Chapter IV Business/Finance

Chapter IV Business/Finance

B4.1   Budget Preparation:  The Chief Executive Officer (CEO) of the College shall prepare an annual operating and debt service budget. The operating expense budget shall include funds to provide for adequate instructional and support operations as well as for major equipment repairs and/or replacements, unexpected enrollment increases, and other emergencies and contingencies. The operating income budget should reflect conservative forecasting.

B4.1.1 Financial Reserves:  The College District goal shall be to maintain an  unrestricted cash reserve of approximately three (3) months of current operation requirements.   The three month reserve should be between 20 and 25 percent of the current year’s unrestricted operating budget.   In addition, the College Chief Executive Officer (CEO) is directed to:

  • a) prepare a current operating budget that will include a minimum contingency line item reserve “Contingency Fund “equal to 1.5 percent of the total proposed expenditure budget. The budgeted contingency reserve will be restricted and any transfer from such line item must be approved by Board action.
  • b) maintain a “Plant Fund” reserve primarily for long-term financial planning relating to institutional software program needs, deferred maintenance, furniture, fixture, equipment, and land purchases in accordance with DMC policy B4.11.4 that addresses land purchases. Transfer authority from this fund is delegated to the CEO. The CEO will notify the Board of any transfers made into or out of this fund.
  • c) create and maintain a “Risk Fund” reserve that will provide financial flexibility to support the mission of the College throughout a financial crises. Funding will be used for catastrophic loss deductibles, uninsured losses, emergent needs for health and safety occurrences, supplement operational needs due to loss of or reduction in funding source as a result of national or state emergency declaration or economic downturns. Transfer authority from this fund is delegated to the CEO. The CEO will notify the Board of any transfers made into or out of this fund.

B4.2 Checks - Authorized Signatures:   The Chief Financial Officer (CFO) shall develop and implement appropriate procedures for expediting the signing of checks for routine bills, payroll, student grants, scholarships, and refunds by the use of "impressed" funds and/or machine signature. Such policies and procedures must be approved by the College CEO and the Board’s Audit Committee. The CFO, with approval of the CEO of the College, shall operate and maintain necessary checking accounts in the name of the College with the depository officially approved by the Board of Regents. Funds of the College may be withdrawn from the depository by instruments signed by either the CEO, CFO, or the Comptroller and countersigned by either the Chair, the Vice Chair, the Secretary, or the Assistant Secretary of the Board of Regents or persons with subsequent titles approved by the Board.

A4.2.1 Accounts Payable Procedures:   Policies and procedures as follows shall be utilized in writing and signing checks issued from the Accounts Payable Fund.

A4.2.1.1  The CFO shall draw checks on the Accounts Payable Fund for the purpose of paying all College bills. The checks shall bear the machine-signed signature of the Chair of the Board and shall be manually countersigned by the CFO, the Comptroller, the Director of Accounting, or the CEO of the College. All College disbursement activity shall be presented to the Board as part of the monthly financial statements and shall be accepted by the Board.  

A 4.2.2 Payroll Fund:  Policies and procedures as follows shall be utilized in writing and signing checks issued from the Payroll Fund.  

A4.2.2.1  A local maintenance fund check or bank transfer in an amount equal to the total required to cover payroll checks issued shall be manually signed by either the CEO, the CFO, or the Comptroller and countersigned by the Chair, the Vice Chair, the Secretary, or the Assistant Secretary of the Board of Regents.

A4.2.2.2  Payroll checks shall bear the machine-signed signature of the CEO of the College or of the CEO’s manual signature. 

A4.2.3 Federal and Agency Funds:   Policies and procedures as follows shall be utilized in writing and signing checks issued from Student Federal Loan Funds and Agency Fund Accounts. 

A4.2.3.1  Each check issued in an amount less than $1,000 shall be manually or machine signed by either the Comptroller, the Director of Accounting, the CFO, or the CEO of the College.

A4.2.3.2  Each check issued in an amount of $1,000 or more, in addition to the requirements above, shall be countersigned by another College official from the same group.

B4.3 Contracts - Authorized Signatures:   Contracts involving the College District shall be signed by the Chair of the Board of Regents or, under certain conditions, by the CEO of the College.

B4.3.1 Chair of the Board of Regents:   The Chair of the Board shall sign all contracts approved by the Board of Regents and other contracts involving the College District if the contracting party requires the signature of the Chair of the Board. Should the Chair of the Board of Regents be absent, incapacitated, or unavailable, the Vice Chair of the Board shall sign for the Chair.

B4.3.2 Secretary of the Board:  Where the signature of the Secretary is required, the Assistant Secretary shall sign in the absence, incapacity, or unavailability of the Secretary.

B4.3.3 Chief Executive Officer of the College:  The Chief Executive Officer (CEO) of the College or the CEO’s designated representative shall sign contracts in the following instances:  

B4.3.3.1   The contract is for the purchase of an item(s) or service(s) provided for in the annual budget of the College.

B4.3.3.2   The authorization and procedures for handling the signing of change orders on construction are provided in a separate planning and construction policy and procedure statement.

B4.3.3.3   The contracts are for the purchase of furniture and/or equipment provided for in a budget for new facilities if the budget has been approved previously by the Board of Regents or an authorized committee of the Board.

B4.3.3.4   The documents have originated with federal and state agencies if the program or purpose involved has prior approval of the Board of Regents.

B4.3.3.5   The contract provides operating program services or support activities relating to the purpose and mission of the College.

B4.4 Contracts:   No one is authorized to contractually obligate the College unless stated in policy.

B4.5 Agency Reports:   The Chief Executive Officer (CEO) or the CEO's representative is responsible for making assessments, collections, payments, and reports as required by appropriate agencies designated by the state or the federal government.

A4.5.1 Social Security:  Funds shall be allocated in the operating budget to finance College participation in the Social Security System.

A4.5.2 Worker’s Compensation:  Provision shall be made for the necessary worker’s compensation insurance by carrier. Competitive bidding is required at least every three years.

A4.5.3 Unemployment Compensation:  The College shall join the Texas Association of School Boards groups as a reimbursing employer in order to provide Unemployment Compensation Insurance.

A4.5.4 ORP/Tax Sheltered Annuity:   The CEO of the College or the CEO's representative shall sign necessary documentation in connection with the Optional Retirement Program and Tax Sheltered Annuity agreements.

B4.6 Investment:   The purpose of this Investment Policy is to provide Del Mar College with specific policy guidelines so that the risk to invested capital may be minimized while obtaining a reasonable market return.  It is the policy of Del Mar College (the "College") that the administration of its funds and the investment of those funds shall be handled as its highest public trust. Investments shall be made in a manner which will provide the maximum security of principal invested through limitations and diversification while meeting the daily cash flow needs of the College and conforming to all applicable statutes governing the investment of public funds. It is the intent of the College to be in complete compliance with the Texas Public Funds Investment Act (Section 2256, Texas Government Code) and the Public Funds Collateral Act (Section 2257, Texas Government Code). The earnings from investment will be used in a manner that best serves the public trust and interests of the College.

B4.6.1 Investment Objectives:  Investment of funds shall be governed by the following investment objectives, in order of priority, for each fund listed in Article II of this Policy.  

B4.6.1.1  Preservation and Safety of Principal - to ensure that capital losses from default or erosion of market value are avoided;

B4.6.1.2  Liquidity – to ensure that funds are available to meet all obligations when due;

B4.6.1.3  Diversification – to minimize risk from any one sector, maturity, or issuer; and

B4.6.1.4  Yield – to attain a reasonable market yield.

B4.6.2 Cash Management:    The College shall maintain a comprehensive cash management program, which includes collection of accounts receivable, prudent investment of its available cash, disbursement of payments in accordance with invoice terms, and the management of banking services.

B4.6.3 Investment Strategy:  

B4.6.3.1 Operating Funds:  The investment strategy of the College for operating funds will incorporate the equal objectives of safety, liquidity, diversification, and yield. Funds shall be invested only in accordance with the Investment Policy. The authorized securities for this portfolio will be of the highest credit quality. The portfolio securities, when not matched to a specific liability, will be structured to attain reasonable market yield through a laddered structure designed to minimize volatility and market risk. The portfolio shall be diversified as to market sector and maturity to protect against market and credit risk. Diversification can be augmented by the use of a pool or money market mutual fund.

The weighted average maturity of the operating fund portfolio will be no greater than one year.  Because all of the funds may be combined for investment purposes, the portfolio will address the varying needs of all funds in the portfolio, recognizing liquidity needs as well as the desire to extend slightly for incremental return on the core funds in the portfolio. No investment of operating funds shall have a stated maturity exceeding two (2) years from the date of purchase.

B4.6.3.2 Reserve Funds:  The investment strategy of the College for reserve funds will incorporate the same objectives of safety, liquidity, diversification, and yield. Funds shall be invested only in accordance with the Investment Policy. Reserve funds may be combined for investment purposes and the portion of the portfolio designated as reserve funds may extend to a maximum maturity of five (5) years in recognition that these funds are not needed for liquidity purposes. The objective of yield will be secondary only to safety for investment of these funds. The weighted average maturity of the reserve fund portfolio will be no greater than one year.

B4.6.4 Scope:  The  College may combine its funds into one or more pooled investment portfolio for investment purposes for efficiency and maximum investment opportunity. This Investment Policy and investment strategies shall apply to all the financial assets and funds of Del Mar College. These funds are defined in the College’s Annual Financial Report and include:  

B4.6.4.1  the local maintenance fund,

B4.6.4.2  the plant funds,

B4.6.4.3  the debt service funds, including reserves and sinking funds, to the extent not required by law or existing contract to be kept segregated and managed separately,

B4.6.4.4  the tax bond interest and sinking fund,

B4.6.4.5  the agency funds, to the extent not required by law or existing contract to be kept segregated and managed separately, and

B4.6.4.6  any new fund created by Del Mar College, unless specifically exempted from this Policy by the Board of Regents or by law.

This Investment Policy shall apply to all transactions involving the financial assets and related activity for all the foregoing funds. However, this Policy does not apply to employee retirement and pension funds administered and/or sponsored by Del Mar College.

B4.6.5 Standard of Care:  The standard of care to be used by investment officers shall be that of the "prudent person" and shall be applied in the context of managing the entire portfolio.  Investments shall be made with judgment and care, under circumstances then prevailing, which persons of prudence, discretion, and intelligence exercise in the management of their own affairs, not for speculation, but for investment, considering the probable safety of their capital as well as the probable income to be derived.

  B4.6.6 Designation of Investment Officers:  The  Board of Regents is responsible for considering the quality and capability of staff, investment advisors, and consultants involved in investment management and procedures. The Board of Regents has ultimate fiduciary responsibility for all funds. All participants in the investment process shall seek to act responsibly as custodians of the public trust.

The Director of Accounting and Budget Officer and the Comptroller shall be designated by resolution of the Board of Regents as the Investment Officers of the College and are responsible for investment management decisions and activities acting on behalf of the Board of Regents.  An outside investment advisor may be appointed to assist the Investment Officers in the management of College funds and may be granted limited investment discretion within the guidelines of this Investment Policy.

Designation of an Investment Committee: The CFO and the designated Investment Officers shall be designated as an internal Investment Committee for discussion on the general direction of the portfolio and any changes to the Policy to go to the Board. 

B4.6.7 Term:  Investment authority granted to the Investment Officers is effective until rescinded by the Board.

