[Speaker 3] (0:03 - 0:23)
I call this meeting of the Lee College Board of Regents budget workshop to order on July 1st, 2025 at 6 30 p.m. We'll begin we do have a quorum this evening so we'll begin with our invocation and pledge the United States flag and pledge to the Texas flag and Regent Warford will lead us.

[Speaker 8] (0:25 - 1:16)
You bow with me please. Dear gracious father we thank you for your blessings that you shower on us every single day. We thank you for your grace and your mercy.

Thank you for this college the ability to serve here and the opportunity that we have to try to make a difference in each student. Give us wisdom tonight lord as we make decisions of college and the guide us and direct us in all those decisions. Amen.

Ben. I pledge allegiance to the flag of the United States of America and to the republic for which it stands one nation under god indivisible with liberty and justice for all. And the Texas flag honor the Texas flag.

[Speaker 11] (1:17 - 1:24)
I pledge allegiance to thee Texas one state under god one and indivisible.

[Speaker 3] (1:29 - 1:36)
All right thank you very much. Welcome everybody. Next item on the agenda is public comment.

Do we have anyone signed up to speak?

[Speaker 11] (1:37 - 1:41)
Yes we do Mr. Chairman we have David Isaac. All right Mr. Isaac come on up.

[Speaker 7] (1:55 - 3:21)
Good evening. Evening. As a member of the general public and an individual that got 500 votes last election cycle I believe it's incumbent on me to comment on the budget workshop this evening or on the budget process in general.

First thing I would like to not see is government money being used to propagate candidacy incumbent candidates in the lat like such as in the last election. We saw four different articles from Mr. Daryl Fontenot who was my opponent in the last election cycle. One specifically written by Amanda Smoke your public relations person paid for by government dollars partly and some of the tuition here at school to promote the candidacy of Mr. Regent Fontenot. I find that highly inappropriate. I also find it highly inappropriate by the way that Mr. Regent Hall decided to call uh Baytown's son to get something changed. Mr. Chairman, Madam President, you need to talk to your boy per se. You need to get him in line per se. No one on this board should be calling the Baytown son to change a narrative in an election cycle. That is called election interference is what that's called and I will blow the whistle much louder if it happens again in another election cycle.

I'm here to be a watchdog on that. Harold Skews called that a regretful mistake when I went to go pay them a visit. It wasn't going to go unheard.

Another thing I find highly inappropriate by the way I don't I don't see a timer here so I'm just going to go another thing I find inappropriate.

[Speaker 3] (3:22 - 3:23)
I'll let you know when you have 30 seconds left.

[Speaker 7] (3:23 - 5:05)
Appreciate that. That uh that we have other incumbent regents backing challengers running for this seat. We have egg on some of our faces now because many of you went publicly to back Ms. Susan Moore Fontenot against Herron Thomas. Most of you of which never even talked to him or asked about his candidacy. It's inappropriate. The city of Baytown does not do this.

Goose Creek School Board does not do this. Justice of the Peace, they do not back other incumbent candidates for those seats. Tonight I'm asking you to institute what I call the Isaac Doctrine.

No more of this. No more of this good old boy system. No more of these incumbent regents backing other candidates trying to snowball trying to stack the deck against good-hearted individuals trying to represent their community and garner votes to play a role in this governing body.

I'm asking you kindly to create a new tradition in this governing body one of which I've been around for quite some time now and will continue to participate by the way. So watch your behavior. Stop with the backdoor phone calls.

Stop trying to control narratives. Stop trying to gang up on individuals. Stop trying to gang up on individuals trying to run for these seats.

It's inappropriate. Think about spending some money for a robust student newspaper so that you can't interfere in the only vessel that Fred Hartman created for free speech in this town. And consider spending some money to video record these meetings.

That's all I have. Thank you very much.

[Speaker 3] (5:08 - 5:38)
All right. Moving on to items of action under new business. One item.

One item tonight. Consideration of approval of Furniture Marketing Group furniture updates. The administration recommends that the board authorize the president or her designee to negotiate final terms and approve Furniture Marketing Group for furniture updates at multiple buildings for $810,920 and one cent.

[Speaker 8] (5:40 - 5:41)
Second.

[Speaker 3] (5:41 - 5:46)
Got a motion from Regent Fontenot. Second from Regent Warford. Any discussion or comments on this item?

[Speaker 6] (5:47 - 6:07)
Chairman, I have a comment. I would I'm going to vote against it because I would prefer to wait until we finished our evaluation and usage. Stay with our originally.

I feel like we're getting on the court right before the horse a little bit. That's my reason for it.

[Speaker 3] (6:08 - 6:09)
Okay. Any other comments?

[Speaker 5] (6:10 - 6:17)
What is this? Was this budget budgeted some point to come out of next year's budget?

[Speaker 4] (6:17 - 6:56)
It was it was planned for FY26. Jacob, please. But this is also in in accordance with the other plant the plan that we have and have been doing to replace furniture and upgrade.

So we've been doing that and this is a continuation of that. But we have ample funds and surplus to take care of now before next year. So and we'd like to be able to have the furniture in place for the fall semester so our students have a great learning environment.

[Speaker 5] (6:58 - 8:26)
I guess one of my concerns is that we are unclear of I think the funding for next year. Be as generous to the college. Isn't that a concern that we hear about programs of maybe programs that might lose some funding?

Haven't we discussed that a little bit? Hasn't that been mentioned that we're unclear if our funding is going to be as robust? And because of that I feel like if we've got additional funds right now maybe we shouldn't spend them and hold on to them to see what the state does give us so that if we do have less funding then I think we might have a little bit of money that could go more towards student needs and I think furniture is important but I don't think furniture that we weren't really going to buy right now anyway would trump possible needs of students and that's kind of I am going to choose not to vote for this tonight because I would rather see us we can spend that money later but if if we end up having a student need I know that there was some conversation with the foundation about helping with student needs also and I just kind of view this as some funds that could go towards student needs so I'm going to choose not to vote for that tonight or vote for it.

I'll vote against it.

[Speaker 4] (8:26 - 9:11)
So Jacob can provide a more fulsome explanation I'm sure but I will say that we have look we've received our initial well the runs on what the college will expect in in state funding and it is a loss to the tune of 1.8 million dollars so that you know again when we have shared that we can only expect to have that decrease over time and should not count on it we're now seeing that in the first in the second reiteration of this so we have put that into the budget that change as well as the hits that we expect to losing those three federal grants that

[Speaker 1] (9:11 - 10:28)
we have so we've incorporated that Jacob one thing I would add we have ongoing dollars which we use for the general and continuous operation of the college when we have surpluses those are one-time savings right we get to spend them one time and and then they're gone so the intent would be to cover this out of our one-time savings from last year and the projected one-time savings from this year we'll go into much more detail on this during the budget workshop but to the president's point we have looked at our capital facility needs this is part of our ongoing plan we're already presently working on on furniture and so this is using one-time dollars and not ongoing funds using using available one-time dollars to accelerate this from next spring to this fall in time for our students in fall semester which is why we have brought this to the board today as opposed to waiting until after the fy 26 budget is stopped so

[Speaker 11] (10:35 - 10:44)
last week for about a week ago we can

[Speaker 2] (10:49 - 11:14)
for our usage i think we were supposed to have already had by now that's going to be november i furnished her before other buildings without knowing what we're going to new year what time did we get that report

[Speaker 11] (11:18 - 11:20)
that doesn't make sense to me

[Speaker 2] (11:25 - 12:03)
okay we don't know what's what you're fixing to tell us here you know are we gonna it'll be okay next year we're gonna you know what you'll be able to type you know take their first and this is eight hundred thousand dollars and i believe we ought to table this we ought to put the money aside we ought to get through the budget process we ought to get the facilities master plan the usage buildings are going to actually be using cars on whatever i'm sure that is

[Speaker 9] (12:05 - 12:47)
could it doesn't make a lot of sense to me um i just was going to say since there are some concerns i've heard court before the hearse we don't even know what the budget's going to be but we're here for the budget discussion would it make sense just to delay the vote on this until after the discussion and just kind of just change the order it seems like there's concerns about it but if you're going to present something that may provide more clarification to where the concerns would be less or more but at least we would hear the budget piece would just be my recommendation instead of going ahead and calling for the vote to maybe delay it until after the

[Speaker 3] (12:47 - 12:53)
taking a motion to table this item until later in the meeting i would make a motion that we

[Speaker 9] (12:53 - 13:00)
table this item until after the work the budget workshop portion of the discussion all right we

[Speaker 3] (13:00 - 13:28)
have a motion and a second to table this item until after the uh workshop discussion and all in favor of that please say aye aye opposed okay we'll table this and come back to it uh later in the okay now we'll move uh jacob you can't go anywhere um we'll move to our budget workshop information all yours

[Speaker 1] (13:34 - 17:03)
all right so each of you have uh the slide deck in front of you uh fair warning 35 slides i promise not to spend more than four or five minutes on each slide oh no i want to make sure you understand our position i'm timing you so let's talk about the process this year we had a budget discussion regarding revenues on may 29th today we're discussing our expenditure position the intent is to adopt the operating budget on our july 24th meeting uh so that as we move into august and september we can shift focus to adoption of the tax rate so if we do not adopt a budget by august 31st august 31st the last day of the fiscal year then we will automatically revert to fy25's budget for fy26 so no action means we remain with the same budget and and so yes we do have time if there are concerns or we need additional time as a group to evaluate this to push adoption into august um i've been at the college for three months now and it's been a wild ride to say the least one of the things that i've noted is that we need to spend a little more time as an institution preparing farther in advance for these conversations but we did not ask the campus to have their requests submitted until may 31st right so that puts us into overdrive to evaluate the requests consider changes to our revenues to consider the strategic value of the request before we're bringing them to the board to discuss this and to approve this so while we have typically followed the pattern that i shared in the last slide starting next year we plan to accelerate this into earlier in the year with the potential first budget workshop coming to the board in march now this is important for a couple of reasons while we are under a tuition freeze right at the moment if we want to adopt a change to our tuition and fees we would need to adopt that in march in order to make it applicable for fall semester in order to comply with the truth in tuition state mandates if we wait until after march and we wait until after we open registration for fall semester we are no longer allowed to change our tuition and fees at that point and and so while this does not apply specifically this year in the future it may apply so accelerating these conversations to earlier in the year uh will help administration to more thoroughly more strategically not thoroughly more strategically vet these requests and to give the board ample time to review and consider our position and the best way to allocate resources for the year

