annual budget report 10 30 2015

FY20

16 ANNUALBUDGE TR E POR T

tstc.edu

TSTC has carefully shaped its financial

structure, operating structure, and culture to

drive innovation across the organization.

INNOVATIVE FINANCIAL RESPONSIBILITY

1 FY 2016 Annual Budget Report

EXECUTIVE SUMMARY 03

SITUATIONAL CONTEXT 05

OPERATING BUDGETS – 07 FISCAL YEAR 2012 - 2016 Budget Process and Financial Priorities Revenues Expenses Capital Planning

FISCAL YEAR 2016 25 OPERATING BUDGET REPORTS Revenues by Fund Group by Location Expenditures by Fund Group by Budget Category Operating Budget Summary by Function Functional Operating Budgets by Location Functional Operating Budgets by Category

EXHIBITS 37 Strategic Plan Capital Plan Capital Finance Timeline TSTC Fund Accounting Guide

CONTENTS


Texas State Technical College (TSTC) significantly changed its annual budget process for fiscal year 2016. Single accreditation allowed the transition to a single budgeting process enabling leadership to deploy a more conservative approach to budgeting revenues and expenditures for fiscal year 2016. In addition, the fiscal year 2016 budget was prepared as a single, statewide organization rather than the consolidation of five institutional budgets required under TSTC’s previous accrediting and operating structures. The new, statewide approach supports shaping the budget towards focused, institutional priorities further described below.

The statewide budget for TSTC will grow in fiscal year 2016, primarily due to increases in state appropriations over fiscal year 2015 levels as a result of the appropriations authorized during the 84th Regular Legislative Session.

Leadership took a balanced approach to determining budget priorities for fiscal year 2016. The proposed budget balances an increased emphasis on

• teaching and learning quality and relevance (through innovation),

• marketing, and

• expanding capacity.

The following includes significant budget investments/priorities highlighted in TSTC’s spending plans in fiscal year 2016 relative to fiscal year 2015:

• New Investments in Student Learning. The proposed student learning budget supports $10 million in teaching equipment split between investments in legacy programs and the new Fort Bend location, $629,000 directed at innovations in learning such as competency based learning deployment and creation of microcredentials/badges, and increasing the capacity of existing infrastructure by investing approximately $1,100,000 in night and weekend operations.

• New Investments in Marketing. The fiscal year 2016 proposed budget supports an incremental increase toward the needed level of marketing expenditures required to promote TSTC’s programs in both legacy and new markets. TSTC will increase statewide investment in advertising to $1,900,0000, a $1,100,000 increase over fiscal year 2015 advertising, primarily related to the cost of advertising in new markets. Increased investment in industry relations and talent management (placement) will target new business-to-business markets

EXECUTIVE SUMMARY

4

and create new revenue streams as TSTC pilots a new line of business.

• Balancing the Budget. In recent years, as revenues declined, TSTC significantly reduced or deferred certain expenditures; however, anticipating that the revenue shortfall was temporary, TSTC maintained a minimum level of capacity to mitigate significant start-up costs to restore capacity as revenue levels were restored. Most recently, TSTC focused on retaining talent by implementing recommendations from the 2013 compensation study. The portion of the fiscal year 2016 anticipated revenue increases dedicated to funding the compensation study adjustments (i.e., shifting to a balanced budget) is approximately $3,500,000.

• Supporting Strategic Expansion in New Markets. A significant portion of the increasing revenues was $8,500,000 in

new appropriations funding to support start up costs at TSTC’s new campuses: East Williamson County Campus, North Texas Campus, and Fort Bend County Campus.

• Transformational change while Keeping the Promise to Be a Greater Place to Work. The budget process suspended nearly 100 position vacancies in order to restructure the organization and realize efficiencies without laying off personnel.

The fiscal year 2016 operating budget relies on capital financing plans, including short-term financing for instructional equipment as well as a bond sale during the second half of the fiscal year (including tuition revenue bonds and Higher Education Assistance Fund (HEAF) bonds). New funding is identified to cover debt service for all proposed debt issuances.

Instructional Equipment

Instructional Innovation

Capacity (Nights & Weekends)

Advertising

Industry Relations

Compensation/Retention

Start-up/Expansion Costs

Restructured/Deferred Vacancies

$10 million

$0.6 million

$0.4 million

$1.1 million

$1.1 million

$3.5 million

$4.5 million

$8.5 million


Texas State Technical College (TSTC or the College) is unique as an institution of higher education. From inception, TSTC’s primary focus has been on jobs and workforce development, especially in advanced and emerging technical fields. Student employability and employer satisfaction drive the activity of the College. In recent years, the transition to a new “Returned Value” funding methodology has enhanced this focus on student success after leaving the classroom. The result is a more effective delivery of workforce training statewide. While TSTC’s transition to results-based operations has been viewed as pioneering and unconventional, the need for this effective workforce delivery system is present.

New Funding Formula

TSTC has responded to the mandate of the 82nd Legislature that created a funding and operating model that funds the institution for job placement and earnings of TSTC’s graduates. The 83rd and 84th Legislatures advanced this transition by allocating formula funding to TSTC based on the additional direct and indirect state tax revenues generated as a result of TSTC’s impact on the employment of its students. That is, TSTC has shifted from an institution funded by activities to one that is funded for its results.

TSTC’s new funding and operating model aimed at placing more Texans in good jobs has prepared the institution to expand its response to the growing supply gap of technical training within Texas’ labor market.

