President's Budget Advisory Committee

Minutes February 26, 1998

Approved by PBAC, 26 March 1998

Members Present:

Staff Present:

Members Absent:

Meeting Agenda

APPROVAL OF THE AGENDA

Don Farish brought the meeting to order at 8:10 AM and asked for a motion to approve the Agenda. A motion was made by Katharyn Crabbe. A second was obtained from Debbie Gallagher. The Agenda was approved unanimously.

APPROVAL OF THE MINUTES

Farish asked for a motion to approve the Minutes of 1-26-98. A motion was made by Dennis Harris. A second was obtained from Steve Wilson. The Minutes were approved unanimously.

RECOMMENDATIONS REGARDING THE 1998-1999 BUDGET

Larry Furukawa-Schlereth presented recommendations prepared by the Cabinet Officers regarding the 1998-1999 General Fund Budget (Attachment I). He noted that the recommendations were developed during a recent Cabinet Retreat and reflected a starting point for the PBAC, VPBAC and CRC to consider.

Following Schlereth's presentation, discussion ensued. Key points and questions raised included the following:

The PBAC agreed, by consensus, to forward the Cabinet's Recommendation to both the VPBAC and the CRC for discussion and debate. Members also agreed, by consensus, to double the number of PBAC meetings in April and May in order to give the Committee ample time to develop budget recommendations for the President.

COLLABORATIVE MANAGEMENT SYSTEMS

Schlereth referenced materials contained in the Packet (Attachment II) related to the CSU Collaborative Management System initiative. He asked Members to review the material prior to the March meeting and noted that revised data would also be available at that time.

GOOD OF THE ORDER

No items were raised for the good of the order.

ADJOURNMENT

As it was approaching 10:00 AM, Farish indicated that discussion on CMS would dominate the March meeting of the PBAC. The meeting was then adjourned at 9:58 AM.

Minutes prepared by Larry Furukawa-Schlereth.


ATTACHMENT I
CABINET RECOMMENDATIONS REGARDING THE 1998-1999 BUDGET

NEW GENERAL FUND REVENUE

The 1998-1999 Governor's Budget incorporates the following new General Fund revenue for Sonoma State University:

1997-1998 represents the third year of a three year funding commitment from the CSU for the campus-based assured access requirement. Resources to continue this financial commitment are not currently reflected in the Governor's Budget.

The University has determined that projected revenue from the GTE Mobilnet lease will not materialize as anticipated in 1997-1998. In addition, costs associated with the gray water project and sewage bills are anticipated to increase in fiscal 1998-1999. Loss of revenue and new expenses will be offset by projected utility savings related to the deregulation of electricity in California.

ALLOCATION OF NEW GENERAL FUND REVENUE

The Cabinet recommends Sonoma State University follow the intent of both the Governor and the Trustees in the allocation of new revenue to the various budget units on campus. The following specific recommendations are offered:

4% Salary Increase Pool Revenue
Recommendation: Per the terms of the Collective Bargaining Agreement
New Revenue - Workers Compensation
Recommendation: To University Wide - Risk Pool Premium
New Revenue - Deferred Maintenance
Recommendation: To Administration and Finance-Facilities
New Revenue - Teacher Preparation
Recommendation: To Academic Affairs
New Revenue - Technology
Recommendation: To Academic Affairs-Information Technology
Revenue Adjustments - Financial Aid
Recommendation: To University-Wide: Financial Aid

For the past academic year, the University has served several hundred students above funded enrollment levels. Both the Trustees and the Governor have recognized this reality and provided resources to fully address target enrollment as determined by the campus.

The $5900 marginal cost of each new full-time equivalent student recognizes that each new student impacts the instructional, academic support, student services, and institutional support operations of the campus. Specific percentage calculations are reflected in the 1998-1999 Support Budget documentation provided by the Trustees.

The CSU Financial Information Reporting Management System (FIRMS) makes it possible to ascertain where instructional, academic support, student services, and institutional support budgets are deployed within the four Divisions of the University. Utilizing the Trustees Marginal Cost of New Enrollment percentages in concert with FIRMS produces marginal cost of new enrollment percentages for SSU. Following the view of the Trustees as expressed to the Governor, it is the Cabinet's recommendation that Sonoma State University utilize these percentages in the allocation of new enrollment/discretionary resources as outlined below:

Distribution of Expense
Division Percentage Amount
Executive Office 2.18%

$23,391

Academic Affairs 86.22%

$925,142

Student Affairs 2.14%

$22,962

Administration/Finance 9.46%

$101,505

TOTAL 100%

$1,073,000

The Cabinet has identified the following University-Wide, on-going budget priorities.

