MEETING OF THE COMMITTEE OF THE WHOLE
OF THE BOARD OF TRUSTEES
HOUSTON COMMUNITY COLLEGE
August 11, 2011
Minutes
The Board of Trustees of Houston Community College met as a Committee of the
Whole on Thursday, August 11, 2011, at the HCC Administration Building, 2nd Floor,
3100 Main in Seminar Room A, Houston, Texas.
COMMITTEE MEMBERS PRESENT
Richard M. Schechter, Chair
Mary Ann Perez, Vice Chair
Eva Loredo, Secretary
Bruce Austin
Yolanda Navarro Flores
Sandie Mullins
Christopher W. Oliver
Neeta Sane
ADMINISTRATION
Mary S. Spangler, Chancellor
Art Tyler, Deputy Chancellor/COO
Renee Byas, General Counsel
Fheryl Prestage for William Carter, Vice Chancellor, Information Technology
Charles Cook, Vice Chancellor, Instruction
Diana Pino, Vice Chancellor, Student Services
Daniel Seymour, Vice Chancellor, Planning and Institutional Effectiveness
Fena Garza, President, Southwest College
Margret Ford Fisher, President, Northeast College
William Harmon, President, Central College
Zachary Hodges, President Northwest College
Irene Porcarello, President, Southeast College
Betty Young, President, Coleman College
Remmele Young, Executive Director, Government Relations and Sustainability
Willie Williams, Chief Human Resources Officer
OTHERS PRESENT
Jarvis Hollingsworth, System Counsel, Bracewell & Giuliani
Lisa Eason, President, COPA
Alan Ainsworth, President, Faculty Senate
Clarence Grier, RBC Capital
Barron Wallace, Vinson & Elkins, LLP
Other administrators, citizens and representatives from the news media
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Committee of the Whole – August 11, 2011 - Page 2
CALL TO ORDER
Mr. Schechter, Chair, called the meeting to order at 4:10 p.m. and declared the Board
convened to consider matters pertaining to Houston Community College as listed on the
duly posted Meeting Notice.
PROPOSED OPERATING BUDGET (UNRESTRICTED FUNDS) FOR 2011-2012
Dr. Tyler provided a summary of the proposed budget. He apprised that the Budget
Committee recommended suspending the approval of the budget for 2012-2013 until
further review.
Mr. Schechter mentioned that a plan will be in place for the 2012-2013 budget before
December. He noted that there is a $5 million shortfall, which can be covered with a
bond refinance and apprised that if the Board chooses not to refinance, then $5 million
will need to be made up by other means such as tuition increase, spending cuts, and/or
reduction in workforce.
(Mr. Oliver arrived at 4:17 p.m.)
Motion – Mr. Austin moved and Mr. Oliver seconded to approve a one-year budget as
proposed.
Ms. Loredo inquired when did the increase in tuition and fees become effective. Dr.
Tyler informed that the fees were effective immediately upon Board approval at the
Special Meeting held on August 1, 2011.
Ms. Loredo apprised that other measures for identifying revenues should be considered
other than continuing to increase tuition.
Mr. Schechter apprised that the out-of-state tuition mainly affects international students.
He noted that the average increase is approximately $120 annually or $60 per
semester.
Mr. Oliver apprised that the other option available to out-of-district areas is to vote for
annexation.
Ms. Loredo inquired about the fee for early college students. Mr. Schechter apprised
that the measure will be reviewed in the fall and will be considered by the Budget
Committee.
Mrs. Sane inquired about line items regarding the transfer of debt and contingency and
inquired as to why the Special Meeting was postponed. Mr. Schechter informed that
there are financing proposals set for the Special meeting and noted that there is no
reason to discuss refinancing if it will not be part of the proposed budget. He noted that
he would be elated to recess the meeting and convene the Special meeting.
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Committee of the Whole – August 11, 2011 - Page 3
Mrs. Sane apprised that the opportunity should be presented on how to refinance the
debt.
Mr. Austin informed that the financial advisors informed that additional funds would be
left over after bond financing which would be sufficient to close the gap due to the
interest rates. He noted that his motion was to approve the budget as proposed.
Mrs. Sane informed that she has questions regarding the budget and noted that unless
her questions are answered, she will not be in favor of approving the budget. She noted
that even with the timeframe for submitting the budget, transparency should be
available.
Mrs. Sane inquired of the status of the 2010 Maintenance Tax Notes.
Ms. Loredo inquired about the tax bonds and asked if there is an excess of funds on the
bond side and if the funds are available to be used for the operating budget. Mr.
Schechter informed that is not the case. Mr. Austin asked that Board Counsel to provide
an explanation of the bond.
Mrs. Sane asked for the bottom line savings for the two options and how it is calculated.
Mr. Oliver asked for the specific issues referenced by Mrs. Sane be identified.
Mrs. Sane noted that the two items were supposed to be discussed in the Special
Meeting before approving the budget. She noted that action was to be taken on the
items prior to approving the budget; however, discussion and approval of the two items
have been postponed.