B4.6.8 Investment Procedures:  The Investment Officers shall establish written administrative procedures for the operation of the investment program consistent with this Investment Policy.

B4.6.9 Disclosure of Personal Business:   An investment officer who has a business relationship with an entity seeking to sell an investment to the College shall file a written statement with the Board of Regents disclosing that personal business relationship or interest prior to conducting business with that entity. An investment officer who is related, either directly or indirectly through blood or marriage, to an individual seeking to sell an investment to the College shall be required to file with the Texas Ethics Commission, as well as providing the above described disclosure to the Board of Regents prior to conducting business with that individual. Officers and employees involved in the investment of funds shall refrain from personal business activity that could conflict with proper execution of the investment program or that could impair their ability to make impartial investment decisions. Employees and Investment Officers shall disclose to the Board any material financial interests in financial institutions that conduct business with the College, and any personal financial/investment positions that could be related to the performance of this portfolio.

B4.6.10 Training:   Investment Officers shall attend at least ten (10) hours of training as defined by the Public Funds Investment Act within twelve (12) months of assuming duties. Training will include education in investment controls; security, market, and strategy risks; diversification; and compliance with the  Public Funds Investment Act. Training programs will be approved by the Board.  Investment Officers shall attend a minimum of ten (10) hours of similar investment training every two fiscal years.

B4.6.11 Limitation of Liability:  The Investment Officer and those with delegated investment authority under this Policy, when acting in accordance with the written procedures and this Policy and in accord with the Prudent Person Rule, shall be relieved of personal liability in the management of the portfolio, provided that deviations from expectations for a specific security's credit risk or market price change or portfolio shifts are reported in a timely manner and that appropriate action is taken to control adverse market effects. 

B4.6.12 Authorized Investments:   Acceptable investments under this policy shall be limited to the instruments listed below in accordance with and as defined by the Public Funds Investment Act as amended. The investments are to be chosen in a manner that promotes diversity or market sector and maturity. The choice of high-grade government investments and high-grade money market instruments is designed to assure the marketability of those investments should liquidity needs arise. No security shall have a stated final maturity exceeding two (2) years except those designated from reserve funds which will not exceed five (5) years to maturity. Some investment types listed in the Act may be further restricted.  

B4.6.12.1  Obligations of the United States Government, its agencies and instrumentalities, are authorized investments under this Policy if:

  • the stated maturity does not exceed two (2) years from date of purchase for operating and five (5) years for reserve funds, and
  • excluding mortgage backed securities (MBS) and collateralized mortgage obligations (CMOs).

B4.6.12.2  A depository certificate of deposit is an authorized investment under this Policy if:
  • the certificate is issued by a bank doing business in Texas including the banking services depository, and is
  • fully guaranteed or insured by the Federal Deposit Insurance Corporation or its successor, or is
  • fully collateralized in accordance with this Policy Section B4.6.17.

B4.6.12.3  Fully collateralized repurchase agreements are authorized investments under this Policy if the repurchase agreement:
  • has a defined maturity not to exceed 180 days,
  • is a flex repurchase agreements used specifically for bond funds and matched to the anticipated expenditure plan for those funds,
  • is secured by obligations of the US Government, its agencies or instrumentalities,
  • is collateralized at a minimum of 102% of the total book value of the repurchase agreement including accrued interest accumulated on the repurchase agreement
  • held in a depository approved by the Board,
  • is transacted under an executed Bank Market Association Master Repurchase Agreement between the College and the counter-party, and
  • is transacted with a primary government securities dealer as defined by the Federal Reserve or a financial institution doing business in Texas.

B4.6.12.4  Reverse repurchase agreements are authorized investments under this Policy if the funds received under the reverse:
  • are used to acquire additional authorized investments, and
  • the maturity of the acquired securities is no longer than the term of the reverse.
B4.6.12.5  Commercial paper is an authorized investment under this Policy if:
  • it is rated A-1/P-1 or the equivalent by at least two nationally recognized rating agencies, and
  • does not exceed 270 days to stated maturity.
B4.6.12.6  Bankers acceptances are authorized investments under this Policy as defined by the  Public Funds Investment Act and may not exceed 90 days to stated maturity.
B4.6.12.7   Money Market Mutual Funds are authorized investments under this Policy if the fund:  
  • is registered with and regulated by the US Securities and Exchange Commission (SEC), and complies with SEC rule 2a-7,
  • is a fund that includes in its investment objectives the maintenance of a stable net asset value of $1 for each share,
  • is invested exclusively in the type obligations approved in this Policy, and
  • is rated in the highest credit rating category by a nationally recognized rating agency.

B4.6.12.8  No load mutual funds are authorized investments under this Policy if the mutual fund:

  • is registered with and regulated by the US Securities and Exchange Commission (SEC),
  • has an average weighted maturity of less than two (2) years, and
  • is invested exclusively in the type obligations approved in this Policy.

B4.6.12.9  Constant-dollar, Texas Local Government Investment Pools are authorized under this Policy if the pool:

  • strives to maintain a stable net asset value of $1,
  • is rated AAA or equivalent by a nationally recognized rating agency, and
  • complies in all manner with the Public Fund Investment Act as amended.

B4.6.12.10  Cash Management and Fixed Income Funds sponsored by organizations exempt from Federal income tax under Section 501(f) of the Internal Revenue Code.

B4.6.12.11  FDIC insured, negotiable Certificates of Deposit are authorized as investments under this Policy from banks in the US, if the issuing bank has a short term rating of at least A1/P1 or the equivalent by two (2) nationally recognized rating agencies.

B4.6.12.12  Corporate bonds and debentures are authorized investments under this Policy if:

  • the corporation has one of the two highest long term credit ratings of two nationally recognized credit rating agencies, and
  • maturities do not extend beyond two (2) years for operating funds or five (5) years for reserve funds.

B4.6.12.13  Interest bearing depository accounts of banks doing business in Texas insured by the FDIC or collateralized in accordance with this Policy.  

B4.6.12.14  Obligations of any state or political subdivision of any state rated no less than AA by a nationally recognized standard rating agency with a maximum maturity of 24 months.

If additional types of securities are approved for investment by public funds by state statute, they will not be eligible for investment by the College until this Policy has been amended and the amended version adopted by the Board of Regents.

B4.6.13 Unauthorized Investments:  The following mortgage-backed securities are not authorized for purchase by the College:  

B4.6.13.1  Principal Only Strips (POs),

B4.6.13.2  Interest Only Strips (POs),

B4.6.13.3  Inverse Floating Rate mortgage backed securities (Inverses), or

B4.6.13.4  Collateralized mortgage backed obligations with stated maturities greater than ten (10) years.

B4.6.14 Competitive Bidding:  All securities, including certificates of deposit, will be purchased or sold after a minimum of three (3) offers/bids are taken to verify that the College is receiving fair market value/price for the investment.

B4.6.15 Delivery versus Payment:  All security transactions, including collateral for repurchase agreements shall be conducted on a delivery versus payment (DVP) basis.

B4.6.16 Diversification:   Revised on August 9, 2023 The College’s objective is to diversify the investment instruments within its portfolio to avoid incurring the unreasonable risks inherent in over-investing in specific instruments, individual financial institutions, or maturities. Asset allocation in the portfolio should, however, be flexible and capable of adjusting to the outlook for the economy and the securities markets.

As a guideline, the College may invest to the following maximum limits (percent of total portfolio) and guiding percentages are calculated at time of purchase:

US Government Obligations - 80%
US Agencies and Instrumentalities - 75%
Repurchase Agreements - 100%
Depository Certificates of Deposit - 75%
Commercial Paper - 30%
Bankers Acceptances- 20%
Money Market Mutual Funds- 50%
% of Fund Ownership - 10%
Mutual Funds - 10%
% of Fund Ownership - 10%
Investment Pools - 100%
% Ownership by Issuer - 5%
Corporate Obligations - 25%
% by Corporation - 5%
State and Municipal Obligations - 30%
% Ownership by Issue - 5%
Negotiable Certificates of Deposits - 25%
Interest Bearing Accounts - Texas Banks 100%

B4.6.17 Collateral and Safekeeping:   Revised on August 9, 2023  All custodial and safekeeping arrangements shall be approved by the Investment Officer(s) and agreement of the terms executed in writing.  Collateral agreements shall be approved by resolution of the pledging bank to fulfill the requirements of FIRREA (Financial Institutions Resource, Recovery and Enforcement Act). 

Authorized Collateral:

The collateral pledged for time and demand deposits or repurchase agreements shall be, at a minimum, equal to 102% of the total deposit, or agreement principal, plus all accrued interest.  The pledging bank or counter-party shall be liable for monitoring and maintaining the margin. 

Authorized collateral will include only: 
  • obligations of the US Government, its agencies or instrumentalities, excluding letter of credit and including mortgage backed securities;
  • obligations of any state or its agencies or instrumentalities rated A or better by a nationally recognized rating agency;
  • obligations of agencies, counties, cities and other political subdivisions of any state rated not less than A by a nationally recognized rating agency; or
  • FHLB irrevocable letters of credit

Collateral preference will be given to pledged securities.

Voluntary Collateral Pooling Alternative:
Collateral pooling alternatives will be evaluated on a case-by-case basis for use.

If any depository offers a voluntary collateral pooling alternative for the provision of collateral (instead of uniquely pledged securities), the investment officers will fully evaluate the risk factors concerned to determine participation.  The use of collateral pooling will be analyzed using factors such as anticipated balances, fluctuations in balances, duration of deposits and current economic conditions to determine the acceptability of the collateral pool.

Collateral Pledged to the College:  
All securities pledged to the College for certificates of deposit (time) or demand deposits shall be held by an independent custodial, third party bank approved by the Investment Officer. The custodial bank may not be within the same holding company as the bank from which the securities are pledged.

The party custodial bank shall be required to issue (a) original safekeeping receipts listing each specific security by rate, description, maturity, cusip number, and other pertinent information and (b) a monthly collateral report sent directly to the College. Each safekeeping receipt will be clearly marked that the security is pledged to the College. 

Collateral Owned under a Repurchase Agreement:
All securities owned by the College under a repurchase agreement shall be held by an independent custodial, third party bank approved by the Investment Officer.

Safekeeping of College Owned Securities:
All securities owned by the College will be safe-kept by the College's banking services depository or a College approved and contracted custodian.

B4.6.18 Broker/Dealers:   The College shall maintain a list of financial institutions and brokers which are authorized to provide it investment services. The Board will review and approve the list of authorized broker/dealers annually.

Securities broker/dealers not affiliated with a bank shall be classified as primary dealers or regional brokers/dealers, and shall meet certain other criteria as determined by the Investment Officers. The College’s banking services depository, or its brokerage subsidiary, are not authorized as a broker/dealer for securities, other than CDs, in order to perfect ownership by the College on security delivery. The following criteria must be met by those broker/dealer firms on the list:  

B4.6.18.1  provision of an annual audited financial statements,

B4.6.18.2  proof of certification by the Financial Institutions Regulatory Authority (FINRA),

B4.6.18.3  proof of current registration with the State Securities Commission, and

B4.6.18.4  completion of an internal College broker questionnaire.

B4.6.18.5  Policy Review:  Every broker/dealer and financial institution with whom the College transacts business will be provided a copy of the then-current Investment Policy to assure that they are familiar with the goals and objectives of the investment program.

