[Speaker 1] I call the meeting to order. We have a quorum and our one missing member is on her way, stuck in traffic, but she'll be here shortly. And so we will begin with the invocation and the pledge to the flags by Regent Judy Geralds. [Speaker 8] You gave us to give us hope in this world, Lord, and we thank you so much for that. Father, be with us tonight as we go about the business of the college and the community, and we just ask that you would guide us in all that we do. Father, I pray for a safe and blessed Christmas and New Year for everyone in this room tonight. In your precious name we pray. Amen. [Speaker 10] 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. [Speaker 8] Honor the Texas flag. [Speaker 10] I pledge allegiance to thee, Texas, one state under God, one indivisible. [Speaker 1] Okay, next up we have disposition of the minutes. We have Audit and Investment Committee from October 8th, Building Committee from October 16th, Board Meeting October 17th, Policy Committee meeting October 31st, Building Committee meeting November 4th, Building Committee meeting November 11th, Building Committee meeting, boy we've been busy, November 20th, Board Meeting November 21st. Minutes are attached. Do I have a motion on the minutes? So moved. Okay, I have a motion by Regent Cotton and a second by Regent Warford. Any discussion on the minutes? Are we good with the minutes? Hearing no discussion, all in favor of approving the minutes as submitted say aye. Aye. Any opposed? Okay. All right. Report of the Chairman. I want to say how proud I am of our Lee College entry into the parade. Thank you to Amanda Smoke and to Drew for a wonderful job organizing that. Thank you to the regents who participated. Thank you to the drum line and the cheer squad. If you don't know, we won Best Organization or Club and so we were recognized for our efforts. It was a lot of fun. It took a couple days to get our hearing back and voices, absolutely. So it was a really, really good time, great parade, great turnout. So that's all I have for my report. Regent Santana, Building Committee. [Speaker 5] Mr. Chair, the Building Committee met, we met, when did we meet? Yesterday, December 18th, 2024. It was like a long time ago. So we reviewed four items that will be presented to the board this evening for approval and the committee recommends approval of the four items. One is furniture purchases for the ATC building and this is from the funds allotted for campus furniture upgrades. The second item is additional funds for the demolition of Piers for TV 10. That demolition was approved at the June 20th, 2024 meeting. We also are requesting approval of replacing a variable speed drive for Children No. 1 at the South Central Plant. This is an end of life replacement and it will be from our annual maintenance budget and we also approve the purchase of property from our capital reserves. We had more discussion on the evaluation of the Executive Catering Building from Sledge Engineering. We received an update on all the current projects and we discussed scheduling tours. Finally, Regent Warford just won't give up. Tours of the campus buildings for the Building Committee members. We will communicate the schedule and extend an invitation to all board members who would like to participate. That's all I have. Any questions? Nope. That's all I have. [Speaker 1] Okay. Policy committee? We have not met, sir. [Speaker 8] Okay. [Speaker 1] Audit and Investment Committee? [Speaker 8] We did meet last week and it's on the agenda to approve the audit today. [Speaker 1] Okay. Last item is, do I need to read this board training report? Do I need to read? [Speaker 4] You can, but it's just required for us to put it in there, like the other Title IX things and things that we do with this training. Okay. Folks will have until a little bit longer, I think, to complete the work. [Speaker 1] Well, for the record, in compliance with board policy BBD legal and BBD local, this is to report required training completed by board members during calendar year 2024, Texas Higher Education Coordinating Board online training for newly appointed regents and newly appointed, newly elected trustees, completed by Regent Pam Warford, and annual cyber security training completed by Regents Gilbert Santana, Susan Morfantino, and Weston Cotton. And those of us that haven't completed the cyber training, I know I have it in my inbox to complete it. So, there you have it. So, next item, is that the President's report? [Speaker 4] I believe it is. [Speaker 1] Okay. President's report. [Speaker 4] Thanks, Mr. Chairman. I have a brief report. I'd like to begin by congratulating Regent Guillory on her reappointment to the ACCT Governance and Bylaws Committee. Congratulations to you and thank you for representing the college in that capacity. [Speaker 11] Thank you. [Speaker 4] You're welcome. I want to thank everyone who worked as an incredible team to ensure that our commencement ceremonies this past Saturday were successful and special for all of our graduates and their families. I did get the hint after the first ceremony that I was speaking too long to some of our graduates. Several folks told me and I readjusted and, you know, things got better, but you guys know I like to really love on our students. But thank you to all of our board members who were in attendance. It's always great to see you there with the students. We're awaiting final numbers, but I can tell you that it's estimated that the number of graduates that we had this, this past, this past week was approximately 11% greater than it was at the same time last fall. And what's more important as I think about that number, 11%, is that it represents 126 lives who are being improved through the process of allowing us to serve our amazingly college students. And I just, we all know that we're so proud of all of our graduates and I don't know about you, but I can't wait until our next ceremony in May. So it'll be wonderful to witness those ceremonies as well. And finally, I just want to wish everyone a Merry Christmas and the happiest of holidays. I look forward to seeing everyone again in the new year and I am confident with the new year that our amazing team is going to continue to do great things for our amazing students and our community. That concludes my report, Mr. Chairman. [Speaker 1] Thank you very much. Now, at this time, we're going to adjourn into executive session. We're moving that up from, rather, from the end of the meeting to now. And so the meeting of the Lee College Board of Regents on the 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. Adjourned from executive session and we are re-adjourned into regular session. So let's see. We are at informational reports. Resignations. [Speaker 4] Mr. Chairman, I have one resignation and two retirements to report. One is Rhonda Brady in workforce and community development. The next is Rosetta Moore in payroll and that's a retirement. And then Linda Jones-Zabranek of the Small Business Development Center and that's also a retirement. Rosetta worked with us for how many years, Annette? Ever. Yeah, 20 plus years. So we certainly congratulate her and I don't know how long Linda was with us. [Speaker 8] Also a long time. [Speaker 4] Long time as well? So we certainly wish them the best upon their retirements. Thank you. [Speaker 1] Okay. Next up is financial report from our superstar CFO, Annette Ferguson. [Speaker 2] I don't know about all that, but I do have a little bit of a report for you guys. So the financials that we'll be talking about tonight are year to date as of the end of November. Our cash still remains strong. Revenue for tuition and fees, this would represent fall and part of spring. Spring enrollment is not complete. So we would want this 68% to be up closer to, oh, I don't know, 80 or so. So we still have a little ways to go on enrollment. Our state appropriations, we received our payment last month in October and then our next payment we will receive in February. And the February payment would be roughly half of what we received in October. So it'll be a little over 5 million. Our taxes really have not started coming in yet. We'll get quite a bit in in December, but then the bulk of it, of course, will come in January. Other revenue, our interest income is remaining very strong. And the other revenue, you have a breakdown here. A lot of it's coming from the cafe, the dorms, or the housing for our athletes. TDCJ has given us about $50,000 to reimburse for expenses. And then shared positions, the ISDs reimburse us for some of the costs that we have with shared counselors that we have in the ISDs. Looking at restricted funds, you can see most of this is related to Title IV, a little over $600,000. And as soon as those funds are authorized, we will be pulling them down. So, again, it's just a timing issue. And for revenues projecting out, right now we're still projecting that we will be pretty much right on target. Tuition and fees is the one that we're watching pretty close to make sure that we hit that budget number. Looking at net revenue projections right now, we're projecting an operating surplus of a little over $1 million. Most of that coming from expenses. Most of that coming from salaries. Breaking down our costs, we're pretty much right in line with budget, salary and benefits, about 57% of our total budget. Operating expenses, a little over 34, and debt right there at 9%. Looking at our expenses for the month compared to our monthly budget, we are, again, as I said, we're behind, if you will, on salary and benefits. Operating costs were pretty close. Year to date, it's the same story. We're saving a little bit on salary and benefits. Operating costs are very close. Projecting year to date, we're projecting that we will come in under budget on salary, benefits and operating costs. And that concludes my report, unless y'all have any questions for me. I will share with you one other thing real fast, if you would allow. Every year we do a reconciliation of our August operating financial report that we gave to you guys and the audit report. And so our August financial, we had operating net revenues of a little over $11 million. There's a lot of injuries that happen at the end of the year related to revenue that the state may pay on our behalf for benefits such as our group insurance in retirement. We also have TPAG. We had the FAST program revenue that needed to be accrued as well. And so all total, we had about $5 million worth a year in adjustments that impacted revenue. We had a little over $3 million of expenses that needed to be accrued as well for year in adjustments. Depreciation is a big one of those. Reclassing some of our expenses to the balance sheet for debt payments and also for assets that were purchased that needed to be capitalized. You can see the expenses for the OPEB and GASB 68 pension. So all total, the net of our year in adjustments was an additional revenue of 1.5. I'll just stress to you that that's not cash. That's all accounting entries. And so when you look at the net position on our financial report, it's going to show $13 million rather than the $11 million that we showed in August. [Speaker 5] That was the $11 million cash, the way it was presented? [Speaker 2] Most of it, yes. But we'll do another reconciliation that will define what the cash portion is. And then we will be coming back to you to ask for input and direction on how we use that cash. Thank you. [Speaker 1] Oh, we have some questions. [Speaker 7] I've got one question. When we do next year, the value of the property out on North Main, I don't think we've looked at in several to three years. Have we gotten an appraisal on that or are we going to do that? [Speaker 2] We do it like every other year. And so it would be up for this next year. I will tell you that that property... [Speaker 7] No, that's not cash either, but it impacts your net position. [Speaker 2] It does. And it will be... The value did decrease by just like $20,000 this year related directly to the sale that we did to the city for the drainage project or whatever that they were working on. So that property did have a decrease in value of about $20,000. [Speaker 5] That was frontage property, right? Yes. Some of our most expensive property. [Speaker 2] Yes. Okay, thank you. [Speaker 1] Next up is public comment. No one signed up, Mr. Chairman. Fantastic. Moving right along a little slowly. [Speaker 5] Am I slow also? [Speaker 1] Okay, consent agenda. Consideration of new hires. The administration recommends that the board approve the new hires as presented below. I will entertain a motion on this item. [Speaker 11] So moved. Second. [Speaker 1] I have a motion by Regent Guillory and a second by Regent Cotton. Is there any discussion on this item? Hearing none, all in favor say aye. [Speaker 11] Aye. [Speaker 1] Any opposed? Okay, next is new business. First item of new business. Consideration of annual audit report. [Speaker 2] Yes, board. I'd like to introduce you to Patrick Simmons. He's with Whitley Penn and he is the partner on our audit. [Speaker 3] Thank you, Annette. Good evening, President and members of the board. My name is Patrick Simmons. I'm the audit partner with Whitley Penn here to present the audits of the fiscal year 2024 financial statement audit and federal and state single audit. So quick introduction to the rest of our team. Also on the engagement was Lupe Garcia, who is the EQCR partner, and he's just a second set of eyes near completion of the audit where he takes a look and makes sure all the significant items are where they need to be and make sure our audit procedures for those significant items are addressed. We also had Laura Lynch, the senior manager, and we had Christine and Hayden who were really doing most of the field work. So the audit process starts about in the summertime. We come out and we meet with all your different departments and we go through your internal controls, gain an understanding of those, and then we test those controls and make sure that they're operating as you designed them. And then we come back at year end after you close the books and we look at all your balances and we perform substantive audit procedures such as confirming balances with third parties like financial institutions, your cash and your debt and investments and things like that. And then we look at your accruals and just really substantiate the balances and everything before this goes into providing the opinion on the financial statements. Some of the areas we look at internal controls are listed here. So your payroll, HR, AP, purchasing, your federal and state single audit major programs. This year your federal major program with student financial aid. So it's a lot of work and a lot of special tests that go into that one. And then for each compliance requirement there should be a control over each of those two. So we test controls over a lot of different things. Most of that happens at interim. And then here's some of the substantive procedures that we perform. It's not too specific but we just start by getting your trial balance and performing analytical procedures and we come up with expectations for those ratios. And if they don't meet our expectations we get more information from you and we vouch documents from, you know, we call it cradle to grave where we see where you receipt the cash and we trace it all the way to your bank and your general ledger, things like that. And then I already mentioned confirmations and third party reports. And then the outcome of this can go one of three ways. And I'm happy to report an unmodified opinion on the financial statements. And so that's the highest level of assurance that can be provided. And what that means is the financial statements can be relied upon with reasonable assurance. That the amounts and the information in the audit report is correct. And then also there's a couple reports in the back of this document and one of those is the internal control report. So we didn't note any findings there. And then no findings related to compliance. And then also on the federal programs the student financial aid cluster was our major program this year. And that can rotate each year. But with HEERF gone it'll probably be student financial aid again for the foreseeable future. And no findings to report there. And then also on the state side, TEOG was the major program. And we had no internal control findings and no findings on compliance. So overall a very clean audit. And I want to take this chance to thank Annette and Renee for all the hard work and the rest of their team for really making this go as smooth as possible. And I really appreciate their hard work. And I mentioned this before but you know a lot of work goes into just a few slides and it really doesn't do it justice. But there was a lot of late nights so thank you to the college for that. A few slides on the actual statements here. So this is your statement in that position. And it's your balance sheet basically. And so the bottom line your net investment in capital assets is really what drove your increase in your net position. So that increased by about 11 million. And that's your capital assets net of any related debt. That's outstanding. And then you have restricted net position for 424,000 and then unrestricted of 6.2 which increased by a couple million. And just note like Annette mentioned all these numbers do include all those adjustments like your pension and your other benefit liabilities are all in there. And those aren't necessarily something you're going to pay tomorrow. So just keep that in mind. This is the pension and the other post-employment benefit liability. So you can see how large they are 32 million for the OPEB and 15.8 million for pension. And this is something that's recorded at every college across the state. It's your share of the TRS, ERS plans. And then just a snapshot of your operating revenues. So the tuition and fees made up 43 percent of those operating revenues followed by federal grants and contracts and then your auxiliary enterprises. And then on the operating expense side the largest category was your instruction at 34 percent. And then you had your institutional support at 16 percent, operation and maintenance at 12 percent, depreciation at 8 percent and so on. And then with that I'd be happy to take any questions. It's a weird question mark. I don't know what that is. That threw me off. [Speaker 1] I have one question for you since you mentioned state programs. So since we're in the first year of the new funding model do you guys anticipate any challenges with audits in this new environment? [Speaker 3] So yes and hopefully that there's more guidance that comes out on the accounting side on how it should flow into here. So far what's come out is there's discretion involved on where it ends up going in your report. The best thing which y'all are doing now is at least tracking all that so if anything needs to be you know go rewind and get it the right way it can be done. But we're getting questions from all of our college clients. But the good thing is that we work with about 50 school districts across the state and so the way they're funded I imagine will be similar. It'll be treated similar at the end of the day after the year's closed and you see what your your final allotment is going to be. I feel like that'll be similar to how the school districts handle it. So we're ready for whatever comes out of that. So yes it will be difficult but we're here to help and we'll do that. [Speaker 12] Anyone else have any questions? All right thank you very much. Thank you. [Speaker 1] Okay so after hearing that the administration recommends that the board receive discuss and accept the annual audit report for fiscal year 2023-2024 as presented by Whitley Penn. I'll entertain a motion on this item. [Speaker 7] Second. [Speaker 1] That was a motion by Regent Hall and second by Regent Geralds. Any further discussion on this item? Hearing none all in favor say aye. [Speaker 11] Aye. [Speaker 1] Any opposed? Okay. Next item we have consideration of approval of additional funds to remove peers at TV10 demolition site. The administration recommends that the board authorize the president or her designee to negotiate final terms and approve additional funding of $14,500 for TV10 demolition abatement. Thank you. I have a motion by Regent Cotton and a second by Regent Warford. Any discussion on this item? [Speaker 4] I'll just say that the best the best price that we could get was the $14,500 and they did it so our maintenance team thank you guys. [Speaker 9] Are we still to do this work? I'm assuming it'll be done by the end of the year? [Speaker 6] And they were going to demobilize so they gave us that price if we would do it while they had their equipment there so we talked with the deputy director by the way but we just want to get your permission to use it. It's already done? [Speaker 9] It's done. [Speaker 5] Price per peer was pretty low. I can't believe they really got a good deal. I can't believe they removed that many peers that deep for just a few thousand more dollars to the total scope of work because they were mobilized like John said. They were already there. [Speaker 1] Any other questions on this item? Okay. Hearing none all in favor say aye. Aye. Any opposed? Hard to vote against it when it's already done. Okay just saying. Consideration of approval of Johnson Controls to replace VCD chiller number one at South Central Plant. The administration recommends that the board authorize the president or her designee to negotiate final terms and approve JCI to obtain and complete parts necessary for repairs to chiller number one burial speed drive for $113,677.71. Do I have a motion on this item? I move. Second. I have a motion by Regent Santana and a second by Regent Warford. Any discussion on this item? [Speaker 10] Oh go ahead. [Speaker 1] Okay hearing none all in favor say aye. Aye. Any