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BUSINESS AND FINANCE NEWS

October 23, 1996

The California State University

Business and Finance Division

Richard P. West, Vice Chancellor

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MESSAGE FROM THE SENIOR VICE CHANCELLOR'S DESK

NEWS FROM THE DIRECTORS


MESSAGE FROM
THE SENIOR VICE CHANCELLOR'S DESK....................

With the recent passage of AB 2613 and AB 3132, the legislature and the governor have once again made apparent their support of the unique nature of the California State University among the state supported public agencies of California. AB 2613 grants the authority to the California State University to pay bills directly rather than through the state controller - a fundamental change that will save time and money. AB 3132 exempts policies promulgated by the Board of Trustees from review by the Office of Administrative Law and exempts the California State University from statutes passed in the future unless the California State University is named specifically. Collectively, these changes represent a significant step forward in our efforts to enhance our flexibility to continue to provide quality educational services while achieving the productivity gains we must to maintain access.

Richard West, Senior Vice Chancellor, Business and Finance

 

NEWS FROM THE DIRECTORS

 

ACCOUNTING

Direct Vendor Pay

 

On September 26, 1996, Governor Wilson signed AB 2613 which extended direct vendor payment to all CSU campuses effective January 1, 1997. In an effort to provide campus staff with a better understanding of the impact of this legislation, a workshop has been developed to assist the campuses in preparing for this transition. The workshop presenters will be staff from the pilot campuses, CSU Business Management System Cooperative, and the State Controller's Office. The workshop is scheduled for Thursday, November 7, 1996, and will be held at the San Jose South Campus in the Simpkins Center.

The workshop is designed for staff who will have responsibility for all or any part of processing payments for vendors. Attendees should include the campus accounting officer, accounts payable manager, and the person responsible for system job submittals.

A memorandum was sent to all Vice Presidents of Administration on October 4 which included a registration form, campus map, and hotel information. The completed registration form with a check for $25 made payable to the Trustees of the CSU should be returned by Friday, October 25, 1996. The registration fee includes lunch. If you have any questions pertaining to the workshop, please contact Silvia Barajas or Joni Shimotsu at 310-985-2900.

Direct Vendor Payment Implementation

As discussed at the August CABO meeting, each campus should review their most recent FISMA reports and other audit findings for any issues that could impact their ability to successfully implement Direct Vendor Pay. It is assumed that each campus plans to implement Direct Vendor Pay on January 1, 1997. If a campus intends to continue using the State Controller's Office to process vendor payments after January 1, 1997, please contact George Pardon in the Chancellor's Office immediately. If a campus would like an assessment conducted to evaluate their readiness to implement Direct Vendor Pay, please contact George Pardon. All costs associated with the readiness assessment will charged to the campus.

Audited Financial Statements

Responses to our RFP were received on October 7, 1996, from Coopers & Lybrand and KPMG Peat Marwick. A committee is in the process of evaluating the proposals. The Trustees are scheduled to select the firm that will conduct the audit for the CSU at their November meeting.

Student Friendly Services
Payment of Admission Application Fee via the Internet

CSU's undergraduate and graduate admission application will be available on the Internet by November 1996, for the 1997/98 admission application cycle under a contract issued to XAP in late August. This commitment responds to the Executive Council's and CIMIT's request to have an electronic admission application ready for students seeking admission to the CSU for Fall 1997.

The project implementation team recognizes that all campuses are not yet accepting credit cards for payment of admission application fees or may not be in a position to manage alternate payment methods tied to the electronic admission submission. Therefore, to meet the November 1996 implementation date for electronic admission application on the Internet, the Chancellor's Office Accounting Department will collect, process, and report student admission application fees related to the electronic submission of the admission application. To ensure successful startup of this project, the Chancellor's Office will cover the administrative and payment processing cost of the program. Campuses will be credited and will receive each electronic admission application fee payment.

