May 11, 2023 Minutes

PRESIDENT'S BUDGET ADVISORY COMMITTEE

May 11^th, 2023

MEMBERS PRESENT:

STAFF PRESENT:

GUESTS PRESENT:

MEMBERS ABSENT:

            AGENDA

1. Call to Order and Welcome
2. Approval of the Minutes: April 20^th, 2023
3. President’s Updates
4. Reorganization Updates
5. May Revise Update
6. Campus Partner Review
7. 22-23 Accomplishments & 23-24 Goal Planning
8. 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 a.m.

2. Approval of the Minutes: April 20^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 April 20^th meeting. The minutes were approved unanimously.

3. President’s Updates

President Lee discussed the progress the University has made over the 2022-2023 year. Lee reflected on the uncertainty the University was feeling at this time in the prior year and how the past academic year was a time for renewal and a year to focus on student success. Lee reminded the committee of the goal set this year to resolve the budget deficit by the 2024-2025 fiscal year and closing out 2022-2023 meant the University is halfway to that goal. There was significant progress made in 2022-2023 but there is still work to be done to resolve the entire budget deficit by 2024-2025. President Lee spoke strongly about his and the campus leadership's commitment to being transparent through the process and to continuing to seek feedback on how to best build back the campus.

4. Reorganization Updates

Provost Moranski and CFO Monir Ahmed both updated the committee on recent reorganizations within their respective Divisions. Ahmed referenced a campus announcement that was emailed to the campus community on May 3rd, 2023. The reorganizations within Administration and Finance included changes in the following departments; Environmental Health & Safety, Risk Management, Facilities, Human Resources, and Financial Services.

Moranski discussed reorganizations within the Academic Affairs division. Moranski outlined that reorganizations within Academic Affairs would take place within three categories. One category is programmatic reorganizations. There are currently program reviews being done with a group from the Academic Master Plan (AMP), as well as Grays Associates, a consultant group funded by the Chancellor's Office. Moranski stated these groups would not be making specific recommendations on what to do with programs but would be a useful tool in looking at the program array. The program evaluation reports from these groups are expected to be done in Fall 2023. A second category of reorganizations for Academic Affairs is administrative reorganization. This involves looking at non-academic units and making recommendations on how to consolidate, which could result in management personnel reductions. The third category of reorganizations for Academic Affairs would be Academic School reorganizations. Moranski discussed that they are just starting to share notes of potential school reorg plans, which would involve reducing the number of schools and departments. Moranski shared an example that is in progress involving the School of Extended and International Education (SEIE). SEIE has been financially struggling for the past two years and the school is unable to support a Dean position. There will be an Executive Director for a year while plans to merge SEIE with the School of Business and Economics are worked out. Faculty on the committee inquired about what would happen with International Programs as well as how summer sessions would be handled with this reorg plan. Moranski responded that International Programs would be moving stateside to admissions as a recruiting tool and summer sessions would most likely still be supported by SEIE staff.

Moranski discussed that in these School reorgs, there will likely be fewer department chairs as there will be fewer departments, and there is hope to save money on instructional costs by putting tenure track faculty back in the classroom. Moranski stated that there would be no decisions made during the summer and the plan for these reorgs would be discussed with Faculty in the 23/24 Academic Year. Napoleon Reyes, the CFA representative, requested a meet and confer ahead of time of any school reorg plans to voice concerns early in the process. Moranski replied that she and the AVP for Faculty Affairs would reach out to set it up.

5. May Revise Update

Laura Lupei shared an update on the May revise. The May revision is scheduled to be released on May 12th, 2023, and is not expected to be substantially different than the January Governor's budget. Projected revenue receipts are down for the state as many people have deferred taxes, but it is still expected that the CSU will receive the compact funding outlined in the January Governor's budget. Lupei shared that any significant changes in the budget happen towards the end of May through June with the legislature.

6. Campus Partner Review

Lupei presented a budget update for all campus partner units. The campus partners consist of the self-support programs and the auxiliary entities within the University. The presentation reviewed the various policies that govern self-support and auxiliary programs and then went into a detailed five-year budget review of each program. The five-year budget review showed how the programs were performing pre-enrollment decline and pre-pandemic, what the effects of the enrollment decline and pandemic have had on the campus partner programs, and how the recovery of those two major factors is going. Almost all campus partner funds are budgeted to utilize reserves in the 2022-2023 year to balance their budgets.

The Residential Education and Campus Housing (REACH) program has mostly recovered from the pandemic-related loss of revenue as students are now back living on campus. The enrollment decline has continued to affect REACH's budget, but in 2022-2023 the program was able to budget an allocation to reserves. The Campus Union still collected fees throughout the pandemic but the enrollment decline has affected their revenue and the program is budgeted to utilize reserves in 2022-2023. Transportation and Parking Services (TAPS) has been slowly recovering since the pandemic when most all operations, students and employees, were remote and not paying for parking passes. The enrollment decline has also affected their revenue but the program has been able to allocate to reserves for the 2021-2022 and 2022-2023 years. The School of Extended and International Education (SEIE) prior year budgets have not reflected how the program has performed. The SEIE program has utilized a significant portion of its reserves in the 2021-2022 year due to low-performing program revenue and lack of aligning expenses to the shrinking revenue. SEIE will utilize most of its remaining reserves in the 2022-2023 year. The Green Music Center (GMC) has been operating in a budgeted deficit for the past five years, similar to other performing arts institutions. The GMC has received a large gift about every three years which allows the program to utilize reserves each year to balance their budget. The Instructionally Related Activities (IRA) program has seen shrinking revenue due to the enrollment decline, but the reason for utilizing reserves has been the commitment the program kept to fund the “below the line” programs. The Student Health Center (SHC) and the Counseling and Psychological Services (CAPS) programs have both collected revenue throughout the pandemic as they still collected fees, but their revenue has still declined due to enrollment. Both programs have been utilizing reserves for the past couple of years to balance their budgets.

The Auxiliary entities include Sonoma State Enterprises (SSE), Associated Students (AS), and Sonoma State University Foundation (SSUF). SSE has seen a significant decline in revenue due to the pandemic, the entity has still not been able to get all dining operations up and running since closing for COVID. SSE has been able to adjust expenses down to balance their budget in 2022-2023. AS has experienced a decline in revenue due to enrollment and is intentionally spending into reserves to cover its expenses. SSUF has been adding to reserves for the past four years because its revenue stream is not affected by the pandemic or enrollment decline and there are few expenses the entity is responsible for.

Overall, the campus partners, similar to the operating fund budget, need to align expenses with decreasing revenues due to the enrollment decline. Most programs have enough reserves to help transition into smaller expense budgets, but it will be prudent for programs to reduce base expenses to remain financially healthy for years to come.

7. 22-23 Accomplishments & 23-24 Goal Planning

The committee reviewed the accomplishments for the 2022-2023 year and discussed some goals and plans for the 2023-2024 committee. The main accomplishments for 2022-2023 include: strategic enrollment planning, multi-year enrollment planning, multi-year budget planning, the Fall and Spring budget forums, the PBAC working group, system-wide enrollment planning, the cost of education analysis, and 23-24 budget planning. For the 2023-2024 year, the new Vice President for Strategic Enrollment will be attending meetings, which will be beneficial to the committee as enrollment greatly affects the budget.

Moranski thanked the 2022-2023 PBAC members for their work this year.

8.Announcements for the Good of the Order

None.

Moranski adjourned the meeting at 10:00 a.m.  

Minutes prepared by Hayley Avery.