Minutes

Merced Community College District
Bond Citizens Oversight Committee Minutes
June 11, 2003 - 6:00 p.m.
Merced College Tri-College Center Board Room

Members Present:
Bob Edminster, Michelle Allison, Chris Tafoya, Keith Groniga, Maggie Randolph, Mary Villalta Brooks

Members Absent:
Chi Chi Wood, Barbara Ward, Gerald Hoyt

Others Present:
Ben Duran, Larry Johnson, Marvin Smith, Joe Allison, Chet Quaide, Bruce Kerns

The meeting was called to order at 6:03 p.m. by Larry Johnson. Since the Chair and Co-Chair had not been selected at this time, Larry Johnson chaired the meeting.

Larry Johnson explained to the committee that all Citizens Bond Oversight Committee Meetings fall under the Brown Act and as a result, all meetings are open to the public. An opportunity will be given to citizens to address the committee on matters of the bond process - a five minute time limit will be allotted to each speaker, with a maximum of twenty minutes to each subject, unless extended by the Chairperson. Minutes of all meetings will be kept on file and posted on the Bond COC web site.

The web site address is http://www.mccd.edu/news_events/news/coc

1. Additions to the Agenda - There were no additions to the agenda.
2. For Discussion/Action
   1. Introductions: Each committee member and staff member introduced themselves and gave a brief description of their role to the committee.
   2. Welcome: Ben Duran welcomed the committee members and thanked them for their commitment to Merced Community College District.
   3. Master Planning Process: Terry Eyrich, MCCD Facilities Master Planning Committee (FMPC) Chairperson, gave the committee a brief history of the planning process. In 1991, the FMPC was formed for the purpose of developing the College's Facilities Master Plan, which serves as a key document in the preparation of the Educational Master Plan. The Facilities Master Planning Committee is a shared governance group composed of administrators, faculty and staff from all areas on campus.
      
      Terry explained that since 1991, the FMPC has been responsible for planning 20 projects; seven have been funded. Terry referred to a handout which showed the Life of a Construction Project. Project identification is based on several key factors such as Division five-year plans, input from District planners and architects, input from the State, cap/load ratios and input from the campus community. Terry also referred to the Campus Master Plans for Los Banos and Merced and explained that these plans represent buildings planned through 2040.
      
      Ben added that we are very fortunate to not only plan for the future but to actually build for the future.
   4. The Bond Process - Bruce Kerns, District financial consultant with Stone and Youngberg LLC, gave the committee a brief overview of the bond sale process. Bruce referred to several handouts and explained that the first document was an Official Statement, which outlined the series of bond sales and included ratings, interest rates and investor yields. The other two documents were summaries prepared by the rating agencies and analyzed the investments of both improvement districts.
      
      Bruce explained the Improvement Districts were given very good ratings as a result of the presentations given to the rating agencies last month. Investors look at the ratings before determining whether or not to invest. In addition to the good ratings, the District purchased bond insurance, which gives the investors assurance that the payments will always be made.
      
      Bruce will send copies of the booklets prepared for the rating agencies and Sheila will distribute them to the committee members for review. The document is an excellent source of information about the District.
      
      Larry explained to the committee that prior to the bond election, the citizens were polled and the outcome was favorable with the caveat that revenue generated from Los Banos, stay in Los Banos and the revenue generated from Merced, stay in Merced. Because of this, District representatives chose to re-district the area which led to School Facilities Improvement District 1 (Merced) and School Facilities Improvement District 2 (Los Banos). Larry wanted everyone to know that throughout this process, we will refer to Improvement District 1 and Improvement District 2.
      
      Chris Tafoya asked Bruce if committee members were precluded from investing in these bonds. Bruce said no, committee members could invest in these bonds.
   5. Proposed COC Bylaws - Larry reviewed the proposed COC bylaws with the committee and explained that the Bylaws will be presented to the Board of Trustees at the June 17 Board Meeting.
      
      After review, there was consensus that Section VI - Item A be changed to the following AA quorum shall consist of a majority of those appointed to the committee.
   6. Committee Responsibilities - Chet Quaide, District Legal Counsel with Atkinson, Andelson, Loya, Ruud and Romo, gave the committee a brief overview of committee responsibilities and the Brown Act.
      
      Chet explained that Ed Code Section 15278 (a) provides for the establishment of a citizens' oversight committee when a bond measure is passed. The citizens' oversight committee shall actively review and report on the proper expenditure of taxpayers' money for school construction.
      
      Based on the proposed bylaws, the COC may:
      1. Receive and review copies of the annual independent performance audit conducted to ensure that the bond revenue has been expended only on the specific projects listed in the bond propositions;
      2. Receive and review copies of the annual independent financial audit of the bond revenue.
         
         Chet gave the committee a brief overview of the Brown Act and specifically review the following items:
      1. A meeting is a gathering of a quorum of the legislative body, no matter how informal, where business is discussed or transacted.
      2. An agenda must be conspicuously posted at least 72 hours prior to the time of regular meetings in a location freely accessible to members of the public.
      3. Members of the public must be able to address the board regarding items on the agenda before or during the governing board's consideration of the item.
      4. Minutes shall be taken recording all actions taken by the governing board. The minutes are public records.
         
      5. Only items listed on the Agenda may be discussed.

7. Reporting Process - Marvin Smith, District Director of Business Services and Joe Allison, Director of Fiscal Services presented the committee with two sample spreadsheets for reporting bond expenditures. Marvin asked the committee if they had a preference on either one.
   
   After discussion, there was consensus from the committee that Marvin and Joe prepare a draft spreadsheet which gives the detail from the Santa Rosa sample and the information from the Ventura County sample. Marvin and Joe will create a draft form and bring it to the next meeting for the committee to review.
8. Bond Resolution - Larry Johnson referred to the two board approved Bond Resolutions for SFID 1 and SFID 2. Larry said that Exhibit A for each resolution clearly identifies the projects that will be completed with bond revenues. He added that at the fall meeting, a more detailed explanation of the bond projects will be presented by the District Architect.
   
   Chris Tafoya asked what happens with the extra dollars if the bond projects come in under budget. Ben referred to Exhibit A on both resolutions and explained that any available dollars would go towards ongoing Architectural Barrier Removal and ongoing remodels as a result of vacated buildings on campus.
   
   Marvin referred to the rating presentation packet and explained that the packet included a bond sequence, which outlined the spending plan at this time.
   
   However, Ben added that failure to pass any of the state bonds in the future would seriously affect our ability to leverage capital construction projects with state funding. Each year the bond sequence will be reviewed and updated based on the outcome of many variables.
   
   Sheila Flores will send committee members a copy of our Five-Year Construction Plan and a copy of the booklet prepared for the rating presentations, which includes the Bond Sequence.
   
   Mary Villalta Brooks asked if we were under City or County jurisdiction. Ben said that we are under State jurisdiction.
   
   The meeting adjourned at 7:34 p.m.
   
   /sf

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