President's Budget Advisory Committee

Minutes April 16, 1997

Approved by PBAC, 23, 1997

Members Present

Staff Present

Members Absent

Guests Present

Meeting Agenda

Materials Distributed with Agenda Packet

APPROVAL OF AGENDA

Don Farish convened the meeting at 4:10 PM by asking for a motion to approve the Agenda. Dennis Harris moved to approve the Agenda. A second was obtained from Debbie Gallagher. The Agenda was approved unanimously.

APPROVAL OF MINUTES of April 10, 1997

Farish asked for a motion to approve the minutes of the April 10, 1997 meeting of the PBAC. Harris moved to approve the Minutes. A second was obtained from Jose Andrade The minutes of the meetings were approved unanimously.

GENERAL FUND - ACADEMIC AFFAIRS - (continued)

Farish continued with the Speaker's List that remained from the April 10, 1997 meeting. He recognized Bill Barnier who asked what would happen to new funds from the CSU for enrollment growth projected for 1997-1998. Farish responded that the Cabinet had decided that these resources would be allocated to Academic Affairs in 97-98 and that a formula for allocation of enrollment growth funds beyond 97-98 would be developed.

Andy Merrifield asked how much money was collected from students who paid the Enrollment Deposit Fee and then decided not to attend SSU. Silvia Barajas indicated that about $3,000 - $4,000 resulted annually.

HISTORICAL FINANCIAL ANALYSIS

Schlereth introduced the Historical Financial Analysis, which was developed at the request of the PBAC and is a comparison the "Black Book" budgets for 1992/93 and 1996/97, for both General Fund and All Funds. The Historical Analysis document was distributed to the Members and added to the PBAC Record of proceedings (Record) He noted that, although the authors (p. 4) are responsible for the analysis, the presentation of that analysis are his own.

Following presentation of the General Fund Only budget for Academic Affairs (p. 8), Farish noted that the $306,000 in Revenue Above the Base has not yet been received and is being "bankrolled for the coming year." As a result, it "can be put against claims." In response to a question by Adler, Farish noted that this is separate from money received for increased enrollment. Farish noted that this revenue would be included in the 1997/98 Base Budget, and thus would be available at the beginning of the year.

There was substantial discussion of the CSU-Mandated Expenses in University Wide (p. 12). Barnard asked how the CSU mandates programs such as Summer Bridge. In response, Schlereth explained that CSU mandates programs and provides funds. If the campus spends more than that provided, it must make up the difference; if it spends less, it retains the savings. Farish pointed out that there is limited latitude, since there still is the requirement that the mandated task be performed. Schlereth noted that decentralization of programs is a fixed item - even though costs may rise, CSU does not increase the funds. Both Schlereth and Merrifield noted the tendency of central budgetary authorities such as the Federal & State governments as well as the CSU to pass through mandates to other authorities (local governments and CSU campuses) without providing either full funding or provision for increased costs.

Garlin asked the relationship between Summer Bridge and ILE. Farish noted that these were separate programs with separate funding.

To explain the funding, Schlereth noted that in the case of Risk Management, the CSU submitted a Plan for Financial Adjustment (essentially a bill) which SSU then paid from its General Fund Budget. He also noted that the Governor's four-year compact with Higher Education came with performance expectations, and that SSU was required to provide an audit report of the use of funds like those for Deferred Maintenance. Farish noted that the Teaching and Learning Productivity funds, $15,000 to each campus, also required an audit report.

In response to questions regarding the flexibility of the campus with regard to New SSU Programs in University Wide (p. 13), it was noted that both the Employee Assistance Program and Hazardous Waste Disposal involve contractual relationships with vendors. The School Development Effort funds are used both to fund personnel and for OEE. Garlin noted that the OEE portion could be available for deficit reduction. $50,000 of the University Scholars Program is used for $1,000 individual grants to entering Freshmen with 4.0 and higher GPAs. They continue to receive these grants as long as they maintain a 4.0. The remaining $50,000 goes to the President's Discretionary Fund. The Thermal Energy Storage (TES) Payment is $60,000 per year for ten years. Once the Information Center comes on line, the accompanying allocation for utilities will provide a source of funds. TES should reduce actual costs, creating savings, unless the Chancellor's Office adjusts our budget for the preexisting TES. Schlereth noted that after ten years, TES should generate new money. Wilson cautioned that it may minimize increased costs. Schlereth noted that the Historical Analysis revealed the campus' success in lowering the overall costs while experiencing greater usage through energy management. It was explained that the Faculty Workstation Program is a three-year, rolling lease agreement with Apple Corporation. If SSU wished to terminate the lease, the earliest it could do so would be the 1999/2000 budget year.