Expansion

While Texas has led the nation in job growth over the last five years, there is a skills supply gap in technical, middle skills (skills requiring more training than a high school diploma and less than a four-year university degree). According to the Texas Association of Workforce Boards, “middle skill jobs make up the largest part of America’s and Texas’ labor demand market. In 2009, approximately 51% of Texas’ jobs were in middle-skills occupations, but only 40% of the state’s workers had the appropriate training for those jobs. It is becoming more common that businesses in key industries in Texas are unable to find enough sufficiently trained workers to fill available, middle-skill jobs.” TSTC is a supplier of these technical, middle-skill jobs.

To address this statewide supply shortage in a meaningful way, TSTC began introducing a strategy in 2011 aimed at expanding into more dense markets to include the Dallas/Fort Worth region, Austin and Houston. TSTC’s

SITUATIONAL CONTEXT

6

first opportunity for such expansion was the completion and commencement of operations in East Williamson County Higher Education Center in Hutto (east of Austin) during 2013. That same year, TSTC received approval to establish TSTC North Texas in Red Oak (south Dallas) and also reached a new agreement with Wharton County Junior College for TSTC in Fort Bend County, opening a door to expand into a comprehensive presence in the west Houston region. TSTC has since constructed a technical education facility on approximately 30 acres adjacent to Red Oak high school and has recently broken ground on a new technical education facility on nearly 80 acres granted to TSTC in Fort Bend County.

Operational Effectiveness and Efficiency

In connection with TSTC’s expansion plans, TSTC’s Board of Regents commenced an assessment of TSTC’s organization structure to determine management capacity for anticipated expansions. A project team evaluated organization development principles, estimated growth rates and anticipated cost models and proposed a new, functionally-integrated structure. In May 2014, the Board of Regents recommended management initiate the first major step towards implementing the sustainable, integrated structure by pursuing a single, statewide accreditation. TSTC submitted its substantive change prospectus with its accreditor, the Southern Association of Colleges and Schools Commission on Colleges (SACSCOC) during the spring of 2015 and received approval by the SACSCOC board in June 2015.

Consolidating the accreditation was an integral step to consolidating and standardizing statewide operations. TSTC merged all major operating functions during fiscal year 2015 and will continue its transition towards shared services across its eleven campuses during fiscal year 2016.

Transition Funding

The Returned Value funding model, implemented by the 83rd Legislature does

not provide funding for start-up operations because of the inherent lag between the teaching event and the actual funding. Where start-up operations under the contact hour funding model reimburse related costs within 1-3 years following the teaching event, funding for start-up operations does not enter TSTC’s funding model until 8-10 years after the start-up activity is authorized. The Returned Value funding model is based on the additional direct and indirect state tax revenues generated as a result of the education provided to students by TSTC. Consequently, the funding formula does not fund start-up operations until after the site is located, established, students are enrolled, trained, enter the workforce, and are employed for five years.

Higher Education Funding

TSTC has endured declining funding for nearly eight years. These financial pressures are pervasive throughout higher education as declines in enrollments and state appropriations were the reality in recent years. The pressure on public funding for higher education will continue for the foreseeable future. While TSTC’s Returned Value funding model is not expected to fully shelter TSTC from the pressure on state appropriations, it will provide flexibility to innovate its product and expand its mix of revenue streams.

Innovation

The pace of change in higher education is generally very slow while the relevance of the related operating models faces increasing scrutiny. TSTC is boldly readying itself for the transformations that will occur within higher education. TSTC has carefully shaped its financial structure, operating structure, and culture to drive innovation across the organization. Major change initiatives at TSTC, specifically focused at innovating the model of teaching and learning include: competency-based learning and micro-credentials and badges. Other adaptations of the learning model aimed at maintaining relevance include block scheduling, right-sizing curriculum, aligning college tracks with needs of Texas Workforce, and charting new dual credit pathways that align with House Bill 5.


OPERATING BUDGETS FIVE YEAR TREND REPORT

The operating budgets for each of the five fiscal years from 2012 through 2016 are provided below. Historical trend information highlights the changing budget assumptions and approaches over time. Expense amounts for fiscal years 2012-2015 have been classified to best represent current structures for comparison purposes.

A breakdown of each category of revenue and expense is provided with explanations in the narrative section that follows this report.

BUDGET PROCESS AND FINANCIAL PRIORITIES

Budget Process

On June 11, 2015, TSTC received single accreditation approval from the Southern Association of Colleges and Schools Commission on Colleges (SACSCOC). Consequently, the budget report for fiscal year 2016 represents the first single, statewide college budget (and budget process). However, the statewide approach to the annual budget process began in Fall 2014 with the development of TSTC’s statewide

strategic plan. Subsequently, budget requests and budget decisions were made and vetted through statewide functional hierarchy versus the historical geographic hierarchy (i.e., four independent colleges).

