PRESIDENT'S BUDGET ADVISORY COMMITTEE

Minutes September 6, 2001

MEMBERS PRESENT

STAFF PRESENT:

MEMBERS ABSENT:

STAFF ABSENT:

GUESTS:

AGENDA

APPROVAL OF THE AGENDA

Bernie Goldstein brought the meeting to order at 8:09AM. Dennis Harris moved and Steve Wilson seconded a motion to approve the proposed agenda. The agenda was passed unanimously.

APPROVAL OF THE MINUTES: May 24, 2001

Lynn McIntyre moved and Rand Link seconded a motion to approve the minutes of the last meeting. Scott Gordon asked that the minutes be corrected to reflect his attendance at that meeting. There being no other corrections, the minutes were approved as corrected, with one No vote (Harris) and no abstentions.

YEAR-END FINANCIAL REPORT: 2000-2001

Financial Report 00/01
Item University-Wide Utilization Fund Amount
EXECUTIVE OFFICE   $ 90,255
ACADEMIC AFFAIRS   $ 1,553,519
STUDENT AFFAIRS   $ 117,983
ADMIN & FINANCE   $ 495,662
UNIVERSITY-WIDE   $ 807,545
Educational Mentoring Team Bridge $ 100,000  
Faculty Handbook $ 110,000  
Student Programming Augmentation $ 54,000  
Academic Affairs Fleet Management $ 25,000  
ETC Completion $ 19,250  
Athletics Disk Practice Equipment $ 25,000  
Athletics Scoreboard Connection $ 40,000  
Alcohol Education Program $ 25,000  
Parents Weekend $ 10,000  
Gym Floor $ 220,000  
Workstation Program Shortfall $ 100,000  
Roll-Forward - Utility Budget $ 79,295  
Total Utilization $ 807,545  
Total Funding   $3,064,964
     

Larry Furukawa-Schlereth introduced the item by explaining the two sources of funds contained in the Year-End Financial Report:

  1. savings in each division, which roll forward to the following year according to policy
  2. funds budgeted by not expended or committed in University-Wide, which includes Employee Benefits, Utilities, the Risk Pool, Financial Aid, and excess revenues

For 2000-2001, excess revenues resulted from university fees for 87 FTES, and about 120 above the targeted enrollment of 6,145 FTES. Savings in Benefits resulted from the savings of the large number of new faculty and staff positions created and budgeted but not filled until sometimes long after the July 1 beginning of the budget year. For the divisions, salary savings from budgeted, but unfilled positions, are a one-time savings that roll forward to that division for the next year. Rather than allocate the University-Wide savings to the divisions on the marginal cost formula, the Vice Presidents met and drew up a list from existing needs. Harris, noting that the original Faculty Handbook was created in late 1970's and had not be updated since Diamandopoulus left in the early 1980's, commended Academic Affairs and the Cabinet for finally addressing this need. Phil McGough asked for clarification on why this was before PBAC, to which Schlereth replied that it was the responsibility of PBAC to provide advice to the President. Catherine Nelson asked how the expenditure of the roll-forward of the Division of Academic Affairs would be determined; in response, Goldstein responded that the issue would be discussed in the Vice President's Budget Advisory Committee. Melinda Barnard stated that she was outraged at the violation of PBAC procedures. The expenditure of University-Wide roll-forward money had never been decided by any committee other than PBAC. She noted that the $807 thousand reserve could have been utilized to establish the long desired PBAC goal of creating a University Reserve.

Rick Luttman asked what other options were considered. He also noted a letter from Bill Houghton that informed Lecturers their proposed pay levels for 2001-2002 would be reduced. He expressed his belief that the University-Wide roll-forward should be used to maintain Lecturers' pay. In response to an assertion that the alleged reduction was the result of a rounding problem with PeopleSoft, both Schlereth and Wilson stated that this was not true; according to Wilson, a modification was made to the new software that took care of the initial problem. Gordon asked whether the issue of Lecturers' pay was an issue to be resolved by the Provost or the President, to which Schlereth responded that it was the Provost's prerogative.

