September 12, 2024 PRESIDENT’S BUDGET ADVISORY COMMITTEE
Minutes
PRESIDENT'S BUDGET ADVISORY COMMITTEE
September 12th, 2024
MEMBERS PRESENT:
Karen Moranski - Provost, Vice President of Academic Affairs; Chair
M. Monir Ahmed - CFO, Vice President of Administration and Finance; Vice-Chair
Emily Acosta Lewis - Chair of the Faculty, Communications Department
Suzanne Rivoire - Vice-Chair of the Faculty, Computer Science Department
Puspa Amri - Chair of APARC, Economics Department
Elaine Newman - Proxy for Emily Asencio, CFA Representative; Criminology & Criminal Justice
Laura Lupei - Associate Vice President for University Budget and Resource Planning
John Lynch - Staff Representative, Center for Teaching and Educ Technology
Jonathon Duran Del Villar - Vice President of Finance, Associated Students
Vanessa Sanchez - President, Associated Students
Ed Mills - Ex-officio, Vice President of Strategic Enrollment Management
Mike Ogg - Ex-Officio, AVP for Academic Resources
STAFF PRESENT:
Hayley Avery - Budget Manager, Administration and Finance
GUESTS PRESENT:
Anna Reynolds-Smith - Assistant Vice President for Admin and Financial Planning & Business Ops
Ian Hannah - Assistant Vice President for Advancement Operations
Natalie Sanchez - Budget Director Administration and Finance
MEMBERS ABSENT:
Troi Carleton - Dean, School of Social Sciences
AGENDA
- Call to Order and Welcome
- Approval of the Minutes: May 9th
- Draft PBAC Annual Report
- PBAC Orientation
- 2023-2024 Year End Balances
- 2024-2025 Budget Update
- Announcements for the Good of the Order
- Call to Order and Welcome
Provost and Vice President of Academic Affairs, Karen Moranski, welcomed the committee and began the meeting at 9:02 a.m. The committee did a round of introductions as it was the first meeting of the 2024-2025 Academic Year.
- Approval of the Minutes: May 9th, 2024
Moranski introduced the agenda and asked if there were any additions. Hearing none, Moranski requested a motion to approve the minutes of the May 9th meeting. The minutes were approved unanimously.
- Draft PBAC Annual Report
- The committee reviewed the draft annual report for 2023-2024, which highlights the committee's accomplishments over the past year. The committee recommended including links to the minutes from meetings where specific tasks were discussed. These changes will be made, and the revised report will be forwarded to the President.
- PBAC Orientation
The presentation commenced with an overview of campus budget fundamentals for new committee members. It covered the composition of the campus budget, the state system, budget planning timelines, and commonly used terminology. Lupei also provided an overview of the campus's strategic budgeting framework.
- 2023-2024 Year End Balances
Lupei presented the year-end (YE) balances and reserves for 2023-2024, as outlined in the University Operating Fund Reserve Policy. The committee began by reviewing the YE balances for each division. Notably, no division ended the year in deficit, and all rolled balances into the 2024-2025 fiscal year.
The committee then reviewed the 2023-2024 designated balances and reserves, which totaled $23 million. Of this amount, $8.3 million was retained within the divisions as designated balances, leaving $14.7 million in University-Wide reserves. This $14.7 million comprised $775,000 in the operating reserve, $4.6 million in the capital reserve, $1.6 million in the maintenance and equipment reserve, and $1.5 million from 2023-2024 Summer Session revenue. Additionally, it included $1.2 million in savings from the 2023-2024 deficit strategies, $183,000 allocated for Strategic Enrollment Management temporary positions, and $1.2 million earmarked for 2024-2025 recruitment scholarships. This allocation left $3.6 million to be added to the Operating Fund Reserve at the close of 2023-2024. These funds were distributed according to the Operating Fund Reserve Policy and its four categories. With the 2023-2024 Reserve Balance and the YE distribution to the Reserve, the opening reserve balances for 2024-2025 are as follows: the Operating Reserve is $1.9 million, the Maintenance Reserve is $1.9 million, the Capital Reserve is $6.3 million, and the Equipment Reserve is $314,000.