In addition, the process for deploying funds changed to address statewide strategic priorities and projects, rather than follow an allocation and local prioritization process. For example, Higher Education Assistance Fund appropriations (HEAF) were historically distributed through an allocation method (e.g., number of degrees and certificates awarded). For the fiscal year 2016 budget, the

68

REVENUES 2012 Budget 2013 Budget 2014 Budget 2015 Budget 2016 Budget

Tuition, Fees & Educational Sales

51,654,266 51,652,471 52,788,484 55,381,405 48,506,823

State Appropriations & HEAF

77,354,078 77,699,048 78,133,436 78,769,246 86,526,744

Sponsored Programs 13,095,142 10,888,575 7,552,133 7,098,641 10,206,833

Auxiliary Enterprises 15,302,357 14,490,330 13,768,466 13,457,336 13,422,345

Other Revenues 62,101,764 50,599,674 34,218,281 32,789,625 30,797,462

Total Revenues 219,507,607 205,330,098 186,460,800 187,496,253 189,460,207

EXPENSES 2012 Budget 2013 Budget 2014 Budget 2015 Budget 2016 Budget

Operations 97,731,247 92,534,113 99,259,021 97,952,381 103,010,258

Finance 102,876,318 94,450,527 68,682,603 71,711,966 60,638,676

Marketing 4,919,047 4,916,459 5,339,110 5,938,926 8,906,859

Information Technology 6,840,520 7,535,773 7,520,978 7,356,686 7,811,491

Culture 4,674,299 4,312,398 4,731,030 4,513,128 4,304,377

Office of the CEO 1,588,080 1,954,738 2,001,443 1,993,765 2,311,002

Business Intelligence 1,209,764 1,246,380 1,522,649 1,613,393 1,458,340

Policy 175,528 179,478 182,966 390,618 1,019,204

Total Expenses 220,014,803 207,129,866 189,239,800 191,470,863 189,460,207

BUDGET MARGIN (DEFICIT) 2012 Budget 2013 Budget 2014 Budget 2015 Budget 2016 Budget

(507,196) (1,799,768) (2,779,000) (3,974,610) 0


disbursement of HEAF funds was made on a project-by-project basis through a strategic prioritization of statewide projects.

Financial Priorities

This budget reflects a stabilization of revenues after nearly 8 years of declines. During this period of declining funding, leadership found it necessary to defer certain investments across categories such as compensation, classroom infrastructure, and facilities infrastructure. In addition, TSTC’s has historically made a passive, inconsistent, and nonstrategic approach to marketing it’s premier product, making it the best kept secret in Texas. In recent years, TSTC has re-invested in compensation to mitigate talent retention risks within the recommendations of the compensation study. TSTC’s compensation practices continue to evolve with new standards and a consistent classification framework. The budget requests for fiscal year 2016 confirmed the organization’s need to resume investment in classroom infrastructure, facilities infrastructure, and marketing.

Leadership took a balanced approach to determining budget priorities for fiscal year 2016. Significant emphasis was targeted at increases that would assist the enrollment management processes with a focus on improving results beginning with the Fall 2016 semester, balancing (1) student learning quality and relevance (through innovation), (2) investment in marketing, and (3) expanding efforts throughout the enrollment funnel. Augmenting this investment is a statewide, multi-functional effort of integrating processes and intelligence within instruction, recruiting, talent pipeline/career services, enrollment administration, and finance. Leadership expressed three financial goals during the fiscal year 2015 budget process. All remained relevant and were carried forward for fiscal year 2016, while adding a fourth “Balancing the Budget.”

Financial Goal 1: Increase TSTC’s Revenue Producing Capacities. Investment in revenue producing activities encompasses investment

in instructional infrastructure and innovating learning delivery methods through competency based learning and microcredentialing badges. In addition, initiatives supporting a sales culture, investment in advertising with specific emphasis at penetrating new markets, and a new venture in business-to-business sales focused on industry relations and talent placement. Other revenue producing activities include investments of start-up capital at the newest locations as well as a bold offering of night and weekend programs to extend the capacity of existing resources.

Financial Goal 2: Exploit TSTC’s Potential Scale and Size. TSTC’s statewide consolidation of its accreditation and functional operations was a critical step for expanding TSTC’s footprint while focusing more resources on education rather than administration. During fiscal year 2015, student learning leadership and faculty responded to the monumental requirement to standardize TSTC’s curriculum statewide; consequently, new opportunities have emerged for leveraging and stretching statewide resources. Shifting to statewide budgeting and facility planning and control provide new, statewide and strategic perspective as leadership monitors and controls spending. In addition, TSTC will begin combining its purchasing power, including examples such as statewide purchases of instructional and HVAC equipment as well as statewide fleet management.

Financial Goal 3: Right-size and Refocus Investments in Programs & People. To support the shift to more optimal deployment of human capital and program mix, leadership has paused replacement of vacancies. With the exception of faculty, criticality of all vacant positions is currently assessed at both TSTC’s statewide compensation committee and by the Chancellor. Also, finance, operations, marketing, and

10

business intelligence are developing a statewide process for reviewing program/department vitality to evaluate and manage outcomes as well as support levels of investment in both instructional and administrative programs.

Financial Goal 4: Manage Cash Flows. The college has proposed a budget that continues to merge four colleges, expand to new markets, builds a strong brand, pioneers a new funding formula, innovates the delivery of higher education, and continues the shift from a higher education to business model without overspending revenues.

REVENUES

TSTC is forecasting a slight increase in total statewide revenues for fiscal year 2016 of $1,963,954, or less than 1 percent. TSTC’s mix of revenue streams that source the College’s operations vary in scale, driving force, and customer base. For purposes of this report, revenues are categorized into four major categories: Tuition, Fees, and Educational Sales; State Appropriations & HEAF; Sponsored Programs; Auxiliary Enterprises; and Other Revenue.

Tuition, Fees & Educational Sales

TSTC’s fiscal year 2016 budget estimates tuition, fees and educational sales estimated for budget purposes represent a decrease of $6,874,582, related to a more conservative methodology for budgeting revenues specifically in the “Other” category of tuition, fees, and educational sales. This decrease is offset by projected increases in both state and designated tuition relative to budgeted state and designated tuition for fiscal year 2015.