Questions about the collection, processing, and reporting of student admission application fee payments may be directed to Bill Musselman, Accounting at 310-985-2893 or william_musselman@calstate.edu or to Larry Lin, Planning and Analysis at 310-985-2705, or lawrence_lin@calstate.edu. Questions about the Student Friendly Services project may be directed to the project team leaders Allison Jones, at 310-985-2939 or allison_jones@calstate.edu, or Russ Utterberg, at 310-985-9404 or russell@calstate.edu.

Interfund Internal Borrowing Options

Some campuses have been pursuing third party financing and/or delaying acquisitions of goods and services for cash flow purposes. Additionally, campuses have asked for loans from the Chancellor's Office to meet cash flow requirements. Oftentimes, third party financing has high financing costs associated with it as well as collateral requirements. Delaying acquisitions may result in opportunity losses. During the 1993 Legislative session, the CSU was successful in obtaining legislation that provides campuses with significant flexibility in providing internal financing. This legislation was effective January 1, 1994, pursuant to SB 593, Chapter 0779, Statutes of 1993. The legislation is as follows:

 

89760. (a) The trustees may transfer money from one special fund to another special fund or to the general fund in order to meet the commitments of the California State University if the transferred moneys are returned to the special fund of origin in time to fulfill the purposes of the special fund. Interest shall be paid on all money transferred to another special fund or to the general fund at a rate determined by the trustees to be the current earning rate of the fund from which the money was transferred.

(b) "Special fund,'' as used in this section, means enterprise and trust funds of the California State University and does not include any fund subject to the State University Revenue Bond Act of 1947 (Article 2 (commencing with Section 90010) of Chapter 8 of Part 55).* (*The funds currently subject to the State University Revenue Bond Act of 1947 are Housing and Student Union Revenue Bond Programs).

 

By looking to other funds available to the campus in meeting financing needs, a campus can be assured that they are paying a low interest rate with terms flexible enough to meet campus cash flow concerns. The interest rate to be paid should minimally meet the interest rate paid by the State Pooled Money Investment Fund (SMIF) since that is the rate most special funds would earn if not loaned out. The SMIF rate for the six months ending June 30, 1996 was 5.56%.

It is critical that each campus record the appropriate receivable and payable entries in the financial statements.

If a campus has short term (1 to 5 years) financing needs beyond its existing resources, please contact either George Pardon or Bill Musselman in the Chancellor's Office and we will attempt to obtain a financing option for the campus.

Position Opening - Chancellor's Office Accounting Department

We are recruiting for a Financial Data Coordinator in the Chancellor's Office Accounting Department. This position will fill the vacancy left by Fyle Cabagnot who recently accepted a position at Cal Poly Pomona. The Financial Data Coordinator is responsible for financial data analysis and data management to ensure the integrity and validity of CSU systemwide financial information; administration of a uniform structure of financial information for all twenty-two entities of California State University; validation of systemwide financial data against financial classification tables, legal/budgetary appropriation laws, Generally Accepted Accounting Principles and the business rules; performing analyses and generating a variety of automated financial reports.

This is an AOA III position with an annual salary range of $45,000 - $55,000. Please contact the Chancellor's Office Personnel Office at 310-985-2900 for a more detailed job description.

George Pardon, Director

 

AUXILIARIES PLANNING AND BONDS

 

Bond Financing

On October 1, 1996, we successfully sold $13.13 million of bonds on behalf of the Trustees for the expansion and remodeling of the Long Beach Student Union. The project will add approximately 40,300 gross square feet to the student union providing space to existing student clubs and organizations. The issue was awarded to BA Securities, Inc. as the low bidder in a competitive sale. Student unions that are planning construction projects should be in close communication with the Office of Auxiliaries Planning and Bonds and Physical Planning and Development. Please contact Ms. Rosa H. Renaud at 310-985- 2790.

On October 1, 1996, Housing System Revenue Bonds, Series AU were issued in the amount of $4.0 million to finance the costs of seismic repairs, upgrades, and other renovations to the dining and administrative housing building at Humboldt State University. The bonds are secured by a first lien on and pledge of the net revenues derived by the Trustees from all existing housing, dining, and other facilities and any additional Housing System facilities to be constructed or acquired by the Trustees. The issue was awarded to BA Securities, Inc. as the low bidder in a competitive sale.

