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BUDGET DEVELOPMENT
Patrick Lenz, Assistant Vice Chancellor

Status Report on the 2003/04 and 2004/05 Support Budgets

2003-04 Budget Adjustments: Last month Governor Schwarzenegger proposed state General Fund budget reductions of $1.9 billion for the fiscal years 2003-04 and 2004-05. Of this amount, $23.8 million in budget reductions were proposed for 2003-04 for the CSU, consisting of a $11.3 million unallocated reduction and a $12.5 million reduction to CSU Outreach programs. In addition, the Administration proposed budget reductions of $52 million for 2004-05, including $37 million that would eliminate funding for the Educational Opportunity Program (EOP).

Chancellor Reed has responded that the CSU would take the entire $23.8 million budget cut for 2003-04 as an unallocated reduction and reduce student enrollment by 1 percent or 5,000 students seeking access this spring and summer to the CSU. Chancellor Reed has also indicated that he is adamantly opposed to the total elimination of the EOP funding proposed for the 2004-05 fiscal year.

Governor’s Proposed 2003-04 Budget

Governor’s Proposed 2003-04 Budget: On January 9, Governor Schwarzenegger released his 2004-05 budget that included an assumption that the voters would pass a $15 billion budget deficit recovery bond scheduled for the March ballot. In addition, the Administration proposed addressing an additional $15 billion budget gap with significant program reductions to health, human services and higher education, funding shifts, transfers, and some additional borrowing. Senate Pro-Tem John Burton has indicated that the Governor’s budget is particularly harmful to the poor while providing the wealthiest Californians with tax breaks, and indicated that he will pursue a tax increase on the upper tax bracket as part of the 2004-05 budget solutions.

Proposed 2003-04 CSU Support Budget: The Governor’s budget proposes to reduce the California State University, support budget by $239.7 million and leaves unfunded an additional $57.5 million in mandatory costs. The Governor’s budget will reduce student access and proposes to raise student fees for undergraduates by 10%, graduate students by 40% and nonresident students by 20%. An outline of the proposed 2004-05 budget for the CSU follows:

Governor’s Budget General Fund Adjustments ($239.7 million)

  • $69.5 million to restore one-time budget reductions in the 2003-04 fiscal year
  • ($52 million) to eliminate CSU General Fund Outreach and EOP Program
  • ($52.6 million) a 7.5 % reduction in Academic and Institutional Support
  • ($6 million) to defer CMS Implementation Cost for one year
  • ($53.5 million) to increase the Student/Faculty Ratio by a factor of 1
  • ($24.4 million) to eliminate the General Fund subsidy for excess course units
  • ($21 million) to redirect 10 percent first-time freshman from the CSU to the CCC
  • 1.9 million augmentation to provide counseling for freshman enrolling in the CCC
  • ($23 million) unallocated reduction
  • ($31.7 million) General Fund reduction, offset by 10% increase in Undergraduate Fee
  • ($33.9 million) General Fund reduction, offset by 40% increase in Graduate Fee
  • ($12.8 million) General Fund reduction, offset by 20% increase in Nonresident Fee

Governor’s Budget Fee Action $105.6 million

  • $51.2 million to increase Undergraduate fee by 10%
  • $60.3 million to increase Graduate/Post Baccalaureate fees by 40%
  • $20.5 million to increase Nonresident Tuition fee by 20%
  • $26.4 million to set-aside 20% of fee increase revenue for financial aid

Unfunded 2004-05 Mandatory Costs ($57.5 million)

  • ($9.5 million) full-funding for faculty 2.65% SSI Increase effective June 30, 2003
  • ($26 million) health benefit rate increase (15% effective January 2004)
  • ($3.1 million) for new space
  • ($15 million) for insurance costs (workers compensation, property insurance, etc.)
  • ($3.9 million) for increasing energy costs

CSU Budget Initiatives:

  • Excess Units – Student would pay full cost of units that exceed 10% of what they need to graduate
  • Freshman Redirection – Assume 10% of CSU first-time freshman would be redirected to the community colleges. Student fees at the community colleges would be waived, counselor resources would be provided at the CSU.
  • Long-Term Student Fee Policy – Based on 10 percent for 2004-05 and an annual increase based on per-Capita income. Graduate fee to be 50% greater than undergraduate fee.

