July 26, 2000 Minutes
SPECIAL MEETING
OF THE BOARD OF TRUSTEES
Houston Community College System
July 26, 2000
Minutes
The Board of Trustees of the Houston Community College System held a Special
Meeting on
July 26, 2000 at the HCCS Administrative Center, 2nd Floor Boardroom, 22 Waugh
Drive, Houston, Texas 77007.
BOARD MEMBERS PRESENT
Bruce A. Austin, Chairman
James R. Murphy, Vice-Chairman
Herman Litt, Secretary
Michael P. Williams, D.Min., Deputy Secretary
Herlinda Garcia
Carol H. Smith
BOARD MEMBERS ABSENT
Abel Davila
Christopher W. Oliver
W. F. Russell
ADMINISTRATION
Ruth Burgos-Sasscer, Chancellor
John O'Malley for Jack Daniels, President, HCC-Central
Margaret Forde, President, HCC-Northeast
Diana Castillo for Sylvia Ramos, President, HCC-Northwest
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Charles Cook, Vice Chancellor, Educational Development
Jose Villarreal, Vice Chancellor, Economic Development
Patricia Williamson, Vice Chancellor, Institutional Development
Joseph A. Fenninger, Chief Financial Officer
Stephen Gonzalez, Executive Director, Public Information and Marketing
Nat Campos, Executive Director, Human Resources
OTHERS PRESENT
Arturo Michel, Bracewell and Patterson
Leslie Berardo, Principal, Mir, Fox & Rodriguez
Juan Torres, Engagement Principal, Mir, Fox & Rodriguez,
David Ahola, Director of Internal Audit Service, Mir, Fox & Rodriguez
Other administrators and staff
CALL TO ORDER
Mr. Murphy called the meeting to order at 4:36 p.m. and declared the Board
convened to consider matters pertaining to the Houston Community College
System as listed on the duly-posted meeting notice.
REVIEW OF BUDGET ASSUMPTIONS - MIR, FOX & RODRIGUEZ
The Board of Trustees engaged the firm of Mir, Fox & Rodriguez, P.C. (MFR) to
review the proposed budget for 2000-2001. Leslie Berardo, MFR Principal,
explained that the firm had reviewed major budget assumptions for the 2000-01
budget (see Budget Review for the Board of Trustees attached). She pointed out
that lease costs have gone down, while physical plant costs have risen, because of
the new facilities brought online, although the System continues to lease certain
facilities. There will be ongoing expenses associated with ownership including
personnel, supplies and maintenance. However, service capabilities have increased
as a result of the improved infrastructure. Ms. Berardo noted some duplicate
budgeting which needs to be corrected. Duplicate budgeting was found in several
areas including the telephone system, physical plant items, computer purchases
and in the budgeting of salaries. She explained that sometimes this is caused by
incorrect coding. The Executive Team has been apprised of the findings.
Juan Torres, Engagement Principal, reported on the revenue side and made the
following observations and recommendations:
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Lease income from 3100 Main - At this time, the firm could only make
assumptions on increased revenue from leasing. Future budgets will be
impacted when 3100 Main is brought online. The leasing of space will, of
course, require some investment and capital commitment over and above
the renovation and building.
Administration should ensure that no sources of revenue have been excluded
from the budget. Mr. Torres discussed possible discrepancies in revenue
related to the truck driving program. The Executive Team has been advised
of this issue.
Consider increase in tax rate - Mr. Torres pointed out that HCCS' tax rate is
lower than comparable institutions in the area.
Implement an enrollment management plan to market the System and
increase enrollment. Based on their findings, the College System has not
been effective in correlating investments with increased enrollment. The
Chancellor noted that the strategic plan is projecting a growth cycle and Ms.
Berardo added that the budget for marketing has been increased this year.
Ensure that outlying facilities are operating at maximum efficiency in terms
of faculty workloads and class size.
Information Technology efficiencies and investments - the System has made
a considerable investment in this area and should begin to see a payback.
The updated technology should eliminate redundancies and duplication of
tasks and free up funds. The Board expressed the need for an audit trail for
the electronic data processing system, especially in the financial model.
General Obligation Bonds - the System needs strong public support before
such an initiative is undertaken. The community must perceive HCCS as a
long-term, viable entity.
Consider annexation of outlying areas to increase the tax base.
ADJOURNMENT TO CLOSED OR EXECUTIVE SESSION
Mr. Austin adjourned the meeting to Executive Session at 5:45 p.m., notice having
previously been given, and reiterated by him, in accordance with the Open
Meetings Law. He 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. Austin reconvened the meeting in Open session at
7:20 p.m. and entertained motions on pending matters.
HKMK RELEASED FROM CONTRACT TO PURCHASE DUNLAVY PROPERTY
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Motion - Mr. Litt moved approval for the first amendment to the contract between
HCCS and HKMK, as buyer of the Dunlavy property, effective this date. The
amendment has been executed by HCCS releasing both parties from their
agreement. Dr. Williams seconded the motion. Motion carried 5-0. Mrs. Garcia
abstained from voting.
SALE OF DUNLAVY PROPERTY TO HISD AUTHORIZED
Motion - Mr. Litt made the following motion: that it be resolved and ordained by
the Board of Trustees of the Houston Community College System that the
requirements or conditions including the finding that the property is no longer
necessary for the operation of the Houston Community College System and any
other requirements or conditions necessary for the sale of college property have
been met or occurred with regard to the property located at Richmond and
Dunlavy, Houston, Harris County, Texas, property for the sum of $2,600,000. The
Board of Trustees of the Houston Community College System authorizes the sale
of the property to the Houston Independent School District. The Board of Trustees
of the Houston Community College System authorizes the execution of the earnest
money contract and all attachments to the Earnest Money Contract regarding the
sale of the property so long as the same is approved and executed by the
Chancellor. The Board of Trustees of the Houston Community College System
authorizes the execution of such deeds, documents or other instruments as may
be necessary and proper to effectuate the sale of the proper so long as same is
approved and executed by the Chancellor. Passed, approved and adopted this
26th day of July 2000 with the amendment to the commercial real estate contract
as entered into between HKMK Interests as buyer. Dr. Williams seconded the
motion. Motion carried 5-0. Mrs. Garcia abstained from voting.
BUDGET PRESENTATION FROM ADMINISTRATION
Mr. Fenninger, Chief Financial Officer, presented three budgeting scenarios:
Plan A: Original proposed budget of $175 million
Plan B: Plan A with cutbacks - $167 million
Plan C: Balanced Budget (expenses = forecasted revenue) - $160 million
ADMINISTRATION TO PREPARE BUDGET FOR BOARD CONSIDERATION
Motion - After an in-depth discussion of the three plans, Dr. Williams made a
motion that administration prepare a budget for the Board's consideration based
on Plan C, to include a $5.00 tuition increase for out-of-district students only, to
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become effective September 1, 2001, and a 2% across-the-board salary increase
for all faculty and staff. Mr. Murphy seconded the motion. Motion carried 5-0.
(Mrs. Garcia had already left the meeting).
The Board agreed to retain Mir, Fox & Rodriguez through the budget process. The
Board will meet on August 1, 2000 for adoption of the budget.
ADJOURNMENT
With no further business to come before the Board, Mr. Austin adjourned the
meeting at 9:30 p.m.
Minutes Prepared By:
Linda Gray, Administrative Assistant
Board Services
Reviewed, Finalized and Submitted By:
Herman Litt, Secretary
Board of Trustees
Minutes Approved as Submitted: October 24, 2000
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