Sonoma State University

September 3, 2020 Minutes

Minutes

PRESIDENT’S BUDGET ADVISORY COMMITTEE

September 3rd, 2020

 

MEMBERS PRESENT:

Karen Moranski Interim Provost, Vice President of Academic Affairs; Chair Joyce Lopes Vice President of Administration and Finance; Vice-Chair Jerlena Griffin-Desta Chief of Staff and AVP for Strategic Initiatives and Diversity Jeffrey Reeder Chair of the Faculty; Modern Languages & Literature

Laura Krier Vice-Chair of the Faculty; University Library

Elita Virmani Chair of APARC; Early Childhood Studies

Erma Jean Sims CFA Representative; Literacy Studies & Elementary Ed. Laura Lupei Senior Director for University Budget and Planning, A&F

Audra Verrier Staff Representative, Career Services

Melissa Kadar President, Associated Students

Jonathan Dominguez Vice President of Finance, Associated Students

 

 

STAFF PRESENT:

Elias Lopez AVP for Academic Resources, Academic Affairs

Hayley Avery Budget Manager, Administration and Finance

 

 

GUESTS PRESENT:

Judy K. Sakaki President, Sonoma State University

Ian Hannah Assistant Vice President for Advancement Operations

Anna Reynolds-Smith Director, Administrative and Financial Planning, Student Affairs Natalie Sanchez Budget Director, Administration and Finance

 

 

MEMBERS ABSENT:

Troi Carleton Dean, School of Social Sciences

 

 

AGENDA

 

  1. CALL TO ORDER AND WELCOME
  2. APPROVAL OF THE AGENDA AND MINUTES: May 14th, 2020 & June 19th, 2020
  3. WELCOME & INTRODUCTIONS
  4. ANNOUNCEMENT’S FOR THE GOOD OF THE ORDER
  5. PRESIDENT’S RESPONSE & CHARGE
  6. FALL BUDGET BRIEFING
  7. BUDGET CALL RESULTS

 

  1. CALL TO ORDER AND WELCOME

Interim Provost and Vice President of Academic Affairs, Karen Moranski, welcomed the committee and began the meeting at 8:30 am.

 

  1. APPROVAL OF THE AGENDA AND MINUTES

Moranski introduced the agenda and asked if there were any additions. Hearing none, Moranski requested a motion to approve the minutes of the May 14th and June 19th meetings. Minutes were approved unanimously.

 

  1. WELCOME & INTRODUCTIONS

This meeting was the first for the 2020-2021 Academic Year so the committee members introduced themselves and their position on the committee.

 

  1. ANNOUNCEMENTS FOR THE GOOD OF THE ORDER

Joyce Lopes announced that a couple of PBAC members had received questions about the budget from a Sonoma State Star reporter and that Laura Lupei will be responding to them.

 

  1. PRESIDENT’S RESPONSE & CHARGE

(Please see the September 3rd agenda packet for related documents)

 

President Judy Sakaki was in attendance to thank the committee for the work last year and to set goals for the 2002-2021 year. The President expressed her appreciation for the Annual Report that was submitted and thanked the committee for all the work done in 2019-2020. The President highlighted the Budget Call as an essential tool in guiding the campus through deficit planning. She expressed her gratitude for the role the committee plays in being a sounding board for Cabinet and the Campus and the main point of communication to the various stakeholder groups each of the members represent. The President outlined that the communication with the stakeholder groups the members represent will be essential in this year and years to come as we navigate challenging budget environments. She asked the committee to engage with their stakeholder groups and receive their feedback and bring those comments to the committee as we work to accomplish the 2020-2021 PBAC goals.

 

The President discussed with the committee the goals to focus on in the 2020-2021 year. The committee should focus on creating a contingency framework to guide annual spending of the contingency funds for the University; refining and continuing the annual budget call process; continuing the all-funds budget discussions, and planning for the 2021-2022 fiscal year. The President continued to discuss the importance of the committee’s role in the economic future of the campus and for everyone to think about how to set the University up for future success. It may include making tough decisions as the University faces more state allocation and enrollment revenue losses but the committee should be a part of those decisions providing feedback where necessary. The President expressed her appreciation for all the committee has done and will continue to do to improve transparency and communication around the University’s budget.

