Remarks by Dr. Charles B. Reed – May 13, 2009

​Chancellor, California State University
CSU Board of Trustees Meeting
May 13, 2009

Thank you, Chair Bleich.

I know you are not here very long today and have a flight back to Washington D.C. soon; thank you for making the extra effort to be here. I too want to welcome new Trustee Linda Lang. I had a chance to spend some time with her a couple weeks ago, and I look forward to working with her. With Bill Hauck's appointment to a third term, I want you all to think about this - it ends in 2017…that seems like a long way off!

As our new trustee comes in, I want to thank those who are departing the board: Faculty Trustee Craig Smith - thank you for your counsel and advice; and Student Trustee Curtis Grima, thank you for representing the best intentions of the students and the way you performed on this board.

We had fun honoring them last night at dinner. I hope the board will unanimously approve the resolutions that we will be voting on shortly which we gave them framed last night.

This also will be the last meeting for Executive Vice Chancellor and Chief Academic Officer Gary Reichard. I want to thank Gary for his years of service and all the work he did here. Roberta (Achtenberg) probably knows how much work Gary did. He has left his stamp on the CSU for the next 10 years with the Access to Excess plan; he spent an enormous amount of time drafting and redrafting it. So Gary, thank you very much for that.

Some reports:

  1. N1H1 virus:

The CSU did experience the N1H1 virus. We had two students - one at CSU Long Beach and one at San Diego State - come down with the N1H1 (swine flu) virus. They are both doing well.

What I was really proud of is that all 23 of our institutions worked together. The presidents were meeting here when that (virus) started. A couple of years ago we had put a pandemic flu plan in place. All the presidents reactivated their plans. We didn't have to use them but they monitored the situation.

Our plan turned out to be a very good plan. We isolated students and tested them. We had 10-12 students at Long Beach, eight to nine at San Diego who didn't feel well and we tested them and isolated them while tests were going on. I just wish that the state had plans as good as ours. (SDSU President) Steve Weber and (CSU Long Beach President) King Alexander can tell you that I probably talked to them three-to-four times a day, every day during this crisis.

We got the most inconsistent information from the various health departments - at the city, county and state levels. And it scares me because there is no plan there. We were asked, maybe told to do things that we ended up not doing but we provided a very safe environment for our students.

All of our campuses remained open, and as I said to one health officer - we're not an elementary school and we're not going to send everybody home, which is what they were looking for. Their testing procedures did not follow the protocols they had told us they would follow, and in the end it was interesting: the two students who had the virus were well before we ever heard back on the test results.

The other thing that did happen is that on May 3 Cal Maritime's Golden Bear left for its training cruise to South America. You can see their itinerary on their website. One of the other emergencies we had was to get more than 200 doses of Tamiflu on the ship in case it is needed for anyone aboard. Our good friends at the UC San Francisco Medical Center helped us getting the Tamiflu. In addition, the ship is scheduled to make a call in Puerto Vallarta in June, but they will be monitoring that visit and will make a final decision on whether to stop, depending on flu conditions in Mexico.

  1. CSUEU:

Today I also want to thank Pat Gantt and his colleagues on the CSUEU Executive Board for approving a two-year extension of the MOU and working with us going forward. I think that's going to be an advantage for everybody.

  1. Advocacy Day and Budget:

Karen (Zamarripa) reported this morning on CSU Advocacy Day last week in Sacramento. There wasn't a lot of good news coming out of that. I want to say that I have been in government service for 45 years and I have seen ups and downs and economic recessions, but I have never ever seen anything like what is happening here in California and in this country.

It is nothing short of an “economic meltdown.” I anticipate continuing to receive bad news. I don't anticipate things getting better for 18 to 24 months.

I know that there is a recommendation on our agenda today to adjust student fees upwards to 10 percent. I don't like to do that but I can say to this board that we don't have any other choice. We can either have fewer students, fewer people working for us or more revenue. It's very obvious that the state doesn't have any revenue. We will commit one-third of the fee increase to financial aid like we have done with previous increases.

I met with the presidents two weeks ago and let me share with the board that I have a plan but I don't have a plan today. The reason is that we don't have enough information to put it together. Tomorrow we are going to get a peek at information but not enough detail to build a plan. I commit to this board that by the end of the first week in June, I will have a plan for this board to go forward. I will figure out how to keep the board informed by email and other correspondence, and I will consult with the board chair, vice chair and the chair of the finance committee.

The events that are coming will come pretty fast. Everyone has a hunch about the May 19th election. If the ballot measures go down, the Governor has said that could potentially cause a deficit of $21.3 billion.

In my visits with the leadership in the Legislature last week, they told me that we are looking at an 18-20 percent cut. Now think how California's budget was $120 billion, then $100 billion, now it is an $80 billion base - that is just incredible, and that is how fast state revenue is coming down.

Now, I worry can we manage because if we are told how much we have to cut or save, can I save enough, fast enough to be able to meet our payroll, which is $296 million a month; and we have to cash-flow that. Last December and January it was a nightmare because we were trying to operate our construction projects and pay contractors and subs who hadn't been paid in November and December and make sure we had enough money to meet our own payroll.

The 19th comes and 10 days later the Governor will issue the May Revise. In that May Revise there will be enough detail for us to put together a plan. I have made an assumption, and in 11 of 12 years I've been right: where you start with the Governor is generally where you end up. There are some nicks and knacks: a $100 million one way or the other but in a $4.3 billion budget, a $100 million is important but we will deal with all of it.

So that is May 28th. I have asked all of the presidents to work through that weekend until June 1. They will all come here on June 1, and we will talk about what kind of allocations and reductions we would put in place to be able to meet the budget that the Governor is recommending in the May Revise. The leadership, the Speaker of the Assembly and the President of the Senate, both said to me that they are not going to take a long time and that their goal is to have a budget between June 15 and July 1. They will be working off the May Revise too.

I will then take a few days after June 1 and again consult with members of this board and then make a final decision. After that first week in June I will send out to the presidents their allocations and suggestions about how we reduce our budget.

Now, I'm going to have some principles and goals that I want to achieve.

  • Number one: students first. We need to do everything we can to make sure that we do all we can for the students.

  • Number two: I want us to save all the jobs that we possibly can. That doesn't mean we are going to save them all, but want to be sensitive about that because everybody has a family. So I'm going to work as hard as I can and we are going to talk about some different initiatives that we haven't done in labor before.

That's not a very uplifting report but I think it is accurate where California is right now. The leadership and folks I talk to, and someone said it this morning: don't anticipate any new tax revenue. They're going to say that the May 19th vote is assurance that Californians don't want any more taxes - guess they want to go off the cliff. I will keep you all informed - watch your emails as we go forward.


Lastly, we anticipate more than 90,000 students graduating this year. Two weeks ago we had our first graduation at Cal Maritime Academy. Every week from now until the middle of June we will have commencements. I know that we will reach more than 90,000 degrees and be sending our students out into the workforce. I just hope they can get jobs in this year's economy. Many of you will be at the ceremonies, so enjoy seeing the students and their families celebrating a joyful and significant moment in their lives.

Chair Bleich that concludes my report. Thank you.