B4.6.18.6  Policy Certification:  In accordance with the Act, any investment pool or a discretionary investment adviser to the College must receive a copy of the then-current Investment Policy to assure that they are familiar with the goals and objectives of the investment program.  The pool or firm will be required to return a written certification form acceptable to the College certifying that the policy has been received and reviewed and that procedures are in place to preclude transactions not authorized by this Policy.

Depositories: The College shall competitively bid for its primary banking services provider at least every four years. The College may also utilize other Texas depositories for time and interest bearing demand deposits which provide investment opportunities. 

B4.6.19 Internal Management Reports:  Each quarter, the designated Investment Officers shall jointly prepare and submit signed, written reports of all investments, in compliance with Section 2256.023 of the Public Funds Investment Act and the Texas Education Code Section 51.0032. These reports shall be submitted to the Board of Regents and the Chief Executive Officer (CEO) and contain sufficient information to permit an informed outside reader to evaluate the performance of the investment program.

B4.6.20 Pricing:  The market price used for reporting of market values will be obtained from an independent source such as the  Wall Street Journal or an investment advisor or a broker not involved with the sale of the particular security.

B4.6.21 Benchmark:   The benchmark for investments shall be equal to the average yield on the current six (6) month and one (1) year US Treasury Bills for the comparable period for comparison to the established weighted average maturity. When comparing the performance of the College’s portfolio, all fees and expenses involved with the management of the portfolio shall be included in the computation of the portfolio’s yield.

B4.6.22 Distribution of Interest:   Investment income consists of interest earned on investments, net amortization earnings, interest earned on checking account balances, and realized gains resulting from sales of securities. Investment income will be allocated to the fund for which the interest was earned on an allocation basis as directed by the Board.

B4.6.23 Internal Controls:  The Investment Officers shall establish a system of internal controls and procedures for the operation of the investment program which are consistent with this Investment Policy and documented in writing. Such controls shall be designed to prevent losses of public funds arising from fraud, employee error, or misrepresentations by third parties. These controls shall be reviewed annually by Del Mar College’s independent auditor. No officer or designee may engage in an investment transaction except as provided under the terms of this Policy and the procedures here established.

The Investment Advisor shall monitor, on no less than a weekly basis, the credit rating on all authorized investments in the portfolio based upon independent information from a nationally recognized rating agency. If any security falls below the minimum rating required by Policy, the Investment Advisor shall notify the CFO of the loss of the rating, conditions affecting the rating, and possible loss of principal with liquidation options available, within one weeks after the loss of the required rating.

The Investment Officer or Investment Advisor shall monitor, on no less than a weekly basis, the status and ownership of all banks issuing negotiable CDs owned by the College based upon information from the FDIC. If any bank has been acquired or merged with another bank in which negotiable CDs are owned, the CD which places the College above the FDIC insurance level will be immediately liquidated.

B4.6.24 Cash Flow Analysis:  Cash flow forecasting is designed to protect and sustain cash flow requirements of the College. The Investment Officer will maintain a cash flow forecasting process designed to monitor and forecast cash positions for investment purposes. Cash flow will include the historical researching and monitoring of specific cash flow items, payables, and receivables as well as overall cash position and patterns.

B4.6.25 Investment Policy Adoption:  The Policy and its strategies shall be reviewed and adopted on an annual basis by the Board. The College’s Investment Policy shall be adopted by the Board of Regents. A written resolution approving this review and detailing any changes to the Policy or strategy as a result of the review will be passed and recorded.

B4.7 Membership Dues:  The College may pay dues for institutional membership in professional and civic organizations, but not for individual membership except as approved by the Chief Executive Officer (CEO) of the College when the College can receive benefits of membership only through individual membership.

B4.8 Customer Supplies:  The administration shall operate a revolving customer supplies account fund for the purchase and payment of repair parts and other instructional needs in the shop programs.  

B4.9 Authorization of the Buildings and Grounds Committee of the Board in Master Planning and Development:   The Buildings and Grounds Committee, comprised of all members of the Board of Regents, is authorized by the Board to formulate and carry out policies and procedures involving master planning and development, including needs assessment, construction and other capital improvement projects, budget requirements, acceptance of bids and awarding of contracts, major change orders, and acceptance of completed projects. The Buildings and Grounds Committee is authorized to select and contract with the planning and coordinating architect, project architects and engineers, and/or other professional and technical personnel as needed.

A4.9.1 HUB Guidelines:    The following guidelines will be used to increase the utilization of Historically Underutilized Business (HUB) firms in the awarding of contracts for the expenditure of monies from the issuance of general obligation bonds.

A4.9.1.1  Fees expended for Architectural and Engineering Services shall include a goal of 20% of all Architectural/Engineering projects to be expended with HUB certified Architectural or Engineering firms.

A4.9.1.2  Fees expended for General Construction shall include a goal of 26% of all General Construction projects to be expended with HUB certified General Contracting or Subcontracting companies.

A4.9.1.3  Fees expended for Heavy Construction shall include a goal of 11% of all Heavy Construction projects to be expended with HUB certified Construction companies.

A4.9.2 HUB Vendor:    A HUB certified vendor is one that has been certified by the State of Texas as having met all the rules established by the Texas Building and Procurement Commission (TBPC) and can present said certification to the College upon request.

B4.10 College Master Development Plan:  The College Master Development Plan provides a long term framework of policy, guidelines, and directions within which the daily strategic decisions of campus development can occur. It is a management tool which recognizes the dynamic character of educational institutions and allows for development flexibility while integrating the College goals and objectives with broader concerns of the community it serves. The plan is a strategy for land and building utilization and development for the foreseeable future of the campus. It provides the physical framework to accommodate the anticipated enrollment of the institution and to facilitate the delivery of services. The plan is directed toward creating a campus environment that supports the campus mission and the goals and objectives of the academic plan. It utilizes the concept of proper space management in order to maximize use of existing facilities and to facilitate changing program requirements and increased enrollment.

B4.10.1 Goals and Objectives:  A statement of the goals and objectives of the plan itself is required. Examples are as follows: 

B4.10.1.1  The physical environment of the College shall promote learning, teaching, and research by providing classrooms and teaching laboratories with appropriate equipment and services; private faculty office space for consultation, study, and research; library facilities for research, research instruction, and public service; laboratories and other specialized support space for teaching and research; and required related service facilities to support academic programs.

B4.10.1.2   The physical environment of the College shall attempt to promote campus safety and security by providing safe and easy access to the facility for participants in all campus programs and by providing secure and safe learning, teaching, and research conditions for faculty, staff, and students.

B4 .10.1.3  The physical environment of the College shall promote accessibility, efficiency, and economy in programs by removing barriers to facilities for the handicapped and complying with  Federal 504 regulations; by locating College programs in facilities that minimize the need for extensive travel; by continuing a program of capital improvements to reduce operating costs through energy conservation and other means; and by developing and implementing a College-wide preventive maintenance program.  

B4.10.2 Planning Assumptions:  In addition, the goals and objectives of the development plan shall be supported by generally accepted planning assumptions. Examples are as follows: 

B4.10.2.1  The development plan shall be guided by existing and future program needs and plans.

B4.10.2.2  The  development plan shall be long-range and conceptual in nature but should also provide specific policy guidance and recommendations with regard to development standards.

B4.10.2.3  Most existing campus buildings of permanent construction will be retained and renovated as necessary to provide a useful life of at least forty years. 

B4.10.3 <VACANT>

B4.10.4 Urban Context:  A statement of the relationship between the College and its surrounding community will include development guidelines that will enhance the contribution of the College to the community environment and minimize the adverse impact of institutional activities on surrounding neighbors.

B4.10.5 General Land Use Policies and Plan:  A statement of the policies which will govern the use of land resources in planning the campuses shall deal with issues such as campus zoning, dedicated open space, preservation of natural amenities, density of buildings, and established campus boundaries and the associated land acquisition program. A plan of the campus showing zones of land use is exemplified by the following categories: open space, recreation, parking, instructional areas, administrative and plant support, special uses, and student services.

B4.10.6 Transit Service:  The College shall pursue transportation policies and actions that will allow better transit service; encourage the municipality to provide transit services designed to serve a larger percentage of the population; provide incentives to faculty, staff, and students to use transit, as appropriate; and cooperate with the city and community in achieving and maintaining an operable level of traffic on streets surrounding and leading to the campus. 

B4.10.6.1  Transportation and parking policies must contain a statement of those policies that will govern the development of circulation systems for private vehicles, service vehicles, pedestrians, bicycles, transit system vehicles, as well as a statement of those policies that control the extent, type, and location of parking facilities.

B4.10.6.2  The Transportation and Circulation Plan must display a graph of current and future elements of transportation, circulation, and parking, including major city streets, campus streets, transit lines, major pedestrian paths, and surface parking. 

B4.10.7 Site Development and Site Design Policies:  Site development and site design policies must contain a guide for physical development of the campus. Examples of general site development and design policy are as follows:

B4.10.7.1  Major design elements established over many years, including distinct campus boundaries, formal and informal open spaces, views, vistas, and access, shall be preserved and reinforced in the future development of the campus.  

B4.10.7.2  Land use and circulation elements shall be interrelated in a manner that reinforces campus structure; campus roads shall be respected as major form-giving elements.

B4.10.7.3  Buildings and sites of special aesthetic, architectural, and historic value shall be preserved and respected by surrounding development.

B4.10.8 Site Development Plan:  A graph illustrating special features of the future development of the campus will show potential above-grade and below-grade building sites; it could illustrate open areas requiring special development, such as plazas, as well as open areas to be explicitly preserved in a natural state.

B4.10.9 Site Development Details:   Site development details must include landscape plans and special details leading toward a uniformity of grounds and building development design elements.

B4.10.10 Development Guidelines and Standards:  Development guidelines and standards must set specific development standards to guide project consultants in designing campus buildings; these standards include educational program requirements, maximum structure heights, setbacks, landscaping requirements, light, glare, noise prevention requirements, signs, transportation, and parking details. Wherever possible, these standards should be similar to those specified in the local zoning code.

B4.10.11 College Management Strategies:  College management strategies will present specific studies dealing with the effective management of the physical plant.

A4.10.11.1  Goals will be to minimize operational and energy consumption expenses and to simplify and streamline service delivery systems.  

A4.10.11.2  The following will be included: master utility and service plans; energy conservation program plans; space utilization analysis and space management plans; exterior graphic systems; landscape development plans, policies, and details; College development plan implementation and updating procedures; and fire protection plans.

B4.10.12 Project Programming:   Project Programming should be based on instructional or administrative planning formulated from the College's philosophy and stated goals.

A4.10.12.1  Academic or administrative users of the facility will state a philosophy and relate it to the stated goals of the College. 

A4.  Although the program document primarily provides the required direction for the project and design architect, this portion of the document must emphasize the fulfillment by the College administration of certain of the institution’s achievements and eventual goals.

A4.  These two functions of the program document form the basis for contracted arrangements which will lead to the implementation of actions agreed upon. 

A4.10.12.2  Users of the facility will provide a statement or diagram of their administrative organization and of the academic organizations which will exist within the anticipated academic departments.

A4.10.12.3  Users of the facility will provide a statement of deliberations of alternative actions and justification of the chosen action, as well as of a schedule of anticipated events.

A4.10.12.4  Users will provide statements of space requirements for each unit to be accommodated in the proposed facility and of anticipated growth, indicating the desired expansion capabilities of the proposed facility.

A4.10.12.5  Users will provide a statement of illustration of required or desired adjacency and traffic and communications patterns. 

A4.  To properly function, the many elements of a user’s department should be arranged to allow the degrees of adjacency requirements to be implemented. The degrees might be absolutely required, generally required, highly desired, not desired, or not required.

A4.  Only the departmental users can make this evaluation, and because obviously all parts cannot be adjacent to all other parts, the criteria for evaluation will require cooperation and, at times, compromise.

B4.11 Acquisition of Real Property and Disposition of Improvements:  In order to deal fairly with property owners in the geographic boundaries of the College master plan and to make known to the public the method by which Del Mar College acquires real property and disposes of improvements, the Board of Regents determines the boundaries of the College.

B4.11.1 Boundaries:  The geographic boundaries of the East Campus are Baldwin, Ayers, Edwards, Naples, Kosar, and South Staples streets; and approximately 3.5 acres across Ayers Street at the corner of Ayers and Edwards streets. The West Campus consists of 100 acres at the intersection of Morgan Avenue, Old Brownsville Road, and Airport Road. The Center for Economic Development is located at Staples and Kostoryz.

A4.11.2 Appraisers:  The administration shall designate three (3) appraisers who are members of, and certified by, the American Institute of Real Estate Appraisers and/or the Society of Real Estate Appraisers. 

A4.11.2.1  One of these persons shall be selected by mutual agreement of the administration and the property owner to appraise the property within the geographic limits of the master plan.

A4.11.2.2  The College will pay the cost of the appraisal. 

A4.11.3 Negotiations:  The administration shall forward the appraisal report to the property owner. 

A4.11.3.1  Should the owner offer to sell at the appraised value, the offer shall be forwarded to the Buildings and Grounds Committee of the Board of Regents for consideration. 

A4.11.3.2  Should the owner not offer to sell at the appraised value, the administration shall negotiate with the owner, and any offer by the owner shall be forwarded to the Buildings and Grounds Committee for consideration.

A4.11.3.3  If unable to negotiate the sale in an equitable and reasonable manner, the College may seek condemnation of the property. 

B4.11.4 Purchases:  The Buildings and Grounds Committee is authorized to purchase such real property within the Master Plan described in B4.11.1 and within the limits of funds available in the Plant Fund.

B4.11.5 Costs:  The College will pay all customary closing costs except curative work required on the title.

B4.11.6 Improvements:  The Buildings and Grounds Committee shall consider, on a case by case basis, any request by the owner to retain title to the improvements.  

B4.11.7 Surplus:  Any residential improvements owned by the College and determined by the administration to be surplus to the needs of the College shall be disposed of according to approved purchasing policies and procedures. 

A4.11.7.1  The administration will advertise, receive bids, and award the sale of the improvements, to be moved at the bidder’s expense, to the highest bidder.

A4.11.7.2  If no bids are received, the administration will negotiate a sale with prospective buyers.

A4.11.7.3  In case of negative results from the two items above, the administration may advertise and/or negotiate a bid for demolition and removal of the improvements, or College employees may complete the demolition and removal.

A4.12 Property Donated:   The Chief Financial Officer (CFO) shall, with approval of the Chief Executive Officer (CEO) of the College, prepare appropriate forms to be used in accepting property, other than buildings and land, donated to the College. The College does not independently verify the stated value.  

A4.12.1 Prior Written Approval:  Property, including equipment, supplies, and cash, may be donated to the College only when prior written approval has been obtained on the appropriate agreement form.

A4.12.2 Recommendation:  Acceptance of the agreement to donate property to Del Mar College must be recommended by the appropriate Chair and/or Dean and must be approved by the appropriate Vice President and the CFO, who    may refer a request, if desirable, to the CEO for submission to the Board of Regents for acceptance.

A4.12.3 Responsibility:  College personnel recommending approval shall be responsible for providing information concerning related costs, such as installation, operation, and repair and/or any other costs related to the use of the donated property.

A4.12.4 Disposal:  If College personnel at a future date determine that the donated item is no longer of educational value, they may dispose of the item according to College policy.

A4.12.5 College Policies:  Like purchased property, donated property is subject to all general College policies and procedures.

A4.13 Property Loaned:   The CFO shall, with approval of the CEO of the College, prepare appropriate forms to be used in accepting property, exclusive of buildings and land, loaned to the College.

A4.13.1 Prior Written Approval:  Property, including equipment, and supplies, may be loaned to the College only when prior written approval on the appropriate agreement form has been obtained.

A4.13.2 Recommendation:  Acceptance of the agreement to lend property to Del Mar College must be recommended by the appropriate Chair and/or Dean and must be approved by the appropriate Vice President and the CFO.

A4.13.3 Responsibility:  College personnel recommending approval shall be responsible for providing information on related costs, such as installation, operating, and repair and/or any other costs related to the loaned property.

A4.13.4 Inventory Records:  Purchasing and Property Accounting shall be responsible for required inventory records.

A4.13.5 Insurance Cost:  The Chief Risk Management Officer (CRMO) shall be responsible for insurance coverage as required. Cost of such insurance shall be the expense of the department utilizing the property. The Department Chair shall be responsible for proper care, security, and maintenance of loaned property and for assuring that receiving reports are processed through Property Accounting.

A4.13.6 Non-Applicability:  This policy does not apply to property temporarily located on the campus for the benefit of the owner, such as exhibits and demonstrations, when control and liability are not assumed by the College.

A4.14 Disposal of Surplus Property:   The administration shall determine when property, exclusive of land and buildings, is surplus to College needs and shall implement procedures for sale or disposition of such items.

A4.14.1 Sealed-Bid Sale:  The administration may advertise a sealed-bid sale with the award going to the highest bidder after approval by the CEO of the College.  

A4.14.2 Defaulted First Bid:  Should the successful bidder refuse to honor the bid, the administration may award the item to the next high bidder or withdraw the item from the approved sale and include it in a later sale, whichever is considered in the best interests of the College.

A4.14.3 Method of Payment:  The administration shall prepare appropriate bid forms and bidding requirements in the best interests of the College, including such items as requirements for cash or cashier’s check payments and earnest money deposit with the bid submission.

A4.14.4 Public Auction:  The administration may choose to employ a licensed auctioneer to hold a public auction, as necessary and as approved by the CEO of the College.

A4.14.5 Donation:  The CEO may negotiate the sale or may donate surplus property to taxing units or tax exempt agencies within the College district.

A4.15 Disposition of Abandoned and Unclaimed Personal Property:  The administration shall implement provisions in accordance to state law, which   authorizes governing boards to "promulgate rules   and regulations providing   for the disposition of abandoned and unclaimed personal property coming into the possession of the   campus security personnel where the personal property is not being held as evidence to be used in any pending criminal case."

A4.15.1 Notification:   College personnel coming into possession of abandoned personal property shall notify the Director of Purchasing of the nature and location of such property.

A4.15.2 Temporary Disposition:   Pending final disposition, the Director of Purchasing shall determine the temporary disposition of such property.

A4.15.3 Public Notice:   Periodically, as necessary, the Director of Purchasing shall publicize through College publications lists of such property and dates for final disposition of such property not suitably identified and reclaimed before the date of final disposition.

A4.15.4 Final Disposition:  The administration may make final disposition by sale, through the usual procedures for sale of surplus property, by destruction of unsalable property, by use of suitable items in conjunction with College programs, or by donation of the items to a governmental entity.

B4.16 Acceptance of  Student Loan Funds:  The Chief Executive Officer (CEO) of the College may establish student loan funds.  

A4.16.1 Liability:  Del Mar College shall not be liable for any loan or part thereof which is determined to be uncollectible.

A4.16.2 Account:  The fund shall not require a separate bank account since its integrity can be maintained without a separate account.

A4.16.3 Report:  A financial report shall be furnished within a reasonable time after the close of the school year upon the request of the individual or organization responsible for establishing the fund.

A4.16.4 Termination:  The fund may be dissolved by approval of the CEO if it becomes inoperable due to lack of funds or if the CEO determines that it would be in the best interests of the College to terminate such a fund.

A4.16.5 Stipulations/Conditions:  No stipulations or conditions contrary to federal or state law or policies of the Board of Regents may be included in the agreement or provisions governing the loan fund.

B4.17 Acceptance of Student Scholarship Funds:  The Chief Executive Officer (CEO) may create student scholarship agreements which conform to all appropriate federal, state, and College rules, regulations, and procedures.

A4.17.1 Administration of Funds:  Appropriate College administrators designated by the CEO, such as the Director of Financial Aid and the Comptroller, shall recommend procedures to administer all federal, state, and local scholarship programs in accordance with appropriate guidelines.

A4.17.2 Named Funds:  The following conditions shall apply to the creation and administration of permanent named scholarship funds when the money is to be held by the College and the recipients selected by the College. 

A4.17.2.1  The principal amount of the fund must reach at least $1,000 within one year of the creation of the fund.

A4.17.2.2  Money from the funds not reaching this minimum within one year will be transferred to the Del Mar Memorial Scholarship Fund for use with money in that fund to award Memorial Scholarships.

A4.17.2.3  The names of persons honored by the funds which are transferred as stated above will be permanently recorded in the Business Office.

A4.17.2.4  Any future donations received from the fund merged into the Del Mar Memorial Scholarship Fund will be deposited in the Memorial Scholarship Fund.

B4.18 Allocation of Income to Funds:  The administration shall allocate, periodically, net income from game tables machines, customer supplies, and sale of unclaimed lost-and-found items into College short-term student loan funds or scholarship funds by allocating the funds in such a manner as to achieve and maintain relative balance among the various funds.

B4.19 Delinquent Obligations:  The administration, with approval of the Chief Executive Officer (CEO) and the College attorney, shall pursue diligently the collection of all delinquent claims, student loans, accounts, or obligations of others to Del Mar College of every nature whatsoever and take such steps as deemed appropriate in each specific case until it is determined that the collection of such amount is unlikely.

B4.19.1 Collections:  The administration may employ one or more reputable collection agencies for collecting delinquent accounts.

B4.19.2 Grace Period:  Delinquent accounts from the Perkins Student Loan Program, the Federal Nursing Student Loan Program, and the various short-term loan funds will not be referred to the collection agency until the present College collection procedures have been utilized with negative response and/or until the account is delinquent over 120 days.  

B4.19.3 Litigation:  As recommended by the Chief Financial Officer (CFO) and approved by the Chief Executive Officer (CEO) of the College, the administration may utilize an attorney in the collection process, including filing of suits in cases believed collectible. Federal regulations provide for payment of such legal expense for the appropriate federal student loan fund.

B4.20 Write-Offs and Defaults:  After due diligence has been exercised toward collection of delinquent obligations, including correspondence, telephone communication, and, in some cases, personal contact, the Chief Financial Officer (CFO) will recommend, with approval of the Chief Executive Officer (CEO), the following action.  

B4.20.1 Delinquent Loans:  Delinquent short-term student loans will be written off after accounts are two (2) years past due.  

B4.20.2 Defaulted National Defense/Direct Student Loan Notes:  Defaulted National Defense/Direct Student Loan Notes will be assigned to the United States Government in accordance with current federal regulations and any amendments thereto.

B4.21 Property/Equipment Security, Accountability, and Control:  The administration shall develop policies and procedures governing the use, security, and accountability for College-owned property and equipment. The intent of this policy is that College-owned and controlled property and equipment normally will be used only for the purposes for which they were procured.  

A4.21.1 Overall Responsibility:  The Chief of Security is charged with the overall responsibility of providing security for the campuses and establishing and maintaining effective control policies. A night security officer patrols the campus seven days a week and covers weekends and holidays on a twenty-four hour basis.  

A4.21.2 Physical Security:   The Chief of Security or the designee, as applicable, is responsible for physical security of College buildings. The Director of Physical Facilities, or designee, is responsible for the securing and issuing of keys. 

A4.21.2.1  Grand-master keys will be issued only to the Director of Physical Facilities, the Associate Director and appropriate supervisory personnel as determined by the Chief Physical Facilities Officer (CPFO). 

A4.21.2.2  Master keys will be issued only to building custodians, and appropriate supervisory administrators, as determined by the CPFO.

A4.21.2.3  Sub-master keys will be issued in lieu of building masters for buildings with multiple departmental use.

A4.21.2.4   Only full-time faculty and staff will be issued keys; part-time faculty and staff and substitutes will not be issued keys.

A4.21.2.5  Vice Presidents via the Deans will submit in writing the names of those persons authorized to obtain keys from the Director of Physical Facilities; keys will be tagged, secured, and issued to the assigned personnel, and excess keys will be tagged and returned to the Physical Facilities Office.

B4.22 After-Hours Building Use:  An electric detective system is operative from building closing time until building opening time as per the regular custodial work schedule. Employees are not permitted to enter during closed hours, and violators will be considered to be trespassers and will be treated as such by security personnel, local police, and/or College officials. The Chief Executive Officer (CEO) has the authority to develop and implement administrative policies and procedures governing after-hours building use.

A4.22.1 Open Hours:  Most College buildings on both the East and the West Campus are generally open, exclusive of holidays, from 7:00 a.m. until 10:30 p.m., Monday through Friday, but the hours are subject to change. Department Chairs and supervisors should obtain opening and closing times from the applicable maintenance department and post them and/or notify employees via memo.

A4.22.2 After Closing Time:  Custodians will see that buildings are cleared after the evening classes; they will lock their respective buildings and activate the electronic protective system. Custodians are instructed and authorized to request persons in the building after closing time to leave; they are charged with remaining until the building is vacated and with reporting refusals to comply.

A4.22.3 Use for Special Events:  Prior approval for building use for special events must be obtained at least forty-eight hours in advance of the event, counting normal working days.

A4.22.3.1  After-Hours Building Use Forms will be forwarded through the appropriate administrative channels to the Chief Physical Facilities Officer (CPFO).

A4.22.3.2  The person requesting building use after hours is responsible for determining, prior to scheduling an event, that final approval is granted. The Physical Facilities office will send a copy of the request to the person who is requesting after-hours use. 

A4.22.4 Use on Weekends/Holidays:   Access to College facilities on weekends and holidays is permitted to faculty and staff on Saturdays and Sundays and certain announced holiday periods between 8:00 a.m. and 6:00 p.m. Only one entrance will be used in order to preserve key control and building access. 

A4.22.4.1  Campus Security will admit an employee to a particular building upon proper identification and sign-in, disengage the electronic security system, and relock the building door.

A4.22.4.2  Employees may leave without a key; however, they should report by phone or in person to the security officer so that the officer may reactivate the system and maintain security. If entrance is needed for only a few minutes, the officer will remain at the building entrance until the building is vacated.

B4.23 Equipment/Facilities Responsibility:  Department Chairs and unit managers are responsible for the equipment in their departments and shall periodically complete physical inventory checks.   The College's inventory list shall include, at a minimum, all capital assets.

A4.23.1 Removal from Designated Area:  No item of equipment/furniture may be moved without the approval of the Department Chair and notification on an Equipment Transaction Record (ETR) form to the Purchasing and Property Accounting Office.

A4.23.2 Personal Use:   College-owned equipment or other property may not be taken off campus, or loaned, for personal use.  Personal use of College-owned property violates the insurance carried by the College, and exceptions to this policy will not be made.

A4.23.3 Report of Loss:   Loss of equipment should be reported immediately by email and phone to the Chief Financial Officer (CFO) and to Campus Security. 

A4.23.3.1  Campus Security will then call the local police and complete a police report if it is necessary for police to be dispatched to the campus.

A4.23.3.2  The Department chairs and unit managers reporting the loss should complete an Equipment Transaction Record (ETR), which summarizes the circumstances of the loss, as well as the date and time the police report was made, and which requests that the lost item be removed from the inventory accountability records for the department. 

A4.23.4 Equipment Capitalization:  All College owned equipment will be capitalized according to the College's capitalization policy. Grant funded equipment may be capitalized according to OMB circular requirement or College capitalization policy as determined by the College's Comptroller or Chief Financial Officer (CFO). 

A4.23.4.1   The College administration will follow current OMB Circular recommendations and GASB 34/35 guidelines in determining equipment capitalization levels.

A4.23.5 Assets to be Inventoried:  All tagged capital assets that are within the parameters of the current capitalization policy as well as capital assets that are part of the depreciation schedules will be listed on the annual inventory.  Specific items with a value below the capitalization threshold that are designated by departments/college units to be inventoried and tagged for purposes of accountability, will also be included on the College inventory.  All items on the inventory should be physically identified and accounted for annually.


A4.25 Richardson Performance Hall:  The Richardson Performance Hall Manager schedules use of the Performance Hall for all events and initiates contracts for rental of the Performance Hall to external clients. The manager shall maintain a master event calendar showing dates and times for which the Performance Hall is scheduled for assemblies, graduation ceremonies, performances, rehearsals, apparatus and stage set-up/tear-down, facility maintenance, and the like.

A4.25.1 Scheduling for Internal (College) Events:  The Performance Hall Manager will schedule the Performance Hall for internal (College) events for the  next College fiscal year (September through August) during the period January 1 through April 15 of the current fiscal year in order to give College programs priority opportunity for their events. However, if an external client has contracted to use the Performance Hall during the next College fiscal year, those dates will not be available for internal events.

A4.25.2 Chargeback Fee for Cancellations:  An internal (College) event that is scheduled in accord with A4.25.1 and then cancelled after April 15th, may subject the department to a $500 chargeback per cancelled event as a consequence of restricting the Performance Hall availability to other College departments or external clients.

A4.25.3 Written Requests:  All internal scheduling requests must be submitted on the "Richardson Performance Hall Request Form". (This form will be available on the Performance Hal website). Requests not made on the form will neither be honored nor confirmed.

A4.25.4 Fund Raising or Outreach Events:  Any internal (College) event scheduling the use of the Richardson Performance Hall for fund-raising and/or outreach or where registration fees, entry fees or donations are paid to the event sponsor or College department by event participants, may be required to reimburse the Performance Hall for hard costs, ticket service fees and other reasonable and necessary expenses to support the event as determined by the Performance Hall Manager.

A4.25.5 Unscheduled Requests:  Authority for dealing with unscheduled requests for use of the Richardson Performance Hall is vested in the Performance Hall Manager.

A4.25.6 Use of Ticketing System:  An event that requires tickets must use the Performance Hall's automated ticketing system.

B4.26 Rental and Use of College Facilities:  The administration shall establish a rental fee schedule and shall provide for rental of College facilities. Rental may be denied if the administration judges the use to be in conflict or competition with College programs. The Facilities Rental Fee Schedule may be obtained from the Office of the Chief Physical Facilities Officer.

A4.26.1 Employees Responsible For Rentals:  Employees responsible for rental of each facility are as follows: Richardson Performance Hall, the Performance Hall Manager; Aquatic Center and Gymnasium, Chair of Kinesiology, Health Studies, and Recreation Department; C. N. Coleman and E. L. Harvin Student Centers, Director of Student-Leadership and Campus Life; Patio Room and Wolfe Recital Hall, which are restricted to musically and academically related organizations (rental of band and choir rooms not permitted), Chair of Music Department; all classrooms, Registrar; and all Center for Economic Development facilities, Dean of Workforce and Economic Development.

A4.26.2 Rental Sessions:  Classrooms are rented by the hour. All other rental sessions are from 8:00 a.m. to 12:00 noon, from 1:00 p.m. to 6:00 p.m., and from 7:00 p. m. to 12:00 midnight. The regular fee shall apply to each session during any twenty-four hour period from 8:00 a.m. each date of the contract. Rehearsal rates are charged for each rehearsal session. Full rental fees must be paid prior to use.

A4.26.3 College Sponsorship:  If a department wishes to have the College cosponsor an event for which College facilities are used, the sponsoring department must submit a written request for sponsorship and must actively participate in the event. "Actively participate" means that the College will co-host the event and/or the department involved will directly participate in the event. The cosponsor maybe required to pay the appropriate utility costs and an additional amount to provide any additional services such as security officers and custodial or other labor services required by the College. Del Mar College will not be a joint sponsor with any non-College organization for political and sectarian gatherings. The College will not enter into joint sponsorship of any program or activity in which the educational implications are not self-evident and which does not directly supplement the educational activities of the College. The College will not knowingly enter into joint sponsorship of any project or program that will, or may, result in profit or private gain for the other sponsor or sponsors.

Under no circumstances will an employee use status or position to obligate the College in violation of  Article III, Section 52, of the Texas Constitution, which prohibits the Legislature from authorizing political subdivisions of the state from making grants of public money or items of value to anyone.

B4.26.4 Designation of College Facilities as location for voting and placement of campaign signs:    The Election Manager, as the College's election official, will designate the voting site at the College for any/all elections. In order to further promote the democratic process, the Election Manager will designate appropriate areas of campus offering candidates and other citizens access for placement of  2’ x 2’ or smaller campaign signs as to sought political offices and/or propositions on the official ballots of local, State, or national elections for a thirty-day time period immediately prior to the related election date(s). The area for sign placement will be identified and listed on the College website at least 30 days before the election date. Placement of campaign signs shall be in compliance with Sections 62.013 and 85.036 of the Texas Election Code prohibiting electioneering within 100 feet from the entrance of the building where voting is taking place and with all other applicable law. The Election Manager may also designate various sites for early voting in conjunction with election officials.

B4.27 Purchasing   The Chief Executive Officer (CEO) of the College, the Chief Financial Officer (CFO), and the Director of Purchasing will develop policies and procedures to achieve the purposes stated below with the primary purpose being adequate and effective fiscal control which recognizes the existence of statutory provisions that affect the policies and procedures under which the College shall operate.

B4.27.1 Ethics:  The administration shall maintain the highest ethics in business relationships with vendors and their representatives, purchase only from reliable, responsible vendors, and offer efficient and timely service to all concerned.  

B4.27.2 Local Vendor/Competitive Bids or Proposals or Responses to Requests for Qualifications:  Purchases shall be made based on competitive bids or competitive sealed proposals whenever possible and practicable, or as otherwise permitted by statute.  

B4.27.3 Best Value:  Purchase of goods and services shall be made as permitted by the Texas Education Code or other governing statutes so as to provide the best value for the College.

B4.27.4 Quality:  Purchases shall be made of equipment, supplies, and services of quality commensurate with use and location.

B4.27.5 Accounting:  Accounting processes should be simplified by making purchase agreements before the beginning of the school year whenever possible and by holding the number of vendors and individual orders to a minimum; all invoices should be cleared in time to take advantage of cash discounts.

B4.27.6 Grant Equipment/Non-Expendable Supplies:  All equipment and non-expendable supplies purchased either with College funds or with funds obtained from grant contracts between Del Mar College and outside agencies for use in College grant projects approved for faculty and staff remain the property of the College.