The CSU will reduce enrollment of eligible students applying to the CSU as a result of these budget reductions. This unfortunate reduction in access for those individuals seeking entry to the CSU is necessary to maintain the quality of education, access to course sections, and ensure the success for students currently attending the CSU.

BUSINESS PLANNING & INFORMATION MANAGEMENT

Lenore Rozner, Assistant Vice Chancellor

QUALITY IMPROVEMENT (QI) PROGRAMS

Process Improvement Training Available: With increased pressure on our operations as a result of the current budget challenges, now is a good time to consider ways of streamlining your processes. Utilizing the process mapping methodology, teams throughout the CSU have demonstrated the value of analyzing current practices to identify ways of improving productivity and enhancing service to students, faculty and staff. Training on this methodology is available through the Quality Improvement Programs staff at the Chancellor’s Office. For more information on how this valuable tool can be brought to your campus, contact John Sanders at .

2004 Quality Improvement Symposium Goes “Virtual”: Acknowledging the current budget situation, the CSU QI Steering Committee agreed that that best way to enable broad participation in the 2004 QI Symposium would be to convert it from an “in-person” one-day event, to a “virtual symposium” that would be held over several months. The content of the planned break-out sessions – and Expo examples - will be delivered through more cost-effective means, utilizing some of the distance learning options now available (video conferencing, webinars, etc.). Details on those sessions will be announced in the near future.

New Audit Issues Sharing Initiative: In order to provide campuses with timely information on the findings and the objectives associated with audits conducted by the Office of the University Auditor, the QI Programs staff will be coordinating the compilation by campus internal auditors of audit findings. For the purposes of this initiative, the covered areas will include: cyclical (FISMA, construction and auxiliary), recurring and new subject matter audits. A template for required information is being developed that participating campuses can use to organize audit findings. These compilations will be shared with all campuses, with the ultimate goal of identifying systemic control issues and potential model practices.

John Sanders, Manager, QI Programs

CAPITAL PLANNING, DESIGN AND CONSTRUCTION

Elvyra F. San Juan, Assistant Vice Chancellor

Organizational Update: Ms. Linda (Lees) Burke has decided to retire after 28 years with the CSU. We will miss her enthusiasm and dedication to the CSU. As a result, Nancy Freelander-Paice has been assigned the added responsibilities for Board of Trustees' agenda items, the capital training program, legislative bill analysis, and personnel. Carol Hendrickson is now picking up oversight responsibilities of the CPDC website and updates to the State University Administrative Manual (SUAM).

In Facilities Planning, Ms. Hong Lin has been promoted to help manage the Space and Facilities Database, and Ms. Theresa Tsik has moved from the Energy and Utilities unit to now provide analytical support in space management. Both individuals are working diligently to learn from Ms. Sharon Fike, who will be retiring this spring. Sharon has done a tremendous job improving our processes and supporting our department and the campuses. The group continues to work on improvements to the recently launched web-enabled database.

We have received a number of inquires regarding the status of the CPDC training program in consideration of the Chancellor’s Executive Order. As the system is currently managing $2 billion in design and construction, these training sessions will continue through 2004 as scheduled. We realize that campus travel budgets are restricted and will continually monitor attendance and session evaluations as input to the future training needs of the campuses.

Elvyra F. San Juan, Assistant Vice Chancellor

Architecture & Engineering

Report on the Paso Robles Earthquake: At approximately 11 a.m. on Monday, December 22, 2003, a 6.5 magnitude earthquake struck the central California coastal area near Paso Robles. Effects on our nearest campus, San Luis Obispo, turned out to be minimal. Follow-up reviews at outlying campuses and facilities, found little or no appreciable damage.

The CSU maintains a standing body of seismic experts collectively known as the Seismic Review Board to advise on earthquake related matters relative to its systemwide capital program. Measures are in place to provide and maintain appropriate assurance of life safety, should a seismic event occur. Individual campus emergency teams provide the initial first response after the seismic event.