(Ms. Perez stepped out at 4:42 p.m.)
Mr. Oliver asked that the Board discuss the two issues referenced by Mrs. Sane.
Mr. Hollingsworth apprised that since the item is a part of the budget discussion it could
be discussed during the Committee of the Whole.
Dr. Tyler apprised that the numbers have changed since the last information was
presented to the Board and asked Mr. Clarence Grier to provide most favorable options
available to the Board.
Mr. Grier apprised with the U.S. Government’s rating was downgraded and that means
there are more favorable savings to the college. He noted that the Board should
consider those items that produce a sure savings and noted that it is a game-time
decision.
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Committee of the Whole – August 11, 2011 - Page 4
Ms. Mullins inquired what happens if there is an increase in interest rates in the mist of
completing the transaction. Mr. Grier informed that the savings are so substantial that
there is no likelihood that would be the case.
Ms. Sane informed that she is only concerned with the bottom line savings. She noted
that she reviewed the caluclations and asked why Scenario 1 has to be chosen over
Scenario 2.
Dr. Tyler informed that when analyzing the numbers, there must be a review of the ratio
and noted that RBC has reviewed the ratios. He noted the ratio for Scenario 1 provides
savings of 39.93% and Scenario 2 provides less savings. He noted that the
recommendation is not based on just how much money can be obtained.
Mr. Austin noted that the lower the ratio the better the deal based on other ancillary
costs.
Mr. Austin motioned to call for question.
Mr. Hollingsworth informed that the motion to call for the question needs a second or
Mr. Austin would need to withdraw the motion.
Mr. Austin withdrew the motion to call the question.
Mr. Schechter provided an explanation of the options available for Board consideration.
(Mrs. Sane stepped out at 4:58 p.m.)
(Mr. Austin stepped out at 4:49 p.m.)
Mr. Schechter noted that the funds would be borrowed at 3%; however, the account that
the funds will be placed in provides less and therefore, giving a negative arbitrage.
(Mr. Austin returned at 5:01 p.m.)
(Mrs. Sane returned at 5:02 p.m.)
Mr. Schechter noted that the higher the savings the better.
(Mrs. Sane stepped out at 5:03 p.m.)
Mr. Oliver noted that the measures are based on the volatility of the market and asked if
the market becomes better are we locked into the current rates. Mr. Schechter noted
that the bonds could only be refinanced once.
Mr. Austin noted that the Board should be considering what is in the best interest of the
college.
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Committee of the Whole – August 11, 2011 - Page 5
(Mrs. Sane returned at 5:06 p.m.)
Ms. Loredo inquired what the cost would be. Mr. Grier informed that the cost would be
approximately $2.8 million.
Mr. Oliver noted that anytime there is an opportunity to save cost on debts, it should be
taken.
Mrs. Sane asked the Financial Advisor a professional opinion. Mr. Grier informed that if
an option was being selected, Scenario 1 would be the better because of the flexibility.
Mr. Barron Wallace informed that the federal tax laws will need to be met as well as
meeting the desires of the Board.
Vote - The motion passed with vote of 7-0.
PROPOSED OPERATING BUDGET (Restricted Funds) for 2011-2012
Dr. Tyler informed that the Restricted Budget consists of grants funds as well as
financial aid. He noted that the Board does not have control of the funds but the custody
of the funds. He noted that there is not latitude for utilizing the funds.
Motion - Mr. Austin moved and Mr. Oliver seconded. The motion passed with vote of 70.
Mr. Schechter recessed the meeting at 5:11 p.m. and reconvened at 6:02 p.m.
(Present: Trustees Austin, Flores, Loredo, Mullins, Perez, Sane and Schechter)
(Mrs. Flores arrived during the recess.)
CAPITAL IMPROVEMENT PROGRAM CLOSEOUT
Dr. Tyler informed that administration recommended that the Board consider the 2003
portion for the CIP as being completed; however, Bond Counsel was not present and
the Board recommended that Bond Counsel review the matter prior to approving the
close out.
Mr. Barron Wallace informed that review of the CIP was conducted as well as
representation of the market. He noted that every bond project was reviewed and noted
that discernment was made. He noted that based on the review there is nothing
prohibiting the Board from determining that the projects are completed.
(Mr. Oliver joined at 6:07 p.m.)
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Committee of the Whole – August 11, 2011 - Page 6
Mr. Hollingsworth informed that by approving the item, the Board is in essence stating
that the bond is deemed complete. He recommended that the Board should be provided
a list of the projects to have before them when considering the item.
Ms. Mullins recommended that the language be revised to note that it is complete within
a percentage.
Mr. Schechter recommended postponing the approval of the item until September 2011.
Mrs. Flores recommended a list of the projects completed and the ones not completed.
Ms. Perez requested that the percentage of completion also be included.
Mrs. Flores requested an explanation of the expended funds and the reason for the
balance remaining. She asked that the information also provide the usage of the funds.
