HARTNELL COMMUNITY COLLEGE DISTRICT Board of Trustees Annual Organizational and Regular Meeting AGENDA December 7, 2010 TIME/PLACE: 411 Central Avenue, Salinas CALL Building, Room 208 5:00 p.m. – PUBLIC SESSION 5:05 p.m. – CLOSED SESSION 6:00 p.m. – RECONVENE PUBLIC SESSION Board of Trustees Patricia Donohue, President Kevin Healy, Vice President Candi DePauw, Bill Freeman, Elia Gonzalez-Castro Ray Montemayor, Erica Padilla-Chavez Shaundra Taylor, Student Trustee Dr. Phoebe Helm, Superintendent/President, Secretary to the Board The Board of Trustees welcomes you to its meetings, scheduled on the first Tuesday of each month, unless otherwise noted. The agenda and accompanying documents are on the college’s website at www.hartnell.edu/board. Contracts requiring approval of the Board on this agenda are available to view in the President’s Office. Typically, the agenda consists of the following: A. CONSENT AGENDA: These matters include routine administrative and financial actions and normally approved by a single majority vote. B. REGULAR AGENDA: Action Items: These items include significant administrative and financial actions classified by departmental areas and approved by majority vote for each item. Information Items: These items include presentations to the Board and items for discussion prior to Board action, normally taken at the next meeting. C. CLOSED SESSION: In accordance with Government Code Sections, 3549.1, 54956.9, 54957 and/or 54957.6, the Board of Trustees may meet in Closed Session to consider legal, personnel, labor, and/or contract matters. INDIVIDUALS DESIRING TO ADDRESS THE BOARD: Any member of the audience desiring to address the Board should complete and submit to the Superintendent prior to the meeting, if possible, a Speaker Request Form, available at the door. When the item PUBLIC COMMENTS is taken, the Board President will recognize those who have filled out a Speaker Request Form in the order in which they are received. The Board President may limit the time of presentation to three minutes per speaker, and a maximum of fifteen minutes. Following public comment, the Board President will limit discussion to the Board only. MISSION STATEMENT: Hartnell College provides the leadership and resources to ensure that all students shall have equal access to a quality education and the opportunity to pursue and achieve their goals. We are responsive to the learning needs of our community and dedicated to a diverse educational and cultural campus environment that prepares our students for productive participation in a changing world. HCCD – ANNUAL ORGANIZATIONAL AND REGULAR MEETING OF THE BOARD – DECEMBER 7, 2010 Page 1 of 4 For the pleasure of the Board and guests, performing will be Estudiantina Hartnell William Faulkner, Faculty, and Students I. OPEN SESSION, CALL TO ORDER – 5:00 P.M. A. ROLL CALL Action B. ADOPT AGENDA C. DISCLOSURE OF ITEMS DISCUSSED IN CLOSED SESSION, AS FOLLOWS: Items discussed in Closed Session will include, legal, personnel, labor, and/or contract matters authorized for Closed Session per Government Code Sections, 3549.1, 54956.9, 54957, and/or 54957.6. 1. Reconsideration of Release of Probationary Faculty Member – 1 case 2. Update on Negotiations – Hartnell College Faculty Association D. PUBLIC COMMENT PERIOD REGARDING CLOSED SESSION ITEMS Fifteen minutes set aside for public comment on closed session items. Maximum three minutes each. II. MOVE TO CLOSED SESSION The Board of Trustees of Hartnell Community College District will meet in Closed Session to consider legal, personnel, labor, and/or contract matters authorized for Closed Session per Government Code Sections, 3549.1, 54956.9, 54957 and/or 54957.6. III. RECONVENE TO PUBLIC SESSION (APPROXIMATELY AT 6:00 P.M.) Pledge of Allegiance A. REPORT OUT FROM CLOSED SESSION IV. ANNUAL ORGANIZATION – BOARD OF TRUSTEES Action A. ELECTION OF OFFICERS Elect officers to the Board of Trustees for the 2011 calendar year. Action B. APPOINTMENT OF REPRESENTATIVES TO STANDING ORGANIZATIONS Appoint one representative to the Sunrise House and one representative to the Monterey County School Boards Association for the 2011 calendar year. Action C. DESIGNATION OF 2011 BOARD MEETING DATES AND TIMES Set dates and times of Board meetings for the 2011 calendar year. Roll-call D. RESOLUTION 10:15, AUTHORIZING SIGNATURE OF BOARD SECRETARY ON DOCUMENTS Adopt Resolution 10:15, Authorizing Signature of Board Secretary to sign all appropriate documents. HCCD – ANNUAL ORGANIZATIONAL AND REGULAR MEETING OF THE BOARD – DECEMBER 7, 2010 Page 2 of 4 V. PUBLIC COMMENTS ON PUBLIC SESSION ITEMS AND ITEMS NOT ON THE AGENDA Fifteen minutes (three-minute maximum per person) set aside to receive public comments on public session agenda items or items not on the public session agenda, but within the jurisdiction of the Board. 1. Receive public comments on items on the public session agenda. 2. Receive public comments on items not on the public session agenda. VI. PRESENTATIONS A. VII. PRESENTATION ON ANNUAL AUDIT REPORTS Gema M. Ptasinski, CPA – Vicenti, Lloyd, & Stutzman LLP 1. Independent Accountant’s Audit Report for the year ending June 30, 2010. 2. Measure H Obligation Bond Independent Accountant’s Report (Performance Audit) and Financial Audit for 2009-2010. CONSENT ITEMS A. MINUTES Approve Minutes of Regular Meeting of November 9, 2010. B. DISBURSEMENTS Ratify disbursements from any or all of the following funds: general; debt service; bookstore; child development; capital outlay projects; scheduled maintenance; property acquisition; bond projects; cafeteria; self-insurance; retirees health benefits; associated student body; scholarship, loan, and trust; and intercollegiate athletics. C. CURRICULUM COMMITTEE Ratify Curriculum Committee actions. D. CONTRACT BETWEEN INDEPENDENT AUDITING FIRM, VICENTI, LLOYD, STUTZMAN, LLP AND HARTNELL COLLEGE Authorize to amend the contract by one year with the independent auditing firm, Vicenti, Lloyd, and Stutzman, LLP, for financial auditing services through the end of fiscal year 2011. E. PERSONNEL ACTIONS Approve and/or ratify Personnel Actions (included in packet). VIII. Action Action Roll-call ACTION ITEMS A. ACCEPT INDEPENDENT ACCOUNTANTS’ AUDIT REPORTS FOR YEAR ENDING JUNE 30, 2010 Accept the Independent Accountants’ Audit Reports for the year ending June 30, 2010. The reports for 2009-2010 include all funds: 1) General (restricted and unrestricted), 2) Hartnell College Foundation, and 3) Measure H Capital Bond Funds. In addition to the financial audits, a Performance Audit of Measure H is included. B. APPROVE BUDGET REVISIONS Approve budget revisions numbered 9021 to 9053. C. ADOPT RESOLUTION 10:16, APPROVING AMENDED AND RESTATED BYLAWS Adopt Resolution 10:16, Approving Amended and Restated Bylaws. HCCD – ANNUAL ORGANIZATIONAL AND REGULAR MEETING OF THE BOARD – DECEMBER 7, 2010 Page 3 of 4 IX. INFORMATION ITEMS A. UPDATE ON CURRENT CONSTRUCTION PROJECTS Receive oral and written report on current construction projects. Damon Felice, Felice Consulting Services / Joseph Reyes, Director, Maintenance B. FINANCIAL STATEMENTS Receive and accept financial statements for month ending October 31, 2010. C. MONTEREY COUNTY TREASURERS QUARTERLY REPORT Receive County of Monterey Treasurer’s Report of Investments for the Quarter Ending September 30, 2010. D. PROCESS FOR REDRAWING ESTABLISHED TRUSTEE AREA BOUNDARIES Receive information on the redrawing of established trustee area boundaries. E. REPORTS FROM SENATES Receive oral reports from College Senates on matters of interest to the college. 1. Stephanie Blancas, Student Senate 2. Nancy Schur, Academic Senate 3. Classified Senate F. PRESIDENT’S REPORT Report from the Superintendent/President. G. BOARD OF TRUSTEES COMMUNICATION Trustee reports on matters of interest to the college. X. NEXT MEETING January 18, 2011, 5:00 p.m., Hartnell College, 411 Central Avenue, CALL Building, Room 208. XI. ADJOURNMENT Adjourn the meeting. HCCD – ANNUAL ORGANIZATIONAL AND REGULAR MEETING OF THE BOARD – DECEMBER 7, 2010 Page 4 of 4 ANNUAL ORGANIZATION ANNUAL ORGANIZATIONAL MEETING OF TRUSTEES: Title December 7, 2010 Number Annual Election of Officers for 2011 IV. A Area Status Superintendent/President Action Recommendation It is recommended that the Board of Trustees conducts the annual election of officers. Summary In accordance with Education Code Section 72000, the Hartnell College District Board of Trustees will conduct its annual election of officers for 2010 as follows: Board President Board Vice President In accordance with Board Policy 1010, Annual Organization Meeting and Officers of the Board, the Hartnell College Board of Trustees will appoint as follows: Superintendent/President as Secretary of Board ANNUAL ORGANIZATIONAL MEETING OF TRUSTEES: Title December 7, 2009 Number Annual Appointment of Representatives to Standing Organizations IV. B. Area Status Superintendent/President Action Recommendation It is recommended that the Board of Trustees appoint its representatives to standing organizations for calendar year 2011. Summary Each year, the Hartnell College District Board of Trustees appoints its representatives to: Sunrise House Executive Board Monterey County School Boards Association ANNUAL ORGANIZATIONAL MEETING OF TRUSTEES: Title Designation of 2011 Board Meeting Dates and Times Number Area Superintendent/President Status Action December 7, 2010 IV. C. Recommendation It is recommended that the Board of Trustees adopts the dates and times for regular meetings and for board development for calendar year 2011. (Board Policy 1015 and 1100). Summary Education Code Section 72000 requires that the governing board of each community college district hold regular monthly meetings and Accreditation Standard IV. B.1.f. requires the governing board have an on-going program for board development. The dates of the Board’s regular meetings are recommended the first Tuesday of each month and the development meetings on the third Tuesday of each month, except where noted. The Board will open its regular business meeting at 5:00 p.m., closed session to follow immediately after, if needed. The Board’s development meetings will open at 5:00 p.m. The dates for both meetings are as presented below: Regular Board Meeting January 18, 2011* February 8, 2011* March 1, 2011 April 5, 2011 May 3, 2011 June 7, 2011 July 12, 2011* August 16, 2011* September 13, 2011* October 4, 2011 November 1, 2011 November 29, 2011* January 17, 2012* Board Development Meeting January 25, 2011* February 15, 2011 March 15, 2011 April 26, 2011* May 17, 2011 June 21, 2011 July 19, 2011 August 23, 2011* September 20, 2011 October 18, 2011 December 6, 2011* December 13, 2011* January 24, 2012* NOTE: In 2011, Election Day is November 8th, the second Tuesday rather than the first Tuesday of the month. *These dates have been adjusted. Revised 12/6/2010 ANNUAL ORGANIZATIONAL MEETING OF TRUSTEES: Title Adopt Resolution 10:15, Authorizing Signature of Superintendent/President as Secretary of the Board of Trustees Number Area Status Superintendent/President Action (Roll Call) December 7, 2010 IV. D. Recommendation It is recommended that the Board of Trustees adopts Resolution 10: 15 authorizing the signature on appropriate documents of Dr. Phoebe Helm, Superintendent/President, as Board of Trustees Secretary. Summary Board Policy 1010, Annual Organization Meeting and Officers of the Board, states that the Superintendent/President will serve as Secretary of the Governing Board as such, the Board must adopt a resolution authorizing Dr. Phoebe Helm, Superintendent/President, as Board of Trustee Secretary. HARTNELL COMMUNITY COLLEGE DISTRICT Resolution 10:15 Authorizing the Signature on Appropriate Documents Superintendent/President, as Secretary of the Board of Trustees WHEREAS, Dr. Phoebe Helm has been duly appointed to perform the duties of Secretary of the Board of Trustees (as set forth in the Education Code) of Hartnell College District, NOW, THEREFORE, BE IT RESOLVED, that Dr. Phoebe Helm is hereby authorized to sign all appropriate documents requiring the signature of the Board of Trustees’ Secretary. PASSED AND ADOPTED by the Hartnell Community College District Board of Trustees on December 7, 2010 by the following vote: AYES: NOES: ABSENT: Board President Dr. Phoebe K. Helm Secretary of the Board of Trustees CONSENT AGENDA ITEM FOR BOARD MEETING OF: December 7, 2010 Number Title Minutes of Regular Meeting of November 9, 2010 VII. A. Area Status Superintendent/President Prepared by: Dr. Phoebe Helm Consent Recommendation It is recommended that the Board of Trustees reviews, revises as appropriate, and adopts the minutes of regular meeting of November 9, 2010. Summary Minutes of the Board of Trustees for are submitted for review and approval as follows: Regular Meeting of November 9, 2010 Unadopted HARTNELL COMMUNITY COLLEGE DISTRICT MINUTES Regular Meeting of the Board of Trustees CALL 208, Training Room 411 Central Avenue Salinas, California November 9, 2010 OPEN SESSION Meeting called to order at 5:11 p.m. ROLL CALL Patricia Donohue, President Kevin Healy, Vice President Candi DePauw Bill Freeman Elia Gonzalez-Castro Ray Montemayor Erica Padilla Chavez Shaundra Taylor, Student Trustee – (advisory vote per Board Policy 1030) Phoebe K. Helm, Board Secretary AGENDA On a motion by Trustee Healy, seconded by Trustee Padilla-Chavez and by vote of 7-0, the Board approved the agenda. Trustee Taylor stepped away from the table and did not vote. DISCLOSURE OF Trustee Donohue disclosed items for Closed Session as authorized per Government Code Sections 3549.1, 54956.9, 54957, and/or 54957.6: CLOSED SESSION ITEMS 1. Update on Collective Bargaining – Hartnell College Faculty Association 2. Program Project Management Contract Agreement PUBLIC COMMENTS There were no public comments on the closed session agenda. MOVED TO CLOSED SESSION The Board of Trustees of Hartnell Community College District, and Dr. Phoebe Helm, Superintendent/President, moved to Closed Session at 5:15 p.m. to consider legal, personnel, labor, and/or contract matters authorized for Closed Session per Government Code Sections, 3549.1, 54956.9, 54957 and/or 54957.6. Damon Felice, Felice Consulting Services, and Joseph Reyes, Director, Maintenance, joined the Board during this portion of the closed session. RECONVENED PUBLIC SESSION Trustee Donohue reconvened the public session at 7:25 p.m. She apologized for the delay and announced the Board recessed from Closed Session and will reconvene after the public meeting. PUBLIC COMMENTS Students, Juan Gutierrez, Evangelina Quiroz, Demetrius Ramon, and Alan Garcia spoke in support of offering an Art 3 class during the winter intersession. They stated that it HCCD –REGULAR MEETING – NOVEMBER 9, 2010 Page 1 of 13 was scheduled to be offered (in the draft schedule), but was removed and that they needed the course offered during intersession so that they could complete their program and they urged the Board for their support. Student, James Morgan, addressed the status of the auto collision program (AUC); that AUC courses are not in the spring schedule and requested the matter be resolved as soon as possible. Student, Juan Gutierrez, stated that he had filed a grievance with student services regarding another student and asked for a resolution. PRESENTATIONS Research Scholar Institute Dr. Kelly Locke, Faculty, stated that Dr. Brooke Haag, Faculty, and adjunct faculty, Dr. Sewan Fan, held a Summer Research Scholar Institute for six interns that was funded by the Title V STEM grant. Two interns, Ignacio Maravilla and Jose Rico were in attendance to present their research projects. Dr. Brooke Haag thanked the Board for the opportunity to present and stated she is proud of the students and their work and that the summer program was a huge success. Jose Rico, Hartnell student and graduate of Alvarez High School, presented his project on micro droplets generation where he learned to make micro pipettes using a micro pipette puller machine. Also, he learned how to design and assemble a CCD camera imaging system, obtain the magnification of an imaging system, assemble a glass grinding station for polishing fine glass nozzles, and learned how to apply the thin lens equation. Mr. Rico worked in with fellow intern, Aysha Sadikka, who was not able to attend the meeting. Ignacio Maravilla, Hartnell student and graduate of Salinas High, presented his project on the Synchronization of a Camera Flash System where he learned how to build a digital circuit having pulse delay and width adjustments, assemble and test a pulse rate divider circuit that incorporates division by 10, 5 and 3, and learned how to set up and evaluate a CCD camera imaging system. Both students extended their appreciation to Dr. Fan, Dr. Haag, Dr. Locke, and Tito Polo, Science Lab Technician and stated this was an opportunity to allow each research student to work together in ways they have not and it provided a hands-on learning experience. National Conference: Society for the Advancement of Chicano and Native American Scientists Dr. Jeff Hughey, Faculty, reported that Hartnell College placed 32 interns over this past summer. He referred to the 4th Annual Hartnell College STEM Internship Symposium booklet that the Board received and stated that it summarizes all 32 internships and their projects. Of the 32, five of them attended the National Conference for the Society for Advancement of Chicano and American Scientists (SACNAS) held in Southern California. Of those 5, two presented, Timothy Fuller (mentored by Dr. Hughey) and Samantha Gebben (mentored by Carolee T. Bull, USDA). Samantha reported that she did her research project in Salinas at the USDA center located adjacent to the Alisal Campus. Her research was on lettuce and on the type bacteria that causes a Bacterial Leaf Spot. At SACNAS, Samantha presented her project titled, Lettuce Cultivar Influences on Xanthamonas campestris pv. vitians popluations. HCCD –REGULAR MEETING – NOVEMBER 9, 2010 Page 2 of 13 She cited statistics on the conference stating that it was at a record high, over 3,000 registered of which 500 were graduate students, 100 post doctorates, over 1,000 professionals, 33 college professors, over 1,000 undergraduate students, 880 student research presenters, 800 posters presented, and 80 graduate oral presenters. She stated that attending the conference was a great experience for her because she was exposed to different fields of study, received a lot good advice, and met really good people. Dr. Hughey stated that Timothy Fuller came to tonight’s meeting, but had to leave because he is presenting in his Oceanography class. He stated that Timothy’s research project was on the Molecular Investigation of the Invasive Sponge Hymeniacidon sinapium from Elkhorn Slough. Through his research, Timothy is the first person ever to discover an orange-colored invasive sponge, and by the use of DNA prove that is native only to Korea and Japan. At SACNAS, Timothy’s Poster Presentation was ranked in the top tier of the 800 Research Poster Presentations at the Conference. The Board thanked and congratulated all of the science students for their research and noted that this was a rare opportunity for students in their first two years of college. DIESEL MECHANICS – A GROWING INDUSTRY Neil Ledford, Interim Dean, Advanced Technology, thanked the Board for the opportunity to present a Power Point that showcased the growth opportunities in the diesel mechanics job market and program. Following the presentation, Val Rodriguez, Faculty, introduced two former students, Phuc Lee and Rene Manzur. Both, Mr. Lee and Mr. Manzur spoke about their current employment and about how the program helped them to be successful. Mr. Lee is a Master Technician at Coastal Tractor and Mr. Manzur owns and operates his own business, Golden State Mobile Repair. Mr. Ledford introduced advisory council members Mike Hernandez, Assistant General Manager/COO, MST; Greg Diehl, VP, Graniterock; Al Parolini, General Manager, Coastal Tractor; and Patrick Cruse, Account Manager, Snap-On Industrial Tools. The members stated that diesel mechanics is a diverse, high demand, growth industry because it is needed on various types of motor vehicles and equipment (trucks, tractors, busses, water irrigation, water reclamation plants, etc); that they anticipate 30% of trained technicians will retire in five to seven years and that there is a great need for well-skilled, trained technicians in the latest technology. They stated the average technician can earn up to $80,000 annually. They thanked the Board for the new facilities designed for the Alisal Campus and stated that Hartnell has the opportunity to be a dominate provider for this growing market, but to do so, they will soon need additional faculty. Trustee Padilla-Chavez asked questions related to the recruitment of students and Mr. Rodriguez responded that he spends much of his time going to homes and speaking to parents and that the Program hosts an open house where they reach out to local high school students. Trustee Padilla-Chavez thanked the advisory members coming this evening and for their support. Trustee DePauw stated she attended last year’s open house was impressed with the students and their demonstrations. In addition, Miguel Munoz and Aurelio Cureva, diesel mechanic students, demonstrated HCCD –REGULAR MEETING – NOVEMBER 9, 2010 Page 3 of 13 an electric board they had built. These hands on projects make the program and learning exciting. CONSTRUCTION UPDATE The Board received an updated, written report on the construction projects. The report is housed at: http://www.hartnell.edu/board/packets/November_2010_Board_Packet.pdf (Page 174). Trustee Donohue asked about the status of the land swap with the City of Salinas and Mr. Felice, Felice Consulting Services, responded that it’s still in process. Also, she asked about the city sidewalk replacement program to which Damon responded that the city has approved the program and MST has agreed to where they want the bus stop and thus it is moving forward. CONSENT ITEMS On a motion by Trustee Healy, seconded by Trustee DePauw, by vote of 7-0, and by advisory vote of Aye (Taylor), the Board moved to approve Consent Items A through N. Pulled for questions and/or comments were Items, D, K, L, and M. A. MINUTES Approved minutes of regular meeting of October 5, 2010. B. DISBURSEMENTS Approved disbursements from any or all of the following funds: general; debt service; bookstore; child development; capital outlay projects; scheduled maintenance; property acquisition; bond projects; cafeteria; self-insurance; retirees health benefits; associated student body; scholarship, loan, and trust; and intercollegiate athletics. C. NON CASH DONATIONS Accepted the non-cash donations from the Hartnell College Foundation. D. SURPLUS AND DISPOSAL OF PROPERTY Declared listed property as surplus and authorize the administration to dispose. E. CURRICULUM COMMITTEE ACTIONS Ratified the recommendations from the Curriculum Committee. F. M. J. JOHNSON CONTRACT, GRANT EXTERNAL EVALUATOR Approved agreement with Michael J. Johnson, grant external evaluator. The purpose of this agreement is to provide a review, assessment, summary, and conclusion regarding the execution and effectiveness of grant goals, objectives, outcomes, reporting processes, and fiscal responsibilities for the college’s High School Equivalency Program. The cost for this review is $4,000, paid from the grant, and the review will occur during the month of November. Trustee Montemayor asked if the welders listed were part of the auto collision program to which Joseph Reyes, Director of Maintenance, responded these particular welders are part of the welding program. Trustee Montemayor stated that he would prefer, if at all possible, that equipment be donated to schools. Trustee Gonzalez-Castro made the same request, specifically computer equipment to the Alisal Union School District. HCCD –REGULAR MEETING – NOVEMBER 9, 2010 Page 4 of 13 G. AGREEMENT CLARKE AND ASSOCIATES Authorized the administration to enter into an agreement with Clarke and Associates for writing, submitting, and evaluating the U.S. Department of Education (USDOE) Educational Talent Search Program grant. The College would pay Clarke & Associates $4,500 upon acceptance of the contract, $3,000 upon submission of the grant proposal for a total of $7,500 from the unrestricted general fund. In addition, if awarded, the college would pay Clarke & Associates $5,000 in the first and third year of the grant period. The Educational Talent Search Program grant is proposed at $230,000 each year for five years. H. AGRICULTURAL LEASE AGREEMENT FRANSCIONI BROTHERS, INC. Approved an amendment to the agricultural lease agreement between Hartnell College and Franscioni Brothers, Inc. for Alisal Campus farmland, beginning December 3, 2010 through December 2, 2011. There is no impact to the general fund. Annual rental revenues from property must be placed in the restricted Property Acquisition Fund. I. LETTER OF AGREEMENT – SAN FRANCISCO COMMUNITY COLLEGE DISTRICT Ratified the 2010-2011 Letter of Agreement between Hartnell College and San Francisco Community District for the California Early Childhood Mentor Program. This agreement will connect Hartnell College early childhood education students with high quality, experienced early childhood professionals. There are no budget implications. Participants are paid directly from San Francisco Community College District. J. AGREEMENT – FOUNDATION FOR COMMUNITY COLLEGES Ratified the 2010-11 Agreement between Hartnell College and the Foundation for Community Colleges for grant funding, fiscal management, and accountability for the Youth Empowerment Strategies for Success Independent Living Program (YESS-ILP). The funding amount of $22,500 will provide educational and employment training opportunities for foster and probation youth. K. AGREEMENT – MCOE AS SUBRECIPIENT OF GRANT FROM U.S. DEPT OF COMMERCE Authorized the administration to enter into an agreement to accept funds from the Monterey County Office of Education as a sub recipient of a grant from the U. S. Department of Commerce for $659,246, over two years. This partnership, with Monterey County Office of Education, Cal State University, Monterey Bay, Monterey County Free Libraries, Boys and Girls Clubs of Monterey County, Community Information Center, the National Steinbeck Center, will the focus on improving community access to technology through the development of “Public Computer Centers”. Trustee Padilla-Chavez said that she is pleased the college is receiving a sub-award and she asked about the scope of work to be performed by the College. Dr. Helm responded that the work is done in partnership with MCOE and CSUMB and stated she would provide the information to the Board. L. CONTRACT DMC CONSTUCTION – CAB REFRESH #4 Authorized the administration to enter into a contract with DMC Construction, lowest responsive bidder, for CAB Refresh Project, #4. The amount for this project is $150,501.98 and paid from Measure H funds. The project scheduled to start on December 18, 2010 and completed by January 23, 2011. Trustee Padilla-Chavez asked what the total project cost is for this project. The total project cost for CAB Refresh Projects 1, 2, 3, and 4 is $1.2 million. HCCD –REGULAR MEETING – NOVEMBER 9, 2010 Page 5 of 13 M. CONTRACT – Authorized the administration to enter into a contract with Perma Green Hydroseeding, PERMA GREEN Inc., lowest responsive bidder, for the Alisal Campus Landscape Project. The amount FOR LANDSCAPE for this project is $ 458,000 and paid from Measure H funds. The project scheduled to start on November 10, 2010 and completed by January 23, 2010. Trustee Padilla-Chavez asked what the total project cost is and Mr. Felice responded, $500,000. N. PERSONNEL ACTIONS Approved and/or ratified personnel actions (Appendix A) ACTION ITEMS BUDGET REVISIONS On a motion by Trustee Padilla-Chavez, seconded by Trustee Healy, on vote of 7-0, and by advisory vote of Aye (Taylor), the Board moved to approve budget revisions numbered 8996 to 9009. QUARTERLY On a motion by Trustee Padilla-Chavez, seconded by Trustee DePauw, on vote of 7-0 FINANCIAL STATUS and by advisory vote of Aye (Taylor) the Board moved to accept the required State REPORT Report: Quarterly Financial Status Report (CCFS-311Q) for quarter ended September 30, 2010. Trustee Padilla-Chavez asked members of the Ad-hoc Audit Committee if there is anything the Board should know and is everything in order. Trustees Healy and Donohue stated they had no concerns and that all is in order. INFORMATION ITEMS Financial Statements The Board received the financial statements for periods ending June 30, 2010 and September 30, 2010. Trustee Montemayor asked if the college has received the funding for the Hispanic serving grant, Title V. Both, Mr. Stephens and Dr. Helm responded that this particular grant is in partnership with Cabrillo College and when the dollars are spent, the College is reimbursed. To date, no funding has been received. SENATE REPORTS Student Senate Stephanie Blancas, VP Student Senate, reported that some senate members attended the Fall General Assembly in San Diego late October and that they were not pleased that their resolution was not successful; that they held a Pink Panther Day where they celebrated breast cancer and handed out information from the American Cancer Society; that they had a Club Day, and on October 29th they held their annual Spooktacular Event which was held in the parking garage, that it was well attended, and a good event. Academic Senate Nancy Schur reported that the Statewide Senate has been working closely with all of the local Senates to implement Senate Bill 1440, Student Transfer, and that the Articulation Officer attended