SPECIAL MEETING
OF THE BOARD OF TRUSTEES
HOUSTON COMMUNITY COLLEGE
January 12, 2012
Minutes
The Board of Trustees of Houston Community College held a Special Meeting on
Thursday, January 12, 2012 at the HCC Administration Building, 3100 Main, 2nd Floor,
Seminar Room A, Houston, Texas.
BOARD MEMBERS PRESENT
Richard Schechter, Chair
Mary Ann Perez, Vice Chair
Eva Loredo, Secretary
Bruce Austin
Yolanda Navarro Flores
Sandie Mullins
Christopher W. Oliver
Carroll G. Robinson
Neeta Sane
ADMINISTRATION
Art Tyler, Deputy Chancellor/COO
Margaret Ford Fisher, President, Northeast College
William Harmon, President, Central College
Zachary Hodges, President, Northwest College
OTHERS PRESENT
Jarvis Hollingsworth, System Counsel, Bracewell & Giuliani
Gene Locke, Counsel, Andrew Kurth, LLP
Lisa Eason, President, COPA
Other administrators, citizens and representatives from the news media
CALL TO ORDER
Mr. Schechter, Chair, called the meeting to order at 11:29 a.m. and declared the Board
convened to consider matters pertaining to Houston Community College as listed on the
duly posted Meeting Notice.
Mr. Schechter informed that the purpose of the meeting is to hold the Trustees’ Annual
Ethics, Governance, and Financial Training. Mr. Hollingsworth apprised that the training
is required and there may be an opportunity for additional one-on-one discussions
outside of the scheduled training.
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Special Meeting – January 12, 2012- Page 2
The following presenters provided training to the Board:
Ethics Training - Open Government: The Tide Has Changed
Presenter: Gene Locke, Counsel with Andrews and Kurth
Mr. Locke informed that in 2011 the trend to hold public officials under extreme scrutiny
continued. He mentioned that procurement issues are at the forefront of concern.
Mr. Locke apprised that the training would discuss conflicts of interests, disclosure
requirements, abuses of office, open records act, and open meetings act.
Conflicts of Interest (Chapter 171)
Mr. Locke informed that there is a cynical nature of the way Americans looks at public
officials and that there are people who make money off the erroneous perception. Mr.
Locke noted that the HCC Board has taken proactive measures by strengthening its
bylaws.
Mr. Locke discussed the following types of conflict of interests:
(1) Self-dealing - participating in a matter where you have substantial interest
(2) Nepotism - appointing a relative to a position that is publically funded by the
agency that you serve
Mr. Locke noted that substantial interest includes relatives. Mr. Austin requested the
definitions for consanguinity and affinity. Mr. Locke apprised that consanguinity is the
bloodline and affinity involves relationships by marriage.
The Board discussed the appropriate mechanism to identify conflicts of interest. Mr.
Hollingsworth informed that a review of filed conflicts of interest could be completed
prior to each meeting.
(Trustee Oliver joined the meeting at 11:49 a.m.)
Mr. Locke informed that regarding Chapter 171, the key issues are substantial interest,
conflict of interest affidavit and not participating. He noted that there is not a blanket
affidavit and a conflict of interest must be filed for each occurrence.
Mr. Hollingsworth informed that the conflict does not take affect when a prime contractor
hires a subcontractor. Mr. Locke informed that the key is that an action is done
knowingly.
(Trustee Mullins joined the meeting at 11:57 a.m.)
Mr. Locke informed that nepotism simply means that a Trustee cannot be involved in
the appointment of a relative for pay at HCC. He further explained that relative extends
beyond immediate family and includes in-laws.
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Special Meeting – January 12, 2012- Page 3
Disclosure Requirements (Chapter 176)
Mr. Locke informed that disclosure address relationships with vendors attempting to
conduct business with the college. He apprised that gifts from vendors should disclose if
value is over $250 during a 12-month period. Business relationships and affiliations with
vendors need to filed on a Conflicts Disclosures Statement form and should be posted
on the agency website.
(Mr. Oliver stepped out at 12:03 p.m.)
Mr. Austin inquired if training should be implemented for the executive administration.
Mrs. Byas informed that training is held annually with administration (pay grade E40 and
above).
