3.2.2 Governing Board Control

The legal authority and operating control of the institution are clearly defined for the following areas within the institution’s governance structure:

c. Institutional policy, including policies concerning related and affiliated corporate entities and all auxiliary services

d. Related foundations (athletic, research, etc.) and other corporate entities whose primary purpose is to support the institution and/or its programs

St. Petersburg College is in compliance with this comprehensive standard because the legal authority and operational control of the College are clearly defined in Florida Statute and Board Rules.

The legal authority for and governance structure for all of Florida’s public education institutions are provided within Florida Statute 1004.65 Community colleges; definition, mission, and responsibilities and through Rules of the Florida State Board of Education.

Excerpt from Florida Statute 1004.65 Community colleges; definition, mission, and responsibilities

Florida Statute 1001.64 provides community college Boards of Trustees with responsibility for policy decisions appropriate to the community college’s mission.

Excerpt from Florida Statute 1001.64 Community college boards of trustees; powers and duties

(1) The boards of trustees shall be responsible for cost-effective policy decisions appropriate to the community college's mission, the implementation and maintenance of high-quality education programs within law and rules of the State Board of Education, the measurement of performance, the reporting of information, and the provision of input regarding state policy, budgeting, and education standards.

Florida Statute 1001.65 charges the President of St. Petersburg College with recommending rules to Board of Trustees consistent with its mission.

Excerpt from Florida Statute 1001.65 Community colleges; definition, mission, and responsibilities

Each community college president shall:

(1) Recommend the adoption of rules, as appropriate, to the community college board of trustees to implement provisions of law governing the operation and administration of the community college, which shall include the specific powers and duties enumerated in this section. Such rules shall be consistent with law, the mission of the community college and the rules and policies of the State Board of Education.

Florida Statute 1004.65 defines a general mission for all community colleges within Florida.

Excerpt from Florida Statute 1004.65 Community colleges; definition, mission, and responsibilities

Although St. Petersburg College is a four-year institution, the Florida Statute on Special Programs, 1004.73, St. Petersburg College, directs SPC to maintain the mission and policies of a community college.

(2)(a) The primary mission of St. Petersburg College is to provide high-quality undergraduate education at an affordable price for students and the state. The purpose is to promote economic development by preparing people for occupations that require a bachelor's degree and are in demand by existing or emerging public and private employers in this state.

(b) St. Petersburg College shall maintain the mission and policies of a Florida community college, including the open-door admissions policy and the authority to offer all programs consistent with a community college's authority.

Hence, the College’s mission reflects the authority granted by Florida Statute:

… to provide accessible, learner-centered education for students pursuing selected baccalaureate degrees, associate degrees, technical certificates, applied technology diplomas and continuing education within our service area as well as globally in programs in which the College has special expertise. As a comprehensive, multi-campus postsecondary institution, St. Petersburg College seeks to be a creative leader and partner with students, communities, and other educational institutions to deliver enriched learning experiences and to promote economic and workforce development.

St. Petersburg College fulfills its mission by developing an outstanding team of diverse Faculty and staff providing students with advanced teaching and learning technologies in the classroom, distance education courses, international study opportunities, innovative teaching methods and a comprehensive library for promoting literacy and research. St. Petersburg College embraces continuous institutional self-evaluation to assure a climate for student success and an enduring commitment to excellence.

The Mission is formally revised at least every five years with the latest formal revision completed in the 2004-2005 academic year by a committee representing Faculty, administrators, students, community leaders and members of the Board of Trustees and was approved by the Board of Trustees in May, 2005. The Mission also is reviewed annually by President’s Cabinet before the new strategic planning cycle begins. In the most recent review in January 2007, the President’s Cabinet recommended minor changes to the Board of Trustees Rule on the College’s mission and goals, including inserting the term “globally” in place of “in the State of Florida and other areas,” scheduled for consideration by the Board of Trustees on March 20, 2007. This change is included the latest revision to Board of Trustees Rule to incorporate the changes adopted by the Board, placed on the SPC Web site upon adoption, and revised in the printed College Catalog for 2007-2008. The prior revision in 2002 added the Baccalaureate degrees, published in the 2002-2003 College Catalog. .

