HARTNELL COMMUNITY COLLEGE DISTRICT
Board of Trustees –Annual Organizational and Regular Meeting
November 29, 2011
TIME/PLACE
411 Central Avenue, Salinas - CALL Building, Room 208
5:00 p.m. – PUBLIC HEARING ON 50% LAW
ANNUAL ORGANIZATIONAL, REGULAR MEETING, AND CLOSED SESSION TO FOLLOW
Board of Trustees
Erica Padilla-Chavez, President
Kevin Healy, Vice President
Candi DePauw, Patricia Donohue, Bill Freeman,
Elia Gonzalez-Castro, Ray Montemayor
Juan M. Gutierrez, Student Trustee
Dr. Phoebe Helm, Superintendent/President, Secretary to the Board
The Board of Trustees welcomes you to its meetings. The agenda and supporting 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 Clerk 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. Pursuant to Board Policy 1025, members of the public shall also be able to address the
Governing Board regarding items on the agenda as those items are taken up. 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.
ACCOMMODATIONS: All meeting locations are wheelchair accessible. The following services are
available when requests made by 4:00 p.m. of the Wednesday before the Board meeting: American
Sign Language interpreters or use of a reader during a meeting; large print agenda or minutes;
assistive listening devices. Please contact, the Office of the President at (831) 755-6900, if you need
assistance in order to participate in a public meeting or if you need the agenda and public documents
modified as required by Section 202 of the Americans with Disabilities Act.
HCCD – ANNUAL ORGANIZATIONAL AND REGULAR MEETING OF THE BOARD – NOVEMBER 29, 2011
Page 1 of 5
I. PUBLIC HEARING ON 50% LAW
Action
A.
CALL TO ORDER
B.
PLEDGE OF ALLEGIANCE
C.
ROLL CALL
D.
OPEN PUBLIC HEARING
E.
PRESENTATION ON 50% LAW – C. M. Brahmbhatt
F.
PUBLIC COMMENTS ON 50% LAW – (Three minutes maximum per person)
G.
CLOSE PUBLIC HEARING
H.
APRROVE REQUEST FOR EXEMPTION
I.
RECOGNIZE THE 2011 LIVING BREATH FOUNDATION BOWL CHAMPIONS
J.
PUBLIC COMMENTS (3 minutes maximum person)
II. AUDIT REPORTS FOR FISCAL YEAR ENDING JUNE 30, 2011
Action
A.
PRESENTATION - Gema M. Ptasinski, CPA – Vicenti, Lloyd, & Stutzman LLP
B.
ACCEPT INDEPENDENT AUDITOR’S REPORT FOR YEAR ENDING JUNE 30, 2011
Accept the Independent Auditor’s Report for the year ending June 30, 2011. The reports for 20102011 include all funds: 1) General (restricted and unrestricted), 2) Hartnell College Foundation, 3)
Measure H Capital Bond Funds, and four (4) Performance Audits.
III. ANNUAL ORGANIZATION – BOARD OF TRUSTEES
A. SWEARING IN OF TRUSTEES
Administer Oath of Office to recently elected Trustees to serve four-year terms, effective
December 2, 2011 in accordance with Education Code 72000, et.seq.
(10 minutes)
Action
Action
Action
Roll-call
Roll-call
BREAK
B. ELECTION OF OFFICERS
Elect officers to the Board of Trustees for the 2012 calendar year.
C. APPOINTMENT OF REPRESENTATIVES TO STANDING ORGANIZATIONS
Appoint one representative to the Sunrise House and one representative to the Monterey County
School Boards Association for calendar year 2012.
D. DESIGNATION OF 2012 BOARD MEETING DATES AND TIMES
Set dates and times of Board meetings for the 2012 calendar year.
E. RESOLUTION 11:13, AUTHORIZING SIGNATURE OF BOARD SECRETARY
Adopt Resolution 11:13, Authorizing Signature of Board Secretary to sign all appropriate documents.
F. RESOLUTION 11:14, INAPPRECIATION OF OUTSTANDING PUBLIC SERVICE
Adopt Resolution 11:14, In appreciation of outstanding public service for Trustee Healy.
HCCD – ANNUAL ORGANIZATIONAL AND REGULAR MEETING OF THE BOARD – NOVEMBER 29, 2011
Page 2 of 5
IV.
REGULAR SESSION
PUBLIC COMMENTS
Fifteen minutes (three-minute maximum per person) set aside to receive public comments on closed
session and public session, or items not on the public session agenda, but within the jurisdiction of
the Board.
V.
CONSENT AGENDA
A. MINUTES
Adopt minutes of Regular Meeting of November 1, 2011 and Special Meeting of
November 15, 2011.
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
Ratify the recommendations from Curriculum Committee actions for the period of October 6
through October 20, 2011.
D. LETTER OF AGREEMENT WITH SAN FRANCISCO COMMUNITY COLLEGE DISTRICT
Ratify the 2011-2012 Letter of Agreement between Hartnell College and San Francisco
Community College 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.
E. AGRICULTURAL LEASE AGREEMENT WITH FRANSCIONI BROTHERS, INC.
Approve to amend the agricultural lease agreement between Hartnell College and Franscioni
Brothers, Inc. for Alisal Campus farmland, beginning December 3, 2011 through December 2,
2012. There is no impact to the general fund. Annual rental revenues from property must be
placed in the restricted Property Acquisition Fund.
F. CONTRACT BETWEEN INDEPENDENT AUDITING FIRM VICENTI, LLOYD,
STUTZMAN, LLP AND HARTNELL COLLEGE
Approve 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 2012. This
amendment brings the total contract cost to a not to exceed amount of $122,560 and extends the
end date through December 31, 2012 for the audit of all funds for 2011-12.
G. CONTRACT WITH UNIVERSAL PROTECTION SERVICES
Approve to amend the term of the agreement with Universal Protection Services through June 30,
2013, for security services at the Main and Alisal Campuses and at the King City Education
Center. The annual cost for these services is not to exceed $560,000 paid from the general fund.
HCCD – ANNUAL ORGANIZATIONAL AND REGULAR MEETING OF THE BOARD – NOVEMBER 29, 2011
Page 3 of 5
H. AWARD BID AND AUTHORIZE ADMINISTRATION TO ENTER INTO AGREEMENT
WITH KIS GROUP, MOST QUALIFIED BIDDER
Award bid and authorize administration to enter into agreement with KIS Group, most qualified
bidder, for campus wide Virtualization and Network Administrative Software Modernization
project at a cost of $631,607 over three phrases, paid from multiple funds.
I.
AWARD BID AND AUTHORIZE ADMINISTRATION TO ENTER INTO A CONTRACT
FOR THE ALISAL CAMPUS PARKING LOT PROJECT
Award bid and authorize administration to enter into a contract with Perma Green Hyrdoseeding,
lowest responsive bidder, for the Alisal Campus Parking Lot Project. The cost of this project is
$831,700, and paid from Measure H funds.
J. STUDENT TRUSTEE TRAVEL
Ratify travel for Student Trustee to attend Statewide Student Trustee Meeting on
November 4, 2011 at the San Jose Fairmont Hotel. Reimbursement included one night’s
lodging, mileage reimbursement, and meals.
K. PERSONNEL ACTIONS
Approve and/or ratify Personnel Actions (included in packet).
VI.
ACTION ITEMS
A. BUDGET REVISIONS
Approve the budget revisions numbered 9493 to 9525.
B. AWARD EMPLOYEES A ONE-TIME STIPEND
Award employees a one-time stipend of 2%.
C. AWARD A PROFESSIONAL SERVICES CONTRACT
Award a Professional Services Contract to conduct a national search.
VII.
INFORMATION ITEMS
A. UPDATE ON CURRENT CONSTRUCTION PROJECTS
Receive the written report on current construction projects.
B. FINANCIAL STATEMENTS
Receive financial statements for period ending October 31, 2011.
C. FIRST READING – BOARD POLICY
Review first reading of revised Board Policy 1010, Annual Organizational Meeting and Officers
of the Board.
D. REPORTS FROM SENATES
Receive oral reports from Student, Academic, and Classified Senates on matters of interest to the
college.
E. REPORT FROM SUPERINTENDENT/PRESIDENT
F. REPORTS FROM BOARD OF TRUSTEES
HCCD – ANNUAL ORGANIZATIONAL AND REGULAR MEETING OF THE BOARD – NOVEMBER 29, 2011
Page 4 of 5
VIII.
CLOSED SESSION
Items discussed in Closed Session may 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. Conference with Legal Counsel - Anticipated Litigation - Significant exposure to
litigation pursuant to Section 54956.9(b): One case
IX.
RECONVENE PUBLIC SESSION
A. REPORT OUT FROM CLOSED SESSION, IF ANY
B. ANNOUNCEMENT OF NEXT MEETINGS
1. Board Development Meeting – December 6, 2011, 5 p.m., CALL, Room 208
2. Board Development Meeting – December 13, 2011, 5 p.m., CALL, Room 208
3. Regular Board Meeting – January 24, 2012, 5 p.m., CALL, Room 208
X.
ADJOURNMENT
Adjourn the meeting.
HCCD – ANNUAL ORGANIZATIONAL AND REGULAR MEETING OF THE BOARD – NOVEMBER 29, 2011
Page 5 of 5
PUBLIC HEARING
AGENDA ITEM FOR BOARD MEETING OF:
November 29, 2011
Title
Public Hearing and Request for an Exemption
from the 50% Law
Number
Area
Superintendent/President
Prepared by: Dr. Phoebe K. Helm
Status
Action
I.H.
Recommendation
It is recommended that the Board of Trustees holds a Public Hearing on the Request for an Exemption
from the 50% law and approve a request for an exemption.
Background: In 1958, legislation passed in California to require that 50% of all general funds be spent in
the classroom. The only items that count as being spent “in the classroom” are basically the salaries and
benefits of faculty while teaching. That means that counselors, librarians, and non-teaching faculty
(reassigned to other duties such as Academic Senate President, Union President, etc) do not count as “in
the classroom” expenditures. Despite this limited definition and despite the fact that “smart classrooms”
today require far more than the “sage at the front of the stage” that was typical of the classroom in 1958,
California Community Colleges, including Hartnell, have managed to stay above the 50% requirement.
The recent rapid decrease in State funding of Categorical Programs as well as General Operations has
begun to threaten that ability across the system. And, this is the specific reason why Hartnell is
requesting an exemption for FY 2010-11.
First, let us look at how the calculations work. Categorical Funds do not count in the formula. General
fund expenditures fall into either the numerator (above the line) or denominator (below the line) in
determining the ratio of 50%. Salaries and benefits of teaching faculty count in the numerator and all
other salaries and benefits (CSEA, confidential, L-39, administrators, supervisors, student tutors, trustees,
and others) utilities, contracts, fees, trustee elections, travel, equipment, supplies, and etc. count in the
denominator. In recognition of the fact that community college students need support outside the
classroom to be successful, the State began funding categorical programs, namely, Extended Opportunity
Programs and Services (EOPS) and Disabled Students Programs and Services (DSPS) and Matriculation.
Matriculation is defined as student success and includes such expenditures as counseling, counseling
support services, transfer services, tutoring and basic skills. The creation of these services as
Categorically Funded Programs enabled colleges to provide these services outside of the General Fund
and thus, outside of the formula for calculating the 50% law.
Second, let us look at the specific reasons why the expenditure of General Funds fell below the 50% line
in FY 2010-11. State reductions in both Categorical and General Funds led the college to make two
decisions that account for the need for an exception: 1. Categorical Funds from the State were reduced by
$1,055,905. The college chose to maintain a substantive portion of these services using General Funds
and did so by providing $753,053 in excess of the required match. 2. Because 700 or more FTES were
unfunded and general State reserves were decreasing; the college chose not to hold Summer School in
2010, which saved approximately $1 million in teaching salaries in General Fund expenditures.
Summary
While these two decisions were good for students and good for our current financial health, they changed
the distribution of expenditures of General Funds in FY 2010-11 by decreasing the numerator by $1
million and increasing the denominator by $753,053. Had the college not provided the excess match in
general funds, $200,361 would not have been available in basic skills support and $552,692 would not
have been available in counseling, outreach, counseling support, and transfer services. As a result, the
college expended 48.79% on teaching salaries and benefits in FY 2010-11, which necessitates this request
for an exemption.
AGENDA ITEM FOR BOARD MEETING OF:
Title
November 29, 2011
Number
Accept the Independent Auditor’s Reports
for the fiscal year ended June 30, 2011
II. B.
Area
Status
Office of Support Operations
Prepared by: Alfred Muñoz
Action
Recommendation
It is recommended that the Board of Trustees accepts the annual Audit Reports for fiscal year
ended June 30, 2011.
Summary
The attached Audit Reports for the fiscal year ended June 30, 2011 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 2010-2011 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, 2011
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
AUDIT REPORT
June 30, 2011
CONTENTS
Page
INDEPENDENT AUDITOR’S 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 – Agency Funds .................................................
Statements of Fiduciary Net Assets – Trust Funds .....................................................
Statements of Changes in Fiduciary Net Assets – Trust Funds ..................................
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 .................................................................
12-41
REQUIRED SUPPLEMENTARY INFORMATION:
Schedule of Postemployment Healthcare Benefits Funding progress ........................
Notes to Required Supplementary Information ..........................................................
42
43
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 ..........................................................................
44
45-47
48
49
50
51
52-53
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
AUDIT REPORT
June 30, 2011
CONTENTS
Page
OTHER INDEPENDENT AUDITOR’S 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 ...................................................................
Independent Auditor’s Report on Compliance with Requirements That Could
Have a Direct and Material Effect on Each Major Program and on Internal
Control Over Compliance in Accordance with OMB Circular A-133...................
Independent Auditor’s Report on State Compliance ..................................................
FINDINGS AND QUESTIONED COSTS:
Schedule of Findings and Questioned Costs – Summary of Auditor Results .............
Schedule of Findings and Questioned Costs Related to Financial Statements ...........
Schedule of Findings and Questioned Costs Related to Federal Awards ...................
Status of Prior Year Findings and Questioned Costs ..................................................
54-55
56-57
58-60
61
62-68
69
70
DRAFT for Discussion Purposes Only
INDEPENDENT AUDITOR’S 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, 2011 and 2010 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, 2011 and
2010, 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.
In accordance with Government Auditing Standards, we have also issued our report dated November 16,
2011 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
postemployment healthcare benefits 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, is the
responsibility of management and was 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 16, 2011
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
Fiscal Year Ending June 30, 2011
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.
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 2010-11 fiscal year, final recalculated FTES at November 2011
were 7,000 as compared to 7,373 in the 2009-10 fiscal year. Of the total FTES generated, 6,493
were funded in 2010-11 based on P2 FTES and any additional funding for the recalculated FTES
of 7,000 will be received in February 2012. 6,819 FTES were funded in 2009-10.

During the 2010-11 fiscal year, the District provided over $15 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, 2011
FINANCIAL ANALYSIS OF THE DISTRICT AS A WHOLE
NET ASSETS as of June 30,
(Amounts in thousands)
2011
2010
ASSETS
Current Assets
Cash and investments
Accounts receivable, net
Other current assets
$ 12,803
12,222
90
Total Current Assets
Restricted cash and other non-current assets
Capital Assets, net
$
25,115
57,088
138,635
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
13,273
9,653
72
22,998
71,496
124,911
$ 220,838
$
219,405
$
$
9,184
1,908
8,334
2,101
10,435
134,835
11,092
131,782
145,270
142,874
NET ASSETS
Invested in capital assets
Restricted
Unrestricted
48,227
12,179
15,162
54,272
11,159
11,100
Total Net Assets
75,568
76,531
Total Liabilities
Total Liabilities and Net Assets
$ 220,838
$
219,405
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, 2011
There were substantial changes in ending balances from prior fiscal year to current fiscal year. Accounts
receivable, net increased by $2.5 million. This increase was primarily due to increases in apportionment
deferral, grants, and increase in student receivables for summer session enrollment. The District did not
have a summer session in fiscal year 2009-10. 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
Advanced Technology (CAT) building.
Operating Results for the Year Ended June 30,
(Amounts in thousands)
2011
2010
Operating Revenues
Tuition and fees
Grants and contracts
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
Other nonoperating revenues
and (expenses)
Total Nonoperating Revenue
and (Expenses)
Other Revenues, Expenses, Gains and Losses
State and local capital income
Interest income, Capital
Interest expenses and losses
Total Revenues, Expenses, Gains
and Losses
Increase in Net Assets
$
1,963
23,824
504
$
2,300
19,856
536
26,291
22,692
32,109
24,585
3,954
30,648
18,759
3,395
60,648
52,802
(34,357)
(30,110)
16,315
22,445
1,253
11
14,991
22,880
972
208
77
2
40,101
39,053
1,044
95
(7,846)
2,717
1,013
(5,262)
(6,707)
(1,532)
(963)
$
7,411
This schedule has been prepared from the Statement of Revenues, Expenses, and Changes in Net Assets
presented on page 2.
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, 2011
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.
Operating expenses increased primarily due to increases in financial aid awarded to students. Nonoperating interest expense relates directly to debt service requirements of the general obligation bonds.
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 years 2009-10 and 2010-11. The District recovered $274,837 in fiscal year
2009-10 and $101,328 in fiscal year 2010-11.
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)
2011
2010
Cash Provided by (Used in)
Operating activities
Noncapital financing activities
Capital financing activities
Investing activities
Net (Decrease) in Cash
Cash, Beginning of Year
Cash, End of Year
$ (31,083)
38,523
(23,384)
1,142
(14,802)
82,882
$ 68,080
$ (28,746)
35,952
33,607
(1,810)
39,003
43,878
$ 82,881
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.
Fiscal year 2009-10 reflects the general obligation bond issue, Series D, of approximately $48.4 million as
indicated in capital financing activities.
-iv-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
Fiscal Year Ending June 30, 2011
CAPITAL ASSET AND DEBT ADMINISTRATION
Capital Assets
At June 30, 2011, the District had $138.6 million in a broad range of capital assets, including land,
buildings, and furniture and equipment, net of depreciation. At June 30, 2010, net capital assets
were $124.9 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.
Capital projects are planned for the 2011-12 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)
2011
2010
35,209
$
39,614
131,792
110,398
9,502
8,813
176,503
37,868
Totals
$
-v-
138,635
158,825
33,914
$
124,911
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
Fiscal Year Ending June 30, 2011
Long-Term Obligations
At the end of the 2010-11 fiscal year, the District had $137 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.
General obligation bonds
Premium on obligations
Early retirement incentive
Other post employment benefits
$
Totals
$
(Amounts in thousands)
2011
2010
131,625
$
128,227
4,418
4,729
517
601
133
376
136,936
$
133,690
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 Standard in August 2010 for Series A, B, C, and D. The Standard & Poor’s rating
has also been downgraded from AAA to AA- during the same period for Series A, C, and D. Series B was
downgraded to AA+ Watch Negative.
-vi-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
MANAGEMENT’S DISCUSSION AND ANALYSIS
Fiscal Year Ending June 30, 2011
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. In fiscal year 2011-12 the State funding level was reduced by $400
million from the prior fiscal year.
The District issued 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 Technology Building, the
Classroom Administration Building renovation, and the Science Building.
At the time the budget was developed, the following assumptions were made:

The 2011-12 State budget for community colleges contains no Cost of Living Allowance (COLA)
increase.

The 2011-12 State budget for community colleges contains no increase in funding for student
growth.

The 2011-12 State budget for community colleges contains no change in categorical funding from
the previous year.

