BUDGET OFFICE Patrick Lenz, Assistant Vice Chancellor

Business and Finance News The California State University  Business and Finance Division 

Richard P. West, Executive Vice Chancellor and Chief Financial Officer Ffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffffff______

NEWS FROM THE DEPARTMENTS November 2002

The CSU budget includes $292.8 million from the 2003/04 Partnership Agreement funding and another $115.8 million that was requested but not funded during the 2002/03 fiscal year. The budget recognizes $78.6 million to meet the 2003/04 mandatory costs for the ongoing, full-year costs of faculty (average 2.64% increase) and non-faculty compensation agreements, as well as the increased costs for a 28.5 percent increase in the employer’s portion of employee health benefits premiums, CSU insurance premiums for risk management, and the on-going maintenance, custodial, landscape, utilities, and administrative services required to open and operate 878,200 square feet BUDGET OFFICE of new space coming on line in 2003/04. Patrick Lenz, Assistant Vice Chancellor The CSU budget plan also includes $118.9 million On October 31, 2002, the Board of Trustees for 5 percent enrollment growth (16,057 FTES), approved a $408.7 million increase for the above budgeted enrollment in the current year. 2003/04 California State University Support Actual demand has already exceeded funded Budget to meet the mandatory costs, enrollment enrollment in the current year by nearly 3 percent. growth, employee compensation, and long-term Partnership funding is also being used for YRO needs of the system. The budget increase is based Conversions (1,683 FTES), Financial Aid, Long- on the Partnership Agreement with the State that Term Needs, a 2.46 percent non-faculty recognizes an annual funding increase of 4 compensation adjustment, and a 1 percent percent, a funding increase of 1 percent for the compensation increase for all employees. long-term core budget needs, 5 percent increase in enrollment growth, and a State General Fund System budget priorities for the additional $115.8 “buyout” of student fee revenue. million are to fund a 3 percent faculty and non- faculty compensation increase, $35.6 million to While $408.7 million is optimistic given the fund the first year costs to hire more full-time state’s fiscal condition, it does represent the faculty (ACR 73), funding for three Off-Campus funding needs for the CSU to continue providing Centers ($3 million), and for High Cost Academic student access while maintaining quality education Programs ($ 5.9 million). to ensure students’ success. The Board did not take any action regarding student fees but the budget plan does include a revenue set-aside to Additional Funding for Campus Enrollments increase funding for the CSU State University Grant program and to fund increases in CSU mandatory fee waivers. 1 The Budget Office is allocating funds for the 1%  Distinguished Service Award: Jack Williams, increase in campus enrollment targets (3,008 San Jose State FTES) provided for in the final State budget.  Quality Improvement Facilitator of the Year: Budget allocations generally will be based on the Katy Rees, CSU San Marcos marginal cost of enrollment for 2002/03.  Quality Improvement Champion of the Year: Campuses will receive notification of their portion Captain Marianne Alvarez, San Jose State of the 1% FTES enrollment increase in a joint  Quality Improvement Team of the Year: The letter from Executive Vice Chancellors David STARRS Team from CSU San Bernardino Spence and Richard West and will receive an allocation letter on their enrollment funding from Congratulations to all the nominees and winners. Assistant Vice Chancellor Patrick Lenz. Actual allocations will be posted to campus’ State Performance Measurement 2002: The second Controller accounts over the next several weeks. Performance Measurement workshop for established function groups will be held on Questions regarding an individual campus’ December 3-4 at the Chancellor’s Office. increased enrollment target should be directed to Function groups participating in this Dr. Marsha Hirano-Nakanishi at (562) 951-4767. workshop include Accounts Payable, Career Questions concerning FTES budget allocations Centers, Environmental Health & Safety, should be directed to Rodney Rideau at (562) 951- Facilities, Financial Aid, Libraries, Mail 4559. Questions concerning campus General Fund Services, Parking, Procurement, Student allocations associated with their FTES enrollment Accounts Receivable, and University Police. growth should be directed to Sean Boylan at (562) 951-4619. Attendees will receive training on the Balanced Scorecard framework, Performance Measurement Development, and how to utilize the pbviews BUSINESS PLANNING & software to enter data and comment on results. On INFORMATION MANAGEMENT the second day of the workshop, function reps will Lenore Rozner, Assistant Vice Chancellor meet to review and enhance the measures they will use for comparison purposes, with the ultimate Quality Improvement (QI) Programs coal of identifying potential model practices. For QI Symposium: The 5th Annual Quality more information on this free event, and to register Improvement Symposium and Expo was held on-line, please visit the QI website at: November 7 & 8 at the Crowne Plaza Hotel in www.calstate.edu/qi/agenda/qipmagenda.shtml. Foster City, CA. The 200 attendees were welcomed by Richard West, who encouraged Process Improvement “Train-the-Trainer” them to continue to strive for excellence Workshop: For those who have been despite the budgetary challenges we face as a involved in improvement efforts utilizing the system. They were also inspired by the Process Mapping Methodology and would keynote address delivered by Michael like to train others in using this program, the Josephson, President of the Josephson QI Programs group will be offering a train- Institute for Ethics. This, as well as an the-trainer session at the Chancellor’s Office assortment of informative breakout sessions, on January 14-15, 2003. Details on this provided a day of education and motivation training program will be available soon on the for those who work so hard to make the CSU QI Website: www.calstate.edu/qi a better place to learn.

