November 9, 2023 Minutes

PRESIDENT'S BUDGET ADVISORY COMMITTEE

November 9^th, 2023

MEMBERS PRESENT:

STAFF PRESENT:

GUESTS PRESENT:

MEMBERS ABSENT:

            AGENDA

1. Call to Order and Welcome
2. Approval of the Minutes: October 5^th, 2023
3. President’s Updates
4. 23-24 Campus Partner Budget Review
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 8:32 a.m.

2. Approval of the Minutes: October 5^th, 2023

Moranski introduced the agenda and asked if there were any additions. Moranski requested a slight change to the minutes to indicate that the budget needed to be balanced by July 1, 2024 instead of by the end of 24-25. The change was accepted and there was a motion to approve the minutes of the October 5^th meeting. The minutes were approved unanimously.

3. President’s Updates

President Lee spoke about the recent two-day Board of Trustees meeting in Long Beach. There were three main issues that the President focused on.  The first main issue was compensation. At the time of the meeting five of the bargaining units had signed tentative agreements. The Teamsters and CFA currently do not have signed tentative agreements. The Teamsters have planned a one-day strike on November 4^th, 2023 while CFA plans on having a one-day strike at four campuses during the first full week of December. The new agreements will have an impact on the campus budget as they are not fully funded from the increase in state allocation.  The second main issue was the current state budget. It is difficult to forecast the year end revenue at this time. Thankfully, the governor still supports the multi-year compact providing 5% base increases each year of the compact.  The final issue was the Budget Reallocation Plan that would affect seven under enrolled campuses including Sonoma State. The affected campuses have made progress to meet their enrollment goals, but it may not be possible to meet them in the given timeframe. The campuses will be asking for additional time to achieve the goals. The President reminded the committee that while there some difficult decisions to be made in the future, we must be mindful while cutting costs to ensure that any cost saving measure implemented will not cause issues down the road or limit opportunities.

4. 23-24 Campus Partner Budget Review

Natalie Sanchez presented the 2023-2024 Campus Partner Review. The campus partners consist of the self-support programs and the auxiliary entities. 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 the programs dealing with those two major factors is going. Almost all campus partner funds are budgeted to utilize reserves in the 2023-2024 year to balance their budgets.

The Residential Education and Campus Housing (REACH) continues to improve its position in relation to pandemic revenues. In 2022-2023 the program was able add to its reserves to bring them up to 58% of its reserve goal. The Campus Union will continue to utilize reserves due to enrollment decline and increased costs, in particular in its debt service payment as the prior year was the final year of a reduced debt service payment amount as a result of a system debt refinance.  Transportation and Parking Services (TAPS) is expecting a slight dip in revenue due to enrollment and increased costs for debt service.  The School of Extended and International Education (SEIE) is operating with a deficit that will exhaust available reserves. The program is currently working on a robust plan to balance the budget and a plan to bring them to a balanced cash position for this fiscal year. The group asked for more information on the plan to balance the budget.  Moranski elaborated that this may include ending programs with little to no revenue and outdated programs, and rethinking how SEIE and the campus work together. The committee also had a discussion regarding course modality and how that may contribute to future planning around SEIE.  The Green Music Center (GMC) has been operating in a budgeted deficit for the past five years, similar to other performing arts institutions. The Instructionally Related Activities (IRA) has continued to see lower revenues but utilized reserves to minimize the effects on both the above the line and below the line programs.  Both the Student Health Center (SHC) and the Counseling and Psychological Services (CAPS) programs continue to be impacted by the decline in enrollment.  These programs have been utilizing reserves to balance their budgets for the past several years.

The Auxiliary entities include Sonoma State Enterprises (SSE), Associated Students (AS), and Sonoma State University Foundation (SSUF). SSE is still is still experiencing a reduction in revenue that started during the pandemic. While the program has been able to reduce expenses to align with revenues in past years, it will need to make use of reserves this year.  AS continues to experience reduced revenues due to low enrollment numbers and is utilizing reserves to balance its budget. SSUF has a balanced budget this year as its revenue stream is not affected by the pandemic or enrollment decline and there are few expenses the entity is responsible for. The recent increase in SSUF’s reserves ($599k to $3.78m) was due to a large board designated endowment. 

Overall, the campus partners, similar to the operating fund budget, have been working to align expenses with decreasing revenues due to the enrollment decline. Most programs have enough reserves to help transition and most have multi-year plans that show the gaps shrinking as enrollment begins to stabilize over the next several years.
 

5. Announcements for the Good of the Order

None.

Moranski adjourned the meeting at 9:30 a.m.  

Minutes prepared by Shawn Taylor.