********************************************* DISCLAIMER: THIS CART FILE WAS PRODUCED FOR COMMUNICATION ACCESS AS AN ADA ACCOMMODATION AND MAY NOT BE 100% VERBATIM. THIS IS A DRAFT FILE AND HAS NOT BEEN PROOFREAD. IT IS SCAN-EDITED ONLY, AS PER CART INDUSTRY STANDARDS, AND MAY CONTAIN SOME PHONETICALLY REPRESENTED WORDS, INCORRECT SPELLINGS, TRANSMISSION ERRORS, AND STENOTYPE SYMBOLS OR NONSENSICAL WORDS. THIS IS NOT A LEGAL DOCUMENT AND MAY CONTAIN COPYRIGHTED, PRIVILEGED OR CONFIDENTIAL INFORMATION. THIS FILE SHALL NOT BE DISCLOSED IN ANY FORM (WRITTEN OR ELECTRONIC) AS A VERBATIM TRANSCRIPT OR POSTED TO ANY WEBSITE OR PUBLIC FORUM OR SHARED WITHOUT THE EXPRESS WRITTEN CONSENT OF THE HIRING PARTY AND/OR THE CART PROVIDER. THIS IS NOT AN OFFICIAL TRANSCRIPT AND SHOULD NOT BE RELIED UPON FOR PURPOSES OF VERBATIM CITATION. ********************************************* January 30, 2023 Special Board Meeting, Afternoon Session... >> MS. THERESA RIEL: We're going to call the meeting back to order. >> DR. DAVID BEA: Good afternoon, Chairperson Riel, members of the board, colleagues and guests. My name is David Bea. I'm the executive vice chancellor for finance and administration here at the college. It's my pleasure to talk a little bit about finance and administration and introduce you to my key executive leadership team folks, the folks who report to me. Overall we have a lot of the administrative functions at the college. I try to make sure that how we think about things is ensuring that we balance efficiency and effectiveness to make sure we are supporting the college's mission. We are the behind-the-scenes people mostly, try to be the behind-the-scenes people that make sure things move smoothly. With that, I will take a little bit of time, I will introduce myself and then turn it over first to Brandye D'Lena, Carleen Thompson, who is the assistant vice chancellor for human resources, assistant vice chancellor for facilities, and then Isaac Abbs, who I know you met at exec session recently. He is on the phone because he's under the weather today. He will be joining us but remotely. In addition to that, I will be speaking on behalf of the Employee Service Center, so that is the organization that does payroll and benefits here at the college. At different organizations, it's either under HR, or sometimes it's under finance. Here it's sort of in between. It straddles between the two, but it reports directly to me. So I will be speaking to sort of what their functions are and priorities are, what the things are that they do. And I will also talk for finance, because I'm currently without an AVC for finance. We are recruiting for that position this spring. With that, let me tell you a tiny bit about myself. I grew up in the Bay area in Northern California. I went back East to college to Colgate University. My first job out of college was in magazine publishing in New York City. Spent a couple of years in New York City. Learned that what I really wanted to do was take the business side what I had experienced in magazine publishing, bring it back to what I really loved, which was education. Sort of discovered, hey, there is actually a career that is higher education administration. Looked into different programs. Went back to Southern California where I got my Master's and Ph.D. from the Claremont Graduate University, and I also worked for the Claremont colleges for 10 years before coming to Pima. I have been at Pima now for over 18 years. Kind of crazy. I have been the CFO here for almost 16 years. So I have been here a while. I love the place. I love what we do. I love making sure, as I was saying just a bit ago I think before we were recording, making sure that things move smoothly is kind of my obsession. I don't want the limelight. I just want to make sure things work well. With that, I'm going to turn it over to Brandye, and then I will sit down and then join you back at the end. >> BRANDYE D'LENA: So there was your organizational structure that you just heard a little bit about, and here is facilities. To similar to what Dr. Bea just did, I will share a little bit about myself with you. Can you hear me through this mask okay? Great. Good afternoon, Board Chair Riel, board members. As mentioned, I'm Brandye D'Lena and I'm your assistant vice chancellor of facilities. A little bit about my background. After studying architecture and construction at Cal Poly, San Luis Obispo -- and I think it's important to tell you that I was at a polytechnic school, because it's very much like the center of excellence projects that we are emphasizing here at Pima where it's a hands-on experience. So I had that in college. Anyway, after graduating, I worked 11 years as a consultant in the state of California. I worked in 17 different districts. Got really familiar with what happens in the state of California and community colleges at that point. I was shepherding large construction projects and programs. When a district didn't have experience for a big capital improvement process, they would hire me or the company that I worked for. In this role, I developed the operating and training manuals for five divisions in the company, and I take those training manuals with me every time I go to my next job and work those processes into my operations. So then from there, I spent three years at a K-12 environment. Then from there I went to a California community college, and I was there for 11 years. While there, I went to, I have to get this name right, it's kind of tricky. I was a member of a statewide Association of Chief Business Officials facilities task force. That just means that the CBOs at the community colleges and facilities people, there were some contractors, architects, other people in the industry who would get together, there were about 60 of us around a table, and monthly we would talk about things we could do to improve facilities at a community college level, at a state level, as you're probably aware. It's a state system there, run by a state system. Then after that, I was elected to the Board of Community College Facilities Coalition, and on that board we pursued legislation at a state level relative to budgets, funding, and regulatory issues. A little bit about my history there. And that's enough about me. Let's talk about our beautiful facilities and projects here. So you can see on the facilities list, this is a real high-level list of all the different departments that are in the facilities. I'm not going to spend a whole lot of time on this slide because you will see the same list on this slide with a few things that we are emphasizing this year. Plant operations is the first area that I would like to talk with you about. You're probably already aware that we have central plant improvement needs here on campus. I'm sure a few of you have already heard about the East Campus concerns with heating and air conditioning, so we're working on those improvements. We have all-gender restrooms going in now. There's typically an all-gender restroom at every location, and we are working to develop more of those. And then inside the plant operations department we are also doing exterior lighting improvements. You might have been aware that we just finished one over at Northwest Campus. There was a little bit of a concern, because those buildings are really tall, and we had to do glare shields on them. We did, and that solved the problem. So that was all good. Under maintenance and work control, we have a bunch of different things going on. We have security cameras and card reader installations going on to improve the security of our facilities. At Desert Vista we have a culinary project going on. That's a grant-funded project. And we also have performed a security master plan review, and we are getting ready to implement some of the recommendations on that security master plan. Then in facilities planning, that's where your center of excellence projects are managed by our project managers. We also have the Downtown hotel properties that are just in the programming phases right now. Then just as a little aside we have a truck driver training school down by the Maintenance & Security building, and it's a modular building that we're going to be changing. Then other things that we do, we work with the state fire marshal's office for permitting. We are our own authority having jurisdiction. That means occasionally we need to review the codes and which ones we want to implement here at Pima. So you will be seeing a little bit of that in the future. We will be bringing some of that to you in the future. We also ensure that we have federal regulatory concurrence. I mentioned grant programs before, so the way we pay our contractors has to align with the requirements there. Moving on, transportation and fleet services, we have police and maintenance vehicle needs. We also have a fleet that we make available to people who need to travel to, say, Phoenix or other locations. In the transportation and fleet services we are very conscious about sustainability issues. Are working toward electric vehicles, planned to buy a few this year, but weren't able to because of the chip crisis and lack of availability for those vehicles. Now we are going to go to the warehouse, mail service, inventory, and move services. When you think about those big capital projects, you think about people who are living in spaces and needing to go to other spaces, and the people in our warehouse are primary and making sure that those moves happen smoothly. We also work with IT on those moves. There is a lot of changes that have to happen in that regard. Real estate and leases, we have a number of people who lease properties with -- they come to Pima Community College and lease portions of our property. We also have to address our easements. For instance, at the Downtown Campus when we built the transportation center and the A&M building, we acquired some of the city road properties, and we are working on having those become our properties. Currently they are easements. Sustainable projects and energy management, talked a little bit about that under the transportation heading. But we do have an energy saving performance project, which is installing controls at our -- in all of our facilities, the controls are what manage the temperature, so we are installing a control system that can be controlled by software. Also will inform us of any problems remotely that we might be having with our HVAC systems. Then the last thing, environmental health and safety, that's the department that ensures workplace safety and safety training. I know this is really a 30,000-foot level view of what we do just to give you an idea of what's in my department. I'm