PRESIDENT'S BUDGET ADVISORY COMMITTEE

Minutes February 1, 2001

MEMBERS PRESENT:

STAFF PRESENT

MEMBERS ABSENT

STAFF ABSENT

AGENDA

APPROVAL OF THE AGENDA

Bernie Goldstein brought the meeting to order at 8:10AM. He introduced John Hughes, Purchasing Coordinator for Facilities Services, as the new Staff Representative, replacing Pat Seda. Goldstein also welcomed back Martha Ruddell, who is sitting in for Dean Fernlund. Phil McGough requested of the Chair that members be notified of the meeting date and time the Monday preceding each PBAC meeting. Melinda Bernard moved and Rand Link seconded a motion to approve the proposed agenda. The agenda was passed unanimously.

APPROVAL OF THE MINUTES: November 9, 2000

Goldstein asked for a motion to approve the minutes of the November 9, 2000 meeting. McGough moved and Lynn McIntyre seconded the motion. The minutes were approved with one dissenting vote from Dennis Harris. There were no absentees.

GOVERNOR'S BUDGET: 2001-2002

CFO Larry Schlereth introduced a January 8, 2001 report from the CSU Office of Governmental Affairs, entitled "2001/02 California State University Support Budget". [Available at the following CSU web site: http://www.calstate.edu/GA/legindex.shtml.] Schlereth explained that the Governor's initial Budget proposal was the second of four steps in the budget process:

The CSU Board of Trustees' Budget Request - adopted in October of each year after consultation with campus presidents, CSU faculty and administrative representatives.

The Governor's Budget - presented in early January and based upon both agency requests (including that of the CSU) and the Governor's own priorities given the previous Fall's estimate of State revenue available for the forthcoming budget year.

The "May Revise" - a revision of the Governor's initial budget proposal based both upon updated revenue estimates and upon changed priorities. Changes can result both from unforeseen problems (e.g., the current energy crisis) and from lobbying by constituent groups (e.g., CSU, employee unions) to add items not included in the original Governor's Budget.

The Adopted Budget - Constitutionally required in June but often delayed until July, August, or later, the budget is first approved by the Legislature (Senate & Assembly) and then modified by the Governor, utilizing his item veto. Following adoption of the budget, the CSU notifies campuses of their General Fund Support funding for the year.

Schlereth concluded this summary of the budget process by noting that PBAC would have to meet during the summer — in July and August — to review the impact of the final budget on campus funding for the year. Faculty PBAC members on ten-month appointments would be compensated for their time; student members would be compensated for their out-of-pocket expenses.

CFA President Victor Garlin noted that the report was both a summary of the Governor's budget proposals and a political statement, reflecting CSU administration's interpretation of university needs, priorities, and issues — including the additional 2% employee salary increase sought by the CSU but not included in the initial Governor's budget, an amount the CSU claims would reduce the current CSU faculty salary lag to "0.6 percent", a figure disputed by CFA. Schlereth responded by acknowledging that budget making was a political process made necessary by democratic decision-making. For that reason, the CFO said, he wanted to call attention only to the Governor's budget figures as presented in the document.

$68 Million for Increased Enrollment, Including $12.3 Million for Expanded Year-Round Operations.

Schlereth then turned to page 2 of the document and the first figure under the heading "Appropriations within the partnership". As background, he reviewed the initial four-year "compact" with the previous governor and the current, revised "partnership" with Governor Davis, by which the CSU committed itself to enrollment growth averaging 4% per annum and Davis committed his administration to a 4% growth in state funding. He noted that the CSU expected to grow only 3% in 2001/02; although SSU would grow by almost 5% and other "high-demand campuses" would experience growth, this would be offset by steady-state or declining enrollment on other campuses.

In response to a question from Bill Barnier, Provost Goldstein responded that 9 campuses would be on year-round operations (YRO) in Summer 2001, with the remaining campuses, including Sonoma State, beginning YRO in Summer 2002.

