SUBOA Meeting Minutes: November 20-21, 2002

November 20-21, 2002 Meeting Minutes

In attendance (for part or all of the meeting): Albany - Leo F. Neveu & Kathryn K. Lowery; Alfred - Ceramics - Brice M. Weigman; Binghamton - Anthony A. Ferrara & James Van Voorst; Brockport - Greig W. Mitchell; Buffalo Center - John Bell; Buffalo College - Rebecca J. Schenk; Canton - Carson E. Smith; Cobleskill - Carol A. Young; Cornell Statutory Colleges - Nathan Fawcett & John A. Lambert; Cortland - William E. Shaut; Delhi - J. William Harniman; Empire State - Dennis C. Belt; Environmental Science & Forestry - Connie S. Webb; Farmingdale - Richard J. Hume; Geneseo - Kenneth H. Levison; SUNY Downstate Medical University - Ivan M. Lisnitzer; SUNY Upstate Medical University - Steven C. Brady; Maritime - Kimberly R. Cline; New Paltz - Johanna D'Aleo; Old Westbury - Deirdre M. Dowd; Oneonta - Leif S. Hartmark & Peter Shea; Optometry - David A. Bowers; Oswego - Nicholas A. Lyons; Plattsburgh - John R. Homburger; Potsdam - Michael D. Lewis; Purchase - Judy Nolan; Stony Brook - Richard L. Mann; Utica/IT - Stewart W. Richards & Bruce E. Reichel; SUNY System Administration - Jim Campbell; Ed Engelbride; Joanne M. Fazioli; David Richter; Brian Stenson; Mike Trunzo; Joyce Villa & Patrick J. Wiater; Construction Fund - Jim Biggane & Robert Haelen

Wednesday, November 20, 2002

Presidents Report - David Bowers

David opened the meeting by welcoming Bruce Reichel, the new Vice President for Administration at Utica - IT. He has spent 12 years at ESF and 6 Years at Utica-IT.

He announced that Ed Engelbride would be making a presentation later today on the revised student Activity Fee Policy and indicated the Executive Committee will meet in same room at 4:30 p.m.

David indicated that dinner will be at the Real Seafood Co. starting at 6:30 p.m. and that two guests are expected: John Murphy and Richard Miller.

Tomorrow's agenda will be pretty packed with issues and post election updates on the budget front.

David asked for assistance in clarifying existing committee membership representation by announcing that a roster will be circulated with sign-in sheet looking for new volunteers and reaffirmation of current members to work on the various committees.

Secretary's Report - John R. Homburger

Due to the minutes being distributed at the beginning of the meeting, the secretary asked to defer a motion to accept the minutes until Thursday, giving everyone more time to review them.

Treasurer's Report - Brice M. Weigman

The checking account has $32.96 and the savings account has $8,661.29.

Sector Meetings -

Comprehensive Colleges and Colleges of Technology -

Administrative Systems - Questions were asked concerning the impact on URAS and other system enhancements at the campus level. It was suggested that SUBOA recommend a point person at each campus to ensure information regarding the system enhancements are clearly communicated and coordinated. The project has secured funding of $15 million. There have been 3 new people assigned to work on the project. The coding standards have been started and the revenue codes are under review.

Fees and Guidelines - A/B/B has been reviewing the policy and procedure section .050 that addresses comprehensive fees. It has been rumored that any increase in fees would be capped at 3 ½ - 4 ½ % of the highest respective fee. The issue of inequity was briefly discussed concerning the catch up capability of campus's that have substantially lower fees than others. In all, any proposed fee increases remain an issue, particularly when coupled with the potential for a tuition increase.

Operations Managers Meeting - Apparently there are some old OSC Bulletins around that expose RF to pre-audit with regard to 3rd party contracts (i.e. looks like a pass through contract). The implications of this recent finding could be pervasive into other RF contractual relationships that may lead to delays and additional 3rd party bid and compliance issues.

The scheduling of OM meetings was discussed briefly concerning the coordination of meeting dates with SUBOA. The recent OM meeting was scheduled on Monday and SUBOA met on Wednesday of the same week. Inasmuch as most of the Business Officers are OM's, it caused many members to make a priority choice and not attend the OM meeting.

The self-evaluation for OM's was briefly discussed and many concerns were expressed as to the difficulty in conducting such a process. It needs to be discussed more in future OM meetings.

Local Entity Agreement - Members of the task force met last week to discuss concluding the Agreement language and it was indicated that the rule making process was underway. It was expressed that if the new language suggests by-law changes it may become problematic at the local board level (i.e. representation).

SGA Fee - The 25-cent per student assessment was brought up and the issue was deferred until Ed Engelbride made his remarks later in the day.

Other topics briefly discussed:

SUNY refinancing of bonds- Saw announcement in Rochester paper.

Stabilization Transfer by SUP was prudent. Thank you.

Early Retirement issues: Is DOB still going to cover 1st year cost? Is the position snapshot on filled vs. authorized when calculating filled/unfilled position counts?

HIPAA - The scope and timetable for compliance is awesome. There will be more to come on implementation. Peter Pileggi and Steve Smith are overseeing implementation of the project and have been working with about 5 campuses as a prelude to help institute the program throughout SUNY.

