April 26, Charlie Faas Vice President of Administration & Finance and CFO. Marna Genes Associate Vice President, Finance

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1 Finance Office of The Associate Vice President Accounting Services Accounts Payable Budget & Financial Management Bursar s Office Contracts & Purchasing Distribution Services Finance Support One Washington Square San José, California Voice: Fax: April 26, 2018 TO: FROM: SUBJECT: Charlie Faas Vice President of Administration & Finance and CFO Marna Genes Associate Vice President, Finance PRELIMINARY COST ALLOCATION PLAN In accordance with ICSUAM policy number (Cost Allocation / Reimbursement Plans for the CSU Operating Fund), the Office of Budget Planning and Financial Management has drafted the Preliminary Cost Allocation Plan for Non-CSU Operating Fund Entities. Attached is a summary of the plan and supporting documentation to assist interested parties with budget planning. The figures presented are based on currently available data: Early Bird Risk Premium projections; known contractual costs increases; and FTE data for students, on-campus residents, and employees. The final Cost Allocation Plan prepared in the fall will address further updates based on actual year-end expenditure data, actual risk premiums, Business Plans, student enrollment, actual on-campus residents, and employees. This preliminary plan incorporates the following additional changes since previous iterations of the plan: 1. Reduction to the Business and Financial Services fee charged to Student Union based on the reduction of human resources support functions provided to the auxiliary. 2. Inclusion of the Facility Use Fees that will be charged to igateways and College of International and Extended Studies for space occupied at the Student Union. 3. A phase-in of the full operating cost of University Police Department into the calculated cost of security per FTE on campus. Previous cost allocations only accounted for a portion of the department s operating budget. An additional $1.5 million per year was not being considered. For, 50% of these costs will be included in the calculated cost of security per FTE; in 2019/20, 100% of the costs will be integrated. Please indicate your approval of the attached Preliminary Cost Allocation Plan with your signature below. The California State University: Chancellor s Office Bakersfield, Channel Islands, Chico, Dominguez Hills, East Bay, Fresno, Fullerton, Humboldt, Long Beach, Los Angeles, Maritime Academy, Monterey Bay, Northridge, Pomona, Sacramento, San Bernardino, San Diego, San Francisco, San Jose, San Luis Obispo, San Marcos, Sonoma, Stanislaus Charlie Faas, VP for Administration & Finance and CFO cc: See distribution list 5/4/2018 Date

2 Academic Affairs: Andy Feinstein, Provost and Senior Vice President for Academic Affairs Bradley Olin, Interim Associate Vice President, Academic Planning & Budgets Nami Shukla, Associate Dean, College of International and Extended Studies Ruth Huard, Dean, College of International and Extended Studies Rajnesh Prasad, Executive Director, Research Foundation Scott Broberg, Director of Operations and Finance, College of International and Extended Studies Administration and Finance: Lisa Thomas, Executive Director, Spartan Shops Ninh Pham-Hi, Director of Internal Control, Administration and Finance City of San Jose, Public Library: Jenny Choi, Administrative Officer, San José Public Library Jill Bourne, City Library Director, San José Public Library Hammer Theatre: Shannon Miller, Dean, College of Humanities and the Arts Brenda Wilhelm, Academic Resources Manager, College of Humanities and the Arts Information Technology: Bob Lim, Vice President and Chief Information Officer, Information Technology Kara Lee, Director of Strategy, Planning and Business