NEWS FROM THE DIRECTORS
Development of the 1999/00 Support Budget
A planning estimate of the 1999/00 Support Budget was presented at the September Board of Trustees' (BOT) meeting. The 1999/00 budget priorities were listed as compensation, enrollment growth, mandatory costs, maintenance of plant, and special initiatives. The 1999/00 budget planning estimate includes proposed increases in compensation ($95 million); enrollment increase of 3%-4% ($60-75 million); mandatory costs such as state university grants, benefits maintenance, and new space ($15-20 million); maintenance of plant ($5-20 million); and special initiatives including technology infrastructure ($30-45 million).
The FY 1998/99 budget represented the final year of the state's four-year Higher Education Compact (Compact I). Compact I assured a stable General Fund increase of 4%, support for bond payments, and included funding to offset student fee increases in fiscal year 1998/99. A proposal for a second Higher Education Compact (Compact II) to begin in the FY 1999/00 was presented at the September BOT meeting. The Compact II proposal lists similar General Fund support as provided under Compact I with some adjustments and one significant modification- -full funding of enrollment increases will be proposed in addition to the 4% General Fund increase.
Consultation with the Executive Council, System Budget Advisory Committee, and other CSU constituency groups on the planning estimate occurred in May, July, and August. Modifications to the planning estimate will be made based on further consultation. The BOT is scheduled to take action on the 1999/00 Support Budget at the end of October.
Lottery Budget and Schedule
The Board of Trustees will review the 1999/00 Lottery Revenue Budget at its November 1998 meeting. The proposed budget will maintain the current funding levels of all programs at $29.8 million. The timing of the lottery budget is changing to coincide with the General Fund Support Budget. The Chancellor and Executive Council will consider recommended programmatic changes for the 1999/00 Lottery Revenue Budget.
1998 Student Fee Report
The Budget Office is in the process of collecting annual student campus fee reports in accordance with Executive Order 661. An aggregate fee report will be presented at the November Board of Trustees meeting so that the BOT may consider the level and range of fees charged to students. This year, a standardized student fee report form was provided to campuses for completion to allow for consistent campus reporting. Also, the standardized format of reports will enable downloading of student fee data into a database. The student fee database will be utilized to generate various reports and may later be used as a campus resource.
John Richards, Director
CONTRACT SERVICES AND PROCUREMENT
Minor Capital Outlay Projects (Less than $250,000 )
CS&P is participating with PPD to develop modified bid procedure guidelines for minor capital projects. It is anticipated that the guidelines will be available by the first of the year. Any questions regarding this subject (modified bid) that arise in the interim can be directed to: Haaziq Muhammad at (562) 985-9581, or via e-mail at firstname.lastname@example.org. email@example.com.
Small Business Legislation
The following bills were enacted and chaptered during the most recent Legislative session. Additional analysis and/or implementation provisions related to this legislation will be forthcoming.
AB 835: stipulates that California-based companies evoking the 5% small business preference must demonstrate their eligibility for Small Business, Enterprise Zone and Target Area Contract preferences based upon labor surplus zone requirements.
AB 1092: provides that prime contractors may submit additional information, other than subcontractor's name and location of business, up to 24 hours after the established bid deadline. (Note: this is consistent with current CSU practices).
AB 2505: redefines the term "small business." This bill makes the following changes: it deletes the requirement that a small business need not be dominant in its field of operation; may have 100 or fewer employees, and an average annual gross revenue of $10,000,000 or less (over the previous three years), or may be a manufacturer with 100 or fewer employees.
Tax Reform Act of 1997 (Public Law # 105-34, section 201(c), 111)
This statute allows certain taxpayers who pay qualified tuition and related expenses to an eligible educational institution to claim a Hope Scholarship Credit or a Lifetime Learning Credit against their federal income tax liability. The law establishes certain reporting and student service information requirements for institutions.
CS&P is currently working with the C.O. Accounting department to identify potential vendors who can assist CSU campuses with compliance with the new Internal Revenue Service's requirements. The feasibility of a systemwide master services contract is being investigated. Questions regarding this project may be directed to Loren House at (562) 985-9160.
Pat Dayneko, Director
FINANCING AND RISK MANAGEMENT
Student Union Program
On October 5, 1998, the Board of Trustees successfully sold bonds for two student union projects. The Chico Student Union bonds for $23,370,000, at true interest cost of 4.46%, were awarded to Salomon Smith Barney as the low bidder in a competitive sale. The bond proceeds, together with student union reserves, will be used to finance the construction of approximately 14,700 additional square feet to the student union, and to remodel a portion of the existing student union (52,500 square feet). Additionally, the campus will construct a new three-story bookstore of approximately 57,700 square feet immediately adjacent to the student union facility. The San Francisco Student Union bonds for $12,950,000, at true interest cost of 4.57%, were also awarded to Salomon Smith Barney as the low bidder in a competitive sale. The bond proceeds, together with student union reserves, will be used to finance the renovation and expansion of the student union and renovation of the bookstore which is located in the union. Should you have any questions on the issuance of student union bonds, please contact Rosa H. Renaud, Financing and Risk Management, at (562) 985-2790.
Housing Occupancy and Financial Information
We recently completed the collection of occupancy and financial information from Dormitory Revenue Fund Housing programs. Based on previously identified adjusted design capacity, total systemwide averaged occupancy was approximately 87% for fiscal year 1997/98. Since the 1994/95 decentralization, campuses have improved efforts to increase occupancy levels as demonstrated from the low of 63% occupancy in Fiscal Year 1993/94 to the 81% occupancy in Fiscal Year 1996/97. The initial campus efforts after the decentralization focused on increasing the revenues coming into the program with recent emphasis on committing funds to enhance the housing facilities and services. The housing system net debt service coverage continues to remain strong at 1.82% in FY 1997/98. However, while net revenues increased by 15% in 1994/95 from the prior year, in 1997/98 net revenues decreased by 6% from the prior year, primarily due to a 13% growth in operating expenses between 1996/97 and 1997/98. While some campuses are experiencing close to full capacity, others continue to maintain occupancy in the 70% range. We expect to continue to monitor those campuses with the lowest occupancy to ensure that they are able to meet annual debt obligations and remain solvent in their operations. If you have any questions about the DRF housing program, please contact Benjamin Figueroa at (562) 985- 2790 or via e-mail at firstname.lastname@example.org.
Tax-Exempt Financings of Personal Property (Equipment)
Please ensure that the Office of Financing and Risk Management has sufficient notice to review and approve any tax-exempt equipment financing you may be contemplating or currently pursuing. While some of this process has been standardized with the existence of pre-approved financing vendors and the existence of CSU terms and conditions, there are some transactions that are more complex and require a greater amount of internal review and may also require an external tax counsel opinion. If you have any questions on this process, please contact Benjamin Figueroa at (562) 985-2790 or via e-mail at email@example.com.
The November Board of Trustees meeting will include two possible items related to public/private partnerships. This presents an ideal opportunity to remind campuses that the Trustees have adopted a public/private policy that may be found in the Financing and Risk Management web site. While the initial trustee approval relates to the support of the project concept, campuses should have prepared as part of the agenda submission process a sound financial feasibility review to ensure that the project will minimize costs to the campus while still offering a return of investment to external investors. If you need a copy of the policy and/or would like to receive copies of prior Trustee items, please contact Benjamin Figueroa at (562) 985-2790 or via e-mail at firstname.lastname@example.org.
New Additions to FRM Web Site
Please visit our web site for the following new addition:
Auxiliary Organizations-- Timeline for Board of Trustee Approval of Tax Exempt Financings
The timeline maps out the trustee approval process as it relates specifically to the bond sale process, but also its' relation to the physical planning and financial planning process by auxiliary organizations.
Important dates for Risk Management:
November 4-6, 1998: "The Second Annual Risk Management: Fitting the Pieces Together." Registrations are being accepted, the hotel is filling up! Make your reservations now. Two and a half days of practical workshops will cover workers' compensation topics as well as general liability, workplace violence, student interns, volunteers, student travel, and a keynote speech from Richard West, Senior Vice Chancellor, Business and Finance.
November 11, 1998: "Insurance Requirements in Contracts." A special one- day workshop, designed specifically for risk managers and contracts and procurement personnel will be held November 11, 1998, at the WestEd facility Conference Room A. This workshop will address the common (and sometimes uncommon) issues associated with what kind of insurance and how much insurance should be required in contracts. Please mark your calendars and plan to attend this workshop.
For additional information on the above workshops, please contact Charlene Minnick or Marti Lopez at (562) 985-2080.
Richard Leffingwell, Director
For copies of CSU Legislative Reports or other legislative information pertaining to the CSU, please visit our website at http://www.calstate.edu/oga/.
INFORMATION RESOURCES AND TECHOLOGY
For information related to technology projects within the CSU, please visit our website at http://www.calstate.edu/tier3/irt.
Tom West, Assistant Vice Chancellor
PHYSICAL PLANNING AND DEVELOPMENT
Five-Year Capital Outlay Program
The 1999/2000 capital outlay program priority list totaling $214,898,000 was approved by the Board of Trustees at their September meeting, while the five- year improvement program was presented for information. The program funding relies upon voter approval of a K-university public education bond measure that will be before the voters in November.
The Department of Finance has requested SCOPE visits at the Fullerton, San Diego, San Jose, Chico, and Stanislaus campuses in order to review program requests. In addition, the Legislative Analyst's Office has requested site visits at San Luis Obispo, San Jose, and Sonoma for program review and discussions on year-round operations.
Capital Projects Training Program
The Capital Projects Training Program has provided 13 days of training programs at multiple locations over the past year. Training topics to date have covered CSU Capital Projects Management, CSU Construction Management Procedures, Claim Recognition & Mitigation, CPM Scheduling, CSU Contract Law, and Internet-Based Electronic Project Management Tools.
