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ABA Management Council September 15, 2008

ABA Management Council September 15, 2008. Strategic Goal #1 Meet Enrollment Targets Recruit New Students Class Schedule Supports Enrollment Targets Student Retention Graduation Rates Cross Division Collaboration Division Priorities Multi-Year Financial Planning

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ABA Management Council September 15, 2008

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  1. ABA Management CouncilSeptember 15, 2008

  2. Strategic Goal #1 Meet Enrollment Targets Recruit New Students Class Schedule Supports Enrollment Targets Student Retention Graduation Rates Cross Division Collaboration Division Priorities Multi-Year Financial Planning Position campus for recovery UBAC Considerations

  3. Process • Extensive Review of Campus Financial Information • Carry-forward Funds • Reserves • Baseline Allocations • All University Expenses/Central Costs • Long Term Obligations - Loans • Conversations with the Provost and Vice Presidents • Questions/Conversation with President and Cabinet

  4. January Financial Assumptions - $4.4 M Campus Carry Forward Gap $1.9 M Net New fees – Assuming 4% - $6.3 M Net Reduction - Governor’s Budget Funding to meet CSU “enrollment growth” and 4% cost increases 10% General Fund reduction ($16.6M) - $2.0 M Unfunded Costs - $ .5 M Reduction in Retirement Costs -$10.3M Projected Structural Deficit

  5. Recommendations • Eliminate Structural Gap in 08/09 • Concern for 2009/10 and beyond • Use One Time Funds • Reduce Structural Gap • Large One-Time Costs • Reserves

  6. Recommendations – Step 1 • Eliminate Structural Gap in 08/09 • Concern for 2009/10 and beyond • Use One Time Funds • Reduce Structural Gap • Large One-Time Costs • Reserves

  7. 1a. Reduce Gap from $10.3M to $7.1M - $4.4 M Campus Carry Forward Gap $4.8 M Net New fees 10%(+ $2.9 M) - $6.3M Net Reduction - Governor’s Budget Funding to meet CSU “enrollment growth” and 4% cost increases 10% General Fund reduction ($16.6M) $1.3 M Interest Earnings (+ $1.3 M) - $3.0 M Unfunded Costs ( - $1.0 M) - $ .5 M Reduction in Retirement Costs - $7.1 M Projected Structural Deficit (+ $3.2M)

  8. All University Expense $2.2M Pay Off Loans $1.445M Baseline Savings Various All University Cost Decreases - $.7M Research Admin Space Sac State Magazine Risk Pool Premium 1b. Eliminate Remaining $7.1M Gap

  9. 1b. Eliminate Remaining Gap (cont’d) • Baseline Reductions to Divisions - $4.9 Million • Academic Affairs -3.5% -$3.566 M • Admin and Business Affairs -3.5% -$.561 M • Athletics -1.0% -$.032 M • Govt & Civic Affairs -0.0% -$.000 M • Info Resources & Tech -5.0% -$.287 M • Student Affairs -2.0% -$.182 M • Human Resources -3.0% -$.055 M • Office of the President -3.5% -$.035 M • University Advancement -3.5% -$.144 M

  10. Recommendations – Step 2 • Eliminate Structural Gap in 08/09 • Concern for 2009/10 and beyond • Use One Time Funds • Reduce Structural Gap • Large One-Time Costs • Reserves

  11. Sources of One-Time Funds - $8.61 M • 2006/07 Central Carry Forward • $3.1M AUE/Mandatory Costs • $1.8M Interest Earnings • 2007/08 Central Projected Surpluses • $1.9M Benefits Pool • $1.8M All University Expenses • Insurance, Utilities, Space Rental, etc.

  12. Use Central One Time Funds - $8.34M • Pay Off Loans – $4.3 Million • 2 CMS Loans $3.356 Million • Benicia Hall $ .350 Million • Energy Bond $ .515 Million • Electrical Sub $ .120 Million • Baseline Savings $1.445 Million • Old Bookstore Remodel - $3.5 Million • One-Time Funding Requests - $.5 Million

  13. Recommendations • Eliminate Structural Gap in 08/09 • Concern for 2009/10 and beyond • Use One Time Funds • Reduce Structural Gap • Large One-Time Costs • Reserves

  14. Reserves • Reserves • $3.75M - Emergency/Disaster Reserve • This is NOT an operating reserve! • $0.25M - Liability Claim Reserve (1 claim) • Should be at least $.5M (2 claims) • $1.80M - Operating Reserve (< 1%) • Cushions • $0.75M – Revenue offset (enrollment) • $0.46M – Held for Final Adjustments

  15. Addressed…. • If the State Budget is passed at the January 2008 level (additional $97.6M reduction at CSU level) • Sac State’s reduction will be ~ -$5.7M • Our campus has one-time funds to absorb reductions • Structural deficit will be carry forward into next fiscal year

  16. Not Addressed…. • Surprises in 08/9 State Budget • Future State or CSU Cuts – 2009/10 and beyond • State Structural Gap – expect multi-year • Unfunded Mandates • Divisions’ Structural gap • Ongoing renewal costs • Equipment, computing, telecom, voice mail, vehicles, furniture, etc. • 60 year old campus – Deferred Maintenance • mechanical/ electrical • heating/cooling, • water/sewer, • painting, carpet, flooring, etc.

  17. Questions?

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