In addition, the annual Quality Improvement Awards were distributed at the Symposium. The recipients included:

2 CAPITAL PLANNING, DESIGN AND Contract General Conditions: Contract General CONSTRUCTION Conditions for all methods of construction procurement will be updated and posted to the J. Patrick Drohan, Assistant Vice Chancellor CPDC website in January 2003. Campus staffs should look to this website before assembling a Construction Management project specifications manual to ensure that they have the most recent version. SUAM, Section XII-Construction Management for Public Works Contracts: Several bills Prequalification of Bidders: Bidders have been were chaptered last month, and these new using the revised prequalification forms that laws will have some affect on this particular contain the more stringent prequalification criteria section in SUAM. Since the chaptered bills for nearly 18 months. Approximately 15 percent will not be in effect until January 1, 2003, of all prospective bidders did not pre-qualify under the updates to SUAM will not be posted to the newer criteria. Note that telecommunications the CPDC website until then. subcontractors are included in these numbers.

General areas of change in procedure will include: Facilities Planning Bidding using alternatives, certified payroll, labor compliance program, bid opening procedures, New Schedule of Major Capital Outlay Reports consultant conflict of interest requirements. on CPDC’s Website: Facilities Planning recently added to the CPDC website a schedule of Major Campus directors of facilities and related staff Capital Outlay reports to the Board of Trustees, should watch for an update to SUAM by checking Department of Finance, and the Legislature. This the CPDC website under ‘Executive.’ SUAM schedule is for Active Projects Report and Section XII will have a January 2003 modification Completed Projects Report required by the Board date next to it. Staff may then download a copy of of Trustees; Quarterly Reports required by the the newly updated SUAM, Section XII, and the Department of Finance; and the Streamlined new forms, found in Appendix D. Projects Report sent to the Joint Legislative Budget Committee. Model and Guidelines for both Design/Build and Construction Manager at Risk with The intent of the schedule is to inform CPDC and Guaranteed Maximum Price: The Design/Build campus staffs of report deadlines and improve Model and Guidelines were recently updated for coordination of information gathering from the October training, but will not be available on campuses for the various reports. CPDC’s website until January 2003. Recent legislative actions and other items have yet to be Capital Outlay Projects - Cash Flow inserted into the Contract General Conditions. Projections: Under the delegated capital outlay projects process, campuses are required Similarly, the Model and Guidelines for to submit monthly projected cash flow charts Construction Manager at Risk with Guaranteed to the Chancellor’s Office (coded memo Maximum Price were created for October training, AD 98-03). An integral part of the capital but will not be available online until January 2003. outlay process is the ability of the State Campus staffs that attended this training were Controller and the Chancellor’s Office asked to submit recommendations for changes to Financial Services department to estimate the the CM @ Risk process to Jim Corsar, Chief of cash amounts required on a monthly basis for Construction Management, by November 8. All the G.O. Bond funded projects. Responses recommendations will be reviewed and, if from campuses have been inconsistent. appropriate, inserted into the model. Recent legislative actions also need to be inserted into the A key tool in accomplishing this task is the 2-7 Contract General Conditions. form. A campus sets the schedule of project

