AGENDA BOARD OF TRUSTEES REGULAR BOARD MEETING. November 18, :00 p.m.

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1 AGENDA BOARD OF TRUSTEES REGULAR BOARD MEETING November 18, :00 p.m. HCC Administration Building 3100 Main, 2 nd Floor Auditorium Houston, Texas

2 Strategic Plan Creating Opportunities for Our Shared Future Approved by the HCC Board of Trustees, June 2012 Mission: Vision: Guiding Principles: Houston Community College is an open-admission, public institution of higher education offering a high-quality, affordable education for academic advancement, workforce training, career and economic development, and lifelong learning to prepare individuals in our diverse communities for life and work in a global and technological society. Houston Community College will be the most relevant community college in the country. We will be the opportunity institution for every student we serve essential to our community s success. Our Guiding Principles direct our interactions with students, the internal and external communities we serve, and each other, giving focus to our primary purpose: devotion to the achievement of student success, defined as timely completion of certificates and degrees that drive real accomplishments in the workplace, at universities, and in society. Freedom with Responsibility HCC subscribes to and upholds a doctrine of freedom that follows the principle of responsibility. Commitment to Excellence HCC believes that a commitment to doing one s very best without regard to position is the starting point of all expressions of excellence and setting of high standards for quality and performance. Respect for the Person HCC holds that a principle of community mindfulness begins with respect for oneself and for others. Respect is the framework of personal integrity and provides the tie that binds us together. Sound Stewardship Stewardship is the path to fulfilling HCC s Mission and acknowledges our guardianship of its resources and positive impact on the lives of our students and community at large. 1

3 NOTICE OF A REGULAR MEETING OF THE BOARD OF TRUSTEES HOUSTON COMMUNITY COLLEGE November 18, 2014 Notice is hereby given that a Regular Meeting of the Board of Trustees of the Houston Community College will be held on Tuesday, the eighteenth (18 th ) day of November 2014 at 4:00 p.m., or after, and from day to day as required, at the HCC Administration Building, 2 nd Floor Auditorium, 3100 Main, Houston, Texas. The items listed in this notice may be considered in any order at the discretion of the Chair or Board and items listed for closed session discussion may be discussed and/or approved in open session and vice versa as permitted by law. I. Call to Order II. III. Prayer and Pledge of Allegiance Approval of Minutes Approval of Minutes from Special Meeting of October 2, 2014, Academic Affairs/Student Services Committee Meeting of October 7, 2014, Committee of the Whole Meeting of October 7, 2014, Special Meeting of October 7, 2014, and Regular Meeting of October 16, IV. Awards, Presentations, and Recognitions V. Chairman s Report VI. Chancellor s Report A. Faculty Senate Report (President of Faculty Senate). VII. Hearing of Citizens VIII. Consent Agenda A. Board Governance 1. Modification to Board Policy D.1: Equal Education Opportunities and D.4.5: Sexual Harassment, Assault, and Violence. 2. Modification to Board Bylaws Article A, Section 10(e): Mechanisms for Enforcement. Page 1 of 5

4 Houston Community College Regular Board Meeting November 18, 2014 B. External Relations 3. State and Local Government Relations Consulting Services (Project No. RFQ 15-01). 4. Approve Appointment to Midtown Zone Board of Directors. C. Facilities and Finance 5. Authorize Transfer of Funds from Bond CIP Project J (Northeast- North Forest Campus) to Bond CIP Project I (Northeast-Northline Campus). IX. Topics for Discussion and/or Action A. Audit 1. Annual Financial Report for the Fiscal Year Ended August 31, B. Board Governance 2. Personnel Agenda (Faculty). C. Facilities and Finance 3. Ratify the 2014 Tax Rate for Maintenance & Operations and Debt Service. 4. Investment Policy for Acceptance of Donation from National Oilwell Varco. 6. Engagement for Legal Services with Gibbs & Bruns LLP. 7. Authorization to Acquire Certain Real Estate at or near Brays Oaks 8. Investment Report for the Month of September Monthly Finance Statement for September Update on Bond Capital Improvement Plan (CIP) Related Matters Page 2 of 5

5 Houston Community College Regular Board Meeting November 18, 2014 X. Adjournment to closed or executive session pursuant to Texas Government Code Sections , , , and , the Open Meetings Act, for the following purposes: A. Legal Matters 1. Consultation with legal counsel concerning matters on which the attorney s duty to the System under the Texas Disciplinary Rules of Professional Conduct clearly conflicts with the Texas Open Meetings Laws. 2. Consultation with General Counsel on Pending Legal Matters. B. Personnel Matters 1. Deliberate Individual/Faculty/Administration Classified Staff a. Employment of Faculty Regular and Executive Contracts. 2. Deliberate the appointment, employment, evaluation, reassignment, duties, leave, discipline, contract status, or dismissal or to hear complaints or charges against the chancellor, employees or board members. C. Real Estate and Property Matters 1. Deliberate the purchase, exchange, lease, or value of real property for Agenda items if deliberation in an open meeting would have a detrimental effect on negotiations. Reconvene in Open Meeting XI. XII. Consider Action on Agenda Items, Including Closed Session Matters Additional Closed or Executive Session Authority If, during the course of the meeting covered by this Notice, the Board should determine that a closed or executive meeting or session of the Board should be held or is required in relation to any items included in this Notice, then such closed or executive meeting or session as authorized by Section et seq. of the Texas Government Code (the Open Meetings Act) will be held by the Board at that date, hour and place given in this Notice or as soon after the commencement of the meeting covered by the Notice as the Board may conveniently meet in such closed or executive meeting or session concerning Page 3 of 5

6 Houston Community College Regular Board Meeting November 18, 2014 any and all subjects and for any and all purposes permitted by Sections , inclusive, of the Open Meetings Act, including, but not limited to: Section For the purpose of a private consultation with the Board s attorney on any or all subjects or matters authorized by law. Section For the purpose of discussing the purchase, exchange, lease or value of real property. Section For the purpose of considering a negotiated contract for a prospective gift or donation. Section For the purpose of considering the appointment, employment, evaluation, reassignment, duties, discipline or dismissal of a public officer or employee or to hear complaints or charges against a public officer or employee. Section To consider the deployment, or specific occasions for implementation, of security personnel or devices. Section For the purpose of considering discipline of a student or to hear a complaint by an employee against another employee if the complaint or charge directly results in a need for a hearing. Section For the purpose of excluding a witness or witnesses from a hearing during examination of another witness. Should any final action, final decision, or final vote be required in the opinion of the Board with regard to any matter considered in such closed or executive meeting or session, then such final action, final decision, or final vote shall be at either: A. The open meeting covered by this Notice upon the reconvening of the public meeting, or B. At a subsequent public meeting of the Board upon notice thereof, as the Board shall determine. XIII. Adjournment XIV. Dinner Following the conclusion of all business, the Board of Trustees will meet for dinner in the Chancellor s Conference Room, 12 th Floor, Suite 12D15, System Administration Building, 3100 Main, Houston, Texas 77002, where the Board may generally discuss System business, but will not take action on such business. Page 4 of 5

7 Houston Community College Regular Board Meeting November 18, 2014 CERTIFICATE OF POSTING OR GIVING NOTICE On this 14 th day of November 2014 at or before 4:00 p.m., this Notice was posted at a place convenient to the public and readily accessible at all times to the general public at the following locations: (1) the HCC Administration Building of the Houston Community College, 3100 Main, First Floor, Houston, Texas 77002; (2) the Harris County's Criminal Justice Center, 1201 Franklin, Houston, Texas 77002; (3) the Fort Bend County Courthouse, 401 Jackson, Richmond, Texas 77469; and (4) the Houston Community College s website, The Houston Community College s Fort Bend County public meeting notices may be viewed after hours (i.e. between the hours of 5:30 p.m. and 7:30 a.m.) on the kiosk located on the west side of the new Fort Bend County Courthouse (the "William B. Travis Building"), located at 309 South Fourth Street, Richmond, Texas Sharon R. Wright, Manager Board Services Page 5 of 5

8 Minutes

9 SPECIAL MEETING OF THE BOARD OF TRUSTEES HOUSTON COMMUNITY COLLEGE October 2, 2014 Minutes The Board of Trustees of Houston Community College held a Special Meeting on Thursday, October 2, 2014 at the HCC Administration Building, 2nd Floor, 3100 Main in Seminar Room B, Houston, Texas MEMBERS PRESENT Neeta Sane, Chair Christopher W. Oliver, Vice Chair Robert Glaser, Secretary Zeph Capo Carroll G. Robinson Adriana Tamez David B. Wilson ADMINISTRATION Cesar Maldonado, Chancellor E. Ashley Smith, Acting General Counsel Shantay Grays, Chief of Staff Steve Levey for Zachary Hodges, Acting Vice Chancellor, Academic Affairs Diana Pino, Vice Chancellor, Student Services Teri Zamora, Vice Chancellor, Finance and Planning Michael Edwards, Acting President, Coleman College Fena Garza, President, Southwest College Irene Porcarello, President, Southeast College Janet May, Chief Human Resources Officer Remmele Young, Associate Vice Chancellor, Governmental and External Affairs OTHERS PRESENT Derrick Mitchell, Board Counsel, Bracewell & Giuliani Jodie Khan, President, COPA Other administrators, citizens and representatives from the news media CALL TO ORDER Mrs. Neeta Sane, Chair, called the meeting to order at 3:33 p.m. and declared the Board convened to consider matters pertaining to Houston Community College as listed on the duly posted Meeting Notice. (The following Trustees were present: Capo, Oliver, Robinson, Sane, Tamez and Wilson) FIRST PUBLIC HEARING REGARDING TAX REVENUE CALCULATION AND VOTE Motion Mr. Capo moved and Dr. Tamez seconded.

10 Houston Community College Special Meeting October 2, 2014 Page 2 Dr. Maldonado provided an overview of the proposed tax rate. Mrs. Sane inquired if representatives from the public were present to provide comments to the Board regarding the proposed tax rate. ADJOURNED TO CLOSED SESSION Mrs. Sane adjourned the meeting to Executive Session at 3:38 p.m. notice having previously been given and reiterated in accordance with Sections , , and/or of the Open Meetings Law. Mrs. Sane stated that any final action, vote or decision on any item discussed in Executive Session would be taken up in Open Session or in a subsequent Public Meeting. Mrs. Sane reconvened the meeting in Open Session at 4:21 p.m. and entertained any motions on pending matters. (The following Trustees were present: Capo, Glaser, Sane, Tamez, and Wilson) ADJOURNMENT With no further business coming before the Board, the meeting adjourned at 4:22 p.m. Minutes recorded, transcribed & submitted by: Sharon Wright, Manager, Board Services Minutes Approved as Submitted:

11 MEETING OF THE ACADEMIC AFFAIRS/STUDENT SERVICES COMMITTEE OF THE BOARD OF TRUSTEES HOUSTON COMMUNITY COLLEGE October 7, 2014 Minutes The Academic Affairs/Student Services Committee of the Board of Trustees of Houston Community College held a meeting on Tuesday, October 7, 2014, at the HCC Administration Building, 2 nd Floor, 3100 Main in Seminar Room B, Houston, Texas. MEMBERS PRESENT Adriana Tamez, Committee Chair Zeph Capo, Committee Member Neeta Sane, Committee Member Alternate Eva Loredo Carroll G. Robinson David B. Wilson ADMINISTRATION Cesar Maldonado, Chancellor E. Ashley Smith, Acting General Counsel William Carter, Vice Chancellor, Information Technology Steve Levey for Zachary Hodges, Acting Vice Chancellor, Academic Affairs Diana Pino, Vice Chancellor, Student Services Teri Zamora, Vice Chancellor, Finance and Planning Michael Edwards, Acting President, Coleman College Margaret Ford Fisher, President, Northeast College Fena Garza, President, Southwest College William Harmon, President, Central College Butch Herod, Acting President, Northwest College Irene Porcarello, President, Southeast College Janet May, Chief Human Resources Officer OTHERS PRESENT Derrick Mitchell, Board Counsel, Bracewell & Giuliani Susan Goll, President, Faculty Senate Jodie Khan, President, COPA Other administrators, citizens and representatives from the news media CALL TO ORDER Dr. Adriana Tamez, Committee Chair, called the meeting to order at 3:08 p.m. and declared the Board convened to consider matters pertaining to Houston Community College as listed on the duly posted Meeting Notice. (The following Trustees were present: Capo, Loredo, Robinson, Tamez and Wilson)

12 Houston Community College Academic Affairs/Student Services Committee Meeting October 7, Page HCC STRATEGIC PLAN CRITICAL INDICATORS OF SUCCESS Dr. Diana Pino informed that the presentation was an update regarding the critical indicators for the strategic plan and noted that the update for October was the completion and graduation data. Dr. Pino provided an overview of the following: Definition of Success Course Completion Fall-to-Spring Persistence Fall-to-Fall Persistence Program Completers Mr. Capo inquired of what has driven the increase from 2010 to current. Dr. Pino informed that it is a combination of items. She noted that student advisors have been implemented. Mr. Capo inquired if welding programs are included in program completers. Dr. Pino informed that if the completion led to a certificate, it was included. Dr. Cesar Maldonado reiterated that if it leads to a certificate, it is included in the number. He apprised reverse calculation needs to be implemented because if a student does not apply for the award, it is not included. Mr. Robinson requested a breakout of academic and workforce. He also inquired if it is possible to have compounded average. Dr. Maldonado noted that the numbers are reflective over the life of the plan, which is a five-year plan. Mr. Robinson inquired if the data could be provided with the aggregation between academic and workforce and include it into the presentation. Dr. Maldonado informed that it could possibly be provided in the requested format and noted that a team will be attending a conference regarding programs and totality. Dr. Maldonado inquired if the request is to provide a de-segregation of the numbers by rewards. Mr. Robinson noted that he is looking at course completion and graduation. (Mrs. Sane joined the meeting at 3:20 p.m.) Ms. Loredo inquired how students are counted who transfer out of HCC to pursue education at the university level. She inquired if there is a mechanism for tracking those students. Dr. Maldonado informed that data is captured for transfers; however, they are not counted as completers. He apprised that if they transfer without the awards, they are not counted as a degree or certificate completer.

13 Houston Community College Academic Affairs/Student Services Committee Meeting October 7, Page 3 REPORT ON INTERNATIONAL TRAVEL FOR HCC HONORS COLLEGE STUDENTS TO SPAIN AND FRANCE Dr. Cheryl Peters advised that the students travel as a part of the honors program and noted that the students learn history, culture, and art. She informed that the students have been participating in the international travel for the last seven years. Dr. Peters apprised that the expenses are often covered through sponsorships. She noted that the item is presented for information purposes. Dr. Tamez commended the college for making the travel available to the students and inquired of the percentage of students who travel from the Honors College. Dr. Peters informed that approximately 17 students travel of a class size of approximately 20 to 25 students. She apprised that some students are undocumented and not able travel. Ms. Loredo noted that she attended the awards ceremony and informed that the students often expressed appreciation to the Board for allowing them to travel under the program. Dr. Peters apprised that the travel is life altering for the students. Mr. Robinson expressed appreciation to Dr. Maldonado regarding the student scholarship and reiterated that some of the funds will go to the Honors College. Mr. Robinson inquired if there is a process in place to combat the homesickness issue that occurred on a previous international trip. Dr. Peters informed that there is a process in place and denoted that the homesickness was a part of the Brazilian travel not the Honors College. Mr. Robinson apprised that he would like to see a process that provides the means for getting the student back home in the case of homesickness and then deal with any reimbursement issues. Mr. Robinson also recommended having a health protocol in light of the Ebola situation arising from the worker in Spain. Mr. Capo inquired if there is a parallel for the students unable to travel. Dr. Peters informed that the program is sensitive to making certain students are exposed to other places. With no further business coming before the Board, the meeting adjourned at 3:32 p.m. Minutes recorded, transcribed & submitted by: Sharon Wright, Manager, Board Services Minutes Approved as Submitted:

14 MEETING OF COMMITTEE OF THE WHOLE OF THE BOARD OF TRUSTEES HOUSTON COMMUNITY COLLEGE October 7, 2014 Minutes The Board of Trustees of Houston Community College met as a Committee of the Whole on Tuesday, October 7, 2014, at the HCC Administration Building, 2 nd Floor, 3100 Main in Seminar Room B, Houston, Texas. MEMBERS PRESENT Neeta Sane, Chair Christopher W. Oliver, Vice Chair Zeph Capo Eva Loredo Sandie Mullins Carroll G. Robinson Adriana Tamez David B. Wilson ADMINISTRATION Cesar Maldonado, Chancellor E. Ashley Smith, Acting General Counsel Shantay Grays, Chief of Staff William Carter, Vice Chancellor, Information Technology Steve Levey for Zachary Hodges, Acting Vice Chancellor, Academic Affairs Diana Pino, Vice Chancellor, Student Services Teri Zamora, Vice Chancellor, Finance and Planning Michael Edwards, Acting President, Coleman College Margaret Ford Fisher, President, Northeast College Fena Garza, President, Southwest College William Harmon, President, Central College Butch Herod, Acting President, Northwest College Irene Porcarello, President, Southeast College Janet May, Chief Human Resources Officer OTHERS PRESENT Derrick Mitchell, Board Counsel, Bracewell & Giuliani Jorge Rodriguez, Financial Advisor, Coast Securities Susan Goll, President, Faculty Senate Jodie Khan, President, COPA Other administrators, citizens and representatives from the news media (The following Trustees were present: Capo, Loredo, Oliver, Robinson, Tamez, Sane and Wilson)

15 Houston Community College Committee of the Whole Meeting October 7, Page 2 CALL TO ORDER Mrs. Neeta Sane, Chair, called the meeting to order at 4:04 p.m. and declared the Board convened to consider matters pertaining to Houston Community College as listed on the duly posted Meeting Notice. Mrs. Sane apprised that the items will be taken out of order and informed that item A.6 has been pulled by administration. AUTHORIZE TRANSFER OF FUNDS FROM BOND CIP PROJECT J (NORTHEAST- NORTH FOREST CAMPUS) TO BOND CIP PROJECT I (NORTHEAST-NORTHLINE CAMPUS) The item was pulled by administration. APPROVE CONCEPT OF THE HCC INTERNATIONAL INITIATIVES MODEL Motion Ms. Loredo moved and Dr. Tamez seconded. (Ms. Mullins joined the meeting at 4:05 p.m.) Dr. Maldonado apprised that the item would provide approval for the concept and informed that under no circumstances will contracts be entered into without Board approval. He noted that Dr. Steve Levy would provide an overview of the concept model. Dr. Levey provided an overview to include the following: Mission Statement Delivery Methods Additional Fee-Based Services International Programs Community Advisory Board Timeline for Implementation Dr. Maldonado apprised that the Advisory Board would provide insight, information, and support to HCC in global areas to include: Strategic international program development, quality, and management Assess international program goals and outcomes Recommend an updated mission statement regarding international initiatives for adoption by the Board Dr. Maldonado noted that the timeline will include: October The new HCCS model for international engagement is presented to the Board. November Formal public consideration and adoption of the strategy and appoint the international Advisory Board. December Implementation of the strategy.

16 Houston Community College Committee of the Whole Meeting October 7, Page 3 Dr. Maldonado informed that the basic strategy is to use existing resources to generate revenues. Mrs. Sane inquired of the strategy to help local students. Dr. Maldonado apprised that through the partnerships, the international community is expected to grow, which will expose current students to a broader range of diversity and increase revenues. Mr. Oliver inquired of the overall purpose for local students other than to generate revenue. He noted that the information appears vague and requested specifics regarding the size and support of the Advisory Board. Dr. Maldonado informed that there is a definitive delivery method provided in the concept model. He apprised that in terms of the Advisory Board, there is a level of vagueness to allow for input from the community. He noted that the approval desired is regarding the framework. Dr. Maldonado informed that a tighter concept will be presented to the Board with the financial data. Mr. Oliver inquired if there has been consideration regarding the geographic areas. He apprised that the concept is acceptable but he desires to see more information. Dr. Maldonado noted that the strategy regarding geographic focus will be developed; however, there needs to be input from the broader community. He informed that the Advisory Board would share ideas and bring recommendations to the Board. Mr. Oliver apprised that possibly other entities such as the Greater Houston Partnership could provide insight regarding the initiative. He noted that the item needs to be revamped. Mrs. Sane informed that she views the item as a systematic approach regarding international programs available. She apprised that the concept appears to be more of an approach as to how future international initiatives will be handled. She noted that the previous approaches were random and informed that the item provides a start to an approach to international initiatives. Mr. Robinson apprised that he has some degree of discomfort because the pre-admission has been passed and a $1 million scholarship fund has been approved. He noted that the community does not know about the pre-admission or available scholarships. Mr. Robinson informed that he is gun shy until exposure to these programs is more present in the community. He apprised that the presentation in the Academic Affairs/Student Success Committee showed enrollment numbers are flat. Mr. Robinson noted that he would like to see a friendly amendment that splits the revenues fifty-fifty between scholarships and faculty development. Mrs. Sane informed that the Board is not ready to define how revenue will be allocated. Mr. Robinson apprised that he does want to give direction as to how the funds will be used. He noted that if the remaining Board members do not want to amend the item, it is their right to cast a vote.