On August 1, 1996, the Associated Students of San Francisco State University, Auxiliary Organization Revenue Bonds, (Children's Center Facility) Series 1996 were issued in the amount of $3.0 million to pay for the costs of designing, acquiring, and constructing a new children's center on campus. The bonds were issued by the Associated Students (ASI) and their creditworthiness supported by the financial strength of the campus San Francisco State University Foundation (the Foundation) and the San Franciscan Shops (the Corporation).

Auxiliary Tax Exempt Financing Limits

Tax Counsel is currently finalizing a request for an Internal Revenue Service ruling that would permit the CSU to apply a $150 million tax-exempt financing limit to each campus rather than the system in total. As previously reported, an auxiliary organization project has been identified to serve as the test case. At this time, all campuses have forwarded their contribution for the cost of the private letter ruling request initiative.

As part of this effort, please expect to receive a request for information on tax-exempt financings completed by auxiliary organizations at your campus where the transaction was classified as a financing on behalf of the Board of Trustees, or a third party entity such as California State Community Debt Authority participating with an auxiliary organization to issue debt on behalf of the Board of Trustees. The purpose of this upcoming request is to develop a more accurate systemwide summary of "on behalf of" financings.

Richard Leffingwell, Director

 

CONTRACT SERVICES AND PROCUREMENT

 

Blanket Public Works Contracts

The Governor has recently signed into law a new section (10710) of the Public Contract Code that provides for annual "blanket" public works contracts not exceeding $1 million to be awarded for repair or other kinds of repetitive work (i.e., excluding any new construction) during the course of a given fiscal year. The law takes effect on January 1, 1997.

Further details regarding the implementation of the provisions of P.C.C. 10710 will be forthcoming. In the meantime, general questions on this subject can be addressed to Cliff Johnson at 310-985-2785.

Contract Services and Procurement Moving to WestEd

Contract Services and Procurement (CS&P) moved from the Chancellor's Office to the Los Alamitos WestEd facility (formerly SWRL), on October 14, 1996. New phone/fax numbers are listed below:

 

Area code (310) Prefix 985 -

Department phone #
Jackie Baird, Suite 275
Pat Dayneko, Suite 271
Darryl Dearborn, Suite 275A
Loren House, Suite 273
Cliff Johnson, Suite 270
Linda Masterton, Suite 276A
Marjorie Morris-Threats, Suite 276
Sue Nash, Suite 271A
Tom Roberts, Suite 272
Trish Vanderveer, Suite 274A
Department fax #
Buyer's fax #

9100
9158
9157
9166
9160
9177
9169
9161
9163
9159
9162
9407
9408

UIAS Status

Under the Strategic Plan entitled "Transforming CSU Librarian for the 21st Century," the CSU Council of Library Directors determined, as its highest priority, a project to plan, design, and implement a Unified Information Access System (UIAS). A UIAS is defined as a single, easy to use, integrated, and coherent computer-based user interface which provides for the end-user indexing to and direct online access to or delivery of: (1) Analog Resources such as those described in CSU Libraries' Online Public Access Catalogs and in selected catalogs of libraries beyond CSU, (2) Digital Resources, including (2.1) online and CD-ROM Index and Abstract databases which provide access to the content of the journal literature; (2.2) CSU text, image, video, and multi-media resources available via CSUNet; and (2.3) Internet-based resources from within and beyond CSU. Integrated access to both forms of material has become a necessity.

The Request for Proposals were due on August 23, 1996. Ten vendors responded to the RFP (A960078). The Evaluation Committee reviewed ten conceptual proposals and selected five firms to advance as Phase I Finalists. The five firms that were selected as Phase I Finalists were invited to participate in confidential negotiations and discussions concerning future pilot test demonstrations. Upon the successful completion of pilot test demonstrations, the finalists will be given the opportunity to submit a "Best and Final Officer" to the CSU Evaluation Committee.