Services, Information Technology Intercollegiate Athletics: Marie Tuite, Athletic Director, Division of Intercollegiate Athletics Mike Waller, Senior Associate Athletic Director, Division of Intercollegiate Athletics Organizational Development: Jaye Bailey, Chief of Staff and Vice President, Organizational Development Sami Monsur, Manager of Organizational Planning and Projects, Organizational Development Joanne Wright, Senior AVP for University Personnel Patricia Rodriguez, Manager of Employee Support Services, University Personnel Student Affairs: Sharon Willey, Interim Vice President for Student Affairs Cathy Busalacchi, Executive Director, Student Union Cedric Woolfork, Associate Director of Accounting, Student Union Kevin Kinney, Director, University Housing Services Robb Drury, Senior Director, Resources Management for Student Affairs Romando Nash, AVP for Student Services Roger Elrod, Director, Student Health Center Tari Hunter, Executive Director, Associated Students University Advancement: Paul Lanning, Vice President for University Advancement Leslie Rohn, Chief Operating Officer, Tower Foundation Julie Jimenez, Director, Financial and Administrative Services University Police Department: Alan Cavallo, Interim Chief of Police Stacy Hale, Budget and Personnel Analyst

3 SUMMARY OF COST ALLOCATIONS Services and Use of Facilities Costs Insurance Premium Costs Risk Management Non-CSU Operating Fund Entities Business & Financial Services IT Services Facility Use Fees UPD Security Workers' Comp IDL / NDI / UI Risk Liability Insurance Vehicle Insurance Premiums TOTALS Associated Students $ 106,715 $ 154,428 $ 5,322 $ 7,452 n/a n/a n/a n/a n/a n/a $ 273,917 Athletics n/a (B) n/a n/a n/a n/a n/a n/a n/a n/a n/a - Housing 239,901 1,208, , ,429 35,302 21,666 55, ,658 2, ,139 2,738,698 CERF 2,797,192 (C) 201, ,753 (J) 71, ,999 80,400 77,501 n/a n/a 288,900 3,596,478 Int'l Student & Scholar Svcs n/a n/a 95,612 (J) n/a n/a n/a n/a n/a n/a n/a 95,612 Lottery 158,662 n/a n/a n/a ,510 n/a n/a 5, ,327 Other Trust 130,960 (D) n/a n/a n/a 45,500 (I) (I) n/a n/a 45, ,460 Parking 507,050 (D) 99, ,416 1,169,456 11,496 7,056 17,381 43,102 4,629 83,664 2,233,326 Research Foundation 68,569 (E) 245, ,200 n/a n/a n/a n/a n/a n/a n/a 501,037 Rsrch Fndtn: igateways n/a (F) n/a 241,127 n/a n/a n/a n/a n/a n/a n/a 241,127 Spartan Shops 8, , ,000 (H) 13,809 n/a n/a n/a n/a n/a n/a 1,223,248 Student Health 690,475 (D) 433,869 17,802 19,070 52,696 32,342 29,001 16,529 n/a 130,568 1,291,784 Student Union 134, , ,577 10,083 n/a n/a n/a 79,324 n/a 79, ,817 Tower Foundation 41,849 (E) 81,756 40,728 3,945 n/a n/a n/a n/a n/a n/a 168,278 City of San Jose (MLK) n/a (G) 504,162 n/a 24,330 n/a n/a n/a 31,407 n/a 31, ,899 Hammer Theatre 25,040 (D) 31,794 n/a 1,534 n/a n/a n/a n/a n/a n/a 58,368 TOTAL, NON-CSU OPERATING FUND $ 4,909,607 $ 3,456,136 $ 2,571,699 $ 2,022,768 $ 276,089 $ 141,523 $ 185,368 $ 378,020 $ 7,167 $ 988,167 $ 13,948,376 TOTAL, CSU OPERATING FUND $ 1,652,171 $ 1,014,014 $ 840,115 $ 475,244 $ 32,998 $ 4,014,542 ************ TOTAL, UNIVERSITY $ 1,928,260 $ 1,155,537 $ 1,025,483 $ 853,264 $ 40,165 $ 5,002,709 ************ Property / Building Total Insurance cost allocations are highlighted. Cost allocations will be posted quarterly in October/November, December, March and May/June. Fixed charges. These costs have been adjusted beginning FY 2016/17 to address years of suppressed costs, which had not taken into consideration the increase in benefit costs. (B) Athletics will not be charged for IT and Business & Financial Services per an agreement for services in kind: tickets to Athletic events. (C) CERF estimated balance; to be transferred to A&F after all other costs have been posted. (D) Variable charges will be dependent upon revenues collected. (E) Cost distribution between the Foundations varies each year. See Business & Financial Services page for details. (F) igateways operates out of Research Foundation, however they occupy space on campus. (G) City of San Jose Public Library (MLK) will be charged for ITS Baseline Services and partial cost of the (MLK) Building Insurance Premium. (H) The Facility Use Fee for Spartan Shops is governed by their operating agreement and may be adjusted after year-end reconciliation of sales revenue. (I) Trust portion of risk premium will be fully applied to WC premium for ease of calculating other costs. (J) CIES moved back to campus in June 2017 to an area in the Student Union. Student Union will bill CIES directly for the Facility Use Fee which will be paid by the University. Costs will be distributed accordingly to each entity/fund by the University Cost Allocation Preliminary Plan, Summary Last Updated: 4/26/2018

4 BUSINESS & FINANCIAL SERVICES Cost Allocations Based on General Salary Increase (GSI) Adjustments Charge 3% GSI Increase + Benefits Cost Charges Associated Students $ 102,530 $ 4,185 $ 106,715 Athletics Housing 230,492 9, ,901 Lottery 152,439 6, ,662 Foundations (Research and Tower) 106,087 4, ,418 (B) Spartan Shops 7, ,293 Student Union 183,542 7, ,901 (C) Total Based on GSI $ 783,058 $ 31,966 $ 758,890 Split of Research and Tower Foundation 2016/17 Actual Exp. (B) Pro-rata share Charges Research Foundation $ 55,480, % $ 68,569 Tower Foundation 33,861, % $ 41,849 Total $ 89,342, % $ 110,418 Cost Allocation Estimates Based on Anticipated Revenue Fund Revenue % of Rev. Billed Charges CERF $ 32,992,144 N/A $ 2,797,192 (D) Parking Fines and Forfeitures ,125 Parking Fees ,073,000 Parking Total 6,338, % 507,050 (E) Other Trusts various various 156,000 (F) Student Health Services Fee ,586,135 Student Health Facilities Fee ,898,360 Student Health Voluntary Fee ,000 Student Health Total 13,809, % 690,475 (G) Total Based on Anticipated Revenue $ 4,150,717 TOTAL COST ALLOCATION $ 4,909,607 Increase for Business and Financial Services fee reflects approved bargained compensation adjustments (3% effective 7/1/18) and estimated benefits at rate of %. (B) Tower and Research Foundation Cost Allocation for Business and Financial Services is calculated by taking the base cost for both (established when they were one entity), and dividing by the pro-rata share, based on prior year expenditure actuals (FIRMS data). (C) University no longer provides human resources support to the Student Union, except for a limited number of work study students for which Student Union offers value in-kind through the placement of students. The Charge relects a credit to account for this reduction in support from the University. (D) CERF estimated cost allocation is calculated based on anticipated credit revenue (OU, Special Session, Winter/Reg Extension and Summer) less other University cost allocations, per a campus agreement. See CERF page for details. Revenue estimate based on Business Plan. (E) Parking Funds included are Fines and Forfeitures, and Parking Fees. Funds for Construction and Maintenance and Repair are not included. Revenue estimates based on Business Plan. (F) Each Trust Fund agreement details the percentage of the Business and Financial Services fee. Other Trusts includes Hammer Theatre. Revenue estimate for is based on 2016/17 actuals. (G) Student Health revenue estimates based on Business Plan; estimates do not include transfers in/out. revenue for self-support units will be updated based on Business Plans in the fall Cost Allocation Preliminary Plan, Bus & Fin Services Last Updated: 4/26/2018