17 Houston Community College Committee of the Whole Meeting October 7, Page 4 Mr. Robinson informed that Board Counsel needs to be in the forefront on all the initiatives. He apprised that he would amend to make certain Board Counsel is involved. Mr. Robinson noted that he would like to have an appointment to the Advisory Board. He informed that his focus would be to bring international students to HCC and to target the following geographic areas: China India Mexico Caribbean Africa Middle East Mrs. Sane clarified that Mr. Robinson s amendment was that a portion of the revenue generated be allocated for scholarships. She apprised that there might be a need for equipment or training for students. Ms. Mullins noted that the mission statement needs tweaking because it could appear that the focus is on international business. She informed that the college is not here to support international businesses. She apprised that the mission needs to be student based and the benefit needs to be locally. Ms. Mullins noted that a la cart is good but there needs to be a break out of gross and net. She informed that she has mixed feelings regarding the Advisory Board because there are local critical issues that need to be addressed. She requested more structure regarding the Advisory Board. Dr. Tamez apprised that the item is to approve the concept. She noted that as the model is developed it will encompass the concerns raised by the Board. She informed that she supports the concept but also supports the thoughts of her colleagues that the revenues should support the local students. Mr. Capo apprised that the idea of utilizing the distance education program is moving in the right direction. (Ms. Mullins stepped out at 4:41 p.m.) Mr. Capo noted that there are a couple of international programs currently in place that need to be dealt with before moving forward with new initiatives. He informed that external advisory boards should be comprised under the purview of the Board. Mr. Capo apprised that he supports assisting international business that employ locally. He noted that the timeframe needs to be adjusted. (Ms. Mullins returned out at 4:42 p.m.) Ms. Loredo noted that she is glad to see a framework initiated and apprised that the Board needs to be informed of the initiatives. She inquired of the number of students in

18 Houston Community College Committee of the Whole Meeting October 7, Page 5 distance education. Dr. Levey noted that there are approximately 18,000 unduplicated students. Ms. Loredo informed that the effort will bring in revenue but must make certain that the focus is to assist the students. Mr. Wilson apprised that his understanding of the education code states that the college could only spend money in its designated district. He informed that the focus must be to take care of home before considering the international concept. He apprised that the people in the communities do not support international initiatives. Mr. Oliver associated with Mr. Capo and Ms. Loredo that the effort should not be just for generating revenues. He recommended that the concept be revamped based on the input from the Board. He apprised that the existing international program should be incorporated with the concept. He noted that the timeline needs to be revisited. Mrs. Sane informed that she feels that the concept is fine and noted that the Chancellor cannot be held accountable for the previous administration s decisions. She apprised that she supports the concept. Mrs. Sane noted that the concept would allow for Dr. Maldonado to provide his vision regarding the international initiative. Ms. Loredo clarified that there are currently international programs in place and inquired if this will be separate. Dr. Maldonado informed that this will be separate from the current programs in place. Mrs. Sane apprised that she would like to see what internal changes are being made prior to moving forward with the international concept. Mr. Oliver inquired if the item should be tabled for future consideration. Ms. Mullins noted that the item is to approve the international concept model and informed that she is in support of approving the concept but not ready to move forward regarding the negotiation piece. Mrs. Sane apprised that more structure could be provided regarding the model. Mr. Robinson noted that he supports going international and clarified that there needs to be better promotion of what is already in place locally because the public is not sufficiently aware. He apprised that the only reason he discusses past experience is because it informs of the policy solutions placed on the table. Mr. Robinson noted that Ms. Loredo s comments are important to him and inquired if the international initiative includes efforts to recruit students into the country. Dr. Maldonado informed that Ms. Loredo s inquiry was if there is a separate international program and apprised that the answer is yes. He noted that the answer to Mr. Robinson s inquiry is also yes; he noted that the second item on the chart presented, states the second year delivery method is to bring students to HCC.

19 Houston Community College Committee of the Whole Meeting October 7, Page 6 Mr. Robinson informed that decisions about revenue creation and streams are policy issues, which are determined by Board action. Mr. Robinson apprised that Board Counsel needs to be involved and reiterated that every contract needs to go through the Office of General Counsel. He noted that all international contracts need to go through Board Counsel for review. Mr. Robinson informed that the General Counsel does not typically represent the Board s interest. He apprised that the attorney for the Board needs to fully, clearly, and expressly be a part of the procedural process for review. Mr. Robinson noted that scholarships and faculty development are two imperative issues and the allocation to those areas will assist in addressing those issues. Mr. Robinson informed that he is satisfied with the proposed change to the item suggested by Ms. Mullins to approve the concept and drop the negotiation portion outside of the Nigeria item. He recommended approving the model. (Dr. Tamez stepped out at 5:01 p.m.) Dr. Maldonado apprised that in addition to Nigeria, there are other relationships that administration is currently working on. He noted that decision regarding allocation of the funds is clearly a Board decision and informed that the approval of the item would allow engaging in dialogue with a foreign partner to form a contract for Board Counsel s review prior to bringing to the Board for consideration. Dr. Maldonado apprised that the action would give a starting point and noted that the administration s vision is not to put faculty overseas but to develop a program that generates revenue for the institution. (Dr. Tamez returned at 5:03 p.m.) Mr. Oliver inquired why the Board is voting on the concept. Mr. Capo noted that the Chancellor addressed the questions that he had as to what is in the works that would cause an issue for approving the concept. He inquired of a realistic timeline in consideration of the discussions currently underway. Mr. Capo inquired if the Advisory Board discussion could be brought before the Board next month. He informed that he does not want to see an Advisory Board appointed without input from the Board. Dr. Maldonado apprised that the Advisory Board establishment is not critical in the timeline. He noted that it is to seek input as to what the model would be. He informed that the contracts would come to the Board for approval. Dr. Maldonado apprised that the concept is a starting point to begin a framework to negotiate partnerships to bring back to the Board for consideration. He noted that the Board would not find out in an inappropriate way regarding various partnerships. Mr. Capo informed that he would rather have a framework than no framework. He apprised that he would rather solve the issues on the table.

20 Houston Community College Committee of the Whole Meeting October 7, Page 7 Dr. Maldonado noted that the issues of the two existing contracts are not a part of the concept and informed that this action is separate and apart from those contracts. Mr. Capo apprised that he would not want to move forward until it is clear regarding the current contracts. Mrs. Sane noted the options are to either vote on the item at a later time or keep the item and take a vote. She inquired if Dr. Maldonado wanted to suggest modifications to the item presented. Mr. Oliver informed that his comments were to inquire if the Chancellor wanted to table the item or move forward with a vote. Mr. Robinson apprised that the Board is aware of item #7 regarding Nigeria and reiterated that Dr. Maldonado mentioned that there was discussion with Mexico. He inquired if there was anything else and noted that the Board could approve with the understanding that the negotiations are just with Nigeria and Mexico. Dr. Maldonado noted that those are all that he is aware of but that does not mean that someone would not contact the college to discuss a possible partnership. Mr. Capo informed that future inquiries should be advised that the college is not able to enter any discussion without approval from the Board. Mr. Robinson apprised that he is okay with moving the item forward with the understanding that there are negotiations with Nigeria and Mexico but new opportunities will be brought to the Board. Mrs. Sane recommended amending the item to negotiate with Nigeria and Mexico and any other opportunities that may come forward will be brought back to the Board. Amended Motion - Mrs. Sane moved and Mr. Robinson seconded to amend to include negotiation with Nigeria and Mexico and any other opportunities that may come forward will be brought back to the Board. Mr. Robinson clarified that the amendment will move the item forward and the Chancellor is in negotiation with Nigeria and Mexico but if anybody else comes in the door, they will wait until the item comes back before the Board. Mr. Capo noted that the item is striking international clients and replacing with Nigeria and Mexico. Vote on amendment The motion passed with a vote of with Mr. Wilson opposing and Mr. Oliver abstaining. Mrs. Sane informed that the amendment passed and called for a vote on the amended motion. Mr. Robinson informed that he wanted to discuss the scholarship part. Mr. Capo apprised that is the part that he left off because he is in agreement with Mr. Robinson that there

21 Houston Community College Committee of the Whole Meeting October 7, Page 8 needs to be a discussion regarding how to prioritize all of the revenue. He recommended discussing the auxiliary fund and the fund balance together at a later date. Mr. Robinson noted that he associates with Mr. Capo with the exception to making this a restricted revenue source. Mr. Oliver called the question. Mrs. Sane noted that the question has been called and took a vote on the amended motion. Vote on Amended Motion The motion passed with vote of with Mr. Oliver and Mr. Wilson opposing and Mr. Robinson abstaining. ENTREPRENEURIAL PARTNERSHIP WITH FEDERAL POLYTECHNIC OF OIL AND GAS Dr. Maldonado pulled the item because it was approved as a part of the international initiative concept item. HCC REPRESENTATIVE ON MISSOURI CITY TAX INCREMENTAL REINVESTMENT (TIRZ) ZONE 3 Motion Mr. Robinson moved and Mr. Capo seconded. The motion passed with vote of 8-0. (Mr. Capo left at 5:16 p.m.) (Mr. Oliver stepped out at 5:17 p.m.) INVESTMENT REPORT FOR THE MONTH OF AUGUST 2014 AND MONTHLY FINANCIAL STATEMENT FOR AUGUST 2014 Motion Dr. Tamez moved and Ms. Loredo seconded. Mrs. Teri Zamora presented a summary of the Investment Report and Monthly Financial Statement for the Month of August Mr. Robinson expressed appreciation to the Chancellor regarding the scholarships but noted that there is no policy. He requested that in preparation for the next budget cycle, consideration is given regarding the proposed policy that would allow for a percentage of the fund balance to be set aside for scholarships. (Mr. Oliver returned at 5:20 p.m.) Mr. Robinson recommended reviewing the program implemented in Chicago that provides a full scholarship to first time college attendees that graduated from high school with a 3.0 or higher grade point average. He informed that there is a responsibility to make certain students have an opportunity to attend school.

22 Houston Community College Committee of the Whole Meeting October 7, Page 9 Ms. Loredo inquired as to the process for students to apply for the $1 million scholarships. Mrs. Zamora apprised that the criteria are currently being reviewed so that the scholarship could be implemented immediately. Mr. Oliver requested information of the number of students currently receiving financial aid and how much financial aid has been disbursed over the last three years. Mr. Robinson noted that his discussion regarding scholarships relates to economic reality. He informed that everyone should be concerned with college debt load. (Mr. Robinson stepped out at 5:27 p.m.) Mr. Oliver apprised that scholarships are important but there needs to be a review regarding all demographics for students to go to college. Vote The motion passed with vote of 6-0. ADJOURNED TO CLOSED SESSION Mrs. Sane adjourned the meeting to Executive Session at 5:28 p.m. notice having previously been given and reiterated in accordance with Sections , , and/or of the Open Meetings Law. Mrs. Sane stated that any final action, vote or decision on any item discussed in Executive Session would be taken up in Open Session or in a subsequent Public Meeting. Mrs. Sane reconvened the meeting in Open Session at 6:59 p.m. and entertained any motions on pending matters. (The following Trustees were present: Mullins, Oliver, Robinson, Sane, Tamez and Wilson) Mrs. Sane noted that the Board would consider items A.1 through A.4 Motion Mr. Robinson moved and Mr. Oliver seconded to approve items A.1 through A.4. Dr. Tamez commended Dr. Maldonado and the Board for making sure that what was promised to the communities was followed through as far as the bond is concerned, and in her case in particular, making sure the community in Southeast and Central area reaps as all the communities. Vote The motion passed with vote of 5-1 with Mr. Wilson opposing. The following items were approved: Authorize Transfer of Funds from Bond CIP Project N (Coleman Campus) to Bond CIP Project C (Southwest-West Loop Campus) and Project D (Southwest-Brays Oaks Campus).

23 Houston Community College Committee of the Whole Meeting October 7, Page 10 Authorize Transfer of Funds from Fund Balance to Reimburse Bond CIP Project N (Coleman Campus) for Funds Transferred to Bond CIP Project C (Southwest-West Loop Campus) and Bond CIP Project D (Southwest-Brays Oaks Campus). Authorization to Acquire Certain Real Estate at or Near Brays Oaks. Authorization to Acquire Certain Real Estate at or Near Southwest-West Loop Campus. Mrs. Sane called for a motion to reconsider item A.6. Motion to Reconsider Ms. Mullins moved and Mr. Oliver seconded to reconsider Item A.6 to approve the concept of the HCC International Initiatives Model. The motion passed with a vote of 6-0. Amendment Mr. Robinson moved and Ms. Mullins seconded to amend to add all existing international programs to be reviewed in the model contained in the item and dedicate the revenue 50% to debt reduction, 25% for scholarships and 25% for faculty development. Mr. Robinson called the question. Dr. Maldonado inquired if the amendment would include all existing negotiations. Mr. Derrick Mitchell informed that item would include Mexico, Nigeria, Vietnam, Qatar, and China. Mr. Robinson apprised that he did not want to name beyond Mexico and Nigeria but to include all existing negotiations and dedicate the revenue 50% towards debt reduction, 25% for scholarships and 25% for faculty development. Vote - The motion failed with vote of 4-2 with Trustees Mullins, Oliver, Robinson and Tamez in favor and Trustees Sane and Wilson opposing. ADJOURNMENT With no further business coming before the Board, the meeting adjourned at 7:05 p.m. Minutes recorded, transcribed & submitted by: Sharon Wright, Manager, Board Services Minutes Approved as Submitted:

24 SPECIAL MEETING OF THE BOARD OF TRUSTEES HOUSTON COMMUNITY COLLEGE October 7, 2014 Minutes The Board of Trustees of Houston Community College held a Special Meeting on Tuesday, October 7, 2014 at the HCC Administration Building, 2nd Floor, 3100 Main in Seminar Room B, Houston, Texas MEMBERS PRESENT Neeta Sane, Chair Christopher W. Oliver, Chair Zeph Capo Eva Loredo Carroll G. Robinson Adriana Tamez David B. Wilson ADMINISTRATION Cesar Maldonado, Chancellor E. Ashley Smith, Acting General Counsel Shantay Grays, Chief of Staff William Carter, Vice Chancellor, Information Technology Steve Levey for Zachary Hodges, Acting Vice Chancellor, Academic Affairs Diana Pino, Vice Chancellor, Student Services Teri Zamora, Vice Chancellor, Finance and Planning Michael Edwards, Acting President, Coleman College Margaret Ford Fisher, President, Northeast College Fena Garza, President, Southwest College William Harmon, President, Central College Butch Herod, Acting President, Northwest College Irene Porcarello, President, Southeast College Janet May, Chief Human Resources Officer OTHERS PRESENT Derrick Mitchell, Board Counsel, Bracewell & Giuliani Susan Goll, President, Faculty Senate Jodie Khan, President, COPA Other administrators, citizens and representatives from the news media CALL TO ORDER Mrs. Neeta Sane, Chair, called the meeting to order at 3:33 p.m. and declared the Board convened to consider matters pertaining to Houston Community College as listed on the duly posted Meeting Notice.

25 Houston Community College Special Meeting October 7, 2014 Page 2 (The following Trustees were present: Capo, Loredo, Oliver, Robinson, Sane, Tamez and Wilson) SECOND PUBLIC HEARING REGARDING TAX REVENUE CALCULATION AND VOTE Motion Mr. Capo moved and Dr. Tamez seconded. Dr. Cesar Maldonado provided an overview of the proposed tax rates. He noted that the debt tax rate increase is due to the debt service. He informed that the proposed rate is below the rollback and apprised that the Maintenance and Operations (M&O) remains the same as last year. (Mr. Capo stepped out 3:36 p.m.) Mrs. Sane provided an opportunity for the public to speak before the Board regarding the proposed tax rate. (Mr. Capo returned at 3:38 p.m.) Mrs. Sane noted that the item does not require a vote and closed the public hearing. COMMUNITY COLLEGE OF QATAR CONTRACTS (PERSONNEL) Motion Mr. Oliver moved and Dr. Tamez seconded. Dr. Maldonado informed that this is the final year for the contract. He apprised that full time personnel contracts for HCC employees who are working at Community College of Qatar (CCQ) are hired under one-year contracts. Mr. Robinson requested clarity of the contract expiration. He noted that he was under the impression that the contract ended in May Dr. Maldonado informed that this item is to approve the employee contracts and not a request for an extension of the Qatar contract. Ms. Janet May apprised that the employee contracts expire August 31, Ms. May noted that the May date was referencing the notice that is required for employees to inform that they would be returning. Mr. Robinson inquired if HCC employees returning will have a job. Dr. Maldonado informed that those who were employed at HCC will be returning to a position but external persons will not have a position at HCC. Mr. Capo inquired when the 90 day notice will be provided. Ms. May apprised that if there is not going to be a continuation, the 90 day notice will need to be provided in May. Mr. Oliver inquired of the date the contracts will end. Ms. May noted that on August 31, 2014 the contracts will end.

26 Houston Community College Special Meeting October 7, 2014 Page 3 Mr. Capo apprised that he was informed that some of the employees want to continue where they are and noted that the employees should be informed of the contract expiration. Dr. Tamez inquired of the plan to apprise the Board as to who will remain and who will return. Dr. Maldonado informed that the 90-day notice will initiate the plan. Dr. Tamez requested an update be provided in May 2015 regarding the employees who will remain and those returning. Mr. Oliver noted that should be an administrative item. Dr. Maldonado apprised that an update would be provided in the personnel agenda as per normal practice. Vote The motion passed with vote of 7-0. ADJOURNMENT With no further business coming before the Board, the meeting adjourned at 3:47 p.m. Minutes recorded, transcribed & submitted by: Sharon Wright, Manager, Board Services Minutes Approved as Submitted:

27 REGULAR MEETING OF THE BOARD OF TRUSTEES HOUSTON COMMUNITY COLLEGE October 16, 2014 Minutes The Board of Trustees of Houston Community College held a Regular Meeting on Thursday, October 16, 2014 at the HCC Administration Building, Second Floor Auditorium, 3100 Main, Houston, Texas. MEMBERS PRESENT Neeta Sane, Chair Christopher W. Oliver, Vice Chair Robert Glaser, Secretary Eva Loredo Carroll G. Robinson Adriana Tamez David B. Wilson ADMINISTRATION Cesar Maldonado, Chancellor E. Ashley Smith, Acting General Counsel Shantay Grays, Chief of Staff William Carter, Vice Chancellor, Information Technology Zachary Hodges, Acting Vice Chancellor, Academic Affairs Diana Pino, Vice Chancellor, Student Services Teri Zamora, Vice Chancellor, Finance and Planning Michael Edwards, Acting President, Coleman College Margaret Ford Fisher, President, Northeast College William Harmon, President, Central College Fena Garza, President, Southwest College Butch Herod, Acting President, Northwest College Irene Porcarello, President, Southeast College Janet May, Chief Human Resources Officer Chuck Smith, Chief Facilities Officer OTHERS PRESENT Derrick Mitchell, Board Counsel, Bracewell & Giuliani Susan Goll, President, Faculty Senate Jodie Khan, President, COPA Other administrators, citizens and representatives from the news media CALL TO ORDER Mrs. Neeta Sane, Chair, called the meeting to order at 4:13 p.m. and declared the Board convened to consider matters pertaining to Houston Community College as listed on the duly posted Meeting Notice.