happy to answer any questions. I'm sure you will have those as time goes on, and we are here to be of service. That's it from me. We are going to move to Carleen now. >> MR. GREG TAYLOR: I do have a quick question, if you don't mind. Maybe this is a whole other topic and can be addressed another time, but you mentioned transportation. I'm not saying whether this is a good, bad, or indifferent idea, I'm just genuinely curious. Has the college ever explored offering transportation for students to get them between campuses? >> BRANDYE D'LENA: Yes, that has been explored. There was a shuttle service that moved between East Campus and Downtown Campus. Dr. Bea will be able to tell us if it was more than that. It turns out there were like two students on that shuttle service, like that was the frequency of use, so it was canceled. But there is still consideration that it might be a good idea in the future. It's an open subject. Okay. Thank you. >> DR. DAVID BEA: And Brandye did a really nice job explaining it. We have a couple of different times explored shuttle services and had them in operation, and the use was so low, it wasn't justifiable to continue doing it. But like a lot of things, sometimes it's a timing issue, right? What didn't work at one point becomes important going forward. Always willing to explore viability of things. >> MR. GREG TAYLOR: Great. >> MS. THERESA RIEL: I'd just like to mention too at the East Campus there is a Sun Tran bus that goes from the East Campus west, and so a lot of students, that runs every 15, 27 minutes where maybe our shuttle was in competition with that. You know, I think it's always good to be looking at those options, especially if Sun Tran decides not to offer their services out to the East Campus. There is two buses, I think it's the 17 bus and the No. 4 bus that goes there, and then there is quite a few from the West Campus and the Downtown -- well, Downtown, everybody goes by the Downtown Campus. >> DR. DAVID BEA: Yeah, working with Sun Tran to make sure that they don't change routes. Sometimes that's an issue they are trying to cut costs. So the college has worked with them to ensure that that kind of transportation -- the advantage of the shuttle service is that it's faster, because it's a direct drive from one campus to the other. You don't have a bunch of different stops. That's the downside of public transportation often. >> CARLEEN THOMPSON: Hi, everyone. It's great to be here today. So in keeping with my colleague, I will tell you a little bit about myself. I am originally from the Midwest, from St. Louis, Missouri. That's where I grew up. Went on to college not very far away, in Columbia, Missouri, University of Missouri, Mizzou. Go Tigers! (Laughter.) So anyway, after that, worked for a short period of time for one of the Department of Labor workforce programs under what was called the CETA Act. I was in a team of people who investigated complaints, issues, things that occurred under new workforce contracts that were focused on increasing diversity and particularly hiring women and minorities in areas where they had been unrepresented. These were jobs that paid really well. They were, you know, people who were manning bridges, doing welding repair on roads, all kinds of things. But we handled kind of the dispute, the issue, many hearings that occurred throughout the Midwest. That piqued my interest in both human resource management and labor relations. I went on in that regard to get my Master's in HR from University of Illinois, Champaign, one of the top programs, along with Cornell, and then went to law school. Why did I go to law school? I like to tell this story, because I think opening up to others and sharing your experience and sharing your vision and instilling in people and fellow employees all that they can do and all that they can be is so important. So while I was getting my Master's, it was an applied Master's, you had to have a lengthy internship. My internship was with PepsiCo, and I met a woman who was their VP of labor relations. She also did a substantial part of HR. And she had a law degree. It kind of, she, I can't say mentored me, but talked to me about the possibilities and talked to me about her path, and that kind of opened up a whole new world of possibilities. Went on to law school. Immediately thereafter started as an attorney with the National Labor Relations Board. It was what I really wanted to do. I was not a law firm type (smiling). So jumped right in handling appeals throughout the country. As you know, the NLRB focuses mainly on labor issues but on issues that are just workplace related in any capacity. Hearing representation, just all kinds of things that we accept now as commonplace in the workplace. Many of them started out of issues and cases there. I won't go into any more detail, because it's almost 30 years. We'd be here a long time. It's not an interview. I already have the job (laughter). So, you know, I have a combined, I'd say, almost 50/50 employment law, labor law, and HR management. I came most recently from higher ed having been at Indiana University-Purdue University, which sort of piqued my interest later in Pima, because that campus is a very urban campus, a very working campus. Over 80% of its students hold down jobs. It's not residential. That's not the focus. Has some dorms now, but really started as an effort to expand educational opportunities in Indiana where they were very much needed. Also spent time, same capacity as here, at the very historic Tuskegee University, which has served as a platform for progression of education in the South for years. So that's my story. Kind of a little bit of who I am. Let's look at my department and who I am and who my folks are applies to this. Talent management is one of our areas. We have organizational effectiveness and OD, compensation, and affirmative action. I'm missing a bullet. We now have an employee relations area. And I will also talk about our Governing Board, our HR resource advisory committee. So starting with talent management, these are the folks who bring people to Pima. They are in charge of managing and facilitating recruitment, workforce realignment, looking ahead at what we might need two years, one year down the road, changes we might need to make. A lot of their work, I'd say 40/60, is transactional, because that's what it means to get people here, making sure that people are guided through the right process from start to finish. From start, that might mean background checks that they take care of. From finish, that might mean a pleasant offboarding and making sure that we do an interview to see why they are leaving. Also, one thing I'm starting to focus on is to make sure that we have some way of possibly maintaining contact or maintaining some people as a resource, because some leaving is a natural progression. Some leaving is a really good thing. Some leaving means more resources for Pima ultimately. So these are some of the things that they do. We have OD, organizational effectiveness and development, also called the OD team. They do a really exciting onboarding program. I found it to be one of the best and most unique that I had ever walked into, experiencing it as a new employee. New employees are paired during the onboarding process with their immediate manager, meaning for a substantial part of that onboarding, for that welcoming, their manager is there. It might have been remote during the pandemic. It's becoming less remote. But they are there, and they are getting to know their new employee and unique ways, including the manager takes a Myers-Briggs, you know, examination survey, and then the new employee does as well. That information is shared in unique ways through games, through team efforts during the onboarding process. So that's one of the things they do. They also manage all of the internal training and training processes. That might mean a group request a retreat in late summer to get them ready, excited, and booted up for the fall semester. That team will help manage, coordinate, and put on the retreat, for example. They conduct and really promote some unique training opportunities for managers. Supervision in the 21st Century is one of those. It goes year-round sessions and has a continual fill and waiting list. Teaching managers, new managers in particular, things that they need to know to manage that might not be covered intensively in other courses, and The Pima Way and Pima policies and Pima, you know, real-world situations and how we handle those. They are the administrators for the performance evaluation system. I will say we are so excited. Last year the completion rate was in the 60s, I think 68%, 69%. This year it is over 90% completion rate, which is way above the national average. So they've gotten behind that, created a lot of enthusiasm, had training prior to the evaluation period. And they will continue to make improvements. The next thing is compensation. This is our class compensation, class comp group. They are a small group of three. They also are tasked with the managing and promoting the affirmative action program. With regard to compensation, I think everyone knows, we have just gone through an enormous class comp study that resulted in realigning salaries, moving from Step Progression to grade, a grade structure, making sure that the end result or the end goal was market-based salaries that we met or we were in line with our comparator institutions and our comparator region. So that is a big task that they pulled off. That task led to, which we encouraged, appeals by employees who perhaps did not understand their new compensation or not. Did not understand, for example, a new title. So we had 353 appeals, and that included a process that extended the appeals time as per requests from employee groups, and we have just completed the appeals process, which was enormous. Two people, 353, a lot of issues, a lot of complexities. Very excited about that. Let's see. The next thing we are missing is the employee relations team. That is a new team within HR that has just been developed in the previous year. Along with the legal division, I thought it would be the ultimate opportunity to have a way in HR to examine issues that occur within the workplace and decisions or discipline within the workplace that would not be tied to the talent management team. In other words, the folks who are hiring and forming this close relationship with managers, HR business partner relationship, should not be the ones who are dealing with the real, you know, complex, sticky issues. So we've got a team of three great professionals with a combined over 60 years of experience in problem