February 24, 2022 Minutes

PRESIDENT'S BUDGET ADVISORY COMMITTEE

February 24th, 2022

MEMBERS PRESENT:

STAFF PRESENT:

GUESTS PRESENT:

MEMBERS ABSENT:

AGENDA

1. Call to Order and Welcome
2. Approval of the Minutes: January 27^th, 2022
3. All Funds Review
4. Budget Forum Planning
5. 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: January 27^th, 2022
   Moranski introduced the agenda and asked if there were any additions. Hearing none, Moranski requested a motion to approve the minutes of the December 16^th meeting. Minutes were approved unanimously.

3. All Funds Review
   Laura Lupei presented the 2021-2022 Campus Partner Review, starting with two major definitions:
   1. Auxiliary: Auxiliary organizations at the California State University are non-profit organizations and separate legal entities. Auxiliary organizations were created to perform essential functions associated with a postsecondary educational institution, which under California law were difficult, cumbersome, or legally restricted for the university and were not supported by state funding
   2. Self-Support: Self-support programs are defined as those not receiving state general fund appropriations; instead, fees are collected to pay the full cost of a program
      
      ​Lupei then discussed the Fee Policies that govern the way the fees are structured within the CSU. There are three main laws/policies: California Education Code, California Code – Title 5, and the CSU Student Fee Policy – Executive Order (EO) 1102. On campus, the Student Fee Advisory Council provides advisory recommendation on most fee categories to the President, who has final authority. The campus also submits an annual Student Fee Report to the Chancellor’s office each August.
      
      Two other major policies were discussed that affect the auxiliary and self-support units. EO 1000 (Cost Recovery) ensures that costs incurred by the CSU Operating Fund for services, products, and facilities provided to other CSU funds and to Auxiliary Organizations are properly and consistently recovered. E0 994 is an Executive Order to address several Debt and Financing topics including Debt capacity, general financing guidelines, and self-support reserve guidelines. The campus reserve policies, at a minimum, should address the following needs: Major Maintenance and Repair/Capital Renovation and Upgrades, Working Capital, Capital Development for New Projects, and Catastrophic Events.
      
      Sonoma State University has eleven distinct Campus Partners spilt into two main categories: Self Supports, and Auxiliaries.There are currently eight Self Supports: Residential Education and Campus Housing (REACH), Campus Union, Transportation and Parking Services (TAPS), School of Extended and International Education (SEIE), Green Music Center (GMC), Instructionally Related Activities (IRA), Student Health Center (SHC), Counseling and Psychological Services (CAPS).
      
      There are currently three separate Auxiliary units on campus: Sonoma State Enterprises (SSE), Associated Students (ASI), and the Sonoma State University Foundation (FDN). These organizations are separate, non-profit, legal entities.
      
      In the 21-22 Fiscal Year (FY), six of the eight Self Supports are expected to end the year with losses. To give context to the 21-22 FY budget, the presentation included the prior two FY budgets to show the effects of the pandemic and enrollment decline.
      
      REACH had net revenue of $5.5M in FY19-20, followed by a loss of $12.2M in FY20-21 due to the pandemic. In FY21-22, REACH is projected to end in a $1.6M deficit. This loss does not include an estimated $10M in HEERF revenue that REACH is expected to receive. It is projected that the REACH Reserve Goal of $56.6M will be 21% funded based on the reserve goals set by the campus as guided by EO 994 by the end of FY 21-22. Conversation ensued about the $10M in HEERF funding REACH is projected to receive. The committee would like more information on the HEERF funding plan to get a better sense if $10M is the appropriate amount to be given to REACH.
      
      Campus Union had net revenues of $24.2K in FY19-20, followed by a loss of $468.6K in FY20-21. In FY21-22, the loss increased slightly to $530.7K. The budgeted losses in Campus Union are due to the enrollment decline. It is projected that the Campus Union Reserve Goal of $6M will be 136% funded by the end of FY 21-22.
      
      TAPS had net revenue of $555.4K in FY19-20, followed by a loss of $1.9M in FY20-21 due to the pandemic. In FY21-22, the revenues recovered with a net gain of $95.2K. It is projected that the TAPS Reserve Goal of $2.5M will be 55% funded by the end of FY 21-22.
      
      SEIE had net losses of $506K in FY19-20, followed by losses of $235.8K in FY20-21. In FY21-22, the unit adjusted their expenses to match the lower projected revenue and budgeted a net gain of $48.9K. It is expected that the SEIE Reserve Goal of $6M will be 51% funded by the end of FY 21-22.
      
      GMC had a budgeted net loss of $506K in FY19-20, followed by another budgeted loss of $235.8K in FY20-21. In FY21-22, the budgeted losses continue with a shortfall of $357.2K. GMC does not currently have a Reserve goal but is projected to have $370k in reserves to end the 21-22 FY.
      
      IRA had a net loss of $40.7K in FY19-20, followed by a net gain of $233.6K in revenues for FY20-21. In FY21-22, the IRA program has a budgeted loss of $43.2K. It is projected that the IRA Reserve Goal of $1.2M will be 313% funded by the end of FY 21-22.
      
      SHC had a net loss of $434.4K in FY19-20, followed by reduced loss of $95.3 for FY20-21. In FY21-22, the net loss is projected to be $6.2K as the unit works to realign expenses with less revenue due to the enrollment decline. It is projected that the SHC Reserve Goal of $3M will be 166% funded by the end of FY 21-22.
      
      CAPS had net revenue of $20.1K in FY19-20, followed by a loss of $30.7K for FY20-21. In FY21-22, the budgeted loss grew to $243.7K due to the enrollment decline as well as an increase focus and spending on mental health services for students. It is projected that the SHC Reserve Goal of $275K will be 224% funded by the end of FY 21-22.
      
      In the 21-22 FY, two of the three Auxiliaries are expected to end the year with losses.
      
      Sonoma State Enterprises ended FY19-20 with a balanced budget. In FY20-21, SSE faced a $4.4M loss due to COVID 19 pandemic shutdowns. With the campus opening back up for FY21-22, the deficit for SSE will shrink to a budgeted $1.5M. SSE is projected to end the year with a reserve balance of $2.8M, down from $8.5M in FY19-20.
      
      Associated Students also had a balanced budget in FY19-20. In the next year, AS had a small deficit of $4.5K. In FY21-22 it is anticipated that the deficit will increase substantially to $374K. They are projected to end this year with $3.3M in reserves which is slightly below the reserve levels for the previous two years.
      
      The Sonoma State University Foundation did relatively well the past 3 years with positive net revenue. In FY19-20, they ended with net revenues of $105K. In the next year, the saw a 23% reduction in net revenues ($81K). For FY-21-22 the are expecting a similar decrease in net revenues ($65K). FDN has been able to steadily increase their reserves from $377.7K in FY19-20 to an expected ending balance for FY21-22 of $574K.
      ​
4. Budget Forum Planning
   There was a brief conversation regarding the upcoming Spring 2022 Budget and Planning Forum to be held March 10^th. The discussion was about the format of the forum which is similar to previous forums. There will be presentations from Campus leadership and then roundtable discussions lead by PBAC members to gather feedback from the Campus community. The feedback from the forum will be available at the next PBAC meeting in April.
    
5. Announcements for the Good of the Order

None.

Moranski adjourned the meeting at 10:05 am. 

Minutes prepared by Shawn Taylor.