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BUDGET DEVELOPMENT
Patrick Lenz, Assistant Vice Chancellor

The Senate and Assembly budget subcommittees have conducted hearings on the CSU support and capital outlay budgets. The hearings were informational in nature, with legislators gaining a better understanding of the impact of the net $260.7 million CSU budget reduction proposed in the Governor’s January budget. While it’s unlikely that the budget subcommittees will take formal action on the support budget prior to the May Revise, due May 14, the Senate Budget subcommittee has approved all the CSU capital outlay projects proposed for 2003-04. The Assembly Budget subcommittee heard the CSU capital outlay issues on May 7 and has recommended consent on most items.

Although the legislature has yet to take formal action, alternative budget proposals have been made to address the $34.6 billion budget gap. The Assembly Democrats have proposed a budget package that would reduce CSU’s budget by an additional $69.5 million over the Governor’s January budget. The Assembly Republicans have put forth a comprehensive budget package that would balance the budget without fee (except student fees) or tax increases, but would cut the CSU’s budget $200 million more in 2003-04, $210 million in $2004-05, and $221 million in 2005-06. These two budget options have set a range of anticipated additional budget reductions for 2003-04 between $69.5 million and $200 million.

The proposed budget reductions and timing of enactment of the state budget make it extremely difficult to implement additional budget reductions in the fall of 2003. Based on an additional $69.5 million cut to the Governor’s January budget, the CSU could be faced with options such as:

  • An additional 12.5 percent increase in undergraduate fees over the current 25 percent increase assumed in the Governor’s January budget. ($104.2 million net student fee revenue, less $34.7 million for financial aid); or
  • A combination of budget reductions and student fee increases that would total $69.5 million; or
  • A cut in enrollment as high as 3.3 percent, which represents as many as 10,540 full-time equivalent students (FTES), and the potential layoff of as many as 1,079 FTE employees (583 non-faculty and 496 faculty FTE).

Based on an additional $200 million cut to the Governor’s January budget, CSU could be faced with options such as:

  • An additional 35.8 percent increase in undergraduate fees over the current 25 percent increase assumed in the Governor’s January budget. ($300 million net student fee revenue, less $100 million for financial aid); or
  • A combination of budget reductions and student fee increases that would total $200 million; or
  • As much as a 9.4 percent enrollment reduction equivalent to 30,331 FTES, and the potential layoff of 3,106 FTE employees (1,680 non-faculty and 1,426 faculty).

The proposed budget reduction options come at a time when the CSU received 41,000 more applications for admission to the University than in the prior year.

BUSINESS PLANNING & INFORMATION MANAGEMENT

Lenore Rozner, Assistant Vice Chancellor

QUALITY IMPROVEMENT (QI) PROGRAMS

Performance Measurement: The participating function groups continue to make progress on the bi-annual systemwide effort. Measures have been finalized and will allow for cross-campus comparisons in the search for potential model practices. Several groups have already completed their data entry into pbviews via web interface. Function groups participating in this year’s efforts include: Career Services, Environmental Health & Safety, Facilities, Human Resources, Parking, Payroll, Procurement, Student Health Services, and University Police. For more information on the actual measures used, refer to the Performance Measurement link on the QI website ( and select “2002”.

Process Improvement Showcase: For years, campus Quality Improvement practitioners have used the Process Mapping Methodology to analyze and improve key processes throughout the CSU. In an effort to share the potential model practices that have resulted from those efforts, Process Improvement teams are being asked to submit the results of their projects by posting them in the Process Improvement Showcase, a new page on the QI website. Submission information is available at If you are aware of process improvement successes on your campus, please encourage your teams to submit their projects so that others can benefit from their efforts.

Employee Climate Survey: Administration of an employee satisfaction survey has been postponed due to the current budgetary constraints. This systemwide initiative will be considered again in the future.

John Sanders, Manager, Quality Improvement Programs

CAPITAL

PLANNING, DESIGN AND CONSTRUCTION

J. Patrick Drohan, Assistant Vice Chancellor

ARCHITECTURE & ENGINEERING

State Fire Marshal Plan Reviews: CPDC has reached a tentative agreement with the State Fire Marshal on an improved plan check and field review process. This process is expected to greatly reduce review and approval bottlenecks that were impacting the systemwide CSU capital projects program.

Under terms of the tentative agreement, now pending Department of Finance consent, individual capital projects will contribute funding for dedicated plan review and augmented field review by the State Fire Marshal. The proposed CSU/SFM Memorandum of Understanding is expected to substantially reduce plan code review lead times and improve field review responsiveness for projects currently under construction. Earlier this year State Fire Marshal plan review times reached 12 weeks in duration; a level three times longer than forecasted. Currently, in anticipation of this MOU moving ahead, the SFM has reduced plan review durations to 3 weeks or less.

This greatly improved responsiveness will provide additional time that can be applied to reduce construction schedule impacts, resulting in improved construction bids and lower overall project costs.