[Speaker 2] (17:13 - 17:20)
you a true zero based budget review since we're starting this early i'm glad you anticipated

[Speaker 1] (17:20 - 29:07)
that question so i i uh i some of you have have mentioned right a true zero based budgeting activity i would like to walk you through what we're doing right now to demonstrate how close we are to a zero based budgeting activity now in in our current process and i asked amanda this earlier she's not here i want to use hr as an example so what we so so it's it's up here i did not provide this as a slide um this this was this was just uh inspiration i knew somebody was going to ask this so i wanted to come prepared uh it can we put this project this onto their screen so so what we do each year is we provide a document to the department heads that show a breakdown of their budget and as you can see we typically budget on an account level so we're looking at uh in this case stipends salaries salaries classified contract services supplies advertising and each department head is responsible for looking at their current budget looking at what they're considering and then justifying the changes one thing that has impressed me about this process at lee college is our managers efforts to trim their budgets wherever and whenever possible so you can see you know adjustments to to salaries to contract services based on need a reduction in equipment these changes are ongoing and and and regular now you probably haven't seen how many cuts and reallocations have been made in the past at this level of detail uh this is the summary sheet if if you want to see the level of detail that we go into take contract services for example so amanda has gone through and for her budget identified every single vendor and every single need a year in advance with an estimate of what it's going to cost um in order to address those issues so so as we talk about doing a zero-based budgeting activity it would not vary significantly from what we're doing right now because we are literally going to back into our existing budget and justifying every single expense um on the department level now where we can make improvements and and what we'll work on in the future is to try and ensure that we are doing a thorough evaluation to ensure a strong strategic alignment between the use of our resources and our strategic plan and and ultimately towards our expected outcomes and and we we hope to be able to enhance that language throughout this process both internally across the college as well as uh with all of you um during these board workshop meetings uh this is just a brief example i i could go through every specific line item and show you all all of the budgets but in the matter of time i'd like to get back to the presentation but but we are very very detailed and specific in the way that we evaluate our budgets each year a key pressure that we have faced over the last five years has been uh high fluctuations in inflation right and obviously it peaked in 2022 it's starting to come down and stabilize right now but we're going to look at a lot of five-year data and so keep in mind uh this this had a significant impact on the college and we're usually a year behind right uh high peak in inflation in 22 results in a higher budget in 23 and 24 as we try to catch up because we don't we don't pre-fund increases based on inflation you know we're reactionary as an institution all right so first thing we need to do is look at fy25 and our performance year to date we review this every single month just keep in mind that through the end of may we were 75 of the way through the year you can see that all of our expenses are trending below 75 this is an indication that we're going to have some budget surplus for this year and we're going to talk about that a little later in terms of a growth analysis over the last five years you can see a fairly linear trend in salaries our salaries um our increases in salaries are always the impact of two or three factors number one we try to provide a cola increase to our employees each year so that the value of the work that they provide is commensurate with the value of compensation that they continue to earn from the institution year over year we also do an annual study with Gallagher where they come in and they evaluate the market competitiveness and the grading of our positions and so oftentimes included in our comp increase are market adjustments based on the evaluation that that is conducted by Gallagher the market adjustments also help us to address pay compression right so sometimes we'll have positions that supervise each other that are too close to one another and that creates recruiting and retention issues for us and and so the market adjustments also address pay compression and then we do add positions each year as the college continues to grow now in a declining enrollment environment you won't see the new positions but we have been growing steadily since fy22 and obviously for the last three years we've hit new enrollment records each of the last three years in terms of we we adjust salaries throughout the year no so what we do is we budget for the increase and then those increases become effective on September 1st and that salary remains consistent throughout the entire year and and so we're only making these adjustments once a year as a result of approval on the budget there are times when it's become necessary for us to add a new position outside of the budgeting cycle in in those cases we're adding the position and using uh available dollars in the current budget to fund those and then building that increase into the budget request that comes to the board for the following year it it really is fairly standard yes all right if you look at the operating expense part of budgeting college finances is you know we have our needs we we have our our core needs that we must fund in order to be successful as an institution and then we have many additional services that we would like to provide we have growth initiatives we have efficiency initiatives and we have compliance initiatives that we need to fund um sometimes our expense budget increases because our revenue increases and so remember in 23 hb8 was adopted and implemented and we had an extra 10 million dollars you can see that reflected in part um in the increases in the operating budget the operating budget that's where we started putting additional money into repair and remaintenance initiatives into capital project initiatives and so as you see the the increases across those years and this is based on historical spending that's showing our ability to ramp up and to start uh addressing those needs with the additional revenue that we received finally in terms of our debt uh especially with bonds you can see the big jump in fy23 we did two things in fy23 number one we refinanced our revenue bonds and we started uh committing an additional two million towards our general obligation bond so what you see here is the total amount that we paid each year to meet our debt obligations from 23 on that includes a voluntary two million dollar early defeasance payment so let's move into the largest expense for the college our our total salaries excluding benefits is about 50 of our budget and our benefits are between 8 and 10 of our budget so our total salaries expense with benefits is just under 60 of our total budget a couple of things that I would like to highlight on this particular chart please note that while our salaries have increased on average seven percent each year our salaries for full-time faculty have only increased on average two percent each year our cola increases during this five-year period were more than two percent what that means is that our the number of full-time faculty over that five-year period was actually declining right that that two percent is an indication that we have fewer full-time faculty now than we did in 2020 we had fewer faculty in 2020 than we did in 2015 you will also note that items like stipends and faculty overload and overtime and part-time are are increasing at more than seven percent per year that's because as an institution we have been trying to be more efficient with our salaries and wages as we shift more work to part-time it's less expensive for us on a per hour basis so with adjunct faculty members or part-time employees that can complete the same work that a full-time employee can do minus the benefits that saves us money and and so this is reflective of the effort to engage more in part-time and i and i have more slides that will detail out the numbers later in this but but that's why you see some line items that are uh you know below the seven percent and some that are above the seven percent average in total for salaries yes sir so that is a federal designation classified staff are essentially non-exempt employees so they qualify for overtime they have to clock in they have to clock out they they don't enjoy some of the benefits or the responsibilities that exempt employees have and and so that that classification is for us to keep track of the different types of employees that we have

[Speaker 2] (29:09 - 29:32)
on the the salaries for student assistants that's the largest of what what is that and what what do we change to obviously we've made some major changes in the last three or four years any idea what what we're doing different than we were or we reclassifying anything or so student

[Speaker 1] (29:32 - 35:20)
assistants are utilizing student employees and and so as we're as we're growing that uh you know 290,000 is not a significant portion of our budget we provide amazing opportunities for our students when they get to come and work on campus we'd actually like to see this number continue to grow to benefit our students and you know in all of my years in higher ed and i've been in higher ed a long time some of my favorite activities have been mentoring and helping student employees grow professionally they're hungry they're excited they're getting opportunities in their field of study for the first time in their careers and and so that that is what we what what we mean when we say salary student assistants moving on to benefits benefits obviously follow uh our salaries expense so as salaries go up benefits go up commensurately with those a couple of notes that i would like to highlight on our benefits number one we have very little control over our benefit expenses it's mandated largely by the state right in terms of our health benefits in terms of our employee retirement in terms of the college's obligation for pension funds we essentially get told by the state what we're going to have to commit as an institution based on our full-time uh staff salaries and faculty salaries an important thing to note this year of the state is mandating an eight percent to our group health insurance plan while that's a lot for us coming from another state that does not have a full state medical program like we do here in the state of texas our average increase was over eight percent and for the last several years we've had no increases in our health benefits so texas is doing an amazing job managing the benefits as best that they can they're doing better than some other states that are very well run and this is uh this is a amazing benefit for our employees and for the college to be able to manage these resources so effectively if we were to try and do this as an independent institution not part of a huge system our costs would be far more volatile and far higher than they are as part of the texas system yes sir i was hoping amanda was going to be here i cannot answer that for you right now but i i can follow up with you later my my suspicion is this is more related to claims and accidents that we've had as opposed to a change in state policy but we'll we'll get back to you on that all right uh so using our gulf coast colleges um and peer group i i wanted to demonstrate some of the changes that we and our peers have seen in terms of full-time versus part-time faculty mix as it relates to student enrollments so as you can see in 2015 lee college was almost 50 50 right we only had a little more than one adjunct professor for every one full-time uh faculty member that's not very effective right a full-time faculty member teaches at least five courses an adjunct faculty member might only teach one course so you can see that a large percentage of our courses were being taught by full timers fast forward to 2020 we dropped our head count down to 164 and increased our part-time faculty up to 245 and then in 2024 we have continued that trend this this is us moving in the right direction you will see that uh most institutions rely heavily on adjunct faculty right lone star college is one of the most aggressive institutions in the 50 college um uh cooperative and they're at 901 to 3700 or 890 to 2800 right they they their strategy is to do everything that they possibly can with an adjunct and only fill in with a full-time faculty when necessary while that's a nice savings for us financially the quality of classroom instruction goes down when you shift from a full-time faculty member to an adjunct so as an institution we're working this year on putting together a measurable uh reportable system that we can use for trying to balance by program the mix between full-time faculty and adjunct faculty and and so you'll see that initiative come forward sometime during fy 26

[Speaker 5] (35:23 - 35:26)
any reasoning behind why the quality drops

[Speaker 1] (35:30 - 36:50)
so there are some amazing adjunct faculty out there and when you find an amazing adjunct faculty you're very lucky because full-time faculty have specific and specialized training and instruction they're just not they're simply not just content experts they've been trained as educators in addition to that most of our adjunct faculty are not teachers by trade they're content experts by trade and and so the classroom experience the teaching interaction sometimes isn't as good as it is with full-time faculty additionally anytime it's your full-time job and you're committed and it's your entire career you do it better than when it's a part-time sidekick and that's just just statistically the case um and and so finding the right balance that that's the goal college offer any type of um yes fresh course we we do training we we provide instruction assistance there are things that we do to help our adjuncts be effective but a crash course is not the same thing as a multi-year degree and and you know many of our faculty have terminal degrees and phds that have spent their entire career preparing to be teachers

[Speaker 2] (36:54 - 37:13)
in in 2020 we had 164 and 245 and then last year we had 163 263 close but our enrollment is like doubled how did we do that we didn't increase the faculty that much well i was here in spirit

