ABA Management Council September 15, 2008

UBAC Considerations –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

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

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

Recommendations 1.Eliminate Structural Gap in 08/09 –Concern for 2009/10 and beyond 2.Use One Time Funds –Reduce Structural Gap –Large One-Time Costs 3.Reserves

Recommendations – Step 1 1.Eliminate Structural Gap in 08/09 –Concern for 2009/10 and beyond 2.Use One Time Funds –Reduce Structural Gap –Large One-Time Costs 3.Reserves

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) - $6.3 M 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)

1b. Eliminate Remaining $7.1M Gap 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 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

Recommendations – Step 2 1.Eliminate Structural Gap in 08/09 –Concern for 2009/10 and beyond Use One Time Funds –Reduce Structural Gap –Large One-Time Costs 1.Reserves

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.

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

Recommendations 1.Eliminate Structural Gap in 08/09 –Concern for 2009/10 and beyond 2.Use One Time Funds –Reduce Structural Gap –Large One-Time Costs 3.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

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

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.

Questions?