3 milestones (schematics, preliminaries, working All training will be conducted at the CSU drawings, bidding and construction) when Chancellor’s Office. We had record attendance requesting a project in the Governor’s Budget. during 2002 and look forward to another year of The campus schedule is formalized in the outstanding participation from the campuses. Supplemental Language for all approved projects, within the framework of the Budget Act, with 2003 CSU Facilities Planning and Management respect to the dates that the funds expire and Conference: The 2003 CSU Facilities Planning revert. Once the funds are allocated to the and Management Conference will be October 26- campus, a projection of cash flow for project 28, 2003 at the Disneyland Resort of Southern expenditures must be submitted every month to California. Please mark your calendars for this the Chancellor’s Office (Lisa Tran, 562–951-4569, dynamic conference planned for you and your [email protected]), based on the schedule the staff. campuses have projected for completion of milestones, invoices paid, and estimated spending. CPDC Due Dates for CPB&G Agenda Items (January 28-29, 2003, Trustees’ Meeting) Facilities Planning Due Dates: Final Capital Outlay Budget Change Proposals (COBCPs) with -Master Plan Revisions-November 26, 2002 Feasibility Studies for 2004/05 are due into CPDC -All Other Items; December 10, 2002 from campuses on December 2, 2002. Please note that for non-state projects to be funded through As a reminder, the complete listing of 2002/03 Systemwide Revenue Bonds, a final financial plan CPBG due dates can be found on the CPDC should be submitted to Financing and Treasury by website at: December 2, 2002 and reviewed by that office by www.calstate.edu/CPDC/Executive/DDt02-03.shtml February 7, 2003, to be included in the 2004/05 program. According to the new procedures being Material that must accompany the agenda items, developed for the action year Non-state Capital plus guidelines on preparing agenda items, can Outlay Program, revenue bond financed projects also be found at: will generally not be eligible for later amendment www.calstate.edu/CPDC/Executive/index.shtml into the program. Linda Burke, Director of Trustees/ A draft Priority List of projects for the 2004 action Legislative/Capital Training Programs year will be presented to the Executive Council at their February 11-12, 2003 meeting. A draft FINANCIAL SERVICES Capital Improvement Program for 2004/05 Dennis Hordyk, Assistant Vice Chancellor through 2008/09 will be presented to the trustees at their March 2003 meeting. The COBCPs and Financing and Treasury feasibility studies for the projects in the action year will be transmitted concurrently to the Housing System – Upcoming Changes for Department of Finance for their review and Paying Debt Service: The CSU housing program recommendation for inclusion in the Governor’s will be going through some changes in the coming Budget for 2004. fiscal year to better align itself with its debt service obligations. The changes are necessary to Elvyra F. San Juan, Chief of Facilities Planning assure that funds are available to make debt payments when due on November 1st and May 1st Trustees/Legislative/Capital Training Programs of each year. One expected change will affect the timing of campus’ transfers to the Chancellor’s 2003 CSU Capital Training Program: The Office from monthly to quarterly, and the deposit schedule for the 2003 CSU Capital Training of funds earlier so that the deposits fully fund the Program is on the CPDC website at: required debt payments. Another consideration www.calstate.edu/CPDC/Trg2003.shtml that is being evaluated is the need to have a small reserve for unexpected immediate campus

4 hardships thus increasing the probability that cash Sonoma and California Maritime campuses was is available to fund all bond payments when due. completed in September. A "SA implementation lessons learned" document is being prepared for In the past, the Housing System has been able to use by subsequent CMS campus SA pay for debt service using system reserves that are implementations. Two SA close-follower then replenished at year-end when campus’ equal campuses, Long Beach and San Jose, went live monthly transfers are completed. However, debt October 1 with their first SA functionality, payments are not equal throughout the year, and as Admissions. They are on schedule to go live with more and more housing bonds are issued to meet Financial Aid in March 2003 and will continue to campus’ capital needs, the debt service obligations roll out CMS SA functionality throughout spring have similarly been growing beyond the Housing and summer 2003. System’s available reserves. In order to avoid a shortfall and to minimize the Trustees’ credit Technical Architecture and Infrastructure risks, the Executive Vice Chancellor and Chief Review and Planning: A three-day planning Financial Officer has asked the Office of Finance session was held in October with representatives and Treasury with the advice of the Chief from CSU, Unisys, PeopleSoft and Sun. The Administrators and Business Officers (CABO) to planning efforts focused on the architecture and develop a new transfer methodology, and will be infrastructure requirements for the Unisys data communicating with campuses in the near future center. Current and future infrastructure specific guidelines that will affect campuses in requirements were discussed and evaluated in an fiscal year 2003/04. Additional information will effort to ensure that the architecture and design be forthcoming in future months. For further meet our ongoing needs. information, contact Richard K. Leffingwell or his staff, Rosa H. Renaud, at (562) 951-4570. Academic Technology Services

Update Regarding Auxiliary Organizations: System-wide Academic Technology (SWAT) The Compilation of Policies and Procedures Procurement & Dissemination: The for California State University Auxiliary SWAT Core Team has become the forum Organizations has been updated. The primary for inter-segmental collaboration on changes reflect the new “business best procuring academic technology practice guidelines”, executive orders and resources. Members of SWAT include Board of Trustees resolutions that are representatives from ITAC, ATAC, applicable to auxiliary organizations. The COLD, CO Procurement Dept, SEIR, updated version can be viewed and printed at CSU Faculty Development Council, the Financing and Treasury website: CATS, Directors of Academic www.calstate.edu/FT/AuxOrg/PDF0800/Compilat Computing Centers, and Campus ion.shtml Bookstores in academic technology. Please call Financing and Treasury at (562) 951- 4570, if you have any questions. The SWAT Core Team is negotiating with Turnitin for plagiarism detection software Richard K. Leffingwell, Senior Director with system-wide pricing.