Victor Garlin returned to the item under "University-Wide" labeled "Faculty Handbook". He asserted that this was incorrectly titled, that the amount ($110,000) related to the settlement of a Personnel Issue. According to Garlin, this was incorrectly assigned to "University-Wide"; instead, funds "should come from the unit were the problem first arose". Wilson responded that Garlin's proposal would open the possibility of examining all problems with financial costs that were resolved by the university. Garlin replied that the problem was one of Risk Management and of the University's behavior toward its personnel. Schlereth provided the committee with background on the CSU Risk Pool program and the campus' responsibility for the first $100,000 of costs per Risk Pool expense. To spread the risk broadly and not go back to the individual unit or budget "responsible", it has been SSU policy to bare the deductible costs at the "University-Wide" level. McGough expressed his disagreement with the unit assessment approach proposed by Garlin, stating that this is "one University" and that assigning responsibility to a unit for purposes of assessment would be divisive.

Luttmann asked if the vice-presidents could identify the items they had proposed for coverage through the "University-Wide category. In response, Schlereth said that he had proposed the utility roll-forward, the work station program shortfall, the ETC completion, and the faculty handbook. Goldstein identified the EMT bridge, and, along with Schlereth, the Fleet Management transition. Link identified the student programming, athletics equipment, athletics scoreboard, alcohol education, parents weekend, and gym floor expenditures. With regard to the latter, Link noted that Athletics was primarily funded through the IRA program, that there was no ongoing source of funds for athletic facilities improvements, and that the gym was significantly utilized by the Kinesiology department and by Recreation Sports, not by Intercollegiate Athletics. In response to a question from Luttman, Link stated that roll-forward funds in Student Affairs were already committed to various items.

Bernard asked to return to her original point, that beyond those items specifically included as part of University-Wide by policy, it was the prerogative of the PBAC to make recommendations to the President on what unfunded items should be covered by any year-end University-Wide surplus. Schlereth indicated his agreement with Bernard's point regarding proper procedure and suggested that the surplus be distributed to the units by the marginal cost formula, with the vice-presidents working out among themselves coverage of the unfunded items. A motion to this effect was moved by Schlereth and seconded by Harris. After some discussion, Wilson proposed to amend the motion by retaining the following items within University-Wide: the EMT bridge, the Handbook/Risk Management issue, ETC completion, the gym floor, workstation program shortfall, and the utility roll-forward. After further discussion, the motion, as amended, was passed with 18 Ayes, 1 Nay (McIntyre), and No Abstentions.

GOVERNOR'S FINAL BUDGET: 2001-2002

Final Budget FYE02
Item SSU Directly CSU
Marginal Cost - Growth: 8,760 FTES 305 FTES, $2,176,000 $ 62,310,000
Compensation 2% Salary Pool $ 40,760,000
Mandatory Costs Insurance & Benefits $ 20,442,000
Natural Gas Increase (00-01 - 1X) $433,000 $ 62,310,000
Governor's Teaching Fellowships SSU participation $ 17,500,000
YRO Conversion   $ 16,013,000
Natural Gas Price Increase, 01-02 $383,000 $ 15,523,000
Technology Equipment & Network TII Equipment $ 11,599,000
State University Grants Financial Aid - Growth $ 6,055,000
Governor's K-12 Technology Training Pass-through $ 6,000,000
Channel Islands None $ 3,000,000
Central Valley Economic Incubator None $ 650,000
Cal Tech and CPEC Study None $ 528,000
Marine Studies Matching Funds None $ 500,000
CSU, PERB, Pasadena 1X None $ 200,000
Center for California Studies None $ 114,000
SFSU Labor Art Exhibit None $ 100,000
Less Agricultural Research Initiative Budget Reduction None $ -1,000,000
TOTAL   $218,850,000

Schlereth briefly reviewed the outcome of state budget deliberations reflected in the above table. He then distributed the following sheet from the May packet for comparison with the final outcome:

ATTACHMENT II [from May 24, 2001 PBAC packet] LIKELY CSU MANDATES AND NEW SSU UNIVERSITY-WIDE ITEMS 2001-2002

Schlereth noted that the first two items reflected PBAC policy recommendations, which the President had accepted. The next five were CSU mandates that the campuses were required to finance. The two SSU construction shortfalls, that for the renovation of Salazar and that covering custodial services required by the ETC above the CSU allocation formula reflected costs in excess of budgets. And the last reflected uncertainties in the costs of utilities resulting from a variety of factors.