B4.27.7 Hiring of Consulting/Coordinating Architect  and Project Architect:

B4.27.7.1  Hiring of consulting/coordinating architect and project architects shall be in accordance with the requirements of the Professional Services Procurement Act (Texas Government Code,  ch. 2254), and other applicable laws. 

B4.27.7.2   The consulting/coordinating architect shall not serve as a project architect with respect to any major renovation, improvement, or alteration project with an estimated construction cost greater than $100,000.


B4.29 Open Records:   Under the provision of Article 552.275, Texas Government Code, the College will, for those persons or organizations whose requests for information require more than 36 hours of college employee time to produce, charge $15.00 an hour for each college personnel employee hour necessary to fulfill the request beyond the initial 36 hours. The College Chief Executive Officer (CEO) or designee is responsible for responding to Public Information Act (PIA) requests and will provide the requestor with a written statement of the amount of time spent complying with requests for public information from that requestor during the applicable 12-month period. If a requestor equals or exceeds the 36 hours limit, the College CEO or designee will provide the requestor with a written estimate of the total cost necessary to comply with the request on or before the 10th working day after the date on which the public information was requested. The requestor must then submit a statement in writing, on or before the 10th working day after this written estimate was provided, indicating his/her commitment to pay the costs. Each year, on September 1, the record of time computed for charging shall begin anew with no charge for the first 36 hours of college personnel time used for documents produced as the result of a PIA request.

4.30 Parking/Tow-Away:  (see  Del Mar College Parking Rules and Regulations) :The administration shall implement the following parking control plan:

B4.30.1 Prohibited Areas:  Areas of the campus in which parking is prohibited shall be clearly identified. Signs warning that vehicles in these areas will be towed away at the owner’s expense and without liability to the College shall be posted.

B4.30.2 Removal of Cars:  The administration may arrange with a commercial firm to remove cars parked in prohibited areas. Before cars are removed, their physical condition shall be inspected and recorded on an appropriate record to be maintained by the College.

B4.30.3 Expenses/Liability:  The College shall not bear any of the expense of towing away vehicles or for storage of such vehicles. Neither the College not its employees shall have liability to owners of vehicles towed away.

B4.31 Land Lease:  The administration may enter into a land-lease agreement under customary conditions that are most feasible and advantageous to the College.

B4.32 Externally Funded Grants Contracts and Agreements:   Such grants, contracts and agreements must support and enhance the  mission and purpose of Del Mar College as stated in the Catalog and adopted by the Board of Regents. All grants/projects/contracts, and agreements are subject to institutional control.

B4.32.1 Control:  Del Mar College shall maintain control of all externally funded research and instruction through direct supervision and/or appropriate administrative approvals.  Any externally funded grant, contract, or agreement must be made for specific periods of time.

B4.32.2 Approval:   Final authority and approval for all externally funded grants contracts and agreements rest with the College CEO or his/her designee.

A4.32.2.1 Routing:  All proposals for externally funded grants, contracts, and agreements must be reviewed and approved through the appropriate organizational channels utilizing the form GRA 503 before submitting to the Chief Financial Officer (CFO) for budget review. The document will then be forwarded to the College CEO for final approval and authorization for submission. The original documentation will be returned to the submitting department.

A4.32.2.2 Notification:  Upon final approval by the College CEO, the submitting department will send the required notification form to the Office of Grants and Sponsored Research. The Grants and Sponsored Research Office must receive electronic copies of all grant documents submitted, including the abstract, proposal narrative, budget and budget narrative in order to maintain a central database for grant submissions and funding information.  

A4.32.2.3 Notice of Award:  Upon receipt of the Notice of Award, original documentation must be forwarded to the Office of the CFO, whereby the appropriate budget account will be established and notification made to the Office of Grants and Sponsored Research.

B4.32.3 Conflict:   Participation in and activities related to externally funded grants, contracts, and agreements should not interfere with regular duties unless provided by administrative assignments.

A4.32.3.1 Administrative Assignments:  Administrative Assignments: Notification will be provided to Administrative Services and to the Payroll Office of all full-time employees assigned to an externally funded grant, contract, or agreement.  The amount of release/reassignment time or percentage of salary to be charged will be submitted on the appropriate College form.

A4.32.3.2 Percentage of Time:  All full-time employees who are providing a percentage of time to support these activities are required to document their time and effort.  This documentation must be submitted to the Payroll Office on a monthly basis.

A4.32.3.3 Limitation of Assignments:  A full-time employee may not have more than 100 percent of total time assigned to externally funded grants, contracts, or agreements.

B4.32.4 Salaries:  All salaries and wages paid through externally funded grants, contracts, and agreements will conform to the budget detail contained in the grant, contract, or agreement. Any exceptions shall be approved by the College Chief Executive Officer (CEO) upon the recommendation of the appropriate administrators.

A4.32.4.1 Externally Funded Positions:  External  funded positions are not classified on a grade and step system at Del Mar College.  The College operates under the protocol that the grant-writer and administrator establish or initiate salaries for externally funded positions according to market demand, and salaries are set sufficiently competitive to recruit qualified candidates to externally funded positions.  While grant and contract administrators are not required to complete the standard classification documentation for each position and submit to Human Resources for review and evaluation before recruiting, they must prepare a job description outlining the duties and responsibilities described in the grant or contract proposal prior to recruitment and hiring.

Proposals which request externally funded positions must include related anticipated salary and fringe benefit costs.  The GRA102 and GRA501 forms will be utilized to document externally funded salary activity.  Time and effort documentation must be submitted to the Payroll Office to document chargeable time to the externally funded activity.

A4.32.4.2 Increases:  Proposals that extend for a period of time exceeding one year may include an annual three percent increase to salaries, wages, and benefits.  Increases will be implemented beginning with the next grant, contract, or agreement period.  Any increase for step adjustments awarded to regularly funded positions will not be made to externally funded positions.

B4.32.5 Funds:  All funds received for a grant, contract, or agreement shall be separately identified. All expenditures shall follow established College procedures in accordance with requirements of the grant, contract, or agreement.

A4.32.5.1 Equipment Purchases:  The purchasing policy requirement will be utilized in the procurement of externally funded equipment.  Equipment purchased through external funding shall be properly tagged and accounted through the College’s property accounting department.  Utilization of externally funded equipment will be governed by the requirements of the grant, contract, or agreement and college policies and procedures, including annual inventory requirements.  Disposal of externally funded equipment will follow the applicable guidelines established by the grantor of those funds.

A4.32.6 Indirect Cost:  The College shall maintain through application an approved Federal Negotiated Indirect Cost Rate.  All proposals that allow for recovery of indirect costs must apply the approved indirect cost rate or the allowable percentage; any variances must be approved in accordance with Administrative policy.

A4.32.6.1 Approved Indirect Cost Rate:  When a specific proposal does not allow the full amount of the approved indirect cost rate, documentation to that effect must be submitted to the CFO for review and consideration.

A4.32.6.2 Designation of Indirect Cost:    The College CEO and CFO, in conjunction with the respective division Vice President, will determine any distribution of indirect cost monies.

B4.33 Bank Depository:  In accordance with state law, the Chief Financial Officer (CFO) with the approval of the Chief Executive Officer (CEO) of the College shall in odd numbered years solicit bids from banking institutions desiring to serve as the depository of the district for the biennium beginning September 1.

B4.33.1 Approval of the Bid Document:   Prior to requesting bids, the bid document shall be submitted to the Board of Regents Finance Committee for approval.

B4.33.2 Depository Contract:  The depository contract shall be awarded by the Board of Regents.

B4.33.3 Protection of College Deposits:   As minimum protection of College deposits, the bid specifications and contract will include compliance with the current Texas School Depository Act requirements applicable to the College District.

B4.34 External Audit:  The Board of Regents shall engage the services of an accounting firm as the external auditor for the College. The external auditor shall conduct an annual review of the financial records and provide an audit report. The Audit Committee, as appointed by the Board of Regents, shall receive and review the annual report prior to recommending action to the Board of Regents. The Audit Committee is authorized to solicit and review proposals from interested accounting firms and to make a recommendation for Board of Regents’ action.

A4.35 Routine Maintenance, Preventive Maintenance, and Deferred Maintenance of Buildings, Grounds, and Equipment:  The administration shall establish a routine maintenance, preventive maintenance, and deferred maintenance program for the upkeep of buildings, grounds, and equipment. The Physical Resources Task Force shall develop, implement, and oversee detailed procedures to comply with this policy.

A4.35.1 Routine Maintenance:  Routine maintenance shall consist of normal, regularly scheduled operating procedures. 

A4.35.2 Preventive Maintenance:  Preventive maintenance shall be a plan developed in advance for the upkeep of buildings, grounds, and equipment.

A4.35.3 Deferred Maintenance:  Deferred maintenance shall consist of procedures which are postponed due to their low priority or which in conflict with other instructional schedules.

A4.35.4 Provisions:  The program, which includes fire protection and security, provides for the operation, maintenance, repair, replacement, and preservation of College physical facilities.

A4.35.5 Annual Review:  All programs referred to above shall be reviewed annually for necessary modifications.

B4.36 Tax Refunds:  Periodically, taxpayers apply for refunds due to overpayment or erroneous payment of taxes.

B4.36.1 Authority to Refund Tax:  The Chief Executive Officer (CEO) or the CEO’s representative shall authorize the tax collecting authority to refund the tax overpayment. The Chief Financial Officer (CFO) shall report all tax refunds to the Board at its next regular meeting. Under certain circumstances, the CEO may consult with the Board prior to initiating the tax refund.

A4.37 College Auxiliary Funds:

A4.37.1 Auxiliary Funds:  Auxiliary funds are enterprise funds from self-supporting activities.

A4.37.2 Use of Auxiliary Funds:   Auxiliary funds will be utilized in support of student activities, student scholarships and special purpose events or operations as directed by Board of Regents.  A proposed budget will be prepared and submitted to the Board of Regents for approval.

B4.37 Overview of District’s Tax Increment Financing Policy:  Tax increment financing is a tool authorized by Chapter 311 of the Texas Tax Code (“Chapter 311”) by which local governments, such as the Del Mar College District (the “District”), can reinvest tax revenues from certain taxable property in the District to fund the costs of certain public works, or other projects that benefit a specific geographical area. The specific geographical area is termed, for the purposes of Chapter 311, a “Reinvestment Zone,” “Zone,” or, “TIRZ.”

Texas counties and cities create Reinvestment Zones and, under Chapter 311, the District may elect to participate as a Taxing unit in the TIRZ by agreeing to forego some or all of the incremental tax revenue derived from a TIRZ to finance eligible public works projects.

B4.37.1 Request Process, Evaluation Criteria and Requirements:  In order to provide an orderly and efficient mechanism for the Board of Regents of the District to evaluate whether the District’s participation in a Tax Increment Reinvestment Zone is in the best interests of the District and its constituents, the following sets forth the applicable process, evaluation criteria and requirements, by which a request may be submit a request (“Request”) to the District seeking the District’s participation in a Reinvestment Zone.

B4.37.1.1 Submission of Request for District Participation in a TIRZ:  Requests soliciting the District’s participation as a taxing unit in a Tax Increment Reinvestment Zone created in the District’s taxing area by a County or City shall be submitted after the adoption of a TIRZ by a County or City.

The Requests shall be in writing and comply with the following:

Requests must be filed with the Office of the Chief Executive Officer of the District during regular business hours, at the Del Mar College Heldenfels Administration Building, 101 Baldwin Blvd., Corpus Christi, Texas, 78404.  