  1. FALL BUDGET BRIEFING

(Please see the September 3rd agenda packet for related documents)

 

Laura Lupei presented the final 2020-2021 budget. As new information became available there have been many iterations of projections for the 2020-2021 budget, but this presentation outlined the final numbers for the 2020-2021 year. For the 2020-2021 enrollment, the final planning number is 7,188 bringing the final enrollment decrease over the prior two years to 1,750, which will result in a $9.9M reduction in base enrollment revenue. The final reduction in state allocation is $299M system-wide, which is about an

$8.5M reduction to Sonoma State. In 2019-2020 the Campus Budget was $149M. The changes in revenue for 2020-2021 include a $9.9M reduction in enrollment revenue, $8.5M reduction in state allocation revenue, $480K reduction due to redistribution of the State University Grant, and about $587K reduction in other campus revenue sources. There was a $1M allocation to the University for salary and benefit increases, bringing the 2020-2021 Campus Budget to $131M. The University is facing about a $20M deficit in the 2020-2021 year, which includes the revenue reductions outlined above ($18M), and the following cost changes: the allocation of the salary and benefits cost increase funding ($1M), the reduction in financial aid ($480K), unfunded mandatory costs ($859M), and a portion of the structural deficit from the 2019-2020 year ($21K), totaling about a $20M deficit to address in 2020-2021.

 

Lupei then reviewed four main strategies that are being taken toward solving the $20M budget deficit. The first strategy is utilizing $1M of Operating Reserves following the University Operating Fund Reserve Policy. This provides a temporary solution to the base deficit but will help bridge the gap as the deficit quickly became much larger than originally anticipated. Pausing phase II of the Staff Equity increases is another strategy being put in place. Pausing phase II equity will result in about $551K of base funding to be applied to the deficit. The third strategy is the central pooling of the salary savings of the vacant position funds across divisions, which will result in an estimated $752K in additional one-time funding for the deficit. The final strategy was reissuing the Budget Call to Divisions. Each Division was required to meet the 12% reduction with a mix of one-time funding and base reductions. Reissuing the budget call is the main strategy from a dollar amount standpoint resulting in approximately $15.2M to be applied to the 20/21 deficit, $7.7M in base funding, and $7.5M in one-time funding. All four strategies total about $17M to utilize for the deficit, leaving about $2.8M to be resolved by the end of the 2020-21 year and about $11.6M in a base deficit to roll to 2021-2022.

 

The committee discussed the possibility of utilizing other funding sources for cash flow issues, such as the endowment, but Lopes responded that it would make more sense to look to the system to solve any projected cash flow issues as 99% of the endowment is restricted by donor intent. The amount of reserves being used was also discussed and Lupei will bring more detailed information on the reserve and the amount available for use towards the deficit to the next meeting.

 

  1. BUGDET CALL RESULTS

(Please see the September 3rd agenda packet for related documents)

 

Lupei presented more detailed information on the results from the reissued budget call. The total goal for the budget call was to identify $15.2M to apply to the deficit, specifically with 50% in base funding and 50% in one-time funding. The University achieved the goal and all divisions met their outlined amounts.

Between all division’s there were a couple of main strategies used, which included: reductions in unassigned vacant personnel dollars, reduction in MPP/COS position lines through non-retention, reduction in vacant MPP/COS and staff lines, reductions in the lecturer pool funding, reductions in vacant coaching positions, reductions in student assistant budgets, and reductions in operating expense budgets. Through all these strategies, divisions were able to meet their 12% reductions. There was a discussion on how to move forward with additional deficit planning and how the University would handle the additional base reductions. Lopes and Moranski both outlined the University will be utilizing the strategic budgeting framework and looking at the Universities priorities as well as utilizing feedback from campus stakeholders to meet future reductions.

 

 

Moranski adjourned the meeting at 10:00 am. Minutes prepared by Hayley Avery.