PRESIDENT'S BUDGET ADVISORY COMMITTEE

Minutes February 13, 2003

MEMBERS PRESENT

STAFF PRESENT

MEMBERS ABSENT

STAFF ABSENT

GUESTS PRESENT

AGENDA

APPROVAL OF THE AGENDA

Bernie Goldstein brought the meeting to order at 8:06am. Goldstein introduced and welcomed Henry Amaral, Staff Representative and Debora Hammond, VPBAC Representative to the Committee. No additions or deletions to the agenda were proposed.

APPROVAL OF THE MINUTES: December 17, 2002

Steve Wilson moved and Katharyn Crabbe seconded a motion to approve the minutes of December 17, 2002. The minutes were approved unanimously with abstentions from those not in attendance at the December 17, 2002 meeting.

GOVERNORS MID-YEAR BUDGET REDUCTIONS: 2002-2003

(Please see the February 13, 2003 Agenda Packet for this document)

Schlereth updated Members on the status of the proposed 2002-2003 Governors mid-year budget reductions. The reductions are proposed as follows:

Proposed Reductions
Item Amount
General Fund Reduction $ 129,800
Increase in State University Fee (SUF) $ 566,500
Less One-Third to Financial Aid $-189,000
Net New SUF $ 377,500
General Fund Reduction Offset by Increased Net SUF $ -377,500
Plus Financial Aid Recalculation Costs $ 0
TOTAL $ 952,000

Reductions Financing in 2002-2003
Item Amount
Funds Held in the Campus 2002-2003 Expenditure Plan, Governors Unallocated Reduction $ 104,000
Portion of Growth Money Remaining After Fully Funding the Instructional Program at 18.9:1 $ 145,000
PG&E Rebates from Salazar Solar Panels and Anticipated Utility Savings from Buying our Utilities from Arizona Power Instead of PG&E. (Funds will be restored to Plant Maintenance and Operations Budget Program should the Governors Proposed Budget Reduction not be enacted or if surplus funds exist in the University-Wide Budget Category at June 30, 2003) $ 703,000
TOTAL $952,300

Financial Aid recalculation costs will be absorbed by staff in Administration and Finance, Office of Financial Aid and the Customer Service Center.

Schlereth does not expect further reductions for the 2002-2003 year. All reductions are contingent upon approval by the legislature. If reductions are not approved for this year, they will likely be pushed to next years reductions.

Andy Merrifield, speaking for Noel Byrne and the Academic Senate Budget Committee, applauds this plan for minimally impacting instruction of students. He is hopeful Chancellor Reed does not downplay the impact of these cuts to the legislature because this reduction still impacts the University. Schlereth indicated that the University is required to report the steps taken to meet this reduction. In the report, the University will not downplay the seriousness of these cuts. Hammond thanked Schlereth for taking steps to improve the campus energy efficiency. Wilson noted that the effects of these cuts may seem minimal, however they affect the entire campus community; faculty staff and students. Gloria Ogg noted that the mid-year fee increase recalculation costs were absorbed by the granting of comp time to existing staff instead of overtime pay. At some point this time will need to be used by the staff and will affect the staffing of the Customer Services Center and Financial Aid Office.

BUDGET PLANNING: 2003-2004

(Please see the February 13, 2003 Agenda Packet for this document)

Based on the Governors January budget, Schlereth presented the following information. For the upcoming 2003-2004 fiscal year Sonoma State University will need to reduce annual general fund expenditures by $7,496,415 or approximately 14% of our campus General Fund appropriation.

This year, the Governor has specifically targeted these reductions in various areas of the campus budget including direct instruction, student services and other academic and institutional support. This is a departure from the Governors previous practice of unallocated reductions that allowed more campus flexibility. Combined with mandated new costs such as increased health benefits and anticipated utility costs, the cuts impact SSU's operating divisions in the following way:

Cuts to Operating Divisions
Division Amount
Academic Affairs $5,127,611
Administration and Finance 1,833,657
Executive 163,237
Student Affairs 372,910
TOTAL $7,497,415

The Governor is committed to full access for new students now entering college (what we call Tidal Wave II, the children of Baby Boomers). At Sonoma State University we will increase our student body by 445 full-time equivalent students (FTES) next year. This means we will have an estimated 534 actual new students. The Governor has proposed to provide funding for these new students via the CSU marginal cost formula of $7,407 for each new full-time student. New growth dollars will be allocated to the campus divisions in accordance with the marginal cost formula as illustrated below:

Growth Allocations
Division Amount
Academic Affairs $2,636,232
Administration and Finance 488,155
Executive 75,811
Student Affairs 95,917
TOTAL $3,296,115

The total impact of the above reductions plus the new funds would be a net reduction for each division is as follows:

Net Reductions
Division Amount
Academic Affairs $2,491,379
Administration and Finance 1,345,502
Executive 87,426
Student Affairs 276,993
TOTAL $4,201,300

The following represents the above cuts as a percent of total budget net new growth dollars: Academic Affairs 7%, Administration and Finance 10%, Student Affairs 17%, Executive Office 7% and Total University 8%. The overall budget reduction, as currently presented, represents a 14% reduction, plus 6% in enrollment growth money to equal a net reduction of 8%.

We clearly face a great challenge to not only reduce our budget by a significant amount but also increase access for students. As we face these challenges, it is likely we will need to make significant changes to the way we do business at Sonoma State University. Our goal is still to maintain quality programs for our students and maintain a good working environment for our employees. At this time, Dr. ArmiƱana stands behind his commitment to avoid lay-off of any permanent employees.

Again, this is the January proposed budget from the Governor. This budget will be revised in May and then scrutinized by the State Legislature before a final budget is officially adopted later this year. Based on discussions between leaders in Sacramento, there is virtually no chance that the budget for higher education (CSU, UC and community colleges) can improve with the Governors May revised budget. The possibility does exist that it could worsen as revisions are adopted.

Victor Garlin expressed that many groups including the CFA are lobbying for their interests in the budget process. Merrifield asked if flexibility existed within each budget category in the allocation of the reductions. Schlereth responded that some flexibility exists, however the integrity of the mandated reductions must be maintained. Link noted that many other cuts, not seen here in the General Fund, have already taken place in areas such as community tutoring. System-wide allocations for programs such as these have been severely reduced.

Schlereth explained that utilities budgets are still fluid because of discussions between the Public Utilities Commission and PG&E. Should the campus be required to return to PG&E for electricity purchases, our utility costs will likely rise further. Also, PG&E is pushing for the CSU to pay a premium for the years we did not purchase energy from the company.

Garlin asked to see where the President has discretion in this budget so the Committee may provide advice before the cabinet agrees on a strategy. He would like to see options before the May budget revisions so recommendations can be forwarded to the President. Ogg responded that each divisions consultative body will provide advice to the PBAC on their divisions response to the reductions. Ogg also expressed the need to reevaluate what services we are providing that can be eliminated in the face of reduced staffing. She would prefer to have fewer services provided in a quality manner than maintenance of current service levels at a poor quality. Hammond expressed that the largest group of part-time employees is faculty. If faculty numbers are reduced, workload will be significantly increased. Merrifield feels as budgets are reduced, services need to be reduced as well. John Kramer emphasized that the 8% in reductions is amplified by the 6% increase in students.

Schlereth noted that the Presidents commitment to not lay-off permanent employees may be jeopardized should reductions be increased, new fee revenue not realized or if new growth dollars are limited.

Goldstein adjourned the meeting at 9:59am

Minutes prepared by Neil Markley


PBAC minutes 2002-2003
Updated 2008-01-24
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