Mr. Robinson inquired if there is a prohibition of adopting a policy that no family member
is allowed to do business with the college. Mr. Locke informed that it is not a prohibition
and noted that such a policy would be a different matter.
(Mr. Oliver returned at 12:09 p.m.)
Mr. Locke informed that Board members with ownership or interest in real estate, which
the college is considering for purchase, must file a disclosure form at the courthouse.
He noted that the form must include name, office, title, description of property and
interest as well as the following statement: “I swear that the information in this affidavit
is personally known by me to be correct and contains the information required by
Section 553.002, of the Government Code”.
Abuses of Office
Mr. Locke noted that abuses of office are covered by the penal code and is punishable
by jail time. Mr. Locke reviewed the following abuses of office.
• General prohibition
• Misuse of official information
• Misuse of government property
• Perjury and aggravated perjury
Offenses Against Public Administration
Mr. Locke provided a review on the following offenses against public administration:
• Bribery
• Honorarium
• Gifts to public servants (beware of accepting any gifts)
(Mr. Schechter stepped out at 12:24 p.m.)
(Ms. Perez stepped out at 12:24 p.m.)
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Special Meeting – January 12, 2012- Page 4
Mr. Locke noted that gifts, benefits, and acts for personal gain should be refused. Mr.
Locke informed that if the host is present at the event, then transportation, lodging, and
food are acceptable.
(Mr. Schechter returned at 12:26 p.m.)
Mrs. Byas reminded that any value of $250 or more needs to be disclosed.
(Ms. Perez returned at 12:28 p.m.)
(Mr. Robinson stepped out at 12:28 p.m./returned at 12:31 p.m.)
Open Meetings and Open Records Acts
Mr. Locke apprised that Open Meetings and Open Records Acts are carefully monitored
by the State. Mr. Locke informed that under the Open Records Acts certain information
may not be released such as social security numbers. He further noted that there is a
time restriction on responses to requests.
Mr. Schechter noted that emails and text messages between Trustees are part of Open
Records. Mr. Hollingsworth informed that if the communication involves HCC business,
the medium does not matter.
(Mrs. Sane stepped out at 12:35 p.m.)
(Ms. Loredo stepped out at 12:37 p.m.)
Mr. Locke noted that all Trustees are required to complete online training in regards to
Open Meetings Act within 90 days of taking office.
(Ms. Loredo returned at 12:43 p.m.)
Mr. Locke informed that the Open Meetings Act covers all meetings, including private
meetings with less than a quorum. He further apprised that a quorum can only meet if it
is posted and that items not posted may not be discussed or acted upon. He apprised
that Closed Session discussions are regulated and an Executive Session agenda
should be kept.
(Mr. Robinson stepped out at 12:51 p.m.)
Mr. Locke advised the Board to be cautious and careful, as there is no guarantee of
what information is discoverable.
(Mr. Robinson returned at 12:54 p.m.)
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Special Meeting – January 12, 2012- Page 5
Mr. Locke noted that attention should be given to the following items although detailed
discussion on the items was not held during the training:
• Altering public records
• Destroying public records
• Individual civil liability for procurement mishaps
• Campaign reporting and violations
• Theft of public services
(Mrs. Sane returned at 1:02 p.m.)
Ms. Mullins inquired how the blackout period relates. Mr. Hollingsworth noted that this
is a self-imposing restriction and that administration is currently working on the details.
Mr. Austin recommended that Board Counsel review what needs to be resolved
regarding the blackout period. Mr. Hollingsworth suggested sending a notice advising
the Board when a contract is signed similar to the notice that is sent when an RFQ or
RFP goes out.
Mr. Schechter recessed the meeting at 1:10 p.m. and reconvened at 1:17 p.m.