a recent conference on how this could be accomplished; that one of the Senate’s goals is to examine the college’s process for granting equivalency and they are currently reviewing the current process and are looking at how other community colleges grant equivalency. HCCD –REGULAR MEETING – NOVEMBER 9, 2010 Page 6 of 13 PRESIDENT’S REPORT Dr. Helm shared a bookmark that highlighted statistics for the Nursing Program last academic year. Last spring, there were 45 Registered Nursing graduates – the largest class in the history of the college. She stated that she was very proud of the fact that one third of the class was male and one third was from the Alisal. Also, at first attempt, the NCLEX (a national licensure exam for nursing students) pass rate for the Registered Nursing Program was 96%. Dr. Helm pointed out that the national average for the first attempt is at 84% and that the two who did not pass initially have already retaken the test and passed. So, Hartnell is now at a 100% pass rate. And, this is especially noteworthy in that this is the year that the standard for passing the national exam was raised. Given the economic and demographic diversity of our students, Dr. Helm gave high praise to them and to their faculty, as well as the support the college receives from its clinical partners, especially the generosity of SVMHS. And, for the first time ever, the nursing program now offers an 18-month evening and weekend program and 10 students are enrolled this fall. Currently, there are 122 nursing students and the projected number of graduates is 62. Dr. Helm pointed out that the bookmark notes some of the volunteer community projects the nursing students and faculty have joined in. These projects include Dorothy’s Kitchen Flu Clinic, Hartnell Faculty Science and Health Day, Haiti Outreach Project, Farm Day, among many others. Dr. Helm, the Board, and assembly applauded the Nursing Program faculty and students for their outstanding program and community projects. Also, Dr. Helm reported that she and Kent Stephens, Vice President, Support Operations met with Dr. Nancy Kotowski, County Superintendent, and Ron Eastwood, MCOE Communications Officer, to talk about Hartnell and other school districts sharing the costs to redistrict trustee areas and she urged the Board to attend the upcoming November 22nd workshop, 6 p.m., Monterey County Office of Education, sponsored by the Monterey County School Boards Association. At the October meeting, members asked what is used to determine when a course is considered to be inactive or deleted. Dr. Helm distributed the information related to this matter, and pointed out that the administrations relies primarily on the expertise of faculty as it relates to curriculum and other academic matters as stated in AB 1725. Dr. Helm pointed out the Board’s events calendar and provided a draft calendar for the 2011 Board meeting and development dates. She suggested the Board review the dates against their personal calendars and reminded them that they will approve the 2011 dates at their December meeting. Also, Dr. Helm reported that she and Trustee Donohue will attend the final CLASS Institute on Friday and Saturday in Sacramento and she announced the college will be closed Friday in observance of Veterans Day. In closing, Dr. Helm stated that she was fined $100 at Rotary and as a result, she was given two minutes of bragging rights. So, she proudly bragged that Hartnell had: 1) increased enrollment by 3, 000 over the past three years, 2) increased FTES by 1,000, 3) opened new college facilities, 4) increased the success of student athletes and nurses, and, 5) announced The Western Stage’s successful Gala and their soon to open, A Mexican Christmas Carol. HCCD –REGULAR MEETING – NOVEMBER 9, 2010 Page 7 of 13 BOARD Trustee Taylor thanked all of the presenters this evening – that she is pleased with all of COMMUNICATIONS what the students are learning; that she attended the Fall Assembly with four senators and is worried about some of the issues that arose out of that Assembly. Trustee Padilla Chavez thanked Beverly Grova and her team for the extraordinary Western Stage Gala; she extended kudos to Dr. Helm for meeting with the South County Superintendents – that they really appreciated her time; she asked about email addresses placed on the college website; she thanked Dr. Helm for being pro-active in working with the Art students, and she asked for an update on the Auto Collision program review in December. Trustee Freeman said he would like to see the Art class the students talked about this evening reinstated and he would like to see the Auto Collision Program back because the Board received a petition with over 200 signatures even if after completing this program, the students don’t make a lot of money; that he is proud of the students who presented this evening and that great things are happening at Hartnell; and since the last meeting, it has been a sad time with the passing of Lucy Serrano’s brother-in-law, the passing of a long-time supporter and sports announcer, Jim Silveria – that he spoke in honor of Mr. Silveria during half-time at the last football game; and that his good friend and former student of Hartnell, Hank Hughes, recently passed. Trustee Freeman requested that the Board adjourn in honor of those passed and all Veterans. In closing, he stated that he is concerned about the overwhelming violence in our community, that he is privileged and honored to be a trustee and graduate of Sacramento State and he believes that the college should invite all Salinas elected officials to a summit to help bring this city together in some way because Hartnell is the largest educational institution in our community. Trustee Gonzalez-Castro congratulated Neil Ledford for his excellent presentation –she stated she is impressed that students, previous students, and members of the advisory council waited to present to the Board – that it shows their commitment to the college and to the program. She stated that the science students are amazing because of their work and because of what they discovered – that it shows the quality of education that is being taught at Hartnell and that it is impressive. Further, she reported The Western Stage Gala was an extraordinary event and she commended her fellow council members for all of their work in helping to set up and decorate and she reported that there were 180 attendees and that it made a profit – she thanked everyone of their support. She gave an update on the upcoming NALEO visit and thanked Dr. Helm for her support. She stated this is an opportunity for both Hartnell College and joint partner, Salinas Union High School District, to showcase what is being done for healthy living within the community and stated that the coordination of the visit is going well and hopes that everyone plans to attend; she asked about the college’s memberships to national organizations for superintendents and trustees. She encouraged the membership to such organizations and provided membership information. In particular, she shared information on upcoming conferences sponsored by national organizations and stated that she encourages and supports training for trustees because it helps them do a better job as trustees and said she would like to attend an upcoming conference in Washington D. C. Also, she expressed concern over a grievance related earlier by the student to which Dr. Helm responded that an update will be provided to the Board and Trustee Gonzalez-Castro wanted to ensure that the revised minutes from the September meeting were posted on the website. HCCD –REGULAR MEETING – NOVEMBER 9, 2010 Page 8 of 13 Trustee DePauw stated that she is proud that Trustee Freeman campaigned for Mayor and is glad that he will stay because she believes the Board continues to work as a team and she sees him has an important part of that team. She presented each member and Dr. Helm a vest with the college logo and statement, that says, “we got juice”. Further, she stated that she believes the Board is doing good work together. Trustee Montemayor reported that tonight’s presentations showed the diversity of the college and that he is impressed with each of them. In particular, though, he acknowledge the diesel mechanics program because just a few years ago, if a person wanted to go into this field, they would have to go to Colorado or Arizona to get the education and training and it’s a huge jump for Hartnell College to be able to offer this type of program. Also, Trustee Montemayor asked that the Board receive an update on the comments made by the student related to a grievance. Trustee Healy stated he is impressed with each of the presentations this evening, which speaks to diversity. He commended the faculty and students on all of their fine work; he reported that the Sunrise House had their executive meeting earlier and is pleased to report that, for the first time ever, every Hartnell athlete signed a drug-free contract and he commended Coach Teresa for his efforts in this task and asked that the administration consider developing a policy that requires this happen each year. Trustee Healy stated the Sunrise House is involved in a program called Birdies for Charity through AT&T Pro Am and more information on this event is forthcoming. Also, the Sunrise House is currently soliciting professional attire for their project Teen Closet (ages 18-25) and Trustee Healy asked Trustee Taylor and the Student Senate to help in any way possible. Trustee Donohue reported that she attended the Hartnell College Foundation Scholarship Donor Reception and that the gratitude expressed was tear-jerking. Also, she attended the naming of the Nursing Program Salinas Valley Memorial Healthcare System Nursing Education Center and that it was a wonderful celebration between the College and SVMHS. RECONVENE CLOSED SESSION The Board of Trustees and Dr. Phoebe K. Helm, Superintendent/President reconvened closed session at 9:40 p.m. to consider legal, personnel, labor, and/or contract matters authorized for Closed Session per Government Code Sections, 3549.1, 54956.9, 54957 and/or 54957.6. Kent Stephens, Vice President, Support Operations joined the Board during this portion of the Closed Session. REPORT OUT FROM CLOSED SESSION Trustee Donohue reported there was no action taken in Closed Session. ADJOURNMENT The meeting adjourned at 10:45 p.m. Patricia Donohue Board of Trustees President HCCD –REGULAR MEETING – NOVEMBER 9, 2010 Phoebe K. Helm Board Secretary Page 9 of 13 APPENDIX A THE FOLLOWING PERSONNEL ACTIONS WERE APPROVED AND/OR RATIFIED AT THE REGULAR MEETING OF THE HARTNELL COLLEGE BOARD OF TRUSTEES OF NOVEMBER 9, 2010: I. Retirements, resignations, releases, and leave requests A. Ratify resignation of regular personnel: 1. Shannon McCann, MESA Project Coordinator (#CC-29), effective October 25, 2010. II. Appointments A. Ratify appointment of regular classified position: 1. Rosa I. Arreguin De Salinas, part-time, 30 hours per week, 12 months per year, Secretary – Classified, (#CC-181), High School Equivalency Program, Step A, Range 16, effective October 6, 2010. 2. Eva Diaz, part-time, 20 hours per week, 10 months per year, Clerical Assistant – Classified, (#CC-182), TRIO/Student Affairs Department, Step A, Range 14, effective October 13, 2010. 3. Ana Valles, full-time, 40 hours per week, 12 months per year, Financial Aid Technician – Classified, (#CC-101), Student Affairs, Step E, Range 18, effective October 4, 2010. This action reflects a transfer from part-time, 30 hours per week, 11 months per year, Admission & Records Technician – Classified, (#CC-72), Admissions & Records Department. 4. Imelda Suarez, part-time, 20 hours per week, 12 months per year, Assessment Technician – Classified, (CC#-142), Counseling Department, Step D, Range 15, effective October 4, 2010. This action reflects a voluntary return from full-time, 40 hours per week, 12 months per year, Financial Aid Technician – Classified, (#CC-101), Student Affairs. B. Approve hiring of short-term employee: 1. Request to hire a Financial Aid Technician, CSEA salary range 18, Step A, at the main campus as a short-term employee to begin November 10, 2010 and end June 30, 2011, for the purpose of catching up with the increased workload of financial aid files that need to be processed at the main campus. This request fits within the definition of short-term employee in section 88003 of the Education Code and has been discussed with the CSEA. C. Ratify appointment of part-time instructors for spring semester 2011: 1. Bonnie Bufkin, Learning Skills. 2. Jordan Daniels, Construction. 3. Frank Henderson, Counseling & Instructional Aide. 4. Dustin Jones, English. Appointment based on equivalency as follows: BA in English from San Diego State University and has completed all coursework (and is near completion of his thesis) for an MA in English literature and an MA certificate in composition. 5. Jennifer Keller, Speech. Appointment based on equivalency as follows: BA in Communications at Regis University, graduate coursework in Public Relations, combined coursework and work experience equivalent to masters in Speech. 6. Erlinda Manzo-Rodriguez, Nursing. 7. Robin McKee-Williams, Theater Arts. HCCD –REGULAR MEETING – NOVEMBER 9, 2010 Page 10 of 13 8. John Perez, Mathematics. Appointment based on equivalency as follows: BS in Mathematics from San Jose State University and has 12 semester units of graduate level Math Ed courses, plus 2 additional courses in Education. 9. Erin Saelens, Office Technologies & Team Self-Management/ACE. 10. Prince Williams, Physical Education. D. Ratify appointment of part-time donated instructors for spring semester 2011: 1. 2. 3. 4. LaMar Castañeda, Nursing Jorge Espinas, Nursing Erlinda Manzo-Rodriguez, Nursing Michael Stone, Apprenticeship Electrical E. Ratify appointment of Professional Experts: The Nursing and Health Sciences Department comprises four programs: Registered Nursing, Vocational Nursing, Emergency Medical Technician (EMT), and Certified Nursing Assistant. Lab instruction assistants are required to meet Board of Registered Nursing (BRN) requirements for specific student-to-certified-instructor ratios. Assignments run August – December 18, 2010: 1. Derek Bonsper, $30/hr (not to exceed 120 hrs/semester), EMT assistant. 2. Stephanie Kever, $47.86/hr (6 hrs/week), skills lab assistant. 3. Lucas Kohot, $30/hr (not to exceed 120 hrs/semester), EMT assistant. 4. Lisa Kozinski, $30/hr (not to exceed 120 hrs/semester), CPR lab assistant. 5. Bryon Merritt, $30/hr (not to exceed 120 hrs/semester), EMT assistant. 6. Amber Roach, $30/hr (not to exceed 120 hrs/semester), EMT & HES assistant. 7. Melinda Valdez, $47.86/hr (6 hrs/week), skills lab assistant. Physical Education swim classes require lifeguard services: 8. James Helm, $15/hr (15 hrs/week), lifeguard, August 16, 2010 – June 30, 2011. 9. Weston Kile, $15/hr (6 hrs/week), lifeguard, September 11, 2010 – June 30, 2011. Hartnell’s theater arts program/The Western Stage (TWS) provides students the opportunity to learn their craft within a professional context. TWS’ current season runs through December 30, 2010: 10. 11. 12. 13. Michelle Galindo, $1300 flat rate, musician, September 15 – October 16, 2010. Jane Orzel, $1300 flat rate, musician, September 15 – October 16, 2010. Ruben Pulido, $1200 flat rate, musician, September 15 – October 16, 2010. Ian Shields, $1400 flat rate, musician, September 15 – October 16, 2010. The Foster Kinship Care Education Program (FKCE) provides advanced training for current and prospective foster, relative, and non-related extended family member caregivers, adoptive parents, and local agency employees; and support for foster home recruitment activities. This grant funded program is a joint effort of the California Community College Chancellor’s Office and the Department of Social and Employment Services (DSES). Assignments include orientation leaders, trainers, childcare and activity providers, and program coordination, and run through June 10, 2012: HCCD –REGULAR MEETING – NOVEMBER 9, 2010 Page 11 of 13 14. Christina Leon, $13/hr (as needed), ILP-YEDSS mentor, September 20, 2010 – June 10, 2012. The sustainable design and construction programs need expert, experienced support in effectively implementing assigned grant activities related to curriculum development, summer bridge program, and internships, along with associated outreach and events: 15. Violeta Mendoza Wenger, $3000/month, grant support, October 4, 2010 – August 31, 2011. 16. Alice Paipa-Lenard, $4000/month, grant support, October 4, 2010 – August 31, 2011. The Hartnell Science Talent Expansion Program (STEP) grant provides support for underrepresented students in a variety of ways, all intended to increase the number of women and Latinos enrolling and succeeding in math and science courses. One component of this grant provides for a summer bridge program, titled Summer Undergraduate Mathematics & Science (SUMS). 17. Kate Lockwood, $1650 flat rate, computer science instructor, June 21 – July 22, 2010. 18. Sathya Narayanan, $1650 flat rate, computer science instructor, June 21 – July 22, 2010. 19. Patrick Yun, $1650 flat rate, biology instructor, June 21 – July 22, 2010. The High School Equivalency Program (HEP) is funded by the US Department of Education Office of Migrant Education. HEP is a migrant education program designed to assist migrant and seasonal field workers obtain their GED and employment, military service, apprenticeship, Certificate of Skills Acquisition, Certificate of Achievement, or Associates Degree. 20. Leticia Sanchez, $13.52/hr (20 hrs/week), instructional aide, October 1, 2010 – December 30, 2011. F. Ratify appointment of non-credit Instructors for spring 2011: 1. Paul Doughty, GED language arts reading G. Ratify appointment of Volunteers: 1. Joseph Callado, Physical Education 2. Ramon Hernandez, Physical Education H. Ratify appointment of Student Workers for fall semester 2010: 1. Amy Adkins, Child Development Center, Student Worker I 2. Monica Alvarado, Library/Media, Student Worker I 3. Norma Armenta, Child Development Center, Student Worker I 4. Yesemin Arevalo, Computer Lab, Student Worker I 5. Christan Bravo, EOPS Department, Student Worker II 6. Elida Campos, Child Development Center, Student Worker III 7. Maria Carranza, Child Development Center, Student Worker I 8. TJ Combs, Tutorial Center, Student Worker II 9. Carlo Figueroa, Tutorial Center, Student Worker II 10. Joanna Flores, Tutorial Center, Student Worker III 11. Jose Garcia, Art Department, Student Worker I 12. Mei-Hua Guajardo, Computer Lab, Student Worker II 13. Grisel Guerrero, Student Affairs, Student Worker III 14. Lucy Guido, Tutorial Center, Student Worker III 15. Juan Gutierrez, Art, Student Worker I HCCD –REGULAR MEETING – NOVEMBER 9, 2010 Page 12 of 13 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. Rachel Heavin, Physical Education, Student Worker III Jose Hinojosa, MESA, Student Worker III Elizabeth Izquierdo, High School Equivalency Program, Student Worker I Amy Jurado, Child Development Center, Student Worker I Alexandra Kastner, Cafeteria, Student Worker I Ashley Landess, Human Resources/EEO, Student Worker I Aaron Lopez, East Salinas GEARUp, Student Worker III Evangelina Martinez-Quiroz, Art, Student Worker I Anabel McCarter, EOPS, Student Worker II Ana Medrano, Cafeteria, Student Worker I Cathleen Miché, Business Office, Student Worker III Juan Morales, Tutorial Center, Student Worker II Monica Navarro, Student Affairs, Student Worker III Estefania Palacios Pacheco, Child Development Center, Student Worker I Eliana Perez, Tutorial Center, Student Worker I Alicia Prado, Human Resources/EEO, Student Worker I Adriana Rivera, Child Development Center, Student Worker III Mary Rubio, Computer Lab, Student Worker II Erica Soler, Child Development Center, Student Worker I Xuliang Tan, Art, Student Worker I Alana Tsue, Library/AV, Student Worker II Jose Urquizo, Maintenance/Warehouse, Student Worker I Samantha Villafuerte, Tutorial Center, Student Worker II HCCD –REGULAR MEETING – NOVEMBER 9, 2010 Page 13 of 13 AGENDA ITEM FOR BOARD MEETING OF: December 7, 2010 Title Ratify Disbursements of District Funds Number Area Office of Support Operations Prepared by: Kent Stephens Status Consent VII. B. Recommendation It is recommended that the Board of Trustees ratifies the disbursements from District accounts. Summary The attached lists of disbursements from District accounts are presented for ratification. COUNTY WARRANTS Any or all of the following funds: General; Debt Service; Bookstore; Child Development Center; Capital Outlay; Scheduled Maintenance/State-Funded Projects; Property Acquisition; Bond Projects; Cafeteria; Self-Insurance; Retirees’ Health Benefits; Associated Student Body; Scholarship, Loan, and Trust; and Intercollegiate Athletics NO OF DATE WARRANT NUMBER WARRANTS AMOUNT 10/04/10 12815211 12815277 67 $178,785.07 10/13/10 12817121 12817256 136 $995,504.51 10/18/10 12818018 12818076 59 $113,677.64 10/27/10 12819963 12820020 58 $18,072.90 Subtotal $1,306,040.12 Note: Legal fees in above summary total $0.00 CHECKING ACCOUNTS General Fund Revolving DATE October 2010 WARRANT NUMBER 10232 10242 NO OF WARRANTS 11 AMOUNT $25,046.00 $25,046.00 Total Budget Implication None $1,331,086.12 AGENDA ITEM FOR BOARD MEETING OF: December 7, 2010 Title Number VII. C. Ratify the Recommendations from the Curriculum Committee Area Status Office of Academic Affairs Prepared by: Suzanne Flannigan Consent Recommendation It is recommended that the Board of Trustees ratifies the recommendations from the Curriculum Committee. Summary The following actions were reviewed by faculty in the disciplines, approved by the Curriculum Committee which is a standing committee of the Academic Senate: NEW COURSES—2 Courses DAN 7, Dance Appreciation (Units: 3, Time Allocation: 3 Lec Hours) RTV 79, Broadcast Video and Television Production (Units: 3, Time Allocation: 2 Lec Hours, 3 Lab Hours) COURSE REVISIONS—27 Courses Changed course description and updated outline: AOD 99, Practicum in Chemical Dependency BUS 131, Business English CSS 31, Database Management DRA 64, Industrial Print Reading ECE 16, Preschool Curriculum: Music ECE 17, Preschool Curriculum: Movement Updated outline: AST 1, Introduction to Astronomy ENG 1A, College Composition and Reading ENG 1B, College Literature and Composition Updated textbook: CSS 169, Computer Maintenance and Repair GOVERNING BOARD MEETING December 7, 2010 Page 2 COURSE REVISIONS (continued) Changed discipline from CON to CONS, changed course description, course number, updated outline, and 1 title change: CONS 152, Advance Field Practice in Construction-title to Construction Field Practice CONS 125, Green Building Materials and Methods CONS 129, Managing Offsite Impacts of Construction CONS 130 Highway and Heavy Construction Changed description only, to clarify corequisites: PEAC 37, Intermediate Baseball PEAC 42, Hydro-Fitness PEAC 43, Strength Training PEAC 44, Water Jogging PEAC 46, Circuit Endurance Training PEAC 47, Strength Training Lab PEAC 49, Aerobic Strength Conditioning PEAC 52, Volleyball PEAC 58, Beginning Tennis PEAC 59, Intermediate Tennis PEAC 60, Advanced Tennis PEAC 69, Introduction to Weight Training PEAC 74, Advanced Volleyball INACTIVE COURSES—8 Courses The following CSS courses lack sufficient enrollment and resources: CSS 12, Systems Analysis and Design CSS 170B, Supporting Windows Networks CSS 3, Computer Architecture and Assembly Language Programming CSS 32, SQL and PL/SQL Programming CSS 33A, Database Architecture and Administration CSS 33B, Database Maintenance CSS 34, Database Forms and Reports CSS 6, Programming in Visual Basic DELETED COURSES—14 Courses The following courses are cross-listed with Business application courses and are taught in Business: CSS 148.1, Adaptive Computer Keyboarding CSS 148.2, Adaptive Word Processing CSS 148.3, Adaptive Internet Literacy CSS 150.15, Word Processing CSS 150.15A, Word Processing Level I CSS 150.15B, Word Processing Level II GOVERNING BOARD MEETING December 7, 2010 Page 3 DELETED COURSES (continued) CSS 150.25, Electronic Spreadsheets CSS 159.15A, Word Processing-Module I CSS 159.15B, Word Processing Module II CSS 200, Computer Skills Acquisition Lab CSS 201.1, Introduction to the Computer Center CSS 201.2, Introduction to the Computer Center and the Internet CSS 210.48, Computer and Information Literacy Lab CON 120, Introduction to Green Building Budget Implication None AGENDA ITEM FOR BOARD MEETING OF: Title December 7, 2010 Number Authorize to amend contract between Vicenti, Lloyd & Stutzman, LLP and Hartnell College for auditing services for fiscal year 2010-2011 VII. D. Area Status: Office of Support Operations Prepared by: Kent G. Stephens Consent Recommendation It is recommended that the Board of Trustees authorizes to amend the contract with Vicenti, Lloyd & Stutzman, LLP, independent auditing firm, for financial auditing services through June 30, 2011. The contract will be extended for one year at a cost of $115,810 which represents a 7% increase over the prior years. Summary Education Code § 84040 requires that each community college district provide for an audit of the books and accounts of the District. The audits must be made by a certified public accountant or a public accountant licensed by the State Board of Accountancy. Background In fall 2007, after more than 10 years with the prior auditor, the District advertised a Request for Qualifications (RFQ) for an audit firm to conduct district audits in compliance with Education Code § 84040. Proposals were screened and three firms were interviewed by the Audit Committee of the Board, the Superintendent/President, and Controller. Vicenti, Lloyd, & Stutzman, LLP, were selected in 2008 and awarded a three-year contract. This amendment provides for a one-year extension and an increase in fees of approximately seven percent (7%). Budget Implications Cost for the annual audits will be shared between the Foundation, Measure H bond funds, and the general fund for 2010-2011. Budget impact will be in 2011-12 fiscal year for a total expense of $115,810. AGENDA ITEM FOR BOARD MEETING OF: December 7, 2010 Title Number VII. E. Personnel Actions Area Human Resources & Equal Employment Opportunity Status Consent Prepared by: Terri Pyer Recommendation It is the recommendation that the Board of Trustees approves and/or ratifies the personnel actions as listed below: Summary Approval of: 1 release of regular CSEA employee due to layoff Ratification of: 3 appointments of regular classified positions 1 appointment of temporary faculty position 1 part-time instructor hire for fall semester 2010 4 donated part-time instructors for spring semester 2011 5 appointments of professional experts 9 student worker hires for fall semester 2010 Detail I. Retirements, resignations, releases, and leave requests A. Approve release of regular personnel: 1. Ligia Polio, Financial Aid Technician (#CC-62), effective January 22, 2011, due to layoff, and placement on 39-month re-employment list in accordance with Education Code § 88117. This layoff is due to lack of work in King City. II. Appointments A. Ratify appointments of regular classified positions: 1. Brenda M. Thrasher, part-time, 20 hours per week, 12 months per year, Accounting Assistant – Classified, (#CC-12), Range 21, Step A, effective November 8, 2010. 2. Silvina Zepeda, full-time, 40 hours per week, 12 months per year, DSPS Specialist – Classified, (#CC-90), Range 32, Step A, effective November 10, 2010. This action represents a promotion from DSPS Clerical Assistant (#CC-91), full-time, 40 hr/week. 3. Andrea Curtis, full-time, 40 hours per week, 12 months per year, Division 1 AGENDA ITEM FOR BOARD MEETING OF: December 7, 2010 Administrative Assistant – Classified, (#CC-165), Student Affairs, Range 22, Step A, effective November 18, 2010. B. Ratify appointment of full-time temporary academic personnel: 1. Timothy Castellano, full-time temporary Astronomy Instructor – Math & Science, Step 8, Column E, effective January 20, 2011. This appointment is for the spring 2011 semester, as a leave replacement. C. Ratify appointment of part-time instructor for fall semester 2010: 1. Byron Merritt, Health Services. D. Ratify appointment of Professional Experts: Hartnell’s theater arts program/The Western Stage (TWS) provides students the opportunity to learn their craft within a professional context. TWS’ current season runs through December 30, 2010. 1. Lorenzo Aragon, $3000 flat rate, phase 1 development & teaching for new Theater Arts program at the Alisal Center, September 21 – December 10, 2010. Provide contract training demos for King City Union School District employees: 2. Janet Bessemer, $60/hr (4 hrs), trainer, October 19, 2010. Through the CCRAA HIS sub-award, the objective of this grant is to increase the number of transfer students and the retention and graduation rates to CSU - Monterey Bay in the science technology, engineering, and math majors. 3. Chante Davis, $1363.63/mo. (not to exceed $15,000), liaison, October 1, 2010 – September 30, 2011. To provide assistance in mentoring students, creating and implementing education plans, coordinating work of science and math intern grant programs. 4. Patrick McNeil, $25/hr (20 hrs/week), program assistant, October 12, 2010 – March 31, 2011. The mission of GEAR Up is to increase the number of Alisal High School students who are prepared to enter and succeed in post-secondary education. It gives more low-income students the academic skill, psychosocial support services, information and financial assistance needed to enter, pursue, and succeed in college. 5. Jaime Diaz, $15/hr (30hrs/week), family liaison, October 11 – June 30, 2011. 