BUSINESS AND FINANCE NEWS
February 28, 1996
The California State University
Business and Finance Division
Richard P. West, Vice Chancellor
MESSAGE FROM THE VICE CHANCELLOR'S DESK
THE VICE CHANCELLOR'S DESK....................
The legislative budget process is underway. In early discussions with legislative and agency representatives, several themes regarding our budget for 1996/97 have emerged. The need to eliminate the backlog of deferred maintenance and to develop a strategy to fully fund scheduled maintenance in the future appears to be as important to Sacramento as it has been to the Board of Trustees. The amount of carry-forward savings also continues to be an issue that control agencies in particular are focused on. You will want to read the item on this issue in the Accounting section of this newsletter. Faculty workload and financial aid are also high on the priority list of some key legislative staff and members. Discussions about the California State University capital outlay program are on hold pending the outcome of Proposition 203 in March. All in all, the 1996/97 budget process is off to a fairly good start. We will keep you posted.
Richard West, Vice Chancellor, Business and Finance
NEWS FROM THE DIRECTORS
Executive Order 648 has been issued which addresses certain delegation of fiscal authority and responsibility to CSU Presidents. The Executive Order states that the campus president is responsible for ensuring prior-year balances are reviewed regularly and eliminated as soon as possible after the close of the fiscal year in which the funds were appropriated. The Executive Order also states that "unexpended balances in funds subject to reversion will be transferred from the campus by the Chancellor's Office six months prior to the date that the funds are no longer available for encumbrance".
According to this policy, campus cash balances remaining in the 1993/94 fiscal year appropriation as of December 31, 1995, would revert back to the system. Due to the timing of the issuance of Executive Order 648, the reversion of the cash balances remaining in the 1993/94 fiscal year appropriation will occur as of March 31, 1996. In the future, reversion will occur as of the December 31 time frame.
Lots of information is now located on the CSU Web Site (http://www.calstate.edu/), but I wanted to direct your attention to what is now available from the Chancellor's Accounting Department (http://www.acct.co.calstate.edu/Accounting.shtml). All coded accounting department letters since January 1993 including attachments are now available. There is no longer a need to call for copies of issued letters if your campus has access to the Internet. The Code Book (systemwide chart of accounts) is on its way. If you have any questions concerning the Accounting Department Web Page, please contact Ms. Laleh Graylee by e-mail at firstname.lastname@example.org or by telephone at 310-985-2886.
George Pardon, Director
AUXILIARIES, PLANNING AND BONDS
A review is currently underway to assess potential savings from refinancing some outstanding bonds in the housing and student union programs. The first formal step in this process will be to request Trustee action at the March 19-20, 1996, meeting to permit the refinancing when conditions are determined to be favorable. Any savings from this refunding would be realized over the remaining life of the bonds. Campuses will be provided additional information as it becomes available.
Recent concerns have been raised about campuses not funding adequate reserves to provide for deferred maintenance (including remodeling) for enterprise operations (housing, parking, student unions, and health centers) and counting on the issuance of additional debt to fund such costs. The financial community views such operations as being under greater financial stress and this situation could impact all campuses by raising the costs of borrowing. Campuses should plan to fund such costs through the accumulation of reserves from operations.
Assembly Bill 269, introduced on behalf of the CSU by Assembly Member Steve Kuykendall (R-Long Beach), was approved by the State Assembly and now moves to the senate where a strong debate is expected. This bill is designed to conform California law with federal law regarding asbestos content standards and save money, all without any deterioration in protection for the public and environment. For more information, contact Elizabeth Stowe at email@example.com or 310-985-9010.
Funds have been distributed to each campus to aid campuses with operations and maintenance expenses specific to asbestos. A memorandum regarding these funds and authorized expenditures was sent to all the Environmental Health and Safety Directors. The funds are available for expenditure through June 30, 1997. For more information, contact Joyce Kerley at firstname.lastname@example.org or 310-985-9644.
Environmental Resources (ER) has developed a Training Program Matrix which is designed to simplify some of the complex health and safety training requirements associated with various occupations and activities on a campus. The matrix will be distributed to campus presidents and other staff, with multiple copies sent to Environmental Health and Safety Directors. For more information, contact Mike Ceser at email@example.com or 310-985-9013.