The Districts 2011-12 adopted budget reflects a State apportionment deficit of 5% 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, 2011 and 2010
2011
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
12,564,411
238,533
12,221,723
15,588
74,997
25,115,252
2010
$
13,035,537
237,340
9,653,203
14,202
57,252
22,997,534
55,515,429
1,571,956
138,635,171
195,722,556
69,846,201
1,650,318
124,910,699
196,407,218
$ 220,837,808
$ 219,404,752
$
$
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
1,299,809
1,795,963
1,328,694
648,698
16,757
3,243,746
80,974
2,020,000
10,434,641
106,919
4,753,575
1,065,463
654,895
112,562
2,490,230
83,335
1,825,000
11,091,979
Non-Current Liabilities:
Other postemployment benefits other than pensions (OPEB)
Early retirement incentive
Bonds payable
Total Non-Current Liabilities
376,073
436,242
134,023,366
134,835,681
132,820
517,216
131,131,502
131,781,538
TOTAL LIABILITIES
145,270,322
142,873,517
NET ASSETS
Invested in capital assets, net of related debt
Restricted for:
Capital projects
Debt service
Other special purposes
Unrestricted
48,227,138
54,272,506
8,160,085
3,541,296
477,420
15,161,547
6,964,736
3,410,882
783,424
11,099,687
TOTAL NET ASSETS
75,567,486
76,531,235
$ 220,837,808
$ 219,404,752
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, 2011 and 2010
2011
OPERATING REVENUES
Tuition and fees (gross)
Less: Scholarship discounts and allowances
Net tuition and fees
Grants and contracts, non-capital:
Federal
State
Local
Sales
$
4,545,537
(2,582,943)
1,962,594
2010
$
4,308,296
(2,007,884)
2,300,412
17,896,110
4,434,897
1,492,730
504,299
13,771,207
4,504,259
1,580,499
535,716
26,290,630
22,692,093
24,330,404
7,779,035
22,966,059
7,682,398
10,812,258
12,423,604
1,348,305
3,954,176
8,557,994
8,987,127
1,213,935
3,394,757
60,647,782
52,802,270
(34,357,152)
(30,110,177)
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
16,315,268
22,444,956
1,252,950
10,805
87,754
(10,753)
14,991,470
22,880,276
972,127
208,109
113,564
(111,965)
TOTAL NON-OPERATING REVENUES (EXPENSES)
40,100,980
39,053,581
5,743,828
8,943,404
OTHER REVENUES, EXPENSES, GAINS AND LOSSES
State apportionments, capital
Interest and investment income (loss), capital
Interest expense on capital asset-related debt
1,043,899
94,656
(7,846,132)
2,717,185
1,012,650
(5,262,318)
TOTAL OTHER REVENUES, EXPENSES, GAINS AND (LOSSES)
(6,707,577)
(1,532,483)
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 (DECREASE) IN NET ASSETS
(963,749)
7,410,921
76,531,235
NET ASSETS, BEGINNING OF YEAR
NET ASSETS, END OF YEAR
$
See the accompanying notes to the financial statements.
-2-
75,567,486
69,120,314
$
76,531,235
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
STATEMENTS OF CASH FLOWS
For the Fiscal Years Ended June 30, 2011 and 2010
2011
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
$
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
1,267,689
17,499,630
4,369,041
1,844,928
619,504
(12,466,788)
(31,687,146)
(12,423,604)
(106,558)
2010
$
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)
(31,083,304)
(28,746,140)
14,769,019
22,483,033
1,271,220
11,714,562
22,903,301
1,334,629
38,523,272
35,952,492
119,470
1,532,337
(20,348,309)
(4,687,104)
931,746
10,740,254
(21,935,854)
48,405,079
(4,534,716)
(23,383,606)
33,606,509
(51,150)
1,192,890
200,805
(2,010,499)
Net cash provided (used) by investing activities
1,141,740
(1,809,694)
NET CHANGE IN CASH AND CASH EQUIVALENTS
(14,801,898)
39,003,167
82,881,738
43,878,571
CASH BALANCE, BEGINNING OF YEAR
CASH BALANCE - END OF YEAR
Cash balances at June 30, 2011 and 2010 consisted of the following:
Cash and cash equivalents
Restricted cash and cash equivalents
Total cash balances
$
68,079,840
$
82,881,738
$
12,564,411
55,515,429
68,079,840
$
13,035,537
69,846,201
82,881,738
$
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, 2011 and 2010
RECONCILIATION OF OPERATING LOSS TO
NET CASH USED BY OPERATING ACTIVITIES
2011
2010
$ (34,357,152)
$ (30,110,177)
CASH USED BY OPERATING ACTIVITIES
Operating loss
Adjustments to reconcile operating loss to net cash
used by operating activities:
Depreciation expense
Provision for doubtful accounts
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)
Net cash used by operating activities
3,954,176
116,277
3,394,757
262,025
(1,559,730)
(1,385)
(17,745)
(35,373)
(95,806)
753,516
(83,335)
243,253
(730,592)
3,832
58,358
(1,643,759)
99,920
(98,307)
$ (31,083,304)
$ (28,746,140)
See the accompanying notes to the financial statements.
-4-
17,803
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
STATEMENTS OF FIDUCIARY NET ASSETS - AGENCY FUND
June 30, 2011 and June 30, 2010
2011
ASSETS
Cash and cash equivalents
Investments in local agency investment fund
Accounts receivable:
Miscellaneous
Due from District
$
430,827
158,885
2010
$
431,056
158,082
493
17,095
553
12,101
TOTAL ASSETS
607,300
601,792
LIABILITIES
Accounts payable
Funds held in trust
2,506
604,794
3,815
597,977
$
TOTAL LIABILITIES
607,300
See the accompanying notes to the financial statements.
-5-
$
601,792
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
STATEMENTS OF FIDUCIARY NET ASSETS - TRUST FUNDS
June 30, 2011 and June 30, 2010
2011
ASSETS
Cash and cash equivalents
Investments in local agency investment fund
Accounts receivable:
Miscellaneous
Due from District
$
2010
179,691
67,682
$
41,081
117,086
168
20
100,461
247,541
258,648
40,371
338
60,806
9,810
10,303
TOTAL LIABILITIES
101,515
20,113
NET ASSETS
Restricted for scholarships
Unrestricted
TOTAL NET ASSETS
94,615
51,411
146,026
121,998
116,537
238,535
TOTAL ASSETS
LIABILITIES
Accounts payable
Due to District
Funds held in trust
$
See the accompanying notes to the financial statements.
-6-
$
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, 2011 and 2010
2011
ADDITIONS
Local revenues
Transfer from District
Interest and investment income
$
2010
1,125
10,890
100,000
5,049
15,610
115,939
Operating expenses
108,119
32,909
TOTAL DEDUCTIONS
108,119
32,909
(92,509)
83,030
238,535
155,505
TOTAL ADDITIONS
14,485
$
DEDUCTIONS
CHANGE IN NET ASSETS
NET ASSETS, BEGINNING OF YEAR
$
NET ASSETS, ENDING OF YEAR
146,026
See the accompanying notes to the financial statements.
-7-
$
238,535
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, 2011 and 2010
2011
ASSETS
Current Assets
Cash and cash equivalents - unrestricted
Cash and cash equivalents - restricted
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
115,990
3,582,103
507,837
6,341
17,866
4,230,137
$
198,763
2,453,577
672,302
6,033
22,330
3,353,005
5,395,580
320,731
55,214
95,133
325,849
6,192,507
$ 10,422,644
4,322,111
204,173
149,501
101,465
326,183
5,103,433
$ 8,456,438
$
$
640,044
241,180
50,901
932,125
499,111
4,513,497
4,477,911
9,490,519
$ 10,422,644
See the accompanying notes to the financial statements.
-8-
2010
566,544
168,192
65,999
800,735
65,765
3,134,865
4,455,073
7,655,703
$ 8,456,438
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, 2011
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
9,701
171,223
122,190
285,872
1,523,505
2,112,491
319,160
1,815,043
93,595
2,227,798
OPERATING INCOME
2,004,079
32,599
59,531
21,948
(1,523,505)
594,652
594,652
OTHER INCOME
Interest and dividends
Realized gain on sale of investments
Unrealized gain on investments
Total other income
15,790
31,770
472,671
520,231
106,482
452,250
196,901
755,633
CHANGE IN NET ASSETS BEFORE
TRANSFERS
404,924
1,350,285
TRANSFERS
Change in donor designation
Transfer to Endowment - FCCC Foundation
Total transfers
28,422
NET ASSETS
Net Assets, Beginning of year
Net Assets, End of Year
$
79,607
56,578
(28,231)
28,347
28,422
CHANGE IN NET ASSETS AFTER
TRANSFERS
79,607
-
(115,307)
79,607
Total
$ 2,093,387
203,822
181,721
307,820
2,786,750
319,160
1,815,043
93,595
2,227,798
558,952
-
122,272
484,020
669,572
1,275,864
79,607
1,834,816
(85,000)
28,231
(56,769)
-
433,346
1,378,632
22,838
1,834,816
65,765
3,134,865
4,455,073
7,655,703
4,477,911
$ 9,490,519
499,111
$
4,513,497
$
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, 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.
-10-
-
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, 2011 and 2010
2011
2010
Cash flows from operating activities
Change in net assets
$
Adjustment to reconcile changes in net assets to net
cash provided for operations
Unrealized gain on investments
Depreciation
Changes in operating assets and liabilities:
Receivables
Prepaid expenses
Payables
Deferred revenue
Net cash provided by operating activities
1,834,816
$
822,694
(669,572)
334
(325,422)
192
264,776
4,464
146,488
(15,098)
94,558
(22,330)
(107,320)
49,852
1,566,208
512,224
Cash flows from investing activities
Purchase of investments
Proceeds from the sale of investments
Net cash used by investing activities
(4,087,189)
3,566,734
(3,218,675)
2,481,093
(520,455)
(737,582)
Net increase(decrease) in cash and cash equivalents
1,045,753
Cash and cash equivalents, beginning of year
2,652,340
(225,358)
2,877,698
Cash and cash equivalents, end of year
$
3,698,093
$
2,652,340
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, 2011 and 2010
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, 2011 and 2010
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.
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.
-13-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2011 and 2010
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (continued)
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.
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.
-14-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2011 and 2010
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (continued)
C.
BASIS OF ACCOUNTING (continued)
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.
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. All material receivables are considered fully collectible.
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.
Accounts receivable from students for tuition and fees is recorded net of a
provision for uncollectible amounts.
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.
-15-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2011 and 2010
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (continued)
C.
BASIS OF ACCOUNTING (continued)
4.
Prepaid Expenses
Payments made to vendors for goods or services that will benefit periods
beyond June 30, 2011, 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.
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.
-16-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2011 and 2010
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (continued)
C.
BASIS OF ACCOUNTING (continued)
8.
Accounts Payable and Accrued Liabilities
Accounts payable consists of amounts due to vendors for goods and services
received prior to June 30. Accrued liabilities consist of salaries and benefits
payable and deferred summer pay.
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.
Restricted General Fund
10.
2011
2010
$1,299,809
$ 106,919
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.
11.
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.
-17-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2011 and 2010
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (continued)
C.
BASIS OF ACCOUNTING (continued)
11.
Compensated Absences (continued)
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.
12.
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.
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.
-18-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2011 and 2010
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (continued)
C.
BASIS OF ACCOUNTING (continued)
12.
Net Assets (continued)
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
assigned for the following:
Assigned for Bookstore Fund
Assigned for Child Development Fund
Assigned for Cafeteria Fund
Assigned for Self Insurance Fund
Assigned for Retiree Benefits
13.
2011
2010
$1,143,284
219,838
306,225
1,099,471
4,124,012
$1,135,361
255,662
360,697
1,142,839
3,398,886
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 2012 will be recorded in
the year computed by the State.
14.
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.
-19-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2011 and 2010
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (continued)
C.
BASIS OF ACCOUNTING (continued)
14.
Property Taxes (continued)
The District sold delinquent ad valorem property tax receivables to the
Monterey County Delinquent Tax Finance Authority. For the fiscal years
ending June 30, 2011 and 2010, $72,902 and $78,245 was received,
respectively.
15.
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 $235,000 and $205,000 for
STRS at June 30, 2011 and 2010, respectively.
16.
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.
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.
-20-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2011 and 2010
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (continued)
C.
BASIS OF ACCOUNTING (continued)
17.
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.
18.
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.
19.
Reclassifications
Certain reclassifications have been made to the 2010 financial statements to
conform to the 2011 presentation.
-21-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2011 and 2010
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, 2011 and 2010, respectively, $1,582,555 and
$1,795,202 of the District’s bank balance of $1,848,169 and $2,122,877 was
exposed to credit risk as follows:
Uninsured and collateral held by pledging bank’s
trust department not in the District’s name
2011
2010
$1,582,555
$1,795,202
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 unamortized cost which
approximates fair value. The fair market value of the District’s deposits in this
pool as of June 30, 2011 and 2010, as provided by the pool sponsor, was
$62,208,639 and $77,539,879, 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.
-22-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2011 and 2010
NOTE 2 - DEPOSITS AND INVESTMENTS:
A.
Deposits (continued)
Cash in County (continued)
The County investment pool is not required to be rated. Interest earned is deposited
quarterly into participating funds. The investment losses were proportionately
shared by all funds in the pool. The District suffered a loss of earnings in the 200809 fiscal year due to its investments in Lehman Brothers and Washington Mutual of
approximately ($1,400,000). $274,830 was recovered and recorded to interest
earned for the 2009-10 year. $101,328 was recovered and recorded to interest
earned for the 2010-11 year.
B.
Investments
The District maintains investments with the State of California Local Agency
Investment Fund (LAIF) amounting to $465,100 and $512,508 as of June 30, 2011
and 2010, respectively, including amounts invested by Fiduciary Funds. 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.
NOTE 3 - ACCOUNTS RECEIVABLE:
The accounts receivable balance consists of the following:
Federal and State
Student receivable (net of allowance for
doubtful accounts of $1,268,280 and
$1,152,003 as of June 30, 2011 and
2010, respectively)
Miscellaneous
-23-
2011
2010
$ 8,615,594
$ 7,737,663
2,032,526
1,573,603
1,197,547
717,993
$12,221,723
$ 9,653,203
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2011 and 2010
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, 2011:
Balance
June 30, 2010
Non-depreciable assets:
Land
Construction in progress
Total non-depreciated assets:
Depreciable assets:
Site and site improvements
Equipment
Total depreciable assets:
Less accumulated depreciation for:
Site and site improvements
Equipment
Total accumulated depreciation:
Total depreciable assets, net
Governmental capital assets, net
$
590,992
39,022,793
39,613,785
Additions
$
Retirements
$
17,384,609
17,384,609
Balance
June 30, 2011
21,789,226
21,789,226
$
590,992
34,618,176
35,209,168
-
131,792,482
9,501,607
141,294,089
110,397,542
8,813,282
119,210,824
21,394,940
688,325
22,083,265
27,336,457
6,577,453
33,913,910
3,427,439
526,737
3,954,176
-
30,763,896
7,104,190
37,868,086
85,296,914
18,129,089
-
103,426,003
$ 124,910,699
$ 35,513,698
$ 21,789,226
$ 138,635,171
-24-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2011 and 2010
NOTE 5 - CAPITAL ASSETS: (continued)
The following provides a summary of changes in capital assets for the year ended
June 30, 2010:
Balance
June 30, 2009
Non-depreciable assets:
Land
Construction in progress
Total non-depreciated assets:
Depreciable assets:
Site and site improvements
Equipment
Total depreciable assets:
Less accumulated depreciation for:
Site and site improvements
Equipment
Total accumulated depreciation:
Total depreciable assets, net
Governmental capital assets, net
$
590,992
31,779,264
32,370,256
Additions
$
Retirements
$
23,257,668
23,257,668
Balance
June 30, 2010
16,014,139
16,014,139
$
590,992
39,022,793
39,613,785
-
110,397,542
8,813,282
119,210,824
94,383,403
8,553,383
102,936,786
16,014,139
259,899
16,274,038
24,461,169
6,057,984
30,519,153
2,875,288
519,469
3,394,757
-
27,336,457
6,577,453
33,913,910
72,417,633
12,879,281
-
85,296,914
$ 104,787,889
$ 36,136,949
$ 16,014,139
$ 124,910,699
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
2010A). 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 were not reflected as a liability in these financial
statements.
The District did not issue tax Revenue Anticipation Notes during the 2010-11 fiscal year.
-25-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2011 and 2010
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, 2011 and 2010 the principal
balance outstanding was $1,840,000 and $2,265,000, 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, 2011 and 2010, the principal balance outstanding (including
accreted interest to date) was $27,999,932 and $28,587,300, respectively. Unamortized
premium costs at June 30, 2011 and 2010 were $2,591,330 and $2,823,389, respectively.
Unamortized issue costs at June 30, 2011 and 2010 were $334,482 and $364,436,
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, 2011 and 2010 the principal balance outstanding (including accreted interest to
date) was $34,596,494 and $34,783,347, respectively. Unamortized premium costs at
June 30, 2011 and 2010 were $1,058,670 and $1,114,635, respectively. Unamortized
issue costs at June 30, 2011 and 2010 were $469,468 and $494,285, respectively.
Premium and issuance costs are amortized over the life of the bonds as a component of
interest expense on the bonds.
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, 2011 and 2010 the principal balance outstanding
(including accreted interest to date), was $13,917,995 and $13,096,645, respectively.
Unamortized premium and issue costs at June 30, 2011 and 2010 were $179,996 each and
$188,147 each, respectively. Premium and issuance costs are amortized over the life of
the bonds as a component of interest expense on the bonds.
-26-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2011 and 2010
NOTE 7 - GENERAL OBLIGATION BONDS: (continued)
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, 2011
and 2010 the principal balance outstanding (including accreted interest to date) was
$53,560,938 and $49,810,952. Unamortized premium and issue costs at June 30, 2011
and 2010 were $588,010 each and $603,450 each, respectively. 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, 2011 and 2010 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, 2011 and 2010,
unamortized deferred charges were $289,999 and $316,363, respectively.
-27-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2011 and 2010
NOTE 7 - GENERAL OBLIGATION BONDS: (continued)
The outstanding bonded debt for Hartnell Community College District at June 30, 2011
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
6/06/2006
4.10 - 5.25%
6/1/2031
34,995,518
5/27/2009
6.13 - 11.50%
8/1/2033
12,597,888
9/16/2009
6.43 - 11.50%
8/1/2049
48,405,079
(1)
$ 35,000,000
29,062,042
$ 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
$ 160,060,527
(1)
Issued
Current
Year
Outstanding
July 1, 2010
Interest
Accreted
Current Year
$
$
552,632
73,147
Redeemed
Current
Year
Outstanding
June 30, 2011
$
$
425,000
613,502
526,498
213,512
46,488
821,350
$
-
$
3,749,986
5,197,115
$ 1,825,000
1,840,000
25,752,690
2,247,242
34,195,325
401,169
12,597,888
1,320,107
48,405,079
5,155,859
$ 131,915,359
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, 2011,
are as follows:
Series A
Year Ended
June 30,
2012
2013
2014
Principal
Interest
Total
$
515,000
610,000
715,000
$
59,725
39,656
14,300
$
574,725
649,656
729,300
$
1,840,000
$
113,681
$
1,953,681
-28-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2011 and 2010
NOTE 7 - GENERAL OBLIGATION BONDS: (continued)
Refunding Bond
Year Ended
June 30,
2012
2013
2014
2015
2016
2017-2021
2022-2023
Principal
$
Accreted
Interest
Component
Interest
Total
574,752
537,100
502,679
638,159
2,015,000
13,840,000
7,645,000
$
1,163,688
1,163,688
1,163,688
1,163,688
1,118,350
3,703,138
371,093
$
625,248
722,900
822,321
1,251,841
$
2,363,688
2,423,688
2,488,688
3,053,688
3,133,350
17,543,138
8,016,093
$ 25,752,690
$
9,847,333
$
3,422,310
$ 39,022,333
Series B
Year Ended
June 30,
2012
2013
2014
2015
2016
2017-2021
2022-2026
2027-2031
Principal
$
239,391
239,635
263,895
308,540
328,864
3,955,000
12,010,000
16,850,000
$ 34,195,325
Interest
$
1,622,241
1,622,241
1,622,241
1,622,241
1,622,241
7,829,755
6,264,913
2,610,000
$ 24,815,873
-29-
Accreted
Interest
Component
Total
$
65,609
80,365
106,105
146,460
181,137
$
$
579,676
$
1,927,241
1,942,241
1,992,241
2,077,241
2,132,242
11,784,755
18,274,913
19,460,000
59,590,874
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2011 and 2010
NOTE 7 - GENERAL OBLIGATION BONDS: (continued)
Series C
Year Ended
June 30,
2012
2013
2014
2015
2016
2017-2021
2022-2026
2027-2031
2032-2034
Principal
Interest
Accreted
Interest
Component
Total
$
$
$
$
1,195,731
5,101,547
6,300,610
$ 12,597,888
4,372,178
5,867,597
1,080,144
$ 11,319,919
2,154,269
7,888,453
7,619,390
$ 17,662,112
$
7,722,178
18,857,597
15,000,144
41,579,919
Series D
Year Ended
June 30,
2012
2013
2014
2015
2016
2017-2021
2022-2026
2027-2031
2032-2036
2037-2041
2042-2046
2047-2050
Principal
$
483,460
1,868,094
15,876,647
12,229,492
10,802,583
7,144,803
$ 48,405,079
Accreted
Interest
Component
Interest
$
$
7,901,250
11,287,500
6,178,900
$ 25,367,650
-30-
801,539
5,076,906
33,356,982
89,193,888
124,801,679
133,564,632
$ 386,795,626
Total
$
9,186,249
18,232,500
55,412,529
101,423,380
135,604,262
140,709,435
$ 460,568,355
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2011 and 2010
NOTE 8 - LONG-TERM DEBT:
A schedule of changes in long-term debt for the year ended June 30, 2011 is shown
below:
Beginning
Balance
July 1, 2010
Additions
Deductions
Ending
Balance
June 30, 2011
$
$
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
$
2,265,000
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
$
552,632
73,147
425,000
1,140,000
232,059
(26,364)
260,000
55,965
821,350
8,151
3,749,986
5,197,115
15,440
2,110,251
243,253
$ 5,440,368
83,335
$ 2,193,586
1,840,000
27,999,932
2,591,330
(289,999)
34,596,494
1,058,670
13,917,995
179,996
53,560,938
588,010
136,043,366
376,073
517,216
$ 136,936,655
$
515,000
1,200,000
305,000
2,020,000
80,974
$ 2,100,974
Liabilities are liquidated by the General Fund for governmental activities, including net
OPEB obligations and supplemental employee retirement plans. General obligation bond
liabilities are liquidated through property tax collections as administered by the County
Controller’s office through the Bond Interest and Redemption Fund.
-31-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2011 and 2010
NOTE 8 - LONG-TERM DEBT: (continued)
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
-32-
$
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, 2011 and 2010
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.
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 2010-11 and
2009-10 was 8.25% of annual payroll. 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, 2011 and 2010
NOTE 9 - EMPLOYEE RETIREMENT PLANS: (continued)
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 10.707% of annual payroll for fiscal year 2010-11 and 9.709% of
annual payroll for fiscal year 2009-10. The contribution requirements of the plan
members are established and may be amended by State statute.
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,
2009
2010
2011
STRS
Required
Percent
Contribution
Contributed
$ 934,307
836,813
964,542
100%
100%
100%
-34-
PERS
Required
Percent
Contribution
Contributed
$1,033,971
917,282
1,274,324
100%
100%
100%
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2011 and 2010
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. A payment of $83,335 was made during the 2010-11 fiscal year. A payment
of $80,974 is due during the 2011-12 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.
NOTE 11 – POSTEMPLOYMENT HEALTH CARE BENEFITS:
Plan Description
The District administers two single-employer defined benefit healthcare plans: the
Retiree Health Plan (RHP) and beginning in the fiscal year 2010-11, the Retiree Health
Plan – Faculty Post-65 (RHPF).
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 the 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 the 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 full-time employment with the District. Benefits will be granted for a maximum
of ten years.
-35-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2011 and 2010
NOTE 11 - POSTEMPLOYMENT HEALTH CARE BENEFITS: (continued)
Plan Description (continued)
The District-paid health benefits for all retirees, except medical coverage for members of
the Hartnell College Faculty Association beginning in the 2010-11 fiscal year, terminates
at age 65. Retiree members of the Hartnell College Faculty Association receive lifetime
District-paid medical coverage for themselves and their dependents.
The retiree health plans do not issue a separate financial reports.
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 $380,178 to the
plans for fiscal year ended 2011 and $527,694 for fiscal year ended 2010.
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
RHP
2011
RHP
Annual required contribution (ARC)
$
Interest on net OPEB obligation
Adjustment to annual required contribution
Annual OPEB cost (expense)
537,958
RHPF
$
85,057
$
544,841
6,641
5,751
(6,225)
(5,095)
538,374
85,057
545,497
(378,458)
(1,720)
(527,694)
Change in net OPEB obligation
159,916
83,337
17,803
Net OPEB obligation – Beginning of Year
132,820
-
115,017
Contributions made
Net OPEB obligation - End of Year
$
-36-
292,736
$
83,337
$
132,820
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2011 and 2010
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:
Retiree Health Plan:
Fiscal Year
Ended
6/30/2009
6/30/2010
6/30/2011
Annual
OPEB Cost
$
Percentage of
Annual OPEB
Cost Contributed
535,232
545,497
538,374
96.7%
61.0%
70.3%
Net OPEB
Obligation
$
115,017
132,820
292,736
Retiree Health Plan - Faculty Post-65:
Fiscal Year
Ended
6/30/2011
Annual
OPEB Cost
$
85,057
Percentage of
Annual OPEB
Cost Contributed
2.0%
Net OPEB
Obligation
$
83,337
Funding Status and Funding Progress
As of October 1, 2010, the most recent actuarial valuation date, the plan was deemed
unfunded because the District is using an assigned fund rather than an irrevocable trust to
set aside resources for retiree health care costs. For the Retiree Health Plan, the actuarial
accrued liability for benefits as well as the unfunded actuarial accrued liability (UAAL)
was $4,221,464. The covered payroll (annual payroll of active employees covered by the
plan) was $14,917,763, and the ratio of the UAAL to the covered payroll was 28.30%.
For the Retiree Health Plan – Faculty Post-65, the actuarial accrued liability for benefits
as well as the unfunded actuarial accrued liability (UAAL) was $701,178. The covered
payroll (annual payroll of active employees covered the plan) was $6,006,163, and the
ratio of the UAAL to the covered payroll was 11.67%. Although the plans have no
segregated assets, the District does maintain a retiree benefits fund to assign resources for
retiree health care costs. The fund’s assigned balance was $4,142,012 and $3,398,886 at
June 30, 2011 and 2010, 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 postemployment healthcare benefits 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, 2011 and 2010
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 October 1, 2010 actuarial valuation reports for both the RHP and RHPF plans, 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. For the RHP plan, the initial UAAL
is being amortized as a level percentage of projected payroll using a closed amortization
period of 30 years. The remaining amortization period at June 30, 2011 is twenty-seven
years. The remaining UAAL is being amortized as a level percentage of projected
payroll using an open amortization period of 30 years. For the RHPF plan, the UAAL is
being amortized as a level percentage of projected payroll using a closed amortization
period of 20 years.
NOTE 12 - JOINT VENTURES (JOINT POWERS AGREEMENTS):
The District participates in six joint Powers Agreements (JPA) entities, Monterey County
Schools Insurance Group (MCSIG), Bay Area Community College Districts, School
Association for Excess Risk (SAFER), the Statewide Association of Community
Colleges (SWACC), Protected Insurance Program for Schools (PIPS), and the South Bay
Regional Public Safety Training Consortium.
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, 2011 and 2010
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. This is a finite risk sharing pool
that transfers risk away from the members. Premiums are determined based on payroll
expense and additional premiums may be required in subsequent years.
The South Bay Regional Public Safety Training Consortium provides education and
training to public safety students of participating community colleges.
-39-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2011 and 2010
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
6/30/2010
(Audited)
MCSIG
6/30/2010
(Audited)
SBRPSTC
6/30/2011
(Audited)
147,570
6,200
$ 7,163,229
2,751,849
$ 23,309,084
16,545,285
$ 4,175,392
1,742,003
141,370
$ 4,411,380
$ 6,763,799
$ 2,433,389
5,305,101
596,363
$ 39,295,919
39,284,942
$ 3,591,909
4,221,030
$ 78,833,498
78,934,901
$ 7,930,842
8,405,022
4,708,738
$
$ (629,121)
$
$
SWACC
6/30/2010
(Audited)
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
6/30/2010
(Audited)
10,977
(101,403)
(474,180)
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO FINANCIAL STATEMENTS
June 30, 2011 and 2010
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 - 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, 2011 and 2010, the District was committed under various capital
expenditure purchase agreements for construction and modernization projects
totaling $7,960,000 and $26,000,000, respectively. Projects will be funded through
bond proceeds and state funds.
-41-
DRAFT for Discussion Purposes Only
REQUIRED SUPPLEMENTARY INFORMATION
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
SCHEDULE OF POSTEMPLOYMENT HEALTHCARE BENEFITS FUNDING PROGRESS
For the Fiscal Year Ended June 30, 2011
Retiree Health Plan:
Actuarial
Valuation Date
6/1/2009
10/1/2010
Actuarial Value
of
Assets
(AVA)
Actuarial Accrued
Liability
(Unit Cost Method)
(AAL)
$
$
-
4,852,364
4,221,464
Unfunded Actuarial
Accrued Liability
(UAAL)
$
4,852,364
4,221,464
Funding
Ratio
0.0%
0.0%
Covered
Payroll
$
UAAL as a
Percentage of
Covered Payroll
16,251,014
14,917,763
29.86%
28.30%
Retiree Health Plan - Faculty Post-65:
Actuarial
Valuation Date
10/1/2010
Actuarial Value
of
Assets
(AVA)
Actuarial Accrued
Liability
(Unit Cost Method)
(AAL)
$
$
-
701,178
Unfunded Actuarial
Accrued Liability
(UAAL)
$
701,178
Funding
Ratio
0.0%
Covered
Payroll
$
UAAL as a
Percentage of
Covered Payroll
6,006,163
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, 2011, the funds assigned balance was $4,124,012.
See the accompanying notes to the required supplementary information.
-42-
11.67%
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO REQUIRED SUPPLEMENTARY INFORMATION
For the Fiscal Year Ended June 30, 2011
NOTE 1 - PURPOSE OF SCHEDULES:
Schedule of Postemployment 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 postemployment benefits other than
pensions.
-43-
DRAFT for Discussion Purposes Only
SUPPLEMENTARY INFORMATION
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
HISTORY AND ORGANIZATION
June 30, 2011
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
Erica Padilla-Chavez
President
November 2013
Kevin Healy
Vice President
November 2011
William Freeman
Member
November 2011
Elia Gonzalez-Castro
Member
November 2011
Patricia Donohue
Member
November 2011
Candi DePauw
Member
November 2013
Ray Montemayor
Member
November 2013
Juan M. Guitierrez
Student Trustee, Hartnell College
June 2012
DISTRICT EXECUTIVE OFFICERS
Dr. Phoebe K. Helm
Superintendent/President
Dr. Suzanne Flannigan
Vice President for Academic Affairs and Accreditation
Mr. Kent Stephens
Vice President for Support Operations
Ms. Terri Pyer
Associate Vice President for Human Resources
Vacant
Vice President for Student Affairs
Ms. Beverly Grova
Vice President for Advancement
-44-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2011
Federal Grantor/Pass-Through
Grantor/Program or Cluster Title
U. S. DEPARTMENT OF EDUCATION
Direct:
Financial Aid Cluster:
PELL Grant
Financial Aid Administration Allowance
Direct Loan
Academic Competitiveness Grant
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 College
Student Support Services Program
Migrant Ed - High School Equivalency Program
CFDA
Number
Pass-Through Entity
Identifying Number
Program
Expenditures
84.063
84.000
84.268
84.375
84.033
84.007
N/A
N/A
N/A
N/A
N/A
N/A
$ 10,651,723
13,545
395,886
147,485
138,929
150,465
11,498,033
84.031C
84.335A
84.334A
84.334S
84.031S
84.042A
84.141N
N/A
N/A
N/A
N/A
N/A
N/A
N/A
143,175
34,811
1,335,389
638,999
656,541
230,518
497,940
Total direct from U.S. Department of Education
15,035,406
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
84.048
84.243
07-C01-021
N/A
294,932
69,708
Passed through from the California Department of Education
Carl D. Perkins Career and Technical Education (CTE) Act
Tech Prep Demonstration Site
American Reinvestment Recovery Act: State Fiscal Stabilization Fund
84.243
84.394
N/A
N/A
100,000
24,841
Passed through from the California State Department of Rehabilitation
Workability III Department of Rehabilitation
84.126A
26014
140,233
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
115,925
Total passed through from U.S. Department of Education
745,639
See the accompanying notes to the supplementary information.
-45-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2011
Federal Grantor/Pass-Through
Grantor/Program or Cluster Title
CFDA
Number
Pass-Through Entity
Identifying Number
93.375
S0180631
14,995
Passed through from California Community Colleges Chancellor's Office
Temporary Assistance for Needy Families (TANF)
Foster Care - Title IV-E
93.558
93.658
N/A
N/A
55,532
141,514
Passed through from the County of Monterey, Department of Social and
Employee Services
Foster Care - Title IV-E (DSES)
93.658
N/A
378,761
Passed through from Yosemite Community College District
Child Development Training Consortium
93.575
N/A
11,760
DEPARTMENT OF HEALTH AND HUMAN SERVICES
Passed through from the University of California, Santa Cruz
National Institute of Health
Total passed through from Department of Health and Human Services
NATIONAL SCIENCE FOUNDATION
Direct:
Improving Women and Latino Enrollment in STEM Program
Advanced Technological Education
STEM Scholarship Program
Program
Expenditures
602,562
47.076
47.076
47.076
N/A
N/A
N/A
Total direct from National Science Foundation
126,849
12,600
76,234
215,683
Passed through from the University of California, Santa Cruz
CCLI - A Web-Enabled, Interactive Remote Laboratory for Renewable
Energy
47.076
S0182827
19,326
47.076
5027501A-120409-C-A
29,279
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
48,605
CORPORATION FOR NATIONAL AND COMMUNITY SERVICE
Direct:
National Service Award for Scholarships
94.006
Total direct from the Corporation for National and Community Service
See the accompanying notes to the supplementary information.
-46-
N/A
42,752
42,752
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
For the Fiscal Year Ended June 30, 2011
Federal Grantor/Pass-Through
Grantor/Program or Cluster Title
U.S. DEPARTMENT OF AGRICULTURE
Passed through from the California Department of Education
Forest Reserve Funds
Child Care Food Program
CFDA
Number
Pass-Through Entity
Identifying Number
10.665
10.558
10044
2850-6A
Total pass through from the U.S. Department of Agriculture
Program
Expenditures
3,112
10,218
13,330
Department of Commerce
Passed through from the Monterey County Office of Education
American Reinvestment Recovery Act: Broadband Technology
Opportunities Program
N/A
11.557
Total passed through from the Department of Commerce
529,061
529,061
U.S. Department of Labor
Passed through from the Employment Development Department (EDD)
American Reinvestment Recovery Act: Workforce Investment Act Green Building and Clean Energy Project
17.258
AA-17110-08-55-A-6
Total passed through from the U.S. Department of Labor
249,442
249,442
Department of Energy
Passed through from the Employment Development Department (EDD)
American Reinvestment Recovery Act: Green Building and Clean
Energy Project
81.041
N/A
Total passed through from the Employment Development Department:
Department of National Aeronautics & Space Administration
Direct:
Science, Engineering, Mathematics and Aerospace Academy
381,682
381,682
43.000
Total direct from National Aeronautics & Space Administration
N/A
31,948
31,948
Total Federal Awards
$ 17,896,110
N/A- Pass-through entity identifying number is either not available or not applicable
See the accompanying notes to the supplementary information.
-47-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
SCHEDULE OF EXPENDITURES OF STATE AWARDS
For the year ended June 30, 2011
Cash
Received
Program
GENERAL FUND
Block Grant
Basic Skills
California State Grants (CAL Grants)
CalWorks
Career Technical Education Growth & Enrollment Retention for Nursing
Career Technical Regional Occupation Partner #2
Career Technical Regional Occupation Partner #3
Career Technical Regional Occupation Partner #4
Career Technical Education Linking After School Employment
Cooperative Agency Resource Education (CARE)
Disabled Students Programs and Services (DSP&S)
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 Media
Industry Driven Regional Collaborative Sustainable Construction
Industry Driven Regional Collaborative Sustainable Design
Mathematics-Engineering-Science-Achievement (MESA)
Mathematics-Engineering-Science-Achievement (MESA) Supplemental
Matriculation
Office of Statewide Health Planning and Development - Song Brown Grant
Renovation and Repair Grant
Student Financial Aid Administration (SFAA)
Youth Empowerment Strategies for Success-Independent Living Program (YESS-ILP)
Subtotal
CHILD DEVELOPMENT
Child Care Tax Bailout to Community College Districts
State Preschool
Subtotal
Total
$
196,762
158,361
512,385
181,259
115,398
272,580
303,701
400,000
78,811
109,449
360,990
485,958
8,145
47,023
Program Revenues
Accounts
Deferred
Receivable
Revenue
$
$
295,606
12,011
4,230,875
10,488
201,402
687,279
174,960
89,725
509,661
178,175
99,518
272,580
214,087
18,304
78,811
106,939
360,990
482,457
5,829
8,760
47,171
179,124
75,099
125,641
50,500
309,135
61,158
18,762
255,113
22,499
3,744,998
35,537
494,399
529,936
$ 4,760,811
159,203
159,203
360,605
21,347
21,347
708,626
35,537
632,255
667,792
$ 4,412,790
89,614
381,696
2,510
3,501
8,145
41,194
8,760
18,004
56,124
29,167
123,000
75,099
110,160
37,875
8,000
309,135
15,481
12,625
8,000
61,158
18,762
40,493
$
See the accompanying notes to the supplementary information.
-48-
21,802
68,636
2,724
3,084
15,880
Total
Revenue
$
$
Program
Expenditures
$
$
174,960
89,725
509,661
178,175
99,518
272,580
214,087
18,304
78,811
106,939
360,990
482,457
5,829
8,760
47,171
179,124
75,099
125,641
50,500
309,135
61,158
18,762
255,113
22,499
3,744,998
35,537
632,255
667,792
4,412,790
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, 2011
ReCalc Period
Data
Categories
A. Summer Intersession (Summer 2009 only)
1
1. Noncredit
2. Credit
B. Summer Intersession (Summer 2010 - Prior to July 1, 2010)
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
D. Total FTES
3.63
3.63
354.36
4,807.91
280.80
4,807.91
280.80
24.15
969.11
24.15
969.11
325.35
234.69
325.35
234.69
-
-
7,000.00
701.63
H. Basic Skills courses and Immigrant Education
1
(a) Noncredit
(b) Credit
2.37
750.19
CCFS 320 Addendum
CDCP Noncredit FTES
0.86
Centers FTES
1
(a) Noncredit
(b) Credit
426.11
Including Career Development and College Preparation (CDCP) FTES
See the accompanying notes to the supplementary information.
-49-
Audited
Data
354.36
Supplemental Information (subset of above information)
E. In-Service Training Courses (FTES)
1
Audit
Adjustments
-
7,000.00
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, 2011
The audit resulted in no adjustment to the fund balances reported on the June 30, 2011 Annual
Financial and Budget Report (CCFS-311) based upon governmental accounting principles.
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) 2012
Amount
%
2011
Amount
2010
%
Amount
%
2009
Amount
%
13,629
15,217,146
22,603,328
-
0.04
40.87
60.71
101.62
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
Total Expenditures
Change in Fund Balance
$
Ending Fund Balance
$
Full-Time Equivalent Students (Factored)
Full-Time Equivalent Students (Funded)
Total Long-Term Debt
17,000
14,835,155
19,684,802
470,000
0.05
41.93
55.63
1.33
35,006,957
16,657
17,388,320
20,130,651
0.05
51.37
59.48
98.94
37,535,628
13,309,089
7,629,488
6,950,871
511,550
6,247,900
242,500
489,800
37.62
21.56
19.65
1.45
17.66
0.69
1.38
35,381,198
100.00
(374,241)
7,872,367
$
$
17,483
15,925,613
20,715,920
100,000
0.05
44.55
57.95
0.28
$
110.90
36,759,016
102.83
37,834,103
12,526,814
6,974,553
6,433,726
403,577
5,604,740
203,901
1,700,000
37.01
20.61
19.01
1.19
16.56
0.60
5.02
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)
33,847,311
100.00
35,750,244
100.00
37,231,290
100.00
36.80
19.47
19.68
0.93
23.86
0.30
(1.04)
(1.06)
$
3,688,317
10.90
$
1,008,772
2.83
$
602,813
1.62
22.25
$
8,246,608
24.36
$
4,558,291
12.75
$
3,549,519
9.53
*
7,000
7,373
7,624
6,634
6,493
6,819
7,083
$ 139,995,260
$ 136,936,239
$ 133,689,873
$ 83,994,545
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 2012 Budget was adopted by the Board of Trustees on September 13, 2011.
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.
* The District has not determined Full-Time Equivalent Students (Factored) for the 2012 Budget year.
See the accompanying notes to the supplementary information.
-51-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO SUPPLEMENTARY INFORMATION
For the Fiscal Year Ended June 30, 2011
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,
2011 was conducted in accordance with OMB Circular A-133, which requires a
disclosure of the financial activities of all federally funded programs. 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
98,970
U.S. Department of Energy
American Recovery and Reinvestment Act: Green
Building and Clean Energy Project - Cabrillo College
81.041
151,439
$
$
B.
857,759
273,311
1,381,479
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.
-52-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
NOTES TO SUPPLEMENTARY INFORMATION
For the Fiscal Year Ended June 30, 2011
NOTE 1 - PURPOSE OF SCHEDULES:
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.
-53-
DRAFT for Discussion Purposes Only
OTHER INDEPENDENT AUDITOR’S 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, 2011 which collectively comprise the District’s basic financial statements,
and have issued our report thereon dated November 16, 2011. 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.
-54-
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.
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 instances of noncompliance or other matters that are
required to be reported under Government Auditing Standards and which are described in the
accompanying schedule of findings and questioned costs as items 11-01, 11-02, 11-03, 11-04, 11-05, 11-06
and 11-07.
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 16, 2011
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DRAFT for Discussion Purposes Only
INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE
WITH REQUIREMENTS THAT COULD HAVE A DIRECT
AND MATERIAL EFFECT ON 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 could have a direct and material effect on each of its major federal programs
for the year ended June 30, 2011. 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.
-56-
DRAFT for Discussion Purposes Only
INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE
WITH REQUIREMENTS THAT COULD HAVE A DIRECT
AND MATERIAL EFFECT ON 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
could have a direct and material effect on each of its major federal programs for the year ended June 30,
2011.
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 16, 2011
-57-
DRAFT for Discussion Purposes Only
INDEPENDENT AUDITOR’S REPORT ON STATE COMPLIANCE
The Board of Trustees
Hartnell Community College District
411 Central Avenue
Salinas, California 93901
We have audited the compliance of the Hartnell Community College District (the District) with the types of
compliance requirements described in the 2010-11 Contracted District Audit Manual, published by the
California Community Colleges Chancellor’s Office for the year ended June 30, 2011. The District’s State
compliance requirements are identified below. Compliance with the State laws and regulations as
identified below 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 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 the 2010-11 Contracted District Audit Manual,
published by the California Community Colleges Chancellor’s Office. Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether noncompliance with the specific areas
listed below has 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.
In connection with our audit referred to above, we selected and tested transactions and records to determine
the District’s compliance with the following items:

Whether the District's salaries of classroom instructors equal or exceed 50 percent of the District's
current expense of education in accordance with Education Code Section 84362.

Whether the District complied with all requirements necessary to claim FTES for instruction under
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.
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DRAFT for Discussion Purposes Only
INDEPENDENT AUDITOR’S REPORT ON STATE COMPLIANCE

Whether the District acted to ensure that the residency of each student is properly classified and that
only the attendance of California residents, specifically student-athletes, 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 the District complied with all requirements necessary to claim FTES for the attendance of
concurrently enrolled K-12 pupils.

Whether the Gann Limit Calculation was properly calculated and supported by adequate
documentation.

Whether the District reported the full amount of fees charged, regardless of whether the fees are
collected, for the purpose of determining the District’s share of annual apportionment.

Whether the District expended CalWORKS and TANF funds to provide specialized student support
services, curriculum development, or instruction to eligible CalWORKS students.

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 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.

Whether the District expended Economic and Workforce Development (EWD) funds to develop
and deliver services to meet the needs identified in regional economic development plans and that
state laws and regulations regarding subcontracts or grant amendments and operation of an EWD
program center or an industry driven regional collaborative were complied with.

Whether the District expended Extended Opportunity Programs and Services (EOPS) funds to
provide services specifically designed to supplement existing support programs and to help EOPS
eligible students complete their educational goal.

Whether the District expended Disabled Student Programs and Services (DSPS) funds on students
with exceptional needs because of a verified disability to facilitate measureable progress towards
their educational goals.
-59-
DRAFT for Discussion Purposes Only
INDEPENDENT AUDITOR’S REPORT ON STATE COMPLIANCE

Whether the District expended Cooperative Agencies Resources for Education (CARE) funds to
provide educational support services and activities for the academically under-prepared, welfaredependent, single head-of-household student population.

Whether the District provided eligible persons under the federal Jobs for Veterans Act preference
(priority of service) and information regarding benefits and services obtainable through entities and
service providers and to ensure eligible persons are informed of their employment-related rights and
benefits.

Whether the District lists To Be Arranged Hours (TBA) in the schedule of classes and describes
them in the course outline and that student participation is carefully tracked to ensure apportionment
is not claimed for TBA hours for students with documented zero hours as of the census point for a
particular course.
In our opinion, we found that, for the items tested, the Hartnell Community College District complied with
the laws and regulations of the state programs referred to above, except as described in the Schedule of
Findings and Questioned Costs Related to the Financial Statements section of this report as items 11-01,
11-02, 11-03, 11-04, 11-05, 11-06 and 11-07. Further, based on our audit, for items not tested, nothing
came to our attention to indicate that the Hartnell Community College District had not complied with the
laws and regulations of state programs and requirements, except as noted in the Schedule of Findings and
Questioned Costs Related to the Financial Statements section of this report.
The Hartnell Community College District’s responses to the findings identified in our audit are described in
the accompanying Schedule of Findings and Questioned Costs Related to the Financial Statements. 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, the 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 16, 2011
-60-
DRAFT for Discussion Purposes Only
FINDINGS AND QUESTIONED COSTS
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
SUMMARY OF AUDITOR RESULTS
June 30, 2011
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?
Noncompliance material to financial statements noted?
Yes
X
No
Yes
X
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)
Name of Federal Program or Cluster
84.000, 84.007, 84.033,
84.063, 84.268 and 84.375
11.557
Financial Aid Cluster
84.141N
84.334A
84.334S
17.258
81.041
American Recovery and Reinvestment Act:
Broadband Technology Opportunities Program
Migrant Ed – High School Equivalency Program
GEAR UP (East Salinas)
Title V – STEM
American Reinvestment Recovery Act:
Workforce Investment Act - Green Building
and Clean Energy Project
American Reinvestment Recovery Act:
Green Building and Clean Energy Project
Dollar threshold used to distinguish between Type A
and Type B programs:
Auditee qualified as low-risk auditee?
$
300,000
Yes
-61-
X
No
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
RELATED TO FINANCIAL STATEMENTS
June 30, 2011
FINDING 11-01 – STATE COMPLIANCE:
INSTRUCTIONAL SERVICE AGREEMENTS
Original Finding 10-2
Finding: Colleges may 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 approximately 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: The South Bay Regional Public Safety Training Consortium is explained on
p. 171 of the Hartnell College Catalog/2011-12, and the courses are listed on pages 171-175.
Future class schedules will include an announcement that states that “Hartnell offers JAJ courses
throughout the semester” with appropriate contact information.
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DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
RELATED TO FINANCIAL STATEMENTS
June 30, 2011
FINDING 11-02 – STATE COMPLIANCE:
SALARIES OF CLASSROOM INSTRUCTORS (50 PERCENT LAW)
Finding: Education Code Section 84362, commonly known as the 50 Percent Law, requires that
a minimum of 50 percent of the District’s Current Expense of Education (CEE) be expended
during each fiscal year for salaries of classroom instructors. The District expended 48.79% of
the District’s current expense of education for payment of salaries of classroom instructors
during the 2010-11 fiscal year. Total expenditures were $342,955 short of the minimum
required. The District has submitted the Application for Exemption from the Fifty Percent Law
(CCFS-350A).
Recommendation: The District should continue its efforts to monitor compliance with the
percentage of expenditure requirements throughout the year. Any fiscal decisions should
consider the impact to compliance with this regulation.
District Response: The specific reasons why the expenditure of General Funds fell below the
50% line in fiscal year 2010-11 were; 1. Categorical Funds from the State were reduced by
$1,055,905. The college chose to maintain a substantive portion of these services using General
Funds and did so by providing $753,053 in excess of the required match. 2. The college chose
not to hold Summer School in 2010, which saved approximately $1 million in teaching salaries
in General Fund expenditures. These two decisions were good for students and good for our
current financial health; they changed the distribution of expenditures of General Funds in fiscal
year 2010-11 by decreasing the numerator by $1 million and increasing the denominator by
$753,053. Had the college not provided the excess match in general funds, $200,361 would not
have been available in basic skills support and $552,692 would not have been available in
counseling, outreach, counseling support, and transfer services. As a result, the college
expended 48.7% on teaching salaries and benefits in fiscal year 2010-11.
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DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
RELATED TO FINANCIAL STATEMENTS
June 30, 2011
FINDING 11-03 – STATE COMPLIANCE: OPEN ENROLLMENT
Finding: According to CCR, Title 5, Section 51006, “the governing board of each community
college district shall adopt by resolution a policy related to open courses. In addition, a statement
of this policy shall be published in the official catalog, schedule of classes, and any addenda to
the schedule of classes for which full-time equivalent students (FTES) is reported for state
apportionment”. During our review of the course catalog and class schedule for the 2010-11
academic year, we identified that the District’s open enrollment policy adopted by the board was
not published in the Spring 2011 schedule of classes.
Recommendation: The District should include in their schedule of classes a statement of the
adopted policy related to open enrollment.
District Response: The statement of open enrollment will appear in the Spring 2012 class
schedule and in the fiscal year 2012-13 catalog.
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DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
RELATED TO FINANCIAL STATEMENTS
June 30, 2011
FINDING 11-04 – STATE COMPLIANCE: TO BE ARRANGED HOURS (TBA)
Finding: Per the criteria noted in the Contracted District Audit Manual (CDAM) Districts are
required to list TBA hours in the schedule of classes, and describe them in the course outline.
Districts also need to track TBA hour student participation carefully and make sure that they do
not claim apportionment for TBA hours for students who have documented zero hours as of the
census point for the particular course. During our audit of to TBA hours, we noted that the
following deficiencies:
1. Although there is a description that TBA hours are required, the number of required TBA
hours were not posted in the official general catalog or in the official schedule of classes
for all five courses tested.
2. For two courses tested, the course syllabus did not indicate specific instructional
activities that would be performed during the TBA hours.
3. For one course tested the TBA hours did not follow the scheduled course meetings for
daily or weekly census types, but rather was scheduled at the end of the instructional
term.
4. For two of the courses tested, the District was unable to provide substantive
documentation of the students’ attendance.
For the classes noted above, 6.57 FTES are in question.
Recommendation:
1. The District should include in their schedule of classes or course catalog a clear
description of TBA hours, including the requirement and amount of hours needed to
complete the course.
2. The course syllabus or other documentation should indicate specific instructional
activities to be performed during the TBA hours.
3. TBA hours should follow the instructional schedule of the course. For example, for daily
course types, the Student Attendance Accounting Manual states, “TBA contact hours
shall be scheduled for the same number of hours as each scheduled day of the course or
as a portion of hours the course is regularly scheduled for each day it meets.”
4. The District should track students attendance in the TBA courses, for each class meeting.
District Response: The District misclassified courses as TBA courses. The FTES have been
corrected for courses in fiscal year 2010-11 that were incorrectly identified as TBA.
Administrative reviews and staff training are in place to ensure that all courses are classified
correctly.
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DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
RELATED TO FINANCIAL STATEMENTS
June 30, 2011
FINDING 11-05 – STATE COMPLIANCE: RESIDENCY
Finding: During our audit of Residency Determination for Credit Courses, we noted that for 3
out of 10 of the applications tested the District was unable to locate the student’s application.
We were therefore unable to verify the students’ residency. It was also noted for 2 students that
the residency code was revised during the 2010-11 fiscal year for student updated applications
related to the subsequent term. The change was input into the system and the most recent
information was used which incorrectly reported the student as a resident on the annual 320.
For the students tested, 2.42 FTES were inappropriately claimed.
Recommendation: The District should be able to provide the necessary applications to support
the residency claimed for a student on the 320 report. Additionally, any changes to the student’s
residency should be applied to the appropriate term prospectively. The District should contact
the Chancellor’s Office to determine what if any action the District should take to correct the
FTES reported.
District Response: The Admissions & Records Office will scan all paper Admissions
Applications into its existing document imaging system (Matrix) every week to ensure that all
paper applications can be filed and retrieved easily. Since we use CCCApply, we also have the
Admissions Application stored electronically and therefore easily retrievable.
The Admissions & Records Office will develop a Change of Residency Questionnaire that will
be used to document a student’s change of residency.
The Change of Residency forms will only be updated on the following dates for the upcoming
semester/year to ensure that the College’s 320 reports as well as the student’s enrollment fees for
the current year are not altered.



For Spring Semester – Residency updated after January 15th
For Summer Session – Residency updated after July 15th
For Fall Semester – Residency updated after July 15th
-66-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
RELATED TO FINANCIAL STATEMENTS
June 30, 2011
FINDING 11-06 – STATE COMPLIANCE:
STUDENTS ACTIVELY ENROLLED – CENSUS DATE
Finding: According to the Student Attendance Accounting Manual (SAAM) the census date is
the course meeting date 20% into the term. For daily census courses, including independent
study, only those days for which a course is actually scheduled to meet are counted for
attendance purposes (excludes holidays and includes the day of the final examination if one is
scheduled). The results of our testing identified three independent study daily classes and three
daily classes that had incorrectly calculated census dates.
During our audit of this area, we also noted that one of the classes selected was not appropriately
classified. To be a Daily Census type the course must meet five or more days; meet the same
number of hours each scheduled day; and not be coterminous with the primary term. For the
Frame and Unibody Repair course held in Summer 2010, the District reported the course as a
Daily census type, however, the course did not meet the same number of hours for each
scheduled day.
The number of FTES claimed in error is .26 FTES.
Recommendation: The District should contact the Chancellor’s Office to determine what if any
action the District should take to correct the FTES reported. The District should review course
classifications to ensure they have been properly determined. In addition, the District should
evaluate the capabilities of the Student Information System to determine if the calculation of
census date can be automated. Whether calculated manually or through an automated system the
census dates should be reviewed for accuracy.
District Response: New procedures have been implemented to identify the correct census date
for each Daily section. Census dates for fiscal year 2010-11 were recalculated and updated.
There was an error in reporting the Frame and Unibody Repair course held in Summer 2010.
The class was reported as a Daily census type when it should have been reported as a Positive
Attendance Course (PAC) section. After attending recent webinars presented by the
Chancellor’s Office, which has further clarified our understanding, the District will now report
any sections of this type correctly.
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DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
RELATED TO FINANCIAL STATEMENTS
June 30, 2011
FINDING 11-07 – STATE COMPLIANCE:
STATE GENERAL APPORTIONMENT FUNDING SYSTEMCALCULATED STUDENT CONTACT HOURS
Finding: Our audit of student contact hours identified 6 out of 9 courses in our sample where
the contact hours calculated by the District used for apportionment purposes and our
recalculation did not agree.
1. One course was reported as a daily census type, when it should have been reported as
an alternative accounting method. Daily census courses must meet the same number of
hours for each scheduled day. This course met each scheduled Friday for 4 ½ hours
and each scheduled Saturday for 12 hours.
2. Three courses, independent daily census, were calculated using the wrong term length
multiplier. The District used 18 weeks instead of the approved term length multiplier
of 17.5 weeks.
3. For two courses, it was noted that our recalculation did not agree with the contact hours
reported by the District.
The number of FTES claimed in error is 5.88 FTES.
Recommendation: The District was advised to revise the 320 report and did such. The
adjustments made are notated on the Schedule of Workload measures. It is our understanding
that the District manually calculates contact hours. The District should research the capabilities
of their student attendance system to possibly alleviate the manual calculation of contact hours.
District Response: Hartnell corrected the courses in error and has implemented using the
multiplier of 17.5 weeks. Administrative reviews and staff tracking are in place to correct errors
prior to publication. Hartnell staff will continue to attend webinars so that the District remains in
compliance with all current and new requirements.
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DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
SCHEDULE OF FINDINGS AND QUESTIONED COSTS
RELATED TO FEDERAL AWARDS
June 30, 2011
There were no findings and questioned costs related to federal awards for the fiscal year ended
June 30, 2011.
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DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS
June 30, 2011
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.
Current Status: Implemented.
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 approximately 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.
Current Status: Not implemented. See Finding 11-01.
-70-
DRAFT for Discussion Purposes Only
HARTNELL COLLEGE FOUNDATION
(A Component Unit of the
Hartnell Community College District)
Financial Statements and
Independent Auditor’s Report
For the Fiscal Years Ended June 30, 2011 and 2010
DRAFT for Discussion Purposes Only
HARTNELL COLLEGE FOUNDATION
FINANCIAL STATEMENTS
For the Fiscal Years Ended June 30, 2011 and 2010
TABLE OF CONTENTS
Page
Independent Auditor’s Report.......................................................................................
1
Statements of Financial Position...................................................................................
2
Statements of Activities ................................................................................................
3-4
Statements of Functional Expenses ..............................................................................
5-6
Statements of Cash Flows .............................................................................................
7
Notes to the Financial Statements .................................................................................
8-26
DRAFT for Discussion Purposes Only
INDEPENDENT AUDITOR’S REPORT
To the Board of Directors
Hartnell College Foundation
Salinas, CA 93901
We have audited the accompanying statements of financial position of the Hartnell College Foundation (A
Component Unit of the Hartnell Community College District) as of June 30, 2011 and 2010, and the related
statements of activities, functional expenses, and cash flows for the years then ended. These financial
statements are the responsibility of the Hartnell College Foundation’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. 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 financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
financial position of the Hartnell College Foundation as of June 30, 2011 and 2010, and the changes in its
net assets and its cash flows for the years then ended, in conformity with accounting principles generally
accepted in the United States of America.
VICENTI, LLOYD & STUTZMAN LLP
November 8, 2011
-1-
DRAFT for Discussion Purposes Only
HARTNELL COLLEGE FOUNDATION
STATEMENTS OF FINANCIAL POSITION
June 30, 2011 and 2010
2011
ASSETS
Current Assets
Cash and cash equivalents - unrestricted
Cash and cash equivalents - restricted
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
115,990
3,582,103
507,837
6,341
17,866
4,230,137
2010
$
198,763
2,453,577
672,302
6,033
22,330
3,353,005
5,395,580
320,731
55,214
95,133
325,849
6,192,507
$ 10,422,644
4,322,111
204,173
149,501
101,465
326,183
5,103,433
$ 8,456,438
$
$
640,044
241,180
50,901
932,125
499,111
4,513,497
4,477,911
9,490,519
$ 10,422,644
566,544
168,192
65,999
800,735
65,765
3,134,865
4,455,073
7,655,703
$ 8,456,438
The accompanying notes are an integral part of these financial statements.
-2-
DRAFT for Discussion Purposes Only
HARTNELL COLLEGE FOUNDATION
STATEMENT OF ACTIVITIES
For the Fiscal Year Ended June 30, 2011
REVENUE
Donations
Special events
In-kind donations
Miscellaneous revenue
Assets released from restrictions
Total revenues
Unrestricted
Temporarily
Restricted
Permanently
Restricted
$
$
$
79,607
$ 2,093,387
203,822
181,721
307,820
2,786,750
-
-
319,160
1,815,043
93,595
2,227,798
(115,307)
594,652
79,607
558,952
OTHER INCOME
Interest and dividends
Realized gain on sale of investments
Unrealized gain on investments
Total other income
15,790
31,770
472,671
520,231
106,482
452,250
196,901
755,633
-
122,272
484,020
669,572
1,275,864
CHANGE IN NET ASSETS BEFORE
TRANSFERS
404,924
1,350,285
79,607
1,834,816
EXPENSES
Operating expenses
Program expenses
Fundraising expenses
Total expenses
319,160
1,815,043
93,595
2,227,798
OPERATING INCOME
TRANSFERS
Change in donor designation
Transfer to Endowment - FCCC Foundation
Total transfers
28,422
NET ASSETS
Net Assets, Beginning of year
$
2,004,079
32,599
59,531
21,948
(1,523,505)
594,652
56,578
(28,231)
28,347
28,422
CHANGE IN NET ASSETS AFTER
TRANSFERS
Net Assets, End of year
9,701
171,223
122,190
285,872
1,523,505
2,112,491
79,607
Total
(85,000)
28,231
(56,769)
-
433,346
1,378,632
22,838
1,834,816
65,765
3,134,865
4,455,073
7,655,703
4,477,911
$ 9,490,519
499,111
$
4,513,497
$
The accompanying notes are an integral part of these financial statements.
-3-
DRAFT for Discussion Purposes Only
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 loss 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
$
The accompanying notes are an integral part of these financial statements.
-4-
-
DRAFT for Discussion Purposes Only
HARTNELL COLLEGE FOUNDATION
STATEMENT OF FUNCTIONAL EXPENSES
For the Fiscal Year Ended June 30, 2011
Operating
Salaries
Employee benefits
Consulting and marketing
Accounting fees
Management/investment fees
Campus area expenses
Conferences, conventions, and meetings
Memberships
Depreciation
Equipment rental and maintenance
In-kind
Planned giving
Postage, printing, and publications
Scholarships
Special events
Supplies
Taxes and licenses
Telephone
Other
Total functional expenses
$ 200,501
54,470
568
16,850
Program
$
298,722
69,438
15,032
Fundraising
$
123,247
672,120
2,630
5,613
2,820
6,560
334
2,979
10,000
1,209
2,812
20,309
11,450
10,464
5,294
437,687
1,268
6,117
2,099
4,130
$ 319,160
115,661
$
226
37,614
1,815,043
12,035
3,992
1,277
1,965
4,485
64,378
543
899
$
93,595
Total
$
511,258
127,900
15,600
16,850
123,247
672,120
6,659
14,985
334
24,565
21,450
1,965
20,243
437,687
64,378
117,472
6,117
3,224
41,744
$ 2,227,798
The accompanying notes are an integral part of these financial statements.
-5-
DRAFT for Discussion Purposes Only
HARTNELL COLLEGE FOUNDATION
STATEMENT OF FUNCTIONAL EXPENSES
For the Fiscal Year Ended June 30, 2010
Salaries
Employee benefits
Consulting and marketing
Accounting fees
Management/investment fees
Campus area expenses
Conferences, conventions, and meetings
Memberships
Depreciation
Equipment rental and maintenance
In-kind
Other project expenses
Planned giving
Postage, printing, and publications
Scholarships
Special events
Donor recognition
Supplies
Taxes and licenses
Telephone
Other
Total functional expenses
Operating
Program
$ 170,133
52,910
460
10,203
$ 211,043
30,509
5,097
1,739
3,363
192
2,213
11,000
10,382
979
4,476
2,108
3,379
$ 273,537
Fundraising
$
125,518
576,462
3,553
3,063
11,480
3,606
745
1,442
1,883
16,082
24,420
948
1,871
4,449
3,504
396,203
56,245
4,500
419
65,448
25
903
80,919
$ 1,543,729
$
86,608
Total
$ 392,656
87,025
5,557
10,203
125,518
576,462
6,037
7,868
192
5,044
27,082
24,420
1,871
18,335
396,203
56,245
4,500
66,846
4,501
3,011
84,298
$ 1,903,874
The accompanying notes are an integral part of these financial statements.
-6-
DRAFT for Discussion Purposes Only
HARTNELL COLLEGE FOUNDATION
STATEMENTS OF CASH FLOWS
For the Fiscal Years Ended June 30, 2011 and 2010
2011
2010
Cash flows from operating activities
Change in net assets
$
Adjustment to reconcile changes in net assets to net
cash provided for operations
Unrealized gain on investments
Depreciation
Changes in operating assets and liabilities:
Receivables
Prepaid Expenses
Payables
Deferred revenue
Net cash provided by operating activities
1,834,816
$
822,694
(669,572)
334
(325,422)
192
264,776
4,464
146,488
(15,098)
94,558
(22,330)
(107,320)
49,852
1,566,208
512,224
Cash flows from investing activities
Purchase of investments
Proceeds from the sale of investments
Net cash used for investing activities
(4,087,189)
3,566,734
(3,218,675)
2,481,093
(520,455)
(737,582)
Net increase (decrease) in cash and cash equivalents
1,045,753
Cash and cash equivalents, beginning of year
2,652,340
$
Cash and cash equivalents, end of year
3,698,093
(225,358)
2,877,698
$
2,652,340
The accompanying notes are an integral part of these financial statements.
-7-
DRAFT for Discussion Purposes Only
HARTNELL COLLEGE FOUNDATION
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2011 and 2010
NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The Hartnell College Foundation (the Foundation) is a California nonprofit corporation
incorporated on December 18, 1979. The Foundation was formed to assist in the
following:

to render assistance to the Hartnell Community College District (the District)
in providing for the expansion, modification, and addition to the college
facilities of the District;

to provide financial support for the District;

to carry out activities intended to support the District as may be requested by
the Board of Trustees of the District from time to time;

to encourage, obtain, and administer donations of funds, properties, bequests,
annuities, and other instruments of properties of value in the interest of the
District;

to support bond elections and other programs as designed to support the dayto-day and long range financial needs of the District as may be requested
from time to time by the Board of Trustees of the District;

to provide assistance to and develop programs for the educational needs of
students; and

to advise the District as requested by the Board of Trustees of the District
from time to time concerning the investment of personal property, securities,
and real property derived from other than taxes or local, State, or Federal
apportioned sources.
Based upon the relationship described above, the Hartnell College Foundation is
considered a component unit of the Hartnell Community College District.
Mission Statement
“The Hartnell College Foundation will actively support and advise the College in
developing its activities, programs, and facilities; will cultivate bequests and donations;
and will responsibly administer funds, properties, bequests, annuities, and other
instruments in the best interest of the College, the District, and the Foundation.”
-8-
DRAFT for Discussion Purposes Only
HARTNELL COLLEGE FOUNDATION
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2011 and 2010
NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
(continued)
Basis of Accounting
The financial statements of the Foundation have been prepared on the accrual basis of
accounting in accordance with U.S. generally accepted accounting principles. The
statement of activities is a statement of financial activities related to the current reporting
period. Using this method, revenues are recognized when earned, and expenses are
recognized when incurred.
Revenue and Public Support
Revenues are reported as increases in unrestricted net assets unless use of the related
asset is limited by donor-imposed restrictions. Expenses are reported as decreases in
unrestricted net assets. Realized gains/losses and unrealized gains/losses on investments
and other assets or liabilities are reported as increases or decreases in unrestricted net
assets unless their use is restricted by explicit donor stipulation or by law. Expiration of
restrictions on net assets (i.e., the donor-stipulated purpose has been fulfilled and/or the
stipulated time period has elapsed) is reported as assets released from restriction between
the applicable classes of net assets.
Contributions, including unconditional promises to give, are recognized as revenues in
the period received. Conditional promises to give are not recognized until they become
unconditional, that is, when the conditions on which they depend are substantially met.
Contributions of assets other than cash are recorded at their estimated fair value at the
time of the gift.
Use of Estimates
The preparation of financial statements, in conformity with U.S. generally accepted
accounting principles, requires management to make estimates and assumptions that
affect reported amounts of assets and liabilities at the reporting date, and revenues and
expenses during the reporting period. Actual results could differ from those estimates.
-9-
DRAFT for Discussion Purposes Only
HARTNELL COLLEGE FOUNDATION
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2011 and 2010
NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
(continued)
Income Taxes
The Foundation is a charitable, not-for-profit, tax-exempt organization qualified under
provisions of Section 501(c)(3) of the Internal Revenue Code and corresponding
California provisions. Accordingly, no provision for income taxes has been provided in
the financial statements. The Foundation has also been classified as an entity that is not a
private foundation within the meaning of Section 509(a). The Foundation annually files
information returns, Forms 990, 199, and RRF-1, with the appropriate agencies.
The Foundation has evaluated its tax positions and the certainty as to whether those
positions will be sustained in the event of an audit by taxing authorities at the federal and
state levels. The primary tax positions evaluated are related to the Foundation’s
continued qualification as a tax-exempt organization and whether there is unrelated
business income activities conducted that would be taxable. Management has determined
that all income tax positions are more likely than not of being sustained upon potential
audit or examination; therefore, no disclosures of uncertain income tax positions are
required.
The Foundation files informational returns in the U.S. federal jurisdiction and the state of
California. With few exceptions, the Foundation is no longer subject to U.S. federal and
state examinations by tax authorities for years before 2006.
Cash Equivalents for Statements of Cash Flows
For purposes of the statements of cash flows, the Foundation considers all highly liquid
investments purchased with an initial maturity of three months or less to be cash
equivalents. Restricted cash and cash equivalents are limited in use to payment of
program costs and scholarships.
Investments
Investments in marketable securities with readily determinable fair values are presented
at their fair values in the statement of financial position. Unrealized gains and losses are
included in the change in net assets.
-10-
DRAFT for Discussion Purposes Only
HARTNELL COLLEGE FOUNDATION
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2011 and 2010
NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
(continued)
Pledges Receivable
Pledges are recorded at the stated gift value which approximates fair value, in accordance
with the requirements of U.S. generally accepted accounting principles for fair value
measurement. Based on management’s review of the accounts receivable, all amounts
are deemed collectable; therefore no allowance for doubtful accounts is considered
necessary. Any uncollectible pledges are written off when collection efforts have been
exhausted.
Property and Equipment
Equipment is capitalized at cost. It is the Foundation’s policy to capitalize all equipment
purchased with a cost over $5,000. Lesser amounts are expensed. Equipment is
depreciated over its estimated useful life of three to twenty years utilizing the straightline method.
Art Collections
The Foundation has a collection of artwork that is on public display at the Art Gallery.
The display is rotated for public viewing, and all items remain as part of the Gallery’s
permanent collections depending on the terms of the deed of gift. The Foundation has
capitalized its collections since its inception. Donated works of art are stated at appraised
value or estimated fair market value at the time of donation and are not subject to
depreciation.
Scholarships Payable
Scholarships payable consist of awards made to students for the subsequent school year.
A payable and expense is recognized when the recipient is notified.
Compensated Absences
Employees of the Foundation are entitled to paid vacation, depending on job
classification, length of service, and other factors. No liability has been recorded in the
accompanying financial statements. The Foundation’s policy is to recognize the costs of
compensated absences when actually paid to employees. Management’s estimate of
compensation for future absences will not materially affect the financial statement
balances.
-11-
DRAFT for Discussion Purposes Only
HARTNELL COLLEGE FOUNDATION
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2011 and 2010
NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
(continued)
Deferred Revenue
Revenues received which are not earned until the subsequent year are recorded as
deferred revenue. The Foundation’s deferred revenue is primarily related to Western
Stage season ticket sales for future productions.
Net Asset Classes
The Foundation classifies its net assets into three categories: unrestricted, temporarily
restricted and permanently restricted.
Unrestricted net assets generally result from revenues from providing services,
receiving unrestricted contributions, and receiving dividend and interest income, less
expenses incurred in providing services, raising contributions, and performing
administrative functions. The only limits on the use of unrestricted net assets are the
broad limits resulting from the Foundation’s mission as defined in its articles of
incorporation and bylaws.
Temporarily restricted net assets are those whose use by the Foundation has been
limited by donors to a specific time period or purpose.
Permanently Restricted Net Assets are those that have been restricted by donors to
investment in perpetuity.
Functional Allocations of Expenses
The costs of providing various programs and activities have been summarized on a
functional basis. Accordingly, based upon management’s estimates, certain costs have
been allocated among the programs, support services, and fundraising activities.
Donated Assets, Service, and Facilities
The Foundation records the value of donated assets, services, and facilities when there is
an objective basis available to measure their value. Donated assets are capitalized at the
stated donated value and depreciated in accordance with Foundation policies, unless they
are passed through to the District. The Foundation recognizes contributed services when
services received (a) create or enhance long-lived assets, or (b) require specialized skills,
are provided by individuals possessing those skills, and would typically need to be
purchased if not provided by donation.
-12-
DRAFT for Discussion Purposes Only
HARTNELL COLLEGE FOUNDATION
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2011 and 2010
NOTE 1 – ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
(continued)
Reclassifications
Accounts receivable previously reported in the 2010 financial statements have been
reclassified to pledges receivable to conform to the 2011 presentation.
Subsequent Events
The Foundation has evaluated subsequent events through November 8, 2011, which is the
date these financial statements were available to be issued. Subsequent events are as
follows:
In September 2011, the Foundation entered into an agreement with the First 5 Monterey
County Commission to provide a Workforce Development Incentive Program to support
incentives to students of the District who have declared Early Childhood Education/Child
Development majors and complete specific coursework. The Foundation was awarded
$667,000 to be received for qualified reimbursable expenses over a four year period not
to exceed $166,750 in any fiscal year. The grant agreement is effective July 1, 2011
through June 30, 2015.
NOTE 2 – CONCENTRATION OF RISK:
A.
Cash
Cash accounts maintained by the Foundation are insured by the Federal Deposit
Insurance Corporation (FDIC) up to $250,000 per institution. Cash balances in
excess of insured amounts were $1,975,553 at June 30, 2011. At June 30, 2010, all
of the Foundation’s cash balances were fully insured under the FDIC’s Voluntary
Transaction Account Guarantee Program which expired in December 2010.
Effective October 2011, the Foundation has transferred non-insured cash balances
to accounts fully insured under the FDIC’s Dodd-Frank Program.
B.
Investments
Investments with brokers are insured by the Securities Investor Protection
Corporation (SIPC) up to $500,000 of which $250,000 may be cash. Insurance
protects assets in the case of broker-dealer insolvency and not against decline in
market values. As of June 30, 2011 and 2010 the Foundation had investments in
excess of the SIPC insurance amount.
-13-
DRAFT for Discussion Purposes Only
HARTNELL COLLEGE FOUNDATION
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2011 and 2010
NOTE 2 – CONCENTRATION OF RISK:
B.
Investments (continued)
Investments with brokers at June 30, are as follows:
Cash investments
Long term investments
Total
2011
2010
$ 400,667
5,716,311
$6,116,978
$ 492,266
4,526,284
$5,018,550
NOTE 3 –PLEDGES RECEIVABLE:
A.
Unconditional Pledges
Unconditional promises to give at June 30, are as follows:
2011
Agriculture Program
Nursing
Construction - Faculty Support
Construction Technology
Operating
SVMH Service League Scholarship
General Endowed Trust
Planetarium
Western Stage Young Company
Athletics
Foundation for FCC
Other
$
$
-14-
154,668
189,575
93,575
2,000
28,340
10,000
1,000
3,000
64,834
7,000
9,059
563,051
2010
$
$
290,501
223,844
129,600
2,000
8,750
10,000
1,000
3,000
25,000
45,100
83,008
821,803
DRAFT for Discussion Purposes Only
HARTNELL COLLEGE FOUNDATION
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2011 and 2010
NOTE 3 –PLEDGES RECEIVABLE: (continued)
A.
Unconditional Pledges (continued)
Pledges are expected to be realized in the following periods:
Due within 1 year
Due within 1 to 5 years
Total
B.
2011
2010
$ 507,837
55,214
$ 563,051
$ 672,302
149,501
$ 821,803
Conditional Pledges
In December 2010 the Foundation was awarded a multi-year grant from the
Monterey Peninsula Foundation totaling $250,000. The grant requires the
Foundation to raise a match of $250,000 in cash donations from other sources to
receive payment. The Foundation secured two awards in July 2011 totaling
$350,000 meeting the conditional requirements of the grant.
In June 2011, the Foundation was awarded a multi-year pledge from the Nancy
Eccles and Homer M. Hayward Family Foundation totaling $300,000. $100,000
was received in fiscal year 2010-11. The remainder of the pledge will be received
in equal installments for the 2012 and 2013 fiscal years on the condition that a
faculty member is hired to teach sustainable design. The Foundation has
commenced the process for hiring faculty for the 2012 fiscal year to meet the
conditional grant requirements.
-15-
DRAFT for Discussion Purposes Only
HARTNELL COLLEGE FOUNDATION
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2011 and 2010
NOTE 4 – NOTE RECEIVABLE:
In June 2003, the foundation received a bequest of a remainder interest in a residential
real property in Marina, California. The bequest included a life estate interest in that
property which the holder wished to purchase from the Foundation.
In July 2003, the Foundation entered into a long-term note receivable with a total
carrying amount of $142,198. The note bears interest of five percent and is secured by
the Marina property. The term of the note is from July 14, 2003 through June 15, 2023.
Note receivable at June 30 is due within the following schedule:
2011
Due in 1 year
Long-term portion
Total
$
6,341
95,133
$ 101,474
2010
$
6,033
101,465
$ 107,498
NOTE 5 – INVESTMENTS:
Investments are presented at fair value in the financial statements and are composed of
the following at June 30:
2011
Level 1
Common stocks
Corporate bonds
Exchange Traded and Closed End Funds
Government bonds
Mutual funds
2010
Adjusted
Cost
Fair
Value
Adjusted
Cost
Fair
Value
$ 3,711,000
568,060
6,359
434,976
529,692
$ 5,250,087
$ 4,141,525
588,909
10,884
455,033
519,960
$ 5,716,311
$ 3,222,965
523,094
6,458
340,257
596,193
$ 4,688,967
$ 3,121,691
556,151
9,136
362,246
477,060
$ 4,526,284
-16-
DRAFT for Discussion Purposes Only
HARTNELL COLLEGE FOUNDATION
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2011 and 2010
NOTE 5 – INVESTMENTS: (continued)
In accordance with U.S. generally accepted accounting principles, levels 1 through 3
have been assigned to the fair value measurement of investments. The fair value level of
measurement is determined as follows:
Level 1 – quoted prices in an active market for identical assets.
Level 2 – quoted prices for similar assets and market-corroborated inputs.
Level 3– the organization’s own assumptions about market participation,
including assumptions about risk, developed based on the best information
available in the circumstances.
The following schedule summarizes the investment return and its classifications in the
statement of activities for the year ended June 30, 2011:
Interest and dividends
Realized gain on sale of investments
Unrealized gain on investments
Total investment income
Less: Investment fees
Net investment income
Unrestricted
Temporarily
Restricted
Permanently
Restricted
$
$
$
$
15,790
31,770
472,671
520,231
(2,813)
517,418
$
106,482
452,250
196,901
755,633
(39,991)
715,642
$
$
Total
-
122,272
484,020
669,572
1,275,864
(42,804)
$ 1,233,060
The following schedule summarizes the investment return and its classifications in the
statement of activities for the year ended June 30, 2010:
Interest and dividends
Realized gain on sale of investments
Unrealized loss on investments
Total investment income
Less: Investment fees
Net investment income(loss)
Unrestricted
Temporarily
Restricted
Permanently
Restricted
$
$
$
$
18,972
4,144
148,926
172,042
(3,566)
168,476
-17-
$
93,645
58,741
182,199
334,585
(50,436)
284,149
1,876
Total
$
(5,703)
(3,827)
$
(3,827)
$
114,493
62,885
325,422
502,800
(54,002)
448,798
DRAFT for Discussion Purposes Only
HARTNELL COLLEGE FOUNDATION
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2011 and 2010
NOTE 6 – INVESTMENTS WITH FOUNDATION FOR CALIFORNIA COMMUNITY
COLLEGES (FCCC):
The Foundation has entered into a partnership arrangement with the California
Community Colleges Scholarship Endowment (Endowment) through the Foundation for
California Community Colleges (FCCC). The Foundation contributed $91,431 and
$208,000 during the fiscal years ended June 30, 2011 and June 30, 2010, respectively, to
the FCCC Endowment. These funds will be invested in a pooled investment fund held by
the FCCC. At June 30, 2011 and June 30, 2010 the fair value of this investment was
$320,731 and $204,173, respectively. The FCCC has assembled an investment advisory
committee charged with the responsibility for directing and monitoring the investment
management of the Endowment’s assets.
The Endowment has been set up to provide matching scholarships funds for California
community colleges. The endowment was formed through a generous $50 million
matching commitment from the Bernard Osher Foundation and an initial contribution of
$25 million. The California Community Colleges and the Foundation for California
Community Colleges had until June 2011 to raise an additional $50 million, for which the
Osher Foundation will provide a 50 percent match up to $25 million. In the 2009-10
year, the Endowment began to distribute scholarship funding from the initial $25 million
gift to each participating community college. The allocation will be based on each
colleges FTES and each scholarship will be valued at $1,000 for a school year. The
Foundation received $8,000 during fiscal year ended June 30, 2011 and $15,000 during
fiscal year ended June 30, 2010 for scholarships.
-18-
DRAFT for Discussion Purposes Only
HARTNELL COLLEGE FOUNDATION
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2011 and 2010
NOTE 7 – PROPERTY AND EQUIPMENT:
At June 30, 2011, property and equipment owned by the Foundation consist of the
following:
Balance
June 30, 2010
Non-depreciable capital assets:
Land and land improvements
Art Collections
$
Total nondepreciable capital assets
70,000
255,182
$
325,182
Depreciable capital assets:
Buildings and building improvements
Furniture and equipment
Balance
June 30, 2011
Deletions
$
$
-
-
20,000
21,856
41,856
367,038
Less accumulated depreciation:
Buildings and building improvements
Furniture and equipment
Total accumulated depreciation
-
(20,000)
(20,855)
(40,855)
$
326,183
70,000
255,182
325,182
20,000
21,856
Total depreciable capital assets
Total capital assets
Net property and equipment
Additions
(334)
(334)
$
(334)
$
-
-
41,856
367,038
-
(20,000)
(21,189)
(41,189)
$
325,849
At June 30, 2010, property and equipment owned by the Foundation consist of the
following:
Balance
June 30, 2009
Non-depreciable capital assets:
Land and land improvements
Art Collections
$
Total nondepreciable capital assets
70,000
255,182
$
325,182
Depreciable capital assets:
Buildings and building improvements
Furniture and equipment
Total depreciable capital assets
Total capital assets
Less accumulated depreciation:
Buildings and building improvements
Furniture and equipment
Total accumulated depreciation
Net property and equipment
Additions
$
-
Balance
June 30, 2010
$
70,000
255,182
-
325,182
20,000
21,856
41,856
-
-
20,000
21,856
41,856
367,038
-
-
367,038
-
(20,000)
(20,855)
(40,855)
(20,000)
(20,663)
(40,663)
$
Deletions
326,375
-19-
(192)
(192)
$
(192)
$
-
$
326,183
DRAFT for Discussion Purposes Only
HARTNELL COLLEGE FOUNDATION
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2011 and 2010
NOTE 8 – RESTRICTION ON NET ASSETS:
All contributions are reported as unrestricted unless specifically restricted by donor
stipulations. When a donor restriction expires, either by the passage of time or an event,
the assets are reclassified to unrestricted funds through the “assets released from
restriction” account.
Temporarily restricted net assets consist of the following at June 30:
2011
Federal Gear Up Grant
Scholarships – FCCC
Scholarships
Academic and student support
$
58,992
21,300
1,043,690
3,389,515
$4,513,497
2010
$
53,042
582,113
2,499,710
$3,134,865
Permanently restricted net assets consist of the following at June 30:
Endowed scholarships – FCCC
Endowed scholarships
Endowed academic and student support
-20-
2011
2010
$ 299,431
3,888,937
289,543
$ 204,173
3,961,357
289,543
$4,477,911
$4,455,073
DRAFT for Discussion Purposes Only
HARTNELL COLLEGE FOUNDATION
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2011 and 2010
NOTE 9 – ENDOWMENT:
The Foundation’s endowment consists of approximately 55 individual funds established
for a variety of purposes. Its endowment includes both donor-restricted endowment
funds and funds designated by the Board of Directors to function as endowments. As
required by U.S. generally accepted accounting principles, net assets associated with
endowment funds, including funds designated by the Board of Directors to function as
endowments, are classified and reported based on the existence or absence of donorimposed restrictions. The Board of Directors has designated amounts in its endowment
for support of the Library and Foundation operations.
Interpretation of relevant law
The Board of Directors of the Foundation has interpreted the Uniform Prudent
Management of Institutional Funds Act (UPMIFA) as requiring the preservation of the
fair value of the original gift as of the gift date of the donor-restricted endowment funds
absent explicit donor stipulations to the contrary. As a result of this interpretation, the
Foundation classifies as permanently restricted net assets (a) the original value of gifts
donated to the permanent endowment, (b) the original value of subsequent gifts to the
permanent endowment, and (c) accumulations to the permanent endowment made in
accordance with the direction of the applicable donor gift instrument at the time the
accumulation is added to the fund. The remaining portion of the donor-restricted
endowment fund that is not classified in permanently restricted net assets is classified as
temporarily restricted net assets until those amounts are appropriated for expenditure by
the Foundation in a manner consistent with the standard of prudence prescribed by
UPMIFA. In accordance with UPMIFA, the Foundation considers the following factors
in making a determination to appropriate or accumulate donor-restricted endowment
funds:
(1)
(2)
(3)
(4)
(5)
(6)
(7)
The duration and preservation of the fund
The purposes of the Foundation and the donor-restricted endowment fund
General economic conditions
The possible effect of inflation and deflation
The expected total return from income and the appreciation of investments
Other resources of the Foundation
The investment policies of the Foundation
-21-
DRAFT for Discussion Purposes Only
HARTNELL COLLEGE FOUNDATION
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2011 and 2010
NOTE 9 – ENDOWMENT: (continued)
Interpretation of relevant law (continued)
Endowment net asset composition by type of fund as of June 30, 2011:
Unrestricted
Donor-restricted endowment funds $ (108,636)
Board-designated endowment funds
446,885
Total
$ 338,249
Temporarily
Restricted
Permanently
Restricted
$
950,922
$ 4,477,911
$
950,922
$ 4,477,911
Total
$ 5,320,197
446,885
$ 5,767,082
Changes in endowment net assets for the fiscal year June 30, 2011:
Endowment net assets, July 1
Unrestricted
Temporarily
Restricted
Permanently
Restricted
Total
$ (163,782)
$
$ 4,455,073
$ 4,755,818
464,527
Investment return:
Investment income, net of management
and investment fees
Net realized and unrealized
appreciation(depreciation)
3,997
65,518
69,515
74,345
1,061,270
1,135,615
Total investment return
78,342
1,126,788
Contributions
-
1,205,130
79,607
79,607
Appropriation of endowment
assets for expenditure
(6,407)
Other changes:
Transfer for change in donor designation
Transfer to FCCC Foundation
Transfer of underwater endowment
balances
Endowment net assets, June 30
(210,297)
28,422
(85,000)
28,231
401,674
$
-22-
338,249
(216,704)
(430,096)
$
950,922
(56,578)
28,231
(28,422)
$ 4,477,911
$ 5,767,082
DRAFT for Discussion Purposes Only
HARTNELL COLLEGE FOUNDATION
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2011 and 2010
NOTE 9 – ENDOWMENT: (continued)
Endowment net asset composition by type of fund as of June 30, 2010:
Unrestricted
Donor-restricted endowment funds $ (538,732)
Board-designated endowment funds
374,950
Total
$ (163,782)
Temporarily
Restricted
Permanently
Restricted
$
464,527
$ 4,455,073
$
464,527
$ 4,455,073
Total
$ 4,380,868
374,950
$ 4,755,818
Changes in endowment net assets for the fiscal year June 30, 2010:
Endowment net assets, July 1
Unrestricted
Temporarily
Restricted
Permanently
Restricted
Total
$ (306,772)
$
437,498
$ 4,284,677
$ 4,415,403
Investment return:
Investment income, net of management
and investment fees
Net realized and unrealized
appreciation(depreciation)
2,651
43,616
1,876
48,143
26,138
356,058
(5,703)
376,493
Net investment return
28,789
399,674
(3,827)
424,636
32,690
19,200
51,890
Contributions
Appropriation of endowment
assets for expenditure
Other changes:
Transfer for change in donor designation
Transfer to FCCC Foundation
Transfer of underwater endowment
balances
Endowment net assets, June 30
(12,728)
(136,812)
33,777
(175,371)
126,929
$ (163,782)
-23-
(149,540)
(33,777)
188,800
13,429
(126,929)
$
464,527
$ 4,455,073
$ 4,755,818
DRAFT for Discussion Purposes Only
HARTNELL COLLEGE FOUNDATION
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2011 and 2010
NOTE 9 – ENDOWMENT: (continued)
Description of amounts classified as permanently restricted net assets and temporarily
restricted net assets (endowment only):
2011
2010
Permanently Restricted Net Assets
Portion of perpetual endowment funds that is required to be retained
permanently either by explicit donor stipulation or by UPMIFA
$ 4,477,911
Total endowment funds classifed as permanently restricted net assets $ 4,477,911
$ 4,455,073
$ 4,455,073
Temporarily Restricted Net Assets
Purpose restricted endowment funds
$
Total endowment funds classifed as temporarily restricted net assets $
$
$
950,922
950,922
464,527
464,527
Funds with deficiencies
From time to time, the fair value of assets associated with individual donor-restricted
endowment funds may fall below the level that the donor or UPMIFA required the
Foundation to retain as a fund of perpetual duration. In accordance with U.S. generally
accepted accounting principles, deficiencies of this nature that are reported in
unrestricted net assets were $(108,636) and $(538,732) as of June 30, 2011 and June 30,
2010, respectively. These deficiencies resulted from unfavorable market fluctuations that
occurred and continued appropriation for certain programs that was deemed prudent by
the Board of Directors.
Return objectives and risk parameters
The Foundation has adopted investment and spending policies for endowment assets that
attempt to provide a predictable stream of funding to programs supported by its
endowment while seeking to maintain the purchasing power of the endowment assets.
Endowment assets include those assets of donor-restricted funds that the Foundation
must hold in perpetuity or for a donor-specified period(s) as well as board-designated
funds. Under this policy, as approved by the Board of Directors, the endowment assets
are invested in a manner that is intended to produce results that exceed the price and
yield results of the S&P 500 index while assuming a moderate level of investment risk.
The Foundation expects its endowment funds, over time, to provide an average rate of
return of 7 to 9 percent annually. Actual returns in any given year may vary from this
amount. Endowments held in partnership with the Foundation for California Community
Colleges (FCCC) are managed and follow policies established by the FCCC’s investment
advisory committee which may differ from those of the Foundation.
-24-
DRAFT for Discussion Purposes Only
HARTNELL COLLEGE FOUNDATION
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2011 and 2010
NOTE 9 – ENDOWMENT: (continued)
Strategies employed for achieving objectives
To satisfy its long-term rate-of-return objectives, the Foundation relies on a total return
strategy in which investment returns are achieved through both capital appreciation
(realized and unrealized) and current yield (interest and dividends). The Foundation
targets a diversified asset allocation that places a greater emphasis on quality-based
investments to achieve its long-term return objectives within prudent risk constraints.
Spending policy and how the investment objectives relate to spending policy
The Foundation has a policy of appropriating for distribution each year no more than 5
percent of the endowment funds’ average fair value over the prior 12 quarters through the
calendar year-end preceding the fiscal year in which the distribution is planned. In
establishing this policy, the Foundation considered the long-term expected return on its
endowment. Accordingly, over the long term, the Foundation expects the current
spending policy to allow its endowment to grow at an average of 7 to 9 percent annually.
This is consistent with the Foundation’s objective to maintain the purchasing power of
the endowment assets held in perpetuity or for a specified term as well as to provide
additional real growth through new gifts and investment return.
NOTE 10 – CONTRIBUTED ASSETS AND SERVICES:
The value of contributed equipment and services totaled $21,450 and $27,082 for the
years ended June 30, 2011 and 2010, respectively. These amounts have been reflected in
the statement of activities as in-kind contributions and as operating or program expenses
as appropriate.
-25-
DRAFT for Discussion Purposes Only
HARTNELL COLLEGE FOUNDATION
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2011 and 2010
NOTE 11 – RELATED PARTY TRANSACTIONS:
The Foundation provides various levels of monetary support and service to the District.
The transactions are recorded within the financial statements within program expense and
campus area programs, and scholarship expense. They consist primarily of salaries and
benefits, campus area expenses and scholarship payments totaling $1,415,961 for year
ended June 30, 2011 and $1,168,957 for year ended June 30, 2010.
To assist the Foundation in carrying out its purpose, the District provides administrative
services to the Foundation. The District pays salaries and benefits of the executive
director and the executive assistant which totaled $160,271 and $151,064 for years ended
June 30, 2011 and 2010, respectively. These donated services have been reflected in the
statement of activities as in-kind donations and as operating, program, or fundraising
expenses as appropriate.
Working space for employees who perform administrative services for the Foundation is
provided by the District at no charge. The value of donated facilities has not been
determined and is therefore not included in the financial statements; however,
management does not believe the amount to be material.
-26-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
PROPOSITION 39 GENERAL OBLIGATION BONDS
BOND PROJECTS FUND
MEASURE H
FINANCIAL AUDIT
June 30, 2011
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
PROPOSITION 39 GENERAL OBLIGATION BONDS
BOND PROJECTS FUND
MEASURE H
FINANCIAL AUDIT
June 30, 2011
CONTENTS
Page
Independent Auditor’s Report....................................................................................
1-2
Balance Sheet –Bond Projects Fund ..........................................................................
3
Statement of Revenues, Expenditures and Change in Fund Balance –
Bond Projects Fund ................................................................................................
4
Statement of Revenues, Expenditures and Change in Fund Balance –
Bond Projects Fund – Budget and Actual ............................................................
5
Notes to Financial Statements .....................................................................................
6-13
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 ........................................
14-15
Schedule of Findings and Responses ..........................................................................
16
DRAFT for Discussion Purposes Only
INDEPENDENT AUDITOR’S REPORT
The Board of Trustees
The Measure H Citizens’ Oversight Committee
Hartnell Community College District
We have audited, in accordance with auditing standards generally accepted in the United States of America,
the basic financial statements of the Hartnell Community College District, as of and for the fiscal year
ended June 30, 2011, and have issued our report thereon dated November 16, 2011. We have also audited
the accompanying Balance Sheet, Statement of Revenues, Expenditures and Change in Fund Balance and
Statement of Revenues, Expenditures and Change in Fund Balance – Budget and Actual for the Bond
Projects Fund of the Hartnell Community College District as of June 30, 2011 These statements are the
responsibility of the District’s management. Our responsibility is to express an opinion on these statements
based on our audit.
We conducted our audit of the Bond Projects Fund 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 for the Bond Projects Fund are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the Bond Projects Fund financial statements.
An audit also includes assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation. We believe our audit
provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
financial position and results of operations for the Bond Projects Fund of the Hartnell Community College
District as of June 30, 2011, in conformity with accounting principles generally accepted in the United
States of America.
As described in Note 1 to the financial statements, the Hartnell Community College District adopted the
provisions of Governmental Accounting Standards Board (GASB) Statement No. 54, Fund Balance
Reporting and Governmental Fund Type Definitions, for the year ended June 30, 2011.
-1-
DRAFT for Discussion Purposes Only
In accordance with Government Auditing Standards, we have also issued our report dated November 16,
2011 on our consideration of the Hartnell Community College District’s internal control over the Bond
Projects Fund 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 the Bond Projects Fund 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.
VICENTI, LLOYD & STUTZMAN LLP
November 16, 2011
-2-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
BALANCE SHEET
BOND PROJECTS FUND
June 30, 2011
ASSETS
Cash in county treasury
Accounts receivable
Due from other funds
TOTAL ASSETS
$
44,445,087
51,529
1,842,371
$
46,338,987
$
725,715
725,715
LIABILITIES AND FUND BALANCE
LIABILITIES
Accounts payable
TOTAL LIABILITIES
FUND BALANCE
Restricted
TOTAL FUND BALANCE
45,613,272
45,613,272
TOTAL LIABILITIES AND FUND BALANCE
$
See the accompanying notes to the financial statements.
-3-
46,338,987
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
STATEMENT OF REVENUES, EXPENDITURES AND CHANGE IN FUND BALANCE
BOND PROJECTS FUND
For the Fiscal Year Ended June 30, 2011
REVENUES
Interest and investment income
TOTAL REVENUES
$
EXPENDITURES
Salaries
Benefits
Capital outlay
TOTAL EXPENDITURES
67,214
67,214
18,595
7,169
16,730,347
16,756,111
Net change in fund balance
(16,688,897)
62,302,169
Fund Balance at Beginning of Year
$
Fund Balance at End of Year
See the accompanying notes to the financial statements.
-4-
45,613,272
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
STATEMENT OF REVENUES, EXPENDITURES AND CHANGE IN FUND BALANCE
BOND PROJECTS FUND - BUDGET AND ACTUAL
For the Fiscal Year Ended June 30, 2011
Budget*
REVENUES
Interest and investment income
TOTAL REVENUES
$
EXPENDITURES
Salaries (See Note 6 - page 13)
Benefits (See Note 6 - page 13)
Capital outlay
TOTAL EXPENDITURES
Net change in fund balance
480,000
480,000
Actual
$
18,500
6,699
81,925,233
81,950,432
67,214
67,214
Variance
Favorable
(Unfavorable)
$
18,595
7,169
16,730,347
16,756,111
$ (81,470,432)
(16,688,897)
(412,786)
(412,786)
(95)
(470)
65,194,886
65,194,321
$
64,781,535
62,302,169
Fund Balance at Beginning of Year
$
Fund Balance at End of Year
45,613,272
*Any budgeted revenues reflect estimated amounts to be received in the current year. Any budgeted expenditures
reflect amounts remaining and available for multi-year projects and therefore will not necessarily coincide with
actual current year expenditures.
See the accompanying notes to the financial statements.
-5-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
BOND PROJECTS FUND
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2011
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
ACCOUNTING POLICIES
The accompanying financial statements have been prepared in conformity with generally
accepted accounting principles as prescribed by the Governmental Accounting Standards
Board and Audits of State and Local Governmental Units issued by the American
Institute of Certified Public Accountants.
FUND STRUCTURE
The Statement of Revenues, Expenditures, and Change in Fund Balance is a statement of
financial activities of the Bond Projects Fund related to the current reporting period.
Expenditures frequently include amounts for land, buildings, equipment, retirement of
indebtedness, transfers to other funds, etc. Consequently, this statement does not purport
to present the result of operations or the net income or loss for the period as would a
statement of income for a profit-type organization.
BASIS OF ACCOUNTING
The Bond Projects Fund of the Hartnell Community College District (the District) is
maintained on the modified accrual basis of accounting. As such, revenues are
recognized when they become susceptible to accrual, which is to say, when they become
both measurable and available to finance expenditures of the current period.
Expenditures are recognized in the accounting period in which the liability is incurred
(when goods are received or services rendered).
During the year, Cash in the County Treasury is recorded at cost, which approximates fair
value, in accordance with the requirements of GASB Statement No. 31.
BUDGET
The Statement of Revenues, Expenditures and Change in Fund Balance – Budget and
Actual includes a column entitled “Budget”. The amounts in this column represent the
budget adopted by the Board and all amendments throughout the year.
-6-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
BOND PROJECTS FUND
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2011
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (continued)
FUND BALANCE CLASSIFICATION
During the current fiscal year, the District implemented the reporting model required by
GASB statement No. 54. Therefore, the governmental fund financial statements present
fund balance classifications that comprise a hierarchy based on the extent to which the
District is bound to honor constraints on the specific purposes for which amounts can be
spent. Amounts for which constraints have been placed on the use of the resources either
(a) externally imposed by creditors, grantors, contributors, or laws or regulations of other
governments, or (b) imposed by law through constitutional provisions or enabling
legislation are considered restricted. The Bond Projects Fund Balance of the District is
therefore classified as restricted.
CAPITAL ASSETS AND LONG-TERM DEBT
The accounting and reporting treatment applied to the capital assets and long-term
liabilities associated with the Bond Projects Fund are determined by its measurement
focus. The Fund is accounted for on a spending or “financial flow” measurement focus.
This means that only current assets and current liabilities are generally included on the
balance sheet. The reported fund balance is considered a measure of “available
spendable resources”. Thus, the capital assets and long-term liabilities associated with
the Bond Projects Fund are accounted for in the basic financial statements of the District.