State and designated tuition are expected to increase for fiscal year 2016 as a result of an increase in tuition rates beginning in the Fall 2015 semester compounded with a slight increase anticipated in statewide enrollment. The proposed budget includes increases in the College’s marketing and class infrastructure (equipment). The enrollment outcomes associated with these initiatives (i.e., increased enrollment and enrollment-related revenues) are expected to have their greatest impact beginning in the Fall 2016 semester.

10,000,000

State Tuition

22,0

56,5

49

14,0

48,9

85

15,5

48,7

32

2012 Budget

51,654,266TOTAL

51,652,471TOTAL

52,788,484TOTAL

55,381,405TOTAL

48,506,823TOTAL

20,8

29,4

12

12,9

03,8

12

17,9

19,2

47

2013 Budget

21,2

73,6

65

12,7

90,7

05

18,7

24,1

14

2014 Budget

21,0

02,1

12

11,4

22,1

60

22,9

57,1

33

2015 Budget

20,000,000

15,000,000

25,000,000 Designated Tuition Other

2016 Budget

21,6

05,6

23

12,6

10,0

53

14,2

91,1

47


STATE APPROPRIATIONS & HEAF

As a result of TSTC’s legislative efforts, TSTC reversed the eight-year trend in formula funding reductions during the 84th Regular Legislative Session. For the second session in a row, both the increase in final bill appropriations over the base bill and the increase in final bill appropriations over the prior legislative session significantly exceeded the increases experienced throughout the higher education sector. In addition, the increased appropriations occurred in both funding for legacy operations and new operations. The fiscal year 2016 budgeted revenues for appropriations below reflect those increases:

General Revenue

General Revenue appropriations primarily consist of funding from the two funding formulas: the Administration and Instruction formula and the Infrastructure formula. TSTC’s Returned Value funding formula drives Administration and Instruction funding within the General Revenue category. TSTC’s fiscal year 2016 General Revenue appropriation levels will increase over prior years, as determined by the 84th Legislature.

As designed, the Returned Value funding formula is driven by student earnings measured for the five years following

their time at TSTC. The direct and indirect economic benefit to Texas is then calculated for these “value-added” wages. Finally, through the appropriations process, the Legislature establishes a discounted percentage of the total “value-added” economic benefit and funds TSTC at that discounted rate. The fiscal year 2016 increase in Administration and Instruction, or Returned Value, formula funding, was $2,074,407.

Formula funding for Fiscal Years 2016 and 2017 was based on earnings from students that left TSTC during 2008 and 2009 (a result of the five-year measurement period). From Fiscal Years 2009-2014, TSTC increased the number of graduate awards by 40%, and graduate earnings increased 60% over the same period. Consequently, TSTC’s funding formula yield is expected to increase over the next 6-7 years when considering the trend in both graduate awards and salaries of students entering the workforce. This trend as well as the positive momentum with respect to TSTC’s discounted share of the formula yield position TSTC well for future appropriation allocations over the next 5-6 years.

General Revenue - Transition Funding

Transition funding to fund start up costs at East Williamson County Higher Education

2012 Budget 2013 Budget 2014 Budget 2015 Budget 2016 Budget

General Revenue 61,039,533 59,746,948 57,746,948 57,491,218 59,347,209

Transition Funding 0 0 3,450,000 3,450,000 8,500,000

HEAF Appropriations 5,775,000 5,775,000 5,775,000 5,775,000 5,775,000

Benefits 8,223,346 8,669,194 9,780,917 10,656,002 11,844,495

TRB Appropriations 1,097,706 1,094,506 1,059,639 1,055,639 1,060,040

Other 1,218,493 2,413,400 559,058 341,387 0

Total $77,354,078 $77,699,048 $78,133,436 $78,769,246 $86,526,744

Center and TSTC North Texas was first appropriated to TSTC during fiscal years 2014 and 2015. The $6,900,000 was appropriated and consequently recorded as revenues in the fiscal year 2014. The 84th Legislature increased transition funding for fiscal years 2016 and 2017 to $17,000,000, of which $8,500,000 is included in the fiscal year 2016 budget. The large increase relates to transition funding for the TSTC in Fort Bend expansion.

HEAF Appropriation

The fiscal year 2016 appropriation under the Higher Education Assistance Fund (HEAF) remained at $5,775,000. The

annual appropriation was created “for the purpose of acquiring land either with or without permanent improvements, constructing and equipping buildings or other permanent improvements, major repair or rehabilitation of buildings or other permanent improvements, acquisition of capital equipment, library books and library materials, and paying for acquiring, constructing, or equipping or for major repair or rehabilitation of buildings, facilities, other permanent improvements, or capital equipment used jointly for educational and general activities and for auxiliary enterprises to the extent of their use for educational and general activities” TSTC may pledge up to 50 percent of the money allocated to secure the payment of the principal and interest for the purposes previously described. TSTC will have no remaining HEAF bonds payable at the outset of fiscal year 2016 but plans to issue bonds later during fiscal year 2016.

During the 84th Session, the Legislature increased the annual HEAF appropriation for TSTC to $8,662,500 beginning during fiscal year 2017.

