Business and Finance


A MESSAGE FROM THE VICE CHANCELLOR

September 2001

NEWS FROM THE DEPARTMENTS

 


NEWS FROM THE DEPARTMENTS

BUDGET OFFICE, 
John Richards, Director

2001/2002 Final Budget

The Governor signed the Final Budget on July 26, 2001. A Final Budget highlights and summary will be distributed to the Board of Trustees. The summary will be posted to the Budget Office web page by September 13, 2001.

Budget Process for 2002/03

The budget process for FY 2002/03 has begun. The August FIRMS submissions from the campuses provide the foundation for all calculations in support of the 2002/03 budget. The Executive Council and the System Budget Advisory Committee reviewed a preliminary planning estimate in late August. The Board of Trustees (BOT) will review and discuss preliminary budget proposals during September. Approval of the budget by the Board is scheduled for a special meeting on October 25, 2001.

In the period between the approval by the BOT of the 2002/03 budget request and the Governor's Budget in early January 2002, both the Department of Finance and the Legislative Analyst's Office (LAO) will be reviewing CSU budget issues and amounts. The Governor's decision on those issues, within the context of the state's fiscal environment, will be reflected in his January budget. The LAO will issue a formal review of the budget in mid-February, which sets the agenda for legislative budget hearings during the spring of 2002.

Reminders

The annual report on Instructional Equipment Inventories was due to the Budget Office on August 31, 2001.

Requests for 2001/02 annual student fee reports were sent to campus Budget Officers on August 14, 2001 and are due no later than September 14, 2001.

 

BUSINESS PLANNING & INFORMATION MANAGEMENT
Lenore Rozner, Assistant Vice Chancellor 

Housing Assistance Needs Assessment

The housing needs assessment study being performed by Bay Area Economics is nearing completion as planned. Drafts of the individual campus reports have been distributed to the 12 campus coordinators where the study was conducted. Following campus reviews, the campus reports will be finalized and distributed to campuses. BAE is also currently preparing the systemwide summary report, which is expected to be distributed to all campuses in late September.

CitiMortgage Offering

The legal groups at the vendor's partnering companies are reviewing the final contract terms and conditions. Descriptive brochures should be available for employees at campus benefit offices by mid-October.

Quality Improvement (QI) Programs

The new performance management software, PBViews, which allows campuses to compile and report on their key strategic measures, is currently being rolled out to 7 campuses. Another 7 campuses will be going through system administration training at the end of the month.

The cross-campus, cross-functional Parking Permit Issuance Team is in the process of finalizing its study. They have made use of Customer Surveys, Performance Measures and Process Mapping to identify a model practice for the sale and issuance of parking permits to students, faculty and staff. The results of this effort will be reported at the upcoming CSU Quality Improvement Symposium and Expo, held at the Los Angeles Airport Marriott on November 2. Please make plans to attend this informative and inspiring event.

For more information on Quality Improvement Programs, contact John Sanders at (562)951-4556. On-line registration for the Symposium and other QI information is also available at www.calstate.edu/tier3/qi.

 

CAPITAL PLANNING, DESIGN AND CONSTRUCTION
J. Patrick Drohan, Assistant Vice Chancellor

CONSTRUCTION MANAGEMENT

The Governor has signed AB 1719, the Trustees' sponsored legislation, and the bill was chaptered on August 1, 2001. In part, this bill amended Public Contract Code Sections 10705, 10710 and 10760 and it becomes effective January 1, 2002.

Public Contract Code Section 10705 currently allows the CSU to bid contracts less formally by exempting a project that is $250,000 or less in value from CSU Contract Law provisions. Beginning January 1, 2002, this section of the Public Contract Code links to Public Contract Code Section 10108, wherein the value of a minor capital outlay project is $400,000 or below. Therefore, CSU may exempt a project that is $400,000 or less in value from CSU Contract Law provisions. However, the CSU

Please contact Barbara Nicholson at 562-951-4117 for a copy of these Supplementary General Conditions.

must still comply with the provisions external to the CSU Contract Law, such as: subcontractor listing (Public Contract Code Section 4100 et seq.), DVBE (Public Contract Code Section 10115), payment bond, payment of prevailing wage rates, use of Contracts Register, small business, and license requirements.

Public Contract Code Section 10710 allows for awarding annual contracts for repair or other repetitive work (job order contracts) not to exceed three million dollars. Currently, individual job orders may not exceed $250,000. Beginning January 1, 2002, this section of the Public Contract Code links to Public Contract Code Section 10108, wherein the value of a minor capital outlay project is $400,000 or below. Therefore, individual job orders may not exceed $400,000 after January 1, 2002.

Public Contract Code Section 10760 currently states that the trustees may, and on projects that exceed $300,000, the trustees shall require prequalification. Beginning January 1, 2002, the contract value for projects requiring prequalification increases to $400,000. Note: this section does not link to Section 10108, so if the value of a minor capital project in Public Contract Code Section 10108 is increased in the future, the prequalification level will remain $400,000 until Section 10760 is specifically changed.