WebCT and BlackBoard have agreed to meet with INFORMATION TECHNOLOGY the CSU to discuss consortium licensing and pricing agreements. SERVICES David Ernst, Assistant Vice Chancellor

Common Management Systems

Student Administration (SA) Pilot Project is Complete! The SA pilot project with the Fresno,

5 System-wide Library Projects: CSU libraries completed near the end of the calendar year. have taken a major step in the transition Auditors have visited three campuses – Sonoma, from print to electronic format by Fresno and Long Beach - and worked extensively accepting an offer from Elsevier Science with Chancellor’s Office and campus staff to Publishing which retains online full-text collect data and information to develop an access to journals in the combined understanding of the program. All campuses have 'ScienceDirect' and Academic Press contributed information on budget, funding and 'IDEAL' collections while, at the same implementation. time, allowing campuses the option of greatly reducing the cost of the print IT Labor Management Council: CSEA and the equivalent or canceling it entirely. CSU have decided to continue the ITLMC for this fiscal year. The first meeting will be in late Academic Technology Planning: Collegis was November in Oakland at the offices of the Federal awarded the contract to assist CSU with academic Mediation and Conciliation Services. The FMCS technology planning. A team of campus faculty is once again providing facilitation services for the and administrators has been invited to work with ITLMC process. Last year the group addressed CO staff in planning. The first meeting of the retention and recruitment of IT professionals. One team, called the Academic Technology Planning goal of the first meeting is to review that work and Committee (ATPC) was November 1, in determine current priorities. Oakland. Subsequent meetings will be Nov. 15 and Dec. 6, with a three-day retreat planned for Measures of Success: The fourth Measures of January 7 through 9, 2003. Success, which addresses FY 2001/02, is under final review. It will be submitted to the legislature Focus groups are being conducted on seven in late November. campuses to provide feedback on campus perceptions of needs and issues relative to academic planning technology. The remaining GOVERNMENTAL AFFAIRS campuses will be visited in later phases of the Karen Yelverton-Zamarripa, Assistant Vice planning process. Surveys are being sent to all Chancellor campuses to solicit promising practices and policy obstacles. With the members of the 2003-04 Legislature set to be sworn in on December 2, with the session to Technology Infrastructure Initiative begin in earnest on January 6, 2003, the process to develop the Trustee’s Legislative Program for Stage 1 Progress: Progress on Stage 1 of the TII 2003 is well underway. infrastructure upgrade program - retrofit of the physical plants (pathways, cabling and utility The process begins each August, with a formal spaces) to current CSU standards - continues. solicitation for legislative proposals from Hayward, Humboldt and Sacramento will Chancellor Reed to the campus presidents and complete the bidding process in the very near various departments within the Chancellor’s future. All fourteen Phase 1 and Phase 2 Office. The Chancellor’s memorandum requests campuses will be under contract for Stage 1 that proposals be focused on statutory changes of construction no later than early 2003. Phase 3 benefit to the CSU, and new programs that would campuses continue to work on design. Phase 3 assist the system in achieving partnership campus projects are now funded with the passage agreement goals and those of major CSU strategic of Proposition 47. initiatives such as Cornerstones, teacher education and K-12 partnerships. Other ITS Topics The deadline for proposals to be submitted to the CMS Audit: The legislatively mandated audit of Office of Governmental Affairs was October 1, the CMS project continues, and should be and the proposals received are currently being

6 reviewed internally. In addition, omnibus legislation is being considered to make various technical changes to obsolete provisions in the Education Code.

The proposals for 2003 will be discussed by the Chancellor and his leadership team in November, be reviewed by Executive Council at their December meeting, and formally adopted by the Board of Trustees at the January meeting. The deadline to introduce bills falls in the last week of February.

Copies of CSU Legislative Reports and other legislative information pertaining to the CSU are available on the OGA website at: http://www.calstate.edu/oga

______The Business and Finance Newsletter is accessible from the Chancellor's Office website at: www.calstate.edu/BPIM/Newsletters/NewsLet.sht ml Questions related to receiving the B&F Newsletter or changes in e-mail addresses should be directed to James Francel at (562) 951-4547 or [email protected]