5 IT SERVICES FTE Baseline Services (B) Workstation Refresh (C) Non-Baseline Services (D) Charges Rate per FTE $ 4,542 $ 445 $ 4,987 Self-Support Units Housing $ 295,230 $ 28,925 $ 883,912 $ 1,208,067 CERF ,951 18, ,974 Parking ,840 8,900-99,740 Student Health ,154 38, ,869 Subtotal Self-Support Units $ 965,175 $ 94,563 $ 883,912 $ 1,943,650 Auxiliaries Associated Students $ 154,428 $ - $ - $ 154,428 Research Foundation , ,268 Spartan Shops , ,146 Student Union , ,932 Tower Foundation , ,756 Subtotal Auxiliaries $ 976,530 $ - $ - $ 976,530 Other Entities City of San Jose (MLK) , ,162 Hammer Theatre , ,794 Subtotal Other Entities $ 535,956 $ - $ - $ 535,956 TOTAL COST ALLOCATION $ 3,456,136 FTE based on Business Plans and/or data provided by units. Information will be updated in the fall with budgeted FTE data. (B) Increase for Baseline Services fee reflects approved bargained compensation adjustments (3% effective 7/1/18) and estimated benefits at the rate of %. (C) Any projects and initiatives that expand IT services to new/renovated facilities (e.g. lab refresh) where costs are significantly higher may require the units to assist and support (buy-in contribution) the increased costs. (D) Non-Baseline Services fee covers the television services provided to the residence halls in Housing Cost Allocation Preliminary Plan, ITS Services Last Updated: 4/26/2018

6 FACILITY USE FEES Per EO 1000: Charges for Usage of State Owned/Supported Facilities Space Rental Ground Lease Change from Gross $1.00 per Assignable $2.00 per Building Grounds Total $1.00 per Prior Facility Use Fee Facility Use Fee Sq. Ft. Sq. Ft. x 12 Sq. Ft. Sq. Ft. x 12 Footprints Surround. Sq. Ft. Sq. Ft. FN FY Associated Students 3,544 1,778 5,322 $ 5,322 $ 5,322 $ - $ 5,322 Housing 266, ,162 (B) 266, ,162 College of International & Ext Stds (C) 236, ,753 0 International Student & Scholar Services (C) 95,612 95,612 0 Parking 845,327 (adjusted) (D) 373, ,416 Research Foundation: Sponsored Activities (E) 187, ,200 Research Foundation: igateways 5,494 $ 131,856 (F,C) 241, , ,856 Spartan Shops (G) 915, ,000 Student Health Center 17,802 17,802 17,802 (H) 17,802-17,802 Student Union 173,447 19, , ,577 (I) 192, ,577 Tower Foundation 1,697 40,728 (J) 40,728-40,728 TOTAL COST ALLOCATION $ 2,571,699 $ 441,636 $ 2,130,063 Associated Students will not pay rent for the University House until 2032, per a lease agreement between AS and SJSU. Note that the agreement states that the University will pay property insurance on the AS house. (B) The new Campus Village II was completed in the fall Hoover and Royce Halls were demolished also in the fall and construction began for the new SRAC. (C) CIES moved back to campus in June 2017 into a space in the Student Union. Student Union will bill CIES directly for the Facility Use Fee which will be paid by the University. Costs will be distributed accordingly to each entity/fund by the University. ISSS is a CSUOF entity, therefore, their lease will be paid by the University. igateways has acquired additional office space within CIES area. RF will be billed for their lease payments. CIES will reimburse the University for their lease as well. (D) The Parking ground lease is adjusted by the space occupied by Student Services Center, Human Resources, and UPD located in UPD parking & building space. (E) Research space is negotiated between the Research Foundation and the University. (F) igateways Program held in IS Building. A total of 10 rooms and office space have been assigned for dedicated use by CIES-iGateways effective June (G) The Facility Use Fee for Spartan Shops is governed by their operating agreement and may be adjusted after year-end reconciliation of sales revenue. (H) Student Health & Counseling Center began paying ground lease in FY 2015/16. (I) The new Student Union expansion was completed in April 2014 and the seismic renovation in Summer The Aquatics Center closed at the end of May 2016 and construction for the new SRAC began in fall Facility Use Fees for SRAC will begin as Student Union takes beneficial occupancy of the space; an updated projection will be incorporated in the fall. (J) Tower Foundation utilizes various offices and cubicles on the third floor of Clark Hall. Other adjustments also include funding changes to UA personnel Cost Allocation Preliminary Plan, Facilities Use Fee Last Updated: 4/26/2018