TRB Appropriation

During fiscal year 2016, the expected appropriation for debt service on state tuition and revenue bonds is $1,175,468. The 84th Legislature authorized TSTC to issue approximately $45 million in tuition and revenue bonds. However, the Legislature only appropriated the related debt service for all institutions beginning in fiscal year 2017. In addition, the appropriation for TRB debt service for fiscal year 2017 was made in a lump sum for all institutions for which TRBs were authorized and allocation of the debt service appropriation is subject to processes determined by the Texas Higher Education Coordinating Board. Consequently, TSTC will schedule the issuance and sale of related bonds to allow debt service payments that begin in fiscal year 2017.

12

$137.750%

$89.833%

Calculated Economic Value to State Economy83rd Legislature ($ in millions)

$137.750%

$47.917%

$39.515%

State Portion ofReturned Value

Funded to TSTC

Portion Retained by State

$133.450%

$90.435%

Calculated Economic Value to State Economy84th Legislature ($ in millions)

$133.450%

State Portion ofReturned Value

Funded to TSTC

Portion Retained by State


Auxiliary Enterprises

A substantial portion of revenue from Auxiliary Enterprises relates to the operation of student serving auxiliaries including housing, bookstore, and food service operations. Consequently, revenues from these operations will correlate with enrollment results for the respective period. Other factors have also impacted these operations including competition (e.g., entrance of competitor housing in Marshall, the efficiency/competitiveness of the book sales market, deferred maintenance reducing the available units in Waco, etc).

In connection with the consolidation of statewide auxiliaries, an assessment of operations is in progress. There are numerous opportunities to expand auxiliary revenues as well as improve profitability of auxiliary operations. Examples in housing include increasing revenue capacity by bringing properties online in high-demand areas, active monitoring and response to

destructive tenant behavior, and leveraging available occupancy as recruiting device. Within bookstore operations, new opportunities such as leveraging scale through statewide purchasing and consolidating oversight responsibilities, improving e-commerce operations, strengthening inventory (especially textbook) management, and expanding the footprint of operations. Opportunities within food service operations have centered around management of talent, food cost, and capturing more non-student sales.

The variance in airport revenues relates to grants associated with airport maintenance and development. Specifically, the Texas Department of Transportation provides funding to match investments made on the TSTC Waco airport.

100,000

500,000

Housing

8,74

9,17

9

5,83

8,27

3

2,01

0,92

2

672,

603 1,

292,

719

315,

000

6,10

6,74

3

5,59

2,77

2

1,69

5,27

2

647,

097

1,05

9,97

9

298,

360

5,22

0,58

3

4,77

0,00

3

1,83

1,30

8

933,

999

887,

988

377,

425

5,22

6,04

2

4,49

6,17

8

1,80

2,74

7

884,

979 2,42

1,95

5

335,

378

5,28

1,51

0

4,01

1,09

8

2,11

5,44

4

0

1,82

1,51

9

191,

892

2012 Budget

$15,302,357TOTAL

$14,490,330TOTAL

$13,768,466TOTAL

$13,457,336TOTAL

$13,422,345TOTAL

2013 Budget 2014 Budget 2015 Budget

5,000,000

1,000,000

10,000,000 Bookstore Food Service Golf Course Airport Other

2016 Budget

Sponsored Programs

Revenues from sponsored programs are comprised of funding from federal, state, or other grants. These funds are only budged upon confirmation of award. Consequently, the timing of awards drives significant variances when comparing across fiscal years.

Other Revenues

Portions of fund balances are carried forward from year-to-year typically to fund ongoing projects. The significant changes during the five-year period from fiscal year 2012 through 2016 were substantially related to plant-related or grant-related projects and their crossover between fiscal years.

14

Carryforward of Fund Balance Financial Aid Miscellaneous

2012 Budget

$62,101,764TOTAL

$50,599,674TOTAL

2013 Budget

6,011,325

27,920,408

286,548

4,246,825

28,242,589

300,211

$34,218,281TOTAL

2014 Budget

33,899,162

26,952,602

1,250,000

26,029,855

24,569,819

$32,789,625TOTAL

2015 Budget

2,285,462

28,000,000

512,000

$30,797,462TOTAL

2016 Budget

Grants - Federal Grants - State Other

2012 Budget

$13,095,142TOTAL

$10,888,575TOTAL

2013 Budget

3,725,896

1,746,635

2,179,602

3,450,286

1,718,560

1,929,795

$7,552,133TOTAL

2014 Budget

9,085,398

1,454,732

2,555,012

8,116,911

2,014,130

757,534

$7,098,641TOTAL

2015 Budget

2,679,200

5,974,219

1,553,414

$10,206,833TOTAL

2016 Budget


EXPENSES

Statewide

Overall budgeted expenditures decrease in fiscal year 2016, relative to fiscal year 2015. The reduction in planned expenditures relates to deferred replacement of vacant positions. Leadership suspended nearly 100 requested staff vacancies until efficiencies or revenues are identified to support the related, ongoing expenditure. This savings of approximately $4,500,000 was offset by expense increases to support investment teaching equipment, investments in marketing and carryover expenses related to compensation adjustments in previous years. Details of budget priorities within each major function are described below.

Operations

The Operations division represents the core educational activities of the college. The growth in the Operations budget relates to capital expenditures for instructional equipment (debt service for nearly $10 million in equipment purchases), investment in faculty necessary for start up operations in new locations as well as for night and weekend operations. Other contributing factors to the additional Operations expenditures relates to new investment innovation, specifically focused towards the implementation of competency-based education and badges. Increases included within sponsored programs relates to additional grant expenditures relative to the prior year.