resolution, coaching managers, partnering with managers, to make great decisions for Pima College. So that's a team. And next, the Governing Board's human resource advisory committee. The members of the committee, the committee is a resource that meets quarterly, has the goal of advising me and my team on better ways to do things, sharing your experiences with regard to people, people management, where you feel that HR should be heading at the college. Our members are the Honorable Trustee Luis Gonzales. Thank you. Always there at the meetings. Always concerned. The Honorable Trustee McLean is our new leader of the committee, I believe? Yes. (Laughter.) Thank you. Paul Bellows, who is a consultant, national consultant, in the Tucson area. And Helena Rodriguez, who is VP CHR of University of Arizona. I'm jumping ahead on my next big priorities, things-I'm-working-on screen. And I will say a big priority is to add members to the HR advisory committee. I put some messages out in this regard last year, but we really do need a couple more members of that committee. I'm a member of a, it's Arizona-based, it's the HR -- we are very informal, VPs of HR of Community Colleges. Some feelers out there, but anything that anyone could do to help build up our membership, we do need a quorum for all meetings. That would really be appreciated. Thank you. Got that little pitch in there. >> MR. GREG TAYLOR: A question. You're looking for other HR leaders in the community? Or who are you looking for to participate in that? >> CARLEEN THOMPSON: Dave, can you please speak to this? >> DR. DAVID BEA: Yeah, what we try to get are people who are knowledgeable about the area, other HR leaders. The balance, I'm speaking a lot from finance audit, but we are trying to use that similar model where you have people who are subset experts in the various areas of HR or, in the case of the finance audit and finance audit, but also that they are representative of types of organizations that could provide insight and value. You want to have a couple of private sector people, you want to have like a couple of public sector people, a K12 person, university people. That's really helpful because they then understand the context of what our environment is, but then they can bring their expertise and experience from outside to help us. >> MR. GREG TAYLOR: If you help me remember, it seems just off the top of my head, and I can help facilitate this if you'd like partnering with either the Tucson Chamber or Southern Arizona Leadership Council to get out to their membership for their HR leadership that there is a need for it, because my guess is that some of those folks might be interested in being a part of it but have no idea that that's even an option. So I can do that if you help me to remember it, please. >> CARLEEN THOMPSON: Thank you so much. We will. Absolutely. Looking at HR priorities, in the class comp area, we want to continually review our compensation practices and efforts and make sure that things stay in alignment. They are in alignment now, but as with all class comp, that can fall out, things can happen. We want to make sure that decisions are being made, hires are being made that are directed to our class comp study and our program and that we stay in alignment. This also includes refreshing and making sure we now have completely, across the board, I can say, updated job descriptions. So making sure that we can continue that practice as well. The other half of what the class comp team does is AAP EEO reporting. Pima College is a federal contractor with fairly high level substantial federal contracts in several areas. If you are a federal contractor, you are required by the government to file an affirmative action plan. You now don't have to physically file it, send it somewhere like it was in the old days. But you have to have it ready. You have to prepare it every year. It's prepared in the manner that we do our taxes. It's a look-back year but also kind of a look-ahead year. So in the spirit of the look-ahead, this team is doing something that I'm so excited about, it's really phenomenal. They are preparing a report, an in-depth report, for every leader in Pima that reflects diversity, goals, hiring over the past year, prospective hiring over the upcoming year so you can see what your opportunities for goal completion might be. These are not quotas. These are goals. These are things that we aim for. And also, a lot of emphasis in those reports on best efforts. They are called good-faith efforts. So what are you doing to partner with my talent team in recruitment efforts? What are you doing to make sure that you're always maintaining consistent recruitment practices, interview practices, in particular, and selection practices. So we are excited about that. It gives us something to really aim for. The other thing is employee relations. The employee relations team is partnering with all of the other teams to participate in training. This includes training, coaching training for managers so that the ER team is not the only coachers but we have managers who understand the value of continual coaching and handling difficult conversations and not avoiding situations so that they, you know, there is not a reoccurrence or even an occurrence down the line. I think I have one more page. OD, organizational effectiveness and development, they will continue to upgrade the performance evaluation process, and they are also looking at the tool for possible application to future merit-based pay implementation down the road. We are not there yet, but in the event that that is decided as something that we want to do, they want to be ready, because your performance tool has to meet that challenge. The talent employment team has made incredible strides, even during the pandemic and certainly now that things are better, and outreach efforts. These are just a few of the things they have done. They attended over a dozen job fairs in 2022, including the Focus on Your Future Career event. All of the Arizona virtual hiring events for veterans. The Tucson Job Fair. The Pima Community College Job Fair. That's far from a complete list. Our upcoming events include January 17, participating in the DoubleTree by Hilton event. On the 16th they will participate in the Veterans Priority Career Fair at the Grand Luxe Hotel and Resort. April 10 through 12 we will be participating in a big way in the National Student Week with regard to recruiting in a job fair capacity. We are in discussions with the casinos to have a series of job fairs there. It's been a little slow, but we are making headway, and I expect that we will be able to announce a schedule on that soon. The remote work program is another priority. We are closing in on the final for a remote work program. As you know, now we have remote work situations going on, but this is a formalized program that we have established the parameters of the program, the process, the approval process, and we will create training for both participants and managers on appropriate selection, appropriate work modes, and how to strategically fit this into whatever your department or program is. It's been a very lengthy journey, a team of now over, I have additional people, so now over 18 representing all segments of the college. We looked at what other institutions are doing, so we started off with a cross-comparison. We did a very lengthy survey process. All employees were surveyed to look at both what their experience had been during the pandemic working at home and what their future needs might be. A lot of space for comments, and we got a lot of comments (smiling). So we have a presentation to ELT coming up on the 20th, and then we will roll out the template to our governance groups. AERC, Staff Council, AFSCME. Questions? >> MS. THERESA RIEL: I have a couple of questions. My first question is when you were talking about the class and comp and you mentioned the peer institutions, would you be able to give us a list of the institutions we were compared to for sometime in the near future? It's not before this next board meeting obviously, but just for us to know. And then the second question was when you're talking about talent and employment search, what kind of efforts do we do at Pima College to make sure that we try to recruit women, people of color, minorities, that sort of thing? Because there is all sorts of research, especially in educational institutions, that students learn better when they are represented by someone who looks like them, acts like them, comes from their same background. When we have predominantly Anglo educators, I think that a lot of our students may be missing out on that connection. I'm wondering what kind of efforts are we making to make sure we are recruiting and trying to obtain more minority educators, employees? >> CARLEEN THOMPSON: Yes, in '22 we made a tremendous stride in diversity advertising, for example, that's one factor, advertising in Native Americans in Higher Ed. This is repeated intensive, continual advertising positions, whether it was faculty side and staff side combined. Asians in Higher Ed, LGBTQ in Higher Ed, Veterans in Higher Ed, Arizona At Work, Hispanics in Higher Ed, and about eight others, Disabled in Higher Ed. And I am encouraging that we increase our visibility at any conferences or symposiums they may have that might present a unique segmented opportunity by area for recruitment. >> DR. DAVID BEA: I'm going to actually add one little bit that Carleen's group put together a report, and this is one of the things that will go to the HR advisory group, as well, but to give sort of this big overarching perspective is the college's employees are very stable over time. So retention stats year over year as a total for regular employees is around 90%. Faculty is closer to 94 to 95%. So one of the challenges when you want to change and add diversity, you have to have people leave before you can have people hire in with a little bit better diversity. So it is something that takes a little bit of time, but it's something we are definitely prioritizing. The bigger point I wanted to make is that our employee base is quite stable. That's important to understand as the board. >> MR. GREG TAYLOR: I have a question, and maybe given what you just said, the sample size of what I'm about to ask is probably very small. I'd be curious to know, what are the most common barriers you're seeing to recruiting who you want to recruit, getting them to want to come here, and what are the most common reasons among the small group who does leave, that you're saying that they are leaving? >> CARLEEN THOMPSON: Some of the issue areas are certainly workplace flexibility. We are hoping the remote work program addresses that. Because it's not just remote work. It's actually called a flexible work program. So showing that we do have mechanisms for flexibility. People are also attracted to, and you can flip this, one thing that they are very attracted to at Pima is developmental opportunities that we have tremendous training and we have tremendous openness to getting people trained, to fulfilling requests for training, for, you know, going for an outside experience, that experiential training as well. I think prior to the class comp study, there may have been some, you know, room for digression there in compensation, but I think we are pretty, we're much more aligned, I'll say, than we have perhaps had been. >> DR. DAVID BEA: The other one I think is the one that every employer of a type like ours is experiencing, which is that we have a rapidly changing experience in terms of the technology and how quickly things change in terms of the systems you're using, being able to access and analyze the information, move quickly. The challenge is finding people who have the skillset that we need. So a part of it is that training people up if they don't have it, providing the professional development in-house so that we get the skills we need in place. But it is a challenge with certain positions, and that's why it was really important for the class comp study to be tied to market, because we needed to make sure that we are paying appropriately to get the talent we need to do the jobs we need to do here. Thanks, Carleen. Any other HR-related questions? Isaac? >> ISAAC ABBS: All right. Good afternoon, Board Chair Riel, vice-chair, members of the board. I apologize for not being able to be there in person today. The benefits of having two little girls is that you get everything they bring to the house, whether that's princess dresses, painted fingernails, or the latest cold which I have at the moment. I was told very clearly to stay home today. Quickly give you a brief overview of who I am, even though we got to meet a few weeks ago and then go over the areas of IT and what we are looking to do for priorities for the given year. As mentioned, Isaac Abbs, assistant vice chancellor for information technology and chief information officer at the college. I have now over I think about 20 years in IT experience, both in higher ed as well as public sector. Like Dave, I grew up on the coast in California, the Monterey Bay area. After high school went off to college at Bates College in Lewiston, Maine. Unlike Dave, I could not handle the cold weather and made my way back west and finished up college at the University of Arizona. After graduation I started work with the City of Tucson where I worked for seven-and-a-half years in various IT progressive roles, after which I came to Pima as director of enterprise systems. Did that for eight-and-a-half years. Went on to become the IT director of the Town of Marana for three-and-a-half years and have been back at the college now for about seven months. Early on in my tenure I also attended grad school. I have a Master's in management information systems from the University of Illinois at Springfield. So a little bit about me. The areas that IT covers are records management, so that is all records, records retention, records schedules, that is both paper and electronic records. We have technical services. That is the infrastructure. So those are the things that nobody cares about until they go wrong. That would be Internet, infrastructure, network, servers, whatnot. Filing system falls under that as well. Enterprise systems, that's where our software developers are, business analysts, those that maintain the myriad of enterprise systems that we now rely on heavily to do our day-to-day operations. User services, this is where education technology falls in as well as our user support help desk. So this is, I have a problem, where do I go. It all starts with our user support services. Lastly, security, which we had the opportunity to chat a little bit about a few weeks ago. Obviously that's a big one right now. Will always be a big one. In terms of priorities, the priorities on the slide, I'm not sure if you can see the slide if it's up, are not in any particular order, but they are foundational efforts for what I have been tasking the department with is setting the stage for greatness. At Pima we have a very unique opportunity you don't get very often in higher ed or the public sector, and that is we are well-funded, we are well-staffed, we have a chancellor that really believes in innovative technologies and is really pushing us forward. When you have those things, you can't settle for just being good. You have an obligation to push for greatness. When I came back to the college about, like I said, seven months ago, really quickly was doing an assessment of where we are and where I'd like us to go into the future. The biggest thing that I have told people is I want to make sure IT is well aligned with the college and where we are going and that we're viewed as a strategic partner, not just an operational unit that's there to put out fires or make sure things are running, but a place where the organization can rely upon and partner with to ensure that we are maximizing strategic value and doing things that will take us to the next level. So as you can see here, a lot of the foundational elements, the first one on the list is formalizing IT project intake and prioritization process. This is something that the college has struggled with for a long time. We struggled with it when I was here. Struggled with it when I came back. But we have put a process now in place, a very solid and sound process, we're probably a few months into it where, instead of drinking from the fire hose on project requests, we are now running them through a process where we are doing proper business cases, we are ensuring there is an alignment with strategic priorities and prioritizing these efforts to make sure that we are putting the limited resources we have on the most important projects that help move us forward. Also not overpromising and underdelivering. We will never have a shortage of project requests. That's fine. We have to make sure we are doing the right ones. Standardizing the service desk with an emphasis on self-service. A big part of this is making sure that we have sound processes for prioritizing tickets that come in to the service desk, making sure that we are properly escalating, getting things resolved quickly and as judiciously as possible, but another big part of that is ensuring that we are transferring knowledge down to the level that is able to solve the problem. So that's not everything rising to the top but pushing, we measure it at about 85%, shift to the left, shift down to the front-line staff that answers the phone. Then even taking that a step further in making knowledge available for any user so they can help themselves, right? So we recently rolled out multi-factor authentication. How do I sign up for multi-factor authentication, making that type of stuff available so individuals can help themselves. Obviously if they need assistance, we are always here to help them, but that's the whole idea of shifting left, self-service approach. Standardizing asset management, obviously, as you can imagine, we have a lot of assets under IT. A lot of equipment is out there, making sure we know where that equipment is at all times, making sure we are refreshing that equipment on a timely manner so that it's not going stale, making sure we are not just buying equipment to buy equipment, that we're buying equipment when we need it, and likewise with software. Obviously IT is always going to be a big one, so developing an IT security strategy, something we are looking at as a holistic review of all the different areas within IT at the college, identifying gaps in security, and obviously steps to remediate those gaps. It's always going to be a fighting effort with security. Always going to be an increased cost. As we talked about a few weeks ago, as we get more and more sophisticated, so do the threat actors. Not sure if you all are aware, but TUSD was compromised over the weekend, are down right now in a ransomware attack. This is a time it's hit close to home and a real opportunity to continue to re-evaluate and re-emphasize the importance of security. And it is not just an IT thing. It's an entire organizational effort, and end users will always be the easiest way in. So one of the things that will coming here in the near future is a kind of reimagine security awareness training program. So instead of your annual 45-minute PowerPoint board training, these will be short monthly videos, about three to five minutes, entertaining videos, the most important thing is they will be memorable. This is an effort really to keep people on their toes and engage and active and looking out for all the bad stuff that's out there. Another one is creating an IT steering committee. This is something that the college lacks right now is really a governance structure around IT. I talked about making sure that IT is aligned with the business, that this is the big first effort in doing that is standing up an IT steering committee that will being tasked with overseeing various areas and recommendations from various areas within IT, whether that's risk, IT security, service, project, portfolio management, information security, those types of areas will roll up under a larger IT steering committee. The last two are tied to chancellor goals and/or strategic plans. The first one is exploring the use of innovative technologies for teaching and learning. A lot of this is with AR, VR, augmented reality, virtual reality. We actually have a small group of deans tomorrow that's going to do a private tour, if you will, of a digital twin university in the metaverse to get an idea of how this type of technology can be used to augment education. I had the opportunity to take the tour myself back in December. It was pretty neat. I will be honest, prior to that, I don't know how much I, I was like, Eh, is this really a thing? But having seen it and seeing classroom labs where they hand out a human heart to each person, you can expand the heart, walk inside the heart, see the chambers of the heart, you know, it's a real opportunity there for students to get a different level of virtual hands-on experience that otherwise would be difficult to facilitate at scale in a classroom. We will be doing that tomorrow, engaging the appetite, and determining where, as an organization, we go with that technology. AI, I'm sure you all have heard about ChatGPT, the latest in AI development where the big fear now in higher ed, you can ask this ChatBot to write your paper and then within a couple minutes it can spit out a very well-crafted essay on a given topic. There is a focus group that's getting started I think later this month with faculty round table, faculty resource center really having engaging conversations about this. We are exploring use of this type of technology in IT. I talked about the help desk and self-service, one area we are looking at using this same type of ChatBot technology to augment the help desk and potentially leverage opportunities to bring our outsourced help desk that provides off-hour support and student support in-house, save costs and I think ultimately provide a better experience. But, you know, this is a disruptive technology that is definitely going to change I think as educators how we assess learning outcomes, right? So I'm really looking forward to this conversation, because I think it's a great opportunity. We read this book "The Great Upheaval" how higher ed is changing, and I think this is one of the areas we are going to start to really, really feel it and have to adapt. Trying to disallow, ban this type of technology isn't going to work. This is going to be the first of what will be many of these types of technologies. It's really about how we embrace it and leverage it to enhance the learning experience. The last one is creating an application portfolio management process. We have a wealth of different systems at this institution. Some that are well-used, some underused, and some that replicate what other systems do, and this is really doing a comprehensive holistic review of all of these systems, ensuring we are maximizing those we should be, ensuring we are planning to sunset those we are no longer using, and making sure we are not paying for duplicate systems. It's going to be a big effort, going to take a lot of time, but in the end it will get us really where we need to be. Like I said, these are the initiatives that IT is working on really to set that foundation that will allow us to launch off to into bigger and better, more strategic initiatives in the future that help really move this college forward. Thank you very much. Any questions you may have? >> DR. DAVID BEA: Okay. Rounding out the end of the tour, I guess, in terms of the organizational structure, I mentioned earlier that the Employee Service Center is the payroll and benefits side of the, again, it's sort of in between HR and finance. They manage the payroll, benefits and wellness programming for the college. The head of that unit is presently Andrew Plucker who is doing a fantastic job. He's been at the college for a long time. Just to get some context, payroll, they just got their W-2s out in the mail. This is the time of year. 3,300 W-2s were sent out, so that gives you an opportunity how many employees we have in a given year. Somewhere around 1,300 to 1,400 regular full-time employees. This is a large operation. We do biweekly payroll. It's the entity that never stops. Some of our areas like worked when they were on recess, payroll is getting payroll out every two weeks. On the benefits side, this is where working with Carleen's group, the ESC, I think we look at it as having a holistic perspective on our employees. We are striving to be an employer of choice in Tucson if not "the" employer of choice in Tucson. That includes, in addition to providing the professional development opportunities, the professional opportunities throughout the college, but making sure that we have robust benefits options for employees. We had self-funded medical, self-funded pharmacy plans. Those are our biggest contractual obligations every year. Open enrollment is in April, so come March, you'll be seeing information related to the recommendation for our benefits program, the premium structures, and the costs going forward. The college has worked very hard to minimize the impact on employees of medical cost increases over time. We have often folded that into the budget to minimize that impact and not shift it over to employees. It's always a challenge, because those costs go up every year pretty dramatically. Going self-funded saved the college a lot of money. I would say I know that about four years ago we had an assessment and it saved, I think it was in the neighborhood of $30 million, so it's probably in the neighborhood of 40 to $50 million at this point, shifting over to self-funded medical versus fully insured, which is where we were. We offer four choices for employees. There is an EPO plan, a PPO plan. So preferred provider is one type of a medical plan. EPO, which is exclusive provider, sort of analogous to, a newer version of the HMO-type plan. And then we have two high deductible plans, base high deductible plan and a bio plan that's got a little bit different mix in terms of employee choice. Employee only for the high deductible, base high deductible plan is provided at no premium cost to the employee. The others require a little bit of premium subsidy, contribution from the employee. That's the stuff that we will share that information with the board when we talk about the renewals in March. So we sort of showed this is the distribution. We do subsidize beyond for families a little bit more heavily in the high deductible plan and the PPO plans to try and encourage people to have affordable care available for their families and have options for them through our plan. That was something we did a number of years ago where the emphasis was on employee only and not so much on family coverage, and what we were finding is people weren't covering their families, so it was, okay, let's make it more affordable for folks. In addition to healthcare, the usual life, short-term, long-term disability, dental, vision, we have a strong relationship with our employee assistance program. So that provides as-needed counseling, crisis intervention for employees. They can call at any time if they are having any stress of any particular type, whether it's psychological, they have financial counseling. They are a good source for an employee to get ahold of somebody, to get them a resource available in the community to help them. We also work with them on those occasions when we have a crisis at the college, a death of an employee, things like that we work with our Employee Assistance Program to have people come on-site to help people work through the stress they may be experiencing from those kinds of crises. Our retirement program. We have a combination of three different programs, depending on which employee you are. We are Arizona State Retirement System, so it's a state pension plan. They manage the program. We have to carry the liability on our books, but for all intents and purposes, that's the agreement that the employee has with Arizona State Retirement System. We have a Public Safety Retirement System, which is for our police officers. That has a little more board involvement in it where, particularly through Finance Audit Committee, we talk to them about what the outstanding liability is, because it's a little more direct what our responsibility is with that. We are investing to make sure that they have proper funding, a strong funding level in terms of their unfunded liability for the public safety system. Historically at the state level, the Arizona State Retirement System is a solid pension program. It's pretty well funded in terms of where things are in the country. The public safety was not as strong. So it was somewhere in the neighborhood -- I'm giving you made-up numbers, approximate numbers. Arizona system is around 70%, I think it's in that realm, and I can get an update for you. Public safety was closer to 50 to 55%. So you can see where there is a pretty big difference in terms of the unfunded liability. Because of that then there was the priority to push the local employers to move up the unfunded liability share. So we are adding money in the budget every year. It's already operationalized, so it's not something you have to think of how we're going to find the money for it. But we are contributing in addition to what their base contribution rates are to get that to be more completely funded. The last one is the Optional Retirement Plan. When an employee comes to the college, they have a choice to make. They can choose the Arizona State Retirement System or the Optional Retirement Plan. The state system is a defined benefit plan, a pension plan. The Optional Retirement Plan is a defined contribution plan, so more like a 401(k) for those in the private sector with private sector experience. It's a one-time choice. You go down that path and you are on that path as long as you're an employee. That program started up right after I got here at the college. The decision was pre, before my time, so around 17, 18 years ago is when we rolled that out to employees, that choice. It's in the neighborhood of 200 employees participate in the Optional Retirement Plan versus the other plans and is a good choice for people who are coming to work from either private sector or another educational institution where they are already vested. And so it gives us a little bit of a competitive advantage in terms of recruiting folks as well. Our wellness program, just to get through that quickly, we have a state recognized program. It is one of the better things that we have going at the college. It is a robust program to try and encourage and create programming for folks to be as healthy as possible with a nonjudging kind of way but looking at, okay, whether having classes available, programs available, it includes financial counseling for folks who may have personal financial challenges. And there is a premium reduction if people participate in some of the wellness programming at a certain level every year. So there is sort of an incentive for people to be engaged in the wellness programming. That's all of the stuff that's going on in the Employee Service Center, which does a lot of different things. Let me forward -- I will do the finance relatively quickly, because I want to get into some of the overarching transparency stuff. So finance and business services is all the business-related functions at the college, both locally, some of the folks are actually located at the campuses, most of whom are though located here at District Office. It includes the usual things: accounts receivable, business and travel services, contract services. Financial services is the combination of accounting and budgeting that is probably going to be separated out in the future. I'm giving you a little bit of foreshadowing. But both of those functions are under that what's called financial services at this point. Grant services. The college gets in, depending on the year, around $20 million of grants that we manage on an annual basis, give or take again. It ebbs or flows depending on which grants, where they are in the grant cycle and which ones we have received. Then procurement and payment services. Those are the folks who are ensuring that when we recommend a contract to you in a board meeting that they have been properly vetted according to the college's rules and best practices for the state and federal guidelines in terms of procurement. So that's a quick-and-dirty of the different finance functions. Again, my AVC for finance retired last year, and we will be recruiting for that position in this upcoming year. In terms of priorities, these are the things I said at the beginning the focus, it's never changed much, that how you do it has changed, but how you think about things from my perspective is it is all about making sure that you are effectively doing what you need to do and you do it efficiently so that you're maximizing the resources that go to the mission of the institution. That is how they all should be thinking about it, that's how -- I hit them over the head with that language all the time. But then you see the kinds of things they are working on are really trying to streamline the processes that we have. When we implement systems, no, it's not just implementing a new system to have a new system. It's how is that going to be more efficient for the college, how does that reduce the labor involved in doing whatever you're doing, how is it more effective in terms of having better compliance, those kinds of things. That is the emphasis of what they do. A handful of things they have done recently is electronic procurement, the digital checks for students so that they can get almost an overnight, they can get a check when it's a refund of their financial aid that flows through the account, that they have access to the funds about as quickly as possible so they can get digital checks that they can then print out if they don't have it go right to their account, that they can actually can get a printout of a digital check. Digital invoicing and third-party procurement are some of the things, third-party procurement is we work with a vendor and we pay things through them and we get rebates as a result of that. That's in the neighborhood of over $100,000 of rebates we get every year by working with a third-party vendor to really streamline how payments go out. That's on the accounts payable side. Any questions on any of that? Because I want to get to some of the really good stuff here at the college that you guys need to know (smiling). I'm going to kind of pass by on the budget stuff, because that's the study session today. I'm going to walk you through the budget. Included in that, just a quick summary, we often are talking about scenarios. Budgets are you're setting the course for the coming year, but that often means that you have competing priorities and there are limits in terms of what you can do. You can never do what everyone wants to do, so it's how do we prioritize the kinds of things that we're going to do on a given basis, talking through scenario planning, what does that mean in terms of a tuition increase versus a tax levy increase, those kinds of things. So we will be having those conversations this spring. The challenges and opportunities are the things that we know are a challenge. Enrollment is a challenge. Right now we are looking at some -- spring is looking good. Hopefully that's going to continue. But it is constantly making sure that we have mechanisms in place that adapt to the enrollment realities. We have talked, anyone who has watched any of the videos of me before you all came on board, Board Member Gonzales has seen them, where we are talking about ratios of staffing, right? Okay, and it's not a hard-and-fast. We don't say we cut you off here, you do not get one more person. But the idea is let's keep track of these ratios to make sure that we have a good, sustainable budget model. The classroom funding model does exactly that. It has targets for how many students should be in each particular classroom. Then we fund them so that if enrollment goes up, there are mechanisms where more money goes out to the campuses, to those divisions -- to the divisions, that's kind of old language, talking about as campuses is old language. Goes out to the divisions so that they can add sections. If you have more enrollment, you add more sections with adjunct faculty. We have a mechanism in place to make sure that that goes up and down. So as enrollment declines, that drops down in terms of the expectation is you don't offer as many sections if enrollment drops, and we have a mechanism in place to track on that. Then we have already talked about the class and comp structure, and we will be talking more about that for sure fin the budget conversation. We mentioned the HR committee, and I alluded to the finance committee. There is also a Finance Audit Committee that is roughly taken out of a Sarbanes-Oxley type of model. The idea is it's a group of folks who are professional, knowledgeable, whether they are -- presently there are people who are expert just at business, investments, internal audit, people from the community -- we actually went to SALC, and they helped us get some members originally -- and two board members. That has turned into just one of the richest experiences at the college in terms of having people who ask really good questions, get you to think a little bit differently about it. But also they give good feedback to the board in terms of, hey, we understand these challenges, you know, given what the priorities of the college, maybe it does make sense to do a tax levy increase. So they will give feedback as they see fit, as they get briefings on the budget, that sort of thing. They also have the opportunity to have independent conversations with the auditors. Again, we are all about transparency and accountability. We have a very good relationship with our auditor. One of the important things is that we do provide an opportunity for those who are on the Finance Audit Committee to meet with the auditors without management presence. That is best practices from Sarbanes-Oxley, and so they can ask the questions, make sure that my staff and the people at the colleges are responsive to their needs and providing the information that they expect. We have a lot of great information again along the lines of transparency on the finance web page, property tax information. Let me pop... I'm not going to go through everything here, but know that this information is available, and if you ever have any questions, and -- it's taking forever. If you have any questions about any of the information, we have all of our financial reports are posted on our website. We have salary information. We have information about understanding property taxes. We have historical information. We have metrics that compare us to other community colleges in the state. So there is a wealth of information available to folks, both if it's members of the public or for yourselves, if you have any questions. I know I think we handed out the annual financial report. There's also a lot of great information in the back of our annual financial report if you want to have an idea historically how have things changed in terms of revenues, in terms of expenses, that sort of thing. That information is readily available. And again, you can see property tax information includes -- we provide this. Property taxes in Arizona are an interesting proposition to understand if you're a layperson, if you're a taxpayer. So we actually have a white paper here that is intended to explain to people how property taxes work in Arizona. It's about six pages. It does come from the context of Pima College, so it explains what our tax rate is and so forth. But it also provides general information about how assessments work, you know, and has links to Pima County for people to find information. That's often, when we get calls about the tax levy increase, it's often from people who don't understand how the tax system works. So we provide the information to them. We direct them to this website and to this document. This also gives them information where they can find -- because we don't determine what their assessment value is. The county does. So it also gives them information about how they can look into their assessment valuation and appeal on what their assessment valuation is. So that's the kind of thing we provide for our folks. I think that's getting -- I shot through a lot of the other stuff. Again, all of the financial reports, we are audited by the Arizona State Auditor General's Office. They do both our regular audit, that's the one that you're all looking at, the annual financial report. They also do our federal programs and our internal controls and compliance report as well as expenditure limitation report, that sort of thing. We also, again, have an internal auditor. That person does not report to me. That reports up through Jeff Silvyn and has a direct line both to Lee and also to the Finance Audit Committee. They come in, and why that's important is that if they report it to me and it's something where he's looking at the operations in my area, you could have a scenario where you have some influence on that. The idea is let's keep it away from the operational area so that they have as objective perspective as possible, and that is again really a healthy practice here at the college. With that, I will stop and ask, and I think I'm ahead a little bit of time, so I was shooting to try to be a little early. Any questions about any of this? >> MS. THERESA RIEL: I have some questions. I don't know if anybody else is in the same situation as me, but I don't 100% understand expenditure limitations. >> DR. DAVID BEA: We will talk about that later today. >> MS. THERESA RIEL: Okay. Perfect. Then the second thing I wanted to mention was that I have been looking through, maybe not this document, but the college's budgets and things like that, and there are many words that I'm not familiar with. So, you know, I have Googled some of them, and sometimes I'm like, oh, that makes sense. Then sometimes it doesn't clear it up for me at all. So I am going to be on the finance committee, one of the board members. I'm not sure, I don't remember -- are we together? >> DR. DAVID BEA: Ms. Garcia is. And she has been on it for a number of years, at least four. >> MS. THERESA RIEL: So she might be a resource to me also. But is there something like, you know, "Finance For Dummies," you know, that describes it pretty well but I