Schlereth then turned to the following table. He noted that the New Discretionary Revenue included the withholding of $500,000 until the campus reaches 102% of the enrollment target of 6,450 FTES, since Fall enrollment has historically exceeded both Spring enrollment and the budget target. However, everyone is feeling very confident that SSU will meet its enrollment target. Since Academic Affairs will also receive over 79% of the money withheld, the total to Academic Affairs under the marginal cost formula will exceed $865,000 once Census Date - September 26th - confirms that SSU has met or exceeded its enrollment target.

McGough noted that the total to Academic Affairs was approximately $500,000 less because of the cost of the new University-Wide items that had been taken off the top. He questioned whether the amount to Academic Affairs was sufficient to staff Instruction at a ratio of 20 to 1, noting the SSU has been exceeding this ratio. He also noted that the percentage of the Full-Time Equivalent Faculty (FTEF) represented by Lecturers has continued to increase at SSU, asserting that the allocation of new revenue to Academic Affairs was meaningless unless the campus is adding Tenure-Track Faculty. Garlin noted that of the total $ 2.2 million generated by the Marginal Cost formula for increased enrollment, Academic Affairs would receive less than 40%, not the 79% reflected in the table. Schlereth noted that the University-Wide items included both CSU mandates and SSU self-imposed expenditures.

ALLOCATION OF NEW DISCRETIONARY REVENUE: 2001-2002

ALLOCATIONS

Discretionary Funding
Funding Source Amount
305 FTES @ Marginal Cost $7,133 $ 2,176,000
Increase in Discretionary Lottery Funding $ 45,301
Less Contingency, Failure to Meet Target $ -500,000
Total $ 1,721,301

Less New University-Wide Items
Item Amount
PBAC Desk Top Replacement Program Phase I $ 150,000
PBAC University Reserve Phase I $ 150,000
CSU Risk Pool Program $ 150,000
CSU Common Management System $ 350,000
CSU Fee Waiver Reduction Initiative $ 30,000
CSU Audit Assessment $ 23,000
CSU Audit Finding Rental Payment: Nursing to Health Center $ 3,000
SSU Construction Shortfall, Salazar Renovation $ 150,000
SSU Custodial Services - ETC, above CSU Allocation $ 15,000
SSU Executive Office Position $ 60,000
SSU Risk Management, Athletics $ 50,000
NET NEW DISCRETIONARY REVENUE $ 590,301

Discretionary Allocations
Division Amount
Executive Office 2.11% $ 12,455
Academic Affairs 79.38% $ 468,581
Student Affairs 2.49% $ 14,699
Administration and Finance 16.02% $ 94,566
TOTAL DISCRETIONARY ALLOCATIONS 100% $ 590,301

A motion was made by Harris and seconded by Ogg to recommend to the President the proposed allocation of New Discretionary Revenue for 2001-2002, excluding the next to last item - $60,000 for funds to replace one-time money in the Executive Office that had funded a University Affairs position for a Media Specialist. Bernard moved, and Garlin seconded, an amendment to exclude the last item on the list, $50,000 in funds to provide rental buses for Intercollegiate Athletic travel. As amended, the motion passed with 13 Ayes, 5 Nays (Garlin, Bernard, McGough, Luttmann, and Byrne), and 1 Abstention (Burke)

With time running out, Schlereth announced that the remainder of the items on the agenda would be continued to the October meeting.

The meeting adjourned at 10:08 AM.

Minutes respectfully submitted by Dennis Harris. September 18, 2001


PBAC minutes 2001-2002
Updated 2008-01-23
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