Student Learning Student Development

Innovation Admin (Operations)

Office of Sponsored Programs

College Readiness

2012 Budget

$97,731,247TOTAL

$92,534,113TOTAL

2013 Budget

48,675,098

42,420,963

5,264,671

1,928,738

97,128872,423

46,899,010

43,816,759

3,788,6312,459,059

127,176

861,746

$99,259,021TOTAL

2014 Budget

42,655,482

42,328,420

9,151,368

1,657,360

554,114

1,384,503

42,326,448

38,919,189

7,871,718

2,348,966

154,084

913,708

$97,952,381TOTAL

2015 Budget

49,919,001

43,600,170

4,914,712

401,996

2,549,939

1,124,760

$103,010,258TOTAL

2016 Budget

Finance

The Finance division budget decreased relative to 2015, primarily due to fiscal year 2015 expenditures for facilities projects contained within auxiliary services (housing renovations and airport renovations) and the office of facilities and planning. Other decreases occurred due to reduced debt service expected for fiscal year 2016 (HEAF bonds matured during fiscal year 2015 and drawdown timing for fiscal year 2016 capital equipment financing as well as timing of bond

sale(s) reduce required debt service for fiscal year 2016).

Efficiencies related to the statewide consolidation of the finance function are anticipated within the finance division, especially in the areas of auxiliary services and financial services. Other gains from the finance consolidation include the concentration of resources to create a new focus on financial analysis, as featured in fiscal year 2016.

2012 Budget 2013 Budget 2014 Budget 2015 Budget 2016 Budget

Auxiliary Services 18,956,718 15,543,167 14,181,864 15,346,643 12,502,900

Office of Facilities & Planning 15,548,572 14,992,894 13,064,555 16,623,471 11,548,742

Financial Services 3,415,916 2,984,434 2,966,635 3,082,437 2,594,915

Financial Analysis 801,228

Governance, Risk & Compliance 535,752 802,932 847,985 878,450 835,344

Strategic Initiatives 2,112,833 2,402,150 3,117,448 2,528,960 2,353,013

Accounting & Reporting 249,046 371,641 314,932 305,979 620,452

Admin, Logistics & Benefits 18,890,765 20,375,119 20,137,710 20,812,630 19,782,712

Debt Service 5,500,873 10,822,428 10,796,779 8,805,564 6,614,126

Renovations 37,665,843 26,155,762 3,254,695 3,327,832 2,625,244

Total $102,876,318 $94,450,527 $68,682,603 $71,711,966 $60,638,676

16


Marketing

Total cost of marketing will increase by $2,967,933 when comparing the level of fiscal year 2016 expenditures to fiscal year 2015. Investments in advertising and media represent a significant portion of the increase, approximately $1,100,0000 during fiscal year 2016, as TSTC’s penetrates new markets with a mix of promotional strategies. The pricing of advertising in newer, more condensed markets is significantly higher than in TSTC’s legacy markets. The planned expenditures for fiscal year 2016 will support a minimal/tactical level of advertising that generally supports messaging in advance of registration periods. This is a step toward sustained, strategic messaging campaigns anticipated for TSTC’s

long-term plans for brand recognition. Marketing increases also include new investments of positions in Recruiting and Career Services, including $300,000 in new positions (as well has shifting existing positions) to new markets, $150,000 for expansion of the student ambassador program to bolster inside sales efforts, as well as new costs for capital equipment and promotional items. Advancement operations expenditures will rise to accommodate event support and new expenditures for alumni relations. The career services division includes new costs associated with an industry relations revenue-center pilot program aimed at building new business-to-business relationships that create placement arrangements between TSTC and industry.

100,000

Communications

2,78

1,63

2

1,15

2,30

3

260,

080

403,

578

0 321,

454

2,62

0,70

3

1,23

5,25

8

174,

410

411,

970

104,

164

369,

954

2,84

6,73

4

1,23

9,54

6

447,

429

476,

231

0 329,

170

3,03

0,93

8

827,

210

970,

634

491,

720

310,

424

308,

000

4,18

1,07

2

1,87

1,26

6

847,

856

832,

840

703,

678

444,

038

2012 Budget

$4,919,047TOTAL

$4,916,459TOTAL

$5,339,110TOTAL

$5,938,926TOTAL

$8,906,859TOTAL


1,000,000

500,000

5,000,000

Recruitment Field Development Career Services

Advancement Ops Admin

2016 Budget

Information Technology

Information technology expenditures will increase during fiscal year 2016 due to the addition of new systems, upgrades to existing systems, increases in licensing and maintenance costs in existing shared systems, as well as anticipated increases in bandwidth costs. Budgeting for new systems includes a $275,000 recruiting management system, $175,000 for a data warehouse and reporting systems, and other smaller scale systems.

Culture

The net decrease in expenditures for Culture relate to statewide reductions in costs associated with the office of the provost. These reductions were offset by investments in the Human and Organization Development division that included $285,000 in new positions as well as increased operating costs that accommodate new advertising and other onboarding costs for recruiting talent to TSTC.

HOD Provosts Admin

2012 Budget

$4,674,299TOTAL

$4,312,398TOTAL

2013 Budget

1,055,628

3,267,374

190,126

$4,731,030TOTAL

2014 Budget

1,399,276

3,275,023

1,091,784

3,220,614

1,169,656

3,561,374

$4,513,128TOTAL

2015 Budget

1,268,077

2,787,916

245,776

$4,304,377TOTAL

2016 Budget

Support Operaionts

355,

981

75,0

50

1,58

6,27

7

52,5

70

672,

977

4,09

7,66

5

165,

3814

0

1,90

2,19

0

610,

556

37,5

60

4,82

0,08

3

1,83

9,40

7

760,

565 2,

095,

464

451,

380

291,

648

2,08

2,51

4

1,87

2,53

5

791,

739 2,

021,

480

343,

973

306,

611

2,08

2,51

4

1,86

5,64

8

752,

902

1,59

6,32

9

405,

606

246,

760

3,00

3,07

6

2012 Budget

$6,840,520TOTAL

$7,535,773TOTAL

$7,520,978TOTAL

$7,356,686TOTAL

$7,811,491TOTAL


App Development Infrastructure Admin (IT)/Other

Income Producing Shared

2016 Budget

10,000

50,000

1,000,000

500,000

5,000,000

100,000

18


Office of the Chief Executive Officer

Increased costs within the Office of the CEO primarily related to the newly created execution office which was installed to lead the start up of the Fort Bend Expansion.

Business Intelligence

Planned costs for fiscal year 2016 were reduced within the Business Intelligence function. The source of reduced expenditures included reduced accreditation costs and other consolidation-related savings (including salary savings and membership reductions).

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000 Chancellor36

7,98

8

0 213,

411

621,

506

385,

175

642,

101

0

340,

481

711,

124

261,

032

579,

106

0

439,

687

715,

892

266,

758

528,

467

0

530,

046

630,

832

304,

420

567,

116

292,

173

516,

192

674,

300

315,

038

2012 Budget

$1,588,080TOTAL

$1,954,738TOTAL

$2,001,433TOTAL

$1,993,765TOTAL

$2,311,002TOTAL


Execution Office General Counsel Internal AuditExternal Relations

2016 Budget

Institutional Effectiveness & Research Education Effectiveness ERPM Admin

2012 Budget

$1,209,764TOTAL

$1,246,380TOTAL

2013 Budget

1,060,545

171,084

234,897

146,867

880,663

176,425

250,988

171,839

$1,522,649TOTAL

2014 Budget

820,969

212,594

176,201

911,171

169,472

165,737

1,175,280

189,165

158,165

$1,613,393TOTAL

2015 Budget

$1,458,340TOTAL

2016 Budget

Policy

During fiscal year 2015, TSTC launched the Center for Employability Outcomes (C4EO), a new applied research center uses a common skills language to link education and industry for a more competitive Texas workforce. New costs are committed to the start-up and commercialization of the center. Revenues of nearly $650,000 were also budgeted in fiscal year 2016 in connection with the initiative.

CAPITAL PLANNING

Major capital investments are vetted by the Board of Regents on a project-by-project basis. Any project exceeding $1 million requires Board approval. A summary of TSTC’s capital plans is provided in Exhibit B of this report. For each instance of anticipated debt issuance, newly available revenue streams were identified and will be available for debt service (i.e., cash from operations is not the source of repayment for debt service). During fiscal year 2016, TSTC anticipates the following capital financing transactions:

• Equipment financing utilizing the Master Lease Purchase Program through the Texas Public Finance Authority;

• Issuance and sale of general obligation bonds secured by Higher Education Assistance Fund appropriations (HEAF Bonds); and

• Issuance and sale of tuition and revenue bonds authorized (including debt

C4EO Forecasting

2012 Budget

$175,528TOTAL

$179,478TOTAL

2013 Budget

$182,966TOTAL

2014 Budget

$390,618TOTAL

2015 Budget

$1,019,204TOTAL

2016 Budget

450,

400

483,

280

200,000

100,000

300,000

400,000

500,000

service appropriation) by the 84th Texas Legislature (State TRB) through TSTC’s Revenue Financing System.

The estimated timing of these capital finance projects is included in Exhibit C to this report. The first anticipated financing relates to equipment financing to prepare the new facility in Fort Bend for its opening in Fall 2016. In addition, TSTC will seek financing to update teaching equipment needed statewide. TSTC will leverage its statewide buying power for these large capital equipment outlays, as well as augment the purchase plan with targeted gift and other sponsored programs.

The chart that follows illustrates the five-year history of TSTC’s outstanding debt as well as the projected debt based on the anticipated issuances of debt during fiscal year 2016:

20


While TSTC’s debt will grow significantly, the total debt service obligation to be covered from operations will not be affected by the related debt issuances since funding streams are committed for each anticipated issuance of debt. In addition, purchasing the TSTC North Texas technical education facility will free up the $600 thousand annual lease obligation (not recorded as debt payable) currently paid from transition funding.

The table below shows capital project investment by repayment source:

8/31/11 8/31/12 8/31/13 8/31/14 8/31/15 Est. 8/31/16 Est.

40

20

60

80

100

120

140M

illio

ns

PLANT-RELATED DEBT

Estimated Aug. 31, 2015 Proposed Aug. 31, 2016

Debt Covered from Operating Funds 49,213,089 77% 46,483,943 28%

Debt Covered with Other Committed Fund Sources* 14,373,566 23% 86,373,566 52%

TSTC Debt 63,586,655 132,857,508

Facility Backed/Guaranteed by Donor** 0% 33,774,494 11%

* Other Committed Fund Sources included segregated appropriations (HEAF, TRB, Transition Funding) and commitments from joint venture partners

** For facility financed and constructed by TSTC Foundation with gift agreements and guaranty from contributing donor. Includes $26 milion facility financed by the TSTC Foundation (not a TSTC liability) and a $7.8 million gift of land to TSTC.

