Financial Stability Process Memo

Dear Cal State East Bay colleagues,

I am writing today to initiate a broad and inclusive process to address and improve the financial stability of our university. 

I want to stress two things. First, overall we are a healthy, state-supported university serving around 10,000 diverse regional students with robust and impactful educational opportunities. Second, we have experienced reductions in our tuition revenue over many years that must be addressed to ensure our future financial health and stability. To repeat: addressing our revenue gap will be an inclusive process, with ideas and options shared widely for input through formal groups, like the Academic Senate, and with the broader campus community.

Our tuition revenue challenge

Primarily due to population declines in the state, especially in northern California, our enrollment is now approximately 2,500 full-time equivalent students fewer than our CSU target of 12,522. Many factors have contributed to this decline. The System directive to revise our bachelors degrees not to exceed 120 units, while good for students, has reduced our full-time equivalent enrollments over time. Improving our graduation rates without being able to replace graduating students from an increasingly smaller pool of local high school graduates has also impacted our enrollment and tuition revenue. Further, state revenue allocated to us by the CSU System will decrease by 5 percent in FY2024-25 if we do not increase our CA resident enrollment to within 10 percent of our target. Yes, it is possible that due to changes in our local economy, higher unemployment may result in some enrollment increases for us, but we cannot count on this past pattern to fully solve our current revenue gap.

At Cal State East Bay, we have improved our outreach and recruitment, developed and expanded new high-demand degree programs, and improved our retention and graduation rates over the past three years. We have made it through the worst parts of the COVID-19 pandemic. We have publicly committed to improving equity and addressing systemic racism throughout our university. I am proud of our work. Yet, the time has come to adapt to a new smaller reality. We have been able to cover our tuition shortfalls in past years by using our university reserves. This is not a sustainable practice in the long term.

Path forward

As described in my recent email dated February 2, 2023, I have formed an Enrollment Gap Tiger Team to identify ways to quickly increase our CA resident enrollment, like shifting summer sessions from self-support to statewide, among other methods. I have also formed a Budget Gap Tiger Team to quickly identify options for closing our budget gap. These options will be shared broadly for input. I want to thank Monique Cornelius, Maureen Pasag, Fa'aalu Lealaimatafao, Rafael Hernandez, Veronica Salvador, and Myeshia Armstrong for agreeing to serve on this team. 

Open position review

As an immediate measure, I have instituted a review of all open staff positions. We have hundreds of unfilled positions throughout the university, positions that have been open for recruitment for months. Given our smaller enrollment, I have asked all administrators to review each and every open position closely. Some essential staff recruitments must go forward in order for us to fulfill our mission. However, this is not true for each and every open position. We will be able to save from not filling all open positions. 

Next steps

In the coming weeks, I will organize an open forum to share more information and provide an opportunity for ideas and input.

Again, I want to emphasize that though this is a serious situation we must address, it is not a crisis. I am confident in our ability to achieve financial stability and to continue to serve our important mission. Our leadership group has developed a list of Guiding Principles for us as we embark on this work. Our students and our equity goals will remain front and center—serving as our compass points as we make decisions and determine our future.

Sincerely yours,

Cathy Sandeen
President

March 6, 2023