PURCHASE OF FINANCIAL AUDIT, TAX AND OTHER ATTESTATION SERVICES

REQUEST FOR COMPETITIVE SEALED PROPOSAL (CSP)

CSP NO. 20A-010 Release Date: January 24, 2020

Proposals must be submitted to:

Alamo Colleges District Purchasing and Contract Administration

See addresses in “Key Dates and Information”

Proposal Deadline: February 25, 2020, 2:00 p.m.

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TABLE OF CONTENTS

Key Dates and Information General Information

A. CSP Project Scope B. Description of Alamo Colleges District C. Definition of Terms

Section 1: Scope of Work

A. Scope of Work B. Statement of Work

Section 2: Terms and Conditions of the CSP & Submission of Proposal

A. Terms and Conditions of the CSP B. Preparation of Proposals C. Submission of Proposal

Section 3: Proposal Pricing Schedule Section 4: Offeror’s Checklist Section 5: Certification of Non-Collusion Section 6: Proposal Certification Section 7: Form CIQ – Conflict of Interest Questionnaire Section 8: Terms and Conditions of the Contract

1. Defined Terms 2. Project Objective(s) and Scope 3. Project Deliverables 4. Supplemental Deliverables or Rate Changes 5. Access 6. Communication 7. Policies 8. Compliance with Applicable Laws 9. Insurance 10. Payment 11. Term and Termination 12. Licenses, Permits, Taxes and Fees 13. General Terms

13.1 Notices 13.2 Choice of Law 13.3 Data Security and Notification 13.4 Successors and Assigns 13.5 Entire Agreement 13.6 Amendments 13.7 Force Majeure 13.8 Severability 13.9 Gender and Number 13.10 Captions 13.11 Exhibits 13.12 Drafters

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13.13 No Third Party Beneficiaries 13.14 Dispute Resolution 13.15 Release of Liability of Alamo Colleges District 13.16 Indemnification of Alamo Colleges District and Affiliates and Release of Affiliates 13.17 Release of Information 13.18 Independent Contractors 13.19 Copyrights, Consents & Assignments 13.20 Records 13.21 Covenants Pertaining to Contractor Employees Working at Alamo Colleges District

Premises 13.22 Right to Audit 13.23 Contractor Parking 13.24 Prohibition Against Boycotting the State of Israel

Appendix A: Student Internship Program Parameters

Attachments: Attachment A: Listing of Information Available by Web-link Attachment B: Northeast Lakeview College FY19 Annual Financial Report Attachment C: Alamo Colleges Foundation FY19 Annual Financial Report Attachment D: ACCD Public Facility Corporation FY 19 Annual Financial Report Attachment E: Tobin Lofts, LLC FY18 Annual Financial Report Attachment F: Proposal Pricing Schedule Template

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KEY DATES AND INFORMAITON

CSP NAME: Competitive Sealed Proposal (CSP) for Purchase of Financial Audit, Tax and Other Attestation Services

CLOSURE: The Alamo Colleges District will be closed for Spring Break March

9, 2020 through March 15, 2020, and Easter Holiday on April 10, 2020. During this time we will not be responding to any emails or phone call messages.

SUBMITTAL DEADLINE: February 25, 2020, prior to 2:00 pm CST.

DELIVERY LOCATION: Alamo Colleges District Purchasing and Contract Administration Re: Purchase of Financial Audit, Tax and Other Attestation Services CSP # 20A-010 Reception Desk 2222 N. Alamo St. San Antonio, Texas 78215 CONTRACT TERM: Any contract awarded by the Board of Trustees as a result of

the CSP will begin upon award and terminate March 31, 2025. For the fiscal years ending August 31, 2020, 2021, 2022, 2023, and 2024). The Board of Trustees will consider and approve each year separately.

NOTICE: All questions related to this CSP are to be directed to Jeremy Taub, Assistant Director,

Purchasing and contract Administration, via email to: jtaub@alamo.edu with a copy to dst-purchasing@alamo.edu

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MINIMUM QUALIFICATIONS

The respondents to this CSP must have the following minimum qualifications. Failure to meet minimum qualifications may be grounds for rejection. Alamo Colleges District reserves the right to reject Proposals that fail to include this information with the Offerors Proposal submission.

a. Offeror shall affirm in writing: The engagement and review partners,

manager or principal, supervisor, and senior auditors will be certified public accountants licensed in Texas, and submit evidence with its Firms` proposal submission.

b. Offeror shall affirm in writing: The firm will meet the State of Texas licensing requirements or other legal requirements to perform these audit services and submit evidence with its Firms` proposal submission.

c. Offeror shall affirm in writing: The firm will be in good standing and will not have any disciplinary actions during the past 3 years with the Texas State Board of Public Accountancy and submit evidence with its Firms` proposal submission.

d. Offeror shall affirm in writing: The firm meets the independence requirements promulgated by the U.S. Government Accountability Office and the American Institute of Certified Public Accountants and submit evidence with its Firms` proposal submission.

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GENERAL INFORMATION

A. CSP Project Scope: The purpose of this CSP is to solicit proposals for the purchase of Financial Audit, Tax and Other Attestation Services for Alamo Colleges District. The scope of services is required to assist the Alamo Colleges District with obtaining a Financial Audit inclusive of all campus locations, Tax and Other Attestation Services.

B. Description of Alamo Colleges District:

The Alamo Colleges District was established as a public community college through a public election in 1945. The District operates as a political subdivision under the laws of the State of Texas. A nine-member Board of Trustees is the governing body of the District. The Trustees are elected locally to six-year staggered terms by Bexar County voters. The Chancellor, the District’s chief executive officer, guides and implements the program and policies of the Alamo Colleges District. In Fall 2014, the Board of Trustees welcomed the inclusion of a Student Trustee member to serve as a non-voting student liaison to the Board of Trustees and Chancellor. The Board of Trustees meets as a Committee of the Whole usually the second Tuesday of the month, except for in November and June. Items are usually presented to this Committee for consideration, discussion and recommendation before advancing the item to the Regular Board Meeting. The Regular Board Meetings usually are scheduled the third Tuesday of the month, except for in November and June. Board Retreats and Special Board Meetings are scheduled as needed to discuss specific items. The District is considered to be a special purpose, primary government. While Alamo Colleges receives funding from local, state and federal sources, and must comply with the spending, reporting, and recordkeeping requirements of these entities, it is not a component of any other governmental entity. The District serves the educational needs of Bexar County and surrounding communities through its colleges and educational centers. The District operates five separately accredited colleges, including San Antonio College, St. Philip’s College, Palo Alto College, Northwest Vista College and Northeast Lakeview College. The five colleges support the education and lifelong learning needs of a multicultural community by providing associates degree, certificates, pre-major/transfer programs continuing education and community services. The 300+ programs are arranged in six Institutes, known as the AlamoINSTITUTES, by career choices: Creative & Communication Arts, Business &Entrepreneurship, Health & Biosciences, Advanced Manufacturing & Logistics, Public Services and Science & Technology. The Institutes have clear roadmaps to guide each student efficiently and effectively from his/her point of entry to attainment of high-quality post-secondary credentials and/or a career. Students are taught by highly qualified faculty with Master’s and Doctorate degrees who are committed to creating a learning-centered environment. Student services include advising, counseling, learning resource centers, computer labs, tutoring, financial aid services, services for the disabled, developmental instruction, veteran’s services, service learning and job placement. A certified advisor works closely with each student to ensure each course taken can be counted toward the student’s goal, and that completion of degrees and/or certificates can be accomplished most effectively and efficiently.

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The District is the third largest community college system in enrollment in Texas, includes four colleges designated as Hispanic-Serving Institutions and includes the nation’s only institution designated as both a Historically Black College and a Hispanic-Serving Institution. Preliminary enrollment numbers for FY2019 indicate annual unduplicated enrollment is 76,445 and duplicated enrollment numbers are 104,186. Fall 2019 showed a 2% increase in enrollment from 66,436 in Fall 2018 to 67,774 for Fall 2019.

The Alamo Colleges District has also earned numerous awards in the areas of procurement, budgeting and finance. For the eighth consecutive year, the Alamo Colleges District was awarded the National Achievement of Excellence in Procurement Award from the National Procurement Institute and the Distinguished Budget Presentation Award from the Government Finance Officers Association (GFOA). In addition, the Alamo Colleges District was the only community college in Texas awarded the Certificate of Distinction by the Government Treasurers’ Organization of Texas (GTOT) for its investment policy in fiscal year 2017. The GFOA awarded a Certificate of Achievement for Excellence in Financial Reporting to the Alamo Colleges District for its Comprehensive Annual Financial Report for the fiscal year ended August 31, 2018. This was the tenth consecutive year that the District has achieved this prestigious award. In order to be awarded a Certificate of Achievement, a government must publish an easily readable and efficiently organized comprehensive annual financial report. The report must satisfy both generally accepted accounting principles and applicable legal requirements. On November 15, 2018, U.S. Commerce Secretary Wilbur Ross named the Alamo Colleges District a 2018 recipient of the Malcolm Baldrige National Quality Award (MBNQA), marking a significant milestone in the District’s ongoing journey to achieve the highest level of student success and performance excellence. A Presidential award, the Baldrige Award is the highest level of national recognition that a U.S. organization can receive for performance excellence in innovation, efficiency, and leadership. The Alamo Colleges District is the first community college system to achieve this level of recognition in the history of the program. Three of the Alamo Colleges – Northwest Vista College (NVC), San Antonio College (SAC) and Palo Alto College (PAC) were named to the list of 150 community colleges eligible to complete for the 2019 $1 million Aspen Prize for Community College Excellence, the nation’s signature recognition of high achievement and performance among America’s community college. Only 15 percent of community colleges nationwide have been invited to apply for the Aspen Prize, which is awarded every two years. PAC was named as a “Rising Star” award winner and received a $100,000 cash prize. In November 2019, the Aspen Institute College Excellence Program again named NWC, SAC, and PAC to the list of 150 community colleges eligible to compete for the 2021 $1 million Aspen Prize for Community College Excellence. The 150 community colleges eligible to compete for the 2021 Aspen Prize were selected from a pool of nearly 1,000 public two-year colleges nationwide using publicly available data on student outcomes. Ten finalists will be named in April 2020.

Offerors can visit Alamo Colleges District’ website at https://www.alamo.edu/ to learn about Alamo Colleges.

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Component Units and Related Entities Alamo Colleges Foundation, Inc. – Discrete Component Unit The Alamo Colleges Foundation, Inc. (the Foundation) is a separate non-profit organization, and its sole purpose is to provide benefits such as scholarships and grants to the students, faculty and staff of the District. The Foundation is a legally separate entity which utilizes District financial resources for its operation. The Foundation’s financial statements are included in the District’s annual report as a discrete component unit. Stand-alone financial statements of the Foundation can be obtained from the Finance and Fiscal Services department of the Alamo Community College District. ACCD Public Facility Corporation (PFC) – Discrete Component Unit The PFC was incorporated on September 23, 2011 as a public non-profit corporation formed under the Public Facility Corporation Act, Chapter 303, Texas Local Government Code, as amended. It is also a public corporation within the meaning of the United States (U.S.) Treasury Department rulings of the Internal Revenue Service per sections 103 and 141 of the IRS Code of 1986, as amended. The PFC is governed by a three-member Board of Directors that also serve on the Board of Trustees of the District. The PFC was formed exclusively for the purpose of assisting the District in financing, refinancing, or providing public facilities. The PFC may finance the acquisition of District obligations, provide for the acquisition, construction, rehabilitation, renovation, repair, equipping, furnishing and placement in service of public facilities, issue bonds as permitted by the Act and perform other such activities on behalf of the District as provided in its Certificate of Formation. The PFC does not have authority to levy taxes. The District appoints the entire governing body of the PFC, however, this board is not considered substantively the same as the Board of Trustees of the District because it consists of less than a majority of the District’s Board. Accordingly, the PFC’s financial statements are included in the District’s financial statements as a discrete component unit. The books of the PFC are maintained by the Finance and Fiscal Services Department. Stand-alone financial statements of the PFC can be obtained from the Finance and Fiscal Services department of the Alamo Colleges District. Tobin Lofts LLC – Related Entity The PFC is a member of Tobin Lofts LLC (LLC). The LLC was created to carry out the purposes of its initial sole member, the PFC. This includes providing housing for college students and employees of Alamo Colleges. The LLC leases land from the PFC under a 75-year ground lease and operates residential housing and retail facilities on the land. In August 2012, the LLC prepaid its ground lease in the amount of $1.8 million and the PFC is recognizing lease revenue on a monthly basis over the life of the lease. The PFC may receive distributions in the future from the LLC under limited contractual conditions. At the end of the 75-year lease, title to the tenant improvements will pass to the PFC. The books of the LLC are prepared by a management company hired to oversee the daily operations of the facility. Tobin Lofts Condominium Association, Inc. (TLCA) – Related Entity The TLCA was established as a Condominium Regime under the Texas Uniform Condominium Act, Title 7, Chapter 82, Texas Property Code for three separately designated Master Units. Two units are owned by the PFC and are part of Tobin Lofts LLC. One unit is owned by Alamo Community College District and is a parking garage.

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C. Definition of Terms:

1. “Alamo Colleges District,” “District” or “ACCD” refers to the Alamo Community College District. 2. “Offeror,” “Proposers,” or “Company” refers to a company which chooses to submit a Proposal

to provide products and/or services for the District as specified in this CSP. 3. “Contractor” refers to the company awarded the contract to provide products and/or services

for the Alamo Colleges District as specified in this CSP. 4. “Proposal” refers to the offer, from Offeror to the Alamo Colleges District, to provide the

products and/or services as specified in the Agreement.

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SECTION 1

SCOPE OF WORK

Scope of Work Alamo Colleges seeks proposals from experienced and qualified certified public accounting firms to provide the following professional services:

Independent financial audit services conducted in accordance with auditing standards generally accepted in the United States of America and/or the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States.

Independent compliance audit services for each major federal program conducted in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance).

Independent compliance audit services for each major state program conducted in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States; and the audit requirements of the State of Texas Uniform Grant Management Standards (UGMS), which includes the State of Texas Single Audit Circular.

Review engagement services conducted in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the American Institute of Certified Public Accountants (AICPA).

Federal and Texas Franchise Tax return preparation services.

Alamo Colleges is requesting that Contractor not engage in sub-contracts or participate in joint ventures for these services. Alamo Colleges requires that if out of town staff are used on any engagement, there will be no charge back of travel, lodging, or other expenses to Alamo Colleges. It is the option of Alamo Colleges to select more than one contractor for the combination of the services requested. At a minimum, the deliverables will consist of the following: FINANCIAL STATEMENTS AND OTHER REPORTS 1. A report of independent certified public accountants to include an opinion as to whether the financial

statements present fairly the Alamo Colleges financial position, and the changes in its net position and its cash flows as of August 31 in conformity with accounting principles generally accepted in the United States of America. A report of independent certified public accountants on internal control over financial reporting and on compliance and other matters required by Government Auditing Standards. If Alamo Colleges elects to award the audit services to more than one contractor, the financial statement auditor will issue the Report on Internal Control over Financial Reporting and on Compliance and Other Matters Required by Government Auditing Standards, as well as all other required reports.

2. A management letter identifying existing control deficiencies, especially any considered material or

significant in accounting, procedures or internal control, and any other matters that come to the auditor’s attention, together with any recommendations for corrections or improvements for the Alamo Colleges District.

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3. A report of independent certified public accountants on compliance with the Public Funds Investment Act (PFIA) for the District and the related State of Texas compliance requirements as shown on

https://www.sao.texas.gov/InternalAudit/PublicFunds/#publicfunds

4. A report of independent certified public accountants to include an opinion as to whether the financial statements present fairly Northeast Lakeview College’s (NLC) financial position, and the changes in its net position and its cash flows as of August 31 in conformity with accounting principles generally accepted in the United States of America. A report of independent certified public accountants on internal control over financial reporting and on compliance and other matters required by Government Auditing Standards.

5. A management letter identifying existing control deficiencies, especially any considered material or

significant in accounting, procedures or internal control, and any other matters that come to the auditor’s attention, together with any recommendations for corrections or improvements for Northeast Lakeview College.

6. A certified public accountants report and opinion as to whether the financial statements present fairly the

Alamo Colleges Foundation, Inc. financial position, and the changes in its net assets and its cash flows as of December 31 in conformity with accounting principles generally accepted in the United States of America.

7. A report of independent certified public accountants to include an opinion as to whether the financial

statements present fairly the ACCD Public Facility Corporation’s financial position, and the changes in its net position and its cash flows as of August 31 in conformity with accounting principles generally accepted in the United States of America. A report of independent certified public accountants on internal control over financial reporting and on compliance and other matters required by Government Auditing Standards.

8. An independent accountant’s review report specifying if the auditor is aware of any material modifications

that should be made to the financial statements of Tobin Lofts, LLC which include its balance sheet and related statements of operations and member’s equity and cash flows as of August 31 in accordance with accounting principles generally accepted in the United States of America.

SINGLE AUDIT

Federal and State Single Audit to include:

1. Report of Independent Certified Public Accountants on Compliance for Each Major Federal

Program and on Internal Control Over Compliance required by the Uniform Guidance; Schedule of Federal Findings and Questioned Costs; Report of Independent Certified Public Accountants on Internal Control over Financial Reporting and on Compliance and Other Matters Required by Government Auditing Standards.

2. Report of Independent Certified Public Accountants on Compliance for Each Major State Program and on Internal Control over Compliance Required by the State of Texas Uniform Grant Management Standards ; Schedule of State Findings and Questioned Costs.

TAX PREPARATION AND CONSULTATION SERVICES

Preparation of Tax Returns and consultation services to include:

1. Alamo Colleges Foundation, Inc. IRS Form 990.

2. ACCD Public Facility Corporation IRS Form 1120.

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3. Tobin Lofts Condo Association IRS Form 1120.

4. Tobin Lofts Condo Association Texas Franchise Tax Form (05-163) and Form (05-102)

5. Tobin Lofts, LLC Texas Franchise Tax Form (05-163) and Form (05-102)

6. Consulting services related to topics such as sales tax, 1099 reporting, payroll taxes, international students and other questions as they arise.

Schedule for Work during Contract Period:

Deliverable FY 2019

FY 2020

FY 2021

FY 2022

FY 2023

FY 2024

Alamo Colleges District - audit report on comprehensive annual financial report X X X X X

Alamo Colleges District - management letter and other CPA opinions X X X X X

Alamo Colleges District -compliance report on the Public Funds Investment Act X X X

Alamo Colleges District - Single Audit reports for both federal and state grants X X X X X

Northeast Lakeview College -audit report on annual financial report X X X X X

Northeast Lakeview College - management letter and other audit opinions X X X X X

Alamo Colleges Foundation, Inc. – audit opinion on annual standalone financial report X X X X X

Alamo Colleges Foundation, Inc. – preparation of IRS Form 990 X X X X X

ACCD Public Facility Corporation – audit opinion on annual standalone financial report X X X X X

ACCD Public Facility Corporation – preparation of IRS Form 1120 (Tobin Lofts, LLC is a disregarded entity) X X X X X

Tobin Lofts, LLC – independent accountant’s review report on annual standalone financial report X X X X X

Tobin Lofts, LLC – preparation of Texas Franchise Tax Form 05-163 and Form 05-102 X X X X X

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Tobin Lofts Condominiums Owners Association, Inc.-preparation of IRS Form 1120 X X X X X

Tobin Lofts Condominiums Owners Association, Inc. -preparation of Texas Franchise Tax Form 05-163 and Form 05-102 X X X X X

Training (at no additional cost) - To enhance the effectiveness of the Alamo Colleges Finance & Fiscal Services and Internal Audit Departments, the Contractor will also invite members of the Finance & Fiscal Services and Internal Audit Departments to participate in the Offeror’ s professional development seminars and provide any other assistance that would train and develop the Alamo Colleges staff members.

Administrative Responsibilities of the Alamo Colleges District

1. Alamo Colleges will assign a liaison to coordinate all draft reports, schedules, confirmations, pre-audit requests, audit inquiries and responses. Online Banner access to auditors for testwork is encouraged and will be provided as it is determined to be efficient for the audit fieldwork. Audit support is provided either through a shared-database, Sharepoint, made available to the audit team or via an encrypted document exchange portal provided by the Contractor at no additional cost to the District.

2. The Alamo Colleges accounting/finance team will prepare a draft of the financial statements,

including footnotes, schedules and other supporting documentation. The Alamo Colleges will make the final changes and accept responsibility for printing and binding of the financial statements. The Alamo Colleges team will also be available to reproduce copies of documents or audit evidence and provide documents for review.

3. Alamo Colleges will provide office space at 2222 N. Alamo St. for the external audit projects.

4. Electronic data files containing transactions and balances for use by the Contractor.

Access/Retention of Work Papers

The Contractor shall provide access, at no extra cost to Alamo Colleges, to all work papers and other related documents produced during the financial audits and other services rendered hereunder. The Contractor will also retain the audit and other services’ work papers for a period of seven (7) years from the date of the Contractor’s opinion, report or date of tax return submittal. These documents shall be made available to Alamo Colleges and its Federal and State of Texas audit and other agencies upon request by Alamo Colleges.

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Timelines All materials related to the District’s annual external audit must be completed in time for submission at the December Committee of the Whole meeting and December Board of Trustees meeting in order to meet State deadlines of January 1, of each year for submission of audited financial statements and all related reports. The Contractor shall prepare and deliver to Alamo Colleges the deliverables described below and by the time frame specified, based on a start of final year-end audit work by the first week of October.

ATTESTATION ENGAGEMENTS Proposed Timeline and Due Dates to Alamo Colleges District and Related Entities

Engagement

Letter

Communicate Audit Plan to

Board Interim

Fieldwork Yearend

Fieldwork

Draft Opinions

and/or Schedule of

Findings and Questioned

Costs

Presentation to Audit, Budget & Finance

Committee

Presentation to the Board of

Trustees

Alamo Community College District:

Audit of CAFR; issue opinion & management letter

March-First Week

April-Second Week July and August

October through

November November-Third Week

December-First Week

December-Second Week

Report on Public Funds Investment Act

March-First Week

April-Second Week July and August

October through

November November-Third Week

December-First Week

December-Second Week

Single audit for both federal and state grants

March-First Week

April-Second Week July and August

October through

November November-Third Week

December-First Week

December-Second Week

Northeast Lakeview College:

Audit of annual financial report; issue management letter

March-First Week

April-Second Week None

October through

November November-Third Week

December-First Week

December-Second Week

Alamo Colleges Foundation, Inc.:

Audit opinion on annual financial report February February None March April May

N/A – only present to Committee

ACCD Public Facility Corporation:

Audit of annual standalone financial report; issue management letter August N/A N/A September September N/A N/A

Tobin Lofts, LLC:

Tobin Lofts, LLC-review opinion; issue management letter December N/A N/A December January N/A N/A

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TAX RETURN PREPARATION SERVICES

Proposed Timeline and Due Dates

Tax Form Fiscal Year End Date

Normal Due Date

Extended Due Date

Fieldwork-Normal Due

Date

Fieldwork – Extended Due

Date

Alamo Colleges Foundation, Inc. :

IRS Form 990 December 31 May 15 November 15 March-April September-

October

ACCD Public Facility Corporation:

IRS Form 1120 August 31 November 15 May 15 October Texas

Franchise Tax Form 05-163 and 05-102 August 31 May 15 November 15

TBD during planning

TBD during planning

Tobin Lofts, LLC. :

IRS Form 1120 August 31 November 15 May 15 October Texas

Franchise Tax Form 05-163 and 05-102 August 31 May 15 November 15

TBD during planning

TBD during planning

Tobin Lofts Condominium Owners Association, Inc. :

IRS Form 1120 August 31 November 15 May 15 October Texas

Franchise Tax Form 05-163 and 05-102 August 31 May 15 November 15

TBD during planning

TBD during planning

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SECTION 2 TERMS AND CONDITIONS OF THE CSP AND SUBMISSION OF PROPOSAL

A. Terms and Conditions of the CSP:

1. Award of Contract.

Award will be made to the Offeror which provides the best value to the Alamo Colleges District on the basis of the published evaluation criteria, and not solely based on the purchase price. Alamo Colleges District reserves the right to accept or reject any and/or all Proposals, and to waive any and/or all formalities and irregularities in the Proposals received and re-solicit, as deemed necessary. Alamo Colleges reserves the right to select more than one contractor for the combination of services requested. The selection and award may be made on the basis of the Proposals initially submitted, without discussion, clarification or modification. Respondent(s) who submit a Proposal may be required to make an oral presentation(s) of their Proposal to Alamo Colleges District. Offerors may be required to present information from their proposal in-person at Alamo Colleges during the week of March 16, 2020.

2. a. Evaluation Criteria.

Only those proposals meeting the minimum qualifications will be evaluated. Responses to the following items will be evaluated in accordance with the criteria in the Evaluation Table.

Minimum Qualifications:

1. Offeror shall affirm in writing: The engagement and review partners, manager or principal,

supervisor, and senior auditors will be certified public accountants licensed in Texas, and must submit evidence with its Firms` proposal submission.

2. Offeror shall affirm in writing: The firm will meet the State of Texas licensing requirements

or other legal requirements to perform the requested audit services and submit evidence with its Firms` proposal submission.

3. Offeror shall affirm in writing: The firm will be in good standing and will not have any

disciplinary actions during the past 3 years with the Texas State Board of Public Accountancy and submit evidence with its Firms` proposal submission.

4. Offeror shall affirm in writing: The firm meets the independence requirements promulgated

by the U.S. Government Accountability Office and the American Institute of Certified Public Accountants and must submit evidence with its Firms` proposal submission.

The proposal must contain responses to the requested information, which will serve as the basis for the evaluation. Please be complete and concise in all responses to all required items. Respond to each item separately beginning each response with the question asked.

1. Alamo Colleges District will consider the following in evaluation of the proposals:

Evaluation Table

Criteria CSP Reference

Weighting

Purchase Price - Attachment F – Excel Spreadsheet

Section 3 35

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Criteria CSP Reference

Weighting

Quality of Vendor’s Goods and Services: - Firm Structure and Services Offered - Financial Stability - Peer Review

Section 2:

30

Extent to Which the Goods or Services Meet the District’s Needs: - Meet requirements in the scope of services - Experience in providing Required Services - Higher Education Experience - Audit and Management Plan - Staffing for Required Services

Section 2:

35

Total: 100

2. Alamo Colleges District shall evaluate the information provided in the proposals received.

Information and/or factors gathered during interviews, and any reference checks, will be utilized in the evaluation criteria, rankings, and award decision. References may or may not be reviewed at the discretion of the Alamo Colleges District. Alamo Colleges District also reserves the right to contact references other than or in additional to those furnished by a respondent.

3. Alamo Colleges District may use various price analysis techniques and procedures to

evaluate price. Normally, reasonableness of price is established through adequate price competition, but may also be separately assessed through the price analysis techniques. Award will be made on a best value basis. Alamo Colleges reserves the right to make multiple awards as a result of this solicitation.

b. In response to this CSP, please provide information regarding the following matters:

1. Purchase Price - Cost of Services:

a) Fair and reasonable price for the services to be rendered, (Attachment F).

2. Stability, Capabilities and Competency:

a) Service Capabilities – The Alamo Colleges will weigh heavily the service level capabilities of the Offeror. The Alamo Colleges will evaluate the Offeror’s demonstrated ability to understand the higher education industry and applicable Federal and State laws with respect to the services provided;

b) Financial Stability – The District will only consider financially strong and stable firms as determined by the Alamo Colleges;

c) Management Plan – Offerors are expected to submit their management oversight structure and proposed staffing relevant to the services provided.

The process the Alamo Colleges will use to select a firm will include the determination of an optimum mix of experience, capabilities, references and the establishment of a written agreement with mutually acceptable terms, conditions and consideration. Award will be made to the Offeror(s) on the basis of demonstrated competency to perform the services; and for a fair and reasonable price.

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The Responses to the following will be used in evaluating stability, capabilities and competency:

1. The organizational structure and size of the firm. Indicate whether the firm is local, regional, national or international in its operations;

2. The location of the office from which the engagement will be staffed, and the number of professional staff (by staff level) employed at that office (the District requires if out of town staff are used, Alamo is not to be charged for expenses for travel, lodging, etc.);

3. Name(s) of persons authorized to represent the Offeror, during the proposal process, including title, address, (including email address) and contact numbers;

4. A description of the activities performed by the local office such as auditing, accounting, tax compliance, etc.;

5. Provide a copy of the most recent peer review report and any new ones issued during the course of the engagement. State whether in the most recent two reviews an unmodified report was issued or the reason(s) an unmodified report was not issued;

6. State what percentage your proposed fee would be in comparison with your projected

annual revenue for 2020 and actual revenue for 2019. Please provide a copy of your most recent financial statements;

7. Individual resumes listing experience of partners, managers and key members of staff who will be assigned to the engagement(s) along with a description of the Proposer's policy on staff rotation;

8. Experience of the Offeror in financial statement audits for governmental entities reporting

under GASB:

a. Provide a list and description of current and/or recent audit assignments of governmental clients including a general description of the scope of services provided;

b. List any current or recent (3 years or less) community college, junior college, and/or four-year college or university audit assignments in Texas. Provide the length of the fieldwork for the engagement and general description of the scope of services provided.

9. Experience and knowledge of the Offeror in conducting Federal Single Audit compliance

audits performed in accordance with auditing standards generally accepted in the United States of America, the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance);

10. Experience and knowledge of the Offeror in conducting State Single Audit compliance audits performed in accordance with auditing standards generally accepted in the United States of America, the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States; and the audit requirements of the Texas Comptroller of Public Accounts State of Texas Uniform Grant Management Standards (UGMS), which includes the State of Texas Single Audit Circular;

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11. Experience of the Offeror in financial statement audits for non-profit entities reporting under FASB:

a. Provide a list and description of current and/or recent audit assignments of non-

profit clients, particularly any Foundations, including a general description of the scope of services provided;

b. List any current or recent (3-5 years) community college, junior college, and/or four-year college or university Foundation audit assignments in Texas. Provide the length of the fieldwork for the engagement and general description of the scope of services provided.

12. Explain how members of the audit team satisfy the Continuing Professional Education hours

required by Government Auditing Standards;

13. Demonstrate experience, knowledge and expertise of interpretation and implementation of GASB and FASB standards and describe resources available to provide technical guidance with upcoming pronouncements including training opportunities, membership on technical accounting committees, expertise within the local and national offices within the firm and any other resources available;

14. Describe your firm’s use of technology to enhance the efficiency and efficacy of the services

to be performed under this solicitation;

15. Proposed method of gaining acceptable audit reliance on the administrative software and systems used to produce financial transactions and financial reports;

16. Experience with major accounting software and relational data base systems in higher

education or other similar not-for-profit organizations;

17. Provide a detailed management and audit plan for the financial and single audit of the Alamo Colleges and Northeast Lakeview College including: a) The approach and timeline for completing the audit (within the timeframes beginning on

page 14); and proposed staffing for the audits.

b) Describe the audit tests and procedures to be applied in completing the audit plan;

c) Complete the Proposal Price Fee Schedule and Audit Plan in Section 3.