[Speaker 1] (37:13 - 38:41)
in 2020 so let me do the best i can to answer that question well i'm sure you've asked that question when you saw that so during covid we saw a sharp decline and then a sharp recovery in our enrollments and number one it was our goal like many other institutions to not furlough employees and terminate people because of temporary declines in enrollment number two a lot of these extra expenses were being offset by cares funding right there was a pathway forward for us to maintain these employees through federal funding so we weren't it it wasn't necessary from a budgetary expense uh to eliminate these employees as well so out of an abundance of care for our employees most of these positions maintained from one year to the next and and had this persisted right we would have had no other choice but to dramatically reduce our sections and to dramatically reduce our staff to respond to such a significant decline in enrollment but it bounced right back and and other than that there are others in the audience who might be able to provide more context but it's really a consistency of employment and a temporary issue due to a once in a century catastrophic event a lot of enrollment

[Speaker 9] (38:41 - 38:54)
that enrollment includes huntsville yes that's total so this is total student headcount enrollment increased enrollment would not have necessarily impacted what was happening here on campus

[Speaker 3] (38:57 - 39:18)
and that's consistent with businesses during that that time they maintained their their workforce there was there was federal assistance to do that ppp loans and and the goal was to maintain the the the quality of employees you had and keep them whole during the crisis while businesses suffered but then came back so that I that makes sense

[Speaker 2] (39:19 - 39:36)
but in in 15 we we had only 6200 enrolled and we had a few less faculty but if you compare 15 to 24 you know it's like we're we're doing more with with less yes

[Speaker 8] (39:38 - 39:40)
yeah we've added programs as well

[Speaker 2] (39:45 - 39:51)
oh yeah but if you just compare the the faculty between 15 and 24

[Speaker 3] (39:51 - 40:01)
not really a linear comparison is it I mean there's a lot of variables in their number of courses and adjuncts I mean it's it's not very linear though right

[Speaker 1] (40:01 - 40:54)
it is not so course loads um we we actually have a significant number of full-time faculty that teach overload courses so instead of doing the standard five coursework uh you know course load they're taking on an extra one or two classes um every single semester and so this is simply the headcount but when it comes to dollars right headcounts with what what matters and and so that's why we're sharing this from a headcount perspective but but to your point um Regent Hemswell this is a demonstration of the efforts that we are making to be more efficient with our faculty and the fact that our enrollments could grow by over 25 percent with only a slight increase in our adjunct faculty is is a credit to those efforts to be as efficient as possible

[Speaker 6] (40:56 - 41:31)
um I would just comment looking I know this is part-time full-time but also the enrollment volatility is not the same it's considerably different between our sister colleges around in the area and did have a significant drop but we didn't had a very significant gain wasn't reflected in some of the other community colleges and typically Houston and Lone Star are flat but Houston community's dropped and Lone Star has kind of remained flat unless their data is not

[Speaker 1] (41:31 - 41:58)
completely accurate so this data is pulled um directly from the state data so this is everything that they provided to the coordinating board so if it's if it's wrong on here somebody messed up in their report to the state which is it's not likely and so yes to your point our our enrollments were more volatile uh than some of the other institutions in the gulf coast region I think that's reflective

[Speaker 6] (41:58 - 42:05)
of the growth that's happening and will continue to happen and I'm talking about population growth

[Speaker 1] (42:05 - 43:49)
in our area I'm postulating here but I think it's also a reflection of the type of students that that we serve right with 70 percent of our students lacking at least one basic need issues changes as a result of a pandemic that that throw their life into chaos is probably more disruptive than it is for student populations in more affluent areas where they have far fewer students that are struggling with basic need wants salaries and benefits per student so this is taking uh the fy24 so if you took the last box from the prior column right we're looking at the same enrollments we're looking at the total salaries reported now these total salaries include all salaries right this is not just instruction this is uh executive administrative staff uh regular staff and faculty and if we if we look at that simply as a function of total salaries divided by total number of students on average it costs us four thousand five hundred dollars in salaries per student to educate our students now that that puts us closer on par to some of the other larger institutions the the big one again is Lone Star College if you notice how far down they are that that is that is a reflection of their overall strategy do everything part-time that you possibly can to save as much money as

[Speaker 2] (43:49 - 44:06)
possible any questions on this slide before i move on so one reason that we're higher are we the only one on that list that that offer social security benefits to our employees i have not

[Speaker 1] (44:06 - 44:11)
looked at that question and that that is a good question um particularly as it relates to student

[Speaker 2] (44:11 - 44:50)
benefits to benefits on your previous slide that was like two two million dollars or something i think wasn't it on that was the FICA i believe you had but and that yeah two million yeah two million so if you if you took that out you know just for comparison oh that that would drop us down into the six hundred dollar range right i think we may be the only college up there that pays us as a peer detour employees i know for sure that brazosport college does not i i i do not know but um and one time there was only like two or three in the state that that did it besides us so

[Speaker 1] (44:50 - 44:56)
that may have changed that would have a significant impact on our benefits per student ratio compared

[Speaker 6] (44:56 - 45:56)
to schools that do not pay so i can add a comment um when i you know 20 years ago it was a uh kind of a source of pride that lee college did have a larger segment of full-time faculty member in fact it was a goal of the boards previously and i'm not advocating for that i'm just saying that that was part of the history and they also bragged about having some of the highest pay for community college instructors that was a goal to be in the top 10 that's just a little historical reference and and i think the argument back then was it it created a more academic higher academic excellence as far as the environment of the college was the argument and but i i realize i understand you know the realities of finances i'm just that's the flip side of having higher

[Speaker 1] (45:57 - 47:04)
uh i agree and that goal is going to cost you more money you're really talking about different strategies right one is a cost driven strategy one is a student success driven strategy different objectives with different outcomes and different costs to be clear we are not advocating that we adopt the lone star model i do not think that that is what's in the best interest for our students but what i am advocating for is that we be very intentional and strategic about the way we approach this in the future on a program level where we've evaluated the needs of the program the the need for full-time faculty balanced with adjunct faculty and that includes a host of issues right our ability to recruit adjuncts how well the program's doing what kind of leadership we can get to support adjuncts right there's there's many variables that go into that but on a program level we we want to be very intentional with how we address this problem

[Speaker 4] (47:04 - 47:56)
in the future and regent i'm sorry regent hall um you're you're right that is the um that is the way that a number of colleges have have focused on you know quality in terms of the number of full-time faculty but as jacob just spoke about we need to have a balance between both and we have looked at historical data for the performance of student success over lots of years and i i will just tell you that it hasn't been better than it is now so so you know as a strategy it wasn't it didn't pan out the way we expected or i wasn't here then but in spirit too didn't pan out yeah you didn't see the the positive results

[Speaker 6] (47:57 - 48:08)
when you look back historically and i'm not sure that type of analysis was done back in those days how how long ago are you speaking i'm i'm speaking from 20 to 30 and

[Speaker 4] (48:08 - 48:14)
35 years ago oh yeah i don't i haven't looked at that data i just know that it's increased over time

[Speaker 8] (48:16 - 48:40)
we allow our students to evaluate each professor or faculty member that they have and so we're looking carefully to see that the part-time faculty who are not educators but they are content expert so maybe their expertise so they're they're not maybe as good in the classroom and conveying what they know are our students getting it are they getting the knowledge they

[Speaker 1] (48:40 - 49:22)
need so not only do we evaluate our adjunct faculty we do the same thing with our full-time faculty if you remember the board meeting is it just last um you know there were several contracts that you voted not to continue right so so we we try to maintain uh top shelf level teaching and we do that through evaluations and through a regular review of our staff where are not a tenured faculty institution right faculty members can't make tenure and then coast for the rest of their career at lee college they have to come and they have to teach and they need to teach well or uh we're prepared to move on uh to others who can do that for us

[Speaker 6] (49:23 - 49:38)
so to follow up on her question and i'm not talking about any particular you know faculty member obviously but we do have some process or program where the evaluation is done by the can impact employment one way or the other

[Speaker 4] (49:38 - 50:54)
i wouldn't go as far to say employment unless we find that there is really a huge issue in that area but it's usually combined with other factors as well related to performance um so i wouldn't say it's solely solely based upon that and we don't only just look at um student evaluations because anytime you do that and and students are required to fill out those evaluations just like any survey you have people who usually respond are those who are really unhappy and those who are really happy right you don't usually get that middle and so um they can be biased in terms of what grades students receive um by just how happy they were or not happy with their experience but we also evaluate faculty on the basis of performance evaluations that they have every single year and you know we look at whether or not the listed goals that they have are happening or not happening and address those things but i don't think it's uh i don't we don't usually see that just in the classroom in terms of quality of teaching

[Speaker 1] (50:57 - 52:07)
no it's good question right moving on to other operating expenses so here you can see a list uh by category of our general expenses that we incur during the regular operation of the facility a couple of line items that i would like you to note starting with legal fees you'll notice that our projected expenses for the end of this fiscal year are going to be more than twice what we've ever incurred in legal fees in the past that is an anomaly based on some of the extensive legal advice we've needed we've been uh negotiating the barber's heel contract all year long um heavy legal review on a regular basis associated with that we've also had a number of employee related matters that we've needed to bring general counsel in uh to review so while that is higher and it's skewing that uh average increase that we believe that to be a an anomaly year that that we should drop back down to the 130 range once

[Speaker 2] (52:09 - 52:16)
we get through some of these big projects and that 267 that includes the legal for all the

[Speaker 1] (52:16 - 53:09)
grievances and everything everything every time we've gone to outside counsel okay for any kind of advice it's covered in that 267 now if we were to hire a first class attorney just a regular staff attorney you know we're looking at a six digit uh salary for anybody that could come in and provide uh any kind of services and in at the same level that we get um the reason that we've continued to use contract services here is our issues abroad right we need specialty in contract we need specialty in uh you uh human resource related issues right and and so there's no one person that we could hire that would bring the level of expertise that we need and so this for the time being is still a effective strategy for us to address our our legal needs as an institution

[Speaker 11] (53:13 - 53:13)
you

[Speaker 1] (53:19 - 53:53)
no i i don't really believe that that is a role that he can fill for the institution as he conducts audits and reviews he's helping us to identify problems sometimes he's helping us to identify problems that might require legal advice so if anything it's the other direction you know uh but but but no his his role is is internal and it's he's not an attorney is not in a position to provide legal counsel to us regarding these types of issues and so different function

[Speaker 2] (53:59 - 54:10)
well thank you some of the other schools i mean since covid our expenses have over you know doubled or is that the trend with other colleges in our area

[Speaker 1] (54:12 - 59:31)
yes are they seeing so as many of you knew i i came here from houston community college their budget increased by 65 million dollars last year um from about 400 399 million to over 465 million in one year and and so these changes are a result of increased enrollments right as covid ended students came back to school um we're not the only ones that are seeing an increase in enrollments um the new hba funding on a statewide perspective right that that was hundreds of millions of dollars that the state injected into the community college system so we're not the only institution that saw an increase in those types of benefits and then all institutions are enjoying higher interest rates for the last several years which is you know for us four or five million dollars for big institutions like hcc that has 500 million dollars in their investment account it's 30 or 40 million bucks a year and and so the increases the increases are are fairly universal that's not to say that there aren't some institutions out there that are struggling that there are those uh but uh i would say on average funding for community colleges is up since the end of covid another highlight i would like to bring to your attention on this slide is the change in insurance if you look at the difference between fy23 and fy24 because we do not have insurance for named storm damage our total insurance cost is actually quite low right at 336 000 in fy23 that's that's a that's a very low premium considering the value of all the assets that are covered in response to that as many of you know the board started to commit a million dollars a year into an insurance reserve we have budgeted that so that's part of our operating budget we set the money aside and then we move it into a reserve account in the event that we have a significant catastrophe that is not covered by insurance as we do have that named storm gap in our insurance coverage we intend to continue that for as long as the board instructs us to do so as part of the ongoing operating budget if if we were to pay for coverage on named storm yes we'd be in the 800 to a million dollars a year in premiums now we are assuming risk with this strategy if we have a tornado that rips right through the center of campus and does millions of dollars of damage to multiple buildings we have no coverage and we're going to have to dip into the board reserves and the insurance reserves to make those repairs so the the coverage for that is like all of the insurance coverages that every one of us with a home experience here in the houston area now we're totally getting hose but what are you going to do chances are we're going to be in a hurricane at some point seriously i moved here from utah and i about died when i got my insurance premium i couldn't believe it anyway that side note that could be on the record officially i love it here in houston so happy to be here an additional note travel and professional development so this goes back to fy21 obviously fy21 height of covid no travel everything was remote we only incurred 191 thousand dollars in travel expenses in fy25 we're back up to 1.1 almost 1.2 million dollars to put that into context in fy2019 our travel expense was 1.28 million so we still aren't back to uh travel levels uh even pre-covid and so i know it has been an initiative of administration over the past several years to be very mindful of how we use our travel dollars and to be very frugal with the use of those funds and that's reflected in the slow growth that we've seen over time especially now that professional development isn't readily available online like it used to be if you want to participate in any of the tack events for example you've got to travel because they're not they're not streaming those those types of events anymore and so uh this is an important function of the institution and it's being well managed with that said any other questions on operating history over the last five years just real quick

[Speaker 2] (59:31 - 59:38)
back on the insurance what's our balance now in that account is it just the two million or we've

[Speaker 1] (59:38 - 1:14:58)
we've been doing it longer than two years i think it's only about the two million dollars that we have in there do you feel comfortable with what we're doing i don't think it's reasonably possible for us to put more money into that but we are adequately reserved as a group and and i i do talk about this a little later in the presentation today and and so that continued investment in addition to the four months of reserve that we've been maintaining means that we could probably survive a major hit now it might blow all of the work that we've done to create some reserves for us but i think we would be we would be okay in the event of a major catastrophe for your information i i want to talk about our general obligation bonds as well as our revenue bonds outstanding so here you can see a schedule of all of our future payments for our geo bonds and our revenue bonds if you look at the note down at the bottom if we continue to make the two million dollar principal payments each year we will finish paying off our general obligation bonds in 2032 which puts us in a in a very nice position a very flexible position as an institution to be able to reissue some general obligation bonds without having to increase the total tax rate to to our to our taxpayers that means that we don't have to go out to an election to to issue new bonds right so paying this down while we have extra cash is beneficial it also is a two million dollar cushion for us as an institution if for some reason in the future right we we find ourselves in a pinch where we can't cash flow for a year we can eliminate that because it's voluntary and free up that two million dollars for other activities so we are going to propose that we continue to make that additional two million dollar defeasance payment each year until we have paid off our general obligation bonds our revenue bonds are bonds that are covered out of operational funds right we essentially pledge our general revenue in order to issue that debt and that debt matures in 2037 any questions we also have capital leases that we have to cover now capital leases are shorter term they have a different payment schedule by fy28 we will have completed all of our capital leases but this generally if if you're looking at our debt schedule and what we're paying in debt on the financial statements the capital leases are included in the total cost of our debt which brings me to debt burden by per student so if you look at the nukubo's definition of of debt burden this this indicates that we rely less on debt to educate our students than some of our peers so college of the mainland san jack college even lone star they they are issuing significantly more debt on a per student basis than we are as an institution it's not a metric that's discussed very often but as you look at all of the legislation that was proposed this year related to the management of of bonds right this is an indication that we are in line with the general expectation of of those legislatures because we would we would be in line with every single metric that they used college of the mainland lone star those those institutions would have issued too much debt at least under one bill to be in compliance with the proposed laws and so we are in a very good position from our debt management we do not rely on it heavily to educate our students and that allows us to maintain a great deal of flexibility in the future depending on what opportunities we'd like to pursue in future periods so that's the overview of where we've been now i'd like to talk about what we would like to do this year so first let me state that we this last week got a notice back from the state regarding the net impacts of the legislative changes for lee college that's a reduction in funding of 1.8 million dollars from 25 to 26 so our budget is going to be lower than it was last year let me also highlight during this portion of the discussion that we had some flexibility built into our budget had a number of contingencies and a number of items that generally led to a surplus at the end of each year and you've all noted that as you've looked at our surplus amounts following that the end of each year while our budget is going to go down our ability to address some of our growing needs and and some of our budget requests is only possible because we are going to trim all of the fat out of the budget right so my expectation is for fy 26 we'll have less than a million dollars and maybe less than five hundred thousand dollars in surplus at the end of the year it's going to be really tight and and so significant changes uh that are unexpected will have to be addressed in an adjustment to the budget for example if you were to like you did last year adopt a half penny cut in the tax rate after the budget's adopted we would be coming back to you uh talking about how we want to adjust the budget down to it to account for that difference or to ask you to provide surplus funds from prior years in order to to close the hole for us right because we don't we do not have we we are not going to present a budget that has any fat in it and and you've seen how trim uh and how thorough we are on the department level i'm going to highlight all of the areas where we've had excess that we will no longer have excess moving forward so with regard to salary and benefit changes we are proposing a four percent cola increase for employees most institutions across the state are between three and four percent there are a few that are less than that but they have significant revenue issues and simply cannot afford an increase at three or four percent additionally as i mentioned before gallagher comes in and does an evaluation of our employees so they're evaluating certain categories of positions they're evaluating compression they're also evaluating comparison to market the four percent was recommended in order to keep us competitive with market now there have been periods in the past when we've gotten behind and have had to catch up we're pretty close to market right now so about one percent of this is associated with a market increase three percent is the minimum that we need in order to keep our employees whole from a cost of living increase perspective additionally the state mandated an eight percent increase in group insurance so that's an additional 313 dollars in order to address these increases over the last five years we have averaged closer to an eight percent vacancy rate we've been budgeting for a four to five percent vacancy rate which means that additional three or four percent that we've had in vacancies has just resulted in budgeted surplus so this year we're proposing with the increase to also budget for eight percent vacancies that's going to put us right on the line now based on our five-year history that's where we are so i'm comfortable with this move but it takes out the built-in surplus that we've had for the last five years related to vacancies within our our employment of our employees initially last year we built in a little over 500,000 for new position contingency and so what that means is that there was extra budget available for adding positions outside of the regular budget cycle that we're going through right now we're going to take that out as well so if we do need to add a position that's going to that's going to come out of the 500,000 total contingency that we want to maintain as an institution we do have some new uh and reallocated positions so so if you look in the appendix at the end and i'll i'll go over this when we get to the end of the presentation we do have seven or eight new positions that we're requesting for this year and then we have some reallocations part of those reallocations include institutionalizing positions that were partly funded through title five funds so with the student resource and advocacy center that was funded through a title five grant we paid for part of the employee's position and the grant paid for part of that position that grant expired this year and we are not permitted to reapply or to continue that grant going into the future and so some of those reallocations are picking up the rest of those individual salaries and then finally uh we as we've looked at needs we are requesting an increase in part-time budgets and the associated benefits to continue to expand the use of adjunct faculty student employees and part-time employees to offer similar services for less money than what we could get from a full-time employee any questions on salary changes moving on to operating expenses now here's where we needed to make some sacrifices that i'm hoping we can reverse in future periods in order to make this work we had to move from dedicating 5.2 million for repair and maintenance capital improvement projects so ongoing 5.2 million we had to reduce that by 3.9 million now those projects are all one time in nature they're appropriate to be paid out of one-time funds and we have some surplus money so we're just shifting that hopefully temporarily one year from an ongoing budget to one time to utilize those surplus funds that will allow us to continue to move forward with our goal of trying to stay on top of our deferred maintenance and address issues that have gone neglected for many years additionally we had some one-time it requests that was built in as an ongoing request these are one time we don't have to replace these types of items every single year so we're shifting that out of the ongoing budget into one-time surplus request in the budget we had also included a million dollars for fast contingency we've had that in the budget for the last two years we never needed any of that money for the fast program nor would we likely ever need that in the future so we're simply removing that from the budget and then we had a general contingency of one million dollars which we have not used so we're going to cut that from a million to five hundred thousand now when you consider all of the other contingencies that we had built into the budget that we're eliminating that will be the only contingency we have so we're we're expecting to operate within our regular budget and any unforeseen issues on a operational level we're targeting for five hundred thousand dollars or less in the upcoming year in terms of new operating expenses that we would like to move on to the budget first we want to institutionalize grant expenses this is again part of that title five funding that's being eliminated it's also partly in preparation of what we expect to be cuts regarding c campus and trio this is not everything that the grant provides but it's what we feel we absolutely have to have moving forward now most of that about four hundred thousand of that is for title five which is gone forever and and so we know we need to do that if we want to continue to operate the student resource and advocacy center at the same levels we have in the past some of that is related to c campus if those programs are indeed cut we are through this process trying to leave enough in surplus from prior years to maybe pick some of that support up in the event that those are canceled and so we're moving as much as we can in the current budget to institutionalized expenses but we may need additional support from the board if those cuts do indeed come to fruition i could have that perkins so this does not include anything for perkins zero perkins funding in this now perkins funding is not being identified for cut by the federal government what the federal government has said is that they would like to shift the focus from higher ed to k-12 but we still have contracts with them so our hope or assumption is that we'll at least be able to complete the contracts that we already have in place unlike the other funding where the the feds are just going to cut it off and it's going to go away immediately so we are not anticipating changes to perkins funding immediately but we are prepared for that to be an issue at some point in the future as we try to continue to support workforce about the fears of

[Speaker 5] (1:15:00 - 1:15:14)
department of education i thought there was some talk about that affecting something going on not going on things changed well but there i thought it would be more well the department of education is bigger than perkins

[Speaker 1] (1:15:15 - 1:16:01)
for grants right so so the mechanism so i guess what i would say is if we're talking about this explicitly from a budgeting perspective perkins funding has not been identified for being cut yet so even if they eliminate the department of education they will have to come up with some other solution to administer the perkins funding which is still in the budget and and so yes we understand that the department of ed is under attack and that there are significant changes that have been made and more that will be made but our best estimate for what we can expect in terms of support in the future is the funding bills what programs are being funded and what aren't and we're just going to have to deal with whatever administrative changes are made because

[Speaker 5] (1:16:01 - 1:16:15)
of the torpedoing of the department of ed well and i guess i could be misled but i thought a lot of the doing away with the department was not going to mean that money just disappeared

[Speaker 1] (1:16:15 - 1:16:35)
it just funneled down to the state level yes so we have not we have not been instructed on how the programs will be administered under the change we just know that they're going to be funded which means we can with some confidence continue to move forward with the expectation that the money that has already been allocated to us will continue to be allocated to us

[Speaker 2] (1:16:35 - 1:16:51)
so jacob the the 567 does that include the money that we discussed at the foundation meeting last month is that would that be included in that or no if that were to go away or what so so what we

[Speaker 1] (1:16:51 - 1:18:16)
did we we tried to institutionalize the full-time position for c campus and some of the funds um utilized in the track we have not institutionalized everything and so some of those needs still exist now uh in the presentation we're going to show you that we're not asking that all of the surplus funds be allocated just a portion of them so that we do have that backing in the event that those that those programs are cut and we would come back to the board at a future point once we know if that funding's gone for sure uh with a plan to address those issues but there simply wasn't enough room i've i've gone through and tried to cut every possible thing that i could without having to cut services in order to make this work and so i couldn't cover all of those expenses and and this is really the point i was trying to make in the foundation board meeting right one time money we have we have a nice pot and and we're well reserved but ongoing ongoing is where we're taking the hits and as our ongoing budget continues to decline we can't address those needs indefinitely with one-time funds with our limited one-time funds so that's when we have to start making cuts or identify new uh revenue um opportunities to

[Speaker 11] (1:18:16 - 1:18:28)
address those needs uh so we have a couple of vehicles we're addressing that that need

[Speaker 2] (1:18:28 - 1:18:34)
somewhere right yes that million dollars that you threw out we we're going to have that

[Speaker 1] (1:18:34 - 1:20:26)
covered if we need it somewhere we we will not need any money from the foundation that puts that to bed we might need more money from surplus but we will not need any money from the foundation and our on our most critical expenses have been covered in the budget we have uh some new equipment this is fairly standard it might not be exactly these vehicles or a forklift or utility vehicles but uh as equipment ages we have to replace it this is what's on the schedule for this year 451 000 and and then the big one and and this one has been difficult to work into this particular year but it's so important it's been a high priority for us is the ability to begin the erp purchase process now the 2.25 million is the difference between our current contracts of about 250 000 to what could be as high as 500 000 per year for the first year plus 2 million dollars of implementation service uh typically implementation of a new erp is about three years and is very expensive for those three years doing up two to three million dollars each year for implementation services but we'll have whole teams of of consultants coming in and helping us to build structure uh the system start to implement it start to implement our processes into it and that will take us three years to fully implement including finance hr and students but this is beginning and the reason that this is going into the operating budget as opposed to one time because these expenses are coming back again in years two and year three so we need to account

[Speaker 2] (1:20:26 - 1:20:34)
for this into the future but you think we're going to spend the two million in in 26 yes so have we

[Speaker 1] (1:20:36 - 1:21:45)
identified the vendor we're going to use we have not we are in the process of working on that so you may or may not know one of the things that the college was a fortunate recipient of was a hundred thousand dollars grant from the state for essentially it consulting services so we are going to utilize that during the next year to help us identify the appropriate product and good implementation services to develop a thorough it strategic plan and to help put together a plan over the next five years for how we're going to implement the erp as the backbone and then the supporting services that we need to to give us the full functionality that we need to significantly enhance the services that we provide to our students oh i'm sorry enterprise people soft people soft replacement uh so it's enterprise enterprise resource planning

[Speaker 8] (1:21:46 - 1:21:54)
enterprise resource planning just but replace people soft then we wouldn't have oh

[Speaker 1] (1:21:54 - 1:22:20)
new people soft all right so so we're we are very excited i am very excited about this initiative some other people are excited that we're going to have a new product but they're not excited about the next three years uh this is this is a huge project for us but it genuinely will set the stage for us to provide services in a completely different manner than we do right now you'll keep

[Speaker 2] (1:22:20 - 1:22:27)
us updated on on that right because we will it's a big deal that uh in all likelihood a little bit

[Speaker 1] (1:22:27 - 1:22:49)
about it we'll be bringing we'll be bringing vendors to you to talk about the available products right this this is this is a huge strategic decision obviously we we want you to be well informed of the progress that we're making and and make the ultimate final approval which you would have to from a purchasing perspective anyway and and so yes you will

[Speaker 2] (1:22:49 - 1:22:54)
be well appraised of a progress any of our committees fall under that or where they would be

[Speaker 5] (1:22:56 - 1:23:24)
audit and investment meetings that's come up times in the last few meetings that we've talked about with are going out and trying to find the best fit for the college so we have we have talked about that not in major detail but we have talked about that and and the benefits of getting your new erp system will revolutionize what you guys do but it'll be a little uncomfortable for a while and

[Speaker 1] (1:23:24 - 1:23:36)
and obviously we'll have to run two systems simultaneously um during the transition so yes it will be a very busy few years for the information you'll provide us will be more

[Speaker 9] (1:23:36 - 1:23:42)
from a contractual yes you know approving we're we're not funding stuff like that but the we

[Speaker 1] (1:23:42 - 1:23:48)
won't be bringing chart of accounts and structures to you come to us just but we're going to want to

[Speaker 2] (1:23:48 - 1:24:02)
know the the different vendors and who uses those you know for instance just for reference i will approach this very that lone star would use or you know or you know who uses the one

[Speaker 9] (1:24:02 - 1:24:06)
that we're looking at because this is about references as a part of the bidding process

[Speaker 1] (1:24:06 - 1:24:18)
they have to give you all of that as a part of the bike so so yes all of those typical things that we would do for a very large purchase will still take place right are a lot of colleges going

[Speaker 5] (1:24:18 - 1:24:22)
through the same thing we are that they were predominantly heavy on people soft and they're

[Speaker 1] (1:24:22 - 1:26:43)
having to go through the same thing too or yes you know it's it's kind of cyclical you saw in the early 2000s a wave of implementations across the community college systems in texas and 25 years later we're all going through it again all right finally uh miscellaneous changes there's a table in the index that summarizes those by account that's everything else all added together that that departments have requested and justified in terms of need to continue to move forward uh in terms of debt but uh our debt budget bonding is really interesting if if you if you remember the schedule of our principal payments right fy26 the principal payment is only 130 000 right but then it jumps back up to 1.3 million the year after that because we don't have a very consistent payment schedule like you would with a typical mortgage that amount shifts a great deal what we are proposing to do right is we're going to lower the ins rate because our payment will be a million and a half almost two million dollars less than it was the year before and increase the mno rate so that the total rate to the taxpayer remains the same then next year when our ins payment jumps back up to where it was last year or this year we'll lower the mno rate and increase the ins rate so that we maintain consistency in making those payments what without cutting a rate that would then jeopardize our ability to operate at the same level in the future which is why you have a two million dollar savings in the geo refunding for 2023 any questions thanks well no it's the refunding from 2023 the refunding that that is causing a two million dollar reduction in our 2026 principal payment

[Speaker 3] (1:26:44 - 1:26:49)
not we're paying less we're still paying the two million extra but we're still going to do the

[Speaker 1] (1:26:49 - 1:27:06)
two million extra but the minimum required payment is two million dollars less and then for one year and then the minimum required payment for 27 jumps back up so we have enough cash

[Speaker 2] (1:27:06 - 1:27:13)
flow to pay an extra two million each year right now we've been doing that but so we've been doing

[Speaker 1] (1:27:13 - 1:28:07)
that for three years and and and we're we're trying to maintain that and there's there's a number of reasons right the biggest one being if i can be really candid with the board i've i've heard many of you say the community loves us and supports us but i think in general the community has significant fatigue with property taxes right it's not just our tax rate that they're dealing with they're dealing with the the city and the county and we are by far the smallest so doing a a debt issue in the future but being able to build that within our existing rate means we don't have to go out for an election and we want to maintain that flexibility if we cut our rate too low we lose that every time we cut our rate we reduce that ability if we cut it too low we'll eliminate that ability to issue debt in the future without having to go out to an election now let me i'm

[Speaker 3] (1:28:07 - 1:28:32)
just going to interrupt because i think we may discuss that a little more there's nothing wrong with going to an election and no rate increase as a part of it the public still has an opportunity to vote on debt yes right so we we can talk about that later i wouldn't say we don't we're not going to go to the taxpayers for a vote on debt that doesn't raise their taxes we can discuss that

[Speaker 1] (1:28:32 - 1:28:36)
later and and that's that's up to you as a board how you'd like to handle that we wouldn't be

[Speaker 3] (1:28:36 - 1:29:07)
required to yeah because we're still issuing debt and it still is growing the the tax payment right where it could go down it could yes right so the voters approving that continued tax rate would be important we we can discuss that later i'm just saying we we don't want to sound like we don't have to go and we're not going to go to the taxpayers you

