Del Mar College Board of Regents September 8, 2020

1 Compliance

CCREDC provides compliance reviews for: • City of Corpus Christi • Nueces County • San Patricio County • Del Mar College • San Patricio County Drainage District • Corpus Christi Business & Job Development Corporation (Type A Board) Compliance Procedures

• Review all of the requirements from the Agreements • Use standard documents to test compliance • IRS form 941 and 940 • Audited financials • TWC reports • Review all of the company’s assertions • Report on findings to Del Mar College President Tax Abatement Agreements (Existing Agreements for Del Mar College) Company Year Investment Jobs •M&G 2014 751.0M 200 •voestalpine 2015 56.7M 10 •Castleton 2016 300.0M 20 •EPIC Y-Grade 2019 200.0M 10 The Numbers

M&G voestalpine EPIC Y- Topaz Total Resins Docks GRADE Year Approved 2008 2014 2015 2017 Investment (mils) $ 630.0 $750.0 $56.7 $200.0 $1,636.7 Act. Investment 669.0 (mils) 900.5 67.0 $200.0 $1,836.5 Construction 2009 2015 2016 2018

Production Start 2011 Est 2024 2017 2020 The Numbers

Taxes over a ten-year period - Net of Incentives

voestalpine EPIC Y- Topaz M&G Resins Total all Projects Docks GRADE Taxes without 61,080 48,964 0.0 29,045 139,089 Investment

Taxes with 11,299,357 14,119,347 1,235,176 3,687,093 30,340,975 Investment M&G Resins

Corpus Christi Polymers LLC, a joint venture between Alpek, Indorama, and Far Eastern Investment, has entered into an asset purchase agreement with M&G USA Corp. Questions

Draft – For Discussion

DEL MAR COLLEGE DISTRICT TAX ABATEMENT GUIDELINES AND PROCEDURES

GENERAL PURPOSE AND OBJECTIVES OF THE POLICY

As authorized under Chapter 312 of the Texas Tax Code (“Chapter 312”), Del Mar College District (the “District”) has elected to become eligible to participate in tax abatement projects in Reinvestment Zones which may be created from time to time by counties or cities in the taxing jurisdiction of the District. The District established this policy to allow it to work in concert with other taxing units as part of an overall publicly supported incentive program, designed to create job opportunities that bring new economic advantages or to strengthen the current economic base of the community.

It is the intent of the Del Mar College District Board of Regents (the “Board”) to consider requests for tax abatement agreements (the “Agreements”) for projects in duly designated Reinvestment Zones in the Taxing Jurisdiction of the District. The criteria set out in this policy are the minimum eligibility criteria for consideration of a proposed Agreement with the District. The Board, in its sole discretion, will determine whether the District’s participation in a proposed Agreement is in the public interest, notwithstanding that the Applicant has demonstrated compliance with these minimum criteria.

SECTION 1 – DEFINITIONS

For the purposes of these guidelines and procedures, the following terms, when capitalized, shall have the following stated meanings:

(a) “Abatement” means the full or partial exemption from ad valorem taxes of certain real and/or personal property in a reinvestment zone designated for economic development purposes. (b) “Agreement” means a contractual agreement between a property owner and a Taxing Unit for the purposes of tax abatement. (c) “Applicant” means the legal entity seeking tax abatement. (d) “Base Year Value” means the assessed value of the applicant’s eligible real and personal property located in a designated reinvestment zone on January 1 of the year of the execution of the agreement. (e) “Deferred Maintenance” means improvements necessary for continued operations which do not improve productivity or alter the process technology.

(f) “Economic Life” means the number of years a property improvement is expected to be in service in a facility. (g) “Reinvestment Zone” is an area designated as such for the purpose of tax abatement as authorized by Chapter 312 of the Texas Tax Code. (h) “Taxing Jurisdiction” means territory in the Del Mar College District Service Area, which is subject to ad valorem tax assessment and levy by the District pursuant to the elections creating the District or which may have been subsequently annexed to the District, or which may have been subsequently annexed to the District as a result of annexations by the City of Corpus Christi, Texas, and which have become subject to assessment and levy as a result of such actions pursuant to the Texas Education Code, as amended. (i) “Taxing Unit” means Del Mar College District and any county, municipality, school district or other entity, which is located in the territory of the Del Mar College District, and that levies ad valorem taxes upon and provides services to property located within the proposed or existing reinvestment zone.

SECTION 2 – ABATEMENT AUTHORIZED

The Board of the District may grant an Abatement on a case-by-case basis upon receipt and review of a complete application in compliance with the guidelines and criteria and set out in this policy. This policy however is not intended to limit the discretion of the Board to determine whether to approve a specific Agreement. The Board hereby authorizes the President and Chief Executive Officer of the District and his staff to develop and adopt such administrative policies and processes as may be appropriate to facilitate bringing Agreements for Abatement before the Board for consideration and to make such recommendations to the Board concerning the application or any Agreement, as the administration may deem. The policy does not create any property, contract, or other legal right in any person to require the Board to consider or grant a specific Agreement for Abatement.

In determining whether to grant or deny a proposed Agreement, the Board will consider whether an Abatement Agreement is reasonably likely to:

(1) contribute to the expansion of primary employment in the Reinvestment Zone; or (2) attract major investment in the Reinvestment Zone that would: (a) constitute a significant benefit to property in the Reinvestment Zone and provide an educational benefit to the District; and (b) contribute to the economic development of the Reinvestment Zone and the District.

In considering the request, the Board and Administration may examine and rely on the findings and conclusions of the county or city which designated the Reinvestment Zone and may seek

additional input and a recommendation from the governing board of the county or city designating an area as a reinvestment zone pertinent to the proposed Agreement.

Agreements for the Abatement of ad valorem taxes assessed and levied by the District for maintenance and operation of the District may be authorized by the Board based on the following conditions and subject to the Applicant demonstrating compliance with the Minimum Criteria set out in subsequent sections of this policy.

Authorized Facilities. A facility may be eligible for abatement if it is a manufacturing/ assembly facility, regional distribution facility, regional tourist entertainment facility, biomedical/biotech research facility, or other industry and is located in a Reinvestment Zone.

Creation of New Values. Abatement may only be granted for the additional value of eligible real property improvements subject to such limitations as the District may require. The District shall not enter into an abatement agreement if (1) it finds that the application for Tax Abatement was filed after the commencement of construction, expansion, or modernization, or (2) it finds that the District was not officially notified that construction, expansion, or modernization would commence on a given date.

New and Expansion of Existing Facilities. Abatement may be granted for new facilities for purposes of modernization or expansion.

Eligible Property. Abatement may be extended to the value of buildings, structures, fixed machinery and equipment, site improvements, as well as office space and related fixed improvements necessary to the operation and administration of the facility.

Value and Term of Abatement. Abatement may be granted on a case-by-case basis at the sole discretion of the Board of the District. Abatement, if granted, will be effective with the January 1 valuation date immediately preceding the date of the execution of the Agreement and in no event shall an abatement extend for a term greater than 10 years from the January 1, valuation date.

SECTION 3 – MINIMUM CRITERIA

In addition to any other requirements established by this policy, any application filed with the District pursuant to this policy must demonstrate that the proposed project meets each of the following minimum criteria.

Criteria regarding Qualifying Area

(1) Covered area. To be eligible and receive tax abatement, the Applicant must demonstrate that the proposed improvements are located in an area designated by the municipality or the county as a Reinvestment Zone under Section 312 of the Texas Tax Code, or in an enterprise zone as designated by the State.

(2) Increased valuations. The Applicant must demonstrate the proposed improvements will

increase the appraised value of the improved property in each year of the proposed abatement period. Additional elements specifying the minimum amount of investment are set out in later sections of this Policy, but it is the intention of this requirement that the Applicant demonstrate that the proposed improvements have economic lives that substantially exceed the Abatement period sought.

(3) Create more jobs. To the extent the application for Abatement is predicated on the creation of jobs, the Applicant must demonstrate the proposed improvements are expected to increase employment in the community beyond those in existence in the community in the base period and based on the number of permanent jobs created and sustained in each year of the Agreement

(4) No adverse impact on existing facilities. The Applicant must demonstrate the proposed improvements will not have an adverse impact on existing jobs in the community. In particular, the application should demonstrate that the proposed improvements will not be expected to solely or primarily have the effect of merely transferring existing employment from one part of the District to another.

Criteria regarding Scope, Term and Amount of Abatement

(1) Abatement limited to maintenance and operation tax rate. Any application for Abatement of ad valorem taxes and any Agreement proposed for such Abatement shall be limited solely to Abatement of ad valorem taxes imposed by the District for Maintenance and Operation of the District. No Abatement granted pursuant to this policy shall be applicable to any tax assessed and levied by the District for debt service on any existing or future bonds of the District.

(2) Base year taxable. The base year value of existing eligible property shall be fully taxable.

(3) Valuation date. An application for Abatement and any Agreement proposed pursuant to such application shall provide that an Abatement, if granted, be effective with the January 1 valuation date immediately following the date of the approval by the Board granting the Abatement and approving the Agreement.

(4) Deferral of Abatement period. If it is determined that deferring the commencement date beyond January 1 following the Board granting the Abatement and approving the Abatement application would be mutually beneficial, the Board may defer the commencement date of the Abatement period to January 1 of a future year.

(5) Maximum term. The Board of Regents shall consider the Abatement period and the term of the Abatement based upon the overall value of the project, the expected Economic Life of the improvements that are proposed, the number of new jobs being created and other factors and consideration which may be provided to the District under the Agreement in lieu of the tax liability that is abated. However, in no event shall the term of the Abatement exceed 10 years or one-half (1/2) of the Economic Life of the improvement whichever is less. The Economic Life will be calculated from the earlier of 4

the effective date of the Agreement or the date the improvement is placed in service.

(6) Amount. The percent of value and the amount of the Abatement may be proposed in any amount up to one hundred percent of the taxable appraised value of the improvements or such percentage of value as may be determined by the Board.

Economic Criteria

(1) Minimum investment. To be eligible for District participation in an Abatement Agreement, the Applicant must demonstrate that the planned improvement will be reasonably expected to increase the value of the property in the amount of at least $___ million in the first year of the Abatement period.

(2) Jobs Created and Jobs Retained. In addition to the minimum investment requirements, the Applicant must comply with the following requirements regarding jobs:

(3) (a) Minimum number of new jobs created. The Applicant must demonstrate that the proposed improvements will create employment for at least ___ new people on a full- time (40 hours per week equivalent) basis in the territory of the District for the duration of the Abatement period at the abated facility site described in the Abatement application.

(4) (b) Existing jobs retained. The Applicant may alternatively demonstrate that, for the duration of the Abatement period, the proposed improvements will result in the retention of jobs and prevent the loss of employment of ____ employees or ____ percent (___%) of the existing number of employees, at the time of application, employed at the existing facility containing the improvements proposed for Abatement in the application.

SECTION 4 – APPLICATION AND CONTENTS

Written applications for District participation in an Abatement Agreement for a Reinvestment Zone must be filed with the President and Chief Executive Officer of the District during regular business hours. The application must be limited solely to proposals seeking abatement of maintenance and operation ad valorem taxes levied by the District.

Any application must be accompanied by a non-refundable application fee of $______. Proposals may be submitted by the county or municipality authorizing the Reinvestment Zone or by an Applicant seeking the District’s participation.

Application Contents

(1) Basic information. In addition to other specific information addressing the criteria set out in the foregoing sections of this policy, an application requesting that the District participate in an Agreement shall include: (a) A copy of any application filed with the city or county for the creation of the Reinvestment Zone. 5

(b) A copy of the county or city criteria for Reinvestment Zone adopted pursuant to Tex. Tax Code Section 312.202. (c) A copy of any report or findings created by the city or county concerning its analysis of the Applicant’s request for creation of the Reinvestment Zone and its determination, if any, concerning its confirmation of the adequacy and public benefits associated with the creation of the Zone. (d) If the Zone has been created, a certified copy of the order or ordinance creating the Zone along with a copy of the minutes of the meeting of the governing board of the city or county at which the order or ordinance was adopted. (e) A copy of any Abatement Agreement approved by the city or county as well as a copy of any Abatement Agreement provided to any other Taxing Unit that has been requested to participate in the Reinvestment Zone and an indication of the status of approval of each such Agreement. (f) The transcript of the public hearing or hearings held by the city or county on the creation of the Zone and its benefits to property in the Zone. (g) A map and an engineering survey of the area included in the Zone. The acreage and the current total assessed valuation contained inside the Reinvestment Zone. (h) An inventory of any existing educational buildings or other educational facilities owned by or on behalf of a school district, the District or any other political subdivision within the proposed Zone. If no educational facilities or buildings are located within the Zone, the application shall include a description of the relative proximity of any existing District buildings or facilities measured from the approximate center of the Zone. (i) A statement of the appraised value of each tax parcel that is included in the Zone as of the current tax year. The application must further specify if the current tax year will constitute the base year or whether some other future ad valorem tax year is proposed to constitute the base year. (2) General description of improvements proposed in Abatement area. To the extent not otherwise set out in other portions of the application, the Applicant shall provide: (a) a detailed inventory of the improvements proposed for construction in the Reinvestment Zone; (b) the timeline for construction of these improvements; and (c) the number of jobs to be created/retained, as applicable based on these improvements. (3) Educational benefit. The application shall describe the specific educational benefits, if any, which the Applicant expects to directly accrue to the District from the District’s 6

participation in the Reinvestment Zone through any Agreement for Abatement. To the extent that an application proposes to make contributions of facilities to the District in lieu of ad valorem tax payments, the application should include a detailed description and a construction timeline of any educational buildings or other facilities proposed to be contributed to the District. (4) Other benefits to District taxpayers. The application shall contain an explanation of the ways in which the proposed Zone will benefit other taxpayers of the District. (5) Payments in lieu of tax. The Applicant may propose, and any Agreement may contain provisions for annual or other payments of revenue or the donation of facilities to the District in lieu of the abated tax revenues for use in District authorized educational initiatives. The Board may apply such revenues or donated facilities as it determines appropriate for District purposes. (6) Reimbursement of District Fees and Expenses. The application shall confirm the Applicant’s understanding that it is liable for any legal or other professional fees incurred by the District or other expenses associated with the review and negotiation of any Agreement proposed under the application. (7) Application’s compliance with minimum criteria. To the extent not otherwise included in the foregoing sections of the application, the application shall include a clear and concise explanation of how the application and proposed Agreement comply with the District criteria. (8) Agreement. The application shall include a copy of any Agreement for Abatement proposed to be entered into with the District which contains provisions addressing each of the requirements set out in Section 5 of this policy to the extent applicable.

SECTION 5 – AGREEMENT

Upon approval of any application submitted under this policy, the Board may negotiate and authorize and execute an Agreement with the Applicant which shall include:

(a) A list of and associated estimated value of improvements proposed to be abated and the base year value; (b) percent of value to be abated each year; (c) the commencement date and the termination date of Abatement; (d) the proposed use of the facility, nature of construction, time schedule, map, property description and improvement list as provided in the application; (e) contractual obligations in the event of default, violation of terms or conditions, delinquent taxes, or recapture;

(f) size of investment and average number of jobs involved for the period of Abatement; (g) covenants requiring that Applicant shall annually furnish information necessary for the District’s evaluation of Applicant’s compliance with the terms and conditions of the Abatement Agreement and these Guidelines and Criteria (in the form of an annual report/statement of compliance), together with an additional provision that the District may, at its election, request and obtain information from Applicant as is necessary for the District’s evaluation of Applicant’s compliance with the terms and conditions of the Abatement Agreement and these Guidelines and Criteria; (h) provision that, upon expiration of the Abatement Agreement, Applicant shall begin annually reporting the status of the abated improvements regarding active service and operation as part of a facility operating in a producing capacity. Reporting will be for the same amount of years as the Abatement period (i.e., ten year Abatement, then follow-up reporting for an additional 10 years); (i) provisions for recapture consistent with the requirements set out in this policy; (j) provisions for the reimbursement of legal fees and other expenses incurred by the District in the review and negotiation of any Agreement; (k) provisions allowing the District or its representatives access to the Reinvestment Zone during the term of the Abatement to inspect the facilities and improvements which are the subject of the Agreement to determine if the terms and conditions of the Agreement are being met. All inspections will be made only after the giving of twenty-four (24) hours prior notice and will only be conducted in such a manner as to not unreasonably interfere with the construction and/or operation of the facility. All inspections will be made with one or more representatives of the company or individual and in accordance with their safety standards; and (l) Any other requirements imposed by this policy or the Board.

SECTION 6 – RECAPTURE

The Board reserves the right to audit and review compliance with the Agreement. In the event that the Applicant fails to construct the improvements and facilities (or create the jobs) which are the subject of the Agreement in conformity with the amounts, timelines and other terms set out in the Agreement, the Agreement shall provide for a full recapture of any abated ad valorem taxes. The Board may determine if a graduated partial recapture may be appropriate for a particular project. The Board may require that any Agreement entered into, pursuant to this policy, include provisions granting the District the right to cancel the Agreement and require that any abated taxes shall become due to the District and shall establish such terms and conditions as may be appropriate for a particular Agreement and application.

SECTION 7 – ADMINISTRATION

The President and Chief Executive Officer of the District shall establish policies for the administration and monitoring of compliance with any Agreement granting an Abatement entered into by the District under this policy.

SECTION 8 – ASSIGNMENT

The Board may determine, in its sole discretion, whether to consent to the assignment of an Agreement authorized under this policy. The Board specifically recognizes that the policy contemplates the grant of an Abatement based on unique considerations specific to a particular Applicant and the Board and District’s experience and history with that Applicant/taxpayer, and that consideration of an assignment of the existing Agreement to another entity raises questions that the Board will need to consider on a case by case basis. Any Agreement shall contain provision for notification of the District of any request for assignment and shall include provisions granting the District unilateral rights to consent to any assignment consistent with this Section. No assignment shall be approved if the assignor or the assignee is indebted to the District or any other Taxing Unit for ad valorem taxes or other obligations.

SECTION 9 – SUNSET PROVISION

These Guidelines and Criteria are effective as of the date of adoption and will remain in force for two years, at which time all Reinvestment Zones and Agreements created pursuant to its provisions will be reviewed by the county to determine whether the goals have been achieved. Based on that review, the Guidelines and Criteria will be modified, renewed or eliminated. These guidelines and criteria may be amended by the Board at any time during their effective period.

PENDING BUSINESS Item Date Request Due Status 1 Tax Abatement Yearly Review September September and Abatement Policy Agenda

2 *Workshop: Key Performance September September Indicators Agenda

3 *Workshops: Board Policy Review September September & Agenda October 4 Enrollment Update October

5 *Workshop: Service Area Analysis October

6 Quarterly Financial Report October

7 Quarterly Investment Report October

8 RFQ for Internal Auditors October

9 Enrollment Update October

10 Internal Audit Report to the Board October

11 Legislative Update October

12 Clery Data October

13 THECB 60x30 Strategic Plan November (DMC steps/plan for compliance)

14 *Workshop: Residential/Campus November Housing

15 *Workshop: Distance Learning November

16 Interim Status Report of Grant November Management Audit by Staff

17 SACS & QEP Updates November

18 *Workshop: Strategic Enrollment & December Marketing Plan 19 Foundation Yearly Update December

20 Professional Contract Review by Board December of Regents 21 Review of Tuition Policy December

22 Report on Tax Collections February 2021 *Workshop dates may change 23 Set Tuition February 2021

24 Annual Ethics Update Feb 2021

25 *Workshop: Strategic Plan March 2021 26 *Workshop: Key Performance March Indicators 2021 27 *Workshop: Regional Workforce May Needs 2021

*Workshop dates may change

Consent Agenda 1 MINUTES OF THE WORKSHOP AND CALLED MEETING OF THE BOARD OF REGENTS OF THE DEL MAR COLLEGE DISTRICT

August 3, 2020

The Workshop and Called Meeting of the Board of Regents of the Del Mar College District convened at the Isensee Board Room, Del Mar College, Corpus Christi, Texas at 10:34 a.m. on Monday, August 3, 2020, by video teleconference, with the following present:

From the Board:

Ms. Carol Scott, Dr. Nicholas Adame, Ms. Libby Averyt, Mr. Ed Bennett, Ms. Elva Estrada, Mr. Hector Salinas, and Dr. Mary Sherwood.

From the College:

Dr. Mark Escamilla, President and CEO; Mr. Raul Garcia, Vice President and CFO; Ms. Lenora Keas, Executive Vice President and COO; Ms. Tammy McDonald, Vice President of Administration and Human Resources; Mr. August Alfonso, Vice President and Chief Information Officer; Dr. Rito Silva, Vice President of Student Affairs; Mr. Augustin Rivera, Jr., General Counsel; Mr. John Strybos, Vice President and Chief Physical Facilities Officer; Ms. Lorette Williams, Executive Director of Strategic Communication and Government Relations; Dr. Natalie Villarreal, Director of External & Board Relations; Ms. Mary McQueen, Executive Director, Development; Ms. Delia Perez, Executive Administrative Assistant to the President & Board Liaison, and other staff and faculty.

CALL TO ORDER QUORUM CALL/MOMENT OF SILENCE/PLEDGE OF ALLEGIANCE/VISION STATEMENT

Ms. Scott called the meeting to order with a quorum present. She requested a moment of silence followed by the Pledge of Allegiance and Del Mar College Vision Statement.

Due to the health and safety concerns and the Coronavirus Pandemic Crisis, this meeting was conducted by video and/or teleconference and was conducted in accordance with guidance from the Texas Governor’s Office and the Texas Attorney General’s Office. Provisions were made for the public to participate in this meeting with public comments.

ITEMS FOR DISCUSSION AND POSSIBLE ACTION:

1. Discussion of the proposed Maintenance & Operations Budget and the Debt Service Budget for Fiscal Year 2020-2021 (Goal 6: Financial Effectiveness and Affordability)

President Escamilla provided an opening statement regarding the College’s 2020-2021 budget that is being developed under the COVID-19 pandemic and asked for the Board of Regents’ feedback for the final budget.

Mr. Garcia began the presentation with information regarding the Risk Reserve Fund and the College’s long-term risk management financial plan which included the following:

RISK MANAGEMENT GOALS: • To have financial resources that are sufficient and flexible enough to support the mission of the College throughout COVID-19 and the recession crises • To maintain steady and modest tuition increases • To continue to maintain a good credit status by maintaining a double AA bond rating

OBJECTIVES: • To maintain a $5 to $7 million risk management reserve throughout the crises

FINANCIAL RESOURCE RISKS (with an outlook through FY 2023): • Reduced state base appropriations ($3.3 million) • Health and Safety Supplies and Equipment ($1.5 million) • Reduced property tax collections ($2.4 million) • Incremental instructional costs due to reduced class size driven by social distancing ($800,000) • Catastrophic loss deductibles or not insured ($250 thousand to $1 million)

ACTION PLAN: • Risk Management Reserve ($5 to $7 million) • Reduced Spending • Travel • Non-essential equipment • Food • Hiring restrictions/freeze • Energy

FUNDING: • 2020 Surplus with an estimated value of $5 to $7 million • Financial activity will be tracked in our general ledger

ANNUAL TRANSFERS FOR UNDERESTIMATED: • health and safety supplies and equipment • Instruction • Property tax revenue • Tuition and Fee revenues • State appropriations • Other catastrophic related costs

BOARD FINANCIAL REPORTING: New fund balance reporting on the balance sheet into three categories. • GASB related Fund Balance ($-97 million) • Risk Management Fund Balance ($5 $7 million) • Operating Fund Balance (fund balance that is not assigned)

FUND DURATION: • Continue throughout COVID 19 and recession crises • Consideration for an extension for the next financial crises

Ms. Tammy McDonald continued the discussion regarding proposed revisions to Board Policy B4.1.1 to include language for the Plant Fund and Risk Fund.

Mr. Garcia advised that the College has completed the final 2021 Budget Plan Proposal and that it was planned accounting for COVID-19, the recession and a possible catastrophic event.

Dr. Escamilla provided comments regarding the proposed Budget plan and how the work helped achieve the College’s accreditation.

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Dr. Catherine West stated that they are refining the budget process and in the Fiscal Year 2020, the Budget Team began working with Dr. Kristina Wilson’s team to improve the College’s resource allocation process to ensure that there are adequate resources to support the strategic initiatives of the College.

Dr. Wilson stated that there were not a lot of budget increases in the 2021 Budget Plan because they were going to stay flat and concentrated on Goal One: Completion; Goal Two: Recruitment and Persistence; Goal Three: Learning Environment; and Goal Four: Workforce Development, Community Partnerships, and Advocacy.

Dr. Garcia continued presenting the Strategic Plan Initiative for the Risk Reserve Funds Goal Six: Financial Effectiveness and Affordability as follows:

Risk Reserve Fund - Potential Financial Resource Risks: • Reduced state base appropriations ($3.3 million) • Emergent Health and Safety Supplies and Equipment ($1.5 million) • Reduced property tax collections ($2.4 million) • Incremental instructional costs due to reduced class size driven by social distancing ($800,000) •Catastrophic loss deductible or not insured event $250 thousand to $1 million)

Mr. John Johnson provided information regarding the Revenue Assumptions which included a $2 tuition rate increase (new rate $69); 1% decrease in collection rate - 96% to 95%; 4.49% increase in net taxable value; Maintenance and Operations Tax Rate will decrease by 0.6 cents; debt service rate increases by 1.4 cents attributable to new tax bond issue for an overall tax increase of 0.8 cents.

Mr. Johnson continued with his presentation regarding the proposed 2020-2021 tax rates. The College is proposing a combined tax rate of 0.288600 in order to achieve strategic activities built into the board-approved M&O Budget of $107.8 million. The annual tax is $496 on property with an appraisal of $172,000 and it will scale down to $390 by fiscal year 2025. The debt service rate is $23.4 million.

The proposed M&O rate will be used to fund various student-focused activities. The FY 2021 M&O Expense Budget is $80.2 million in faculty and staff salaries. The total expenditures amount is $107.8 million.

Mr. Garcia continued with the presentation and stated that the M&O Expense Budget Detail has not changed since the July Board meeting. The Budget Team has a balanced Budget of $107.9 million. The net impact reclassification shuffled between salary and non- salary expenses is $964,000.00.

Ms. Tammy McDonald provided information regarding the proposed employee compensation which includes a 1% raise for exempt and non-exempt employees and a total benefit change in the amount of $135,381.00.

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Mr. Johnson and Ms. Jackie Landrum provided information regarding future revenue and expense assumptions including the following:

-Risk Reserve Fund of $5-7 million -Revenue ·Tuition & Fees Assumptions of $2 tuition rate increase for each year; enrollment growth projections-flat for each year ·Tax Assumptions 95% collection rate for each year (a 1% decrease from the norm) 3% increase in net taxable value for each year ·State Appropriations 10% decrease - FY 2022 & FY 2023 5% decrease - FY 2024 & FY 2025 -Expenses ·Salary Increases for each year: 2% each year-F/T Faculty, Exempt, F/T Non-Exempt ·Non-Salary: Average 2.07% on most categories for each year Utilities average 4.67% for each year Supplies & Library average 5.23% for each year ·Energy Cost Savings: $125,000 FY 2021 $500,000 FY 2022-2025

Mr. Garcia reviewed and discussed the dates on the Budget Timeline and Process.

Ms. McDonald, Mr. John Johnson, Mr. Garcia, and Dr. Escamilla responded to questions from the Board of Regents.

2. Discussion and possible action related to the adoption of the Order to Conduct a Public Hearings on the 2020-2021 College Budget………………………...... Mr. Raul Garcia (Goal 6: Financial Effectiveness and Affordability)

Mr. Augustin Rivera, Jr., General Counsel, read the proposed Order to Conduct a Public Hearing on the 2020-2021 College Budget:

ORDER OF THE BOARD OF REGENTS OF THE DEL MAR COLLEGE DISTRICT BUDGET 2020-2021

BE IT ORDERED, by the Board of Regents of the Del Mar College District that, for the purpose of adoption of a budget for the 2020-2021 fiscal year, the Board schedule and conduct a ______Workshop & Called Meeting Page 4 August 3, 2020

meeting and public hearing on Tuesday, August 25, 2020, at 11:00 a.m., via video and/or teleconference at the Isensee Board Room, Harvin Center, Del Mar College, East Campus, Baldwin and Ayers Street, Corpus Christi, Nueces County, Texas.

Due to the COVID-19 (Coronavirus) pandemic crisis, this meeting and public hearing will be conducted in accordance with guidance from the Offices of the Governor and Attorney General, and the provisions of Sections 551.122 and 551.127 of the Texas Government Code and other open meeting requirements, that have not been suspended by order of the Governor.

BE IT FURTHER ORDERED, that proper publication and notice of such meetings and public hearings be given as required by law.

Regent Averyt made a motion to approve the Order for Public Hearings on the 2020-2021 College Budget. Dr. Sherwood seconded the motion. There was no further discussion from the Board. There were no public comments. A roll call vote was taken and the motion carried unanimously, 7-0, with Regents Adame, Averyt, Bennett, Estrada, Salinas, Sherwood, and Scott in favor.

3. Discussion and possible action related to the adoption of the Order to Conduct Public Hearings on the 2020-2021 Tax Rates…………………………...... Mr. Raul Garcia (Goal 6: Financial Effectiveness and Affordability)

Mr. Augustin Rivera, Jr., General Counsel, read the proposed Order to Conduct a Public Hearing on the 2020-2021 Tax Rates:

ORDER OF THE BOARD OF REGENTS OF THE DEL MAR COLLEGE DISTRICT TAX RATE 2020-2021

BE IT ORDERED, by the Board of Regents of the Del Mar College District that the Board consider a proposal to increase total tax revenues from properties on the roll in 2019 by 6.32 percent and that the Board schedule and conduct a meeting and public hearing on such proposal to consider such tax increases on Tuesday, August 25, 2020, at 11:30 a.m., via video and/or teleconference at the Isensee Board Room, Harvin Center, Del Mar College, East Campus, Baldwin and Ayers Street, Corpus Christi, Nueces County, Texas. Due to the COVID-19 (Coronavirus) pandemic crisis, this meeting and public hearing will be conducted in accordance with guidance from the Offices of the Governor and Attorney General, and the provisions of Sections 551.122 and 551.127 of the Texas Government Code and other open meeting requirements, that have not been suspended by order of the Governor.

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BE IT FURTHER ORDERED, that proper publication and notice of such meetings and public hearings be given as required by law.

Regent Estrada made a motion to approve the Order to Conduct Hearings on the 2020-2021 Tax Rates. Regent Averyt seconded the motion. There was no further discussion from the Board. There were no public comments. A roll call vote was taken and the motion carried unanimously, 7-0, with Regents Adame, Averyt, Bennett, Estrada, Salinas, Sherwood, and Scott in favor.

CALENDAR: Discussion related to calendaring dates.

ADJOURNMENT: The meeting was adjourned at 11:59 a.m.

MINUTES REVIEWED BY GC: /s/ARjr

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MINUTES OF THE REGULAR MEETING OF THE BOARD OF REGENTS OF THE DEL MAR COLLEGE DISTRICT

August 11, 2020

The Regular Meeting of the Board of Regents of the Del Mar College District convened at the Isensee Board Room, Del Mar College, Corpus Christi, Texas at 1:00 p.m. on Tuesday, August 11, 2020, in person and/or by teleconference, with the following present:

From the Board:

Ms. Carol Scott, Dr. Nicholas Adame, Ms. Libby Averyt, Mr. Ed Bennett, Ms. Elva Estrada, Ms. Susan Hutchinson, and Dr. Mary Sherwood.

From the College:

CALL TO ORDER QUORUM CALL/MOMENT OF SILENCE/PLEDGE OF ALLEGIANCE/VISION STATEMENT

Ms. Scott called the meeting to order with a quorum present. She requested a moment of silence followed by the Pledge of Allegiance and Del Mar College Vision Statement.

Due to the health and safety concerns and the Coronavirus Pandemic Crisis, this meeting was conducted by video and/or teleconference and was conducted in accordance with the Texas Governor’s Office and the Texas Attorney General’s Office. Provisions were made for the public to participate in this meeting with public comments.

GENERAL PUBLIC COMMENTS – The public was given the opportunity to provide public comments (both general and specific to any agenda item) by calling a toll-free phone line prior to the Board meeting and registering with their name and subject of public comment.

There were no public comments made for this meeting.

SPECIAL ACTION ITEM………………………………………………Ms. Carol Scott

Discussion and possible action regarding adoption of Resolution Honoring Regent Gabriel Rivas, III (Goal 5: Workforce Development, Community Partnerships, and Advocacy)

Mr. Augustin Rivera, Jr. read the following Resolution Honoring Regent Gabriel Rivas, III entitled “Resolution of the Board of Regents of the Del Mar College District in Honor and Memory of Regent Gabriel “Gabe” Rivas, III (1954-2020)”:

RESOLUTION OF THE BOARD OF REGENTS OF THE DEL MAR COLLEGE DISTRICT IN HONOR AND MEMORY OF REGENT GABRIEL “GABE” RIVAS, III (1954-2020)

August 11, 2020

WHEREAS, Gabriel “Gabe” Rivas, III, was first elected to the Del Mar College Board of Regents in November 2000 and served through 2006, during which time he led the Board as President for four of those years;

WHEREAS, during his tenure as President, Regent Rivas helped guide Del Mar College to the successful passage and implementation of an historic $108 million bond referendum that re-imagined the College’s West Campus and expanded educational opportunities with the construction of the Health Sciences and Emerging Technology Complex; the Public Safety Education Complex; and, the Industrial Education Complex;

WHEREAS, Regent Rivas was appointed by the Del Mar College Board of Regents in August 2007 to fill a vacancy in the District 1 seat, a position to which he was re-elected by the voters of District 1, most recently to a term that would have run through 2024, and served as the Board’s First Vice-Chair during those years;

WHEREAS, during his twenty years of devoted service to Del Mar College, Regent Rivas unfailingly carried out his duties to the Board, to the College, and to the entire community, with exemplary distinction, tireless commitment, and the highest integrity, and his visionary leadership and hard work in promoting better and more access to educational opportunities inspired much of Del Mar College’s success over those twenty years;

WHEREAS, Regent Rivas, through his honesty, humility, collegiality, and sincere respect for others, embodied the very best qualities of a community college regent and made him a trusted colleague who was deeply revered and held in the highest regard by his fellow Del Mar College Regents and countless other trustees throughout the State of Texas and nationally, as well;

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WHEREAS, Regent Rivas always maintained the utmost compassion and concern for the well-being of each and every member of the Del Mar College community, including, staff, faculty, and, most importantly to him, the students of Del Mar College, many of whom regarded Regent Rivas as an advisor, a mentor, and, beloved friend;

WHEREAS, Regent Rivas’ extensive and life-long commitment to public service included, in part, serving as: President of the League of United Latin-American Citizens (LULAC) Council No. 1; Graduate of Leadership Corpus Christi, Class XV; Chair of the Leadership Corpus Christi Alumni Association; Member of numerous City of Corpus Christi commissions, including the Human Relations Commission; and, Member of the Board of Directors of Amistad Community Health Center; and,

WHEREAS, on August 5, 2020, the entire Del Mar College family and the broader Corpus Christi community lost a much beloved and valued community leader and friend, with the sad passing of Regent Gabriel “Gabe” Rivas, III;

NOW, THEREFORE, BE IT RESOLVED, that the Board of Regents of the Del Mar College District, hereby:

(1) recognizes and honors with deepest appreciation their dear colleague and friend, Regent Gabriel “Gabe” Rivas, III, for his profound and significant service and contributions to Del Mar College; for his passionate life-time dedication to expanding access to quality higher education for all; and, for his genuine care, concern and compassion for the staff, faculty, and students at Del Mar College; and,

(2) together with many, many others, mourns his passing and extends its sincerest condolences to his beloved family.

______Carol Scott, Chair Ed Bennett

______Dr. Nicholas L. Adame, 2nd Vice-Chair Elva Estrada

______Dr. Mary Sherwood, Secretary Susan Hutchinson

______Libby Averyt Hector Salinas ______Regular Meeting Page 3 August 11, 2020

The Board of Regents and President Escamilla shared their heartfelt memories of Regent and friend, Gabe Rivas.

Regent Estrada made a motion to pass the Resolution Honoring Regent Gabriel “Gabe” Rivas, III. Regent Adame seconded the motion. There was no further discussion from the Board. There were no public comments. A roll call vote was taken and the motion carried unanimously, 7-0, with Regents Adame, Averyt, Bennett, Estrada, Hutchinson, Sherwood, and Scott in favor.

COLLEGE PRESIDENT’S REPORT…………………………………Dr. Mark Escamilla (Goal 4: Learning Environment)

President Escamilla gave his condolences to all who have lost loved ones because of COVID-19, especially within our Del Mar College family. President Escamilla provided an update regarding Del Mar College’s limited accessibility and stated that the College is in Return-to-Campus Phase II and will continue throughout the Fall Semester with adjustments made as needed. Del Mar College employees continue to work remotely when possible. The campus remains closed to the public with only designated areas open on a restricted basis. He reiterated that the health and safety of the students, staff, employees and guests is their top priority.

President Escamilla gave an update regarding the communications and procedures provided in response to Hurricane Hannah by the Crisis Management Team and thanked them for their efforts. There was minimal property damage to the College and no campus injuries. The College resumed operations under RTC Phase II conditions on July 27, 2020.

A new program by the Student Enrollment Center is now providing Virtual Assistance to help students with the 2020 fall semester registration. All protocols are being taken to ensure continued health and safety.

On August 14, 2020, the College will hold Graduation live via Facebook and YouTube channel.

On August 17, 2020, the College Convocation will be held virtually for all faculty, staff and Board of Regents which will include a tribute to the Del Mar College family lost this year.

President Escamilla congratulated Chairwoman Scott who was elected as Chairwoman to the Community College Association of the Texas Trustees Board of Directors. The Community College Association of Texas Trustees deals with community college issues at the state level.

The Student Services Division hard work assisted the College in receiving the Trio Grant which is a student services grant which supports completion for specially designated

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students. The Grant is in the amount of approximately $1.5 million which will be received over the next five years.

President Escamilla provided a SACSCOC onsite visit update, he stated that it is going to be a virtual visit. The visit will take place the week of October 26-30, 2020.

For future reference, President Escamilla stated that there are eleven scheduled workshops for the next year.

REGENT’S COMMENTS:

• CCATT Annual Meeting………………………………………..……………..Ms. Carol Scott (Goal 5: Workforce Development, Community Partnerships, and Advocacy)

Chairwoman Scott provided information regarding the CCATT Annual Meeting and stated that the incoming Chair-Elect is Robert Glaser with Houston Community College who will be chairing their Legislative Committee. Chairwoman Scott encouraged the Board of Regents to contact her if they would like to get further involved with numerous committees. Although the conference in Corpus Christi was canceled, webinars and professional development seminars will be provided by CCATT and the information will be provided by Delia Perez, Board of Regents Liaison.

• ACCT Congress (Virtual) September 30 - October 5-8, 2020…………..Ms. Carol Scott (Goal 5: Workforce Development, Community Partnerships, and Advocacy)

The annual ACCT Congress is being reimagined into a virtual Congress for a week in early October, 2020. There will be a series of online seminars and/or webinars. All of the seminars will be available online once the Congress has concluded.

STAFF REPORTS:

• Legislative Update…………………………………….…………Dr. Natalie Villarreal (Goal 5: Workforce Development, Community Partnerships, and Advocacy)

Dr. Escamilla introduced Dr. Natalie Villarreal who began her presentation and stated the 87th Legislative Session will start January 12, 2021 and end May 31, 2021 (140 days). The Legislature will elect a new Speaker of the House and discuss changes due to COVID-19.

Del Mar College’s involvement and collaboration for community college advocacy includes the following at the State level: Texas Association of Community Colleges (TACC); Community Colleges Association of Texas Trustees (CCATT); Texas Community College Teachers Association (TCCTA); and the Texas High Education Coordinating Board (THECB). Del Mar College Day at the Texas State Capitol is tentatively scheduled for March 4, 2021.

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Currently, they are in the 116th National Congress. In February 2020, Regent Scott and Dr. Villarreal traveled to Washington D.C. with the ACCT National Congress and heard Senator Lamar Alexander and Senator Murray speak. Their focus was on the Higher Education Re-Authorization Act which has been up for renewal for many years. The College received relief from the initial CARES Act which included the Higher Ed Relief Fund. Del Mar College received $1.9 million and $245,000 as a minority serving institution. Del Mar College is also a member of the American Association of Community College Trustees and the American Association of Community Colleges which promotes advocacy at the national level.

PENDING BUSINESS:

• Status Report on Requested Information (Goal 5: Workforce Development, Community Partnerships, and Advocacy)

Chair Scott reviewed the list of pending business.

CONSENT AGENDA

CONSENT MOTIONS: (At this point the Board will vote on all motions not removed for individual consideration.)

ITEMS FOR DISCUSSION AND POSSIBLE ACTION:

1. Approval of Minutes: Regular Board Meeting July 14, 2020 (Goal 5: Workforce Development, Community Partnerships, and Advocacy)

2. Acceptance of Investments for July 2020 (Goal 6: Financial Effectiveness and Affordability)

3. Acceptance of Financials for June 2020 (Goal 6: Financial Effectiveness and Affordability) Regent Estrada made a motion to approve the Consent Agenda items. Regent Sherwood seconded the motion. There was no further discussion from the Board. A voice vote was taken, and the motion passed unanimously, 7-0 amongst Regents present, with Regents Adame, Averyt, Bennett, Estrada, Hutchinson, Scott, and Sherwood in favor.

REGULAR AGENDA

4. Discussion and possible action related to acceptance of internal audit follow-up reports and Fiscal Year 2021 Internal Audit Plan……………………..Ms. Tammy McDonald (Goal 5: Workforce Development, Community Partnerships, and Advocacy)

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Dr. Escamilla provided introductory comments. Ms. McDonald introduced Dan Graves and Brandon Tanous with Weaver.

Mr. Graves stated that the College will have an Annual Internal Audit Report and will follow the State Auditor’s Guidelines which have not been provided possibly due to delays resulting from COVID-19 and remote working of most state agencies.

Mr. Graves provided details regarding the 2020 Internal Audit Follow-up Reports including purchasing; accounts payable & disbursements; financial aid; student services, and proposed 2021 Internal Audit Plan. They evaluated the corrective action of the 4 open internal audit findings from the 13 overall findings identified in the 2017 Internal Audit Report over Purchasing. For Accounts Payable and Disbursements, they evaluated the corrective action of the 2 open internal audit findings from the 5 overall findings identified in the 2018 Internal Audit Report. They evaluated the corrective action of the 1 open internal audit finding from the 6 overall findings identified in the 2016 Internal Audit Report over Financial Aid. They also evaluated the corrective action of the 6 open internal audit findings identified in the 2019 Internal Audit Report.

Mr. Graves and Mr. Tanous discussed the results of the internal audit follow-up procedures performed for the College for Purchasing, Accounts Payable and Disbursements, Financial Aid, and Student Services.

Ms. McDonald, Mr. Graves, Mr. Tanous, and Dr. Escamilla responded to questions from the Board of Regents.

Regent Bennett made a motion to accept the College’s Internal Audit Follow-up Reports and Fiscal Year 2021 Annual Internal Audit Plan. Regent Averyt seconded the motion. There was no further discussion from the Board. There were no public comments. A roll call vote was taken and the motion passed unanimously, 7-0, with Regents Scott, Adame, Averyt, Bennett, Estrada, Hutchinson, and Sherwood in favor.

5. Discussion and possible action regarding revisions and additional related policies to Board Policy B9.1….……………………………….…..………..Ms. Tammy McDonald (Goal 5: Workforce Development, Community Partnerships, and Advocacy)

Ms. McDonald discussed the Title IX mandated changes from the Department of Education which will primarily affect procedures and processes that are not in Board “B” policy but instead, in Administrative “A” policy. Board policy will instruct Administration to establish all necessary procedures and processes to fully comply with Title IX as amended. The proposed B9.1 policy also includes revisions to the Texas Education Code per SB212 covering the reporting of sexual misconduct.

Procedure and process revisions will be established based on new mandates and distributed in compliance with Title IX. A few of the highlights of the procedural mandates include

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-Revision to the rights of the complainant and respondent (the accused -Revision of definition of “sexual misconduct” -Complaint process to include a hearing with a decision maker overseeing the hearing -Establishes a defined appeal process -Title IX Coordinator/Deputy Coordinators can no longer serve as investigators -Require 2 persons to investigate a complaint -New roles and training for persons who are part of the complaint and hearing process (Advisors and Decision Makers) -Reporting of incidents of sexual misconduct to the State (SB212) -Discipline/dismissal of employees who fail to report an incident of sexual misconduct (SB212)

Changes to B9.1 will require additional revisions to the following Board “B” policies as a result of revisions to B9.1: B2.1.2.14; B5.1; B5.11; B5.41; B5.43; B5.50; B6.9; B7.13.3.15; B7.19.

Regent Hutchison made a motion to adopt the revisions and additional related policies to Board Policy B9.1. Regent Averyt seconded the motion. There was no further discussion from the Board. There were no public comments. A roll call vote was taken and the motion passed unanimously, 7-0, with Regents Scott, Adame, Averyt, Bennett, Estrada, Hutchinson, and Sherwood in favor.

6. Discussion and possible action regarding revisions to Cash Reserve Policy B4.1.1 ……………………………………………………………………...…Mr. Raul Garcia (Goal 6: Financial Effectiveness and Affordability)

Mr. Garcia discussed revisions to the Board Policy B4.1.1 regarding Cash Reserves. Mr. Garcia stated that Board Policy B4.1.1 requires the College to maintain a certain level of cash reserves and plan for an annual budget contingency. The College is seeking to make revisions to the existing policy to include a plan and risk management reserve both which have a long-term financial outlook. The risk reserve fund is intended to provide funding that is sufficient and flexible enough to support the mission of the College throughout a crisis. The plant fund is intended to fund the College’s needs for software, deferred maintenance, furniture and fixtures, equipment and land purchases.

Regent Bennett made a motion to adopt the revisions related to Board Policy Cash Reserve B4.1.1. Regent Sherwood seconded the motion. There was no further discussion from the Board. There were no public comments. A roll call vote was taken and the motion passed unanimously, 7-0, with Regents Scott, Adame, Averyt, Bennett, Estrada, Hutchinson, and Sherwood in favor.

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At 3:00 p.m., the Chair announced the Board was going into Closed Session pursuant to:

7. CLOSED SESSION pursuant to:

A. TEX. GOV’T CODE § 551.087: (Deliberation Regarding Economic Development), regarding the discussion or deliberation of information and/or an offer of a financial or other incentive received from a business prospect engaged in economic development negotiations with Del Mar College, with possible discussion and action in open session.

B. TEX. GOV'T CODE § 551.071: (Consultation with legal counsel), regarding pending or contemplated litigation or claims, or a settlement offer, with possible discussion and action in open session; and, the seeking of legal advice from counsel on pending legal or contemplated matters or claims, with possible discussion and action in open session;

C. TEX. GOV’T CODE § 551.074(a)(1): (Personnel Matters), regarding the appointment, employment, evaluation, evaluation, reassignment, duties, discipline, or dismissal of a public officer or employee; including, 1.) Annual Evaluation of College President, and 2.) College President’s Contract, with possible discussion and action in open session.

The Board reconvened in Open Session at 4:06 p.m.

There was no action taken in Closed Session.

CALENDAR: Discussion related to calendaring dates.

ADJOURNMENT: The meeting was adjourned at 4:10 p.m.

MINUTES REVIEWED BY GC: /s/ARjr

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Consent Agenda 2

Consent Agenda 3

Regular Agenda Item 4

Del Mar College 2016 South Campus Construction Project Change Order

September 8, 2020 John Strybos, PE, CPA Vice President and Chief Physical Facilities Officer South Campus Project Site South Campus Project STEM Building Main Building South Campus Rendering Del Mar College South Campus Trellis Addition to Main Building South Campus Project Schedule Activity Date Building Size (GSF) Detailed Design Begins July 2018 Central Plant Construction Begins July 2019 7,945 Central Plant Substantial Completion March 2022 STEM Building Construction Begins November 2019 100,665 STEM Building Substantial Completion March 2022 Culinary Arts Construction Begins July 2022 59,561 Main Building Substantial Completion July 2022 79,951 Classes Start – STEM Building Fall 2022 Classes Start – Culinary Arts and Main Building Spring 2023 South Campus Budget Summary as of July 28, 2020

Item Amount ($) Bond Proceeds 139,000,000 Interest Income 2,932,823 Total Funds Available 141,932,823 Expenditures Consultants 9,079,434 Construction 23,466,599 Total Expenditures 32,546,033 South Campus Budget Summary as of July 28, 2020

Item Amount ($) Total Construction Budget 115,992,488 Expenditures (20%) 23,466,599 Remaining Construction Costs (80%) 92,525,889 South Campus Trellis Addition to Main Building • The Trellis Addition to the Main Building is an architectural enhancement that will improve the outdoor learning environment for the campus. • The ability to effectively and efficiently make use of the outdoors spaces has become increasing important in the current COVID-19 conditions. Central Plant (Bid Package 1) Construction Contract Limit Contract Change Order Item Amount ($) Original Contract Amount 9,250,000 + Changes in scope of work +20,360 - Cost savings -83,162 Net Change Order -62,802 Adjusted Contract Amount 9,184,780 Main, STEM, Culinary Arts and Site (Bid Package 2) Contract Change Order

Item Amount ($) Original Contract Amount 106,742,488 + Change in scope of work (Trellis) +876,936 Adjusted Contract Amount 107,619,424 Change Order Funding Sources Central Plant Deduct Change Order 62,802 2016 Bond Interest Income* 814,134 Total Change Order Funding 876,936 * Through July 31, 2020 the 2016 bonds have earned $2,932,833 in Interest Income. Discussion

Regular Agenda Item 5

Del Mar College RFQ#2019-20 Architectural and Engineering Services to Support Various Del Mar College Projects September 8, 2020 John Strybos, PE, CPA Vice President and Chief Physical Facilities Officer 2014 Bond Projects Status as of July 31, 2020

Project Status Current Budget ($) Central Plant Upgrades Phase 1 and 2 Complete 2,959,511 Richardson Auditorium Flooring Complete 256,434 Venters Fire Alarm Complete 213,574 Master Plan South Complete 1,650,439 General Academic Music Building Complete 59,519,476 Workforce Development Center Complete 20,551,531 Emerging Technology Complete 11,780,070 Subtotal (61.77% complete of $156,941,729) 96,931,035 2014 Bond Projects Status as of July 31, 2020 Project Status Current Budget ($) Pilot Plant Project Canopy Under Construction 467,500 Fine Arts Music (existing) Renovation Reviewing Space programming 7,199,691 Harvin Student Center Renovation Reviewing Space programming 7,253,900 Re-Roofing (Packages 1, 2 and 3) Preparing Solicitation 4,435,359 Heldenfels Renovation Reviewing Space programming 4,570,749 Memorial Classroom Building Renovation Reviewing Space programming 2,520,000 White Library Renovation Reviewing Space programming 9,369,108 Heritage Hall Demolition Scope of Work Definition 553,033 General Purpose Building Demolition Scope of Work Definition 359,100 West Campus Paving, Asphalt, Signage, Lighting, Fire Alarm, IT Site Scope of Work Definition 3,546,939 East Campus, Edge, Signage, Lighting, Fire Alarm, IT Site Scope of Work Definition 11,527,448 Contingency 8,207,867 Subtotal (38.23% remaining of $156,941,729) 60,010,694 2014 Bond Projects Preliminary Schedule

Project 20 2020 – 2021 2021 – 2022 2022 – 2023 Green = Design, Blue = Construction Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Pilot Plant Project Fine Arts Music (existing) Renovation Harvin Student Center Renovation Re-Roofing (Packages 1, 2 and 3) Heldenfels Renovation Memorial Classroom Building Renovation White Library Renovation Heritage Hall Demolition General Purpose Building Demolition West Campus Paving, Asphalt, Signage, Lighting, Fire Alarm, IT Site East Campus, Edge, Signage, Lighting, Fire Alarm, IT Site 2014 Bond Projects Next Steps

1) Use Indefinite Delivery Indefinite Quantity (IDIQ) Request for Qualifications (RFQ) Number 2019-20 “For Architectural and Engineering Services to Support Various Del Mar College Projects” to identify Project Architects and Engineers. 2) Upon Completion of the Construction Documents, Solicit Competitive Sealed Proposals (CSP) for the Construction of the Projects. 2014 Bond Projects Next Steps (Continued)

1) Finalize Space Programming Reports for Renovation Projects. 2) Complete Definition of Scope of Work for other Projects. 3) Begin Design Work. 4) Advertise for Asbestos Abatement Services. 5) Advertise for Building Demolition. RFQ#2019-20 Recommended Firms Prime Consultant Service Project Amtech Solutions Building Envelope and Roofs Reroofing Projects WKMC Architects Architecture Reroofing Projects Facility Programming Space Programming, Demographic Studies To Be Determined Gignac Architects and LNV Architecture and Engineering Memorial Classroom With NRG Engineering Building Renovation Harvin Student Center Renovation General Purpose Building Renovation Pfluger Architects with Architecture and Engineering East and West Gignac Landscape Campus Edge Architecture Recommended Firms Prime Consultant Service Project Richter Architects Architecture and Engineering Heldenfels Renovation Rock Engineering and Testing GeoTech and Construction Materials Testing To Be Determined Stridde Callins Mechanical and Electrical Engineering To Be Determined Terracon GeoTech, Construction Materials Testing, To Be Determined Assessments Turner/Ramirez Architects Architecture and Engineering White Library Renovation, Fine Arts Renovation Urban Engineering Civil Engineering To Be Determined Discussion

Regular Agenda Item 6

Request for Qualifications

Internal Audit Services

Board Review of Draft Language for RFQ Content: Service Overview Scope of Work Evaluation & Criteria Term of Engagement

This draft contains sections of the RFQ for Board of Regent discussion, input, and direction. The other sections of the RFQ are developed by Staff to meet Procurement, Legal, and Process/Submission requirements and will be integrated into the RFQ document using procurement formatting.

1. Overview The expected activities to be covered by the internal audit service provider will be determined after the successful bidder is selected. For purposes of responding to this proposal, you should assume focused effort in the following areas when responding to detailed questions on internal audit methodology:  Internal controls over processes; o financial, student services, campus operations, administrative, follow-ups from prior year’s upon request  Internal controls over financial reporting  Internal controls over safeguarding assets

It is expected that the selected firm will perform a risk assessment and develop an annual (12 month) audit plan based on the priority of risks and directives from the Board and President/CEO. The firm should also be flexible enough to re-assess the College’s risk profile from time to time and address situations that may arise requiring ad hoc reviews. See Scope of Work for more details. Tentative Schedule (dates subject to change) xxx RFQ Release date xxx Pre-submittal teleconference xxx Deadline to submit written questions xxx Receive SOQ xxx Evaluation period xxx Interviews xxx Contract/Engagement start date

2. Scope of Work a. Overview The College desires for the internal audit function to utilize a risk-based approach. The selected firm will be the College’s internal audit provider for the following functions and will provide services including but not limited to operational, financial, student services, administrative, compliance, risk and internal control reviews of systems, functions, and programs as coordinated by the Vice President of Administration and Human Resources in consult with the President/CEO. The selected firm will work closely with VPA/HR but will have a direct reporting relationship to the Board of Regents and President/CEO of the College. The selected firm may subcontract portions of the annual internal audit plan when specialized skills and expertise are warranted based on the complexity and risk of the area under review, but the firm will be the primary liaison to the VPA/HR, Board of Regents , President/CEO for all work performed. b. Excellence: The College wants and expects a high level of excellence in all areas of the Respondent's services, and this will be a significant factor in evaluating Respondent Capabilities.

Respondent’s Capability: The desired Respondent is expected to demonstrate a strong Capability (See Definitions herein) to best meet the College’s needs and objectives for this Project. Such Capability will include consideration of the following for the firms, project personnel and proposed subcontractor(s). Excellence in Capability to Achieve the College's Vision Respondent Capabilities: The College expects that the Respondent will excel in the areas listed below in order to better fulfill the College's vision. Excellence in Personnel Assigned to This Project High Level of Qualifications High Level of Similar Project Experience Excellence in Business Capability Strong Commitment to Client Needs History of Dependable and Stable Performance Strong Risk Control Performance Strong Financial Resources Strong Organization and Project Management Current and Projected Workload Project Understanding and Commitment Surplus Capability to Meet Unexpected Needs Quick Service Access to College Ease of Working Together Long Term Relationship Potential c. Internal Audit Experience and Resources Should be in operation for a minimum of five (5) years. Must be familiar with GAAP accounting principles.

Primary internal auditor must be a certified public accountant or a certified internal auditor and have at least three years of auditing experience. Should be familiar with TEXAS GOVERNMENT CODE; TITLE 10. GENERAL GOVERNMENT; SUBTITLE C. STATE ACCOUNTING, FISCAL MANAGEMENT, AND PRODUCTIVITY; CHAPTER 2102. INTERNAL AUDITING Auditing expertise and services provided to similar Texas community colleges. d. Internal Audit Team Must have sufficient staffing resources to meet the College’s needs as referenced herein and in Section 2.2 Overview. Assigned staff must have sufficient qualifications in the areas of experience, education and professional credentials for the services requested. Should have a commitment to staff training and professional development. Should have a commitment to provide staffing continuity. e. Internal Audit and Compliance Services Increased operational effectiveness through the identification of significant risks and internal control weaknesses pertaining to business processes including but not limited to those items referenced herein and in Section xx Overview

Assurance that internal control systems are designed and functioning to provide efficiency and to identify and mitigate risks Assurance that significant financial, managerial, and operational information is accurate, reliable, and timely Assurance that the College complies with legal and regulatory requirements Assurance that resources are acquired and used in a reasonably economical and efficient manner and are adequately protected Coordinate internal audit work with the external financial statement audit team, where appropriate and practicable, to support the external auditors’ work f. Start-up and Communication Must be able to provide an efficient and effective plan to establish a successful engagement Assist the Board and College President/CEO in exercising their oversight responsibilities. Working with the Board and President/CEO will include: Meeting with and reporting to the Board at least quarterly Presenting a yearly risk assessment and corresponding internal audit schedule (typically presented in August) Present an annual report to the Board and submit report in compliance with the Texas State Auditor’s office Providing the Board a copy of the institution’s plan of action as a result of any internal audit examination; including a schedule to ensure implementation or corrective actions recommended Should possess knowledge sharing tools to share information within your firm, with the College and various College stakeholders Will be required to assist the College with the end of contract/engagement transition.

3. SOQ Evaluation and Criteria a. Introduction It is the policy of the College that the selection of firms to provide professional services in connection with its projects shall be on the basis of demonstrated competence and on the professional qualifications needed to best meet the College’s needs and objectives for this Project. (Texas Government Code 2254) The College will put each SOQ submitted through a process of evaluation to determine responsiveness to the College's needs. The College reserves the right at any time to reject any or all SOQs. Award of Contract/Engagement, if made, will be to the Respondent who the College selects to best serve its interests. b. RFQ Evaluation Method Respondent Selection Process: This process includes selection of the evaluation team, discussions, investigations, findings, compliance checks, selecting Respondents for interview, recommendations to the Regents, negotiation with selected Respondent(s), and other activities related to evaluation of and negotiation with Respondents prior to the award of the Contract/Engagement. RFQ Evaluation Team: All SOQs will be reviewed by an Evaluation Team to evaluate each Respondent’s Capability to best meet the College's needs and objectives. The Evaluation Team will be comprised of key representatives of the College, and other persons selected by the College. A representative of the Director of Purchasing and

Business Services will be a non-voting member of this Evaluation Team. RFQ Compliance Check: All SOQs will be reviewed to verify that minimum requirements have been met. At the College’s option, any SOQ may be eliminated from consideration if it does not follow the requirements in this RFQ or does not meet minimum content and quality standards. Interviews: At the discretion of the College, any or all of the following interviews with any Respondent may occur at times and locations of the College’s choice. Interview(s) with the Evaluation Team, mandatory. Interview(s) with the administrative staff, if desired by the College. c. Evaluation Criteria (This section will include standard language and requirements per Procurement guidelines and establish evaluation criteria for evaluation team to use for evaluating submissions.)

d. Purpose of Request for Qualifications (RFQ) Del Mar College District proposes to retain the services of a Respondent to provide internal auditing and related professional services for this Project. Such services shall be provided by professionals (Certified Public Accountants, Certified Internal Auditors, and other related professionals) who are licensed or registered in the State of Texas with verifiable Capability in providing professional services comparable to those needed for this Project. The College intends to enter into a professional services Contract/Engagement with the selected Respondent.

4. General Terms and Conditions a. Term Initial term: Since the College fiscal year ends in August we wish to enter into a one- time agreement covering the period from March 1, 2021 thru August 31, 2022. Contract/Engagement may be renewed on an annual basis upon written agreement by both parties for four additional one year renewals not to exceed fiscal year ending August 31, 2026.