Chancellor's Report

to the Board of Trustees

July 20, 2005

Thank you, Chair Galinson.

I want to join you in welcoming our newest presidents - Ham Shirvani and Diane Cordero de Noriega.

Also congratulations to our new trustees who have now received Senate confirmation.

And many thanks to Larry Adamson for his service on this board. We have enjoyed working with you, and we look forward to working with Bob Linscheid as well.

Dana Bezerra will be taking Bob's place as president of the Alumni Council.

I also want to join Chair Galinson in welcoming Marshelle Thobaben and the new Academic Senate Board. We are relying on you to do important work for the CSU, especially as you continue working on the lower division transfer issue.

Budget Update

I am very pleased that we have a new budget agreement that protects student access at the CSU. We are extremely grateful to the governor and legislators for preserving the compact with the CSU and the UC.

I want to thank Richard, Patrick, and the rest of our budget team and all of our team members in Sacramento for their hard work.

Progress of SB 724 (Ed.D. bill)

Next, I want to thank Karen, our Sacramento team, and all of our key leaders and alumni who worked on behalf of SB 724, the education doctorate bill.

I am glad to report that we have reached agreement with the UC on a plan that will allow the CSU to offer independent Ed.Ds.

This agreement builds on the mutual strengths of CSU and UC campuses while remaining consistent with the basic tenets of the Master Plan for Higher Education. It is also responsive to the state's needs for training programs for educational leaders across all of the segments.

California schools require the highest performance standards and the most rigorous standards-based reporting and accountability process in the country. Yet our state's production of education doctorates is substantially lower than other states.

The Ed.D. bill will utilize the expertise and experience of CSU faculty in preparing K-12 and community college leaders. With this effort we are looking to make an important, positive change, through an approach that is widely used around the country.

Sustainability

Next, I want to thank Vi San Juan and her team for their work on the new sustainability policy.

The CSU has a longstanding commitment to operating energy-efficient buildings and has a proud history of performing well against energy conservation goals.

The CSU is currently on track to achieve a major reduction in total energy consumption in support of a goal set in 2001. This reduction is especially noteworthy considering that CSU facilities house a growing number of computers and data networks, and the CSU is home to a new generation of increasingly complex science buildings.

With this new sustainability policy, the CSU is positioned to remain a national leader in promoting energy conservation and awareness.

Home Depot Center

At the May meeting this Board placed three contingencies upon the approval of the Dominguez Hills Master Plan revision, which calls for the construction of a new conference facility alongside the Home Depot Center on the existing Home Depot Center leased property. This Board asked me to report back to you at this meeting on the status of that situation. I have not yet received a final report from the Dominguez Hills President on the three contingencies, but there have been a number of conversations about the three issues that concerned this Board, and I want to report back to you on the current status of each.

First, this Board wanted to ensure that there are no outstanding material issues of noncompliance in the agreements between the University or Anschutz Entertainment Group (AEG), and the University Heights community, including satisfaction of all issues contained in the Settlement Agreement between AEG and University Heights for Phase I of the project. We have looked into this and determined that the University Heights Homeowners' Association is satisfied with the University's actions and performance on its agreement. There is, however, one issue of substance that Mr. Gil Smith, a resident in University Heights, remains unsatisfied about because it is contrary to the statements in the EIR for Phase I of the project --- and that is the construction of stadium lights at the track and field facility. These lights belong to CSU Dominguez Hills not AEG. I met with Mr. Smith on Monday. I have instructed the campus that the only remedy that is guaranteed to meet the EIR requirement is to remove the lights. President Lyons has asked Mr. Smith if the University can wait until after the 1st of November (after the University soccer season is over) to take the lights down.

Mr. Smith has other issues with the Home Depot project, but none of them rises to the level of an Environmental Impact Report (EIR) violation. The EIR calls for a certain level of camera surveillance on the perimeter of the property for security purposes. Those cameras have been installed and are in compliance with the EIR. Mr. Smith feels that there should be additional camera surveillance throughout other locations on the property. Some of the neighbors are concerned about privacy. That is not required by the EIR. Mr. Smith has also complained about construction and operation noise occurring in the early morning hours, mostly set up and tear down for events. That has happened, on rare occasion, and in each instance that has been brought to the campus' attention, an apology was issued to Mr. Smith, and steps have been taken to ensure that it does not recur. I have asked President Lyons once again to meet with AEG and to assure that the requirements about working hours around the Home Depot Center adhere to the conditions agreed to in the Settlement Agreement among the home owners association, the University and AEG.

Mr. Smith also feels that the campus should have prepared a full EIR on the Master Plan revision, rather than a focused Supplemental EIR, and the attorney for the City of Carson has issued an opinion in agreement with him. I have asked our internal EIR experts to take another look at this situation, and they have confirmed to me that the Supplemental EIR was appropriate because of the relationship between the proposed hotel and training facility project and the existing Home Depot Center. The circumstances under which the new project will be undertaken are not so substantially changed as to require major revisions to the prior EIR to make it applicable to the Phase 2 project. The CSU was able to rely upon much of the existing information and environmental analysis in the prior-certified EIR to identify most of the environmental impacts of the proposed project, with the previously adopted mitigation measures brought forward to mitigate the impacts of the proposed project. As a result of this analysis, it was determined that because the incremental effects of the proposed project and the additional mitigation measures associated with the proposed project did not require major changes to the prior EIR, the changes could be addressed through a Supplemental EIR. A Supplemental EIR is given the same kind of notice and public review as a Draft EIR or Subsequent EIR.

I note that this question was raised during the public comment period, and the CSU responded in the Final EIR.

With the exception of the track and field stadium lights, which are now to be removed, I am satisfied that the University has done everything else required to satisfy the first contingency placed on the approval of the revised Master Plan.

The second contingency was a written agreement from AEG which ensures that California State University Dominguez Hills will be referred to in all AEG media releases, announcements and broadcasts from the Home Depot Center, and that a further commitment will be sought from all third party licensees and media outlets that broadcast from the facility. There have been several drafts of language setting forth this commitment that have been exchanged with AEG. A final version is not yet agreed upon, but I believe that we are very close, and I will continue to follow that until such time as there is an appropriate agreement signed and in place.

The third contingency was a determination that the revenue resulting from Phase II of the project is equivalent to comparable market rates. A thorough analysis of comparable market rates for similar conference facilities; i.e., a hotel at UC San Diego, and for-sale property in Carson, has been made and discussed with the chancellor's office staff. The agreement for the conference center and the agreement for the original athletics stadium are market rates. This will be confirmed when the campus completes all of the contingencies and provides me with a final analysis.

I will report to you again at the September Board meeting.

Chair Galinson, that concludes my remarks.