Bernie Goldstein brought the meeting to order at 8:05am. Goldstein noted that Andy Merrifield would be proxy for CFA Representative Victor Garlin. At the request of Rick Luttmann, Goldstein added an item to the Agenda regarding principles guiding our budget discussion. Rand Link moved and Gloria Ogg seconded a motion to approve the proposed agenda. The agenda was passed unanimously.
Luttmann moved and Steve Wilson seconded a motion to approve the minutes of the April 25, 2002 meeting. The minutes were approved unanimously with abstentions from those not in attendance at the April 25, 2002 meeting.
Schlereth addressed the issue of why the general fund distribution (GFD) of campus resources does not match the marginal cost distribution (MCD). History can help explain the imbalance. The State appropriated orange book formulas specifically allocated money to the campus. In 1994, the orange book was discontinued and additional funding came through growth. A base funding was established in 1994 according to orange book allocations, future years were based on the MCD. Schlereth does not believe one can make a parallel between GFD and MCD because the MCD did not exist for the 35 years prior to 1994. Further, certain fixed costs are assumed before a campus enrolls its first student. These fixed costs generally fall into the administrative side of the campus and skews the numbers. These factors explain why Academic Affairs receives 78% of new revenue based on the MCD, but totals only 66% of the campus budget. The CSU and CFA agree that MCD does not necessarily fund enrollment. Further, it does not recognize cost of living, faculty salary differentials, etc.
Rick Luttmann asked if the allocations were legally binding. Schlereth explained that they are mostly discretionary. Luttmann feels that while we don't legally have to use the dollars the way they came to, we have an ethical obligation to do so. Schlereth agreed. Luttmann feels Administration and Finance has received more money via the MCD than needed. Schlereth disagrees with Luttmann. Merrifield feels the base budgets developed after the orange book were arbitrarily set by President Armiñana and this has caused many problems. Schlereth explained that the base budgets were developed based on previous orange book formulas. Wilson noted that many campuses handled the budget crisis of the early nineties in different ways and this campus's method included a principle of people. Merrifield noted that he has always applauded President Armiñana for not laying off employees. Schlereth reminded members that redirecting money and no lay-offs leads to the retraining and redirecting of employees.
(Please see the May 23, 2002 Agenda Packet for this document)
Schlereth presented an update of the 2002/2003 budget reductions. He noted the $43,000,000 in one-time reduction to libraries, instructional equipment, technology and maintenance should read $38,000,000. Schlereth feels additional cuts of 2% are likely in December. Lynn McIntyre noted that other departments in the state, such as Health and Human Services, have been cut far more than the CSU. She agrees with Schlereth that more cuts are likely. McIntyre noted that the legislature has been floating the idea of a fee increase, however the Governor does not seem open to such an idea.
Schlereth feels the guiding principles for the budget should be in protecting people and protecting the student faculty ratio (SFR). Luttmann proposed his own guiding principles of zero-base budgeting, protecting the SFR, reducing the difference between the MCD and GFD, and reducing administrative bloat. Merrifield agrees with many of Luttmann's points, however does not agree with the idea of a zero-base budget. He feels this would be too costly in time and generally isn't workable. Melinda Barnard agrees with Merrifield that zero-base budgeting would not be a good idea, however commends Luttmann for thinking outside the box. She feels we should reexamine the no lay-off policy.
Schlereth feels the MPP paper issued by a faculty member in San Marcos is rudimentary and not based in reality. Schlereth explained, again, that Sonoma has a higher number of MPP due to the way this campus chooses to classify employees and because the auxiliaries are integrated into the University. Scott Gordon feels Schlereth's comments are a good starting point for a continued discussion. Rick Luttmann pointed out that while Sonoma has the highest number of MPP's for a campus our size, it also has the lowest MPP salaries. Ogg noted that Administration and Finance always reevaluates a position when it becomes vacant. If the position is not filled, the work does not disappear, it gets absorbed by current employees. Barnard sees the connection between the MPP reclasses and the work performed by the individual. She does not feel this is bloat. Members were generally agreeable to preserving people and SFR. Schlereth feels the current budget situation is manageable. If the budget gets worse, however, the principles will need to be changed.
Schlereth informed Members that a summer meeting schedule will be developed if a budget is passed before September.
Goldstein adjourned the meeting at 9:55am
Minutes prepared by Neil Markley.
PBAC minutes 2001-2002