Thomas Kennedy, Chief of Architecture and Engineering

FACILITIES PLANNING

CSU Facilities Renewal: The CSU Facilities Renewal Model, a statistical model that projects capital renewal and deferred maintenance costs based upon life cycles of major building and infrastructure sub-systems, will be updated this spring. The model, designed by the Pacific Partners Consulting Group, has not been updated since its inception in September 2000. This process will enable each campus to enter into the database the results of capital renewal and special repair/deferred maintenance projects completed during this time, in addition to adding/removing facilities to accurately reflect the changing face of the physical plant.

The database itself will be receiving a ‘facelift.’ Currently existing in a client/server environment, the new database will emerge on the web, housed on a server at the Chancellor’s Office. This change will ease future updates of the database and eliminate previous conflicts between software versions. As the web-enabled database is a recent development by the vendor, there will be many improvements and enhancements both in the collection and retrieval of data that will benefit the CSU.

2004/2005 Capital Outlay Book: Preparation for the publication of the 2004/05 Capital Outlay Executive Summary and 5-Year Capital Improvement Program books is currently underway. Campus maps and legends have been received for review and book preparation. The president’s statement, current project-related photographs, and the campus history have recently been requested and are due May 26, 2003.

Elvyra San Juan, Chief of Facilities Planning

CONSTRUCTION MANAGEMENT

CSU Labor Compliance Program: CPDC has hired Mr. Chris Mitrovich as Labor Compliance Manager/Construction Manager. He will be implementing the CSU’s Labor Compliance Program as mandated by AB 1506, passed into law this year and affecting all projects (Majors, Minors, JOCs) using funds from the Kindergarten-University Public Education Facilities Bond Act of 2002. Only contracts and job order contract work orders authorized on or after April 1, 2003 are obliged to comply with this requirement. As part of his responsibilities, Mr. Mitrovich will attend and conduct pre-construction meetings with the contractor and subcontractors, providing them with tools for labor compliance, and to manage CSU compliance with the Labor Code. As campuses prepare projects for bid, please contact Mr. Mitrovich for appropriate documentation to include in project documents. For further information, he may be reached by telephone: 562-951-4107, or by email: .

Supplementary General Conditions: Cost-loaded and resource-loaded scheduling requirements were presented in the April 25, 2003 training session, Construction Delivery Methods, and have been posted to the CPDC web site. This cost-loaded, resource-loaded schedule should only be utilized on large, complicated projects, and is not appropriate for projects with a very tight or aggressive project duration. The schedule may be used to calculate unit costs; for more accurately determining and /negotiating credits and adds.

Public Works Coverage Determination – Off-Site Fabrication and Prefabrication: On March 4, 2003, the Director of the Department of Industrial Relations issued a precedential public works coverage determination on two cases, that “prevailing wages must be paid to the employees of contractors and subcontractors engaged in the off-site fabrication or prefabrication of items specially produced for public works projects advertised for bid after the date this determination is posted on the Department’s web site.” Those employees were to be paid rates “based on the location of the construction site, not the location of the fabrication facility.” As a result of this determination, project costs could soar due to the rise in wages paid in these areas.

On April 16, 2003, the Director of the Department of Industrial Relations stayed the implementation of this decision, pending resolution of administrative appeals. Be aware that this stay is not permanent.

Jim Corsar, Chief of Construction Management

LAND USE PLANNING & ENVIRONMENTAL REVIEW

New Rules for Storm Water Pollution Prevention Stayed by State Appeals Court: A Ninth Circuit Court of Appeals ruling has placed a hold on implementation of new rules regarding upgraded levels of storm water pollution mitigation measures required for new construction projects on campuses.

The State Water Resources Control Board, under recently enacted Phase II National Pollution Discharge Elimination System (NPDES) Permit Requirements, has put forth significant new regulations governing the discharge of storm water flows into public streets, gutters, and channels.

One important change is that a Storm Water Pollution Prevention Plan (SWPPP), previously only required for construction sites of five (5) acres or more, is now required for sites of one (1) acre or more. These SWPPP’s must be submitted to and approved by the Regional Water Quality Control Board (RWQCB) before new construction can begin. In addition, most campuses are required to develop a more comprehensive storm water management plan for their entire campus.

Pending the final outcome of the Court of Appeals ruling, campus facilities planning managers have been working closely with the campus Environmental Health and Safety (EH&S) managers to determine the most effective means to comply with the new regulations. The result of this process, as is often the case, is to require CPDC and campuses to re-evaluate the costs of projects with the new upgraded mitigation construction measures.

David Rosso, Chief of Land Use Planning & Environmental Review

PLANT, ENERGY & UTILITIES

Energy Issues: The California State Legislature has introduced SB 888, which takes apart Direct Access legislation and attempts to return California consumers to the 'days of old' regulated investor-owned utilities. The CSU is working diligently, along with a broad spectrum of other interested parties to defeat this bill. At minimum, we hope to get an exclusion for educational institutions, which will enable CSU to continue realizing savings of approximately $12-$15 million dollars versus the alternative.

Master Enabling Agreement: Plant, Energy & Utilities is in the process of finishing a Master Enabling Agreement for Energy Services Companies (ESCO's) in an effort to assist campuses in the development and construction of energy efficiency projects. The Agreement will be similar in form to the Job Order Contract (JOC) process and is expected to be available for campus use in early September.