Responsibility for the fiscal stability of the College is shared by the Florida State Legislature, the State Board of Education, the Board of Trustees and the College President. Each community college Board of Trustees is vested with the responsibility to operate its respective community college with such authority as may be necessary for the proper operation and improvement of the institution in accordance with statute and State Board of Education Rules.

Excerpt from Florida Statute 1001.64 Community college boards of trustees; powers and duties

(10) Each board of trustees shall establish fees …

(11) Each board of trustees shall submit an institutional budget request, including a request for fixed capital outlay, and an operating budget to the State Board of Education for approval in accordance with guidelines established by the State Board of Education.

(12) Each board of trustees shall account for expenditures of all state, local, federal and other funds in the manner described by the Department of Education.

The College President, Senior Vice Presidents, Administrators, and Board members work closely with the College’s legislative delegation, as well as the leadership of the Division of Community Colleges and the State Board of Education regarding the provision of College funding from the State of Florida.

Excerpt from Florida Statute 1001.65 Community college presidents; powers and duties

(2) Prepare a budget request and an operating budget ... for approval by the community college board of trustees at such time and in such format as the State Board of Education may prescribe.

(6) Act for the community college board of trustees as custodian of all community college property and financial resources. The authority vested in the community college president under this subsection includes the authority to prioritize the use of community college space, property, equipment, and resources and the authority to impose charges for the use of those items.

As a Florida public community college, St. Petersburg College is dependent upon the state legislature for adequate funding in support of the College’s mission. The College’s budgeting and state funding follow the prescribed processes outlined in Florida Statutes.

Each community college president shall recommend to the community college board of trustees a budget of income and expenditures at such time and in such form as the State Board of Education may prescribe. Upon approval of a budget by the community college board of trustees, such budget shall be transmitted to the Department of Education for review and approval. Rules of the State Board of Education shall prescribe procedures for effecting budget amendments subsequent to the final approval of a budget for a given year.

There is established a Community College Program Fund. This fund shall comprise all appropriations made by the Legislature for the support of the current operating program and shall be apportioned and distributed to the community college districts of the state on the basis of procedures established by law and rules of the State Board of Education.

State law also requires that in the execution of the College’s budgets, the Board may amend budgets but must receive State Board of Education approval of amendments that move budget between funds or amendments that might affect the financial stability of the institution.

(3) Boards of trustees are authorized to amend budgets. Amended budgets are required to be in compliance with laws, rules and accepted educational accounting standards.

(a) Budget amendments approved by the board of trustees may reallocate funds between organizational units of a fund and between object codes.

(b) The following budget amendments require approval by the chancellor:

1. Transfer of funds from the Current Unrestricted Fund

2. Amendments which cause the unencumbered fund balance to be inconsistent with the statutory guidelines specified in Section 1011.84(3)(e), Florida Statutes

Excerpt from Florida Statute 1011.84 Procedure for determining state financial support and annual apportionment of state funds to each community college district

(3)(e) If at any time the unencumbered balance in the general fund of the community college board of trustees approved operating budget goes below 5 percent, the president shall provide written notification to the State Board of Education.

The College’s business services regularly prepares financial reports for review by the College President and Board of Trustees in accordance with a process specifically approved by the State Auditor to demonstrate compliance with the established budget parameters and to document the fiscal stability of the College.

As chief executive officer of the College, the College President holds day-to-day responsibility for the College’s fiscal stability. The recommended budget for the coming fiscal year is presented to the Board annually, generally at the June Board meeting of each year. The recommended annual budget represents the results of collaborative educational and administrative planning by the College’s Budget Review Committee and the President’s Cabinet.

05-141. The President sought approval of Item IX-K, Annual Capital Outlay Budget, Operating Budget and Auxiliary Fund Budget, and Salary Adjustments for FY 2005-2006, as well as Item IX-L, Adoption of 2005-2006 Salary Schedules.