7 UNIVERSITY POLICE DEPARTMENT SECURITY FEE Faculty / Staff FTE Student FTE Staff / Faculty / Student Residents (B) Charges Rate per FTE $ $ $ Associated Students $ 7,452 Housing , ,429 CERF ,660 Spartan Shops ,809 Student Health ,070 Student Union ,083 Tower Foundation ,945 Hammer Theatre ,534 City of San Jose (MLK) ,330 Parking 1,169,456 (C) TOTAL COST ALLOCATION $ 2,022,768 Security Cost per Faculty / Staff / Student FTE UPD Budget $ 6,460,109 Total Projected Campus FTE (2,746 Faculty / Staff; 26,726 Students) 29,472 = Rate per Faculty / Staff / Student FTE $ (B) Security Cost per Staff / Faculty / Student Resident UPD Budget per Officer/Dispatcher $ 143,299 x UPD Officer / Student Ratio (1.5 / 1,000) = Gross Security Rate per Staff / Faculty / Student Resident $ Discount for Weekday Security Covered by CSU Operating Fund (1/3 of weekdays) (51.18) = Rate per Staff / Faculty / Student Resident $ (C) Per comprehensive/principal agreement/contract between the Non-CSU Operating Fund and the University Cost Allocation Preliminary Plan, UPD Security Last Updated: 4/26/2018

8 WORKERS' COMP, IDL / NDI / UI, RISK, VEHICLE LIABILITY PREMIUMS CSURMA Premiums Workers' Compensation Program $ 1,928,260 IDL / NDI / UI Program 1,155,537 Risk Liability Program 970,530 Student Professional Liability 34,587 Student Academic Field Exp. for Credit Liability 20,366 Property Insurance Program 853,264 AIME Program 430,645 Vehicle Insurance 40,165 TOTAL UNIVERSITY $ 5,433,354 Cost Allocations Based on 2016/17 Personnel Expenses 2016/17 Personnel Expenses (B) Workers' Comp IDL / NDI / UI Charges Campus Annual Premium $ 1,928,260 $ 1,155,537 $ 3,083,797 Housing $ 5,425, % $ 35,302 $ 21,666 $ 56,968 CERF 20,133, % 130,999 80, ,399 Lottery 14, % Parking 1,766, % 11,496 7,056 18,552 Other Trust 45,500-45,500 (C) Student Health 8,099, % 52,696 32,342 85,038 CSU Operating Fund 253,932, % 1,652,171 1,014,014 2,666,185 TOTAL UNIVERSITY $ 289,373, % $ 1,928,260 $ 1,155,537 $ 3,083,797 Cost Allocations Based on 2016/17 Total Expenditures 2016/17 Total Expenditures (D) % of Total Personnel Expenses % of Total Expenditures Risk Liability Campus Annual Premium $ 970,530 Housing $ 21,064, % $ 55,975 CERF 29,165, % 77,501 Lottery 2,073, % 5,510 Parking 6,540, % 17,381 Other Trust N/A (C) Student Health 10,913, % 29,001 CSU Operating Fund 295,471, % 785,162 TOTAL UNIVERSITY $ 365,228, % $ 970,530 Cost for Coverage Cost Allocations Based on Vehicle Inventory FD&O Inventory (E) Cost Per Vehicle (F) Rate per Vehicle $ Housing 17 $ 2,538 Parking 31 4,629 CSU Operating Fund ,998 TOTAL UNIVERSITY 269 $ 40,165 SPL and SAFECLIP are categorized as CSU Operating expenses and the costs are reduced from the Liability Premium allocated to the campus. SPLIP and SAFECLIP totals provided by Alliant/Risk Management (R. Leong) on 10/18/17. (B) Personnel expenditures include all salary, wages, and benefits, including work study. (C) Other Trust portion is applied as a 1% charge to actual expenditures during the fiscal year. For ease of calculation, entire cost allocation to Other Trust will be applied to the Workers' Compensation Premium. The estimate is based on 2016/17 actuals which will be updated in the fall with actuals. (D) Expenditures include all expenses except risk premiums and transfers out. (E) Detailed listing of vehicles for cost allocations provided by auto shop on 9/15/17. (F) Cost per vehicle information is calculated by dividing the total vehicle insurance cost by number of vehicles Cost Allocation Preliminary Plan, WC, ID, NDI, UI, Vehicle Last Updated: 4/26/2018