18. Experience and knowledge of the Offeror in preparing IRS Form 990 and IRS Form 1120. List any entities for whom your firm has prepared these IRS Forms in the most recent 3 years; specifically identify any of these returns prepared for community colleges, junior colleges, and/or four-year colleges or universities or their related entities.

19. Experience and knowledge of the Offeror in preparing Texas Franchise Tax Form 05-163 and Form 05-102. List any entities in Texas for whom your firm has prepared Texas Franchise Tax Form 05-102 and Form 05-102 in the most recent 3 years;

References –Offeror must provide five (5) client references for which services of a comparable nature, scope and complexity have been completed by Proposer. References must be for services performed in the name of the company submitting the Proposal; work performed by Offerors` employees, subcontractors or representatives while engaged by another company does not qualify as an acceptable reference. Projects for client references should have occurred within

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the last three (3) years. Failure to provide all of the requested reference information with your proposal may result in the disqualification of your proposal.

3. Acknowledgment of Addenda. Any clarifications or interpretations will be issued in written addendum form, and such addenda will be included as part of the Proposal Documents. Offeror shall acknowledge receipt of addenda in the spaces provided in the Proposal form. Only written interpretations or corrections officially issued by an addendum shall be binding.

4. Release of Information. The Alamo Colleges District is a governmental entity in the State of

Texas. Documents submitted pursuant to this procurement solicitation become a government record. Access by the public to government records is governed by the Texas Public Information Act ("PIA"). Proprietary information, such as trade secrets and confidential commercial and financial information submitted in response to this procurement solicitation which Bidder (or any Offeror responding to this procurement solicitation) believes should be exempted from disclosure shall be specifically identified and marked as such. Blanket-type identification by designating a whole document or pages or sections as containing proprietary information, trade secrets or confidential commercial and financial information will not ensure confidentiality, especially if information is contained in the designated areas that clearly is not of a confidential nature. In the event a request is made for information designated as proprietary, Alamo Colleges District may determine in its sole discretion whether sufficient legal justification exists for withholding the information and whether an opinion should be requested from the Texas Attorney General. If an opinion is requested from the Texas Attorney General, Alamo Colleges District will notify Offeror (or the particular Offeror affected) and Offeror has the responsibility, in accordance with PIA, to assert any arguments it may have in opposition to release of the information. In the event Offeror requests judicial intervention, the party so requesting shall indemnify Alamo Colleges District for its costs (including attorney's fees) associated with the judicial action. Under no circumstances will Alamo Colleges District be liable for any costs, damages, or claims of any nature, related to release or disclosure of any information contained in documents submitted pursuant to this procurement solicitation.

5. Insurance. The insurance requirement is enumerated in Section 8.

6. Errors/omissions made in the proposal responses will be interpreted in favor of the Alamo

Colleges District. In the event of mathematical error(s), the unit cost shall prevail and the Offeror(s) total offer may be corrected accordingly.

7. Written questions must be received at least seven (7) calendar days prior to deadline for

proposals. Alamo Colleges District is not responsible for misdirected or undelivered submissions.

8. Offerors certify as a condition of award that they have not engaged in collusion with any firm or person in relation to the preparation, submittal or award of this proposal. Additionally, it is understood that a firm's or individual's giving practices will be of no advantage in consideration of the award of this proposal.

9. The Offeror affirms that he/she has not given, offered to give, and does not intend to give at any

time hereafter any economic opportunity, contribution, future employment, gift, loan, gratuity, special discount, trip, favor, free meal or service to a public servant or elected official in connection with this proposal.

10. Proposals must be valid for one hundred twenty (120) days after closing date for evaluation

purposes.

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11. Offeror must state on the proposal form whether they owe State of Texas margin taxes (formerly franchise tax).

12. The Alamo Colleges District qualifies for exemption of the Texas Limited Sales, Excise and Use

Tax; sales tax will not be charged on these purchases. A tax-exemption certificate will be provided to the awarded firm.

13. Alamo Colleges District will not reimburse Offerors responding to this CSP for any expenses

incurred in preparing or presenting proposals. Alamo Colleges District reserves the right to retain all proposals and to use any ideas submitted in a proposal regardless of whether the proposal is selected.

14. Offerors shall indicate any exceptions to any paragraph; otherwise acceptance of all conditions

contained in the CSP is assumed. Exceptions stated by the Offeror to any of the paragraphs herein may be cause for rejection of the proposal, other than variances deemed minor by Alamo Colleges District. The Offeror must certify whether all specifications have been met and state any exceptions on a separate sheet.

15. Notification of Criminal History of Contractor. A person or business entity that enters into a

contract with Alamo Colleges District must give advance notice to the Alamo Colleges District if the person or an owner or operator of the business entity has been convicted of a felony. The notice must include a general description of the conduct resulting in the conviction of a felony.

Alamo Colleges District may terminate a contract with a person or business entity if the Alamo Colleges District determines that the person or business entity failed to give notice as required by the previous paragraph or misrepresented the conduct resulting in the conviction. The Alamo Colleges District must compensate the person or business entity for services performed before the termination of the contract. The criminal history notification requirement does not apply to a public held corporation.

16. Family Code. Under Section 231.006, Family Code, the vendor or applicant certifies that the

individual or business entity named in the contract, proposal or application is not ineligible to receive the specified grant, loan, or payment and acknowledges that the contract may be terminated and payment may be withheld if this certification is inaccurate.

17. Texas Resident Information. Under Chapter 2252, Subchapter A, of the Texas Government code

establishes certain requirements applicable to proposers who are not Texas residents. Under the statute, a “resident” Offeror is one whose principal place of business is in Texas, including one whose ultimate parent company or majority owner has its principal place of business in Texas. Section 44.031 (b) of the Texas Education Code establishes certain criteria that a community college in the State of Texas must consider when determining to whom to award an Agreement. Among the criteria for certain Agreements is whether the vendor or the vendor’s ultimate parent or majority owner (i) has its principal place of business in Texas; or (ii) employs at least 500 people in Texas.

18. Disclosure of Interest. All Offerors must disclose the name(s) of any of its employees, officers,

directors, subcontractors, or agents who may also be a member of the Board of Trustees, or an employee or agent of the District. Further, all Offerors must disclose the name of any District employee, or Board of Trustees member, who has directly or indirectly, any financial interests in Offerors firm or any of its branches, submit this information on an attachment to the proposal which is to be titled “Disclosure of Interest” and included the person’s name, position, and the extent of financial or other interest the person(s) has in Offeror’s business affairs.

19. District policy C.1.5.1 states that from the date the project is approved for publication until a

contract is executed, no College District Board member or employee other than authorized

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Purchasing and Contract Administration Department personnel shall communicate with potential contractors, consultants, or other vendors (referred to collectively as potential proposers) who are interested in, or in the view of a reasonable person situated similarly to the potential proposer, might reasonably become interest in, any competitive procurement opportunity, other than for a legitimate purpose unrelated to the pending procurement. If, from the date the project is approved for publication until a contract is executed, a potential proposer contacts any Board member or College District employee other than authorized Purchasing and Contract Administration Department personnel, the Board member or College District employee shall inform the potential proposer that such communication is prohibited by policy, direct them to Purchasing and Contract Administration, and immediately report the contact to the designated representative in Purchasing and Contract Administration.

Offerors who violate this policy may be subject to a range of sanctions including disqualification

from competition for the procurement opportunity and/or other future procurement opportunities after Board of Trustees review. Employees who violate this policy may be subject to disciplinary action, including termination after review by the Chancellor.

20. The Alamo Colleges District make environmental considerations with performance, availability,

and costs of buying environmentally preferable goods and services. All products and services must meet or exceed the standards set by independent accredited organization in order to be deemed environmentally preferable.

21. When the scope of work on project is estimated to be greater than or equal to $1,000,000 in

value: Student Internship Program - The Alamo Colleges District are engaged in a three-way partnership

between employers, the community and educators to implement the Alamo Compact for Economic Performance (A-CEP). Each offeror shall provide a discussion in their proposal response which demonstrates their ability and commitment to develop and provide paid student internship opportunities in related fields of study, if any. Provide at least three (3) examples of past successful participation in programs of this type. Additional information and requirements concerning the A-CEP Internship Program is shown in Attachment “C” to the specifications.

When the scope of work on project is estimated to be less than $1,000,000 in value: Student Internship Program - The Alamo Colleges District are engaged in a three-way

partnership between employers, the community and educators to implement the Alamo Compact for Economic Performance A-CEP). Bidders/Offerors are encouraged to participate in this program, which offers real life learning experiences for students in a workplace setting.

22. Continuous Improvements. Offeror is to propose a plan for improving service delivery during the

contract period. The Services provided under this Agreement shall enhance the quality of life on the campus. The

contractor shall perform in such a way as to contribute to the prestige of the Alamo Colleges District by providing a solid business operation. Service delivery must gradually evolve (and not remain static) in order to continue to be successful. As a result, receptivity to new ideas should be demonstrated by the contractor’s staff and proposed to Alamo Colleges District. Contractor shall be alert to changing service trends, new market forms, and changing patterns that evolve throughout the service industry. With input from the Alamo Colleges District, methods of service delivery in all operations should be continually reviewed to increase usage, improve service, and maximize value to the Alamo Colleges District.

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The Contractor will be required to propose suggestions for improving service delivery. Proposed suggestions should include brief illustrations, descriptions, breakdown of estimated cost, and suggested schedule of when work should be started and completed.

23. Any brand names, catalog or manufacturer's reference used in describing an item is merely

descriptive, and not restrictive, unless otherwise noted, and is used only to indicate quality and capability desired. Proposals submitted for comparable items must clearly identify the proposed product, model, and type, as applicable, and shall include manufacturer specification sheet(s) for each proposed item with proposal response. Product specifications shall be the most current available and be sufficiently detailed and descriptive so as to permit Alamo Colleges District to determine the item's suitability and compliance with proposal specifications. Alamo Colleges District shall be the sole judge of equality and suitability of comparable items.

24. Pro-rata adjustments to packaging and pricing may be allowed at the sole discretion of the Alamo

Colleges District. 25. If requested by Alamo Colleges District, Offeror shall provide product samples, demonstrations,

and/or testing of items proposal to ensure compliance with specifications prior to award of the contract. Samples, demonstrations and/or testing must be provided within 7 calendar days of the Alamo Colleges District request. Failure to comply with the Alamo Colleges District request may result in rejection of a proposal. All samples (including return thereof), demonstrations, and/or testing shall be at Offeror's expense. Samples will be returned upon written request. Requests for return of samples must be made in writing at the time the samples are provided. Otherwise, samples will become property of the Alamo Colleges District at no cost to the Alamo Colleges District. Samples that are consumed or destroyed during demonstrations or testing will not be returned.

26. Prices are to be quoted FOB destination (freight prepaid). There is not a loading dock or dock

ramp at this location. Unit cost must include the cost of profit, freight, packaging, insurance, overhead, etc. No additional charges will be accepted.

27. In accordance with HB 1295, Texas Government code 2252.908, the awarded contractor will be

required to submit an electronic Disclosure of Interested Parties to Alamo Colleges District for any contract over $1,000,000 or any contract that requires a vote by the Alamo Colleges District Board of Trustee, at the time of contract execution. The 1295 Certificate of Interested Parties Electronic Filing application website is https://www.ethics.state.tx.us/filinginfo/1295/

28. Mission, Vision, and Values: We believe that economically, it makes good business sense and

contributes to student success to be engaged in partnership between contractors, employees, educators, and the community to implement the Alamo Colleges District Mission, Vision, and Values. The Alamo Colleges District promotes collaboration by achieving consensus on the measures of student success and by stressing that student success is everyone’s business.

In 2014, the Alamo Colleges District adopted policy that includes our Vision, Mission, and Values:

Alamo Way. In support of our policy, the purpose of this segment is to enhance recognition by contractors for our efforts. As a valued member in our procurement process, we ask that your company demonstrate their commitment to serving students by becoming actively engaged in recognizing the Alamo Colleges District Mission, Vision, and Values.

29. Business to Business (B2B) Integration: Offerors’ order placement process should allow for

Business to Business integration with the Alamo Colleges District eProcurement system. Participation in the Alamo Colleges District eProcurement system is at no cost to participants and will enable Alamo Colleges District end-users to easily source and purchase goods and services, electronically, through our online marketplace. Participating vendors will receive orders (via fax or email), invoice and track payment status, electronically, through an online portal. Further

CSP #20A-010 Page | 24

details regarding participating in the Alamo Colleges District eProcurement system will be provided, upon award of contract.

30. Offeror hereby certifies, represents and warrants that neither Offeror nor any of its affiliates

presently does, and during the term of the contract will any of them, boycott the State of Israel, by, without limitation, refusing to deal with terminating business activities with, or otherwise taking any action that is intended to penalize, inflict economic harm on or limit commercial relations with the State of Israel, or with a person or entity doing business within the State of Israel or in any territory controlled by the State of Israel.

B. Preparation of Proposals:

1. Offerors are expected to examine the complete Request for Competitive Sealed Proposal documents and all attachments. Failure to do so will be at the Offeror’s risk.

2. Each Offeror shall furnish the information required by this Request for Competitive Sealed

Proposal. C. Submission of Proposal: 1. Signed and sealed proposals shall be submitted prior to 2:00 pm. Central Standard Time (CST)

on February 25, 2020. Offeror must provide one (1) original, three (3) bound copies and one (1) electronic copy (preferred format for electronic copy is Word or PDF), and delivered to:

Alamo Colleges District Purchasing and Contract Administration

Re: Purchase of Financial Audit, Tax and Other Attestation Services CSP # 20A-010 Reception Desk 2222 N. Alamo St. San Antonio, TX 78215 Proposals received will be publicly acknowledged in the Staff Conference Room #100, 1st floor,

West Wing, which is directly behind the Reception Desk. Any proposals received after the due date and time will be rejected and returned unopened. No proposal may be changed, amended, or modified by telegram or otherwise, after the same has been submitted or filed in response to this notice. A proposal may be withdrawn, however, and resubmitted any time prior to the time set for receipt of proposals. E-mailed or faxed proposals will not be accepted.

2. Proposals should be submitted in narrative form comprehensively covering all points in Scope of

Work and CSP Requirements in the order listed. 3. Proposals shall not exceed one-hundred (100) single sided 8-1/2 x 11 sheets. The following

items are not counted in the page limit: front and back cover pages; cover letter (not to exceed two pages); sheet/chapter dividers; resumes, CSP pages requiring execution; and certificate of non-collusion.

3. Each Offeror shall determine whether their current business relationship with the

District or an elected official of the District is subject to the requirements of Local Government Code section 176.001 and 176.006. Should the Offeror meet the stated requirements of the referenced legal sections, form CIQ (Section 8) shall be completed and submitted to the Alamo Colleges District in accordance with section 176.006.

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5. Upon submission of a response, you agree to the following:

The Purchasing & Contract Administration recommendation and summary analysis will be uploaded to the applicable Alamo Colleges District Board of Trustees Committee agenda and will be viewable by the public on the Friday prior to the Tuesday Committee meeting where the contract award will be considered. Alamo Colleges District will use best efforts to notify you by email shortly before the availability date for their proposals.

Alamo Colleges District’ competitive proposal procedures are largely mandated by statute and do not permit the renegotiation of proposals after the submission deadline has passed. However, should you believe that Alamo Colleges District has made a calculation error regarding your proposal after reviewing the limited web-available summary analysis; its Purchasing & Contract Administration offers an opportunity for proposers not recommended for contract award to submit comments or engage in discussion concerning the proposed contract award promptly after the contract award recommendation is made public. Written comments may be submitted, or a meeting can be scheduled at your request. Consent to Alamo Colleges District’ recording of any verbal interview, at its discretion, is a condition of any interview. This opportunity will be subject to any additional requirements that may appear in any notice that you may receive from the Purchasing and Contract Administration in order to be considered. Efforts to contact individual Trustees or Alamo Colleges District’ employees other than those in the Purchasing & Contract Administration regarding such matters are prohibited.

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SECTION 3 PROPOSAL PRICING SCHEDULE

Proposal Pricing of: _____________________________________________ Offeror Name

Price(s) must include the cost of profit, labor, materials, tools, equipment, permits freight, packaging, insurance, overhead, etc. No additional charges will be accepted. Responses to the following will be used in evaluating fair and reasonable price. Total all-inclusive price (must include all expenses, no additional out-of-pocket expenses or travel expenses will be allowed). Alamo Colleges reserves the right to select more than one contractor for the combination of the services requested. The Single Audits will be performed by the same firm that is awarded the District financial audit and the Northeast Lakeview College financial audit. The preparation of the Alamo Colleges Foundation IRS Form 990 will be performed by the same firm that is awarded the Alamo Colleges Foundation audit. The firm that is awarded the audit of the ACCD Public Facility Corporation’s financial statement audit will also perform the review of Tobin Lofts, LLC. and will prepare the PFC IRS Form 1120, the Tobin Lofts Condominium Owners Association IRS Form 1120 and Texas Franchise Tax Forms 05-163 and Form 05-102, and will prepare the Tobin Lofts, LLC’s Texas Franchise Tax Forms 05-163 and 05-102. Separate pricing must be provided for each of the services listed below, on the Proposal Pricing Schedule Template (Attachment F). The actual amount paid will depend on the services purchased. If the price is “$0.00” or the menu item is “not offered,” it must be stated as such in the Proposal Pricing Schedule Template (Attachment F). A “blank” or anything other than the format requested will be considered a “no response.” This information will be used in evaluating the Offeror’s proposal. Alamo Colleges reserves the right to make multiple awards as a result of this solicitation.

1. Alamo Colleges District financial audit 2. Alamo Colleges District Federal and State Single audits (Pricing for the single audits should

include the number of programs to be audited for the indicated price, as well as the price for additional program(s) if requirements deem it necessary.)

3. Alamo Colleges District PFIA audit 4. Northeast Lakeview College financial audit 5. Alamo Colleges Foundation financial audit 6. Alamo Colleges Foundation IRS Form 990 7. ACCD Public Facility Corporation financial audit 8. ACCD Public Facility Corporation IRS Form 1120 9. Tobin Lofts, LLC. financial review 10. Tobin Lofts, LLC Texas Franchise Tax Form 05-163 and Form 05-102 (one price for both) 11. Tobin Lofts Condominium Owners Association IRS Form 1120 12. Tobin Lofts Condominium Owners Association Texas Franchise Tax Form 05-163 and Form

05-102 (one price for both)

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SECTION 4 OFFEROR’S CHECKLIST

A. Have all specifications and features been met? Yes _____ No _____

If no, please explain: ________________________________________________

B. Has the Offeror provided a list of names, address, contact person, and phone numbers of a minimum of three (3) but not more than five (5) client references (including school districts, higher education institutions, or other political subdivisions) for which equipment and/or services of a comparable nature, scope and complexity have been provided by your firm? Yes ___ No ___

C. Has the certificate of non-collusion been signed? Yes _____ No _____

If no, please explain: _____________________________________________________

D. Does Offeror owe any State of Texas Margin taxes? Yes ___ No ___ If yes, please explain: ______________________________________________________

E. Is the person submitting this proposal currently more than thirty (30) days delinquent in child

support payments? Yes ___ No ___ If yes, please explain: ___________________________________

F. Location of Principal Place of Business (City/State): __________________________________ G. If neither bidding company nor the ultimate parent company or majority owner has its principal

place of business in Texas, does offeror, ultimate parent company, or majority owner employ at least 500 people in Texas? Yes ___ No ___

H. Does the Offeror have any information to disclose about past or current relationships that may

impact the Offeror’s service? Yes ___ No ___

I. Does the Offeror agree to “hold harmless”, defend at its own expense and indemnify Alamo Colleges District against any and all liability arising out of acts or failures to act by the firm or its officers, agents or employees? Yes _____ No _____

J. Has one (1) unbound original, three (_3_) bound copies, and one (1) electronic version on

flash/thumb drive of the proposal been submitted with Offeror's response? Yes ___ No ___

K. Does the Offeror meet all specific requirements imposed by federal, state or local laws or rules and

regulations? Yes ___ No ___

L. Offeror agrees to comply with all the stated requirements in this request for proposal. Any

exceptions must be stated in the proposal response. Yes ___ No ___

Exceptions: (Use additional pages, if necessary) _____________________________________________________________________________

M. Has all requested information in the CSP been addressed? Yes ____ No ____ N. Has information been provided to substantiate minimum qualifications Yes___ No____ O. How did Offeror learn about this project?

____________________________________________

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SECTION 5 CERTIFICATION OF NON-COLLUSION

"The undersigned affirms that they are duly authorized to execute this contract, that this company, corporation, firm, partnership or individual has not prepared this proposal in collusion with any other Offeror, and that the contents of this proposal as to prices, terms or conditions of said proposal have not been communicated by the undersigned nor by any employee or agent to any other person engaged in this type of business prior to the official opening of this proposal." FILL IN APPLICATION INFORMATION: A CORPORATION, chartered in the State of , authorized to do business in the State of TEXAS. A Partnership, composed of : ____________________________________________________ An Individual, operating under the name of: ________________________________________

Respectfully Submitted, (SEAL: If Proposal is by a Corporation)

By: ____________________________________ Signature

_____________________________________ Name (Print or Type)

_____________________________________ Position with Company

_____________________________________ Offeror Name _____________________________________ Street Address

___________ ____________________________________________________ Date City, State Zip ______________________________________ _____________________________________ Phone No. Fax No. ____________________________________________________________________________ E-mail Address

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SECTION 6 PROPOSAL CERTIFICATION

I certify that I, the undersigned, am duly authorized to execute this certification. I have carefully reviewed the CSP documents and any attachments, and agree to abide by all terms and conditions contained therein. Further, I certify that all statements and documents submitted by my firm/company are true and accurate and may be verified by Alamo Colleges District. It is recognized that all parts of the proposal response become the property of Alamo Colleges District and will not be returned. __________________________________ _________________________________ Signature Email Address __________________________________ _________________________________ Printed Name Telephone Number __________________________________ _________________________________ Title Fax Number __________________________________ Firm / Offeror Name

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SECTION 7

CONFLICT OF INTEREST QUESTIONNAIRE FORM CIQ For vendor doing business with local governmental entity

This questionnaire reflects changes made to the law by H.B. 23, 84th Leg., Regular Session. OFFICE USE ONLY

This questionnaire is being filed in accordance with Chapter 176, Local Government Code, by a vendor who has a business relationship as defined by Section 176.00(1-a) with a local governmental entity and the vendor meets requirements under Section 176.006(a). By law this questionnaire must be filed with the records administrator of the local governmental entity not later than the 7th business day after the date the vendor becomes aware of facts that require the statement to be filed. See Section 176.006(a-1), Local Government Code. A vendor commits an offense if the vendor knowingly violates Section 176.006, Local Government Code. An offense under this section is a misdemeanor.

1 Name of vendor who has a business relationship with local governmental entity.

2

Check this box if you are filing an update to a previously filed questionnaire. (This law requires that you file an update completed questionnaire with the appropriate filing authority not

later than the 7th business day after the date on which you became aware that the originally filed questionnaire was incomplete or inaccurate.)

3 Name of local government officer about whom the information in this section is being disclosed.

________________________________________________ Name of Officer

This section (item 3 including subparts A, B, C & D) must be completed for each officer with whom the vendor has an employment or other business relationship as defined by Section 176.001(1-a), Local Government Code. Attach additional pages to this Form CIQ as necessary. A. Is the local government officer named in this section receiving or likely to receive taxable income, other than investment income, from the filer of the questionnaire? Yes No B. Is the vendor receiving or likely to receive taxable income, other than investment income, from or at the direction of the local government officer named in this section AND the taxable income is not received from the local governmental entity? Yes No C. Is the filer of this questionnaire employed by a corporation or other business entity with respect to which the local government officer serves as an officer or director, or holds an ownership interest of one percent or more? Yes No D. Describe each employment or business and family relationship with the local government officer named in this section.

4 ___________________________________________ ________________ Signature of vendor doing business with the governmental entity Date

Adopted 8/7/2015

Section 8

Terms and Conditions of the Contract

COMPETITIVE PROCUREMENT SERVICES

AGREEMENT BETWEEN

ALAMO COMMUNITY COLLEGE DISTRICT

AND

(Full Name of Company)

This Agreement is entered into by and between Alamo Community College District, a political subdivision

of the State of Texas (“Alamo Colleges District”) and (Full Name of Company)., located at (Full Address)

(“Contractor”), collectively sometimes referred to herein as “the Parties.”

WHEREAS, Alamo Colleges District is a public junior college district comprised of district services offices

and five colleges, San Antonio College, St. Philip’s College, Palo Alto College, Northwest Vista College, and

Northeast Lakeview College; and

WHEREAS, Alamo Colleges District published a competitive procurement solicitation (“Request”),

designated CSP 19_-___ to obtain _______________ Services for College/District Office and

WHEREAS, Contractor responded to such Request and desires to provide such services to Alamo Colleges

District according to the terms of such Request as herein augmented and/or modified.

NOW THEREFORE, in consideration of the mutual covenants set forth herein below, and for other good

and valuable consideration, the receipt of which is hereby acknowledged, Alamo Colleges District and Contractor

hereby agree as follows:

1. DEFINED TERMS.

1.1 “Project” has the meaning defined in Exhibit A hereto. The Contractor hereby agrees to furnish the services specified in Exhibit A

1.2 “Project Coordinator” means the employee of Alamo Colleges District designated in Exhibit A hereto who will manage the relationship between Alamo Colleges District and Contractor. The designated employee will be knowledgeable of the Project and be experienced in managing projects similar to the one established herein.

2. PROJECT OBJECTIVE(S) AND SCOPE.

The Project objective and scope is defined in Exhibit A.

3. PROJECT DELIVERABLES. Contractor’s Project deliverables are set forth in Exhibit A.

4. SUPPLEMENTAL DELIVERABLES OR RATE CHANGES. Additional services resulting from project modifications or changes will be performed at Contractor’s discretion with Alamo Colleges District’ written approval and will be invoiced at the then current Contractor service rates.

5. ACCESS. The Parties agree to grant one another, their employees and agents assigned to the

Project reasonable access to appropriate portions of one another’s facilities to the extent

Competitive Procurement Services Agreement Rev 01-2019 Page 32 of 42

reasonably necessary to perform their obligations under this Agreement.

6. COMMUNICATION. The Parties agree to communicate in furtherance of the Project, including but not limited to setting mutually agreed upon hours in which Alamo Colleges District and Contractor will perform the Project Deliverables and notifying one another of any and all changes in personnel, operations, or policies that may affect the Project.

7. POLICIES. The Parties agree to advise one another, and their respective employee(s) assigned to the Project, of their responsibility for complying with one another’s existing rules and regulations, and of the content of same.

8. COMPLIANCE WITH APPLICABLE LAW. CONTRACTOR agrees to comply with all applicable law, including, without limitation, to ensure that its activities hereunder do not cause ALAMO COLLEGES DISTRICT to fail to comply with all applicable federal statues and regulations , including, without limitation, the Family Education Rights and Privacy Act , 20 United States code 1232g, 34 CFR Part 99 (“FERPA”). Any exchange by the parties of student record information protected by FERPA (which includes information generated by contractor for inclusion in a student record) shall commit the receiving party to limit the use of such information to the purposes for which the disclosure was made, to refrain from any re-disclosure except in compliance with 34 CFR 99.3 and either with the specific written permission of Alamo Colleges District, or in strict compliance with any explicit permission granted to Contractor in the Agreement or separately by the eligible student, and to require the return or certified secure destruction by Contractor of all such information, including any copies that may reside in system backups, temporary files, or other storage media, as soon as the intended purpose for such disclosure ends. Contractor agrees to immediately report any and all Alamo Colleges District student record data security breaches via electronic mail directly to the appropriate Alamo Colleges District personnel. Parties agree to have in place and abide by a policy prohibiting discrimination, harassment, and retaliation on the basis of any legally protected criteria, including, without limitation, race, color, gender/sex, sexual preference, religion, age, disability, genetic information, national origin, veteran status or political affiliation. The Parties agree not to deny or discriminate on the basis of any legally protected criteria in the provision of any service or benefit, including, without limitation, access to any educational program or use of any facility. Contractor agrees to abide by all applicable Alamo Colleges District’ policies, including, without limitation, those relating to financial ethics and accountability. Contractor hereby certifies that it is not a company identified on the Texas Comptroller’s list of companies known to have contracts with, or provide supplies or services, to, a foreign organization designated as a Foreign Terrorist Organization by the U.S. Secretary of State (the “Foreign Organization List”). In the event that Contractor is added to the Foreign Organization List at any time during the term of this Agreement, Contractor shall promptly provide notice to Alamo Colleges District. Alamo Colleges District may, at its discretion, terminate this Agreement immediately upon receipt and verification of information, by any means, that Contractor has been added to the Foreign Organization List.

9. INSURANCE.

9.1 Alamo Colleges District maintains insurance coverage for claims or causes of action

brought for which immunity has been waived under the provisions of the Texas Tort Claims Act.

9.2 Contractor shall obtain at its own cost insurance with coverage of its activities pursuant to this Agreement at the following minimum levels of coverage:

WORKERS’ COMPENSATION STATUTORY

Must include coverage for alternate employers and borrowed servants

Competitive Procurement Services Agreement Rev 01-2019 Page 33 of 42

EMPLOYER’S LIABILITY

Each Accident (bodily injury) $1,000,000.00

Policy Limit (bodily injury by disease) $1,000,000.00

Each Employee (bodily injury by disease) $1,000,000.00

GENERAL COMMERCIAL LIABILITY

General Aggregate $2,000,000.00

Each Occurrence (bodily injury/property damage) $1,000,000.00

Each Occurrence (personal injury/advertising injury) $1,000,000.00

Each Occurrence (Damage to Premises Rented To You) $1,000,000.00

All coverage must be primary and non-contributory

BUSINESS AUTOMOBILE LIABILITY

(if service vehicle operated on property owned or controlled by ACCD)

Combined Single Limit (bodily injury/property damage) $1,000,000.00

Must include all owned, non-owned and hired vehicle

UMBRELLA/EXCESS LIABILITY

Each Occurrence $1,000,000.00

POLLUTION ON-SITE LIABILITY (if services present risk)

Each Occurrence $1,000,000.00

Contractor shall, at the time of execution of this agreement, provide Alamo Colleges District with a copy of a certificate of insurance evidencing all applicable required policies which must list “Alamo Community College District” as a NAMED ADDITIONAL INSURED and beneficiary of contractual indemnification coverage and waiver of subrogation.