If a significant event occurs, Dr. Charles Thiel, chair of the CSU Seismic Review Board, acting under his authority as a systemwide deputy building official, will proceed to the campus to make a knowledgeable and immediate condition assessment of individual campus buildings. In a serious seismic event, buildings would be posted as safe, restricted, or unsafe to enter by Dr. Thiel. This posting would carry the force of law and would be enforced by the campus police. This would conclude the initial response. More detailed reviews and engineering investigations would then occur on an as-needed basis.

These established procedures were activated after the Paso Robles quake last month. Seismic Review Board member, Jim Hill, lives in nearby Atascadero. Mr. Hill assessed the condition of the SLO campus and contacted Dr. Thiel to inform him that no appreciable campus damage was noted.

Thomas Kennedy, Chief of Architecture and Engineering

Land Use Planning and Environmental Review

CSU has become a leader in addressing issues related to faculty and staff housing, student housing, and development of university support facilities. Other institutions across the country continue to express interest in a number of CSU initiatives. This interest in non-traditional university development projects is evidenced by the growing network of CSU staff with members of the Association of University Real Estate Officers (AUREO). As our CSU campus executives explore opportunities in this realm, the Land Use Planning and Environmental Review Unit (LUPER) will be conducting training in late January to assist campuses in making sound decisions about the various ways to approach the development of real property to further the educational mission of the university.

LUPER's upcoming workshop will include presenters experienced with university public-private development concepts and provide a forum for interactive discussion. The objective of the training, set for January 30th, is to assist campuses in recognizing and critically analyzing potential opportunities, and more importantly, to avoid pitfalls that can result in an undesirable long-term commitment of university resources and assets. Other aspects of the day long seminar will explore campus master planning, use of the new Land Records data base, and recent changes in California's environmental regulations and procedures.

David Rosso, Chief of Land Use Planning & Environmental Review

Plant, Energy And Utilities

Energy Efficiency Grants: UC/CSU Utility Partnership received a $12 million dollar grant for energy efficiency programs for 2004-2005 from the California Public Utilities Commission (CPUC). Each system will receive $6 million dollars from investor owned utilities Southern California Gas, Southern California Edison and Pacific Gas and Electric. The programs are estimated to reduce peak electric demand by 2 MW and reduce systemwide energy consumption by 14 million kWh per year. Natural gas consumption is estimated to be reduced 700,000 therms per year.

The funding, which is expected to be available in early 2004, will be applied in three areas: energy efficiency retrofits, commissioning and control systems, and energy efficiency training and best practices development. We anticipate that the energy efficiency measures will help the campuses meet CSU Trustee policy, which mandates that energy consumption be 15 percent less than that of 1999-2000 base year consumption. A call letter will be issued in January 2004 to CSU Energy Managers soliciting projects for funding. The CPUC decision may be accessed on-line at:

Green Campus Grant: An additional $ 1.8 million was awarded to the Alliance to Save Energy ( by the CPUC for the Green Campus program. CSU students will lead the energy efficiency outreach program - aimed at providing energy efficiency education to campus administrators, students, faculty, and facilities staff. Specific outreach targets include energy kiosks on campus, back-to-school energy efficiency purchasing brochures for students, K-12 local outreach programs, incorporating energy efficiency into school curricula, and planning meetings and information gathering processes aimed at identifying and reducing energy waste. The Green Campus program will coordinate efforts with UC/CSU’s energy efficiency program.

Annual Energy Utility Managers Conference: UC and CSU participated in a joint energy conference hosted by APS Energy Services in early December in Berkeley, CA. CSU and UC discussed commodity market outlooks, renewable energy, energy information systems, legislative and regulatory issues, commissioning, cogeneration, and sustainable building policy. CSU held an additional half-day session where topics included revising CSU energy policy, a web-based monthly energy reporting system, potential photovoltaic projects, and energy retrofit case studies. CSU energy managers have been invited to attend the next planned Executive Deans/Plant Directors meeting in March at Fresno State.

