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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.)
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