The CSU Teleconference Series Governing Committee has selected Ergonomics as the topic for its next live telecast, which is scheduled for May 14, 1996. This will be the thirteenth in a semi-annual series of satellite training programs specially designed to address university needs. Indoor Air Quality is being researched as a possible two part series for November 1996 and February 1997. For more information, contact Diane Leduc at firstname.lastname@example.org or 310-985-9039
Next time you fly to Sacramento for state business, you may want to consider renting one of the alternative fuel vehicles available through National Rental Car at the Sacramento Airport. This rental program for clean fuel vehicles is supported by the Department of General Services and the California Energy Commission in a unique public/private partnership with National Rental Car, Honda Motor Company, and the Sacramento Municipal Utility District. For more information, contact Hazel Hofman, at email@example.com or 310-985-9658.
Richard Leffingwell, Director
The Governor's Budget for 1996/97 provides total funding of the Board of Trustees' Support Budget request approved at the November board meeting. It provides full funding of the four percent commitment of General Fund increase included in the Governor's four-year compact with higher education initiated last year, as well as sufficient General Fund support to replace revenue that would have been generated by a 10 percent student fee increase. 1996/97 will mark the second year in a row of no student fee increases at the CSU.
CSU enrollment is budgeted to increase by 2,000 FTES in 1996/97. Enrollment funding will receive over $11 million of the proposed support budget increase in the 1996/97 budget plan. A four percent compensation pool has also been included in the budget plan for negotiating employee compensation increases. Over $68 million will be provided to cover the full-year cost of 1995/96 compensation increases and to create a pool of funds for 1996/97 negotiations with employee bargaining units. The trustees' priority focus on the CSU physical plant will be fully funded at $9.6 million and a special focus to provide $4.5 million for academic and technological support is included as part of the 1996/97 budget plan. Special funding initiatives associated with the campuses at San Marcos and Monterey Bay and the California Maritime Academy are also provided in the budget plan. The remaining increase in CSU budget support will fund mandatory cost increases including costs associated with opening new space and inflationary price increases, as well as lease revenue bond payments and payments associated with deferred maintenance borrowing.
Budget allocations for 1996/97 will be based on enrollment decisions currently being discussed with campus presidents and the allocation formulas agreed to as part of the CSU budget redesign process. Preliminary allocations based on the Governor's Budget should be available to campuses in early March.
Several campuses have agreed to participate in a trial run of new budget reporting processes for submission of annual campus budget details to the Budget Office. The goal is to devise a simplified budget reporting system that makes fewer demands on campus personnel and provides the essential data needed to satisfy system analytical and budget reporting requirements. Participating campuses will receive additional information at the north/south workshops being held by the Financial Officers Association in February, and detailed instructions in conjunction with their Governor's Budget allocations. For additional information, please contact Sean Boylan at 310-985-2712.
John Richards, Director
CONTRACTS AND PROCUREMENT
The CSU has been granted a systemwide blanket waiver for the purchase of any custom/special order wood products not listed in the PIA Prompt Delivery Program Catalog. This waiver relieves campuses of the need to seek individual waivers when purchasing such furniture.
PIA plans to expand the Prompt Delivery Program in March 1996. Under the Prompt Delivery Program, PIA guarantees product delivery within a maximum of 20 working days or an automatic waiver will be issued so the product can be purchased elsewhere. Based on recent experiences, the program seems to be achieving the intended delivery improvements as well as increasing customer satisfaction.
The systemwide site license for Operating System 7 has been extended with Claris (formerly licensed with Apple) through June 30, 1996. Current negotiations are underway to establish a new 2-year site license agreement to be effective July 1, 1996.
Software & Electronic Information Resources (SEIR) continues to negotiate systemwide agreements to make a broad variety of on-line resources available to the CSU through the internet. For more information regarding these agreements see the Contract Services and Procurement home page, Web address: http://www.co.calstate.edu/BusinessFinance/csp/.
The CSU continues to benefit from the use of procurement cards. Bid protests have been resolved and a final award for a State master agreement has been awarded to Rocky Mountain Bank. It is anticipated this 3-year Agreement (with 2 one-year extensions) will become effective April 1, 1996, and credit cards will be issued at no cost for the first year of the contract; thereafter maximum annual card will be $25/card. Lower per card cost will become available as statewide annual usage levels are reached.
Source: Rocky Mountain Bank - Summary Statistical Report
Source: Rocky Mountain Bank - Summary Statistical Report
The Chief Administrators/Business Officers (CABO) group has initiated an effort to encourage and promote multi-campus procurement activities. The purpose of this effort is identify target areas of opportunity in the acquisition of goods and services that maximize savings and improve processing efficiencies. Specifically, CABO representatives will be meeting with the campus Procurement Officers in March to discuss the mechanism for communication and facilitation of the procurement efforts. Initial priority targets of opportunity include: 1) hazardous waste handling and disposal; 2) express/overnight mail delivery services; and 3) personal computer workstation volume pricing agreements.