2 AGENDA ITEM FOR BOARD MEETING OF: December 7, 2010 E. Ratify appointment of Student Workers for fall semester 2010: 1. Sherri Boyd, Child Development Center, Student Worker I 2. Stephanie Castro, East Salinas GEARUp, Student Worker III 3. David Gonzalez, East Salinas GEARUp, Student Worker III 4. Juan Hernandez Villarruel, Tutorial Center, Student Worker II 5. Evelyn Meza, Human Resources/EEO, Student Worker I 6. Mario Nunez, East Salinas GEARUp, Student Worker III 7. Angel Ramos, East Salinas GEARUp, Student Worker III 8. Carolina Suarez, East Salinas GEARUp, Student Worker III 9. Ivan Vega, King City Education Center, Student Worker I 3 ACTION ITEMS AGENDA ITEM FOR BOARD MEETING OF: Title December 7, 2010 Number Accept the Independent Accountants’ Audit Reports for the Fiscal Year Ended June 30, 2010 VIII. A. Area: Status: Office of Support Operations Prepared by: Kent G. Stephens Action Recommendation It is recommended that the Board of Trustees accepts the annual Audit Reports for fiscal year ended June 30, 2010. Summary The attached Audit Reports for the fiscal year ended June 30, 2010 was reviewed by the Ad hoc Board Committee, the Audit Committee of the Foundation, and the Bond Oversight Committee. Auditors will be available to answer questions, also. The Audit Reports for 2009-2010 include all funds: 1) General (restricted and unrestricted) 2) Hartnell College Foundation, and 3) Measure H Capital Bond Funds. In addition to the financial audits, a Performance Audit of Measure H was conducted and reported in compliance with Article 13 (A) Section 1 (C) of the California Constitution. The audit reports will be submitted to the Chancellors Office, the Accrediting Commission, and placed on the college’s website. The Financial and Performance Audits for Measure H funds will be placed on the website for the Bond Oversight Committee, as well. Budget Implications None DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT MONTEREY COUNTY REPORT ON AUDIT OF FINANCIAL STATEMENTS AND SUPPLEMENTARY INFORMATION INCLUDING REPORTS ON COMPLIANCE June 30, 2010 DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT AUDIT REPORT June 30, 2010 CONTENTS Page INDEPENDENT AUDITORS’ REPORT MANAGEMENT’S DISCUSSION AND ANALYSIS ............................................... i-vii BASIC FINANCIAL STATEMENTS: Statements of Net Assets............................................................................................. Statements of Revenues, Expenses and Changes in Net Assets ................................. Statements of Cash Flows ........................................................................................... Statements of Fiduciary Net Assets ............................................................................ Statements of Changes in Fiduciary Net Assets ......................................................... 1 2 3-4 5-6 7 DISCRETELY PRESENTED COMPONENT UNIT – HARTNELL COLLEGE FOUNDATION: Statements of Financial Position ................................................................................. Statements of Activities .............................................................................................. Statements of Cash Flows ........................................................................................... 8 9-10 11 NOTES TO FINANCIAL STATEMENTS ................................................................. 12-42 REQUIRED SUPPLEMENTARY INFORMATION: Schedule of Postemployment Healthcare Benefits Funding progress ........................ Notes to Required Supplementary Information .......................................................... 43 44 SUPPLEMENTARY INFORMATION: History and Organization ............................................................................................ Schedule of Expenditures of Federal Awards ............................................................. Schedule of State Financial Assistance - Grants ......................................................... Schedule of Workload Measures for State General Apportionment Annual (Actual) Attendance ............................................................................................... Reconciliation of Annual Financial and Budget Report with Audited Fund Balances ........................................................................................................ Schedule of Financial Trends and Analysis ................................................................ Notes to Supplementary Information .......................................................................... 45 46-47 48 49 50 51 52 DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT AUDIT REPORT June 30, 2010 CONTENTS Page OTHER INDEPENDENT AUDITORS’ REPORTS: Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards .................................................................... Report on Compliance with Requirements Applicable to Each Major Program and on Internal Control over Compliance in Accordance with OMB Circular A-133 . Report on State Compliance ....................................................................................... 55-56 57-59 FINDINGS AND RECOMMENDATIONS: Schedule of Findings and Questioned Costs – Summary of Auditor Results ............. Schedule of Findings and Questioned Costs Related to Financial Statements ........... Status of Prior Year Findings and Questioned Costs .................................................. 60 61 62-68 53-54 DRAFT for Discussion Purposes Only INDEPENDENT AUDITORS' REPORT The Board of Trustees Hartnell Community College District 411 Central Avenue Salinas, California 93901 We have audited the accompanying basic financial statements of the Hartnell Community College District, including its discretely presented component unit, as of and for the year ended June 30, 2010 and 2009 as listed in the table of contents. These financial statements are the responsibility of the District's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the basic financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall basic financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements listed in the aforementioned table of contents present fairly, in all material respects, the financial position of the Hartnell Community College District as of June 30, 2010 and 2009, and the results of its operations, changes in net assets and cash flows for the fiscal years then ended in conformity with accounting principles generally accepted in the United States of America. As discussed in Note 14 to the financial statements, certain errors in reporting capital assets were discovered during the 2009 year. Accordingly, the 2009 beginning net assets have been restated to correct the error. In accordance with Government Auditing Standards, we have also issued our report dated November 17, 2010 on our consideration of the Hartnell Community College District's internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered in assessing the results of our audit. DRAFT for Discussion Purposes Only Board of Trustees Hartnell Community College District Accounting principles generally accepted in the United States of America require that the required supplementary information such as management’s discussion and analysis, and the schedule of funding progress be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Our audits were conducted for the purpose of forming an opinion on the Hartnell Community College District’s financial statements as a whole. The supplementary schedules are presented for purposes of additional analysis and are not a required part of the financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and is also not a required part of the financial statements of Hartnell Community College District. The supplementary section, including the schedule of expenditures of federal awards are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated in all material respects in relation to the financial statements as a whole. VICENTI, LLOYD & STUTZMAN LLP November 17, 2010 DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT MANAGEMENT’S DISCUSSION AND ANALYSIS Fiscal Year Ending June 30, 2010 USING THIS ANNUAL REPORT In accordance with generally accepted accounting principles, the annual report consists of three basic financial statements that provide information on Hartnell Community College District's (the District) activities as a whole: the Statement of Net Assets; the Statement of Revenues, Expenses, and Changes in Net Assets; and the Statement of Cash Flows. The focus of the Statement of Net Assets is designed to show the financial position of the District. This statement combines and consolidates current financial resources (net short-term spendable resources) with capital assets and long-term obligations. The Statement of Revenues, Expenses, and Changes in Net Assets focuses on the costs of the District's operational activities, which are supported mainly by property taxes and State revenues. This approach is intended to summarize and simplify the user's analysis of the costs of various District services to students and the public. The Statement of Cash Flows provides an analysis of the sources and uses of cash within the operations of the District. The Western Stage Auxiliary Corporation was a legally separate organization that was a component unit of the District through December 31, 2008. The corporation was dissolved on December 31, 2008. The financial activity for the period ending December 31, 2008 has been consolidated within the financial statements of the District. Separate audited financial statements can be obtained through the District’s Office of Support Operations. Responsibility for the completeness and accuracy of this information rests with the District management. FINANCIAL HIGHLIGHTS The District's primary funding source is based upon apportionment received from the State of California. The primary basis of this apportionment is the calculation of Full-Time Equivalent Students (FTES). During the 2009-10 fiscal year, FTES were 7,373 as compared to 7,624 in the 2008-09 fiscal year. Of the total FTES generated, 6,819 were funded in 2009-10 and 7,083 were funded in 2008-09. During the 2009-10 fiscal year, the District provided over $8.9 million in financial aid to students. This aid was provided in the form of grants, scholarships, loans, and tuition discounts funded through the Federal government, State Chancellor's Office, and local funding. The District passed $131 million in general obligation bonds in November 2002 for the construction and renovation of buildings and equipment throughout the District. These projects were approved by the voters within the District's boundaries and will be completed over the next ten years or so. The first series of $35 million was issued in April 2003. The second series of $35 million was issued in June 2006. The third series of $12.6 million was issued in May 2009, proceeds were received in June 2009. The fourth series of $48.4 million was issued in August 2009. Proceeds were received in October 2009 -i- DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT MANAGEMENT’S DISCUSSION AND ANALYSIS Fiscal Year Ending June 30, 2010 FINANCIAL ANALYSIS OF THE DISTRICT AS A WHOLE NET ASSETS as of June 30, (Amounts in thousands) 2010 2009* ASSETS Current Assets Cash and investments Accounts receivable, net Other current assets $ 13,273 9,653 72 Total Current Assets Restricted cash and other non-current assets Capital Assets, net $ 22,998 71,496 124,911 Total Assets LIABILITIES Current Liabilities Accounts payable, accrued liabilities and other current liabilities Current portion of long-term obligations Total Current Liabilities Long-Term Obligations 10,344 14,487 134 24,965 34,875 104,788 $ 219,405 $ 164,628 $ $ 11,513 1,660 9,184 1,908 11,092 131,782 13,173 82,334 142,874 95,507 NET ASSETS Invested in capital assets Restricted Unrestricted 54,272 11,159 11,100 55,081 6,864 7,176 Total Net Assets 76,531 69,121 Total Liabilities Total Liabilities and Net Assets $ 219,405 $ 164,628 *Certain reclassifications have been made to conform to the 2010 presentation. This schedule has been prepared from the District's Statement of Net Assets (page 1), which is presented on an accrual basis of accounting whereby assets are capitalized and depreciated. Cash and short-term investments consist primarily of funds held in the Monterey County Treasury. The changes in the cash position are explained in the Statement of Cash Flows (pages 3-4). Unrestricted net assets are composed of reserves for self-insurance, retiree health benefits, bookstore and cafeteria reserves, and general reserves for the ongoing financial health of the District. -ii- DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT MANAGEMENT’S DISCUSSION AND ANALYSIS Fiscal Year Ending June 30, 2010 There were substantial changes in ending balances from prior fiscal year to current fiscal year. Accounts receivable, net was reduced by $4.8 million. This reduction was primarily due to receiving state funds for capital outlay costs generated in 2008-09 fiscal year. The reduction in other current assets is due to a reduction in prepaid expenditures prior to fiscal year-end June 30, 2010. Capital assets, net increased due to the completion of various construction projects. A large part of the increase was due to completion of the Center for Assessment and Lifelong Learning (CALL) building. Operating Results for the Year Ended June 30, (Amounts in thousands) 2010 2009 Operating Revenues Tuition and fees Grants and contracts Auxiliary sales and charges $ Total Operating Revenues Operating Expenses Salaries and benefits Supplies, other operating expenses, and financial aid Depreciation Total Operating Expenses Loss on Operations Nonoperating Revenues and (Expenses) State apportionments Property taxes State revenues Interest income (loss) Other nonoperating revenues and (expenses) Total Nonoperating Revenue and (Expenses) Other Revenues, Expenses, Gains and Losses State and local capital income Interest income (loss), Capital Interest expenses and losses Total Revenues, Expenses, Gains and Losses Increase in Net Assets $ 2,300 19,856 536 $ 2,395 16,961 1,755 22,692 21,111 30,648 18,759 3,395 35,301 20,486 2,365 52,802 58,152 (30,110) (37,041) 14,991 22,880 972 208 14,402 24,193 915 (58) 2 185 39,053 39,637 2,717 1,013 (5,262) 10,350 (809) (3,715) (1,532) 5,826 7,411 $ 8,422 This schedule has been prepared from the Statement of Revenues, Expenses, and Changes in Net Assets presented on page 2. Auxiliary sales and charges consist of cafeteria revenues. The operations are self-supporting. -iii- DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT MANAGEMENT’S DISCUSSION AND ANALYSIS Fiscal Year Ending June 30, 2010 Grant and contract revenues relate to student financial aid, as well as specific Federal and State grants received for programs serving the students of the District. These grant and program revenues are restricted as to the allowable expenses related to the programs. In 2008-09 the District had a negative balance in interest income. This was the result of the write-off of Washington Mutual and Lehman Brothers Investments held by Monterey County Treasurer. A portion of this loss was recovered in fiscal year 2009-10. The District recovered $274,837 in fiscal year 2009-10. The District is recording the depreciation expense related to capital assets. The detail of the changes in capital assets for the year is included in the notes to the financial statements as Note 5. The Statement of Cash Flows provides information about cash receipts and payments during the year. This statement also assists users in assessing the District's ability to meet its obligations as they come due and its need for external financing. Statement of Cash Flows for the Year Ended June 30, (Amounts in thousands) 2010 2009 Cash Provided by (Used in) Operating activities Noncapital financing activities Capital financing activities Investing activities $ (28,746) 35,952 33,607 (1,810) Net (Decrease) in Cash Cash, Beginning of Year 39,003 43,878 Cash, End of Year $ 82,881 $ (33,069) 38,803 (7,216) (5,515) (6,997) 50,875 $ 43,878 The primary operating receipts are student tuition and fees and Federal, State, and local grants and contracts. The primary operating expense of the District is the payment of salaries and benefits to faculty and staff. While State apportionment and property taxes are the primary sources of noncapital related revenue, GASB accounting standards require that this source of revenue is shown as non-operating revenue because it comes from the general resources of the State and not from the primary users of the District’s programs and services. The District depends upon this funding as the primary source of funds to continue the current level of operations. Capital financing activities increased substantially due to bond issue Series D during the current fiscal year. The Series D was approximately $48.4 million. -iv- DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT MANAGEMENT’S DISCUSSION AND ANALYSIS Fiscal Year Ending June 30, 2010 CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets At June 30, 2010, the District had $124.9 million in a broad range of capital assets, including land, buildings, and furniture and equipment, net of depreciation. At June 30, 2009, net capital assets were $104.8 million. The District is currently in the middle of a major capital improvement project with construction ongoing throughout the District. These projects are funded primarily through local and state general obligation bonds. The majority of our West campus property was purchased in 1936 and 1954 from the U.S. Government. The Alisal campus property was purchased for $1 from the U.S. Government in 1948. Capital assets reported within these financial statements reflect the cost at the time of purchase. Current market values of our property are not reflected in the financial statements. Several capital projects are planned for the 2010-11 year with funding through the general obligation bonds and the State of California Land and construction in progress Buildings and improvements Furniture and equipment $ Subtotal Accumulated depreciation (Amounts in thousands) 2010 2009 39,614 $ 32,370 110,398 94,384 8,813 8,553 158,825 33,914 Totals $ -v- 124,911 135,307 30,519 $ 104,788 DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT MANAGEMENT’S DISCUSSION AND ANALYSIS Fiscal Year Ending June 30, 2010 Long-Term Obligations At the end of the 2009-10 fiscal year, the District had $133 million in bonds outstanding from the voter approved general obligation bonds and other long-term obligations. These bonds will be repaid annually through property taxes on assessed property within the Hartnell Community College District boundaries. The lease revenue bonds issued to fund construction of the King City Education Center building in King City were defeased in December 2009. General obligation bonds Premium on obligations Early retirement incentive Other post employment benefits $ Totals $ (Amounts in thousands) 2010 2009 128,227 $ 78,857 4,729 4,422 601 601 115 133 133,690 $ 83,995 District bond ratings have changed as more debt has been issued and property values have declined in recent years. The rating from Moody’s Investors Service has been downgraded from a rating of Aaa in 2006 to a rating of A1 in August 2009. The Standard & Poor’s rating has also been downgraded from AAA to AA- during the same period. -vi- DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT MANAGEMENT’S DISCUSSION AND ANALYSIS Fiscal Year Ending June 30, 2010 ECONOMIC FACTORS AFFECTING THE FUTURE OF HARTNELL COMMUNITY COLLEGE DISTRICT The economic position of Hartnell Community College District is closely tied to the State of California as State apportionments and property taxes allocated to the District represent approximately 55 percent of the total sources of revenues received by the District. The District is aligning its course offerings with the reduction of workload measures as issued by the Chancellor’s Office. The State of California is still currently in a precarious financial condition due to the nationwide recession and the mortgage, real estate, banking and unemployment crisis. The State budget for fiscal year 2009-10 provided a reduction for California community colleges of over $800 million by reducing categorical programs funding levels and reducing FTES base funding. In fiscal year 2010-11 the State funding level did not change from prior fiscal year. The District issued $35 million in general obligation bonds in April 2003 to fund various construction projects throughout the District. The District issued a second series of general obligation bonds in June 2006, a third series in June 2009, and a fourth series in September 2009. All bonds, related to the 2002 Measure H election, have been issued as of September 2009. The major projects outstanding are the Center for Advanced Technology, the College Center renovation, the Physical Education renovation, the Northeast Quad landscaping project, the Classroom Administration Building renovation, and the Science Building. At the time the budget was developed, the following assumptions were made: The 2010-11 State budget for community colleges contains no Cost of Living Allowance (COLA) increase. The 2010-11 State budget for community colleges contains no increase in funding for student growth. The 2010-11 State budget for community colleges contains no change in categorical funding from the previous year. The Districts 2010-11 adopted budget reflects a State apportionment deficit of 3% over previous year in anticipation of continued State revenue shortfall. CONTACTING THE DISTRICT'S FINANCIAL MANAGEMENT This financial report is designed to provide our citizens, taxpayers, students, and investors and creditors with a general overview of the District's finances and to show the District's accountability for the money it receives. Questions may be directed to the Vice President for Support Operations, Hartnell Community College District, 411 Central Avenue, Salinas, CA 93901. -vii- DRAFT for Discussion Purposes Only BASIC FINANCIAL STATEMENTS DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT STATEMENTS OF NET ASSETS June 30, 2010 and 2009 2010 ASSETS Current Assets: Cash and cash equivalents Investments in local agency investment fund Accounts receivable, net Inventory Prepaid expenses Total Current Assets $ Non-Current Assets: Restricted cash and cash equivalents Capitalized fees Capital assets, net of accumulated depreciation Total Non-Current Assets TOTAL ASSETS 13,035,537 237,340 9,653,203 14,202 57,252 22,997,534 2009 $ 10,113,054 231,079 14,486,848 18,034 115,610 24,964,625 69,846,201 1,650,318 124,910,699 196,407,218 33,765,517 1,109,787 104,787,889 139,663,193 $ 219,404,752 $ 164,627,818 $ $ LIABILITIES Current Liabilities: Short-term borrowing Accounts payable Accrued liabilities Accrued interest payable Due to fiduciary funds, net Deferred revenue Early retirement incentive Bonds payable Total Current Liabilities 106,919 4,753,575 1,065,463 654,895 112,562 2,490,230 83,335 1,825,000 11,091,979 2,117,418 4,833,924 1,301,230 659,208 12,642 2,588,537 1,660,000 13,172,959 Non-Current Liabilities: Other postemployment benefits other than pensions (OPEB) Early retirement incentive Bonds payable Total Non-Current Liabilities 132,820 517,216 131,131,502 131,781,538 115,017 600,551 81,618,977 82,334,545 TOTAL LIABILITIES 142,873,517 95,507,504 54,272,506 55,080,882 6,964,736 3,410,882 783,424 11,099,687 2,856,291 3,124,581 882,954 7,175,606 76,531,235 69,120,314 $ 219,404,752 $ 164,627,818 NET ASSETS Invested in capital assets, net of related debt Restricted for: Capital projects Debt service Other special purposes Unrestricted TOTAL NET ASSETS TOTAL LIABILITIES AND NET ASSETS See the accompanying notes to the financial statements. -1- DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS For the Fiscal Years Ended June 30, 2010 and 2009 2010 OPERATING REVENUES Tuition and fees (gross) Less: Scholarship discounts and allowances Net tuition and fees Grants and contracts, non-capital: Federal State Local Sales $ 2009 4,308,296 (2,007,884) 2,300,412 $ 3,758,958 (1,364,255) 2,394,703 13,771,207 4,504,259 1,580,499 535,716 10,678,865 5,038,073 1,244,268 1,755,179 22,692,093 21,111,088 22,966,059 7,682,398 25,824,642 9,476,306 8,557,994 8,987,127 1,213,935 3,394,757 12,331,352 6,888,898 1,265,361 2,365,126 52,802,270 58,151,685 (30,110,177) (37,040,597) NON-OPERATING REVENUES (EXPENSES) State apportionments, non-capital Local property taxes State taxes and other revenue Interest and investment income (loss), non-capital Other non-operating revenues Transfer to agency fund Transfer to foundation 14,991,470 22,880,276 972,127 208,109 113,564 (111,965) 14,402,203 24,193,011 914,437 (57,738) 222,937 (13,741) (24,301) TOTAL NON-OPERATING REVENUES (EXPENSES) 39,053,581 39,636,808 8,943,404 2,596,211 OTHER REVENUES, EXPENSES, GAINS AND LOSSES State apportionments, capital Interest and investment income (loss), capital Interest expense on capital asset-related debt 2,717,185 1,012,650 (5,262,318) 10,349,839 (808,877) (3,715,213) TOTAL OTHER REVENUES, EXPENSES, GAINS AND LOSSES (1,532,483) 5,825,749 7,410,921 8,421,960 69,120,314 58,370,600 TOTAL OPERATING REVENUES OPERATING EXPENSES Salaries Employee benefits Supplies, materials, and other operating expenses and services Financial aid Utilities Depreciation TOTAL OPERATING EXPENSES OPERATING LOSS INCOME BEFORE OTHER REVENUES, EXPENSES, GAINS AND LOSSES INCREASE IN NET ASSETS NET ASSETS, BEGINNING OF YEAR, AS ORIGINALLY STATED Adjustment for restatement (see note 14 - pg 41) NET ASSETS, BEGINNING OF YEAR, AS RESTATED NET ASSETS, END OF YEAR $ See the accompanying notes to the financial statements. -2- - 2,327,754 69,120,314 60,698,354 76,531,235 $ 69,120,314 DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT STATEMENTS OF CASH FLOWS For the Fiscal Years Ended June 30, 2010 and 2009 2010 CASH FLOWS FROM OPERATING ACTIVITIES Tuition and fees Federal grants and contracts State grants and contracts Local grants and contracts Sales Payments to suppliers Payments to/on-behalf of employees Payments to/on-behalf of students Net amounts due to (from) fiduciary funds $ 2,940,783 13,664,638 3,698,208 1,059,637 695,791 (11,327,738) (30,478,287) (8,987,127) (12,045) 2009 $ 2,404,380 9,261,289 5,946,772 2,498,121 842,510 (12,971,352) (34,126,963) (6,888,898) (34,711) (28,746,140) (33,068,852) 11,714,562 22,903,301 1,334,629 13,544,298 24,222,802 1,036,362 35,952,492 38,803,462 931,746 10,740,254 (21,935,854) 48,405,079 (4,534,716) 7,538 8,131,454 (21,184,388) 12,597,888 (6,768,266) 33,606,509 (7,215,774) 200,805 (2,010,499) (610,380) (4,905,369) (1,809,694) (5,515,749) NET CHANGE IN CASH AND CASH EQUIVALENTS 39,003,167 (6,996,913) CASH BALANCE, BEGINNING OF YEAR 43,878,571 50,875,484 Net cash used by operating activities CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES State apportionments and receipts Property taxes State tax and other revenues Net cash provided by non-capital financing activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Interest received on capital debt State apportionment for capital purposes Purchases of capital assets Issuance of capital debt Principal and interest paid on capital debt Net cash provided (used) by capital and related financing activities CASH FLOWS FROM INVESTING ACTIVITIES Net investment activity Net change in short-term borrowings Net cash used by investing activities CASH BALANCE - End of Year Cash balances at June 30, 2010 and 2009 consisted of the following: Cash and cash equivalents Restricted cash and cash equivalents Total cash balances $ 82,881,738 $ 43,878,571 $ 13,035,537 69,846,201 82,881,738 $ 10,113,054 33,765,517 43,878,571 $ See the accompanying notes to the financial statements. -3- $ DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT STATEMENTS OF CASH FLOWS For the Fiscal Years Ended June 30, 2010 and 2009 RECONCILIATION OF OPERATING LOSS TO NET CASH USED BY OPERATING ACTIVITIES 2010 2009 $ (30,110,177) $ (37,040,597) CASH USED BY OPERATING ACTIVITIES Operating loss Adjustments to reconcile operating loss to net cash used by operating activities: Depreciation expense Changes in assets and liabilities: Accounts receivable, net Inventory Prepaid expense Accounts payable and accrued liabilities Due to fiduciary funds, net Deferred revenue Early retirement incentive Other postemployment benefits other than pensions (OPEB) 3,394,757 2,365,126 (468,567) 3,832 58,358 (1,643,759) 99,920 (98,307) (1,200,440) 4,841 285,273 849,143 (20,970) 973,204 600,551 115,017 17,803 $ (28,746,140) Net cash used by operating activities See the accompanying notes to the financial statements. -4- $ (33,068,852) DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT STATEMENTS OF FIDUCIARY NET ASSETS - AGENCY FUND June 30, 2010 and June 30, 2009 2010 ASSETS Cash and cash equivalents Investments in local agency investment fund Accounts receivable: Miscellaneous Due from district $ 2009 431,056 158,082 $ 553 12,101 TOTAL ASSETS LIABILITIES Accounts payable Accrued liabilities Funds held in trust 397,664 153,862 13,241 $ 601,792 $ 564,767 $ 3,815 $ 464 597,977 564,303 TOTAL LIABILITIES 601,792 564,767 NET ASSETS Unrestricted TOTAL NET ASSETS - - $ TOTAL LIABILITIES AND NET ASSETS 601,792 See the accompanying notes to the financial statements. -5- $ 564,767 DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT STATEMENTS OF FIDUCIARY NET ASSETS - TRUST FUNDS June 30, 2010 and June 30, 2009 2010 ASSETS Cash and cash equivalents Investments in local agency investment fund Accounts receivable: Miscellaneous Due from district $ 41,081 117,086 2009 $ 87,678 113,955 20 100,461 TOTAL ASSETS LIABILITIES Accounts payable Due to district Funds held in trust $ 258,648 $ 201,633 $ 8,454 1,356 