In response to Chancellor Elect Charles Reed’s request, President Welty and I have certified the CETI partnership projected Campus Benefits/Commitments (Reference February 2, 1998 memorandum from Quillian to University Community, Subject: Certification of CETI Partnership Projected Campus Benefits/Campus Expenditures). I wish to express my appreciation to Jim Morris, John Briar, and the members of the Budget Committee for their assistance and input.
A copy of the certification
memorandum and the attachments
are below for your reference.
BFQ:pt
Memorandum
To: Mr. Richard West, Senior Vice Chancellor, Business and Finance, The California State University
From: John D. Welty, President
Benjamin F. Quillian, Vice President for Administration
Subject: Campus Benefits/Commitments with CETI
We have reviewed the attached data [below] which were provided to the Executive Council on January 26, 1998. This memorandum is to confirm those data, except as qualified herein and in the also attached document reflecting our understandings of the underlying assumptions and bases of the data.
Please note the revision we have made to the 1996/97 Campus Reported Expenditures. Specifically, the figure of $5,512,300 has been reduced to $5,188,300 to reflect more accurately the 1996/97 "in-scope" expenditures of California State University, Fresno. Said reduction revises the Total Campus Benefit from $10,318,614 to $9,994,614. In that context, it is reasonable to expect the campus to spend, assuming a fairly large margin, $5,188,300 (current dollars) in future years for goods and services that are within the scope of the CETI partnership. At California State University, Fresno, large expenditures within the scope of CETI will normally involve consultation with our University Budget Committee and the Information and Educational Technology Coordinating Committee.
Your attention is invited to several issues addressed in the attachment explaining our understandings. First, we are concerned about the reduction in the amount of resources being devoted to the infrastructure build-out. We believe there should be adherence to the Telecommunications Infrastructure Master Plan (TIMP) standards that were developed for the CSU, which call for a specific number of data/voice faceplates and video drops in each room on campus. The TIMP standards will better serve the needs of our students, faculty and staff. If the TIMP standards are used, the infrastructure build-out benefit would increase by $5,948,267, bringing the total amount to $25,619,267 instead of $19,671,000.
Second, we have a concern about the Uniform Messaging component. Although we recognize the importance of establishing a uniform messaging capability for the CSU, campus technicians have advised us that the proposed migration to NT servers will not scale well. Consequently there may be problems of reliability and additional costs for installation, operation, maintenance and synchronization of the required large scale "NT Farm." We invite your attention to these matters.
Third, the fixed amount of resources being devoted to refreshing the telecommunications infrastructure should be revisited. We suggest using the proposed dollar amount as a minimum set aside for refresh, leaving open the opportunity to increase the refresh figure should CETI income increase. We also believe it would be most appropriate to recalculate the minimum figure based upon a reasoned estimate of the resources that will be required to keep the CSU and campus infrastructures appropriately refreshed.
Fourth, the allocation for infrastructure support is adequate only if extended warranties/operational support are sufficient to ensure proper support services and coverage of possible liabilities. Your attention to this matter is encouraged.
Fifth, we question the adequacy of the allocation for training and help desk support. Given the size of our campus and its population, as well as the anticipated build-out cost, we ask your consideration of an allocation that is proportional to the headcount of our students, faculty and staff or to the infrastructure build-out costs – as opposed to the currently proposed across-the-board allocation.
We fully understand the importance of the build-out of the telecommunications infrastructure for our students, faculty and staff. Moreover, we sincerely appreciate the efforts going into this project. If additional information is needed, please contact us.
JDW/BFQ:pt
Attachments
c: Cabinet
IETCC
Academic Senate Budget Committee
CALIFORNIA STATE UNIVERSITY, FRESNO
CAMPUS BENEFITS/COMMITMENTS WITH CETI
As of 1/22/98
The following headings and numbers correspond to those indicated for the Fresno campus on the Campus Benefits/Commitments with CETI as of January 22, 1998 document, dated January 29, 1998. This document is to provide the understandings the Fresno campus has regarding said document and explain the assumptions underlying the numbers contained herein as understood by the campus.
