April 20 2023 Minutes

PRESIDENT'S BUDGET ADVISORY COMMITTEE

April 20^th, 2023

MEMBERS PRESENT:

STAFF PRESENT:

GUESTS PRESENT:

MEMBERS ABSENT:

AGENDA

1. Call to Order and Welcome

2. Approval of the Minutes: February 2^nd, 2023

3. President’s Updates

4. 23-24 Budget Planning Update

5. Cost of Education Review

6. Announcements for the Good of the Order

1. Call to Order and Welcome
   Provost and Vice President of Academic Affairs, Karen Moranski, welcomed the committee and began the meeting at 8:30 am.
2. Approval of the Minutes: February 2^nd, 2023
   Moranski introduced the agenda and asked if there were any additions. Hearing none, Moranski requested a motion to approve the minutes of the February 2^nd meeting. The minutes were approved unanimously.
3. President’s Updates
   Interim President Mike Lee provided University-wide and System-wide updates. Lee reminded the committee that the Staff, Faculty, and Teaching Assistant's salary increase negotiations are underway and anything that is settled by bargaining becomes mandatory to be funded. Lee also discussed the March Board of Trustees (BOT) meeting. At the BOT meeting, the financial sustainability committee, which is exploring how CSU campuses are currently funded and if that is the most strategic and sustainable funding model, provided a preliminary report. The committee is looking at what the base operating cost for a campus is, regardless of how many students attend that campus, and how much it takes to provide a base level of instruction. It is not known when this committee provide their final report.
   
   Lee then discussed the Voluntary Separation Incentive Program (VSIP) results and shared that Management Personnel (MPP) is now being reviewed, as the MPP positions were not included in the VSIP, to reduce the workforce and help resolve the deficit. In the discussion about VSIP and MPP positions, Lee commented that the University has cut all it can in way of staff before compromising the safety of the University and will now have to take a look at the instructional budget. Interim President Lee has asked Provost Moranski to look into teaching loads across departments, functions, and schools to analyze whether the instructional resources are being utilized effectively. The reason for this analysis is for budget purposes and equity purposes, ensuring teaching loads are equitable across the University. Lee and Moranski both acknowledged there are pedological differences across disciplines and will take that into account.  Moranski noted that assigned time is also being reviewed for the same reasons: budget purposes, and equity across schools.
   
   Troi Carleton asked for an update on the school reorganization plans. Moranski and Lee, both acknowledged it has taken a while to sort out, because of the complexity. Some campus reorganization plans have been announced and are being implemented. Lee has asked the Vice Presidents to consider three things with reorganization plans; take care of the people who are being impacted, have a continuity plan, and have a good communication plan. Moranski shared that reorganization conversations will begin during the week with Deans to start to discuss Academic Affairs reorganization plans.
    
4. 23-24 Budget Planning Update
   Laura Lupei presented the 23-24 budget planning update. Lupei noted that this presentation is similar to the information that was presented at the Spring Budget & Planning forum, but the enrollment projections are updated based on historical yield rates, not the strategic enrollment plan goal figures. With the updated enrollment figures, the estimated deficit in 23-24 is $17.9M. The deficit is comprised of $13.9M from the prior year's base deficit, $4M from a decrease in tuition revenue, and a small increase in revenue ($372K) due to adjustments in the cost allocation plan. Additionally, there are unfunded mandatory costs that are expected to increase the deficit by $346k. The base reduction strategies to address the deficit to date include; VSIP and attrition position savings ($4.8M), MPP position savings ($1.2M), and reduced instructional costs ($2M), totaling about $8M in base strategies. After the base strategies, there is about $9M remaining to resolve the deficit in the 23-24 year. There are a handful of one-time strategies totaling $2.4M to use towards the deficit in 23-24. These strategies include deficit roll forward from PY ($1.9M), use of University Reserves ($750k), Hiring Slowdown Savings ($500k), and New Funding Held Centrally until Needed ($150k). Within the one-time strategies, there is funding being held to cover VSIP payouts for positions that were eliminated through the VSIP program. After all base and onetime strategies, there is $7.5M still to be resolved with additional onetime funding in the 23-24 year, and $9.8M in the base deficit that will roll to the 24-25 year.
   
   Lupei then reviewed the preliminary 24-25 budget. The total projected base deficit for 24-25 is $7.2M. The base deficit includes the $9.8M from the prior year base deficit, a projected increase in tuition revenue of $2.2M, an increase in cost allocation revenue of $750k, and unfunded mandatory costs in the amount of $350K. The base strategies to resolve the deficit to date in 24-25 include an estimated $1.7M in attrition and position savings, and about $104K due to campus partners relocating back on campus, which would result in rental payments to the University. After the projected base reduction strategies, there is $5.4M left to be resolved in the 24-25 year. The deficit needs to be completely resolved, in the base, by the 24-25 year per the guidelines from the Chancellor’s Office.
   
   The committee briefly discussed that more strategies should be explored to resolve the base deficit other than attrition savings and increasing enrollment. With the discussion earlier about the instructional budget analysis and the various division reorganizations, other strategies are being explored but just taking more time due to the complexity of the strategies.
    
5. Cost of Education Review
   ​Lupei reviewed the Cost of Education analysis with the committee. This analysis is to help better understand the University’s spending trends against peer CSU campuses and incorporate the data into the University’s strategic budgeting practices and inform reorganization and reallocation decisions. Lupei first reviewed the definitions of each of the functional categories that are a part of the Cost of Education that will be discussed in the presentation. These categories included Instruction, Academic Support, Student Services, Institutional Support, and Operations and Maintenance of Plant.
   
   Lupei next reviewed the Expenditures Comparison Summary which compares expenditures by Functional Category between SSU, CSU Average, and the Similar Size Average, a composite of campuses with comparable Full Time Equivalent Student (FTES) targets. Compared to Similar Sized Campuses, SSU spends approximately $2.5k less per FTES. But, while receiving less funding per FTES, SSU has been able to allocate 52% directly to students’ academic experience (instruction and student services). This is about 3% greater than the Similar Size Average and 4% above the CSU Average.
   
   Lupei then summarized the proportional spending trends over time and compared them to the CSU averages, and similar size campuses for each functional category. For 2021-22 actual expenditures (the latest year with actuals available for all CSU campuses), SSU was above average in actual spending by proportion in the following categories: Instruction, Academic Support, and Student Services.  The Institutional Support and Operations and Maintenance of Plant categories were the only categories where SSU falls below the CSU Average in proportional spending.
   
   The final aspect of the presentation was looking at the University’s actual FTES per Employee FTE comparisons for each employee type (Faculty, Staff, and MPP). Sonoma State is just below the CSU Average in FTES per Faculty FTE and FTES per Staff FTE, but higher than the CSU Average in FTES per MPP FTE. SSU has 19 FTES per 1 Faculty FTE, 19 FTES per 1 Staff FTE, and 58 FTES per 1 MPP FTE.
    
6. Announcements for the Good of the Order
   Moranski talked about Seawolf Decision Day on April 22^nd. Moranski shared that as of April 19^th, over 600 students, and 1600 people total had planned to come to campus for decision day.
    

Moranski adjourned the meeting at 9:57 am.  

Minutes prepared by Hayley Avery.