28 Houston Community College Regular Meeting October 16, 2014 Page 2 (The following Trustees were present: Glaser, Loredo, Robinson, Sane, Tamez, and Wilson) PRAYER AND PLEDGE OF ALLEGIANCE Mr. Robinson led the prayer and the pledges. APPROVAL OF MINUTES Motion Ms. Loredo moved and Mr. Glaser seconded. Vote The motion passed with a vote of 6-0. The following minutes were approved: Academic Affairs/Student Services Committee Meeting of September 11, 2014, Board Governance Committee Meeting of September 11, 2014, Committee of the Whole Meeting of September 11, 2014, Small Business Development Committee Meeting of September 11, 2014, Special Meeting of September 11, 2014, and Regular Meeting of September 18, 2014 CHAIRMAN S REPORT Mrs. Sane announced accomplishments for the year achieved by the Board and Administration to include the approval of all fourteen Capital Improvement Projects (CIP) Bond Projects and the budget for FY Mrs. Sane mentioned that Dr. Maldonado will be unveiling his vision for the institution over the next couple months. She noted that four new Trustees have been integrated and expressed appreciation to everyone for their efforts this year. Meetings Schedule for November Committee and Committee of the Whole meetings will be held on Thursday, November 13, 2014 and the Regular meeting will be held on Tuesday, November 18, Board Birthday Celebration Mrs. Sane announced that Trustee Tamez will celebrate her birthday on October 25 th (Mr. Oliver joined the meeting at 4:20 p.m.) CHANCELLOR S REPORT Dr. Cesar Maldonado provided the following report: Society of Petroleum Engineers Donation The Society of Petroleum Engineers Gulf Coast Section donated $100,000 in support of the RigOne and Petroleum Engineering Technology programs at the HCC Northeast Campus. The group has been supportive of HCC with contributions dating back to 2007: o Petroleum Engineering Technology Scholarship

29 Houston Community College Regular Meeting October 16, 2014 Page 3 o Chancellor s Symposium o HCC Northeast STEM Fair Dr. Maldonado invited Ms. Jeanne Perdue, Chapter Chair and Ms. Gabrielle Guerre, Education, Committee Chair to make remarks. Also, participating in the presentation were Dr. Ford Fisher, President, Northeast College, Dr. Madeline Burillo, Associate Vice Chancellor for Workforce Instruction, Dr. Joanna Kile, Executive Director, HCC Energy Institute, Ms. Carme Williams, Executive Director, HCC Foundation and Ms. Bea Emanuel-Sims, Director, Development for Workforce. Dr. Tamez expressed appreciation to the Chancellor for the commitment and the outreach regarding the RigOne project. Dr. Maldonado expressed appreciation for the funding and informed that there will be an outreach regarding the personal connection. Mr. Glaser apprised that the group is very important to the industry and noted he looks forward to the growth on both sides. Sembradores de Amistad Scholarship Contribution The HCC Foundation received a contribution from Sembradores de Amistad to create a permanent scholarship resource for Hispanic and low-income students pursuing an education in Science, Technology, Engineering and Math (STEM) at HCC. The Sembradores de Amistad has given scholarship funds since 2007 and this donation is to create a $60,000 endowed scholarship fund. Matching provided a total endowed scholarship fund of $120,000. The Sembradores de Amistad has also added $5,000 to their existing general scholarship fund. Dr. Zachary Hodges introduced the following distinguished members of Sembradores de Amistad: o Martin Cuellar o Manuel Davila o Don Hollis o Arturo Jacobs o Vidal Ramirez o Solomon Silva o Adan Trevino, Emeritus Board Member, HCC Foundation o Mrs. Joe Villarreal The Board expressed appreciation to the Sembradores de Amistad for the donation to HCC and the opportunity to work with the organization and for their work in the community.

30 Houston Community College Regular Meeting October 16, 2014 Page 4 Hispanic Scholarship Committee Dr. Maldonado thanked Trustees Capo, Loredo, and Tamez for their efforts as chairs for the Hispanic Scholarship Council and noted that the annual luncheon held on October 10, 2014 raised over $60,000 in scholarships. Ms. Loredo thanked everyone for their support of the Hispanic Scholarship Council Luncheon and the contributions to the scholarship effort. National Association for Community College Entrepreneurship (NACCE) NACCE is the nation's leading organization focusing on promoting entrepreneurship through community colleges. NACCE recently honored three individuals during their 12th annual conference in Phoenix; one of the honorees, Marilyn Harris, is a Houston Community College graduate. Ms. Harris, Executive Director, Women Veterans Business Center in Houston, launched her business in 2010 to meet the unmet needs of Houston's 30,000 plus women veterans. The Women Veterans Business Center has touched the lives of over 7,200 women veterans and their families. Ms. Harris not only teaches entrepreneurship at HCC, she also collaborates with HCC to reach veterans and fuel HCC programs. Faculty Senate Report Ms. Susan Goll, President of Faculty Senate thanked the Board for their interest in faculty professional development, a vital component of student success. Ms. Goll announced that the Bedicek Orman Auction will be held Friday, October 24, 2014 at the West Loop Auditorium. She thanked the Trustees and administration for their generous support. Ms. Goll apprised that faculty need instructionally meaningful programmed based opportunities and travel funds for development to ensure that they are meeting the needs of 21 st century learners. She apprised that faculty also need time to develop innovative teaching resources and workload flexibility to engage in cross disciplinary collaboration. Ms. Goll noted that the Quality Enhancement Plan (QEP) is an example of the creative collaboration that directly impacts student success. She informed that with the right professional development, the QEP model can be extended to other instructional programs. Ms. Goll apprised that faculty is hopeful that funding will be made available for instructional programs system-wide.

31 Houston Community College Regular Meeting October 16, 2014 Page 5 HEARING OF THE CITIZENS There following individual(s) requested to speak before the Board: Daniel Arp CONSENT AGENDA Motion Mr. Glaser moved and Mr. Robinson seconded to approve the consent agenda item A.5. The motion passed with a vote of 7-0. The following item was approved: HCC Representative on Missouri City Tax Incremental Reinvestment (TIRZ) Zone 3 AUTHORIZE TRANSFER OF FUNDS FROM FUND BALANCE TO REIMBURSE BOND CIP PROJECT N (COLEMAN CAMPUS) FOR FUNDS TRANSFERRED TO BOND CIP PROJECT C (SOUTHWEST-WEST LOOP CAMPUS) AND BOND CIP PROJECT D (SOUTHWEST-BRAYS OAKS CAMPUS) Motion - Ms. Loredo moved and Mr. Glaser seconded to discuss item A.1. Amended Motion - Mr. Robinson moved and Ms. Loredo seconded to amend the motion to include item A.2. The following items were discussed. Authorize Transfer of Funds from Fund Balance to Reimburse Bond CIP Project N (Coleman Campus) for Funds Transferred to Bond CIP Project C (Southwest- West Loop Campus) and Bond CIP Project D (Southwest-Brays Oaks Campus) Authorize Transfer of Funds from Bond CIP Project N (Coleman Campus) to Bond CIP Project C (Southwest-West Loop Campus) and Project D (Southwest- Brays Oaks Campus) Ms. Loredo requested clarification of the process regarding items A.1 and A.2. Dr. Maldonado noted that the transaction is to pull Capital Improvement Plan bond proceeds from the Coleman project to cover the three projects and informed that the action for item A.2 will be to authorize replacing the money from the fund balance to reimburse the Coleman project. Ms. Loredo inquired as why the funds are not taken from the fund balance regarding the three projects in item A.1. Dr. Maldonado apprised that the transaction took into consideration the tax implications as it relates to the spend down requirement. Mr. Robinson noted that he is in agreement with items A.1 and A.2. Vote - The motion passed to approve consent agenda items A.1 and A.2 with a vote of 7-0. INVESTMENT REPORT FOR THE MONTH OF AUGUST 2014 AND MONTHLY FINANCE STATEMENT FOR AUGUST 2014 Motion Mr. Robinson moved and Dr. Tamez seconded.

32 Houston Community College Regular Meeting October 16, 2014 Page 6 Mrs. Teri Zamora informed that this is the final investment report for the fiscal year and that a total of $2.3 million in interest was earned. Mrs. Zamora apprised that this is the final financial report for the fiscal year and noted that the year ended with approximately $12 million added to the unrestricted fund balance. She informed that the auxiliary fund balance ended at $6 million of which $2.2 million is set aside for student concerns and the remaining is unrestricted. Mr. Robinson requested an account of Fund 5 be provided. Mr. Robinson inquired of the funds allocated for vacant positions. Mrs. Zamora apprised that $10.3 million was unspent due to the moratorium to not fill positions over the summer. Mr. Robinson inquired of the amount spent from the Opportunity Fund. Mrs. Zamora noted that colleges begin to run short on adjunct funds in the Spring and Summer. Mr. Robinson inquired of the budget for faculty development and informed he would like to see if some of the unused funds could be realigned for faculty development. Mr. Wilson inquired of the $7.3 million in excess of revenue. Mrs. Zamora apprised that it was due to property taxes. Vote - The motion passed with vote of 7-0. TOPICS FOR DISCUSSION AND/OR ACTION Mrs. Sane noted that items B.3, B.4, and B.5 were pulled by Administration. APPROVE THE 2014 TAX RATE FOR MAINTENANCE & OPERATIONS AND DEBT SERVICE Motion Mr. Oliver moved and Ms. Loredo seconded. Dr. Maldonado informed that two public hearings have been held regarding the tax rate and noted that the action is the formal adoption of the tax rates. He apprised that this is the last step in moving forward with the tax rate presented at the last two public hearings. Vote The motion passed with vote of 7-0. Mr. Oliver inquired if items B.3, B.4, and B.5 would eventually be discussed. Mrs. Sane noted that the Chancellor will bring the items back for consideration at a later time. ADJOURNED TO CLOSED SESSION Mrs. Sane adjourned the meeting to Executive Session at 5:09 p.m. notice having previously been given and reiterated in accordance with Sections , , and/or of the Open Meetings Law. Mrs. Sane stated that any final action, vote or decision on any item discussed in Executive Session would be taken up in Open Session or in a subsequent Public Meeting.

33 Houston Community College Regular Meeting October 16, 2014 Page 7 Mrs. Sane reconvened the meeting in Open Session at 6:53 p.m. and entertained any motions on pending matters. (The following Trustees were present: Glaser, Loredo, Robinson, Sane, Tamez, and Wilson) AUTHORIZATION TO ACQUIRE CERTAIN REAL ESTATE AT OR NEAR BRAYS OAKS Motion Mr. Robinson and Mr. Glaser seconded. Amended motion - Mr. Robinson and Ms. Loredo seconded to amend the item to approve the purchase of approximately 12 acres in relation to the Brays Oaks project. Mrs. Sane recessed the meeting at 6:56 p.m. and reconvened at 6:57 p.m. Mr. Derrick Mitchell informed that the initial action item was to negotiate and the amendment is to approve the purchase of the property. Vote on amendment - The motion failed with vote of with Mr. Wilson opposing and Ms. Loredo abstaining. Mr. Sane recessed the meeting at 7:00 p.m. and reconvened at 7:01 p.m. Vote Original motion The motion failed with vote with Mr. Wilson opposing and Ms. Loredo abstaining. Mr. Robinson apprised that the Board just voted down the land for a project for which a Construction Manager-at-Risk (CMAR) and architect services were approved. Mrs. Sane advised the Chancellor to revisit the project with due diligence. Mr. Robinson noted that he would like to change his vote to no to be on the prevailing side. The Chair informed that there will need to be a motion to reconsider. Mr. Mitchell informed that the motion failed. Mr. Robinson apprised that it is his anticipation that the Chancellor will bring the item back for reconsideration. (Mr. Oliver returned from closed session at 7:04 p.m.) AUTHORIZATION TO ACQUIRE CERTAIN REAL ESTATE AT OR NEAR SOUTHWEST-WEST LOOP CAMPUS Motion Mr. Glaser moved and Mr. Oliver seconded. The motion passed with a vote of 6-1 with Mr. Wilson opposing. PERSONNEL AGENDA (FACULTY) Motion Mr. Oliver moved and Mr. Glaser seconded. The motion passed a vote of 7-0.

34 Houston Community College Regular Meeting October 16, 2014 Page 8 Mrs. Sane recessed the meeting at 7:06 and reconvened at 7:07 p.m. ADJOURNMENT With no further business coming before the Board, the meeting adjourned at 7:07 p.m. Minutes recorded, transcribed & submitted by: Sharon Wright, Manager, Board Services Minutes Approved as Submitted:

35 Consent Agenda

36 ACTION ITEM Meeting Date: November 18, 2014 Committee: Board Governance ITEM NO. ITEM TITLE PRESENTER 1 Modification to Board Policy D.1: Equal Education Opportunities and D.4.5: Sexual Harassment, Assault, and Violence Dr. Cesar Maldonado Ashley Smith RECOMMENDATION Modify Policy D.1 Equal Educational Opportunities to comply with Title IX s required Assurance of Nondiscrimination. Replace Policy D.4.5 title from Sexual Harassment, Assault and Violence to Convicted Sex Offenders COMPELLING REASON/RATIONALE An institution that receives Title IX funding and is eligible to administer federal financial aid must comply with Title IX. The recommended updates are needed to comply with Title IX requirements and provide clarity for students. DESCRIPTION OR BACKGROUND Recent legislation requires specific elements to be included in an institutions policy on discrimination to include an assurance of nondiscrimination clause. FISCAL IMPACT No fiscal impact STRATEGIC GOAL ALIGNMENT Strategic Initiative: Increase Student Completion through Advanced Educational Opportunities Attachment Title(s): Policy D.1 Equal Educational Opportunities - Update This item is applicable to the following: Central Coleman Northeast Northwest Southeast Southwest /18/ :27 PM

37 Policy D. Student Services - Updates D. Student Services D.1 Assurance of Nondiscrimination Title IX of the Education Amendments of 1972 prohibits discrimination based on sex in educational programs and activities that receive federal financial assistance. The College is committed to providing an educational climate that is conducive to the personal and professional development of each individual. Houston Community College does not discriminate and prohibits discrimination on the basis of race, color, religion, gender identity and gender expression, national origin, age, disability, sex, sexual orientation, or veteran status in employment or the rights, privileges, programs, and activities generally accorded or made available to students at the school, administration of its educational policies, admissions policies, scholarship and loan programs, and athletic and other school administered programs. To ensure compliance with Title IX and other federal and state civil rights laws, the College has developed policies and procedures that prohibit sex discrimination in all of its forms. This statement of non-discrimination applies to educational programs, educational policies, admissions policies, educational activities, employment, access and admission, scholarship and loan programs, and athletic and other school-administered programs. Inquiries regarding compliance with Title VI of the Civil Rights Act of 1964, Title IX of the Education Amendments of 1972, Section 504 of the Rehabilitation Act of 1973, the Americans with Disabilities Act of 1990 or other civil rights laws should contact one of the following individuals: Title IX coordinator(s) Manager of Office of Institutional Equity 3100 Main, Suite 702 Houston, TX Section 504 Coordinator/Disability Access and Accommodation Director of Institutional Equity & Compliance 3100 Main, Suite 702 Houston, TX D.2 Enrollment D.3 Financial Aid

38 D.4 Student Rights & Responsibilities D.4 Student Activities D.4.1 Student Activities D.4.2 Registered Student Organizations D.4.3 Student Travel D.4.4 Student Rights & Responsibilities D.4.5 Convicted Sex Offenders The Texas Code of Criminal Procedures Article requires each person who is required to register as a sex offender, and who intends to attend classes at HCC to register with HCC s Police Department at least seven (7) days prior to reporting to any System location. Current HCC Board policy requires that a sex offender seeking to enroll at HCC must submit information pertinent to his or her offenses to HCC s Review Committee for a determination of eligibility for enrollment. A person seeking to be enrolled as a student must first be approved before completing the registration process. D.4.6 Discipline and Penalties D.4.7 Electronic Use Policy D.4.8 Social Networking Policy D.4.9 Statement Regarding Students with Disabilities

39 ACTION ITEM Meeting Date: November 18, 2014 Committee: Board Governance ITEM NO. ITEM TITLE PRESENTER 2 Modification to Board Bylaws Article A, Section 10(e): Mechanisms for Enforcement RECOMMENDATION Discuss and/or approve proposed revisions to Board bylaws regarding Article A-Ethics. Derrick Mitchell COMPELLING REASON/RATIONALE The Board of Trustees desires to revise its bylaws by allowing the board to approve certain investigations. STRATEGIC GOAL ALIGNMENT Strategic Initiative: Support Innovation Attachment Title(s): Proposed Modification to Bylaws-Article A, Section 10(e) This item is applicable to the following: Central Coleman Northeast Northwest Southeast Southwest /6/2014 6:06 PM

40 HCC Bylaws, Article A 10. MECHANISMS FOR ENFORCEMENT. The mechanisms for enforcement of the Code of Ethics are: a. b. c. d. e. f. g. h. Board members must report an alleged violation of this Ethics Code to Board Counsel and Senior Staff must report such communications to the General Counsel. Any person may allege noncompliance with this Ethics Code to the Board Chair (or the Vice-Chair if the Chair is the target of the allegation) or to the Chancellor if it involves a member of the Senior Staff. The Board shall be advised when any allegation of a violation of this Code of Ethics is made. The Chair, Vice-Chair or Chancellor, as appropriate, will undertake a process to resolve the complaint. If either the complainant or the Board member complained about requests, and a majority of the Board approves such request, the Chair (or Vice Chair, if the Chair is the target of the allegation), after consultation with Board Counsel, willthe Chair may initiate an independent investigation of the complaint after receiving approval from a majority of the board. Upon approval, the chair shall consult with Board Counsel, then name an independent third party to investigate the complaint within the parameters set by the Board and report to the Board such results. With the approval of a majority of the Board, the Chair, after consultation with Board Counsel, may also initiate such investigation based on the complaint.. Further, the chair shall provide regular updates to the Board through the named investigator. If the Board finds a violation of this Ethics Code, it can reprimand or censure the Board member, the only sanctions available under Texas law. If the Chancellor finds a violation of this Ethics Code by a member of Senior Staff, the Chancellor shall take appropriate action under the HCC human resources policies. After an evidentiary hearing, a majority vote of the total membership of the board may disqualify a vendor or subcontractor from participation in any solicitation or contract for up to one (1) year for violating this Ethics Code. # #

41 ACTION ITEM Meeting Date: November 18, 2014 Committee: External Relations ITEM NO. ITEM TITLE PRESENTER 3 State and Local Government Relations Consulting Services (Project No. RFQ 15-01) Dr. Cesar Maldonado Remmele Young RECOMMENDATION Authorize the Chancellor to negotiate and execute a contract with Locke Lord LLP to provide State and Local Government Relations Consulting Services on an as needed basis, in accordance with RFQ The contract term for the awarded contract will be three (3) years. COMPELLING REASON/RATIONALE Houston Community College issued a Request for Qualification (RFQ) for the selection of a firm to provide State and Local Government Relations Consulting Services for HCC. Key features of the scope of service included the following HCC 2015 Legislative Priorities for the 84th Texas Legislative Session: Critical needs in the areas of workforce skills alignment that include seeking to increase funding for innovative methods in improving both workforce and college readiness, transfer and articulation, financial aid, and general appropriations to include core operations, student success, and contact hour-based funding. Policy considerations specifically important to HCC in areas where the institution has been the lead policy proponent (i.e., hire local first and expansion of community colleges' opportunity to offer baccalaureate degree programs). Additionally, the disciplines of STEM will receive priority consideration for advancement. This recommendation to the Board of Trustees is in accordance with RFQ and Chapter 2254 of the Texas Government Code. DESCRIPTION OR BACKGROUND The Request for Qualification (RFQ 15-01) was issued on September 15, The solicitation document was distributed electronically in addition to being published in local newspapers; notice was provided to four hundred (400) firms. Additionally, the solicitation was duly posted on the Electronic State Business Daily (ESBD) website. Five (5) responses were received by the solicitation due date of October 8, 2014 at 2:00 p.m. Five (5) responses were deemed responsive to the requirements of RFQ and were submitted to the Evaluation Committee for evaluation and scoring. FISCAL IMPACT In accordance with this recommendation, the fee for Government Relations Consulting Services shall be negotiated prior to the contract award. The services will be funded from the FY15 HCC Operations Budget. 11/18/ :28 PM

42 LEGAL REQUIRMENTS This recommendation to the Board of Trustees is being made to the most highly qualified firms on the basis of demonstrated competence and qualifications in accordance with Chapter of the Texas Government Code. Pursuant to the published RFQ document and in accordance with Chapter 2254 of the Texas Government Code, the Evaluation Committee has selected the offeror that submitted a statement of qualifications demonstrating the most highly qualified firms on the basis of demonstrated competence and qualifications based on the published selection criteria and as evidenced in the final evaluation ranking. Following the Texas Government Code and in accordance with the procurement process, HCC has selected the most highly qualified firms on the basis of demonstrated competence and qualifications. STRATEGIC GOAL ALIGNMENT Strategic Initiative: Support Innovation Attachment Title(s): 1. Summary of Procurement 2. Composite Score Sheet This item is applicable to the following: Central Coleman Northeast Northwest Southeast Southwest /18/ :28 PM

43 SUMMARY OF PROCUREMENT BOARD ACTION ITEM PROJECT TITLE: State and Local Government Relations Consulting Services PROJECT NO.: RFQ PROCUREMENT METHOD: Request for Qualification (Most Highly Qualified) PROJECT MANAGER: Remmele Young, Associate Vice Chancellor Government & External Affair NAME OF BUYER: PURPOSE: RECOMMENDED VENDORS: LEGAL REQUIREMENTS: Jennifer Chiu, Senior Buyer Houston Community College issued a Request for Qualification (RFQ) for the selection of a firm to provide State and Local Government Relations Services on an as needed basis, in accordance with RFQ Locke Lord LLP This recommendation to the Board of Trustees is being made to the most highly qualified firms on the basis of demonstrated competence and qualifications in accordance with Chapter of the Texas Government Code. Pursuant to the published RFQ document and in accordance with Chapter 2254 of the Texas Government Code, the Evaluation Committee has selected the offeror that submitted a statement of qualifications demonstrating the most highly qualified firms on the basis of demonstrated competence and qualifications based on the published selection criteria and as evidenced in the final evaluation ranking. Following the Texas Government Code and in accordance with the procurement process, HCC has selected the most highly qualified firms on the basis of demonstrated competence and qualifications. LOCATION INFORMATION: In performing the work under RFQ 15-01, the recommended vendor will be working out of their Houston offices.