opposed? Next up we have consideration of the purchase of annual licenses for ATLO software. The administration recommends that the board authorize the president or her designee to negotiate final terms and approve the purchase of $153,825 of annual licenses for ATLO software. Do I have a motion on this item? [Speaker 11] I move. Second. [Speaker 1] I have a motion by Regent Guillory and a second by Regent Geralds. Any discussion on this item? [Speaker 5] I just have a clarifying question. The fiscal implication states the cost but doesn't say where the cost is coming from. Is that from the TDCJ budget or our own expenses? [Speaker 4] I don't know the answer to that. Renee do you? Can you come up and? [Speaker 8] It'll be covered by the state. [Speaker 5] TDCJ? [Speaker 8] Yes. [Speaker 5] Just an amendment to the contract or in the budget we have already or? [Speaker 8] It's going to be in the budget already but. [Speaker 5] Okay. Anything that happens there just covered by TDCJ? [Speaker 8] Okay. [Speaker 5] All right I did it was a clarifying question I just want to make sure. Yep thanks. [Speaker 1] Okay all in favor say aye. [Speaker 11] Aye. [Speaker 1] All opposed? Okay next item consideration of furniture marketing group furniture updates. The administration recommends that the board authorize the president or her designee to negotiate final terms and approve the furniture updates for the advanced technology center from furniture marketing group for $252,945.36. Do I have a motion on this item? [Speaker 11] I move. Second. [Speaker 1] I have a motion by Mrs. Smith and a second by Regent Forford. Any discussion on this item? [Speaker 10] I've been waiting all night to say that. [Speaker 1] Hearing none all in favor say aye. Aye. Any opposed? Okay. Consideration of purchase of property located at 660 West Texas Avenue Baytown, Texas. The administration recommends that the board authorize the president or her designee to conduct reasonable and necessary due diligence and to negotiate final terms and enter into agreements as necessary to purchase the property located at 660 West Texas Avenue. Do I have a motion? [Speaker 5] I move. Second. [Speaker 1] Okay I have a motion by Mr. Regent Santana and a second by Regent Hall. Do we have discussion on this item? [Speaker 7] Just to clarify we have set we have agreed to price. [Speaker 1] Correct. [Speaker 7] We have agreed to price am I correct? [Speaker 4] We we do with the company and we've been just using that company and we're very we're we're using them because we're ensuring consistency across the campus but in terms of what was a specific question? [Speaker 7] About the price of it's been negotiated. [Speaker 4] Yeah it has been negotiated with with yeah two hundred and fifty thousand. [Speaker 7] It's in the details it's in the details. Okay I missed it. I'm sorry. [Speaker 9] Do we have a use for this building yet or? [Speaker 1] Yes. [Speaker 4] For ATC? No for the purchase. Oh okay I thought we were talking about ATC. [Speaker 5] It's almost it's almost immediate use building with some minor modifications offices can be set up in there could be a potential relocation for the 909 Decker folks when the time comes. So it's a it's it's a move-in ready type building. Yeah this was one of the items we discussed at building committee so and and and pretty much squares up that block. Yeah. You know it's the only corner we don't own on that block. We get all the parking that goes with it a lot a lot of good stuff. [Speaker 9] It mentioned in the environmental study but I didn't see it. Maybe I didn't maybe it wasn't there but. [Speaker 5] For this one? [Speaker 9] Yeah. [Speaker 5] Well those are things that the new diligence part. [Speaker 2] The one that we have that they provided was like 15 years old and so we're going to get that updated and so we have until February 15th to do all of our due diligence associated with this purchase and so that is one thing that we will follow up on and get an updated study. [Speaker 9] The one that we have it was clean? [Speaker 2] Yes it was. It was just old so. [Speaker 9] Are those expensive? [Speaker 5] Environmental reports. $2,700 per net. [Speaker 1] Any other discussion or questions? Hearing none, all in favor say aye. Aye. Any opposed? Okay last item is matters of concern for future agendas. [Speaker 9] Could we get an update on this elevator in Rundale Hall? That that has got to have been broken for months and months and months. [Speaker 4] It hasn't been months but it has been ongoing issues with the provider who we've really struggled with and we've got some supply chain management issues. [Speaker 6] It should be working no later than Saturday. [Speaker 4] So it'll be working no later than the second is what? [Speaker 6] We've been working out last two days but we had leaky valves and packing and it was losing hydraulic oil up to the packing so there has been a history of problems with that elevator a long time so we have a new we brought a new elevator company in in September I believe midsummer and they're working on it and hopefully they'll be working. They were working out last two days. They brought the parts yesterday and they worked out today and he said he'd come he'd stay and work Saturday. [Speaker 9] I removed my matter of future agenda item. [Speaker 5] That's the quickest matters of future concern we've had taken care of. [Speaker 1] Okay well hearing no other matters for future agendas this meeting is adjourned. Merry Christmas to all.