$93 Million for a 4% Employee Salary Increase and $16.6 Million in Lieu of a Student Fee Increase.

Faculty Chair-Elect Rick Luttman observed that the Governor did not give the Trustees all they requested, since their request was for a 6% increase for faculty. Schlereth agreed, saying there were a number of items excluded, which the document lists on its last page, and which he would address later. Garlin stated that CFA, CSEA, and other unions would be lobbying the Legislature between now and the May Revise to include the additional 2% in the final budget. Ruddell asked whether anyone had addressed the impact of the "cool-down of the dot.coms" on the CSU, suggesting that an increased CSU enrollment might be the result. Schlereth responded that campuses really should not exceed their targeted enrollments because excess enrollment is not funded by the system, and "the faculty really eat it" with increased class size and no additional staff. McIntyre noted that in addition to the union lobbying to which Garlin had referred, SSU and other CSU campuses utilized local community affiliates to gain university support among local officials and state representatives. AS President Eric Carlson predicted the economic slowdown would be deferred or unfelt in Sonoma County.

Barnier asked what happens to the accrued interest on unspent funds, such as faculty salary money. Schlereth answered that for the CSU, there was no interest; the State Controller's Office, which does not pass through interest on unspent General Fund allocations to the CSU, held the money.

Scott Gordon asked whether the $16 million in lieu of a student fee increase went directly to the students. Schlereth stated that this was General Fund money, available for any appropriate use, and not a dedicated fund.

Schlereth called members' attention to $10 million in the Governor's Budget in funds dedicated to enhance the state economy, of which SSU would receive a portion for its Computer Science and Nursing programs.

Luttman noted the contradiction in the document between the initial assertion of $93.5 million for employee compensation and the subsequent statement that $81.5 million would be available for this purpose. Schlereth stated that he did not know why the contradiction existed or which figure was accurate. He would investigate and report back to PBAC at its next meeting.

$25 Million for Dedicated Items.

Schlereth then addressed four items for which the Governor had proposed dedicated funding. All of these were restricted to the purposes intended, and each campus was required to report how these funds were spent. The $10 million to complete the CSU technology infrastructure build-out would likely be held centrally by the CSU. The $5 million for expanded network services and electronic library resources would also likely be held centrally by the CSU to cover CMS costs and system-wide electronic subscriptions. This would also be true for the $4 million for campus libraries, which would be used by the CSU to cover system-wide inter-library loan costs. Only the last item, $4 million for deferred maintenance projects, would be distributed; SSU's share of this would be approximately $60 to $90 thousand, and this would be subject to discussion and review by the Campus Reengineering Committee.

$64 Million for a Variety of Initiatives.

Schlereth next turned to the following section of the document, which lists almost $64 million for a variety of initiatives proposed either by the CSU or by the Governor. These include $3 million for the new CSU Channel Islands campus, $17.5 million for the Governor's Teacher Fellowship Program, $18.5 million to fully fund the Governor's Education Technology Professional Development Program, and $1 million of the $4 million requested by the Trustees for the joint UC-CSU-CCC Diagnostic Writing Service (which might become dedicated funding for the School of Education). There is also $20 million in one-time funding for instructional equipment, which would add about $500,000 to the $200,000 the Provost and CFO had already committed, as well as $3 million in agricultural, biotechnology, and marine studies research activities, none of which apparently would come to SSU.

$83.9 Million for Projects NOT Included in the Governor's Budget

Lastly, Schlereth revised the section of the document listing those Trustees' proposal excluded from the Governor's Budget proposal. Most important is the $40.8 million for additional employee compensation above the partnership. Second is a request for $12 million to improve student services, which Schlereth and Link explained would go for such items as student services CMS costs, the EMT program, and the Freshmen Seminars; however, given the new energy crisis. The Trustees also asked for $5 million for feasibility studies associated with proposals for faculty and staff housing assistance. Even if this item were funded, which is now doubtful, SSU would not receive any of it because it has already received CSU assistance for this item.

