August 31, 2023 Minutes

PRESIDENT'S BUDGET ADVISORY COMMITTEE

August 31^st, 2023

MEMBERS PRESENT:

STAFF PRESENT:

GUESTS PRESENT:

MEMBERS ABSENT:

            AGENDA

1. Call to Order and Welcome
2. Approval of the Minutes: May 11^th, 2023
3. President’s Updates
4. Reorganization Updates
5. Priorities for the Year
6. Fall Budget Briefing
7. 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 8:35 a.m. It was the first meeting of the 2023-2024 Academic Year so the committee took time for introductions.

2. Approval of the Minutes: May 11^th, 2023

Moranski introduced the agenda and asked if there were any additions. Hearing none, Moranski requested a motion to approve the minutes of the May 11^th meeting. The minutes were approved unanimously.

3. President’s Updates

President Lee was unable to attend the meeting, so no updates were provided from the President.

4. Reorganization Updates

Provost Moranski and CFO Monir Ahmed both updated the committee on recent reorganizations within their respective Divisions. Ahmed outlined that Athletics has moved to the Division of Student Affairs and Information Technology (IT) has moved into Administration and Finance. Additionally, there has been some restructuring within the Risk Management, Human Resources, Accounting, and Environmental Health & Safety departments which was outlined in the May 3^rd campus communication. Ahmed also shared the Chancellor's Office has hired, and is funding, an Energy Manager. This position will work with Sonoma State, San Francisco State, and Stanislaus, on various energy initiatives, sustainable practices, and applying for grants that can help fund various initiatives.

Moranski shared reorganization updates that pertain to Academic Affairs. Strategic Enrollment Management has now been moved to a separate division under Interim Vice President Ed Mills. This unit will also take on orientation, which was previously run through Student Affairs. Moranski updated the committee about the School of Extended and International Education (SEIE) reorganization. With a significant loss of revenue over the past couple of years, SEIE is working on a revitalization of programs. There have also been some personnel changes in SEIE and as the reorganization of the unit is still in progress, Karen Schneider will be the Interim Executive Director as the long-term needs and financial sustainability of the school are worked out. Additionally, within Academic Affairs, the Office of Research and Sponsored Programs (ORSP), will no longer have an Associate Vice President, there will be a Senior Director, and the unit will report to the AVP of Faculty Affairs and Success. The Center for Environmental Inquiry (CEI) will no longer be in the ORSP unit, CEI will now report directly to the Provost Office. The Center for Community Engagement (CCE) will be combined with the Learning and Academic Resource Center (LARC).

5. Priorities for the Year

Moranski and Ahmed led a conversation about campus priorities for the 2023-2024 year. The President and the Cabinet are focused on enrollment and resolving the budget deficit. There will be efforts to create a more individualized marketing plan for enrollment, as well as increasing international recruitment efforts. Strategic Enrollment Management is also looking to involve more current students in recruitment efforts, by increasing student content and the number of student ambassadors. Solving the budget deficit by June 30^th, 2024 remains a top priority and leadership is looking for ways to increase operational efficiencies and increase revenue. Improving campus infrastructure and maintaining student services continue to be important priorities for the University in 2023-2024 as well.

6. Fall Budget Briefing

Laura Lupei presented the Fall 2023 Budget Briefing to the committee. The beginning of the presentation reviewed some of the campus budget basics for new committee members. The presentation summarized the composition of the campus budget, the state system and campus budget planning timelines, and commonly used terms.  Lupei also provided an overview of the campus's strategic budgeting framework.

Lupei then reviewed the 22/23 Year End (YE) Balances and Reserves. This information is annually reported to the committee per the University Operating Fund Reserve Policy. To begin, the committee reviewed the YE balances for each division. The YE balances graph shows the starting base budget and revised budget for each division, as well as expenses for the year. The year-end balance amount is the sum of the revised budget less expenses. No division ended the year in deficit and all rolled balances into the 23/24 year.

The committee then reviewed the 22/23 YE designated balances and reserves.  The total 22/23 campus budget YE balance was $23.8M. Of the $23.8M, $9.3M was kept within the divisions as designated balances, leaving $14.5M in University-Wide. The $14.5M in University-Wide consisted of; $849K in the operating reserve, $5M in the capital reserve, $1.1M in the maintenance and equipment reserve, $1.8M in remaining HEERF funding, $1.5M in 22/23 deficit strategy savings, $912k to various University Wide designated balances, leaving $3.4M to

be allocated to the Operating Fund Reserve to end 22/23.  These funds were allocated according to the Operating Fund Reserve Policy and the four categories within the policy. Including the 22/23 Reserve Balance and the 22/23 YE distribution to the Reserve, the 23/24 opening reserve balances are as follows; Operating Reserve $1.9M, Maintenance Reserve $1.5M, Capital Reserve $6.6M, and Equipment Reserve $339K.

Lupei then provided the Fall Budget Briefing summarizing the 2023-2024 budget. The prior year's campus budgeted revenue was $137.9M. For 2023-2024, the campus will receive increases to revenue of about $3.8M from the following sources; designated funds for employee benefit increases ($2.9M), 2022-2023 student basic needs funding ($99K), 2022-2023 graduation initiative funding ($405K), and funding for increased insurance premiums ($333K). There are also decreases to campus revenue in the following categories; redistribution of CSU Financial Aid State University Grant ($-415k) and other campus budgeted revenue decreases ($-3.6M). With the revenue increases and decreases, the total 2023-2024 campus budgeted revenue is $137.7M.

Budgeted expenses for 2023-2024 total $147M. With expenses exceeding revenues for this fiscal year, there is a base deficit of $9.3M. The majority of the $9.3M base deficit consists of the base deficit that was not resolved in the prior fiscal year that carried over to 2023-2024. The remainder of the $9.3M deficit consists of various revenue decreases and increases including an enrollment revenue decrease ($4M), an increase in cost allocation revenue ($602K), and a reduction in other campus revenue ($50K). In addition to revenue reductions contributing to the deficit, there were also various mandatory cost increases totaling $5.5K. The University did take $8M in base reductions this year, which brings the total base deficit for 2023-2024 to $9.3M.

While there is a remaining base deficit, there is also a plan to address it utilizing various one-time funding sources. The one-time funding sources include: excess funds from 22/23 deficit strategies ($1.8M), remaining HEERF funding ($1.5M), central comp pool funds – use in onetime ($315K), use of campus operating fund reserves ($1.2M), hiring slowdown savings ($500K), new funding held centrally ($300K), and onetime funding from divisions ($4M). There are also remaining payouts for VSIP and other personnel actions budgeted to come from University Wide that will cost $290K. It is important to note that these strategies are one-time funding strategies being used for a base shortfall and the base deficit will roll to 2024-2025.

7.Announcements for the Good of the Order

None.

Moranski adjourned the meeting at 10:05 a.m.  

Minutes prepared by Hayley Avery.