Regarding Item IX-K, he briefly reported on individual meetings with trustees and how some of their concerns have been addressed. He noted that on the 2-year side, the proposed budget (1) puts a “skid” on trying to spend new money when there is a slight decrease in 2-year enrollment, and (2) does catch-up on salaries, primarily through reduced expenditures. …

Mr. Burke noted this is an extraordinary budget, which took tremendous sacrifice on the part of the College to make happen and a commitment on the Board’s part to show dedication to the Faculty.

During the year, if legislative action requires budget adjustments, special meetings for the budget review committee are scheduled, and recommendations are formulated and made to the President’s Cabinet, which includes Faculty and Student representatives, and subsequently to the Board of Trustees. Amended budgets are consistently submitted to the College President and then to the Board for final approval.

Board Rules delineate the signing authority for expenditure of College funds, and approval of contracts and other documents reflecting action authorized by the Board.

The President is hereby authorized to sign, on behalf of the Board, all contracts and other documents reflecting action previously approved or authorized by the Board. In addition, all contracts including those involving expenditures not exceeding the amount as specified in Section 287.017, Florida Statutes, for Category Five may be approved and signed by the President or designee.

Over time, increases or decreases in the institution’s net assets are one indicator of whether financial health is improving or deteriorating. There are 28 Community Colleges in the Florida Community College System. An analysis based upon the 2001-2004 audited annual financial reports of these 28 Community Colleges places St. Petersburg College 3^rdin the net assets rank with $159.2 million for this three year average. College revenues and other support exceeded expenses, creating an increase in the College’s total net assets. Fiscal years 2005-2006, 2004-2005, 2003-2004 and 2003-2002 resulted in increases in total net assets of $14.0 million, $20.3 million, $14.2 million, and $26.3 respectively.

Another indicator of financial strength is the ability of the college to meet financial obligations as they mature. The Statement of Cash Flows in each of the audited Financial Statements presents the information related to cash inflows and outflows. The College’s ending cash flows in fiscal years 2005-2006, 2004-2005, 2003-2004and 2002-2003 were $20.6 million, $23.5 million, $35.1 million and $30.5 million respectively. Furthermore, the College was 3^rd among the 28 Community Colleges in Florida for the 2001-2004 three year average in cash flow rank. Cash provided from non-capital financing activities such as state appropriations, grants and gifts increased approximately $20.4 million over 2003-2004. This is due in part to a $4.3 million increase in State appropriations and a $16.2 million increase in cash flow, primarily from Federal grants and contracts; Federal Grants and Contracts shifted $7.7 million to non-operating revenues for Homeland Security instruction and training for external agencies.

In addition, the College has consistently achieved State of Florida planning and budgetary guidelines for maintaining the Unallocated Fund Balance in an amount equal to or greater than 5 percent of total operating funds available for the fiscal year. Currently the College has allocated reserves and surplus investments sufficient to fund accelerated construction projects as a hedge against dramatic increases in construction costs, and reserves for certain federal grants which may be discontinued or reduced in coming years. In an internally prepared comparative analysis of annual financial reports, completed in August 2005, the College’s fiscal health, financial position, and financial stability ranked # 3 in net assets, #1 in 3-year average change in net assets, and #3 in 3-year average change in cash flow among colleges in the Florida Community College System for the Fiscal Years 2001-2002 through 2003-2004.

Institutional policies, including policies concerning related and affiliated corporate entities and all auxiliary services

St. Petersburg College’s institutional policies are maintained in compliance with Florida Statutes and Board of Education rules. The College President and Board of Trustees are ultimately responsible for ensuring that policy compliance is maintained and that policy implementation follows state guidelines.

Excerpt from Florida Statute 1001.64 Community college boards of trustees; powers and duties

(4)(b) Each board of trustees is specifically authorized to adopt rules, procedures, and policies, consistent with law and rules of the State Board of Education, related to its mission and responsibilities ..., its governance, personnel, budget and finance, administration, programs, curriculum and instruction, buildings and grounds, travel and purchasing, technology, students, contracts and grants, or college property.

The Board of Trustees has adopted rules and procedures in the areas authorized by Florida Statute. The Board of Trustees Rules and Procedures are maintained on the St. Petersburg College Web site and appropriate references to Board rules are made in the College Catalog, Faculty Manual, and Student Handbook.

The College is authorized by the Board to operate or to contract for auxiliary services which are defined as those self-supporting activities that provide service to and are incidental to the instructional program of the College. These enterprises usually are service-oriented. Funds derived from auxiliary enterprises are to be used for the benefit of the College. Auxiliary contract units of the College currently include bookstore management, book publishing, manual food service, and vending.

Excerpt from Board of Trustees Rule 6Hx23-5.07 – Auxiliary Enterprises and Undesignated Gifts

St. Petersburg College, as a community-based institution, may provide selected institutional support services to advance identified community agencies, national organizations, or regional associations which are directly connected to community college programs or to higher education and for which an employee of the College maintains an approved and active participatory role. Such support services include supporting the Florida Association of Community Colleges (FACC), the American Association of Community Colleges, and the League for Innovation in Community Colleges, and as of Fall 2006, the Immediate Past Chair of the American Association of Community College Trustees is on the Board of Trustees of St. Petersburg College.

Policies concerning the development of related direct support organizations (DSOs) are provided by the Florida Statutes.

Excerpt from Florida Statute 1004.70 Community college direct-support organizations

(a) "Community college direct-support organization" means an organization that is:

1. A Florida corporation not for profit, incorporated under the provisions of chapter 617 and approved by the Department of State.

2. Organized and operated exclusively to receive, hold, invest, and administer property and to make expenditures to, or for the benefit of, a community college in this state.

3. An organization that the community college board of trustees, after review, has certified to be operating in a manner consistent with the goals of the community college and in the best interest of the state. Any organization that is denied certification by the board of trustees may not use the name of the community college that it serves.

Each DSO operates according to its own bylaws, which outline the structure, authority, powers and duties of their Board of Directors, and other necessary organizational matters.

The Board of Trustees is authorized to permit DSOs to use property, facilities and personal services subject to the provisions of Florida Statutes. One member of the St. Petersburg College Board of Trustees also serves on the board of each Direct Support Organization.

Excerpt from Florida Statute 1004.70 Community college direct-support organizations

(2) BOARD OF DIRECTORS.--The chair of the board of trustees shall appoint a representative to the board of directors and the executive committee of each direct-support organization established under this section, including those established before July 1, 1998. The president of the community college for which the direct-support organization is established, or the president's designee, shall also serve on the board of directors and the executive committee of the direct-support organization, including any direct-support organization established before July 1, 1998.

Direct Support Units are accountable for their financial stability to the College’s Board of Trustees and the Division of Community Colleges under the State Board of Education.

Excerpt from Florida Statute 1004.70 Community college direct-support organizations

(5) ANNUAL BUDGETS AND REPORTS.--Each direct-support organization shall submit to the board of trustees its federal Internal Revenue Service Application for Recognition of Exemption form (Form 1023) and its federal Internal Revenue Service Return of Organization Exempt from Income Tax form (Form 990).

(6) ANNUAL AUDIT.--Each direct-support organization shall provide for an annual financial audit in accordance with rules adopted by the Auditor General … The annual audit report must be submitted … to the Auditor General, the State Board of Education, and the board of trustees for review. The board of trustees, the Auditor General, and the Office of Program Policy Analysis and Government Accountability may require and receive from the organization or from its independent auditor any detail or supplemental data relative to the operation of the organization.

In the Footnotes section of the Annual Financial Report, footnote 1 entitled “Summary of Significant Accounting Policies,” also describes the legal status of these direct support units:

The College's component units are also direct-support organizations, as defined in Section 1004.70, Florida Statutes, which are legally separate from the College, but are financially accountable to the College. These legally separate entities are managed independently, outside the College's budgeting process, and their powers generally are vested in a governing board pursuant to various State statutes. These entities receive, hold, invest, and administer property and make expenditures to or for the benefit of the College.

Excerpt from Florida Statute 1004.70 Community college direct-support organizations

(4)(c) Any transaction or agreement between one direct-support organization and another direct-support organization … must be approved by the board of trustees.

(d) A community college direct-support organization is prohibited from giving, either directly or indirectly, any gift to a political committee or committee of continuous existence … for any purpose other than those … directly related to the educational mission of the community college.

The language in the Board of Trustees Rule 6Hx23-1.33 Direct Support Organizations parallels the Florida Statute. The DSOs have complied with the Florida Statutes and SPC’s Board of Trustees’ rules by submitting their audits and requesting permission to collaborate when appropriate. As an example, the following matter was brought to the Board of Trustees:

BOARD OF TRUSTEES

ST. PETERSBURG COLLEGE

Collaboration between Direct Support Organizations (DSOs)

SPC Alumni Association/SPC Foundation

In accordance with Florida Statute 1004.70, the Board of Trustees must approve all transactions or agreements between one direct support organization and other direct support organizations.

Approval is sought for a transaction whereby the SPC Alumni Association, Inc., and the SPC Foundation, both direct support organizations of St. Petersburg College, will share the cost to renew a service agreement with ResultsPlus, the company that administers our combined database.

Dr. Carl M. Kuttler, Jr., President; Amelia Carey, Director of Institutional Advancement; and Janice Buchanan, Executive Director, SPC Foundation, Inc., recommend approval.

St. Petersburg College has three active related corporate entities – the St. Petersburg College Foundation, Inc., the St. Petersburg College Alumni Association and the Leepa Rattner Museum of Art, Inc. The Foundation, Inc., the private fund-raising arm of the College, and the other DSOs were established in accordance with Florida Statutes. These corporate entities are re-affirmed by the Florida Department of State annually and audits are reviewed by the College’s Board of Trustees annually in accordance with Florida Statute 1004.70 (1)(a)(1).

Mission of the St. Petersburg College Foundation, Inc. The St. Petersburg College Foundation, Inc. supports student success through direct financial support for deserving and needy individuals, through Faculty enrichment and through continued expansion of relevant programs. The mission statement is as follows:

The St. Petersburg College Foundation, Inc. is a 501(c)(3) corporation chartered under Florida statutes, serving as a direct support organization of St. Petersburg College. In support of the vision and mission of SPC the Foundation accepts and prudently manages all gifts including cash, securities, property, bequests and trust or life-income arrangements.

The Foundation is guided by a Board of Directors composed of professional, business and civic leaders who are vitally interested in higher education in the greater Tampa Bay area.

The St. Petersburg College Foundation, Inc. promotes the practice of philanthropy through partnerships with the community for the advocacy of higher education in general and specifically at SPC, for (1)the provision of student scholarships, awards and financial grants, (2) the advancement of teaching and instructional services, (3) new and improved facilities and (4) state-of-the-art technology.

The mission of the St. Petersburg College Foundation, Inc. is aligned with the College mission:

Structure of the St. Petersburg College Foundation, Inc. The Foundation, Inc. is organized and operated exclusively to receive, hold, invest, and administer property and to make expenditures to or for the benefit of, St. Petersburg College. The College’s Board of Trustees, by virtue of its Rules, authorizes the transfer of contributions received by the College to the Foundation.

The structure of the foundation’s board defined in the by-laws of the corporation and Board of Trustees’ Rules assures that the leadership of the foundation and institution are separate but work cooperatively. Of the seven-to-thirty Directors, one is selected from the College’s Board of Trustees, one nonvoting member is the College President and two nonvoting members are senior administrators of the College. The three nonvoting members bring current information and future plans to the rest of the Board of Directors.