44 PROJECTED VALUE: In accordance with this recommendation, the fee for Government Relations Consulting Services shall be negotiated prior to the contract award. The services will be funded from the FY15 HCC Operations Budget. CONTRACT TERM: ADVERTISEMENT: The contract term for the awarded contract will be three (3) years. This procurement was advertised in the following newspapers: The Houston Chronicle: September 17, 21, & 23, 2014 African American: September 22 thru 28, 2014 La Información: September 18 thru 24, 2014 Voice of Asia: September 19 & 26, 2014 PROCUREMENT NOTICE: A notice of the procurement was distributed to the following: Notice to HCC Board of Trustees on September 23, 2014 Texas State Procurement Website on September 15, 2014 HCC Procurement Operations Website September 15, 2014 SOLICITATION INFORMATION: COMPETITIVE: PROPOSAL EVALUATION: The Request for Qualification (RFQ 15-01) was issued on September 15, The solicitation document was distributed electronically in addition to being published in local newspapers; notice was provided to four hundred (400) firms. Additionally, the solicitation was duly posted on the Electronic State Business Daily (ESBD) website. Five (5) responses were received by the solicitation due date of October 8, 2014 at 2:00 p.m. Five (5) responses were deemed responsive to the requirements of RFQ and were submitted to the Evaluation Committee for evaluation and scoring. Yes, please see Composite Score Sheet. Responses were evaluated by the Evaluation Committee which consisted of representatives with relevant subject matter understanding who scored proposals in accordance with the published evaluation criteria noted below. Evaluation Criteria Available Points Profile, Overview and Qualification & Experience of the Firm 20

45 Demonstrated Qualifications of Personnel 25 Technical Approach & Methodology 25 Past Performance & References 20 PRIOR HCC EXPERIENCE: Small Business Practices 10 Total 100 Yes. REFERENCES: SMALL BUSINESS GOAL: Evaluated and found to be favorable. In accordance with Section 1.9 of the Procurement Operations Manual, for this solicitation, HCC advertised a 25% Good Faith Effort Small Business Participation Goal. The recommended firm proposed a 35% subcontracting commitment for the services required under RFQ Balance of page intentionally left blank.

46 State & Local Government Relations Consulting Services (Project No ) Composite Score Sheet Firm Total Score Lock Lord LLP 84 Gardere Wynne Sewell LLP 73 Cornerstone Government Affairs 71 Texas Star Alliance 71 The Harris Law Firm 70

47 ACTION ITEM Meeting Date: November 18, 2014 Committee: External Relations ITEM NO. ITEM TITLE PRESENTER 4 Approve Appointment to Midtown Zone Board of Directors Dr. Cesar Maldonado RECOMMENDATION Approve appointment of Trustee Adriana Tamez, Trustee Robert Glaser, Trustee Eva Loredo (Alternate) and Teri Zamora, Vice Chancellor of Finance and Planning as non-voting ex-officio members to the Midtown Zone Board of Directors. COMPELLING REASON/RATIONALE The Midtown/HCCS agreement allows for appointment to the Midtown Zone Board of Directors as non-voting ex officio members. DESCRIPTION OR BACKGROUND Per the Midtown/HCCS agreement, the position is non-voting. FISCAL IMPACT There is no fiscal impact. STRATEGIC GOAL ALIGNMENT Strategic Initiative: Support Innovation This item is applicable to the following: Central Coleman Northeast Northwest Southeast Southwest /18/ :28 PM

48 ACTION ITEM Meeting Date: November 18, 2014 Committee: Facilities and Finance ITEM NO. ITEM TITLE PRESENTER 5 Authorize Transfer of Funds from Bond CIP Project J (Northeast- North Forest Campus) to Bond CIP Project I (Northeast-Northline Campus) Dr. Cesar Maldonado Charles Smith RECOMMENDATION Authorize the Chancellor to transfer funds from Bond CIP Project J (Northeast- North Forest Campus) to Bond CIP Project I (Northeast-Northline Campus). COMPELLING REASON/RATIONALE The transfer of funds from Bond CIP Project J (Northeast- North Forest Campus) is needed to expand the project scope of Bond CIP Project I (Northeast-Northline Campus). DESCRIPTION OR BACKGROUND Bond CIP Projects I and J were approved by the Board and recent events have made it necessary to expand the scope of Bond CIP Project I (Northeast-Northline Campus). FISCAL IMPACT Transfer of $3.5 million from Bond CIP Project J (Northeast- North Forest Campus). STRATEGIC GOAL ALIGNMENT Strategic Initiative: Increase Student Completion and Develop 21st Century Learners This item is applicable to the following: Central Coleman Northeast Northwest Southeast Southwest /18/ :28 PM

49 Topics for Discussion and/or Action

50 ACTION ITEM Meeting Date: November 18, 2014 Committee: Audit ITEM NO. ITEM TITLE PRESENTER 1 Annual Financial Report for the Fiscal Year Ended August 31, 2014 Dr. Cesar Maldonado Teri Zamora Dr. Karla Bender RECOMMENDATION Approve the audited Annual Financial Report for the fiscal year ended August 31, 2014 as prepared by the auditing firm of Grant Thornton, LLP. COMPELLING REASON/RATIONALE Section Reports, Higher Education, Texas Educational Code, and Section , Texas Government Code require that the governing board furnish the required number of copies of the audited annual financial report to the governor, comptroller of public accounts, state auditor, Texas Higher Education Coordinating Board, Legislative Budget Board and various other state, federal, and bond agencies by January 1 of each year. The approval of the audited financial report by the Board of Trustees is recommended prior to the public distribution of the annual financial report. DESCRIPTION OR BACKGROUND Grant Thornton LLP audited the financial statements of HCCS in accordance with U.S. general accepted auditing standards and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. The audit of compliance for federal and state programs also followed standards of the OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and the State of Texas Single Audit Circular. Tests of the accounting records of the System and other procedures considered necessary in order to express an opinion and render the required reports were performed. STRATEGIC GOAL ALIGNMENT Strategic Initiative: Support Innovation Attachment Title(s): Annual Financial Report (Will be forwarded under a separate cover) This item is applicable to the following: Central Coleman Northeast Northwest Southeast Southwest /18/ :28 PM

51 ACTION ITEM Meeting Date: November 18, 2014 Committee: Board Governance ITEM NO. ITEM TITLE PRESENTER 2 Personnel Agenda (Faculty) RECOMMENDATION Approve the personnel action item for November 2014 Dr. Cesar Maldonado COMPELLING REASON/RATIONALE Full-time contract Faculty is hired under one-year term contracts that are either renewed or nonrenewed on an annual basis under Board Policy A.7.1. STRATEGIC GOAL ALIGNMENT Strategic Initiative: Support Innovation Attachment Title(s): Personnel Agenda - Faculty (November 2014) This item is applicable to the following: Central Coleman Northeast Northwest Southeast Southwest /18/ :28 PM

52 Personnel Agenda - Faculty (For Board Approval) Board Meeting: November 20, 2014

53 HOUSTON COMMUNITY COLLEGE SYSTEM FACULTY November 20, 2014 FACULTY (REGULAR) FOR BOARD APPROVAL Name Previous Organization Proposed Title/Organization FLSA/Grade Previous Salary Salary Effective Date 1. Adjei, Gideon HCCS P/T Biology to F/T Biology Instructor/ FAC/12 $1,910 course $51,221 yr Instructor/NW NW 10.5 months 2. Boutte-Heiniluoma HCCS P/T Sociology to F/T Sociology Instructor FAC/12 $61,350 yr. $45,677 yr Nichole Instructor/NE /NE 9 months 3. McClay, Fay Vista College to F/T Associate Degree FAC/12 $81,158 yr. $65,925 yr Nursing Instructor/ 10.5 months Coleman 4. Zinebi, Savannah HCCS P/T Biology to F/T Biology Instructor/ FAC/12 $1,910 course $38,502 yr Instructor/SE SE 9 months 1

54 Credentials & Selection Process - Faculty (For Board Approval) Board Meeting: November 20, 2014

55 HOUSTON COMMUNITY COLLEGE SYSTEM FACULTY/REGULAR November 20, 2014 FACULTY (REGULAR) FOR BOARD APPROVAL Name Job Title/Requirements Nominee s Credentials Selection Process 1. Adjei, Gideon Instructor Biology PHD-Cellular & Development Job Vacancy Notice-N/A Must have completed at least eighteen) MS-Agronomy -HR Referred-N/A (18) graduate hours in Biology and hold a Adjunct Professor 1 yr. 5 mos. -Screening committee evaluated Master s degree. Minimum of one (1) year Corp. Bus. Dev. Mgr. 2 yrs.9 mos. and reviewed-n/a of college level teaching experience or Regional Mgr. 5 yrs.0 mos. -Hiring authority evaluated and five (5) to ten (10) years of related work interviewed-n/a experience required. Total 9 yrs. 2 mos. -Applicant selected-n/a 2. Boutte-Heiniluoma, Instructor Sociology PHD-Sociology Job Vacancy Notice-4391 Nichole Must have completed at least eighteen Sociology Instr. 1 yr. 9 mos. -HR Referred-40 (18) graduate hours in Sociology and hold Asst. Professor 1 yr. 5 mos. -Screening committee evaluated a Master s degree. Minimum of one (1) Visiting Professor 1 yr. 9 mos. and reviewed-4 year of college level teaching experience preferred. -Hiring authority evaluated and interviewed-3 Total 4 yrs. 2 mos. -Applicant selected-external HCC P/T to F/T 3. McClay, Fay Instructor/Associate Degree Nursing PHD-Curriculum & Instruction Job Vacancy Notice-2130 Licensed as a registered nurse in Texas MS-Nursing -HR Referred-5 and hold a Master s degree in nursing or a Instructor ADN 17 yrs. 9 mos. -Screening committee evaluated Master s degree with a minimum of six (6) Nurse 6 yrs. 6 mos. and reviewed-3 hours of graduate level nursing courses -Hiring authority evaluated and relevant to the clinical area of Total 24 yrs. 3 mos. interviewed-2 responsibility. Three (3) years of current -Applicant selected-external professional clinical work experience in New Hire F/T the nursing field. 1

56 HOUSTON COMMUNITY COLLEGE SYSTEM FACULTY/REGULAR November 20, 2014 FACULTY (REGULAR) FOR BOARD APPROVAL Name Job Title/Requirements Nominee s Credentials Selection Process 4. Zinebi, Savannah Instructor/Biology PHD-Biological & Physical Sci. Job Vacancy Notice-4424 Must have completed at least eighteen Instructor 9 yrs. 2 mos. -HR Referred--94 (18) graduate hours in Biology and hold a -Screening committee evaluated Master s degree. Minimum of one (1) year and reviewed-11 of college level teaching experience or Total 9 yrs. 2 mos. -Hiring authority evaluated and five (5) to ten (10) years of related work experience required. interviewed-4 -Applicant selected-external HCC P/T to F/T 2

57 ACTION ITEM Meeting Date: November 18, 2014 Committee: Facilities and Finance ITEM NO. ITEM TITLE PRESENTER 3 Ratify the 2014 Tax Rate for Maintenance & Operations and Debt Service Derrick Mitchell RECOMMENDATION Ratify the attached resolution to adopt the tax rate of $ per $100 assessed valuation as the tax rate for Maintenance & Operations Tax for year Ratify the attached resolution to adopt the tax rate of $ per $100 assessed valuation as the rate for the Debt Service Tax for year The combined rate for Maintenance and Operations and Debt Service approved is $ and the percentage by which this rate exceeds the effective tax rate is 18.04%. DESCRIPTION OR BACKGROUND Chapter 26 of the Property Tax code requires taxing units to comply with the truth-in-taxation statutes in adopting their tax rates. A taxing unit must calculate and publish its effective and rollback tax rates before adopting an actual rate. The purpose of the law is to make taxpayers aware of the tax rate proposed and to allow taxpayers, in certain cases, to roll back or limit a tax increase. The effective and rollback tax rates were posted on the HCC website on Monday, September 8, 2014 and published in the Houston Chronicle on Monday, September 8, 2014 and Wednesday, September 10, 2014 in order to comply with the Truth-In-Taxation Property Tax Code, Chapter 26. The following two public hearings were held: The first public hearing was held on Thursday, October 2, 2014 at 3:30 p.m. at the HCC Administration Building, 3100 Main, 2 nd Floor. The second public hearing was held on Tuesday, October 7, 2014 at 3:30 p.m. at the HCC Administration Building, 3100 Main, 2 nd Floor. The tax rates were approved by the Board on October 16, 2014 at 4 p.m. at the HCC Administration Building, 3100 Main, 2 nd Floor. This ratification is to provide confirmation of such action. FISCAL IMPACT The Maintenance & Operations tax rate for 2014 is $ per $100 assessed valuation. The debt service tax rate is $ per $100 assessed valuation. In keeping with the Board's policy to minimize the tax burden on constituents, the administration proposed a total tax rate of $ , which will raise sufficient tax funds to support the fiscal year operating budget and debt service. STRATEGIC GOAL ALIGNMENT Strategic Initiative: Support Innovation Attachment Title(s): Resolution This item is applicable to the following: Central Coleman Northeast Northwest Southeast Southwest /14/ :37 AM

58 HOUSTON COMMUNITY COLLEGE SYSTEM HOUSTON, HARRIS COUNTY, TEXAS RESOLUTION AND ORDINANCE FIXING THE TAX RATE AND LEVYING AD VALOREM TAXES FOR THE HOUSTON COMMUNITY COLLEGE SYSTEM FOR DEBT SERVICES FOR THE YEAR WHEREAS, The Board of Trustees of the Houston Community College System is authorized, by a majority of the electors that voted in the election, to levy and pledge annual ad Valorem taxes sufficient to pay the principal and interest on negotiable coupon bonds as the same come due in the year 2014 at for the Houston Community College System on the One Hundred Dollars ($100.00) of assessed taxable property value during the current year. THEREFORE, BE IT RESOLVED AND ORDAINED BY THE BOARD OF TRUSTEES OF THE HOUSTON COMMUNITY COLLEGE SYSTEM THAT: 1. The above paragraph is incorporated and made a part of the Resolution and Ordinance; and 2. The College Tax rate for the Houston Community College System year 2014 shall be, and the rate is hereby fixed at for the debt service obligation of the Houston Community College System, on each One Hundred Dollars ($100.00) of assessed value of taxable property, such Ad Valorem taxes to be levied on all taxable property situated in the College District for the purpose of satisfying the District s general obligation debt, during the year 2014 and the Assessor and Collector of Taxes of the College District is hereby authorized and directed to assess property and collect District taxes on the basis of this rate for the year 2014, and

59 HOUSTON COMMUNITY COLLEGE SYSTEM HOUSTON, HARRIS COUNTY, TEXAS 3. The assessed value of taxable property shall be based upon the current assessment ratio of ONE HUNDRED PERCENT (100%) of market value; and tax rolls for 2014 and all prior years are approved. 4. This Resolution and Ordinance shall become effective from its passage. On motion of Trustee Seconded by Trustee and the above Resolution and Ordinance fixing the Houston Community College System tax rate and levying ad Valorem taxes for the year 2014 was adopted and it was so ordered. PASSED, APPROVED, AND ADOPTED THIS 16 TH DAY OF OCTOBER, By: Neeta Sane, Board Chair Board of Trustees Houston Community College System ATTEST: By: Robert Glaser, Secretary Board of Trustees Houston Community College System

60 HOUSTON COMMUNITY COLLEGE SYSTEM HOUSTON, HARRIS COUNTY, TEXAS RESOLUTION AND ORDINANCE FIXING THE TAX RATE AND LEVYING AD VALOREM TAXES FOR THE HOUSTON COMMUNITY COLLEGE SYSTEM FOR MAINTENANCE AND OPERATION FOR THE YEAR WHEREAS, The Board of Trustees of the Houston Community College System finds that after reviewing all sources of revenue, it is necessary that the Board fix the tax rate for all purposes at for the Houston Community College System on One Hundred Dollars ($100.00) of assessed taxable property value to operate the College during the current year. WHEREAS, The Maintenancemaintenance and operations tax levy for 2014 to fund maintenance and operations expenditures is the same as in the tax levy for WHEREAS, Houston Community College System will fix the maintenance and operations tax rate of for 2014 and this rate is greater than the 2014 calculated effective maintenance and operations tax rate of WHEREAS, the 2014 maintenance and operations tax rate of will raise more taxes for maintenance and operations than the 2013 tax rate of , which is a 7.31%. increase from The tax rate will increase/decrease taxes for maintenance and operations on a $100,000 home by approximately $0.00. THEREFORE BE IT RESOLVED AND ORDAINED BY THE BOARD OF TRUSTEES OF THE HOUSTON COMMUNITY COLLEGE SYSTEM THAT: 1. The above paragraph is incorporated and made a part of this Resolution and Ordinance; and 2. The College tax rate for the Houston Community College System year 2014 shall be, and the rate is hereby fixed at $ for maintenance

61 HOUSTON COMMUNITY COLLEGE SYSTEM HOUSTON, HARRIS COUNTY, TEXAS and operations expenses of the Houston Community College System, on each One Hundred Dollars ($100.00) of assessed value of taxable property, such ad valorem taxes will be levied on all taxable property situated in the College District for all purposes, during the year 2014 and the Assessor and Collector of Taxes of the College District is hereby authorized and directed to assess property and collect College District taxes on the basis of this rate for the year 2014,2014; and 3. The assessed value of taxable property shall be based upon the current assessment ratio of ONE HUNDRED PERCENT (100%) of market value; and tax rolls for 2014 and all prior years are approved.; and 4. THIS TAX RATE WILL RAISE MORE TAXES FOR MAINTENANCE AND OPERATIONS THAN LAST YEAR'S TAX RATE.; and 5. THE TAX RATE WILL EFFECTIVELY BE RAISED BY 7.31% AND WILL RAISE TAXES FOR MAINTENANCE AND OPERATIONS ON A $100,000 HOME BY APPROXIMATELY $0.00; and This Resolution and Ordinance shall become effective from its passage.

