Centralized Investment Pool

The California State University Short-Term and Total-Return Accounts, managed by Metropolitan West Securities, Inc. are officially open for business. Due to monthly valuation, Total-Return Account initial deposits are effective as of September 1, 1997. Deposits to the Total-Return Account must be wired to The Bank of New York no later than 1:00 PM on the last business day of the month for proper account credit. Please provide communication of changes to the Total-Return Account no less than 4 business days prior to month-end.

The investment objective of the Short-Term Account is to maximize current income, consistent with the preservation of capital. This account invests in a portfolio of fixed-income securities of varying maturities with an approximate portfolio duration of .75 to 2.0 years. The investment objective of the Total Return Account is to maximize long-term total return. This account invests in a diversified portfolio of fixed-income securities of varying maturities with an approximate portfolio duration of 3.75 to 5.75 years.

Campuses may monitor investment account activity by accessing the Metropolitan West Website at with their assigned user name and password. Passwords are available to authorized representatives by contacting Ed Curiel, MetWest's Chief Information Officer at( 310) 441-7601.

George Pardon, Director


1997/98 State Budget Action

In response to a recent court judgment requiring the state to pay back retirement funds borrowed from the Public Employees Retirement System (PERS) during the state's economic downturn in the early 90's, the Governor directed the Department of Finance to repay PERS $1.36 billion in settlement costs in the 1997/98 fiscal year. Negotiations with PERS over a potential multi-year settlement did not prove fruitful. The Governor's decision to repay the settlement in one lump-sum came in response to failed negotiations with the legislature on a personal income tax cut and a pay raise for state employees. This has had a financial impact on all state agencies with the exception of K-12 and community colleges, which are protected by Proposition 98. The legislative Conference Committee made the budget adjustments necessary to bring the budget in balance with the PERS action. As a result, the CSU did not receive the $15.6 million in supplemental augmentation proposed by the legislature which was to be used to enhance academic technology and employee compensation increases. Although the final budget includes nearly the same level of funding requested in the Board of Trustees' support budget under the commitment of the Governor's four-year compact, $2.5 million has been removed from CSU base budget support as a result of the Governor's veto of funding redirected by the legislature for technology.

1997/98 Support Budget (AB 107, Chapter 282, Statutes of 1997)

The 1997/98 Final Budget provides for a state General Fund appropriation increase of approximately $102.5 million, including state General Fund support in lieu of a student fee increase and a $4.8 million increase in state university fee revenue due to a 2,499 FTES enrollment. This budget represents the third year of the Governor's commitment to a four-year compact in which the CSU is assured of a stable General Fund support increase of 4% (plus General Fund support for bond payments and to offset any need for student fee increases) until fiscal year 1998-99.

The CSU's 1997/98 Final Budget appropriates funding for necessary mandatory increases such as changes in the cost of employee benefit payments. It also appropriates funds sufficient to provide a four percent compensation increase pool, increase student enrollment by 2,499 FTES and support the Trustees' priority focus on academic technology and physical plant maintenance. The state has also redirected $2.5 million for the K-12 economic improvement initiative (The $2.5 million was already included in the 1996/97 budget), and augmented the compact with $1.7 million for the conversion of the Stockton Development Center, $1 million for CSU outreach efforts, and $328,000 for the Center for California Studies.

1997/98 Lottery Budget

The Board of Trustees is scheduled to review and adopt the 1997/98 Lottery Revenue Budget at its September 16-17, 1997 meeting. After the budget is adopted, we will allocate a portion of the 1997/98 budget to campuses. Campuses can expect to receive allocations similar to those contained in the 1996/97 budget.

1996 Instructional Equipment Inventory Report

Campuses will receive materials to complete the 1996/97 Instructional Equipment Inventory report with their 1997/98 Final Budget allocation letters. It is requested that these reports be returned to the Chancellor's Office no later than September 15, 1997 so that the information can be incorporated in the 1998/99 budget process.

John Richards, Director



CSU Planned Purchased - Targets of Procurement

The CSU continues to make progress in developing and using cooperative purchasing agreements. During the first 6 months of this year, use of systemwide agreements has resulted in significant savings for the CSU; 1996/97 third and fourth quarter statistics include:

  • Purchase of Microsoft products has doubled with a total of 11,734 licenses purchased,


  • A 300 % increase in purchase of Claris software with pricing available under this agreement being very attractive, resulting in significant savings systemwide.


  • The CSU spent over $4 million on procurement card purchases with 17 campuses and the CO participating in this systemwide program.

Also, a new systemwide agreement has been completed with MedPro Software, LLC for the purchase of site licenses for MedPro software designed for medical service applications. Volume purchases of the licenses can result in up to a 25% savings off educational list price.

Additional information about these agreements or other are available at the CS&P website .

