Budget Advisory Group
Minutes
October 16, 2007

Revised November 6, 2007

Attendees: Diana Burlison, Ralph Carr, Mike Gillilan, Dan Gregory, Steve Ludwig (Co-Chair), Wanda Overland, John Palmer (Co-Chair), Annette Schoenberger, Michael Spitzer, Kristi Tornquist, and Mike Uran

I. Review and Approve October 2, 2007, Minutes.

No objections were expressed. Kristi Tornquist conveyed a request to modify wording in the September 18, 2007, minutes. It was agreed to revise the second paragraph of Section II to reflect that President Potter requested measurable outcomes rather than indicators for the projects.

II. Carry Forward Guidelines

Carry Forward Guidelines   (Carry Forward Guidelines 'clean')

It was agreed to postpone revising the salary portions (with the exception of removing the word “non-salary” from the first sentence) of the document until discussion between Michael Spitzer and Steve Ludwig has been held.

Per input from attendees, Steve Ludwig agreed to incorporate a definition of “carry forward” to clarify it includes both a deficit and a surplus.  Further, a definition of “nonrecurring” or “recurring” will also be included.

Kristi Tornquist shared that the electronic classrooms account would be a problem given the current wording of the document.  It was explained that the document shows that there is a plan, and the plan would be executed to include this.  Steve Ludwig agreed to re-word the document based on the conversation he will have with Michael Spitzer.

Clarification was made that this set of guidelines would apply to units rather than departments.  After concern was expressed with how the document could be perceived, it was clarified that this document does not intend to study the university’s budget or make budget determining policies; it seeks to make a policy regarding carry forward funds.

It was then suggested that perhaps two guidelines could be drafted:  One for deficits and one for surplus carry forward dollars.  Steve Ludwig agreed to discuss this topic with Michael Spitzer as well as the wording of a sentence proposed by Michal Spitzer: “Units that repeatedly request investment plans which go unexpended will have their budgets revised for permanent reallocation.”  Diana Burlison agreed to participate in rewording the document.

Steve Ludwig and Michael Spitzer excused themselves early to attend a meeting with President Potter and Office of the Chancellor staff.  Steve asked Diana Burlison to share two other topics in his absence.

Prior to moving on to the next topics, Kristi Tornquist requested that her concerns regarding the Timeline section be documented in the minutes.  Her concern with an August timeline is that areas that wait to spend dollars at the end of the fiscal year hoping to apply them to a plan for the following fiscal year will lose those funds if the unit’s proposal is not approved.

Diana Burlison agreed to talk with Steve Ludwig on the topic as well as explore some other ways to think about and subsequently re-word the document.

III. Other 2009 budget schedule information.

• set a target date for the completion of the document

Per John Palmer, setting a deadline will remain on the agenda.

• discuss revisions

Diana Burlison shared that information had been received from the Office of the Chancellor (OOC) regarding timelines (“Draft – Activities Calendar for FY’s 2008 and 2009(pdf)”) and when the OOC intends to start the conversation regarding fiscal year 2009 budgets with the board. Based on that timeline, a “Scenario Overview FY 2008 and FY 2009” document was also distributed which may reflect SCSU’s financial position.

The known assumptions in the FY 2008 column are: Tuition, Enrollment in FYE (with great certainty), classified salaries, and the current reserve. Unknown information includes faculty salaries and benefits. The unknown assumptions are filled in with recommendations from the Office of the Chancellor. While fringe benefits will increase in the number of funds, the amount of funds per faculty will not increase. All other expenditures are estimated at 2%. Per Minnesota State Colleges and Universities policies, the reserve balance should be 5% - 7%.

With the appearance of a 2 million dollar deficit, Diana went on to explain how the budget is closer to a balance of “0” as it should be. She shared that $750,000 will probably not be placed in reserve to bring the reserve to 5%. Discussions have been held with the OOC regarding how the same reserve formula is used for larger institutions and smaller institutions which results in an extreme difference in actual reserve dollars. Further, FY 07 to FY 08 carry forward is not reflected because those numbers are still being finalized. The anticipated amount of undesignated carry forwards is at least $750,000. The 2% amount that has not been given out is approximately $400,000. The total of the three figures add up to approximately 2 million dollars.

SCSU is no longer discounting for anticipated enrollment shortfalls.

The OOC is discussing tuition changes and raising faculty salaries for FY 09. The assumptions listed in the document are from the OOC. Those figures are what show scenarios on the spreadsheet with deficit plans anywhere from $1-$3 million. A simplistic projection to meet the projected scenario deficits would be: If SCSU’s FY 2009 reserve percentage remains at 4.8% rather than 5%, 1 million dollars could be saved; if the same carry forward amount and unspent 2% of the budget occur in FY 09, SCSU’s projected balance could be close to $0 dependent on the scenario..

While nothing has been finalized, these numbers are starting to be shared in order to have all constituencies (including students) informed, conversations can occur, and the OOC timeline can stay on-target. More definitive information will be known by November because the initial 2009 budgets will be presented to the board in January, 2008. It is anticipated SCSU will have a more firm 2009 budget by late December or early January. Bargaining conditions can change any of the budgets/timelines.

A desired campus timeline is: Campus allocations and resources known in November which incorporates any updates; and possibly notify units in March and look for responses by April so that the budget can be established by May, 2008.

Future meeting times (all 12:45 p.m. - 1:45 p.m.)

Tuesday, November 6, 2007, Granite Room
Tuesday, November 20, 2007, Granite Room
Tuesday, December 4, 2007, Granite Room
Tuesday, December 18, 2007, Granite Room
Tuesday, January 15, 2008, Administrative Services Building, room 201
Tuesday, February 5, 2008, Granite Room
Tuesday, February, 19, 2008, Granite Room
No meeting March 4, 2008 (Spring Break)
Tuesday, March 18, 2008, Granite Room
Tuesday, March 25, 2008, Granite Room
Tuesday, April 1, 2008, Granite Room
Tuesday, April 15, 2008, Granite Room

Note taker:  Lucie Schwartzkopf, OAS, Int., Office of Administrative Affairs