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.
-7-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
BOND PROJECTS FUND
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2011
NOTE 2 – DEPOSITS – CASH IN COUNTY TREASURY:
In accordance with Education Code Section 41001, the District maintains all of its cash in
the Monterey County Treasury as part of the common investment pool. These pooled
funds are carried at cost which may differ from fair value. The fair market value of the
District’s deposits for the Bond Projects Fund in this pool as of June 30, 2011, as
provided by the pool sponsor, was $44,469,045.
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. Any investment losses are proportionately
shared by all funds in the pool.
NOTE 3 – DUE FROM OTHER FUNDS:
Interfund receivables represent temporary loans to the Scheduled Maintenance Fund for
project costs to be reimbursed by state funds. The District anticipates reimbursement to
the fund during the 2011-12 fiscal year.
NOTE 4 – BONDED DEBT:
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, 2011 the principal balance
outstanding was $1,840,000.
-8-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
BOND PROJECTS FUND
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2011
NOTE 4 – BONDED DEBT: (continued)
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, 2011 the principal balance outstanding (including accreted interest
to date) was $27,999,932.
On June 6, 2006, the District issued 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, 2011 the principal balance outstanding (including accreted interest to date) was
$34,596,494.
On May 27, 2009, the District issued 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, 2011 the principal balance outstanding (including
accreted interest to date) was $13,917,995.
On September 16, 2009, the District issued 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, 2011
the principal balance outstanding (including accreted interest to date) was $53,560,938.
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, 2011 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.
-9-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
BOND PROJECTS FUND
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2011
NOTE 4 – BONDED DEBT: (continued)
The outstanding bonded debt for Hartnell Community College District at June 30, 2011
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
9/16/2009
6.43 - 11.50%
(1)
8/1/2049
$ 35,000,000
29,062,042
48,405,079
$ 160,060,527
(1)
Issued
Current
Year
Outstanding
July 1, 2010
$ 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
$
Interest
Accreted
Current Year
$
552,632
73,147
Redeemed
Current
Year
Outstanding
June 30, 2011
$
$
425,000
613,502
526,498
213,512
46,488
821,350
$
-
$
3,749,986
5,197,115
$ 1,825,000
1,840,000
25,752,690
2,247,242
34,195,325
401,169
12,597,888
1,320,107
48,405,079
5,155,859
$ 131,915,359
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, 2011,
are as follows:
Series A
Year Ended
June 30,
2012
2013
2014
Principal
Interest
Total
$
515,000
610,000
715,000
$
59,725
39,656
14,300
$
574,725
649,656
729,300
$
1,840,000
$
113,681
$
1,953,681
-10-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
BOND PROJECTS FUND
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2011
NOTE 4 – BONDED DEBT: (continued)
Refunding Bond
Year Ended
June 30,
2012
2013
2014
2015
2016
2017-2021
2022-2023
Principal
$
Accreted
Interest
Component
Interest
Total
574,752
537,100
502,679
638,159
2,015,000
13,840,000
7,645,000
$
1,163,688
1,163,688
1,163,688
1,163,688
1,118,350
3,703,138
371,094
$
625,248
722,900
822,321
1,251,841
$
2,363,688
2,423,688
2,488,688
3,053,688
3,133,350
17,543,138
8,016,094
$ 25,752,690
$
9,847,334
$
3,422,310
$ 39,022,334
Series B
Year Ended
June 30,
2012
2013
2014
2015
2016
2017-2021
2022-2026
2027-2031
Principal
$
239,391
239,635
263,895
308,540
328,864
3,955,000
12,010,000
16,850,000
$ 34,195,325
Accreted
Interest
Component
Interest
$
1,622,241
1,622,241
1,622,241
1,622,241
1,622,241
7,829,755
6,264,913
2,610,000
$ 24,815,873
-11-
Total
$
65,609
80,365
106,105
146,460
181,137
$
$
579,676
$
1,927,241
1,942,241
1,992,241
2,077,241
2,132,242
11,784,755
18,274,913
19,460,000
59,590,874
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
BOND PROJECTS FUND
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2011
NOTE 4 – BONDED DEBT: (continued)
Series C
Year Ended
June 30,
2012
2013
2014
2015
2016
2017-2021
2022-2026
2027-2031
2032-2034
Principal
Accreted
Interest
Component
Interest
Total
$
$
$
$
1,195,731
5,101,547
6,300,610
$ 12,597,888
4,372,178
5,867,597
1,080,144
$ 11,319,919
2,154,269
7,888,453
7,619,390
$ 17,662,112
$
7,722,178
18,857,597
15,000,144
41,579,919
Series D
Year Ended
June 30,
2012
2013
2014
2015
2016
2017-2021
2022-2026
2027-2031
2032-2036
2037-2041
2042-2046
2047-2050
Principal
$
483,460
1,868,094
15,876,647
12,229,492
10,802,583
7,144,803
$ 48,405,079
Accreted
Interest
Component
Interest
$
$
7,901,250
11,287,500
6,178,900
$ 25,367,650
-12-
801,539
5,076,906
33,356,982
89,193,888
124,801,679
133,564,632
$ 386,795,626
Total
$
9,186,249
18,232,500
55,412,529
101,423,380
135,604,262
140,709,435
$ 460,568,355
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
BOND PROJECTS FUND
NOTES TO THE FINANCIAL STATEMENTS
June 30, 2011
NOTE 4 – BONDED DEBT: (continued)
The repayment of the debt related to the general obligations bonds is accounted for in the
District’s Bond Interest and Redemption Fund which is part of the District’s basic
financial statements. The recognition of premiums on bonds is recorded as long-term
liabilities and the recognition of issuance costs is recognized as capitalized fees in the
basic financial statements of the District. Amounts paid to the refunded debt escrow
agent, in excess of outstanding debt at the time of payment, are recorded as deferred
charges in the basic financial statements of the District.
NOTE 5 – PURCHASE COMMITMENTS:
As of June 30, 2011, the District was committed under various capital expenditure
purchase agreements for bond projects totaling approximately $7,960,000. Projects will
be funded through bond proceeds and state funds.
NOTE 6 – EXCESS OF EXPENDITURES OVER APPROPRIATIONS:
Excesses of expenditures over appropriations, by major object amounts, occurred in the
Bond Projects Fund as follows:
Salaries
Benefits
$
-13-
95
470
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
The Measure H Citizens’ Oversight Committee
Hartnell Community College District
We have audited the Bond Projects Fund financial statements of the Hartnell Community College District
(the District) as of and for the year ended June 30, 2011 and have issued our report thereon dated
November 16, 2011. 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 the District’s internal control over the Bond Projects
Fund 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
the District’s internal control over financial reporting. Accordingly, we do not express an opinion on the
effectiveness of the 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 financial statements will not be prevented or detected and corrected on a timely basis.
Our consideration of internal control over fund 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.
-14-
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
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the District’s Bond Projects Fund 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 no instances of non-compliance or other matters that are
required to be reported under Government Auditing Standards.
This report is intended solely for the information and use of management, the Board of Trustees, and the
Citizens’ Oversight Committee and is not intended to be and should not be used by anyone other than these
specified parties.
VICENTI, LLOYD & STUTZMAN LLP
November 16, 2011
-15-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
BOND PROJECTS FUND
SCHEDULE OF FINDINGS AND RESPONSES
June 30, 2011
There were no findings related to the financial audit of the Bond Projects Fund for fiscal year
ended June 30, 2011. In addition, there were no findings related to the financial audit of the
Bond Projects Fund for fiscal year ended June 30, 2010.
-16-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
PROPOSITION 39 GENERAL OBLIGATION BONDS
BOND PROJECTS FUND
MEASURE H
PERFORMANCE AUDIT
Fiscal Year Ending June 30, 2011
-1-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
PROPOSITION 39 GENERAL OBLIGATION BONDS
BOND PROJECTS FUND
MEASURE H
PERFORMANCE AUDIT
June 30, 2011
CONTENTS
Page
Independent Auditor’s Report....................................................................................
1
Background Information.............................................................................................
2
Objectives......................................................................................................................
3
Scope of the Audit ........................................................................................................
3
Procedures Performed .................................................................................................
4
Conclusion ....................................................................................................................
5
-2-
DRAFT for Discussion Purposes Only
INDEPENDENT AUDITOR’S REPORT
The Board of Trustees
The Measure H Citizens’ Oversight Committee
Hartnell Community College District
We have conducted a performance audit of the Hartnell Community College District (the “District”),
Measure H General Obligation Bond funds for the year ended June 30, 2011.
We conducted our performance audit in accordance with Government Auditing Standards issued by the
Comptroller General of the United States. Those standards require that we plan and perform the audit to
obtain sufficient, appropriate evidence to provide a reasonable basis for our conclusion based on our audit
objectives.
Our audit was limited to the objectives listed on page 3 of this report which includes determining the
District’s compliance with the performance requirements for the Proposition 39 Measure H General
Obligation Bonds under the applicable provisions of Section 1(b)(3)(C) of Article XIIIA of the California
Constitution and Proposition 39 as they apply to the Bonds and the net proceeds thereof. Management is
responsible for the District’s compliance with those requirements.
Solely to assist us in planning and performing our performance audit, we obtained an understanding of the
internal control of the District to determine if internal controls were adequate to help ensure the District’s
compliance with the requirements of Proposition 39, as specified by Section 1(b)(3)(C) of Article XIIIA of
the California Constitution. Accordingly, we do not express any assurance on the internal control.
The results of our tests indicated that, in all significant respects, the District expended Measure H General
Obligation Bond funds for the year ended June 30, 2011 only for the specific projects developed by the
District’s Board of Trustees and approved by the voters, in accordance with the requirements of Proposition
39, as specified by Section 1(b)(3)(C) of Article XIIIA of the California Constitution.
VICENTI, LLOYD & STUTZMAN LLP
November 16, 2011
-1-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
PROPOSITION 39 GENERAL OBLIGATION BONDS
MEASURE H
PERFORMANCE AUDIT
June 30, 2011
BACKGROUND INFORMATION
In November, 2000, the voters of the State of California approved Proposition 39
authorizing the issuance of general obligation bonds by California public school district’s
and community colleges under certain circumstances and subject to certain conditions.
On November 5, 2002, a general obligation bond proposition (Measure H) of the Hartnell
Community College District was approved by the voters of the District. Measure H
authorized the District to issue up to $131,000,000 of general obligation bonds to finance
various capital projects, and related costs, as specified in the bond measure provisions of
Measure H.
Pursuant to the requirements of Proposition 39, and related State legislation, the Board of
Trustees of the District established a Citizens’ Oversight Committee and appointed its
members. The principal purpose of the Citizens’ Oversight Committee, as set out in State
law, is to inform the public as to the expenditures of the proceeds of the bonds issued
pursuant to the Measure H bond authorization. The Citizens’ Oversight Committee is
required to issue at least one report annually as to its activities and findings.
Section 1(b)(3)(C) of Article XIIIA of the California Constitution requires the District to
conduct an annual independent performance audit to ensure that the proceeds of the
bonds deposited into the Bond Projects Fund have been expended only for the authorized
bond projects.
-2-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
PROPOSITION 39 GENERAL OBLIGATION BONDS
MEASURE H
PERFORMANCE AUDIT
June 30, 2011
OBJECTIVES
The objectives of our performance audit were to:
•
Document the expenditures charged to the Hartnell Community College District
Bond Projects Fund established for the bonds and the net bond proceeds deposited
into the Bond Projects Fund.
•
Determine whether expenditures charged to the Bond Projects Fund have been
made in accordance with the bond project list approved by the voters through the
approval of Measure H in November 2002.
•
Note any incongruities, system weaknesses, or non-compliance with specific
Education Code sections related to bond oversight and provide recommendations
for improvement.
•
Provide the District Board of Trustees and the Citizens’ Oversight Committee
with a performance audit as required under the requirements of the California
Constitution and Proposition 39.
SCOPE OF THE AUDIT
The scope of our performance audit covered the period of July 1, 2010 to June 30, 2011.
The expenditures tested included all object and project codes associated with the bond
projects. The propriety of expenditures for capital projects and maintenance projects
funded through other State or local funding sources, other than the proceeds of the bonds,
were not included within the scope of our audit. Expenditures incurred subsequent to
June 30, 2011 were not reviewed or included within the scope of our audit or in this
report.
-3-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
PROPOSITION 39 GENERAL OBLIGATION BONDS
MEASURE H
PERFORMANCE AUDIT
June 30, 2011
PROCEDURES PERFORMED
We obtained the general ledger and the project expenditure reports prepared by the
District for the fiscal year ended June 30, 2011, for the Bond Projects Fund. Within the
fiscal year audited, we obtained the actual invoices and other supporting documentation
for expenditures to ensure compliance with the requirements of Proposition 39 and
Measure H as to the approved bond projects list. We performed the following
procedures:
•
We reviewed the projects listed to be funded with general obligation bond proceeds
as set out in the Measure H election documents.
•
We selected a sample of expenditures for the fiscal year ended June 30, 2011, and
reviewed supporting documentation to ensure that such funds were properly
expended on the authorized bond projects. Our sample included 35 transactions
totaling $11,647,631.
This represents 70% of the total expenditures of
$16,756,111.
•
We verified that funds from the Bond Projects Fund were generally expended for
the construction, reconstruction, acquisition, furnishing and equipping of District
facilities constituting the authorized bond projects. In addition, we verified that
funds held in the Bond Projects Fund were used for salaries of administrators only
to the extent they perform administrative oversight work on construction projects as
allowable per Opinion 04-110 issued on November 9, 2004 by the State of
California Attorney General.
-4-
DRAFT for Discussion Purposes Only
HARTNELL COMMUNITY COLLEGE DISTRICT
PROPOSITION 39 GENERAL OBLIGATION BONDS
MEASURE H
PERFORMANCE AUDIT
June 30, 2011
CONCLUSION
The results of our tests indicated that, in all significant respects, the District has properly
accounted for the expenditures of the funds held in the Bond Projects Fund and that such
expenditures were made on authorized bond projects. Further, it was noted that the funds
held in the Bond Projects Fund, and expended by the District, were used for salaries of
administrators only to the extent they perform administrative oversight work on
construction projects as allowable per Opinion 04-110 issued on November 9, 2004 by
the State of California Attorney General.
-5-
ANNUAL
ORGANIZATION
ANNUAL ORGANIZATIONAL MEETING OF TRUSTEES:
Title
November 29, 2011
Number
Annual Election of Officers for 2012
III. B.
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 2011 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
November 29, 2011
Number
Annual Appointment of Representatives to
Standing Organizations
III. C.
Area
Status
Superintendent/President
Action
Recommendation
It is recommended that the Board of Trustees appoint its representatives to standing
organizations for calendar year 2012.
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 2012 Board Meeting
Dates and Times
Number
Area
Superintendent/President
Status
Action
November 29, 2011
III. D
Recommendation
It is recommended that the Board of Trustees adopts the dates and times for regular meetings
and for board development for calendar year 2012.
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:
2012
January 24 ...... Regular Board Meeting
February 7 ...... Regular Board Meeting
February 21 .... Board Development
March 6 .......... Regular Board Meeting
March 20 ........ Board Development
April 10 .......... Regular Board Meeting
April 24 .......... Board Development
May 1 ............. Regular Board Meeting
May 15 ........... Board Development
June 5 ............. Regular Board Meeting
June 19 ........... Board Development
July 10 ........... Regular Board Meeting
July 17 ........... Board Development (TBD)
August 21 ....... Regular Board Meeting
August 28 ....... Board Development
September 4 ... Regular Board Meeting
September 18 . Board Development
October 2 ....... Regular Board Meeting
October 16 ..... Board Development
November 6 ... Regular Board Meeting
November 20 . Board Development
December 4 .... Annual Organizational Mtg
December 18 .. Board Development
2013
January 22
Regular Board Meeting
ANNUAL ORGANIZATIONAL MEETING OF TRUSTEES:
Title
Adopt Resolution 11:13, Authorizing
Signature of Superintendent/President as
Secretary of the Board of Trustees
Number
Area
Status
Superintendent/President
Action (Roll Call)
November 29, 2011
III. E.
Recommendation
It is recommended that the Board of Trustees adopts Resolution 11:13 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 11:13
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 November 29, 2011 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:
Title
November 29, 2011
Number
V. A.
Minutes
Area
Status
Superintendent/President
Prepared by: Dr. Phoebe K. Helm
Consent
Recommendation
It is recommended that the Board of Trustees reviews, revises as appropriate, and adopts the
minutes as presented.
Summary
Minutes of the Board of Trustees for are submitted for review and approval as follows:
Regular Meeting – November 1, 2011
Special Meeting – November 15, 2011
Unadopted
HARTNELL COMMUNITY COLLEGE DISTRICT
MINUTES
Regular Meeting of the Board of Trustees
CALL 208, Training Room
411 Central Avenue
Salinas, California
November 1, 2011
OPEN SESSION
Meeting called to order at 5:05 p.m. by Trustee Padilla-Chavez.
PLEDGE OF
ALLEGIANCE
Trustee Gonzalez-Castro led the Pledge of Allegiance.
ROLL CALL
Erica Padilla Chavez, President
Candi DePauw
Patricia Donohue
Bill Freeman (arrived at 5:20 p.m.)
Elia Gonzalez-Castro
Ray Montemayor
Juan M. Gutierrez, Student Trustee – (advisory vote per Board Policy 1030)
Dr. Phoebe K. Helm, Superintendent/President
ABSENT
Kevin Healy, Vice President
OPENED PUBLIC
HEARING ENERGY
Trustee Padilla-Chavez announced that the Board would conduct a Public
Hearing on Redistricting/Trustee Area Maps and the Board opened the public
hearing at 5:07 p.m.
PRESENTATION BY
DEMOGRAPHER
Demographers Dr. Shelley Lapkoff presented an overview of the redistricting
process and the work of the Redistricting Advisory Committee appointed by
the Board of Trustees.
The presentation addressed
• General Redistricting Principles
• Redistricting Legal Requirements, Criteria and Hartnell Trustee Guidelines
• Current areas needing adjustments
• Plan developed and submitted by the Committee for legal review (Plan B5), which was developed by the demographers based on the opinion of the
legal consultant (at least 55% Hispanic Citizen Voting Age Population in
each Trustee Area) – Appendix A
During Dr. Lapkoff’s presentation, the Board asked for clarification and asked
several questions, and made comments specific to the process and maps.
Dr. Lapkoff explained the next step is to submit the plan to the Department of
Justice (DOJ) for the pre-clearance process. Trustee Padilla-Chavez reminded
HCCD – REGULAR MEETING OF THE BOARD OF TRUSTEES – NOVEMBER 1, 2011
Page 1 of 8
the Board that the college has secured an attorney from a firm that has many
years of experience with the pre-clearance process, who has worked closely
and frequently with the DOJ. The Board held a study session on October 19,
2011 to receive an update on the work of the Redistricting Advisory
Committee and to review and discuss the recommended plan, B-4. On October
24, the Redistricting Advisory Committee met and revised Plan B-4, resulting
in Plan B-5.
PUBLIC COMMENTS
ON REDISTRICTING
David Serena, who introduced himself as the President of the Coalition for
Peace, Justice, and Fairness, and Member of the Monterey County Office of
Education Board, and Jose Ibarra, community member, urged the Board to not
take action this evening – to wait until after the November elections to allow
potential new board members input – similar to what the Monterey County
Office of Education Board has done.
CLOSED PUBLIC
HEARING
Trustee Padilla-Chavez closed the public hearing at 6:01 p.m. and opened the
discussion to the Board.
BOARD’S COMMENTS
ON REDISTRICTING
Trustee Montemayor stated that he believes East Salinas needs more than one
trustee representing the Alisal area in order to ensure critical needs are being
met – that more than one trustee representing the Alisal area is best.
Student Trustee Gutierrez stated that, this November, he would be voting for a
trustee that will no longer represent his area and that more effort should have
been made to keep the boundaries similar to what they are now.
Trustee DePauw stated that, while she appreciates concerns expressed this
evening, the Board identified a process, developed guiding principles, and each
individual Trustee designated two representatives from their area to serve on
the Advisory Committee. The committee did their work as assigned and she
supports that work.
Trustee Freeman stated that he cannot support the plans because he believes the
process is being rushed, that there needs to be more public input and that the
Board has until February/March to finalize this process. Also, since members
of the Board may change, the approval should wait until after the elections.
Trustee Gonzalez-Castro stated that she agrees with Trustee DePauw – a
process was used. Further, she believes that the Trustees of Hartnell College
all work toward improving the whole district, not just individual Trustee areas;
that the process is not being rushed because of elections. The work of the
Committee should be supported.
Trustee Donohue thanked the Advisory Committee for their work. She stated
that the Board represents the entire district and not just one trustee area. She
believes that each Trustee unilaterally supports all of the good work that is
being done in the Alisal area and believes each wishes to continue this good
work, and she supports taking action this evening.
Trustee Padilla-Chavez thanked those who addressed the Board this evening.
HCCD – REGULAR MEETING OF THE BOARD OF TRUSTEES – NOVEMBER 1, 2011
Page 2 of 8
She stated that she appreciates all comments because of what she has learned
by serving on a redistricting committee for the County of Monterey. Further,
Trustee Padilla-Chavez stated that this process has been underway since March
2011, that there is a redistricting website available in English/Spanish; that the
advisory committee met multiple times; that each trustee identified two
individuals from their respective areas; that the maps fare well – the Latino
population is represented well. Further, she stated that redistricting is
happening everywhere and that she supports approving the maps and moving
forward with the pre-clearance process in order to allow time to address issues,
if any. In closing, she stated she is at peace knowing that our legal advisors are
experts in the voting rights act and thanked the committee for their work.
ACTION OF THE
BOARD ON
REDISTRICTING
On a motion by Trustee DePauw, seconded by Trustee Gonzalez-Castro, and
by roll-call vote of 4-2 (Nay: Freeman, Montemayor) and by advisory vote of
Nay (Student Trustee Gutierrez), the Board moved to adopt Plan B-5 as
recommended by the Redistricting Advisory Committee.
PUBLIC COMMENTS
ON THE AGENDA AND
WITHIN THE
JURISDICTION OF THE
BOARD
Francisco Estrada, Student, stated he believes he continues to be harassed by
administration, that he asked for support at last month’s Board meeting and has
received none. He asked both Dr. Helm and Trustee Padilla-Chavez to step in
or he would go to the media – similar to what he has done in the past.
Trustee Freeman called for a point of order and began to address the comments
made by Francisco Estrada. Trustee Padilla-Chavez asked that the public be
allowed to continue with their comments, but Trustee Freeman continued to
express that he is tired of the students being harassed and that it needs to stop –
and that when he is re-elected he will stop it - that the school belongs to the
students and that they are good people.
Jose Ibarra, member of the pubic, stated that there were too many political
activities or agendas at Hartnell.
STUDENT SENATE
REPORT
Francisco Estrada, President of the Student Senate asked to give his report early
so that he could attend his Tuesday evening class. He reported that the Senate
hosted their annual Spooktacular event last evening and that it went well and
that that the students have a new Student Life Coordinator, Margaret Ortega.
CONSENT AGENDA
Trustee Donohue made a motion, seconded by Trustee Gonzalez-Castro to
approve and/or ratify the consent items A through I.
Trustee Montemayor asked for clarification on the Controller appointment
because there was no name inserted. Both Dr. Helm and Terri Pyer explained
that when meeting materials were mailed, they had not completed the
interviews and thus, had no name to insert, but had hoped one would be
available this evening.
In addition, Trustee Montemayor asked if this appointment was an internal
promotion or candidates outside of the college. Ms. Pyer responded that the
top two candidates are from outside Hartnell.
The motion was amended to exclude the Controller appointment.
HCCD – REGULAR MEETING OF THE BOARD OF TRUSTEES – NOVEMBER 1, 2011
Page 3 of 8
On a motion by Trustee Donohue, seconded by Trustee Gonzalez-Castro, by
vote of 6-0 and by advisory vote of Aye (Student Trustee Gutierrez), the Board
moved to approve and/or ratified the consent items A through I, excluding the
Controller position as stated in Personnel Action. The appointment of the
Controller will be brought back to a later meeting.
A. MINUTES
Adopted minutes of regular meeting of October 4, 2011 and Study Session of
October 19, 2011 as submitted.
B. DISBURSEMENTS
Approve 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. QUARTERLY
FINANCIAL STATUS
REPORT
Reviewed and accepted the Quarterly Financial Status Report (CCFS-311Q) for
the quarter ended September 30, 2011.
D. NON CASH
DONATIONS
Accepted non-cash donations from the Hartnell College Foundation.
E. AWARD BID –
RANGER PIPELINE
INFRASTRUCTURE
PROJECT, PHASE II
Awarded bid and authorized the administration to enter into a contract with
Ranger Pipeline, Inc., lowest responsive bidder, for the Main Campus
Infrastructure Project, Phase II. The project consists of the tie in of water, gas
and data that were instated as part of Phase I in 2004. In addition, isolator shutoff valves, which are being tied in as part of this project, will be installed at all
the buildings.
F. AGREEMENT –
CLINICAL
EXPERIENCE
SALINAS VALLEY
MEMORIAL
Ratified an affiliation agreement with Salinas Valley Healthcare Systems for
clinical experience for students enrolled in the nursing program. The agreement
is effective October 1, 2011 with a written termination clause of 90 days notice
by either party.
G. FOSTER AND
Accepted funding from the Chancellor’s Office to implement the Foster and
KINSHIP CARE
Kinship Care Program for academic year 2011-2012. The program allocation,
PROGRAM FUNDING effective July 1, 2011 through June 30, 2012 is $194,365.
2011-2012
H. GRANT
APPLICATION – CTE
TRANSITIONS
Ratified the California Community Chancellor’s Office –CTE Transitions
grant, accept funds if awarded, and authorize the administration to enter into
agreements to implement the grant. CTE Transitions grant aims to provide
support for the coordination of work-based learning and similar experiences,
including internships. The grant amount is $46,970 for fiscal year 2011-2012.
HCCD – REGULAR MEETING OF THE BOARD OF TRUSTEES – NOVEMBER 1, 2011
Page 4 of 8
I. PERSONNEL ACTION
Ratified and or approved personnel actions, excluding the controller
appointment. (Appendix B)
ACTION ITEMS
BUDGET REVISIONS
On a motion by Trustee Donohue, seconded by Trustee Gonzalez-Castro, by
vote of 6-0 and by advisory vote of Aye (Student Trustee Gutierrez), the
Board moved to approve the budget revisions numbered 9440 to 9487.
SECOND READING –
BOARD POLICIES
Trustee Montemayor asked for clarification on the CEO Selection policy. Dr.
Helm explained the statements removed from the policy are more appropriately
placed in the administrative procedure of that policy.
At the recommendation of Trustee Padilla-Chavez, the Board reviewed,
discussed, and voted on the policies individually.
Approved to renumber, rename, revise
BP 1100, Meeting Attendance revised to BP, 2725, Board Member
Compensation
MSC: Donohue/Gonzalez-Castro
Vote: 5-1 (Nay: Montemayor) – Advisory Aye: Student Trustee Gutierrez
Approved to delete
BP 1106, Life Insurance Benefits for the Members of the Governing Board
MSC: DePauw, Montemayor
Vote: 6-0; Advisory Aye (Student Trustee Gutierrez)
Approved to not delete and maintain policy
BP 1110, Health Benefits for Members of the Governing Board
MSC: Montemayor, DePauw
Vote: 4-2 (Nay: Donohue, Padilla-Chavez) – Advisory Aye (Student Trustee
Gutierrez)
Approved to delete and replace
BP 1440, New Member Orientation delete and replace with BP 2740 Board
Education
MSC: Gonzalez-Castro, DePauw
Vote: 6-0; Advisory Aye (Student Trustee Gutierrez)
Approved new policy
BP 2745 Board Self Evaluation
MSC: Gonzalez-Castro, DePauw
Vote: 6-0; Advisory Aye (Student Trustee Gutierrez)
Approved new policy
BP 3200 Accreditation
MSC: Gonzalez-Castro, Donohue
Vote: 6-0; Advisory Aye (Student Trustee Gutierrez)
HCCD – REGULAR MEETING OF THE BOARD OF TRUSTEES – NOVEMBER 1, 2011
Page 5 of 8
Approved new policy
BP 2200, Board Duties and Responsibilities
MSC: Montemayor, Donohue
Vote: 6-0; Advisory Aye (Student Trustee Gutierrez)
Approved new policy
BP 2431, CEO Selection
MSC: Gonzalez-Castro, DePauw
Vote: 6-0; Advisory Aye (Student Trustee Gutierrez)
Approved new policy
BP 2435 Evaluation of CEO
MSC: Gonzalez-Castro, Donohue
Vote: 6-0; Advisory Aye (Student Trustee Gutierrez)
Failed motion to delete and replace
BP 1105, Mileage Allowance to BP 2735 Board Member Travel
MS: Donohue, Gonzalez-Castro
Vote: 3 Aye: Donohue, Gonzalez-Castro, Padilla-Chavez
Nay: DePauw, Freeman, Montemayor
Advisory Nay: Student Trustee Gutierrez
INFORMATION ITEMS
CONSTRUCTION
PROJECTS – UPDATE
The Board received an updated, written report on the current construction
projects. The report is on Page 118 of the November 1, 2011 Meeting Agenda
Packet housed at:
http://www.hartnell.edu/board/packets/November_1_2011_Agenda_Packet.pdf.
Trustee Padilla-Chavez asked Joseph Reyes when the Alisal Turnaround would
be complete. Joseph responded the project is expected to be completed by midNovember. Trustee Padilla-Chavez thanked everyone for their work on this
project and stated that transportation to the Alisal is a wonderful service to our
community and students and again, commended students leaders for supporting
the Free Fare Zone, which reduces student transportation costs by 50%.
FINANCIAL
STATEMENTS
The Board received the financial statements for the periods ending June 30,
2011 and September 30, 2011.
SENATE REPORTS
Academic Senate: Nancy Schur reported that the Senate continues to meet
regularly; that the Senate adopted its goals and plans to look at the evaluation
process, textbook selections, distance education, and that several appointments
have been made to committees.
Classified Senate: None were present.
Student Senate: Francisco Estrada reported on Senate business earlier in the
meeting (See Page 3 Public Comments)
HCCD – REGULAR MEETING OF THE BOARD OF TRUSTEES – NOVEMBER 1, 2011
Page 6 of 8
PRESIDENT’S REPORT
Dr. Helm’s reported on:
1. Auto Collision – Dr. Zahi Atallah, Dean for Applied Technology, has
interviewed the auto collision community and the Board received his
written report. Industry representatives are uniform in their preference to
hire factory trained journeymen if and when the economy supports hiring.
Preparatory skills were identified with in existing general education and
auto technology courses as being helpful.
2. Counseling – Counseling hours available to students have greatly expanded
– actually doubled - this year. Nine full-time counselors provide 228
counseling hours per week (up from 195 last year) and part-time counselors,
many of whom are high school counselors during the day, provide an
additional 374 hours per week. As a result, the wait time for a student has
been reduced to zero in many cases and at busier times to less than 1.5 days
for a “non-crisis” event. The Board received a more detail report on this
matter.
3. Salary Comparisons – The Board requested and received documents on
salary comparisons for faculty that included Cabrillo, Cuesta, Gavilan,
MPC, and Hartnell Colleges. These comparisons are computed annually
for the CCCCO by the Santa Rosa System.
4. Dr. Helm reported that she has been attending a global transformation
conference in Monterey since Saturday and on Thursday she, along with
Mayor Donohue, will host a smaller group of foreign dignitaries at the
Alisal campus prior to a tour of Agriculture processing, distribution and
growing sites in the Valley.
5. Dr. Helm reported that she authorized travel for Student Trustee Gutierrez
to attend a Statewide Student Trustee Meeting in San Jose on November 4th
and plans to bring the item to the Board for ratification at their next regular
meeting.
6. Dr. Helm thanked Lucy Serrano for her serving as the assistant to an
accrediting site visit team
BOARD REPORTS
Trustee Donohue reported she just returned from England where talked about
the college’s science programs with other women and she thanked the
Redistricting Committee for all of their important work.
Student Trustee Gutierrez reported that he heard disabled students find it
difficult to get to the second floor of Visual Arts Facility and perhaps funds
from Measure H could help support installing an evaluator. Also, he stated that
he has witnessed that the Student Senate use their constitution when convenient
and that it is not appropriate for them to do so. And, he reported that tomorrow
is Transfer Day where several universities will be on campus.
Trustee Montemayor reported that the Sunrise House is moving to a less
expensive location and plans to report more at the next meeting.
Trustee DePauw reported that Farm Day was successful and another one is
planned in February 2012.
HCCD – REGULAR MEETING OF THE BOARD OF TRUSTEES – NOVEMBER 1, 2011
Page 7 of 8
Trustee Freeman reported he attended the Hartnell football game where they
won; that he attended a volleyball game where he purchased 13 cupcakes and
ate most of them; that he supports the college purchasing MST bus passes for
students who don’t have cars; and he said he’s served as a board member for the
last eight years and with the help of North Salinas he hopes to serve another
four years.
Trustee Gonzalez-Castro thanked the political science club for inviting her to
participate in the Candidate’s forum – it was an amazing experience – that her
last four years have been great. Trustee Gonzalez-Castro thanked everyone for
the opportunity to serve over the past four years and she hopes to continue her
dream to serve the college and the community because this is where her heart is.
Trustee Padilla-Chavez asked the Board to complete a self-assessment, as
required by accreditation, and distributed an evaluation form for each to
complete and submit to Lucy by November 10th. A special meeting is
scheduled November 15 to discuss the results of that evaluation. She asked for
100% participation. She thanked the Redistricting Committee for their work.
CLOSED SESSION
The Board of Trustees and Dr. Phoebe K. Helm, Superintendent/President, Terri
Pyer, Associate Vice President, Human Resources, and Alison Neufeld, Legal
Counsel, Liebert, Cassidy, Whitmore, moved to Closed Session at 7:26 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.
1. Conference with Legal Counsel - Anticipated Litigation Significant
exposure to litigation pursuant to Section 54956.9(b): One potential
case with regards to a publisher.
RECONVENE PUBLIC
SESSION AND
REPORT OUT FROM
CLOSED SESSION
Trustee Padilla-Chavez reconvened the public session at 7:58 and reported out
the following:
ANNOUNCEMENTS
1.
2.
3.
4.
ADJOURNMENT
On a motion by Trustee Montemayor, seconded by Trustee DePauw, and
unanimously carried, the Board moved to adjourn the meeting at 8:00 p.m.
On a motion by Trustee Donohue, seconded by Trustee Padilla-Chavez, and by
vote of 4 Ayes, 1 No (Freeman); 1 Abstained (Montemayor) the Board moved
to reject Claim#456375.
Special Meeting – November 15, 2011, 5:45 p.m., CALL 208
Annual Organizational Meeting – November 29, 5 p.m., CALL 208
Study Session – Holiday Social – December 6, 2011, 5 p.m., CALL 208
Study Session – December 13, 2011, 5 p.m., CALL 208
Erica Padilla-Chavez
Board of Trustees President
Phoebe K. Helm
Board Secretary
HCCD – REGULAR MEETING OF THE BOARD OF TRUSTEES – NOVEMBER 1, 2011
Page 8 of 8
Lapkoff & Gobalet Demographic Research, Inc.
www.Demographers.com
22361 Rolling Hills Road, Saratoga, CA 95070-6560 
2120 6th Street #9, Berkeley, CA 94710-2253 
Plan B-5
(408) 725-8164 
(510) 540-6424 
Fax (408) 725-1479
Fax (510) 540-6425
Appendix A
October 26, 2011
On October 24, Hartnell’s Redistricting Committee met to review Plan B-4, which had been
presented to the Board at its October 19 study session. The Committee members considered four
issues: whether Plan B-4 still reflected their recommendation; whether they were concerned about the
change in the numbering of Trustee Areas 2 and 4; whether Alisal should be in a single trustee area;
and whether the Plan’s deviation could be reduced.
The Committee members unanimously agreed that Plan B-4 still reflected their recommendations.
While no vote was taken, the discussion indicated that members were not particularly concerned that
the numbering had changed; they also thought it best that Alisal should be in a single trustee area.
The Committee then worked to reduce the B-4 Plan’s deviation. Several small changes were made to
reduce the population of Trustee Area 1, and thereby reduce the plan’s deviation from 9.0 to 7.6
percent, while still maintaining at least a 55 percent Hispanic CVAP in the Salinas trustee areas. The
changes were agreed upon, and the plan was renamed B-5. This report discusses Plan B-5, first
describing the changes made in Plan B-4, and then explaining why the Committee favors this plan.
Several maps of Plan B-5 are provided at the end of this report.
Changes made between Plan B-4 and Plan B-5
In Plan B-4, Trustee Area 1 is the most populous, with a deviation of 4.3 percent, and Trustee Area 6
is the least populous, with a deviation of minus 4.6 percent. To reduce the plan’s deviation, we
could decrease the population of Trustee Area 1 and/or increase the population in Trustee Area 6.
The Committee considered increasing the population of Trustee Area 6, but rejected changes because
the boundaries of Trustee Area 6 in Plan B-4 are very logical, following either city or school district
boundaries. Also, Trustee Area 6 is likely to see population growth during the decade, so that it is
advantageous for it to be one of the lower populated trustee areas, initially.
However, the Committee made suggestions for reducing the population of Trustee Area 1 that led to
the following changes:

In west Salinas, a total of 50 people were moved from Trustee Area 1 to Trustee Area 4, so
that Trustee Area 1 follows the city limits.

In central Salinas, territory was shifted from Trustee Area 1 to Trustee Area 3, so that the
boundary between Trustee Areas 1 and 3 runs along Rossi Road.
As a result of these changes, Trustee Area 3 becomes the most populous, with a 3.0 percent deviation.
Trustee Area 6 remains the least populous, with a deviation of 4.6 percent. This causes the overall
plan deviation to be 7.7 percent (due to rounding).
Note that Trustee Areas 2, 5, 6, and 7 are the same as in Plan B-4.
1
Reasons that the Committee Recommends Plan B-5
One of the central features of Plan B-5 (and B-4 and B-3) is the configuration of Trustee Area 5.
Trustee Area 5 is a consolidated Alisal trustee area. The Committee felt it was important that Alisal
have its own trustee area. Alisal is of great concern, especially educationally, and it is believed that
a Hartnell trustee whose exclusive focus was East Salinas would best represent this area. In
particular, the Committee noted that:
•
Alisal is a strong and important community of interest in the Hartnell Community College
District;
•
Alisal has special needs, especially educational ones;
•
California Department of Education data show that Alisal High School has one of the lowest
graduation rates in the state;
•
Many potential Hartnell students from this area would be the first in their families to attend
college;
•
ESL classes are particularly important in this area;
•
Hartnell College has opened an Advanced Technology Center in the Alisal, as a specialized
campus to serve the entire District;
•
A trustee from the area could help ensure that there were programs that would help students
enroll at Hartnell;
•
A Hartnell trustee from the East Alisal area might help to increase college attendance and
graduation rates in this community.
Other Features of Plan B-5 Approved by the Committee
Committee members liked the extensive use of city limits and school district boundaries to demarcate
the proposed trustee areas.
Committee members liked the compact nature of the new Salinas trustee areas.
Committee members studied the piece of land west of Natividad in Trustee Area 2 which gives an
awkward shape to the trustee areas. This shape is necessary in order to achieve a 55 percent Hispanic
CVAP in Area 2. Committee members examined this matter in detail and came to the same
conclusion as the demographer. The fact that school district boundaries were used in the boundary
between Areas 2 and 4 was applauded.
The Committee members noted that all of Creekbridge and Williams Ranch were in one trustee area.
2
Maps of Plan B-5
Four maps are provided for Plan B-5:

An overview of the entire District, with the current trustee areas shaded in the background