Procurement Modeling Projects

Procurement Professional Development Training Plan: This project is part of the CABO sponsored systemwide procurement reform efforts. The goal is to identify and develop a world class training program for procurement professionals. The training team held its kick-off meeting on 6/23/97, at the Pomona campus and categorized staffing levels to identify core competencies into the following:

Foundation level - Staff new to the procurement field, with typically two or three years of experience at the CSU.

Journey Level - Staff which are experienced in the field, typically with three to ten years of experience in public procurement.

Senior Professional level - These individuals handle the most complex procurement transactions and are widely considered to be experts in the procurement function.

A survey questionnaire has been initiated by the consultant firm, Ray T. Jensen and Associates, to help aggregate information to generate recommendations and support and to assist with defining systemwide core competencies and curriculum development.

Procurement Technology Projects/Electronic Commerce: The technology team continues to investigate available vendor technology in the area of electronic commerce. A recommendation for pilot programs is expected to be presented to CABO in October.

Public Works Restructuring

CS&P, working closely with PPD, continues to make progress on the restructuring of public works contracting. To date, 16 campuses have received delegation to process their own capital outlay projects and other campuses continue to request delegation authority. To assist campuses in this new responsibility, efforts are underway to consolidate the old SUAM ¤2600 and ¤9000 series and a final draft should be ready in September.

In addition, model public works capital outlay agreements for Architecture and Engineering services have been developed and are available on the CS&P Web page. These new models are intended to standardize contracting and information reporting across campuses. Since January, all Architecture and Engineering agreements executed from the Chancellor's Office are in this new format. CS&P is responsible for keeping current the model agreements, General Provisions, Supplemental Provisions, etc., posted on the web. Campuses are encouraged to use these new forms by downloading them from the web. Any questions regarding the new agreement format should be directed to: Haaziq Muhammad at (562) 985-9581 or e-mail at:

Pat Dayneko, Director


Name Change

Effective July 1, 1997, we changed our department name from "Auxiliaries Planning and Bonds" to "Financing and Risk Management." Future coded memoranda will be issued under the department's initials "FRM." This name change will not affect any of the existing management reporting lines within Business and Finance. The new name is intended to best reflect both existing and new responsibilities of the department and to communicate the broader aspect of its involvement in financing activities.

Lease Financing

As of July 1, 1997, responsibility for the review and approval of tax-exempt financed personal property acquisitions (most commonly associated with lease-financing) was transferred from the Office of Contract Services and Procurement to the Office of Financing and Risk Management. As previously reported, the intent of this action is to concentrate the system review of financing issues under one program area. At this time, no changes are planned to the existing review and approval process. However, efforts will be made to continue to identify economies and efficiencies to the overall lease financing program. Please contact Mr. Ben Figueroa in Financing and Risk Management at (562) 985-2790 if you have questions or require any information. The Office of Contract Services & Procurement will continue to assist with procurement issues and will maintain a contracts resource library that includes model agreements and other reference material. Please refer to E.O. 669 and BA 97-03 for additional information.

$150 Million Tax Exempt Financing Limit

As last reported, a request for a letter ruling on the $150 million tax-exempt financing limit was transmitted to the Internal Revenue Service in May 1997. It requested that for purposes of Section 103 of the Internal Revenue Code of 1986, each auxiliary be viewed as an "instrumentality" of the State of California. In the alternative, a ruling was requested that all auxiliaries not be treated as "one organization" for purposes of computing the $150 million limitation.

Since then, much activity has taken place at the federal legislative level to repeal the financing limit altogether. An initiative planned and directed by the systemwide offices and which included specific action by presidents and members of the board of trustees was instrumental in bringing together the members of the California delegation in a non-partisan effort to advocate for repeal of the limit on any new financings. The provision to remove the limit was incorporated into the tax package that congress sent to the president. The president has signed the tax legislation which is effective for all such financings as of August 6, 1997 and thereafter.

The limit will still apply to existing 501 (c) (3) debt and any related financings of this debt, so that the process for existing debt may continue to be monitored and managed. We are continuing the revenue ruling request process for the benefit of any refinancings and because the "instrumentality" status would provide additional procedural benefits. Please contact Richard Leffingwell or Benjamin Figueroa if you have questions on the ruling request or the recent federal legislative action.

Athletic Injury Medical Expense Program (AIME)

The California State University Risk Management Authority (CSURMA) officially formed its newest program effective July 1, 1997. The purpose of this self-insured program is to pay medical expenses for injuries sustained while participating in intercollegiate athletics. Seventeen campuses enrolled in this new effort. A new feature to this pool is the purchase of stop-loss coverage, i.e. when losses hit a certain limit ($1 million), a commercial insurance product picks up coverage for losses from that point to a limit of $1 million. Athletic Directors, Head Trainers, Assistant Athletic Directors participated in the formation of this program. For more information, please contact Charlene Minnick, Systemwide Risk Manager at (562) 985-2080 or Sedgwick, Public Entity Group (415) 983-9662.