James R. Corsar, Chief, Construction Management

FACILITIES PLANNING

With the last of Prop 1A funds from the 1998 funding of capital outlay projects in 2001, the capital programs of the three segments of higher education are pretty much at a standstill, awaiting the passage of a new General Obligation Bond.

Faced with the prospect of adding the equivalent of a campus the size of Hayward every year for the next ten years, the G.O. Bond is especially critical for the CSU. The CSU plans to address forecasted capacity limitations in part by:

  • Moving forward aggressively to implement year-round operations at 14 campuses this year and the remaining campuses in 2002,
  • Expanding evening and weekend course offerings, and
  • Improving distance-learning opportunities.

However, the renovation or replacement of facilities built thirty or more years ago remains a pressing need, along with new facilities and infrastructure to accommodate growth.

At present, a $4.8 billion G.O. Bond for K-12/ Higher Education over a four-year period is being sought. The CSU estimates that its needs over the next four years require a funding level of approximately $3.1 billion. The CSU has also agreed with the other two segments to set aside $800 million to address additional needs of the community colleges, tri-segmental joint facilities and new campuses/centers.

Elvyra F. San Juan, Chief, Facilities Planning

 

PLANT, ENERGY AND UTILITIES

With the last of Prop 1A funds from the 1998 funding of capital outlay projects in 2001, the capital programs of the three segments of higher education are pretty much at a standstill, awaiting the passage of a new General Obligation Bond.

Faced with the prospect of adding the equivalent of a campus the size of Hayward every year for the next ten years, the G.O. Bond is especially critical for the CSU. The CSU plans to address forecasted capacity limitations in part by:

  • Moving forward aggressively to implement year-round operations at 14 campuses this year and the remaining campuses in 2002,
  • Expanding evening and weekend course offerings, and
  • Improving distance-learning opportunities.

However, the renovation or replacement of facilities built thirty or more years ago remains a pressing need, along with new facilities and infrastructure to accommodate growth.

At present, a $4.8 billion G.O. Bond for K-12/ Higher Education over a four-year period is being sought. The CSU estimates that its needs over the next four years require a funding level of approximately $3.1 billion. The CSU has also agreed with the other two segments to set aside $800 million to address additional needs of the community colleges, tri-segmental joint facilities and new campuses/centers.

Elvyra F. San Juan, Chief, Facilities Planning

PLANT, ENERGY AND UTILITIES

The CSU campuses have done very well in responding to the California Energy Crisis. Plans for responding to Stage One, Two, and Three Energy Emergencies have been developed by every campus as well as contingency measures to be used in the case of a rolling blackout. All of these plans, as well as other conservation efforts, have been documented in the CSU Peak Load Reduction Plan that has been forwarded for approval by the California Energy Commission.

Rolling blackouts were originally predicted to affect the campuses as much as 55 days over the course of the summer (April to October). While we still face more hot weather in the next few weeks, it appears the State of California has secured commitments for enough reserve power to avoid any further rolling blackouts. Overall, only a few campuses (Fresno, Humboldt, San Francisco, and Sonoma) have been subjected to rolling blackouts for the four-campus total of less than 5 hours!

The future of the energy market is still very unpredictable and volatile. Natural gas prices have dropped significantly, but even with levels that are much lower than just six months ago, forecasts on the price of future natural gas are still double what the campuses paid in the past several years. The one positive note is the natural gas market appears to be stabilizing in price within the next 6-12 months.

Conversely, the electric market does not appear to be stabilizing in the near future. The Legislature and the California Public Utility Commission are still working feverously to rebuild a broken deregulated market and the proposed fixes and changes are many and frequent. For CSU, we have reached a settlement with Enron Energy Services, our Direct Access power provider since 1998, and are in the process of working out terms and conditions far an extension to our existing contract that will provide us Direct Access electricity through the year 2004. It is believed that the electric market will have stabilized, and hopefully recovered, by 2004 from one of the worst energy crisis the State of California has ever faced.

Mark Gutheinz, Chief, Plant, Energy and Utilities

CPDC Due Dates for CPB&G Agenda Items (January 29-30, 2002 Trustees' Meeting)

Master Plan Revisions:

November 27, 2001

All Other Items:

December 11, 2001

A complete listing of 2001/02 due dates for CPB&G agenda items is located at CPDC website http://www/tier3/PPD/Executive/index.html

 

FINANCIAL SERVICES

FINANCING AND TREASURY

Over the past year ongoing staff responsibilities within the Financing and Treasury office have changed and it may be helpful to update this information. The trustee's housing and health center facilities debt programs have recently been assigned to Rosa Renaud and Angelique Sutanto (rrenaud@calstate.edu and asutanto@calstate.edu). Rosa and Angelique also staff the trustee's student union, parking and other long-term debt programs. Walter Marquez (wmarquez@calstate.edu) handles auxiliary organization financing programs, equipment financings and third party property development initiatives. Shahenaz Churiwala and Lisa Tran (schuriwala@calstate.edu and ltran@calstate.edu) handle the cash management, investment, and commercial paper programs.