Training sessions scheduled for the remainder of this year included the "CSU Design/Build & Contractor Prequalification" that was held Oct 23 at San Francisco State and as well as a repeat of the CSU State Contract Law session scheduled for November 2 at the Long Beach Renaissance Hotel. Registration information and future updates to the training program schedule can be found at www.calstate.edu/tier3/ppd/.
Proposition 1A on November 3 Ballot
K-University Public Education Facilities Bond Act The Governor signed SB 50 that placed the $9.2 billion K-University Public Education Facilities Bond Act on the November 3 ballot. $2.5 billion is allocated to higher education, including approximately $832 million for CSU projects over the next four years. Passage of Proposition 1A will ensure funding for critically needed facilities at CSU campuses. The "Yes on 1A for California Schools" website address is www.yeson1a.org//. Please visit the site for further information.
National Collegiate CAD Conference
The 1998 National Collegiate CAD (Computer Aided Design) Conference was held in August at Stanford University and was attended by staff of several CSU campuses. The NCCC meets annually to discuss how CAD and Geographic Information Systems can be used to improve university facilities management and planning operations. Bob Schulz, principal architect, physical planning and development, presented this year's keynote address with a presentation on integrating information systems in building design & construction projects. The presentation highlighted strategies that PPD is developing to minimize errors in the construction documents and gain more control of the architects' and contractors' performance by coordinating CAD submittal standards and design and construction contract requirements with Internet-based project information systems.
PPD Due Dates for CPB&G Agenda Items (January 26-27, 1999 Trustees' Meeting)
J. Patrick Drohan, Deputy Senior Director
PLANNING AND ANALYSIS
Collaborative Management Systems (CMS) Initiative
A systemwide contract procuring the PeopleSoft administrative software suite was signed on September 21, 1998. An orientation meeting of the CMS Board appointees was held on October 7 to provide the presidential delegates with results of the PeopleSoft negotiations and to discuss the formation of the collaborative. It is assumed that a subset of campuses will participate in the initial collaborative implementation starting in January 1999. Campuses are asked to declare by November 12th their formal intent to participate in the "first wave" of implementation. The next meeting of the CMS Board is also scheduled for November 12.
The final report for the 1997/1998 benchmarking project was issued and distributed on September 18, 1998. Copies were sent to campus presidents, vice presidents, executive deans, and campus libraries. Binder copies were also distributed to campus coordinators at the participating campuses for any additional reproduction that might be needed.
On November 20, 1998, at the Crowne Plaza near the Los Angeles airport, Charles B. Reed, Chancellor and Richard P. West, Senior Vice Chancellor, will be among several speakers and presenters in the CSU Quality Improvement Symposium. The theme of the symposium is "Achieving Performance Excellence in CSU Administrative Processes." All Vice Presidents of Administration and Vice Presidents of Student Affairs, as well as their senior administrative staff, are encouraged to attend.
A "mini" benchmarking project is underway for Fall 1998. Student Health Services held their pre-data collection workshops on October 7 in conjunction with their annual meeting. On October 8, Career Centers held their pre data- collection workshop. Libraries, Mail Services, Public Safety, Campus Coordinators and campus representatives collecting campus overall indicators will meet on November 2 in Ontario. Development of relevant and insightful benchmarks is being emphasized for all functions.
Customer Satisfaction Survey
The first comment draft of a revised function customer satisfaction survey is being distributed in October to campus coordinators, participating benchmarking function chairs, and the CSU Benchmarking Task Force. Testing of the survey instrument is scheduled for mid November 1998 with administration of the survey planned for spring 1999.
The Human Resources process mapping project has concluded and the report is undergoing final editing. The documents should be distributed by the end of October 1998.
The Distribution/Delivery Services process mapping project held its' kickoff meeting on September 29 with a visit to the Fresno campus. The deliverables for the project will include process maps for the mail and delivery service functions on each campus, activity-based costing models for the "as-is" processes, and recommendations regarding potential improvements and best practices. Completion of this study is anticipated for early 1999. If you have questions regarding this project, contact Glenn Ducat at (562) 985-2721 or via e-mail at email@example.com.
If you have any questions concerning benchmarking, customer satisfaction surveying, or the HR process mapping, contact Ron Ashcroft at (562) 985-2706 or via e-mail at firstname.lastname@example.org
Year 2000 Embedded Systems Pilot Project
Year 2000 Embedded Systems Pilot Project An identification and analysis project with CSU, Long Beach dealing with the embedded systems issue is in its final phases. This pilot project, jointly- sponsored by CSU, Long Beach and the Chancellor's Office, is designed to generate a series of "lessons-learned" in the process of identifying and remediating problems associated with Year 2000 non-compliant embedded microchips. These lessons-learned will be shared with all campuses at the next Systemwide Plant Directors' meeting in and will be communicated to all campus Y2K Coordinators. Additional detail on embedded systems is also being requested of all campuses for the Year 2000 progress report due on October 31, 1998. Glenn Ducat is the Chancellor's Office contact on the embedded systems project.
Lenore Rozner, Senior Director
The Business and Finance Newsletter is now accessible from the Chancellor's Office