[Speaker 1] (1:29:17 - 1:31:52)
so that so in order for us to make an early defeasance payment we actually structure that into our ins right now there is a new law that was passed this year that goes into effect next year that will change the way that we do this specifically in the board meeting we have to state what the minimum rate would be in order to meet our minimum obligation and then the board would have to adopt an additional rate separating and being more transparent with the fact that that we are using part of the rate for an early defeasance payment and and so did that did i answer your question or you still have more questions but so so in terms of what is officially recorded um with the county assessor the two million dollars will be included in the ins rate it will not be included in the mno rate but we have to reduce the ins or we have to increase the amount that we put into the account for defeasance right because the ins rate is the rate that we have to charge based on the valuation of the property in order to meet our minimum debt obligation right that that's where it starts so so when we when we cut the ins rate um we we can always cut uh without any issues um if we cut the ins rate that cuts our total rate and it cuts the amount of tax that we collect so next year if we wanted to recover from that we would now have to increase our rate in order to recapture that two million dollars that's going to come back in and and so in an effort to maintain a flat rate for the taxpayers right it's going to ins rate's going to go down mno rate's going to go up a little bit then next year the mno will go down and the ins will go up a little bit but unless the board makes some other decision the total tax rate will remain the same if we don't do that i have to go figure out how to cut two million dollars more out of the mno budget i think the question is more about the two

[Speaker 3] (1:31:52 - 1:31:58)
million we've been adding is part of the total tax rate the reduction of two million is what

[Speaker 12] (1:31:58 - 1:32:12)
telling me you want to reduce the finance to the fire for the minimum payment okay there's two million extra my logic has to be coming from the other side

[Speaker 11] (1:32:13 - 1:32:14)
because you've reduced

[Speaker 1] (1:32:17 - 1:35:40)
so so think of it in in different steps right so step one we have to identify what the ins rate must be in order to meet our minimum obligation that two for us is we've allocated an additional two million dollars in early defeasance that actually gets added to the ins rate so that when you're looking on your property tax statement the ins rate that you're seeing covers the minimum amount plus the additional two million dollars in early defeasance the third step that happens is we adopt the mno rate which is separate which uh you know we use for the general obligate general operations of the institution so we can cut the ins rate down to what it's required to be because the principal payment is dropping by two million dollars one year one year so that's essentially a one cent cut to the ins rate we're not we're not reducing it on purpose we're having to reduce it the problem that that poses is that the following year now we have a tax increase that we would have to take back to the uh general public showing that we're increasing our ins rate back up by one cent now if the general public doesn't want to approve that our only option is to reduce our mno rate and increase our ins rate and and and and so we're we're simply what i'm proposing is that the shift is to level what we collect from the taxpayers to deal with this you know one year blip in obligation on on our debt because of the way that the payments are structured not because of any other decision that we made as an institution better all right so here's our formal recommendation now i we reserve the right to make a few modifications between now and the 24th where we're still cleaning up a few things uh because because every day poses a new challenge it it seems like but but this is very close to where we need to be based on what we project we're going to collect in total revenue right with the decline in state appropriations and the reallocations we can support our budget with 87.4 almost 87.5 million dollars which is a 1.5 million dollar reduction in our total budget from the prior year as you can see salaries are the primary cause for the increase debt you know provides two million dollars of relief assuming that you adopt the shift from ins to mno if you don't adopt that transfer then the ins rate drops and we lose that two million dollar savings which means i have to cut two more two million dollars more out of the budget any questions before i move on to a short presentation on surplus funds

[Speaker 3] (1:35:41 - 1:35:44)
does this budget include

[Speaker 1] (1:35:46 - 1:36:07)
and item we had before we started so the agenda item before we had started would be coming out of fy25 operating funds not in this budget so it's not included in this yes does this

[Speaker 6] (1:36:07 - 1:36:28)
lowering of the recommended from 89 million which is what we've collected from the state oh we have we have a state funding drop that's correct we don't we don't realize any tax rate reduction benefits here because we're dropping funding from state funds no so so in in terms of the

[Speaker 1] (1:36:28 - 1:36:51)
decline in budget that is a result of the decline in state appropriations okay that this is my this budget is built on two assumptions number one we maintain the total tax rate at 19 and a half cents and number two the valuations that we got in may hold true essentially no growth in in

[Speaker 2] (1:36:51 - 1:37:01)
the tax base you say no growth in the tax base is you talking about the current values that's not

[Speaker 1] (1:37:01 - 1:37:53)
new construction or new issues right that that's true but as we look at the total revenue that we're going to collect um if we build in uh uh an allowance for my mind's gone totally blank where you can test your property taxes what's that called hcat protests protests right right for protests and non-payments and and some of those other things we're going to be very very close to collecting the same amount of revenue in 26 that we collected in 25 or essentially no increase in the tax is going to be almost virtually the same as the no new revenue rate now that could fluctuate five hundred thousand dollars if we collect a little better or a little worse than we're anticipating but it's going to be very close that five hundred thousand

[Speaker 2] (1:37:53 - 1:38:01)
we equate to about a quarter percent or quarter quarter cent uh yes so it's about 2.1 million

[Speaker 1] (1:38:01 - 1:38:06)
dollars that we collect in revenue for every one cent that we have in our tax rate so that yes

[Speaker 6] (1:38:06 - 1:38:23)
that would be about a quarter cent can i ask what your i know that's a crystal ball we we have had some rather wild uh numbers that have come from hcat in the past it's been kind of all over the

[Speaker 1] (1:38:23 - 1:38:45)
map with changes that came later or and fy24 was a good example of that they gave us preliminary estimates and then when it finally came in actually after they gave us official numbers they gave us updated numbers that said oh yeah we made a mistake it's actually worth more so in in cases like that what what result is we collect additional tax revenue

[Speaker 11] (1:38:45 - 1:38:54)
beyond what we budgeted and impossible to say if that's going to happen again this year or not

[Speaker 1] (1:39:00 - 1:41:07)
all right grant budget projections so uh the discussion with the foundation and and after some additional conversations with chairman santana we wanted to make you aware of what we currently have scheduled to receive in terms of grant funding from the federal state and private organizations this money that you see here is not included in the budget that we just talked about right this is money outside of the regular operating budget now most grants have a very specific purpose they work on a reimbursement basis so we incur the expense we get reimbursed the net position for the institution is zero this is a way for us to expand our services not our financial position the biggest portion of this is 14 million dollars for that goes directly to the students but because we are the fiscal agent for that that that shows up in in in this report when we bring this to you on the 24th we're going to ask you to approve this budget now functionally you can't lower or raise this it's based on what our awards are and we spend within those awards but i would like to get into the practice of having the board approve all source all funding that we track separately right we track this separately from the operating budget so we would like to make you aware of what we have scheduled and make sure that you're approving that as part of the total budget approval process any questions on what is proposed for next fiscal year some of this will likely change if legislation is passed by the federal government specifically c campus and ed opportunity center uh so uh roughly a million dollars right goes away if that bill is passed this is revenue so this is revenue and then of course

[Speaker 3] (1:41:07 - 1:41:30)
the expenses match the revenues exactly show us where the expenses go how they're used salaries is it program supplies right none of the salaries included in our other salary budget no so all of the salaries that are

[Speaker 1] (1:41:30 - 1:42:09)
included are just what we pay out of operation so when we talk about institutionalizing title five because part of the position was paid for a grant and part was paid out of operations the only thing that you were seeing was the portion that was paid out of operations the portion of the salary that was paid out of the grant comes out of the grant funds and so we we show you this once a month you know the total expenses and the revenues and the net difference if you would like to see something else please let me know i can i can modify that but this is money in money out based on the execution of the grant contract

[Speaker 3] (1:42:10 - 1:42:32)
programs so that that are taking place on our campus every day funded by these grants and a lot of times i don't think we separate those programs and funding from all the other programs taking place i can look at that educational opportunity center yes two hundred eighty three thousand dollars so what is that

[Speaker 1] (1:42:34 - 1:43:13)
uh what is that program we're building or so that's essentially trio right that's a service that we provide to our students and and so yes these are all programs and services that we provide to our students the pell goes directly to the students and some of the other funds do but you know 10 million dollars if you subtract pell out of this that's that this has a significant measurable impact for the institution it just hasn't been addressed from a budgetary perspective because it's on an award reimbursement basis not on a revenue collection allocation basis but it's

[Speaker 3] (1:43:13 - 1:43:18)
part of the total services we're providing to our students it is and when we lose these services

[Speaker 1] (1:43:18 - 1:43:27)
obviously the students are are impacted significantly are there any that you um

[Speaker 5] (1:43:28 - 1:43:32)
predict would need to be institutionalized at some point because we wouldn't get

[Speaker 1] (1:43:33 - 1:44:24)
so c campus for 790 000 and ed opportunity center for 283 are the two that are the most likely to be terminated due to federal legislative changes title five not in this list i mean there's a small part but so already institutionalized so that's the cleanup on title five because that grant ended for all intent purposes we're already institutionalizing those expenses as part of the budget that we just talked about what does c campus the campus is uh child care right so it's it's support it's child care support for our students

[Speaker 2] (1:44:26 - 1:44:34)
okay child care child care is that the daycare that we operate over there no no those are funds

[Speaker 4] (1:44:34 - 1:44:48)
that are directly given to students to cover child care go to the provider the students apply

[Speaker 5] (1:44:48 - 1:44:54)
for that benefit and then it gets funded to their child care or they okay

[Speaker 10] (1:45:15 - 1:45:26)
for child care how many students this serves kelly does i know about the money part and kelly knows

[Speaker 13] (1:45:26 - 1:45:46)
about the student part forgive me i don't have the exact numbers right in front of me but it from that funding source it's about 60 unique students each semester that are receiving the services how many did you say 60 60 60 students are using 790 000 but they could have more than

[Speaker 5] (1:45:46 - 1:45:51)
one child in child care right so correct it's not necessarily a ratio of one to one

[Speaker 13] (1:45:51 - 1:45:57)
and that's per semester so children and correct or something and

[Speaker 5] (1:45:57 - 1:46:01)
um i got two grandbabies in child girl i know

[Speaker 13] (1:46:03 - 1:46:16)
thousands i will say that that is a rollover from year one um so that's a little bit higher than the annual cost um in our original allocation or award it was 500 000 each year