(Present: Trustees Austin, Loredo, Mullins, Perez, Robinson, Sane and Schechter)
Financial Training: Community College Finance 101
Presenter: Art Tyler, COO/Deputy Chancellor
Dr. Tyler apprised that the training session is not the same as the budget workshop held
during the year. He noted that the training session was in conjunction with the financial
training requirement established by the Board. Dr. Tyler provided a review of the
following information:
•
Planning and Budget Integration
o Review of the planning process
o Mission, vision, master plan, strategic plan, operation plan, unit plan
o Calendar of events
o Collection and disbursement of funds
o Cash management
o Planning drives the biennium budget
 Schedule of classes
 Growth projections
 Philosophy of resource use (Non-profits but fiscally responsible)
•
Revenue Streams
o State appropriations
o Taxes
o Tuition and fees
o Other: enterprises
(24%)
(35%)
(40%)
( 1%)
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Special Meeting – January 12, 2012- Page 6
•
Fixed Expenses (little control to change within a given year)
o Debt
o Utilities
o Full-time salaries
o Benefits
o Multi-year contracts
•
Variable Expense
o Supplies
o Travel
o Marketing
o Adjunct faculty
o Part-time staff
•
Policies (Drives practices and budget development)
o Debt
o Investment
o Reserve
o Master planning
•
•
•
•
Reading the Financials
External Audit
Internal Audit
SACS
•
Types of Financing
o G.O. bonds
o Maintenance tax notes
o Senior liens
o Junior liens
o Commercial paper
o Public Facilities Corporation (PFC)
(Mrs. Sane stepped out at 1:53 p.m.)
•
Timeline Drivers
o Budget adopted by August 31st - legal requirement
o Budget update in February
o Including:
 Last date for changes to tuition/fees that affect semesters
 Date for tax decision – Sept (dependent upon County Assessors’
certification of tax rolls)
 State budget (June Biennium)
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Special Meeting – January 12, 2012- Page 7
•
Budget Development
o Rollover
o Based and growth
o Zero based
o Modified zero based
•
Calculator
o Bottom up – Class schedule driven
o 600 units from all college participate
o Each unit manager or program faculty chair determines how they will use
fixed resources and employees (full-time)
o Each unit manager or program faculty chair determines how they will use
variable resources and employees (Part-time/Adjunct)
Ms. Mullins inquired of the class driven budget. Dr. Tyler informed that classes are
opened and canceled based on enrollment. He noted that currently, a wait list is being
considered, which will automatically open a class once the wait list is at 22 students.
(Ms. Loredo and Ms. Perez stepped out at 2:19 p.m.)
Dr. Tyler provided an overview of checks and balances to include the roles of those
reporting to the Chancellor and/or to the Board.
Internal Staff – Reports to Chancellor
• CFO & Certified Public Accountants
• Office of Institutional Effectiveness
• General Counsel
• Office of Planning & Budget
Reports to the Board
• Internal Audit
• External Audit
• Board Counsel
• Bond Counsel
• Financial Advisor
Mr. Robinson asked if all contracts have a central repository. Mrs. Byas informed that
the Office of General Counsel currently houses all procurement contracts and is working
to become the central repository with a contract coordinator.
Mr. Austin noted that all contracts should be reported to the Board monthly. Dr. Tyler
noted that the reporting period is quarterly.
Mr. Robinson noted that administration needs to know where all the contracts are and
provide a report to the Board in order to ensure compliance with Board policy.
(Ms. Loredo and Ms. Perez returned at 2:31 p.m.)
(Mr. Robinson stepped out at 2:32 p.m.)
(Mrs. Sane stepped out at 2:33 p.m.)
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Special Meeting – January 12, 2012- Page 8
Mr. Hollingsworth informed that Chapter 171 refers to contracts that require Board
action and noted that contracts that the fall under the authority of the Chancellor is not
included.
(Mr. Robinson returned at 2:34 p.m.)
Mr. Hollingsworth informed that at no time may a Board member use his or her position
to influence a contract and noted that a Trustee may make an introduction; however,
they should not be involved in negotiations.
(Mrs. Sane returned at 2:36 p.m.)
Dr. Tyler noted that all contracts go through procurement and a record is maintained;
however, agreements, memorandums of understanding and affiliations with no financial
obligation are not recorded in procurement.
Mr. Robinson requested that Board Counsel, Dr. Tyler and Ethics Counsel review
requirements for Board to complete a form 171 and/or 176.
(Ms. Perez stepped out at 2:43 p.m. and returned at 2:44 p.m.)
(Mr. Schechter stepped out at 2:44 p.m.)
Ms. Perez recessed the meeting at 2:46 p.m.
Ms. Perez reconvened the meeting at 2:55 p.m.
