(0:00 - 0:15)
And it's a little past six, so call this meeting to order. First thing on the agenda is public comment. David, do we have anyone signed up to speak? No, Mr. Chairman, no one signed up.

(0:15 - 0:40)
Great, then we will go right into workshop. Annette, you're up. All right, thank you, Chairman.

(0:41 - 1:05)
Dr. B., we are here tonight to have run two of our budget discussion. Where we are in our budgeting process, we have submitted all of the expense budgets to all the different department and budget managers. They've gone through those budgets.

(1:05 - 1:23)
They have submitted their requests back for the next fiscal year. We are in the process right now of meeting with all of the different budget managers. We have not met with all of them yet.

(1:24 - 1:45)
We should be finished with that process probably with next week. And so then we will start being able to put together final expenses and compare that against the revenue. The revenue number is still not complete either.

(1:47 - 2:01)
We don't have... I was just going to say, Annette, that I don't know if Romero knows, but we're not getting... Yeah, whatever that is, is not... It's not on our screens. Yeah, I've got nothing here. Okay, thank you, Romero.

(2:02 - 2:11)
Oh, I should hurry and go really fast. I forgot where I was. You don't have the revenue numbers either.

(2:11 - 2:22)
Oh, thank you. We do not have the final revenue numbers right now. We have preliminary numbers on our taxable values.

(2:22 - 2:36)
They're pretty good numbers, but they're not final. We won't have final numbers for Harris County until after we adopt our budget. So we'll have to estimate those as best we can.

(2:36 - 3:06)
And House Bill 8 is giving us some things to think about when we are looking at our tuition and fee revenue for this next year. And we'll talk about a couple of those things as we go through the revenue projections tonight. Right now, if we look at our total revenue projection, we're at $71,573,000.

(3:06 - 3:32)
That's about a $2.8 million increase over the current year that we have. Our reserves, we've talked about this. So we have right now about $25 million in reserves.

(3:33 - 3:54)
You may recall we had an operating surplus last year of about $5 million. We put $4 million of that into capital improvements, facility improvements. And we put $1 million of that operating surplus into the bond reserve.

(3:55 - 4:14)
We also put our $300,000 in the insurance reserve. And then we still have the capital asset reserve where we sold some of that property on I-10. And so that is still being held as well.

(4:17 - 4:27)
Oh, there you are. Is the property asset part of the $25 million? No, it is not. This is cash.

(4:27 - 4:49)
The $25 million is cash money that is either in an investment pool. There's a small amount that's in an investment pool, but most of it is in some type of a security investment. What is the property value? It's time to have that updated.

(4:50 - 5:00)
We did not update it last year. I think it was around $9 million, $11 million last year. We've been updating that every other year.

(5:01 - 5:25)
So this budget or this audit period would be the time to ask for another estimate on that valuation. But that has nothing to do with these amounts that I'm sharing with you here. Where you would see any adjustment related to that is going to be on the final annual report.

(5:27 - 5:40)
And so it would not be on the operating report that we'll give to you at the end of August. And it is certainly not part of these cash balances either. I'm sorry, I pulled a question.

(5:40 - 6:05)
Oh, we finally got this. The reserve, $25 million, that's our goal, right? Our target was about $25 million? If you look down here, so our policy says that we need to be between four and six months of operating expenses. Our operating expenses right now are averaging just a little over $4 million, about $4.5 million a month.

(6:05 - 6:26)
So to be at four months, we would need to have about $17 million. To be at six months, we would need to have about $26 million. But, again, I would just point out to you that that relates only to this top amount, to the board reserve, not the full $25.

(6:27 - 6:42)
These other two are outside that operating reserve. So we're comparing the $21 to the $17 and the $26. So we're good then? Yes.

(6:42 - 6:49)
We're good. We're good. We're roughly, say, five? Yes, we are between the four and the six-month level.

(6:50 - 7:05)
So, yes, sir, we are within our policy. Do you have any residual from this year included in those numbers? No. Expected? None of the anticipated operating surplus for the current year is included in that.

(7:06 - 7:37)
And so if you look right here, you can see right now, based on our latest financial statement, we had anticipated or we have estimated almost a $5 million operating surplus. Now, I will tell you about a million of that is related to the additional revenue in lieu of tax that we have received. So that's really kind of a one-time deal, and it's really nothing that we should ever be budgeting for.

(7:38 - 7:58)
Also, our interest income exceeded our budget this year, which we talked about. And then our tuition and fees are also above what we had originally budgeted. So about $3 million of the five is related to increased revenue.

(8:01 - 8:13)
The other part is related to savings on expenses. So we've saved about a million dollars of our contingency. We have not spent any of that money this year.

(8:14 - 8:50)
We also always budget that $300,000 that we put into the reserve for insurance. And then the other half million is related to vacant positions and other operating accounts where we have come in under budget. The $300,000 for insurance, are we putting that in there, or is that over? We've already put it all, and that's what's left over? We budget that as an expense, and then it gets added to our reserve.

(8:50 - 8:57)
Okay. $1.6 million. So we'll have close to $2 million pretty quick.

(8:57 - 9:11)
After this year, yes, sir. Do we have a target in mind for that insurance reserve? We do not at this point. It's probably something we need to look at.

(9:12 - 9:48)
You know, I started, or we talked about doing that, and we started doing that back when I first came because everyone recognized that we don't carry named storm coverage, and so we have pretty large exposure there if we were to suffer any type of a catastrophic loss due to a named storm. Certainly $1.6 million isn't going to do a whole lot for us. We would have to be doing a whole lot of other things if we were to suffer any type of a major loss due to a named storm.

(9:48 - 10:20)
I can tell you as well, we this year for our insurance, we did issue an RFP, and we've asked as an alternate to get some quotes on what that type of coverage would look like for us. So that is something that we'll be able to review and evaluate and make a decision on as we move forward. But we may want to discuss increasing that $300,000 to more.

(10:21 - 10:26)
Potentially, yes, sir. You're right, $2 million. That's a couple of roofs maybe.

(10:26 - 10:34)
Maybe, yeah. That's it. Yeah, the $1.6 million, I mean, it's something.

(10:35 - 10:56)
It's better than nothing, but it still isn't going to rebuild a campus by any stretch of the imagination. Oh, but the good news is, right, after we got our bond rating upgrade the other day, I got an e-mail from, I don't know who it was, and they were so excited to let me know that I could go borrow $200,000. I was like, wow, all right.

(10:57 - 11:10)
Thank you so much. Needless to say, I just moved on. Okay, so here's the detail of our revenue projections here.

(11:11 - 11:44)
And so, as I mentioned before, on our tuition and fees, we've got a couple of things that are impacting this number. And one big thing is our first-time free-at-leave program. So, you know, we started that a year or two ago where a student from our service area, their first semester at Lee, they could come here at no out-of-pocket cost, and that was our first-time free-at-leave program.

(11:45 - 12:04)
That cost we were able to fund with CARES funding. And so it never truly impacted our financial statements in a negative way by doing that. This would be the first year that we will be funding that operationally.

(12:05 - 12:34)
And based on the amounts that we waived for this program last year, that cost is going to be about $1.3 million. Most of that expense is recognized in the fall term. Of the $1.3 million, about a million of it relates to the fall term, because that's the term when you get most of your new students.

(12:35 - 12:59)
And then about $300,000 would relate to the spring term. But all total is about $1.3 million. When we looked at what our actual results were this year compared to our budget, we exceeded our budget by over $800,000, almost $1 million in tuition and fees.

(13:00 - 13:51)
So when you net that together, the increase plus the additional waivers, there is a reduction of somewhere around $300,000 or more that we will need to figure out how we're going to fund. But you're saying the tuition-paying students are covering the ones that were given free? Because the tuition is up $800,000, and you're netting that against the cost of this program. Right. 

So the net effect on the budget. Right. So what you're saying is, though, that the tuition-paying students are paying for the first time? I'm saying the difference in the budget is that amount.

(13:51 - 14:22)
How it gets funded is still part of the whole budget process. That particular section of the budget, when you're looking at the revenue for that budget, will be lower than the budget of the current year by that amount. How it gets funded, how it gets covered or paid or whatever term you want to use, that is still part of the whole budgeting process, and it may be that we reduce other expenses to cover it.

(14:22 - 14:44)
There's a lot of still unknowns in that whole process. So I can't say that one student is paying for another, but what I can say is that area of our budget will have a lower amount associated with it. And I hope that answers your question.

(14:44 - 15:11)
I've got a question, Annette. Your column difference between fiscal year 23 versus fiscal year 24 budget, I'm having trouble figuring out what 50 percent, 36 percent, what this relates to. Can you help me with the math? Yeah, that was just a calculation that shows that our resident in-district tuition is 50 percent of our total tuition amount.

(15:11 - 15:41)
So if you were to add the 5.6, the 4 million, the 460,000 and the 1.4, that's a total of 11 million. So that's just kind of a percentage breakdown on our student body. So about 50 percent is coming from in-district, 36 percent is coming out of district, 4 percent is non-resident, and then dual credit is roughly 10 percent.

(15:43 - 16:02)
Annette, of the students for the first time free, they do the FAFSA, right? And we see if they qualify. So that 1.3 million, is that on top of what we got back from? So that number actually would have been much higher if? That's correct. That's the net.

(16:03 - 16:18)
Wow. Do we know how, and you may not know this, but I wonder just what the total would have been like if they had not received any kind of? I don't know what that number is. I'm sure it's something that we could try to take a look at.

(16:18 - 16:30)
It's not imperative. I'm just wondering how big a gap, like did we get lots of financial aid to come in or? I'm just curious, but it's not critical. Well, one of the things, I think that's a good question.

(16:30 - 16:54)
One of the things that we are seeing is that many students would ordinarily not complete the FAFSA, and so students are completing the FAFSA in much higher amounts, and because of that, they're receiving aid they never would have gotten. So that's a real silver lining for us. They're required.

(16:54 - 17:22)
They're required in order to receive first degree at Lee. You know, part of the House Bill 8 is that we're going to be receiving some additional state funds as well for student aid, and so financial aid is taking a look at that to see how those funds may help offset some of this cost as well because we got about a, seems like it was about a million dollars. Help me out, Dr. Vate.