For more information about these programs, please contact Richard Leffingwell, head of the Financing and Treasury Office (rleffingwell@calstate.edu). All department staff can be reached at (562) 951-4570.

Richard Leffingwell, Senior Director

ACCOUNTING

The Direct Vendor Pay (DVP) program began in January 1997. The program permits campuses to disburse payments directly to vendors for goods and services, versus the conventional method of payment processing through the State Controller's Office. The original legislation was implemented on a temporary basis and was set to expire on January 1, 2002.

In the fall of 1999, the CO's Accounting Department began a system wide analysis of the University's DVP performance. The analysis was completed in the fall of 2000 and was the basis of our support to seek permanent DVP legislation.

In addition to the in-house analysis of the University's ability to properly manage the new payment system, the CSU received a favorable DVP audit report by the Bureau of State Audits that included a recommendation of permanent DVP legislation.

By spring of 2001, through the efforts of the Governmental Affairs office in Sacramento, the CSU's DVP bill was introduced in the Assembly with a full committee as its sponsor. The bill passed both houses of the legislature unopposed and on August 8, 2001 the Governor signed it into law.

Approval of the DVP legislation is a significant victory for the CSU. It represents increased efficiencies and cost savings not usually associated with governmental entities. We wish to thank everyone who assisted Governmental Affairs and us in this effort.

William Musselman, Director

 

GOVERNMENTAL AFFAIRS,

Karen Yelverton, Assistant Vice Chancellor

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

 

INFORMATION TECHNOLOGY SERVICES
David Ernst, Assistant Vice Chancellor

ACADEMIC TECHNOLOGY SERVICES

The MERLOT International Conference was recently held in Tampa Florida. Over 300 faculty, staff, and administrators from 4 continents representing over 35 states and provinces participated in the three-day conference. The new CEO for MERLOT, Dr. Ed Cooper, met with the MERLOT Transitional Advisory Board to begin planning the transition of MERLOT into a 501C3 independent, non-profit organization.

COMMON MANAGEMENT SYSTEM (CMS)

CMS staff has been actively supporting the 1st wave campuses on either or both of the first two applications - Human Resources and Financial Administration. These campuses cut over from their legacy systems during the summer and are now in production on the PeopleSoft product. Preparations continue for the first 2nd wave campuses to receive baseline software. The student administration pilots at Fresno, Sonoma and California Maritime are proceeding on schedule.

Chancellor Reed was a guest speaker at the recent PeopleSoft Conference in Atlanta and was presented with a Golden CD commemorating the fact that CSU will be the first system in the nation to go live on Student Administration 8.0.

Please visit the CMS web site for additional information at http://www.calstate.edu

TECHNOLOGY INFRASTRUCTURE INITIATIVE

Three Phase 1 campuses - Sonoma, Long Beach and San Bernardino - have completed the bidding process for Stage 1 construction related to the Telecommunications Infrastructure Build-out Project. It is expected that the remaining Phase 1 campuses will complete this component of the process by February.

With respect to Stage 2, also known as the Infrastructure Terminal Resources Project (ITRP), TII is nearing completion of the Master Enabling Agreement for System Integration Services from Pacific Bell. However, by way of a series of interim agreements with PacBell, Stage 2 activities have already started. On Friday, August 31, a significant milestone was reached when a new core switch was installed at the San Bernardino campus. Additionally, the ITRP contract allows for campuses and CSU auxiliaries to purchase network equipment and related services in support of local initiatives and a number of campuses and 4CNet have been able to realize significant savings while upgrading their current infrastructures.

Directories Working Group Established by ITAC

It has become apparent that as the CSU becomes more dependent on networked services and applications, creation of effective Directory Services will be key element in their successful deployment. Given this, the Information Technology Advisory Committee has established a Directories Working Group that is hard at work developing a set of principles, recommendations and test beds for the development of Directories Architecture for the CSU. Composed of CIO's and Network, Systems and Applications support staff from a number of campuses, the working group is focused on CSU issues, but is also closely monitoring similar efforts being undertaken by other campuses around the country, as well as Internet 2. Participation on the working group is open to any campus or CO representative that wishes to participate. For more information, contact Mark Crase at ext. 1-4266 or at mcrase@calstate.edu

Please visit the CMS web site for additional information at http://www.calstate.edu

The Business and Finance Newsletter is accessible from the Chancellor's Office website http://www.calstate.edu/BF/. 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 jfrancel@calstate.edu.