10,303 $ 28,854 599 16,675 TOTAL LIABILITIES NET ASSETS Reserved for scholarships Unrestricted TOTAL NET ASSETS $ TOTAL LIABILITIES AND NET ASSETS 20,113 46,128 121,998 116,537 238,535 119,102 36,403 155,505 258,648 See the accompanying notes to the financial statements. -6- $ 201,633 DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT STATEMENTS OF CHANGES IN FIDUCIARY NET ASSETS - TRUST FUNDS For the Fiscal Years Ended June 30, 2010 and 2009 2010 ADDITIONS Local revenues Transfer from District Interest and investment income (loss) $ 10,890 100,000 5,049 2009 $ 12,275 (4,248) 115,939 8,027 Operating expenses 32,909 88,274 TOTAL DEDUCTIONS 32,909 88,274 83,030 (80,247) 155,505 235,752 TOTAL ADDITIONS DEDUCTIONS CHANGE IN NET ASSETS NET ASSETS, BEGINNING OF YEAR $ NET ASSETS, ENDING OF YEAR 238,535 See the accompanying notes to the financial statements. -7- $ 155,505 DRAFT for Discussion Purposes Only DISCRETELY PRESENTED COMPONENT UNIT – HARTNELL COLLEGE FOUNDATION -8- DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT DISCRETELY PRESENTED COMPONENT UNIT HARTNELL COLLEGE FOUNDATION STATEMENTS OF FINANCIAL POSITION June 30, 2010 and 2009 2010 ASSETS Current Assets Cash and cash equivalents - unrestricted Cash and cash equivalents - restricted Accounts receivable Pledges receivable, current Note receivable, current Prepaid expenses Total current assets $ Noncurrent Assets Investments - restricted Investments with FCCC Pledges receivable Note receivable Property and equipment, net Total noncurrent assets Total assets LIABILITIES AND NET ASSETS Liabilities Accounts payable Scholarships payable Deferred revenue Total Liabilities Net Assets Unrestricted Temporarily restricted Permanently restricted Total net assets Total liabilities and net assets 198,763 2,453,577 83,008 589,294 6,033 22,330 3,353,005 $ 204,419 2,673,279 810,138 5,733 3,693,569 4,322,111 204,173 149,501 101,465 326,183 5,103,433 $ 8,456,438 100,500 107,488 326,375 3,997,643 $ 7,691,212 $ $ 566,544 168,192 65,999 800,735 65,765 3,134,865 4,455,073 7,655,703 $ 8,456,438 See the accompanying notes to the financial statements. -8- 2009 3,463,280 665,217 176,839 16,147 858,203 (156,690) 2,705,022 4,284,677 6,833,009 $ 7,691,212 DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT DISCRETELY PRESENTED COMPONENT UNIT HARTNELL COLLEGE FOUNDATION STATEMENT OF ACTIVITIES For the Fiscal Year Ended June 30, 2010 REVENUE Donations Special events In-kind donations Miscellaneous revenue Assets released from restrictions Total revenues Unrestricted Temporarily Restricted Permanently Restricted $ $ $ EXPENSES Operating expenses Program expenses Fundraising expenses Total expenses 29,061 166,411 161,864 218,580 1,378,371 1,954,287 273,537 1,543,729 86,608 1,903,874 OPERATING INCOME 1,539,581 59,707 16,282 13,082 (1,378,371) 250,281 19,200 19,200 - - Total $ 1,587,842 226,118 178,146 231,662 2,223,768 273,537 1,543,729 86,608 1,903,874 50,413 250,281 19,200 319,894 OTHER INCOME(LOSS) Interest and dividends Realized gain on sale of investments Unrealized gain (loss) on investments Total other income(loss) 18,972 4,144 148,926 172,042 93,645 58,741 182,199 334,585 1,876 (5,703) (3,827) 114,493 62,885 325,422 502,800 CHANGE IN NET ASSETS BEFORE TRANSFERS 222,455 584,866 15,373 822,694 33,777 (188,800) (155,023) (33,777) 188,800 155,023 429,843 170,396 822,694 2,705,022 4,284,677 6,833,009 4,455,073 $ 7,655,703 TRANSFERS Change in donor designation Transfer to Endowment - FCCC Foundation Total transfers - CHANGE IN NET ASSETS AFTER TRANSFERS 222,455 NET ASSETS Net Assets, Beginning of year Net Assets, End of Year (156,690) $ 65,765 $ 3,134,865 $ See the accompanying notes to the financial statements. -9- - DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT DISCRETELY PRESENTED COMPONENT UNIT HARTNELL COLLEGE FOUNDATION STATEMENT OF ACTIVITIES For the Fiscal Year Ended June 30, 2009 REVENUE Donations Special events In-kind donations Miscellaneous revenue Assets released from restrictions Total revenues Unrestricted Temporarily Restricted Permanently Restricted $ $ $ EXPENSES Operating expenses Program expenses Fundraising expenses Total expenses 7,416 99,652 181,292 146,217 1,475,668 1,910,245 230,669 1,564,481 88,039 1,883,189 OPERATING INCOME 1,583,010 8,971 61,839 13,420 (1,475,668) 191,572 52,702 52,702 - - $ 1,643,128 108,623 243,131 159,637 2,154,519 230,669 1,564,481 88,039 1,883,189 27,056 191,572 OTHER INCOME(LOSS) Interest and dividends Realized (loss) on sale of investments Unrealized (loss) on investments Total other income(loss) 36,578 (382,794) (208,408) (554,624) 121,217 (379,348) (206,740) (464,871) - CHANGE IN NET ASSETS BEFORE TRANSFERS (527,568) (273,299) 52,702 (30,000) 30,000 - TRANSFERS Change in donor designation Net transfer of assets and liabilities from Western Stage Auxiliary Corporation Total transfers CHANGE IN NET ASSETS AFTER TRANSFERS NET ASSETS Net Assets, Beginning of year before restatement Restatement Net Assets, Beginning of year as restated Net Assets, End of Year 271,330 157,795 (762,142) (415,148) (1,019,495) (748,165) 24,301 24,301 (30,000) 30,000 24,301 24,301 (503,267) (303,299) 82,702 (723,864) 109,853 236,724 346,577 $ 52,702 Total (156,690) 3,006,646 1,675 3,008,321 $ 2,705,022 4,440,374 (238,399) 4,201,975 $ See the accompanying notes to the financial statements. -10- 4,284,677 7,556,873 7,556,873 $ 6,833,009 DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT DISCRETELY PRESENTED COMPONENT UNIT HARTNELL COLLEGE FOUNDATION STATEMENTS OF CASH FLOWS For the Fiscal Year Ended June 30, 2010 and 2009 2010 2009 Cash flows from operating activities Change in net assets $ Adjustment to reconcile changes in net assets to net cash provided for operations Unrealized (gain) loss on investments Depreciation Donation of collection items Changes in operating assets and liabilities: Receivables Prepaid expenses Payables Deferred revenue Net cash provided by operating activities 822,694 $ (723,864) (325,422) 192 415,148 1,515 (4,600) 94,558 (22,330) (107,320) 49,852 137,968 512,224 128,603 286,289 16,147 Cash flows from investing activities Purchase of equipment Purchase of investments Proceeds from the sale of investments (1,385) (1,725,879) 2,407,192 (3,218,675) 2,481,093 Net cash used by investing activities (737,582) 679,928 Net increase in cash and cash equivalents (225,358) 808,531 2,877,698 Cash and cash equivalents, beginning of year 2,069,167 Cash and cash equivalents, end of year $ 2,652,340 $ 2,877,698 Supplemental Disclosure: Noncash financing transaction: Collection items contributed $ - $ 4,600 See the accompanying notes to the financial statements. -11- DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS June 30, 2010 and 2009 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: A. REPORTING ENTITY The District is the level of government primarily accountable for activities related to public education. The governing authority consists of elected officials who, together, constitute the Board of Trustees. The District considered its financial and operational relationships with potential component units under the reporting entity definition of GASB Statement No. 14, The Financial Reporting Entity. The basic, but not the only, criterion for including another organization in the District’s reporting entity for financial reports is the ability of the District’s elected officials to exercise oversight responsibility over such agencies. Oversight responsibility implies that one entity is dependent on another and that the dependent unit should be reported as part of the other. Oversight responsibility is derived from the District’s power and includes, but is not limited to: financial interdependency; selection of governing authority; designation of management; ability to significantly influence operations; and accountability for fiscal matters. Based upon the requirements of GASB Statement No. 14, and as amended by GASB Statement No. 39, Determining Whether Certain Organizations are Component Units, certain organizations warrant inclusion as part of the financial reporting entity because of the nature and significance of their relationship with the District, including their ongoing financial support of the District or its other component units. A legally separate, tax-exempt organization should be reported as a component unit of the District if all of the following criteria are met: 1. The economic resources received or held by the separate organization are entirely or almost entirely for the direct benefit of the District, its component units, or its constituents. 2. The District, or its component units, is entitled to, or has the ability to otherwise access, a majority of the economic resources received or held by the separate organization. 3. The economic resources received or held by an individual organization that the District, or its component units, is entitled to, or has the ability to otherwise access, are significant to the District. -12- DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS June 30, 2010 and 2009 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (continued) A. REPORTING ENTITY (continued) Based upon the application of the criteria listed above, the following potential component units have been included in the District’s reporting entity: The Hartnell College Foundation (the Foundation) – The Foundation is a separate not-for-profit corporation formed to promote and assist the educational programs of the District. The Board of Directors is comprised of up to 35 members including the President of the College, a member of the Board of Trustees selected by the President and the Executive Director of the Foundation. In addition, the Foundation does not carry on any activities not approved by the Superintendent of the District. The financial activities of the Foundation have been discretely presented. Financial statements for the Foundation may be obtained through the District. The Western Stage Auxiliary Corporation (the Auxiliary) – The Auxiliary was a legally separate organization component unit of the District. The Auxiliary was formed to augment and enhance the District’s Theater Arts program. The District’s Board of Trustees and the Auxiliary’s Board shared common members, and the Board of Trustees provided oversight of the Auxiliary’s operation. On September 9, 2008 the District Board of Trustees approved a resolution to dissolve the Auxiliary effective December 2008 and remaining assets and liabilities of the Auxiliary were transferred to the Hartnell College Foundation. The financial activity through December 31, 2008 has been “blended” or consolidated within the financial statements as a component of the General Fund of the District as if the activity was the District’s. Financial statements for the Auxiliary for the six months ended December 31, 2008 can be obtained through the District. -13- DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS June 30, 2010 and 2009 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (continued) B. FINANCIAL STATEMENT PRESENTATION The accompanying financial statements have been prepared in conformity with generally accepted accounting principles as prescribed by the Governmental Accounting Standards Board (GASB), including Statement No. 34, Basic Financial Statements and Management’s Discussion and Analysis – for State and Local Governments and including Statement No. 35, Basic Financial Statements and Management’s Discussion and Analysis of Public Colleges and Universities, issued in June and November 1999 and Audits of State and Local Governmental Units issued by the American Institute of Certified Public Accountants. The financial statement presentation required by GASB No. 34 and No. 35 provides a comprehensive, entity-wide perspective of the District’s financial activities. The entity-wide perspective replaces the fund-group perspective previously required. Fiduciary activities are excluded from the basic financial statements. C. BASIS OF ACCOUNTING Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements. Basis of accounting relates to the timing of measurement made, regardless of the measurement focus applied. For financial reporting purposes, the District is considered a special-purpose government agency engaged in business-type activities. Accordingly, the District’s basic financial statements have been presented using the economic resources measurement focus and the accrual basis of accounting. Under the accrual basis, revenues are recognized when earned, and expenses are recorded when an obligation has been incurred. All significant intra-agency transactions have been eliminated. For internal accounting purposes, the budgetary and financial accounts of the District have been recorded and maintained in accordance with the California Community Colleges System Office’s Budget and Accounting Manual. -14- DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS June 30, 2010 and 2009 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (continued) C. BASIS OF ACCOUNTING (continued) To ensure compliance with the California Education Code, the financial resources of the District are divided into separate funds for which separate accounts are maintained for recording cash, other resources and all related liabilities, obligations and equities. By state law, the District's Governing Board must approve a budget no later than September 15. A public hearing must be conducted to receive comments prior to adoption. The District's Governing Board satisfied these requirements. Budgets for all governmental funds were adopted on a basis consistent with generally accepted accounting principles (GAAP). These budgets are revised by the District's Governing Board during the year to give consideration to unanticipated income and expenditures. Formal budgetary integration was employed as a management control device during the year for all budgeted funds. Expenditures cannot legally exceed appropriations by major object account. In accordance with GASB Statement No. 20, the District follows all GASB statements issued prior to November 30, 1989 until subsequently amended, superceded or rescinded. The District has the option to apply all Financial Accounting Standards Board (FASB) pronouncements issued after November 30, 1989 unless FASB conflicts with GASB. The District has elected to not apply FASB pronouncements issued after the applicable date. 1. Cash and Cash Equivalents The District’s cash and cash equivalents are considered to be cash on hand, demand deposits and short-term investments with original maturities of three months or less from the date of acquisition. Cash in the County treasury is recorded at cost, which approximates fair value, in accordance with the requirements of GASB Statement No. 31. -15- DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS June 30, 2010 and 2009 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (continued) C. BASIS OF ACCOUNTING (continued) 2. Accounts Receivable Accounts receivable consists primarily of amounts due from the Federal government, state and local governments, or private sources, in connection with reimbursement of allowable expenditures made pursuant to the District’s grants and contracts. Accounts receivable are recorded net of estimated uncollectible amounts. The District recognized for budgetary and financial reporting purposes any amount of state appropriations deferred from the current fiscal year and appropriated from the subsequent fiscal year for payment of current year costs as a receivable in the current year. 3. Inventories Inventories are presented at cost, on the weighted average method and are expensed when used. Inventory consists of cafeteria food and supplies held for resale to the students, faculty and staff of the College. 4. Prepaid Expenses Payments made to vendors for goods or services that will benefit periods beyond June 30, 2010, are recorded as prepaid items using the consumption method. A current asset for the prepaid amount is recorded at the time of the purchase and an expenditure/expense is reported in the year in which goods or services are consumed. 5. Capitalized Fees Amounts paid for fees and underwriting costs associated with long-term debt are capitalized and amortized to interest expense over the life of the liability. These costs are amortized using the straight-line method. -16- DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS June 30, 2010 and 2009 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (continued) C. BASIS OF ACCOUNTING (continued) 6. Restricted Cash and Cash Equivalents Restricted cash and cash equivalents are those amounts externally restricted as to use pursuant to the requirements of the District’s grants, contracts, and debt service requirements. 7. Capital Assets Capital assets are recorded at cost at the date of acquisition. Donated capital assets are recorded at their estimated fair value at the date of donation. For equipment, the District’s capitalization policy includes all items with a unit cost of $5,000 or more and an estimated useful life of greater than one year. Buildings as well as renovations to buildings, infrastructure, and land improvements that significantly increase the value or extend the useful life of the structure are capitalized. Interest incurred during construction is not capitalized. The cost of normal maintenance and repairs that does not add to the value of the asset or materially extend the asset's life is recorded in operating expense in the year in which the expense was incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally 50 years for buildings, 10 years for building and land improvements, 3-8 years for equipment and vehicles. Land and construction in progress are not depreciated. 8. Accounts Payable Accounts payable consists of amounts due to vendors. -17- DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS June 30, 2010 and 2009 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (continued) C. BASIS OF ACCOUNTING (continued) 9. Short-Term Borrowing Negative balances in the cash in county account generally result from timing differences between expenditures and reimbursements from the state or other sources. These negative balances have been recorded as short-term borrowings in the statement of net assets. 2009 2010 Restricted General Fund Debt Service Fund Scheduled Maintenance Fund $ 106,919 3,659 2,113,759 $ 106,919 10. $ $2,117,418 Accrued Liabilities Accrued liabilities consist of salaries and benefits payable and deferred summer pay. 11. Deferred Revenue Deferred revenue arises when potential revenue does not meet both the “measurable” and “available” criteria for recognition in the current period or when resources are received by the District prior to the incurrence of qualifying expenditures. In subsequent periods, when both revenue recognition criteria are met, or when the District has a legal claim to the resources, the liability for deferred revenue is removed from the combined balance sheet and revenue is recognized. Deferred revenues include (1) amounts received for tuition and fees prior to the end of the fiscal year that are related to the subsequent fiscal year and (2) amounts received from Federal and State grants before the eligibility requirements are met. -18- DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS June 30, 2010 and 2009 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (continued) C. BASIS OF ACCOUNTING (continued) 12. Compensated Absences In accordance with GASB Statement No. 16, accumulated unpaid employee vacation benefits are recognized as a liability of the District as accrued liabilities in the statement of net assets. Sick leave benefits are accumulated without limit for each employee. The employees do not gain a vested right to accumulated sick leave. Accumulated employee sick leave benefits are not recognized as a liability of the District. The District's policy is to record sick leave as an operating expense in the period taken since such benefits do not vest nor is payment probable; however, unused sick leave is added to the creditable service period for calculation of retirement benefits when the employee retires and within the constraints of the appropriate retirement systems. 13. Net Assets Invested in capital assets, net of related debt: This represents the District’s total investment in capital assets, net of outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of invested in capital assets, net of related debt. Restricted net assets – expendable: Restricted expendable net assets include resources in which the District is legally or contractually obligated to spend resources in accordance with restrictions imposed by external third parties or by enabling legislation adopted by the District. The District first applies restricted resources when an expense is incurred for purposes for which both restricted and unrestricted net assets are available. -19- DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS June 30, 2010 and 2009 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (continued) C. BASIS OF ACCOUNTING (continued) 13. Net Assets (continued) Restricted net assets – nonexpendable: Nonexpendable restricted net assets consist of endowment and similar type funds in which donors or other outside sources have stipulated, as a condition of the gift instrument, that the principal is to be maintained inviolate and in perpetuity, and invested for the purpose of producing present and future income, which may either be expended or added to principal. The District had no restricted net assets – nonexpendable. Unrestricted net assets: Unrestricted net assets represent resources available to be used for transactions relating to the general operations of the District, and may be used at the discretion of the governing board, as designated, to meet current expenses for specific future purposes. Of the unrestricted net assets, the following amounts have been Board designated for the following: Designated for Bookstore Fund Designated for Child Development Fund Designated for Cafeteria Fund Designated for Self Insurance Fund Designated for Retiree Benefits 14. 2010 1,135,361 255,662 360,697 1,142,839 3,398,886 2009 1,088,284 91,095 367,289 1,122,273 1,240,012 State Apportionments Certain current year apportionments from the state are based upon various financial and statistical information of the previous year. Any prior year corrections due to the recalculation in February of 2011 will be recorded in the year computed by the State. -20- DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS June 30, 2010 and 2009 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (continued) C. BASIS OF ACCOUNTING (continued) 15. Property Taxes Secured property taxes attach as an enforceable lien on property as of March 1. Taxes are payable in two installments on November 15 and March 15. Unsecured property taxes are payable in one installment on or before August 31. Real and personal property tax revenues are reported in the same manner in which the County auditor records and reports actual property tax receipts to the Monterey County Office of Education. This is generally on a cash basis. A receivable has not been accrued in these financial statements because it is not material. Property taxes for debt service purposes cannot be estimated and have therefore not been accrued in the basic financial statements. 16. On-Behalf Payments GASB Statement No. 24 requires that direct on-behalf payments for fringe benefits and salaries made by one entity to a third party recipient for the employees of another, legally separate entity be recognized as revenue and expenditures by the employer government. The State of California makes direct on-behalf payments for retirement benefits to the State Teachers and Public Employees Retirement Systems on behalf of all Community Colleges in California. However, a fiscal advisory was issued by the California Department of Education instructing districts not to record revenue and expenditures for these on-behalf payments. The amount of on-behalf payments made for the District is estimated at $205,000 and $228,000 for STRS at June 30, 2010 and 2009, respectively. 17. Classification of Revenues The District has classified its revenues as either operating or non-operating revenues according to the following criteria: Operating revenues: Operating revenues include activities that have the characteristics of exchange transactions, such as student fees, net of scholarship discounts and allowances, and Federal and most state and local grants and contracts. -21- DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS June 30, 2010 and 2009 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (continued) C. BASIS OF ACCOUNTING (continued) 17. Classification of Revenues (continued) Non-operating revenues: Non-operating revenues include activities that have the characteristics of nonexchange transactions, such as State apportionments, taxes, and other revenue sources that are defined as nonoperating revenues by GASB No. 9, Reporting Cash Flows of Proprietary and Nonexpendable Trust Funds and Governmental Entities that use Proprietary Fund Accounting, and GASB No. 33, Accounting and Financial Reporting for Nonexchange Transactions, such as investment income. 18. Scholarship Discounts and Allowances Student tuition and fee revenues, and certain other revenues from students, are reported net of scholarship discounts and allowances in the statement of revenues, expenses, and changes in net assets. Scholarship discounts and allowances are the difference between the stated charge for goods and services provided by the District, and the amount that is paid by students and/or third parties making payments on the students’ behalf. Certain governmental grants, such as Board of Governors’ grants are recorded as operating revenues in the District’s financial statements. To the extent that revenues from such programs are used to satisfy tuition and fees and other student charges, the District has recorded a scholarship discount and allowance. 19. Estimates The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results may differ from those estimates. 