For further information on any of these items, please contact Joyce Kerley at 562-951-4121 or via e-mail at

Len Pettis, Chief of Plant, Energy, & Utilities

Construction Management

Post Performance Reviews: Campuses have been requested to submit information on projects completed between October 1, 2002 to September 30, 2003, for CPDC’s report to the March Board of Trustees. Follow-up visits will be scheduled with campuses to complete the Post Performance Review.

Jim Corsar, Chief of Construction Management

FINANCIAL SERVICES

Dennis Hordyk, Assistant Vice Chancellor

CONTRACT SERVICES AND PROCUREMENT

CSU Planned Purchasing Activity

  • Recycle Paint Pricing Agreement – Vision Recycling, Inc. (CS&P Bulletin 03-25) – re-manufacturer and distributor of interior/exterior latex paint.
  • Buy Recycled Products – Toner Cartridges Pricing Agreement with JDT Technology (CS&P Bulletin 03-27) – ink and toner cartridges for laser printers, fax machines and inkjet printers. Purchases utilizing these new pricing agreements will apply toward CSU’s Buy Recycled Products goal
  • ASAP Software Express (Microsoft Products) - ASAP Software Express, has been chosen via RFP as the CSU’s administrator and reseller of the current Microsoft Campus 3 Agreement. As ASAP is the current vendor, contacts and ordering for purchases and licensing of Microsoft software under the Campus 3 and Select Agreements remain unchanged. Over the next several weeks ASAP will be piloting a customized version of their electronic commerce web site for the CSU. Systemwide implementation and campus orientation for frequent users will commence in February. Details of the existing Microsoft agreements can be found at

The Procurement and Support Services Officers Association will be holding its annual conference March 23-25 at the Holiday Inn in San Francisco, with San Francisco State University serving as the host campus.

Further information can be obtained at: or by contacting Pat Dayneko @562.951.4595.

INFORMATION TECHNOLOGY SERVICES (ITS)

David Ernst, Assistant Vice Chancellor

IT Security: In order to better understand system-wide security needs, a brief survey was distributed to the campus ITAC representatives during their December 11, 2003 meeting. The objective of the survey is to identify campus interest in security-related services. This will help to ensure that ITS efforts in this area can be properly focused based on campus input.

Additionally, in a broader context, CSU has contracted with Stanford’s emeritus director of IT Security to identify the larger issues facing CSU. This work will begin in January 2004. The deliverable will be an outline of problems and issues facing CSU relative to IT security, and the description of a recommended framework for addressing short-term, mid-term and long-range problems. Recommendations for developing a strategic approach to the problems and issues will also be included.

Measures of Success: The fourth in a series of reports to the legislature on the success of the Integrated Technology Strategy was published on November 30, 2003 and distributed to the legislature on December 5. Copies and CDs were sent to the campuses and the document will be available on the ITS Website,

ACADEMIC TECHNOLOGY SERVICES

Systemwide Library Initiatives: The Fall 2003 issue of the systemwide library newsletter "libraries @ calstate" has been published, focusing on library facilities for the 21st Century. Several forward-looking CSU library building projects, both recently completed and in planning, are described in detail. The newsletter

is available online at:

Systemwide Electronic Information Resources: The CSU Shared e-Book Collection currently includes more than 5,000 titles and is available to all CSU students, faculty and staff. The Collection is funded through the central Library Resources Budget on an annual basis. e-Books are accessible on major hardware platforms and readers in wide use at CSU libraries and without special technical requirements such as plug-ins or proprietary systems. The Shared e-Book Collection is an initiative that fulfills CSU's goal to develop the full spectrum of information resources most useful to students and faculty through a combination of collection development, licensing and cooperative agreements. The Collection provides diversity in forms of recorded knowledge resources to support academic programs and student learning by encouraging the use of new technologies and by promoting cooperation among the CSU libraries.

Academic Technology Initiatives: As of December 1, 2003, Gerry Hanley (Senior Director, Academic Technology Support) has been assigned to coordinate efforts of campuses, CO Academic Affairs and ITS to plan and implement the CSU academic technology initiatives. He will be reporting to both Academic Affairs and ITS.