won't have to spend more than 20 hours trying to -- because our next meeting I think is within the next I think two-and-a-half weeks. >> DR. DAVID BEA: Yeah. >> MS. THERESA RIEL: Just so I can understand what's going on in that meeting as opposed to asking, hey, what does that word mean, what does that word mean? >> DR. DAVID BEA: It's not bad to actually do that. Holding people to not use the jargon is always a good sign. If you can explain it to a layperson, then you know it. I will be happy, if you have any questions and you want to ask me, I'm happy to provide that information. In your monthly financials that we include in the board packet, there is a glossary back there that has a lot of that jargon in it that may not totally answer all the questions. When you get to something like unrealized losses or something like that, it's sort of a complicated thing to talk through. We will focus on the things that are important. A lot of the jargony, real complicated accounting terms are really more important on an annual basis, much more than they are during the year. But feel free, if you ever have a question, I'm happy to hear wherever it comes from and give my take on it to help you out. Yeah, it's loaded with jargon. Accounting in particular is -- I'm all about providing information that's understandable to the extent possible. So I'm happy to provide that kind of feedback. If you think it is confusing, I will do my best. Expenditure limitation is a hard one, and I will talk about that. I won't get into the details of why it's complicated, because it's complicated when you get into the weeds. It's not complicated conceptually. >> MS. THERESA RIEL: One other thing, just recently I was meeting with someone from the Tucson Metro Chamber of Commerce and I mentioned something about Pima College purchasing property. He told me that there are different ways of a college spending money and that we are limited on the amount of money that we spend on salaries, but there wasn't quite the same kind of limit on spending money for real property. I just wanted to know if you could clear some of those kinds of things up for us too. >> DR. DAVID BEA: Okay. That's someone who's heard conversation about expenditure limitation that gets into the weeds (smiling). Because that is related to expenditure limitation. When you're at the limit, when you're at your cap, and you have to be really careful about how you're spending money, there are exclusions to expenditure limitation, like expenses that don't count against it. Buying property is one of them. Also issuing debt and paying on debt is also -- the idea, again, and I will say it again later, the idea with expenditure limitation is that it was to put a constraint on how much public entities were spending from public funds, from tax-based funds. It's really about keeping control of tax-based revenue growth, and so what it does is it basically says, okay, well, you're allowed to grow year over year for two things. We understand there is inflation and we understand you might be serving more people. So if you're a city, think about a city that's growing a lot. Well, that wouldn't be fair for them to have the same limit, right? If their population grows, it adapts for that. It starts with here is how much you can spend, and then you can grow for inflation and for population growth. Now, getting back to what I was saying, there are exclusions. The reason they have exclusions is because they recognize that every so often you have to build a new building or you have to purchase property or you have to borrow money to update and renovate facilities. The idea is, okay, we understand that that shouldn't be coming off of that base control, like the base operation control. That's the premise of it, and that's where it comes from. But that's how it gets quirky. Because then the understanding becomes this: Wait, you can buy property but you can't pay for payroll. When you're at the limit, your operations are constrained and you may be able to get more money from taxes but not spend it on operational purposes. That's where we were at a few years ago. So at the extreme, that can happen. But you could still invest in building a new building or whatever. Sorry for the long answer. That's the basic of it. And I will explain it a little bit later, but I think it's going to be one of those things that the more you hear it, eventually it will click. But again, just think of expenditure limitation is intended to put a limit on the growth on tax-based dollars that are spent for common operations. That's the purpose of it >> MS. THERESA RIEL: So this just can be a yes-or-no answer: Do all entities that spend tax dollars like cities and counties and hospitals, if they are run, do they all have an expenditure limitation? >> DR. DAVID BEA: Yes. It's an Arizona law. It's in Arizona. If you go to California and you say expenditure limitation, they would probably -- they have their own thing. Prop 13 was their thing if you know California at all. So in Arizona, all of the local jurisdictions, cities, counties, have expenditure limitation. K12s have it. Community colleges have it. And the state has it. What the state is is a total. It's quirky. You don't hear the University talking about it, because they are part of the state and it's a really big pot that they're dealing with. Where you do hear about it a lot is smaller towns. Oro Valley, Marana both had issues with expenditure limitation locally around here. We obviously had the issue -- most community colleges have a real challenge now with it, and then statewide, you'll hear this both in my conversation and then with the legislative update, it is "the" biggest thing going on at the state. Because the K12s are all running up against expenditure limitation. And even if the state wants to give them more money, constitutionally they are bound from being able to use it for operational purposes. So they are trying to get relief from it. >> DR. WADE McLEAN: So if the legislature doesn't increase our expenditure limit, what's our liability? >> DR. DAVID BEA: So our expenditure limit, because we went to taxpayers a few years ago with Prop 481, we actually have a pretty good cushion right now. The challenge will be if enrollment doesn't grow or if enrollment shrinks into the future and we continue to increase expenses, then we will have a problem, but right now we do not have an immediate probable. It's a problem to be aware of in the future, not right now. >> DR. WADE McLEAN: So we would not have to cut the budget if the legislature doesn't act? >> DR. DAVID BEA: Right. I will say this in two different ways. The legislature doesn't give us much now, so there is not much vulnerability that they can cut us, because they don't give us enough that it makes that big of a difference. The second thing is nothing they do with expenditure limitation at this point, unless they do something quirky that was unintentional, it will only benefit us. That's where Lee and I work with the other community colleges, because they are desperate and they know what we did. We will be working with them making sure they don't propose any change that would have a detrimental effect on us. It's the idea is that focus on things that help them which will also help us. That's the key. >> DR. WADE McLEAN: So then some of the groups could ask their voters to expand the expenditure limit above what the statute says, and we are in that group? >> DR. DAVID BEA: Yes. >> DR. WADE McLEAN: K12 is not in that group? >> DR. DAVID BEA: K12, I'm not an expert on the K12 side of it. I think they have an issue where it's a combined total, but I can come back to -- I won't have that answer today, but I will come back to you on that one, because that's an interesting question. Part of it is there are jurisdictions where they won't get support for an increase in expenditure limitation. That's where some of them run into the problem. Some of the community colleges are in districts where, when people hear about expenditure limitation, they think it's a control on taxes, because you heard me say things that sounded like that, right? So if you go to them and you say, well, we just need more capacity, they think you're just increasing taxes and they will vote no. It's a really quirky law, but you do -- all of the local jurisdictions have the ability to go to their jurisdiction, to their taxpayers, and ask, there are two different ways you can do it. You can actually go for a temporary override or you can go for what's called a base-limit reset, and that's what we did a few years ago. We increased the base limit sufficiently that now it's not a problem for us. To give you a context, our expenditure limitation, if we didn't do it, would be around $80 million right now. Our expenses right now that are related to expenditure limitation are probably 105 million. So we would be over by 25 million if we didn't do that. Our limit is about 140 million. That's why I'm saying we don't have an immediate problem. We moved it up far enough, the goal was to move it up far enough that we never have to talk about it again, and then enrollment declined. So, hmm, but we have a lot of capacity right now. We just have to be aware going forward in budget decisions that we have going forward, that's why making sure that the college's structure is aligned with enrollment is an important conversation. >> DR. WADE McLEAN: When you do your presentation later for me, could you tell us exactly how we get our money? >> DR. DAVID BEA: I will show you some charts, yes. >> DR. WADE McLEAN: Where, how, and -- >> DR. DAVID BEA: Then we will have multiple conversations about it, because I won't be able to get to all of them today, I'm sure. The primary ones, from an operational standpoint, what the board talks the most about is primarily property taxes and tuition. So think about it, at this point it's about 70% property tax, 25% tuition, and then the rest is other, including state aid and investments. >> DR. WADE McLEAN: If you want to defer this question, it's okay with me, to later, so if the property tax assessment generates our revenue, what does enrollment have to do with that? >> DR. DAVID BEA: It does not. They operate exclusively with the exception of that control that I just said. There are two things. There is indirect and then a very indirect. The indirect is expenditure limitation. Ultimately, if enrollment drops too far and your expenses keep going and you're drawing off that tax base, then you will have expenditure limitation problems. The other thing is that if your enrollment is so low that you're not really meeting the needs of the taxpayers or they don't feel like you're a good use of their tax dollars, you