20. Reclassifications Certain reclassifications have been made to the 2009 financial statements to conform to the 2010 presentation. -22- DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS June 30, 2010 and 2009 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (continued) C. BASIS OF ACCOUNTING (continued) 21. Recent Accounting Pronouncement The Governmental Accounting Standards Board (GASB) has issued Statement No. 45, Accounting and Financial Reporting by Employers for Postemployment Benefits Other than Pension Plans, outlining accounting standards for governmental agencies regarding other postemployment benefits. The statement was effective for the District in fiscal year 2008-09. The statement requires governmental agencies to record and disclose the actuarially determined cost of postemployment benefits other than pensions based on the benefits expected to be earned by employees in the future, as well as those benefits the employees have already earned. Annual required contributions shall include the employer’s normal cost and a provision(s) for amortizing the total unfunded actuarial accrued liability for a period not to exceed 30 years. Detailed disclosure required by the statement is provided at Note 11. NOTE 2 - DEPOSITS AND INVESTMENTS: A. Deposits Custodial Credit Risk Custodial credit risk is the risk that in the event of a bank failure, the District’s deposits may not be returned to it. Although the District does not have a specific deposit policy for custodial risk, the California Government Code requires California banks and savings and loan associations to receive a local agencies’ deposits by pledging government securities with a value of 110% of a local agencies’ deposits. As of June 30, 2010 and 2009, respectively, $1,795,202 and $760,617 of the District’s bank balance of $2,122,877 and $1,083,181 was exposed to credit risk as follows: Uninsured and collateral held by pledging bank’s trust department not in the District’s name -23- 2010 2009 $1,795,202 $ 760,617 DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS June 30, 2010 and 2009 NOTE 2 - DEPOSITS AND INVESTMENTS: (continued) Cash in County In accordance with Education Code Section 41001, the District maintains substantially all of its cash in the Monterey County Treasury as part of the common investment pool. These pooled funds are carried at cost which approximates fair value. The fair market value of the District’s deposits in this pool as of June 30, 2010 and 2009, as provided by the pool sponsor, was $77,539,879 and $37,813,042, respectively. The County is authorized to deposit cash and invest excess funds by California Government Code Section 53648 et. seq. The county is restricted by Government Code Section 53635 pursuant to Section 53601 to invest in time deposits, U.S. government securities, state registered warrants, notes or bonds, State Treasurer’s investment pool, bankers’ acceptances, commercial paper, negotiable certificates of deposit, and repurchase or reverse repurchase agreements. The funds maintained by the County are either secured by federal depository insurance or are collateralized. Interest earned is deposited quarterly into participating funds. The investment losses were proportionately shared by all funds in the pool. The County advised the District to expect a loss of earnings in the 2008-09 fiscal year due to its investments in Lehman Brothers and Washington Mutual. The District’s proportionate share for all funds including fiduciary funds of ($1,428,904) for the 2008-09 year is reported net of interest earned in these financial statements. $274,830 was recovered and recorded to interest earned for the 2009-10 year. B. Investments The District maintains investments with the State of California Local Agency Investment Fund (LAIF) amounting to $512,508 and $498,896 as of June 30, 2010 and 2009, respectively, including amounts invested by Fiduciary Funds. Interest of $9,067 was earned during the 2008-09 fiscal year, but was not recorded. An adjustment was not made as the amount is not considered material to the financial statements. LAIF pools these funds with other governmental agencies and invests in various investment vehicles. These pooled funds approximate fair value. Regulatory oversight is provided by the State Pooled Money Investment Board and the Local Investment Advisory Board. LAIF is not subject to categorization as prescribed by GASB Statement No. 3 to indicate the level of custodial credit risk assumed by the District at year end. -24- DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS June 30, 2010 and 2009 NOTE 3 - ACCOUNTS RECEIVABLE: The accounts receivable balance consists of the following: Federal and State Miscellaneous 2010 2009 $ 7,737,663 1,915,540 $12,826,502 1,660,346 $ 9,653,203 $14,486,848 NOTE 4 - INTERFUND TRANSACTIONS: Interfund transfers consist of operating transfers from funds receiving resources to funds through which the resources are to be expended. Interfund receivables and payables result when the interfund transfer is transacted after the close of the fiscal year. Interfund activity has been eliminated in the basic financial statements, except for transactions occurring between governmental and fiduciary funds. NOTE 5 - CAPITAL ASSETS: The following provides a summary of changes in capital assets for the year ended June 30, 2010: Balance June 30, 2009 Land Site and site improvements Equipment Construction in progress Total cost $ 590,992 94,383,403 8,553,383 31,779,264 135,307,042 Additions $ Balance June 30, 2010 Retirements $ 16,014,139 259,899 23,257,668 39,531,706 $ 16,014,139 16,014,139 590,992 110,397,542 8,813,282 39,022,793 158,824,609 Less accumulated depreciation for: Site and site improvements Equipment 24,461,169 6,057,984 2,875,288 519,469 Total accumulated depreciation 30,519,153 3,394,757 Governmental capital assets, net $ 104,787,889 -25- $ 36,136,949 27,336,457 6,577,453 $ 16,014,139 33,913,910 $ 124,910,699 DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS June 30, 2010 and 2009 NOTE 5 - CAPITAL ASSETS: (continued) The following provides a summary of changes in capital assets for the year ended June 30, 2009: Balance June 30, 2008 Land Site and site improvements Equipment Construction in progress Total cost $ 590,992 89,656,392 8,044,363 16,357,218 114,648,965 Additions $ Balance June 30, 2009 Retirements $ 4,727,011 509,020 20,149,057 25,385,088 $ 4,727,011 4,727,011 590,992 94,383,403 8,553,383 31,779,264 135,307,042 Less accumulated depreciation for: Site and site improvements Equipment 22,532,902 5,621,125 1,928,267 436,859 Total accumulated depreciation 28,154,027 2,365,126 Governmental capital assets, net $ 86,494,938 $ 23,019,962 24,461,169 6,057,984 $ 4,727,011 30,519,153 $ 104,787,889 NOTE 6 - TAX REVENUE ANTICIPATION NOTES (TRANS): During the fiscal year ended June 30, 2010, the District issued $2,815,000 of Tax Revenue Anticipation Notes dated July 8, 2009 through the California Community College Financing Authority’s Tax and Revenue Anticipation Note Program (Series 2009A). The notes matured on June 30, 2010 and yielded .95% interest. The notes were sold by the District to supplement its cash flow. The funds were held in a Guaranteed Investment Contract. Repayment requirements were that $2,815,000 be deposited in June 2010, inclusive of interest. All repayment requirements were met as of June 30, 2010. The notes were considered in-substance defeased on June 30, 2010 and are not reflected as a liability in these financial statements. During the fiscal year ended June 30, 2009, the District issued $2,080,000 of Tax Revenue Anticipation Notes dated July 1, 2008 through the California School Boards Association Finance Corporation’s Cash Reserve Program (Series 2008-09). The notes matured on July 6, 2009 and yielded 1.65% interest. The notes were sold by the District to supplement its cash flow. -26- DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS June 30, 2010 and 2009 NOTE 6 - TAX REVENUE ANTICIPATION NOTES (TRANS): (continued) The funds were held in a Guaranteed Investment Contract. Repayment requirements were that $2,080,000 be deposited in July 2009, inclusive of interest. All repayment requirements were met as of June 30, 2009. The notes were considered in-substance defeased on June 30, 2009 and are not reflected as a liability in these financial statements. NOTE 7 - GENERAL OBLIGATION BONDS: On November 5, 2002, the District voters authorized the issuance and sale of general obligation bonds totaling $131,000,000. Proceeds from the sale of the bonds will be used to finance the construction, acquisition, and modernization of certain property and District facilities. On April 15, 2003, the District issued General Obligation Bonds, Election of 2002, Series A of $35,000,000 of current interest bonds. Interest ranges from 2.0% to 5.0% payable semiannually on February 1 and August 1. At June 30, 2010 and 2009 the principal balance outstanding was $2,265,000 and $2,610,000, respectively. On March 23, 2005, the District issued 2005 General Obligation Refunding Bonds of $23,500,000 of current interest bonds and $5,562,042 of capital appreciation bonds. Interest rates range from 4.50% to 5.25% payable semiannually on February 1 and August 1. At June 30, 2010 and 2009, the principal balance outstanding (including accreted interest to date) was $28,587,300 and $29,053,453, respectively. Unamortized premium costs at June 30, 2010 and 2009 were $2,823,389 and $3,055,448, respectively. Unamortized issue costs at June 30, 2010 and 2009 were $364,436 and $394,388, respectively. Premium and issuance costs are amortized over the life of the bonds as a component of interest expense on the bonds. On June 6, 2006, the District issued the General Obligation Bonds, Election 2002, Series B of $32,815,000 of current interest bonds and $2,180,518 of capital appreciation bonds. Interest ranges from 4.10% to 5.25% payable semiannually June 1 and December 1. At June 30, 2010 and 2009 the principal balance outstanding (including accreted interest to date) was $34,783,347 and $34,938,019, respectively. Unamortized premium costs at June 30, 2010 and 2009 were $1,114,635 and $1,170,600, respectively. Unamortized issue costs at June 30, 2010 and 2009 were $494,285 and $519,104, respectively. Premium and issuance costs are amortized over the life of the bonds as a component of interest expense on the bonds. -27- DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS June 30, 2010 and 2009 NOTE 7 - GENERAL OBLIGATION BONDS: (continued) On May 27, 2009, the District issued the General Obligation Bonds, Election 2002, Series C of $3,366,499 of capital appreciation bonds and $9,231,389 of convertible capital appreciation bonds. Interest ranges from 6.13% to 11.50% payable semiannually February 1 and August 1. At June 30, 2010 and 2009 the principal balance outstanding (including accreted interest to date), was $13,096,645 and $12,597,888, respectively. Unamortized premium and issue costs at June 30, 2010 and 2009 were $188,147 each and $196,295 each, respectively. Premium and issuance costs are amortized over the life of the bonds as a component of interest expense on the bonds. On August 27, 2009, the District issued the General Obligation Bonds, Election 2002, Series D of $2,516,428 of capital appreciation bonds, $32,590,041 of capital appreciation term bonds, and $13,298,610 of convertible capital appreciation bonds. Interest ranges from 6.43% to 11.50% payable semiannually February 1 and August 1. At June 30, 2010 the principal balance outstanding (including accreted interest to date) was $49,810,952. Unamortized premium and issue costs were $603,450 each. Premium and issuance costs are amortized over the life of the bonds as a component of interest expense on the bonds. Capital appreciation bonds have maturity dates for: Series B from June 1, 2008 through June 1, 2016; Series C from August 1, 2023 through August 1, 2033; Series D from August 1, 2023 through August 1, 2049 and the Refunded Bonds from August 1, 2005 through August 1, 2014. Prior to the applicable maturity date, each bond will accrete interest on the principal component. The refunding bonds were issued to advance refund a portion of the outstanding Series A general obligation bonds. $28,554,555 in refunding proceeds were placed into an irrevocable escrow account and will be used to fund the future required principal and interest payments of the refunded bonds. The amount of refunded debt to be paid from the escrow account at June 30, 2010 and 2009 for Series A is $27,240,000. The refunded portions of the bonds are considered in-substance defeased and are not recorded in the financial statements. Amounts paid to the refunded debt escrow agent, in excess of outstanding debt at the time of payment, are recorded as deferred charges on the statement of net assets and are amortized to interest expense over the life of the liability. At June 30, 2010 and 2009, unamortized deferred charges were $316,363 and $342,726, respectively. -28- DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS June 30, 2010 and 2009 NOTE 7 - GENERAL OBLIGATION BONDS: (continued) The outstanding bonded debt for Hartnell Community College District at June 30, 2010 is: Series Series A Refunding Bond Accreted Interest Series B Accreted Interest Series C Accreted Interest Series D Accreted Interest Amount of Original Issue Date of Issue Interest Rate % Maturity Date 4/15/2003 3/23/2005 2.00 - 5.00% 4.50 - 5.25% 8/1/2013 8/1/2022 6/6/2006 4.10 - 5.25% 6/1/2031 34,995,518 5/27/2009 6.13 - 11.50% 8/1/2033 12,597,888 8/27/2009 6.43 - 11.50% 8/1/2049 48,405,079 (1) $ $ 2,610,000 27,019,246 2,034,207 34,610,002 328,017 12,597,888 Interest Accreted Current Year $ $ Redeemed Current Year Outstanding June 30, 2010 $ 345,000 653,054 426,946 201,165 33,835 $ $ 1,660,000 $ 613,847 80,328 498,757 $ (1) 35,000,000 29,062,042 Issued Current Year Outstanding July 1, 2009 160,060,527 48,405,079 $ 79,199,360 $ 48,405,079 1,405,873 $ 2,598,805 2,265,000 26,366,192 2,221,108 34,408,837 374,510 12,597,888 498,757 48,405,079 1,405,873 128,543,244 The maturity date has been revised from the original date of August 1, 2027 to reflect the final maturity date on the remaining non-refunded bonds. The annual requirements to amortize all bonds payable, outstanding as of June 30, 2010, are as follows: Series A Year Ended June 30, 2011 2012 2013 2014 Principal Interest Total $ 425,000 515,000 610,000 715,000 $ 76,175 59,725 39,656 14,300 $ 501,175 574,725 649,656 729,300 $ 2,265,000 $ 189,856 $ 2,454,856 Refunding Bond Year Ended June 30, 2011 2012 2013 2014 2015 2016-2020 2021-2023 Principal $ 613,502 574,752 537,100 502,679 638,159 12,510,000 10,990,000 $ 26,366,192 Accreted Interest Component Interest $ Total 1,163,688 1,163,688 1,163,688 1,163,688 1,163,688 4,378,906 813,675 $ 526,498 625,248 722,900 822,321 1,251,841 $ $ 11,011,021 $ 3,948,808 $ 41,326,021 -29- 2,303,688 2,363,688 2,423,688 2,488,688 3,053,688 16,888,906 11,803,675 DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS June 30, 2010 and 2009 NOTE 7 - GENERAL OBLIGATION BONDS: (continued) Series B Year Ended June 30, 2011 2012 2013 2014 2015 2016-2020 2021-2025 2026-2030 2031 Principal $ 213,512 239,391 239,635 263,895 308,540 3,258,864 10,135,000 16,040,000 3,710,000 $ 34,408,837 Accreted Interest Component Interest $ 1,622,241 1,622,241 1,622,241 1,622,241 1,622,241 7,953,059 6,769,100 3,419,250 185,500 $ 26,438,114 Total $ 46,488 65,609 80,365 106,105 146,460 181,137 $ $ 626,164 $ 1,882,241 1,927,241 1,942,241 1,992,241 2,077,241 11,393,060 16,904,100 19,459,250 3,895,500 61,473,115 Series C Year Ended June 30, 2011 2012 2013 2014 2015 2016-2020 2021-2025 2026-2030 2031-2034 Principal Accreted Interest Component Interest Total $ $ $ $ 622,564 4,074,667 7,900,657 $ 12,597,888 3,122,984 6,155,931 2,041,003 $ 11,319,918 1,262,436 6,845,333 9,554,343 $ 17,662,112 $ -30- 5,007,984 17,075,931 19,496,003 41,579,918 DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS June 30, 2010 and 2009 NOTE 7 - GENERAL OBLIGATION BONDS: (continued) Series D Year Ended June 30, 2011 2012 2013 2014 2015 2016-2020 2021-2025 2026-2030 2031-2035 2036-2040 2041-2045 2046-2050 Principal $ Accreted Interest Component Interest $ 257,300 1,641,602 13,751,264 12,517,598 11,087,410 9,149,905 $ 48,405,079 $ 5,643,750 11,287,500 8,436,400 $ 25,367,650 Total $ 392,700 3,988,398 20,448,737 83,183,283 116,862,825 161,919,683 $ 386,795,626 6,293,750 16,917,500 42,636,401 95,700,881 127,950,235 171,069,588 $ 460,568,355 NOTE 8 - LONG-TERM DEBT: A schedule of changes in long-term debt for the year ended June 30, 2010 is shown below: Beginning Balance July 1, 2009 Additions Deductions Ending Balance June 30, 2010 Amount Due in One Year General obligation bond: Series A Refunding bond Refunding bond - bond premium Deferred liability on refunding Series B Series B - bond premium Series C Series C - bond premium Series D Series D - bond premium Total general obligation bonds payable Other postemployment benefits other than pension (OPEB) Early retirement incentive Total long-term debt $ 2,610,000 29,053,453 3,055,448 (342,726) 34,938,019 1,170,600 12,597,888 196,295 83,278,977 115,017 600,551 $ 83,994,545 -31- $ $ 613,847 80,328 345,000 1,080,000 232,059 (26,363) 235,000 55,965 498,757 8,148 49,810,952 615,030 51,618,914 11,580 1,941,389 17,803 $ 51,636,717 $ 1,941,389 $ 2,265,000 28,587,300 2,823,389 (316,363) 34,783,347 1,114,635 13,096,645 188,147 49,810,952 603,450 132,956,502 132,820 600,551 $ 133,689,873 $ 425,000 1,140,000 260,000 1,825,000 $ 83,335 1,908,335 DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS June 30, 2010 and 2009 NOTE 8 - LONG-TERM DEBT: (continued) A schedule of changes in long-term debt for the year ended June 30, 2009 is shown below: Beginning Balance July 1, 2008 Additions Deductions Ending Balance June 30, 2009 Amount Due in One Year General obligation bond: Series A Refunding bond Refunding bond - bond premium Deferred liability on refunding Series B Series B - bond premium Series C Series C - bond premium Total general obligation bonds payable Lease revenue bonds Early retirement incentive Other post employment benefits Total long-term debt $ 2,880,000 29,416,437 3,287,507 (369,090) 35,112,150 1,226,565 $ 85,869 12,597,888 196,974 13,542,747 71,553,569 2,330,000 $ 73,883,569 $ 662,016 600,551 115,017 $ 14,258,315 270,000 1,025,000 232,059 (26,364) 260,000 55,965 679 1,817,339 2,330,000 $ 4,147,339 $ 2,610,000 29,053,453 3,055,448 (342,726) 34,938,019 1,170,600 12,597,888 196,295 83,278,977 600,551 115,017 $ 83,994,545 $ 345,000 1,080,000 235,000 1,660,000 83,335 $ 1,743,335 NOTE 9 - EMPLOYEE RETIREMENT PLANS: Qualified employees are covered under multiple-employer defined benefit pension plans maintained by agencies of the State of California. Academic employees are members of the State Teachers’ Retirement System (STRS) and classified employees are members of the Public Employees’ Retirement System (PERS) and part-time, seasonal and temporary employees and employees not covered by STRS or PERS are members of the Public Agency Retirement System (PARS). State Teachers’ Retirement System (STRS) Plan Description The District contributes to the State Teachers’ Retirement System (STRS), a cost-sharing multiple-employer public employee retirement system defined benefit pension plan administered by STRS. The plan provides retirement, disability and survivor benefits to beneficiaries. Benefit provisions are established by State statutes, as legislatively amended, within the State Teachers’ Retirement Law. STRS issues a separate comprehensive annual financial report that includes financial statements and required supplementary information. Copies of the STRS annual financial report may be obtained from STRS, 7667 Folsom Boulevard, Sacramento, CA 95826. -32- DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS June 30, 2010 and 2009 NOTE 9 - EMPLOYEE RETIREMENT PLANS: (continued) Funding Policy Active plan members are required to contribute 8.0% of their salary and the District is required to contribute an actuarially determined rate. The actuarial methods and assumptions used for determining the rate are those adopted by the STRS Teachers’ Retirement Board. The required employer contribution rate for fiscal years 2009-10 and 2008-09 was 8.25% of annual payroll. The contribution requirements of the plan members are established and may be amended by State statute. Public Employees’ Retirement System (PERS) Plan Description The District contributes to the School Employer Pool under the California Public Employees’ Retirement System (CalPERS), a cost-sharing multiple-employer public employee retirement system defined benefit pension plan administered by CalPERS. The plan provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. Benefit provisions are established by State statutes, as legislatively amended, within the Public Employees’ Retirement Law. CalPERS issues a separate comprehensive annual financial report that includes required supplementary information. Copies of the CalPERS’ annual financial report may be obtained from the CalPERS Executive Office, 400 P Street, Sacramento, CA 95814. Funding Policy Active plan members are required to contribute 7.0% of their salary; currently the District contributes the employees’ portion for California School Employees Association and Local 39 bargaining unit members. The District is required to contribute an actuarially determined rate. The actuarial methods and assumptions used for determining the rate are those adopted by the CalPERS Board of Administration. The required employer contribution was 9.709% of annual payroll for fiscal year 2009-10 and 9.428% of annual payroll for fiscal year 2008-09. The contribution requirements of the plan members are established and may be amended by State statute. -33- DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS June 30, 2010 and 2009 NOTE 9 - EMPLOYEE RETIREMENT PLANS: (continued) Contributions to STRS and PERS The District’s contributions to STRS and PERS for each of the last three fiscal years are as follows: Year Ended June 30, 2008 2009 2010 STRS Required Percent Contribution Contributed $1,060,052 934,307 836,813 100% 100% 100% PERS Required Percent Contribution Contributed $1,287,360 1,033,971 917,282 100% 100% 100% NOTE 10 - EARLY RETIREMENT INCENTIVE: On April 14, 2009, the Board of Trustees adopted a resolution for the implementation of an Early Retirement Incentive for full-time faculty. A total of seven full-time faculty are participating. The District will pay benefits totaling $600,551. The first payment of $83,335 is due during the 2010-11 fiscal year with subsequent payment amounts varying through 2017-18. The total remaining liability has been reflected in these financial statements. The net savings for the life of the plan is estimated at $945,000. -34- DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS June 30, 2010 and 2009 NOTE 11 - POSTEMPLOYMENT HEALTH CARE BENEFITS: Plan Description The District administers a single-employer defined benefit healthcare plan (the Retiree Health Plan). The District provides medical, dental, and vision insurance coverage, as prescribed in the various employee union contracts, to retirees meeting plan eligibility requirements. Eligible employees retiring from the District may become eligible for these benefits when the requirements are met. The eligibility requirements for employees who are members of California School Employees Association or International Union of Operating Engineers Stationary Local Number 39 are a minimum age of 60 and have a minimum of ten years of continuous service with the District. These employees receive one year of benefits for each two years with the District not to exceed five years. Additional age and service criteria may be required. The eligibility requirement for members of Hartnell College Faculty Association is a minimum age of 58 with ten years of full-time service. These employees receive one year of benefits for each two years with the District not to exceed seven years. Additional age and service criteria may be required. The eligibility requirement for managers, supervisors, and confidential employees are: to be of eligible age to retire from STRS or PERS, whichever is appropriate and have five years of fulltime employment with the District. Benefits will be granted for a maximum of ten years. The District-paid health benefits for all retirees terminates at age 65. The Retiree Health Plan does not issue a separate financial report. Funding Policy The District currently finances benefits on a pay-as-you-go basis. The District contributes 100 percent of the cost of current year premiums for eligible retired plan members and their dependents as applicable. The District contributed $527,694 to the plan for fiscal year ended 2010 and $420,215 for fiscal year ended 2009. -35- DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS June 30, 2010 and 2009 NOTE 11 - POSTEMPLOYMENT HEALTH CARE BENEFITS: (continued) Annual OPEB Cost and Net OPEB Obligation The District’s annual other post employment benefit (OPEB) cost (expense) is calculated based on the annual required contribution of the employer (ARC), an amount actuarially determined in accordance with the parameters of GASB Statement 45. The ARC represents a level of funding that, if paid on an ongoing basis, is projected to cover normal cost each year and amortize any unfunded actuarial liabilities (or funding excess) over a period not to exceed thirty years. The following table shows the components of the District’s annual OPEB cost for the year, the amount actually contributed, and changes in the OPEB obligation: 2010 Annual required contribution (ARC) $ Interest on net OPEB obligation Adjustment to annual required contribution Annual OPEB cost (expense) Contributions made Change in net OPEB obligation (1) Net OPEB obligation – Beginning of Year Net OPEB obligation - End of Year $ 535,232 5,751 - (5,095) - 545,497 535,232 (527,694) (420,215) 17,803 115,017 115,017 $ (1) 544,841 2009 132,820 $ 115,017 GASB Statement No. 45 provides for prospective implementation, therefore the beginning net OPEB obligation is set at zero as of the beginning of the initial year. -36- DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS June 30, 2010 and 2009 NOTE 11 - POSTEMPLOYMENT HEALTH CARE BENEFITS: (continued) The District’s annual OPEB cost for the year, the percentage of annual OPEB cost contributed, and the net OPEB obligation for the fiscal year was as follows: Fiscal Year Ended 6/30/2009 6/30/2010 Percentage of Annual OPEB Cost Contributed Annual OPEB Cost $ $ 535,232 545,497 78.5% 96.7% Net OPEB Obligation $ $ 115,017 132,820 Fiscal year 2008-09 was the year of implementation of GASB Statement No. 45 and the District elected to implement prospectively. In future years, three-year trend information will be presented. Funding Status and Funding Progress As of June 1, 2009, the most recent actuarial valuation date, the plan was unfunded. The actuarial accrued liability for benefits as well as the unfunded actuarial accrued liability (UAAL) was $4,852,364. The covered payroll (annual payroll of active employees covered by the plan) was $16,251,014, and the ratio of the UAAL to the covered payroll was 29.86%. Although the plan has no segregated assets, the District does maintain a retiree benefits fund to designate resources for retiree health care costs. The fund’s designated balance was $3,398,886 and $1,240,012 at June 30, 2010 and 2009, respectively. Actuarial valuations of an ongoing benefit plan involve estimates of the value of reported amounts and assumptions about the probability of occurrence of events far into the future. Examples include assumptions about future employment, mortality, and the healthcare cost trend. Amounts determined regarding the funded status of the plan and the annual required contributions of the employer are subject to continual revision as actual results are compared with past expectations and new estimates are made about the future. The schedule of funding progress, presented as required supplementary information following the notes to the financial statements, presents multiyear trend information about whether the actuarial value of plan assets, if any, is increasing or decreasing over time relative to the actuarial accrued liabilities for benefits. -37- DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS June 30, 2010 and 2009 NOTE 11 - POSTEMPLOYMENT HEALTH CARE BENEFITS: (continued) Actuarial Methods and Assumptions Projections of benefits for financial reporting purposes are based on the substantive plan (the plan as understood by the employer and the plan members) and include the types of benefits provided at the time of each valuation and the historical pattern of sharing of benefit costs between the employer and plan members to that point. The actuarial methods and assumptions used include techniques that are designed to reduce the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets, if any, consistent with the long-term perspective of the calculations. In the June 1, 2009 actuarial valuation, the entry age normal actuarial cost method was used. The actuarial assumptions included a 5.0 percent investment rate of return (net of administrative expenses) which is a blended rate of the expected long-term investment returns on plan assets and on the employers own investments calculated based on the funded level of the plan at the valuation date, and an annual healthcare cost trend rate of 4 percent. The UAAL is being amortized as a level percentage of projected payroll over 30 years. The District will need to make an election with respect to whether to use an “open” or “closed” amortization period in future valuations. NOTE 12 - JOINT VENTURES (JOINT POWERS AGREEMENTS): The District participates in seven joint Powers Agreements (JPA) entities, Monterey County Schools Insurance Group, Bay Area Community College Districts, School Association for Excess Risk (SAFER), the Statewide Association of Community Colleges (SWACC), Protected Insurance Program for Schools (PIPS), South Bay Regional Public Safety Training Consortium and the Monterey County Delinquent Tax Finance Authority (the Authority). The relationship between the District and the JPAs is such that the JPAs are not component units of the District for financial reporting purposes. Monterey County Schools Insurance Group administers medical, dental and vision benefit programs for its member districts. -38- DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS June 30, 2010 and 2009 NOTE 12 - JOINT VENTURES (JOINT POWERS AGREEMENTS): (continued) Bay Area Community College Districts administers a cooperative insurance program for member districts. Under this program, member districts are insured under certain liability and property insurance policies purchased by the Agency. The Agency is governed by a board comprised of one representative for each member district. Coverages under current policies provide for the member districts to pay for the first $10,000 and the Agency to pay for the next $240,000 on each property claim and the next $90,000 for each liability claim. Claims over the $250,000 and $100,000 self-insured retention are covered by excess insurance pools. SAFER provides excess property and liability program protection for its member agencies. SAFER is governed by a board which is comprised of one or two members, determined based on ADA (Average Daily Attendance) or FTES, for each participating district. Each member’s contribution is determined based on its respective total insurable values, loss history, unusual exposures and other information relative to providing coverage. The base contribution rate may be subject to modification based on each member’s claim experience. SWACC provides liability and property insurance for approximately nineteen community colleges. SWACC is governed by a Board comprised of a member of each of the participating districts. The board controls the operations of SWACC, including selection of management and approval of members beyond their representation on the Board. Each member shares surpluses and deficits proportionately to its participation in SWACC. PIPS provides workers’ compensation insurance protection to its membership for public schools and community colleges throughout California. The South Bay Regional Public Safety Training Consortium provides education and training to public safety students of participating community colleges. The Authority purchases delinquent ad valorem property taxes from school agencies in Monterey County to receive additional unrestricted revenues through financing of property tax delinquencies. The Authority is a pass through entity and financial information is not available. For the fiscal year 2009-10, the District received $78,245 in local revenue from the Authority. -39- DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS June 30, 2010 and 2009 NOTE 12 - JOINT VENTURES (JOINT POWERS AGREEMENTS): (continued) Each JPA is governed by a board consisting of a representative from each member district. Each governing board controls the operations of its JPA independent of any influence by the Hartnell Community College District beyond the District’s representation on the governing boards. Each JPA is independently accountable for its fiscal matters. All JPAs maintain their own accounting records. Budgets are not subject to any approval other than that of the respective governing boards. Member districts share surpluses and deficits proportionately to their participation in the JPA. The relationships between the Hartnell Community College District and the JPAs are such that the JPA is not a component unit of the District for financial reporting purposes. Separate financial statements for each JPA may be obtained from the respective entity. Condensed financial information for the most current information available is as follows: Bay Area CCD 6/30/2009 (Audited) MCSIG 6/30/2009 (Audited) SBRPSTC 6/30/2010 (Audited) 140,632 10,239 $ 6,807,484 1,766,983 $ 21,349,807 14,484,605 $ 4,394,369 1,486,800 130,393 $ 5,040,501 $ 6,865,202 $ 2,907,569 5,305,101 596,363 $ 36,307,747 36,181,611 $ 3,496,556 4,287,922 $ 75,456,028 77,341,178 $ 7,853,185 8,881,152 4,708,738 $ $ (791,366) $ (1,885,150) $ (1,027,967) SWACC 6/30/2010 (Unaudited) PIPS 6/30/2010 (Audited) Total assets Total liabilities $ 46,019,292 21,417,925 $ 117,734,937 69,742,511 $ Net assets $ 24,601,367 $ 47,992,426 $ Total revenues Total expenditures $ 11,118,079 12,547,315 $ Change in net assets $ (1,429,236) $ -40- SAFER 6/30/2009 (Audited) 126,136 DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS June 30, 2010 and 2009 NOTE 13 - RISK MANAGEMENT: The District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; natural disasters; and medical claims. The District contracts with the Statewide Association of Community Colleges (SWACC), School Association of Excess Risk (SAFER) and Bay Area Community College District Joint Powers Authority for property and liability insurance coverage. Settled claims have not exceeded the coverage provided by the JPA in any of the past three fiscal years. The District participated in the Protected Insurance Program for Schools (PIPS), an insurance purchasing pool. The intent of PIPS is to achieve the benefit of a reduced premium for the District by virtue of its grouping and representation with other participants in the PIPS. The workers’ compensation experience of the participating districts is calculated as one experience, and a common premium rate is applied to all districts in the PIPS. Each participant pays its workers’ compensation premium based on its individual rate. Total savings are then calculated and each participant’s individual performance is compared to the overall saving. A participant will then either receive money from or be required to contribute to the “equity-pooling fund.” This “equity pooling” arrangement ensures that each participant shares equally in the overall performance of the PIPS. Participation in the PIPS is limited to community college districts that can meet the PIPS’s selection criteria. NOTE 14 - RESTATEMENTS: Beginning Net Assets – Fiscal Year Ended June 30, 2009 Beginning net assets on the statement revenues, expenses and changes in net assets has been restated to reflect the: Capital assets, net of accumulated depreciation not recorded in previous years for the King City Campus Center Building -41- $ 2,327,754 DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS June 30, 2010 and 2009 NOTE 15 - COMMITMENTS AND CONTINGENCIES: A. Litigation The District is involved in various claims and legal actions arising in the ordinary course of business. In the opinion of management, the ultimate disposition of these matters will not have a material adverse effect on the District’s financial statements. B. State and Federal Allowances, Awards and Grants The District has received state and Federal funds for specific purposes that are subject to review and audit by the grantor agencies. Although such audits could generate expenditure disallowances under terms of the grants, it is believed that any required reimbursement will not be material. C. Purchase Commitments As of June 30, 2010 and 2009, the District was committed under various capital expenditure purchase agreements for construction and modernization projects totaling $26,000,000 and $31,065,000, respectively. Projects will be funded through bond proceeds and state funds. -42- DRAFT for Discussion Purposes Only REQUIRED SUPPLEMENTARY INFORMATION DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT SCHEDULE OF POST EMPLOYMENT HEALTHCARE BENEFITS FUNDING PROGRESS For the Fiscal Year Ended June 30, 2010 Actuarial Valuation Date 6/1/2009 Actuarial Value of Assets (AVA) $ - Actuarial Accrued Liability (Unit Cost Method) (AAL) Unfunded Actuarial Accrued Liability (UAAL) $ $ 4,852,364 4,852,364 Funding Ratio 0.0% Covered Payroll $ UAAL as a Percentage of Covered Payroll 16,251,014 Note: Fiscal year 2008-09 was the year of implementation of GASB Statement No. 45 and the District elected to implement prospectively, therefore, prior year comparative data is not available. In future years, three year trend actuarial information will be presented. Although the plan has no segregated assets, the District does maintain a retiree benefits fund to designate resources for retiree health care costs. At June 30, 2010, the funds designated balance was $3,398,886. See the accompanying notes to the required supplementary information. -43- 29.86% DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT NOTES TO REQUIRED SUPPLEMENTARY INFORMATION For the Fiscal Year Ended June 30, 2010 NOTE 1 - PURPOSE OF SCHEDULES: Schedule of Post Employment Healthcare Benefits Funding Progress This schedule is prepared to show information for the most recent actuarial valuation and in future years, the information from the three most recent actuarial valuations in accordance with Statement No. 45 of the Governmental Accounting Standards Board, Accounting and Financial Reporting by Employers for Postemployment Benefits Other Than Pensions. The schedule is intended to show trends about the funding progress of the District’s actuarially determined liability for post employment benefits other than pensions. -44- DRAFT for Discussion Purposes Only SUPPLEMENTARY INFORMATION DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT HISTORY AND ORGANIZATION June 30, 2010 The Hartnell Community College District was established in 1949 and serves communities in both Monterey and San Benito counties. The District currently operates one college. BOARD OF TRUSTEES Member Office Term Expiration Patricia Donohue President November 2011 Kevin Healy Vice President November 2011 William Freeman Member November 2011 Elia Gonzalez-Castro Member November 2011 Erica Padilla-Chavez Member November 2013 Candi DePauw Member November 2013 Ray Montemayor Member November 2013 Shaundra Taylor Student Trustee, Hartnell College June 2011 DISTRICT EXECUTIVE OFFICERS Dr. Phoebe K. Helm Superintendent/President Dr. Suzanne Flannigan Vice President for Academic Affairs and Accreditation Mr. Gary Hughes Associate Vice President for Administrative Information Systems and Library Services Mr. Kent Stephens Vice President for Support Operations Ms. Terri Pyer Associate Vice President for Human Resources Dr. Gregory Peterson Vice President for Student Affairs Ms. Beverly Grova Vice President for Advancement -45- DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Fiscal Year Ended June 30, 2010 Federal Grantor/Pass-Through Grantor/Program or Cluster Title U. S. DEPARTMENT OF EDUCATION Direct: Financial Aid Cluster: PELL Grant Financial Aid Administration Allowance Academic Competitiveness Grant Federal Work Study American Recovery and Reinvestment Act: Federal Work Study Supplemental Educational Opportunity Grants (S.E.O.G.) Total Financial Aid Cluster College Cost Reduction and Access Act - Math & Science Child Care Access Grant GEAR UP (East Salinas) Title V - STEM Title V - Gavilan Student Support Services Program Migrant Ed - High School Equivalency Program CFDA Number Pass-Through Entity Identifying Number 84.063 84.000 84.375 84.033 84.033 84.007 N/A N/A N/A N/A N/A N/A 84.031C 84.335A 84.334A 84.031S 84.031S 84.042A 84.141N N/A N/A N/A N/A N/A N/A N/A Total direct from U.S. Department of Education Program Expenditures $ 7,772,910 12,110 101,228 139,176 27,722 118,335 8,171,481 926,624 13,665 723,380 346,828 726,531 271,526 328,109 11,508,144 Passed through from California Community Colleges Chancellor's Office Carl D. Perkins Career and Technical Education (CTE) Act CTE - Title I, Part C CTE - Title II, Tech Prep American Recovery and Reinvestment Act: State Fiscal Stabilization Fund 84.048 84.243 84.394 07-C01-021 N/A N/A 262,217 67,750 218,747 Passed through from the California State Department of Rehabilitation Workability III Department of Rehabilitation 84.126A 26014 201,190 Passed through from the Foundation of California State University, Monterey Bay College Cost Reduction and Access Act - Math & Science 84.031C 5024701A-081120-S-A 70,904 Total passed through from U.S. Department of Education 820,808 DEPARTMENT OF HEALTH AND HUMAN SERVICES Passed through from the University of California, Santa Cruz National Institute of Health 93.375 S0180631 13,476 Passed through from California Community Colleges Chancellor's Office Temporary Assistance for Needy Families (TANF) American Recovery and Reinvestment Act: Emergency Contingency Fund for Temporary Assistance for Needy Familieies (TANF) Foster Care - Title IV-E 93.558 N/A 54,339 93.714 93.658 NA N/A 15,000 147,632 Passed through from the County of Monterey, Department of Social and Employee Services Foster Care - Title IV-E (DSES) 93.658 N/A 402,239 Passed through from Yosemite Community College District Child Development Training Consortium 93.575 N/A 10,029 Total passed through from Department of Health and Human Services See the accompanying notes to the supplementary information. -46- 642,715 DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS For the Fiscal Year Ended June 30, 2010 Federal Grantor/Pass-Through Grantor/Program or Cluster Title NATIONAL SCIENCE FOUNDATION Direct: Improving Student Success in Computer Science, Engineering, and Mathematics Improving Women and Latino Enrollment in STEM Program CFDA Number Pass-Through Entity Identifying Number 47.076 47.076 N/A N/A Program Expenditures 177,735 23,750 Total direct from National Science Foundation 201,485 Passed through from the University of California, Santa Cruz Transforming Undergraduate Laboratory Experience 47.076 DUE-0816754 2,481 47.076 5027501A-120409-C-A 35,690 Passed through from the University Corporation at California State University, Monterey Bay Monterey Bay Advanced Networking Education Consortium Total passed through from the National Science Foundation 38,171 CORPORATION FOR NATIONAL AND COMMUNITY SERVICE Direct: National Service Award for Scholarships 94.006 N/A 44,125 Total direct from the Corporation for National and Community Service U.S. DEPARTMENT OF AGRICULTURE Passed through from the California Department of Education Child Care Food Program 44,125 10.558 2850-6A 8,479 Total passed through from the U.S. Department of Agriculture 8,479 U.S. DEPARTMENT OF LABOR Passed through from the Monterey County Office of Education Agricultural and Industrial Technology Training Program Workforce Investment Grant Passed through from the Employment Development Department (EDD) American Recovery and Reinvestment Act: Workforce Investment Act: Green Building and Clean Energy Project 17.000 17.259 N/A N/A 132,889 5,655 17.258 N/A 145,737 Total passed through from the U.S Department of Labor 284,281 Department of Energy Passed through from the Employment Development Department (EDD) American Recovery and Reinvestment Act: Green Building and Clean Energy Project 81.041 N/A 222,999 Total passed through from the Department of Energy 222,999 Total Federal Awards $ 13,771,207 Student Financial Aid Loan Programs: Loans Outstanding Hartnell Community College District had the following loan balance outstanding as of 6/30/10: Stafford Loans N/A: Pass-through entity identifying number is either not available or not applicable See the accompanying notes to the supplementary information. -47- $ 271,029 DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT SCHEDULE OF EXPENDITURES OF STATE AWARDS For the year ended June 30, 2010 Cash Received Program GENERAL FUND Block Grant Basic Skills California State Grants (CAL Grants) CalWorks Career Technical Education Equipment for Nursing Career Technical Education Growth & Enrollment Retention for Nursing Career Technical Regional Occupation Partner #1 Career Technical Regional Occupation Partner #2 Career Technical Regional Occupation Partner #3 Career Technical Education Linking After School Employment Cooperative Agency Resource Education (CARE) Disabled Students Programs and Services (DSP&S) Entrepreneurship Career Pathways Projects (YEP) Extended Opportunity Program and Services (EOPS) Faculty and Staff Development Faculty and Staff Diversity (Equal Employment Opportunity) First 5 Contract Foster & Kinship Care Education (FKCE) 25% Industry Driven Regional Collaborative Food Safety Tech Industry Driven Regional Collaborative Sustainable Construction Mathematics-Engineering-Science-Achievement (MESA) Matriculation Probation Contract - FKCE Probation Contract Small Business Development Center (SBDC) Student Financial Aid Administration (SFAA) Telecommunications and Technology Infrastructure Program (TTIP) Transfer and Articulation (California Articulation Number Grant) Youth Empowerment Strategies for Success-Independent Living Program (YESS-ILP) Subtotal CHILD DEVELOPMENT Child Care Tax Bailout to Community College Districts State Instructional Materials and Supplies Contract State Preschool Subtotal Total $ 553,941 145,172 434,459 183,213 18,871 195,794 205,239 361,090 310,000 284,341 111,394 417,551 49,768 544,473 12,132 48,461 Program Revenues Accounts Deferred Receivable Revenue $ 1,241,611 364,837 69,154 451,411 183,213 18,871 155,733 205,239 88,510 6,299 225,368 102,321 320,380 49,768 540,400 3,987 6,556 9,895 49,211 101,520 103,215 50,568 236,803 25,775 31,300 74,393 301,435 7,001 519 22,482 3,806,164 164,568 164,568 $ 1,406,179 35,537 254 492,362 528,153 $ 4,334,317 40,061 19,838 272,580 303,701 78,811 9,073 97,171 4,073 8,145 41,905 9,895 12,418 9,524 17,306 12,642 75,099 41,191 31,300 11,903 62,490 306,114 7,001 519 4,679 22,482 164,260 4,883,515 $ 92,508 92,508 256,768 See the accompanying notes to the supplementary information. -48- 189,104 76,018 16,952 36,793 91,996 161,008 37,926 277,994 25,775 35,537 254 564,422 600,213 $ 5,483,728 $ Total Revenue $ Program Expenditures $ $ 364,837 69,154 451,411 183,213 18,871 155,733 205,239 88,510 6,299 225,368 102,321 320,380 49,768 540,400 3,987 6,556 9,895 49,211 101,520 103,215 50,568 236,803 25,775 31,300 74,393 301,435 7,001 519 22,482 3,806,164 35,537 254 492,362 528,153 4,334,317 DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT SCHEDULE OF WORKLOAD MEASURES FOR STATE GENERAL APPORTIONMENT ANNUAL (ACTUAL) ATTENDANCE For the Fiscal Year Ended June 30, 2010 Revised Reported Data Categories A. Summer Intersession (Summer 2009 only) 1 1. Noncredit 2. Credit B. Summer Intersession (Summer 2010 - Prior to July 1, 2010) D. Total FTES 3.38 842.17 1.53 1.53 4,697.34 426.33 4,697.34 426.33 35.34 940.04 35.34 940.04 298.52 127.99 - 298.52 127.99 - 7,372.64 Supplemental Information (subset of above information) E. In-Service Training Courses (FTES) 602.14 H. Basic Skills courses and Immigrant Education 1 (a) Noncredit (b) Credit 13.50 470.13 CCFS 320 Addendum CDCP Noncredit FTES 1.62 Centers FTES 1 (a) Noncredit (b) Credit 1 9.25 432.74 Including Career Development and College Preparation (CDCP) FTEs See the accompanying notes to the supplementary information. -49- Audited Data 3.38 842.17 1 1. Noncredit 2. Credit C. Primary Terms (Exclusive of Summer Intersession) 1. Census Procedure Courses (a) Weekly Census Contact Hours (b) Daily Census Contact Hours 2. Actual Hours of Attendance Procedure Courses 1 (a) Noncredit (b) Credit 3. Independent Study/Work Experience (a) Weekly Census Contact Hours (b) Daily Census Contact Hours (c) Noncredit Independent Study/Distance Education Courses Audit Adjustments - 7,372.64 DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT RECONCILIATION OF ANNUAL FINANCIAL AND BUDGET REPORT WITH AUDITED FUND BALANCES For the Fiscal Year Ended June 30, 2010 The audit resulted in no adjustment to the fund balances reported on the June 30, 2010 Annual Financial and Budget Report (CCFS-311) based upon governmental accounting principles. The financial data for the District’s County of Monterey School District’s Debt Service Fund is a component part of these financial statements and is not reported in the District’s CCFS-311 series. Additional entries were made to comply with the GASB 34/35 reporting requirements. These entries are not considered audit adjustments for purposes of this reconciliation. See the accompanying notes to the supplementary information. -50- DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT SCHEDULE OF FINANCIAL TRENDS AND ANALYSIS For the Fiscal Year Ended June 30, (Budget) 2011 Amount % 2010 Amount 2009 % Amount % 13,629 15,217,146 22,603,328 - 0.04 40.87 60.71 101.62 2008 Amount % 12,464 14,861,596 21,783,173 743 0.03 40.82 59.82 0.00 36,657,976 100.67 UNRESTRICTED GENERAL FUND: Revenue Federal State County and Local Other Financing sources $ Total Revenue Expenditures Academic Salaries Classified Salaries Employee Benefits Supplies and Materials Other Operating Expenses and Services Capital Outlay Other Uses 17,000 15,159,366 19,517,854 - 0.05 43.69 56.26 - 34,694,220 100.00 12,231,609 7,182,752 7,028,058 510,450 8,001,894 209,457 (470,000) Total Expenditures 34,694,220 $ 35.26 20.70 20.26 1.47 23.06 0.60 (1.35) 100.00 17,483 15,925,613 20,715,920 100,000 0.05 44.55 57.95 0.28 $ 36,759,016 102.83 37,834,103 12,502,786 6,117,644 6,289,008 385,594 3,634,696 177,680 6,642,836 34.97 17.11 17.59 1.08 10.17 0.50 18.58 13,700,149 7,249,762 7,328,482 346,252 8,881,502 111,236 (386,093) 35,750,244 100.00 37,231,290 $ 36.80 19.47 19.68 0.93 23.86 0.30 (1.04) 13,328,254 7,433,292 7,165,075 495,968 8,001,335 486,930 (498,550) 100.00 36,412,304 Restatement Change in Fund Balance $ - Ending Fund Balance $ 4,558,291 - $ 1,008,772 2.83 $ 602,813 1.62 $ 13.14 $ 4,558,291 12.75 $ 3,549,519 9.53 $ (2.51) (667,792) (1.84) 2,946,706 6,819 7,373 7,624 6,586 Full-Time Equivalent Students (Funded) 6,819 6,819 7,083 6,586 $ 136,693,402 $ 133,689,873 $ 83,994,545 $ 73,883,569 IMPORTANT NOTES: The California Community College Chancellor's Office has provided guidelines that recommend an ending fund balance of 3% of expenditures as a minimum, with a prudent ending fund balance being 5% of expenditures. Full-time Equivalent Students (FTES) includes resident and nonresident factored FTES. All percentages are of total expenditures. The 2011 Budget was adopted by the Board of Trustees on October 5, 2010. Factored FTES represent actual FTES as reported on page 49. Funded FTES represent the FTES used by the California Community College Chancellor's Office to determine apportionment funding. See the accompanying notes to the supplementary information. -51- 100.00 (913,464) Full-Time Equivalent Students (Factored) Total Long-Term Debt 36.61 20.41 19.68 1.36 21.97 1.34 (1.37) 8.09 DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT NOTES TO SUPPLEMENTARY INFORMATION For the Fiscal Year Ended June 30, 2010 NOTE 1 - PURPOSE OF SCHEDULES: A. Schedules of Expenditures of Federal Awards and State Financial Assistance The audit of the Hartnell Community College District for the year ended June 30, 2010 was conducted in accordance with OMB Circular A-133, which requires a disclosure of the financial activities of all federally funded programs. To comply with A-133 and state requirements, the Schedule of Expenditures of Federal Awards and the Schedule of State Financial Assistance was prepared for the Hartnell Community College District on the modified accrual basis of accounting. Subrecipients Of the Federal expenditures presented in the Schedule of Federal Awards, the District provided Federal awards to subrecipients as follows: Federal Grantor/Pass-Through Grantor/Program CFDA Number Amount Provided to Subrecipients U.S. Department of Education GEAR-UP - Salinas Union High School District Title V - Gavilan College 84.334A 84.031S U.S. Department of Labor American Recovery and Reinvestment Act: Workforce Investment Act: Green Building and Clean Energy Project - Cabrillo College 17.258 52,943 U.S. Department of Energy American Recovery and Reinvestment Act: Green Building and Clean Energy Project - Cabrillo College 81.041 81,011 $ $ B. 594,210 337,779 1,065,943 Schedule of Workload Measures for State General Apportionment The Schedule of Workload Measures for State General Apportionment represents the basis of apportionment of the Hartnell Community College District's annual source of funding. C. Reconciliation of Annual Financial and Budget Report with Audited Fund Balances This schedule reports any audit adjustments made to the fund balances of all funds as reported on the Form CCFS-311. D. Schedule of General Fund Financial Trends and Analysis This report is prepared to show financial trends of the Unrestricted General Fund over the past three fiscal years as well as the current year budget. This schedule is intended to identify if the District faces potential fiscal problems and if they have met the recommended available reserve percentages. -52- DRAFT for Discussion Purposes Only OTHER INDEPENDENT AUDITORS’ REPORTS DRAFT for Discussion Purposes Only REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS The Board of Trustees Hartnell Community College District 411 Central Avenue Salinas, California 93901 We have audited the basic financial statements of Hartnell Community College District (the District) as of and for the year ended June 30, 2010 which collectively comprise the District’s basic financial statements, and have issued our report thereon dated November 17, 2010. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Internal Control Over Financial Reporting In planning and performing our audit, we considered Hartnell Community College District’s internal control over financial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Hartnell Community College District’s internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of Hartnell Community College District’s internal control over financial reporting. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. -53- DRAFT for Discussion Purposes Only REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Our consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over financial reporting that might be deficiencies, significant deficiencies, or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. However, we identified a certain deficiency in internal control over financial reporting, described in the accompanying schedule of findings and questioned costs as item 10-1 that we consider to be a significant deficiency in internal control over financial reporting. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Compliance and Other Matters As part of obtaining reasonable assurance about whether Hartnell Community College District’s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed an instance of noncompliance or other matters that is required to be reported under Government Auditing Standards and which is described in the accompanying schedule of findings and questioned costs as item 10-2. Hartnell Community College District’s responses to the findings identified in our audit are described in the accompanying schedule of findings and questioned costs. We did not audit the District’s responses and, accordingly, we express no opinion on them. This report is intended solely for the information and use of management, the audit committee, Board of Trustees, the California Department of Finance, the State Chancellor’s Office and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. VICENTI, LLOYD & STUTZMAN LLP November 17, 2010 -54- DRAFT for Discussion Purposes Only INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 The Board of Trustees Hartnell Community College District 411 Central Avenue Salinas, California 93901 Compliance We have audited the compliance of Hartnell Community College District (the District) with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that are applicable to each of its major federal programs for the year ended June 30, 2010. The District’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major federal programs is the responsibility of the District’s management. Our responsibility is to express an opinion on the District’s compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the District’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of the District's compliance with those requirements. -55- DRAFT for Discussion Purposes Only INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 In our opinion, the District complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs for the year ended June 30, 2010. Internal Control Over Compliance The management of the District is responsible for establishing and maintaining effective internal control over compliance with requirements of laws, regulations, contracts and grants applicable to federal programs. In planning and performing our audit, we considered the District’s internal control over compliance with requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance, and to test and report on internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the District’s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees in the normal course of performing their assigned functions to prevent or detect and correct noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies in internal control over compliance such that there is a reasonable possibility, that material noncompliance with a type of compliance requirement of a federal program will not be prevented or detected and corrected on a timely basis. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. This report is intended solely for the information and use of management, the audit committee, Board of Trustees, the California Department of Finance, the State Chancellor’s Office and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. VICENTI, LLOYD & STUTZMAN LLP November 17, 2010 -56- DRAFT for Discussion Purposes Only REPORT ON STATE COMPLIANCE The Board of Trustees Hartnell Community College District 411 Central Avenue Salinas, California 93901 We have audited the basic financial statements of Hartnell Community College District, as of and for the year ended June 30, 2010, and have issued our report thereon dated November 17, 2010. Our audit was made in accordance with auditing standards generally accepted in the United States of America, and the standards for financial and compliance audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. An audit includes examining, on a test basis, evidence about the District’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Our audit does not provide a legal determination of the District’s compliance with those requirements. In connection with our audit referred to above, we selected and tested transactions and records to determine the District’s compliance with the following state laws and regulations in accordance with the Chancellor’s Office’s California Community Colleges Contracted District Audit Manual (CDAM). Management is responsible for the District’s compliance with those requirements. Our responsibility is to express an opinion on the District’s compliance based on our examination: Whether the District's salaries of classroom instructors equal or exceed 50 percent of the District's current expense of education in accordance with Section 84362 of the Education Code. Whether the District has the appropriate documentation to support the FTES, if any, that are claimed for instructional service agreements/contracts. Whether the District has the ability to support timely accurate and complete information for workload measures used in the calculation of State General Apportionment. -57- DRAFT for Discussion Purposes Only REPORT ON STATE COMPLIANCE Whether the District has acted to ensure that the residency of each student is properly classified and that only the attendance of California residents is claimed for apportionment purposes. Whether the District claimed for apportionment purposes only the attendance of students actively enrolled in a course section as of the census date. Whether District has complied with all requirements necessary to claim FTES for the attendance of concurrently enrolled K-12 pupils. For programs not impacted by the provisions of Education Code Section 84043, whether the District had local funds to support at least 75 percent of the credit matriculation activities and that all matriculation expenditures are consistent with the District's State approved matriculation plan. For programs impacted by the provisions of Education Code Section 84043, whether the District held a regularly scheduled public hearing before funds were redirected and whether the funds were redirected among designated programs. Whether the Gann Limit Calculation was properly calculated and supported by adequate documentation. Whether the District is reporting the total amount that students should have paid for enrollment fees for the purpose of determining the District’s share of annual apportionment. Whether the District expended CalWORKS program State and TANF funds to provide specialized student support services, curriculum development, or instruction to eligible CalWORKS students. Whether the District spent an amount equal to or greater than the amount provided by the State for scheduled maintenance and special repairs. Funds provided by the State must be to supplement, not supplant, District scheduled maintenance funds. The amount expended for plant maintenance and operations during the base year of 1995-96 was $1,998,725. Whether all District courses that qualify for State apportionment are open to enrollment by the general public unless specifically exempted by statute. Whether the District has adopted policies or regulations regarding the authority of the District to require students to provide various types of instructional materials and whether the District has advised students of the exemptions from payment of health fees and established a process to ensure that students may claim the exemptions. -58- DRAFT for Discussion Purposes Only REPORT ON STATE COMPLIANCE In our opinion, except for finding 10-2 described in the accompanying schedule of findings and questioned costs Hartnell Community College District complied with the compliance requirements for the state programs listed and tested above. Nothing came to our attention as a result of the aforementioned procedures to indicate that Hartnell Community College District had not complied with the terms and conditions of state assisted educational programs not selected for testing. Our examination of compliance made for the purposes set forth in the preceding paragraph of this report would not necessarily disclose all instances of noncompliance. The Hartnell Community College District’s (the District) response to the finding identified in our audit is described in the accompanying schedule of findings and questioned costs. We did not audit the District’s response and, accordingly, we express no opinion on it. This report is intended solely for the information and use of management, the audit committee, Board of Trustees, the California Department of Finance, the State Chancellor’s Office and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. VICENTI, LLOYD & STUTZMAN LLP November 17, 2010 -59- DRAFT for Discussion Purposes Only FINDINGS AND RECOMMENDATIONS DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT SCHEDULE OF FINDINGS AND QUESTIONED COSTS SUMMARY OF AUDITOR RESULTS June 30, 2010 Financial Statements Type of auditor’s report issued: Unqualified Internal control over financial reporting: Material weakness(es) identified? Significant deficiency(ies) identified not considered to be material weaknesses? Yes X Noncompliance material to financial statements noted? X No Yes None reported Yes X No Yes X No Yes X None reported X No Federal Awards Internal control over major programs: Material weakness(es) identified? Significant deficiency(ies) identified not considered to be material weaknesses? Type of auditor’s report issued on compliance for major programs: Unqualified Any audit findings disclosed that are required to be Reported in accordance with Circular A-133, Section .510(a) Yes Identification of major programs tested CFDA Number(s) 84.000, 84.007, 84.033, 84.063 and 84.375 84.394 93.658 17.258, 81.041 Name of Federal Program or Cluster Financial Aid Cluster American Reinvestment Recovery Act: State Fiscal Stabilization Fund Foster Care – Title IV-E and Title IV-E (DSES) American Reinvestment Recovery Act: Green Building and Clean Energy Project Dollar threshold used to distinguish between Type A and Type B programs: $ 413,136 Yes Auditee qualified as low-risk auditee? -60- X No DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT SCHEDULE OF FINDINGS AND QUESTIONED COSTS RELATED TO FINANCIAL STATEMENTS June 30, 2010 FINDING 10-1 – CLOSING PROCEDURES Finding: The calculation of accruals for construction projects funded by the State should be determined using the latest State certified allocation, and accrued up to the level of expenditures incurred and adjusted for previous reimbursements received. During our audit we noted a postclosing entry of $904,827 to reduce the State receivable for project reimbursement. Based on discussions with District staff it appears that the error was the result of both a lack of established procedures to properly reconcile the accrual and due to a decrease in the State allocation which had not been resolved prior to the closing process. Recommendation: We recommend that the District establish procedures for regular monitoring of the reconciliation process. In particular, procedures for the year-end closing process should be established to ensure accurate accruals for reimbursements due from the State. District Response: The appropriate Fiscal department staff will reconcile transactions to determine appropriate costs that are to be reimbursed by the State. A receivable will be posted for the related cost transactions. On a quarterly basis, Fiscal department staff will meet with representative of construction management company and review all transactions for the quarter to determine all transactions have been appropriately accounted for and reconcile with State Certified Allocation Report. FINDING 10-2 – INSTRUCTIONAL SERVICE AGREEMENTS Finding: Colleges are allowed to have agreements with public and private entities to provide instruction, known as “instructional service agreements”. The courses must be open to all admitted students that meet approved prerequisites for the course. The District is required to publish the course in the official general college catalog and/or the schedule of classes and/or addenda. During our audit of instructional service agreements, we noted that the courses were not advertised in the official general college catalog or schedule of classes. The number of FTES claimed for those agreements was 600. Recommendation: The District should include in their course catalog or schedule of classes all courses that are taught by the District as well as those offered through the instructional service agreements. District Response: While courses offered through the South Bay Regional Public Safety Training Consortium for 2009-10 were advertised with a flyer to students to meet the open courses requirement, these courses were not included in the printed schedule or the 2010-11 catalog. This will be corrected, and these courses will be listed in the 2010-11 catalog to be published in May 2011. A statement on the availability of these courses will also be included starting in the Summer/Fall 2011 schedule. -61- DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS June 30, 2010 FINDING 09-1 – INTERNAL CONTROL Original Finding No. 08-3 Finding: During our evaluation of internal control we noted the following deficiencies: Cash Receipt Procedures: Proper controls over cash/checks include mail containing cash/checks being opened at a central location and a listing of the items received prepared. During our evaluation of internal controls we noted improvement over the prior year. The District currently receives mail containing cash/checks at a central location. However, it was noted that a listing of the items received is prepared only as time allows. The listing does not indicate a deposit date to allow for the daily receipts to be reconciled to deposits per the bank statement. Bank Reconciliation: Proper controls over revolving cash funds include the performance of timely reconciliations to the imprest amount. During our evaluation of internal controls it was noted that a reconciliation of the revolving cash imprest amount is not performed consistently. Recommendation: procedures: We recommend the following changes to improve the internal control Cash Receipts Procedures: The District should evaluate the cash receipt process and consider implementing the preparation of a listing as the cash/checks are opened. This listing should include documentation, such as deposit date, that can be used to verify amounts have been properly deposited while preparing the reconciliation to the bank statement. Bank Reconciliations: The District should ensure that reconciliations of the revolving cash imprest amount are being performed and reviewed. Current Status: Implemented. -62- DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS June 30, 2010 FINDING 09-2 – CALIFORNIA WORK OPPORTUNITY AND RESPONSIBILITY TO KIDS (CalWORKs) STATE FUNDS AND CalWORKS FEDERAL TEMPORARY ASSISTANCE FOR NEEDY FAMILIES FUNDS Original Finding: 07-13 Finding: The CalWORKs handbook stipulates the following: “The District’s CalWORKs program must have a system/process in place for case management to track a student’s continuing eligibly for program services, progress made in achieving their educational goals and tracking the services provided to support the student.” It further states, “The District’s CalWORKs program must have a process for tracking the expenditure of CalWORKs funds to ensure expenditures comply with legal requirements.” In our sample of 17 CalWORKs recipients tested for eligibility requirements, we noted 11 recipients who were receiving CalWORKs services who did not have the proper eligibility documentation through the County Welfare Department for each academic term served. Additionally, during our testing of expenditures we noted three out of 19 expenditures tested had exceptions to these guidelines. Recommendation: The District should evaluate the procedures for eligibility verification to ensure that all students have the proper documentation from the County Welfare Department for each academic term the student participates in the program. Services provided through other college departments, such as the Child Care Center and other departments, must be coordinated with the CalWORKs program office and Monterey County to verify student's ongoing eligibility for services, academic progress, and to monitor program expenses that are directly attributable to support for the identified CalWORKs eligible recipients. Additionally, the District should review all expenditures to ensure there are no additional ineligible student expenditures charged to the CalWORKs program. The District should transfer all expenditures for ineligible students or items discovered out of the CalWORKs program. Current Status: Implemented. -63- DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS June 30, 2010 FINDING 09-3 – SALARIES OF CLASSROOM INSTRUCTORS – 50 PERCENT LAW Finding: During our audit of Salaries of Classroom Instructors law, the following deficiencies were noted: Lottery Account: In accordance with Government Code, Section 8880.5(k), the District should have established a separate account/subfund to account for the receipt and expenditure of unrestricted lottery funds to determine that lottery funds have been properly excluded from the 50 Percent Law calculation. During our review of the 50 Percent Law calculation, we noted that the District does not maintain a separate account or subfund for unrestricted lottery receipts and expenditures. Employee Classification: Employees whose salaries are classified as instructional aides should have job responsibilities that include assisting an instructor in a classroom setting. During our testing of the 50 Percent Law, it was noted that two out of ten instructional aides selected for testing were found to have job descriptions which were not instructional in nature. These positions were a Telephone Technician and a LRC Student Worker. Recommendation: We recommend the following changes to be compliant with the 50 Percent Law: Lottery Account: The District should establish a separate account for accumulating expenditures and recording receipts which meet Lottery requirements and which the District plans to use for exclusion in the 50 Percent Law. Employee Classification: The District should review the employees classified as instructional aides and determine if job responsibilities are instructional in nature. If additional employees are discovered to have job responsibilities that are non-instructional in nature they should be reclassified to a non-instructional account code. Current Status: Implemented. -64- DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS June 30, 2010 FINDING 09-4 – ALLOWABLE COSTS – COMPENSATION FOR PERSONAL SERVICES Original Finding Number 07-7 CFDA Title and Number: CTE (CFDA #84.048 and 84.243) Federal Award Number: 07-C01-021 Name of Federal Agency: U.S. Department of Education Name of Pass-through Agency: California Community College Chancellor’s Office Compliance Requirement: B. Allowable Costs/Cost Principals Criteria: Procedures and controls over how the District ensures compliance with time accounting requirements were found to be ineffective. Although, we found centralized monitoring has been established for the program noted above, we found that the required certifications were not prepared and collected in a timely manner to document compliance. Condition: OMB Circular A-21, Cost Principles for Educational Institutions, Part J, General Provisions for Selected Items of Cost, No. 10, Compensation for Personal Services. (1)(e) At least annually, a statement will be signed by the employee, principal investigator, or responsible official(s) using suitable means of verification that the work was performed, stating that salaries and wages charged to sponsored agreements as direct charges and to indirect cost are reasonable in relation to work performed. Effect: Inadequate monitoring of program compliance requirements leaves the District vulnerable to noncompliance that could result in loss of funding and disallowed costs. Recommendation: We recommend that the District review procedures over time certification monitoring to ensure the appropriate documentation is collected in a timely manner and maintained as support for the employees’ effort in the program. Questioned Cost: Includes salaries and benefits for all multi-funded permanent professional or professorial staff for CTE of approximately $10,600. Current Status: Implemented. -65- DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS June 30, 2010 FINDING 09-5 – PROCUREMENT, SUSPENSION AND DEBARMENT – SUSPENSION OR DEBARMENT CERTIFICATIONS FOR CONTRACTS OVER $25,000 Original Finding: 07-8 CFDA Title and Number: GEAR UP (GEAR UP East Salinas) (CFDA #84.334A) Federal Award Number: P334A060158-07 Name of Federal Agency: U.S. Department of Education Name of Pass-through Agency: Not applicable Compliance Requirement: I. Procurement and Suspension and Debarment Criteria: Title 34 – Education, Part 80 – Uniform Administrative Requirements for Grants and Cooperative Agreements to State and Local Governments, Sub-part C, Pre-Award Requirements, Section 80.35 Sub awards to debarred and suspended parties: Grantees and sub grantees must not make any award or permit any award (sub grant or contract) at any tier to any party, which is debarred or suspended or is otherwise excluded from or ineligible for participation in Federal assistance programs under Executive Order 12549, "Debarment and Suspension." OMB Circular A-110, Grants and Agreements with Institutions of Higher Education, Hospitals, and Other Non-Profit Organizations, Sub-Part C, Pre-Award Requirements, Section .33 Debarment and suspension: Federal awarding agencies and recipients shall comply with the nonprocurement debarment and suspension common rule implementing E.O.s 12549 and 12689, "Debarment and Suspension." This common rule restricts sub awards and contracts with certain parties that are debarred, suspended, or otherwise excluded from or ineligible for participation in Federal assistance programs or activities. Condition: Internal controls, including policies and procedures, necessary to ensure compliance with debarment requirements are not in place. Further, required debarment certifications or other verification for each grant subrecipient were not obtained or performed per the requirements of the Federal regulations. This must be done not only on all vendors over $25,000, but also must be done for all subrecipients of Federal programs whose spending is over $25,000. -66- DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS June 30, 2010 FINDING 09-5 – PROCUREMENT, SUSPENSION AND DEBARMENT – SUSPENSION OR DEBARMENT CERTIFICATIONS FOR CONTRACTS OVER $25,000 (continued) Effect: Grant requirements specify that the certifications must be obtained prior to entering into an agreement to provide the sub award. Recommendation: We recommend the District review its policies and procedures to verify all vendors who are providing services to federally funded programs in excess of $25,000 are not suspended or debarred or otherwise excluded. This verification may be accomplished by checking the Excluded Parties List System (EPLS) maintained by the General Services Administration (GSA), collecting a certification from the entity, or adding a clause or condition to the covered transaction with that entity. The District should also update contract templates for all contract types that exceed $25,000 to avoid a violation of the Executive Order 12549. Questioned Cost: None. Current Status: Implemented. -67- DRAFT for Discussion Purposes Only HARTNELL COMMUNITY COLLEGE DISTRICT STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS June 30, 2010 FINDING 09-6 – PHYSICAL INVENTORY OF CAPITAL ASSETS Original Finding No. 08-10 CFDA Title and Number: CTE – Title I, Part C, CFDA #84.048 and College Cost Reduction and Access Act – Math & Science, CFDA #84.031C Federal Award Number: 07-C01-021 and P031C080096 Name of Federal Agency: U.S. Department of Education Name of Pass-through Agency: CTE pass-through: California Community College Chancellor’s Office Compliance Requirement: F. Equipment and Real Property Management Criteria: OMB Circular A-110, Uniform Administrative Requirements for Grants and Agreements Section 34(f)(3), Property Management. Condition: Through inquiry, we determined that a physical inventory of equipment had not been performed in more than two years. This appears to be a systemic organizational issue and would apply to all grants subject to compliance requirement F. Equipment and Real Property Management. Effect: The existence and location of equipment purchased with Federal funding is in question. Recommendation: The District should conduct a physical inventory of all equipment purchased with Federal funding as soon as possible. In the future, this process should be repeated every two years in order to be in compliance with Federal regulations. Questioned Cost: For the asset audited in the above programs the cost is $8,559 and 9,165, respectively. Current Status: Implemented. -68- AGENDA ITEM FOR BOARD MEETING OF: December 7, 2010 Title Number Ratify Budget Revisions VIII. B. Area Status Office of Support Operations Prepared by: Kent Stephens Action Recommendation It is recommended that the Board of Trustees ratifies the Budget Revisions for FY 2010-2011 numbered 9021 to 9053. Background The Board of Trustees recognizes that the annual budget of the District is a financial plan and is subject to adjustments during the fiscal year caused by changes in enrollments, programs, services, and the cost of goods and services. Summary Revisions to the adopted budget are subject to approval by the Board of Trustees. Budget revisions consist of transfers between major object expenditures or from the appropriations for contingencies, as well as budgetary increases for the use of funds not included in the original budget. All budget entry numbers are assigned automatically assuring a complete sequence accounting. Numeric breaks on the attached report are due to the exclusion of budget transfers, which do not require Board approval. The accompanying Budget Journal Entry Detail Report was produced directly from the accounting software. Budget Implication The unrestricted General Fund budget remains unchanged. The restricted general fund budget increased by $964,207, due to increased revenue to programs. The Associated Student Body Fund (71) budget remains unchanged. AGENDA ITEM FOR BOARD MEETING OF: Title December 7, 2010 Number Adopt Resolution 10:16, Approving Amended and Restated Bylaws for the Independent Citizens’ Bond Oversight Committee VIII. C. Area Status Superintendent/President Action (Roll-call) Recommendation It is recommended that the Board of Trustees adopts Resolution 10:16, Approving Amended and Restated Bylaws for the Independent Citizens’ Bond Oversight Committee. Background The Hartnell Community College District was successful at the election conducted on November 5, 2002 in obtaining authorization from the District’s voters to issue up to $131,000,000 aggregate principal amount of the District’s general obligation bonds (Measure H). The election was conducted under Proposition 39. Pursuant to Section 15278 of the Education Code, the District was obligated to establish a Committee in order to satisfy the accountability requirements of Prop 39. The Board of Trustees of the Hartnell Community College District established the Independent Citizens’ Bond Oversight Committee in January 2003 in compliance with this requirement. As part of the newly established Independent Citizens’ Bond Oversight Committee a set of bylaws were created and the amended bylaws will bring the Independent Citizens’ Bond Oversight Committee current with other Districts in the State. Summary The administration recommends, through consultation with Bond Counsel, that the Board adopt Resolution 10:16, Approving Amended and Restated Bylaws for the Independent Citizens’ Bond Oversight Committee. Budget Implications No impact to the general fund. -1- HARTNELL COMMUNITY COLLEGE DISTRICT RESOLUTION 10:16 APPROVING AMENDED AND RESTATED BYLAWS THEREFOR WHEREAS, the Board of Trustees of the Hartnell Community College District (the “District”) previously adopted a resolution requesting Monterey and San Benito Counties to call an election for general obligation bonds (the “Bond Election”) to be held on November 5, 2002; and WHEREAS, notice of the Bond Election was duly given; and on November 5, 2002 the Bond Election was duly held and conducted for the purpose of voting a measure for the issuance of bonds of the District in the amount of $131,000,000 (“Measure H”); and WHEREAS, based on the Canvass and Statement of Results for the Counties, more than fifty-five percent of the votes cast on the Measure H were in favor of issuing the aforementioned bonds; and WHEREAS, the Board of Trustees of the District has established independent citizens' bond oversight committee (the “Committee”) in connection with issuance of bonds under Measure H; and WHEREAS, the Board of Trustees has previously approved Bylaws governing such Committee but now desires to amend and restate such Bylaws, in whole, to make them applicable to Measure H. NOW, THEREFORE, THE BOARD OF TRUSTEES OF THE HARTNELL COMMUNITY COLLEGE DISTRICT DOES HEREBY FIND, DETERMINE AND CERTIFY AS FOLLOWS: Measure H was authorized pursuant to paragraph (3) of Section 1. Authorization. subdivision (b) of Section 1 of Article XIIIA of the California Constitution and subdivision (b) of Section 18 of Article XVI of the California Constitution in accordance with the requirements of the Strict Accountability In Local School Construction Bonds Act of 2000 (the “Act”). Section 2. Bylaws. The Committee shall operate pursuant to the Board approved Amended and Restated Bylaws. The Committee shall have only those responsibilities granted to them in the Act, in the resolutions calling for the election for Measure H and in the Amended and Restated Bylaws. The Amended and Restated Bylaws, as submitted herewith and attached hereto, are hereby approved. The previous Bylaws relating to Measure H are rescinded and of no further force and effect. ADOPTED, SIGNED, AND APPROVED this 7th day of December, 2010 BOARD OF TRUSTEES OF THE HARTNELL COMMUNITY COLLEGE DISTRICT Board President ATTEST: Board Secretary DOCSSF/74429v1/024399-0001 STATE OF CALIFORNIA MONTEREY COUNTY ) ) ) I, Phoebe K. Helm, do hereby certify that the foregoing Resolution No. 10:16 was duly adopted by the Board of Trustees of the Hartnell Community College District at a meeting thereof held on 7th day of December 2010 and that it was so adopted by the following vote: AYES: NOES: ABSENT: ABSTENTIONS: By: Secretary 2 DOCSSF/74429v1/024399-0001 CITIZENS' BOND OVERSIGHT COMMITTEE AMENDED AND RESTATED BYLAWS Section 1. Committee Established. The Hartnell Community College District (the "District") was successful at the election conducted on November 5, 2002 (the “Election”), in obtaining authorization from the District's voters to issue up to $131,000,000 aggregate principal amount of the District's general obligation bonds. The election was conducted under Proposition 39, being chaptered as the Strict Accountability in Local School Construction Bonds Act of 2000, at Section 15264 et seq. of the Education Code of the State ("Prop 39"). Pursuant to Section 15278 of the Education Code, the District is now obligated to establish the Committee in order to satisfy the accountability requirements of Prop 39. The Board of Trustees of the Hartnell Community College District (the "Board") hereby establishes the Citizens' Bond Oversight Committee (the "Committee") which shall have the duties and rights set forth in these Bylaws. The Committee does not have independent legal capacity from the District. Section 2. Purposes. The purposes of the Committee are set forth in Prop 39, and these Bylaws are specifically made subject to the applicable provisions of Prop 39 as to the duties and rights of the Committee. The Committee shall be deemed to be subject to the Ralph M. Brown Public Meetings Act of the State of California and shall conduct its meetings in accordance with the provisions thereof. The District shall provide necessary administrative support to the Committee as shall be consistent with the Committee's purposes, as set forth in Prop 39. The proceeds of general obligation bonds issued pursuant to the Election are hereinafter referred to as "bond proceeds." The Committee shall confine itself specifically to bond proceeds generated under Measure H. Regular and deferred maintenance projects and all monies generated under other sources shall fall outside the scope of the Committee’s review. Section 3. Duties. To carry out its stated purposes, the Committee shall perform the duties set forth in Section 3.1, 3.2 and 3.3 and shall refrain from those activities set forth in Sections 3.4 and 3.5: 1 Inform the Public. The Committee shall inform the public concerning the District’s expenditure of bond proceeds. 2 Review Expenditures. The Committee shall review expenditure reports produced by the District to ensure that (a) bond proceeds were expended only for the purposes set forth in the ballot measure; and (b) no bond proceeds were used for any teacher or administrative salaries or other operating expenses, in accordance with Attorney General Opinion 04-110 issued on November 9, 2004. 3 Annual Report. The Committee shall present to the Board, in public session, an annual written report which shall include the following: (a) A statement indicating whether the District is in compliance with the requirements of Article XIIIA, Section 1(b)(3) of the California Constitution; and (b) 4 5 A summary of the Committee's proceedings and activities for the preceding year. Duties of the Board/Superintendent/President. Either the Board or the Superintendent/President, as the Board shall determine, shall have the following powers reserved to it, and the Committee shall have no jurisdiction over the following types of activities: (i) Approval of construction contracts, (ii) Approval of construction change orders, (iii) Appropriation of construction funds, (iv) Handling of all legal matters, (v) Approval of construction plans and schedules, (vi) Approval of deferred maintenance plans, and (vii) Approval of the sale of bonds. Voter-Approved Projects Only. In recognition of the fact that the Committee is charged with overseeing the expenditure of bond proceeds, the Board has not charged the Committee with responsibility for: (a) Projects financed through the State of California, developer fees, redevelopment tax increment, certificates of participation, lease/revenue bonds, the general fund or the sale of surplus property without bond proceeds shall be outside the authority of the Committee. (b) The establishment of priorities and order of construction for the bond projects shall be made by the Board in its sole discretion. (c) The selection of architects, engineers, soils engineers, construction managers, project managers, CEQA consultants and such other professional service firms as are required to complete the project based on District criteria established by the Board in its sole discretion. (d) The approval of the design for each project including exterior materials, paint color, interior finishes, site plan and construction methods (modular vs. permanent) by the Board in its sole discretion and shall report to the Committee on any cost saving techniques considered or adopted by the Board. (e) The selection of independent audit firm(s), performance audit consultants and such other consultants as are necessary to support the activities of the Committee. (f) The approval of an annual budget for the Committee that is sufficient to carry out the activities set forth in Prop 39 and included herein. (g) The amendment or modification of the Bylaws for the Committee as provided herein, subject to the legal requirements of Proposition 39. DOCSSF/74430v1/024399-0001 2 (h) Section 4. 1 The appointment or reappointment of qualified applicants to serve on the Committee, subject to legal limitations, and based on criteria adopted in the Board’s sole discretion as part of carrying out its function under Prop 39. Authorized Activities. In order to perform the duties set forth in Section 3.0, the Committee may engage in the following authorized activities: (a) Receive and review copies of the District's annual independent performance audit and annual independent financial audit, required by Prop. 39 (Article XIIIA of the California Constitution). (b) Inspect college facilities and grounds for which bond proceeds have been or will be expended, in accordance with any access procedure established by the District's Associate Vice President for Support Services. (c) Review copies of deferred maintenance proposals or plans developed by the District. (d) Review efforts by the District to maximize bond proceeds by implementing various cost-saving measures. Section 5. 1 Membership. Number. The Committee shall consist of a minimum of seven (7) members appointed by the Board of Trustees from a list of candidates submitting written applications, and based on criteria established by Prop 39, to wit: 2 • One (1) student enrolled and active in a community college support group, such as student government. • One (1) member active in a business organization representing the business community located in the District. • One (1) member active in a senior citizens' organization. • One (1) member active in a bona-fide taxpayers association. • One (1) member active in a support organization for the college, such as a foundation. • Two (2) members of the community at-large. Qualification Standards. (a) To be a qualified person, he or she must be at least 18 years of age. (b) The Committee may not include any employee, official of the District or any vendor, contractor or consultant of the District. DOCSSF/74430v1/024399-0001 3 3 Ethics: Conflicts of Interest. By accepting appointment to the Committee, each member shall comply with the Committee Ethics Policy attached as "Attachment A" to these Amended and Restated Bylaws. 4 Term. Except as otherwise provided herein, each member shall serve a term of two (2) years, commencing as of the date of appointment by the Board. No member may serve more than two (2) consecutive terms. At the Committee's first meeting, members will draw lots to select a minimum of two members to serve for an initial one (1) year term and the remaining members for an initial two (2) year term. Members whose term has expired may continue to serve on the Committee until a successor has been appointed. 5 Appointment. Members of the Committee shall be appointed by the Board through the following process: (a) appropriate local groups will be solicited for applications; (b) the Superintendent/President or his designee will review the applications; and (c) the Superintendent/President or his designee will make recommendations to the Board. 6 Removal; Vacancy. The Board may remove any Committee member for any reason, including failure to attend two consecutive Committee meetings without reasonable excuse or for failure to comply with the Committee Ethics Policy. Upon a member's removal, his or her seat shall be declared vacant. The Board, in accordance with the established appointment process shall fill any vacancies on the Committee. Vacancies shall be filled within 90 days. 7 Compensation. The Committee members shall not be compensated for their services. 8 Authority of Members. (a) Committee members shall not have the authority to direct staff of the District; (b) Individual members of the Committee retain the right to address the Board, either on behalf of the Committee or as an individual; and (c) the Committee and its members shall have the right to request and receive copies of reports and records relating to Measure H projects which have been prepared for the Board and which have become a public record. Section 6. Meetings of the Committee. 1 Regular Meetings. The Committee is required to meet at least once a year including an annual organizational meeting, but no more frequently than quarterly or as needed determined by the Bond Oversight Committee. 2 Location. All meetings shall be held within the jurisdiction of the Hartnell Community College District. 3 Procedures. All meetings shall be open to the public in accordance with the Ralph M. Brown Act, Government Code Section 54950 et seq. Meetings shall be conducted according to such additional procedural rules as the Committee may adopt. A majority of the number of Committee members shall constitute a quorum for the transaction of any business. Section 7. 1 District Support. The District shall provide to the Committee necessary technical and administrative assistance as follows: DOCSSF/74430v1/024399-0001 4 2 (a) preparation of and posting of public notices as required by the Brown Act, ensuring that all notices to the public are provided in the same manner as notices regarding meetings of the District Board; (b) provision of a meeting room, including any necessary audio/visual equipment; (c) preparation and copies of any documentary meeting materials, such as agendas and reports; and (d) retention of all Committee records, and providing public access to such records on an Internet website maintained by the District. District staff and/or District consultants shall attend all Committee proceedings in order to report on the status of projects and the expenditures of bond proceeds. Section 8. Reports. In addition to the Annual Report required in Section 3.3, the Committee may report to the Board from time to time in order to advise the Board on the activities of the Committee. Such report shall be in writing and shall summarize the proceedings and activities conducted by the Committee. Section 9. Officers. The Superintendent/President shall appoint the initial Chair of the Committee. Thereafter the Committee shall elect the Chair and a vice-chair who shall act as chair only when the chair is absent. No person shall serve as chair for more than two consecutive one-year terms. Section 10. Amendment of Bylaws. Any amendment to these Bylaws shall be approved by a majority vote of the Board. Section 11. Termination. The Committee shall automatically terminate and disband concurrently with the Committee’s submission of its final Annual Report which reflects the final accounting of the expenditure of all Measure H monies. DOCSSF/74430v1/024399-0001 5 CITIZENS' BOND OVERSIGHT COMMITTEE ETHICS POLICY STATEMENT This Ethics Policy Statement provides general guidelines for Committee members to follow in carrying out their roles. Not all ethical issues that Committee members face are covered in this Statement. However, this Statement captures some of the critical areas that help define ethical and professional conduct for Committee members. The provisions of this Statement were developed from existing laws, rules, policies and procedures as well as from concepts that define generally accepted good business practices. Committee members are expected to strictly adhere to the provisions of this Ethics Policy. POLICY • CONFLICT OF INTEREST. A Committee member shall not make or influence a District decision related to: (1) any contract funded by bond proceeds; or (2) any construction project which will benefit the Committee member's outside employment, business, or a personal finance or benefit an immediate family member, such as a spouse, child or parent. • OUTSIDE EMPLOYMENT. A Committee member shall not use his or her authority over a particular matter to negotiate future employment with any person or organization that relates to: (1) any contract funded by bond proceeds, or (2) any construction project. A Committee member shall not influence a District decision related to any construction project involving the interest of a person with whom the member has an agreement concerning current or future employment, or remuneration of any kind. For a period of two (2) years after leaving the Committee, a former Committee member may not represent any person or organization for compensation in connection with any matter pending before the District that, as a Committee member, he or she participated in personally and substantially. Specifically, for a period of two (2) years after leaving the Committee, a former Committee member and the companies and businesses for which the member works shall be prohibited from contracting with the District with respect to: (1) bidding on projects funded by the bond proceeds; and (2) any construction project. • COMMITMENT TO UPHOLD LAW. A Committee member shall uphold the federal and California Constitutions, the laws and regulations of the United States and the State of California (particularly the Education Code) and all other applicable government entities, and the policies, procedures, rules and regulations of the Hartnell Community College District. • COMMITMENT TO DISTRICT. A Committee member shall place the interests of the District above any personal or business interest of the member. DOCSSF/74430v1/024399-0001 6 INFORMATION ITEMS AGENDA ITEM FOR BOARD MEETING OF: Title December 7, 2010 Number Receive Updated Report on Construction Projects IX. A. Area Status Office of Facilities Information Recommendation It is recommended that the Board of Trustees receives an updated report on construction projects. Summary Each month, the Board of Trustees receives an oral and written report on current design, planning, and construction projects. Completed projects are removed from the report and current activities are updated monthly. The construction consultant and district manager are available at the meeting to answer questions. CONSTRUCTION UPDATE AS OF 11/16/2010 CURRENT DESIGN, PLANNING AND CONSTRUCTION PROJECTS PLANNING PROJECTS Alisal Campus Master Plan Main Campus Facilities Master Planning Process As part of the 142 acre Alisal Campus a master plan will be need for a few reasons. First, the District needs to determine the best locations for current construction projects and second this document will be needed once an Environmental Impact Report (EIR) is prepared for the site. ⇒ The District has begun the planning process for the 142 acres of the Alisal Campus ⇒ The process will include two master plans, (1) for the +/- 42 acre campus and (1) for the remaining +/- 100 acres ⇒ Once a master plan is complete the EIR process will begin with the City of Salinas ⇒ The land swap with the City of Salinas is currently underway. It is anticipated that this will take between 18 and 24 month The main campus has prepared a master plan for the campus which is a living document and needs to updated as needed. Not only is this something that Hartnell College needs but it is also something that the California Community College Chancellors Office (CCCCO) needs to be updated on a yearly bases. This document has been used to place the current buildings but was also used to place the Science Building and the Health Science Building. ⇒ The 5-year Capital Outlay Plan was completed and submitted to the CCCCO on June 29, 2009. ⇒ The 2009-10 IPP for a new Health Sciences & Nursing Building was completed and submitted to the CCCCO on June 29, 2009. ⇒ A modified Health Sciences & Nursing Building IPP was prepared based off of the newly released enrollment projections and will be submitted to the CCCCO by August 31, 2010. ⇒ The updated facilities master plan was completed and will be submitted to the CCCCO on August 31, 2010. Science Building FPP In order for Hartnell to get states funds for project two important documents need to be prepared and Initial Project Proposal (IPP) and a Final Project Proposal (FPP). ⇒ Lionakis, out of Sacramento, is the Architect of Record for this project, which includes the preparation of the FPP. ⇒ The kick-off meeting for the FPP took place on 02/19-20 ⇒ The stakeholders took a trip to Cal Poly on 03/09 to look at their facilities ⇒ At our second meeting a few general layouts were established and we are working from those layouts ⇒ The group took its second field trip to look at both San Mateo and San Jose City College’s new science building ⇒ The last programming meeting was May 8 and all the user groups concerns were addressed ⇒ Lionakis completed the FPP and the Board Approved the document on June 8, 2009 and the FPP was submitted to the CCCCO on June 29, 2009. Hartnell College ● Facilities Development Office ● 411 Central Ave., Salinas, CA 93901 Phone (831)770-7041 ● Fax (831)770-7040 1 ⇒ The project has been approved by the CCCCO for funding but because the state has no money it has been put on a shelf until a GO bond passes. DESIGN PROJECTS CAB Building Renovation City Sidewalk Replacement As part of the District master plan the College Administration Building (CAB) was to be renovated. This project will be the renovation to the first floor of the CAB. ⇒ The programming for this project has started ⇒ The pre-qualification package for a Design/Build entity was out to prospective teams in December and was due on January 7, 2010. A total of 25 teams submitted. ⇒ The short-list has been created and the letter to those firms have been sent out. Additionally letters were sent to the remaining 20 firms who submitted pre-qual packages. ⇒ Of the 25 DBEs a total of 24 firms met the pre-qual minimum requirements ⇒ The list was shortlisted to the top five scores, which ended up yielding a total of 6 DBE teams: • Rudolph & Sletten - Lionakis • Dilbeck & Sons - HBFL • Kitchell - Smith Group • Blach Construction - BFGC-IBI • Lusardi Construction Company - Davy Architecture • Soltek Pacific Construction Company - Mosher Drew Watson Ferguson As part of the EIR which was approved in 2005 one of the mitigations was to replace the sidewalk around the campus, as needed. In addition to the sidewalk Monterey Salinas Transit (MST) requested that a bus turnout be installed on Alisal St. ⇒ An RFQ was put out on the street for interested civil engineering firms interested in design the sidewalk, bus turnout and misc infrastructure projects on the campus. ⇒ A total of three firms submitted and all were shortlisted and issues and RFP. ⇒ C3 Engineering was chosen based off of the firms experience and cost proposal. ⇒ The design work will start on May 5th and we are currently working with the City of Salinas and MST to finalize the plans. ⇒ Both the City and MST have agreed on both items and City is making final comments ⇒ District to meet with the City of Salinas to finalize the encroachment permit on 11/16. Once that meeting takes place the project can go out to bid. Campus Infrastructure #2 In 2004 infrastructure phase I was completed and as part of that project new power, water, gas, data, sewer and storm drains. This project will install water and gas isolator valves to all the existing buildings. In addition the old data lines will be terminated and the new data lines will be connected to all buildings. ⇒ An RFQ was put out on the street for interested civil engineering firms interested in design the sidewalk, bus turnout and misc infrastructure projects on the campus. ⇒ A total of three firms submitted and all were shortlisted and issues and RFP. ⇒ C3 Engineering was chosen based off of the firms experience and cost proposal. ⇒ The plans are close to completion and will be out to bid in the next few weeks. Hartnell College ● Facilities Development Office ● 411 Central Ave., Salinas, CA 93901 Phone (831)770-7041 ● Fax (831)770-7040 2 Keyless Entry and CCTV System CAB Chiller and Boiler Replacement As both a safety precaution, a tracking mechanism and future cost savings to the District, the District is investigating the installation of both a keyless entry system and Closed Circuit Television cameras campus-wide. ⇒ Aurum Consulting Engineers will be preparing a campus wide design of a keyless entry and CCTV system for the main campus the anticipated schedule is as follows: ⇒ Out to bid in November ⇒ Bid opening in December ⇒ Start Construction in 2011 As part of an energy efficient project on campus the 30 year old chiller and boiler on the roof of the CAB will be replaced. As part of that project and energy efficient cool roof will also be installed. ⇒ Axiom Engineers will be preparing a design of a new energy efficient chiller and boiler for CAB ⇒ We will also be working with PG&E to investigate a possible rebate for the delta between the existing units and the new units ⇒ The anticipated schedule is as follows: • Design Period - April 7 - June 30 • DSA Review - July 1 - November 1 • Issue RFB for Chiller and Boiler Units - July 1 • Bid Period - December 2010 0 February 2011 • Construction - February 2011 - July 2011 ⇒ Axiom and Skyline Engineering are working on the design of the project ⇒ The District plans on bidding the equipment (chiller & boiler) in the next few weeks so the an order can be placed and the equipment can arrive sooner ⇒ Once the design is completed we will bid the work per the above schedule ⇒ The DIstrict is also working with PG&E to get a rebate for the energy efficient changes which are being made. ⇒ The design is complete and will be submitted to DSA for review and approval. ⇒ We have received bids on both the Chiller and the Boiler and the District has purchased them. ⇒ Both the Chiller and Chiller have been ordered. ⇒ The plans are currently at DSA for review and approval Technical Training Building This will be the second building constructed on the Alisal Campus. The building will house diesel and auto mechanics as well as green construction. The building is slated to be between a 10k and 15k building and will be seeking LEED Certification. ⇒ Hartnell issued a request for qualifications (RFQ) for architectural services related to the design of the Technical Training Building on the Alisal Campus. A total of eight firms submitted an RFQ. A group of faculty and staff(the users of the building) met and shortlisted a total of 5 firms for interviews. The shortlisted firms were: NTD (Salinas), Paul Davis Architecture (Monterey), W, R & D (Monterey), BAG (Salinas) and Kasavan Architects (Salinas). ⇒ The users then interviewed the firms and they selected NTD based off of previous similar project experience and cost. ⇒ The team had its first programming meeting on 7/14 and a schedule was put together on the remainder of the meetings. ⇒ The team took a trip to Delta College to look at their facilities and our next time will be to Cal Poly to look at their CM program Hartnell College ● Facilities Development Office ● 411 Central Ave., Salinas, CA 93901 Phone (831)770-7041 ● Fax (831)770-7040 3 PE Field House As part of the PE master plan the second phase was a new field house which will house locker rooms, restrooms, a classroom, a training room and a concessions area for food. ⇒ Currently there is an RFQ out for architectural and engineering services. The due date for the RFQ is December 16, 2010. CONSTRUCTION PROJECTS Alisal Campus Center for Applied Technology This is the first building be constructed at the Alisal Campus. It is a 50/50 Stated funded project, meaning that the State covers costs up to $14M and the District must cover the remainder of the cost. The building is a 55k sq ft. building will replace many of the programs currently housed in the VoTech building on the main campus. ⇒ Kasavan Architects is the AOR for the project ⇒ Dilbeck construction is the GC for this project ($19,340,000) ⇒ Construction began on July 14, 2008 ⇒ The project will be completed in 2010 ⇒ All structural steel has been erected ⇒ Interior metal studs and drywall is currently going up ⇒ The roofing and exterior siding is currently going up ⇒ Check out the webcam on the Measure H website, http://webcam.hartnell.edu/popup.html ⇒ Interior finishes are continuing to be placed in the building. ⇒ The welding equipment is scheduled to be ordered on May 5th and all will be installed by August 1st and will be ready for classes to start in fall. ⇒ Permeant power was switched over on June 1 ⇒ Work continues on the interior finishes of the building. ⇒ 65% of the landscaping around the building has been completed. ⇒ All of the furniture and AV equipment has been ordered for the new building and are anticipating a early August delivery date. ⇒ The Oskar welding equipment will be delivered during the first few weeks of September for installation. ⇒ Floor finishes are going down in wing C and furniture will be installed starting on Nov. 1 and Audio Visual (AV) equipment will follow with a January 24, 2011 scheduled opening Student Center Renovation/Remodel Project The Student Center project is a complete renovation to the building. The project includes new finishes, HVAC units, a complete overhaul of the servery and all new furniture. ⇒ BFGC is the Architect of Record for this project ⇒ DMC Construction was the low bidder and will be the GC for the project ⇒ Construction started on November 17th and is scheduled to be completed by September 2010 ⇒ The new bookstore in Steinbeck Hall is the first scope of work ⇒ DMC finish the heavy demo work over the break and they are now finishing up the Steinbeck side of the building. ⇒ During spring break the move of the bookstore and the reopening of Steinbeck Hall took place ⇒ DMC is working on the whole building and the Steinbeck Hall, bookstore, servery and faculty lounge will be completed by 8/15. ⇒ The remainder of the building will be opened some time in September/October. ⇒ The furniture for Steinbeck Hall and the staff lounge will be delivered on 08/09 ⇒ The servery was opened on 8/23 Hartnell College ● Facilities Development Office ● 411 Central Ave., Salinas, CA 93901 Phone (831)770-7041 ● Fax (831)770-7040 4 ⇒ Alisal Campus Landscape Project The center and west portion of the building are still being worked on with a move in date slated for November 29 As part of the expansion to the Alisal Campus the entrance needed to be brought up to ADA compliance as well as make the area a safe area for the new students who will be attending class on the campus. The project includes the landscaping of the entrance at Alisal St. and will have new planted areas, accessible paths and lighting. ⇒ The project is currently out to bid with construction starting in November and will be completed by 01/23/11 ⇒ The project bid on 10/20 with a total of six contractors bidding the project. The apparent low bidder was Perma Green Hydroseeding and we are awaiting Board approval before that work can start. ⇒ The tentative schedule is for work to start on 10/15/10 and be substantially completed by 01/23/11. ⇒ Perma Green Hydroseeding has started the submittal process and is in the process of identifying all underground infrastructure. Work will start once all underground items are identified. CAB Refresh #4 This is the fourth refresh project which will take place in the CAB. The project includes new finishes in a number of rooms, hallways as well as making a number of classrooms smart. ⇒ The project is currently out to bid with construction starting in December and will be completed by 01/23/11 ⇒ The project bid on 10/19 with a total of seven contractors bidding the project. The The apparent low bidder was DMC Construction and we are awaiting Board approval before that work can start. ⇒ The tentative schedule is for the work to start on 12/18/10 and be completed by 01/23/11. ⇒ The District has started having weekly meetings with DMC so the work will be ready to start once finals end. Hartnell College ● Facilities Development Office ● 411 Central Ave., Salinas, CA 93901 Phone (831)770-7041 ● Fax (831)770-7040 5 AGENDA ITEM FOR BOARD MEETING OF: Title December 7, 2010 Number Receive and Accept Financial Statements for Period Ending October 31, 2010 IX. B. Area Status Office of Support Operations Prepared by: Kent G. Stephens Information Recommendation It is recommended that the Board of Trustees receives and accepts the Financial Statements for the period ending October 31, 2010. Summary Financial Statements of District funds for the period ending October 31, 2010 are attached for information. Budget Implications None AGENDA ITEM FOR BOARD MEETING OF: Title: December 7, 2010 Number Receive the County of Monterey Treasurer’s Report of Investments for the Quarter Ending September 30, 2010 IX. C. Area Status Office of Support Operations Prepared by: Kent G. Stephens Information Recommendation It is recommended that the Board of Trustees reviews and approves the County of Monterey Treasurer’s Report of Investments for the Quarter Ending September 30, 2010. Summary Government Code § 53466(b) requires the Treasurer to submit a quarterly report of investments. The attached Exhibit A describes the investment portfolio position by investment type as of September 30, 2010 and Exhibit B provides a narrative portfolio review of economic and market conditions that support the investment activity during the July through September period. Budget Implications None MONTEREY COUNTY BOARD OF SUPERVISORS MEETING: October 26, 2010 AGENDA NO: SUBJECT: Receive and Accept the Treasurer’s Report of Investments for the quarter ending September 30, 2010 DEPARTMENT: Treasurer-Tax Collector RECOMMENDATION: It is recommended that the Board of Supervisors receive and accept the Treasurer’s Report of Investments for the quarter ending September 30, 2010. SUMMARY: Government Code Section 53646 (b) requires the Treasurer submit a quarterly report of investments. The attached Exhibit A provides a narrative portfolio review of economic and market conditions that support the investment activity during the July – September period. Exhibit B describes the investment portfolio position by investment type as of September 30, 2010. Exhibit C is a listing of common investment definitions and is included for reference purposes. Exhibit D describes the investment portfolio by maturity range, and Exhibit E is an overview of the short term funds that the Treasurer invests in overnight, liquid assets. DISCUSSION: During the first quarter of FY 2010-11, the investment portfolio continued to be subject to downward pressure on interest rates. Due to continuing poor economic news and a lack of recovery in the real estate markets, the continued flight to safety resulted in lower yields along all areas of the U.S. Treasury yield curve. On September 30, 2010 the Monterey County investment portfolio contained an amortized cost basis of $885,603,531 spread among 69 separate securities and funds. The par value of those funds was $882,051,532, and the market value was $886,338,982 or 1.08% of amortized book value. The portfolio’s net earned income yield for the period was 0.62%. The portfolio produced estimated income of $1,401,771 for the quarter which will be distributed proportionally to all agencies participating in the investment pool. The investment portfolio had a weighted average maturity of 240 days. The investment portfolio was in compliance with all applicable provisions of state law and the adopted investment policy, and contained sufficient liquidity to meet all projected outflows over the next six months. Market value pricings were obtained through Bloomberg LLP, Union Bank of California and included live-bid pricing of corporate securities. OTHER AGENCY INVOLVEMENT: A copy of this report will be distributed to all agencies participating in the County investment pool and the Treasury Oversight Committee. In addition, the report will be displayed on the County Treasurer’s web site. A monthly report of investment transactions is provided to the Board of Supervisors as required by GC 53607. FINANCING: The investment portfolio contains sufficient liquidity to meet all projected expenditures over the next six months. We estimate that the investment earnings in the General Fund will be consistent with budgeted revenue, but at historically low levels, as the Federal Reserve is expected to continue keeping short term interest rates at the current rate of 0.00 – 0.25%. Ongoing recovery efforts for defaulted Washington Mutual and Lehman Brothers are more fully described in Exhibit A. Prepared by: Approved by: _______________________ Eamonn M. Mahar Investment Officer September 30, 2010 _______________________ Louis G. Solton Treasurer-Tax Collector September 30, 2010 cc: County Administrative Office County Counsel Auditor-Controller – Internal Audit Section All depositors Treasury Oversight Committee Attachments: Exhibit A – Investment Portfolio Review – 09.30.10 Exhibit B – Portfolio Management Report – 09.30.10 Exhibit C – Investment Definitions Exhibit D – Aging Report – 09.30.10 Exhibit E – Overnight (Liquid) Asset Distribution AGENDA ITEM FOR BOARD MEETING OF: Title: December 7, 2010 Number Process for Redrawing Established Trustee Area Boundaries IX. D. Area Status Office Superintendent/President Information Background Hartnell Community College District has seven political sub-districts or Trustee Areas. The boundaries of these areas must be reexamined every ten years using US Census data. The summary below outlines the basic steps in the process as provided by Jeanne Gobalet, in the training sponsored by the Monterey County Office of Education, November 22, 2010. A workshop packet has been provided to each Board member. Summary Phase One: 1) Contract with a Demographer and 2) contract with an attorney. Phase Two: 1) Demographer analyzes 2010 Census Data (beginning April 1, 2011) to determine whether current Trustee Area Boundaries meet legal requirements. And, if adjustments need to be made, adopt a process for doing so. In this case, the recommended process is that the Board not do the work but instead that the Board appoint a citizens advisory committee, plus demographer, plus counsel to make boundary recommendations to the Board. 2) Board adopts new boundaries by March 1, 2012 in accordance with Education Code. Phase 3: 1) Changes submitted to US Department of Justice for Preclearance (minimum 60 day process). Phase 4: 1) County Elections Office adjusts precincts as needed. It is recognized that this lengthy process is not likely to be completed before the filing deadline for 2011 elections. Recommendation That the Board appoint a Demographer and an Attorney not later than January, 2011; consider any savings that might be leveraged by working with MPC and school districts in Monterey County; and, recognize that the estimated cost for these services are expected to range from $50,000 (the amount charged by the demographer in 2001) to as much as twice that amount plus attorney fees. BOARD OF TRUSTEES ADJOURNMENT