62 HOUSTON COMMUNITY COLLEGE SYSTEM HOUSTON, HARRIS COUNTY, TEXAS On motion of Trustee Seconded by Trustee and the above Resolution and Ordinance fixing the Houston Community College System tax rate and levying ad valorem taxes for the year 2014 was adopted, and it was so ordered. PASSED, APPROVED, AND ADOPTED THIS 16 TH DAY OF OCTOBER By: Neeta Sane, Board Chair Board of Trustees Houston Community College System ATTEST: By: Robert Glaser, Secretary Board of Trustees Houston Community College System

63 HOUSTON COMMUNITY COLLEGE SYSTEM HOUSTON, HARRIS COUNTY, TEXAS STATE OF TEXAS COUNTY OF HARRIS VERIFICATION BEFORE ME, the undersigned Notary Public, on this day personally appeared. Who is duly authorized to make this verification in their representative capacity. Being duly sworn under oath, stated that he/she is the person appearing and the facts contained therein are within his/her personal knowledge are true and correct. SUBSCRIBED AND SWORN TO BEFORE ME ON THIS 16 TH DAY OF OCTOBER, NOTARY PUBLIC IN AND FOR THE STATE OF TEXAS MY COMMISSION EXPIRES: VERIFICATION BEFORE ME, the undersigned Notary Public, on this day personally appeared. Who is duly authorized to make this verification in their representative capacity. Being duly sworn under oath, stated that he/she is the person appearing and the facts contained therein are within his/her personal knowledge are true and correct. SUBSCRIBED AND SWORN TO BEFORE ME ON THIS 16 TH DAY OF OCTOBER, NOTARY PUBLIC IN AND FOR THE STATE OF TEXAS MY COMMISSION EXPIRES:

64 ACTION ITEM Meeting Date: November 18, 2014 Committee: Facilities and Finance ITEM NO. ITEM TITLE PRESENTER 4 Investment Policy for 2015 Dr. Cesar Maldonado Teri Zamora RECOMMENDATION Review and approve the HCCS Investment Policy and investment strategies, with recommended changes, as required by the Texas Government Code, Chapter 2256, and Public Funds Investment Act. Review and adopt the list of qualified brokers, and authorize the investment officer to utilize these brokers through the fiscal year as deemed appropriate for investment transactions. RATIONALE FOR RECOMMENDATION The Texas Government Code, Chapter 2256, Public Funds Investment Act, requires the governing body of an investing entity to review its written investment policy and strategies not less than annually, and review, revise and adopt a list of qualified brokers that are authorized to engage in investment transactions for the System. The governing body shall adopt a written instrument by rule, order, ordinance or resolution stating that it has reviewed the investment policy, investment strategies, and list of qualified brokers; and that the written instrument so adopted shall record any changes to the investment policy, investment strategies and list of qualified brokers. DESCRIPTION OR BACKGROUND The Board of Trustees adopted the existing written investment policy on December 17, FISCAL IMPACT Provide safety and liquidity of principal and a reasonable return on our investments in prevailing economic and investment environments. STRATEGIC GOAL ALIGNMENT Strategic Initiative: Support Innovation Attachment Title(s): 1. Investment Policy 2. List of Qualified Brokers This item is applicable to the following: Central Coleman Northeast Northwest Southeast Southwest /18/ :29 PM

65 HOUSTON COMMUNITY COLLEGE SYSTEM INVESTMENT POLICY Approved by the Board of Trustees on November XX, 2014December 17, Formatted: Highlight /05/14

66 HOUSTON COMMUNITY COLLEGE SYSTEM, TEXAS INVESTMENT POLICY PREFACE The purpose of this document is to set forth specific investment policy and strategy guidelines for the Houston Community College System (the HCCS ) in order to achieve the goals of safety, liquidity, public trust, and yield for all investment activity. The Board of Trustees of HCCS (the Board ) shall review its investment strategies and policy not less than annually. This policy serves to satisfy the statutory requirements (specifically the Public Funds Investment Act, Chapter 2256 of the Texas Government Code [the Act ]) to define, adopt and review a formal investment strategy and policy. It is the policy of HCCS that, giving due regard to the safety and risk of investment, all available funds shall be invested in conformance with State and Federal regulations, applicable Bond Resolution requirements, adopted Investment Policy and adopted Investment Strategy. Effective investment strategy development coordinates the primary objectives of HCCS Investment Policy and cash management procedures with investment security risk/return analysis to enhance interest earnings by increasing the available investment period. Maturity selections shall be based on cash flow and market conditions to take advantage of interest earnings as viable and material revenue to all HCCS funds. HCCS portfolio shall be designed and managed in a manner responsive to the public trust and consistent with the Investment Policy. Each major fund type has varying cash flow requirements and liquidity needs. Therefore, specific strategies shall be implemented considering the fund s unique requirements. 2

67 HOUSTON COMMUNITY COLLEGE SYSTEM INVESTMENT POLICY TABLE OF CONTENTS SECTION TITLE SECTION # Page # Preface Purpose 1. Page 4 Policy 2. Page 4 Investment Strategy 3. Page 4 Scope 4. Page 7 Investment Objectives 5. Page 8 Investment Responsibility 6. Page 9 Authorized Investments 7. Page 11 Credit Rating Review and Effect of Loss of Required Rating 8. Page 15 Diversification 9. Page 15 Authorized Broker Dealers and Financial Institutions 10. Page 16 Delivery Versus Payment 11. Page 16 Safekeeping and Collateralization 12. Page 17 Performance 13. Page 19 Reporting 14. Page 19 Investment Policy Adoption and Amendment 15. Page 20 Attachments: A. Certification Form

68 INVESTMENT POLICY 1. PURPOSE. The purpose of this Investment Policy (the Policy ) is to comply with the Act, which requires that the HCCS annually adopt a written investment policy for the investment of its funds and funds under its control. This document will set forth specific investment policy and strategy guidelines for HCCS in order to achieve the goals of ensuring safety of principal, maintaining adequate liquidity, maintaining public trust for all investment activities, and achieving the best allowable yield commensurate with the risk criteria of this Policy. 2. POLICY. It is the policy of the HCCS that after allowing for the anticipated cash flow requirements and giving due consideration to the safety and risks of investments, all available funds shall be invested in conformance with these legal and administrative guidelines to target a risk-commensurate rate of return. Effective cash management is recognized as essential to good fiscal management. An active cash management and investment policy will be pursued to take advantage of investment interest as a viable and material source of revenue. HCCS portfolio shall be designed and managed in a manner intended to optimize this revenue resource, to be responsive to the public trust, and to be in compliance with legal requirements and limitations. HCCS will invest its funds in a manner that will provide optimal security and a reasonable rate of return while meeting the daily cash flow demands. Investments shall be made with the primary objectives of: v Safety and preservation of principal, v Maintenance of sufficient liquidity to meet operating needs, v Public trust from prudent investment activities, and v Risk-commensurate yield on the portfolio. 3. INVESTMENT STRATEGY. HCCS maintains a portfolio that utilizes specific investment strategy considerations designed to address the unique characteristics of the fund groups represented in the portfolio. A comprehensive and proactive cash management program will be maintained to monitor and control all funds, to ensure maximum utilization, and to yield a risk-commensurate rate of return. The investment strategy emphasizes low credit risk, diversification, and the management of maturities. In order to minimize risk of loss due to interest rate fluctuations, investment maturities will not exceed the anticipated cash flow requirements of the funds. The composite portfolio will have a dollar weighted average maturity of two (2) years or less. The management of maturities is accomplished by structuring the maturity dates of the direct investments in a laddered allocation. In this structure, longer-term maturities will be purchased to enhance yield while shorter-term maturities are positioned to cover cash flow needs. The allowable investment instruments as defined in Section 7 of this Policy reflect the avoidance of credit risk. Diversification is accomplished by allocating investments among a variety of alternatives and maturity terms. 4

69 3.1 The primary investment strategies as specified in this Policy (See Section 2.) are listed below, in their order of importance: Safety and preservation of principal; Maintenance of sufficient liquidity to meet operating needs; Seek at all times to maintain public trust by adhering to the above stated objectives; and Achieve a risk-commensurate rate of return on the investment portfolio. 3.2 The list of investments authorized by this Policy intentionally excludes some investments allowed by State Law. The restrictions limit possible credit risk and provide the conservatively appropriate measure of safety. Within the investment objectives, the investment strategy is to utilize authorized investments for maximum advantage to HCCS. 3.3 The general portfolio strategy for the aggregate portfolio is to increase the interest earnings for funds identified as being available for investment over longer periods of time based upon a cash requirements projection. The following general portfolio strategies will be considered: Strategy No. 1. Satisfying liquidity requirements through the use of financial institution deposits, local government investment pools and money market mutual funds. An investment pool or money market mutual fund is an entity created to invest funds jointly on behalf of its participants. Funds are usually available from investment pools and money market mutual funds on a same-day basis, meaning the pools or funds have a high degree of liquidity. Because of the size and expertise of their staff, investment pools and money market mutual funds are able to prudently invest in a variety of the investment types Strategy No. 2. Building a laddered structure of authorized investments with staggered maturities for all or part of the longer-term investable funds. The benefits of this laddered approach include the following: It is straight-forward and easily understood; It represents a prudent diversification method; All investments remain within the approved maturity horizon; It helps minimize the impact of volatile interest rate changes; It will normally allow HCCS to capture a reasonable portion of the yield curve; and, It provides predictable cash flow with scheduled maturities and reinvestment opportunities Strategy No. 3. Pursuant to the Act, HCCS may, at its discretion, contract with an investment management firm registered under the Investment Advisors Act of 1940 (15 U.S.C. Section 80b-1 et seq.) and with the State 5

70 Securities Board to provide for investment and non-discretionary management of its public funds or other funds under its control. An appointed Investment Advisor shall act solely in an advisory and administrative capacity, within the guidelines of this Policy. At no time shall the Advisor take possession of investments or funds or otherwise be granted authority to transact business on behalf of HCCS. Any contract awarded by HCCS for investment advisory services must be approved by the Board and may not exceed two years, with an option to extend by mutual consent of both parties. The Investment Advisor contracted by HCCS shall abide by the Prudent Expert Rule, whereby investment advice shall, at all times, be given with the judgment and care, under circumstances then prevailing, which persons paid for their special prudence, discretion and intelligence in such matters exercised in the management of their client s affairs, not for speculation by the client or production of fee income by the advisor or broker, but for investment by the client with emphasis on the probable safety of the capital while considering the probable income to be derived. Chapter 2263 of the Texas Government Code mandates certain actions by governing boards of State entities involved in the management and investment of State funds and adds disclosure requirements for outside financial advisors and service providers. Ethics and disclosure requirements for outside financial advisors and service providers are in Chapter through of the Texas Government Code Strategy No. 4 - Hold until Maturity. The strategy of HCCS is to maintain sufficient liquidity in its portfolio so that it does not need to sell or liquidate an investment prior to maturity. Should it become necessary to sell or liquidate an investment prior to maturity, where the sale proceeds are less than the current book value, the Investment Officers have the authority to take such action. 3.4 The specific investment strategies for the HCCS fund or fund group(s) utilize four strategy considerations designed to address the unique characteristics of the fund group(s) represented in the portfolio(s), all authorized investments shall be suitable for each fund-type strategy and marketability shall be managed by maturity limitations: Investment strategies for operating funds and pooled funds containing operating funds have as their primary objective to assure that anticipated cash flows are matched with adequate investment liquidity. The secondary objective is to create a portfolio structure that will experience minimal volatility during economic cycles through diversification by investment type, maturity date, and issuer. 6

71 3.4.2 Investment strategies for debt service funds shall have as the primary objective the assurance of investment liquidity adequate to cover the debt service obligation on the required payment date(s). These funds have predictable payment schedules. Investments purchased shall not have a stated final maturity date which exceeds the next unfunded debt service payment date, or funds shall be maintained in other shorter-term options to be available for debt service payments. Additionally, debt service funds shall be invested according to the restrictions and/or requirements of the related bond covenants Investment strategies for bond funds and debt service reserve funds shall have as the primary objective the ability to generate a dependable revenue stream to the appropriate debt service fund with low degree of volatility. Managing the Debt Service Reserve Fund s portfolio maturities to not exceed the call provisions of the bond issue will reduce the investment s market risk if HCCS bonds are called and the reserve fund liquidated. Except as may be required by the bond ordinance specific to an individual issue, investments should be of high quality, with short to medium term maturities. No investment maturity shall exceed the final maturity of the bond issue. Additionally, bond and debt service reserve funds shall be invested according to the restrictions and/or requirements of the related bond covenants Investment strategies for special projects or capital projects funds will have as their primary objective to assure that anticipated cash flows are matched with adequate investment liquidity. Market conditions and arbitrage regulations will influence the investment of capital project funds. When market conditions allow, achieving a positive spread to applicable arbitrage yield is the desired objective; although at no time shall the anticipated expenditure schedule be exceeded in an attempt to increase yield. 4. SCOPE. This Policy shall govern the investment of all financial assets considered to be part of HCCS and includes all funds or fund types as described in the HCCS Audited Financial Report ( AFR ) and any other funds which have been contractually delegated to HCCS for management purposes. HCCS may add or delete funds as required by law, or for proper accounting procedures. This Policy does not include funds governed by approved trust agreements, or assets administered for the benefit of HCCS by outside agencies under retirement or deferred compensation programs. Additionally, bond funds (including debt service and reserve funds) are governed by bond ordinances and are subject to the provisions of the Internal Revenue Code and applicable Federal regulations governing the investment of bond proceeds. 7

72 5. INVESTMENT OBJECTIVES. HCCS shall manage and invest its cash with four primary objectives, listed in order of priority: safety, liquidity, public trust, and yield. The safety of the principal invested always remains the primary objective. All investments shall be designed and managed in a manner responsive to public trust and consistent with all applicable Texas statutes, this Policy, and any other approved, written administrative procedures. HCCS shall maintain a comprehensive cash management program that includes prompt collection of accounts receivable, processing vendor payments in accordance with invoice terms, and prudent investment of available cash. Cash management is defined as the process of managing monies in order to assure maximum cash availability and optimal yield on short-term investment of pooled idle cash. The four objectives of HCCS investment activities shall be as follows (in the order of priority): 5.1 Safety. Safety of principal invested is the foremost objective in the investment decisions of HCCS. Each investment transaction shall seek to ensure the preservation of capital in the overall portfolio. The risk of loss shall be controlled by investing only in authorized investments as defined in this Policy, by qualifying the financial institutions with whom HCCS will transact, and by portfolio diversification. Safety is defined as the undiminished return of the principal on HCCS investments. 5.2 Liquidity. HCCS investment portfolio shall remain sufficiently liquid to meet all operating requirements that may be reasonably anticipated. This is accomplished by structuring the portfolio so that investments mature concurrent with cash needs to meet anticipated demands. Because all possible cash demands cannot be anticipated, a reasonable portion of the portfolio will also be placed in investment options which offer same day liquidity for short-term funds. 5.3 Public Trust. All participants in HCCS investment program shall seek to act responsibly as custodians of the public trust. Investment Officers shall avoid any transaction which might involve a conflict of interest or otherwise impair public confidence in HCCS ability to govern effectively. All personnel of HCCS having either a direct or indirect role in the process of investing idle funds shall act responsibly as custodians of the public trust. 5.4 Yield. HCCS investment portfolio shall be designed with the objective of attaining a risk-commensurate rate of return throughout budgetary and economic cycles, taking into account the investment risk constraints and liquidity needs. Return on investment is of secondary importance compared to the safety and liquidity objective described above. The core of investments is limited to relatively low risk instruments in anticipation of earning a fair return relative to the risk being assumed. 8

73 6. INVESTMENT RESPONSIBILITY AND CONTROL. The authority for investing funds rests with the Board. As provided in this Policy, the daily operation and management of HCCS investments are the responsibility of the following persons. These individuals must be qualified and capable in making investment decisions. 6.1 Designation of Investment Officers for HCCS. The Board delegates the authority to invest HCCS funds to the Vice Chancellor of Finance and Planning and the Treasurer. Therefore, the Vice Chancellor of Finance and Planning and the Treasurer are the Primary Investment Officers for HCCS and are authorized to deposit, withdraw, invest, transfer or manage in any other manner the funds of HCCS. All persons involved in investment activities, but not officially designated as Investment Officers will be referred to in this Policy as Investment Personnel. No persons may engage in an investment activity except as provided under the terms of this Policy and the procedures established by the Vice Chancellor of Finance and Planning or the Treasurer. The Vice Chancellor of Finance and Planning or Treasurer shall be responsible for executing all transactions undertaken, and shall establish a system of controls to regulate the activities of Investment Personnel. The system of controls shall be designed to provide reasonable assurance that the assets of HCCS are protected from loss, theft or misuse. The concept of reasonable assurance recognizes that: (1) the cost of a control should not exceed the benefits likely to be derived; and, (2) the valuation of costs and benefits requires estimates and judgments by management. The Treasurer and the Vice Chancellor of Finance and Planning shall be designated as the Primary Investment Officers for HCCS and shall be responsible for investment decisions and activities under the direction of the Board. The Deputy Treasurer is approved as a Secondary Investment Officer to serve in the absence of the Treasurer. The Treasurer is responsible for daily investment decisions and activities. However, ultimate responsibility for investment decisions will rest with both the Vice Chancellor of Finance and Planning and the Treasurer. Commitment of financial and staffing resources in order to maximize total return through active portfolio management shall be the responsibility of the Board. The Treasurer shall be designated as the Primary Investment Officer for HCCS and shall be responsible for investment decisions and activities under the direction of the Board. The Treasurer is responsible for daily investment decisions and activities. However, ultimate responsibility for investment decisions will rest with both the Vice Chancellor of Finance and Planning and the Treasurer. The Treasurer, in his absence, is authorized to delegate his responsibility to the Deputy Treasurer. Commitment of financial and staffing resources in order to maximize total return through active portfolio management shall be the responsibility of the Board. 9

74 6.2 Prudence. The standard of prudence to be applied by an Investment Officer shall be the "prudent person" rule, which states, "investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived." In determining whether the Investment Officer has exercised prudence with respect to an investment decision, the determination shall be made taking into consideration the following: 10

75 6.2.1 The investment of all funds over which the Investment Officer had responsibility rather than a consideration as to the prudence of a single investment; and, whether the investment decision was consistent with the written Investment Policy and procedures of HCCS. 6.3 Due Diligence. An Investment Officer acting in accordance with written policies and procedures and exercising due diligence, shall not be held personally responsible for a specific security s investment s credit risk or market price changes. All Investment Officers and Personnel involved in investment activities will be bonded. 6.4 Ethical Standards and Conflicts of Interest. All HCCS Investment Officers and Personnel having a direct or indirect role in the investment of HCCS funds shall act as custodians of the public trust avoiding any transaction which might involve a conflict of interest, the appearance of a conflict of interest, or any activity which might otherwise discourage public confidence. Investment Officers and Personnel involved in the investment process shall refrain from any personal business activity that could conflict with proper execution of the investment program, or which could impair the ability to make impartial investment decisions. An Investment Officer who has a personal business relationship with a depository bank or with any entity seeking to sell an investment to HCCS shall file a statement with the Texas Ethics Commission and the HCCS Board disclosing that personal business interest. Investment Officers shall disclose any material interests in financial institutions with which they also conduct business on behalf of HCCS. They shall further disclose any personal financial/investment positions that could be related to the performance of the investment portfolio. Investment Officers and Personnel shall refrain from undertaking personal investment transactions with the same individual with whom business is conducted on behalf of HCCS. An Investment Officer who is related within the second degree of affinity or consanguinity to an individual seeking to sell an investment to HCCS shall file a statement disclosing that relationship. A statement required under this subsection must be filed with the Texas Ethics Commission and the Board. 6.5 Training. Each member of the Board shall attend at least one training session related to the person s responsibilities within six months after taking office or assuming duties. The training will include education in investment controls, security risks, strategy risks, market risk, diversification of investment portfolio, and compliance with the Act. In order to ensure qualified and capable investment management, the Investment Officers shall attend at least one training session containing at least 10 5 hours of instruction relating to the Officer's responsibility under the Act within twelve 11

76 six (126) months after assuming duties, and attend an investment training session not less than once each State fiscal biennium, receiving an additional ten five (105) hours of training. The investment training session shall be provided by the following approved training sources; the Texas Higher Education Coordinating Board, the Government Finance Officers Association of Texas (National and Texas), the Government Treasurers Organization of Texas, the Texas Municipal League, the Government Investment Officers Association, and the University of North Texas Center for Public Management. 6.6 Internal Control. The Primary Investment Officer shall establish a system of internal controls. The controls shall be designed to prevent loss of public funds due to fraud, error, misrepresentation, unanticipated market changes, or imprudent actions. HCCS independent external auditors, in conjunction with their annual financial audit, shall perform a compliance audit of management controls and adherence to HCCS established Investment Policy. The internal controls shall address the following points: v Control of collusion; v Separation of transactions authority from accounting and record keeping; v Custodial safekeeping; v Avoidance of physical delivery securities; v Clear delegation of authority to subordinate staff members; and v Written confirmation for telephone (voice) transactions for investment and wire transfers. 7. AUTHORIZED INVESTMENTS. As stated previously, safety of principal is the primary objective in investing HCCS funds and can be accomplished by limiting two types of risk: credit risk and interest rate risk. Credit risk is the risk associated with the financial failure of an investment issuer or backer. Interest rate risk is the risk that the value of a portfolio will decline due to an increase in the general level of interest rates. In order to provide for safety of principal as HCCS primary objective, only certain investments are authorized as acceptable investments for HCCS. HCCS is not required to liquidate investments that were authorized investments at the time of purchase. The following list of authorized investments for HCCS intentionally excludes some investments authorized by law. These restrictions are placed in order to limit possible risk and provide the conservatively appropriate measure of safety to HCCS funds. 7.1 Authorized and Acceptable Investments. The authorized list of investment instruments are as follows: Obligations of, or Guaranteed By Governmental Entities The following as authorized by Section (a) of the Public Funds Investment Act: (1) Obligations, including letters of credit, of the United States or its agencies and instrumentalities; (2) Direct obligations of this State or its agencies and instrumentalities; 12

77 (3) Collateralized mortgage obligations directly issued by a federal agency or instrumentality of the United States, the underlying security for which is guaranteed by an agency or instrumentality of the United States, with the exception of those excluded in Section 7.2 of this Policy; (1) Other obligations, the principal and interest of which are unconditionally guaranteed or insured by, or backed by the full faith and credit of, this State or the United States or their respective agencies and instrumentalities including obligations that are fully guaranteed or insured by the Federal Deposit Insurance Corporation or by the explicit full faith and credit of the United States; and (2) Obligations of states, agencies, counties, cities, and other political subdivisions of any state rated as to investment quality by a nationally recognized investment rating firm not less than A or its equivalent Financial Institution Deposits. A deposit issued by, or placed with, a depository institution that has its main office or a branch office in this State, and is: (1) guaranteed or insured by the Federal Deposit Insurance Corporation or its successor or the National Credit Union Share Insurance Fund or its successor; (2) secured by obligations that are described by the Public Funds Collateral Act and eligible within the Policy; and (3) collateralized in accordance with Section of this Policy. In addition to the above provisions, HCCS may invest in certificates of deposit through a broker or depository institution that has its main office or a branch office in this State and is selected as required by the Act. The broker or depository institution must arrange for the deposit of the funds in certificates of deposit in one or more federally insured depository institutions, wherever located, for the account of HCCS. The full amount of the principal and accrued interest of each of the certificates of deposit must be insured by the United States or an instrumentality of the United States. HCCSSSC must either appoint the depository institution or broker as custodian for the HCCS with respect to the certificates of deposit, or require delivery versus payment settlement Eligible Local Government Investment Pools. Public funds investment pools which invest in instruments and follow practices allowed by the current law as defined in the Act, provided that: the investment pool has been authorized by the Board of Trustees; the investment pool has an advisory board as specified in the PFIA. 13

78 the pool shall have furnished the Investment Officer an offering circular containing the information required by the Act; the pool shall furnish the Investment Officer investment transaction confirmations with respect to all investments made with it; the pool shall furnish to the Investment Officer monthly reports containing the information required in the Act; the pool is continuously rated no lower than AAA or AAA-m or an equivalent rating by at least one nationally recognized rating service; the pool marks its portfolio to market daily; the pool is compliant with all requirements of the Act; and the pool s investment philosophy and strategy are consistent with this Policy Repurchase Agreements. Repurchase Agreements must have a defined termination date and must be secured by a combination of cash and obligations of the United States or its agencies and instrumentalities The Repurchase Agreement must be placed through a primary government securities dealer, as defined by the Federal Reserve, or a financial institution doing business in the State of Texas The collateral underlying the Repurchase Agreement must be pledged to HCCS, held in an account in the name of HCCS, and deposited at the time the investment is made with HCCS custodial (safekeeping) agent No repurchase agreement shall be entered into unless a Repurchase Agreement has been executed between HCCS and its trading partner All repurchase agreement transactions will be on a delivery versus payment basis Securities pledged as collateral for repurchase agreements must have a market value greater than or equal to 102 percent of the outstanding principal plus accrued interest of the agreement at all times Regulated No-Load Money Market Mutual Funds. These investments are authorized, under the following conditions: the money market mutual fund is registered with and regulated by the Securities and Exchange Commission; 14

79 the fund provides HCCS with a prospectus and other information required by the Securities Exchange Act of 1934 or the Investment Company Act of 1940; the investment objectives include the maintenance of a stable net asset value of one dollar ($1.00) per share; and the fund is continuously rated no lower than "AAA" or an equivalent rating by at least one nationally recognized rating service HCCS may not invest funds under its control in an amount that exceeds 10% of the total assets of any individual money market mutual fund Regulated No-load Mutual Fund is an authorized investment if the mutual fund: is registered with the Securities and Exchange Commission; has an average weighted maturity of less than two years; is invested exclusively in obligations approved by the Act; is continuously rated as to investment quality by at least one nationally recognized investment rating firm of not less than AAA or its equivalent. complies with the information and reporting requirements for investment pools as prescribed in the Public Funds Investment Act. HCCS may not invest funds under its control in an amount that exceeds 15% of the total monthly average fund balance, excluding bond proceeds, reserves and debt service funds. In accordance with the Act, HCCSD may not invest any proceeds of bond issuances, bond reserve funds or funds held for debt service in a mutual fund described in this section Securities Lending Program in accordance with the Act. 7.2 Investment Instruments NOT Authorized. State law specifically prohibits investment in the following securities: Obligations whose payment represents the coupon payments on the outstanding principal balance of the underlying mortgage-backed security collateral and pays no principal Obligations whose payment represents the principal stream of cash flow from the underlying mortgage-backed security collateral and bears no interest Collateralized mortgage obligations that have a stated final maturity date of greater than ten years. 15

80 7.2.4 Collateralized mortgage obligations, the interest rate of which is determined by an index that adjusts opposite to the changes in a market index. 8. CREDIT RATING REVIEW AND EFFECT OF LOSS OF REQUIRED RATING. Not less than quarterly, the Investment Officers will obtain the current credit rating for each held investment that is required to maintain a minimum credit rating, from a reliable source to ensure that the investment has maintained the required minimum rating. The Investment Officers will take all prudent measures that are consistent with this Policy to liquidate an investment that is downgraded to less than the required minimum rating. 9. DIVERSIFICATION. Diversification of investment instruments shall be utilized to avoid incurring unreasonable risks resulting from over-concentration of investments in a specific maturity, a specific issue, or a specific class of investments. With the exception of U.S. Government securities, as authorized in this Policy, fully collateralized financial institution deposits, and authorized local government investment pools, no more than fifty percent (50%) of the total investment portfolio will be invested in any one security type. Diversification of the portfolio considers diversification by maturity dates and diversification by investment instrument. 9.1 Diversification by Maturities. The longer the maturity of investments the greater their price volatility. Therefore, it is HCCS policy to concentrate its investment portfolio in shorter-term investments in order to limit principal risks caused by change in interest rates. HCCS will attempt to match its investments with anticipated cash flow requirements. Unless matched to a specific cash flow, HCCS will not directly invest in instruments maturing more than ten (10) years from the date of purchase. However, the above described obligations, certificates, or agreements may be collateralized using longer date instruments. HCCS shall diversify the use of investment instruments to avoid incurring unreasonable risks inherent in over-investing in specific instruments, individual financial institutions or maturities. Maturity scheduling shall be managed by the Investment Officers so that maturities of investments shall be timed to coincide with projected cash flow needs. The entire HCCS portfolio, including funds at HCCS primary depository bank, shall comprise one pooled fund group, and the maximum average dollar-weighted maturity allowed based on the stated maturity date for the portfolio is two (2) years or less. Investment maturities for debt service interest and sinking funds and/or other types of reserve funds whose use is longer-term, may not exceed ten (10) years or the maturity date of the applicable bond issue. 9.2 Diversification by Investment Instrument. Diversification by investment instrument shall not exceed the following guidelines for each type of instrument: Percentage of Portfolio (Maximum at Time of Purchase) U.S. Treasury Obligations 100% U.S. Government Agency Securities and Instrumentalities 80% 16

81 of Government-Sponsored Corporations U.S. Agency Step-Up Options 10% Authorized Local Government Investment Pools 100% Fully Collateralized Financial Institution Deposits 100% Fully Collateralized Repurchase Agreements 10% SEC-Regulated No-Load Money Market Mutual Funds 50% SEC-Regulated No-Load Mutual Funds 15% (excluding bond funds) Obligations of States, Agencies, Counties, Cities and other 20% government entities 10. AUTHORIZED BROKER/DEALERS AND FINANCIAL INSTITUTIONS. Financial institutions (federally insured banks) with and through whom HCCS invests shall be state or national banks. No public deposit shall be made except in a qualified public depository as established by State laws. Broker/dealers authorized to provide investment services to HCCS will include only those authorized by the Board. All primary banking services will be governed by a depository contract awarded by the Board. In addition, Investment Officers shall maintain a list of authorized brokers/dealers and investment pools that are authorized by the Board. All investment providers will be required to provide a certification of having read HCCS Investment Policy signed by a qualified representative of the organization, acknowledging that the organization has implemented reasonable procedures and controls in an effort to preclude imprudent investment activities arising out of investment transactions conducted between HCCS and the organization Broker/Dealers. Brokers/dealers with whom HCCS does business must supply the following, as appropriate: (1) audited financial statements; (2) proof of Financial Industry Regulatory Authority (FINRA) certification; (3) proof of state registration; and (4) completed broker/dealer questionnaire Selection Criteria for federally insured financial institutions shall include the following: (1) the financial institution must be insured by the FDIC; (2) the financial institution must be incorporated under the laws of the State of Texas or of the United States of America; and (3) the financial institution must eligible under the Act. 11. DELIVERY VERSUS PAYMENT. It is the policy of HCCS that all security transactions entered into with HCCS shall be conducted on a DELIVERY VERSUS PAYMENT (DVP) basis through the Federal Reserve System or other appropriate settlement system. By doing this, HCCS funds are not released until HCCS has received the securities purchased. HCCS shall authorize the release of funds only after the safekeeping bank has received the purchased or pledged security in the safekeeping account of HCCS. 17

82 12. SAFEKEEPING AND C OLLATERALIZATION 12.1 Safekeeping. All securities owned by HCCS shall be held by its safekeeping agent, except the collateral for bank deposits. The collateral for bank deposits will be held in a Federal Reserve Bank, a Federal Home Loan Bank, or other custodial institution acceptable to HCCS in an account in HCCS name. Original safekeeping receipts shall be obtained and held by HCCS. HCCS shall contract with a bank or banks for the safekeeping of securities either owned by HCCS as part of its investment portfolio or held as collateral to secure time deposits Collateralization. Consistent with the requirements of the Public Funds Collateral Act, it is the policy of HCCS to require full collateralization of all HCCS funds on deposit with a depository bank. In order to anticipate market changes and provide a level of security for all funds, the collateralization level will be 107% of market value of principal and accrued interest on the deposits or investments reduced to the extent that the deposits are insured by the Federal Deposit Insurance Corporation (FDIC) unless otherwise noted in this section. Securities pledged as collateral shall be held in HCCS segregated account at the Federal Reserve Bank, the Federal Home Loan Bank or by an independent third party with whom HCCS has a custodial agreement. The agreement is to specify the acceptable investment securities as collateral, including provisions relating to possession of the collateral, the substitution or release of investment securities, ownership of securities, and the method of valuation of securities. The agreement must clearly state that the custodian bank is instructed to release purchased and collateral securities to HCCS in the event HCCS has determined that the depository bank has failed to pay on any matured investments in certificates of deposit, or has determined that the funds of HCCS are in jeopardy for whatever reason, including involuntary closure or change of ownership. A clearly marked pledge receipt must be supplied to and retained by HCCS. Release of collateral or substitution of securities must be approved by the HCCS HCCS may accept the following as collateral for bank deposits; FDIC coverage; U.S. Government securities; including bonds, certificates of indebtedness, or notes, irrevocable letters of credit, or other evidence of indebtedness of the United States that is guaranteed as to principal and interest by the United States or its agencies and instrumentalities, State of Texas bonds; including obligations, the principal and interest on which, are unconditionally guaranteed or insured by the State of Texas, Other obligations, the principal and interest of which are unconditionally guaranteed or insured by, or backed by the full faith and credit of the State of Texas or the United States or their respective agencies and instrumentalities. 18

83 Bonds issued by other Texas governmental entities (e.g. City, County, school district, or special districts) with a remaining maturity of twenty (20) years or less. Bonds must be (and must remain) rated at least "A" or its equivalent; or A surety bond that meets the requirements of the Act For certificates of deposit and other evidences of deposit the market value of collateral will always equal or exceed 107% of the principal plus accrued interest of deposits at financial institutions Financial institutions with whom HCCS invests or maintains other deposits, shall require the custodian to provide monthly, and as requested by the Investment Officers, a listing of the collateral pledged to HCCS, marked to current market prices. The listing shall include total pledged securities itemized by name, type, description, CUSIP, par value, current market value, maturity date, and Moody's or Standard & Poor's rating, if applicable. HCCS and the financial institution shall jointly assume the responsibility for ensuring that the collateral is sufficient Collateralized Deposits. Consistent with the requirements of State law, HCCS requires all bank deposits to be federally insured or collateralized. Financial institutions serving as HCCS depositories will be required to sign a "Depository Agreement" with HCCS. The collateralized deposit portion of the Agreement shall define HCCS rights to the collateral in the event of default, bankruptcy, or closing and shall establish a perfected security interest in compliance with Federal and State regulations, including: the Agreement must be in writing; the Agreement has to be executed by the Depository and HCCS contemporaneously with the acquisition of the asset; the Agreement must be approved by the Board of Directors or the Designated Committee of the Depository and a copy of the meeting minutes must be delivered to HCCS; and, the Agreement must be part of the Depository's "official record" continuously since its execution Competitive Pricing. In making investment purchases, the Investment Officers shall compare yields on potential investments to yields on US Treasury Bills and Notes, money market accounts at HCCS depository bank, and local government pools. Three competitive quotes will be obtained for all purchases of Securities, Fully Collateralized Repurchase Agreements, and Obligations of States, Agencies, Counties, other government entities and Cities. 19

84 HCCS may solicit quotes for certificates of deposit: 1. orally; 2. in writing; 3. electronically; or 4. in any combination of those methods. HCCS recognizes that a competitive quote process is not always necessary or is not always in the best interest of HCCS. On these occasions, the Investment Officers are authorized to purchase a security without seeking a competitive quote. The following are three occasions that are authorized: 1. Market conditions are changing rapidly 2. The security is a new issue that is still in the primary market 3. A specific type of security, maturity date, or rate or return is sought that may not be immediately available. 13. PERFORMANCE. HCCS investment portfolio will be managed in accordance with the parameters specified within this Policy. The portfolio shall be designed with the objective to obtain a market rate of return on investments commensurate with investment risk constraints and cash flow requirements of HCCS. The dollar-weighted average yield to maturity shall be the standard for calculating portfolio rate of return. 14. REPORTING. The Investment Officers shall submit a signed quarterly investment report that complies with the Act, summarizes the investment strategies employed in the most recent quarter, describes the portfolio in terms of investment instruments, maturities, risk characteristics, and total investment return for the quarter Annual Audit of Reports. The reports prepared by the Investment Officers shall be formally reviewed at least annually by an independent auditor as part of the annual audit and the result of the review shall be reported to the Board by that auditor Methods. The quarterly investment report shall include a succinct management summary that provides a clear picture of the status of the current investment portfolio and transactions made over the past quarter. This management summary will be prepared in a manner, which will allow HCCS to ascertain whether investment activities during the reporting period have conformed to the Investment Policy. The report will be provided to the Board. The report will include the following: A listing of individual instruments held at the end of the reporting period. This list will include the name of the fund or pooled group fund for which each individual investment was acquired; 20

85 Unrealized gains or losses resulting from appreciation or depreciation by listing the beginning and ending book and market value of instruments for the period. Market values shall be obtained from financial institutions or portfolio reporting services independent from the broker/dealer from which the security was purchased; Fully accrued interest for the reporting period; Average weighted yield to maturity as compared to applicable benchmarks; Listing of investments by maturity date; The percentage of the total portfolio which each type of investment represents; and Statement of compliance of HCCS investment portfolio with State Law and the investment strategy and policy approved by the Board. 15. INVESTMENT POLICY ADOPTION AND AMENDMENT. HCCS Investment Policy shall be adopted by resolution of the Board. It is HCCS intent to comply with State laws and regulations. HCCS written policies and procedures for investments are subject to review not less than annually to stay current with changing laws, regulations and the needs of HCCS. The Board must adopt a written instrument that it has reviewed the Investment Policy and investment strategies and the written resolution so adopted shall record any changes made to the Investment Policy or strategies. 20

86 ATTACHMENT A SAMPLE INVESTMENT POLICY TEXAS PUBLIC FUNDS INVESTMENT ACT CERTIFICATION BY BUSINESS ORGANIZATION This certification is executed on behalf of the Houston Community College System, Houston, Texas (the HCCS ) and (the Business Organization ) pursuant to the Public Funds Investment Act, Chapter 2256, Texas Government Code (the Act ) in connection with investment transactions conducted between the HCCS and the Business Organization. The undersigned Qualified Representative of the Business Organization hereby certifies on behalf of the Business Organization that: 1. The undersigned is a Qualified Representative of the Business Organization offering to execute an investment transaction with the Investor as such terms are used in the Public Funds Investment Act, Chapter 2256, Texas Government Code; and 2. The Qualified Representative of the Business Organization has received and reviewed the Investment Policy furnished by the HCCS; and 3. The Qualified Representative of the Business Organization has implemented reasonable procedures and controls in an effort to preclude investment transactions conducted between the Business Organization and the HCCS that are not authorized by the HCCS Investment Policy, except to the extent that this authorization is dependent on an analysis of the makeup of the HCCS entire portfolio or requires an interpretation of subjective investment standards. Qualified Representative of Business Organization: Firm: Signature: Printed Name: Title: Date: 21

87 HOUSTON COMMUNITY COLLEGE LIST OF QUALIFIED BROKERS As of November 2014 Bank of America (Merrill Lynch) Investment Strategies/Fund Management Group Coastal Securities, Inc. First Public J. P. Morgan Securities, L.L.C. Rice Financial Products Company Robert W. Baird & Co. Wells Fargo Bank 1

88 ACTION ITEM Meeting Date: November 18, 2014 Committee: Facilities and Finance ITEM NO. ITEM TITLE PRESENTER 5 Acceptance of Donation from National Oilwell Varco Dr. Cesar Maldonado Teri Zamora RECOMMENDATION Authorize the Chancellor to accept the donation of a dual Christmas tree from National Oilwell Varco. The estimated value of the donation is $250,000. COMPELLING REASON/RATIONALE Students enrolled in energy programs must have access to equipment encountered in the field. The Christmas tree is a critical piece of equipment to the oil and gas industry. DESCRIPTION OR BACKGROUND National Oilwell Varco has offered to donate and deliver a 15-foot dual Christmas tree, typically used in offshore production. The tree will supplement instruction for the RigOne Program as well as AAS degree programs at the Global Energy Training Institute. FISCAL IMPACT No fiscal impact to the college. STRATEGIC GOAL ALIGNMENT Strategic Initiative: Increase Student Completion and Respond to Business and Industry Attachment Title(s): HCC Acceptance of Donated Property Form This item is applicable to the following: Central Coleman Northeast Northwest Southeast Southwest /18/ :29 PM

89 ACCEPTANCE OF DONATED PROPERTY FORM (TO BE COMPLETED BY DEPARTMENT) Campus: _System Department: DEL & GETI Responsible Person/Department Action Required Initial contact with donor 1) Complete form with all required signatures. 2) Send 1 copy to Foundation 3) Send 1 copy to Campus Manager / Asset Management 4) Send 1 copy to Chief Administration Officer for approval. Upon Approval: 1) Return original to Department 2) Send 1 copy to Donor 3) Send 1 copy to Asset Management Note: See Page 2 for more details PROCEDURE FLOW STEPS Donated Item Description Dept ID Serial # Model # QTY Est. Value Dual Christmas Tree 7038 N/A N/A 1 $250,000 TAG # Assigned Location (Building/ Room) Use Restrictions? YES - X NO - Restriction Details: For use with the RigOne Program and the Global Energy Training Institute Name of Donor (Print) SIGNATURE OF DONOR DATE Name of Recipient (Print) SIGNATURE OF RECIPIENT DATE Joanna Kile, Energy Institute DEPARTMENT HEAD OR DESIGNEE SIGNATURE DATE VICE CHANCELLOR, PRESIDENT OR DESIGNEE SIGNATURE DATE Foundation Approval Y N Foundation Representative Signature DATE Risk Management Review: Name Date Comments: Legal Review: Name Date Comments: CHECK ALL FACTORS BELOW THAT HAVE BEEN CONSIDERED: Maintenance/repair costs No Company endorsements implied Restrictions on usage are acceptable Installation costs DONATION REJECTED? YES - NO - IT system compatibility Suitable for specified program Use encumbrances Estimate remaining life Rejection Reason: Note: Donated property shall become the property of the Houston Community College. The tax-exempt status of the College is determined in pursuant to Section 115 of the Internal Revenue Code. Donations to any of the Houston Community Colleges fall under the provisions of Section 170 (c) (1) of the Code. Attach supporting appraisal or value estimation documentation to this form. DONATION ACCEPTANCE FORM AND POLICY Last Revised:7/21/14 1

90 ACTION ITEM Meeting Date: November 18, 2014 Committee: Facilities and Finance ITEM NO. ITEM TITLE PRESENTER 6 Engagement for Legal Services with Gibbs & Bruns LLP RECOMMENDATION Approve engagement of Gibbs & Bruns LLP for legal services. Dr. Cesar Maldonado Ashley Smith COMPELLING REASON/RATIONALE Gibbs & Bruns LLP will provide legal services regarding HCC matters and will need access to files necessary to provide those services. STRATEGIC GOAL ALIGNMENT Strategic Initiative: Support Innovation 11/18/ :29 PM

91 ACTION ITEM Meeting Date: November 18, 2014 Committee: Facilities and Finance ITEM NO. ITEM TITLE PRESENTER 7 Authorization to Acquire Certain Real Estate at or near Brays Oaks Dr. Cesar Maldonado Charles Smith RECOMMENDATION Authorize Chancellor to purchase acres of real property on West Belfort near South Gessner for Brays Oaks campus site. COMPELLING REASON/RATIONALE The purchase is necessary to proceed with Bond CIP Project D (Southwest-Brays Oaks Campus) approved by the Board. DESCRIPTION OR BACKGROUND A contract for the purchase of the land from HISD was negotiated and executed, and all site due diligence has been completed. Authorization is needed to close on the transaction, in order for HCC to obtain ownership of the property and commence the construction phase of the project. STRATEGIC GOAL ALIGNMENT Strategic Initiative: Increase Student Completion and Develop 21st Century Learners This item is applicable to the following: Central Coleman Northeast Northwest Southeast Southwest /18/ :29 PM

92 ACTION ITEM Meeting Date: November 18, 2014 Committee: Facilities and Finance ITEM NO. ITEM TITLE PRESENTER 8 Investment Report for the Month of September 2014 RECOMMENDATION Approve the Investment Report for the month of September. Dr. Cesar Maldonado Teri Zamora COMPELLING REASON/RATIONALE Monthly report advises the Board as to the status of the investment portfolio and complies with the law. DESCRIPTION OR BACKGROUND This report is required by the Public Funds Investment Act (Sec ) to be submitted to the governing body of Houston Community College no less than quarterly. FISCAL IMPACT The interest income earned and earnings credit for the month totaled $190,954 and the interest income earned and earnings credit for the fiscal year-to-date totaled $190,954. The Investment Report attached identifies HCC's investment holdings for the month ending September 30, It includes the unexpended proceeds of the various bond issues. The portfolio is highly liquid and secure with 83% of the assets invested in local government pools, money market funds and short-term certificates of deposit. All pools and money market funds are rated at the highest level. Certificates of deposit, high yield savings and other bank deposits are secured with U.S. Treasuries/agencies. The balance of the portfolio is invested in U.S. Treasuries and governmentsponsored entities/agencies with "AAA" credit ratings. Interest rates have remained historically low. The weighted average interest rate (WAR) at September 30, 2014 is.48%. STRATEGIC GOAL ALIGNMENT Strategic Initiative: Support Innovation Attachment Title(s): Investment Report - September 2014 This item is applicable to the following: Central Coleman Northeast Northwest Southeast Southwest /18/ :29 PM

93 HOUSTON COMMUNITY COLLEGE SYSTEM INVESTMENT PORTFOLIO COMPOSITION As of SEPTEMBER 30, 2014 Beginning Book Value ( SEPTEMBER1, 2014) $ 573,197,225 Beginning Market Value ( SEPTEMBER1, 2014) $ 572,549,617 Additions/subtractions ( Book value - Net) $ (10,999,306) Change in Market value $ (192,758) Ending Book value ( SEPTEMBER 30, 2014) $ 562,197,919 Ending Market value ( SEPTEMBER 30, 2014) $ 561,329,487 Unrealized Gain/(Loss) $ (868,432) WAM (83% of Portfolio's weighted average maturity - All Funds) 1 This report is in compliance with the investment strategies approved in Houston Community College System investment policy and is in accordance with the Public Funds Investment Note: This month's Investment does not include $6,760,708 with Bank Of America which is earning higher than market yield from earning credits.

94 INVESTMENTS INVENTORY HOLDINGS REPORT (OPERATING AND OTHERS) As of SEPTEMBER 30, 2014 % of Total Coupon Purchase Maturity Beginning Beginning Purchased Ending Ending Change in Unrealized Description Held At Investment Fund Rate Date Date Par Mkt. Value Book Value (Redeemed) Book Value Mkt. Value Mkt. Value Gain/(Loss) Fannie Mae ARM Pool Bank of America 0.01% % 02/22/05 05/01/33 53,541 57,405 55,188 (238) 54,949 57, ,261 Fannie Mae ARM Pool Bank of America 0.01% % 12/23/04 12/01/34 58,299 62,430 64,340 (182) 64,157 62,223 (30) (1,934) Federal Farm Credit Bank US Domestic Bond Bank of America 0.18% % 08/03/12 08/03/15 1,000,000 1,002,337 1,000, ,000,000 1,001,995 (342) 1,995 Federal Home Loan Bank US Domestic Multi-step cpn Bond Structured Not Bank of America 0.36% % 07/30/12 07/30/27 2,000,000 1,845,962 2,000, ,000,000 1,822,650 (23,312) (177,350) Freddie Mac Domestic MTN Unsecured Bond Bank of America 0.18% % 03/10/14 03/10/17 1,000, ,865 1,000, ,000, ,384 (1,481) (2,616) Freddie Mac Domestic MTN Unsecured Bond Bank of America 0.18% % 08/22/12 02/22/18 1,000, ,838 1,000, ,000, ,979 (2,859) (20,021) Fannie Mae US Domestic Multi-step CPN Bond Structured Note Bank of America 0.35% % 08/27/12 08/27/27 2,000,000 1,999,532 1,990, ,990,000 1,993,770 (5,762) 3,770 Federal Home Loan Bank US Domestic Multi-step cpn Bond Structured Not Bank of America 0.19% % 07/30/12 07/30/27 1,080, ,569 1,080, ,080, ,954 (12,615) (94,046) Federal Home Loan Bank US Domestic Multi-step cpn Bond Structured Not Bank of America 0.28% % 08/27/12 11/27/24 1,600,000 1,525,581 1,600, ,600,000 1,511,114 (14,467) (88,886) Federal Home Loan Bank US Domestic Multi-step cpn Bond Structured Not Bank of America 0.48% % 07/30/12 07/30/27 2,675,000 2,531,992 2,675, ,675,000 2,504,324 (27,668) (170,676) Federal Farm Credit Bank US Domestic Unsecured Bank of America 1.78% % 04/11/13 04/11/18 10,000,000 9,937,970 10,000, ,000,000 9,908,320 (29,650) (91,680) Federal Home Loan Bank US Domestic Unsecured Bank of America 0.89% % 04/17/13 01/17/17 5,000,000 4,995,055 5,000, ,000,000 4,988,960 (6,095) (11,040) Federal Home Loan Bank US Domestic Multi-step cpn Bond Structured Not Bank of America 1.78% % 06/13/13 06/13/18 10,000,000 9,891,890 10,000, ,000,000 9,858,510 (33,380) (141,490) Federal Home Loan Bank US Domestic Bond Unsecured Bank of America 0.89% % 03/21/14 06/13/16 5,000,000 4,989,750 4,994, ,994,100 4,983,820 (5,930) (10,280) Federal Home Loan Bank US Domestic Unsecured series 0003 Bank of America 1.78% % 03/27/14 03/27/17 10,000,000 10,005,730 10,000, ,000,000 9,996,670 (9,060) (3,330) Federal Home Loan Bank US Domestic Muti-step CPN BND Unsecured seribank of America 0.89% % 06/30/14 06/26/19 5,000,000 4,980,680 5,000, ,000,000 4,963,990 (16,690) (36,010) U.S. Treasury Notes US Govt. National Bank of America 0.71% % 07/10/14 06/30/16 4,000,000 4,004,844 4,001, ,001,250 4,002,344 (2,500) 1,094 Federal Home Loan Bank US Domestic Unsecured Bank of America 0.19% % 07/10/14 09/12/16 1,080,000 1,079,144 1,078, ,078,304 1,078,173 (971) (132) Federal Farm Credit Bank US Domestic Unsecured Bank of America 0.53% % 09/24/14 09/18/17 3,000, ,999,670 2,999,670 2,994,096 - (5,574) Federal Home Loan Bank US Unsecured Bank of America 0.89% % 09/24/14 02/27/17 5,000, ,995,600 4,995,600 4,992,435 - (3,165) Freddie Mac Domestic MTN Unsecured Bond Bank of America 0.89% % 09/25/14 01/30/18 5,000, ,000,000 5,000,000 4,993,960 - (6,040) Federal Home Loan Bank US Domestic Unsecured Structured Notes Bank of America 0.44% % 09/25/14 08/11/17 2,500, ,500,000 2,500,000 2,499,348 - (653) Federal Home Loan Bank US Domestic Unsecured Bank of America 0.71% % 09/26/14 06/26/17 4,000, ,000,000 4,000,000 3,998,960 - (1,040) Federal Home Loan Bank US Domestic Series:0001 Unsecured Bank of America 1.78% % 09/27/14 03/29/17 10,000, ,000,000 10,000,000 9,990,510 - (9,490) Freddie Mac Global Unsecured Bond Bank of America 0.89% % 09/29/14 09/29/16 5,000, ,000,000 5,000,000 4,997,900 - (2,100) Fixec Time Deposit Unity Bank 0.02% % 06/09/14 06/09/15 100, , , , Fixec Time Deposit Unity Bank 0.03% % 10/18/13 10/18/14 150, , , , Plant Fund Interest Checking ( ) Bank Of America 0.01% % 09/01/14 66,432 66, ,437 66, Debt Service 2001A Bond Int Checking (10080) Bank Of America 0.38% % 09/01/14 2,129,672 2,129, ,129,790 2,129, HCCS Merchant service (10012) Bank Of America 8.88% % 09/01/14 49,966,068 49,966,068 (48,496) 49,917,572 49,917, Checking Acoount Jr. lien Bank Of America 0.00% % 09/01/ LTD2013 Tax Bond Grneral Checking A/C (10090) Bank Of America 0.52% % 09/01/14 3,939,080 3,939,080 (1,043,197) 2,895,883 2,895, LTD2003 Tax Bond Checking A/C (10092) Bank Of America 0.34% % 09/01/14 1,929,233 1,929, ,929,366 1,929, Managed PFI Account Bank Of America 3.63% % 09/01/14 20,404,330 20,404,330 5,118 20,409,448 20,409, Merrill Lynch, Pierce, Fenner & smith (1110) Bank Of America 0.01% % 09/01/14 31,886 31, ,886 31, Merrill Lynch, Pierce, Fenner & smith (3110) Bank Of America 0.00% % 09/01/14 5,050 5, ,050 5, Merrill Lynch, Pierce, Fenner & smith (7xxx) Bank Of America 0.00% % 09/01/14 1,568 1, ,568 1, Merrill Lynch, Pierce, Fenner & smith (7306) Bank Of America 0.07% % 09/01/14 417, , , , Public Fund Money Market_Premier (1110) Regions Bank 2.86% % 09/01/14 24,847,813 24,847,813 (8,771,684) 16,076,129 16,076, Public Fund Money Market_Premier (7160) Regions Bank 0.00% % 09/01/14 9,500 9, ,500 9, Public Fund Money Market_Premier (7160) Regions Bank 0.09% % 09/01/14 546, ,041 (38,395) 507, , Public Fund Money Market_Premier (7208) Regions Bank 0.52% % 09/01/14 3,185,372 3,185,372 (244,922) 2,940,450 2,940, Public Fund Money Market_Premier (7140) Regions Bank 0.00% % 09/01/14 17,449 17, ,451 17, Public Fund Money Market_Premier (7206) Regions Bank 1.92% % 09/01/14 10,776,943 10,776,943 (6,046) 10,770,896 10,770, Public Fund Money Market_Premier (7308) Regions Bank 0.00% % 09/01/14 19,617 19, ,620 19, Public Fund Money Market_Premier (7309) Regions Bank 0.40% % 09/01/14 2,264,892 2,264, ,265,255 2,265, Public Fund Money Market_Premier (7370) Regions Bank 3.90% % 09/01/14 1,933,124 1,933,124 20,000,310 21,933,434 21,933, Public Fund Money Mkt_Premier (Regions-1110)-2 Regions Bank 0.05% % 09/01/14 307, ,414 (12) 307, , Chase High Yield Savings (fund 7150) Chase Bank 0.01% % 09/01/14 43,084 43, ,085 43, Chase High Yield Savings (fund 7170) Chase Bank 0.00% % 09/01/14 2,413 2,413 (15) 2,398 2, Chase High Yield Savings (fund 7204) Chase Bank 0.03% % 09/01/14 172, , , , Chase High Yield Savings (fund 7170) Chase Bank 0.84% % 09/01/14 5,024,753 5,024,753 (304,969) 4,719,784 4,719, Chase High Yield Savings (fund 7300) Chase Bank 0.01% % 09/01/14 75,483 75, ,486 75, Chase High Yield Savings (fund 7207) Chase Bank 1.60% % 09/01/14 8,970,012 8,970, ,970,345 8,970, Chase High Yield Savings (fund 7309) Chase Bank 0.13% % 09/01/14 718, , , ,

95 Chase High Yield Savings (fund 1110) Chase Bank 1.79% % 09/01/14 10,598,707 10,598,707 (525,849) 10,072,858 10,072, Chase High Yield Savings (fund 7307) Chase Bank 0.18% % 09/01/14 1,038,020 1,038, ,038,059 1,038, Chase High Yield Savings (fund 7305) Chase Bank 0.01% % 09/01/14 47,972 47, ,974 47, Chase High Yield Savings (fund 7203) Chase Bank 0.29% % 09/01/14 1,657,633 1,657,633 (10,366) 1,647,267 1,647, Chase High Yield Savings (fund 7306) Chase Bank 0.05% % 09/01/14 288, , , , Chase High Yield Savings (Fund 7370) Chase Bank 8.78% % 09/01/14 103,848, ,848,546 (54,507,068) 49,341,478 49,341, Certificate of Deposit (Fund 1110) Chase Bank 5.87% % 07/25/13 01/24/15 33,027,309 33,027, ,027,309 33,027, Certificate of Deposit (Fund 7203) Chase Bank 0.26% % 07/25/13 01/24/15 1,481,266 1,481, ,481,266 1,481, Certificate of Deposit (Fund 7150) Chase Bank 0.00% % 07/25/13 01/24/15 2,232 2, ,232 2, Certificate of Deposit (Fund 7207) Chase Bank 0.00% % 07/25/13 01/24/15 16,465 16, ,465 16, Certificate of Deposit (Fund 7305) Chase Bank 0.00% % 07/25/13 01/24/15 2,485 2, ,485 2, Certificate of Deposit (Fund 7306) Chase Bank 0.00% % 07/25/13 01/24/15 14,957 14, ,957 14, Certificate of Deposit (Fund 7307) Chase Bank 0.07% % 07/25/13 01/24/15 384, , , , Certificate of Deposit (Fund 7300) Chase Bank 0.01% % 07/25/13 01/24/15 70,689 70, ,689 70, Certificate of Deposit (Fund 7370) Chase Bank 8.89% % 03/22/13 09/22/15 50,000,000 50,000, ,000,000 50,000, Certificate of Deposit (Fund 7370) Chase Bank 5.34% % 03/22/13 03/22/17 30,000,000 30,000, ,000,000 30,000, Certificate of Deposit (Fund 7370) Chase Bank 3.56% % 03/25/13 03/22/18 20,000,000 20,000, ,000,000 20,000, Certificate of Deposit (Fund 7370) Chase Bank 5.34% % 03/22/13 09/22/14 30,000,000 30,000, ,000,000 30,000, Certificate of Deposit (Fund 7370) Chase Bank 3.56% % 04/03/13 04/03/15 20,000,000 20,000, ,000,000 20,000, Certificate of Deposit (Fund 7370) Chase Bank 7.11% % 04/03/13 04/03/16 40,000,000 40,000, ,000,000 40,000, Certificate of Deposit (Fund 7370) Chase Bank 3.56% % 04/03/13 04/03/18 20,000,000 20,000, ,000,000 20,000, Corporate Overnight Fund Lone Star 0.28% % 09/01/14 1,596,390 1,596, ,596,548 1,596, Tex Pool (General Fund) State Street Bank 1.40% % 09/01/14 7,845,033 7,845, ,845,248 7,845, Tex Pool (Limited Tax Bond ) State Street Bank 0.12% % 09/01/14 681, , , , Total % 572,549, ,197,225 (10,999,306) 562,197, ,329,487 (192,758) (868,432)

96 INVESTMENTS EXECUTIVE SUMMARY INVENTORY HOLDINGS REPORT September 30, 2014 Ending Ending Unrealized Book Value Market Value Gain (Loss) US Treasuries 4,001,250 4,002,344 1,094 US Agencies 93,031,781 92,162,255 (869,526) Local government pools 10,123,724 10,123,724 - Money market funds 55,303,538 55,303,538 - High yield savings 77,138,902 77,138,902 - Certificates of deposit 245,250, ,250,000 - Interest bearing checking 77,348,725 77,348,725 - Total 562,197, ,329,487 (868,432) WAR (weighted average interest rate) 0.48% 10/27/2014 Attach-InvestmentRpt_Sept2014.doc

97 ACTION ITEM Meeting Date: November 18, 2014 Committee: Facilities and Finance ITEM NO. ITEM TITLE PRESENTER 9 Monthly Finance Statement for September 2014 Dr. Cesar Maldonado Teri Zamora DISCUSSION Accept the financial report for the month of September STRATEGIC GOAL ALIGNMENT Strategic Initiative: Support Innovation Attachment Title: Financial Report - September 2014 This item is applicable to the following: Central Coleman Northeast Northwest Southeast Southwest /18/ :30 PM

98 Houston Community College System Summary of Financial Statements As of September 30, 2014 In the Unrestricted Fund as of September 30, 2014, total revenue received is $54.7 million. This represents 18.3% of budgeted annual revenues of $298.7 million. Expenses total $26.1 million to date; which is 8.5% of the total expense budget of $306.7 million. Compared with the same period last year, revenue shows a 2.7% increase, and expenses are 8.2% lower than the prior year. Actual Net Revenue is $28.6 million to-date. That translates into a like amount increase in fund balance. Tuition and fee revenue for Extended Learning shows a 52.9% increase, due partially to an increase in enrollment and also largely to a differential category fee created for out-of-state and international students taking non-credit courses. Salaries and benefits increased 4.1% and 6.5% respectively. This increase is due namely to an across the board salary increase of 2% for full-time employees and an increase in part-time faculty salary rates, as well as increases in the cost of selected benefits. Expenses related to supplies, instruction and other materials, and capital outlay have decreased namely due to the change in practice regarding purchase order rolls. Purchase orders in the current unrestricted fund will no longer roll into the next year. Commitments that extend across fiscal years will be set up during budget planning and presented for approval in the related year budget.

99 Summary Operating Statements For the Period September 1, 2014 September 30, 2014 For the Meeting of the Board of Trustees November 13, 2014 for Houston Community College System & Houston Community College Public Facility Corporation

100 Table of Contents For the Period September 1, 2014 September 30, 2014 For the Meeting of the Board of Trustees Houston Community College System Memorandum Management Discussion & Analysis 1 Fund Balances Fund Balance Statement 2 Operating Summary HCCS Unrestricted Revenue & Expenditures 3 Auxiliary Sources and Uses of Auxiliary Funds 4 Budgets Adjusted Budgets by Division 6 Balance Sheet Balance Sheet by Fund 7 Exemptions/Waivers Exemptions & Waivers Detail 8

101 HOUSTON COMMUNITY COLLEGE SYSTEM Unaudited Fund Balances and Activities All Funds as of September 30, 2014 Unrestricted Restricted Auxiliary Loan & Endowments Scholarship Agency Unexpended Plant Capital and Technology Retire of Debt Invest in Plant Public Facility Corp. Grand Total Fund Balance as of 9/1/2014, Unaudited $ 101,072,452 $ 4,510,527 $ 6,010,890 $ 509,932 $ $ (59,601) $ 4,255,168 $ 8,250,000 $ 10,077,727 $ 221,755,000 $ (5,898,375) $ 350,483,719 Revenues 54,698,530 4,284,783 1,758,504 36,769, ,315 2,141, ,864,121 Expenses Salaries 15,451, , , ,973 18,533 16,473,906 Employee Benefits 2,684,939 65,775 82, ,192 2,837,354 Supplies & General Exp 188,413 10,101 7, ,716 Travel 40,806 19,401 5,243 65,449 Marketing Costs 55,030 55,030 Rentals & Leases 153, ,197 Insurance/Risk Mgmt 6,076,167 1,953 6,078,120 Contracted Services 176,209 28,505 9,529 3,086 7, ,252 Utilities 39,388 1,847 41,235 Other Departmental Expenses 93,093 8,405 4, ,948 Instructional and Other Materials 234, , ,978 Maintenance and Repair 9,937 31, ,053 74,365 Transfers (In)/Out * 914,022 (914,022) 0 Debt 7,125 7,125 Capital Outlay 7, , ,706 Depreciation 1,625,920 1,625,920 Scholarship Distribution 37,485,229 37,485,229 Total Expenses 26,131, , ,815 36,752, ,328 7,922 1,625,920 66,322,530 Net of Revenue/Expenses 28,567,377 3,654,625 1,254,689 17,090 (460,013) 2,133,685 (1,625,920) 58 33,541,591 Fund Balance Entries 24,184 18,818 43,001 Fund Balance as of 09/30/2014 $ 129,639,829 $ 8,165,151 $ 7,265,579 $ 509,932 $ 17,090 $ (59,601) $ 3,819,339 $ 8,250,000 $ 12,211,412 $ 220,147,898 $ (5,898,316) $ 384,068,312 *Transfers include student revenue bond payment funds, scholarship matching funds, and transfers to Unexpended Plant and Capital and Technology Funds 2