Requests may be submitted by the County or Municipality authorizing the Reinvestment Zone, or by a private party seeking the District’s participation. The submission of a Request does not substitute or otherwise take the place of or eliminate the requirements for the notice and hearing requirements stated in Tex. Tax Code Chapter 311.

B4.37.1.2 Information Required in Requests  :  Any proposal for District participation in a Reinvestment Zone must address or contain the following items:

B4.37.1.3 Basic Information. In addition to other specific information required in other sections of this policy, a Request for District participation in a TIRZ shall include:

  1. A copy of any Project plan filed with the City or County creating the Zone, including a detailed description of proposed projects to be funded or reimbursed with tax increment revenues and a construction timeline.
  2. A copy of any report or findings created by the City or County concerning its analysis of the Project plan and its determination, if any, concerning its confirmation of the adequacy and public benefits associated with the creation of the zone.
  3. 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.
  4. 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.
  5. A certification by the City or County that all requisite publication and posting requirements concerning the public hearing have been met.
  6. A certification by the City or County that each property owner in the proposed Zone received notice of the inclusion of the person’s property in the Zone and an indication whether each owner consents to the inclusion of their respective property in the Zone or whether they oppose the inclusion of their property in the Zone.
  7. A map and an engineering survey of the area included in the the acreage and the current total assessed valuation contained inside the Reinvestment Zone.
  8. An inventory of any existing educational buildings or other educational facilities owned by or utilized on behalf of a school district, the District or any other political subdivision within the proposed 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.
  9. 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 tax increment base year or whether some other future ad valorem tax year is proposed to constitute the base year.
  10. A financial impact analysis.

B4.37.1.4 Purpose of the Zone. To the extent not included in the Project plan, or other Basic Information filed in response to Section 1, the Request shall include a detailed explanation of the reason the Zone is needed. A particular emphasis on the public purpose and the economic or other social benefits reasonably anticipated to be derived by the District, other Taxing units and the sponsoring City or County from the creation of the TIRZ should be clearly articulated in the Request.

B4.37.1.5 Educational Benefit and Mission of the District . In addition, the Request shall identify and describe the educational benefit expected to result from the District’s participation in the TIRZ. The Request shall also explain how the District’s participation in the TIRZ is complementary with the District’s Mission Statement. 

B4.37.1.6 Other Benefits to District Taxpayers. The Request application shall also contain an explanation how the proposed Zone will benefit other taxpayers of the District.

B4.37.1.7 Tax Increment Financing Details . To the extent not otherwise included in the Project plan, the Request shall include:

  1. A detailed description of the anticipated private sector development, a construction timeline, and an estimate of the amount of private funding committed to the project by applicant, including a description of the developer’s background, its record at undertaking similar projects, the background of its major principals, its relocation and expansion history over the past ten years, its financial condition over the past five years, and its source of financing for this project.
  2. The description of private sector funding should provide details as to the availability and commitment of such funds and the relative financial capacity of the applicant to sustain the Project plan.
  3. The Request shall include a description of the estimated life of the Reinvestment Zone. In no event should the District’s participation in the Reinvestment Zone be expected to extend for longer than 20 years from the base year.
  4. In addition to the level of participation in reinvestment of the tax increment by the District or of any tax abatement requested of the District, the Request shall provide a detailed description of the level of reinvestment and abatement requested from every other Taxing unit that is proposed for participation in the Zone. To the extent there is a difference in the level of reinvestment or abatement sought from the District as compared to any other Taxing unity, the Request shall provide a detailed description of the rationale for any such differential.
  5. A description of what public improvements will be funded with tax increment financing and how these improvements will overcome the Zone’s barriers to growth. 
  6. A detailed description of anticipated annual tax increment to accrue to the District, costs, increments, and debt service requirements.
  7. An explanation of the Zone’s financial and economic growth assumptions.

B4.37.1.8 Economic Impact Analysis. The Request shall provide a detailed description of the impact of the Zone’s development on the local economy and the District’s property tax base and, if applicable:

  1. a description of the number and types of new permanent jobs to be created and the projected payroll.
  2. An explanation, if applicable, of how the project will revitalize economically distressed areas, provide employment for the chronically unemployed, and/or provide employment in areas that align with the College’s programs and curriculum.

B4.37.1.9 Future Tax Impact. As part of the Request, the District seeks to obtain an understanding of how the project will benefit the future educational goals, objectives and Mission of the District. The application should include a detailed present value analysis that identifies the year in which the additional tax revenue benefits to the District are projected to equal or exceed the tax increment revenues that the District will forego.

B4.37.1.10 Make Whole Provisions. To the extent not included in the Project plan, the Request shall describe the benchmarks (description, amount and timeframe) for the construction of all public improvements funded through the reinvested tax revenues of the District and the specific contractual covenants by the principals if the principals fail to meet the benchmarks. Said terms, conditions and covenants shall also be set out in any draft proposed agreement with the District and the Board of the Reinvestment Zone which should further detail the method of repayment of these amounts and any funds pledged by the principals of the project as security for such repayment. The agreements may contain provisions for the release of pledged security on such schedule as the Administration may determine appropriate considering completion of construction of improvements per the benchmarks.

B4.37.1.11 Other Information.

  1. A copy of any existing marketing or feasibility study pertaining to proposed development activities within the Reinvestment Zone.
  2. The acreage and the current total assessed valuation contained inside the Reinvestment Zone.
  3. The name, address, and telephone number of the appropriate contacts at the sponsoring municipality or county.
  4. Other information as requested by the Administration or Board.

B4.38 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.       

B4.38.1 - 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.

B4.38.2 - 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 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.

B4.38.3 - 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.

B4.38.3.1 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.

B4.38.3.2 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 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.

B4.38.3.3 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 an amount deemed sufficient by the Board.

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

3)  Minimum number of new jobs created. The Applicant must demonstrate that the proposed improvements will create employment opportunities and new jobs related to programs in career fields offered at Del Mar College. 

B4.38.4 - Application and Contents

Written applications for District participation in an Abatement Agreement for a Reinvestment Zone must be filed with the 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 in an amount to be determined by College Administration. 

B4.38.4.1 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.

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 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.

B4.38.5 - 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

e)  description and improvement list as provided in the application; 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.

B4.38.6 - 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.

B4.38.7 - Administrtation

The 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.

B4.38.8 - 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. 

B4.38.9 - 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.


B4.40 Debt Management:  This policy (the "Policy") establishes conditions for the use of debt and creates parameters designed to:

  • Manage the debt obligations of the Del Mar College District (the College or the College District) within available resources,
  • Minimize the debt service and issuance costs,
  • Achieve the highest credit ratings given our objectives,
  • Maintain full, complete, and accurate financial disclosure and reporting, and
  • Comply with appropriate and applicable laws of the State of Texas (the "State") and the federal government.

B4.40.1 Within the applicable laws of the State, the College may enter into debt obligations to finance the construction or acquisition of buildings and infrastructure and other assets, maintenance of existing facilities, to purchase land and personal property, or to refinance or restructure existing debt, also known as a "refunding".

B4.40.2 All debt will be incurred at the College District level or through a public faciity corporation created by the College District, unless recommended otherwise by the Chief Financial Officer (CFO) to the Chief Executive Officer (CEO) and approved by the Board of Regents.

B4.40.3 This policy applies to all debts issued by the College regardless of the purpose for which issued or the funding source for repayment.  The CFO is responsible for the debt management for the College.  Responsibility for the operational activity related to management of debt may be delegated by the CFO.

B4.40.4 The objective of the Policy is to ensure prudent debt management practices that include: 

  • Maintain financial stability;
  • Preserve public trust;
  • Minimize costs to taxpayers;
  • Manage the cost of capital;
  • Mitigate risks associated with its debt;
  • Monitor the overall capital structure and use of debt instruments;
  • Preserve or enhance the College's credit ratings;
  • Execute debt issuance in an efficient and cost-effective manneer;
  • Assure full, complete, and accurate financial disclosure and post-issuance reporting complaince;
  • Comply with State and federal laws.

B4.40.5 Alternative Structures: The College District will not use alternative methods of financial management products such as interest rate swaps, derivative products, etc., in connection with any outstanding and newly issued bonds without the express authorization from the Board of Regents.

A4.40.6 Available Borrowing Methods include:

A4.40.6.1 Limited Tax Bonds:  Limited Tax Bonds (also generally referred to as "GO Bonds") authorized through a successful bond election, are issued for the acquisition of land, building construction costs, and the furnishing and equipping of buildings.  The College secures Limited Tax Bonds through levying, assessing and collecting ad valorem taxes sufficient to pay the principal and interest of the bonds when due, provided that the annual interest and sinking fund ("I&S") tax rate will never exceed the State statutory limit, according to Texas Education Code Section 130.122 - Tax Bonds and Maintenance Tax. 

A4.40.6.2 Maintenance Tax Notes:   Maintenance Tax Notes may be issued for any legal maintenance expenditures, including furnishing and equipping existing buildings, and for making renovations and repairs at existing facilities. Maintenance Tax Notes cannot be used for new construction. Maintenance Tax Notes may be paid and secured from any available operating funds. Repayment may be made through either M&O ad valorem tax revenues or non-tax revenues. Maintenance Tax Notes do not require voter authorization. Maintenance Tax Notes may not at any time exceed 75 percent of the previous year's unrestricted revenues and must mature not more than 20 years from their date. 

A4.40.6.3 Revenue Bonds: Revenue Bonds may be issued for the acquisition of land, buildings, building construction costs, and the furnishing and equipping of buildings. Revenue Bonds are payable from and are secured by pledged operating revenues, such as tuition and other fees, generally a reserve fund, or other resources. Voter approval is not required. Debt service additional bonds test coverage ratios or other bond provisions like reserve fund requirements
contained in existing bond covenants must be considered when issuing new revenue debt. 

A4.40.6.4 Lease Revenue Bonds: Lease Revenue Bonds may be used for construction, furnishing, and equipping of facilities. Under Chapter 303 of the Texas Local Government Code, the College District is authorized to establish a Public Facility Corporation ("PFC") with authority to issue bonds to construct facilities for the College District without an election. The College District would lease these facilities from the PFC to pay the debt service. These bonds are payable based upon an annual appropriation from lawfully available funds, including from maintenance and operating ("M&O") tax revenues. 

A4.40.6.5 Contractual Obligations:  The College is authorized to incur contractual obligations under Section 271.005 of the Texas Local Government Code to pay for items such as buses, computers, furniture or other moveable personal property. These contractual obligations may be in the form of a lease, a lease with an option or options to purchase, an installment purchase, or any other form considered appropriate (including the issuance of a "public security"). 

A4.40.6.6 Refunding Bonds:  All or any part of the College District's outstanding bond issues may be refunded or refinanced for debt service savings or restructuring. 

A4.40.6.7 Contract Revenue Bonds:  Capital improvements may be financed through Contract Revenue Bonds, which requires the College to enter into a contract with a third-party entity. They are payable from either M&O taxes, revenues, or both. Voter approval is not generally required. 

A4.40.6.8 Taxable Debt:  Generally the College will issue tax-exempt debt; however, taxable debt may need to be issued to comply with limitations imposed by the Internal Revenue Code of 1986, as amended (the "Code"). When market conditions are favorable, taxable debt may also be issued for refunding if favorable savings will be achieved and the refunded tax-exempt issue cannot be advance refunded per the Code. 

