CALIFORNIA STATE UNIVERSITY, LONG BEACH
FINANCIAL AFFAIRS COUNCIL
MINUTES
Meeting Number 3
October 7, 2003

Voting & Non-voting members present:  D. Harris, Adams, Anwar, Tabzadeh, Snidecor, Boyd-Batstone (Secretary), Klink (Vice Chair), Yeung-Lindquist, Bostic, McConnell, McMahan, Hood (Chair), Snidecor, D’Amicantonio, McClintock, Preston, Horne, Jernigan, Sauders, B. Harris, Green, Meylor, Wang, Costa, Hata, Johnson.

Chair Hood called the meeting to order at 1:10pm
1.	Agenda approved.  MSP

2.	Minutes of Meeting Number 2 of September 16, 2003 were approved with corrections.  MSP

3.	Announcements:  Chair Hood informed the FAC about a current Bill before the Legislature that provided a “2+2 golden handshake.” It appears that the short and long term cost of the proposed program is prohibitive to implement.

Doug Harris announced the allocation of the 49er Shops Inc. for student activities support funding.  $100,000 was allocated to support 29 student activities during AY 03-04.  Fifty program proposals totaling $299, 780 were received from campus units as a result of a campus-wide announcement.  Vice President for Student Services Douglas Robinson consulted with Academic Affairs, Student Services, and the executive officers of the Associated Students, Inc. as part of the recommendation process.

4.    New Business

4.1	University Foundation Annual Report: Foundation Executive Director Behm and Associate Executive Director Tennenbaum.

Executive Director Behm introduced the annual report with a brief description of the role of the Foundation as a non-profit organization formed to support and advance the mission of CSULB by pursuing a wide range of opportunities in the areas of grants and contracts, campus programs, public-private partnerships, technology transfer, and other entrepreneurial activities to complement the University’s teaching, research, scholarly, creative, fund-raising, and public service goals.

He explained that the Foundation’s financial report had been prepared in accordance with Governmental Accounting Standards Board (GASB) principles which establish standards for external financial reporting for public colleges and universities.  Overall the financial condition of the Foundation depends on the condition of the University as reported in the 2002-2003 Year-end Management Financial Report (p. 15).  Several significant activities were highlighted in his presentation.  First, the United States Department of the Navy released the Foundation from its obligations with respect to a note on the 30-acre parcel, known as Technology Park, as conveyed to the Foundation in 1996.  The Long-term debt forgiveness amounted to $1 million and was reported as a non operating item, Federal Government Appropriation.  Another significant activity was a temporary contract with the City of Long Beach to handle payroll accounts which brought $3.5 million to the Foundation.  The City of Long Beach contract which was to be for 3 years was extended for an additional 6 months by the city. The contract ended in April 2003.

Associate Executive Director Tennenbaum reported that during FY 2003, total assets increased $4.5 million, or 6%.  The increase was attributed to the increase in current assets primarily consisting of cash, cash equivalent of $6.7 million, short-term investments of $11.9 million and receivables of $9.5 million.  Total liabilities decreased $3.3 million, or 12%.  The liabilities consisted of accounts payable of $2.9 million, accrued salaries, benefits and compensated absences of $2.1 million and deferred revenues of $3.6 million.  Noncurrent liabilities consisted of deferred revenues of $1.8 million, long-term debt of $10.3 million, and other liabilities of $3.6 million.  Again the decrease in noncurrent liabilities was the result of the Navy’s forgiveness of debt.  As a result, the overall financial position of the Foundation improved during FY 2003.  Net assets increased $7.8 million, or 16%, from $47.8 million in 2002 to $55.6 million in 2003.

Looking to the future management is projecting a 6% increase in revenues in the general fund revenues due to an anticipated growth in grants, contract revenues, and other programs.  In order to improve the Foundation’s overall financial condition, management has budgeted a 6% decrease in total expenses in the general fund, primarily in the area of supplies, expenses, computer hardware and maintenance, professional services, and other operating expenses, including a 3% decrease for indirect cost share returns to the University.

    4.2    2002-2003 Year-end Management Financial Report: Associate Vice President Latter

Associate Vice President Latter reported that in accordance with State accounting rules this report is not audited because it is considered supplemental.  He proceeded to review the report in detail.

As of June 30, 2003, the University reported a total Adjusted Budget of $260,971,809 in its General Fund Allocation, which is an increase of $14,593,647 from the Initial Budget Allocation.  The increase is attributed in part to the State University Fee (SUF) combined with an increase of 929 Full-time equivalent students (FTES).  Other related revenue sources included Non-Resident Tuition (NRT), Student Health Fee, ID Card Fee, Application Fee, and Miscellaneous Revenue associated with enrollment growth.

Fiduciary Funds Activity was compared over last three years showing a marked increase in financial aid from $82,512,839 in 00-01, to $88,158,000 in 01-02, to $98,118,037 due to fee increase compensation.

In the Combined Statement of Funds’ Revenues, Expenditures, and Other Additions or Deductions for the fiscal year ended June 30, 2003, VP. Latter highlighted total revenue of $467,685,221.  A positive balance in State Lottery Funds, which can be carried over year to year, of $1,223,088 was reported, as well as, a $7, 033,513 reported balance from the CSULB Foundation.  The Parking Program reported a balance of $550,689 and is scheduled to build a Parking Office and two new lots.

A loss of non-resident units by 1000 was reported due to NRT fee increases.  It was also expected that interest income would decrease due to the current economic climate.  Housing was down $352, 630 due to refurbishing and renovation.  The major Capital Outlay was attributed to $19 million for renovation and upgrade of the Library.  49er Shops loss of $63, 528 was due to an off-site competitor reducing sales by $100,000 from the previous year and increase cost of worker compensation and insurance.

Retained earnings for University College and Extension Services (UCES) were $6,164,302.  Fund raising in the form of gifts and contributions exceeded the stated goal of $25,500,000; however the reported total of $25,525,463 did not included a $5,000,000 gift which was back dated to last year.

Despite a $4 million budget cut, there was a carry over of $14,301,715.  This considerable achievement was due to encouraging Divisions to save and to strategically prepay insurance, workers compensation and, liability for two years.  In addition, prepaid contracts, advance purchases and accrued payroll in Academic Affairs contributed to the re-appropriated amount.

    4.3    Discontinuance of the Option in Language and Linguistics under the B.A. in English presented by Eileen Klink, Chair of the Department of English.
 Action:  Vote to recommend the discontinuance of the B.A. in English with an Option in Linguistics.  MSP

5.    Meeting Adjourned @ 2:35pm