There was substantial discussion of the Explanation of the Structural Deficit (p. 14). Schlereth noted that the appearance of a structural deficit is not unusual, since the Original Budget was developed in March, while the Governor, Legislature, and CSU Chancellor's Office were still developing the final budget. Garlin asked whether COLAs were the same as what the CFA referred to as general salary increases. Schlereth responded affirmatively. In response to Garlin's question about the Benefits, Schlereth explained that the Budget was a forecast, a planning document. Actual costs of benefits differed for employees depending upon family status. The Budget was also developed prior to notification by PERS of any increases in employer contributions to benefits. Sometimes unions will bargain an increase in benefits (Wilson cited the recent Unit 8 contract). Schlereth noted that the bargaining and budgeting processes were not in synchronization. Garlin asked what funded the President's housing and car allowances. Schlereth responded that these were included in Executive Office OEE.

Barnard asked for clarification of the $422,310 noted on page 13 (New SSU Programs) and that in the explanation. Schlereth explained the $422,310 was a result of the failure to cut other based budgeted expenses in response to projected budgeted revenue. Link asked for an explanation of Benefits under the Original and Revised budgets. Schlereth said the Revised primarily reflected changes in Part-Time Faculty. There is no way of knowing in March whether such faculty will be hired by multiple departments/schools and qualify for benefits. He also noted that where there are savings in actual Benefits expenditures, the surplus will be moved to cover deficits in other University-Wide categories. Farish noted that ideally, we will have savings in University-Wide benefits; however, the campus has reduced its budget projections based upon actual practice, thereby reducing the ability to "capture benefits as savings." In response to Garlin's question about the differences between the Budget document and a year-end expenditures report, Schlereth noted that in the past SSU had not prepared a formal year-end report for distribution. The campus will prepare one at the end of the 1996/97 fiscal year.

After a ten-minute recess, PBAC turned to the Historical Financial Analysis of All Funds (p.16). In response to Terrill's question, Link said there had been Student Health Center Fee increases in 1992/93, 1993/94, and 1994/95. Link noted that the negative variance of $32,001 represented the loss of one management position. It response to Garlin's question, Link noted that the Health Center has always been part of Student Affairs.

Regarding the IRA Variance Available to Academic Affairs (p. 23), Crabbe noted that IRA funds are a pass-through, with the IRA Board recommending the budgets and Academic Affairs receiving the money allocated for the funded programs. She also noted that "part of the deal" when the IRA fee was last raised was that the increased revenue would not be used to offset a reduction in General Fund money. It response to Garlin's question, Barnard explained that IRA programs must be instructionally related; Lacrosse is a "club sport" related to instruction in the Kinesiology department; and funds were utilized for equipment actually used in classes. Terrill questioned whether the Library should be funded through IRA.

Regarding the Total Academic Foundation Variance Available in Academic Affairs (p. 24), Barajas reminded PBAC that the OEE Augmentation to Schools was shown in last week's presentation of Academic Affairs OEE. Farish explained that the division of these funds between the Provost and the schools was the result of "sometimes ancient agreements between the Director, the Dean, and the Provost." He had already had discussions with the California Institute for Human Services about renegotiating the agreement and expected to be doing the same with the Anthropological Studies Center shortly.

Three additional items were distributed. Barajas distributed a sheet entitled "Revenue Growth - $503,290", which identified exisitng (Alumni Director, $88,087), IT Augmentation, $100,000; Academic Clericals, $90,000; Budget Officer, $80,010; and Part-Time Faculty Augmentation, $260,955) as well as planned (Savings to be Allocated, $306,000) expenses, totalling $925,052, and creating a negative nariance of -$421,762. In addition, Farish distributed an Outcomes Analysis for Academic Affairs [which follows page 47 of the 4/17/97 revision of the Historical Analysis], and Schlereth provided a written explanation of the "Utilization of New Funds" for A&F's All Funds Budget.

Following a review of the remainder of the All Funds analysis, PBAC agreed to "Move the Agenda" to the next item.

