President's Budget Advisory Committee

Minutes October 2, 1997

Approved by PBAC, 20 November 1997

Members Present:

Staff Present:

Members Absent:

Guests Present:

Meeting Agenda

Materials Distributed With Agenda

Introduction of New Members

Don Farish brought the meeting to order at 8:10 AM and began by introducing new members to the PBAC including:

Don also indicated that Marty Ruddell, while not new to the Committee, was now serving as an AARCC representative substituting for Paul Crowley.

University Response to the CFA Budget Analysis

Larry Furukawa-Schlereth distributed the University's Response to the CFA Budget Analysis which was published by the CFA in May, 1997. Farish indicated that if members had questions regarding the Response or wished to discuss it in depth, the item could be placed on a future meeting agenda.

1996-1997 Year-End Financial Report

Farish then recognized Steve Wilson who presented the 1996-1997 Year-End Financial Report referencing a document that had been distributed with the Agenda. Specifically, Wilson noted that the following resources were being "rolled" from the respective Division's 1996-1997 Year-End Balance to that Division's 1997-1998 spending authorization:

"Rolled" Resources
Area 96-97 Surplus or (Deficit) Revenue Above Benchmark Roll-Forward to 97-98
Executive Office $ 53,572   $ 53,572
Academic Affairs (361,105) $579,925 218,820
Student Affairs 52,360   52,360
Administration/Finance 51,910   51,910
University Wide 113,322   113,322

Wilson provided detail regarding revenue in excess of the revenue-bench-mark by explaining the following financial information:

Revenue in Excess of Revenue Bench Mark
Area Benchmark for 1996-1997 Actual Achieved
1996-1997
Surplus/(Deficit)
State University Fee $ 9,774,000 $ 10,041,659 $ 267,659
Non-Resident Tuition $ 610,000 $ 705,971 $ 95,971
Application Fee $ 265,500 $ 397,715 $ 132,215
Enrollment Deposit $ 24,000 $ 25,995 $ 1,995
Transcripts $ 10,725 $ 6,252 $ -4,473
Library Fines $ 48,000 $ 50,001 $ 2,001
Late Registration $ 7,775 $ 17,125 $ 9,350
Returned Check Fee $ 3,000 $ 2,280 $ -720
Miscellaneous Revenue $ 25,000 $ 927 $ -24,073
Allowance for Bad Debt $ -100,000 $ -0- $ 100,000
       
TOTAL $ 10,668,000 $ 11,247,925 $ 579,925

Wilson concluded his report by indicating that surplus resources in the 1996-1997 University-Wide budget had been rolled to the 1997-1998 University Wide Reserve Account. The Reserve Balance as of October 1, 1997, he noted, stood at $65,951 as indicated below:

Reserve Balance as of October 1, 1997
Item Amount
University-Wide Roll Forward from 1996-1997 $113,322
1996-1997 Risk Pool Deductible Charges from CSU $-17,371
Summer Orientation - 1x Augmentation $-5,000
Film Series - 1x Augmentation $-5,000
One Time Augmentation to Information Technology In Lieu of ATT Long Distance Savings $-10,000
One Time Augmentation to University-Wide Revenue associated with lateness of GTE Mobilnet Lease execution $-10,000
Reserve Balance Available $65,951

1997-1998 Final General Fund Budget

Schlereth then explained the 1997-1998 final general fund budget indicating that the budget incorporated recommendations made to Dr. Armiñana by the President's Budget Advisory Committee (PBAC). He noted that changes in the PBAC recommendation were the result of variances in PBAC planning parameters and the actual budget received from the CSU as reflected below:

  1. Annually, the CSU calculates budget appropriations for financial aid and makes adjustments in the campus general fund appropriation. Two items, not known to the PBAC related to financial aid, were made by the CSU including:
    -a reduction of $255,000 in the State University Grants (SUG)
    The impact of reducing the SUG allocation results in an equivalent reduction to the annual amount available to award to SSU eligible students.
    -an increase of $3,429 in the Perkins State Match
    The impact from the match requirement to the Perkins loan program requires campus internal financing not previously planned for.
  2. Working from the Trustee's original budget request, the PBAC anticipated an allocation of $178,000 for deferred maintenance. The final budget incorporated $151,000 for this purpose. The impact of this reduction will be a reduction in the number of deferred maintenance projects originally anticipated by the Division of Administration and Finance. Reductions in the deferred maintenance allocation is a direct result of a change in the PBAC anticipated salary increase pool from 3.4% to 4.0%.
  3. The PBAC had anticipated a $488,500 allocation for the Assured Access Program. While the CSU reflects an allocation for technology at the System level, no allocation to any campus from this fund has yet been made. We are aware that the System-Wide technology allocation was reduced from $13.5 million to $8.5 million to assist in funding the increase in the salary pool. At the same time, we have received assurances that full funding will be forthcoming for this important campus priority.
  4. The increase in the salary pool from 3.4% to 4.0% required the CSU to eliminate funding for inflationary growth, thought to be approximately $81,000. This new base resource was to be allocated to Academic Affairs.
  5. The initial premium increase to the CSU risk pool was planned at $300,000. After distribution to self-supporting funds, the final impact to the general fund was a premium increase of $181,055. This resulted in a savings of $118,945 which has been distributed as follows:
Premium Increase
Item Amount Total
Risk Pool Premium Savings   $118,945
Plus Savings from Cola in Excess of Allocation $5,000  
Less: Loss of Inflationary Increase $-81,000  
: Perkins Loan Match $-3,429  
Difference in C/O and Campus Revenue Projections $-29,200 $108,629
FY 97/98 General Fund Reserve

$10,316

The CSU final budget for SSU along with the PBAC recommendations to the President combine to produce the following budget appropriations for University-Wide, the Executive Office, Academic Affairs, Student Affairs and Administration and Finance:

Budget Appropriations
Area 1996-1997 1997-1998
University-Wide $13,816,960 $15,293,485
Executive Office $932,597 $885,116
Academic Affairs $29,151,591 $29,531,609
Student Affairs $1,272,461 $1,462,849
Administration and Finance $6,341,887 $6,338,173
TOTAL $51,515,496 $53,511,232

The following data illustrates the detailed changes in each of the above base budgets.

University Wide
Item Amount Note
Salary Increase Pool $1,650,000 (To Be Allocated)
Net Change in Employee Benefits $120,325 *
CSU Internal Audit Charge $6,400  
Increase in Risk Pool -- General Fund $181,055  
Decrease in State University Grants $-255,000  
Increase in Perkins State Match $3,429  
Increase in Utilities -- New Buildings $20,000  
Elimination of Thermal Energy Storage Payment* $-60,000 **
Elimination of Inter-fund Loan Debt Service** $-200,000 ***
Reserve $10,316  
1997-1998 Base $15,293,485  

* Reflects (a) increases in benefits associated with the salary increase pool, (b) PBAC recommended reductions in employee benefits, and (c) the PBAC recommendation to eliminate one position in both Academic Affairs and the Executive Office.

** Per the PBAC recommendation, Thermal Energy Storage debt service will be financed by fully costing the various special funds for utility usage.

*** Per the PBAC recommendation, internal loan debt service will be financed by the University-Wide budget appropriation for space management which will liquidate during the 1997-1998 fiscal year.

Executive Office
Item Amount Note

1996-1997 Base

$932,597

PBAC Recommended Reduction

$-47,481

*

1997-1998 Base

$885,116

**

* Vacant Public Affairs position. Variance between $47,481 and actual PBAC recommendation will come from a reduction in Benefits in University-Wide.

** Per the PBAC recommendation, the Executive Office must fund its on-going costs associated with the CSEA/MSA Settlement. In addition, the Executive Office will be assessed its share of any shortage that occurs in the University-Wide budget.

Academic Affairs
Item Amount Note
1996-1997 Base $29,151,591  
Transfer of Athletics to Student Affairs $-210,388  
Reduction in Information Technology - ATT $- 20,000 *
PBAC Reduction $- 64,344 **
New Resources, Enrollment Growth $287,750  
New Resources, Inflation $81,000  
New Resources, Revenue above the Base $306,000 ***
1997-1998 Base $29,531,609 ****

* $10,000 will be provided to Information Technology on a one-time basis from the campus Reserve to permit full savings from the new ATT long distance contract to be realized.

** Vacant administrative position occupied by Bonnie Moody. Variance between $64,344 and actual PBAC recommendation to come from a reduction in Employee Benefits in University-Wide.

*** Represents a permanent change in the Academic Affairs bench-mark revenue from 1996-1997. New bench-marks are illustrated below:

Academic Affairs Benchmarks
Item 1996-1997 Benchmark 1997-1998 Benchmark
State University Fee $9,774,000 $9,853,200
Non-Resident Tuition $610,000 $706,000
Application Fee $265,500 $400,000
Enrollment Deposit $24,000 $26,000
Transcripts $10,725 $12,000
Library Fines $48,000 $50,000
Late Registration $7,775 $18,000
Returned Check Fee $3,000 $3,000
Miscellaneous Revenue $25,000 $5,800
Sub-total $10,768,000 11,074,000
Less Allowance for Bad Debts $-100,000 $-100,000
TOTAL $10,668,000 $10,974,000

Academic Affairs' benchmark revenue was increased a total of $306,000 of which $306,000 has been permanently allocated to the division's base expenditure budget. In accordance with campus financial policy, actual revenues collected above $10,974,000 will be allocated to Academic Affairs as an augmentation to their FY 98/99 expenditure budget. Schlereth noted that specific individual benchmarks would likely be adjusted by the Provost but indicated that these changes would not impact the total target benchmark revenue of $10,984,000.

**** Per the PBAC recommendation, Academic Affairs must fund its on-going costs associated with the CSEA/MSA Settlement. In addition, Academic Affairs will be assessed its share of any shortage that occurs in the University-Wide budget.

Student Affairs
Item Amount Note
1996-1997 Base $1,272,461  
Transfer of Athletics from Academic Affairs $210,388  
Health Center revenue adjustment $-20,000  
1997-1998 Base $1,462,849 *

* Per the PBAC recommendation, Student Affairs must fund its on-going costs associated with the CSEA/MSA Settlement. In addition, Student Affairs will be assessed its share of any shortage that occurs in the University-Wide budget.

Administration and Finance
Item Amount Note
1996-1997 Base $6,341,887  
New Allocation for Deferred Maintenance $151,000  
Funds for New Buildings - Facilities $47,596  
PBAC Reduction $-202,310 *
1997-1998 Base $6,338,173 **

* In addition to this reduction, and consistent with the PBAC overall recommendation, Administration and Finance is also assigned financial responsibility for payment of the following items:

Administration and Finance - Additional Responsibilities
Item Amount
Implementation Costs -- CSEA/MSA Settlement $90,000
Back-Pay, General Fund CSEA/MSA Settlement $378,000

** Per the PBAC recommendation, Administration & Finance must fund its on-going costs associated with the CSEA/MSA settlement. In addition, Administration and Finance will be assessed its share of any shortage that occurs in the University-Wide Budget.

Schlereth concluded his report by indicating that the University's detailed Expenditure Plan for 1997-1998 (commonly known as the "black book") would be published in January, 1998.

Fall Semester Meeting Schedule and Agenda

Farish then facilitated a discussion regarding agenda topics for the Fall semester. Members indicated a desire to focus on a variety of issues during the Fall and early Spring including an estimate of future revenue projections, development of appropriate fiscal planning parameters, methodologies to establish financial priorities, mechanisms to insure Division autonomy, strategies to encourage accountability and analytical activities related to potential cost saving initiatives identified in Spring, 1997. It was agreed that the PBAC would begin by examining those concepts identified in 1996-1997 that could not be implemented in 1997-1998.

Members also agreed to meet two additional meeting times in Fall, 1997 - once in November and once in December on Thursday mornings between 8 and 10 AM. Schlereth agreed to coordinate specific meeting times.

Adjournment

There being no additional business, Farish adjourned the meeting at 9:50 AM.

Minutes prepared by Larry Furukawa-Schlereth


PBAC minutes 1997-1998
Updated 2007-12-14
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