Pat Dayneko, Director

 

PHYSICAL PLANNING AND DEVELOPMENT

 

Announcement

I am pleased to announce the permanent appointments of the following individuals who have served capably in acting capacities for the past two years:

 

                - Ms. Elvyra F. San Juan, Chief of Program Management
                - Mr. W. Clifford Hahn, Chief of Construction Management

In addition, Mr. J. Patrick Drohan has been promoted to Deputy Senior Director of Physical Planning and Development.

As you know, with the Business and Finance reorganization, contracting and accounting functions previously performed by PP&D have been transferred to the Office of Contract Services and Procurement directed by Ms. Pat Dayneko, and the Office of Accounting directed by Mr. George Pardon. In line with the B&F reorganization, we have eliminated PP&D's Administration Unit, transferred fiscal management responsibilities, and reduced staff to the Program Management Unit.

We are committed to serving your needs and look forward to working together on behalf of the CSU. Thanks for your support!

AB 1890: California's Electric Utility Restructuring Legislation

 

The Governor signed Legislative Bill AB 1890 on September 23, 1996, which codified the California Public Utilities Commission's decision of December 20, 1995, to change the way electrical power is provided to customers in the State of California. It confirms the key issue pushed by the existing utility companies to recover their uneconomic investments in generation plants which will not be competitive in the new structure where customers can choose their generation provider. These investments will be written down over the next few years instead of over 40 to 50 years, with all existing customers paying for this through CTC; a Competitive Transition Charge. PP&D remains active in the ongoing deliberations necessary to settle the many remaining issues, and is working with a CABO task force, chaired by Vice President David DeMauro of San Bernardino, on decisions the CSU and individual campuses must make in the next few months.

1997 CSU/UC Joint Facilities Planning and Management Conference

The Office of Physical Planning and Development is working with the University of California Office of the President on arrangements for an exciting bi-annual joint systemwide conference on capital planning and construction including strategic and budget planning, plant operations/maintenance, telecommunications, utility services, capital renewal and deferred maintenance. The conference is scheduled for March 2-5, 1997, in Newport Beach.

The theme for the joint conference is "A Partnership for the 21st Century." This is the second time the two university systems have formally produced this conference together, and represents a commitment made at the 1994 conference to continue working together in meeting the challenges of higher education. Presentations will focus on current issues in the development of higher education facilities, and the impact of changes in our technological and legislative environment on how we do business. With changes in the CSU's project delivery system and in legislative authority on the horizon, there is a great deal of mutually beneficial information to be shared by all attendees. Our previous joint conference was an overwhelming success, with over 450 people participating from 30 campuses. We are anticipating strong participation from both UC and CSU personnel. An agenda and registration information will be available soon at the PP&D web site on the CSU home page of the World Wide Web at http//www.co.calstate.edu/PPD/. Information will also be available by calling Ms. Glenda Echols in PP&D at 310-985-9493.

Ribbon-cutting Ceremony for New Pier at the California Maritime Academy

Hundreds of alumni and friends turned out for the official opening of the new pier at the California Maritime Academy on September 21, 1996. Those attending the ribbon-cutting ceremony were Congressman George Miller, President Jerry Aspland, Frank Johnston of the Maritime Administration, Dan Donahue and Ray Miller of the Vallejo City Council, and George Owen of The California State University Chancellor's Office. Employees Lee Allen, Director of Facilities Management, and Cletus Gephardt, Waterfront/Boathouse Supervisor, were honored with special plaques.

The new pier will offer a permanent home to the campus' new training ship, Golden Bear. Transferred by the U.S. Navy in September 1994, the vessel successfully completed her maiden voyage this spring, traveling from Cabo San Lucas to Seattle and back to Alameda. While in port, cadets hold "Open Ship" and provide personal tours of the training vessel to thousands of visitors. Students at Cal Maritime are required to spend 60 days at sea each year. In the future, the Golden Bear will travel to Asia, the South Pacific, and South America.