(Trustees Schechter, Mullins, Loredo, Robinson and Perez)
Dr. Tyler provided an overview of external financial checks and balances, awards, and
commendations as follows:
Southern Association of Colleges and Schools (SACS)
• Creates a set of standards for all institutions of higher education
• Finance is the number one rational thing which causes scrutiny
External Auditor
• Roles and Responsibilities
• Methodology
o Sampling
o Compliance validation
• Terms
o Unqualified vs. qualified opinion
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Special Meeting – January 12, 2012- Page 9
Awards and Commendations
• Certificate of Achievement for Excellence in Financial Reporting Award (CAFR)
6 years in a row
• Government Treasury Office of Texas (GTOT) – Award for Investment Policy
• Unqualified Audits (Gainer, Donnelly & Desroches)
• Bond Rating Upgrade (S&P, Moody’s & Fitch)
• No SACS write-ups
(Mr. Oliver stepped out at 3:01 p.m.)
Governance Training
Presenter: Jarvis Hollingsworth, Board Counsel with Bracewell & Giuliani
Mr. Hollingsworth informed that the binders are reference materials and he noted that
the training session would cover General Legal Orientation and Procurement Guidelines
Applicable to Community Colleges.
(Mr. Oliver returned at 3:04 p.m.)
(Mr. Austin returned at 3:04 p.m.)
(Mr. Robinson stepped out at 3:05 p.m.)
General Legal Orientation
Mr. Hollingsworth noted that each Trustee and the College is a subdivision of the State.
He noted that the Board has exclusive power to govern and oversee the District and
apprised that the Board has the authority to delegate to the administration.
(Mr. Robinson returned at 3:06 p.m.)
Mr. Hollingsworth informed elaborated on the powers of the Board and noted that the
most important power under SACS 2.2 states that the Board is a policy making body,
which means that Board members are not administrators and they do not run the daily
operations.
Mr. Austin recommended the Board read 2.2 of the Core Principles.
(Ms. Perez stepped out at 3:09 p.m.)
Mr. Hollingsworth apprised that page 3 lists the powers of the Chancellor. He noted that
the Board provides the mission and the Chancellor determines how to accomplish the
mission.
Mr. Hollingsworth informed that the Board is one body and acts as one as no individual
commands the institution. He apprised that the Board only acts with a quorum votes.
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Special Meeting – January 12, 2012- Page 10
(Mrs. Sane returned at 3:12 p.m.)
Mr. Austin noted that the Board has received a list of practical responses for the press;
however, the Board Chair should be the voice.
(Mr. Robinson stepped out at 3:12 p.m.)
Mr. Hollingsworth noted that all committees including Committee of the Whole have
equal powers. He further noted that the Board has chosen to follow Robert’s Rules of
Order.
(Mrs. Sane stepped out at 3:13 p.m.)
(Ms. Perez returned at 3:18 p.m.)
(Mr. Oliver and Mr. Austin stepped out at 3:24 p.m.)
Mr. Hollingsworth provided an overview of the following procurement methods:
•
•
•
•
•
•
•
•
•
Competitive bid
Sealed proposal
Request for proposal
Interlocal agreement
Design build project
Contract to construct
Job order contract
Reverse auction
Formation of subdivision
Mr. Schechter noted that the procurement process binds most contracts and the Board
is obligated to abide by the procurement method.
(Mr. Robinson and Mrs. Sane returned at 3:21 p.m.)
(Mr. Robinson stepped out at 3:25 p.m.)
(Mr. Austin and Mr. Oliver returned at 3:27 p.m.)
Ms. Loredo inquired if the selection process will be changed to allow selection of the
lowest bidder. Mr. Hollingsworth informed that the selection is based on the
procurement method chosen.
(Mrs. Flores arrived at 3:29 p.m.)
(Mr. Robinson returned at 3:31 p.m.)
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Special Meeting – January 12, 2012- Page 11
Mr. Hollingsworth informed that certain types of services must be procured by certain
methods.
Mr. Hollingsworth suggested the Board refer to the reference material provided as
needed.
ADJOURNMENT
With no further business, the meeting adjourned at 3:32 p.m.
Minutes recorded, transcribed & submitted by:
Sharon Wright, Manager, Board Services
Minutes Approved as Submitted:
February 23, 2012