Salinas area detail, with the current trustee areas shaded in the background

Salinas area detail, with the K-12 school districts shaded in the background

Salinas area detail, with cities/”Census designated places” shaded in the background.
The latter two maps show clearly how many of the boundaries follow either school district or city
boundaries.
3
Plan B-5
Population Balance
Trustee Area
1
2
3
4
5
6
7
Total
Population
38,376
36,618
38,620
36,741
38,360
35,751
37,993
262,459
Percent
Deviation Deviation
882
2.4%
-876
-2.3%
1,126
3.0%
-753
-2.0%
866
2.3%
-1,743
-4.6%
499
1.3%
7.7%
Most populous trustee area
Least populous trustee area
Difference
Ideal Trustee Area Size
Plan's Percent Deviation
Percent of Trustee Area's Population that was Hispanic/Latino/Spanish
Surname
Total
Population
57%
77%
37%
72%
93%
86%
80%
71%
Voting Age
Estimated Citizen
Population Voting Age Population Registered Voters Nov
Voters
(VAP)
(CVAP)
voters 2010
2010
Nov 2008
51%
38%
36%
29%
32%
73%
59%
61%
55%
57%
32%
26%
21%
16%
18%
66%
55%
52%
46%
49%
91%
76%
79%
74%
76%
83%
70%
70%
66%
67%
76%
57%
58%
57%
51%
66%
50%
48%
41%
42%
38,620
35,751
2,869
37,494
7.7%
4
5
6
7
8
APPENDIX B
THE FOLLOWING PERSONNEL ACTIONS WERE APPROVED AND/OR RATIFIED AT THE
NOVEMBER 1, 2011 REGULAR MEETING OF THE HARTNELL BOARD OF TRUSTEES:
I. Retirements, resignations, releases, and leave requests
A. Ratify resignation of regular personnel:
1.
Andrea Curtis, Division Administrative Assistant (#CC-165), effective October 31,
2011.
B. Ratify approved requests for partial leaves of absence:
1.
Maria Teutsch, English Instructor, up to 40 percent of load for one and a half years,
unpaid leave of absence for professional development, beginning spring semester,
January 2012. This is in accordance with Article 7 Section K of the Hartnell
College Faculty Association (HCFA) contract.
2.
Angelita Lopez, Secretary (#CC-175), Advanced Technology/Community, unpaid
leave of absence for “Baby Bonding,” from December 1, 2011 to January 11, 2012,
according to the CFRA and FMLA rights.
II. Classification and Compensation
1.
Approve the reclassification of Director of Facilities, Operations and Asset
Management (#A-38) from Management Level VII to Management Level VI,
effective October 1, 2011. Reclassification addresses expansion of oversight
responsibilities to include food services.
III. Appointments
A. Ratify appointments to management positions:
1.
Controller (#A-12), management range V, effective November 2011.
2.
Kristi Lee Andreen, Coordinator of Allied Health and Director of the Respiratory
Care Practitioner Program (#A-63), Nursing Department, Range XI, Step E,
effective October 17, 2011. This is a grant-funded, half-time management position
during the first year, and starting in fall semester 2012, half-time teaching duties
will be added.
B. Ratify appointment to regular classified position:
1.
Margaret Ortega, full-time, 40 hours per week, 10 months per year, Student Life
Coordinator (#CC-24), Student Services, Range 31, Step E, effective October 26,
2011.
C. Ratify appointment of part-time instructors for fall semester 2011:
1
APPENDIX B
THE FOLLOWING PERSONNEL ACTIONS WERE APPROVED AND/OR RATIFIED AT THE
NOVEMBER 1, 2011 REGULAR MEETING OF THE HARTNELL BOARD OF TRUSTEES:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
Eric Becerra, Counseling
Katrina Camarena, English
LaMar Castaneda, Nursing
Daniel Ehrler, Speech
Mike Gideon, Computer Information Systems
Margaret Heaman, Theatre Arts
Stephanie Kever-Frizzell, Nursing
Salina Lopez, Psychology
Jose Maldonado, Counseling
Suzanne Mann, Theatre Arts
Joseph Martinez, Counseling
Ryan Montgomery, Astronomy
Jaeduck Park, English as a Second Language
Meagan Plumb, English
Yvonne Reed, Physical Education
Nancy Saldaña-Pimentel, Counseling
William Y. Yanowsky, Physical Education
Maximino Zabala, Nursing
D. Ratify appointment of donated instructors for fall semester 2011:
1.
2.
Jimmie Moore – Electrical apprenticeship
Michael Stone – Electrical apprenticeship
E. 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. Assignment is for 2011 subscription season,
which runs January 24 – December 17, 2011:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
Judy Ataman, $5000 total, Actor, October 1 – December 11, 2011.
Lisa Marie Baratta, $3625 total, musician, July 20 – December 11, 2011.
Greg Bullock, $1250 total, musician, September 14 – October 15, 2011.
Skylar Campbell, $2525 total, musician, May 28 – December 11, 2011.
Howard Cespedes, $1250 total, musician, September 14 – October 15, 2011.
Rumina Druneva, $1250 total, musician, September 14 – October 15, 2011.
Jeffrey Flower, $1200 total, musician, September 14 – October 15, 2011.
Nancy Flower, $3525 total, musician, July 20 – October 15, 2011.
Jeff Gallaher, $2525 total, musician, September 14 – October 15, 2011.
Michelle Galindo, $1200 total, musician, September 14 – October 15, 2011
Margaret Heaman, $700 total, costume design consultant, October 1 – November
19, 2011.
Jeff Heyer, $6800 total, program production assistant, September 1 – December
17, 2011.
2
APPENDIX B
THE FOLLOWING PERSONNEL ACTIONS WERE APPROVED AND/OR RATIFIED AT THE
NOVEMBER 1, 2011 REGULAR MEETING OF THE HARTNELL BOARD OF TRUSTEES:
13.
14.
15.
16.
17.
Kevin Jordan, $3375 total, musician, July 20 – December 11, 2011.
Kathy Nathan, $1200 total, musician, September 14 – October 15, 2011.
Joe Niesen, $4000 total, choreography, October 1 – November 19, 2011.
Julian Starks, $4500 total, costume design, September 19 – October 15, 2011.
Craig Whitwell, $2525 total, musician, September 14 – December 11, 2011.
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.
18.
19.
20.
21.
2011.
22.
23.
24.
25.
26.
Carolina Cortez, $50/hr (as needed), FKCE Trainer, September 1, 2011 – June 10,
2013.
Michael Davis, $13/hr (as needed), childcare, July 1, 2011 – June 10, 2013.
Juana De Jesus Gonzalez, $13/hr (as needed), ILP Youth Mentor, September
1, 2011 – June 10, 2013.
Shaylene Duran, $22/hr (as needed), DSES/ILP Trainer, July 1 – October 10,
Jason Hall, $40/hr (as needed), Wraparound Trainer, July 1, 2011 – June 10, 2013.
Alejandra Moreno, $16/hr (as needed), Training Supervisor, September 1, 2011
– June 10, 2013.
Amor Ortiz, $13/hr (as needed), childcare, August 1, 2011 – June 10, 2013.
Maryanne L. Rehberg, $100/hr (as needed), DSES Instructor, September 1, 2011 –
June 10, 2013.
Daniel Salaz, $22/hr (as needed), PEER Recruiter, September 1, 2011 – June
10, 2013.
Hartnell College provides Crisis Counseling Services that are completely confidential and free
of charge to enrolled Hartnell students. A Marriage & Family Therapist Counseling Intern is
available to assist students in crisis.
27.
Tara Heller-Berlin, $20/hr (16 hrs/week), intern, September 15, 2011 – June 15,
2013.
Supplemental Instruction (SI) is a peer-led academic support program that helps students
enrolled in certain historically challenging courses. SI leaders in the Tutorial Center facilitate
student learning through out-of-class discussion and study skills support. Grant-funded.
28.
Alexander Sigala, $14.42/hr (13 hrs/week), Chem 1A tutor, August 15 – December
16, 2011.
3
APPENDIX B
THE FOLLOWING PERSONNEL ACTIONS WERE APPROVED AND/OR RATIFIED AT THE
NOVEMBER 1, 2011 REGULAR MEETING OF THE HARTNELL BOARD OF TRUSTEES:
The Hartnell College Math Academy was a two-week, not-for-credit, non-graded program
designed for incoming freshmen whose placement scores on the Accuplacer diagnostic test do
not qualify them for pre-algebra or for elementary algebra.
29.
Patricia Garcia, $3589.45 total, instructor, July 6 – August 12, 2011.
The WIA Youth CTE grant supports a 15-month program of accelerated instruction in
Advanced Technology. Over the course of the program, which runs October 2011 – March
2013, up to 100 students will complete requirements for a Hartnell College Certificate in either
Agriculture Industrial Technology or Green Building, in addition to industry-issued certificates
in four related skill areas. All students will complete the core Academy for College Excellence
courses, along with math, English and career preparation courses. Tutorial, counseling, and job
placement support services will be provided. Partnering with Hartnell on supporting grant
activities are the Monterey County Workforce Investment Board and Rancho Cielo.
30.
Christine Pedersen, $4000/mo., coordinator, September 19, 2011 – September 18,
2012.
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 Associate’s Degree.
31.
Miguel Zuniga, $30/hr (12 hrs/week), HEP-GED Instructor, October 4, 2011 – June
30, 2012.
The vacant counseling data technician position was scheduled to be phased out in the Student
Services reorganization. The CSEA and District have agreed to assign this work to a
professional expert through the end of the semester, and to find a resolution thereafter.
32.
E.
Yesenia Carrillo, $13.92/hr (20 hrs/week), technician, September 22 – December
31, 2011.
Ratify appointment of substitute position:
1.
Esther Vargas, $13.59/hr (25 hrs/week), clerical assistant, August 11 –
October 7, 2011.
4
APPENDIX B
THE FOLLOWING PERSONNEL ACTIONS WERE APPROVED AND/OR RATIFIED AT THE
NOVEMBER 1, 2011 REGULAR MEETING OF THE HARTNELL BOARD OF TRUSTEES:
F.
Ratify appointment of volunteer position:
1.
G.
Doreen Remer, Ceramic Lab (10 hrs/wk), August 23, 2011 – June 20, 2012.
Ratify appointment of Student Workers for fall semester 2011:
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
Mayra Aguilar, TRIO, Student Worker I
Daniela Alcantar, Tutorial Center, Student Worker II
Luis Barrera, TRIO, Student Worker II
Tenia Bey, Financial Aid, Student Worker I
Sandra Castillo, Financial Aid, Student Worker I
Alexandria Cordova, ACE, Student Worker II
Yesmin Arevalo Deanda, Computer Lab, Student Worker I
Liliana Diaz, Human Resources, Student Worker I
Mayra Espinoza, HEP, Student Worker I
Beatriz Fernandez, Cafeteria, Student Worker I
Danielle Galvan, EOPS, Student Worker II
Brenda Garcia, Tutorial Center, Student Worker II
Rodolfo Garcia, Tutorial Center, Student Worker III
Vanessa Garcia, Tutorial Center, Student Worker II
David Gopi, Library, Student Worker I
Edwin Gonzalez, East Salinas GEARUp, Student Worker III
Katia Gonzalez, Chemistry, Student Worker IV
Juan Hernandez, Tutorial Center/Alisal Campus, Student Worker II
Abigail Irwin, Tutorial Center, Student Worker II
Adriana Landeros, MESA, Student Worker III
Matthew Lopez, Information Systems, Student Worker III
Ignacio Maravilla, MESA, Student Worker IV
Vanessa Montano, TRIO, Student Worker II
Sosima Morales, MESA, Student Worker IV
Teresa Munoz, MESA, Student Worker III
Adan Ochoa, MESA, Student Worker III
Oscar Ochoa, SSS/TRIO, Student Worker II
Leticia Ortega Lopez, HEP, Student Worker I
Joseph Pacheco, Physical Education, Student Worker III
Vanessa Puga, ACE, Student Worker I
Ryan Ramos, Campus Security, Student Worker I
Hannelore Rose, Tutorial Center, Student Worker II
Chahan Shah, Tutorial Center/Alisal Campus, Student Worker III
Francisco Urtiz-Herrera, Art, Student Worker IV
Jose Ricardo Urquizo, Maintenance, Student Worker I
Kayla Vuong, MESA, Student Worker IV
Nicole Woodrow, Library, Student Worker I
Mary Rose Yasay, Student Affairs, Student Worker III
5
Unadopted
HARTNELL COMMUNITY COLLEGE DISTRICT
MINUTES
Board of Trustees – Special Meeting
CALL 208, Training Room
411 Central Avenue
Salinas, California
November 15, 2011
OPEN SESSION
Meeting called to order at 5:50 p.m. by Trustee Padilla-Chavez.
PLEDGE OF
ALLEGIANCE
Trustee DePauw led the Pledge of Allegiance.
ROLL CALL
Erica Padilla Chavez, President
Kevin Healy, Vice President
Candi DePauw
Patricia Donohue
Bill Freeman (arrived at 6:20 p.m.)
Elia Gonzalez-Castro
Ray Montemayor
Juan Gutierrez, Student Trustee – (advisory vote per Board Policy 1030)
Phoebe K. Helm, Board Secretary
PUBLIC
COMMENTS
There were no public comments
BOARD SELFEVALUATION
Trustee Padilla-Chavez stated that the Board Self-Evaluation is required by
Accreditation and that it is important for each member to participate and that this
process should be done annually. Year-to-year comparisons help to document the
Board’s efforts to engage in continuous improvement. Facilitating the discussion was
Alison Neufeld, Liebert, Cassidy, Whitmore.
Prior to the meeting, the Board was asked to complete a board evaluation survey
(Appendix A) and those results were tallied, summarized, and copies were provided
to members of the Board and to the public present. Trustee Padilla-Chavez stated that
she received four surveys and that these results would be the basis for this evening’s
discussion. Although, she encouraged all members to weigh in on the discussion.
Ms. Neufeld stated that the evaluation covered nine areas 1) Board Organization, 2)
Policy Role, 3) Community Relations, 4) Policy Direction, 5) Board-CEO Relations,
6) Budget and Finance, 7) Board Leadership, 8) Advocating for the College, and 9)
Board Education. In addition, the form included six open ended questions.
Ms. Neufeld read aloud each of the questions under each of the identified areas and at
the conclusion of this review, Trustee Padilla-Chavez opened the floor for discussion.
HCCD – SPECIAL MEETING OF THE BOARD OF TRUSTEES – NOVEMBER 15, 2011
Page 1 of 2
The Board had a lengthy discussion on the survey results (Appendix B) and identified
shared governance; the role and relationship with the CEO, and strategic planning
(goals for the Board and goals for the college) as areas that should be focused on for
Board Development in the coming year. In addition, Trustee Donohue suggested that
the Board should not wait to schedule these sessions and recommended an
experienced facilitator.
Dr. Helm stated that, from an accreditation perspective, the intent of the Board’s selfevaluation is to allow the Board to engage in an open, honest discussion and that the
Board decides collectively what it should work on and how will they accomplish this
work.
MOVED TO
CLOSED SESSION
The Board of Trustees and legal counsel, Alison Neufeld, moved to Closed Session at
7:05 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.
1. Performance Evaluation and Contract of Superintendent/President
Later, Dr. Phoebe Helm joined the Board.
REPORT OUT
FROM CLOSED
SESSION
Trustee Padilla-Chavez reconvened the regular session at 7:40 p.m. and reported the
following:
The Board conducted the evaluation of Superintendent/President.
On a motion by Trustee Healy, seconded by Gonzalez-Castro, by vote of 5-2 (No:
Freeman, Montemayor), the Board moved to accept Dr. Phoebe Helm’s decision to
leave the college (retire) June 30, 2012 (subject to conditions stated in the second
motion).
On a motion by Trustee Donohue, seconded by Trustee DePauw, by vote of 5-1 -1 (No:
Freeman and Abstention: Montemayor) to launch a national search for the next
Superintendent/ President and to extend Dr. Helm’s contract to June 30, 2012 or longer
if needed to ensure a smooth transition..
ADJOURNMENT
It was motioned, seconded, and carried to adjourn the meeting at 7:45 p.m.
Erica Padilla-Chavez
Board of Trustees President
Phoebe K. Helm
Board Secretary
HCCD – SPECIAL MEETING OF THE BOARD OF TRUSTEES – NOVEMBER 15, 2011
Page 2 of 2
APPENDIX A
Board Self-Evaluation
Please rate the Board in the following key functional areas.
SA (Strongly Agree); A (Agree); N (Neither agree or disagree); D (Disagree) SD (Strong
Disagree)
Please provide comments to improve the performance of the Board in specific functions of the
job.
A. BOARD ORGANIZATION
SA
A
N
D
SD
SA
A
N
D
SD
SA
A
N
D
SD
SA
A
N
D
SD
1. Board officer responsibilities clear.
2. Board President speaks for the Board.
COMMENTS:
B. POLICY ROLE
1. Board members understand and support the concept that board
policy is the primary voice of the board.
2. The board has clarified the difference between its policy role and
the roles of the CEO and staff.
COMMENTS:
C. COMMUNITY RELATIONS
1. Board members demonstrate concern for entire community, not
just special interest groups or one trustee area.
2. Board members refer community concerns and complaints to the
CEO.
COMMENTS:
D. POLICY DIRECTION
1. The board is involved in developing and adopting policies.
COMMENTS:
Page 1 of 3
Board Self-Evaluation
APPENDIX A
E. BOARD-CEO RELATIONS
SA
A
N
D
SD
SA
A
N
D
SD
SA
A
N
D
SD
SA
A
N
D
SD
1. A climate of mutual trust and respect exists between the board and
the CEO.
2. The board evaluates the CEO in a manner to assure his/her success
in leading the college.
3. The board clearly delegates the administration of the college to the
CEO.
COMMENTS:
F. BUDGET AND FINANCE
1. The board works to ensure financial stability and approves annual
budgets that reflect college priorities.
COMMENTS:
G. BOARD LEADERSHIP
1. The board works together in spirit of harmony and cooperation.
2. The board understands its responsibilities.
3. Board members read agenda materials and address any questions
to the CEO prior to the meeting.
4. Board members operate ethnically without conflict of interest.
5. Board members support the majority of the board.
COMMENTS:
H. ADVOCATING FOR THE COLLEGE
1. Board members protect the college from liability and work to
improve its image.
2. Board members actively support the foundation’s fund raising
efforts.
COMMENTS:
Page 2 of 3
Board Self-Evaluation
APPENDIX A
I. BOARD EDUCATION
SA
A
N
D
SD
1. New members participate in an orientation to the Board and
the college.
2. Board members engage in continuous process of training and
development.
A. What are the Board’s greatest strengths?
B. What are the major accomplishments of the Board in the past year?
C. What are the areas in which the Board could improve?
D. What are the one or two most important change(s) you think we need to make to improve our
Board meetings and/or other functions?
E. What three issues do you feel the Board should make its priorities for the coming year?
F. Name two or three areas in which you personally want to learn more, improve or do more in
the next year.
Submit the completed form in a sealed envelope no later than November 10, 2011. The results
will be tabulated and provided to the board for discussion on November 15, 2011 at a special
meeting set for that purpose.
Page 3 of 3
Board Self-Evaluation
AGENDA ITEM FOR BOARD MEETING OF: November 29, 2011
Title
Number
V. B.
Disbursements of District Funds
Area
Status
Office of Support Operations
Prepared by: Alfred Muñoz
Consent
Recommendation
It is recommended that the Board of Trustees ratifies 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; SelfInsurance; Retirees’ Health Benefits; Associated Student Body; Scholarship, Loan, and Trust;
and Intercollegiate Athletics
DATE
10/03/11
10/12/11
10/19/11
10/24/11
WARRANT NUMBER
12890199
12891980
12893307
12894310
NO OF
WARRANTS
12890258
12892122
12893571
12894429
60
143
265
120
Subtotal
AMOUNT
358,371.56
494,109.92
37,499.26
229,730.82
1,119,711.56
Note: Legal fees in above summary total $2,635.95
CHECKING ACCOUNTS
General Fund Revolving
DATE
Oct 11
Total
Budget Implication
None
WARRANT NUMBER
10344
10351
NO OF
WARRANTS
8
AMOUNT
5,446.11
1,125,157.67
Revised
AGENDA ITEM FOR BOARD MEETING OF:
November 29, 2011
Title
Curriculum Committee
Number
Area
Curriculum & Instructional Support
Prepared by: Suzanne Flannigan
Status
Consent
V. C.
Recommendation
It is recommended that the Board of Trustees ratifies the actions taken by the Curriculum
Committee from the October 6 and October 20, 2011 meetings.
Summary
The following actions were reviewed by faculty in the disciplines and approved by the
Curriculum Committee which is a standing committee of the Academic Senate:
NEW COURSES – 3 Courses
ABT-81, Integrated Pest Management Principles in Entomology (3 units)
ECE-193, Topics in ECE: Early Childhood Leadership, Advocacy, Parent Relations, and
Management (.5 units)
ECE-194, Topics in ECE: Early Childhood Philosophies, Curriculum, and Innovative Teaching
Methodologies (.5 units)
RE-ACTIVATED COURSES – 1 Course
THA-3, History of the Theater (3 units)
COURSE REVISIONS- 33 Courses
ART-75, 3D Modeling for Digital Animation (3 units)
Areas of revision: description, content, materials
HES-53 Emergency Medical Technician I (Ambulance), (5.5 units)
Areas of revision: prerequisite, laboratory content, methods of evaluation, materials, contact
hours
HIS-17A, United States History A (3 units).
Areas of revision: Pass/No Pass, description, objectives, content, methods of evaluation,
distance education
Page 1 of 4
Revised
HIS-17B, United States History B (3 units).
Areas of revision: description, objectives, content, distance education
NRN-30, Basics of Pharmacology (1 unit).
Areas of revision: corequisites; description, materials
NRN-41, Nursing Theory (4 units).
Areas of revision: corequisites, objectives, content, materials
NRN-41.1, Nursing Clinical (4 units).
Areas of revision: corequisites; description, objectives, content, materials
NRN-41.2, Clinical Reasoning Seminar I (1 unit).
Areas of revision: title change, grade only, description, objectives, materials
NRN-41.3, Nursing Skills Lab (1 unit).
Areas of revision: corequisites; description; objectives; methods of evaluation; materials
NRN-42, Nursing Theory II (4 units)
Areas of revision: description, content, methods of instruction, methods of evaluation,
materials
NRN-42.1, Nursing Clinical II (4 units)
Areas of revision: description, content, methods of instruction, materials
NRN-42.2, Clinical Reasoning Seminar II (1 unit)
Areas of revision: title, description, content, methods of instruction, methods of evaluation,
materials
NRN-42.3, Nursing Skills Lab II (1 unit)
Areas of revision: corequisites, description, content, methods of evaluation, materials
NRN-43, Nursing Theory III (4 units).
Areas of revision: prerequisite; corequisites; description; objectives, content, methods of
instruction, materials.
NRN-43.1, Nursing Clinical III (4 units).
Areas of revision: prerequisite; corequisites; description, objectives, content, methods of
instruction, methods of evaluation, materials.
NRN-43.2, Clinical Reasoning Seminar III (1 unit).
Areas of revision: title; prerequisite, grade only, description, objectives, content, methods of
instruction, methods of evaluation, materials.
NRN-43.3, Nursing Skills Lab III (1 unit).
Areas of revision: prerequisite, description, objectives, content, methods of instruction,
methods of evaluation, materials
Page 2 of 4
Revised
NRN-44, Nursing Theory IV (4 units)
Areas of revision: corequisite; description, objectives, content, methods of evaluation,
materials.
NRN-44.1, Nursing Clinical IV (5 units)
Areas of revision: corequisite, description, objectives, content, instructional methods and
evaluation, materials.
NRN-44.2, Clinical Reasoning Seminar IV (1 unit)
Areas of revision: title, grade only, prerequisite; description, objectives, content, methods of
instruction , materials.
NRN-110, Foundations for Success for Registered Nursing Students (1.5 units)
Areas of revision: corequisite, description, objectives, content, materials
MUS-2, Music Fundamentals (3 units)
Areas of revision: description; content; methods of instruction; materials
MUS-10, Applied Music, Voice (1 unit)
Areas of revision: materials
MUS-19, Music Practicum (1-2 units)
Areas of revision: change to 1 unit; contact hours; Pass/No Pass
MUS-20, Hartnell College Choir (1 unit)
Areas of revision: contact hours; materials
MUS-21, Hartnell Chamber Singers (1 unit)
Areas of revision: contact hours; materials
PEIN-17, Intercollegiate Basketball for Men (2 units)
Areas of revision: units, contact hours
PEIN-18, Intercollegiate Basketball for Women (2 units)
Areas of revision: units, contact hours
PEIN-21, Intercollegiate Softball for Women (2 units)
Areas of revision: units, contact hours, repeatability
PEIN-24, Intercollegiate Track and field (2)
Areas of revision: units, contact hours, repeatability
PEIN-25, Intercollegiate Sports Conditioning (1.5 units)
Areas of revision: units, contact hours, repeatability
PEIN-26, Intercollegiate Baseball (2 units)
Areas of revision: units, contact hours
Page 3 of 4
Revised
PETH-5 Sport in Society (3 units) – reported to Board on October 4, 2011 as PE-41 Sport
Ethics
Areas of revision: course identifier and number, course title
COURSE DELETION – 1 Course
PEAC-73, Step Aerobic Training (1.5 units)
Deletion of Inactive Programs – 15 Programs
Construction Management Associate of Science Degree
Construction Management Certificate of Achievement
Construction Trade Skills Certificate of Achievement
Financial Institution Operations Associate of Arts Degree
Financial Institution Operations Certificate of Achievement
Graphics Certificate of Achievement
Human Services Associate of Arts Degree
Human Services- Certificate of Achievement
Primary Care Associate Program
Theatre Arts: Acting Certificate of Achievement
Theatre Arts: Acting Associate of Arts Degree
Water Technology – Wastewater Management Certificate of Achievement
Water Technology – Wastewater Management Associate of Science
Water Technology – Water Management Associate of Science
Water Technology – Water Management Certificate of Achievement
In making sure that the college catalog agrees with the Chancellor’s Office list of programs, the
curriculum committee and staff found programs on the Chancellor’s Office list that should have
been removed years ago. This action by the Board allows the college to make these corrections.
Page 4 of 4
AGENDA ITEM FOR BOARD MEETING OF:
Title
November 29, 2011
Number
Letter of Agreement between Hartnell
College and San Francisco Community
College District
V. D.
Area
Status
Academic Affairs/Accreditation
Prepared by: Dr. Suzanne Flannigan
Consent
Recommendation
It is recommended that the Board of Trustees ratifies the Letter of Agreement with San Francisco
Community College District-CA Early Childhood Mentor Program.
Summary
Hartnell College has offered services through the California Early Childhood Mentor Program since
August of 1997. The California Department of Education-Child Development Division has contracted
with San Francisco Community College District to implement the California Early Childhood Mentor
Program in community college campuses across the state.
The purpose of the program is to select high quality early childhood teachers and directors in the local
communities to serve as mentors to community ECE staff and Hartnell students. Each college program is
eligible to access up to $11,000-30,000 depending on usage and student placements. Last year local
participants received close to $30,000. The funds are processed directly between the program
participants and San Francisco Community College District.
This program helps Hartnell ECE students take their supervised student teaching in Mentor sites. Mentor
sites give our ECE 12AB lab students more options on places and times to take the lab portion of
supervised student teaching at no extra cost to the college and increases enrollment in those classes.
Graduating students can receive “one on one” support from the ECE Mentors when they begin
employment in local early childhood agencies…at no cost to the agencies.
Selected ECE Mentors earn stipends for assisting local agencies and their staff with quality improvement
activities and staff training. Mentors receive stipends for assisting Hartnell ECE Instructors with
workshops and in class support activities.
This program strengthens the community involvement between Hartnell College and Monterey County