Len Pettis, Chief of Plant, Energy, & Utilities

September 16-17, 2003, Board of Trustees’ Meeting

Due Dates for CPB&G Agenda Items

Master Plan Revisions:July 15, 2003

All Other Items:July 29, 2003

Capital Training Sessions in July

CSU Construction Management Procedures – July 17

The Law of Design and Construction – July 18

Program brochures and registration are located at

Linda Burke, Director, Trustees/Legislative/Capital Training Programs

FINANCIAL SERVICES

Dennis Hordyk, Assistant Vice Chancellor

SYSTEMWIDE FINANCIAL OPERATIONS

Personnel/Reorganization Announcements

New Systemwide Financial Operations Director: Systemwide Financial Operations (SFO) was created about a year ago to better serve the needs of the campuses and the Chancellor’s Office. George V. Ashkar has joined the Chancellor’s Office as the new Director of SFO effective April 1, 2003. George comes to the CSU from the California State Lands Commission and has significant financial experience in private industry. George’s first task was the reorganization of the Capital/Bond Operations as well as Enterprise Operations in order to provide more effective lines of reporting and communication.

Systemwide Financial Reporting: The Financial Systems, Standards and Reporting Department (FSSR) has been replaced by a new unit, Systemwide Financial Reporting (SFR), within SFO reporting to George Ashkar. Sedong John, will head up this unit as the Associate Director and Lily Wang has been named the Financial Reporting Manager, reporting to Sedong. A new financial reporting analyst, Glenn Hui, will begin work at the Chancellor’s Office on May 12, with Lily as his manager. Another financial analyst for the department is still being sought.

Financial and GAAP Reporting Workshops

The CSU Year-End Financial and GAAP Reporting Workshops are scheduled for June 2 – 3, 2003 at the Los Angeles Airport Radisson Hotel. Speakers will include representatives from the State Controller’s Office, KPMG, Chancellor’s Office, and various CSU campuses. You may visit the SFR website on the Chancellor’s Office homepage at: This is the kickoff for Legal and GAAP year-end closing.

CONTRACT SERVICES AND PROCUREMENT

Microsoft Agreement Update: Campuses are now well into the implementation phase of new Microsoft agreements for faculty and staff. As a reminder, the CSU entered into a new agreement in December 2002, for the systemwide use of several Microsoft desktop and server products. The desktop products include: Office Professional, Windows Professional, Visual Studio.NET Professional, and FrontPage. They are available for use on CSU machines, and for faculty and staff use on a home computer.

Campuses can also sell licenses and install CDs for Office Professional and Windows (upgrades) to CSU students. Many campuses have implemented sales to students through computing centers and bookstores.

Visit the web site for complete information, instructions, frequently asked questions, and campus distribution points. Send questions to Keith Wandrey at: or call (562)-951-4582.

Pat Dayneko, Director, CS&P

RISK MANAGEMENT

A contract has been awarded to Octagon Risk Services to serve as the CSU workers’ compensation Third Party Administrator (TPA). A TPA is a company that, in conjunction with the campus claims coordinators, administers and adjusts CSU workers’ compensation claims. Octagon has been working with large, complex clients for the past 22 years, including the University of California. Their experience with higher education should strongly benefit the CSU program.

The claim information system that is used by the CSURMA liability program and by Octagon is the Valley Oak System software. Upon conversion from the old TPA, all data – both liability and workers’ compensation - will be housed in the Valley Oak System software.

Charlene Minnick, Director, Risk Management

INFORMATION TECHNOLOGY SERVICES

David Ernst, Assistant Vice Chancellor

COMMON MANAGEMENT SYSTEMS

Long Beach Campus Live with Student Financial Aid and Registration: Long Beach enjoyed significant Student Administration accomplishments in April. They successfully packaged and generated financial aid offer letters for over 5,000 new students, which is the earliest that Long Beach has ever sent out new student award letters. Long Beach also went live with student registration using full self-service functionality via the web (a first for CSULB) and IVR (telephone registration).

Sacramento Campus Live with Finance and Human Resources: The Sacramento campus is now using PeopleSoft applications for the first time. On April 1, 2003, they successfully went livewith both Finance 7.5 and HR 8.0. This is the last campus to go live with the Finance 7.x version of PeopleSoft; all other campuses will implement or upgrade to the web-enabled version of Finance 8.4 which will be released to the campus CMS teams in July 2003.

CMS Audit Status: The Joint Legislative Audit of the CMS project was released on March 11, 2003. A Joint Legislative Audit Committee hearing was held on April 3, 2003, a subsequent April 21st hearing was postponed and is currently being rescheduled. The CMS teams and other Chancellor’s Office divisions are responding to the 30 audit recommendations. The responses to several of the audit recommendations have been completed. They include:

  • Defining core (baseline) CMS functionality for Human Resources (HR), Finance and Student Administration (SA).
  • Defining and implementing more comprehensive policies regarding IT procurements.
  • Requiring three offers for procurement under Master Enabling Agreements such as the consulting MEA currently in use on campuses for CMS consulting.
  • Establishing a sensitive information policy regarding CMS access.

Other responses are in process including: