(0:00 - 0:14)
Okay, the clock on the wall says 6 o'clock, so I call this meeting to order. We do have a quorum. Let the record show Pam Warford is absent from today's meeting.

(0:15 - 0:55)
I hope she's enjoying her Kenyan vacation. Regent Morfantino, will you lead us in the invocation and pledge to the flags? Father, we come tonight, we are so grateful and so thankful for all of your many blessings. We thank you God to be able to serve in a college like this where our students are placed high priority in a support that comes from our community.

(0:56 - 1:18)
Thank you for the gifted faculty, staff, and administration that are here every day pouring out their hearts on behalf of this college. We ask, oh gracious heavenly father, that you guide us as elected officials tonight to make decisions that are in the best interest of this college. It's in your name we pray.

(1:19 - 1:48)
Amen. I pledge allegiance to the flag of the United States of America and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all. I pledge allegiance to the flag of the United States of America and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all.

(1:48 - 1:58)
Okay, next up, public comment. Do we have anyone signed up? Yes, we do, Mr. Chairman. We have Donna Molman.

(2:00 - 2:25)
Did you pronounce that right? Close as I can, you ought to try to spell it sometime. Good evening, friends. I wholeheartedly support Dr. Villanueva's budget recommendations and applaud her leadership.

(2:25 - 2:54)
As a retired educator, I understand the challenge and balance of living on a fixed income. As a property owner, I understand that there is always something to be repaired, and maintenance costs less than neglect and eventual repair. A wise man helped me understand all budgets are moral documents, no matter if they are personal, household, church, governmental, state, or federal.

(2:55 - 3:27)
Economics 101 teaches us that there are limited resources and unlimited wants. The trick is to discern the difference between needs and wants. No one is self-made. 

Everyone benefits from someone else's labor. If nothing else, from our mothers. In the richest country in the world, all citizens have benefited from those who came before them, from the clean water they drink, roads they travel, education they received, or tax breaks they've been given.

(3:28 - 3:48)
Taxes are the price we pay for society and community, and I am happy to pay my fair share to enjoy those things. Even hermits who live in caves benefit from someone else's benevolence. Human beings are social animals created to live in community and to serve one another.

(3:49 - 4:13)
We are called to give our time, talent, and treasure in service to each other. When we invest in people, the dividends are exponential, as it not only develops that person, but also every person they contact in the future. We are all busy people with many demands on our time, talent, and treasure.

(4:14 - 4:47)
I find it easier to decide how I spend mine if I picture my who and then define my why. My who is a single mother working to give her children a better life by improving her education and fostering in them a sense of lifelong learning. Indigenous peoples lived in communities where all were welcome, valued, safely housed, protected, educated, and had enough to eat.

(4:48 - 5:12)
In his book Tribe, Sebastian Hunger states, To be content, one must feel competent in what they do, authentic in their lives, and connected to others. That's my why. I encourage you to keep focused on the future, Lee College students, rather than the past, property owners like me.

(5:13 - 5:22)
What's your why? Thank you. Thank you. Okay, next item.

(5:22 - 6:07)
Before I turn it over to Linda for an opening statement, it was brought to my attention right before this meeting that we have been issued a challenge by the President's Cabinet. The gala is coming up on September 29th, and the President's Cabinet has stepped up and contributed $5,000 towards the gala, and we have been challenged as a board to match them. So I have to ask that we get 100% participation from the board in supporting our gala, and that we are generous enough to exceed their goal, exceed their challenge.

(6:07 - 6:17)
A gauntlet has been thrown. A gauntlet has been thrown. Now, before I read the agenda item, I'll turn it over to Dr. V for an opening statement.

(6:18 - 6:46)
Thank you, Mr. Chairman. I wanted to let the board know that we learned yesterday that the no new revenue rate is lower than was estimated two weeks ago by .0144. I want to discuss the college's efforts to be mindful of our taxpayers and to balance that with our college's needs. Let's talk about what we have done to support our taxpayers and the economic impact Lee College has on our community.

(6:46 - 7:09)
First, as has been pointed out throughout our discussions, the board has reduced the college's tax rate by an impressive 12% over the last five years, more than any local taxing entity. Second, the board recently raised the 65-plus and disabled exemption by $70,000. This alone more than compensates for the increase in assessed values.

(7:10 - 7:32)
Finally, we continue to offer our taxpayers the highest homestead exemption available by law, 20%. Only 27% of our tax base is residential homeowners, and we have made meaningful steps to minimize their tax burden. The other 73%, about $30 million, comes from business and industry.

(7:32 - 7:54)
And according to Economic Modeling Specialist International, Lee College alumni add $435 million a year to the local economy because of the skills that they earn at Lee College. Said another way, the return on investment is over 1,000%. That's a solid investment in our community.

(7:55 - 8:07)
Finally, nothing about this new information changes the college's needs. We still need to attract and retain the highest quality faculty and staff. We still need to increase our budget for facilities and maintenance.

(8:08 - 8:24)
We still need to self-insure ourselves against named storms. We still need to increase our contingency and operating reserves. And our community is depending upon us to take care of this college so that it is here long after we are gone.

(8:25 - 8:38)
Based upon your direction last week, the board has been provided an overview of the proposed budget. It is displayed for you to consider, or it will be displayed for you to consider. And we ask for your very thoughtful consideration of its adoption.

(8:39 - 8:53)
And I'll now turn it over to Annette to entertain any questions that the board may have in addressing your agenda item. Okay. But I think first, just to be in order, we have to read the agenda item.

(8:53 - 8:57)
Correct. Okay. Well, my screen just disappeared, so that's going to be a problem.

(9:00 - 9:02)
There we go. There we go. Okay.

(9:03 - 9:05)
All right. All right. Agenda item.

(9:06 - 9:22)
Consideration of ordinance and resolution adopting the Lee College District Budget. The administration recommends that the board approve the ordinance and resolution adopting the Lee College District Budget for fiscal year 2023-2024. Do we have a motion? So moved.

(9:23 - 9:32)
Okay. I've got a motion by Regent Morfano and a second by Regent Cotton. Now, discussion.

(9:35 - 9:54)
Do you have a presentation? Yes. Now, the discussion would- No presentation, but ready to entertain any questions that you might have about what's been presented. Well, where do we start? Wherever you'd like, Regent Hensler.

(9:56 - 10:07)
I'm ready to vote if we don't have questions. Can I ask a question? Because I apologize that I wasn't here last meeting, but I did listen to y'all's workshop from last week. I think I missed the last 13 minutes.

(10:08 - 10:37)
But I thought as I got to the end that there was discussion about a tax rate decrease and that- and correct me if I'm wrong because I was not here. I thought there was some discussion about showing two, like some options, like taking out the paying off the debt and doing a decrease. Did I mislisten to that, guys? I think the last 13 minutes might have helped clarify that.

(10:37 - 11:18)
Negated that? Well, it didn't negate it, but what was asked is that we prepare one budget with a no tax increase and with everything included, and that the board would then review it and make determinations from there as to how to direct the administration in its amending its vote. And so in the summary budget, there's footnotes here, and you'll notice that the very first one is the fact that a one cent- for every one cent in the tax rate, it equals $2 million. So that's our guideline for a tax discussion.

(11:19 - 12:02)
I guess for me personally, I've had many- I mean, as we've talked through the philosophies, which I apologize to the- Just for me as a board member, I feel like we spent a lot of time on philosophy, and we had you guys come up here a lot for like three meetings to talk about philosophy, when I think- Personally, I wish I would have said to the administration, I would like to see a budget with one cent taken out. I would like to see this. I apologize that I didn't give you specifics, because we can talk in philosophies, and that doesn't always equal out to what we are actually- And I'm speaking for me.

(12:02 - 12:51)
But I just- I apologize that I didn't come right out and say, I would like to see a budget that has a one cent reduction in taxes. So, Regent Geralds, I'm sorry to interrupt, but I was just going to say, no need to apologize, because if the board directs us and modifies the adoption of the budget to direct us to do that, to reduce the tax rate by a penny, all we would need to say is that we would take it out from this area and modify it accordingly. I just feel like we took away some valuable time that maybe we could have gotten there a little sooner, and maybe we wouldn't be waiting until the last day of the month to vote on this.

(12:51 - 13:14)
So, I just feel like we might could have been a little bit more efficient with other people's time. And I can appreciate those comments, but we tried to have a philosophy meeting August 3rd, and we had two subsequent meetings that could never agree on a philosophy, because in order to agree, we have to vote. And the only time we were planning to vote was on a budget.

(13:15 - 13:51)
And so the budget is the opportunity to vote on whether we want a tax decrease, do we want to not do any of the priorities that we're looking at. So, that's been the struggle I've had since we had our August 3rd meeting, because I missed the first budget meeting in June. And so I was looking forward to discussing those philosophical priorities. 

All of them need to be looked at. And we could never come to consensus on what we wanted to look at to vote on. So, it didn't make any sense to bring three different budgets with tax rate reductions when we're the ones that are going to decide whether we want to reduce the tax rate.

(13:52 - 14:04)
And we're at that point today. But in previous years, we have been presented a budget book, and it had options in it. And it showed each option with a balanced budget.

(14:04 - 14:16)
And they would show us where this money could come from for each of the options. And we didn't get to any of that. And I think because we talked about why they didn't present it, it's because of us.

(14:16 - 14:26)
But in order to do that, they're making the decision on where to cut. And what we talked about, if we're going to cut the tax rate, then we should decide what to cut. Not them.

(14:27 - 14:34)
That's a first, but we can do this. It's our request to cut. We should be the ones to say, we need to cut.

(14:35 - 14:44)
Or you could say, we want a cut. Give us a budget that shows the cuts in there. Where do you think they could best come from? So they probably could answer that.

(14:44 - 14:52)
If we say, where could we cut one cent, I bet Annette could come up here and tell us. We don't need another budget to tell us that. She could just tell us, right? That would be good.

(14:52 - 15:04)
Yeah. So if we want to know that, then we can ask the question and maybe she can answer it. But to address your philosophy, we were sent an e-mail and were asked to submit options, you know.

(15:05 - 15:19)
But none of that came back, you know, at the meeting. I think it was just one person that submitted their six came back, but there were several that didn't come back. It came back the next meeting as a document we tried to discuss, and we didn't get past that document.

(15:19 - 15:26)
Right. Because it was only the input from one person versus everyone's input. It collected everyone's input.

(15:26 - 15:33)
I don't think that was everyone's. My input was in tax reduction, and that was not in there. Tax reduction? No, no.

(15:33 - 15:51)
My input was doing all those things and reducing the taxes a little bit. My input was never when we do these things, then we do this. Mine was we can do it all.

(15:51 - 15:55)
That wasn't expressed in that document. And I think we got hung up on the wording. Yeah, we got hung up on the numbering.

(15:55 - 16:05)
It never said once we finish all these, it says consider these. Don't just cut the tax rate without considering. That was the whole point, right? Yeah, it was misworded.

(16:06 - 16:13)
Yeah, to me the wording, and wording matters. Yeah, so we spent a whole meeting on wording and we never got to an answer. No, but there was other people that submitted.

(16:14 - 16:26)
Some people submitted things that had to do with student success, above all. And that was the budget. Well, but you could put that in there as the top item, possibly.

(16:26 - 16:34)
But it never made it, you know. The student success was covered in the introduction to the list. It is the overall.

(16:34 - 16:40)
Yeah, it was the overall. I didn't see it in the six items. Pins up.

(16:40 - 17:27)
No, I just want to say that we can spend this time, and we can talk about all the things that happened previously, or we can use this time that we do have now to talk about what we need to do today, which is decide do we want to take this recommendation as it is currently written, or if we do not, they have provided the information to where, you know, it's $2 million for $0.01. So if somebody wants to do a $0.01 for $2 million, that's a conversation. We can talk about that right now and where that would come from. Something else that's high, bring it down by that amount, but this is the time to talk about that instead of all the things that we didn't do.

(17:27 - 17:31)
And that's what I would like to talk about. I would like to see us. This is the time.

(17:31 - 17:42)
I like this. I think this budget is wonderful. I don't want anyone to misconstrue the fact that I would like to see a penny reduction means I don't think the administration has done their job.

(17:43 - 17:47)
I think the administration does a great job. I think they're. . . That's okay.

(17:47 - 17:50)
They're. . . We'll just have you reply. Okay.

(17:51 - 38:44)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . for the college to repeat the number on the no new revenue rate because it previously was like two one oh one going from memory it previously it was point two two zero zero seven I believe it was two two zero zero seven and it's now point two zero seven five so that's opinion a quarter right one point four four one point four four yeah one point okay could you I have an additional portrait I've beat the dead horse you know to death probably again I'm not gonna thank you when I when I questioned about the rise in in property values and so forth and I realized the percentage of our overall this reflects a rise in property values is it does it not or am I getting it backwards no it would reflect a rise yes sir we but prior to this knowledge and I don't know if this revelation changes our number but previously with the previous no new revenue rate which is the last one I knew about we were still realizing a revenue additional revenue of three point one two four million dollars and that's what's reflected in your budget the budget yeah the budget that we prepared has our current rate in it point two two zero one and that's the same rate that we've used to prepare all of our budgets so the so I was understanding at first until I went on the website like the chairman did and looked exactly what's in a no new revenue rate no new revenue rate does not mean no additional revenue right and no it does not and my questions in previous meetings were we're we're where is this additional revenue going and and I think I now understand it's adjustments and maybe industrial values or something like that well new construction new construction is the biggest is not included in the calculation for the no new revenue so my point was additional tax revenues additional tax revenue and when I would raise those issues you know you would accurately respond that the no new revenue rate but that leaves the implication that we were not going to have additional revenue and we do have additional 3.1 now are we going to have more additional revenue than this 3.1 million since our proposal right now is to stay with the current rate which is point two two zero one which reflects the three million dollar increase that's what our proposal is but your proposal last week was that was the very same no your proposal last week my understanding was was to stay with the no new revenue rate no sir it was it was stated sir we stated that our current rate was below the no new revenue rate that we knew at that time yes but they changed it but all of our budgets have been prepared based on our current rate of point two two zero one I just I happen to know that it was stated that we were going to stay with the no new revenue rate which was 21 so now now that it's checker 2201 now that it's changed well it was our understanding that we were below the noon and no new revenue rate the 22 but now we're above now we're about correct that's correct that is correct so I go back to my original question of why are we essentially going over and raising taxes and I'm not gonna beat that horse we'll save that for a later but it seems to me that every time the goalposts I mean every time the chain things get changed a little bit the goalposts get moved and this is the revenue rate reflects increased valuations you know across our our district and we're leaving our rate the same which means increased revenue on all of our tax demands on all of our taxpayers and with all of the additional revenue we've had I think my opinion is that's unwarranted and here we have so what you're telling me I just want to be real clear the three point one two four million figure that's here does not change even though our no new revenue rate changes it would change if you decide to change the tax rate that we are using to calculate this budget right now the tax rate that is used to calculate this budget is point two two zero one if you wish to change that then yes that three million number dot that three million dollar number will change I just want to be clear in stating that the no new revenue rate changed and that is not under the college's control right but and our proposal has not changed it still remains the same that's all I want to clarify but my point being that now the current and more accurate no new revenue rate reflects above the proposed tax rate correct correct so that results in additional revenue based on the value times our rate it's people are writing bigger checks that that's that's the only point I can make I do have another question though our spending levels based on the numbers that you gave us yesterday were last year our actual spending projected for the end of the year which we're in tomorrow so it wraps up today 66 million 480 okay thousand the project the proposed budget this year for next year in 2024 is eighty four million nine hundred and sixty two thousand that is a twenty seven point eight percent year-over-year increase from previous year spending to proposed spending for the next year so those are just numbers that you've presented that's correct that's correct twenty twenty seven point eight if you take the proposed budget of eighty four nine sixty two and compare that excuse me to our adopted budget of sixty eight seven thirty nine that calculates out to twenty three point six increase yeah but we didn't spend last year's budget in my my contention and we've been kind of over budgeting for the last few years so I'm going back to our actual spending that should reflect the needs that we had this year and that that gives us the twenty seven point eight because the the budget quite frankly kind of a made-up number so my question is are you aware of any community college in the entire state it has said this level of budget increase proposed I haven't researched that research that I haven't researched that in our history did you research as Lee College ever increased its budget by anywhere even half this rate at 14 you know this is a brand new funding model that was implemented to just please keep in mind that and so all 50 community colleges have been impacted by the new funding model and dr. B we're not talking about a funding model we're talking about a spending model and those are two different things and so we're talking about so I would just refer back to the additional spending that we identified because we are trying to address a lot of things that we've never been able to address in the past which is why our facilities one of the reasons why our facilities are in dire need of repairs and maintenance because we haven't kept up with our spending because we didn't have the opportunity to quite last year's budget didn't include storm insurance for example or other areas that have been neglected or have been able not have been able to be addressed but again we've been this budget insurance for every year I mean we've been three hundred thousand not to the level yeah not to the level that we're recommending and again this is our proposal and it however you as a board want to cut it or you know change it then we are we're here to listen and do as you instruct and I would just also add that the college has also never had two back-to-back years of highest recorded enrollment and this budget also reflects those needs so I could support okay so the building needs and so forth it seems like millions of dollars are going into contingencies the insurance fund we're raising that contribution by nine hundred thousand the argument that was made from the very beginning on not on self-insuring was that we could go into the market and borrow the cap of that insurance policy for way less money than what the premium was if we had loss and so there the risk could be mitigated by going into the market and I think that number would be between six or eight hundred thousand dollars a year if we went and borrowed that was the argument five or six or seven years ago it made sense and I think the argument would would still hold today see the amount that we have proposed here was based on the premium that we were quoted to purchase 15 million dollars worth of name storm insurance so again if you want to cut the one point two and half we can certainly do that I think I mean it was demonstrated six seven years ago and it can be demonstrated today that we could go into the marketplace and borrow 15 million dollars and our annual expense would be around six to eight hundred thousand depending on payment terms and so forth like that so I failed to see why we need to pile this much money in part and that's what before well I'd say five hundred thousand so that's fine we could double our contribution and six hundred thousand that'll put us it what do we have in there now yeah that include this year's contribution okay so we've got so and that covers us from the first dollar loss I just I would recommend that we cut that contribution to the five or six hundred thousand we pick up six hundred thousand there I I just want to relay the concern though to though that if we borrowed fifteen million dollars it would not replace a single building on campus I just want to be mindful of that and we are nowhere near fifteen million dollars even if we borrow that I just I just wanted to say it and it's not what our operating reserves are for but but that's all the insurance policy would pay so we're not it would be hundreds of millions of dollars but the insurance wouldn't pay us either so they're not gonna help us out in that problem I'm just saying it doesn't it doesn't help us I think this is not wanting you to forget though about FEMA because if we don't have insurance we don't stand to get we don't if you look at the budget that you've been provided and you look at what our revenue bond payment is you remember we took out a revenue bond of about eleven million dollars right so our principal payment on that is a little over a million dollars and our interest on the revenue bond is a little over five hundred thousand so our payment on that eleven million dollar bond is 1.5 million so that would be a good estimate on what your payment would be for 15 but I don't know the rate is on that one but what's the term 20 million 20 year right I was using a longer payout which we typically do on our geo box we do about the same so thank you sir no I was just saying I would I can support a half cent tax reduction I wouldn't I would not want to support anything more than that but I think we need to decide you know if if there is an appetite for it or not instead of you know we can continue to talk about it but we need to decide if there's any interest in it or not because it sounds like that is really the only place where we are held up it's on if we want to reduce it or not so if we do if we do then by how much and then where does it come from and what impact will that have on our overall operations what what what does that cause us to go without something or what's the impact of it and I and I think that's where we are and so I will start first by saying I could support a half cent tax reduction which would be a million somewhere we would have to reduce something by a million in order to do that and I I'm not for a half cent I would support one cent that's where I'm at I mean I'm at one cent I think Gilbert's got his pin okay Weston cotton was region cotton was about to speak I just want to remind everybody that this is the cheapest money that we'll ever get next year the taxes are going to go up again next year they'll go up again we can use this money to save our taxpayers from having to spend ever-increasing amounts even though they're paying the amounts I just when you can make the money and put it to use that it stops this deferral that we have and it stops the depreciation and the deterioration that we have I just can't see wasting this opportunity I understand the taxpayers but you look at the reduction and I had to do the calculation for something in it's on the magnitude of less than ten bucks and I mean it makes very little fiscal sense to me for us to do that because in the aggregate we can put that money to use this year and not have to use it next year we're going to need we're going to need some of it next year because we still have ongoing problems that we haven't resolved because we didn't want to raise taxes in the past and we've reduced taxes in the past we still didn't get to the problems that we have and we need to address those. We've been having four or five million dollars left over every year for the past several years and we haven't addressed those needs that we keep talking about and we still don't know what those needs are and if we voted tonight I doubt seriously if we could spend that money in 2024 if we can get get them identified and get the bids and get to get the work done I mean it you know things don't happen that quick but we just haven't we haven't identified them. 

We haven't voted on anything. The chair of the building committee would like to weigh in. Every single dollar that we so-called over collected has been put right into this facility either in a cash reserve or in maintenance needs. 

Every dollar when you say I don't know how we could spend it out we have spent every dollar what we put it in reserve we put which is a priority as well well it's a priority but we've taken seven million dollars in the last two years and put into facilities seven million dollars. We voted on that we agreed to that. How can you say we can't identify those dollars? We've put far more in reserve. 

We've even increased the reserve requirements to six months. That's another part of the budget. If we had a policy that said we should have more in maintenance then we would be doing the same thing.

(38:45 - 1:15:00)
Maybe we need to have a policy meeting. I don't know that we've ever voted on it but raising our reserve requirements to six months which we're not there then I don't think we need to be and there's nothing in this budget I can't identify any catastrophe that could happen here but we would have to lay our hands on that much money in that short a period of time nothing's ever happened three months has been our historical we raised it to four now that we want to raise it to six and we've never identified any potential pitfall unless it's an atomic bomb or something I don't know but a chemical plant explosion but I mean that you've got a way bigger problems than us and we wouldn't know what to do with the money I think if we were if we're gonna take the increase that I'm seeing here is going into a lot of contingencies and it's not going into our facilities it's I got distracted by Regent Hemsworth's comment but what I really wanted to say to begin with was if I can weigh in on this discussion is that I'm gonna go back to the the six items that were listed in our philosophy meeting and all that said was consider these six areas and one of those was the tax rate yes and it wasn't after everything else was finished it was after they were considered and we have we have considered everything I don't see anything in this budget that puts $1 into our cash reserves there's not any money in this budget allocated to our cash reserves so nothing here I don't know what you're talking about there we are we are looking at at raises which was one of the items we're looking at self insurance which is one of the items we're looking at our maintenance budget which was one of the items we're looking at our bond capacity which is one of the items and cutting the tax rate was the was the other item and so for me after considering all these other areas and we had the conversation about we're going to have some reserves excess reserves those will contribute to the to the cash reserve if we choose to do that we haven't decided we haven't voted but there's nothing in this budget that puts a dollar into our into our cash reserves so all these other things are considered in this budget I will say then as I said this before I can support a one-set tax reduction because to me it's appropriate after looking at all these things there's only one thing on this list here big dollar items it's not one of those six priorities and it's the contingency fund okay and and I'm not arguing that that it's not appropriate and scaled and all that you know percentage wise and all that to meet the metrics but it's the only place where we don't structurally take away from maintenance and repairs or building bond capacity or self insurance and all those other things and and not that we could I thought it was three million last time now it's 2.5 I think they knew I was going to probably look at cutting two million there but but you know to me we've had a lot of conversation about the tax rate but we've also had a lot of conversation about philosophy and we can't get past self insurance we can't get past our bond capacity for future we seem to struggle with our cash reserves you know that's just a financial strength item it's no different than you having assets personal assets that improves your personal financial wealth and your strength so I mean yeah are we ever going to need twenty seven million dollars like and spend it all I would hope not because why would we spend that much money anyway but it's a financial strength and and we we are we are stronger by having cash we are stronger in our financial ratings because we are financially strong when we had the conversation about insurance last time we didn't have any money okay we didn't have any money for premiums so we defaulted to self insurance okay we couldn't afford the premiums at the time so to so to say that this is the same discussion is different that's why we brought it up again so all I can say is just we did have the discussion we had money to pay we the premium not those premiums and and not based on the I'm talking let me finish so all I'm saying is after considering everything that that that was laid out I'll admit it I Darrell took my recommendations I'm I can favor a one-cent tax reduction we're talking a very large increase in revenue and if the administration found ten million more dollars I would expect them to tell us where we could use it and it's up to us to decide whether we want to use it or not because we have way more means and needs than any money will ever receive period and so as long as we're meeting the mission of this institution and I believe that every dollar we're spending is generating what Regent Hemsel says is student excellence which is why we're here we don't have a budget for anything else except delivering students a great product we got this money because of the performance of this institution and decisions we've made over the last five or six years to get us to that position including hiring dr. Villanueva which I think is one of the best decisions we've ever made so you know all things considered I'm at that you know one cents two million dollars a lot of money but percent of this budget you know I think it's something we could take a look at okay um you brought up a point about the change in the contingency number and one new item on here that no one has mentioned yet that wasn't on here previously is the there there is a million dollar line item on here this is how fluid this new funding model is guys this this came to our attention in the past week yes in the past week this came to our attention that this is an expense that's going to come out of that new funding model and so it's very fluid situation okay yes the state's giving us an additional nine million dollars and we're finding out every week things that we're required to do with it so and their new program so you can't say we you know it was institutionalized now we're just adding right I would like I mean I don't disagree with with everything your Senate some some things but I've got a proposal I could I think a cent and a half would be more reflective of our additional revenue but let's say the one cent if we could we've we have raised a considerable amount of reserve money by having dollars left over at the end of the budget year and it's been as high as nine million four and five I think it's five million this year somewhere in that it's my understanding the city when they look at those increases or that money left over that they sweep that into their next budget so that their budget actually ends up balanced and then they take that surplus and carry it over into their next year's budget like revenue so prevent us from over budgeting every year by sizable percentages I mean we're talking ten sometimes and even more percent could we adopt that as a policy that when we come up to the next budget year and we have generated or not spent either through additional revenue or through spending restrictions and we have funds left over that we count that as income for the next budget okay regent Hillary would like it is not no because what what you if you want to do like the city does then you're doing you want to do what they're recommending that it drops so whatever is left over drops into our fund balance we call it a fund balance we call it a reserve city of a town calls it a fund balance we do that so that we can have 90 days and we go through that but it goes we have 90 days our goal is 90 days so if you have 120 at the end of the year what do you do that it stays in the bank it is your fund balance that's what it's there for okay well that's what it's there for which is the exact same thing whatever you have left it becomes a council and you need to educate a little bit that's just stop talking to him no I'm kidding don't get your information there but no that is not accurate that is not accurate it drops down into our fund balance so basically it drops into our savings and it remains there it goes into the fund balance which we call a reserve so basically what you said is what's left contributed to our reserve so when you budget for the next year do you target that 75 days does that that's always the goal but that doesn't count as a reserve the fund balance is your savings that's not the reserve it is we just call it for the same thing we just call it two different things it's called it increases a reserve yes and your savings which is the same thing if we dropped it into hours it would go from the four months that we have now whatever we have left that four million five million would go into your reserve that is correct also known as a fund balance which we call a fund balance okay Regent Cotton has something to say if we were to do what Regent Hall says we would wind up I'm afraid like what we have with the federal government when they reach toward the end of their budget cycle and they say oh I have this much money left in my budget I've got to spend it or I won't get it next year and it reads it leads to wasteful spending not saying that people would do that but human nature is that way if they know they've got that cushion and things come up they will budget tightly they will spend their money the way it is but if we say we're going to start backing your budget up for every penny you save us then they're going to quit saving us those pennies yes yeah and I 'll say is I think we've done partially what Reggie gallery said we partially taken early on we took all the funds into our cash reserve because we didn't have any once it started building up we the last couple of years we took what we had left over at the end of the year and we split it some into cash reserves to continue growing and we use the others for maintenance needs correct and and we we have very transparently discussed where that money was going and even the projects that are being done with those funds for the last two years we have a list of projects and their ADA compliance are the most critical needs we have on site so I think you know if we had a healthier maintenance and repair budget or maybe if we went out for a geo bond and we had any money left over at the end of the year we could all we could do something else with it I think we've stewarded the the taxpayers money very very well even though it was excess and if we didn't have the excess we would have had to budget for those items the next year we would not have been able to do everything we've done so I we needed the money and at some point we won't need as much for for our reserve cash reserve at some point hopefully we get caught up in our you know preventive maintenance and I've got something to say I want to point out in the repairs and maintenance line item where it is proposed that we increase the repairs and maintenance budget by three million dollars for facilities and the guideline is two to four percent increasing it by three million only gets us to 1.6 percent of replacement costs so it's a step in the right direction but that's that's how far under we've been so it's you know we're not near there yet and I think I stated at the last meeting I know I did that I would like to see it at three percent if the goal is two to four I'd like to see it at three we're a long way from getting there this is a multi-year challenge I've got a question Gilbert you seem to have kind of been the architect of this and that's fine I'm not arguing with you but I'm always looking for a limiting factor when we let's just say at the end when we're sitting here a year from now we have a seven or eight million dollar surplus in our budget where where does I mean when we reach the six months which I don't think we need what's the limiting factor when do we say okay that we have adequately reached all of these goals and we're going to kind of look at some things that are down the list we've reached our philosophical goals on where we'd like to see maintenance and repairs budgets and our cash reserves and we can have some very specific conversations on the insurance thing again if you want to because that could change our path forward as well but yeah once we reach those those targets then now we we have new we can explore new things or if we're all done growing lee college and and and growing this community and the impact we make then we can just not take the money anymore I think as long as this institution is delivering what we deliver and I'll tell you I've made this comment before I don't know publicly but you know I read I read the Baytown Sunday every time you guys publish it just want you to know that and you know I look at the obituaries and I've told dr. 