SUMMARY OF PRIORITY UNFUNDED ITEMS

Schlereth referenced the Agenda Packet and reviewed the Summary of Unfunded Items that had been updated by the University Cabinet. He clarified the reasons for changes from the original document reviewed by the PBAC at a previous meeting.

The Committee then recessed for a Dinner break.

DEVELOPMENT OF BUDGET RECOMMENDATION

Following dinner, Melinda Barnard suggested the Members brainstorm ideas that could then be evaluated as a possible methods to finance the Priority Unfunded Items. The following list of ideas was generated by the Members: (Note: Several of the items listed were generated by Members after the close of the Meeting and transmitted to the PBAC staff).

  1. Utilize Housing Funds to offset the deficit, including those in the Housing Deferred Maintenance Program. Transfer EMT to Housing, saving $100-400K. Conduct outcomes assessment of EMT, to determine cost/benefit.
  2. Utilize Salary-Savings when higher-cost employees are replaced by lesser-cost employees (e.g., a $65K Full Professor replaced at $40K generates savings of $25K plus benefits).
  3. Utilize $306K in enrollment above the base, along with $288K in enrollment growth, and $90K projected to be allocated by the CSU for inflation.
  4. Reduce existing loan payment to Parking by $100,000 and extend term of loan.
  5. Utilize $50K in School Development funds.
  6. Borrow additional funds from SSE; increase computer (and other goods/services prices) to increase net income of SSE available for General Fund use.
  7. Reduce University Scholarship Fund by $50K.
  8. Unitize vacant, unfilled, & currently recruiting positions in each of the 4 Divisions. Fill positions from transfers within the campus & reinstitute the Job Clearing House.
  9. Eliminate the $17K for the internal GAAP Audit.
  10. Evaluate elements of the $800,000 Interfund Loan Replacement. Reduce Instructional Equipment by $100K.
  11. Eliminate the $300K University Reserve.
  12. Evaluate costs/benefits of Residential Life & delivery of service.
  13. Utilize Trust Fund balances to pay one-time costs in deficit (e.g., CSEA/MSA one-time).
  14. Eliminate Faculty Development Funds.
  15. Eliminate funding for Teaching & Learning Productivity.
  16. Reduce assigned Release Time.
  17. Utilize CERF Reserve & Foundation-SSALI Reserve for Instruction Equipment, as a bridge until CSU revenues can rise or growth income comes from CSU.
  18. Reduce Part-Time Faculty & raise SFR slightly. Capture savings of $400,000 resulting from decline in enrollment from 5770 FTES to 5600 FTES.
  19. Eliminate Child Care Center subsidy.
  20. Leave Dean of Education position vacant; collapse instructional units from 5 to 4 schools.
  21. Utilize Deferred Maintenance reserve.
  22. Leave Director of Athletics position vacant.
  23. Collapse Division of Student Affairs and Office of Athletics into one.
  24. Utilize Academic Centers Administrative Overhead funds.
  25. Provide more IRA support to the General Fund. Reduce budget of Athletics to that available within IRA allocation.
  26. Increase miscellaneous course fees to offset reductions in OEE.
  27. Transfer mental-health counselors to Student Health Center, utilize SHC Reserve Fund, and/or increase SHC fee.
  28. Reduce budget of SHC to the available within SHC fee.
  29. Contract with community colleges to provide instruction in remedial education. (Check with CSU campuses which had contracted but now have returned to internal instruction.)
  30. Contract with community colleges 1st & 2nd (lower-division) instruction, resulting in lower costs of FTEF and lower FTES.
  31. Move General Fund degree programs to CERF. Capture savings from transfer of Faculty from General Fund to CERF.
  32. Move Summer Session and Inter-Session to the General Fund in order to meet enrollment targets while reducing Regular Session expenditures (e.g., costs of registration.
  33. Evaluate costs/benefits of Library and Information Technology.
  34. Evaluate cost/benefit of Customer Service Center.

Following the brainstorm session, considerable discussion ensued with respect to next steps. Members decided, by consensus, to ask the PBAC Staff to analyze the ideas and to prepare a presentation regarding the various alternatives for the April 23, 1997 meeting.

Good of the Order

Adjounment

At 9:55 PM Farish adjourned the meeting and reminded Members of the next meeting scheduled for April 23, 1997 from 4-10 PM.

Minutes prepared by Larry Furukawa-Schlereth


PBAC minutes 1996-1997
Updated 2007-12-14
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