New University-Wide On-Going Priorities
Item Amount
Disability Resources - Risk Management $150,000
Scholarship Coordinator: $60,000
Land Acquisition $60,000
President's Operating Expense $50,000
University Scholars Program $60,000
Executive Compensation $25,000
Overhead Costs - Endowment $325,000
Less Prior Year Appropriations $- 60,000
Less Full Costing: Self-Sustaining Funds $-150,000
TOTAL $520,000

New University-Wide on-going needs are partially off-set by the utilization of resources from prior-year appropriations that, if left unspent, will revert to either the CSU or the State of California.. The Cabinet also believes it appropriate to complete the full-costing of auxiliary corporations, special funds and self-sustaining campus entities begun in 1994-1995. To date, this initiative has addressed the Sonoma State Enterprises, the Parking Program, Instructionally Related Activities and the Housing Program. Funds remaining include the Health Center, the Student Union Corporation, the Associated Students, the California Institute for Human Services, the Anthropological Studies Center, and certain portions of Continuing Education, SALLI and the Center for Distributed Learning.

The Cabinet believes the $520,000 remaining on-going University-Wide needs should be allocated based on the marginal cost of new enrollment among the instructional, academic support student services and institutional support units of the campus as indicated below:

Distribution of Expense
Division Percentage Amount
Executive Office 2.18% $11,336
Academic Affairs 86.22% $448,344
Student Affairs 2.14% $11,128
Administration/Finance 9.46% $49,192
TOTAL 100% $520,000

DIVISION SPECIFIC NEEDS

Academic Affairs

To a large degree, items identified as needing additional financial support in Academic Affairs were addressed in the development of the 1997-1998 budget where the implications of the failed Partners for Excellence initiative were fully explored. Nevertheless, certain needs still exist especially in the areas of instructional equipment, faculty development, Admissions and Records, and Division-Wide general operating expense.

The Provost has indicated he believes it possible to generate new revenue within Academic Affairs via a greater return from the Continuing Education program, greater support from grants and contracts and, as appropriate, changes in the method by which certain portions of the curriculum are provided to students. The Cabinet believes Academic Affairs, working collaboratively with the Academic Affairs Redesign Coordinating Committee and the VPBAC, should continue to explore efforts in academic redesign in order to finance unfunded needs.

Student Affairs

Resources for student programming, a Student Activities/Greek Advisor, the current operating deficit in the Student Health Center, and the need for a part-time compliance officer in Athletics represent key budget priorities in Student Affairs.

The University has received several consultant reports which indicate that cost savings are possible in the Health Center, the Associated Students, and the Student Union Corporation through consolidation of administrative expense, change in service delivery methods, and exploration of new revenue sources via insurance reimbursement. The Cabinet believes Student Affairs, working collboratively with the Associated Students, the Student Union Board and the Student Health Center Advisory Committee, should explore the necessary reengineering and revenue enhancement efforts in order to finance unfunded needs.

Administration and Finance

Significant growth in grants and contracts, substantial new endowment activity, the implementation of various audit recommendations, debt service associated with the CSEA/MSA settlement, and the financing of the University Center are fiscal needs in Administration and Finance.

Administration and Finance has launched a bad-debt collection program which has proven successful. The Division has also developed a comprehensive administrative reengineering plan designed to reduce costs. Finally, the Division has opportunities to realize enhanced revenue from the Sonoma State Enterprises, and the on-campus Housing Program. The Cabinet believes Administration and Finance, working cooperatively with the CRC, should explore these strategies to finance unfunded needs.

Executive Office

The Executive Office has a need for one additional professional in Public Affairs, along with clerical and professional support in Development.

Greater synergy between school-based and University-based fundraising efforts could offset the need for additional professionals in Development. The Cabinet recommends that the Vice-President for Development and the Provost explore this potential reengineering strategy. To fund Development clerical support and professional support in Public Affairs, the Cabinet believes the campus can finance these expenditures at the rate of one FTE per fiscal year in 1999-2000, 2000-2001 and 2001-2002 respectively.

NEXT STEPS

In keeping with the objectives of the expanded PBAC and the role of the VPBAC and CRC in the overall budget recommendation for the President, the Cabinet recommends the following process for final recommendations regarding the 1998-1999 budget:


ATTACHMENT II
COLLABORATIVE MANAGEMENT SYSTEMS

BACKGROUND

In 1995-1996, Senior Vice-Chancellor Richard West asked CABO to develop recommendations regarding administrative software for the CSU. Richard's concern was prompted by three factors including (1) the perceived obsolescence of the Information Associates Financial Reporting System (FRS) (2) the desire of the CSU to develop its own payroll system and (3) the lack of integrated and efficient administrative software on the campuses.

CABO responded to Richard's concern by creating a Collaborative Management Systems Task Force (CMS). The concept of collaboration was and remains important to CABO since it is likely that the overall costs of acquiring and implementing new administrative software will be lower if CSU campuses do so in a collaborative fashion rather than proceeding as individual entities. The CMS Task Force initially consisted of identified CABO members but was later augmented by representatives from the Vice-President for Student Affairs and the Vice-President for Academic Affairs groups.

The CMS Task Force, with the assistance of external consultants, developed a number of guiding principles that have been adopted by the CSU. Key among these include the concept of an integrated suite of administrative software, an enterprise-wide solution and an incentive program to encourage collaboration. CMS also implemented a process which included extensive participation of CSU financial, human resource, enrollment management, financial aid and information resource professionals, to identify those vendors who are able to meet the needs of the CSU. The Executive Council, the various CSU Commissions, CABO and the Vice-Presidents for Academic Affairs have been informed of the CMS work and progress.

CURRENT STATUS

  1. CMS has identified three vendors who are able to meet the needs of the CSU including SCT, Peoplesoft and the Oracle Corporation.
  2. In February, 1998, the CSU will complete the "best and final offer" phase of negotiation with the three vendors.
  3. CMS will recommend incentives for collaborative efforts around a single vendor.
  4. CMS has received preliminary indications of interest regarding the vendors from the campuses. After consultation with Frank Tansey, Mark Resmer, Drew Calendrella, Edna Nakamoto and Steve Wilson, SSU has indicated its interest lies with SCT.
  5. Because of concern over the transition from the State Controller's Office Payroll System to a CSU maintained payroll operation, CMS will likely proceed first with the implementation of the human resource component followed by the financial management system and concluding with the student records/financial aid portion of the integrated suite of administrative soft-ware.
  6. In March or April, 1998, final cost data will be available for the campuses to consider as will information regarding the CSU incentive program for collaboration.
  7. In April, 1998 CSU campuses will be asked for final commitments regarding intentions to participate (if at all) and when they believe their participation (if any) will be effective.
  8. Target date for implementation is July 1, 1998.
  9. Campuses who elect to participate as of July 1, 1998 will encounter the following opportunities and challenges:

SSU OPTIONS

Three options exist for Sonoma State University

  1. choose to join the collaborative at a date later than July 1, 1998
  2. choose to join the collaborative as of July 1, 1998
  3. choose not to collaborate and work independently

Cost factors differ depending on the option chosen. The data presented below must be considered as preliminary since it will change once additional information is known regarding final vendor prices and the level of incentive subsidy from the CSU.

Cost Factor Differences by Option
Factors Option #1
Collaborate at a Date Later Than JULY 1, 1998
Option #2
Collaborate as of JULY 1, 1998
Option #3
Choose Not to Collaborate and Proceed Independently
Preparation for New Payroll System Not addressed in 98-99 Addressed in 98-99 Probably not addressed in 98-99
Potential Vulnerability of Student Records System Not addressed in 98-99 Progress made in 98-99 Probably not addressed in 98-99
Progress toward integrated administrative systems Not addressed in 98-99 Progress made in 98-99 Probably not addressed in 98-99
Ability to influence vendor choice None Significant Complete
Ability to influence collaborative None Significant Complete
Autonomy of campus decision making in this area Complete until participation Limited - 1vote in the Collaborative Not Applicable
Impact of Workload None Significant Very Significant
Impact on budget None* Attachment Attached
Impact on staffing None Being Analyzed Being Analyzed

*Cost to join collaborative at a later date will require an "entry" fee not required of initial participants

COLLABORATIVE MANAGEMENT SYSTEMS PRELIMINARY COST ESTIMATE

Costs associated with the CMS Project are presently uncertain with final estimates a function of several factors including (1) the degree of collaboration among the CSU campuses (2) the level of subsidy from the CSU (3) the viability of a consolidated data center for administrative computing and (4) the final price negotiated with the vendors.

Costs components with approximate ranges can be determined and are reflected below:

Capital Costs

Implementation

On-Going Costs


PBAC minutes 1997-1998
Updated 2007-12-14
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