run into a different problem, right? Then you have people complaining that you're increasing the tax rate. Hey, you don't have any students. Why am I paying taxes to you? But that's extreme. That's not an issue that we have dealt with. >> DR. WADE McLEAN: If we levy a property tax based on the projection of so many students, and we don't get that many students, do we have additional revenue that we don't have to... >> DR. DAVID BEA: They are separate. When we do a tax-based levy increase, it has nothing to do with enrollment. It just says the college needs this money. Here's the budget. Here's how we are going to use it. It isn't tied to enrollment so therefore you have to give money back or anything like that. It doesn't work that way. >> DR. WADE McLEAN: I didn't make myself clear. So when we make that assessment and we come up with X number of dollars for next year, based on a certain number of students, I suspect -- >> DR. DAVID BEA: Based on the balance of our expenditures. >> DR. WADE McLEAN: Which should -- >> DR. DAVID BEA: It is highly correlated to enrollment, yes. >> DR. WADE McLEAN: Then the enrollment is less, then we have an excess? >> DR. DAVID BEA: Yes. At an extreme it would be that way. No, it doesn't tend to play out that way. So our taxes would tend to go up around 2% a year, which is really just offsetting the additional costs that we incur for salaries, just inflationary-type expenses. So it tends to go up more because our expenses tend to go up, and where we want to do is make our overall expenses go down with enrollment declines, that takes some time to do, but generally speaking, we need to be open and we need to provide service to people. So it generally goes up. Expenses generally go up. >> DR. WADE McLEAN: I'm still not making myself clear. >> DR. DAVID BEA: Okay. >> DR. WADE McLEAN: So if we are projecting a certain number of students enrolled, we don't hit that, we won't have to hire as many people as we would have needed if we hit that, so we are saving that portion of money? >> DR. DAVID BEA: Yes. >> DR. WADE McLEAN: So what happens to that? >> DR. DAVID BEA: If that happens in a given year, that would go into a budget surplus, so we would have additional revenues that came in and we wouldn't have spent off of it. So that would be the example of you didn't offer as many sections, right? You don't teach as many classes, okay, as a result of that. But you did levy the same amount. So a certain surplus you could say from the tax dollars would then go into our reserves. >> DR. WADE McLEAN: What happens to the surplus money? >> DR. DAVID BEA: So we have reserves, investments, that sort of thing. I will talk about this and I will show you what it looks like today. We have a target for what those reserves should be. Then we use it to reinvest in the plant. So when they get sufficiently large, it is, okay, let's essentially cash-fund a building. Not borrow money to build a building. If we need a new building, let's actually pay for it out of reserves. Or let's do renovations or do some of these modifications just out of reserves rather than borrowing money or doing something else. >> DR. WADE McLEAN: So the investment returns we make on the reserves goes into our revenue stream? >> DR. DAVID BEA: Yes. >> DR. WADE McLEAN: So as the interest rates go up, then in some respects, because I'm guessing that we have certain constraints on how we can invest our money -- >> DR. DAVID BEA: Yes. >> DR. WADE McLEAN: -- and they are very specific? >> DR. DAVID BEA: Yes. >> DR. WADE McLEAN: Most of those are low-dividend, federal -- >> DR. DAVID BEA: Bonds, yes. >> DR. WADE McLEAN: -- bonds? And they're going to increase in their projected revenues because the interest rates are going up? >> DR. DAVID BEA: Yes. >> DR. WADE McLEAN: We should increase our revenues on our surplus? >> DR. DAVID BEA: Correct, yeah. So that is going to help the budget a little bit. I will talk about that probably not tonight but at the next conversation. The increase is going to be, from our investment returns, it's going to be -- it's a little less than a million dollars expected year over year because of exactly what you said. The interest rate, it's the one positive of the interest rate environment is that it actually helps us for our investments. >> DR. WADE McLEAN: So at some point in time are you going to give us a list of our investments as well? >> DR. DAVID BEA: Finance Audit Committee gets it in detail. If you ever want it, we can provide it. It's available on the website, and we can just show you where that link is. That's something that the Finance Audit Committee talks about. What are the investments, what are the returns looking like. As you surmised, we are very restricted in terms of what we can invest in. Fixed instruments. We have an investment policy in terms of how those are invested, lifetime of those, and the balance of those. So our investments or our reserves are in, and I'm trying to think. I thought I had that in this one. I do have it in this presentation, but the board policies spell out a little bit, the budget, how we need to look at the budget and sort of make sure we are balancing revenues and expenses and we are good stewards of public funds, et cetera, et cetera. There is a financial stability policy that is what this reserve balance is, and it also dictates how we invest those reserves in a very big-picture sense. We maintain about 10% of this target threshold we keep in cash and cash equivalents. That isn't to say it's cash, it's not money, it's not in the bank, it's not in a vault down the hall. Highly liquid instrument. So the state has some things where we can get money in a matter of a day. The bank overnight, we can get the money overnight, that sort of thinking. When we say cash and cash equivalents, that's what it means. We can get access to the money in a matter of a day or so. Then we have short-term and long-term investments. We have two different pools that we use. Our investment firm puts it into those two different pools. The longest term duration is five years. We have some instruments -- and now with interest rate environment that we are looking at, so our lower interest rates are now maturing, and then we are buying into new bonds at higher interest rates, and that's why we get better returns. It's going to be better and better for the next couple of years. >> DR. WADE McLEAN: Who is our investment company? >> DR. DAVID BEA: RBC Capital does the majority of our investing. >> MS. THERESA RIEL: I have one more question. So from a layperson, it seems like it would be obvious that if we have problems with the expenditure limitation for us as a community college, all sorts of energy and effort should be spent on making sure that enrollment is increasing every single year. Where does that whole enrollment action take place in the college? Like which department is in charge of that? >> DR. DAVID BEA: It's split between a couple of departments, but there is a new position that is focused on enrollment management. And that's the purpose is to really get someone focused holistically across the college. Right now it's under Phil Burdick's area with marketing, external relations and outreach. Then enrollment management is sort of also on the student services side. And then obviously with faculty it's also important that there is an interconnection. That's what enrollment management does is it takes those different perspectives and those tend to be silos, right. You say let's look at all of this. What's really important is not only recruitment, but once someone shows interest, how do we get them into the college. Once they are in the college, how do we ensure they are successful so we retain them both semester over semester and then year over year. It's a holistic perspective of really trying to get as many students as you can and then be successful, make sure they are successful, they don't drop out. The challenge is is that the population of traditional college-age students is declining, because we are out of the baby boom light now, right? There is that, called birth dearth or whatever you call it, where the traditional age population is going to be declining over time. That's one of the challenges we are experiencing. Then you also have some of these other pressures. Community colleges are counter-cyclical typically or historically, meaning that when the economy is good and people can get jobs, they don't go to community colleges. So if the economy goes south, you might see enrollment improving. You don't want to hope for that, because that means other problems are happening. But it is a challenge, and we are going to be fighting for students. There are other enrollment challenges. Competition among colleges and universities is totally different than it was when I first came to the college or ten years before that. Online education, for-profit, ASU, all of those kinds of factors. It's an increasingly competitive environment to get this smaller number of students, and that's the challenge that we have. >> DR. WADE McLEAN: If we offered college credit to be on the Governing Board, you might sell a few more classes. (Laughter). >> DR. DAVID BEA: All right? Looking forward to the conversation later. We will get into some of the same topics. That's a good start. Like I said, with expenditure limitation, I have been talking about it for years here. There are people, it's complicated and convoluted, but I will start with the basics and then we will sort of build up from there. Because you are going to be hearing about it. You're going to actually be hearing about it maybe more in the newspaper than because of the college this year because of the K12 issue. It is really the foremost issue going on with the legislature this year with the budget. All right. Thank you. >> MS. THERESA RIEL: Are of there any more comments or anything? Then I adjourn this special session. (Adjournment.) ********************************************* DISCLAIMER: THIS CART FILE WAS PRODUCED FOR COMMUNICATION ACCESS AS AN ADA ACCOMMODATION AND MAY NOT BE 100% VERBATIM. THIS IS A DRAFT FILE AND HAS NOT BEEN PROOFREAD. IT IS SCAN-EDITED ONLY, AS PER CART INDUSTRY STANDARDS, AND MAY CONTAIN SOME PHONETICALLY REPRESENTED WORDS, INCORRECT SPELLINGS, TRANSMISSION ERRORS, AND STENOTYPE SYMBOLS OR NONSENSICAL WORDS. THIS IS NOT A LEGAL DOCUMENT AND MAY CONTAIN COPYRIGHTED, PRIVILEGED OR CONFIDENTIAL INFORMATION. THIS FILE SHALL NOT BE DISCLOSED IN ANY FORM (WRITTEN OR ELECTRONIC) AS A VERBATIM TRANSCRIPT OR POSTED TO ANY WEBSITE OR PUBLIC FORUM OR SHARED WITHOUT THE EXPRESS WRITTEN CONSENT OF THE HIRING PARTY AND/OR THE CART PROVIDER. 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