Report of the Chair

This morning I have three topics to cover.

Today I want to use my Chair’s Report to summarize our strategic planning effort.

• In response to the Board’s direction, the CSU project to develop a strategic plan that will succeed Cornerstones is ongoing.
• A Steering Committee for the project comprised of approximately 47 individuals, including 12 Trustees, together with presidents and other senior campus administrators, faculty, students, and members of the public (drawn from key CSU constituencies), met initially on October 16, 2006, to frame initial “domains” and associated questions to guide the campus dialogues.
• This draft was subsequently reviewed and improved in work undertaken in a joint meeting by campus provosts, campus senate chairs, and the Academic Senate CSU executive committee.
• The Steering Committee for Access to Excellence will meet again on April 4, 2007 in light of campus strategic planning dialogues (Campus Conversations) currently underway. I want to thank my fellow trustees who have attended the campus conversations – there is a trustee present in every case, and in a couple of instances two of you have been present. I had the opportunity to observe the dialogues at Los Angeles, San José and Humboldt, and I will attend the conversation at the Bakersfield campus tomorrow.
• A review of Campus Conversation reports during the April Steering Committee meeting will assist members in framing the discussion during a CSU Systemwide Summit (April 24-25) where an initial CSU strategic plan will be drafted.
• A new strategic plan will be provided for Board approval in late spring or summer 2008.
• Heavy reliance on campus dialogues/conversations is central as this is intended to be plan driven from the grassroots.
• Beginning the process at the campus level ensures that the process leading to the next CSU strategic plan will be broadly inclusive, involving dialogue among—and outreach to—the multiple constituencies that define the University and its mission.
  
  Finally, as many of you know there is a website that can be accessed from the academic affairs main webpage. The project webpage includes background papers and agendas of the conversations held at each campus:
  • System Strategic Planning

I anticipate that the Access to Excellence planning project will launch the CSU forward. One outcome could be a case statement for the funding needs of CSU’s programs and activities. It is not a hollow process as some have commented.

I also want to provide some remarks about the dispute between the California Faculty Association and the CSU. I am concerned about statements in past weeks asserting that student fees are not consequential to support employee compensation.

The CSU has a revenue-based expenditure budget. Revenue comes from the state General Fund allocation, student fees, and federal funds and other reimbursements. The budget includes provision for employee compensation (salary and benefits), instructional costs, technology, libraries, administration, student services, student activities, facilities and grounds upkeep, equipment, utilities, public safety and insurance.

Currently, employee compensation amounts to $3.1 billion dollars of the CSU’s $4.2 billion dollar overall budget. This represents 74% of the budget. The budget presented to the Board annually is an all-funds expenditure plan that does not segregate or allocate sources of funds to a specific program or purpose.

The trustees’ goal of achieving market-equitable compensation for all employees is based on the State providing the full funding of the Higher Education Compact and annual student fee increases up to 10% annually for undergraduate students. Of course, we gladly would accept a fee buy-out, that is, receive additional State funds in lieu of having to increase student fees.

We need the resources, including student fees, to sustain an outstanding university system. Without either a larger share of the finite General Fund or an increase in student fees, our compensation program cannot move forward. Faculty, staff and executives need and deserve fair compensation.

As everyone in this room knows, the California Faculty Association and the CSU have been bargaining over terms of a new contract for a number of months. In an effort to assist progress in these negotiations, Chancellor Reed retained Mr. Richard Barnes – the former head of the Federal Mediation and Conciliation Service in the Clinton Administration – to facilitate the bargaining process. After discussing many Articles in the contract, the upshot was that there was no agreement on compensation and a number of other issues such as parking fees and the early retirement program.

Because of the Impasse, the CFA and CSU requested assignment of a mediator from the state’s Public Employment Relations Board. After working with the parties to reach an agreement, the mediator concluded that further mediation sessions would not produce an agreement. At this point the bargaining process was certified to fact-finding.

In fact-finding, a three-person panel consisting of a neutral party, a CFA representative and a CSU representative review facts and issues a report of recommendations to resolve the outstanding issues. This process will conclude in a matter of days. I remain optimistic that the faculty union and the CSU will reach agreement so that no classes are disrupted.

As a trustee, I believe we have made a generous and good faith salary offer. For the first year of a four-year contract beginning in 2006/07, a 4.0% increase has been offered retroactive to July 1, 2006. Over the four years, if the CSU receives its Compact funding commitment faculty would receive a 21.87% pooled increase with the state funding of the additional 1% compensation the Trustees will request annually over the next three years, bringing the total to a 24.87% pooled salary proposal. The actual value of the total CSU pooled compensation proposal for faculty for 2006 through 2009 would be 27% after the increases are compounded.

In conclusion, we are interested in resolving this dispute and believe we have been earnest in the offer. We are flexible.

Let me be clear: it is the policies of the Board of Trustees that the chancellor and staff are carrying out, not the other way around. Efforts to belittle, vilify, harass, and sully the reputation and integrity of the chancellor are reprehensible to our institution.

I believe this is Dr. Galinson’s final meeting as his term is nearing end. On behalf of your fellow trustees we thank you for your extraordinary service. As is our custom, we will honor your service in conjunction with the May 15-16 meeting of the Board.

That is my report. Now it is time to hear the Chancellor’s Report. Chancellor Reed.