10. PAYMENT. The entire cost of the Project shall not exceed the amount set forth in Exhibit A.

10.1 Alamo Colleges District will pay approved invoices, which must include the purchase order

number, date of service, name of college, and a description of services, within forty-five (45) days of receipt at the address set forth in Exhibit A.

10.2 Within ten (10) days after termination of this Agreement, Contractor will submit a final

invoice (“Final Invoice”) which will set forth all amounts due and remaining unpaid to Contractor and upon approval of the Final Invoice by Alamo Colleges District, Alamo Colleges District will pay (“Final Payment”) to Contractor the amount due under the Final Invoice under the terms established by Texas law. Notwithstanding the foregoing, under Section 231.006, Family Code, the vendor or applicant (Contractor) certifies that the individual or business entity named in this contract, proposal or application is not ineligible to receive the specified grant, loan, or payment and acknowledges that this contract may be terminated and payment may be withheld if this certification is inaccurate. If Contractor is an entity and becomes delinquent in the payment of any Texas Margin Tax due, then any payments due to Contractor may be withheld until such delinquency is remedied.

10.3 Notwithstanding any provision to the contrary, Alamo Colleges District will not be obligated

to make any payment to Contractor if Contractor is in breach or default under this Agreement.

11. TERM AND TERMINATION. The Term of this Agreement is set forth at Exhibit A hereto. The

Term may be extended thereafter by written agreement signed by both parties.

Competitive Procurement Services Agreement Rev 01-2019 Page 34 of 42

11.1 Termination without Cause. Alamo Colleges District may terminate this Agreement for convenience, without any liability therefore by delivering written notice to Contractor no later than thirty (30) days prior to termination. Contractor’s fees due on termination without cause will be prorated based on the portion of authorized work completed.

11.2 Material Breach; Insolvency. This Agreement may be terminated by Alamo Colleges

District for breach of any material terms or conditions of this Agreement by Contractor, which breach is not corrected by Contractor within ten (10) calendar days after written notice thereof is given to Contractor, or immediately should Contractor become insolvent.

11.3 Current Revenues Only. Alamo Colleges District commits only its current revenues

hereunder, as required by Texas law. The Alamo Colleges District Board retains the continuing right to terminate the Agreement without liability for said termination at the expiration of each budget period during its initial and renewal terms. The Alamo Colleges District Board will make best efforts to obtain and appropriate funds to meet Alamo Colleges District’ obligations under the Agreement, consistent with the maintenance of reasonable reserves.

12. LICENSES, PERMITS, TAXES AND FEES. Contractor warrants that it will obtain, maintain in

effect, and pay the cost for all licenses, permits, or certifications that may be necessary for Contractor’s performance of this Agreement. Contractor will be responsible for the payment of all taxes, excises, fees, payroll deductions, employee benefits (if any), fines, penalties or other payments required by federal, state, or local law or regulation in connection with Contractor’s performance of this Agreement.

13. GENERAL TERMS.

13.1 Notices. All notices given pursuant to this Agreement shall be in writing and shall either be mailed

by first class mail, postage prepaid, registered or certified with return receipt requested, or delivered

in person to the intended addressee, or sent by fax or overnight delivery service. Notice mailed shall

be effective on mailing. Notice given in any other manner shall be effective on receipt. For purposes

of notice, the addresses of the Parties shall be as stated under their names as set forth herein, provided,

however, that each Party shall have the right to change its address for notice hereunder to any other

location by the giving of 10 days’ notice to the other Parties in the manner set forth above.

13.2 Choice of Law. This Agreement is made and is to be performed in Bexar County, Texas, and will

be interpreted and governed by the Constitution and the internal laws of the State of Texas. Venue

of any court action brought directly or indirectly by reason of this agreement shall be in Bexar

County, Texas.

13.3 Data Security and Notification. Consultant’s performance under this Agreement may include

access to and review of confidential, personally identifying information about Alamo Colleges

District’ employees, students, and/or vendors. Consultant agrees to use best practices to maintain

data security to prevent identity theft, and to promptly report in writing any red flags to the Program

Administrator, the Vice Chancellor for Finance and Administration, or the Project Coordinator for

this Agreement. Contractor agrees, in the event of a data security breach, to clearly state what

personally identifiable information has been improperly accessed, to explain the measures taken to

prevent future breaches, and to pay for the reasonable costs of appropriate notification and credit

monitoring.

13.4 Successors and Assigns. This Agreement shall be binding on and shall inure to the benefit of the

Parties, and their respective heirs, legal representatives, successors and assigns. No right or interest

in this Agreement shall be assigned or delegation of any obligation made by Contractor without the

prior written permission of Alamo Colleges District, which shall be given or withheld in the

Competitive Procurement Services Agreement Rev 01-2019 Page 35 of 42

reasonable discretion of Alamo Colleges District. Any request for such permission must be directed

to the Alamo Colleges District Director of Purchasing and Contract Administration notice address.

Any unconsented attempted assignment or delegation by Contractor shall be wholly void and totally

ineffective for all purposes. Unless otherwise specified in Exhibit A, Contractor is not required to

perform the Project with the services of any particular employee.

13.5 Entire Agreement. This Agreement represents the entire agreement between the Parties with

respect to the subject matter herein. No representations, warranties, promises, guarantees,

undertakings, or agreements, oral or written, express or implied, have been made by Alamo Colleges

District with respect to the subject matter herein except as expressly stated herein. Notwithstanding

the foregoing, this Agreement also hereby incorporates by reference the provisions of Alamo

Colleges District’ Request to the extent not rejected by Contractor in its response to such Request

(“Response”), as well as the provisions of that Response, to the extent that such provisions are not

inconsistent with specific provisions of this Agreement.

13.6 Amendments. Amendments or modifications may be made to this Agreement only by setting the

same forth in a written document duly executed by the Parties.

13.7 Force Majeure. Any party shall be temporarily excused from performance otherwise due hereunder

only to the extent that, and for so long as, such performance is rendered impossible by reason of

factors beyond that party’s control and not occasioned by the negligence of the party or its affiliates,

including, but not limited to, acts of God. Any party experiencing or anticipating a force majeure

event shall promptly notify the other party in writing thereof.

13.8 Severability. This Agreement is to be performed in accordance with, and only to the extent

permitted by, all applicable laws, ordinances, rules and regulations. If any provision of this

Agreement or the application thereof to any party or circumstance shall, for any reason and to any

extent, be invalid or unenforceable, the extent of such invalidity or unenforceability does not destroy

the basis of the bargain among the Parties as expressed herein, and the remainder of this Agreement

and the application of such provision to other parties or circumstances shall not be affected thereby,

but rather shall be enforced to the greatest extent permitted by law.

13.9 Gender and Number. Whenever required by the context, as used in this Agreement, the singular

number shall include the plural and the neuter shall include the masculine or feminine gender, and

vice versa.

13.10 Captions. The Section headings appearing in this Agreement are for convenience of reference only

and are not intended, to any extent or for any purpose, to limit or define the text of any Section.

13.11 Exhibits. Any and each Exhibit to this Agreement is incorporated herein for all purposes.

13.12 Drafters. Each party to this transaction has been afforded the opportunity to negotiate the terms of

this Agreement, and to consult legal counsel regarding same; therefore, the Parties waive and

disclaim the application of any principle of contract interpretation that would construe any ambiguity

herein against either party as drafter hereof.

13.13 No Third Party Beneficiaries. Nothing in this Agreement, express or implied, is intended or shall

be construed to confer upon any person, firm or corporation other than the parties hereto and their

respective successors or assigns, any remedy or claim under or by reason of this Agreement or any

term, covenant or condition hereof, as third party beneficiaries or otherwise, and all of the terms,

covenants and conditions hereof shall be for the sole and exclusive benefit of the parties hereto and

their successors and permitted assigns.

Competitive Procurement Services Agreement Rev 01-2019 Page 36 of 42

13.14 Dispute Resolution. In the event of any dispute, claim, question, or disagreement arising out of or

relating to this Agreement, the parties agree to do all of the following before commencing legal

action. First, the parties shall use their best good-faith efforts to settle such disputes, claims,

questions, or disagreement. To this effect they shall first consult and negotiate with each other in

good faith, recognizing their mutual interests, and attempt to reach a just and equitable solution

satisfactory to both parties. If such consultation and negotiation does not fully resolve the issue, the

parties agree to promptly engage in non-binding mediation in Bexar County, Texas. If such

mediation does not fully resolve the issue, then either party may thereafter seek legal recourse in

equity and/or at law. Notwithstanding the foregoing, either party may commence litigation

for injunctive relief without having complied fully with these dispute resolution procedures, but

only to require the other party to mediate, to preserve the status quo pending resolution of an issue,

or to protect a vital interest of that party or of an affiliate.

13.15 Release of Liability OF ALAMO COLLEGES DISTRICT. Contractor hereby releases Alamo

Colleges District from all liability arising under this Agreement or relating to use of any Alamo

Colleges District properties, INCLUDING, BUT NOT LIMITED TO, LIABILITY RESULTING

FROM ALAMO COLLEGES DISTRICT’ NEGLIGENCE, whether contributory, sole, or joint,

arising out of or related to this Agreement, with the sole exception of direct but not consequential

contractual damages resulting from breach of this Agreement.

13.16 Indemnification of Alamo Colleges District and Affiliates and Release of Affiliates.

CONTRACTOR AGREES TO INDEMNIFY, DEFEND, AND HOLD HARMLESS Alamo

Colleges District, its Board of Trustees, officers, employees, agents, contractors and assigns

(“Protected Parties”) from and against, and to pay to Protected Parties on demand the amount of, any

and all costs resulting from any complaints, claims, liabilities, suits, damages, judgments, penalties,

fines, settlements, losses and expenses (including legal fees, expert witness fees and other legal

expenses and court costs), imposed upon, incurred by, or asserted against Protected Parties in any

way related to or resulting from the execution, enforcement, or performance of this Agreement, or

from Contractor’s use of Alamo Colleges District’ facilities (“Claims”) to the extent caused by the

legally culpable acts or omissions of Contractor. Contractor’s duty to indemnify, defend, and hold

harmless Protected Parties includes, but is not limited to, Claims resulting from bodily injury or

death of persons, or from damage to property and the resulting loss of its use, regardless of the

ownership of such property and the identity of such persons, EVEN IF SUCH INJURY, DEATH

OR DAMAGE WAS CAUSED IN PART, BY ANY ACT OR OMISSION, INCLUDING,

WITHOUT LIMITATION, THE NEGLIGENCE, GROSS NEGLIGENCE OR STRICT

LIABILITY, OF ANY PROTECTED PARTY. CONTRACTOR HEREBY RELEASES Protected

Parties other than Alamo Colleges District from any and all Claims arising under this Agreement, EVEN

IF CAUSED, IN WHOLE OR IN PART, BY ANY ACT OR OMISSION, INCLUDING,

WITHOUT LIMITATION, THE NEGLIGENCE, GROSS NEGLIGENCE OR STRICT

LIABILITY, OF ANY PROTECTED PARTY. Alamo Colleges District is a state governmental unit

that is prohibited by law from indemnifying other parties pursuant to applicable Texas Attorney-

General opinions. Notwithstanding anything appearing elsewhere to the contrary, there shall be no

special assumption of liability, and no indemnification or “holding harmless” of Contractor, or any

other party, by Alamo Colleges District, regardless of how characterized.

13.17 Release of Information. Alamo Colleges District is a governmental entity in the State of Texas.

Documents submitted pursuant to this Agreement become a government record. Access by the

public to government records is governed by the Texas Public Information Act (“PIA”). In the event

a request is made for information designated as proprietary, Alamo Colleges District may determine

in its sole discretion whether sufficient legal justification exists for withholding the information and

whether an opinion should be requested from the Texas Attorney General. If an opinion is requested

from the Texas Attorney General, Alamo Colleges District will notify Contractor, in accordance

with PIA, to assert any arguments Contractor may have in opposition to release of the

information. In the event Contractor requests judicial intervention, the party so requesting shall

Competitive Procurement Services Agreement Rev 01-2019 Page 37 of 42

indemnify Alamo Colleges District for its costs (including attorney's fees) associated with the

judicial action. Under no circumstances will Alamo Colleges District be liable for any costs,

damages, or claims of any nature, related to release or disclosure of any information contained in

documents submitted pursuant to this Agreement.

13.18 Independent Contractors. Contractor and Alamo Colleges District understand and agree that each

performs tasks, the details of which the other does not have legal right to control and no such control

is assumed by this Agreement. This Agreement does not create an employment relationship,

partnership, or joint venture between Contractor, its employees, and Alamo Colleges District.

Neither party nor its employees shall be deemed employees of the other for any purpose whatsoever,

and neither shall be eligible to participate in any benefit program provided by the other. Nothing in

this Agreement shall be construed to create any borrowed servant, joint employment or leased

employee status. Contractor represents and warrants that it is not a professional employer

organization under the Texas Labor Code.

13.19 Copyrights, Consents & Assignments. If Contractor’s services involve creating images of persons,

including, without limitation, serving as a photographer or videographer, Contractor shall obtain,

deliver to Alamo Colleges District during the Term of this Agreement and maintain for a period of

5 years thereafter all legally required consents of such persons to the creation and unrestricted use

of their images (“Consents”). Contractor warrants that its individual employees and any

subcontractors and their employees who will personally perform the services under the Agreement

(“Employees'') do so as a “work for hire” on behalf of Alamo Colleges District. Contractor consents

to Alamo Colleges District making a recording, by whatever means and upon whatever media of any

verbal report or presentation made in the performance of the Services ("Recording''). Contractor

assigns to Alamo Colleges District all Consents and all rights to any (i) Recordings and (ii) materials

in which it or any Employees own or may claim any intellectual property rights, including the right

to create derivative works, as a work for hire fully paid for by the compensation payable to

Contractor hereunder.

13.20 Records. Contractor agrees to retain its records for a minimum of four (4) years following

termination of this Agreement, unless there is an ongoing dispute under the Agreement, in which

case such retention period shall extend until final resolution of the dispute. Contractor’s “Records”

include any and all information, materials and data of every kind and character generated as a result

of the work under this Agreement. Examples of Records include, without limitation, billings, books,

general ledger, cost ledgers, invoices, production sheets, documents, correspondence, meeting notes,

subscriptions, agreements, purchase orders, leases, contracts, commitments, arrangements, notes,

daily diaries, reports, drawings, receipts, vouchers, memoranda, time sheets, payroll records,

policies, procedures, federal and state tax filings for issue in question, and any and all other

agreements, sources of information and matters that may in Alamo Colleges District’s judgment

have any reasonably pertain to any matters, rights, duties or obligations under the Agreement.

13.21 Covenants Pertaining to Contractor Employees Working at Alamo Colleges District Premises.

Contractor agrees to the following regarding any employees assigned to work at Alamo Colleges

District’ premises on a regular basis. Contractor agrees to comply with the record-keeping and all

other requirements of applicable laws, including, without limitation, the Fair Labor Standards Act

(“FLSA”) and the Immigration Reform and Control Act of 1986. Contractor agrees to properly

classify its workers for purposes of the FLSA and the Internal Revenue Code and timely pay wages

and compensation for their services rendered. Contractor agrees to perform criminal background

checks and to implement and enforce a written policy for a drug-free workplace providing for drug

and alcohol testing prior to hiring and for reasonable cause during employment, complying with all

applicable requirements, including obtaining the worker’s authorization. Contractor represents and

warrants that any worker it assigns to the Project shall have passed the criminal background check

and any drug testing conducted. Contractor agrees to certify in writing at the request of Alamo

Colleges District its compliance with any of its obligations in this Agreement.

Competitive Procurement Services Agreement Rev 01-2019 Page 38 of 42

13.22 Right to Audit. Contractor grants Alamo Colleges District, any applicable grantor, or their

designees the right to audit, examine or inspect (“Audit”), at Alamo Colleges District’ election, all

of Contractor’s records relating to the performance of this Agreement during its term and subsequent

retention period. Alamo Colleges District agrees that it will exercise this right only during regular

business hours. Contractor agrees to allow access to all of Contractor’s Records, its facilities, and

its current or former employees, deemed reasonably necessary by the auditor, to perform such Audit.

Contractor also agrees to provide adequate and appropriate work space necessary to conduct Audits.

13.23 Contractor Parking. Contractor will abide by the Alamo Colleges District Parking Policies at:

https://www.alamo.edu/experience-the-alamo-colleges/current-students/police/parking-

rules-and-regulations/

13.24 Prohibition Against Boycotting the State of Israel. Contractor hereby certifies, represents and

warrants that neither contractor nor any of its affiliates presently does, and during the term of this

Agreement will any of them, boycott the State of Israel, by, without limitation, refusing to deal with,

terminating business activities with, or otherwise taking any action that is intended to penalize, inflict

economic harm on or limit commercial relations with the State of Israel, or with a person or entity

doing business within the State of Israel or in any territory controlled by the State of Israel.

Authorized signatures below constitute acceptance of the terms and conditions set forth in this Agreement.

ALAMO COMMUNITY COLLEGE DISTRICT: CONTRACTOR:

By: ____________________________________ By: __________________________________

Date Date

Print Name: ____________________________ Print Name: ___________________________

Title: __________________________________ Title: ________________________________

EXHIBITS: Exhibit A - Project Details

Competitive Procurement Services Agreement Rev 01-2019 Page 39 of 42

EXHIBIT A TO AGREEMENT TO PROVIDE SERVICES TO ALAMO COLLEGES DISTRICT

1. Exact Legal Name of Contractor:

2. Term of Agreement: Shall commence on date fully executed and terminating August 31, 20__ and have (number), one year options to renew upon mutual consent and by written agreement signed by both parties.

3. Project Description: (Title) for all locations as per price proposal, as well as additional locations as needed.

4. Alamo Colleges District Representative:

5. Maximum Amount Payable to Contractor: Purchase Orders will be issued for each specific job project. Prices as per attached - Attachment I

6. Project Interim Payment Milestones:

7. Detailed Contractor Deliverables: Contractor agrees to provide services as outlined in Section 1 of the CSP as per attached - Attachment II

8. Notice Addresses:

Notices to Alamo Colleges District:

(President/Vice President College Services/Vice Chancellor of __________)

________________(College / Alamo Colleges District)

(Street Address)

San Antonio, TX 78215

Email: ______@alamo.edu

With Copy:

Gary O’Bar, C.P.M

Director, Purchasing & Contract Administration

Alamo Colleges District

2222 N Alamo St

San Antonio, TX 78215

Email: dst-purchasing@alamo.edu

Notices to Contractor:

(Individuals Name) (Title)

(Company Name)

(Street Address)

San Antonio, TX 78222-3925

Email:

9. Contractor shall submit all invoices to Alamo Colleges District at the following address:

Alamo Colleges District

Attn: Accounts Payable Dept.

2222 N Alamo St.

San Antonio, TX 78215

Email: dst-accountspayable@alamo.edu

10. Any location requirements for the Project:

Competitive Procurement Services Agreement Rev 01-2019 Page 40 of 42

11. Any requirements that a particular Contractor employee undertake a particular role regarding the Project:

12. Other Requests/Requirements/Conditions/Exclusions:

Competitive Procurement Services Agreement Rev 01-2019 Page 41 of 42

ATTACHMENT A Listing of Information Available by Weblink

1) Alamo Colleges District Comprehensive Annual Financial Reports: https://www.alamo.edu/about-us/compliance/financial-information/

Click “Comprehensive Annual Financial Reports” for fiscal years 2007-2019 CAFRs

2) Website for policies: https://www.alamo.edu/about-us/leadership/board-of-trustees/board-policies/

3) Annual Operating Budgets: https://www.alamo.edu/about-us/compliance/financial-information/ Click “Annual Operating Budget” for 2010-11 through 2019-20 budget books

4) List of Board of Trustees: See FY19 CAFR, page 6

https://www.alamo.edu/siteassets/district/departments/financial-transparency/comprehensive-annual-financial-reports/fy2019-cafr.pdf

Competitive Procurement Services Agreement Rev 01-2019 Page 42 of 42

APPENDIX A

INTERNSHIP PROGRAM PARAMETERS

The general responsibility for the success of internship programs lies with the Alamo Colleges District, participating

employers, and interns. The Alamo Colleges District are primarily responsible for administration and instructional

components of the program. Participating employers are responsible for providing interns with a work environment

that provides an opportunity to learn or apply occupational skills in a significant way. Specific responsibilities of the

employer and Alamo Colleges District include the following:

A. Role of the Employer

1. To list internship opportunities and job descriptions with the Alamo Colleges District (Internship

Clearinghouse).

2. To select internship students using their own interviewing and selection process. If an employer so

desires, an Alamo College representative will advertise the position, collect student credentials, screen

applicants, and arrange for interviews with the employer.

3. To compensate interns on a fair and consistent basis.

4. To identify and maintain for the student a schedule which meets the minimum hour requirements of the

internship.

5. To enter into a Memorandum of Agreement with the Alamo Colleges District that includes internship:

learning objectives, term, schedule, compensation, and course evaluation process, using approved

Alamo Colleges District format/forms.

6. To assist interns to meet learning objectives during the internship period.

B. Role of the Alamo Colleges District

1. The Alamo Colleges District will provide the participating employers with the name of the student(s)

eligible to participate in the internship program.

2. To work with students, advisors, and employers in developing internships.

3. To provide students with referrals to internship sites.

4. To formulate job-oriented and educational learning objectives.

5. To develop and approve Memorandum of Agreements between the student, employer, and Alamo

Colleges District.

6. To monitor the student’s progress towards attaining stated objectives. This may include visits to job

site and with the student’s immediate supervisor. At a minimum, the faculty or Alamo Colleges District

representative should be in contact with the supervisor via written or telephone communications.

7. Evaluate student’s performance including written materials. Awards credit if earned.

C. Key Internship Features - It is the goal of the Alamo Colleges District Internship program to provide

students with opportunities to learn skills for their chosen career. The program is designed to meet the

diverse needs of the student body in the Alamo Colleges District. Internships can be set up for the summer,

spring, or fall semesters. Full and part-time programs are possible.

1. Intern Duties/Responsibilities – The employer and college representative determine duties and

responsibilities. Work assignments will vary depending upon the level of experience, knowledge and

sophistication of the intern.

2. Compensation for Interns – A normal salary that the company would pay to a beginning individual if

they meet company requirements, but not less than a minimum wage.

3. Memorandum of Agreement – The agreement is between the employer, Alamo Colleges District, and

the intern. All sign the document as an indication of commitment to making the internship a rewarding

experience for all parties.

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Typewritten Text

Attachment B

NORTHEAST LAKEVIEW COLLEGE (A college of the Alamo Community College District)

San Antonio, Texas

Annual Financial Report

For the Years Ended August 31, 2019 and 2018

Prepared by:

Finance and Fiscal Services Department

NORTHEAST LAKEVIEW COLLEGE (A college of the Alamo Community College District)

ANNUAL FINANCIAL REPORT

TABLE OF CONTENTS

INTRODUCTORY SECTION

Transmittal Letter ................................................................................................................................................. 1 Organizational Chart ........................................................................................................................................... 6 Alamo Community College District – Organizational Data ......................................................................... 7 Mission, Vision and Values .................................................................................................................................. 8

FINANCIAL SECTION Report of Independent Certified Public Accountants .................................................................................. 11 Report of Independent Certified Public Accountants on Internal Control Over Financial Reporting and on Compliance and Other Matters Required by Government Auditing Standards ..................................................................................................................................... 14 Management’s Discussion and Analysis (Unaudited) .................................................................................. 17

Exhibit 1 -- Statements of Net Position .......................................................................................................... 27

Exhibit 2 -- Statements of Revenues, Expenses and Changes in Net Position ....................................... 28 Exhibit 3 -- Statements of Cash Flows ........................................................................................................... 29

Notes to Financial Statements ......................................................................................................................... 31

SUPPLEMENTARY INFORMATION

Schedule A -- Schedule of Operating Revenues ......................................................................................... 46

Schedule B -- Schedule of Operating Expenses by Object ...................................................................... 47

Schedule C -- Schedule of Non-Operating Revenues and Expenses ...................................................... 48

Schedule D -- Schedule of Net Position by Source and Availability ....................................................... 49

Introductory Section

December 10, 2019

To the Board of Trustees, the Residents of Bexar County and the Northeast Lakeview College Service Area of Comal and Guadalupe Counties:

We are proud to submit the following annual financial report (AFR) for Northeast Lakeview College (the College or NLC), a college of the Alamo Community College District (Alamo Colleges District or District) for the fiscal years ended August 31, 2019 and 2018. The AFR has been prepared in accordance with United States Generally Accepted Accounting Principles (GAAP) as established by the Governmental Accounting Standards Board (GASB). The report complies, in all material aspects, with the requirements of Annual Financial Reporting Requirements for Texas Public Community and Junior Colleges as set forth by the Texas Higher Education Coordinating Board (THECB).

The purpose of an independent audit is to provide assurance, based on independent review and testing, that the basic financial statements and accompanying notes are fairly stated in all material respects. In 2019, the District’s Board of Trustees affirmed the selection of the independent accounting firm of Grant Thornton LLP to perform an audit for the College. Assets, liabilities and net position attributable to and allocated to the operations of the College are reported in the 2019 and 2018 AFR for the College. This AFR is prepared primarily for submission to the Southern Association of Colleges and Schools Commission on Colleges to provide information related to accreditation.

Management assumes full responsibility for the completeness and reliability of the information contained in this report based upon a comprehensive framework of internal control. The objective of internal control is to provide reasonable, rather than absolute, assurance that the financial statements are free of material misstatements. The concept of reasonable assurance ensures that the cost of the controls does not exceed the benefits derived. The Report of Independent Certified Public Accountants is located at the front of the financial section of this report. Management’s Discussion and Analysis (MD&A) immediately follows the independent auditor’s report and provides a narrative introduction, overview and analysis of the basic financial statements. The MD&A complements this letter of transmittal and should be read in conjunction with it. The Notes to Financial Statements, also in the financial section, are considered integral to the basic financial statements and should be read in conjunction with them.

Profile

Northeast Lakeview College is accredited by the Southern Association of Colleges and Schools Commission on Colleges to award associate degrees. Contact the Southern Association of Colleges and Schools Commission on Colleges at 1866 Southern Lane, Decatur, Georgia 30033-4097 or call 404-679-4500 for questions about the accreditation of Northeast Lakeview College.

Northeast Lakeview College offers Associate of Arts, Associate of Arts in Teaching, Associate of Science and Associate of Applied Science degrees taught by highly qualified faculty with Master's and Doctorate degrees who are committed to creating a learning centered environment. Students experience academic rigor inside the classroom and an enhanced learning environment through support services that include counseling, computer labs, tutoring services, financial services, services for the disabled, veterans’ services and job placement and transfer services.

Established in January 2007, Northeast Lakeview College is one of the five colleges of the Alamo Community College District and one of the youngest community colleges in the nation. It serves students in northeast San Antonio and the surrounding municipalities to include Bexar, Comal and Guadalupe counties. The College traces its beginnings back to 1996 as the Northeast Learning Center, an extension of St. Philip’s College. Due to its growth, the Learning Center closed in 2001 and reopened as Northeast Campus in a larger location as a joint collaboration between St. Philip’s College and San Antonio College. St. Philip’s College discontinued offering classes at the College in 2009. With continued enrollment growth and as a result of a 2005 bond election, a permanent $125 million campus (named Northeast Lakeview College) was constructed at the corner of Loop 1604 and Kitty Hawk road and opened in Fall 2008. Northeast Lakeview College now serves more than 6,000 students in its nine-building facility that sits on 257 acres.

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The College, as a member of the Alamo Colleges District, manages its capital assets as well as administers and conducts its educational services under its own organizational structure. The District supports the College by managing debt and investments, acquiring capital assets, assessing and collecting property taxes and allocating State of Texas appropriations. The College’s administration and staff direct their own budget, as approved by the Board of Trustees of the Alamo Colleges District, and make decisions regarding the funds provided to them or generated by them while conducting its

educational activities. These educational activities include the development of curriculum, the hiring of faculty and staff within District guidelines and the delivery of educational and student support services.

The Alamo Community College District was established as a public community college through a public election in 1945. The District operates as a political subdivision under the laws of the State of Texas. The five member community colleges of the District are Northeast Lakeview College, San Antonio College, St. Philip’s College, Palo Alto College and Northwest Vista College. A nine-member Board of Trustees is the governing body of the District. The Trustees are elected locally to six-year terms by Bexar County voters. The Chancellor, the District's chief executive officer, guides and implements the programs and policies of the District. Each of the five colleges has a campus organization lead by a President who reports to the Chancellor.

Economic Conditions and Outlook

The College sits along the I-35 Corridor toward Austin, one of the fastest growing areas in the region. In addition to northeast San Antonio, the College serves the Metrocom area, comprised of eleven small cities with a combined population of over 155,000 according to the Northeast Partnership for Economic Development. Randolph Air Force Base, a stable presence in the area since opening in 1930, unites the cities and currently has over 17,000 personnel on its base. The area provides affordable housing, low tax rates, opportunities for growth, award-winning school districts, and a skilled work force and the College contributes convenient, affordable higher education. The College location, among growing suburban communities that share a common goal of economic development and quality of life for their citizens and businesses, enhances the College’s potential for success. Northeast Lakeview College has been recognized by the City of Live Oak Economic Development Corporation as an asset to the community and has been recognized multiple times for contributing to continued economic growth in the area.

The College supports the local independent school districts (ISDs) by providing dual credit courses and is home to the Judson Early College Academy, a unique partnership with the Judson Independent School District that allows students to complete an Associate’s Degree while earning their high school diploma at no cost to the student. Because the College is a member of the Alamo Community College District, economic conditions that impact the District inherently impact the College. The three primary revenue streams to the District, other than federal grants used for scholarships, are ad valorem taxes, state appropriations and tuition and fees.

The trend of rising ad valorem tax revenues continued in fiscal year 2019, as revenues from ad valorem taxes increased by 7.0% as net assessed property values within the District increased from approximately $151.8 billion in 2018 to $162.5 billion in 2019, providing funding for facilities’ repairs and maintenance. The pattern of predictable and increasing property values and ad valorem tax collections relieves pressure to increase the tax rate for the District’s constituents. There was no increase in the District’s tax rate for fiscal year 2019.

State appropriations, which are critical to keeping student tuition rates low, decreased in 2019 but are expected to increase in 2020 due to actions by the 86th Texas Legislature. State appropriations are distributed based on a cost-based formula for student contact hour reimbursement, core operations funding and student success outcomes. For fiscal

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year 2019, the State only provided 24% of instructional costs, down from 75% in fiscal years 2008-2009 and provided no funding for growth.

Tuition and fee rates increased $13 per semester credit hour, effective Spring 2019. This was the first tuition rate increase since Spring 2016 and only the second increase since 2011. The student activity fee increased from $1 per credit hour to $3 per credit hour in Fall 2018. Student activity fees are used to support various student initiatives including leadership, clubs, organizations, sports, fitness and other events. Strategic Planning The College utilizes an inclusive strategic planning process in which feedback from all constituent groups, both internal and external, was reviewed and combined into a document that supports NLC’s continuous improvement process to advance the institutional mission and NLC’s overarching goal of student success. The College’s Strategic Plan reflects the direction provided by the community and the leadership of the District, and looks to meet the needs and interests of its local community through the development of specific core objectives, strategies and unit plans. Ongoing evaluation and assessment of the objectives, strategies and unit plans allows for continuous quality improvement to ensure that the community’s higher education needs are met. The College has its own mission, vision and goals. The goals focus on the following: 1) student success and learning, 2) valuing and empowering people, and 3) communications and community engagement. NLC embarked on a year-long strategic planning process during 2018-2019 to update its mission and vision statements and established three belief statements that are shared by the organization and that drive NLC’s culture and its commitment to its overarching goal of student success. Major Initiatives

Northeast Lakeview College, in conjunction with the District and its partners, are committed to ending poverty, enhancing economic and social mobility and meeting workforce demands in San Antonio by joining forces to help more students complete college and obtain the necessary skills to hold high-wage, high-demand jobs. The AlamoPROMISE program, which will be available to high school seniors graduating in 2020, ensures that tuition and mandatory fees are covered for students who graduate from participating high schools. Over 5,000 high school seniors have already completed a “Save Your Seat” pledge and enrollments at the Alamo Colleges District are expected to achieve double-digit growth within the first five years of the program. As a last-dollar funding source, AlamoPROMISE covers

the gap between financial aid and the cost of tuition for up to three years. The AlamoPROMISE eliminates financial barriers to higher education, making a college degree a reality. The Alamo Way is a theoretical framework for improvement adopted by the Board of Trustees and used at the College and throughout the Alamo Colleges District. This policy describes three dynamic models that drive increased employee and student performance as well as greater organizational efficiency, effectiveness and leadership. These models are fully integrated into the culture of the College, its students and employees. The Board holds that the Baldrige Criteria for Performance Excellence, the principles of Achieving the Dream and the Principle-Centered Leadership concepts from the Seven Habits of Highly Effective People (AlamoLEADS) provide the foundation for The Alamo Way (Always Inspire, Always Improve). By integrating leadership competencies and experiences into the core curriculum and in organizational learning opportunities for employees, the College empowers all students and employees to explore and realize their learning, professional and civic potential. The result is the organization achieving its full potential and our diverse communities achieving theirs. The College continues to focus on achieving greater student success and has adopted the following initiatives. 4DX, the Four Disciplines of Execution, provides a simple, repeatable set of practices for organizations and individuals to focus on what is important, to execute strategic priorities and to achieve superb results. MyMap (My Monitoring Academic Progress) was also implemented, which is a series of online, self-paced learning modules designed to help students transition to college, and monitors students’ progress until they earn a certificate or degree. NLC’s Pathways Project partners with local ISDs to bring the college experience to students (pre-K through grade 12) and jumpstart their college experience. Once enrolled, NLC uses the AlamoINSTITUTES to help students identify their career path early in their college journey,

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streamlining course work and guiding students to completion or to employment more rapidly. In 2019, Northeast Lakeview College exceeded its goal in number of graduates, demonstrating a 24% increase in completion rates from 2018. Committed to student success, Northeast Lakeview College continues to enhance its support services. In 2018-2019, NLC expanded veteran services to include the opening of a Veteran’s Center that provides a space where veterans attending Northeast Lakeview College can come together for coffee and camaraderie and exchange experiences. The lounge also provides opportunities for military-connected students to interact with subject matter experts on veteran benefits, academic institutes and off-campus resources. NLC also increased support of advocacy programs by opening the Nighthawk’s Nest that includes services for students such as a food pantry, budget counseling and financial support information. Most recently, NLC completed its first cohort of students in the Texas A&M – Chevron Engineering Academy at Alamo Colleges District – Northeast Lakeview College. Offered in partnership with Texas A&M University’s College of Engineering, this unique program offers students an opportunity to pursue an engineering degree while co-enrolled at Texas A&M and the Alamo Colleges District. Students enrolled in this program take engineering courses taught by Texas A&M faculty at Northeast Lakeview College before transitioning to the Texas A&M campus in College Station. In addition to its Engineering Academy, Northeast Lakeview College expanded its educational offerings to include two associate of applied science degrees: Information Technology – Cybersecurity and Information Technology - Network Administrator. Northeast Lakeview College is committed to changing lives outside of the classroom and received the Pacesetter Award from the United Way for an 82% employee participation rate in the Employee Giving Campaign, the highest participation rate amongst the Alamo Colleges District. Additionally, NLC was awarded the 2018 Platinum Level Healthy Workplace Recognition from the City of San Antonio Mayor’s Fitness Council. The program recognizes local employers for their worksite wellness efforts. Awards and Acknowledgements Northeast Lakeview College was named one of the 2019 Most Promising Places to Work in Community Colleges (PPWCC). Nineteen community colleges made the list recognized by the National Institute for Staff and Organizational Development (NISOD) and Diverse. The PPWCC award ranks institutions annually based on workplace diversity, staffing practices and overall work environment. Other factors include family-friendliness and professional development opportunities. It also recognizes commitments to diversity through best-in-class student and staff recruitment and retention practices, inclusive learning and working environments and meaningful community service and engagement opportunities. Northeast Lakeview College also contributed to the Alamo Colleges District Malcolm Baldrige Quality Award recognition. The award recognizes sustainable excellence through visionary leadership, organizational alignment, systemic improvement and innovation. The award is the most prestigious honor a higher education institution can achieve for performance excellence in innovation, efficiency and leadership. The Alamo Colleges District was one of only five organizations to receive the award this year and is the first community college system to achieve this level of recognition in the history of the program.

Northeast Lakeview College was named one of the top 50 community colleges in the nation. Ranked #12 by Learn.org as a Recognized School, Study.com selected the 50 best community colleges in the nation based on several factors including school data reported by the U.S. Department of Education, the school's program offerings, student services and campus activities. Additionally, Northeast Lakeview College completed the requirements for

recognition at the Commitment Level by the Quality Texas Foundation (QTF). The Commitment Level is for those organizations that have begun using quality principles to build a sound management system. Such organizations have identified areas that are most important to the organization’s long-term success and have begun developing systematic approaches for key processes. The Quality Texas Foundation assists organizations with continuous improvement efforts by utilizing the Baldrige Framework and since 1993, QTF has administered the Texas Award for Performance Excellence (TAPE) as an independent non-profit corporation. Winning TAPE symbolizes that the organization is one of the best in the state of Texas based upon a very rigorous and robust process. QTF has had many organizations win the Malcolm Baldrige

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National Quality Award and lead all the other states in this area. The next step for Northeast Lakeview College is to submit for recognition at the Progress Level.

Dedicated to student success and creating the next generation of leaders, a Northeast Lakeview College student was selected as one of 207 Phi Theta Kappa members named as a 2019 Coca-Cola Leaders of Promise Scholar. Scholars are selected based on their leadership roles at the associate degree level, their participation in Society programs, scholastic achievement and community service. More than 900 applications were received. Selected students receive a scholarship to help defray educational expenses while enrolled in associate degree programs. NLC also had a student receive a Coca-Cola Leader of Promise scholarship in 2018.

The entire Northeast Lakeview College family thanks the members of the Board of Trustees for their support and guidance in conducting the financial operations of Northeast Lakeview College in a highly responsible manner. The timely preparation of this financial report was made possible by the continued dedication and service of the Alamo Colleges District staff. Diane E. Snyder, CPA, Ph.D. Pamela K. Ansboury, CPA, M.Ed. Vice Chancellor Associate Vice Chancellor Finance and Administration Finance and Fiscal Services Alamo Community College District Alamo Community College District

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NORTHEAST LAKEVIEW COLLEGE (A college of the Alamo Community College District)

ORGANIZATIONAL CHART

Vice President of College Services

ALAMO COMMUNITY COLLEGE DISTRICT CHANCELLOR

NORTHEAST LAKEVIEW COLLEGE PRESIDENT

Dean of Student Success

Vice President for Student Success

Dean for Academic Success

Dean for Academic Success

Vice President for Academic Success

Dean for Academic Success

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NORTHEAST LAKEVIEW COLLEGE (A college of the Alamo Community College District)

ALAMO COMMUNITY COLLEGE DISTRICT - ORGANIZATIONAL DATA August 31, 2019

ELECTED OFFICIALS

ADMINISTRATIVE OFFICIALS

Member Position City, State Term Expires

Marcelo Casillas Chairperson San Antonio, Texas 2020

Joe Alderete, Jr. Vice-Chairperson San Antonio, Texas 2022

Anna Uriegas Bustamante Secretary San Antonio, Texas 2022

Joe Jesse Sanchez Assistant Secretary San Antonio, Texas 2020

Dr. Gene Sprague Member of the Board Helotes, Texas 2024

Jose A. Macias, Jr. Member of the Board Converse, Texas 2020

Clint Kingsbery Member of the Board San Antonio, Texas 2020

Dr. Yvonne Katz Member of the Board San Antonio, Texas 2024

Roberto Zarate Member of the Board San Antonio, Texas 2024

Alejandra Gomez Student Trustee San Antonio, Texas *

*Appointed by Board for 1 year term; Non-voting member

Dr. Mike Flores Chancellor

Dr. Diane E. Snyder, CPA Vice Chancellor for Finance and Administration

Robert McKinley Vice Chancellor of Economic and Workforce Development

Ross Laughead General Counsel

Dr. Thomas S. Cleary Vice Chancellor for Planning, Performance & Information Systems

Dr. George Railey Jr. Vice Chancellor for Academic Success

Dr. Adelina Silva Vice Chancellor for Student Success

Sheila Marlow Due Executive Director of Institutional Advancement

Dr. Veronica Garcia President, Northeast Lakeview College

Dr. Ric Neal Baser President, Northwest Vista College

Dr. Robert Garza President, Palo Alto College

Dr. Adena Loston President, St. Philip's College

Dr. Robert Vela President, San Antonio College

Pamela Ansboury, CPA, M.Ed. Associate Vice Chancellor for Finance and Fiscal Services

Patrick F. Vrba, Jr., CPA District Controller

William G. Wullenjohn, Sr. District Director of Internal Audit

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NORTHEAST LAKEVIEW COLLEGE (A college of the Alamo Community College District)

MISSION

Northeast Lakeview College empowers its students for success by offering educational programs and cultural enrichment opportunities. The College provides quality teaching, measurable learning and public service that contribute to the earning of associate degrees and certificates to improve its community’s future.

VISION

To be a transformative force in a culturally rich community, empowered by education, to meet the dynamic demands of the future.

VALUES

Northeast Lakeview College is committed to building individual and collective character through the following set of shared values in order to fulfill our vision and mission.

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Financial Section

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Management and Board of Trustees Alamo Community College District

Report on the financial statements We have audited the accompanying financial statements of Northeast Lakeview College (the “College”), a college of the Alamo Community College District, as of and for the years ended August 31, 2019 and 2018, and the related notes to the financial statements, which collectively comprise the College’s basic financial statements as listed in the table of contents.

Management’s responsibility for the financial statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibility Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the College’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the College’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

GRANT THORNTON LLP 1717 Main Street, Suite 1800 Dallas, TX 75201-4667 D +1 214 561 2300 F +1 214 561 2370

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Opinion In our opinion the financial statements referred to above present fairly, in all material respects, the financial position of the College as of August 31, 2019 and 2018, and the changes in financial position and cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Emphasis of matter As discussed in Note 1 to the financial statements, the financial statements present only the College and do not purport to, and do not, present fairly the financial position of the Alamo Community College District as of August 31, 2019 and 2018, and the changes in its financial position or its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Other matters

Required supplementary information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis be presented to supplement the basic financial statements. Such information, although not a required part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. This required supplementary information is the responsibility of management. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America. These limited procedures consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Supplementary information Our audits were conducted for the purpose of forming an opinion on the financial statements that collectively comprise the College’s basic financial statements. The Schedule of Operating Revenues, the Schedule of Operating Expenses by Object, the Schedule of Non-Operating Revenues and Expenses, and the Schedule of Net Position by Source and Availability, as required by the Texas Higher Education Coordinating Board (“THECB”), are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such supplementary information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures. These additional procedures included comparing and reconciling the information directly to the underlying accounting and other records used to prepare

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the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplementary information is fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Other information The introductory section, as listed in the table of contents, is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance on it.

Other reporting required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report, dated December 10, 2019, on our consideration of the College’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the College’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the College’s internal control over financial reporting and compliance.

Dallas, Texas December 10, 2019

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Management and Board of Trustees Alamo Community College District

We have audited, in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of Northeast Lakeview College (the “College”), a college of the Alamo Community College District, as of and for the years ended August 31, 2019 and 2018, and the related notes to the financial statements, which collectively comprise the College’s basic financial statements, and have issued our report thereon dated December 10, 2019.

Internal control over financial reporting In planning and performing our audit of the financial statements, we considered the College’s internal control over financial reporting (“internal control”) to design audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of internal control. Accordingly, we do not express an opinion on the effectiveness of the College’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the College’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in the College’s internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.

Compliance and other matters As part of obtaining reasonable assurance about whether the College’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS REQUIRED BY GOVERNMENT AUDITING STANDARDS

GRANT THORNTON LLP 1717 Main Street, Suite 1800 Dallas, Texas 75201-4667 D +1 214 561 2300 F +1 214 561 2370

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determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Intended purpose The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the College’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the College’s internal control and compliance. Accordingly, this report is not suitable for any other purpose.

Dallas, Texas December 10, 2019

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NORTHEAST LAKEVIEW COLLEGE (A college of the Alamo Community College District)

Management’s Discussion and Analysis

(Unaudited)

Management’s Discussion and Analysis is included to provide a narrative introduction, overview and analysis of the financial condition and operating results of Northeast Lakeview College (the College), a college of the Alamo Community College District (Alamo Colleges District or the District), for the fiscal years ended August 31, 2019 and 2018. This discussion is prepared by management and should be read in conjunction with the accompanying financial statements and notes. The financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP) as established by the Governmental Accounting Standards Board (GASB) and comply with reporting requirements as set by the Texas Higher Education Coordinating Board (THECB). The notes to the financial statements are considered an integral part of the financial statements and should be read in conjunction with them. Management is responsible for both the accuracy of the data and the completeness and fairness of the presentation of the financial statements and notes. The financial report includes three basic financial statements: the Statements of Net Position provide a summary of assets, liabilities and net position as of August 31, 2019 and 2018; the Statements of Revenues, Expenses and Changes in Net Position provide a summary of operations for the fiscal years; and the Statements of Cash Flows provide categorized information about cash inflows and outflows. Highlighted information from each basic financial statement is presented below.

Total assets decreased approximately $146,000 and total liabilities decreased approximately $2,962,000.

Total net position at August 31, 2019 was approximately $24,434,000, reflecting an increase of approximately $2,816,000 from fiscal year 2018.

The College’s operating loss was approximately $22,880,000.

Statements of Net Position The Statements of Net Position represent the College’s financial position at the end of the fiscal year and include all assets and liabilities recorded on behalf of, or allocated to, the College. Net position is the difference between assets and liabilities and serves as a general indicator of financial stability. Current liabilities are generally those liabilities which are due within one year, and current assets are those assets which are available to satisfy current liabilities. Noncurrent assets primarily include restricted cash and cash equivalents and capital assets. Noncurrent liabilities include bonds and tax notes payable based upon the direct spending by the College of bond and tax note proceeds as budgeted. A Condensed Schedule of Net Position is presented on the following page. Total assets decreased 0.1% or $146,000 during fiscal year 2019 and 1.3% or $1,579,000 during fiscal year 2018. The decreases in 2019 and 2018 are primarily related to decreases in net capital assets of approximately $2.5 million and $3.2 million, respectively, related to depreciation taken on existing capital assets. Total liabilities decreased 3.1% or $2,962,000 in 2019 and by 2.9% or $2,829,000 during fiscal year 2018. Current liabilities increased by approximately $1,242,000 in 2019 due to a $168,000 increase to the current portion of long-term liabilities; a $1,266,000 increase to unearned income related to Fall 2020 tuition revenues collected; partially offset by decreases of $183,000 to accounts payable and $9,000 in funds held for others. Current liabilities increased by approximately $1,207,000 in 2018 due to a $193,000 increase to the current portion of long-term liabilities, a $762,000 increase to unearned income related to Fall 2019 tuition revenues collected, a $236,000 increase to accounts payable and $16,000 increase to funds held for others. Noncurrent liabilities decreased $4,204,000 and $4,036,000 in fiscal years 2019 and 2018, respectively, due to scheduled debt service payments as illustrated in Note 5.

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NORTHEAST LAKEVIEW COLLEGE (A college of the Alamo Community College District)

Management’s Discussion and Analysis

(Unaudited)

The College’s net position at August 31, 2019 was $24,434,000 compared to $21,618,000 at August 31, 2018. This amounted to an increase of approximately $2,816,000 or 13.0%. The fiscal year 2019 increase to net position resulted from a $2.3 million increase to the net investment in capital assets component of net position in addition to increases of $435,000 and $17,000 to the student aid and instructional program components of net position, respectively. The fiscal year 2018 increase to net position resulted from a $2.2 million increase to the net investment in capital assets component of net position partially offset by decreases of $930,000 and $9,000 to the student aid and instructional program components of net position.

Condensed Schedules of Net Position (in thousands)

Statements of Revenues, Expenses and Changes in Net Position The Statements of Revenues, Expenses and Changes in Net Position present the results of operations for the College for the fiscal year. Operating revenues are generated from the services provided to students and other customers of the College. Operating expenses include those costs incurred in the production of goods and services which result in operating revenues, as well as depreciation. All other activity is classified as non-operating revenues and expenses. Since a large portion of the revenue stream including ad valorem property taxes, state appropriations and all federal financial aid grants are classified as non-operating revenues, Texas public community colleges will generally reflect an operating loss with the increase or decrease in net position reflective of all activity. Total revenues and total expenses should be considered in assessing the change in the financial position of the College. When total revenues exceed total expenses, the result is an increase in net position. When the reverse occurs, the result is a decrease in net position. Reduction of debt also results in an increase in net position. Further detail is presented in the Statements of Revenues, Expenses and Changes in Net Position and notes to the financial statements. A summarized comparison of the College’s revenues, expenses and changes in net position for the years ended August 31, 2019, 2018 and 2017 is presented below in table form.

Assets 2019 2018 2017 2018 to 2019 2017 to 2018

Cash and cash equivalents $ 9,760 $ 7,601 $ 5,867 $ 2,159 $ 1,734 Accounts receivable, net and other assets 526 349 474 177 (125)Capital assets 141,942 140,916 140,592 1,026 324 Accumulated depreciation (35,837) (32,328) (28,816) (3,509) (3,512)

Total assets 116,391 116,538 118,117 (146) (1,579)

LiabilitiesCurrent liabilities 8,828 7,587 6,380 1,242 1,207 Noncurrent liabilities 83,129 87,333 91,369 (4,204) (4,036)

Total liabilities 91,957 94,920 97,749 (2,962) (2,829)

Net PositionNet investment in capital assets 21,003 18,752 16,565 2,251 2,188 Restricted, expendable for

Student aid 782 347 1,277 435 (930)Instructional programs 20 3 12 17 (9)

Unrestricted 2,628 2,515 2,514 113 1 Total net position $ 24,434 $ 21,618 $ 20,368 $ 2,816 $ 1,250

Due to rounding, certain totals in this schedule may not add exactly to their constituent amounts.

Fiscal Year Change

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NORTHEAST LAKEVIEW COLLEGE (A college of the Alamo Community College District)

Management’s Discussion and Analysis

(Unaudited)

Condensed Schedules of Revenues, Expenses and Changes in Net Position (in thousands)

Operating Revenues (in thousands)

As shown in the operating table above, total operating revenues increased $320,000 and decreased $1,620,000 for the years ended August 31, 2019 and 2018, respectively. The increase in fiscal year 2019 relates to an increase in net tuition revenues of $161,000, an increase to grants and contracts income of $20,000 and an increase in other operating income of $140,000. The $1,620,000 decrease in fiscal year 2018 is attributable to a $1,628,000 decrease in net tuition and fees related to increased tuition scholarships and discounts awarded because the College achieved accreditation status and is now eligible to disburse federal financial aid on its own; a combined $48,000 decrease to operating grants and contracts and other operating revenues related to the winding down of spending on a multi-year National Science Foundation grant supporting excellence in STEM education; partially offset by an increase of $56,000 in auxiliary enterprise revenue collections.

2019 2018 2017 2018 to 2019 2017 to 2018

Operating revenues $ 8,008 $ 7,688 $ 9,308 $ 320 $ (1,620)Operating expenses 30,888 29,552 24,913 1,336 4,639

Operating loss (22,880) (21,864) (15,605) (1,016) (6,259)

Non-operating revenues (expenses): State appropriations 6,161 6,002 6,381 159 (379)Ad valorem taxes 15,824 16,336 14,449 (512) 1,887

Federal and State grants, non-operating 6,867 4,256 - 2,611 4,256 Interest on capital-related debt (3,184) (3,484) (4,621) 300 1,137 Other net non-operating revenues 29 4 17 25 (13)

Total non-operating revenues, net 25,697 23,114 16,226 2,583 6,888

Increase in net position 2,816 1,250 621 1,567 629

Net position - beginning of year 21,618 20,368 19,747 1,250 621 Net position - end of year $ 24,434 $ 21,618 $ 20,368 $ 2,816 $ 1,250

Due to rounding, certain totals in this schedule may not add exactly to their constituent amounts.

Fiscal Year Change

Amount % of Total Amount % of Total Amount % of Total 2018 to 2019 2017 to 2018

Net tuition and fees 7,354$ 91.8% 7,192$ 93.5% 8,821$ 94.8% 161$ (1,628)$

Grants and contracts 94 1.2% 74 1.0% 113 1.2% 20 (39)

Auxiliary enterprises 344 4.3% 345 4.5% 289 3.1% (2) 56

Other operating revenues 217 2.7% 76 1.0% 85 0.9% 140 (9)

Total operating revenues 8,008$ 100.0% 7,688$ 100.0% 9,308$ 100.0% 320$ (1,620)$

Due to rounding, certain totals in this schedule may not add exactly to their constituent amounts.

2019 2018 2017 Change

19

NORTHEAST LAKEVIEW COLLEGE (A college of the Alamo Community College District)

Management’s Discussion and Analysis

(Unaudited)

The primary component of operating revenue is net tuition and fees. A table showing the components of net tuition and fees is presented below. Total tuition and fees is presented net of waivers. In December 2017, the College earned accreditation from the Southern Association of Colleges and Schools Commission on Colleges (SACSCOC). As such, the College is able to accept federal financial aid from its students in fiscal years 2018 and 2019, and certain operating scholarship allowances and discounts are now recorded at the College level. The table below reflects the significant increases to tuition discounts since fiscal year 2017. In addition, the College can apply for financial aid as separate institution, and receive separate award letters for federal and state funds. Net tuition for fiscal year 2019 increased approximately $161,000. Gross tuition increased $3,052,000, fees increased $157,000, and discounts grew $3,049,000. In fiscal year 2019, a tuition increase of $13 per hour for all residency types was approved by the Board beginning January 1, 2019. This is the first tuition increase by the College since Spring 2016. Student activity fees were also raised from $1 to $3 per hour. Discounts grew 91% from $3,350,000 to $6,399,000 as all categories of federal aid, Pell, FSEOG, and Federal Work-Study received increased allocations totaling $2.6 million more than in fiscal year 2018. The additional aid is attributable to an increase in headcount of students of 1,254 in 2019. In fiscal year 2018, net tuition and fees decreased by $1,628,000. The 2018 decrease was primarily related to a 184.9% or $2,174,000 increase in tuition discounts related to the College obtaining its accreditation status allowing for the recording of federal and state grant discounts at the College as discussed previously. Gross tuition collections increased by approximately $555,000 or 5.6% in fiscal year 2018.

Net Tuition and Fees (in thousands)

Following are charts of the major sources of revenue for fiscal years 2019 and 2018, comparing operating and non-operating revenues. The non-operating revenues comprise the largest portion of total revenues at 78% for both fiscal years 2019 and 2018. The significant increase to non-operating revenues in 2019 and 2018 is due to the College accepting federal financial aid as a result of achieving accreditation status, as discussed previously. Ad valorem taxes remain as the primary component of non-operating revenues, comprising 43% of the total. In 2019, federal and state grants surpassed state appropriations as the second largest component of non-operating revenues, as the College is now able to receive federal financial aid as a result of achieving accreditation status.

Amount % of Total Amount % of Total Amount % of Total

Tuition 13,433$ 182.7% 10,381$ 144.3% 9,826$ 111.4%

Fees 319 4.3% 162 2.3% 171 1.9%

Discounts (6,399) -87.0% (3,350) -46.6% (1,176) -13.3%Total net tuition and fees 7,354$ 100.0% 7,192$ 100.0% 8,821$ 100.0%

Due to rounding, certain totals in this schedule may not add exactly to their constituent amounts.

2019 2018 2017

20

NORTHEAST LAKEVIEW COLLEGE (A college of the Alamo Community College District)

Management’s Discussion and Analysis

(Unaudited)

Revenue Components – Operating and Non-operating

Operating expenses are presented in the following charts in both a natural and functional classification. Following is a three-year comparison of operating expenses by natural classification. In fiscal year 2019, salaries and benefits increased $739,000 having a full year of salary increases approved for January 1, 2018 of the prior fiscal year. Scholarship expense increased $1,188,000, benefitting significantly from the increased allocations in federal financial aid grant revenues. In 2018, salaries and benefits increased $697,000 or 5.6% due to budgeted salary increases that averaged 4.15%, 3.0% and 3.0% for full-time faculty, staff and administrators, respectively, along with corresponding increases to benefit costs. As a key strategic priority, the College has invested in its faculty, staff and administrators by aligning faculty pay with salaries for the top three peer community colleges in Texas and by conducting market studies to determine compensation adjustments for staff and administrative positions.

Operating Expenses in Natural Classification

(in thousands)

The largest increase to operating expenses in fiscal years 2019 and 2018 was to scholarships, with increases of $1,188,000 and $2,448,000, respectively. The increase is due to Northeast Lakeview earning accreditation status in December 2017, which allowed the College to begin accepting federal financial aid for its students for the first time. Increased federal allocations for Pell, FSEOG, and Federal Work-Study continued in fiscal year 2019. Expenses for

2019 2018 2017 2018 to 2019 2017 to 2018

Salaries $ 13,555 $ 13,098 $ 12,539 $ 456 $ 559 Benefits 4,388 4,105 3,967 283 138 Scholarships and fellowships 3,636 2,448 - 1,188 2,448 Supplies and services 5,791 6,371 4,862 (580) 1,509 Depreciation 3,519 3,529 3,545 (10) (16) Total operating expenses $ 30,888 $ 29,552 $ 24,913 $ 1,336 $ 4,640

Due to rounding, certain totals in this schedule may not add exactly to their constituent amounts.

Fiscal Year Change

21

NORTHEAST LAKEVIEW COLLEGE (A college of the Alamo Community College District)

Management’s Discussion and Analysis

(Unaudited)

supplies and services decreased $580,000 in 2019 and increased by $1,509,000 in 2018. The increase in 2018 was primarily attributable to a $0.6 million increase in instructional supplies and services along with increased costs for the operation of maintenance and plant of approximately $0.8 million related to items such as structural maintenance, pavement and grounds, mechanical/electrical/plumbing costs and contracted services, as the College reached its 11th year of existence. These supplies and services costs were not repeated in fiscal year 2019, accounting for the decrease. Depreciation expense remained virtually flat in 2019 and 2018, reflecting minimal additions or disposals to capital assets during the year, resulting in a consistent and comparable amount for depreciation expense.

Operating Expenses in Functional Classification (in thousands)

Factors influencing operating expenses grouped by functional classification include the following:

Instruction includes expenses for all activities that are a part of the instructional program, such as faculty salaries and benefits. In fiscal year 2019, instruction expenses increased $245,000. This is attributable to a $603,000 increase in salaries and benefits related to a salary increase passed on January 1, 2018 of the prior year, offset by reductions in non-capitalized equipment and furnishings of $358,000. In fiscal year 2018, instruction expenses increased by $791,000 due to a $574,000 increase for instructional supplies and services coupled with increases to instructional salaries and benefits of approximately $217,000 resulting from compensation adjustments discussed previously.

Academic support includes expenses related to providing support services for the College’s primary mission of instruction, including libraries, computing support, audio visual services, curriculum development and academic program administration. Academic support costs decreased slightly in both 2019 and 2018. In 2019, the decrease was primarily due to vacancies in academic support positions. In 2018 expenses decreased approximately $108,000 related to decreased costs of approximately $56,000 for supplies and services related to academic support along with vacant academic support positions that saved the College approximately $52,000 in salaries and benefits.

Student services includes expenses of various departments serving students such as student newspapers, intramural athletics, student organizations, counseling and career guidance, student aid administration, student health services, counseling and student success centers. This category increased $214,000 and $483,000 in

2019 2018 2017 2018 to 2019 2017 to 2018

Instruction $ 10,229 $ 9,985 $ 9,194 $ 245 $ 791

Academic support 3,083 3,183 3,291 (100) (108)Student services 3,870 3,656 3,173 214 483 Institutional support 2,826 2,762 2,510 64 252 Operation and maintenance of plant 3,724 3,966 3,191 (243) 775 Depreciation 3,519 3,529 3,545 (10) (16)Scholarships and fellowships 3,636 2,448 - 1,188 2,448

Total educational and general 30,887 29,529 24,905 1,359 4,626 Auxiliary enterprises 1 23 8 (22) 15

Total operating expenses $ 30,888 $ 29,552 $ 24,913 $ 1,336 $ 4,640

Due to rounding, certain totals in this schedule may not add exactly to their constituent amounts.

Fiscal Year Change

22

NORTHEAST LAKEVIEW COLLEGE (A college of the Alamo Community College District)

Management’s Discussion and Analysis

(Unaudited)

2019 and 2018, respectively. In fiscal year 2019, salary and benefit expenses increased $326,000, offset by reductions in supplies, equipment and furnishings of $112,000. The increase in salaries were significantly impacted by an increase in the federal work-study program allocation of $208,000. Of the $483,000 increase in 2018, approximately $300,000 was attributable to increased salaries and benefits for student services personnel. The remaining $183,000 increase was related to additional costs for supplies and services within student services departments across the College.

The institutional support category is primarily comprised of salaries and other operating expenses for central executive-level management that engage in long-range planning for the College. In fiscal year 2019, institutional support expenses were relatively flat, with a slight increase of $64,000. Expenses in the institutional support category increased by $252,000 in fiscal year 2018, attributable to increased salaries and benefits for institutional support employees of approximately $259,000; slightly offset by a $7,000 decrease to institutional support supplies and services.

Operation and maintenance of plant includes expenses for custodial, grounds, and building maintenance, as well as utilities. In fiscal year 2019, expenses decreased $243,000 as one-time renovations completed in 2018 were not repeated. In fiscal year 2018, expenses for operation and maintenance of plant increased by $775,000 or 24.3%. This increase was primarily due to increased costs for structural maintenance, pavement and grounds, mechanical/electrical/plumbing costs, and contracted services as the College continued to age and reached its 11th year in existence.

As discussed previously, Northeast Lakeview earned accreditation status in December 2017, which allowed the College to begin accepting federal financial aid for its students and to award scholarships and fellowships. As such, the College recorded approximately $3,636,000 in scholarships in fiscal year 2019 compared to $2,448,000 in fiscal year 2018.

As financial pressures continue from declining State of Texas appropriations and the Board of Trustees’ intent to limit tax rate and tuition increases, expense controls are in place as developed by the Board of Trustees, administrators, faculty, staff and students across the institution. College administration and all employees continue to strategically plan to identify cost-savings that can have a significant and on-going impact on the budget. Statements of Cash Flows The Statements of Cash Flows provide information about the sources of cash and the uses of cash in the operations of the College. The Statements of Cash Flows help users determine the entity’s ability to meet its obligations as they become due and the impact of external financing. The Statements summarize cash inflows and outflows by operating activities, non-capital financing activities, capital financing activities and investing activities. The Statements of Cash Flows indicated increases in cash of approximately $2,159,000 and $1,734,000 for the years ended August 31, 2019 and 2018, respectively. The primary uses of cash in operations are for payment of salaries and benefits followed by payments to suppliers for goods and services. Sources of cash from non-capital financing activities are primarily from ad valorem taxes and state appropriations. Financing activities include use of cash for payment of debt, both principal and interest, as well as capital assets acquisition and construction. For additional detailed information, see Exhibit 3. Capital Assets Changes in net capital assets are the result of acquisitions, improvements, deletions and changes in accumulated depreciation. The College had approximately $141,942,000 and $140,916,000 in capital assets at August 31, 2019 and 2018, respectively, and accumulated depreciation of $35,837,000 and $32,328,000 for the same periods,

23

NORTHEAST LAKEVIEW COLLEGE (A college of the Alamo Community College District)

Management’s Discussion and Analysis

(Unaudited)

respectively. Depreciation expense totaled approximately $3,519,000 in fiscal year 2019 and $3,529,000 in fiscal year 2018. (See Note 4, Capital Assets, included in the financial statements.) A summary of net capital assets is presented below:

Net Capital Assets at Fiscal Year End

(in thousands)

One method of evaluating the continued life of capital assets is to compare the accumulated depreciation to the original cost of the assets as a percentage. The following table lists assets subject to depreciation and the percentage depreciated to August 31, 2019 and 2018. The accumulated depreciation rate for buildings and other real estate improvements is low, as is expected of a campus comprised of relatively new buildings.

Depreciable Capital Assets and Accumulated Depreciation Percentages

(in thousands)

In fiscal year 2019, the College recorded additions to construction in progress of approximately $959,000 and additions to library materials of $66,000. The College recorded additions to construction in progress, furniture machinery and equipment, and library materials of approximately $263,000, $13,000 and $65,000, respectively, for the year ended August 31, 2018. The College does not record the cost of capital assets as an expense at the time of acquisition or completion of the asset, but rather shows the expense systematically over the expected life of the asset as depreciation expense. The amount shown in the accounting records for the value of the asset will decrease each year until the asset is fully depreciated or removed from service. As a result, the amount of capital assets shown in the Statements of Net Position may decrease from one year to another, even though new assets have been acquired during the year. Capital assets subject to depreciation include improvements to land (such as parking lots and signage), buildings, library materials, furniture and equipment. Land and construction in progress are not depreciated. Below is a schedule of the major capital assets at the College.

2019 2018 2017 2018 to 2019 2017 to 2018Land $ 5,259 $ 5,259 $ 5,259 $ - $ - Buildings and other real estate improvements 99,204 102,627 106,050 (3,423) (3,423)Construction in progress 1,222 263 - 959 263 Furniture, machinery and equipment 46 70 98 (24) (28)Library materials 375 370 369 5 -

Total net capital assets $ 106,105 $ 108,588 $ 111,777 $ (2,483) $ (3,189)

Due to rounding, certain totals in this schedule may not add exactly to their constituent amounts.

Fiscal Year Change

Accumulated % Accumulated %

Capitalized Depreciation Depreciated Capitalized Depreciation Depreciated

Buildings and other real estate improvements 133,805$ 34,601$ 25.9% 133,805$ 31,178$ 23.3%

Furniture, machinery and equipment 779 733 94.1% 778 708 91.0%

Library materials 877 502 57.2% 811 442 54.5%

Fiscal Year 2019 Fiscal Year 2018

24

NORTHEAST LAKEVIEW COLLEGE (A college of the Alamo Community College District)

Management’s Discussion and Analysis

(Unaudited)

Schedule of Major Capital Assets

The District, on behalf of the College, has entered into several contracts for construction and various other renovation projects financed by bond proceeds. Debt The College assumes its portion of general obligation bonds, revenue bonds and tax notes issued by the District based upon the original budget for the bond or tax note developed by the College before issuance. The current allocation rate for the College is approximately 37% of the outstanding balance which amounts to $87.3 million and $91.4 million at August 31, 2019 and 2018, respectively. No new debt was allocated to the College in fiscal year 2019. For additional information, see Note 6 and Note 7. The District had $531.5 million and $579.3 million in outstanding bonds and maintenance tax note debt at August 31, 2019 and 2018, respectively, before premiums and discounts. This amounts to a decrease of $47.8 million in fiscal year 2019 and an increase of $87.6 million in fiscal year 2018. The $47.8 million decrease in bonds and tax notes payable at the District level in 2019 resulted from scheduled principal payments on bonds. The $87.6 million increase in bonds and tax notes payable at the District level in 2018 resulted from the issuance of $258.9 million of Series 2017 Limited Tax and Refunding Bonds partially offset by refundings of $25.8 million and $123.2 million of Limited Tax Series 2007A and Limited Tax Series 2007 bonds, respectively; and scheduled debt service payments totaling approximately $22.3 million. The District’s general obligation debt is payable from the proceeds of a continuing, direct ad valorem tax levied against all taxable property within the taxing district. Revenue bonds are special obligations of the District that are payable solely from and will be equally and ratably secured by an irrevocable first lien on pledged revenues. The pledged revenue is all revenue from tuition as part of the general tuition, and fees from the students for the occupancy or use of the property of the Alamo Colleges District. The District has received bond ratings for its general obligation bonds of Aaa and AAA from Moody’s Investors Service and S&P Global Ratings, respectively. These are the highest ratings available from these rating agencies and the District is one of only three community college districts in Texas and one of only 11 community colleges in the United States to receive the highest rating from both agencies. More detailed information about the District’s noncurrent liabilities is presented in Notes 5, 6, and 7 to its financial statements.

Academic space 180,967 Library 35,782 Student support and administration 95,587 Dining facility 9,258 Athletic facility 37,294

Includes gymnasium, fitness center, putting green and rock climbing wall

Plant facility 10,763

Parking lots (accommodate 2,234 vehicles)

Square footage (in thousands)

25

NORTHEAST LAKEVIEW COLLEGE (A college of the Alamo Community College District)

Management’s Discussion and Analysis

(Unaudited)

Factors Having Probable Future Financial Significance The economic condition of the College and the District is influenced by the economic position of the State of Texas, the County of Bexar and surrounding counties and the City of San Antonio. San Antonio is the seventh largest city in the United States and the second largest city in Texas. The Bureau of Labor and Statistics reported that the August 2019 unemployment rate for San Antonio, the State of Texas and the United States was 3.1%, 3.4% and 3.7%, respectively, with San Antonio’s unemployment rate being less than that of the state and national rates. The Texas economy continues to fare better than that of many other states, with the San Antonio economy being one of the strongest in the state. The San Antonio metropolitan area is considered one of the most attractive locations in the nation for business growth due to affordable land, abundant power and an education system that continues to evolve and improve. In a November 2019 publication, the Federal Reserve Bank of Dallas cited that San Antonio’s business-cycle index, a broad measure of economic activity, expanded at its fastest rate since 2014 and nearly doubled its long term trend rate. The article cited San Antonio’s job growth, low unemployment rate and increased retail sales as indicators of the continued strength of the San Antonio economy. San Antonio again made the Forbes magazine 2019 list of the Best Places For Business and Careers, ranking San Antonio #48 out of 200 major metro areas and #44 in job growth. The level of state appropriations Texas community colleges have historically received enabled the low tuition rates community colleges provided. The State has continued to decrease appropriations and employee benefit coverage and has drastically changed the revenue mix. In the past, the State paid a significant portion of health benefits and all of the retirement contribution matches and provided an allocation adequate to cover instructional costs and growth. The Texas Legislature now has taken a different approach for community college appropriations. The State has reduced its portion of retirement and health benefit coverage to 50% of eligible employee’s retirement and health benefit costs while retirement and health care costs continue to increase. Overall, fiscal year 2019 state appropriations for the District are 1% less than in fiscal year 2002, while enrollment and inflation have increased by 43% and 42%, respectively, during the same time period. For 2019, tuition revenue from students and tax revenue from local property owners now comprise over 75% of the primary revenue streams used for operations, as state allocations are now only sufficient to cover 24% of THECB formula funding. In the long term, without the State’s full support, Texas community colleges will be forced to adjust the level of services to students and possibly significantly raise tuition and ad valorem tax rates. In the future, the College and the District will continue to face a growing challenge to fund increasing demand for state education services. The College continues to strategically analyze and reduce targeted expenses and make the most of favorable economic conditions by aggressively identifying the demand for workforce development programs and providing them. With the adoption of the FY2020 budget, the College and the District has implemented a Smart Growth approach to the future. Smart Growth addresses many of the challenges and opportunities that lie ahead for the College by focusing on enrollment management, student success, obtaining and retaining talent, and innovation. Knowing that 65% of living wage jobs will require education beyond high school, the College and the District see an opportunity to provide that education and plan to grow high demand programs, pace dual credit programs, grow the online education presence, reduce barriers to entry, implement the enrollment coach model and expand experiential learning opportunities. The outlook of Northeast Lakeview College remains positive as a result of its strategic leadership, fiscal management and stable local economy.

26

NORTHEAST LAKEVIEW COLLEGE (A college of the Alamo Community College District)

EXHIBIT 1

Statements of Net Position August 31, 2019 and 2018

The accompanying notes are an integral part of these financial statements.

2019 2018

ASSETS

Current assets:

Cash and cash equivalents 6,954,061$ 5,760,720$

Accounts receivable, net of allowance for doubtful accounts 396,701 210,757

Other assets 8,622 8,622

Total current assets 7,359,384 5,980,099

Noncurrent assets:

Restricted cash and cash equivalents 2,806,062 1,840,177

Other assets 120,715 129,338

Capital assets (net) 106,105,072 108,588,057

Total noncurrent assets 109,031,849 110,557,572

TOTAL ASSETS 116,391,233 116,537,671

LIABILITIES

Current liabilities:

Accounts payable 311,598 494,880

Funds held for others 36,781 45,804

Unearned income 4,275,847 3,009,933

Current portion of noncurrent liabilities 4,204,000 4,036,000

Total current liabilities 8,828,226 7,586,617

Noncurrent liabilities 83,129,131 87,333,452

TOTAL LIABILITIES 91,957,357 94,920,069

NET POSITION

Net investment in capital assets 21,003,024 18,752,323

Restricted for:

Expendable

Student aid 781,925 347,041

Instructional programs 20,236 3,008

Capital projects 215 215

Unrestricted 2,628,476 2,515,015

TOTAL NET POSITION 24,433,876$ 21,617,602$

27

NORTHEAST LAKEVIEW COLLEGE (A college of the Alamo Community College District)

EXHIBIT 2

Statements of Revenues, Expenses and Changes in Net Position August 31, 2019 and 2018

The accompanying notes are an integral part of these financial statements.

2019 2018

OPERATING REVENUES:

Tuition and fees (net of discounts of $6,398,705

and $3,349,831, respectively) 7,353,759$ 7,192,438$

Grants and contracts 93,623 73,916

Auxiliary enterprises 343,806 345,307

Other operating revenues 216,695 76,266

Total operating revenues (Schedule A) 8,007,883 7,687,927

OPERATING EXPENSES:

Instruction 10,229,298 9,984,707

Academic support 3,082,976 3,182,593

Student services 3,870,324 3,656,229

Institutional support 2,826,386 2,762,236

Operation and maintenance of plant 3,723,830 3,966,338

Scholarships and fellowships 3,635,618 2,447,978

Auxiliary enterprises 1,069 22,881

Depreciation 3,518,815 3,528,985

Total operating expenses (Schedule B) 30,888,316 29,551,947

Operating loss (22,880,433) (21,864,020)

NON-OPERATING REVENUES/(EXPENSES):

State appropriations 6,160,732 6,002,046

Ad valorem taxes

Taxes for maintenance and operations 11,425,968 11,796,386

Taxes for maintenance notes 618,960 719,857

Taxes for general obligation bonds 3,779,068 3,819,545

Federal grants, non-operating 6,859,561 4,229,655

State grants, non-operating 7,374 26,385

Gifts 20,319 -

Investment income 8,763 3,889

Interest on capital-related debt (3,183,870) (3,484,182)

Other non-operating revenues/(expenses) (168) -

Net non-operating revenues (Schedule C) 25,696,707 23,113,581

Increase in net position 2,816,274 1,249,561

NET POSITION:

Net position - beginning of year 21,617,602 20,368,041

Net position - end of year (Schedule D) 24,433,876$ 21,617,602$

28

NORTHEAST LAKEVIEW COLLEGE (A college of the Alamo Community College District)

EXHIBIT 3

Statements of Cash Flows August 31, 2019 and 2018

The accompanying notes are an integral part of these financial statements.

2019 2018

CASH FLOWS FROM OPERATING ACTIVITIES

Receipts from students and other customers 8,951,356$ 8,408,471$

Receipts from grants and contracts 97,747 51,919

Other receipts 216,195 76,266

Payments to or on behalf of employees (16,467,216) (15,890,738)

Payments to suppliers for goods and services (6,012,867) (6,096,964)

Payments for scholarships and fellowships (3,635,618) (2,447,978)

Net cash used by operating activities (16,850,403) (15,899,024)

CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES

Receipts from state appropriations 4,684,643 4,688,821

Receipts from ad valorem taxes 11,425,968 11,796,386

Receipts from non-operating federal and state revenue 6,749,924 4,256,040

Receipts from gifts and grants (other than capital) 20,319 -

Receipts from Federal loans for students 1,475,758 550,062

Payment for Federal loans issued to students (1,488,562) (550,062)

Receipts (payments) from/(to) student organizations and other agency transactions (9,023) 15,816

Net cash provided by noncapital financing activities 22,859,027 20,757,063

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES

Receipts from ad valorem taxes for debt service 4,398,028 4,539,402

Payments for capital assets acquisition and construction of capital assets (1,035,998) (340,479)

Payments on capital debt - principal (4,036,321) (3,842,611)

Payments on capital debt - interest (3,183,870) (3,484,182)

Net cash used by capital and related financing activities (3,858,161) (3,127,870)

CASH FLOWS FROM INVESTING ACTIVITIES

Interest on investments 8,763 3,889

Net cash provided by investing activities 8,763 3,889

INCREASE IN CASH AND CASH EQUIVALENTS 2,159,226 1,734,058

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 7,600,897 5,866,839

CASH AND CASH EQUIVALENTS, END OF YEAR 9,760,123$ 7,600,897$

29

NORTHEAST LAKEVIEW COLLEGE (A college of the Alamo Community College District)

EXHIBIT 3

Statements of Cash Flows August 31, 2019 and 2018 (continued)

The accompanying notes are an integral part of these financial statements.

RECONCILIATION OF OPERATING LOSS TO NET CASH 2019 2018

USED BY OPERATING ACTIVITIES:

Operating loss (22,880,433)$ (21,864,020)$

Adjustments to reconcile operating loss to net cash used by operating activities:

Depreciation expense 3,518,815 3,528,985

Allowance for doubtful accounts 17,234 14,107

Non-cash state appropriations - on-behalf payments 1,476,089 1,313,225

Changes in assets and liabilities:

Accounts receivable (73,363) 32,500

Other assets 8,623 78,227

Accounts payable (183,282) 236,046

Unearned income 1,265,914 761,906 Net cash used by operating activities (16,850,403)$ (15,899,024)$

SCHEDULE OF NON-CASH INVESTING AND FINANCING TRANSACTIONS:

State on-behalf payments 1,476,089$ 1,313,225$

Gifts of depreciable and non-depreciable assets 500$ -$

30

NORTHEAST LAKEVIEW COLLEGE (A college of the Alamo Community College District)

Notes to Financial Statements

1. REPORTING ENTITY Northeast Lakeview College (the College), established in 2007, is one of the five colleges of the Alamo Community College District (Alamo Colleges District or the District) serving the educational needs of Bexar County and surrounding communities. The College, as a member of the Alamo Colleges District, administers and provides educational services using the funds provided to or generated by it. The College directs its own budget allocation, as approved by the Board of Trustees of the Alamo Colleges District, and makes decisions regarding educational activities including the development of curriculum, the delivery of educational support services and the hiring of faculty and staff under the Alamo Colleges District’s guidelines. Certain assets, liabilities and net position attributable to the College’s operations are designated separately in the District’s books or are allocated for the basis of reporting at the College level. The College has no separate legal authority to enter into debt, make investments, acquire capital assets, assess or collect taxes or otherwise engage in activities as a separate legal entity. These activities are conducted and reported at the District level on behalf of the entire District and are under the direction of the Chancellor, the administration and/or Board of Trustees of the Alamo Colleges District. The accompanying financial statements present the net position and changes in net position and cash flows of the College. These financial statements are not intended to present the financial position or the change in financial position or cash flows of the District. The Alamo Colleges District is considered to be a special purpose, primary government. While the Alamo Colleges District receives funding from local, state and federal sources and must comply with the spending, reporting and recordkeeping requirements of these entities, it is not a component unit of any other governmental entity. The Alamo Colleges District issues a Comprehensive Annual Financial Report that includes the District operations, as well as the operations of its five member colleges. The Alamo Community College District was established in 1945 in accordance with the laws of the State of Texas. It serves the educational needs of Bexar County and surrounding communities through its colleges and educational centers. The District supports five colleges including San Antonio College, St. Philip’s College, Palo Alto College, Northwest Vista College and Northeast Lakeview College. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Reporting Guidelines The significant accounting policies followed in preparing these financial statements are in accordance with the Texas Higher Education Coordinating Board's Annual Financial Reporting Requirements for Texas Public Community and Junior Colleges for fiscal year 2019. For financial reporting purposes Northeast Lakeview College is part of the District, which is considered a special purpose, primary government engaged in business-type activities. Basis of Accounting The financial statements are prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP) as established by the Governmental Accounting Standards Board (GASB) and comply with reporting requirements as set by the Texas Higher Education Coordinating Board (THECB). The financial statements of the College have been prepared on the accrual basis, whereby all revenues are recorded when earned, and all expenses are recorded when they have been reduced to a legal or contractual obligation to pay. Budgetary Data Each community college district in Texas is required by law to prepare an annual operating budget of anticipated revenues and expenses for the fiscal year beginning September 1. The District’s Board of Trustees adopts the annual budget, which is prepared on the accrual basis of accounting for operating funds and available resources for construction and renewal funds. Copies of the District’s approved budget and subsequent amendments must be filed with the THECB, Legislative Budget Board, Legislative Reference Library and Governor’s Office of Budget and Planning by December 1. The budget documents include the College’s information for tuition and other revenue, student contact hours, state appropriation allocation distribution, expenses and personnel, as well as other information.

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NORTHEAST LAKEVIEW COLLEGE (A college of the Alamo Community College District)

Notes to Financial Statements

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Cash and Cash Equivalents Cash and cash equivalents consist of demand deposits related to operations and agency accounts or amounts held for others with original maturities of less than three months. Restricted Cash and Cash Equivalents Cash and cash equivalents that are externally restricted as to their use are classified as noncurrent assets in the Statements of Net Position. This category includes unexpended cash balances restricted by donors or other outside agencies for specific purposes; gifts whose donors have placed limitations on their use; grants from private or governmental sources; bond proceeds; and other sponsored funds. Accounts Receivable Accounts receivable are recorded at the invoiced amounts. The allowance for doubtful accounts is management’s best estimate of the amount of probable credit losses and is determined based on historical collectability. Account balances are written-off against the allowance when it is probable the receivable will not be recovered. Capital Assets Assets meeting the applicable capitalization threshold with useful lives extending beyond one year are recorded at cost on the date of acquisition. In accordance with GASB Statement No. 72, Fair Value Measurement and Application, donated capital assets are stated at acquisition value, defined as the price that would be paid to acquire an asset with equivalent service potential in an orderly market transaction at the acquisition date. Infrastructure and land improvements which significantly add value or extend the useful life of the structure are capitalized. The costs of normal maintenance and repairs are charged to operating expense in the year the expense is incurred. The straight-line method is used for depreciating assets over their useful lives. Depreciation begins in the following year after capitalization except for equipment, which is prorated in the first year the asset was placed in service. The table below lists the capitalization thresholds and useful lives for each asset category:

Compensable Absences Employee benefits are administered and recorded at the District level and are not allocated to the College. Employee annual leave is accrued as earned and sick leave is not accrued, as a terminated employee is not paid for accumulated sick leave.

Capitalization Useful Life Salvage

Class of Asset Threshold (Years) Value

Land 5,000$ Not depreciated -

Land improvements (except tennis courts) 100,000 20 -

Tennis courts 10,000 7 -

Buildings 100,000 40 10%

Building improvements 100,000 20 -

Portable buildings 10,000 10 10%

Furniture, machinery and equipment 5,000 5-10 -

Infrastructure 100,000 20 10%

Software 5,000 5 -

Library materials All 15 -

Works of art/historical treasures 5,000 Not depreciated -

Leasehold improvements 10,000 Shorter of lease

or useful life -

Technology systems 50,000 5 -

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NORTHEAST LAKEVIEW COLLEGE (A college of the Alamo Community College District)

Notes to Financial Statements

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Self-Insurance The District is self-insured for a portion of workers’ compensation losses. A liability representing the self-insured portion of workers’ compensation losses is recorded at the District level for the estimated amount of eventual loss which will be incurred on claims arising prior to the end of the fiscal year including incurred but not reported claims. Net Position Net Investment in Capital Assets This category represents the total investment in capital assets used primarily by the College, net of related outstanding debt used to acquire or construct those assets and accumulated depreciation related to those capital assets. Restricted Net Position, Expendable Legal or contractual obligations require this portion to be spent in accordance with external restrictions. Unrestricted Net Position These are resources that are not subject to external restrictions and may be used at the discretion of the governing board for any lawful purpose of the College. Operating and Non-operating Revenues The College distinguishes operating and non-operating revenues and follows the District’s method of reporting as a Business-Type Activity (BTA) and as a single, proprietary fund. Operating revenues generally result from providing services in connection with the principal ongoing operations. The principal operating revenues are student tuition and fees net of scholarship discounts and allowances, federal and private grants and contracts, auxiliary enterprises revenue (such as campus access fees and bookstore commissions) and other revenues of a similar nature. The major non-operating revenues are state appropriations, ad valorem property tax collections and federal financial aid through Title IV Higher Education Act grants. The amount of state appropriations allocated to the College is based on student contact hours generated. This is similar to the method the State of Texas uses to allocate appropriations to the District on a biennium basis. State appropriations may not be used for construction of facilities or for repairs and renovation of those facilities. The amount of ad valorem taxes allocated to the College is based on two variables - debt service requirements by the College on allocated debt and District support determined by the budget process for College operations. Any uncollectible assessed taxes are covered by the District. Revenue Recognition and Unearned Income Tuition and fee revenues are recorded when earned. Unrestricted fall tuition, fees and other revenues received related to the period after each fiscal year are recorded as unearned. Restricted revenues for the fall are recognized in the year when the expenses have occurred and all obligations have been fulfilled for the recording of those expenses. Unrestricted unearned charges have been netted against unearned income. Restricted charges where all obligations have been fulfilled are treated as expenses in the period incurred. Tuition Discounting Texas Public Education Grants Certain tuition amounts are required to be set aside for use as scholarships by qualifying students. These amounts, called the Texas Public Education Grant, are shown with tuition and fee revenue as a separate set aside amount (Texas Education Code §56.033). When the award is used by the student for tuition and fees, the amount is recorded as a tuition discount. When the award is used for purposes other than tuition and fees, the amount is recorded as a scholarship expense. Title IV Higher Education Act (HEA) Program Funds Certain Title IV HEA Program funds are received by the College to pass through to students. These funds are received by the College and recorded as revenue. When a student uses the award for tuition and fees, the amount is recorded as a tuition discount. When the award is used for purposes other than tuition and fees, the amount is recorded as a scholarship expense.

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NORTHEAST LAKEVIEW COLLEGE (A college of the Alamo Community College District)

Notes to Financial Statements

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) Other Tuition Discounts The College awards tuition and fee scholarships from institutional funds to students who qualify. When these funds are used for tuition and fees, the awards are recorded as a tuition discount. When these awards are used for purposes other than tuition and fees, the amounts are recorded as scholarship expense. Operating and Non-operating Expenses Operating expenses include the cost of providing instruction, academic support, student services, operation and maintenance of plant and depreciation on capital assets. Expenses related to non-operating federal revenues are reported as operating expenses, either as tuition discounts (if applied to tuition) or as scholarship expenses. The major non-operating expenses are interest on capital-related debt and capital expenses associated with bond proceeds which fall below the capitalization thresholds. Restricted Resources When an expense is incurred that can be paid using either restricted or unrestricted resources, the expense is first applied against restricted resources and then against unrestricted resources. Estimates The preparation of the financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. New Pronouncements In November 2016, the Governmental Accounting Standards Board (GASB) issued Statement No. 83, Certain Asset Retirement Obligations (GASB 83). This Statement addresses accounting and financial reporting for certain asset retirement obligations (AROs), which are legally enforceable liabilities associated with the retirement of certain tangible capital assets. The objective of this Statement is to enhance the comparability of financial statements among governments by establishing uniform criteria for governments to recognize and measure certain AROs, including obligations that may not have been previously reported. The requirements of this Statement are effective for reporting periods beginning after June 15, 2018. The College evaluated the requirements of GASB 83 in fiscal year 2019 and determined it did not have any material asset retirement obligations. In April 2018, GASB issued Statement No. 88, Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements (GASB 88). The objective of this Statement is to improve the information that is disclosed in notes to government financial statements related to debt, including direct borrowings and direct placements. GASB 88 clarifies which liabilities governments should include when disclosing information related to debt and requires additional disclosures related to debt including unused lines of credit, assets pledged as collateral for debt and terms specified in debt agreements related to significant events of default with finance-related consequences and significant subjective acceleration clauses. Because the College has no separate legal authority to enter into debt, the provisions of this Statement were implemented at the District level. Pending Pronouncements The following GASB pronouncements have been issued but not yet implemented by the College: In January 2017, GASB issued Statement No. 84, Fiduciary Activities. The objective of this Statement is to improve guidance regarding the identification of fiduciary activities for accounting and financial reporting purposes and how those activities should be reported. This Statement establishes criteria for identifying fiduciary activities of all state and local governments. The focus of the criteria is generally on (1) whether a government is controlling the assets of the fiduciary activity and (2) the beneficiaries with whom a fiduciary relationship exists. Separate criteria are included to identify fiduciary component units and postemployment benefit arrangements that are fiduciary activities. The requirements of this Statement are effective for reporting periods beginning after December 15, 2018.

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NORTHEAST LAKEVIEW COLLEGE (A college of the Alamo Community College District)

Notes to Financial Statements

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) In June 2017, GASB issued Statement No. 87, Leases. The objective of this Statement is to better meet the information needs of financial statement users by improving accounting and financial reporting for leases by governments. This Statement increases the usefulness of governments’ financial statements by requiring recognition of certain lease assets and liabilities for leases that previously were classified as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of the contract. It will enhance comparability of financial statements among governments by requiring lessees and lessors to report leases under a single model and requires notes to financial statements related to the timing, significance and purpose of a government’s leasing arrangements. The requirements of this Statement are effective for reporting periods beginning after December 15, 2019. In June 2018, GASB issued Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction Period. This Statement requires that interest cost incurred before the end of a construction period be recognized as an expense in the period in which the cost is incurred for financial statements prepared using the economic resources measurement focus. As a result, interest cost incurred before the end of a construction period will not be included in the historical cost of a capital asset reported in a business-type activity or enterprise fund. The requirements of this Statement are effective for reporting periods beginning after December 15, 2019. Earlier application is encouraged and the requirements of this Statement should be applied prospectively. In August 2018, GASB issued Statement No. 90, Majority Equity Interests—an amendment of GASB Statements No. 14 and No. 61. The primary objectives of this Statement are to improve the consistency and comparability of reporting a government’s majority equity interest in a legally separate organization and to improve the relevance of financial statement information for certain component units. The requirements of this Statement will improve financial reporting by providing users of financial statements with essential information related to presentation of majority equity interests in legally separate organizations. The requirements of this Statement are effective for reporting periods beginning after December 15, 2018. The requirements should be applied retroactively, except for the provisions related to (1) reporting a majority equity interest in a component unit and (2) reporting a component unit if the government acquires a 100 percent equity interest. Those provisions should be applied on a prospective basis. In May 2019, GASB issued Statement No. 91, Conduit Debt Obligations. The primary objectives of this Statement are to provide a single method of reporting conduit debt obligations by issuers and eliminate diversity in practice associated with (1) commitments extended by issuers, (2) arrangements associated with conduit debt obligations, and (3) related note disclosures. The requirements of this statement will improve financial reporting by eliminating the existing option for issuers to report conduit debt obligations as their own liabilities, thereby ending significant diversity in practice. The requirements of this statement are effective for periods beginning after December 15, 2020. Earlier application is encouraged. The College has not yet completed the process of evaluating the impact of GASB Statements Nos. 84, 87, 89, 90 and 91 on its future financial statements. 3. CASH AND CASH EQUIVALENTS Total cash and cash equivalents at August 31, 2019 and 2018 were $9,760,123 and $7,600,897, respectively. The FDIC insures all of the noninterest-bearing demand deposits. Interest-bearing deposits in excess of $250,000 are collateralized at a level between 105% and 115% in U.S. Treasuries and Government Securities held in the District’s name.

35

NORTHEAST LAKEVIEW COLLEGE (A college of the Alamo Community College District)

Notes to Financial Statements

4. CAPITAL ASSETS Capital assets activity for the year ended August 31, 2019 was as follows:

Balance Balance9/1/2018 Increases Decreases 8/31/2019

Not Depreciated:Land 5,259,089$ -$ -$ 5,259,089$ Construction in progress 262,702 959,349 - 1,222,051 Subtotal 5,521,791 959,349 - 6,481,140

Subject to Depreciation:Buildings and building improvements 117,273,693 - - 117,273,693 Other real estate improvements 16,530,898 - - 16,530,898 Total buildings and other real estate improvements 133,804,591 - - 133,804,591

Furniture, machinery and equipment 778,092 10,950 10,070 778,972 Library materials 811,283 65,699 - 876,982 Total buildings and other capital assets 135,393,966 76,649 10,070 135,460,545

Accumulated Depreciation:Buildings and building improvements 24,862,027 2,673,102 - 27,535,129 Other real estate improvements 6,315,558 750,369 - 7,065,927 Total buildings and other real estate improvements 31,177,585 3,423,471 - 34,601,056

Furniture, machinery and equipment 708,401 34,711 9,902 733,210 Library materials 441,714 60,633 - 502,347 Total accumulated depreciation 32,327,700 3,518,815 9,902 35,836,613

Net capital assets 108,588,057$ (2,482,817)$ 168$ 106,105,072$

36

NORTHEAST LAKEVIEW COLLEGE (A college of the Alamo Community College District)

Notes to Financial Statements

4. CAPITAL ASSETS (continued) Capital assets activity for the year ended August 31, 2018 was as follows:

Balance Balance9/1/2017 Increases Decreases 8/31/2018

Not Depreciated:Land 5,259,089$ -$ -$ 5,259,089$ Construction in progress - 262,702 - 262,702 Subtotal 5,259,089 262,702 - 5,521,791

Subject to Depreciation:Buildings and building improvements 117,273,693 - - 117,273,693 Other real estate improvements 16,530,898 - - 16,530,898 Total buildings and other real estate improvements 133,804,591 - - 133,804,591

Furniture, machinery and equipment 782,202 12,881 16,991 778,092 Library materials 746,387 64,896 - 811,283 Total buildings and other capital assets 135,333,180 77,777 16,991 135,393,966

Accumulated Depreciation:Buildings and building improvements 22,188,925 2,673,102 - 24,862,027 Other real estate improvements 5,565,188 750,370 - 6,315,558 Total buildings and other real estate improvements 27,754,113 3,423,472 - 31,177,585

Furniture, machinery and equipment 684,604 40,788 16,991 708,401 Library materials 376,989 64,725 - 441,714 Total accumulated depreciation 28,815,706 3,528,985 16,991 32,327,700

Net capital assets 111,776,563$ (3,188,506)$ -$ 108,588,057$

37

NORTHEAST LAKEVIEW COLLEGE (A college of the Alamo Community College District)

Notes to Financial Statements

5. NONCURRENT LIABILITIES As of August 31, 2019, noncurrent liabilities are $83,129,131 with activity for the fiscal year as follows:

As of August 31, 2018, noncurrent liabilities are $87,333,452 with activity for the fiscal year as follows:

Noncurrent liabilities include the College’s allocated portion of the District’s general obligation bonds, maintenance tax notes and combined fee revenue bonds. The District is responsible for repayment of these obligations from tuition and fee revenues and assessed property taxes. Because all employees of the College are District employees and the District has the legal obligation to fund the long-term pension and OPEB benefits of its employees, net pension expense, net OPEB expense, the net pension liability and the net OPEB liability for all of the College’s employees are recorded in the District’s financial statements. 6. DEBT Debt service requirements (in thousands) at August 31, 2019 were as follows:

Balance Balance9/1/2018 Additions Reductions 8/31/2019 Current Portion

Bonds and tax notes payableGeneral obligation bonds 78,618$ -$ 2,691$ 75,927$ 2,827$ Revenue bonds 4,231 - 550 3,681 541 Maintenance tax notes 8,520 - 795 7,725 836

Total 91,369$ -$ 4,036$ 87,333$ 4,204$

Bonds and Tax Notes Payable (in thousands)

For the YearEnding

August 31, Principal Interest Principal Interest Principal Interest Principal Interest2020 2,827$ 3,525$ 541$ 158$ 836$ 371$ 4,204$ 4,054$ 2021 2,965 3,384 567 132 881 326 4,413 3,842 2022 3,111 3,238 593 106 927 280 4,631 3,624 2023 3,264 3,085 621 78 977 230 4,862 3,393 2024 3,415 2,934 651 48 1,028 178 5,094 3,160

2025-2029 19,617 12,131 649 62 3,076 216 23,342 12,409 2030-2034 24,565 7,181 59 1 - - 24,624 7,182 2035-2037 16,163 1,417 - - - - 16,163 1,417

TOTAL 75,927$ 36,895$ 3,681$ 585$ 7,725$ 1,601$ 87,333$ 39,081$

General Obligation Bonds Revenue Bonds Maintenance Tax Notes TOTAL BONDS

38

NORTHEAST LAKEVIEW COLLEGE (A college of the Alamo Community College District)

Notes to Financial Statements

6. DEBT (continued) Debt service requirements (in thousands) at August 31, 2018 were as follows:

The allocations to the College of noncurrent liabilities, the current portion of long-term debt and debt service are based on the level of expenses included in the budget documents prepared before the funding of each bond or note, and averages 37% of the applicable current outstanding bonds and tax notes. 7. BOND AND TAX NOTES PAYABLE Bonds and tax notes payable associated with the College to be paid from District accounts for the years ended August 31, 2019 and 2018 were as follows:

For the YearEnding

August 31, Principal Interest Principal Interest Principal Interest Principal Interest2019 2,691$ 3,658$ 550$ 182$ 795$ 412$ 4,036$ 4,252$ 2020 2,826 3,525 541 158 836 371 4,203 4,054 2021 2,965 3,384 567 132 881 326 4,413 3,842 2022 3,111 3,238 593 106 927 280 4,631 3,624 2023 3,264 3,085 621 78 977 230 4,862 3,393

2024-2028 18,744 13,002 1,244 106 4,104 394 24,092 13,502 2029-2033 23,486 8,262 115 5 - - 23,601 8,267 2034-2037 21,531 2,399 - - - - 21,531 2,399

TOTAL 78,618$ 40,553$ 4,231$ 767$ 8,520$ 2,013$ 91,369$ 43,333$

General Obligation Bonds Revenue Bonds Maintenance Tax Notes TOTAL BONDS

Series Instrument Type and Purpose Amount Issued and Authorized

Current Interest Rates

Balance August 31, 2019

Balance August 31, 2018

Budgeted Expenses for

College by Board

2007

Construct, renovate, acquire and equip new and existing facilities. Dated March 15, 2007. 271,085,000$ 4.5% 37,410,000$ 37,410,000$ 85,730,315$

2007A

Construct, renovate, acquire and equip new and existing facilities. Dated July 15, 2007. 63,490,000 4.75% 5,600,000 5,600,000 37,708,222

2012

Refund certain of the District's outstanding Limited Tax Bonds Series 2007 and 2007A. Dated June 15, 2012. 74,110,000 3.5% - 5.0% 74,110,000 74,110,000 -

2016

Refund the District's outstanding Limited Tax Bonds Series 2006 and 2006A. Dated May 15, 2016. 72,065,000 3.5% - 5.0% 54,535,000 56,630,000 10,500,564

Maintenance Tax Notes (Repayment source - Ad valorem taxes)

2014

Refunding of certain maturities of the 2007 Maintenance Tax Notes. Dated January 15, 2014. 40,665,000$ 5.0% - 5.5% 19,445,000$ 24,085,000$ 1,919,574$

Combined Fee Revenue Bonds (Repayment source Pledged revenues*)

2012A

Refund certain of the District's outstanding Combined Fee Revenue bonds and to construct a parking facility. Dated March 1, 2012.** 55,800,000$ 3.0% - 5.25% 44,545,000$ 49,605,000$ 5,720,570$

Total Bonds that the College has an Allocation 599,510,000$ 235,645,000$ 247,440,000$ 141,579,245$

Allocation Percentage 37% 37%

Balance Allocated to the College at August 31, 2019 and 2018 87,333,131$ 91,369,452$

Debt service requirements at August 31, 2019 and 2018 are based on the percentage allocation as discussed above, applied to the debt service of the District.

District Balances

General Obligation Bonds (Repayment source - Ad valorem taxes)

*Pledged revenue is all revenue to the extent it may be pledged as security for debt obligations pursuant to applicable Texas law.

** Bond series 2012A included $15,875,000 in new funding for projects, $1,200,000 related to NLC. This was reflected in the District August 31, 2019 balance above.

39

NORTHEAST LAKEVIEW COLLEGE (A college of the Alamo Community College District)

Notes to Financial Statements

7. BOND AND TAX NOTES PAYABLE (continued) Bond issuances are supported by planned construction and/or renovation projects. These planned projects become capital budgeted expenses and are approved by the Board and form the basis of the allocation of capital funding and debt to Northeast Lakeview College. The portion of project expenses for each listed bond issuance that have been budgeted by the Board for the College are disclosed in the table above. As bond issuances have been paid off the layer of budget related to that bond issuance has been removed from the budgeted expenses for College by Board. 8. EMPLOYEES’ RETIREMENT PLANS The State of Texas has joint contributory retirement plans for almost all of its employees. All employees of the College must participate in either the Teacher Retirement System of Texas (TRS) or in the Optional Retirement Plan (ORP). Faculty, administrators, counselors and librarians may enroll in either TRS or ORP. Secretarial, clerical and professional employees are limited to participation in the TRS. Employees who are eligible to participate in the ORP have ninety days from the date of their employment to select the optional retirement program. Employees who previously had the opportunity to participate in ORP but declined must remain with TRS for the duration of their employment in the Texas education system. In fiscal year 2015, the District implemented the provisions of GASB Statement No. 68, Accounting and Financial Reporting for Pensions – an amendment of GASB Statement No. 27, which was subsequently amended by the release of GASB Statement No. 71, Pension Transition for Contributions Made Subsequent to the Measurement Date – an amendment of GASB Statement No. 68. The GASB does not require the provisions of this Statement to be applied down to the organizational level and as such, the net pension liability recorded at the District level as required by GASB 68 is not allocated or recorded in the financial statements of the College. For further information, see Note 10 included in the District’s fiscal year 2019 financial statements. Teacher Retirement System of Texas (TRS) – Defined Benefit Plan Plan Description: The District contributes to the TRS, a cost-sharing, multiple-employer defined benefit pension plan that has a special funding situation. TRS administers retirement and disability annuities, and death and survivor benefits to employees and beneficiaries of employees of the public school systems, colleges, universities and the State. It operates primarily under the provisions of the Texas Constitution, Article XVI, Sec. 67, and Texas Government Code, Title 8, Subtitle C. The Texas state legislature has the authority to establish and amend benefit provisions of the pension plan. TRS issues a publicly available financial report with required supplementary information which can be obtained from www.trs.state.tx.us, under the TRS Publications heading. Funding Policy: Contribution requirements are not actuarially determined, but are established and amended by the Texas legislature. The state funding policy is as follows: (1) The State constitution requires the legislature to establish a member contribution rate of not less than 6.0% of the member’s annual compensation and a state contribution rate of not less than 6.0% and not more than 10.0% of the aggregate annual compensation of all members of the system; and (2) a state statute prohibits benefit improvements or contribution reductions if, as a result of a particular action, the time required to amortize TRS’s unfunded actuarial liabilities would be increased to a period that exceeds 31 years, or if the amortization period already exceeds 31 years, the period would be increased by such action. Senate Bill 1812, effective September 1, 2013, limits the amount of the state’s contribution to 50% of eligible employees in the reporting district. State law provides for a member contribution rate of 7.7%, 7.7%, and 7.7% for fiscal years 2019, 2018 and 2017 and a State contribution rate of 6.8% for each of the fiscal years ended August 31, 2019, 2018 and 2017. In certain instances, the District was required to make all or a portion of the State’s contribution.

40

NORTHEAST LAKEVIEW COLLEGE (A college of the Alamo Community College District)

Notes to Financial Statements

8. EMPLOYEES’ RETIREMENT PLANS (continued) Optional Retirement Plan (ORP) – Defined Contribution Plan Plan Description: The State of Texas has also established an optional retirement program for institutions of higher education. Participation in ORP is in lieu of participation in TRS. The optional retirement program is a defined contribution plan that provides for the purchase of annuity contracts and operates under the provisions of the Texas Constitution, Article XVI, Sec. 67, and Texas Government Code, Title 8, Subtitle C. Funding Policy: Contribution requirements are not actuarially determined, but are established and amended by the Texas State Legislature. Since individual annuity contracts are purchased, the State has no additional or unfunded liability for this program. The combined percentage of salaries currently contributed by the College and State of Texas was 6.8% for fiscal years 2019, 2018, and 2017. Each participant contributed 6.65% for the fiscal years ended August 31, 2019, 2018 and 2017. Senate Bill 1812, effective September 1, 2013, limits the amount of the State’s contribution to 50% of eligible employees in the reporting district. The retirement expense for both plans to the State of Texas for the College was $385,232, $311,176 and $278,502 for the fiscal years ended August 31, 2019, 2018 and 2017, respectively. This amount represents the portion of expended appropriations that should have been made by the State legislature on behalf of the College. The retirement expense for the College was $851,352, $718,756, and $769,698 for the years ended August 31, 2019, 2018 and 2017, respectively, and represents the total required contributions for each year. The total payroll for all College employees was $13,554,870, $13,098,475 and $12,539,130 for fiscal years 2019, 2018 and 2017, respectively. The total payroll of College employees covered by the TRS was $10,607,451, $8,542,797 and $9,365,277, and the total payroll of College employees covered by ORP was $1,912,429, $2,027,144 and $1,953,809 for fiscal years 2019, 2018 and 2017, respectively. 9. DEFERRED COMPENSATION PROGRAM College employees may elect to defer a portion of their earnings for income tax and investment purposes pursuant to authority granted in the Texas Government Code 609.001. A total of $92,980 was contributed by 25 College employees under the Internal Revenue Code Section 403(b) Tax Sheltered Annuity (TSA) program and 7 participants contributed a total of $52,646 to a Section 457 Deferred Compensation Plan (DCP) in the fiscal year ended August 31, 2019. A total of $99,768 was contributed by 20 College employees under the Internal Revenue Code Section 403(b) Tax Sheltered Annuity (TSA) program and 7 participants contributed a total of $49,008 to a Section 457 Deferred Compensation Plan (DCP) in the fiscal year ended August 31, 2018. Neither the District nor the College contributes to either plan. The deferred compensation program is not included in the basic financial statements because the program assets are assets of the plan participants and not of the College. 10. RECEIVABLES, ACCOUNTS PAYABLE AND ACCRUED LIABILITIES Receivables at August 31, 2019 and 2018 primarily consist of tuition and fee receivables, contract and grant receivables and other receivables. The District is responsible for collection of all receivables as well as the allowance for doubtful accounts. Accounts payable and accrued liabilities at August 31, 2019 and 2018 are primarily related to operating accounts payable and construction.

41

NORTHEAST LAKEVIEW COLLEGE (A college of the Alamo Community College District)

Notes to Financial Statements

11. FUNDS HELD FOR OTHERS The College holds funds for certain students as well as student and staff organizations. These amounts are reflected in the Statements of Net Position as funds held for others in the amount of $36,781 and $45,804 as of August 31, 2019 and 2018, respectively. 12. SELF-INSURED AND RISK MANAGEMENT PLANS The College is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The buildings, structures, contents and equipment are fully insured through the purchase of commercial insurance at the District level. The District’s Workers' Compensation Self-Insurance Fund (the Fund) is administered by a third party. Through the Fund, the District self-insures workers’ compensation claims up to $400,000 per occurrence. Individual losses of over $400,000 are covered by a specific excess insurance policy up to the maximum statutory benefit per occurrence. Additionally, approximately $3,171,169 of unrestricted net position has been designated by the District to cover losses in excess of those covered by insurance and the Fund. The Fund pays the premium for the specific excess insurance policy and assumes all workers’ compensation claims and expenses not covered by the policy. The District transfers the workers’ compensation standard premium calculated for the District into the Fund. Claims and administrative expenses are paid from the Fund and the balance is reserved toward future claims. The accrued liability representing a provision for unpaid expected claims is carried at the District level. These liabilities are generally based on an actuarial valuation and the present value of unpaid expected claims. 13. HEALTH CARE AND LIFE INSURANCE BENEFITS The State of Texas pays certain health care and life insurance benefits for active employees. These benefits are provided through an insurance company whose premiums are based on benefits paid during the previous year. The State recognizes the cost of providing these benefits for active employees and retirees by expending the annual insurance premiums. The State’s contribution per eligible full-time employee or retiree was between approximately $625 and $1,223 per month for the year ended August 31, 2019 and between $622 and $1,217 per month for the year ended August 31, 2018. The cost of providing those benefits for all employees, paid by the State of Texas on behalf of the College, totaled $1,154,196 and $1,069,463 for the years ended August 31, 2019 and 2018, respectively. Payments of these benefits by the State were recognized as restricted state appropriations with an equal amount recognized as restricted benefit expenses. These payments do not flow through the cash accounts. 14. OTHER POSTEMPLOYMENT BENEFIT PLAN Through the District, the College participates in a cost-sharing, multiple employer, other postemployment benefit (OPEB) plan with a special funding situation. The Texas Employees Group Benefits Program (GBP), also referred to as the State Retiree Health Plan (SRHP), is administered by the Employees Retirement System of Texas (ERS or System). The GBP provides certain postemployment health care, life and dental insurance benefits to retired employees of participating universities, community colleges, and State agencies in accordance with Chapter 1551, Texas Insurance Code. Almost all employees may become eligible for those benefits if they reach normal retirement age while working for the College and retire with at least 10 years of service to eligible entities. Surviving spouses and dependents of these retirees are also covered. Benefit and contribution provisions of the GBP are authorized by State law and may be amended by the Texas Legislature.

42

NORTHEAST LAKEVIEW COLLEGE (A college of the Alamo Community College District)

Notes to Financial Statements

14. OTHER POSTEMPLOYMENT BENEFIT PLAN (continued) In fiscal year 2018, the District implemented the provisions of GASB Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions. The GASB does not require the provisions of this Statement to be applied down to the organizational level and as such, the net OPEB liability recorded at the District level as required by GASB 75 is not allocated or recorded in the financial statements of the College. For further information, see Note 18 included in the District’s fiscal year 2019 financial statements. 15. AD VALOREM TAX Ad valorem property tax is levied each October 1 by the District on the assessed value as of the prior January 1 for all real and business personal property located in Bexar County. The total ad valorem tax levied by the District for August 31, 2019 and 2018 was approximately $235,124,000 and $221,000,000, respectively. Ad valorem property tax is allocated to the College based upon the amount required for maintenance and operations, the College’s portion of debt service and depreciation and a proportionate share of overall results based on the College’s allocated operating budget. Taxes are due on October 1 of each year and are delinquent if not paid before February 1 of the year following the year in which imposed. On January 1 of each year, a tax lien attaches to the property to secure payment of all taxes, penalties, and interest for the previous tax year. Tax collections for the years ended August 31, 2019 and 2018 were 97.72% and 97.56%, respectively, of the current year’s original unadjusted tax levy. Allowances for uncollectible taxes are estimated and recorded at the District level. 16. INCOME TAXES The College is exempt from income taxes under Internal Revenue Code Section 115, Income of States, Municipalities, Etc., although unrelated business income may be subject to income taxes under Internal Revenue Code Section 511(a)(2)(B), Imposition of Tax on Unrelated Business Income of Charitable, Etc. Organizations. The College had no unrelated business income tax liability for the years ended August 31, 2019 and 2018. 17. OTHER OPERATING REVENUES Other operating revenues (Exhibit 2 and Schedule A) include rental income, paper recycling revenue, revenue from various fundraising activities, and other revenues not applicable to any other revenue category. 18. COMMITMENTS AND CONTINGENCIES As of August 31, 2019, various lawsuits and claims involving the College were pending. While the ultimate liability with respect to litigation and other claims asserted against the College cannot be reasonably estimated at this time, this liability, to the extent not provided for by insurance or otherwise, is not likely to have a material effect on the College. The College has entered into several contracts for construction and various other renovation projects. As of August 31, 2019 and 2018, the College was committed for approximately $32,000 and $280,000, respectively.

43

44

Supplementary Information

45

NORTHEAST LAKEVIEW COLLEGE (A college of the Alamo Community College District)

Schedule A

Schedule of Operating Revenues For the Year Ended August 31, 2019

With Memorandum Totals for the Year Ended August 31, 2018

TotalEducational Auxiliary FY19 FY18

Unrestricted Restricted Activities Enterprises Total TotalOPERATING REVENUES:

TuitionState-funded courses

In-District resident tuition 6,165,778$ -$ 6,165,778$ -$ 6,165,778$ 5,550,995$ Out-of-District resident tuition 5,801,108 - 5,801,108 - 5,801,108 4,114,097

Non-resident tuition 839,103 - 839,103 - 839,103 284,565

TPEG - credit set aside * 627,079 - 627,079 - 627,079 430,896 Total tuition 13,433,068 - 13,433,068 - 13,433,068 10,380,553

Fees

Other 319,396 - 319,396 - 319,396 161,716 Total fees 319,396 - 319,396 - 319,396 161,716

Total tuition and fees 13,752,464 - 13,752,464 - 13,752,464 10,542,269

Scholarship allowances and discountsInstitutional allowances and scholarships (427,559) - (427,559) - (427,559) (254,959) Remissions and exemptions - state (777,452) - (777,452) - (777,452) (394,753) Remissions and exemptions - local (1,979,405) - (1,979,405) - (1,979,405) (864,818) Federal grants to students (3,016,443) (3,016,443) - (3,016,443) (1,623,952) TPEG awards (66,356) (66,356) - (66,356) (138,853) State grants to students (131,490) (131,490) - (131,490) (72,496)

Total scholarship allowances and discounts (3,184,416) (3,214,289) (6,398,705) - (6,398,705) (3,349,831) Total net tuition and fees 10,568,048 (3,214,289) 7,353,759 - 7,353,759 7,192,438

Other operating revenuesFederal grants and contracts - 93,623 93,623 - 93,623 73,916

Non-governmental grants and contracts - 2,010 2,010 - 2,010 - Other operating revenues 214,685 - 214,685 - 214,685 76,266

Total other operating revenues 214,685 95,633 310,318 - 310,318 150,182

Sales and services of auxiliary enterprises Bookstore commission - - - 73,088 73,088 117,448 Vending machines and copiers - - - 15,364 15,364 10,828

Campus access fees and fines - - - 237,554 237,554 203,322

Other - - - 17,800 17,800 13,709 Total sales and services of auxiliary enterprises - - - 343,806 343,806 345,307

Total operating revenues 10,782,733$ (3,118,656)$ 7,664,077$ 343,806$ 8,007,883$ 7,687,927$ (Exhibit 2) (Exhibit 2)

*In accordance with Education Code 56.033, $627,079 and $430,896 of tuition was set aside for the Texas Public Education Grant for the years ended August 31, 2019 and 2018.

46

NORTHEAST LAKEVIEW COLLEGE (A college of the Alamo Community College District)

Schedule B

Schedule of Operating Expenses by Object For the Year Ended August 31, 2019

With Memorandum Totals for the Year Ended August 31, 2018

Salaries Benefits Other FY19 FY18and Wages State Local Expenses Total Total

OPERATING EXPENSES:Unrestricted - educational activities

Instruction 6,745,085$ -$ 1,412,173$ 1,322,576$ 9,479,834$ 9,328,914$ Academic support 1,841,691 - 432,464 489,070 2,763,225 2,877,784 Student services 2,343,633 - 589,500 403,795 3,336,928 3,262,143 Institutional support 1,866,672 - 170,742 537,795 2,575,209 2,547,174 Operation and maintenance of plant 505,503 - 235,844 2,586,525 3,327,872 3,646,134

Total unrestricted educational activities 13,302,584 - 2,840,723 5,339,761 21,483,068 21,662,149

Restricted - educational activities

Instruction - 749,464 - - 749,464 655,793 Academic support 42,102 226,128 8,027 43,494 319,751 304,809 Student services 209,027 313,398 - 10,971 533,396 394,086 Institutional support 677 250,438 54 8 251,177 215,062 Operation and maintenance of plant - - - 395,958 395,958 320,204 Scholarships and fellowships - - - 3,635,618 3,635,618 2,447,978

Total restricted educational activities 251,806 1,539,428 8,081 4,086,049 5,885,364 4,337,932

Total educational activities 13,554,390 1,539,428 2,848,804 9,425,810 27,368,432 26,000,081

Auxiliary enterprises 480 - 204 385 1,069 22,881

Depreciation expense - buildings - - - 3,423,471 3,423,471 3,423,472 Depreciation expense - equipment - - - 95,344 95,344 105,513

Total operating expenses 13,554,870$ 1,539,428$ 2,849,008$ 12,945,010$ 30,888,316$ 29,551,947$

(Exhibit 2) (Exhibit 2)

47

NORTHEAST LAKEVIEW COLLEGE (A college of the Alamo Community College District)

Schedule C

Schedule of Non-Operating Revenues and Expenses For the Year Ended August 31, 2019

With Memorandum Totals for the Year Ended August 31, 2018

TotalEducational FY19 FY18

Unrestricted Restricted Activities Total TotalNON-OPERATING REVENUES:

State appropriationsEducation and general State support 4,621,304$ -$ 4,621,304$ 4,621,304$ 4,621,407$ State group insurance - 1,154,196 1,154,196 1,154,196 1,069,463 State retirement match - 385,232 385,232 385,232 311,176

Ad valorem taxes Taxes for maintenance and operations 11,425,968 - 11,425,968 11,425,968 11,796,386 Taxes for maintenance notes 618,960 - 618,960 618,960 719,857 Taxes for general obligation bonds - 3,779,068 3,779,068 3,779,068 3,819,545

Federal revenue, non-operating 6,859,561 6,859,561 6,859,561 4,229,655 State revenue, non-operating 7,374 7,374 7,374 26,385 Gifts 500 19,819 20,319 20,319 - Investment income - 8,763 8,763 8,763 3,889 Total non-operating revenues 16,666,732 12,214,013 28,880,745 28,880,745 26,597,763

NON-OPERATING EXPENSES:Interest on capital related debt - (2,810,394) (2,810,394) (2,810,394) (2,950,056) Interest on capital related debt-MTN (373,476) - (373,476) (373,476) (534,126) Loss on disposal of capital assets - (168) (168) (168) - Total non-operating expenses (373,476) (2,810,562) (3,184,038) (3,184,038) (3,484,182)

Net non-operating revenues 16,293,256$ 9,403,451$ 25,696,707$ 25,696,707$ 23,113,581$

(Exhibit 2) (Exhibit 2)

48

NORTHEAST LAKEVIEW COLLEGE (A college of the Alamo Community College District)

Schedule D

Schedule of Net Position by Source and Availability For the Year Ended August 31, 2019

With Memorandum Totals for the Year Ended August 31, 2018

Detail by Source

Capital Assets

Restricted Net of DepreciationUnrestricted Expendable & Related Debt Total Yes No

Current:

Unrestricted 2,628,476$ -$ -$ 2,628,476$ 2,628,476$ -$ Restricted - 802,376 - 802,376 - 802,376

Net investment in capital assets - - 21,003,024 21,003,024 - 21,003,024

Total net position, August 31, 2019 2,628,476 802,376 21,003,024 24,433,876 2,628,476 21,805,400

(Exhibit 1)

Total net position, August 31, 2018 2,515,015 350,264 18,752,323 21,617,602 2,515,015 19,102,587

(Exhibit 1)

Net increase in net position 113,461$ 452,112$ 2,250,701$ 2,816,274$ 113,461$ 2,702,813$

(Exhibit 2)

Available for Current Operations

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50

Annual Financial Report Published and distributed by the Finance and Fiscal Services Department

2222 N. Alamo Street, San Antonio, Texas 78215-1195 http://www.alamo.edu

(210)485-0301

ALAMO COLLEGES FOUNDATION, INC.

(A Texas Nonprofit Foundation &

Component Unit of the Alamo Colleges District)

AUDITED FINANCIAL STATEMENTS

Years Ended

December 31, 2018 and 2017

ALAMO COLLEGES FOUNDATION, INC. (A Texas nonprofit Foundation & Component unit of the Alamo Colleges District) 

Contents December 31, 2018 and 2017 

Audited Financial Statements:  Page 

Report of Independent Certified Public Accountants ................................................... 1 

Statements of Financial Position .................................................................................. 3 

Statements of Activities ................................................................................................ 4 

Statements of Cash Flows ............................................................................................. 5 

Notes to Financial Statements ...................................................................................... 6 

GT.COM U.S. member firm of Grant Thornton International Ltd.

GRANT THORNTON LLP

1717 Main Street Suite 1800

Dallas, Texas 75201

D +1 214 561 2300

F +1 214 561 2370

Board of Directors

Alamo Colleges Foundation, Inc.

Report on the financial statements

We have audited the accompanying financial statements of Alamo Colleges

Foundation, Inc. (a nonprofit organization) (the “Foundation”), which comprise

the statement of financial position as of December 31, 2018, and the related

statements of activities and cash flows for the year then ended, and the related

notes to the financial statements.

Management’s responsibility for the financial statements Management is responsible for the preparation and fair presentation of these

financial statements in accordance with accounting principles generally

accepted in the United States of America; this includes the design,

implementation, and maintenance of internal control relevant to the

preparation and fair presentation of financial statements that are free from

material misstatement, whether due to fraud or error.

Auditor’s responsibility Our responsibility is to express an opinion on these financial statements based

on our audit. We conducted our audit in accordance with auditing standards

generally accepted in the United States of America. Those standards require

that we plan and perform the audit to obtain reasonable assurance about

whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the

amounts and disclosures in the financial statements. The procedures selected

depend on the auditor’s judgment, including the assessment of the risks of

material misstatement of the financial statements, whether due to fraud or

error. In making those risk assessments, the auditor considers internal control

relevant to the Foundation’s preparation and fair presentation of the financial

statements in order to design audit procedures that are appropriate in the

circumstances, but not for the purpose of expressing an opinion on the

effectiveness of the Foundation’s internal control. Accordingly, we express no

such opinion. An audit also includes evaluating the appropriateness of

accounting policies used and the reasonableness of significant accounting

estimates made by management, as well as evaluating the overall presentation

of the financial statements.

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

1

We believe that the audit evidence we have obtained is sufficient and

appropriate to provide a basis for our audit opinion.

Opinion In our opinion, the financial statements referred to above present fairly, in all

material respects, the financial position of Alamo Colleges Foundation, Inc. as

of December 31, 2018, and the changes in its net assets and its cash flows for

the year then ended in accordance with accounting principles generally

accepted in the United States of America.

Other matters The financial statements of Alamo Colleges Foundation, Inc. as of and for the

year ended December 31, 2017 were audited by other auditors. Those auditors

expressed an unmodified opinion on those 2017 financial statements in their

report dated July 9, 2018.

Dallas, Texas

August 8, 2019

2

ALAMO COLLEGES FOUNDATION, INC. (A Texas nonprofit Foundation & component unit of the Alamo Colleges District) 

Statements of Financial Position December 31, 2018 and 2017 

The accompanying notes are an integral part of these financial statements. 

2018 2017

ASSETS

Cash and cash equivalents 1,765,842$    2,134,263$   

Contributions receivable, net of allowance and discounts 362,212         381,730   

Investments:

Fixed income securities 5,323,425      4,414,646     

Mutual funds/exchange‐traded funds 16,779,216   17,527,335   

Marketable securities 2,017,724      2,550,332     

TOTAL ASSETS 26,248,419$  27,008,306$ 

LIABILITIES AND NET ASSETS

Accounts payable and accrued liabilities 7,321$           13,491$        

Due to affiliates 45,827    35,335     

TOTAL LIABILITIES 53,148    48,826     

NET ASSETS

Without donor restrictions 108,809         92,707     

With donor restrictions 26,086,462   26,866,773   

TOTAL NET ASSETS 26,195,271   26,959,480   

TOTAL LIABILITIES AND NET ASSETS 26,248,419$  27,008,306$ 

December 31

3

 ALAMO COLLEGES FOUNDATION, INC. 

(A Texas nonprofit Foundation & component unit of the Alamo Colleges District) Statements of Activities 

December 31, 2018 and 2017  

The accompanying notes are an integral part of these financial statements.  

Net Assets Net Assets

without Donor with Donor

Restrictions Restrictions Total

Net Assets at January 1, 2017 2,196$            24,623,844$     24,626,040$    

Support and revenue:

Contributions 94,497            2,271,244         2,365,741        

In‐kind revenue 490,090          ‐                   490,090           

Interest and dividend income ‐                  370,630            370,630           

Gain on investments ‐                  2,510,880         2,510,880        

Net assets released from restrictions 2,867,734       (2,867,734)       ‐                   

Total revenue 3,452,321       2,285,020         5,737,341        

Expenses:

Program support and scholarships 2,973,371       ‐                   2,973,371        

General and administrative 305,203          ‐                   305,203           

Fundraising 125,327          ‐                   125,327           

Total expenses 3,403,901       ‐                   3,403,901        

Increase in net assets 48,420            2,285,020         2,333,440        

Designated transfers 42,091            (42,091)            ‐                   

Net Assets at December 31, 2017 92,707            26,866,773       26,959,480      

Support and revenue:

Contributions 83,575            3,237,218         3,320,793        

In‐kind revenue 849,969          ‐                   849,969           

Interest and dividend income ‐                  354,505            354,505           

Loss on investments ‐                  (1,633,070)       (1,633,070)       

Net assets released from restrictions 2,760,073       (2,760,073)       ‐                   

Total revenue 3,693,617       (801,420)          2,892,197        

Expenses:

Program support and scholarships 2,783,823       ‐                   2,783,823        

General and administrative 623,826          ‐                   623,826           

Fundraising 248,757          ‐                   248,757           

Total expenses 3,656,406       ‐                   3,656,406        

Increase (decrease) in net assets 37,211            (801,420)          (764,209)          

Designated transfers (21,109)           21,109              ‐                   

Net Assets at December 31, 2018 108,809$        26,086,462$     26,195,271$    

4

ALAMO COLLEGES FOUNDATION, INC. (A Texas nonprofit Foundation & component unit of the Alamo Colleges District) 

Statements of Cash Flows December 31, 2018 and 2017 

The accompanying notes are an integral part of these financial statements. 

2018 2017

CASH FLOWS FROM OPERATING ACTIVITIES:

(Decrease) Increase in net assets (764,209)$     2,333,440$  

Adjustments to reconcile (decrease) increase in net assets

To net cash provided by (used in) operating activities:

Contributions restricted for endowments (825,044)    (662,614)   

Net loss/(gain) on investments 1,633,070   (2,510,880)   

Change in operating assets and liabilities

Contributions receivable 19,518   589,340    

Accounts payable and accrued liabilities (6,170)    10,169  

Due to affiliate 10,492   13,375  

Net cash provided by (used in) operating activities 67,657   (227,170)   

CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from investment sales 3,213,306     1,474,572    

Purchases of investments (4,474,428) (2,075,528)   

Net cash used in investing activities (1,261,122)    (600,956)   

CASH FLOWS FROM FINANCING ACTIVITIES: 

Contributions restricted for endowments 825,044     662,614    

DECREASE IN CASH AND CASH EQUIVALENTS (368,421)    (165,512)   

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 2,134,263     2,299,775    

CASH AND CASH EQUIVALENTS, END OF YEAR 1,765,842$   2,134,263$  

December 31

5

ALAMO COLLEGES FOUNDATION, INC. (A Texas nonprofit Foundation & component unit of the Alamo Colleges District) 

Notes to Financial Statements December 31, 2018 and 2017 

Note 1 – Organization 

The Alamo Colleges Foundation, Inc. (the “Foundation”) was organized in the State of Texas in 

1985  to  function  as  a  nonprofit  foundation.    The  purposes  for  which  the  Foundation  was 

organized  are  (1)  to maintain,  develop,  increase  and  extend  the  facilities  and  services  of  the 

Alamo Colleges District  (the “District”)  ;  (2) to provide broad educational opportunities to the 

District’s  students,  staff,  faculty  and  the  residents  of  the  geographical  area  that  the    District 

serves;  (3)  to  solicit  and  receive  by  gift,  grant,  devise,  or  otherwise,  property,  both  real  and 

personal, and to manage and administer the same; and (4) to make contributions, grants, gifts 

and transfers of property to or  for the benefit of  the District, or to the benefit of  tax‐exempt 

organizations identified and associated with the District. 

In  accordance  with  Governmental Accounting Standards  Board  (GASB)  Statement  No.  39,

Determining Whether  Certain Organizations  Are  Component Units  – an  Amendment  of  GASB 

Statement No. 14, the Foundation is considered to be a component unit of the Alamo Colleges 

District because of the nature and significance of its relationship with the District.  The economic

resources received or held by the Foundation are almost entirely for the direct benefit of the 

District; the District is entitled to, or can otherwise access, a majority of these resources; and the 

resources received or held by the Foundation are significant to the District. 

Note 2 – Summary of Significant Accounting Policies 

The financial statements are prepared on the accrual basis of accounting in accordance with U.S. 

generally  accepted  accounting  principles  (U.S.  GAAP)  under  Financial  Accounting  Standards 

Board (FASB) Accounting Standards Codification Topic 958, Presentation of Financial Statements 

of Not‐for‐Profit Organizations.  Under FASB Accounting Standards Update (ASU) 2016‐14, the

Foundation’s net assets, support and revenues and gains and losses are classified based on the 

existence or absence of donor‐imposed restrictions.  Accordingly, net assets of the Foundation 

are classified and reported as follows:  

Net assets without donor restrictions – These are net assets that are not subject to donor‐

imposed restrictions and may be used for any operating purpose of the Foundation.  The

Foundation’s board may designate assets without restrictions for specific purposes from

time to time.

Net  assets  with  donor  restrictions  –  These  are  net  assets  that  are  subject  to  donor‐

imposed stipulations that require the passage of time and/or the occurrence of a specific

event,  for  them  to be used.   When a donor  restriction expires, net assets with donor

restriction are  reclassified  to net  assets without donor  restriction and  reported  in  the

statement of activities as net assets released from restriction.

6

ALAMO COLLEGES FOUNDATION, INC. (A Texas nonprofit Foundation & component unit of the Alamo Colleges District) 

Notes to Financial Statements December 31, 2018 and 2017 

Note 2 – Summary of Significant Accounting Policies, continued 

Still, other net assets are required to be maintained in perpetuity, with only the income used for 

operating activities, due to donor‐imposed restrictions. 

In addition, the Foundation is required by FASB ASC Topic 958‐205 to present a statement of cash 

flows in its separately issued financial statements. 

Cash and cash equivalents 

The  Foundation  considers  all  highly  liquid  financial  instruments  purchased  with  an  original 

maturity of three months or less to be cash equivalents.  The Foundation maintains cash and cash 

equivalents at financial institutions, which at times may not be federally insured or may exceed 

federally insured limits.   The Foundation has not experienced any losses in such accounts and 

believes it is not exposed to any significant credit risks on such accounts. 

Investments 

Investments in marketable securities and mutual funds with readily determinable fair values and 

all investments in debt securities are reported at their fair values in the statements of financial 

position.  Realized and unrealized gains and losses are reported in the statements of activities as 

changes  in net assets without donor  restrictions, unless  restricted by donor or  law.   Donated

marketable securities are recorded as contributions at their estimated fair value at the date of 

the donation.  Investment return is presented net of investment fees.  

The investments of the Foundation are managed under agreement with Morgan Stanley Smith 

Barney LLC  in a manner  consistent with  the  investment goals and policies established by  the 

Board of Directors of the Foundation. 

Under the laws of the State of Texas, the Board of Directors may appropriate for expenditure, for 

the uses and purposes for which the endowment was established, a prudent rate of spending 

considering the duration and preservation of the endowment.  The Board of Directors determines 

the amount of such appropriation annually.  The aggregate accumulated unallocated gains and 

losses on donor‐restricted endowment net assets balances are included in net assets with donor 

restrictions in the financial statements. 

Contributions receivable 

Contributions  received  are  recorded  as  with  donor  restriction  and without  donor  restriction 

depending on the existence and/or nature of any donor restrictions.  Contributions receivable 

are  amounts  recorded  for  unconditional  or  conditional  promises  to  give  by  third  parties. 

Unconditional promises to give are recorded at net realizable value if expected to be collected in 

one year.  Amounts that are expected to be collected in future years are discounted to estimate 

the present value of future cash flows, if material.   

7

ALAMO COLLEGES FOUNDATION, INC. (A Texas nonprofit Foundation & component unit of the Alamo Colleges District) 

Notes to Financial Statements December 31, 2018 and 2017 

Note 2 – Summary of Significant Accounting Policies, continued 

Conditional  promises  to  give  are  recorded  as  refundable  advances  when  received,  and  are 

recognized as revenues when the conditions have been met. 

If contributions receivable become doubtful of collection, allowances are made to the extent the 

amounts are determined to be doubtful and are charged to expense.  If doubtful amounts are 

subsequently  determined  to  be  uncollectible,  they  are  written  off  against  allowances  in  the 

period determined.  Contributions are recorded when received in cash as with donor restriction 

and  without  donor  restriction  support,  depending  on  the  existence  and/or  nature  of  donor 

restrictions.  When a donor restriction expires (that is, when a stipulated time restriction ends or 

purpose  restriction  is  accomplished),  net  assets with  donor  restriction  are  reclassified  to  net 

assets without donor restriction reported in the statements of activities as net assets released 

from restrictions.  Contributions of assets other than cash are recorded at their estimated fair 

value.  The Foundation considers contributions receivable to be fully collectible. 

Fixed assets 

The Foundation operates from facilities provided by the District and does not own any buildings, 

equipment or other capital assets.  See Note 9 for an estimated amount of in‐kind contributions 

provided by the District that includes an estimate of donated rent.  Donated rents are reported 

in the financial statements as in‐kind revenue under net assets without donor restrictions. 

Presentation of expenses 

The cost of providing the various programs and activities of the Foundation has been summarized 

on a functional basis in the accompanying statement of activities. 

Program  Support  and  Scholarships  ‐  consists  of  scholarships  and  program  support

payments made to the District for tuition and books on behalf of specified students, staff

and  faculty of  the District  and  the  residents of  the geographical  area  that  the District

serves; and to maintain, develop,  increase and extend the facilities and services of the

District.

General and Administrative ‐ consists of general supporting services that are necessary

for the Foundation’s daily operations and coordination of program activities and includes

salaries and benefits related to administrative personnel.

Fundraising  ‐  activities  are  directed  at  soliciting  and  receiving  funds,  gifts,  grants  and

property  to  enable  the  Foundation  to  fulfill  its  purpose.    It  also  includes  salaries  and

benefits paid to fundraising personnel.

8

ALAMO COLLEGES FOUNDATION, INC. (A Texas nonprofit Foundation & component unit of the Alamo Colleges District) 

Notes to Financial Statements December 31, 2018 and 2017 

Note 2 – Summary of Significant Accounting Policies, continued 

Income taxes 

The Foundation is exempt from federal income tax under Section 501(a) of the Internal Revenue 

Code  of  1986,  as  amended,  as  an  organization  described  in  Section  501(c)(3)  of  the  Code.  

However,  income generated  from activities unrelated  to  the Foundation’s exempt purpose  is 

subject to tax under Section 511 of the Code.   The Foundation did not conduct any unrelated 

business activities in the current fiscal year.  Therefore, the Foundation made no provision for 

federal  income taxes  in the accompanying financial statements.   Accordingly, contributions to 

the Foundation are tax deductible within the limitations prescribed by the Code.  The Foundation 

has also been classified as a publicly supported organization which is not a private foundation 

under Section 509(a) of the Code.  The Foundation believes that it has appropriate support for 

any tax positions taken, and as such, does not have any uncertain tax positions that are material 

to the financial statements.   

Donated materials, services and facilities 

The salaries of certain Foundation employees were donated by the Alamo Colleges District.  The 

District also provides office space and equipment at no cost to the Foundation.   The value of 

these contributed services is provided in Note 9 and is reported in the financial statements as   

in‐kind revenue under net assets without donor restriction. 

Revenue recognition 

The  Foundation  records  contributions  at  fair  value  when  an  unconditional  commitment  is 

received from the donor.  Contributions that are restricted by the donor and are to be used in 

future periods are reported as an increase in net assets with donor restrictions in the reporting 

period in which the contribution is recognized.  When a restriction expires, net assets with donor 

restrictions are reclassified to net assets without donor restriction and reported in the statement 

of  activities  as  net  assets  released  from  restrictions.    Contributions  that  are  restricted  in 

perpetuity by the donor are recorded as net assets with donor restrictions.  In accordance with 

donor restrictions, income earned from net assets with donor restrictions are recorded as net 

assets with donor restrictions until such income is released from restrictions. 

Use of estimates 

Management  uses  estimates  and  assumptions  in  preparing  the  financial  statements.    Those 

estimates  and  assumptions  affect  the  reported  amounts  of  assets,  liabilities,  revenues  and 

expenses.  Actual results could differ from those estimates.  Estimates that have the most impact 

on financial position and results of operations primarily relate to the collectability and present 

value of contributions receivable, the fair value of investments, and the allocation of expenses 

among functional areas. 

9

ALAMO COLLEGES FOUNDATION, INC. (A Texas nonprofit Foundation & component unit of the Alamo Colleges District) 

Notes to Financial Statements December 31, 2018 and 2017 

Note 2 – Summary of Significant Accounting Policies, continued 

New Pronouncements   

In February 2016, the Financial Accounting Standard Board (FASB) issued Accounting Standard 

Update  (ASU)  2016‐02,  Leases  (Topic  842).  Under  ASU  2016‐02,  lessees  will  be  required  to 

recognize  the  following  for  all  leases  (with  the  exception  of  short‐term  leases)  at  the 

commencement date: A  lease  liability, which  is a  lessee‘s obligation  to make  lease payments 

arising from a lease, measured on a discounted basis; and a right‐of‐use asset, which is an asset 

that represents the lessee’s right to use, or control the use of, a specified asset for the lease term.  

This  ASU  requires  a modified  retrospective  transition  approach, which  includes  a  number  of 

optional  practical  expedients,  described  in  ASU  2016‐02, which may  be  applied.    The  ASU  is 

effective for fiscal years beginning after December 15, 2019.  The impact of the new standard has 

not  been  determined,  however  it  is  expected  that  there  will  not  be  an  increase  to  the 

Foundation’s assets and liabilities.  

In August 2016, the FASB issued ASU No. 2016‐14, Not‐for‐Profit Entities (Topic 958): Presentation 

of Financial Statements for Not‐for‐Profit entities. ASU No. 2016‐14 changes the presentation and 

disclosure  requirements  to  provide  qualitative  and  quantitative data  intended to  improve 

financial reporting for not‐for‐profit entities.  The required changes are outlined below: 

Net assets presentation now presented in two categories – net assets without donor

restriction and net assets with donor restrictions;

Presentation of investment income net of investment expenses;

Presentation of expenses by both natural and functional classification;

Disclosure of liquidity and availability of resources;

Presentation of operating cash flows either direct or indirect method; permits the

use of direct method without reconciliation of change in net assets to net cash flows

from operating activities.

In  accordance  with  ASU  No.  2016‐14,  the  Foundation  has  adjusted  the  presentation  of  the 

financial statements and applied the ASU retrospectively to all periods presented. 

The FASB has issued various new or updates to existing accounting guidance in addition to the 

ASU(s)  listed above.   The Foundation has considered  the new pronouncements and does not 

believe that any other new or modified principles will have a material impact on the Foundation’s 

reported financial position or operations in the near future.   

10

ALAMO COLLEGES FOUNDATION, INC. (A Texas nonprofit Foundation & component unit of the Alamo Colleges District) 

Notes to Financial Statements December 31, 2018 and 2017 

Note 3 – Liquidity 

The Foundation maintains a liquid cash balance in checking accounts in an amount necessary to 

meet anticipated expenditures for at  least the next 30 days.   Cash in excess of this amount is 

invested in short‐term investments.  The Foundation reconciles the balance of financial assets 

subject to donor restrictions monthly.  Investments are identified and monitored separately as 

part of the Foundation’s monthly financial reporting procedures.  

The Foundation’s financial assets available within one year of the statement of financial 

position date for general expenditures as of December 31, 2018 are as follows: 

Note 4 – Contributions Receivable 

The  Foundation  reports  pledges  receivable  expected  to  be  collected  within  one  year  at  net 

realizable value. Pledges expected  to be collected  in  future years are  initially  reported at  fair 

value determined using the discounted present value of future contributions. The Foundation 

provides  an  allowance  for  doubtful  collections, which  is  based upon  a  review of  outstanding 

pledge  receivables, historical  collection  information and existing economic  conditions.  Pledge 

receivables are considered past due if they are not received by their payment instrument due 

date.  Delinquent  pledges  are  written  off  based  on  individual  credit  evaluation  and  specific 

circumstances of the donor.  

2018

Financial assets, at year end 26,248,419$ 

Less those unavailable for general expenditure within one year, due to:

Endowments invested in perpetuity (18,426,577)  

Subject to appropriation and donor restrictions (994,645)       

Restricted by donor with time or purpose restrictions (1,354,886)    

Financial assets available to meet cash needs for

 general expenditures within one year 5,472,311$   

11

ALAMO COLLEGES FOUNDATION, INC. (A Texas nonprofit Foundation & component unit of the Alamo Colleges District) 

Notes to Financial Statements December 31, 2018 and 2017 

Note 4 – Contributions Receivable, continued 

Total contributions receivable at December 31, 2018 and 2017 were as follows: 

The  discount  rates  used  in  discounting  contributions  receivable  ranged  between  2.48%  and 

2.63% as of December 31, 2018. The discount rates used in discounting contributions receivable 

ranged between 1.76% and 2.09% as of December 31, 2017.  

Note 5 – Investments 

The composition of the Foundation’s investments as of December 31, 2018 and 2017 is as follows: 

Net investment income for the years ended December 31, 2018 and 2017 is comprised of the 

following: 

The  Foundation  elects  to  net  investment  expenses  with  earnings  from  investments.    Total 

investment expenses in 2018 and 2017 were $117,301 and $102,840, respectively. 

2018 2017

Promises to give expected to be collected in:

Less than one year 286,320$  326,359$ 

One to five years 95,000      56,370     

381,320   382,729   

Less discount on promises to give (3,100)       (999)         

Less allowance for uncollectible accounts (16,008)     ‐           

Net contributions receivable 362,212$  381,730$ 

Type of Security Cost Fair Value Cost Fair Value

Fixed income securities 5,310,377$      5,323,425$      4,370,834$      4,414,646$     

Mutual funds/exchange‐traded funds 15,845,246    16,779,216    14,959,400  17,527,335   

Marketable securities 1,727,706   2,017,724   1,891,758   2,550,332  

Total 22,883,329$    24,120,365$    21,221,992$    24,492,313$   

2018 2017

2018 2017

Interest and dividend income 354,505$         370,630$        

Net (loss)/gain on investments (1,633,070)       2,510,880  

Total (1,278,565)$     2,881,510$     

12

ALAMO COLLEGES FOUNDATION, INC. (A Texas nonprofit Foundation & component unit of the Alamo Colleges District) 

Notes to Financial Statements December 31, 2018 and 2017 

Note 5 – Investments, continued 

The Foundation  invests  in various  investment  instruments which are exposed  to various  risks 

such as  interest rate, market and credit risks.   Due to the  level of risk associated with certain 

investment  securities,  changes  in  the  value  of  investment  securities  may  have  occurred 

subsequent to year end that could materially affect the amounts reported in the statements of 

financial position.  

Note 6 – Functional Expenses 

The cost of providing the various programs and activities of the Foundation has been summarized 

on  a  functional  basis  in  the  accompanying  statements  of  activities.    Functional  expenses 

categorized by program support and scholarships, general and administrative and  fundraising 

costs for the years ended December 31, 2018 are as follows: 

Functional  expenses  categorized  by  program  support  and  scholarships,  general  and 

administrative and fundraising costs for the years ended December 31, 2017 are as follows: 

Program 

Support and 

Scholarships

General and 

Administrative Fundraising Total

Year ended December 31, 2018:

Scholarships and educational support 2,783,823$    ‐$ ‐$               2,783,823$   

Salaries and benefits ‐                 513,028            230,131         743,159        

Rent ‐                 47,029              ‐                 47,029          

Professional services ‐                 20,795              ‐                 20,795          

Professional development, fees and subscriptions ‐                 1,705                ‐                 1,705            

Other ‐                 41,269              18,626           59,895          

             Total 2,783,823$    623,826$          248,757$       3,656,406$   

Program 

Support and 

Scholarships

General and 

Administrative Fundraising Total

Year ended December 31, 2017:

Scholarships and educational support 2,889,319$    ‐$ ‐$               2,889,319$   

Salaries and benefits 79,023           208,028            115,791         402,842        

Rent ‐  61,612              ‐                 61,612          

Professional services ‐  20,105              ‐                 20,105          

Professional development, fees and subscriptions ‐                 2,219                ‐                 2,219            

Other 5,029             13,239              9,536             27,804          

             Total 2,973,371$    305,203$          125,327$       3,403,901$   

13

ALAMO COLLEGES FOUNDATION, INC. (A Texas nonprofit Foundation & component unit of the Alamo Colleges District) 

Notes to Financial Statements December 31, 2018 and 2017 

Note 7 – Endowment Net Assets 

The  Foundation’s  endowment  consists  of  181  individual  funds  established  for  a  variety  of 

purposes, including both donor‐restricted endowment funds and funds designated by the Board 

of Directors to function as endowments.  Net assets associated with endowment funds, including 

funds  designated  by  the  Board  of  Directors  to  function  as  endowments,  are  classified  and 

reported based on the existence or absence of donor‐imposed restrictions. 

The  Board  of  Directors  of  the  Foundation  has  interpreted  the  Texas  Uniform  Prudent 

Management Institutional Funds Act of 2007 (the Act) as requiring the preservation of the fair 

value of  the original gift as of  the gift date of  the donor‐restricted endowment  funds, absent 

explicit donor stipulations to the contrary.   

As a result of this interpretation, the Foundation classifies as net assets with donor restrictions 

(a) the  original  value  of  gifts  donated,  (b)  the  original  value  of  subsequent  gifts,  and  (c)

accumulations made in accordance with the direction of the applicable donor gift instrument at

the time the accumulation is added to the fund.

The donor‐restricted  endowment  fund  is  classified  as  net  assets with  donor  restrictions  until 

those amounts are appropriated for expenditure by the Foundation in a manner consistent with 

the standard of prudence prescribed by the Act. 

In  accordance  with  the  Act,  the  Foundation  considers  the  following  factors  in  making  a 

determination to appropriate or accumulate donor‐restricted endowment funds: 

1. General economic conditions

2. The possible effects of inflation and deflation

3. The expected tax consequences, if any, of investment decisions or strategies

4. The  role  that each  investment or course of action plays within  the overall  investment

portfolio of the Foundation

5. The expected total return from income and the appreciation of investments

6. Other resources of the Foundation

7. The needs of the Foundation and the fund to make distributions and to preserve capital

8. An asset's special relationship or special value, if any, to the charitable purposes of the

Foundation

Realized  and  unrealized  investment  gains/losses  are  recorded  as  net  assets  with  donor 

restrictions. 

14

ALAMO COLLEGES FOUNDATION, INC. (A Texas nonprofit Foundation & component unit of the Alamo Colleges District) 

Notes to Financial Statements December 31, 2018 and 2017 

Note 7 – Endowment Net Assets, continued 

Endowment net assets and classifications of  related unappropriated  income at December 31, 

2018 and 2017 are as follows:  

The  changes  in  endowment  net  assets  and  related  income  classification  for  the  year  ended 

December 31, 2018 are as follows: 

Net assets

without Donor  Non‐endowed Accumulated Endowed 

Restrictions Funds Gains Funds Total

As of December 31, 2018

Endowment funds 108,809$     4,275,361$     3,384,524$     18,426,577$         26,195,271$        

As of December 31, 2017

Endowment funds 92,707$     3,889,575$     5,582,081$     17,395,117$         26,959,480$        

Net Assets

without Donor Non‐endowed Accumulated Endowed

Restrictions Funds Gains Funds Total

Beginning of year 92,707$      3,889,575$        5,582,081$        17,395,117$      26,959,480$    

Contributions 83,575   2,329,449      82,725       825,044      3,320,793      

In‐kind revenue 849,969 ‐       ‐   ‐    849,969    

Investment return:

Interest and dividends ‐    688      353,817     ‐    354,505    

Loss on investments ‐    ‐       (1,633,070)      ‐    (1,633,070)     

Net assets released from restrictions 2,760,073   (1,936,171)     (823,902)    ‐    ‐  

Total revenues 3,693,617   393,966    (2,020,430)      825,044      2,892,197      

Expenses and appropriation of endowment assets (3,656,406) ‐       ‐   ‐    (3,656,406)     

for expenditure

Deductions:

Designated transfers (21,109)       (8,180)       (177,127)    206,416      ‐  

Increase (decrease) in net assets 16,102   385,786    (2,197,557)      1,031,460   (764,209)   

End of year 108,809$        4,275,361$        3,384,524$        18,426,577$      26,195,271$    

Net Assets with Donor Restrictions

15

ALAMO COLLEGES FOUNDATION, INC. (A Texas nonprofit Foundation & component unit of the Alamo Colleges District) 

Notes to Financial Statements December 31, 2018 and 2017 

Note 7 – Endowment Net Assets, continued 

The  changes  in  endowment  net  assets  and  related  income  classification  for  the  year  ended 

December 31, 2017 are as follows: 

From  time  to  time,  the  fair  value  of  assets  associated  with  individual  donor‐restricted 

endowment funds may fall below the level that the donor or the Act requires the Foundation to 

retain as a fund of perpetual duration referred to as underwater endowments.  As of December 

31, 2018 and 2017 the Foundation did not have any such deficiencies.  

The  Foundation  has  adopted  investment  and  spending  policies  for  endowment  assets  that 

attempt to provide a predictable stream of funding to programs supported by its endowment 

while seeking to maintain the purchasing power of the endowment assets.  Endowment assets 

include those assets of donor‐restricted funds that the organization must hold in perpetuity or 

for a donor‐specified period as well as board‐designated funds. 

The Board of Directors, through its Investments Committee, has adopted a specific investments 

objective for the Foundation.  The investments objective is to invest all endowment and other 

available funds to optimize the return on investment to the extent possible, balanced with the 

appropriate level of risk. 

Under the laws of the State of Texas, the Board of Directors may appropriate for expenditure, for 

the uses and purposes for which the endowment was established, a prudent rate of spending 

considering the duration and preservation of the endowment.  The Board of Directors determines 

the amount of such appropriation annually.  The rate for 2018 and 2017 was 4.25% and 4.00%, 

respectively.  The rate for 2019 has been set at 4.75%. 

Net Assets

without Donor Non‐endowed Accumulated Endowed

Restrictions Funds Gains Funds Total

Beginning of year 2,196$            4,544,410$        3,579,596$        16,499,838$      24,626,040$    

Contributions 94,497     1,608,630    ‐      662,614    2,365,741      

In‐kind revenue 490,090   ‐     ‐      ‐   490,090    

Investment return:

Interest and dividends ‐      ‐     370,630   ‐   370,630    

Gain on investments ‐      ‐     2,510,880     ‐   2,510,880      

Net assets released from restrictions 2,867,734     (2,096,145)   (771,589)       ‐   ‐  

Total revenues 3,452,321     (487,515)      2,109,921     662,614    5,737,341      

Expenses and appropriation of endowment assets (3,403,901)      ‐     ‐      ‐   (3,403,901)     

for expenditure

Deductions:

Designated transfers 42,091     (167,320)      (107,436)       232,665    ‐  

Increase (decrease) in net assets 90,511     (654,835)      2,002,485     895,279    2,333,440      

End of year 92,707$          3,889,575$        5,582,081$        17,395,117$      26,959,480$    

Net Assets with Donor Restrictions

16

 ALAMO COLLEGES FOUNDATION, INC. 

(A Texas nonprofit Foundation & component unit of the Alamo Colleges District) Notes to Financial Statements December 31, 2018 and 2017 

 

 

Note 8 – Fair Value of Financial Instruments 

FASB ASC  Topic  820‐10, Fair  Value Measurements  and Disclosures,  provides  a  framework  for 

measuring  fair  value.  FASB  ASC  Topic  820‐10  also  establishes  a  fair  value  hierarchy  that 

distinguishes  between  inputs  based  on  market  data  from  independent  sources  (observable 

inputs) and a reporting entity's internal assumptions based upon the best information available 

when external market data is limited or unavailable (unobservable inputs). 

The fair value hierarchy  in FASB ASC Topic 820 prioritizes  fair value measurements  into three 

levels based on the nature of the inputs.  The three levels of the fair value hierarchy under FASB 

ASC Topic 820‐10 are as follows: 

Level 1 – Investments in this category are valued based on quoted prices in active markets 

for identical assets that are accessible at the measurement date.  An active market is a 

market in which transactions for the asset occur with sufficient frequency and volume to 

provide pricing information on an ongoing basis. 

Level  2  ‐  Investments  in  this  category  are  valued  based  on  inputs,  in  the  absence  of 

actively  quoted  market  prices,  which  are  observable  for  the  asset,  either  directly  or 

indirectly.  Level 2 inputs include: (a) quoted prices for similar assets in active markets, (b) 

quoted prices for identical or similar assets in markets that are not active, (c) inputs other 

than quoted prices that are observable for the asset such as interest rates and yield curves 

observable at commonly quoted intervals, and (d) inputs that are derived principally from 

or corroborated by observable market data by correlation or other means. 

Level 3 ‐ Investments in this category are valued based on unobservable inputs for the 

asset. Unobservable  inputs are used to the extent observable  inputs are not available, 

thereby allowing for situations in which there is little, if any, market activity for the asset 

at the measurement date. 

 

 

 

 

 

 

 

 

17

ALAMO COLLEGES FOUNDATION, INC. (A Texas nonprofit Foundation & component unit of the Alamo Colleges District) 

Notes to Financial Statements December 31, 2018 and 2017 

Note 8 – Fair Value of Financial Instruments, continued 

The fair value hierarchy of investments at December 31, 2018 is as follows: 

The fair value hierarchy of investments at December 31, 2017 is as follows: 

Note 9 – Support Agreement and Related Party Transactions 

By  agreement,  the  Alamo  Colleges  District  provide  administrative  support  for  Foundation 

activities at a level determined to be appropriate, but only to the extent of availability of funds 

within  the  District’s  budget.    Administrative  support  provided  includes  office  space  and  an 

Executive Director and staff for the Foundation.  The total support provided by the District to the 

Foundation in the fiscal years ended December 31, 2018 and 2017 was valued at approximately 

$849,969 and $490,090, respectively, and is  included in the financial statements as net assets 

without restrictions in‐kind revenue. 

From time to time the Foundation remits scholarship funds to the District to cover tuition, books, 

and other student fees for specified students.  During the years ended December 31, 2018 and 

2017,  the  Foundation  remitted  a  total  of  $2,062,641  and  $2,103,127  to  the  District  to  fund 

approximately 3,065 and 2,175 scholarships, respectively.   

Level 1 Level 2 Level 3 Total

Fixed income securities ‐$               5,323,425$    ‐$              5,323,425$   

Mutual funds / exchange‐traded funds 16,779,216    ‐           ‐      16,779,216   

Marketable securities 2,017,724   ‐           ‐      2,017,724     

Total 18,796,940$  5,323,425$    ‐$              24,120,365$ 

2018

Level 1 Level 2 Level 3 Total

Fixed income securities ‐$               4,414,646$    ‐$              4,414,646$   

Mutual funds / exchange‐traded funds 17,527,335    ‐           ‐      17,527,335   

Marketable securities 2,550,332   ‐           ‐      2,550,332     

Total 20,077,667$  4,414,646$    ‐$              24,492,313$ 

2017

18

ALAMO COLLEGES FOUNDATION, INC. (A Texas nonprofit Foundation & component unit of the Alamo Colleges District) 

Notes to Financial Statements December 31, 2018 and 2017 

Note 9 – Support Agreement and Related Party Transactions, continued 

In addition, for the years ended December 31, 2018 and 2017, the Foundation remitted $659,526 

and $609,936, respectively, to the District for program related costs. 

The total scholarship funds due from the Foundation to the District at December 31, 2018 and 

2017 was $45,827 and $35,335, respectively.  These amounts have been included in the due to 

affiliates balances in the accompanying financial statements. 

Note 10 – Future Commitments 

At December 31, 2018, outstanding donor match commitments are as follows: 

Note 11 – Commitments 

The Parent‐Child Scholarship Program provides multi‐generational scholarships.  Parents who are 

eligible  under  this  program and  complete  all  requirements  qualify  their  first‐born  child.    The 

Foundation  has  not  determined  what  amount,  if  any,  will  eventually  be  payable  under  this 

program. 

Note 12 – Restricted Title III and Title V Funds 

In compliance with federal grant restrictions, Title III and Title V grant funds are deposited into 

segregated bank accounts and/or other investment accounts. 

Note 13 – Net Assets without Restrictions 

Net assets without restrictions are comprised of net assets that are not subject to donor‐imposed 

stipulations.  The balances comprising net assets without restrictions as of December 31, 2018 

and 2017 were as follows: 

Year ending December 31,

2019 25,000         

2020 25,000         

2021 25,000         

Total 75,000$       

2018 2017

Net assets without donor restrictions/undesignated 108,809$      92,707$       

19

 ALAMO COLLEGES FOUNDATION, INC. 

(A Texas nonprofit Foundation & component unit of the Alamo Colleges District) Notes to Financial Statements December 31, 2018 and 2017 

 

 

Note 14 – Subsequent Events 

Management has evaluated subsequent events through August 8, 2019, the date the financial 

statements were available to be issued and no changes were necessary to be made to the 

financial statements as a result of this evaluation. 

20

ACCD PUBLIC FACILITY CORPORATION

(A Component Unit of

Alamo Community College District)

AUDITED

FINANCIAL STATEMENTS

For the Years Ended

August 31, 2019 and 2018

ACCD PUBLIC FACILITY CORPORATION (A Component Unit of Alamo Community College District)

Table of Contents August 31, 2019 and 2018

Page

Audited Financial Statements:

Independent Auditor’s Report ........................................................................................................ 1

Statements of Net Position .............................................................................................................. 3

Statements of Revenues, Expenses and Changes in Net Position ..................................... 4

Statements of Cash Flows ................................................................................................................. 5

Notes to Financial Statements ........................................................................................................ 6

Austin | Conroe | Dallas | Fort Worth | Houston Los Angeles | Midland | New York City | San Antonio

Weaver and Tidwell, L.L.P. 1601 South MoPac Expressway, Suite D250 | Austin, Texas 78746

Main: 512.609.1900 | Fax: 512.609.1911 CPAs AND ADVISORS | WEAVER.COM

Independent Auditor’s Report

To the Board of Directors ACCD Public Facility Corporation

Report on the Financial Statements

We have audited the accompanying financial statements of ACCD Public Facility Corporation (the Organization), a component unit of Alamo Community College District, as of and for the years ended August 31, 2019 and 2018, and the related notes to the financial statements, which collectively comprise the Organization’s basic financial statements as listed in the table of contents.

Management’s Responsibility for the Financial Statements

The Organization’s management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinions

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of ACCD Public Facility Corporation as of August 31, 2019 and 2018, and the changes in its financial position, and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

1

The Board of Directors ACCD Public Facility Corporation

Other Matters Required Supplementary Information Management has omitted management’s discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated October 30, 2019 on our consideration of the Organization’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Organization’s internal control over financial reporting and compliance.

WEAVER AND TIDWELL, L.L.P. Austin, Texas October 30, 2019

2

ACCD PUBLIC FACILITY CORPORATION (A Component Unit of Alamo Community College District)

Statements of Net Position August 31, 2019 and 2018

The accompanying notes are an integral part of these financial statements.

2019 2018ASSETSCurrent assets:

Cash 221,663$ 222,034$

Noncurrent assets:Capital assets - land 5,099,847 5,099,847

TOTAL ASSETS 5,321,510 5,321,881

LIABILITIESCurrent liabilities:

Current portion of unearned lease revenue 24,000 24,000

Noncurrent liabilities:Note payable 2,000,000 2,000,000Unearned lease revenue 1,606,000 1,630,000Interest payable 566,667 486,667

Total noncurrent liabilities 4,172,667 4,116,667

TOTAL LIABILITIES 4,196,667 4,140,667

NET POSITIONNet investment in capital assets 3,099,847 3,099,847Unrestricted (1,975,004) (1,918,633)

TOTAL NET POSITION 1,124,843$ 1,181,214$

3

ACCD PUBLIC FACILITY CORPORATION (A Component Unit of Alamo Community College District)

Statements of Revenues, Expenses, and Changes in Net Position For Years Ended August 31, 2019 and 2018

The accompanying notes are an integral part of these financial statements.

2019 2018OPERATING REVENUES/(EXPENSES):

Lease revenue 24,000$ 24,000$ Bank charges (net of interest income) (371) (362)

Total net operating revenues 23,629 23,638

Operating income 23,629 23,638

NON-OPERATING (EXPENSES):Interest on capital-related debt (80,000) (80,000)

Decrease in net position (56,371) (56,362)

NET POSITION:Net position - beginning of year 1,181,214 1,237,576 Net position - end of year 1,124,843$ 1,181,214$

4

ACCD PUBLIC FACILITY CORPORATION (A Component Unit of Alamo Community College District)

Statements of Cash Flows For Years Ended August 31, 2019 and 2018

The accompanying notes are an integral part of these financial statements.

2019 2018CASH FLOWS FROM OPERATING ACTIVITIES:

Receipts from interest on cash deposits 444$ 600$ Payments for bank fees related to cash deposits (815) (962)

Net cash used in operating activities (371) (362)

NET DECREASE IN CASH AND CASH EQUIVALENTS (371) (362)

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 222,034 222,396

CASH AND CASH EQUIVALENTS, END OF YEAR 221,663$ 222,034$

RECONCILIATION OF OPERATING INCOME TO NET CASH USED IN OPERATING ACTIVITIES:

Operating income 23,629$ 23,638$ Adjustments to reconcile operating income to net cash

Used in operating activities:Decrease in unearned lease revenue (24,000) (24,000)

Net cash used in operating activities (371)$ (362)$

SCHEDULE OF NON-CASH CAPITAL ACTIVITIES

Increase in interest payable 80,000$ 80,000$

5

ACCD PUBLIC FACILITY CORPORATION (A Component Unit of Alamo Community College District)

Notes to Financial Statements

1. REPORTING ENTITY The ACCD Public Facility Corporation (PFC) is a public non-profit corporation formed under the Public Facility Corporation Act, Chapter 303, Texas Local Government Code, as amended; it is also a public corporation within the meaning of the U.S. Treasury Department rulings of the Internal Revenue Service per sections 103 and 141 of the IRS Code of 1986, as amended. The PFC was incorporated on September 23, 2011 exclusively for the purpose of assisting the Alamo Community College District (the “District” or “Alamo Colleges District”) in financing, refinancing, or providing public facilities and is a component unit of the District. The PFC is governed by a three-member Board consisting of the Chairperson, Vice-Chairperson and Secretary of the District Board of Trustees. The PFC may finance the acquisition of District obligations; provide for the acquisition, construction, rehabilitation, renovation, repair, equipping, furnishing and placement in service of public facilities of the District; issue bonds as permitted by the Act; and perform other such activities on behalf of the District as provided in the Certificate of Formation. The PFC does not have authority to levy taxes. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting The financial statements of the PFC are prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP) established by the Governmental Accounting Standards Board (GASB). These financial statements have been prepared on the accrual basis of accounting, whereby all revenues are recorded when earned, and all expenses are recorded when they have been reduced to a legal or contractual obligation to pay. Cash Cash consists solely of demand deposits held at a bank fully insured by the Federal Deposit Insurance Corporation (FDIC). At August 31, 2019 and 2018, the PFC had -$0- in excess of the FDIC insurance limit. Capital Assets Assets meeting the applicable capitalization threshold with useful lives extending beyond one year are recorded at cost on the date of acquisition, except for assets transferred within the same financial reporting entity which have been recorded at the carrying value

6

ACCD PUBLIC FACILITY CORPORATION (A Component Unit of Alamo Community College District)

Notes to Financial Statements

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) of the transferor. Capital assets consist of land purchased from an unrelated party and from the PFC’s primary government, the District. Operating and Non-operating Revenues Operating revenues generally result from providing services in connection with the PFC’s principal ongoing operations. The principal operating revenues are from lease payments and development fees collected. The PFC did not have any non-operating revenues for the years ended August 31, 2019 and 2018. Revenue Recognition and Unearned Revenues Lease revenue is recorded when earned. Pre-paid lease payments received have been deferred and are recognized in a rational, systematic manner over the term of the lease. Operating and Non-operating Expenses The PFC distinguishes operating expenses from non-operating expenses. Operating expenses consist of bank charges related to the operating cash account, net of interest income earned on deposits. Non-operating expenses consist of interest on capital-related debt. Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. 3. CAPITAL ASSETS Capital assets consist of land and therefore no depreciation is required. Activity for the years ended August 31, 2019 and 2018 was as follows:

Balance Balance Balance9/1/2017 Increases Decreases 8/31/2018 Increases Decreases 8/31/2019

Land 5,099,847$ -$ -$ 5,099,847$ -$ -$ 5,099,847$

7

ACCD PUBLIC FACILITY CORPORATION (A Component Unit of Alamo Community College District)

Notes to Financial Statements

4. NONCURRENT LIABILITIES Noncurrent liabilities consist of a note payable and related interest to the District for the purchase of land and unearned revenue arising from prepaid rent under a 75-year ground lease from a related organization, Tobin Lofts, LLC. The principal amount of the note is $2 million, with a maturity date of August 1, 2042 and an interest rate of four percent (4%) per annum. Accrued interest on the note is $566,667 and $486,667 at August 31, 2019 and 2018, respectively, payable at maturity. As of August 31, 2019, noncurrent liabilities are $4,172,667 with activity for the fiscal year as follows:

As of August 31, 2018, noncurrent liabilities are $4,116,667 with activity for the fiscal year as follows:

Balance 9/1/18 Additions Reductions

Balance 8/31/19

Current Portion

Note payable 2,000,000$ -$ -$ 2,000,000$ -$ Unearned lease revenue 1,654,000 - 24,000 1,630,000 24,000 Interest payable 486,667 80,000 - 566,667 -

Total liabilities 4,140,667$ 80,000$ 24,000$ 4,196,667$ 24,000$

Total Liabilities

Balance 9/1/17 Additions Reductions

Balance 8/31/18

Current Portion

Note payable 2,000,000$ -$ -$ 2,000,000$ -$ Unearned lease revenue 1,678,000 - 24,000 1,654,000 24,000 Interest payable 406,667 80,000 - 486,667 -

Total liabilities 4,084,667$ 80,000$ 24,000$ 4,140,667$ 24,000$

Total Liabilities

8

ACCD PUBLIC FACILITY CORPORATION (A Component Unit of Alamo Community College District)

Notes to Financial Statements

5. INCOME TAXES Income earned by the PFC can be excluded from gross income for federal tax purposes under Internal Revenue Code Section 115, Income of States, Municipalities, Etc., because its income is from the performance of an essential governmental function and it accrues to a political subdivision. 6. RELATED PARTIES In July of 2012, Tobin Lofts, LLC (LLC) was created to carry out the purposes of its initial sole member, ACCD Public Facility Corporation, which includes providing housing for college students and employees of the Alamo Colleges District. The LLC leases land from the PFC under a 75-year ground lease, classified as an operating lease, and operates residential housing and retail facilities on the land. In August 2012, the LLC prepaid its ground lease in the amount of $1.8 million and the PFC recognizes lease revenue on a monthly basis over the life of the lease. The PFC recognized $24,000 for each year ended August 31, 2019 and 2018. The PFC may receive distributions in the future from the LLC under limited contractual conditions. At the end of the 75-year lease, title to the tenant improvements will pass to the PFC.

9

TOBIN LOFTS, LLC

FINANCIAL STATEMENTS

For the Years Ended August 31, 2018 and 2017

TOBIN LOFTS, LLC Table of Contents

Page

Financial Statements:

Independent Accountant’s Review Report ...................................................... 1

Balance Sheets ............................................................................................................ 2

Statements of Operations and Member’s Equity .......................................... 3

Statements of Cash Flows ...................................................................................... 4

Notes to Financial Statements .............................................................................. 5

Austin | Conroe | Dallas | Fort Worth | Houston Los Angeles | Midland | New York City | San Antonio

Weaver and Tidwell, L.L.P. 1601 South MoPac Expressway, Suite D250 | Austin, Texas 78746

Main: 512.609.1900 | Fax: 512.609.1911 CPAs AND ADVISORS | WEAVER.COM

Independent Accountant’s Review Report

To the Member Tobin Lofts, LLC

We have reviewed the accompanying financial statements of Tobin Lofts, LLC, which comprise the balance sheets as of August 31, 2018 and 2017, and the related statements of operations and member’s equity and cash flows for the years then ended, and the related notes to the financial statements. A review includes primarily applying analytical procedures to management’s financial data and making inquiries of company management. A review is substantially less in scope than an audit, the objective of which is the expression of an opinion regarding the financial statements as a whole. Accordingly, we do not express such an opinion.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement whether due to fraud or error.

Accountant’s Responsibility

Our responsibility is to conduct the review engagements in accordance with Statements on Standards for Accounting and Review Services promulgated by the Accounting and Review Services Committee of the AICPA. Those standards require us to perform procedures to obtain limited assurance as a basis for reporting whether we are aware of any material modifications that should be made to the financial statements for them to be in accordance with accounting principles generally accepted in the United States of America. We believe that the results of our procedures provide a reasonable basis for our conclusion.

Accountant’s Conclusion

Based on our reviews, we are not aware of any material modifications that should be made to the accompanying financial statements in order for them to be in accordance with accounting principles generally accepted in the United States of America.

WEAVER AND TIDWELL, L.L.P.

Austin, Texas January 31, 2019

1

TOBIN LOFTS, LLC Balance Sheets

August 31, 2018 and 2017

The accompanying notes are an integral part of these financial statements.

2018 2017ASSETSCurrent assets:

Cash 1,987,959$ 1,867,231$ Accounts receivable, net 44,194 27,146 Prepaid and other current assets 4,670 9,962

Total current assets 2,036,823 1,904,339

Noncurrent assets:Restricted cash (Note 2) 196,047 339,780 Prepaid ground lease 1,654,000 1,678,000 Property, plant and equipment, net (Note 3) 24,970,714 26,137,555

Total noncurrent assets 26,820,761 28,155,335

TOTAL ASSETS 28,857,584$ 30,059,674$

LIABILITIESCurrent liabilities:

Accounts payable 200,097$ 67,945$ Accrued and other current liabilities 317,914 606,620 Security deposits 104,648 120,870 Tenant prepaid rent 292,226 138,266 Current portion of note payable 600,100 571,362

Total current liabilities 1,514,985 1,505,063

Noncurrent liabilities:Note payable (Note 4) 31,895,245 32,495,345 Deferred loan costs, net (382,037) (445,433)

Total noncurrent liabilities 31,513,208 32,049,912

TOTAL LIABILITIES 33,028,193 33,554,975

MEMBER'S EQUITY (DEFICIT) (4,170,609) (3,495,301)

TOTAL LIABILITIES AND MEMBER'S EQUITY 28,857,584$ 30,059,674$

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TOBIN LOFTS, LLC Statements of Operations and Member’s Equity

For Years Ended August 31, 2018 and 2017

The accompanying notes are an integral part of these financial statements.

2018 2017OPERATING REVENUES

Rental revenue, net 3,755,728$ 3,901,168$ Commercial revenue 229,965 217,710 Other revenue 271,161 205,446

Total operating revenues 4,256,854 4,324,324

OPERATING EXPENSESPersonnel 471,877 463,463 Repairs and maintenance 270,480 105,940 Turn 147,053 164,919 Common area 249,173 172,291 Unit utilities 506,493 455,312 Marketing and leasing 80,971 92,582 Insurance 97,163 70,197 Residence life 13,385 17,266 Management and other professional fees 159,159 155,507 General and administrative 153,380 156,091 Bad debt 38,635 64,748

Total 2,187,769 1,918,316

Operating income before depreciation and amortization 2,069,085 2,406,008

Depreciation and amortization 1,425,591 1,280,910

Operating income 643,494 1,125,098

Non operating expenses (revenues)Interest expense 1,676,678 1,704,039 Developer contributions (357,876) -

Total non operating expenses (net) 1,318,802 1,704,039

NET LOSS (675,308) (578,941)

Member's equity (deficit), beginning of fiscal year (3,495,301) (2,916,360) Member's equity (deficit), end of fiscal year (4,170,609)$ (3,495,301)$

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TOBIN LOFTS, LLC Statements of Cash Flows

For Years Ended August 31, 2018 and 2017

The accompanying notes are an integral part of these financial statements.

2018 2017CASH FLOWS FROM OPERATING ACTIVITIES

Net loss (675,308)$ (578,941)$ Adjustments to reconcile net loss tonet cash provided by operating activities:

Depreciation and amortization expense 1,425,591 1,280,910 Bad debt expense 38,635 64,748 Amortization of deferred loan costs 63,396 63,396 Changes in operating assets and liabilities:

Accounts receivable, net (55,683) (38,127) Prepaid and other current assets 5,295 (622) Restricted cash 143,733 (74,126) Accounts payable and other current liabilities 497,128 (2,080) Accrued expenses (515,946) 302,539

Net cash provided by operating activities 926,841 1,017,697

CASH FLOWS FROM INVESTING ACTIVITIESPayments for property, plant and equipment (234,751) (611,891)

Net cash used by investing activities (234,751) (611,891)

CASH FLOWS FROM FINANCING ACTIVITIESDebt service payments (571,362) (544,001)

Net cash used by financing activities (571,362) (544,001)

NET INCREASE (DECREASE) IN CASH 120,728 (138,195)

CASH, BEGINNING OF PERIOD 1,867,231 2,005,426

CASH, END OF PERIOD 1,987,959$ 1,867,231$

SUPPLEMENTAL DISCLOSURECash paid for interest 1,613,282$ 1,640,644$

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TOBIN LOFTS, LLC NOTES TO FINANCIAL STATEMENTS

1. ORGANIZATION AND BUSINESS Tobin Lofts, LLC (“Tobin Lofts,” “LLC” or “Company”) was created to carry out the purposes of its initial sole member, ACCD Public Facility Corporation (“PFC”), which includes providing housing for college students and employees of the Alamo Colleges District and other higher education institutions in San Antonio, Texas and Bexar County. As of August 31, 2018, the Company’s investment consisted of a single, mixed-use student housing and retail development property known as Tobin Lofts. The property is comprised of two multi-story buildings that were completed in two phases, respectively known as Tobin Lofts at San Antonio College and Tobin Lofts Midtown.  Tobin Lofts consists of real property containing approximately 7.401 acres located at the intersection of Evergreen Street and Howard Street in San Antonio, Texas, together with a student housing property and other improvements constructed thereon.  2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying financial statements include all accounts of the Company and have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP). Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Revenue and Expense Recognition Revenue of the underlying real estate and improvements is recognized on an accrual basis when earned in accordance with the terms of the underlying lease agreements. Gross potential rent is netted against vacancy losses, staff and employee accommodations, one-time and recurring concessions, and gain/loss to lease to arrive at net rental revenue. Property operating cost recoveries from commercial tenants for common area maintenance and other recoverable costs (if any) are recognized in the period the expenses are incurred. Utility and other income are recognized when earned. Expenses are recognized when incurred.

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TOBIN LOFTS, LLC NOTES TO FINANCIAL STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Leasing Activities The Company retains substantially all of the risks and benefits of ownership of the real estate investments leased to tenants. Exposure to credit risk is limited to the extent that receivables exceed security deposits. Property, Plant and Equipment Property, plant and equipment is stated at cost less accumulated depreciation. Expenditures for significant renovations, additions, renewals, and betterments which extend the economic useful lives of the assets are capitalized, while expenditures for maintenance and repairs are charged to expense as incurred. Assets are depreciated on a straight-line basis over their estimated useful lives as follows:

Property, plant and equipment are stated at cost less accumulated depreciation or lower of historical cost or fair value, if deemed impaired. Property and other long-lived assets held and used by the Company are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. The Company does not believe the value of any long-lived assets were impaired at August 31, 2018 and 2017. Cash Cash includes cash on hand, deposits held at banks and all highly liquid assets with original maturities of three months or less, if any. The FDIC insures all bank deposits up to $250,000. The Company maintains a separate cash account to hold funds earmarked for future distribution to the sole member, ACCD Public Facility Corporation, at a later date to be determined. The cash deposits in excess of $250,000 that are held in the separate account earmarked for future distribution to the sole member are collateralized at a level of at least 105% in U.S. Treasuries and Government Securities. The cash held in the remaining accounts periodically may exceed federally insured amounts. Management believes that credit risk associated with cash is low since these accounts are maintained with high credit-quality institutions.

Buildings 40 yearsLand and building improvements 10 yearsTenant improvements 5 - 10 yearsFurniture, fixtures & equipment 5 yearsComputer equipment 3 years

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TOBIN LOFTS, LLC NOTES TO FINANCIAL STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Restricted Cash Restricted cash includes tenant security deposits and escrows established pursuant to mortgage financing arrangements for insurance, replacement reserves, and capital expenditure requirements. Security Deposits Security deposits consist of resident funds held in trust at a financial institution for the period the resident occupies the unit. The deposit is security for the resident’s performance of the terms and conditions of their lease agreement. For financial statement reporting purposes, the security deposits are included in the restricted cash balance on the accompanying balance sheet. Accounts Receivable Accounts receivable consist of tenant and other miscellaneous receivables and are stated at net realizable value. Accounts receivable are reduced by an allowance for amounts that may become uncollectible in the future. The allowance for doubtful accounts is reviewed periodically for adequacy by reviewing such factors as the credit quality of the tenants, delinquency in payment, historical trends and current economic conditions. The Company had an allowance for doubtful accounts of $42,744 and $19,030 at August 31, 2018 and 2017, respectively. Balances that remain outstanding after the Company has used reasonable collection efforts are written off through a charge to the valuation allowance and a credit to accounts receivable. Deferred Loan Costs As required by ASU 2015-03 issued by the Financial Accounting Standards Board (FASB), an entity is required to present debt issuance costs on the balance sheet as a direct reduction from the related debt liability. Amortization of debt issuance costs are reported as interest expense. Deferred loan costs of $382,037 associated with the Company’s outstanding long-term note payable are reported as a reduction to the carrying liability of the Company’s outstanding note payable.

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TOBIN LOFTS, LLC NOTES TO FINANCIAL STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Deferred loan costs are amortized on a straight-line basis, which approximates the effective interest method, over the term of the related indebtedness. Amortization of such costs is included in interest expense and was $63,396 and $63,396 for the years ended August 31, 2018 and 2017. Deferred loan costs are netted against the Company’s long-term note payable on the accompanying balance sheet. Future amortization of deferred loan costs as of August 31, 2018 are as follows:

Income Taxes The Company does not pay federal income taxes and accordingly does not record federal income tax expense or liabilities. The member is to include its respective share of Company profits and losses, if any, in its income tax return. The Company has implemented the accounting guidance for uncertainty in income taxes using the provisions of FASB ASC 740, Income Taxes. Using that guidance, tax positions initially need to be recognized in the financial statements when it is more-likely-than-not the position will be sustained upon examination by the tax authorities. Tax positions taken related to the Company’s pass through status and state taxes, have been reviewed, and management is of the opinion that material positions taken by the Company would more-likely-than-not be sustained by examination. Accordingly, the Company has not recorded an income tax liability for uncertain tax benefits. Penalties and interest assessed by income taxing authorities are included in operating expenses.

Years ending

August 31, Amount2019 63,396$ 2020 63,396 2021 63,396 2022 63,396 2023 63,396

Thereafter 65,057

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TOBIN LOFTS, LLC NOTES TO FINANCIAL STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Concentration of Credit Risk Financial instruments, which potentially subject the Company to concentrations of credit risk, consist of cash and accounts receivable. The Company maintains cash in bank accounts, which periodically exceed federally insured amounts. Management evaluates the financial condition of the institution and has not incurred any related losses. The Company’s operations are subject to a number of risks and uncertainties due to its concentration in the real estate industry, including, but not limited to, the cyclical nature of real estate operations, governmental regulations, environmental considerations, competition, the availability of financing and risk of natural disasters that may occur where the Company’s real estate properties are located. Marketing and Leasing Costs Costs incurred for marketing (including advertising) are generally expensed as incurred. The Company incurred marketing and leasing costs of $80,971 and $92,582 for the years ended August 31, 2018 and 2017, respectively. Subsequent Events The Company evaluates events or transactions that occur subsequent to year end for potential recognition or disclosure in the financial statements through the date on which the financial statements are available to be issued. The financial statements were approved by management and are available to be issued on January 31, 2019.

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TOBIN LOFTS, LLC NOTES TO FINANCIAL STATEMENTS

3. PROPERTY, PLANT AND EQUIPMENT Depreciation expense for property, plant and equipment was $1,425,591 and $1,280,910 for the years ended August 31, 2018 and 2017, respectively. Property, plant and equipment consist of the following at August 31, 2018 and 2017:

4. NOTE PAYABLE The Company entered into a loan agreement dated October 9, 2014. The principal amount of the note is $34,500,000, with a maturity date of November 6, 2024, and an interest rate of 4.85% per annum. The Company must make equal monthly payments of principal and interest of approximately $182,000 and must pay the entire outstanding principal balance of $28,288,902 on the maturity date. The loan has been guaranteed by a third party who guarantees any of the borrower’s obligations under the loan document. Future principal payments of the note payable as of August 31, 2018 are as follows:

2018 2017Land improvements 2,329,018$ 2,312,652$ Buildings 26,005,775 26,044,980 Building improvements 633,189 556,548 Tenant improvements 187,788 84,344 Furniture, fixtures & equipment 1,895,958 1,820,954 Computer equipment 14,342 11,842

31,066,070 30,831,320

Accumulated depreciation (6,095,356) (4,693,765) Property, plant and equipment (net) 24,970,714$ 26,137,555$

Years ending

August 31, Amount2019 600,100$ 2020 625,939 2021 661,767 2022 695,051 2023 730,010

Thereafter 29,182,478

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TOBIN LOFTS, LLC NOTES TO FINANCIAL STATEMENTS

5. LEASE REVENUES The Company leases to tenants under non-cancelable operating leases with various expiration dates through 2020. Future minimum rentals to be received under non-cancelable operating leases at August 31, 2018, are as follows:

These amounts do not include reimbursements which may be due from tenants for recovery of certain operating expenses (e.g. common area maintenance and other recoverable costs). The commercial lease agreements provide the tenants with the option to renew for between two and three additional periods of five years under certain conditions. 6. RELATED PARTY TRANSACTIONS The Company leases land from its sole member, ACCD Public Facility Corporation, under a 75-year ground lease, classified as an operating lease, and operates residential housing and retail facilities on the land. In August 2012, the Company prepaid its ground lease in the amount of $1.8 million and recognizes expense on a monthly basis over the life of the lease. Current year amortization of the prepaid ground lease amounted to $24,000. At the end of the 75-year lease, title to the tenant improvements will pass to the PFC. 7. COMMITMENTS AND CONTINGENCIES The Company is involved from time to time in various claims and legal actions in the ordinary course of business. Management does not believe that the impact of such matters will have a material adverse effect on the Company’s financial position or result of operations.

Years ending August 31, Amount

2019 3,460,752$ 2020 5,658

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