(17:22 - 17:32)
Do you remember? Say that again? The additional TEOG that we got. Oh, the additional TEOG dollars. I was going to send this to the board, but I guess we can say it to them out loud.

(17:32 - 17:57)
We just learned that we are receiving an additional million dollars of TEOG. This is Texas Education Opportunity Grant funding per year in the next biennium, and that, you know, I wish I knew. Maybe Dr. Walzers is listening to me, and so is Scott, and maybe they could tell me exactly how much of an increase that is.

(17:58 - 18:56)
But one of our, remember I was telling you, recall that I was telling you that part of the House Bill funding is an increase in TEOG dollars, and we were having a difficult time in the past using all of the funds, and so I was kind of questioning, like, well, what does it matter if we receive additional funds if we were having a difficult time spending all of them? But we are implementing a new strategy where we are awarding the TEOG dollars first before Pell, and so we believe that we're going to be able to spend all of those dollars down, which is, again, another great thing for our students. Is $1 million that is discussing here part of the expected $6 million, or am I correct on that number increase under the news? That has nothing to do with this, because this is money that just goes to students, direct to students. So we wouldn't report on Pell or anything like that.

(18:58 - 19:23)
But Dr. Walzers is telling me that the answer that you had requested earlier, that it was presented in an analysis that we did when the first-time free at-leave program was approved a few months ago. The totals were there, I guess, on how many people signed up and what the costs were, I guess. I don't remember that presentation, but I'm sure I can look it up.

(19:27 - 20:04)
The volume of students that signed up for it, was that all part of that presentation? And the costs? We'll look at it. No worry. Well, I don't know if it was the total volume, but one of the things that I highlighted in my report last month, which I think was really significant and speaks to the effectiveness of the program, was that the number of students who were 18 to 19 years old, that number, which are first-time and college students, increased by 16%, and that is the target population of students that colleges are struggling to enroll.

(20:05 - 20:47)
So theirs is really declining in that area, and colleges' enrollments who are either flat or increasing really have only been buoyed by dual-credit enrollment, and ours is reflective of both increased dual-credit numbers and first-time and college 18 to 19-year-old new enrollment, which is really great. So what we know then is that this is an incentive program that really is working. And so this first time, and I apologize for maybe repeating all this, but that's for out-of-district also.

(20:47 - 21:05)
For any student that's in our service area. So the local taxpayers here are paying for out-of-district kids. Again, not necessarily, because all of these things are funded by a lot of different ways.

(21:06 - 21:15)
Primarily by Pell. Primarily by Pell. And, you know, TEOG again is also going to figure in, but I do have the original figure.

(21:15 - 21:39)
We were getting 798,000 before, and now it is 1.73 million. We've spoken already in prior meetings about state appropriations. We are expecting some type of an increase.

(21:40 - 21:54)
We don't have a number that we are comfortable in putting into our budget at this point. And so for this discussion tonight, I've just left that flat. Because we don't know for sure what that number is going to end up being.

(21:55 - 22:24)
Do you have any kind of rough idea? I mean, are we talking a million or two or three? Do you have any idea? Yeah, I thought it was a big number, right? But that was when we spoke to the reporter. That was the same estimate that I gave to you guys. It was just the estimate that was provided if the law were implemented at that time.

(22:24 - 22:32)
And that's what we told the reporter. If the law were implemented at that time, that was the amount that we were quoted to receive. But it's not set in stone.

(22:33 - 22:54)
There's still a lot of data to be collected. I know Scott's group is having to create reports to submit to the state that we have never submitted to the state before related to the number of certificates and other programs. Non-credit programs, workforce credentials that we never used to report, etc.

(22:54 - 23:17)
So there's still a lot of calculating to happen. And although the law has been signed by the governor and is ready to be implemented, it's in an emergency rulemaking state right now. And so what that means is, okay, we've said we want to do this, but we don't know how to do it.

(23:17 - 23:54)
So now the THECB, the coordinating board, has developed some committees, and they are trying to work through what the rules and regulations are going to be regarding this new legislation. So although it's been signed, which is obviously great news, we still don't have details of how this is going to play out and what the real numbers are going to be. I think I mentioned to you guys before— Not only on what the number will be, but on what the timing of getting the payment.

(23:54 - 24:04)
It's all up in the air. That too. Anybody that changes the budget based on that is really taking a huge chance because you don't know when you're going to get it.

(24:04 - 24:13)
But we'll get it this year, though, sometime, right? Oh, yeah. The timeline is this year? It is, yeah. And it's going to be in three disbursements.

(24:14 - 24:41)
So we're going to get millions, whether it's three or four or five or maybe six. We're going to get several million dollars this year. Remember one of the things that I said, though, was that there will be corrections that are made because, again, this isn't in a negotiated rulemaking process right now, and there are going to be processes that we don't even know that will be happening that will adjust the money.

(24:42 - 24:55)
So it is not unlikely that we could be given money and then be told, return this money. Sure. So we cannot estimate money that we do not know we'll have.

(24:56 - 25:13)
At all? No. I don't think it, from a financial standpoint, we do not think it. Most of the colleges are, from the meeting that I attended last week, most of the colleges are using their current budget, being very conservative because they don't know.

(25:13 - 25:33)
You know, we've been told that, like Annette talked about, they're doing all of these studies. They have a committee that's looking at the allocations, and they're asking for data that's never been asked for before. So with that in place, we can't.

(25:34 - 26:02)
What was the total pool of money that the legislature is allocating for community colleges, budgeting over previous? Wasn't that like 700 million? A little over $660 to $770 million. So that 600 or 600 and whatever million is coming to community colleges across the state of Texas. It is budgeted to come to community colleges.

(26:04 - 26:28)
And that's over a two-year period? That's over the biennium, correct. I want to remind you that the model is changing completely, and so what we have been accustomed to in the past is, they said it was 670 million. Well, 670 million was divided among all the community colleges, and you got your share based on contact hours and blah, blah, blah.

(26:29 - 27:16)
Well, now what they're telling us, and, again, they're still in the rulemaking process, but what they're telling us is it's not an allocation program any longer. They're saying we've set aside this much money, but the way you're going to earn this money is you'll get so much for a credential, so much for a student who transfers, so much for a student who completes, so much for a student who does something else. So it's not merely an allocation formula any longer in the initial state, but it is more of the student success portion of our funding model before where you would earn based on certain goals or certain criterion.

(27:17 - 27:24)
That is the way the money will be distributed. So maybe it will be 670 million. Maybe it won't.

(27:24 - 27:37)
But in that case, we should do well. We should maybe do better than we thought, right? If it's based on success and achievement and degrees and all that. What it could have should have but didn't is my concern.

(27:38 - 28:00)
Well, if that's what they're basing it on, we should do very well. Again, we have never reported some of these data points before, and that's the unknown here, and that's what we're working on developing. Scott's team has been working really hard to get all this data pulled and submitted to the state in a timely manner.

(28:02 - 28:23)
I'm just not comfortable in saying absolutely we're going to get X amount because I don't know what that is. We feel very positive. I'm not going to say that I think we're not going to get any, but I'm not prepared at this point to put some amount into the budget.

(28:27 - 28:40)
So you're going to put zero? At this point, until I have better information, that's what I am proposing. Yes, sir. Well, it's just like the taxpayers.

(28:41 - 28:46)
You did not. No, I'm after you. Turn your hearing aid down.

(28:47 - 29:05)
Since we've had almost $20 million in surpluses over the last three years. Which was somewhat by design, I will remind you. Okay, but we've had those surpluses, and the taxpayers have funded a lot of that through Advo and Taxa.

(29:05 - 29:14)
We've not changed the rate but one penny. But the values have increased substantially. And we'll go through some of that later on.

(29:15 - 29:41)
In my mind, all the risk is getting shifted to the taxpayer again, and the colleges had these surpluses. It's like there's enough surpluses that we've generated over the last two or three years that can easily cover the risk that we may be taking in putting some number in there, but to say it's zero. I said it's zero at this point.

(29:41 - 29:51)
Because we are still learning about this bill. This is a workshop. I'm not saying this is the final revenue number.

(29:51 - 30:02)
I'm saying this is the number that we have right now. But we have it before August, before we set the budget. I hope to have something before we set the budget.

(30:03 - 30:17)
So, one more question. Because I've got a whole line of them. Well, I was just going to see, Regent Hall, that Annette has a number of pieces of information, I think, that will maybe anticipate some of the questions that you have.

(30:17 - 30:26)
Can we just maybe let her continue and see if they're answered? And if not, then you can continue to answer them. Ask the questions. Thank you.

(30:27 - 30:31)
Gina, it's your turn. No, no, no. Mine can wait.

(30:31 - 30:48)
I was just going to make a comment about which normally you don't make a practice of doing it, but you can come back and amend your budget later on. And so you can always come back after you actually have the money in your hand. Then you can come back and decide what you want to do with it and apply it.

(30:48 - 30:54)
I was just going to make that point. But we'll hold all of our questions. Yes, ma'am.

(30:58 - 31:23)
And then we talked about other revenues and interest income at our last workshop. And we are right now proposing a budget that would increase that budget by about $1.3 million. So, overall, at this point, we have a $2.8 million increase in our revenue budget as it stands right now.

(31:24 - 31:52)
Now, as I mentioned before, the other thing that we have that's going to impact our tuition and fee revenue, and this is an item that we're, again, still trying to get our hands around. And this is what they are calling the FAST program. And this is the Financial Aid for SWIFT Transfer is what the acronym stands for.

(31:53 - 32:16)
And this is part of the House Bill 8 funding model. And so what it says is that if a student qualifies for a free or reduced lunch in the prior four years of them taking a dual credit course, then they can take this course for zero cost. They pay nothing for books.

(32:16 - 32:44)
They pay nothing for tuition. They pay nothing for any other fees if they qualify as a FAST student. So what does that mean to Lee College? Well, if we want to participate in this program, our tuition rate that we would be reimbursed for cannot be higher than the rate that the state will set.

(32:45 - 32:52)
Currently $65 per credit hour. Fifty-five. Fifty-five for $165 total.

(32:52 - 32:59)
Thank you. Say that again. $55 per credit hour for a total of $165.

(32:59 - 33:32)
That's where we are currently at in the negotiating rate. So right now for a Lee College dual credit student, they pay $125 for tuition. They pay a cost of they or their ISD pay a cost for their books of $82.50. And then there's the telehealth fee, which is $12.50. So our agreements with all the ISDs vary.

(33:33 - 33:50)
Some agreements say the ISD will pay the tuition and the students will pay the books. Some agreements say the ISD will pay tuition and books and the student pays nothing. Some agreements say the ISD pays nothing and the student pays everything.

(33:51 - 34:23)
So it varies by ISD. So one thing we are doing internally is trying to evaluate all the different scenarios that we have, and we will be working on a plan or a program to go back to all the ISDs and say, okay, this is your current program. This is what we would be able to recoup from the state if your students qualify for the FAST program.

(34:23 - 35:09)
And so now how do we deal with this other extra amount? Because we cannot charge it to the student if they qualify for FAST. If they do not qualify for FAST, if they are a student who was never on free or reduced lunch, so they're not considered to be academically or economically disadvantaged, then we have to charge them the same tuition rate that we charge the other students. But we could charge them for books or we could charge them for any other fee that we are currently waiving for the FAST students.

(35:09 - 35:51)
I know that's a lot of detail that you probably don't want to hear, but I say all of that to let you know that it is going to be a process, and it is going to take some negotiation and some study to get these agreements in line. And because we've already been charging tuition at the rate that we've been charging it and can't change it midstream, we're going to have to be issuing a lot of waivers, which is going to cost the college money for any students who sign up for this program. So let me repeat to you what I think I heard.

(35:54 - 36:05)
If you're on free and reduced lunch, we're going to charge $165. That's what the state's going to reimburse us. We're not going to charge anything to the student.

(36:05 - 36:18)
Okay, yes, right. The state is going to pay us $165. For the student who is not on free or reduced lunch, we can charge $220.

(36:18 - 36:41)
It's just the tuition part of it can't be any higher than what the free and reduced, so they can pay a higher book, fees, whatever is comprised of the $220 amount. The tuition amount that we charge to both students must be the same, but the other elements that make up the $220 can be tweaked. Yes.

(36:41 - 36:44)
Okay. Yes. That's what I thought I heard.

(36:47 - 37:28)
The estimates that we've received on the number of students who would qualify for the free and reduced lunch, specifically for Goose Creek, that's the largest portion of our dual credit, they're saying that that runs at about 70%, so it's a pretty significant number of students. Now, the upside to this whole thing is right now for Impact and Stewart, which are early college high schools, we receive $0 from the student. We receive $0 from the ISD.

(37:28 - 38:11)
We do receive state funding under the old model for the courses that are taught, but we do not receive any tuition, fees, anything like that. So with this program, any of those students at Impact or Stewart that would qualify as a FAST student, we would be able to recoup dollars from the state for those students. And their representation of the students that are in early college high school are similar to what the makeup is in the regular school district? Yes, sir.

(38:13 - 38:33)
Well, my understanding from Dr. O'Brien is that they tend to be overrepresented in free and reduced lunch. And they really try to ensure that the most underserved students have an opportunity to be at those schools. But I don't know exactly what the percentage is at the schools.

(38:34 - 39:02)
Any modeling that we've been doing for our budget, we're assuming that it is? We've done it by district at this point. That's the data that we have. So as Dr. V said, initially for the fall term, we will be reimbursed at the rate of 125 rather than the 165 because that is the rate that we have been charging the students.

(39:02 - 39:31)
And based on state statute, once a student has enrolled and they've been charged for a course, you cannot change the amount that they were charged for that course. So for the fall term, we're going to have to go with the 125. And then during this fall term, we will be looking to work with the ISDs, renegotiate the MOUs, and up those amounts for the spring term.

(39:35 - 40:14)
This was just some numbers on the number of students that we're talking about with the dual credit. For tuition and fees, we have been pretty steady in the amount of tuition and fees that we are charging our students. In spring of 2020, we raised the out-of-district rate by $5. 

It had been 125. We raised it to 130. Outside of that, the rates have remained constant since 2018.

(40:16 - 41:49)
When you look at how we compare to other schools, and we look at in-district, for statewide, we're number 16. For the Gulf Coast schools, we're number 6. Not too bad. Out-of-district. 

And this is the one that's really important that we make sure that we remain competitive. I mean, the first thing is we want to make sure our in-district rate is not higher than the out-of-district rate for any of our surrounding schools, because if they could go to another school and pay less in tuition, they might do that, which we do not have that situation going on here. When you look at our out-of-district rate compared to the other Gulf Coast schools' out-of-district rate, we're number 6. The top 5? Between 100 and 35. 

102 and 135. Then there's a big gap there, and we're number 6, but we're 162. So there's a pretty large gap there.

(41:49 - 42:50)
So someone who's not in our taxing district, and I'll just use San Jack as an example, somebody who's not in our taxing district and they're not in San Jack's taxing district, if they were just looking at those two schools alone, San Jack would be a cheaper option by, what is that, like 30-some dollars a semester credit hour. That's one of the main reasons that we have tried to hold on our out-of-district rates and not continue to increase those is we're trying to get back in line with the other schools in the Gulf Coast area. Our non-resident rate, we're number 3 for the Gulf Coast, number 7 for the state.

(42:51 - 43:15)
You may recall on the slide that I showed you earlier, it's a very, very small portion of our student base. Any adjustment we made there would be very minute and not impact our budget in any significant way. Back up to the in-district real quick.

(43:15 - 43:26)
The in-district? Yeah, the first one. We're 6. 6 in the Gulf Coast, 16 in the state. We are quite a bit higher than San Jack again.

(43:29 - 43:46)
San Jack is at 78, and we are at 90. But you have to live in their taxing district to get that rate, right? Why is there a star? Go ahead. Longstar College, Eric's slide, they have a star.

(43:47 - 44:01)
I think that's an asterisk. Asterisk. It had to do, when we pulled this off of the state website, they were tagged, and I'm sorry, I don't remember that.

(44:01 - 44:27)
Was it because they were not included in the tax reporting because they're not in-tact? I mean, just a thought. Could be. Have we looked at possibly lowering our in-district in order to get more in line to help the folks that are kind of getting double-dipped? They're paying tuition and taxes, and they're not taking advantage of all the free stuff that we're giving.

(44:28 - 44:43)
Well, they're eligible to participate in the first time free because they're in our service area. Oh, yeah, the first time free. They are eligible to receive free tuition and fees for their first time.

(44:45 - 44:53)
It's certainly something that we can explore. Well, we're quite a bit higher than San Jack. Yeah.

(44:53 - 45:23)
Later on, I'll show you what the cost of raising that would be, and you can just put a little minus in front of it, and that would be what the cost would be to lower it. Is San Jack doing a first time free at San Jack? No, not first time free at San Jack. The first time free is one semester, right? One semester, yes, sir.

(45:23 - 45:28)
Sorry for interrupting again. I'm sorry? We're sorry for interrupting again. Oh, no, you're fine.

(45:29 - 45:48)
And the 1.3 is only for the fall semester. Recall that in the spring, the amount is much, much lower because we have way fewer first time in college students, and so that amount, I believe, is approximately $300,000, $300,000 to $400,000. Yeah, it's about a million in the fall and about $300,000 in the spring.

(45:48 - 46:17)
Much less. Just looking at what our tax rate has done over the past few years, you know, it was up as high as 26 cents back in 2015. Another high point was around 2019 at 25 cents, and then we've lowered it a couple of times since then, and so we're currently at the 2201.

(46:19 - 46:28)
Don't go way too fast. Okay. So we've saved from – I'm just going to pick the 2019.

(46:28 - 46:40)
Let's go back to the 2016. 26 to 22 is about 10 or 20 percent. We've lowered it like 12 percent in the last five years.

(46:40 - 47:00)
From the 2501 down to the 2201, that's about 12 percent, which is on another slide that I'll be sharing with you. Okay, but the value, home value increase over that same period of time is – Has gone up, yes, sir. Like 50 percent or 60? About 39, 38 percent of the total valuation.

(47:01 - 47:05)
That would include industry as well. That's not just homes. I was looking at homes.

(47:05 - 47:13)
Okay. Is that right? Is that correct? Wasn't it about 50 percent on home? I don't have the chart. Do you have it on a future slide? I do.

(47:13 - 47:17)
Okay. I'll put it there. Okay.

(47:18 - 47:45)
So, again, how does that – how does our current rate stack up against the other schools? And I know I say I feel like I'm a broken record here, but I just want to remind everyone that you can't look at the rate alone. There's a lot of other items that are part of that calculation. And so you can't just look at this rate versus that rate.

(47:45 - 48:04)
You have to look at the whole thing to really compare it. And so that's kind of what I did down here. So if you just are looking at the rates by themselves, we're, like, number 39 on the state ranking, and we're number seven of the nine Gulf Coast schools.

(48:05 - 48:31)
And so then if you compare our – and I'm going to call it an effective rate, but that's my term, not necessarily a real term. If you look at how that compares when you take into account – and I didn't do the over 65 or disabled. I just did the straight homestead exemption, where we are offering a 20 percent exemption.

(48:32 - 48:39)
San Jack offers one. Lone Star offers one. HCC offers 15.

(48:39 - 49:10)
So we have one of the highest exemptions for homesteads. And so if you look at that and then you see how that calculation works, you can see that our effective rate, instead of being the 2201, it's more like 18 cents compared to San Jack, which is, like, at 17 cents. So although their rate – if you just look at the rate, Lee College shows 22 cents.

(49:11 - 49:24)
San Jack shows 15 cents. But when you take into account exemptions, we're 18 and 17. So we're right there.

(49:25 - 49:43)
And so I would just remind you that the rate alone does not tell the story, and we've got to look at the whole package. But we're still quite a bit higher than Lone Star and San Jack. And they have a little bit bigger – They've got a 1 percent exemption.

(49:44 - 49:52)
We're still higher, even with our 20 percent exemption. You mean HCC? You mean HCC. San Jack and Lone Star.

(49:52 - 50:09)
The rates we're looking at are – About the 1 percent, right? Was the 2223 rate, is that correct? That's not what you're proposing. Higher than Lone Star and HCC. And on the interest in sinking, the .29, we added a penny there.

(50:09 - 50:21)
Right here? We added – it was 1.7 million. I don't remember the exact calculation right there. I just want an opportunity to come back and talk about that at a future time.

(50:21 - 50:25)
So I'm waiting. Okay. They've got a 1 percent exemption.

(50:26 - 50:45)
That's crazy. So this is what you were asking about earlier, Regent Hall. When we look at our last five years – because, I mean, you could go back to however many years you want to go back, but at some point it has less of a value, quite honestly.

(50:45 - 51:17)
So over the past few years, we have seen an increase in our total valuations of about 39 percent. We have decreased our rate by a little over 12 percent during that same time frame. So our valuation in 2019 was $13 billion or a trillion.

(51:18 - 51:47)
And in 2024, it's $18.8. So that's the increase that has happened in the last five years. So, you know, one question I always get is, you know, what does one penny do for us? And when you're looking at it in total, you can see one penny is going to be about $1.8 million. 1.1. Eight.

(51:48 - 52:01)
1.8. So now let's see what that same one penny means to a homeowner. So home valued at $250,000. They get a 20 percent exemption.

(52:02 - 52:16)
Their taxable value is $200,000. I'm not assuming any other exemptions or waivers. They're going to pay $440 a year in taxes to Lee College.

(52:18 - 52:32)
We lowered it a half a penny. So then our rate would be $21.51. They would pay $430. So they would save $10 by lowering that rate by a half a penny.

(52:33 - 52:45)
If we lowered it by a whole penny, they're going to save $20 for the year. $20 for the year. $1.67 a month.

(52:46 - 53:10)
$0.38 a week. What does that cost the college? $1.8 million to offer the homeowner $20 a year. That they probably will not see if Goose Creek ends up doing what they're talking about doing, which is increasing their rate.

(53:19 - 54:05)
This goes directly to a question you had, Mr. Hall, on the transaction that we just completed where we refunded some bonds that we had outstanding that were callable and refinanced them. And so we had $30 million outstanding, and we refinanced $26 million of that $30. The $30 million on average, the interest rate was 4.71. And with the refunding, our cost is about 3.61. Now, if you look at the coupon on those bonds, it's about 5%.

(54:05 - 54:39)
But there's discounting, premiums, and all kinds of things that go into that calculation. And so the overall true all-in cost is 3.61. That includes the issuant cost, everything. And so I think when we showed this to you all before, we showed that the savings was around $4 million over the remaining life of the bonds to do that refunding.

(54:41 - 55:53)
When we talked about doing that refunding, we also talked about trying to develop a strategy to continue to prepay some of this debt to build capacity within our current bond so that when we do get ready to go out for a bond or when you all are ready to go out for another bond, then we're not going to come back and be asking the homeowners to pay an extra $100 a month or $100 a year, $200 a year for an increase in tax rate to pay for that bond. What we want to do is be able to go to the taxpayer and say, we recognized you paid an extra $10 for the last however many years, and now what we're going to be able to do with that $10 is we're going to be able to go out, issue bonds, and not increase your rate one bit. Now, we have no control over the valuation, so I can't make any promises about that, but what we can control is the rate.

(55:57 - 56:23)
This on the right-hand side shows if we were to continue with that philosophy. So we saved about $4 million by doing the refunding this year. If we continue that strategy going forward, we have about $2 million in bonds that we could go ahead and pay off in 2024.

(56:24 - 56:52)
That will save us another $200,000. I believe those bonds mature in 2026, and so that's the reason the savings is a little bit less, but it would continue to save the taxpayer over $155,000 for paying that debt off early. Tell me when you're ready for questions.

(56:52 - 57:23)
I'm not ready yet. So salaries, we've talked about that before at our previous workshop. We did a 5% increase the year that we're in, and we will be proposing a 6% increase for the 2024 year.

(57:23 - 57:58)
What are you basing the 6% on? Part of it is if you look at 2021, we were not able to provide any raise that would carry forward with employees, but the other part is recognition of inflation rates and what that is doing to our employees, and so that's what the calculation is based upon. Those are the two primary driving factors. It doesn't seem to coincide with what other industries are doing or other districts are doing, right, including our own school district.

(57:58 - 58:05)
No, it actually is. I do have some data on that if you're interested. Yeah, I'm very interested.

(58:05 - 58:32)
So I've met with my colleagues, and they are all very much in line with the amount that we are proposing. Most are right around the 5% to 6% increase, which is very consistent, but we don't usually ever do what ISDs do. No, but I'm talking about people in Baytown that are our peers that like the city or the people that pay the same taxes.

(58:33 - 59:20)
We ought to at least look at that and compare that a little bit. I don't think that we should be giving 6% if the city is giving 3 or 4 or 5% and the school is paying almost nothing. How do we justify that when we have better benefits in pay than any other group in town? I guess the best way that I feel like I can answer that is to say that I would not want to penalize our employees for not working at an institution that is $20 million in debt and not able to pass a flat budget.

(59:20 - 59:41)
So I guess I wouldn't want to penalize our employees for that position. And I think that those employees at that district deserve 6%, if not more, and I would like to see them have that. Yeah, I'd like to see where the 6% comes from.

(59:41 - 1:00:11)
I mean, is that the CPI? Is that the norm? Is that what other people in the city are earning? I mean, we should be on the same or close to the same. We try to compare ourselves to the same industry, which is our peers, which are community colleges in the Gulf Coast region and in the state of Texas. And that's fine, but we also have higher tax rates and everything else than a lot of those other folks, too.

(1:00:12 - 1:00:35)
And we also have better benefits, like Social Security. We pay that, and most of those you're talking about don't do that. I wouldn't say most, but some do not. 

That's true. I'm sorry? I wouldn't say most, but you're correct in that some of them do not pay Social Security. There's only a couple in the state that do, right? I would have to go back and research that.

(1:00:35 - 1:00:45)
That's what we were told years ago. There's only a couple that did that. Well, I guess, again, you present an interesting question.

(1:00:47 - 1:01:16)
I would just say on behalf of our employees that, yes, we do have good benefits, but offering long-term benefits that will help them when they retire doesn't pay the rent now and doesn't help them meet needs now. It doesn't help pay for milk or other groceries that are really inflated right now. And that's what we're trying to do.

(1:01:16 - 1:01:47)
I'm just saying the people that we live with, our neighbors, that we pay the same taxes that we all pay, go to the same grocery store, pay the same bills. But they're not in the same industry. And so it's an apples-to-oranges comparison to say that someone in the city who is not doing the same kind of job that has the same knowledge, skills, and abilities or credentials should be compared to the same.

(1:01:47 - 1:02:02)
I guess I don't understand. But if the board is trying to adopt a different philosophy to pay raises, I think that that's a philosophy that should be discussed by you guys. I'm just trying to understand how we get 6%.

(1:02:02 - 1:02:27)
That's the highest we've paid in many, many, many years. How do we justify that to the taxpayers? I would once again go to 2021 where we were not able to provide a raise, which leads to the kind of compression that the board just had to address by paying over $600,000 to do. And we don't want to be in that kind of bind.

(1:02:28 - 1:02:52)
And complicating that is the economic conditions that we're seeing in the country with inflation. Every year we come back to that 2021, and we justify every year's pay raise based on we didn't give one back in 2021. Well, it multiplies. 

It stays with you forever when you can't give a raise. It always stays with you when we do get the analysis back. But we didn't give the bonuses.

(1:02:53 - 1:02:58)
Those are one-time bonuses, correct. I understand, but we got money. But they didn't stay with them.

(1:02:58 - 1:03:11)
Say something. I didn't want to interrupt. I just wanted to say that normally I would probably say something about what the city was doing, because at this time normally we would have already decided what we were going to.

(1:03:12 - 1:03:36)
But because it is one of those situations where we realize that the amount that we need to give in comparison to the inflation and the compression and everything that's happened in our country overall is that we have to think about it a little longer. And so we have not landed on what that magic number is. It's going to be upwards of 4% as a base.

(1:03:37 - 1:04:00)
But recognize that we've climbed all the way up to 8%, 9% when you go to the grocery store and the bill. So that's the only reason why I'm not saying, no, the city is doing this, because we're still talking about it because it is so serious. And our new city manager wants to make sure that we make the right decision for our employees as well.

(1:04:00 - 1:04:13)
So it's not easy just to throw out a number. But we know even whatever number we come up with, it is not going to be able to clearly offset what it is, the impact that it's having on households. Exactly.

(1:04:13 - 1:04:31)
If you total up 2022 and 2023, that's 8%. Social Security went up by 9% last year for a single year. I think the year before that it probably went up in the 5% or 6% range, 15% for the last two years.

(1:04:32 - 1:04:46)
So theirs is based off of the CPI. I'm not saying we've got to keep up with the CPI, but I'm saying we're way behind on what the inflation rate's been out there in the country. I think this is still a really good conversation.

(1:04:47 - 1:05:01)
The administration's role is to bring us what they recommend, and then it's our role to talk about it and decide where we land. This is a workshop where we can get all the information, but we're not making a decision right now. But I think it's a healthy conversation.

(1:05:01 - 1:05:20)
But, you know, the rest of the people that are supporting us and paying our salaries, they're not getting this kind of raise. They're not getting the same thing. How do we know that? Well, we don't know 100%.

(1:05:20 - 1:05:26)
We don't know that. But we know Goose Creek's not, for instance, and that's a lot of our people in Baytown. It affects a lot of families.

(1:05:28 - 1:05:38)
We can't pattern ourselves behind the district in some instances. And then in other things that they do, we don't want to be compared to it. So I don't think that's a—we're not doing apples to apples.

(1:05:38 - 1:06:01)
And one thing, Mark, is that from an HR perspective, we really want to be competitive enough to be able to recruit and retain. We just did a compression, and that was over $600,000. So when you get behind, it gets extremely hard to keep up with.

(1:06:02 - 1:06:23)
You know, I would think faculty and staff would want to have qualified people working alongside them as well. So I think that's a big push for making sure that we're competitive. And we don't go to Goose Creek to recruit, for the most part, for faculty.

(1:06:23 - 1:06:44)
The criteria for certification is totally different. I never suggested that. I'm just saying we're in the same community, and it seems like we are constantly above the community in most areas, you know, salary-wise and benefits-wise.

(1:06:44 - 1:06:48)
It's a point of pride. I really think it's a point of pride. It is, but they're the ones paying for it.

(1:06:48 - 1:07:23)
And I dare say, if you ask them, you know, they would want a tax decrease, and they would not understand the benefits and the salaries that we do. But here again, we're not going to ask them, obviously, but I think it would— This is an open, and this is a public meeting, and they can be here. I know after we've passed— Nobody cares anymore. 

I know. No, but I'm just saying, after we've passed things in the past, I don't know if you guys have received a lot of things from your constituents about it, saying that we're mismanaging their funds. I don't—I've never had that.

(1:07:23 - 1:07:31)
I don't think anybody's saying we're—anybody's mismanaging it. But we're not making poor decisions with the money that they're entrusting us with. I haven't.

(1:07:31 - 1:07:41)
I don't have people understand, you know, what we do and the benefits that we have. And they're great. I wish everyone could do that.

(1:07:41 - 1:08:18)
I just don't know how long we can sustain this going forward at this level. I mean, we haven't looked at any projections for the next five or ten years, but unless the tax rates keep increasing or our home values keep increasing, we can't sustain this going forward very many years, unless our enrollment skyrockets. And I wish we could look at the projections like we used to look at, but we can't continue this, you know, without more increases in home values or tax increases.

(1:08:18 - 1:08:27)
And we're already at the top. I appreciate the comments. I would say that this proposal is only for this year.

(1:08:27 - 1:08:51)
We're not making a proposal for the next fiscal year or the fiscal year beyond that. We're basing it on where we are right now and where we project ourselves to be for the next budget year. Okay, and then the final slide that I'd like to share with you guys is just the projected value of one.

(1:08:52 - 1:09:19)
So we talked about for property tax the value of one, one penny, would be basically the $1.8 million. When we talked about increases, a 1% increase is around $380,000. The 6% increase would be around $2 million.

(1:09:20 - 1:10:00)
And if you include benefits, around $2.3 million. And when you look at tuition and fees, so if we were to increase our in-district or decrease, whichever way you want to flip the sign, if we were to change our tuition for in-district residents, it would have an effect of, by a dollar, it would have an effect of about $90,000 on our overall budget. For out-of-district, it's about $28,000.

(1:10:01 - 1:10:19)
For non-resident, it's $3,000. And dual credit, it's about $8,000. When you change a fee, you don't have to take into consideration TPEG, so you have the full effect of that change.

(1:10:20 - 1:10:41)
When you change tuition, 6% of that has to go into TPEG. And so that's the reason you only get basically 94% of that increase. So for a fee, if you increased it a dollar, it would be about $91,000.

(1:10:45 - 1:11:26)
So that is the numbers that I came to share with you tonight. As we get better and more information on the new funding model and how that will directly impact Lee College, we will most certainly share all of that information with you guys. We will be, like I say, wrapping up meetings with all the budget directors to start looking at the expense side of requests and then trying to determine how this all comes together.

(1:11:26 - 1:11:41)
And we will present to you a balanced budget. I will not present to you a budget that is $22 million deficit. And I would entertain any questions you may have.

(1:11:42 - 1:12:09)
Do we have a forecast like we had a few years ago? Yeah, I do still have that forecast. And I can make that forecast say kind of whatever you want it to say. If you have some assumptions that you would like for me to plug into it, you know, what happens if our enrollment only increases 1% but salaries increase 3% or what have you, I can certainly plug that in.

(1:12:09 - 1:12:19)
I can just plug the numbers in. You can tell her what it is and she can just plug the numbers in to change. So I think, you know, for salaries you ought to put 5% or 6% every year.

(1:12:19 - 1:12:28)
That seems like what you normally ask for. Well, I don't think that's accurate if you go back and look at the history. I said what you ask for, not necessarily what you get.

(1:12:29 - 1:12:41)
But you typically ask for 5% or 6% or at least 4%. Again, I can put whatever you would like in there. I'd be glad to put whatever number you would like in there and project it out for you.

(1:12:41 - 1:12:57)
Absolutely. Annette, in looking at this calendar here, I don't see another budget workshop until sometime in August. You don't anticipate coming to us in July at all? I won't have any new information.

(1:12:57 - 1:13:08)
Right. Okay. We might have some updated information on our funding bill, but we don't know for sure.

(1:13:08 - 1:13:25)
We will know more on the 21st and 22nd when we are in Austin. Austin, yep. Yeah, but it may not be a bad idea to – I know you guys may not have, and I'm just talking to our team here, that it may not be a bad idea.

(1:13:25 - 1:13:50)
They may not have new information, but to allow us to continue to have discussions about things that was presented today to where we can, you know, we have this data, you have questions, and I necessarily feel like you have to get them all out tonight if we can commit to having another so that we can talk about and kind of – that's an option. I hate to jam it all into August. Sometimes it's hard to do that.

(1:13:50 - 1:14:00)
But we can look at a forecast. We can look at some other options. She said – but I do think we ought to put some money in there for this new appropriation we're going to get.

(1:14:01 - 1:14:13)
If you have an idea as to what amount you would like to put in there, I can put whatever amount. Is it going to be zero? I don't know. I mean, that's kind of our point, Mr. Himsel, is we don't know what it is.

(1:14:13 - 1:14:29)
And so I come in here and I put $5 million, and then it's only two. Then what am I doing? Now I'm scrambling and trying to adjust the budget, and I'm just trying to avoid that fire drill, if you will, and I'm trying to wait until we have better numbers. But I don't think it's – But we do have a reserve.

(1:14:30 - 1:14:40)
I mean, the reserve is made to maybe soak up things like that. But the reserve is not necessarily intended for bad budgeting. The reserve is a rainy day fund, and we don't need to create the rain.

(1:14:42 - 1:14:57)
I just think there needs to be some balance on his point. There's no logical reason not to put some money in there. To leave it at zero makes no logical sense when you're doing that budget.

(1:14:57 - 1:15:11)
I would only feel comfortable doing that if we increased our contingency by the same amount. But the governor signed it. We're going to get $330,000 split over the community colleges.

(1:15:11 - 1:15:21)
That's a fact, right? Sometime in next year. We're going to get some amount over the next year. Of the $330,000, we're going to get our share in 24.

(1:15:21 - 1:15:37)
If you have a good estimate that you are comfortable, I would welcome you to present that to the board, and if the board is telling me to put that in, I'm not going to deny that. I mean, I'll do what you tell me to do. And there are some colleges.

(1:15:38 - 1:15:48)
There is a whole harmless clause in HBA. There are some colleges that are not going to get an increase. I don't think we're going to be one of them, but we don't know that.

(1:15:49 - 1:16:00)
But we've publicly said we're going to plan on getting $6 million. I mean, we've said that. And now that it's signed and we're in the middle of our budget, we're saying, well, it may not, it may zero.

(1:16:01 - 1:16:18)
Regent Hensel, that's not, again, earlier what I said was, if today the data run that we were provided about now two months ago were implemented, that would be the amount we were to receive. That's all I said. Yeah.

(1:16:20 - 1:16:26)
Okay. I would like to talk about the bond thing. Very patiently and let everything pass.

(1:16:28 - 1:16:45)
The bonds that we currently did have were 4.71%. And my concern about doing this refinancing and adding to our tax burden. We did not add to our tax burden. We added a penny last year.

(1:16:45 - 1:16:48)
Oh, okay. Okay. I see what you're saying now.

(1:16:48 - 1:16:49)
I'm sorry. I didn't. Right.

(1:16:49 - 1:16:53)
We added a penny. That's $1.8 million. Right.

(1:16:53 - 1:17:16)
This year, last year, this year, next year, next year, for the next number of years, $1.8 million. And the total savings that you just shared with us, we could possibly have is 4.3 million. So we are quickly exceeding in tax collections from our taxpayers the money that the college is going to save.

(1:17:18 - 1:17:21)
Okay. Okay. You see what I'm saying? No.

(1:17:21 - 1:17:24)
I'm sorry. I don't. We're collecting.

(1:17:25 - 1:17:37)
We collected last year $1.8 million in additional tax revenue that we didn't have to. We were meeting our obligation. And I'm using a penny.

(1:17:38 - 1:17:47)
I realize it's a little less or something. Okay. But we're collecting additional funds to pay debt off early.

(1:17:47 - 1:17:52)
And save in interest. Yes, sir. Save in interest of $4 million.

(1:17:52 - 1:18:07)
But we're collecting $1.8 million a year if we just leave the one penny. So we are collecting additional revenue from our rate payers, industry, houses, all across the board. It doesn't matter.

(1:18:09 - 1:18:28)
We collected that for one year to receive the $4 million savings. We're not collecting that same penny every year thereafter. If we collect another extra penny, we will continue to reduce our debt.

(1:18:28 - 1:18:46)
It's not like that penny is there forever and ever and ever. That penny is there to reduce that debt currently. So we collected an extra $1.7 to save $4.2. That is correct.

(1:18:46 - 1:19:00)
Over how many years? Over the remaining life of the lease, which is what? About 10, 13 years? 13 years. I haven't done the calculation. But it's been said we're saving the taxpayer money.

(1:19:02 - 1:19:15)
But first of all, they're never seeing the money because we never reduce their rate. We're purposely trying to keep the rate up in anticipation of the future bond program. Which is when they would recognize that savings.

(1:19:16 - 1:19:32)
Because now I'm not going to go back to the taxpayer and say, remember that $10 I gave you last year and then the $10 I gave you the year before and then the $10 I gave you the year before? Now I want you to give me back $150. Let me get to my point. Okay, I'm sorry.

(1:19:32 - 1:19:50)
In the calculation of the savings, since we're promising them a savings down the road, the savings comes later. The savings comes now and later. Well, the savings comes to the college now, but to the taxpayer later.

(1:19:50 - 1:20:04)
Okay. That's my point. Was there any calculation of the present value of those dollars down the road? And let me explain what I'm asking when I say that.

(1:20:04 - 1:20:35)
When I take a dollar now, and I promise you that I'm going to save you a dollar and a half 20 years from now, that, the value of that dollar and a half has to be brought back to current, and you do it by, one of the things is, one of the factors is the inflation rate that you're going to experience. And we don't know exactly what that's going to be, but currently, last two years it's been 14 or 15%. So the value of that dollar has already gone down the 14 or 15% that we're saving.

(1:20:35 - 1:20:57)
You keep piling on that inflation rate, which exceeds the interest rate on those bonds, any time, we're in a highly inflationary time that we have not experienced in a number of years. And this is what I was taught, you know, in my economics classes. When you can borrow money at a rate that's less than the inflation rate, it's free money.

(1:20:58 - 1:21:12)
In fact, you may even make some in the process. And so the college is seeing a savings on this, and I'm not even going to go into the refinancing part. It's all, that gets pretty complicated.

(1:21:12 - 1:21:52)
But just as a general rule, when you can borrow money cheaper than the inflation rate, it's to your advantage because you're going to pay back those dollars. I mean, the people that have these 2% interest rates on their home mortgages are really benefiting, but you're going to pay back with much cheaper dollars in a highly inflationary cycle. Was that in the, quote, savings calculated by, in this savings, the guys that ran this number? Because we're taking money from person, from our taxpayers, additional money, and we're saving, the college is saving money, but I don't see how they're saving money because.

(1:21:53 - 1:22:09)
Well, it's their debt, so yeah. Right, but at 4.7%, it's to their advantage to carry the debt and pay it all later. When they can refinance it for 3.6? Even at 3.6, when you've got inflation much higher, they're paying it off in cheaper dollars.

(1:22:10 - 1:22:26)
I'm using the more conservative number, 4.71. I'll take the 3.6. That makes it even more difficult. When you're paying something off with inflated dollars later, it's cheaper dollars later. And so it's costing the taxpayer more money.

(1:22:26 - 1:22:43)
To pay off this debt, when you adjust for the present value and everything, it costs them more money to pay this debt off early than to just let it ride out and pay it off with inflated dollars later. That's one. That's one calculation.

(1:22:43 - 1:22:57)
The second calculation is the additional dollars. I understand the 50 or 75 dollars on a home, but if you own an apartment complex or a business or something, that amount gets much larger. And there's a cost of money, too.

(1:22:58 - 1:23:18)
People can take money and put it in the bank and earn 5% or something like that. So that's an additional cost, opportunity cost they're lost. And so when we take additional dollars from our taxpayers today, for them to see a savings 15 years down the road... They see a savings every year.

(1:23:19 - 1:23:34)
It doesn't... Okay, but, okay, you could even reduce it. But you've got two factors that I don't think have been factored in. I don't see how the taxpayer could possibly be saving what it's costing them money.

(1:23:35 - 1:23:52)
And by my... I think we are costing the taxpayer, after you adjust for these things, we're costing them twice what it would cost to just carry the debt out to its term. That's my problem. If the college was paying this off with our money and our reserves, that's one thing.

(1:23:52 - 1:24:02)
But we're not. We're taking money from somebody else to pay it off. We're assuming that there's gonna be no new debt issued and... What's that? You're assuming that there will be no new debt issued.

(1:24:02 - 1:24:28)
And part of this whole calculation is that there will be debt issued, but it will not increase your cost. So if you lower it, lower it, lower it, then you're gonna come back and you're gonna have to increase it. And so instead of giving that taxpayer back that $10, you're gonna ask him to give you $150 or $250 a year for that increased debt that you're gonna issue.

(1:24:28 - 1:24:41)
And they have an opportunity to vote on that, but look how much it's cost them, theoretically. We've doubled the cost of carrying this debt. Well, you say that, but I'll do some research on that for myself.

(1:24:42 - 1:25:13)
You see what I'm saying? And when you're in business and you're having to calculate all these things, you do consider what you could just earn by putting the money in the bank, and you also consider if I can get a loan for 3% and inflation is at five, I got a 2% gain there every, on an annual basis. It does add up, and I guarantee you business looks at it. And we're not looking at that because we're just sticking another penny on the taxpayer.

(1:25:13 - 1:25:37)
I would just remind you, too, that taxpayer dollars have $325 million worth of deferred maintenance on this campus, and we've been trying to address it piecemeal. You know, we did an $11 million bond issue. We did $3.8 million.

(1:25:37 - 1:25:44)
We did $4 million this year. So we are, you know, trying to make some headways. We used some of our CARES money to help address it.

(1:25:44 - 1:26:24)
But quite honestly, we're never going to get there doing $4 million a year to get this campus put back in place, and we need a, and I would certainly welcome the board to have a workshop on this. I mean, we need a strategy on how we're going to put this campus back together, and $4 million a year isn't going to get us there. And so I would certainly welcome the board to have some type of a strategic conversation on how we do that because it's a true need.

(1:26:25 - 1:26:33)
And we did a study a few years ago, kind of a bond potential study. I don't know how long. Bond advisory.

(1:26:33 - 1:26:37)
Bond advisory. I think you just got on the board. I wasn't on the bond advisory.

(1:26:38 - 1:27:09)
We had a committee even put together and then all the things that came along, that have come along the last few years. But there's also our, and this is straying from the budget, but our situation has changed, and we have other potential things in development right now that would change the outlook and change the dynamic of what, how many students we will have here on this campus in the future. I mean, those are all up in the air, and I think they all need to go back on the table.

(1:27:10 - 1:27:31)
But perhaps instead of doing all of this, I think if we have a, if we can make a case for a $300 million bond program and we sell it to the public, then let's sell it and be straight up and say it's going to cost this. But we've lowered your rate, but now we're going to have to take it back. I think that's a more transparent approach.

(1:27:32 - 1:27:40)
And I think that's a decision for the board as a whole to make, and y'all should develop a strategy. And we're not going to decide that tonight. But other people do have some questions.

(1:27:40 - 1:27:46)
Oh, okay, well, I just have, yeah. Okay. I just, there was the transparency.

(1:27:47 - 1:27:54)
Yeah. I think we have credible, huh? Yeah, we need to get to a question because others have questions. We've got plenty of time.

(1:27:54 - 1:28:12)
Well, my question was, has there been a calculation of the lost value of the, what, the two points that I raised, the present value of the dollar that we're taking from somebody? Because we can't, we're. I will get an answer for you on that question. Yeah, we've been saying we're going to save you money, but that's not true.

(1:28:13 - 1:28:26)
The way we're doing it, we're costing them twice of what it would otherwise, from what I could see. I will get an answer for that for you. So is this affect our budget somehow? It affects our tax rate.

(1:28:26 - 1:28:31)
We've made this decision already, right, on the bonds? It affects our tax rate. The current. It affects our tax rate.

(1:28:31 - 1:28:46)
And the discussion is in line to increase it. Did I see a proposal to increase it to 3.9? No, no. Sent me something to the interest in sinking fund to do this again.

(1:28:46 - 1:29:06)
We just left the tax rate flat, yes. So we're going to charge that penny again that we started last year. We're going to leave the proposal right now and again, this is the reason that we have workshops because nothing is final.

(1:29:07 - 1:29:27)
The proposal that we were looking at was to pay down additional debt, yes. OK, so with just the existing penny, are we going to add another penny? No, we're not adding a full another penny. I don't know the exact amount.

(1:29:27 - 1:29:37)
But for a taxpayer, their tax rate would be flat. And we keep saying we added. We shifted a penny from.

(1:29:38 - 1:29:45)
We shifted a penny. We didn't increase. OK, if you're going to say we increase the tax rate, then say we decreased.

(1:29:46 - 1:29:52)
We increased. We decreased the operating. Because we did need the money because values have gone up.

(1:29:53 - 1:29:58)
OK. We increased our sinking fund. That's an increase.

(1:29:58 - 1:30:19)
We didn't need the other funds because the values have gone up way in excess of our operating costs. Well, I would argue if we have $335 million of deferred maintenance, we certainly needed it on the operations and maintenance side. OK, so I don't agree with you saying we didn't need it.

(1:30:19 - 1:30:51)
What we did was as part of a strategy, we shifted it from operations and maintenance to interest in sinking to save this $4 million. I would like calculations using the two items that I raised that I don't think have been figured because we're taking money from our taxpayers in excess of what we otherwise would need. Now, if we want to increase our maintenance budget by $4, $5, $6 million a year, that's another discussion, but we haven't done that.

(1:30:52 - 1:30:57)
OK. Regent Geralds, you have waited so patiently. That's fine.

(1:30:57 - 1:31:11)
I'm taking it all in. Annette, you had mentioned that if we don't reduce the tax rate, then we don't have to go back to the taxpayer and raise it for a bond. We still go back to the taxpayer.

(1:31:11 - 1:31:23)
They still have to approve the debt. It's just you go back and you say your tax rate will not increase. They'd still have to approve the debt.

(1:31:24 - 1:31:39)
But they would still have to have a vote and approve for the issuance of the bonds. Oh, for doing – OK, but this wouldn't be for, like, a bond to do a bunch of maintenance and stuff. This wouldn't be, like, going out for a – Right.

(1:31:40 - 1:31:57)
So we could go – let's just – argument's sake. We could say, Mr. Taxpayer, we would like your support for a $100 million bond for these capital projects. And you list them out on the ballot, and we are not going to change the tax rate to pay for this $100 million bond.

(1:31:57 - 1:32:19)
And we can do that by not raising the tax rate this year? If we can have a strategy to do this over a number of years, we're steadily reducing our debt so that then we have more bonding capacity for the stated INS rate that we have. Did I state that correctly? You did. OK.

(1:32:19 - 1:32:33)
OK, so we're talking about how many years are we looking at that we can do this. That depends on how much money you want to go borrow. I mean, that's – And that is something I would like to see some work up on at a future meeting.

(1:32:33 - 1:32:37)
Yeah. Because we've talked around it, but I think it would be – That doesn't make sense to me. Well, right.

(1:32:38 - 1:32:54)
And I think that might make it make more sense. And we're not going to – it's not going to cost the taxpayers any more money? Well, again, it depends on the level of debt that you go out for. And that's really a decision that the board needs to make.

(1:32:54 - 1:33:08)
The board needs to do some heavy lifting on this topic and figure it out. Is this a five-year plan? Is it a 10-year plan? I would love to see that kind of thing. That might direct my decisions about budget.

(1:33:08 - 1:33:31)
So, to me, we're maybe about a year late on this because I would have liked to have kind of already had this kind of talk. We did talk about it last year as well. Well, but we haven't had a workshop on it, and we haven't said, okay, if we do this this year and this next year and this next year and this next year, then we won't have to – so, no, we haven't really had that conversation on it.

(1:33:31 - 1:33:43)
Not that clear. But we were told a year ago that this was part of a strategy. Yes, but we need to have a workshop, and let's lay out that strategy.

(1:33:44 - 1:34:17)
But the strategy really needs – I mean, yes, we presented it, and it was approved for the first year. But for – I mean, we can show you what this strategy looks like, but the board needs to develop a philosophy that you want to adopt over and have over the next several years. And that is driven by the board, though.

(1:34:17 - 1:34:23)
Okay, then maybe the board needs to have that meeting. So when are we going to have it? We can set that. Yes.

(1:34:23 - 1:34:37)
Maybe that's what we ought to do in July. Certainly do that. Because – and I will say, too, I am torn because I do think the taxpayers do deserve a decrease.

(1:34:37 - 1:34:58)
So I'm kind of torn with all this. That's why I want to have this meeting and understand our philosophy and our strategy because that's going to help me. And I'm just going to make one comment when we talk about how, well, you know, it's only going to save the taxpayers $10 on their taxes, and it's only going to save them $20 on their taxes.

(1:34:58 - 1:35:15)
I don't think that's for us to say. I think – That's just the calculation. I understand that, but I don't think it's our – I don't think that we should make the assumption that it's not important to them because it's – I wasn't trying to make that assumption, and I'm sorry if I presented it in that way.

(1:35:16 - 1:35:39)
I'm just trying to present to you what the calculation results in, and that is what the calculation results in. The significance of that calculation is probably going to be different for every resident. You know, there's going to be residents that if their taxes went up any at all, it's – And that is a standard way of presenting it.

(1:35:40 - 1:35:53)
I would agree with that. It was merely meant to present the calculation and not any other judgment. I just think we need to have that discussion.

(1:35:53 - 1:36:17)
As we stated, we don't have a workshop scheduled in the month of July, so let's see if we can – Who do we need – And if there's information – Who can we get to tell us if what he's talking about is valid or not? Because I don't understand it. Bond advisors that we've used. Who can do that? Francine and Terrell.

(1:36:17 - 1:36:23)
We'll talk to Post Oak about it. Well, okay. Well, let's coordinate with them and see if they could come to a workshop in July.

(1:36:24 - 1:36:49)
I'm sure they could. And then I would just say that if there's other resources that you want for this discussion, let me know. And if we're not able to provide it, I will certainly reach out and see if I can find someone who could help in that discussion.

(1:36:50 - 1:37:07)
Are there other colleges doing this? Yes, there is. Yes, there is. Can I make a point to that? Is this legal for school districts to do this? I don't know the law for ISDs.

(1:37:07 - 1:37:21)
I understand it's not legal to take operating funds and decrease debt. I would like to ask that question because I understand it's not. And there was a bill introduced.

(1:37:22 - 1:37:32)
Well, I know I've been at a school district board meeting where they actually shifted those pennies. Are we talking about district as in a college district? He's asking about school district. But that's what I'm saying.

(1:37:32 - 1:37:37)
We're asking our staff to get us information about ISD. Let me finish my point. Okay.

(1:37:38 - 1:37:51)
There was a bill introduced in the Senate this year to make this practice illegal. No, it didn't pass, but it was introduced. It was introduced by Benton Court, and it did not pass.

(1:37:51 - 1:38:11)
Now, I don't know what's going to happen in the other leg. But there's a reason that that bill was introduced because I think it hurts our credibility when we go out and say, hey, we're going to sell bonds, and we're going to pay them out over 25 years like you go in and borrow money to buy a car. And then halfway through the process or a third of the way, we go back and we don't get a vote.

(1:38:12 - 1:38:23)
They vote and approve that, and then we come back and say, well, we're going to speed up the payments. I would encourage you to go look at what the voters actually vote on. They vote for us to issue the debt.

(1:38:23 - 1:38:36)
They don't vote on a payment schedule at all. They vote to issue the debt. We usually provide background information and say this is what it's going to be.

(1:38:36 - 1:38:57)
This is what we plan to do on the payment schedule. And I just philosophically I think we're pulling a fast one on the voters by approving and they expect to pay off at a certain rate, and then all of a sudden we're speeding up and forcing them to pay additional that they haven't approved. They have not approved that additional acceleration.

(1:38:57 - 1:39:30)
It's certainly a discussion that you as a board should have, and I would encourage you all to develop a strategy and a philosophy on how we want to try to achieve our goal of being able to put our campus back together. And the first step will be when we get these bond advisors to come present to us in July. The first step towards that philosophy, building that philosophy, will be the workshop we will have in July when we get these bond advisors.

(1:39:31 - 1:39:40)
Right, and we're in the process of scheduling. Is that who we need to answer your questions, Mark? The bond advisor? I think the bond advisor can. Yes, he can satisfy your questions.

(1:39:40 - 1:40:28)
He can address the first issue, yes, as far as the cost. The second issue is more of a philosophical one, our credibility, because if we go out and sell another bond issue and say we generally provide information, it's going to get stretched out and it's going to cost you $50 if you have a $200,000 house or whatever, and then we speed up the repayment five years down the road, the voter has no option to address that other than through us as their elected representatives. And so what you want is someone to be able to verify if you can legally or not, and then once you get your answer, you just want an answer.

(1:40:29 - 1:40:44)
But my point is, my understanding is the school district can't do it, and there's a reason for that. Are you talking about Lee College District or are you talking about Goose Creek? No, I'm talking about as a general principle, school districts can't do it. I heard you.

(1:40:44 - 1:41:05)
And Senator Bentoncourt was going to extend that to prevent junior colleges from doing it because a lot of them across the state are doing it, and some, like myself, view that as being unfair. Right, and I'm just trying to understand what you're saying. Are you saying the bill was presented for ISDs? No, the bill was presented for junior colleges.

(1:41:05 - 1:41:08)
Okay, the one that did not pass. Correct. The one that did not pass.

(1:41:10 - 1:41:23)
Actually, if I'm wrong, it was presented for ISDs, but it extended to community colleges. It was not presented for community colleges. You're saying ISDs can't do this, and that is not correct.

(1:41:23 - 1:41:30)
Community colleges were lumped into that. Okay. I just want to clarify that because we were not the focus of that bill.

(1:41:30 - 1:41:38)
School districts refund that all the time. They refund. I've actually read it.

(1:41:38 - 1:41:52)
I've read it myself and asked this question, and our council said that, yes, school districts, we have more liberty than school districts have, and that's how this is legal. I asked that question last year. So, you already have the answer.

(1:41:53 - 1:42:34)
Well, yes, that's why I said I understand school districts cannot do this. Okay, and I don't think that's right, but okay. So, the only thing that I would ask in preparation for your discussion is any other topics that you would like to have presented to you, please let us know so that we can have the proper people here to have that discussion with you, but I will reach out to Post Oak and ask them Mr. Hall's question on the net present value and what was the other half of that? Lost opportunity.

(1:42:35 - 1:42:45)
Lost opportunity. Which all you're doing is calculating what a taxpayer could earn if they just put the money in or paid their credit card debt off or something. So, it's a derived number you're taking against.

(1:42:46 - 1:43:04)
Can we also get a forecast like we talked earlier? Sure. And, again, I would encourage you to submit to me any assumptions that you would like put into that forecast and we will certainly get that prepared for you as well. Yeah, well, just do it based on what you know right now.

(1:43:04 - 1:43:15)
What are the last few years of history, man? You know, enrollment, salaries. Oh, you're talking about the last spreadsheet we normally have that you predict years in the future. That one.

(1:43:16 - 1:43:27)
Just something to start with. We can start working with it once you get us something to start with. But if you give her something more definitive, she can bring what you want instead of bringing something and then that's not what you want.

(1:43:27 - 1:43:32)
She's got to go back. We can give her a spreadsheet. We can do our own playing around with it like you did before.

(1:43:33 - 1:43:46)
You made it open and we could change the percentages or whatever before. But, I mean, you know what the enrollment's been looking like and you know what the tuition rights have been. I mean, just kind of spread that out.

(1:43:46 - 1:43:56)
It's all just a matter of how conservative do you want the assumptions to be. And so that's what I'm saying. And I don't mean to be flippant by it.

(1:43:56 - 1:44:10)
I'm really just looking for a little bit firmer ground here on what you're looking for. But I can make that forecast say whatever you want it to say. I can make it say that we're going to make a million dollars or I can make it say that we're going to lose five million.

(1:44:10 - 1:44:19)
And so that's the reason I'm trying to get a better understanding. How can you make it say we're going to lose five million? Because I've got to jack up expenses. Well, I know.

(1:44:20 - 1:44:31)
So, I mean, that doesn't mean anything. I mean, you have to use numbers that... I think that's what she's trying to say is that it doesn't mean anything if you just throw out a number. We don't have it.

(1:44:31 - 1:44:59)
We can't put an estimate out that we don't have any data on. I mean, I'm assuming that you have something. I'm assuming you have some assumptions in your mind that you're wanting to see projected out that if these things were to happen, what would be the impact on the college? And I'm just trying to... Do you want her to hold enrollment flat? Do you want her to have enrollment decrease? Wasn't that a big determining factor? Exactly.

(1:44:59 - 1:45:24)
We've actually increased enrollment. You left it like if it stayed flat or if it went down. So maybe if we gave her like if it goes up a certain percent, stays flat a certain percent, or goes down a certain percent, it's kind of giving her something to work with instead of like... And I'm just not sure that I understand what you're looking for and what you're requesting that's different from what we've done in the past.

(1:45:24 - 1:45:39)
Because you're saying you want stuff, but we were able to make some good decisions based upon forecasting that we had in the past. What is different that you're asking? I'm not saying anything is different. We haven't seen one in several years.

(1:45:40 - 1:45:59)
And if we use the one you're referring to to make decisions, I think we need to look at that again because we haven't seen one in years. It is included in your budget book every year, but... We used it before, right? I'm looking at what we had last year. It's in the budget book.

(1:45:59 - 1:46:15)
So that's what I'm trying to figure out. What's different? What are you asking for that's different? I don't know that anything is different, but let's get an updated forecast in. If we've been using it, why don't we have one this year? Well, she hasn't prepared the budget book yet.

(1:46:16 - 1:46:27)
She's saying it will be in the budget book. But that's at the very last, at the last meeting though, right? Or second to the last meeting, we get those. I mean, let's start looking at that.

(1:46:27 - 1:46:53)
If you want to, you know, just leave the salaries and save an average of four, four and a half or five percent over the next ten years in enrollment, you can increase it one percent a year for the next ten years if you want. And you can put in there the free tuition and the free whatever else we're doing and leave the tuition fairly flat. I think that's a decent place to start.

(1:46:53 - 1:47:06)
Yeah, that's good information. At least we can look at it because what we saw a few years ago had a very bleak picture. And I think we need to add some additional money for insurance because obviously that's kind of low.

(1:47:06 - 1:48:03)
So if you want to change that line, you know, to say $500,000 or $600,000 a year, I think we need to get that to where it needs to be, to a realistic number. So let me ask a question. So the workshop that we're planning for July to talk about so we can talk about budget, would that not be the place for the board to decide what it is that we kind of get a consensus on what the board as a whole wants to see? Because if we all have individual things that we're having to go and get, I'm just saying when we meet to talk about where do we pretty much stand on the different issues as one unit instead of having all these individual requests? Okay, the way I understand it, what I've heard, and you all can tell me if I didn't hear it right, but I think we're going to have a special workshop on bond strategy in July.

(1:48:05 - 1:48:34)
Our next budget workshop is not until August. And maybe in the interim if you can work up a draft spreadsheet, you can e-mail that out and going into the August meeting, we'll have time to individually play with that with some assumptions. Would that be what you'd like? Well, if we could talk about it in July, I think we could maybe give you some feedback because typically in August we're up against the deadline.

(1:48:34 - 1:48:47)
We have maybe two meetings and one of those is at a regular board meeting. There's not a lot of workshop time in August. I mean, if we have time, I'd like to discuss the forecast in July.

(1:48:47 - 1:48:51)
So in July we want to, okay, we're going to. Do it at the same meeting. Yeah, maybe we can't.

(1:48:51 - 1:48:54)
Yeah, no, not two meetings, no. Okay. At the same meeting.

(1:48:55 - 1:48:59)
And that will all depend on how much. Because it's budget related. Yeah.

(1:48:59 - 1:49:10)
That's what I'm saying. The July meeting is everything that we're talking about in relation to the bonds and everything else is all budget related. We don't have to only have a budget workshop in August.

(1:49:11 - 1:49:19)
Yeah, right. So, okay. So the discussion in July will extend beyond just bond philosophy.

(1:49:19 - 1:50:11)
Yeah, it'll be another budget workshop. Okay, again, outside of the spreadsheet and the calculation on the savings that Mr. Hall has requested, if there's additional information that you would like to see provided at the July workshop, please let me know as soon as you can so that we can make sure that we can provide it for you. Does the academic master plan need to be discussed at all in conjunction with facilities and our philosophy? Because doesn't the academic master plan kind of, would it affect what we do with facilities? It will affect what you do with facilities.

(1:50:11 - 1:50:28)
I don't know that it's necessarily going to affect your strategy on how you get to improving your facilities. Is there anything on the barber seal stuff that we need to consider during budget? That's in the state's plans. Nothing's happening there? No.

(1:50:29 - 1:51:02)
So, the only other thing, too, that I worry about with the spreadsheet, and Annette, just correct me if I'm wrong here because I may be way off, but because we don't have estimates of the performance indicators that we're going to be evaluated against in the new funding model, I'm not understanding how we will be able to predict and forecast out even a year from now because we have no data on that. We have nothing to base it on. That's my concern.

(1:51:03 - 1:51:12)
Leave that line blank then. Well, that line is now going to be how much percent of our budget, potentially. Twenty-plus, maybe? Yeah.

(1:51:13 - 1:51:25)
So, that's an important factor for the board to determine the tax rate and to adopt the budget. Yeah, but you're going to have to find a way to find a threshold. You're going to have to find a way to come up with something.

(1:51:25 - 1:51:34)
So, our threshold? Because your whole budget is an estimate. Everything is based on a prediction of what may or may not happen. So, that's why? So, you have to come up with something.

(1:51:35 - 1:51:46)
Exactly, and that is why our estimate is to stay flat. We know we will not have any less money than what we had last year. Right.

(1:51:46 - 1:51:52)
We've been promised to be held harmless. So, that's why our estimate has been to be flat. And that's your baseline.

(1:51:52 - 1:51:59)
And so, if he said, okay, if we go up. So, throw up one percent. You can use one percent.

(1:51:59 - 1:52:07)
One percent in state revenue or one percent? Because enrollment doesn't matter. Enrollment actually no longer matters. That's right.

(1:52:08 - 1:52:12)
It doesn't matter. There's no contact hour funding anymore. So, that doesn't matter.

(1:52:13 - 1:52:20)
But our tuition income needs to be put in there, right? And that's based on enrollment. There's no contact hour funding. Well, yes.

(1:52:20 - 1:52:24)
There's no contact hour funding. Remember, it's all performance. It's getting people off the stage now.

(1:52:25 - 1:52:29)
Yeah, well, that's kind of. That's performance. It's completion.

(1:52:29 - 1:52:43)
You've got to have contact hours to get them across the stage. But we're not going to be funded on the basis of it. So, she just needs clarification so that we're not having her wasting time, spinning her wheels trying to come up with something.

(1:52:43 - 1:52:53)
And then she brings it and it's not what we want. So, they presented a lot of data. And so, we just need to look at what they've already.

(1:52:53 - 1:53:04)
There's a lot of information already there. And if there's anything additional, then just try to be as specific. Trust me, I'm talking from a person who has to do the city's budget.

(1:53:04 - 1:53:24)
And it's hard trying to go back and bring something when you have seven different people having seven different things, but none of them have a consensus. And it's hard to go back and produce that one thing to an entire board. Do you all do forecasting at the city? We do a budget, just like it's the same thing.

(1:53:24 - 1:53:31)
We try to do forecasting, absolutely. You do forecasting, right? Yeah, but we also don't get our funding and stuff from the state. And it's not based on performance.

(1:53:32 - 1:53:45)
So, we can't. It's not apples to apples. But I can tell you what is apples to apples is trying to have staff to come and assume what it is that you are saying and interpret it and then try to deliver it.

(1:53:45 - 1:53:54)
And then when we do, it may be off. And then you're going to send us back. And there is a timeline to where we have to get it across the line.

(1:53:54 - 1:54:06)
And so, the more information you can. We're not the experts on the budget. And we look to them to give us, you know, maybe a couple of examples of a forecast.

(1:54:07 - 1:54:22)
I mean, you have to give us something to start with. Well, I think what we're going to try to do next month is also to present what we think is a good philosophy for the board to consider. And that can be a starting place for you guys to have the discussion.

(1:54:22 - 1:54:39)
But we will also certainly do our best to put together a spreadsheet with some numbers in it. That would allow you to play it with the numbers. Okay.

(1:54:39 - 1:54:46)
Any other questions? You have one more? I may have misspoke. I'm not sure. On the Social Security, I said a couple of colleges.

(1:54:47 - 1:54:52)
Find that out. I may have not remembered correctly. If you don't mind.

(1:54:52 - 1:54:58)
I'll see what I can find. Yeah, you had it somewhere. I have one comment.

(1:54:58 - 1:55:13)
I just want to say how much I appreciate Annette and the job she does. I've said this to her personally, and I want to say it publicly. I appreciate her participation in allowing us to have this level of conversation.

(1:55:13 - 1:55:32)
We couldn't have it without your willingness to throw it all out there. And anything, I hope you, you know, we may have some differences of philosophy, but I absolutely love the ability to have this, and it's because of you and the job you do for us. And I'm very sincere about that.

(1:55:32 - 1:55:56)
You know, we may disagree about some things, but, you know, I think hopefully the whole board agrees that we have a fantastic financial person, and, you know, the information she brings for us that's been around a long time is way different than what we used to get. And so please do not underestimate our appreciation. Thank you.

(1:55:56 - 1:56:04)
I appreciate that. If we don't have anything else for Annette, we do have an executive. We will have a short executive session tonight.

(1:56:06 - 1:56:08)
Yeah, that's why I was trying to rest things on. Thank you. Thank you.

(1:56:08 - 1:56:29)
So, the meeting of the Lee College Board of Regents on above listed date after proper posting and in accordance with Chapter 551 of the Texas Government Code for the specific purposes provided will recess from open meeting to closed meeting. No action will be taken while the board is recessed in executive session. And to John Hopkins.

(1:56:30 - 1:56:39)
We don't have anything else outside of John Hopkins. Okay. So, we haven't engaged anybody to do anything? Okay.

(1:56:39 - 1:57:01)
I misunderstood you. So, what I meant in there was that TAC has consulted with their general council on behalf of the 50 community colleges. Does that clarify? I thought you indicated, and I thought I heard it a few weeks ago, that we had some sort of council looking at that particular Senate bill.

(1:57:02 - 1:57:03)
But we do not. Fine. Okay.

(1:57:04 - 1:57:14)
I never mentioned that we were. I don't know where I got that thing. So, if we don't have any outside council or anybody doing any research.

(1:57:15 - 1:57:17)
There's no one else besides Gallagher. Outside of our own attorney. No, that's fine.

(1:57:18 - 1:57:26)
So, you don't have a question then about that? Not if there's no one out there that we're paying money to. Okay. Well, we have bond council.

(1:57:27 - 1:57:33)
No, no. I'm talking about related to Senate bill, is it 17 or whatever it was. That's all I'm talking about.

(1:57:33 - 1:57:36)
It's Senate bill 17. Okay. All right.

(1:57:36 - 1:57:41)
So, any other matters of concern for future agenda? Hearing none, this meeting is adjourned.