Bill way over this I don't know who the people are but I have once I look at once I see their face I have to read it I just have to out of respect and I'll tell you that most times if it's not half of the folks they mentioned Lee college and their obituary I've noticed it too and these are folks who've been around a long time and you know it's it's just a tribute to the this the institution and the impact we've made in people's lives to make their obituary you know sometimes work doesn't even make the obituary and they spend 35 40 years doing that and and I just believe that what we're doing is is good and we have an opportunity with these funds to continue growing doing more for this community instead of limiting ourselves based on the money we have which is all we've done we've always been limited and and but I'm a I'm a sort of a conservative guy I'm not saying we take everything we have that's why I'm in favor of looking at the tax rate as well because I take pride and also being able to state as was stated earlier we've reduced the tax rate more in the last five years percentage wise than any other local taxing entity it's not a competition but if we can do it let's do it we have a completely different dynamic than the city of Baytown absolutely I want a completely different dynamic than the school district does all we have is our dynamic and as long as we steward it correctly I'm I'm proud to be here and on the subject of pride I want to share a very recent story that happened to me okay I had a medical procedure done this morning and my nurse at Baytown Methodist I asked her the question I said where did you go to nursing school and at first she had a surprised look on my face like she wasn't sure where that was going and I explained to her I said well I'm on the Lee College Board of Regents I wondered if you'd gone to Lee College and she goes yes I went to University of Texas for my bachelor's but I got my associates at Lee College I made the comment that you know maybe I got to hand you your diploma she graduated in the COVID year so she didn't but but where it got better was other nurses overheard our conversation and one lady said I graduated in 96 but I'm a proud graduate of Lee College it just you know went like wildfire through that that that recovery room and so yeah a lot of pride in the name Lee College in this community just thought I would share that which is why we're all here yeah exactly yeah yeah we got a consensus for our scent reduction on cash reserves if our budgets now 84 million six months number is really shot up it's a moving take us a long time to it's a moving target but I would just remind you that that reserve is based on operating expenses right so contingency that's not necessarily an operating expense that we need to fund and so an idea what that number is so we continue to change it does change when we looked at it and I shared this with you I think at the last budget workshop we were estimating it had been running a little over four million and it was going to jump up to about five a month I made a month yes sir okay and what is our current operating reserve number 20 21 22 something like that okay so we were currently at about five point out there there's no money in this budget to go into the right reserve right there's nothing here no there's nothing that's right the only reason the only reason I backed off of that was because we talked about possibly doing what we've done the last couple of years and allocating some of our forecasted excess revenue to that but but how much I don't know but I'm I'm just happy that we keep looking at it I I was never saying we got to get to six months all at one time okay I never said that I just said we should consider it my next question you're not going to believe this only the two million that we're wanting to put towards the bond payment I need to better understand that philosophy because I've been thinking about it and like he's been saying you know we're we're paying roughly three point six percent on that money and we're going to take two million dollars out that we could put in reserves towards reserves or insurance and then we could put that money in investments and possibly earn five five plus percent even on a CD why would we not we're not okay it's women so why do that two million what why can't you we're gonna we're gonna take money and put it other places I don't think that's the right question right it's still his question and she's the one with the it's gonna be the wrong answer I know what his question is because he already asked that question last week and here it surely told him why we just want to hit else again until we do something with that two million dollars it's it's ours to do put where we want to put it at right except on bond I'm saying take the two million and put it in insurance reserve no you can't do that you can do that you can do that yeah it depends on which side INS money can only be used for bonds so that the two million dollars that we're going to get from somewhere INS not from somewhere it's coming it's not from somewhere it's very specific that part of the tax rate yeah so you have to increase the M&O rate so where's the money coming from that we're going to put an insurance reserve what the M&O side of the tax rate okay so we can't take that two million and put it somewhere no you can't take it out INS and put it right if you go out and look at that form that Regent Fontenot referenced earlier where you calculate the no new revenue and your bond rate and all of that it is very specific and you have to tell them exactly how much do you want to pay down on your debt and whatever number you tell them which right now we have it in there as two million dollars last year we had the one point seven eight five whatever number you tell them that you want to pay down on your on the geo debt is used to calculate that tax rate so the revenue that you generate from that tax rate must be spent to pay down the debt it cannot be deferred anywhere else the only way we could do anything with that is just not pay the additional two million right right and then that would fall back it will fall out of the INS rate right right and so that's your two million dollars that you want to say that you're looking for if that's what you want to do and that's not what we want to do. Not necessarily the we raised the INS rate and lowered the M&O rate two years ago or last year sometime so yeah we could reverse that I don't know when we when it went into the deadline the point that I believe he was making is that we're paying off three percent three-and-a-half percent debt where we could earn five and a half percent on the money what you could if you change the right the difference between that we're we're giving up the interest difference that's probably $40,000 a year there's there is a there's a separate calculation for the M&O rate and for the INS rate and so if you're saying you want to jack up the M&O side to excuse me to take this money and invest it elsewhere that is a different calculation and I would have to go back and look to see what the limit is for the no new revenue for the M&O side because it is two separate calculations and the rate that I have shared with you is the combined rate the taxpayer doesn't know the difference they're paying the same you're not going to get support for that yeah and and the fact is if you increased it on the M&O side I can tell you as as Regent Cotton has alluded to more than once the best return on investment is spending it on construction costs that go up way more than the rates we're talking about or any rates you can return you can earn in the market so we have that would be the fiscal thing to lower the debt we're required to do that now okay so what's our other option for that two million dollars if we don't put it on geo bond payment what's the other option for that two million and put it anywhere you want to if we don't budget it that way then yeah then you're effectively shifting the money over to the to the M&O side when we adopt the rate that's what we've got to do to reflect that that's the change we've made have to be careful if you if you adopt that you throw that extra penny over there what's that going to do to our tax to our tax rate right and then is that going to shove us into an election right either a required election or one that can be requested by the public and I don't know about you but I don't want to go through that but we can just amend the motion and add the one cent tax rate in right now someone wanted to name one cent where in the motion to accept to take it out where okay and then we discuss where I'd like to make a motion that we reduce this budget with a one cent tax reduction but we already have a motion that's right you have it right you already have a motion already so the conversation is where do we if that's what we want to do where do we want to take it from because you already have a motion right okay so the motion would have to be amended to include that but we still need to say where it's going to come from was there a possibility of looking at several of the different lines and just taking a certain percentage out of some of them so you're not hitting or a dollar amount so you're not hitting one line that's a finance nightmare five lines not like I'm gonna recommend 1.5 comes straight from the contingency line item that's that's 1.5 we need another 500,000 and if we're gonna sit there and have a debate on insurance again then I'm for taking it out of the insurance component and that gets us our 2 million and when we come back and discuss insurance as a philosophy and what we want to do next tax year we may raise it back up again that would be my amended recommendation I don't know so you're saying it's to do 1.394 for the insurance instead of 1.8 I'm saying take $500,000 from whatever that number is what 500,000 from the additional amount that we were going to put in there for self-insurance okay so so right now it's call it one and a quarter it's 1.226 which is for easy numbers so you're talking about lowering it to 750 it's the 1.3 right because that 1.22 is already included in the 1.8 so it's reducing the 1.8 so a two million dollar reduction to get to one penny 1.5 million from the contingency line item they added 1.5 million I get the reason why but that doesn't structurally affect any operational things going on right and then we take the other 500,000 from the self-insurance amount we were going to add since we haven't philosophically agreed on that apparently on what was presented and and that gets us our two million dollars and the one cent tax reduction why don't we just take it out of the additional okay that payment had a longer philosophical plan we're probably going to discuss that as well yeah because we haven't agreed to that one we do need I say I would just say to me if there's a priority between building a self-insurance fund and paying down bond debt I would rather pay down bond debt I get the whole value of the dollar but I'm gonna go with the expert who gave us his opinion and and agree that paying down bond debt now is good for any future potential we may have and so I would prefer to continue doing that and and review the self-insurance fund at a later date what do we need to do we do need to make a final decision on paying down the debt I know that this has been an ongoing discussion but we do have a deadline on posting the the final TNT calculation which paying down bond debt is part of that calculation and so I do need some some closure on that question I don't support changing the bond payment line no I gave a recommendation as as an amendment to the one set tax reduction and how to get there so I made the motion all right so so the original motion was made by Susan and seconded by reading cotton do you wish to amend your motion let's let's repeat what we think we are agreeing upon to get the two million dollar one cent reduction from the budget take 1.5 million from the contingency line item so it'll stay at half a million dollars instead of no stay at 1 million instead of going up to 2.5 so we take 1.5 million from there and we take another five hundred thousand dollars from the additional self-insured payment we were going to put into our interest self-insured fund okay so that I'm clear the contingency is 1.5 and the insurance is 0.5 that equals to the 2 million and that's where I need to make my recommendation of the amended budget my motion amended motion okay I I move to amend my motion to deduct 5 million from 500,000 from the insurance from the insurance and 1.5 million from contingency okay we have a motion from Regent Moore Fontenot and a second from Regent Hall so is there any further discussion on this item I would just like to say that in the spirit of collaboration I amended my motion not that I really think that that is in the best interest of what we're doing so but I will vote for it because I I've listened to all of the comments that have been made I think that we made a lot of comments tonight with lack of information about how this lady has to make her calculations and we're thinking through a lot of things that we don't fully understand but we need as a board to give guidance to the administration and so I'm comfortable with doing it I see on the horizon that we still need more clarity on philosophy of what we believe is important to the board and I hope that we we'd come together and do that at some point thank you for those comments I I agree with Weston Cotton's words that that philosophically this is hard for me to swallow but I will say my priorities are the pay raise and repairs and maintenance and those two items are staying intact so I could support that that amended motion I really appreciate the compromise because I believe this is a budget that addresses all needs and it also takes into consideration the taxpayers and I know it when you look at the dollar amounts it's not it's not substantial but if you look through the years if we continue to get increased revenues and increase state funding which we are not guaranteed I absolutely understand that but I think it gets us going in a really good direction of showing good faith to the taxpayers also that we are very well-rounded in how we use everyone's money and I mean I believe that that everyone who has touched this budget has put their heart and soul into it and I appreciate that I just I appreciate that we got down to business and really started hammering this thing out I just like to say that I am I appreciate all the work that's gone into it and I think we are making this decision on the very last day possible and it is not administration's fault that we got here you know we as a board couldn't get here which is the reason why I believe that we should move up our priorities and all of those things are philosophical beliefs during our board retreat so that this administration will have that data before they even start their budget process and if they have what our priorities are beforehand then they can put together a budget and then present it as a recommendation and then we would have more time to talk about it but that's on us that we have not provided them with the guidance up front and I think we can do a better job of doing that by getting started earlier in the future okay anything further in discussion okay all in favor of the approving the amended budget say aye all opposed say nay okay budget is approved I know it was painful guys but we appreciate it so much Thank You Regent killer I just want to say on behalf of all of our employees at Lee college that we are truly grateful for the board's consideration of its 6% raise and its focus on the college's needs as a whole thank you very much for this spirited conversation and we do not request an executive session mr. chairman okay great do we have any matters of concern for future agenda hearing none I'm sorry I would just say as a follow-up just to formalize it that we should have I don't think we can do it our retreat I think I think we should very soon so we remember everything that was discussed have conversations on our self-insurance our bond capacity I think those two issues are not philosophically agreed to by everyone and I understand that but those those two items we've spent a lot of time talking about over the last three or four meetings mr. chairman in a previous meeting I'm not sure this got registered that we talked about maybe with the policy committee setting some goals and dates and so forth so that we can meet benchmark time schedule where we have a budget say at the end of July or something like that is that is that something that got registered with you to deal with this first time I'm hearing that always gonna depend upon the board giving us the direction no okay the policy committee heard it so yes we did okay they're gonna take that up sure if I didn't but I've heard it now um the the one future agenda item it was brought up the last time I just want to reiterate it is that now that we've got the budget behind us I do look forward to a scheduling tour of facilities I think that absolutely will be very very helpful so all right meeting adjourned