ECE professionals.
Budget Implication
Funding from this program is sufficient to cover the direct costs of administering its operations.
No impact to the Hartnell budget. Funds are paid directly to the participants from San Francisco
Community College District.
AGENDA ITEM FOR BOARD MEETING OF:
Title
November 29, 2011
Number
Agricultural Lease Agreement for Alisal
Campus Farmland
V. E.
Area
Status
Office of Facilities
Prepared by: Joseph Reyes
Consent
Recommendation
It is recommended that the Board of Trustees approves to amend the agricultural lease
agreement with Franscioni Brothers, Inc. for Alisal Campus farmland.
Background
Franscioni Brothers, Inc. was awarded the lease for 116.5 acres of farmland in 2006. The
amount of land leased was reduced by two-tenths (0.2) of an acre in 2008 and the expiration
date was extended one year in each of 2008, 2009, and 2010.
Summary
This amendment extends the expiration date for one year. The price per acre (1,626) remains
the same for a total contract amount of $178,258.38. The contract is invoiced quarterly and
paid within 30 days of receipt.
Term: December 3, 2011 through December 2, 2012.
Budget Implications
No impact on the General Fund. Annual rental revenues from property must be placed in the
restricted Property Acquisition Fund.
AGENDA ITEM FOR BOARD MEETING OF:
Title
November 29, 2011
Number
Amend contract between Vicenti, Lloyd &
Stutzman, LLP and Hartnell College
V. F.
Area
Status:
Office of Support Operations
Prepared by: Alfred Muñoz
Consent
Recommendation
It is recommended that the Board of Trustees amend the contract with Vicenti, Lloyd &
Stutzman, LLP, independent auditing firm, for financial auditing services through June 30,
2012. The contract will extend for one year at a cost of $122,560, which represents a 6%
increase over the prior year.
Background
Education Code § 84040 requires that each community college district provide for an
independent 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.
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.
Summary
This amendment provides for a one-year extension and an increase in fees of approximately six
percent (6%). The increase is to cover the costs of the new audit requirements of the California
Community College Chancellor’s Office regarding contact hours, census type, DSP&S, and
EOPS, etc.
Budget Implications
Cost for the annual audits is shared among the Foundation, Measure H bond funds, and the
general fund for 2011-2012. Budget impact will be in 2012-13 fiscal year for a total expense of
$122,560.
AGENDA ITEM FOR BOARD MEETING OF:
Title
November 29, 2011
Number
Agreement with Universal Protection
Services
V. G.
Area
Status
Superintendent/President
Prepared by: Dr. Phoebe Helm
Consent
Recommendation
The administration recommends extending the agreement with Universal Protection
Services through June 30, 2013.
Background
Universal Protection Services was selected as a result of a competitive process (RFQ) and
began providing services under three year contract in December 2007. Since that time, the
contract had been amended to increase the scope of the work t include the Alisal Campus
and the King City Education Center.
Summary
The amendment to the agreement with Universal Protection Services would extend the
contract one additional year for a “not to exceed” amount of $560,000 through June 30,
2013. This represents a zero increase over the current year.
Budget Implications
Budgeted and paid from general funds.
AGENDA ITEM FOR BOARD MEETING OF:
November 29, 2011
Title
Number
Award Bid and Authorize the Administration to
enter into an Agreement with KIS Group –
Area
Technology and Information Services
Prepared by: Matt Coombs, Vice President
V. H.
Status
Consent
Recommendation
It is recommended that the Board of Trustees awards bid and authorizes the administration to enter into
an agreement with KIS, most qualified bidder, for the campus wide Virtualization and Network
Administrative Software Modernization project.
Summary
The Hartnell College Virtualization and Network Administration Projects consist of changing
foundational enterprise servers and software. Servers/Hardware generate many types of costs, including
management costs, electrical consumption and heat (which must be dissipated by cooling systems,
requiring still more energy). The solution to this problem is to consolidate the functionality of several
servers onto one through virtualization. For instance, a single modern server can easily host multiple
virtual servers—each a logically separate entity partitioned from the others. As each virtual server is
added to the host computer, its software will make demands on the underlying hardware, decreasing idle
time and helping to ensure that the hardware is delivering as much business value as possible.
Additionally, by deploying multiple virtual servers on one physical server, enterprise-class IT can
simplify management, cut costs and increase server flexibility considerably, moving or modifying
virtual servers as necessary to meet emerging business goals. Tracking, updating and maintaining one
physical server is easier and less expensive than doing the same for several. Virtualization will also
allow us to leverage existing hardware for more years and increase access and time on task to all
students on and off campus.
The Network Administrative Software Modernization project will transition Hartnell’s Novell software
to Linux and Microsoft network software, increasing the ability of the college to integrate better with
current administrative systems, increasing security, and decrease annual costs. All of this will result in
cost savings to the college and increased level of service to students and staff.
The transition will allow Hartnell to take advantage of PG&E rebates, leverage grant dollars, and
available bond dollars. All of these additional dollars disappear if we do not act now.
There were a total of four bidders on this project, two of which were fully responsive. The results are as
follows:
Contractor
KIS
Location
Fremont, CA
Phase 1
$116,719
Phase 2
$119,750
Phase 3
$395,138
Total Amt
$631,607
Kanavel
Los Gatos, CA
$124,600
$115,825
$405,100
$645,525
Term: December 1, 2011 thru December 31, 2012
Budget Implication
The approximate amounts budgeted are as follows: $120,000 Measure H; $120,000 BTOP Grant;
$200,000 reimbursed by PG&E; and ultimately an impact to the general fund of $191,607.
AGENDA ITEM FOR BOARD MEETING OF: November 29, 2011
Title
Number
Award Bid and Authorize the Administration
to Enter into a Contract for the Alisal Campus
Parking Lot Project
Area
Status
Office of Facilities
Consent
V. I.
Recommendation
It is recommended that the Board of Trustees awards a bid and authorizes the administration to
enter into a contract with Perma Green Hydroseeding, Inc, lowest responsive bidder, for the
Alisal Campus Parking Lot Project.
Background
The Hartnell College Alisal Campus Parking Lot project consists of additional parking of 117
stalls. In addition, there will be landscaping and a bio-swale to meet storm water requirements.
Summary
Hartnell issued bid documents on November 1, 2011. The project was advertised in both the
Salinas Californian and the Salinas Builders Exchange. The District conducted two mandatory
job walks and the bids opened on November 22, 2011. The project is scheduled to start on
December 12, 2011 and be substantially completed by May 15, 2012.
There were a total of seven bidders on this project:
CONTRACTOR
Perma Green Hyrdoseeding
MPE
Norcal
Don Chapin
Otto Construction
Granite Construction
Galedrige
LOCATION
Gilroy, CA
Marina, CA
Salinas, CA
Salinas, CA
Monterey, CA
Watsonville, CA
Alviso, CA
BID AMOUNT
$831,700
$857,110
$859,024
$870,464
$971,180
$976,879
NR
Term: November 29, 2011 - June 1, 2012
Budget Implication
The budget for the above referenced contract is $831,700 and paid by Measure H funds.
Source of Funds
Local: $ 831,700
AGENDA ITEM FOR BOARD MEETING OF:
Title
November 29, 2011
Number
V. J.
Student Trustee Travel
Area
Status
Superintendent/President
Prepared by: Dr. Phoebe K. Helm
Consent
Recommendation
It is recommended that the Board of Trustees ratifies travel for Student Trustee Gutierrez to
attend a Statewide Student Trustee meeting.
Summary
Student Trustee Gutierrez attended a Statewide Student Trustee Meeting at the San Jose
Fairmont, November 4, 2011. The cost for this travel included one night’s lodging, mileage
reimbursement, and meals.
Budget Implications
The total cost attend this meeting is estimated at $250 and is paid from the general fund for
trustee training and travel.
AGENDA ITEM FOR BOARD MEETING OF:
Title
November 29, 2011
Number
Personnel Actions
V. K.
Area
Status
Human Resources & Equal Employment
Opportunity
Prepared by: Terri Pyer
Consent
Recommendation
It is recommended that the Board of Trustees approves and/or ratifies the personnel actions as
listed below:
Summary
Approval of:
1
reclassification of management personnel
Ratification of:
1
3
2
8
1
5
1
1
7
6
release of regular probationary employee
appointments of management personnel
appointments of classified to supervisory positions
part-time instructor hires for fall session 2011
appointment of donated instructor
appointments of professional experts
appointment of playground assistant
appointment of substitute position
appointments of volunteer positions
student worker hires for fall semester 2011
Detail
I. Retirements, resignations, releases, and leave requests
A. Ratify release of regular probationary employee:
1.
Raymond Porrez, Utility Custodian (#CL-15), Maintenance Department, effective
November 10, 2011, due to failure to complete probationary period.
1
II. Classification and Compensation
A. Approve the reclassification of Development Officer, Management (#A-49), from
Management Level X to Management Level V, Director of Development (#A-64),
effective January 1, 2012. Reclassification addresses increased autonomy of position
and expansion of responsibilities to include major gifts.
III. Appointments
A. Ratify appointment of management personnel:
1.
Alfred Muñoz, interim Vice President Support Operations, (#A-46), Management
Salary Schedule, Range I(a), Step C, effective November 21, 2011.
2.
Mary Dominguez, interim Vice President Student Affairs, (#A-43), Management
Salary Schedule, Range I(a), Step B, effective January 3, 2012.
B. Ratify appointment of classified employee to management position:
1.
Andy Newton, Title V collaborative Grants Director, (#A-64), Management Salary
Schedule, Range VII, Step B, effective December 1, 2011.
C. Ratify appointment of classified employees to supervisory positions:
1.
Jessica Tovar, interim Financial Aid Supervisor, (#S-10), Range 32, Step A,
effective January 3, 2012.
2.
Irene Haneta, interim Enrollment Services Supervisor, (#S-11), Range 32, Step A,
effective January 3, 2012.
A. Ratify appointment of part-time instructors for fall semester 2011:
1.
2.
3.
4.
5.
6.
7.
8.
Efren Celaya, Agriculture Industrial Technology. Appointment based on
equivalency as follows: has adequate coursework for an AA or BS degree and
has 17 years of experience in the agriculture industry.
Bihn Cheung, Agriculture Industrial Technology
Fay Griffin, Mathematics
Mary Gustus, Nursing
Martin Need, English
Andrew Seminario, Construction
Maximino Zabala, Nursing
Angelica Zanetos, Physical Education
B. Ratify appointment of donated instructor for fall semester 2011:
1.
Derek Webster, Electric Apprenticeship
2
C. 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. Assignment is for 2011 subscription season,
which runs January 24 – December 17, 2011:
1.
Desma Johnson, $1650 total, musician, November 9 – December 11, 2011.
2.
Stephen J. Uccello, $1275 total, musician, November 9 – December 11, 2011.
Hartnell College provides Crisis Counseling Services that are completely confidential and free
of charge to enrolled Hartnell students. A Marriage & Family Therapist Counseling Intern is
available to assist students in crisis:
3.
Laurie Lindley-Muender, $20/hr (16 hrs/week), intern, November 1, 2011 –
August 1, 2013.
Hartnell College is creating 2+2+2 career pathways for technicians, engineers, and engineering
designers in two emerging fields of sustainable energy, power engineering and engineering
design. The goals of the project are (1) improve the STEM pipeline from two high schools to
Hartnell College and to the University of California at Santa Cruz, (2) integrate renewable
energy technologies into existing curricula at participating high schools and Hartnell, and (3)
prepare students to work in sustainable energy and engineering technologies jobs. The project
is forming a consortium of at least 10 partners, including industry, in sustainable energy
education: creating and supporting new energy career pathways: increasing student enrollment
in high school and bridge program sustainable energy programs; developing and implementing
an internship program; and using a newly constructed sustainable energy and research facility.
Project deliverables include new courses, research findings from student projects, a model
consortium, high school outreach and instructional materials, and project evaluation data.
4.
Janice Archuleta, $2210/mo. Project coordinator, October 1, 2011 – September
30, 2012.
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.
5.
D.
Ratify appointment of playground assistant:
1.
E.
Lisa Anne Garcia, $47.86/hr (10 hrs/week), NVN Instructor, September 28 –
November 1, 2011.
Nubia Patricia Gomez, $12/hr (35 hrs/week), November 1, 2011 – June 30,
Ratify appointment of substitute position:
3
2012.
1.
F.
Tina Cazares, $14.99/hr (20 hrs/week), A& R Technician, October 10 –
December 2, 2011.
Ratify appointment of volunteer positions:
1. Alejandro Alcaraz, Physical Education, July 1 – December 16, 2011.
2. Phillip Cuevas, Physical Education, October 14, 2011 – May 31, 2012.
3. Rudy Dominguez, Physical Education, September 30, 2011 – May 31, 2012.
4. Kimberly Kouka, Physical Education, July 15 – December 11, 2011.
5. Micah Spane-Wilson, Physical Education, August 15, 2011 – November 15,
2011.
6. Joan Spannagel Rentz, Academic Center, September 19, – December 16, 2011.
7. Levy Zamora Jr., Speech Department, October 24 – December 16, 2011
G.
Ratify appointment of Student Workers for fall semester 2011:
1.
2.
3.
4.
5.
6.
Liliana Bautista, DSPS, Student Worker II
Rusty Guzman, Maintenance, Student Worker I
Jasmine Hernandez, Tutorial Center, Student Worker II
Carolina Lopez-Romero, Tutorial Center, Student Worker II
Lorena Mendoza, ACE, Student Worker I
Riley Schofield, East Salinas GEARUp, Student Worker III
4
ACTION ITEMS
AGENDA ITEM FOR BOARD MEETING OF: November 29, 2011
Title
Number
Budget Revisions
VI. A.
Area
Status
Office of Support Operations
Prepared by: Alfred Muñoz
Action
Recommendation
It is recommended that the Board of Trustees ratifies Budget Revisions for fiscal year 20112012 numbered 9493 to 9525.
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 and Restricted General Fund and Associated Student Body Fund (71) budgets
remain unchanged.
AGENDA ITEM FOR BOARD MEETING OF:
Title
November 29, 2011
Number
Award One-time Stipend of 2%
VI. B.
Area
Status
Superintendent/President
Prepared by: Dr. Phoebe K. Helm
Action
Recommendation
The administration recommends that the Board approves a one-time stipend of two percent (2%) of the
Base Salary to all full-time employees who were employed at Hartnell on or before July 1, 2009 and are
still employed by the college November 1, 2011. Awarding the one-time stipend would be contingent
upon acceptance by the bargaining units.
Background
When the budget was initially presented in May 2011, it was projected that the state’s revenue
allocations for community colleges would be reduced by $400 to $520 million. Hartnell designed its
budget based on the worst case scenario. In September when the final budget was adopted, the state
notified the colleges that revenues were below initial projections. And just this past week, the
Chancellor’s Office stated that one or both “triggers” may be pulled. The first trigger would reduce
revenues to community colleges by $30 million and the second by $72 million for a cumulative
reduction of $102 million. This would raise the total decrease in revenues to $502 million for 2011-12.
At the time the budget was adopted in September, it was suggested that the Board give some thought to
providing a one-time stipend of 2% in December, if budget reductions did not exceed the $520 million
in the mid-year cut, and recommended that up to $400,000 be set aside for that one-time payment.
Some asked, at the time, why not give that increase as a permanent increase to the base, and the
administration responded by pointing out that the future was too uncertain to take on this increase as a
permanent obligation, but felt the increased costs could be managed for one year. This is what some
may recall the past Vice President of Business Services describing as “driving with your headlights on”
or “not making commitments beyond how far out you can see.” And indeed, recent meetings with
representatives on appropriations indicate that they are still considering pushing some or all of the
“cuts” from lost revenues into next year (2012-13) instead of pulling both “triggers” now. This leaves
the college unable to project whether we will have flat or declining revenue for 2012-13. Numerous
authorities, historians, and economists suggest that it will be at least 2015 before revenues begin to
climb in any way that might be considered consistent. These projections are consistent with the
projected “spend down” of the college’s general fund reserves as explained in the budget hearing and
illustrated in the attached chart.
Summary
A one-time 2% lump sum stipend to full-time employees, who were employed on or before July 1, 2009
and were still employed at the College on November 1, 2011, would cost approximately $325,000
including the obligatory benefits. The stipends would be awarded in December, contingent upon
acceptance by the bargaining units.
AGENDA ITEM FOR BOARD MEETING OF:
Title
November 29, 2011
Number
Selection of a Search Firm
VI. C.
Area
Status
Superintendent/President
Prepared by: Dr. Phoebe K. Helm
Action
Recommendation
The administration recommends that the Board approves the selection of a Search Firm and
directs the administration to enter into a contract for Professional Services to conduct a national
search for the next Superintendent/President.
Background
Nationally, it appears that 20% or more of all community college president positions are vacant
or have interim appointments. There is a natural rhythm to work within the colleges and most
who are willing to think about leaving their current employment do so with the expectation that
they will relocate during the summer. Searches generally take six months and spring is the
busiest season for searches. Thus, the most experienced and qualified firms are quickly snapped
up. Board Policy 2431 requires a national search conducted with the guidance of an
experienced firm nationally known for its commitment to diversity and success with
community colleges.
Summary
Twenty firms who conduct searches for college presidents were identified and reviewed. The
number was reduced by eliminating those whose primary experience was with public and
private universities. That number was further reduced by eliminating those that indicated little
national experience as well as firms that served individual job seekers in addition to colleges
and boards.
Telephone interviews were conducted. Reference checks conducted for the finalists. The
finalists were:
TBA
TBA
The services provided will include: Board Retreat to determine the values and attributes
sought; training of the search committee and management of the advertisement, recruitment,
application, screening, and hiring processes.
The recommended firm is: TBA
Budget Implications
General funds not to exceed $TBA
INFORMATION ITEMS
AGENDA ITEM FOR BOARD MEETING OF:
Title
November 29, 2011
Number
Report on Construction Projects
VII. A.
Area
Status
Office of Facilities
Prepared by Joseph Reyes, Director
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.
HARTNELL COLLEGE
Construction Update
Prepared by Joseph Reyes, Director, Maintenance
CURRENT PROJECTS
1.
2.
3.
4.
Campus Infrastructure #2 (830201) – 2011 – Add water and gas isolator valves to enable each building to
be turned on/off independent of the other buildings as needed to avoid closing the whole campus when
only one area is affected. Additionally, old data lines will be terminated and new lines connected to all of
the buildings.
May 2010
Board awarded the contract to C-3 Engineering of Monterey for design bid
specifications.
April 2011
Design and bid specification are being developed by C-3 Engineering.
October 11, 2011
Project Bid Date
October 1, 2011
Board approved to contract Ranger Pipelines, Inc of San Francisco, CA
Keyless Entry and CCTV System (843007) – 2010 – Keyless entry with video surveillance will improve
safety for students, staff, and property and will eliminate the problem resulting from lost and stolen keys.
April 2010
Board awarded the contract to Aurum Consulting Engineers to design a keyless
entry and CCTV system for the main campus and King City Center.
March 20, 2011
Keyless portion of the design is complete, CCTV portion currently underway.
CAB Chiller and Boiler Replacement/Roof Replacement (811200) –2010 – 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 be installed, also.
April 2010
Board awarded contract to Axiom Engineers to design an energy efficient chiller
and boiler.
December 2010
Design, bid specifications, securing DSA approval.
May 10, 2011
Received DSA approval.
May 24, 2011
Project bid date, Chiller/Boiler.
June 8, 2011
Board approve to contract the project to Lyles Mechanical of Fresno, CA
May 26, 2011
Project bid date, Roof.
June 8, 2011
Board approved to contract the project to Progressive Roofing of Manteca, CA
Technical Training Building (813028) – 2010 – 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 users then interviewed the firms and they selected NTD
based off of previous similar project experience and cost.
Page 1 of 3
May 2010
5.
PE Field House (865003) – 2011 - Locker rooms, restrooms, classroom, training room, and concessions
area. Matching funds raised by the Hartnell College Foundation.
April 2011
6.
7.
Approved NTD architect firm of Salinas.
Board awarded contract to Belli Architectural Group Firm of Salinas
Alisal Campus Bus Turnaround (843011)
Sept 22, 2011
Project bid date
October 4, 2011
Board awarded contract to Monterey Peninsula Engineering
Alisal Campus
(843009) – 2011-Additional Parking
November 1, 2011
Project out to Bid
Page 2 of 3
OCCUPIED PROJECTS IN FINAL STAGES OF COMPLETION
Alisal Campus Center for Applied Technology
Pool Renovation
Student Center
Alisal Campus Landscape Project
CALL Building
PE Renovation Project
City Sidewalk Phase II
Alisal Campus Sign
COMPLETED PROJECTS*
Date Closed Out
October 2004
November 2005
June 2006
December 2008
February 2009
September 2010
January 2011
June 2010
September 2010
August 2011
Project Name
Campus Infrastructure Phase I
Parking Structure
Learning Resource Center (LRC)
CAB Refresh #1
CAB Refresh #2
CAB Refresh #3
CAB Refresh #4
NE Landscape Project
Lighting phase II
City Sidewalk Replacement
*Completed means that all of the claims and paperwork have been submitted and no further action/claims on this
project will be forthcoming from the District.
FUTURE PROJECTS
CAB Building First Floor
Science Building
Page 3 of 3
AGENDA ITEM FOR BOARD MEETING OF:
Title
November 29, 2011
Number
Financial Statements for Period Ending
October 31, 2011
VII. B.
Area
Status
Office of Support Operations
Prepared by: Alfred Muñoz
Information
Recommendation
It is recommended that the Board of Trustees receives and accepts the Financial Statements for the
period ending October 31, 2011.
Summary
Financial Statements of District funds for the period ending October 31, 2011 are attached for
information.
Budget Implications
None
AGENDA ITEM FOR BOARD MEETING OF:
Title
November 29, 2011
Number
VII. C.
Board Policy Revision – First Reading
Area
Status
Superintendent/President
Prepared by: Dr. Phoebe K. Helm
Information
Recommendation
It is recommended that the Board of Trustees reviews the first reading of revised board policy.
Background
The Board of Trustees approved a service contract with the Community College League of
California (CCLC) to provide historical policy updates and best practices as well as annual
updates and revisions as required by law, regulation or the Accrediting Commission.
Summary
Board Policy 1010, Annual Organizational Meeting and Officers of the Board is presented
for first reading and discussion. The revisions to this policy are noted in red and include a
number change and language to the first paragraph.
This policy is provided on the college’s website and provided to the public as part of the
Board’s agenda. Comments and/or recommended revisions should be submitted to the
Board Secretary.
HARTNELL COLLEGE
BP 1010 2305
Annual Organizational Meeting and Officers of the Board
Reference: Education Code Section 72000(c)(2)(a)
Each year, at its December meeting, the Governing Board shall, pursuant to Education Code
Section 72000, hold an organizational meeting and swear in new members if applicable. The
terms of these officers as well as the term of service of newly elected members shall begin on
the first Friday after the first Tuesday in December. At such annual organizational meeting, the
Board shall elect from its members the following officers:
Annually the Governing Board shall, pursuant to Education Code Section 72000, hold an annual
organizational meeting and swear in new trustees if applicable. The term of service for these
offices, as well as the term of service for newly elected trustees shall begin on the first Friday in
December in accordance with Ed Code 72027(b). Therefore, the Annual Organizational Meeting
of the Board shall be held on the Tuesday before the first Friday in December of each year. In
certain years, this meeting may fall at the end of November. At this meeting, over which the
current board presides, newly elected or re-elected trustees take the Oath of Office, effective
the first Friday in December, which coincides with the date of the end of term for outgoing
trustees.
Annually at the organizational meeting, the Board shall elect from its members the following
officers:
President
Vice President
Other officers as the Governing Board may from time to time designate
The Superintendent/President shall serve as Secretary to the Board.
Secretary will perform the following duties:
a.
b.
c.
d.
e.
f.
Prepare Board meeting agendas in consultation with the Board President.
Have prepared, for adoption, minutes of Board minutes.
Maintain a classified index of minutes and exhibits of documents.
Attend all Board meetings or assign a designee.
Attend all Board committee meetings, except closed sessions to assess the
performance and/or consider the contract of the Superintendent/President.
Sign, when legally possible, all documents which would otherwise require the
signature of the Superintendent/President and/or Clerk of the Board.
Adopted: __________
ADJOURNMENT