[Speaker 2] (1:46:16 - 1:46:32)
is what we were originally awarded do we know how long that could last or do they tell us that or how does that work so it's going to go away in four years no it's going to go away now in

[Speaker 10] (1:46:32 - 1:47:09)
september one if it's if it goes yes it's a four-year grant 500 000 per year and we would have the ability i mean if it made it in the budget and didn't get cut the federal budget then we would have the ability to reapply for that every four years and typically if you run that grant well and you do what you say you're going to do you get your continuation so this is why c campus was such a game changer for us in being able to provide that child care access for our students you know another big barrier that we could remove um for our students for coming to school

[Speaker 2] (1:47:10 - 1:47:19)
so do we have students that use our daycare center that use this money to pay our daycare center or

[Speaker 10] (1:47:19 - 1:47:25)
am i thinking wrong they they can use that i mean technically it's not our daycare center right it's

[Speaker 4] (1:47:25 - 1:47:31)
not run by the college remember that yeah that's not we only have the building yeah but that that

[Speaker 2] (1:47:31 - 1:47:36)
that facility so that facility over there is getting some of this money maybe right yes we

[Speaker 10] (1:47:36 - 1:48:01)
have some students who are using that facility we have they get to pick their facility so um so that money is actually really going back into the community right it's going it's flowing back into the local baytown community for child care providers any other questions

[Speaker 2] (1:48:04 - 1:48:22)
so i hate to ask this so the 87 million that we spend we could add the 24 to that for total money that gets spent by the college right is that fair to say or no well that's probably a

[Speaker 1] (1:48:22 - 1:49:13)
misrepresentation but we we award the the pell money the federal work study the perkins uh direct loans i'm sorry so so those those funds we are simply the fiscal agent right the student applies the student receives the award we collect the money and distribute to the students so yes we are recording that money on our books at one point during the process but but we're really just managing agency funds right we're collecting revenue and then dispersing it back out to the students we can't choose to treat that money any differently than we do and so right to say that we're at 87 million plus 24 million is our total budget that's a little misleading right but but

[Speaker 2] (1:49:13 - 1:49:19)
we have that much money kind of being going to the community so to speak yes that yeah you

[Speaker 1] (1:49:19 - 1:57:03)
you could definitely say that we do that big number all right uh i'd like to take a few minutes to talk about budget surplus in general right a budget surplus exists when your inflows exceed your outflows or more specifically when your revenues exceed your expenses and there are a number of reasons that a surplus could exist at the end of the year but primarily it's either because you collected more revenue than you anticipated and 24 is a good example with the change in valuations that harris county provided after the rate had already been adopted right we we had no idea that they were going to make a mistake and we were going to collect more in taxes than we were anticipating another way that we generate a surplus is when our expenses are lower than budgeted and i've already talked about how to some degree we've actually had some of that built into our budget so when you look at the fy 23 24 surplus you can see that from additional revenue that was collected in excess of our budget we had about three million dollars so three million dollars came from some property taxes revenue in lieu of taxes which is also property taxes and then other interest in revenues right our our interest earnings were higher than anticipated and so we generated a million dollars more than budgeted in terms of expenses you can see that we had personnel cost savings right that's that vacancy savings and you'll notice that 1.7 million is very close to what we built in as savings in our budget for the future years right we're really trying to trim that out in future budgets you had 821,000 in contract services a million for another operating expenses you had the million dollars of fast which we talked about specifically repairs and maintenance that's kind of tied to how well we can work through our projects and we're going to talk about this more on july 24th but once you allocate the funds to a specific project we're going to let that roll so that we we get away from having timing delays trying to get all the projects done in one fiscal year and letting that activity roll from one fiscal year to the next which will address the repairs and maintenance surplus that we have in the future and then our regular contingency we reduce down to 500,000 everything else is the result of just underspending on our budget and and you know our goal is to never go over our budget we will always be slightly under budget uh but but the goal as i've shared with some of you in the past is a million dollars or less right we want to have a million dollars or less in surplus at the end of every year and that is my target and my commitment to show that we're properly utilizing the revenues that uh and the budget that you're authorizing as a board so when you consider how we got there the fact uh remains that we have 11.5 million dollars from fy24 we have not used any of this money yet so so that that is part of why our cash balances have been higher this year than they were last year uh it's because we're still carrying some extra reserves from the prior year uh i've already talked about uh why we have some of those expenses um reserves in the past have allowed us to build i'm sorry surpluses in the past have allowed us to build up our reserves this is the board adopted policy and i'd like to start there in the middle the target range for the year-end current unrestricted operating fund balance is a minimum of four months current operating expenses of the subsequent fiscal year's operating budget and a suggested level of six months operating expenses so in order for us to stay in line with our own policy we need to ensure that we've set enough money aside to cover four months of operating expenses the policy states that the recommendation is six months and i'll leave that up to you to determine if if you think we need that much in cash reserves me i'm very comfortable if if we have four months of unrestricted board reserves on hand at any given time allow me to walk you through the calculation so if we consider our proposed fy26 budget of 87 million dollars and this is down in the bottom right hand side and we remove our general obligation debt payments out right we collect a separate tax for general obligation that money's a flow through we're going to collect that no matter what those are reserve funds so so we don't need to budget specifically to make meet our general obligation debt so if we take that out that leaves us with a budget of 84 million if we divide that by 12 that's seven million dollars a month times by four that's 28 million so if you look at the darker box on the left bottom left 24 our four months is 28 million right now we have 26 million 372 000 so in order to meet that required minimum four month level we need to invest an additional 1.6 million dollars into board reserves which leads me to uh our proposed request that we would ask you to approve in in the board meeting in two weeks so we have 11.5 from 2024 we're projecting a 3.7 million dollar surplus from fy25 that 3.7 million dollars includes the 800 000 for the chairs if we don't do that if you guys decide you want to postpone that till next fiscal year that'll jump that up to 4.5 million on our equipment these are one-time project related expenses that can be funded out of one-time money without any future impact on future operations for the institution and there are tables at the end that kind of outline some of these now we are still working on the repair and maintenance project list um but you know we were discussing that all the way up until this meeting so i don't have a schedule for you today on that but i will in two weeks every project that we're proposing so that we can adopt that repair and maintenance budget along with the operating budget and the grant and contracts budget in essence we're looking at around 10 million dollars that we're going to be asking for in allocation of surplus funds from fy24 that will leave us with around five million dollars for any type of contingency that might result from changes in legislation or other unforeseen emergencies during the next year and will give us some flexibility for the following year if if we need it uh to to address unmet needs based on our ability to generate revenue for fy27 any questions on this

[Speaker 8] (1:57:05 - 1:57:11)
will you give us more information about this 10 point almost 11 million dollars yes i would like

[Speaker 1] (1:57:11 - 1:58:39)
to have more on it it will be um so for those of you have been on the building board you've seen all of the projects the benefit the need and the estimated amount the proposal for the capital improvement projects budget will be that we will be bringing you specific projects with the estimated amounts and asking for your approval to move money into that fund to pay for those projects okay paper i have the numbers don't match i know i saved the wrong copy of the presentation to my jump drive i'm sorry uh there was a few slight changes to the maintenance and repairs project so here in the appendix you can see the list of new positions you'll note that vast majority of these um are intended to manage growth right we continue to expand programs in huntsville and we need some additional support uh in key instructional areas and then uh these are a list of the emergency management projects uh again i'll give you the

[Speaker 2] (1:58:39 - 1:58:45)
regular repair and maintenance projects in two weeks so the wearable panic cards i thought we

[Speaker 11] (1:58:45 - 1:58:59)
did that we didn't do that already the second one third one we did that one we've done okay we did we've already

[Speaker 1] (1:59:07 - 2:00:36)
okay maybe i'm confused uh next year's it would have been in this current uh so that if if we did pay for that that came out of the current year budget and would not be on the list for next year 81,000 we get clarification on that yeah so all of these were just to give you and i to help you visualize and prepare your questions for two weeks when we go through these formal budgets we'll we'll we'll have this refined and specific down to the penny what we want you to approve but in preparation for that we needed you to see and feel uh you know the the flow of what we're trying to accomplish in the budget adoption for license plate reader that's to be used so that uh that that's a security issue so security can read the license plates of the cars as they go around and manage vehicles on campus to see if the vehicles registered with somebody associated with the institution

[Speaker 9] (2:00:40 - 2:01:14)
what connects with harris county baytown police so the city of baytown has these all over the city you just don't know it and so they can they can automatically scan the license plate so if there's someone that they're looking for from louisiana then they give them the license plate number they can tell if that license plate has been identified in our area would be the same thing you can identify and if you had someone that was wanted or they were looking for there was an issue then uh if they were on our campus or had been

[Speaker 2] (2:01:14 - 2:01:24)
so are we getting a new security camera system or that's the biggest item it looks like

[Speaker 1] (2:01:28 - 2:01:35)
uh so you're going to present these in detail right we will in detail come back you're going

[Speaker 2] (2:01:35 - 2:01:41)
to present them before the budget is voted on or when you bring them to us to approve so so this

[Speaker 1] (2:01:41 - 2:01:57)
will be here's our final list of everything that we would like approved out of surplus all of the projects the cost the details and then we can make sure that we have uh tom and security in that meeting to answer any questions that you might have about those

[Speaker 8] (2:01:57 - 2:02:10)
specific items okay could you also bring the number if we wanted a five-year surplus or five-year yeah five months i'm sorry five months a five month yes so a five months an extra

[Speaker 2] (2:02:10 - 2:02:52)
seven million seven million seven million i'm at the board reserves yes okay could could we also look at the possibility of including a portion of our real estate that we own that for investment purposes to possibly include part of that in in our reserve requirement i know it's not cash but it could be sold in 12 or 24 months probably if we had a disaster we could buy we could get a loan and then pay it back with the proceeds i mean it looks like we all be able to use use some of that money it's got like a nine or ten million dollar value

[Speaker 1] (2:02:54 - 2:03:20)
so that's really up to the board right once we hit the four month minimum we've complied with our internal policy and so if if you as board members would like to include the fair market value of that property as part of the reserve fund that's totally up to you um we're just trying to manage this from a cash basis right that's an that's a asset held for

[Speaker 2] (2:03:20 - 2:03:26)
investment so maybe a policy committee question to to look at that or something maybe yeah the