University Centers -

SUBOA Web Site maintenance - Needs to be reviewed and updated on a regular basis. There is lots of obsolete information on the current web site.

Budget situation - Rumor has it that next year's budget deficit will be in the $10 billion range at the State level. A tuition increase at some level seems imminent. Fee caps will be an issue if tuition is increased.

BAP - Has not been changed and/or updated to respond to declining tax base, rewards (incentives) for enrollment increases, improving quality indicators, and tuition increases.

Capital Plan - Indications are that the Governor is supportive of initiating new financing within the current Bond caps, especially energy related projects ( i.e. NYPA, NYSERTA) that can be paid back with savings.

Risk Management - The recent risk management survey/initiative raises questions related to identifying and assessing risk. What follow-up will there be to the survey information gathered?

Campus entities - What is the actual status of the initiative? Need to know as soon as possible in order to address changes at the campus.

OASIS - There are serious concerns beginning to be expressed openly by Research Foundation and System Administration over how bad the new system is flawed. The general feeling is that a significant decision needs to be determined on the future of this project.

Construction Fund - The Fund is working on MOU language for pilot projects and is showing support for local "LETS" where campuses can show ability to manage the scope of specific projects.

RF special corporations and 3rd party payments - This issue is going to become very problematic if the RF 3rd party payment relationships with the State are not addressed and resolved.

Revised Student Activity Fee Policy - Ed Engelbride

Ed handed out the revised policy document and presented a comprehensive power point overview of that addressed the background, the changes and various issues. The Chancellor had appointed 21 committee members to this project and they have essentially completed their work. It has been approved by the Student Life Committee, Trustees, and the Chancellor. The document has been moved to rule making with the expectation of implementing it in Spring '03. The power point material was handed out as part of the presentation.

The SGA fee was briefly discussed as an initiative sponsored by the Student Assembly to help support related administrative activities. It still needs to be reviewed, discussed and approved by the Student Life Committee, Chancellor, and SUNY Trustees.

The night before - November 20, 2002

The Dinner was held at the Real Seafood Co. on Wolf Road. Dick Miller - Vice Chancellor and Chief Operating Officer addressed the group regarding the budget climate, indicating clear signals from the Governor's Office that the fiscal outlook for the State, and SUNY specifically, is guaranteed to get worse. The dinner also provided an opportunity to say good bye to an "old" SUBOA member, Bill Harniman, who accepted a "lot" of ribbing as well as some very nice words on his behalf from a number of SUBOA members. Good luck on the links, Bill!

Thursday morning - November 21, 2002

David Richter - Vice Chancellor and Chief Financial Officer

Stage-setting context for Brian Stenson. How did we get here?
Summarized remarkable state revenue growth between 1996 and September 11, 2001.
Summarized factors: (1) Internet / technology explosion; (2) conservative use of growth (reduce spending and cut taxes to stimulate the economy).
Reduced state debt; created reserves.
Pretty well positioned even through mild '98 / '99 recession. Then …9 / 11.
$4.5 to $8 billion direct effect of attack on the WTC. $40 billion in cash bonuses decreased sharply and are now paid often in stock options, affecting cash flow. Fallout will occur for some time to come.
Business and tourism declined.
We have not yet seen the depths of this recession. Recovery will be gradual.
Legislative restriction on financing current operations with debt.
Have used all but restricted one-time reserves to balance budgets.
Interesting perspective on SUNY from DOB's eyes: During a period of restraint in General Fund expenditures, support for SUNY operations ($616 million in '96 to $1.1 billion today). Plus $2 billion in capital. SUNY staffing increased while other agencies decreased.
Going forward: Mandated expenses (e.g. Welfare, Medicaid) increasing pressure on discretionary expenditures. Tax increases are not an option for the current administration. Debt (for financing current operations) is not an option.
A 5 percent reduction is very likely … limited to areas that the state can control … e.g. current operations.
No indication on bonded initiatives (NYStar, GEN*E*SIS) but they should be okay since the state problem is with cash.
Increased tuition is not a "slam dunk."
Chancellor King is likely to communicate directly with Presidents.
The message for the Governor and DOB is that we have, in a very measured and precise way, exhausted reserves and other options. Going forward, there will be a consequence to every reduction in budget.
Our bottom line: We want no net reduction … and even then, we are still in trouble.

Brian Stenson - Vice Chancellor for Finance and Business

The analogy, "The perfect storm of budgeting" was used to describe the current economic status of the State.
Referenced and summarized information from (1) the Mid-Year Update http://www.budget.state.ny.us/ under Publications / Enacted Budget Documents; and (2) The AIS (Annual Information Statement) under Investors Guide at the same website.
From those sources (essentially quoted): DOB expects a revenue shortfall for FY03 ("significantly below the levels reported in the current Financial Plan") and a budget gap for FY04 that is substantially larger than the $2.8 billion imbalance projected in February 2002. DOB expects to issue a revised Financial Plan for the current fiscal year, and propose actions to close the FY04 budget gap. DOB is developing a range of approaches totaling five percent of General Fund spending to help bolster the State's reserves and respond to the heightened uncertainties surrounding the receipts forecast. Accordingly, DOB will continue to maintain a strict hiring freeze and controls on all discretionary spending, initiate debt management actions to lower debt costs, and take other administrative measures to reduce costs in the current year.
A 30-month or more problem.
Reserves are essentially depleted. The $710 Tax Stabilization Reserve can be used only as the last transaction to balance the budget.
Emphasized administrative actions. Increased tuition would require legislative action.
The 5 percent of general fund spending is likely to be considered a first installment on FY04.
Hard to tell from the language whether it is 5 percent of funds remaining or 5 percent of the annual budget, which would be an effective 10 percent cut between now and end of year.
Collective bargaining: just one more expense that has to be considered … with obvious tradeoffs: jobs for salaries or vice versa. Speculated that program increases could be delayed.
On tuition: Increased tuition (if enacted) could simply be "swapped out" for reduced state support. Have to consider elasticity of enrollment if an increase in tuition is significant.
On enrollment: Twenty-five or 26 campuses have requested increases totaling about 5,000 students. Inconsistent with declining resources.
On the BAP: Have to "level the playing field" balancing tuition and tax dollars.
On Early Retirement Incentive: No word on whether the state will fund the first-year cost for the ORP incentive.
On timing for the Executive Budget: Seems DOB would want to know as much about January tax receipts as possible versus early delivery to focus attention on the message. Due February 1.
It is not too early to further reduce spending.
On TAP: One way or another, we are likely to pay for it. In times past, increased TAP was funded (indirectly) from increased tuition - at about 25 cents (TAP) on the dollar (tuition). TAP payments are usually paid in March but may be held until June/July. In addition, State subsidies to hospitals could/will be held up.
4 major questions are looming over the budget process for SUNY:

If there is a swap in tuition for State support, there will be a major impact on the BAP distribution.
Will there be a significant impact on enrollment due to tuition increase?
How do we deal with a general enrollment increase in 2003-04 budget request?
When can we expect information on how TAP will be affected?

Campus Entities - 2 main objectives were discussed

Clarify roles of the 3 entities.
Campus role and oversight responsibility (specific arrangements that are exceptions to current agreements will have to be addressed with grandfather arrangements).

David DeMarco - Budget

State-operated campuses reminded by David DeMarco that there is a remaining 1 percent from last year's program to pay out.
Geneseo and New Paltz (perhaps others) responded with a resounding "no" to his question whether all campuses ought be asked to increase enrollment some, say 1 ½ percent, to generate revenue. Tension between growth and quality, and tension between operating and capital needs.
Heads up: The Faculty Senate has asked for a study by next spring, on faculty and staffing changes over the last 10 years. Where have we grown? Declined?

Joyce Villa - Office of Employee Relations

Reviewed some do and don'ts of retrenchment (process, rationale, justification).

The Governor and the Chancellor are committed to retrenchment and layoffs as a last resort.

Retrenchment cannot be budget-based: (1) A political imperative, and (2) in collective bargaining/arbitration, it invites attention to other expenditures that can be viewed as discretionary, e.g. a conference center.

Advance approval required through OER (contractual compliance) and the Provost's office (mission).

The advisory group on collective bargaining has taken the pulse of campuses on union proposals.

A bill that allows arbitration on compensation with correctional workers (big … about 25,000) will change dynamics for this round of bargaining. Other collective bargaining units will hold back because arbitrators always seem to be more generous than management.

Will not exchange demands with UUP for several months. (Normally would be done in December). FY04 is likely to be zero, not because of the budget situation but because we will not have an agreement. The likelihood of accepting zero for the first year increases once the year has passed.

Financial exigency is off the table (it was never on the table). It triggers Federal government looking over our shoulder to look for other options. Reallocation of resources based on judgment basics insulates campus from challenges.

Bob Haelen & Jim Biggane - SUCF

Although the picture could change with a phone call, the bond sale still is on track for December. A substantial piece is related to NYStar.
Do not know how big the capital plan might be. Our "going in" position is at least equal to the current plan.
Invest in scoping-out projects. Planning drives construction. Need a pipeline to reduce lag time and peaks / valleys.
New NYS building codes out January 1. Need to have someone trained by NYS in order to do code work.
EPA campus self-assessments might have SUCF implications and SUCF wants to be kept in the loop on this.

Government Relations - Mike Trunzo and Jim Campbell

SUNY has moved 10 legislative proposals forward: 8 carried over from last year and 2 new ones (see memo of 11/20/02) from Mike Trunzo to SUBOA members. The memo is organized in four areas - Management & Flexibility; Campus Safety Enhancements; Program Enhancements; and Local Initiatives. The meeting concluded with reports from Ken Levison on the status of his tuition paper, and Becky Schenk's remarks covering A/B/B.

Research Foundation - Bonnie Boice

The discussion centered on the OM evaluation proposal. Bonnie listened to the concerns expressed and indicated that all comments would be taken under advisement.

Meeting adjourned at 11:47 a.m.

Respectfully submitted,

John R. Homburger,
Secretary

Back to Minutes/Reports