- 2024-2025 Budget Update
Lupei provided a summary of the Fall Budget Briefing for 2024-2025. The final State budget for 2024-2025 included a $240 million increase for the CSU system, following the restoration of the compact. However, due to a state budget deficit, the CSU system also faced a one-time reduction of $75 million, of which Sonoma State will need to contribute its share.
Lupei reviewed changes to the campus revenue budget for 2024-2025, noting that the previous year’s budgeted revenue was $137.6 million. For 2024-2025, the campus anticipates an increase in revenue of approximately $9.7 million from several sources, including designated funds for employee benefit increases totaling $1.6 million, funding for students with disabilities amounting to $23,000, graduation initiative and student success funding of $358,000, and compensation pool funding from both 2023-2024 and 2024-2025, which are expected to contribute $2.6 million and $3.1 million, respectively. Additionally, Title IX funding will provide $400,000, NAGPRA funding will add $200,000, veteran tuition waiver funding will account for $91,000, and other campus revenue adjustments will contribute $5.3 million, along with $523,000 for increased insurance premiums. Conversely, there are revenue decreases from enrollment reallocation for 2023-2024 amounting to $2.2 million, an offset of new state allocation based on a tuition increase for 2024-2025 of $1.9 million, and a redistribution of CSU Financial Aid State University Grant totaling $395,000. Considering both revenue increases and decreases, the total budgeted revenue for 2024-2025 will be $147.4 million.
Budgeted expenses for 2024-2025 total $155 million. With expenses exceeding revenues for this fiscal year, there is a base deficit of $7.4 million. The deficit is composed of unresolved deficits carried over from the prior fiscal year, alongside various revenue and expense adjustments. Specifically, the $7.4 million deficit includes the base deficit of $9.2M from 2023-2024, an increase in tuition revenue of $1.9 million, an increase in cost allocation revenue of $1.8 million, adjustments to other campus revenue totaling $40,000, a net increase from a 6% tuition increase of $38,000, and a reduction from a 3% enrollment reallocation of $2.2 million. In addition to these revenue reductions, various cost increases totaling $4.8 million contributed to the deficit. The University implemented $5 million in base reductions this year, bringing the total base deficit for 2024-2025 to $7.4 million. As previously mentioned, the CSU system faced a one-time reduction of $75 million, with Sonoma State's share being $1 million, resulting in a remaining deficit of $8.5 million to be resolved in 2024-2025.
To address this deficit, the university plans to utilize various one-time funding sources, including excess funds from 2023-2024 deficit strategies amounting to $1.2 million, Summer 2024 revenue of $1.5 million, campus operating fund reserves of $1 million, and campus capital fund reserves of $1.6 million. Additionally, the strategy includes a sweep of unused Indirect Cost (IDC) funds totaling $1.7 million, projected hiring slowdown savings of $600,000, and centrally held new funding of $800,000. The committee briefly discussed the strategy for sweeping unused IDC funds. IDC revenue, generated from campus grant activities, is intended to recover costs associated with grant operations. The Office of Research and Sponsored Programs (ORSP) manages these funds, which had previously accumulated due to a flat cost allocation calculation. The revised methodology now reflects actual costs, allowing for the sweep of $1.7 million in unused IDC funds. It's important to note that departmental IDC funds, which support research and grant applications, will remain unaffected. All mentioned strategies are one-time funding measures aimed at addressing a base shortfall; the underlying base deficit of $7.4M will roll into the 2025-2026 fiscal year.
- Announcements for the Good of the Order
None.
Moranski adjourned the meeting at 10:33 a.m.
Minutes prepared by Hayley Avery.