[Speaker 3] (2:03:26 - 2:03:34)
four month is a cash position not an asset position it's a it's a cash position typically

[Speaker 1] (2:03:34 - 2:03:54)
that's how you would look at a reserve fund because it's intended to be liquid in the event of an emergency um but like i said that's this is a board policy it's a board expectation so if if you wanted to to work that in or modify that you certainly could it's it's available if

[Speaker 2] (2:03:54 - 2:04:00)
we ever had a really bad disaster like you referred to earlier yes we could sell it

[Speaker 1] (2:04:00 - 2:04:06)
it would be it would be one of our potential negotiable assets for addressing that need

[Speaker 6] (2:04:07 - 2:04:56)
there was a formula used to determine our reserves and this is back seven eight ten years ago that included property and maybe cash flow accounts receivable and all keeping in mind that that reserve was showing seven or eight million dollars when we had zero cash we don't want to go no i don't want to use that form but i would include right i would include the land in that but if we did something like that it could could it be shown as a a non-cash reserve and as separate because the policy clearly states we want four months you know of cash reserves cash i don't know what that old formula was they would try to explain it

[Speaker 3] (2:04:56 - 2:06:08)
from time to time and it was it was a uncalculated net position that was called a reserve a cat a reserve net position i think it was a net position included age receivables and all kinds of stuff that didn't make any sense it was not a cash reserve we've been through that i don't think it's unreasonable to look at any assets that we have as as available to us when in need i don't think property is the value of property meets the the policy we have of cash reserves if we want to say it's worth you know 14 million and that adds us two months to our four month minimum and we want to call it six months because we had that fine but but the four month minimum is cash i don't think we should use it to meet the minimum i i would agree i agree i absolutely agree but i think it would be nice to know what what that value is because it is hanging out there yeah and and i mean obviously any asset we have we could sell we could sell dr villanueva's car and have some money right i mean you know i mean that's that's cash available to us as well anything else we own we could sell and get cash for but as far as calculating that into a reserve i don't i don't think that's

[Speaker 2] (2:06:08 - 2:06:25)
it's an asset that we don't use it's you know unlike the car or whatever else it's an asset it's an asset that we don't use and it has value and if we have a disaster like he's talking about we could get six five we could fire sell it and get five million whatever you know we can within

[Speaker 1] (2:06:26 - 2:06:41)
a few months or 12 months we can include it on the report as an additional asset as as long as we have the four months of cash on hand then we're adequately reserved yeah i don't i mean it

[Speaker 3] (2:06:41 - 2:06:47)
it just hit our books a few years ago so it's not like you know it's not listed but it wasn't listed

[Speaker 4] (2:06:47 - 2:07:15)
for a long time and as far as determining the value today um we talked about this in a previous board meeting years ago and it was the board's um desire to not look at that until we had a you know and a need to sell the land or you know someone who was interested and you wanted to consider that so we didn't the board decided not to move forward with comps at that time

[Speaker 3] (2:07:16 - 2:07:20)
yeah until we decided to do something right so that we weren't talking about every year

[Speaker 9] (2:07:23 - 2:07:38)
and i think we were still periodically just checking to see what the value of it was anyway so we it gets appraised still have that yeah we have that amount and if something was to happen we know that if we don't have enough in cash we still have land but i don't think it should be

[Speaker 3] (2:07:38 - 2:07:49)
included i don't think it should be included in our reserve i think it's an asset that we could we could leverage we could get a loan with it as you know but but but that's not a reserve that

[Speaker 6] (2:07:49 - 2:08:08)
that is i don't see that as reserve we also have the exposure risk exposure from an insurance standpoint so it'd be nice to know what the value is i think it was being appraised every two or three years and so i don't i'm not sure we're up for a re-appraisal but that that may be a

[Speaker 2] (2:08:08 - 2:08:13)
requirement i thought we had to get it done every two years for some every two years we're required

[Speaker 6] (2:08:13 - 2:08:18)
that's what i remember okay i thought so if we could just know what the appraisal is

[Speaker 3] (2:08:21 - 2:08:28)
problem we'll get that for you are there any other questions for jacob on his presentation

[Speaker 11] (2:08:38 - 2:08:46)
that furniture purchase which if it was yes

[Speaker 1] (2:08:48 - 2:08:56)
so that that has always been our intention to finalize that project in fy 26 so yes it would

[Speaker 6] (2:08:56 - 2:09:03)
go into the list so it would be additional income for that project fund and an expense it would

[Speaker 1] (2:09:03 - 2:09:59)
result in additional surplus from fy 25 and an additional allocation into the capital projects fund out of surplus funds now or pay now or pay later right so the advantage of approving it tonight is time the advantage the advantage is the ability to enhance the look and feel of our campus before fall semester starts okay i i mean from a financial perspective it might cost us a little more if we wait six months exactly um then then it would cost right now but but the primary advantage is that this is very outward facing changes that we would be making as part of our strategic plan and uh getting that in place for fall semester better for our students

[Speaker 3] (2:10:00 - 2:10:15)
consistent with the 1.6 million we've already spent on furniture that is correct all the same furniture right okay any other questions on the presentation this evening i just have one comment and that is

[Speaker 4] (2:10:15 - 2:10:41)
that the question of workman's compensation came up and we leslie's already provided the answer so i'll just report that so there was not an increase in the number of claims rather we had on average we spend two thousand dollars on an individual claim we had two that were fifty thousand each oh fifty thousand for the two so it it significantly increased that amount

[Speaker 6] (2:10:43 - 2:10:48)
two of them at fifty thousand it all back with profit one year

[Speaker 9] (2:10:51 - 2:10:58)
i just have a comment jacob um thank you thank you very thorough a lot of good information

[Speaker 1] (2:10:59 - 2:11:40)
um appreciate it thank you so much and and if i could take a moment of personal privilege i'd like renee to stand up she's our controller he's still here right there still here hey renee she has been um an amazing support since i've started and she's spent countless hours working together with me um on this work so i'm very grateful for what she's done and the whole snafu with the presentation she badgered me about three times to make sure i had the right copy saved and i literally have no idea how i messed that up so um

[Speaker 8] (2:11:42 - 2:11:54)
you win all right thank you thank you jacob you're available for questions later yes i i'm not clear on everything you know so i may have some

[Speaker 3] (2:11:56 - 2:12:19)
all right thank you very much jacob okay folks we're going to go back to the new business item um we have a motion and a second on the item we were in discussion we tabled it we're now at the part of the meeting where we're going to revisit we're back in the discussion any other comments

[Speaker 8] (2:12:19 - 2:13:10)
on this item yes i had one um kind of response to regent himself's concern about the um the the plan that we're going to be preparing for the the campus um i think all of these buildings are are buildings that would likely not be torn down they're going to be existing we're going to be renovating or refreshing or still using them of course so i i get the point about you know how the usage is still in question we don't have that information yet but but there's still going to be students in there and so that that was my reason for thinking go ahead and do this and get it ready for september one when students come now we'll have them there i had

[Speaker 12] (2:13:10 - 2:13:40)
the same thought because we've toured each and every one of these say for the liberty campus i don't think we've done that one yet but uh yeah um we've seen them with our own eyes and obviously as a result of any facilities master plan they're still going to be used so i agree completely with regent warford on that and i think it really comes down to a uh you know spend the money now get it ordered now it's obviously going to be cheaper than it will be six months from now so

[Speaker 3] (2:13:41 - 2:14:20)
for the benefit of everyone else just to be clear uh this includes 48 classrooms in multiple buildings including the atc bonner hall john brett hall liberty campus motor hall and tv2 hallway furniture provided for the pact atc and mcnulty haddock buildings so as regent warford stated these are some of our core facilities uh 48 classrooms scattered across all these buildings not to say one or two classrooms in a building from a utilization standpoint may change but as far as 48 classrooms across all these buildings uh the risk is pretty low that we would

[Speaker 4] (2:14:20 - 2:14:38)
eliminate many of these if any at all and just one comment and that is if anything were to change with the plan and somehow one of these buildings was not with us we can move any of this furniture to any other classroom so it's not like it comes with the building and it stays with the building

[Speaker 5] (2:14:40 - 2:15:50)
okay any other discussion just just to clarify so this you feel like this budget it is going to take care of all student needs we don't have to worry about any needs of students this is going to take care of it so we can buy the furniture and not worry about needing the 800 000 someplace else to take care of student needs because that's my big concern if we're needs not being taken care of that that's that's where i i'm looking for a guarantee that this budget takes care of student needs because it seemed like there was such concern over the last few months about not being able to take care of student needs and and you know concern the foundation wanting to pony up a million dollars for student needs i i just want to make sure that if i vote for this that we're not going to come back in a few months and say oops we need to take care of student needs yes we guarantee that

[Speaker 3] (2:15:51 - 2:15:57)
okay that's recorded right well i think yeah and i think we just saw with the surplus that

[Speaker 5] (2:15:57 - 2:16:30)
i just want clarification verbally said out loud on recording that this furniture is not going to any way impede the need for student because it seems like the last few months we kept hearing now we don't know what's going to happen with funding this that and the other student needs we may need it and i just want to make sure we're taking care of students over furniture is wonderful but student needs are more important than than furniture i think that's a concern we all agree with and i just wanted just to have it clarified that's all because if i'm

[Speaker 2] (2:16:30 - 2:17:26)
vote for it i want it clarified and my concern is still we we don't know what our needs are we we know we've been told that we we have a lots and lots of classrooms that we do not use and we will not be using going forward we we have an overabundance of of buildings in classroom i i don't understand why we would buy all this furniture not knowing what we're going to need where we're going to need it ahead ahead of time that it wasn't it wasn't the plan it wasn't the plan it came up in the last week just because we have a extra money instead of showing we got extra 800 we want to spend it now so we don't have to show that we we've got it to me that none of us would do that in our own businesses that it's not it doesn't make logical sense to do that

[Speaker 3] (2:17:29 - 2:18:06)
great we all have our own logic and we can apply it as we vote are there any other comments on this item all right hearing none all in favor raise your hand six any opposed raise your hand two so six four two against one absent motion carries all right folks um no executive session this evening correct no thank you great great all right so we are at future agendas anything uh anyone is interested for a future agenda item

[Speaker 12] (2:18:07 - 2:18:10)
turn my estimate was way off on the time

[Speaker 3] (2:18:11 - 2:18:18)
all right hearing none we'll move we'll move to the last item which is adjournment have a good evening