Chancellor's Report

to the Board of Trustees

September 18, 2002

Thank you, Chair Farar. I want to join you in welcoming Alex Lopez. Alex, I look forward to working with you, as I know all the presidents and staffs do.

I want to begin by congratulating President Rush on the opening of CSU Channel Islands. I know the people in Ventura County have waited 30 years to open a new campus. You and your faculty and staff and the people in Ventura County certainly worked very hard and it was a wonderful day. Given the capacity problems that face the California State University, it was very important to bring that institution online, within budget, on time.

Second, I want to congratulate Milton Gordon on opening the El Toro campus, the branch campus of CSU Fullerton. When you open a branch campus and bring in 2,500 students the first day, that's some heavy lifting. That branch also opened on time and within budget. Thanks, Milton for all the hard work you and others did to bring that online.

Our dynamic and ever-changing institutions are observing many other transitions this year as well. I want to thank Don Gerth for his many years of service. There will be many celebrations all this year for what you and others have done but I just want to say this: There is only one Don Gerth. He is one of kind. He probably knows more about the CSU than anybody. Don has promised that he is going to write the second edition of his book about the CSU, so we all look forward to that. President Esteban, thank you for all you have done at Chico to bring new life to that campus and serve that campus. President Suzuki, you too have made very important contributions to Cal Poly Pomona, and I know the campus reputation is much better today than before you got there. Thank you all for what you have done for the CSU.

Let me talk about some of the major things that we are working on this year. Enrollment is on the top of the list as a hot topic in the CSU. We had a record increase in enrollment this year. We have welcomed 22,000 students to the California State University, an incredible 7% increase in our enrollment. We had planned on a 5% increase, but that is yet to be determined. But we can say this: We have now gone well over 400,000 students in the California State University. Serving those students well is very important. We met with the presidents on Monday night and they spent about 5 hours with us here in the building to talk about enrollment management policies and what we needed to do.

Richard West reported yesterday on the 2002/03 budget. Whether or not there will be more cuts, we do not know. We do know that classes have started. We are accommodating 22,000 new students. Our faculty is crowding students into their classrooms, and we have to serve all of these students. What we know is that we have got to be funded and have the capacity to continue to grow. The worse thing that can happen is to get more students, clog up that pipeline, and make students wait around longer than they should to get the required classes in order to graduate.

We estimate that 2003/04 will be a tougher budget year than 2002/03. We do know that there will be some additional reductions if we do not see additional revenue. I have said this over and over again: Governors and legislatures can pretty much do two things. They can increase revenue or decrease expenditures. I think they have done everything this year outside of that box so next year that is about what is left. Richard's budget recommendations say we have to take care of our mandatory costs this next year. That is about $78 million. That means that no matter what we do it is going to cost us $78 million more to run this university system next year to keep the same level of services in place, meet our labor agreements, and provide the kind of health insurance and others agreements that we do. We will continue to make enrollment, budget, and faculty and staff compensation a priority.

We have included ACR 73 costs of about $35 million in the new budget. I think that the ACR 73 report is an excellent report that showed that the labor, the academic senate and the chancellor's office and the institutions can all work together for the same cause and put forth an excellent plan. As planned, it will take eight years to implement.

We are also asking for some additional money for off-campus centers because they are going to continue to grow. For instance, Coachella Valley has the lowest college-going rate in California. San Bernardino has opened a new facility there and has another facility under construction. But all of these good ideas take operating money to make them work and we hope that the governor and the legislature will recognize that.

When I came five years ago, Martha and this board emphasized to me that implementing Cornerstones was what I was supposed to do. I have Cornerstones out at home, keep a copy under my pillow, and look at it to make sure that we are staying on task and on course. In August, I invited some of the presidents and all of the provosts to come together at the LAX airport to talk about academic technology and the use of technology in the academic arena, an important part of the Cornerstones plan. We have another year of wiring, but we have pretty much put in place the necessary technological infrastructure. This academic technology plan could help us with capacity. If we could rearrange the way that we teach some of our courses or provide incentives to look at the use of technology, maybe we could have some students in some courses only have to come one day a week instead of two or three. We have a task force that will be reporting to this board just as we did for our administrative technology with the CMS project. This January we should have the outline of a report that is right now being discussed with the faculty and provosts and presidents.

Cornerstones also emphasizes the importance of the CSU's role in preparing students for the workforce. Our goal is to work with the California business community to make sure that we are meeting California's workforce needs, especially in the areas of teacher education, nursing, business, engineering, computer science, and agriculture. In June, I hosted a meeting to examine this issue. I very much appreciated Bill Hauck bringing representatives from the California Chamber of Commerce, state health organizations and others with him to talk about what the CSU needed to do.

Cornerstones asks us to connect learning with the real world. So this week we have launched a web site that will allow Californians to hold a virtual discussion about what we should be doing to prepare students for the real world. The address is www.csuadvantage.org. We have asked the California Chamber of Commerce to use their communications channels to alert businesses in California about this opportunity. I believe that we can use technology to have a conversation, and I believe that this is going to be an opportunity for our faculty, our students, our staff, and businesses throughout California to participate in a conversation about what the CSU ought to do to in preparing students for the real world. We will keep the virtual conversation and discussion forum up through Thanksgiving. In December, we will start to pull that information together and then share that back out over the web site.

Another item that Dave Spence brought us is the reading report. Everything that we do is important, but preparing students to read, comprehend, analyze is extremely important. I want to commend our faculty members who will work on the reading project. I have said over and over again, you can't prepare teachers to teach with only one methodology. There are just too many different kids out there and you have got to have more than one way of doing something in order to be successful, so I commend our faculty and staff for working on that.

Another project we are working on for this spring is early assessment. Again, it all relates back to Cornerstones and our goal to minimize students' need for remedial education. In mathematics, we can probably meet the goal if we stay on course. In reading we can't, unless we turn something around. That is why we are doing the reading project and the early assessment. If all the school districts cooperate with us on the early assessment, we can send information back to those school districts and use the 12^th grade year for students to improve their skills. Louis Caldera and I were on a national commission about the 12^th grade, and we found that the 12^th grade is often wasted in American education. If California can turn it around and get students to take math in the 12th grade and do something about their reading skills, then that will help us meet the Cornerstones' remedial education goals.

Chair Farar, that concludes my report.