Dr. Tyler apprised that the remaining unexpended funds are listed in the financial
statement on page 17 and noted that the Board could make a decision as to what to do
with the unexpended funds.
NORTHLINE PARKING INFRASTRUCTURE IMPROVEMENTS
CAMPUS (PROJECT NO. 11-35)
Motion – Mr. Oliver moved and Mr. Austin seconded.
NORTHLINE
Dr. Tyler apprised that the bid was sent out regarding the Northline parking structure
and noted that the Board approved a sealed competitive bid. He noted that it is a
refurbishment of the current structure.
Mrs. Flores inquired about the Small Business participation difference on the item and
the summary of procurement. Mr. Rogelio Anasagasti informed that the actual
participation is 35%.
Mrs. Flores noted that the project is best value and competitive sealed bid; she inquired
why use the method if it is not necessary. Mr. Anasagasti noted that it is a competitive
seal proposal, which implies qualitative factors.
Vote - The motion passed with motion of 8-0.
Mr. Schechter made a statement regarding the purchase of real estate in District VI and
noted that it was not the intent to build a new campus or expand an existing campus by
the purchase of the land. He noted that the institution determines the campus needs
based upon proper planning and analysis.
PARKING LOT IMPROVEMENTS CENTRAL CAMPUS (PROJECT NO. 11-26)
Motion - Mrs. Sane moved and Mr. Austin seconded. The motion passed with a vote of
8-0.
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Committee of the Whole – August 11, 2011 - Page 7
Mr. Austin requested counsel to define when a motion to call for question is made what
action needs to be taken. Mr. Hollingsworth noted that the motion would need a second
and a two-third vote of the Board in order to call the question.
ACCEPTANCE OF GIFTS AND DONATIONS
Motion – Mr. Austin moved and Mr. Oliver seconded.
Dr. Tyler informed that the opportunity is to receive a gift from Mr. Dan W.
Lackenmacher and Mr. L. Money Adams, Jr. who wanted to donate the land to HCC. He
noted the land is located in North Forest off Little York. He apprised that the gift has a
fair market value of $105,500. He noted that the Board has to approve to accept.
Mrs. Sane inquired if usage has been determined. Dr. Tyler informed that the future
usage has not been determined.
Mrs. Sane called for the question.
Vote – The motion passed with a vote of 8-0.
Mr. Austin inquired if the Foundation has a bequest outlined. Mr. Schechter requested
that Dr. Zuniga provide a response to the matter.
INVESTMENT REPORT FOR MAY 2011
Mr. Schechter requested the item be discussed at the Regular Meeting as a new topic
item.
INVESTMENT REPORT FOR JUNE 2011
Mr. Schechter requested the item be discussed at the Regular Meeting as a new topic
item.
MONTHLY FINANCE REPORT FOR JULY 2011
Mr. Schechter requested the item be discussed at the Regular Meeting as a new topic
item.
UPDATE ON STRATEGIC PLANNING PROCESS
Dr. Daniel Seymour informed that a conversation with the community was held on
August 3, 2011. He noted that there was positive input provided from the effort.
Dr. Seymour provided an overview of the timeline and noted that themes will be
generated on “My HCC” in September. He noted that the actual document would be
drafted thereafter.
Mr. Austin noted that he would send a document to the Chancellor regarding the
Trustees’ role in strategic planning. He noted that Section 2.2 of SACS, requires
Trustees to be involved in policy of the college. He asked how will those processes be
accomplished and what form of discussion will involve the Trustees.
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Committee of the Whole – August 11, 2011 - Page 8
Mr. Schechter informed that he requested Dr. Seymour to engage the Trustees and
noted that there should be reporting to the Board for discussion purposes.
Mr. Austin noted that there are regulatory authorities who have stated that the Board
should be involved. Mr. Schechter informed that part of the role of those members of
the Board serving on the committee is to be involved every step of the way.
Dr. Seymour provided strategic planning checklist.
REPORT ON PRELIMINARY PLANNING CALENDAR FOR 2011 TAXATION
Mr. Schechter informed that the information is presented to provide a timeline regarding
the 2011 taxation.
ADJOURNED TO CLOSED SESSION
Mr. Schechter adjourned the meeting to Executive Session at 6:47 p.m., notice having
previously been given and reiterated in accordance with Sections 551.071, 551.072,
and/or 551.074 of the Open Meetings Law. Mr. Schechter stated that any final action,
vote or decision on any item discussed in Executive Session would be taken up in Open
Session or in a subsequent Public Meeting.
Mr. Schechter reconvened the meeting in Open Session at 7:45 p.m. and entertained
motions on pending matters.
(Present: Trustees Austin, Loredo, Mullins, Perez, Sane, and Schechter)
ADJOURNMENT
With no further business, the meeting adjourned at 7:45 p.m.
Recorded and Submitted by:
Sharon R. Wright, Manager, Board Services
Minutes Approved: