In its first full meeting with Scott Svonkin as chair, the committee looked at how bonds are issued by the district, at the financial audit of the bond construction program, and at the final budget for 2011-12.
Jeanette Gordon began by reviewing the cash on hand for bond programs. This totals almost $981 million, including Prop A/AA and Measure J. Over $4.287 billion has been issued in bonds since the start of Prop A in 2001. $1.875 billion in Measure J remains to be issued.
Trustee interest was primarily in the process by which bonds are issued. Gordon and
Jerold Gold, the district's financial adviser, reviewed the steps. The lack of a written policy was of concern to Svonkin and Steve Veres, with Svonkin asserting that the district really didn't have a policy if it wasn't written down. Svonkin asked about the membership of the selection panel. He wondered if the process was "as clear and transparent" as possible and whether there were third party eyes looking at it.
They also had sharp questions as to why Citibank was chosen as the lead institution over 83% of the time, with other work going to Goldman Sachs. The role of both in the recent financial debacle was mentioned. Given a very competitive bond market, they wanted to know why California-based institutions were not selected. Gold replied that
Citibank has lower fees and has been more responsive to district needs. Svonkin wondered if bonds could be issued in smaller amounts, allowing for local firms to be more competitive.
KPMG presented its 2009-10 financial audit of the bond (building) program. Neither a handout nor a PPP was presented. The report was eight months behind schedule due to information getting to KPMG late. Initial errors had to then be reworked. The lateness was a considerable concern to the trustees. They asked to have the 2010-11 audit presented to them in December and want to be informed right away if there are any problems with the audit being completed on time.
The report was "unqualified" (that is, no new problems were identified). However, some ongoing problems dealing with tracking capital assets were mentioned. This problem apparently goes back five years. Veres expressed concern about past problems not being rectified and moved that the trustees ask to have an implementation plan fro this audit from staff in thirty days. The motion was passed unanimously.
Svonkin stated that he preferred not to accept the audit at all at this point, given these problems, but acceded to his colleagues wish to move forward. The committee acceptance is just acknowledgement of receipt of the audit, in any case.

The Final Budget for 2011-12 was the last item. The information was the same as that presented at the last DBC meeting and at earlier BOT meetings and discussion was relatively limited. Svonkin seemed to be under the impression that cutbacks in health benefits had been the main reason for the district's solvency. It was pointed out that extensive cuts in class offerings and in student support services had also taken place.
An angry President Miguel Santiago made an opening statement expressing his concerns regarding the St ate Controller’s Office audit. He asked for a special meeting of the Board to be held on Wednesday, August 17, 2011 at 6:30 PM in the boardroom to discuss the audit report and other bond issues. He said the district would be taking whatever action was necessary to rectify any problems.
David Beaulieu spoke of the findings in the 2009 Capstone Report that appeared to be vindicated by the audit report and mentioned the past strong criticism by some trustees of the Capstone findings. The student representative, Jaden Ledkins, also spoke in support of the special meeting announced by Santiago.
There was one public speaker, Nahasi Ronald Lee from Compton Center, who spoke as the representative of State Student Senate Region 7. He was concerned about shared governance at Harbor and wanted to alert the Board to changes taking place there, especially in regards to student participation.
There were no actions to report from closed session but Svonkin, as chair of the Finance and Audit Committee, noted that the budget would be discussed later in the day’s agenda.
Chancellor Lavista offered comments on the State Contr oller’s audit report. He wishes to quickly and effectively respond as “issues are revealed.” He made note of the fact that the District Bond Review Panel work continues, and their report is expected in
September. The Chancellor said that he had some objections to items in the audit report, but explained that “our job is to look for cues for improvement.” Svonkin interjected that the Finance and Audit Committee had requested a ’30-day response’ from the
Chancellor regarding the audit report. Lavista agreed and moved on to praise the new
Vice-Chancellor of Workforce and Economic Development, Felicito Cajayon for his work to date. He noted the ongoing need to revamp and revise our CTE programs in light of new information. As a central element in our mission, the Chancellor lauded the development of new business-industry partnerships and grants, especially given the probability of future fiscal cuts. The Los Angeles Times recently reported a $540 million cut in state tax receipts and Scott Lay has predicted mid-year cuts to community colleges of $127 million, a roughly 2.3% reduction. Lavista said that we need to focus on resource generation in these difficult economic times.
Cajayon then gave a report to the Board illustrating the programs and dollars in the
LACCD over the past year in CTE areas. Among those mentioned were Advanced
Transportation and Logistics, Apps. Creation Workshop at LATTC, the LA Green
Business Certification Program, and a Federal Transit Administration-LACCD-LACMTA program, involving agencies in California, Colorado and Texas. Veres noted that some

of this work could be funded through the Public Works department and suggested spreading beyond LA to the other 36 cities in our service area. Svonkin ask ed, “What is our capacity to deliver on these grants? How many faculty and staff were compensated for their work on these grants?” The Vice-Chancellor was unable to give a number at the time but would report back. Beaulieu emphasized the critical role of faculty in CTE areas and the hard work already accomplished through the DAS in the past two years to bring CTE faculty together outside the discipline groups. Cajayon added that the District is expecting news of potential new grants to be announced in the fall. Lavista concluded his report with announcements of local and national celebrations and commemorations.
The Consent Agenda portion of the meeting was taken up with numerous questions, comments and discussions. Svonkin requested a report on how the colleges charged for various services and what the typical fees or charges were for those services. He also requested a copy of the District Tech Plan. Mona Field noted that introduction of electronic transcripts was most welcome, and asked about an agenda item that included student per diem expenses for Egyptian students at City. President Jamillah Moore explained that the students were part of a two-year grant (just ending) for 9 students.
Questions were raised by Tina Park and Svonkin regarding change orders at LA City and Southwest campuses. Both were curious as to why ‘unforeseen conditions’ were not anticipated, and whether or not project architects should be held liable for overlooking existing conditions.
There followed a discussion about the appointment of a Mr. Hoffman (a former faculty member at LA City College) to the District Citizen ’s Oversight Committee (DCOC), about the process for announcing DCOC openings, and the general difficulties finding responsible and committed community members to serve on the Oversight Committees.
The consent agenda was passed but Svonkin voted ‘no’ on several items.
The meeting ended with a reminder of the special session of the Board for Wednesday,
8/17/2011, at the Boardroom and an announcement of the coming DAS/District
Administration Summit on Friday, September 23, 2011 at Los Angeles Valley College.
Trustees were interested in receiving invitations to attend.
Miguel Santiago was clearly very upset at the news of the audit release earlier in the day. I had heard about it early on from the LA Times reporters. I declined to give a statement, as I wanted to read the audit first. I’ve now done so. The district has some persuasive answers to the first two findings. I think it gets much more complicated after that, with the response to the last finding the weakest of all. I will hold off on further comment till after tomorrow’s meeting, however.
Thanks to Don Gauthier for writing the bulk of the Open Session portion of this report.
David

David Beaulieu
District Academic Senate President
Los Angeles Community College District
(213) 891-2294 dbeaulieu@email.laccd.edu