PPD Due Dates for CPB&G Agenda Items (January 28-29, 1997 Trustees' Meeting)

Master Plan Revisions:
All Other Items:

November 26, 1996
December 10, 1996

Jon H. Regnier, Senior Director

PLANNING AND ANALYSIS

 

Benchmarking Project

The California State University 1995/96 Benchmarking Report is now complete and was distributed the week of October 21.

On November 1, Benchmarking participants and interested managers will meet for an "Encouraging Improvement Symposium" in San Jose at the Le Baron hotel. Major items of discussion and training will include development of customer satisfaction survey requirements, review and rewrite of data elements, and sharing of successful practices. Richard West, Senior Vice Chancellor of Business and Finance, will be the keynote speaker. There is no charge to the participants, but space is limited. Reservations must be made by October 28.

If have any questions concerning Benchmarking, please contact Ron Ashcroft at 310-985- 2706, or e-mail ron_ashcroft@qmbridge.calstate.edu for further information.

Process Mapping Projects

The Workers' Compensation/Unemployment process mapping project has been completed and the Chancellor's Office will be sending the final reports to the campuses. Sedgwick James, the project consultants, received many compliments for their work on the project. Subcommittees of the Risk Pool have already begun to schedule the discussion and use of the report as part of their future training meetings.

Process mapping topics for a 1996/97 project are currently being reviewed by the CSU Benchmarking Task Force. Solicitations for campus participation will be made by the end of October.

If you have any questions concerning process mapping, please contact Ron Ashcroft as noted above.

CSU One-Card Initiative

During the past month, two additional campuses, Dominguez Hills and Stanislaus, have joined the One-Card Task Force in developing one of the Integrated Technology Strategies Initiative's priority projects - the One-Card Initiative. The One-Card Task Force, which now comprises sixteen campuses and the Chancellor's Office, issued an RFP for the CSU "One-Card" (also commonly referred to as universal, all-campus, and multi-purpose school ID cards) on June 29, 1996. Twenty-four firms submitted conceptual design proposals on 8/16/96, covering ID, banking services, personal and campus long distance telephone service, and system integration services.

Initial price schedules from the proposing vendors were due October 11. Thirteen of the 16 campuses participating in the One-Card Task Force have requested the One-Card service vendors to visit their campuses to address their equipment and infrastructure questions related to "Student Card Production" which are campus-specific. These campus visits by the vendors should be completed during the month of October. A revised deadline for campus commitment to the master contract is November 15.

IBM Consulting is currently completing all campus visits to assist the participating campuses in the development of their implementation plans. These plans will provide the basis of a generalized plan for the other CSU campuses who may wish to opt-in to the contract and implement campus cards in the future. Contact Lawrence Lin at 310-985- 2705, or e-mail lawrence_lin@calstate.edu or Tom Roberts at 310-985-9159 or e-mail tom_roberts@calstate.edu for further information.

Productivity and Investment Program (PIP)

The Productivity and Investment Program (PIP) Committee has awarded over $2.9 million to 25 proposals since the creation of the program in the Fall of 1994. Within the total amount awarded, $1.7 million was awarded to 10 proposals from multi-campus consortia.

Currently, 12 or more PIP projects have been or are in the process of being completed. To share the productivity knowledge and experiences gained through these PIP projects, a CSU productivity fair and workshop is being planned for the Spring of 1997, in which project coordinators will be invited to make presentations on their completed PIP projects to the CSU community.

Status reports on all awarded projects (including past cycles) are available on the Chancellor's Office web page under the Business and Finance section which was most recently updated in July 1996. Lawrence Lin at 310-985-2705 or e-mail:lawrence_lin@calstate.edu.is providing staff support on this program.

Lenore Rozner, Senior Director

The Business and Finance Newsletter is now accessible from the Chancellor's Office website: http://www.calstate.edu/BF/Newsletters/Newslet.shtml.

If you have a question or comment on a technical issue related to receiving the B&F newsletter or want to add, delete, or modify an e-mail address, please contact Suzanne Wallace at voice: 310-985-2075, fax: 310-985-2710, or e-mail: suzanne@calstate.edu.