UP-FRONT CAPITAL INVESTMENT
Infrastructure Investment Including Messaging, 4CNet & Contingency $21,939,320
It is the understanding of the campus that the above number is the approximate total of the following:
Infrastructure Build-out $19,671,000
Uniform Messaging $893,000
4CNet $147,000
Management Reserve/Contingency $1,228,000
Infrastructure Build-out
The original campus request of $ 30,257,597 for infrastructure build-out has been reduced to $19,671,000. It is the understanding of the campus that the reduction results from the following. Non-state buildings have been removed from the scope of work. These facilities include the Bookstore, all buildings associated with the residence halls, Keats, various athletic facilities, University Student Union, and the Satellite Student Union. The removal of these buildings causes a reduction of $4,638,330. The specifications for the build-out of the infrastructure have been changed to minimum baseline standards, as opposed to being increased to meet the TIMP standards developed for the CSU. The TIMP specification calls for a fixed number of data/voice faceplates and video drops in each room on campus. However, the CETI proposal calls for a faceplate for each Faculty and Staff on campus, with a modest additional number for future expansion, and a smaller percentage of video drops. This change in specification causes an additional $5,948,267 reduction.
CAT 3 wiring is being replaced by CAT 5 wiring for all data and video outlets. Additionally, the campus has been advised that a team of technicians will spend several weeks on campus working with campus personnel to clarify the statement of work, which will further refine the total build-out cost. However, the campus anticipates increases in the standards and scope of work.
Uniform Messaging (e-mail)
The campus understands the Uniform Messaging costs are based upon Fresno’s proportionate share of the total CSU headcount of 19,128 (faculty, staff and students) as of October 1996.
4CNet Cost
The campus understands the 4CNet costs of $3,531,000 for the CSU have been divided by the number of campuses in the CSU and allocated equally. The campus costs are associated with the initial installation of communication lines and electronics for 4CNet at the campus demarcation.
Management Reserve/Contingency
The campus understands the amount of Management Reserve/Contingency funds is based upon Fresno’s percent of the total infrastructure build-out costs. The reserve/ contingency is to cover costs associated with engineering, project management, consulting requirements, asbestos containment, etc. The total CSU reserve/ contingency was estimated to be $16,000,000.
6.5% 10 Year Annual Debt Service Cost on Capital Investment $3,051,862
The campus share of the total CSU annual debt service is based upon Fresno’s proportionate share of the total infrastructure build-out cost.
OPERATING/ONGOING CETI CONTRIBUTIONS
Annual Refresh Value $1,152,599
It is the understanding of the campus that the annual refresh contribution from CETI is projected for years 4 through 10 of the partnership. The contribution is based upon information contained in the Proforma Income Statement; namely, CETI will make available from projected income $93,053,000 for the purpose of refreshing the infrastructure system-wide. Apparently, the figure is a fixed negotiated amount, as opposed to being a figure that will increase if more income is generated. Moreover, the figure does not appear to represent the estimated resources required to keep the campus infrastructure refreshed.
The refresh value to each campus is based upon prorata costs of new terminal resource equipment to be delivered to the CSU as part of the infrastructure build-out. Terminal resources are defined as those electronics required for campus connection to the backbone network, including items such as routers, hubs and data ports, as well as video and satellite downlinks. Tax and freight costs are also included. Terminal resources for Fresno, excluding tax and shipping, amount to $3,242,000. Seven years is used as the divisor in this column, resulting in the commencement of annual payments in year 4.
Annual Infrastructure Support $254,478
The campus understands that anticipated infrastructure support costs and related potentially unfunded CSU liabilities will be offset by extended warranties/ operational support. The number is made up of the estimated costs of warranties for the new terminal resources to be placed on campus and the cost of the warranties for uniform messaging based upon the campus’s total number of faculty, staff and students.
4CNet Recurring Costs $236,250
Recurring monthly costs were allocated equally to the campuses. The campus requires clarification of the cost components.
Training & Help Desk $111,125
The campus understands that the annual CETI contribution to the CSU of $2,667,000 is made up $1,667,000 for IT professional development and $1,000,000 for help desk and support activities. The contribution has been allocated equally across the campuses. The campus suggests that consideration be given to changing this allocation from an equal amount to each campus to a distribution that is proportional to the infrastructure buildout costs or total number of faculty and staff. The amount appears to be insufficient to fund fully these activities, but provides basic funding.
CETI Contributed Annualized Value One Time + Ongoing $4,806,314
The figure represents the total of debt service and the CETI contributions.
1996/97 Campus Reported Expenditures $5,188,300
(Revised)
The campus has revised the number indicated on the Campus Benefits/ Commitments with CETI document from $5,512,300 to $5,188,300. Because the figure is to represent fiscal year 1996/97 campus IT expenditures for resources, services and goods within the CETI project scope, $324,000 of out-of-scope purchases have been deleted from the total. The figure of $5,188,300 further refines the figures first reported in the August 1997 survey and refined in November 1997. The figure includes the current annual expenditure of $1,250,800 for the campus PBX switch, which is funded by a special allocation.
Total Campus Benefit $9,994,614
(Revised)
The campus has revised the total to reflect the deletion of out-of-scope purchases from the campus’ reported expenditures.