9 PROPERTY / BUILDING INSURANCE PREMIUMS Site # Building Description Occupied As Student Union Values Premium Change in Premium Over Prior Year Total Values Premium 1 AUTO BANK TELLER BUILDING ATM $ 236,765 $ % $ 236,765 $ STUDENT UNION (INCLUDES EXPANSION) COLLEGE - GENERAL 132,606,710 59, % 132,606,710 60, EVENT CENTER COLLEGE - GENERAL 42,760,645 19, % 42,760,645 19,528 Student Union Total $ 79, % $ 80,196 Parking 53 NORTH PARKING FACILITY (10TH STREET) PARKING STRUCTURE / OFFICES $ 34,524,827 $ 15, % $ 34,524,827 $ 15, SOUTH PARKING FACILITY (7TH STREET) PARKING STRUCTURE 36,310,232 16, % 36,310,232 16, WEST PARKING FACILITY (4TH STREET) PARKING STRUCTURE 19,090,967 8, % 19,090,967 8, UNIVERSITY POLICE DEPARTMENT BUILDING POLICE STATION / OFFICES 5,491,775 2, % 5,491,775 2,508 Parking Services Total $ 43, % $ 43,576 Housing 89 WASHBURN HALL DORM 9,140,483 4, % 9,140,483 4, JOE WEST HALL DORM 36,471,351 16, % 36,471,351 16, DINING COMMONS CAFETERIA 7,815,365 3, % 7,815,365 3, CAMPUS VILLAGE - BUILDING A (FACULTY/STAFF) APARTMENT - HIGH RISE 37,038,510 16, % 37,038,510 16, CAMPUS VILLAGE - BUILDING B (UPPER CLASSMEN) APARTMENT - HIGH RISE 201,575,015 91, % 201,575,015 92, CAMPUS VILLAGE - BUILDING C (FRESHMEN) APARTMENT - HIGH RISE 41,350,850 18, % 41,350,850 18, CAMPUS VILLAGE PHASE 2 APARTMENT - HIGH RISE 126,315,000 57, % 126,315,000 57,686 University Housing Total $ 207, % $ 209,941 Student Health 189 STUDENT WELLNESS CENTER MEDICAL DOCTORS' OFFICES, MEETING RM $ 36,591,250 $ 16, % $ 36,591,250 $ 16,711 Student Health Total $ 16, % $ 16,711 City of San Jose (MLK) 142 DR MARTIN LUTHER KING JR. LIBRARY LIBRARY - HIGH END $ 169,580,483 $ 76, % $ 169,580,483 $ 77,445 CSU Op Fund Portion (59%) 100,052,485 45, % 100,052,485 45,693 City of San Jose Total (41%) $ 69,527,998 $ 31, % $ 69,527,998 $ 31,752 TOTAL NON-CSU OPERATING FUND $ 378, % $ 382,176 TOTAL CSU OPERATING FUND (B) $ 475, % $ 480,475 TOTAL UNIVERSITY $ 853, % $ 862,651 Property appraisals are done every five years, and property values are updated annually by Alliant. The property permiums are based on the CSURMA "Early-Bird" Premium Projections data and property values. (B) Property values and premium information will be updated in the fall. (C) The central fund used by the Chancellor s Office to pay SPWB-funded facility expenses has been dissolved. Thus, premium deposits for bond-funded facilities are no longer payable by the central fund, but are chargeable to the respective campuses. Information provided by Alliant (Van Rin, 10/31/17) Cost Allocation Preliminary Plan, Property Premium Last Updated: 4/26/2018

10 DETAIL OF COST ALLOCATION CHARGES FOR CERF Estimate Based on Anticipated Revenue From CIES Business Plan Revenue Percentage Distribution Campus Portion of Revenue Academic Yr Credit Revenue to SJSU $ 26,142,674 11% $ 2,875,694 Summer 2016 Credit Revenue 6,849,470 11% 753,442 Total Anticipated Credit Revenue 32,992,144 $ 3,629,136 Open Univ Reimbursement (B) $ 269,411 Other Cost Allocations Facility Use Fee $ - (C) IT Services 201,974 UPD Security 71,660 Worker's Comp. 130,999 IDL/NDI/UI 80,400 Liability 77,501 Subtotal $ 831,944 Balance to Business and Financial Services $ 2,797,192 % of Division Trust Fund Balance to Total Credit Revenue 8.48% CERF 11% Distribution is on Credit Revenue which includes Open University, Special Session, Winter/Reg (B) This is based on CSU 1994/95 SJSU estimated Open University/Concurrent Enrollment revenue of $1,926,751 * 13.98%. In 2006/07, SJSU implemented a CERF Funding Model program. $269,411 was included as part of the costs to the Division of Administration and Finance. (C) Facility Use Fees are billed to CIES directly; see the Facility Use Fee page for details Cost Allocation Preliminary Plan, CERF Last Updated: 4/26/2018