Additionally, various auxiliary organizations in the CSU have expressed an interest in participating in this effort. Further investigation is planned to determine feasibility and optimum structure for facilitating auxiliary participation in CSU planned purchasing initiatives.
The Department of General Services, as part of the Governor's Procurement 2000 Project, now provides the option of submitting California State Contracts Register (CSCR) ads via the Internet. The Internet address for the CSCR is http://www.dgs.ca.gov.
Campuses now have the ability to place electronic contracting opportunity advertisements with a 3-day lead time as opposed to the current lead time of 15-20 days. The current service charge of $15.50 for advertisements will remain. The Department of General Services plans to phase out the hard copy of the CSCR by July of 1996, which will also result in an increase to the service charge for agencies submitting hard copy advertisements. The Office of Contract Services and Procurement here at the Chancellor's Office will provide a link to the CSCR through our home page for vendors interested in doing business with the CSU.
Campuses should contact Ray Roa at OSMB 916-324-0269 for authorization forms to access the CSCR Internet advertisement data entry screen or to obtain additional information on this alternative for ad submission.
An RFP will be issued shortly seeking to establish lease financing Master Agreement(s) for the tax-exempt financing of essential campus equipment. These agreements with qualified financing firms would provide flexible, cost efficient, short-term financing (up to 10 years) for a variety of equipment and services. The financing provider will be required to tailor the financing arrangements to meet the scope and timing requirements of individual campus transactions.
The RFP will look to the bidding financing firms to propose creative solutions which will include competitive interest rates, flexible equipment procurement scheduling, expedited credit approvals, and ease of paperwork.
CS&P and representatives from four campuses are working on the RFP. Questions should be directed to Tom Roberts at 310-985-2786 or e-mail firstname.lastname@example.org.
Pat Dayneko, Director
PHYSICAL PLANNING AND DEVELOPMENT
On February 5, 1996, PP&D staff met with the CSU Executive Deans and discussed a lengthy list of issues including:
There were lively discussions on several issues. Some of the challenges stem from when the 1992 enrollment projections represented the previous 1986-1990 time frame and the Capital Outlay Program was supported at $250 million ($150M from GO bonds and $100M from Revenue bonds).
From 1991 through 1995, the CSU experienced a drop in FTES of over 40,000, a loss of a bond issue in 1994, with minimal revenue bonds for equipment only and a new capital budget planning target of $150 million per year. Telecommunications infrastructure was introduced as a pilot project in the 1992 Capital Outlay Program, and our current system priority is to install telecommunications infrastructure on all the campuses. As it stands now, the 1996/97 Capital Budget is still dependent upon passage of the bond measure on the March 1996 ballot.
Master Plan Revisions: March 12, 1996 All Other Items: March 26, 1996
Jon H. Regnier, Senior Director
PLANNING AND ANALYSIS
Data collection and consolidation is in full swing. The campus data collections have been forwarded to the database contractor, Minter & Associates, who consolidated campus diskettes for a preliminary review of the data by the function chairpersons. The final CSU data was sent to NACUBO on February 26.
The campus benchmarking teams will again focus on this effort in mid-May when the national benchmarking results will be first available for review. The systemwide data review workshops for the functional groups will be held June 3-5, 1996, near the Ontario airport.
Sedgwick James, our project consultant, has begun work on the process mapping portion of this project. They have scheduled campus visits (Fresno, Hayward, Long Beach, Sacramento, and San Marcos) during January and February.
Contact Ron Ashcroft (310-985-2706 or email@example.com) if you have questions about the benchmarking or process mapping efforts.
The Productivity and Investment Program (PIP) Committee met on December 13, 1995, to evaluate 47 proposals from our campuses and selected proposals to receive funds for the 1995/96 PIP Cycle. The PIP Committee awarded a total of $679,500 in PIP funds to five multi-campus consortium proposals. Funded proposals include: Asset Management & Computer Assisted Design (CAD) System, Electronic Career Service Center System, Electronic Student Service - Process Mapping, Interactive Computer - Based Injury Illness Prevention Training Program, and Optical Imaging - Student Records. Notification letters, List of 1995/96 Awardees, and Project Status Reports for all prior funded PIP proposals were sent to all PIP proposers on January 26, 1996. Contact Lawrence Lin for copies of the Awardee List and Projected Status Report (310-985-2705 or firstname.lastname@example.org).
Lenore Rozner, Senior Director
The Business and Finance Newsletter is now accessible from the Chancellor's Office