102 HOUSTON COMMUNITY COLLEGE SYSTEM Comparison to Budget and Comparison to Previous Fiscal Year as of September 30, % of Year Expended HCCS CURRENT UNRESTRICTED Year to Date Actuals Thru September 30, 2014 FY2015 Budget Actuals as a % of Budget Year to Date Actuals Thru September 30, 2014 Year to Date Actuals Thru September 30, 2013 Increase (Decrease) FY2015 Compared to FY2014 % Increase (Decrease) REVENUES State Appropriations $ 8,297,871 $ 69,202, % $ 8,297,871 $ 8,297,871 $ 0.0% Ad Valorem Taxes 5, ,968, % 5,618 5,631 (13) 0.2% Tuition, Net 17,096,409 40,308, % 17,096,409 16,712, , % Fees 26,626,571 64,784, % 26,626,571 26,388, , % Other Local Income 141,738 2,247, % 141, ,263 (18,526) 11.6% Tuition & Fee, Net Extended Learning 2,466,609 6,565, % 2,466,609 1,613, , % Indirect Cost Revenues, Grant 63, , % 63,715 59,648 4, % Total Revenues 54,698, ,696, % 54,698,530 53,237,579 1,460, % Fund Balance Transfers In 8,000, % 0.0% Total Revenues and Fund Balance Transfer $ 54,698,530 $ 306,696, % $ 54,698,530 $ 53,237,579 $ 1,460, % EXPENSES Salaries 15,451, ,624, % 15,451,281 14,838, , % Employee Benefits 2,684,939 20,180, % 2,684,939 2,521, , % Supplies Gen Exp 188,413 5,926, % 188, ,085 (391,672) 67.5% Travel 40,806 1,220, % 40,806 73,196 (32,390) 44.3% Marketing Costs 55,030 1,585, % 55,030 40,057 14, % Rental & Leases 153,197 2,591, % 153,197 53,762 99, % Insurance/Risk Mgmt 6,076,167 7,264, % 6,076,167 6,196,872 (120,705) 1.9% Contract Services 176,209 23,490, % 176, ,902 (681,693) 79.5% Utilities 39,388 10,292, % 39,388 84,581 (45,194) 53.4% Other Departmental Expenses 93,093 2,354, % 93, ,884 (160,791) 63.3% Instructional & Other Materials 234,358 10,730, % 234,358 1,145,623 (911,265) 79.5% Maintenance & Repair 9,937 1,334, % 9, ,454 (137,517) 93.3% Transfers/Debt 921,147 32,517, % 921,147 1,151,058 (229,910) 20.0% Contingency 2,052, % 0.0% Capital Outlay 7,188 1,531, % 7, ,581 (512,393) 98.6% Total Expenses $ 26,131,153 $ 306,696, % $ 26,131,153 $ 28,463,763 (2,332,610) 8.2% NET REVENUE/(EXPENSES) $ 28,567,377 $ 0.0% $ 28,567,377 $ 24,773,816 $ 3,793, % 3

103 HOUSTON COMMUNITY COLLEGE SYSTEM Auxiliary Budget By Fund as of September 30, 2014 Auxilary Funds Uncommitted Portion Main Leasing Misc. Auxiliary * Foundation Marketing Bookstore Commission International Student Services Cafe Club NEO 3100 Main Subtotal Uncommitted Fund Balance August 31, 2014 $ 17,856,636 $ (14,671,568) $ (1,706,924) $ (20,030,617) $ 23,713,652 $ (1,587,306) $ (1,545,140) $ 2,028,733 FY2015 Revenue 453,553 26,890 47, ,461 Salaries 19,555 35,869 8,651 25,609 20, ,685 Benefits 4,645 9,292 1,995 5,827 4,742 26,502 Supplies Gen Exp 5, ,738 Travel Marketing Costs Rental & Leases Contract Services (2,984) 12,373 9,389 Utilities 1,847 1,847 Departmental Expenses 4,450 4,450 Instructional & Other ,094 Materials Maintenance & Repair Insurance/Risk Mgmt Exemptions and Waivers Transfer/Debt Capital Outlay Total Expense 23,663 67,702 10,877 31,437 25, ,916 Contribution to Fund Balance 429,889 (40,812) (10,877) (31,437) 21, ,545 Auxiliary Fund Balance Uncommitted Portion $ 2,397,278 * Expenditures in this category include mailroom, child day care, Minority Male Initiative, Govt. Relation, Mobile Go, etc. 4

104 HOUSTON COMMUNITY COLLEGE SYSTEM Auxiliary Budget By Fund as of September 30, 2014 Auxiliary Funds International and Committed Portions International Committed Total Saigon Tech Qatar Subtotal International Minority Business Development Agency Student Vending Commission Student Activity Fee Student Athletic Fee Subtotal Committed Total Auxiliary Fund Balance August 31, 2014 $ 316,770 ######## $ 1,732,695 $ 7,210 $ 294,027 $ 969,278 $ 978,947 $ 2,249,462 $ 6,010,890 FY2015 Revenue 419, ,051 1, , , ,992 1,758,504 Salaries 258, ,759 1,300 5,540 16,564 23, ,848 Benefits 51,894 51, ,031 4,052 82,448 Supplies Gen Exp ,416 7,203 Travel 4,986 4, ,243 Marketing Costs Rental & Leases Contract Services ,529 Utilities 1,847 Departmental Expenses 4,450 Instructional & Other 1,094 Materials Maintenance & Repair 154 Insurance/Risk Mgmt Exemptions and Waivers Transfer Capital Outlay Total Expense 5, , ,688 1,408 6,522 21,281 29, ,815 Contribution to Fund Balance (5,011) 108, ,364 1,120 (1,408) 457, , ,781 1,254,689 Auxiliary Fund Balance Intl, Committed, Total $ 1,836,058 $ 8,330 $ 292,619 $ 1,426,543 $ 1,304,750 $ 3,032,242 $ 7,265,579 5

105 HOUSTON COMMUNITY COLLEGE FY Adjusted Budget by Colleges as of September 30, 2014 Budgeted Expenditures CENTRAL NORTH WEST NORTH EAST SOUTH WEST SOUTH EAST COLEMAN EXTENDED LEARNING SYSTEM Grand Total Salary $ 25,331,044 $ 26,431,644 $ 19,611,587 $ 27,143,860 $ 16,174,115 $ 12,411,681 $ 10,401,913 $ 46,118,344 $ 183,624,188 Employee Benefits 20,180,691 20,180,691 Supplies & Gen 256, , , , , , ,495 4,034,798 5,926,254 Travel 112, ,876 39,288 71,596 65, ,862 67, ,442 1,220,832 Marketing Costs 40,979 47,585 82,822 29, ,434 35, ,287 1,077,218 1,585,454 Rentals & Leases 1, , , ,141 87, ,379 28, ,315 2,591,830 Insurance/Risk Mgmt ,263,077 7,264,193 Contracted Services 328, ,437 77,034 52, , ,220 22,492 22,133,701 23,490,991 Utilities 5,125 4, ,282,281 10,292,368 Other Departmental Expenses 82,405 46,611 80,568 45,501 75, ,285 41,886 1,868,062 2,354,042 Instructional And Other Materials 480, , , ,603 70, , ,938 8,411,200 10,730,383 Maintenance and Repair 138,195 46,322 52,218 45,325 27,189 87, , ,080 1,334,065 Transfers/Debt 864,206 5,640,442 1,250,001 24,763,163 32,517,812 Contingency 50,000 30,964 50,000 50,000 50,000 50,000 1,771,168 2,052,132 Capital Outlay 513, ,410 59,377 94,431 50,509 39, ,515 1,531,232 Total $ 27,342,250 $ 28,783,335 $ 27,036,266 $ 29,851,797 $ 17,136,831 $ 14,392,948 $ 11,825,985 $ 150,327,055 $ 306,696,467 6

106 Houston Community College Balance Sheet By Fund For Month Ended September 30, 2014 CURRENT & LOAN FUNDS 1 PLANT & BOND FUNDS 2 Total All Funds ASSETS Current Assets: Cash & cash equivalents $ 127,836,970 $ 23,842,906 $ 151,679,876 Restricted cash & cash equivalents 8,465,188 8,465,188 Short term Investments Accounts/Other receivable (net) 29,696,876 2,425,373 32,122,249 Deferred charges 1,003,319 1,003,319 Prepaids 119, ,829 Total Current Assets 167,122,182 26,268, ,390,461 Non current Assets: Restricted cash & cash equivalents 318,594, ,594,233 Restricted long term investments 89,368,822 89,368,822 Long term investments 6,795,778 6,795,778 Capital Assets, net 841,881, ,881,196 Total Non current Assets 6,795,778 1,249,844,251 1,256,640,029 Total Assets $ 173,917,960 $ 1,276,112,530 $ 1,450,030,491 LIABILITIES Current Liabilities: Accounts payable 15,109,682 59,271 15,168,953 Accrued liabilities 3,305,012 1,416,571 4,721,583 Compensated absences 2,357,551 2,357,551 Funds held for others 688, , ,086 Deferred revenue 2,668, ,841 2,776,700 Notes payable current portion 7,785,000 7,785,000 Bonds payable current portion 20,285,000 20,285,000 Capital lease obligations current Total Current Liabilities 24,129,980 29,842,892 53,972,872 Non current Liabilities: Deposits Notes payable 161,141, ,141,737 Bonds payable 742,650, ,650,194 Capital lease obligations 102,299, ,299,058 Total Non current Liabilities 1,006,090,989 1,006,090,989 Total Liabilities $ 24,129,980 $ 1,035,933,881 $ 1,060,063,861 Fund Balance August 31, 2014 Unaudited 112,044, ,337, ,382,094 Revenues Over Expenditures Unrestricted 29,822,067 29,822,067 Restricted 3,671,715 3,671,715 Net Investment in Plant 90,754 90,754 Total Fund Balances, Unaudited $ 145,537,981 $ 244,428,649 $ 389,966,631 Total Liabilities & Fund Balances $ 169,667,961 $ 1,280,362,530 $ 1,450,030,491 1 In cludes Unrestricted, Restricted, Loan & Endowment, Scholarship, Agency and Auxiliary Funds. 2 Includes Unexpended Plant, Retirement of Debt and Investment in Plant Funds. 7

107 Exemptions & Waivers Through September 30, 2014 Account FY FY Year to Date Year to Date End of Year Activity thru Activity thru Activity 09/30/ /30/2014 Tuition Budget: Adjusted Budget FY , Net $ 41,453,277 Revenues Received: Tuition 45,771,753 19,747,063 19,909,413 Waivers & Exemptions: Dual Credit (4,931,925) (2,101,035) (2,039,665) Other (2,100,332) (933,593) (773,339) Total Waivers & Exemptions (7,032,257) (3,034,628) (2,813,004) Total Tuition Revenue, Net $ 38,739,497 $ 16,712,435 $ 17,096,409 Tuition Extended Learning Budget: Budget FY , Net $ 6,565,665 Revenues Received: Tuition 8,931,465 1,797,550 2,606,784 Waivers & Exemptions: Corrections (2,021,386) (184,050) (140,175) Total EL Tuition Revenue, Net $ 6,910,079 $ 1,613,500 $ 2,466,609 FY FY Year to Date Year to Date Actuals % End of Year Activity thru Activity thru Inc/(Dec)YTD Exemptions & Waivers Activity 09/30/ /30/2014 vs. PriorYTD Dept of Corrections $ 2,021,386 $ 184,050 $ 140, % Dual Credit Waiver 4,931,925 2,101,035 2,039, % Other: Employee Fee Exemptions 69,909 32,062 24, % Firemen 26,082 7,249 6, % Hazelwood 1,416, , , % Deaf & Blind 207,012 91,667 77, % High Ranking Hi SCH Grad 1, , % Child of Disabled Vet ETC 285 5, % Emp of State Coll & Univ 0.0% Nonres Teach/Research Asst 6,372 2,655 2, % Nonres Competitive Scholar 11,346 4,885 1, % Senior Citizens 15,532 7,617 6, % Misc Tuition/Fees Waivers 6, % Scholarship Distribution 10, % Apprenticeship Waivers 0.0% Refugee Waiver % Foster Children Resident 300, , , % Undocumented Students 11,383 7,378 3, % TX Tomorrow Waiver 2, % Surviving Spouse/Children 2,120 2, % Peace Officer Exemption 3,655 (130) % Early College High School 56, % Adopted Student Waiver 14, % Stipends 3, % Scholars Costs Funded by State 6, % Total Other Exemptions 2,100, , , % Grand Total Exemptions & Waivers $ 9,053,643 $ 3,218,678 $ 2,953, % 8

108 REPORT ITEM Meeting Date: November 18, 2014 Committee: Facilities and Finance ITEM NO. ITEM TITLE PRESENTER 10 Update on Bond Capital Improvement Plan (CIP) Related Matters Dr. Cesar Maldonado Charles Smith DISCUSSION Provide an update on the Bond Capital Improvement Plan (CIP) related matters. STRATEGIC GOAL ALIGNMENT Strategic Initiative: Develop 21st Century Learners This item is applicable to the following: Central Coleman Northeast Northwest Southeast Southwest /18/ :30 PM

109 APPENDIX A

110 Strategic Plan Creating Opportunities for Our Shared Future Approved by the HCC Board of Trustees, June 2012 Mission: Vision: Guiding Principles: Houston Community College is an open-admission, public institution of higher education offering a high-quality, affordable education for academic advancement, workforce training, career and economic development, and lifelong learning to prepare individuals in our diverse communities for life and work in a global and technological society. Houston Community College will be the most relevant community college in the country. We will be the opportunity institution for every student we serve essential to our community s success. Our Guiding Principles direct our interactions with students, the internal and external communities we serve, and each other, giving focus to our primary purpose: devotion to the achievement of student success, defined as timely completion of certificates and degrees that drive real accomplishments in the workplace, at universities, and in society. Freedom with Responsibility HCC subscribes to and upholds a doctrine of freedom that follows the principle of responsibility. Commitment to Excellence HCC believes that a commitment to doing one s very best without regard to position is the starting point of all expressions of excellence and setting of high standards for quality and performance. Respect for the Person HCC holds that a principle of community mindfulness begins with respect for oneself and for others. Respect is the framework of personal integrity and provides the tie that binds us together. Sound Stewardship Stewardship is the path to fulfilling HCC s Mission and acknowledges our guardianship of its resources and positive impact on the lives of our students and community at large.

111 Strategic Initiative #1 - Increase Student Completion HCC currently leads the state and is fifth in the nation in the number of students who complete associate degrees. While we are proud of this fact, we can do better. We will strengthen our efforts and scale up those strategies that have been proven to increase the rates of students persistence and completion. HCC will continue to serve as a national Achieving the Dream (ATD) Leader College and work hand in hand with our high school partners to ensure more students enter our doors college-ready and leave well-prepared for successful transition to jobs, careers, and further education. Action 1.1: Action 1.2: Action 1.3: Action 1.4: Action 1.5: Improve student preparation for higher education and transition to careers Improve academic success of students in their first semester Revamp developmental education to ensure greater success with more efficient delivery Improve students persistence rates from one semester to the next Ensure students complete their programs of study and transition successfully to jobs/careers or further education Strategic Initiative #2 Respond to Business and Industry As the supplier of skilled workers to business and industry, we have a responsibility to build partnerships and to develop the means to respond quickly with the creation and design of programs and student-learning outcomes that meet their requirements. The employer is our customer. Our clear responsibility to both employers and to students is to narrow the jobs gap and the skills gap for both of these stakeholders. Action 2.1: Action 2.2: Action 2.3: Engage industry leaders in dialogue to identify present and future needs Improve the infrastructure of workforce programs (instruction, curriculum, facilities, and equipment) to meet the business and industry needs Ensure students have access to information and support services to complete career and technical education programs

112 Strategic Initiative #3 Develop 21 st Century Learners HCC must prepare our students to become citizens and workers capable of productive and meaningful participation in the 21st century. Core competencies of critical thinking, effective communications, quantitative reasoning, teamwork, personal responsibility, and social responsibility must be taught in all of our instructional programs. All classrooms at HCC should meet minimum technology standards, and all faculty must be trained and supported in using effective teaching and learning strategies to promote success for students in their learning today as well as throughout their lifetime. Action 3.1: Ensure adoption and commitment by HCC to 21 st century core curriculum skills as defined by the Texas Higher Education Coordinating Board (THECB) Action 3.2: Action 3.3: Create new platforms and methodologies to teach and support students using effective methods of course delivery, teaching practices, Provide an environment conducive to optimal learning that includes consideration of facilities, technology, equipment, materials, accessibility, and concern for students Strategic Initiative #4 Support Faculty/Staff Professional Development and Student Leadership Development HCC has celebrated its 40th year by enrolling and graduating more students than ever before. To ensure we continue to thrive as an essential and relevant institution for the educational development of our students and the economic development of our community, we must prepare students, faculty, and staff for the leadership roles of tomorrow. We will do this in multiple ways through the expansion of external resources and support, purposeful mentoring of leadership candidates, infusion of opportunities for leadership development in our instructional programs, student services, extracurricular activities, and human resources. Action 4.1: Action 4.2: Action 4.3: Develop a system-wide strategy to encourage leadership development for students Develop a system-wide strategy for ongoing professional and leadership development for faculty Develop a system-wide strategy for provision of professional and leadership development for HCC personnel at all levels and functions of the organization

113 Strategic Initiative #5 - Support Innovation HCC recognizes that in the near term there will be continuing economic turmoil to challenge the funding and stability of the institution. We also recognize that continuous technical challenges will create disruptions and opportunities in the delivery and transfer of knowledge and data. To counter and overcome these difficulties, we must be an institution where innovation is valued and promoted. However, nothing will be accepted merely on the basis of custom, anecdote, or fad everything we do must be proven to have long-term value in terms of strengthening our institutional resilience and capacity to serve our students and our community. Action 5.1: Action 5.2: Action 5.3: Action 5.4: Reduce HCC s reliance on debt to maximize the use of operating dollars for strengthening teaching and learning capabilities Leverage current and new grant opportunities to improve the institution s capability to respond to our teaching and learning needs Expand opportunities for the HCC Foundation to fund capital projects, program excellence, and faculty development Optimize technology and capital assets through planning for business continuity, disaster recovery, replacements, training, and environmental sustainability Strategic Initiative #6 Support Entrepreneurialism Houston is an entrepreneurial, opportunity city where taking a risk, failing, and starting over again are valued. HCC is the Opportunity College and is grassroots in its approach to serving its constituents. Therefore, HCC is committed to strategic thinking that not only respects students wherever they are, but also inspires and gives them the tools and confidence to follow their dreams. HCC will commit to an entrepreneurial culture within the organization to serve as an example of the spirit of Houston. For this institution, fostering a culture that encourages inspiration and dreaming helps students actualize their potential. Action 6.1: Action 6.2: Action 6.3: Encourage an entrepreneurial culture among all members of the HCC family Develop and implement promising practices that nurture and reward a spirit of entrepreneurialism throughout the institution Strengthen HCC assessment and institutional effectiveness (IE) processes and activities

114 Strategic Initiative #7 Leverage Partnerships Houston is a global leader. The diversity of our economic structure and our willingness to embrace and value the partnerships encourage innovation. HCC is a principle partner for educational and economic opportunities, enhancing and advancing the community s quality of life. HCC is a catalyst for creating jobs. Former U.S. Secretary of Defense Robert M. Gates described foreign language education, study abroad, and the recruitment of foreign students to U.S. campuses as key strategies in promoting America s national security and economic interests. While addressing the audience at the 2012 NAFSA conference in Houston, Gates stated, Our economic future depends on Americans who can work successfully in an international setting. According to an American Council on Higher Education Blue Ribbon Panel on Global Engagement (November, 2011), It is important that college graduates, whatever their location, be not only globally competitive but also globally competent, understanding their roles as citizens and workers in an international context. While identifying common problems, we might also discover common solutions (p.6). I Action 7.1: Action 7.2: Action 7.3: Identify and secure new local partnerships capable of improving the institution s capacity, performance, and resilience Identify and secure new regional and state partnerships capable of improving the institution s capacity, performance, and resilience Identify and secure new international partnerships capable of improving the institutions capacity, performance, and resilience

115 Strategic Plan Creating Opportunities for Our Shared Future Approved by the HCC Board of Trustees, June 2012 Mission: Vision: Guiding Principles: Houston Community College is an open-admission, public institution of higher education offering a high-quality, affordable education for academic advancement, workforce training, career and economic development, and lifelong learning to prepare individuals in our diverse communities for life and work in a global and technological society. Houston Community College will be the most relevant community college in the country. We will be the opportunity institution for every student we serve essential to our community s success. Our Guiding Principles direct our interactions with students, the internal and external communities we serve, and each other, giving focus to our primary purpose: devotion to the achievement of student success, defined as timely completion of certificates and degrees that drive real accomplishments in the workplace, at universities, and in society. Freedom with Responsibility HCC subscribes to and upholds a doctrine of freedom that follows the principle of responsibility. Commitment to Excellence HCC believes that a commitment to doing one s very best without regard to position is the starting point of all expressions of excellence and setting of high standards for quality and performance. Respect for the Person HCC holds that a principle of community mindfulness begins with respect for oneself and for others. Respect is the framework of personal integrity and provides the tie that binds us together. Sound Stewardship Stewardship is the path to fulfilling HCC s Mission and acknowledges our guardianship of its resources and positive impact on the lives of our students and community at large. 1