Garlin reiterated CFA's disagreement with the "CSU interpretation of the salary gap", specifically the assertion that an additional 2% raise would close the gap to 0.6% and the failure of CSU to consider the difference between the cost-of-living in California in comparison to that of the CPEC comparison institutions.

Following this review of the specifics of the Governor's Budget, Bernard noted that, even more than previous years, relationships between the CSU and the Legislature were very important. McIntyre added that letters from and contacts by members of the community are also helpful. Luttman asked for an early determination of summer PBAC meeting dates given the importance of the budget this year.

McGough noted recent press articles regarding a 12% increase in applications with the UC system, including a significant increase in minority applications. Barnier asked how enrollment for 2001 was progressing at SSU. Link replied that the CSU does not have comparable figures because of differences among campuses in admissions processes. Although the number of applications is important, what really matters is the "yield rate" - the percentage of those accepted who show up. Schlereth noted the danger that high housing costs and low vacancy rates may discourage enrollment. McIntyre noted that the expanded Cal Grant program may mean more competition for SSU, because private school fees would not be as great a deterrence as in the past.

STATUS OF THE CAMPUS RESERVE

Schlereth introduced the following table for purposes of discussion.

2000-2001 University Reserve Items
Reserve Item Total Assessments November Assessments Balance Due
Schulz Center Completion

$ 250,000

$ -250,000 $ 0
Loan Repayment to Library 50,000 -50,000 0
Sick Leave-Art & Humanities

40,600

-40,600 0
Learning Skills Services Deficit 13,302 0 13,302
Student Union Fee Referendum 10,000 0 10,000
Environmental Technology Center 125,000 0 125,000
Osborn Preserve Renovation Project 12,000 0 12,000
Sick Leave-Natural Sciences 28,956 0 28,956
TOTAL ASSESSMENTS $ 529,858 $ -340,600 $ 189,258

 

Marginal Cost Distribution
Fund Center Percent of Total Amount of Total Assessment Percent of November Assessment Balance Due
Executive Office 2.12% $ 11,232 $ -7,220 $ 4,012
Academic Affairs 78.47% 415,780 -267,269 148,511
Student Affairs 2.30% 12,187 -7,834 4,353
Admin. & Finance 17.11% 90,659 -58,277 32382
TOTAL DISTRIBUTION 100.00% $ 529,858 $ -340,600 $ 189,258

Increase in Natural Gas prices could produce a potential new Reserve item of as much as $750,000.

The CSU is attempting to obtain additional funds from the State of California for this purpose.

Schlereth began discussion of this topic by noting that the first three items were reviewed at a previous PBAC meeting and the divisions had already been billed for these on the basis of the marginal cost distribution formula. He then explained the origin of the following items, noting that CSU policy mandated SSU payment of the cost of the fee referendum, that there had been an additional unbudgeted sick leave expense, and that the remaining items covered project deficits.

Discussion focused on the footnote at the bottom of the table. Schlereth commended the campus for its reduced electrical usage. Because of the joint CSU-UC contract with Enron, which runs through March 2002, SSU should do fairly well. However, the Department of General Services has informed the campus that it can expect a natural gas deficit of as much as $750,000. Harvey DeLorm, SSU's Director of Engineering has taken the figures for natural gas expenses through December, combined with a forecast of usage for the remainder of the year, and estimates a shortfall of about $550,000. At worst, the energy crisis could absorb all the enrollment growth money for 2001/02; if that happened, the faculty would lose the most, since they would teach an additional 305 FTES with no additional instructional resources.

ITEMS FOR THE GOOD OF THE ORDER

There were no items offered for the good of the order.

The meeting was adjourned at 9:41am.

Minutes respectfully submitted by Dennis Harris
February 6, 2001


PBAC minutes 2000-2001
Updated 2008-01-22
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