Risk Management: Fitting the Pieces Together/San Diego, Mission Valley Hilton

How do HR, EH&S, Workers' Compensation, Risk Management, Public Safety, and Finance work together to manage risk? A two and one-half day conference dedicated to assisting campuses in putting the puzzle together is scheduled for November 3, 4, and 5, 1997 in San Diego. There will be general sessions that exhibit how each of the various disciplines function within the context of Risk Management and specific training and information sessions for Risk Managers, Environmental Health and Safety Directors, and Workers' Compensation claim coordinators. This is a wonderful opportunity for all campus personnel who interact in the areas of Liability, Workers' Compensation, and Environmental Health & Safety and would like detailed information. For more info, please contact Charlene Minnick or Susan McCormick at (562) 985-2080.

Student Union Program

With the new fiscal year, we are commencing plans for a second student union workshop for next spring. In 1995/96, we had our first workshop which had over 45 attendees, including all 19 union directors. Key topics discussed were: student union budget process, bond covenant requirements, and bond funded construction projects. We would be interested in receiving your suggestions to develop our agenda for the next workshop. Please e-mail your suggestions to Rosa H. Renaud at:

Richard K. Leffingwell, Director


Construction Bid Activity

Construction Management reports successes in construction bids over the past fiscal year. Fifteen projects were bid with a total budget of $74,800,000. The total amount awarded for these fifteen projects was $66,188,564, or 11% under budget.

Over the past month, Construction Management reports successful bids on three large projects. Bids were opened for the Chancellor's Office, New Headquarters Building, on July 8, 1997. The contract has been awarded to S. J. Amoroso Construction Co., Inc. in the amount of $23,795,000. Construction is expected to begin in August 1997.

Congratulations to those campuses who have pushed their projects to take advantage of the current good bidding climate. We urge other campuses with construction funds to follow suit.

PPD Due Dates for CPB&G Agenda Items (November 11-12, 1997 Trustees' Meeting)

Master Plan Revisions:
All Other Items:

September 9, 1997
September 23, 1997

Jon H. Regnier, Senior Director


SIP - Systemwide Internal Partnership

The SIP Development Team continues to meet weekly with each of three potential partner teams to work toward successful completion of the partnership business plan proposals that were due on August 25. The project remains on target to identify a single partner team by September 15th. Additional information on this critical systemwide effort is available on the web at:

Benchmarking Project

Pre-data collection workshops for benchmarking functions are scheduled for September 29-October 1 at the Ontario Airport Marriott and early registration is recommended. Gerry Shaw, managing partner of Wellesley Partners Ltd., and formerly a Vice President for Student Services at an eastern college, will be a guest speaker. Mr. Shaw has been instrumental in the development of nationwide benchmarking data for Student Affairs areas. The benchmarking data instruments will be sent to the fourteen participating campuses in mid-September, and collection efforts will begin following the workshops.

The Benchmarking Customer Satisfaction Survey is now available for campus consideration, campuses should make their determine by September 5 whether they will be utilizing the survey in the Fall. Administration of the survey may begin as early as October 1 and will conclude by November 15.

If have any questions concerning the above, please contact Ron Ashcroft (, phone: (562) 985-2706, fax: (562)985-2710).

Process Mapping Project

The Human Resources process mapping project is on schedule and moving forward. The consultants are now in the second round of campus visits and actively mapping campus HR functions and processes. The Process Mapping Committee is scheduled to receive a progress report from the consultants on September 8.

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

CSUMentor Program

The project team has been setting up and testing the CyberCash "CashRegister" product which will allow students to make Internet credit card payments without special software or "cyberwallets." By mid-August 1997, students applying to the Chico, Long Beach, Monterey Bay, and Pomona campuses through CSUMentor will be able to complete Internet credit card payments through CyberCash during a trial basis. Additional campuses will be activated on CyberCash as the system becomes fully operational. Please contact Lawrence Lin at the Chancellor's Office at (562) 985-2705 or e-mail: for additional information.

Collaborative Management Systems (CMS) Project

Seven vendors submitted responses to the CMS Request For Qualifications (RFQ) for integrated campus financial, student, and human resource systems software packages and services. The CMS RFQ evaluation team qualified and approved three vendors (Oracle, PeopleSoft and SCT) to participate in "Vendor Discovery" meetings on July 28-29, 1997 and the second phase of the RFQ process. Starting in August, the CMS Committees began their review and evaluation of the specific system modules from Oracle, PeopleSoft, and SCT.

The CMS Human Resources (HR) work group has also developed an evaluation matrix to identify the current and future HR/payroll services required by the CSU as a part of our continuing participation in the SCO 21st Century Project. The CMS HR work group met during the month of August to complete the HR/Payroll evaluation matrix and develop recommendations to the CMS Task Force. If you have any questions concerning CMS, please contact Lawrence Lin at the Chancellor's Office.

Lenore Rozner, Senior Director

The Business and Finance Newsletter is now accessible from the Chancellor's Office website:

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: