired below that figure.
• Les Adler expressed concern about the rising cost of CMS. Schlereth commented the budgeted figures were conservative and would likely rise. However, the final figures should not be outrageously more, and cost savings should be realized by the Steering Committee. Schlereth further noted that our cost should remain lower if we do not deviate from the CSU baseline "vanilla" software. President Armiñana has stated we would not deviate. Adler followed by asking if Schlereth was still convinced we should be a first wave campus. Schlereth answered yes, because we can develop the baseline product to better suit our needs. He added, Steve Wilson is setting up a product demonstration on March 5, 1999 for our campus.
• Steve Orlick asked what the impact of the CMS expense would be on this campus? What the effects on individual units would be? What will the impact on instruction be? Schlereth responded the cost would be around $8,000,000 and roughly 60% would come from the General Fund. He added, one could speculate on what else we could do with the money, but not going forward now would only delay the cost because this is a mandate from the CSU. Further, our systems need to be updated in order to remain viable.
• Melinda Barnard asked if Schlereth could do a projection of expected new money and if we could use these moneys to cover CMS. Schlereth commented he and Bernie Goldstein have been developing a rough, multi-year financial plan. For a more accurate projection, he added, an answer to the growth question must be answered. Goldstein suggested the Committee ponder the growth issue.
• Harris noted we have had problems and additional costs incurred in the past attempting to customize "vanilla" software. Harris suggested the unit that customizes carry the expense.
• Bill Barnier asked Drew Calandrella to be sure faculty are included in the advising component of the software. Barnier followed by noting many faculty have much pedagogical work on the Macintosh and will have tremendous difficulty trying to switch to the PC platform. He asked if faculty could use the web-based version of the software. Calandrella commented comprehensive consultation will occur. Calandrella added that one of Peoplesoft’s strengths is their web interface, which should work well for low-use users. Intensive users, however, should switch to the PC platform. Schlereth feels Peoplesoft would say faculty/advisors should use the PC based version. Barnier asked whether PeopleSoft is required by contract to provide a product that will work on both Intel and Mac platforms or provide a seamless web interface. [At the next meeting, Schlereth said that PeopleSoft's contract did not mandate either of these.] He will ask more questions of them.
• Joe Latulippe asked if implementing in the second wave lowers the cost. Schlereth responded the cost would be lower, in theory; however other factors neutralize the savings.
• Tom Cooke noted if CMS fails and we are in the first wave, we could incur substantial costs a third wave campus would not. Schlereth noted there are risks associated with going in the first wave or third wave.
• Calandrella commented the software his area is using is five years old and is developing, and experiencing, problems. He needs new software to avoid a failure, which may occur in the next one to two years.
• Orlick noted we are operating lean now, and the campus may not be able to afford this new expense. Schlereth agreed, but noted we have to address this issue soon; we cannot just not do it.

Budget Policy Development

A small Committee is looking at this. A first meeting is being arranged and should be scheduled shortly.

STATUS OF THE CAMPUS RESERVE

Schlereth indicated that the University has no reserve; however this campus currently has approximately $288,535 in items which should be absorbed by a reserve. The following is the Status of the University Reserve:

Status of the University Reserve
1998-1999
Unit Assessments

Current known reserve obligations for 1998-1999 stand at $288,535 as indicted below:

* Total EIR project costs are estimated at $200,000. The following funds sources have been identified:

** Non-General Funds required.

STATUS OF THE CAMPUS RESERVE (Cont.)

Members expressed a general concern regarding the lack of a reserve and its effect on the Schools. Schlereth reiterated his feeling that a reserve should be budgeted. Discussion on the matter ensued. The following points were expressed:

• Harris noted a PBAC policy, adopted in 1987 but rarely - if ever - followed, dictating 1% of the General Fund Personnel Services budget be used for a reserve; this might be a basis for establishing a Reserve in the 1999-2000 budget year.
• Barnier would like the marginal cost formula discussed for mid-year reserve assessments.
• Cara Puccio feels we should fund current programs before spending money on items such as the first wave implementation of CMS.
• Barnard feels the money/reserve issues are at many levels down to Deans and Department Chairs. These folks should stop making commitments they can’t fund.
  

INDIRECT COST RECOVERY ANALYSIS

Schlereth suggested this item be deferred because Sue Parker, who suggested the analysis, was not present. The Committee had no objection.

UTILIZATION OF INSTRUCTIONAL EQUIPMENT DOLLARS

The following analysis presents the amount of money given to instructional equipment since 1994-1995 and where the money actually went:

SONOMA STATE UNIVERSITY
UTILIZATION OF INSTRUCTIONAL EQUIPMENT DOLLARS

1994-1995 $200,000

President establishes an on-going General Fund appropriation for instructional equipment. Appropriation placed in the University-Wide Budget Category. Resources to fund the appropriation were generated via the administrative Reengineering activities of the campus. The appropriation was then moved to the base budget of the Division of Academic Affairs (Provost Office) in fiscal 95-96.

1997-1998 $200,000

President increases the on-going General Fund appropriation for instructional equipment. Appropriation placed in the base budgets of the 5 schools. Resources to fund the appropriation were generated by a reduction in the base budget of the Division of Administration and Finance.

1998-1999 $165,000

The CSU Trustees provide a one-time allocation of $165,000 for instructional equipment. Appropriation placed in the University-Wide budget category.

UTILIZATION OF INSTRUCTIONAL EQUIPMENT DOLLARS (Cont.)

Many Members expressed serious concern about the use of the funds not being used for the intended purpose. Schlereth informed the Committee accountability measures have been developed to prevent this situation from occurring again. Further, Schlereth noted the Financial Services Information Group has been meeting and should help with this problem as well.

UTILIZATION OF TELEPHONE SWITCH DOLLARS

Schlereth presented the following analysis regarding the utilization of telephone switch dollars:

SONOMA STATE UNIVERSITY
UTILIZATION OF TELEPHONE SWITCH DOLLARS

1986

Campus determines it appropriate to purchase a new phone switch
Purchase made with: 1. $200,000 down-payment
2. $197,985 annual payments (lease purchase)

1986-1987

President allocates $197,985 of on-going, General Fund to CMTS (IT) from the University-Wide budget to Information Technology.

July 31, 1996

Lease purchase on the phone-switch fully paid. Funds allocated for the lease purchase payment remain in the Information Technology base budget.

Schlereth explained Information Technology was given $197,985 yearly to pay for a phone switch, which would be fully paid on July 31, 1996. Rather than reverting to the General Fund, the money has stayed within Information Technology to pay for an administrative position and operating expense. A brief discussion ensued. Schlereth indicated much of this issue stems from budget decentralization seven years ago. While he still feels decentralization is the correct methodology, some risks are inherent.

ADJOURNMENT

Given the time, Bernie Goldstein adjourned the meeting at 10:05 AM and encouraged everyone to read their Marginal Cost document.

Minutes prepared by Neil Markley.

PBAC minutes 1998-1999
Updated 2007-12-14
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