A4.40.7 Parameter Orders:  The College may authorize staff and advisors to proceed with a financing under the Capital Improvement Program ("CIP") or a refunding through the use of a Parameter Order. 

A4.40.7.1  A Parameter Order, with reference to a specific debt issuance or issuances, will be submitted by the CEO to the Board of Regents for approval, allowing the CFO to commit to certain financing decisions within the constraints of the approved parameters. The Parameter Order allows the execution of a pricing certificate evidencing final sale terms of a debt financing once the financing is complete. 

A4.40.7.2  The Parameter Order provides flexibility for the College District's Administration to react when market conditions warrant or to change the timing of the sale without regard to the Board meeting schedule. Parameter Orders will be limited as to size and scope to comply with State law and direction of the Board of Regents. 

A4.40.8 Conditions for New Money Debt Issuance:  The timing of borrowing will be structured to meet the CIP and other needs, and to minimize the effect of negative arbitrage while still ensuring that funds are available to meet the project draw schedule.

A4.40.8.1  When the investment earnings on borrowed proceeds are below the cost of borrowing, borrowed capital may have to be increased to provide
sufficient funds to pay project expenses. Since this practice increases the cost and limits the productivity of borrowed capital, the College District will seek to
minimize negative arbitrage where practical. The College's fiscal year and setting of its tax rates, however, will also be considered. 

A4.40.8.2  Any external borrowing will be coordinated to the extent possible so that multiple project needs can be accommodated in a single borrowing. Under a Parameter Order for a specific new money debt, the CFO may proceed with a new money debt issuance if the appropriate conditions are met as set forth in the Parameter Order. 

A4.40.8.3  The term of long-term debt shall in no case exceed 30 years unless otherwise authorized by the Board of Regents. 

A4.40.9 Conditions for Short-Term Debt Issuance:  Short-term financing will be considered for projects that cannot be funded from available current resources. The
repayment term of any issue will be the greater of five (5) years or the longest useful life of any asset class purchased from the proceeds of the issue. 

A4.40.10 Conditions for Debt Refunding:  Periodic reviews of outstanding debt will be undertaken to determine refunding opportunities. Refunding will be considered based on economic benefit, or as needed to alter covenants, restructure debt, or stabilize the tax rate. 

A4.40.10.1  Refundings will generally require at least a 3% net present value as a percentage of the par amount of the refunded bonds to be considered. The threshold requirements may be disregarded for a refunding undertaken solely for business reasons, such as for restructuring purposes. 

A4.40.10.2  The term of the refunding bonds should not exceed the term of the bonds being refunded unless the debt is being restructured. Under a Parameter Order for a refunding bond, the CFO may proceed with a debt refunding if the appropriate conditions are met as set forth in the Parameter Order. 

A4.40.11 Conditions for Debt Defeasance:   Defeasance of debt with funds on hand will be undertaken only after careful consideration of the College's cash flow. Generally, a defeasance will require the engagement of the College's municipal advisor, bond counsel, disclosure counsel, and a verification agent to provide an opinion on the sufficiency of funds in the escrow funded to defease debt. The College will ensure that any material event filings required in connection with the defeasance are posted timely on EMMA (defined below). 

A4.40.12 Parameters for Debt Issuance:

A4.40.12.1 Term of Debt:

A4.  The term of debt will generally not exceed 30 years. Debt may be issued on a fixed or variable rate basis although it will typically issue fixed rate debt. Variable rate debt may serve as a natural interest rate hedge but should be used judiciously after consultation with the College's municipal advisor. The College will normally seek to avoid the use of capitalized interest. 

A4.  In general, debt should be issued with the earliest optional redemption date that is determined to be cost-effective. Typically, debt with a final maturity beyond ten years will be structured with an optional redemption in ten years at par. 

A4.  Debt may be structured with serial or term bonds or any combination thereof. The use of capitalized interest bonds (CABs) will be used sparingly and only to meet State par-to-par test requirements or in specific CIP cases to meet revenue projections. 

A4.40.12.2 Interest Rate: The maximum interest rate for a specific debt issuance will be delineated in a Parameter Order. The maximum interest rate, including a cushion to guard against changing market conditions, should be one that the municipal advisor reasonably believes that the College can obtain given the current market conditions and specific nature of the transaction. 

A4.40.12.3 Minimum Savings:  The minimum savings requirement for a refunding transaction will be listed in a Parameter Order. The minimum savings will be governed by this policy, market conditions, current or advance refunding, and other factors, after consultation with the College's municipal advisor. 

A4.40.13 Method of Sale:  The CFO, in consultation with the College's municipal advisor and approval of the CEO, shall determine the method of sale best suited for each issue of debt. The College will work with its municipal advisor to select the best method of delivery given the specific offering and other College objectives. Possible methods of sale include: 

A4.40.13.1 Competitive Sale:  A competitive sale is a public securities offering in which the College will request prospective purchasers to submit a firm offer to purchase its bonds. The bonds are awarded to the bidder based on the lowest True Interest Cost bid, provided the bid meets all other requirements and sale parameters included in the official Notice of Sale. 

A4.40.13.2 Negotiated Sale:  A negotiated sale is a public securities offering in which the College pre-selects an underwriter or an underwriting syndicate to reoffer bonds to investors. The primary points of negotiation for the College with the underwriting syndicate are the interest rate, call features, and purchase price of the issue. 

A4.40.13.3 Private Placement:  A private placement is a method of sale in which the College sells its bonds directly to a financial institution. The College may retain a placement agent to facilitate a private placement. 

A4.  A private placement typically does not require an offering document or public ratings (unless there is a "new money" delegation under Chapter 1371 of the Government Code) and may have lower costs of issuance, although typically with a higher rate. 

A4.  A private placement is generally an option when a proposed bond issue has a final maturity not exceeding 12-15 years. A private placement may be used if it is determined to provide greater efficiencies and overall value for the College relative to a public competitive or
negotiated sale. 

A4.40.14 External Financial Professionals:  The College District will select its independent municipal advisor, bond counsel, disclosure counsel and arbitrage rebate compliance specialist using an approved procurement process. 

A4.40.15 Compliance Reporting/Procedures:

A4.40.15.1 Continuing Disclosure:  The College District will comply with SEC Rule 15c2-12 (the "Rule") by filing directly, or through a third-party dissemination agent, with the Municipal Securities Rulemaking Board's ("MSRB") Electronic Municipal Market Access ("EMMA") system. The College will file annual financial statements and certain required financial and operating data, as agreed to its Continuing Disclosure Agreements with bondholders. The College will also file or cause to be filed the occurrence of certain events described in the Rule within 10 days of the date of the occurrence.

A4.40.15.2 Arbitrage Rebate Compliance:  Adequate recordkeeping will be maintained to meet arbitrage rebate compliance requirements. This includes careful tracking of investment earnings on debt proceeds and remitting any rebates due to the federal government in a timely manner. An outside compliance specialist will be retained to calculate rebate payments and ensure
that the College maintains compliance with arbitrage rules.

A4.40.16 Rating Agencies:  The CFO is responsible for maintaining the primary relationship and communicating with the national rating agencies in concert with its municipal advisor. This communications effort includes providing periodic updates on the College District's general financial condition along with coordinating meetings and presentations in conjunctions with debt issuances. 

A4.40.17 Credit Ratings:  The CFO, with the approval of the CEO, is responsible for maintaining a ratings strategy that is guided by achieving the best economic situation for the College. 

A4.40.17.1  The ratings strategy shall be adjusted as market conditions and financing needs of the College change and evolve and as specific rating agency criteria change. Attaining a proper balance between minimizing borrowing cost and maximizing financial flexibility will be one of the major goals of the College's debt program. 

A4.40.17.2  For existing bond programs, the College shall attempt to maintain or improve current credit ratings without adversely affecting levels of debt that may be issued for any particular program. For new bond issuances, the College will generally seek investment grade ratings from at least two nationally recognized rating agencies. 

A4.40.18 Credit Enhancement:  The College may secure credit enhancement for all or a portion of each bond issue. Credit enhancement may come in the form of municipal bond insurance, a debt service reserve surety policy (relating to revenue bonds) or a letter/line of credit. 

A4.40.18.1  The CFO, with the approval of the CEO, shall make the final recommendation to use credit enhancement taking into account such factors as the economic benefit of the enhancement, the College's available insurance capacity with the insurance community and future secondary market trading conditions. 

A4.40.18.2  The College will not secure credit enhancement unless the premium cost is less than the present value of the projected interest savings or if such credit enhancement enhances capital market access and/or facilitates liquidity in the secondary market for the securities. For municipal bond insurance, or other forms of credit enhancement which are paid for upfront with bond proceeds, the CFO shall analyze the economic benefit both to the maturity of the bonds and to the first optional redemption date. 

A4.40.18.3  The College may also utilize a letter or line of credit ("LOC") to provide credit support for its debt. The College shall consider the following criteria when selecting the LOC provider: 

  • Long-term ratings at least equal to or better than the College's;
  • Short-term ratings of at least P-1/A-1;
  • Business terms and conditions acceptable to the College;
  • Representative list of clients for whom the bank has provided credit
  • Fees - cost of LOC, draws, bank counsel and other administrative costs;
  • Trading differential cost.

A4.40.18.4  The College may select a liquidity facility to provide liquidity on variable rate bonds. The same criteria for selecting a LOC provider will apply to selection of a liquidity provider. 

A4.40.18.5  The College may also fund a debt service reserve fund to enhance the marketability of its revenue bonds. For revenue bond issues that require a debt service reserve fund, the College may purchase a surety bond policy to satisfy the reserve fund requirement in lieu of funding. 

A4.40.19 Investment of Bond Proceeds:  Investment of debt proceeds will comply with the Board of Regents approved 84.6 Investment Policy that requires all funds available for investment be invested in compliance with the Public Funds Investment Act (PFIA), Government Code Chapter 2256 and Texas Education Code Chapter 51 -Provisions Generally Applicable to Higher Education Section 51.0032 - Investment Reports and Policies. 

A4.40.20 Debt Structure and Repayment Provisions:  The College will structure and seek to repay its debt in an expeditious manner within the College's overall financial objectives and in consideration of the useful life of the project and dedicated repayment revenue sources. Debt will be structured with the following goals: 

  • Ensure earliest possible maturity of bonds in consideration of the useful life of the asset(s) being financed and budget or tax rate considerations;
  • Match or improve upon tax rate assumptions and projections as discussed with citizens at the time of any bond election;
  • Maintain a debt service tax rate that is stable and minimizes significant year-to­year fluctuations; and
  • Maintain or improve the College's bond ratings.

A4.40.21 Management of Debt Service Fund:  The College shall maintain a Debt Service Fund into which the proceeds from all taxes levied, assessed and collected for and on account of tax-supported bonds are deposited, and from which debt service on such bonds will be paid. 

A4.40.21.1   The Fund will be managed to ensure that taxes collected for and on account of tax-supported debt will be sufficient each year to pay such debt service. 

A4.40.21.2  The revenue, expenditures, and balance of the Debt Service Fund will be approved annually as part of the College's budget. 

A4.40.21.3  For revenue bonds, the College will seek to deposit one sixth of the next interest payment and one twelfth of the next principal payment into the Debt Service Fund established for those bonds. 

A4.40.22 Reporting:  The CFO will provide summary debt management reports to the CEO and the Board of Regents with every bond sale.




Page last updated December 4, 2023.