The following table shows the projected debt service by source of repayment:

Debt Service - Appropriated from State Debt Service Committed from Partners

Debt Service from Operatioins Proposed Debt Service - Appropriated from State

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037

10,000

5,000

15,000

20,000

25,000

30,000

35,000

Thou

sand

s

Bond Rating

TSTC’s bonds are currently rated by two bond rating agencies: Standard & Poors and Moody’s. The following are the latest ratings of TSTC’s bonds by the two agencies:

Rating Agency TSTC Bond Rating Outlook

Standard and Poors A- Stable

Moody’s A1 Negative

22


The 84th Legislature’s authorization of tuition revenue bonds was reported by Moody’s as “credit positive” for Texas institutions. The report indicated that the state financial support for capital projects enables “them to move forward with important campus investments” as state support “is an important source of funding for Texas public university capital investment.” TSTC’s percent of projects authorized was specifically noted in the

report as positive for TSTC since less additional investment will be required by TSTC, relative to other institutions reducing risk for TSTC.

The table below illustrates TSTC’s percent of projects authorized, relative to the other institutions whose tuition and revenue bond projects were authorized:

2016-2017 TRB LEGISLATION

School /System Name RatingNumber of Projects

Project Cost $ Millions

Requested $ Millions

Authorized $ Millions

Percent of Project Authorized

Texas Southern UniversityBaa3

Negative1 $70 $70 $60 85%

Texas Woman’s University Aa3 Stable 1 $51 $38 $38 74%

Texas Tech University System

Aa1 Stable 8 $434 $388 $247 57%

University of North Texas System

Aa2 Negative

5 $482 $393 $269 56%

Stephen F. Austin State University

A1 Stable 1 $58 $58 $46 80%

Midwestern State University

A1 Stable 1 $73 $73 $58 80%

Texas State University System

Aa2 Stable 10 $386 $369 $256 66%

University of Houston System

Aa2 Stable 7 $744 $744 $362 49%

Texas A&M University System

Aaa Stable 22 $1,560 $1,332 $801 51%

University of Texas System Aaa Stable 23 $2,647 $1,926 $923 35%

Texas State Technical College System

A1 Negative 4 $45 $45 $42 94%

Total/Average 82 $6,550 $5,437 $3,103 47%

Bond rating agencies interview TSTC management regularly to stay abreast of trends within the college. This is a routine practice by rating agencies and institutions who have outstanding bonds. The following factors will influence bond rating agency assessment of TSTC’s RFS bonds:

• Stabilization of enrollment following declines is currently a positive factor. The projected increases in enrollment anticipated specifically in Fall 2016 will further relieve pressure on TSTC’s debt rating.

• Projected decline in Unrestricted Net Assets for 2015 will negatively influence the rating agency’s assessment. This expected outcome has been communicated to the rating agencies during each regular analyst interview in fiscal year 2015. The balanced budget for fiscal year 2016 should have a mitigating affect on this factor.

• Improvement in three-year student loan default rates will be a positive factor.

• The increase in state appropriations for TSTC both on a standalone basis and relative to the other sectors of Texas state higher education will be a positive factor.

• Issuance of tuition and revenue bonds to build tuition and fees capacity (security for the Revenue Financing System) was indicated as a positive factor.

• Tuition and fee capacity (security for the Revenue Financing System) from the new, unleveraged facility (provided through gift) in Fort Bend County

HEAF bonds are a General Obligation (GO) debt legally secured by a constitutional pledge of the first monies coming into the State Treasury that are not constitutionally dedicated for another purpose. The HEAF bonds are rated based on the state’s bond rating and not on TSTC’s individual rating.

24


FISCAL YEAR 2016 OPERATING BUDGET REPORTS

Fund

AB

IB

RK

BR

WC

Adm

EWC

FBC

HA

RM

AR

NTX

SWT

WA

CG

rand

..

E&G

Des

igna

ted/

Loca

l

Aux

iliar

y

Res

tric

ted

Plan

t

Gra

nd T

otal

189,

460,

207

11,9

35,0

84

37,6

12,4

21

11,6

57,7

15

25,0

60,8

70

103,

194,

116

73,7

61,8

01

5,33

0,57

2

12,788

,382

7,01

2,02

1

10,497

,395

38,133

,431

19,2

86,1

83

848,06

8

3,42

2,94

5

1,43

3,30

2

979,86

5

12,602

,003

2,95

3,01

7

0

73,359

2,87

9,65

8

11,6

64,7

98

492,85

3

1,91

2,66

4

627,43

5

1,61

5,88

0

7,01

5,96

6

62,6

10,2

24

3,61

1,78

6

19,327

,941

2,58

4,95

7

7,15

5,37

1

29,930

,169

1,71

7,75

3

0

70,796

1,64

6,95

6

3,92

8,35

7

1,44

4,59

8

208,79

5

2,27

4,96

5

10,2

95,0

53

207,20

7

160,49

0

3,63

3,15

7

6,29

4,19

9

973,

081

220,79

2

752,28

8

395,

800

50,977

344,82

3

1,87

4,14

0

554,48

3

1,31

9,65

7

TSTC

Ope

rati

ng B

udge

t FY

16

- Re

venu

es

26


Fund Salaries Operating Travel Capital Benefits Grand Total

E&G

Designated/Local

Auxiliary

Plant

Restricted

Grand Total 189,460,207

37,612,421

11,935,084

11,657,715

25,060,870

103,194,116

20,390,271

164,524

278,357

1,072,454

18,874,936

8,189,266

809,663

4,532,909

1,070,832

937,928

837,934

1,293,559

90,566

42,450

974,974

185,569

82,683,170

34,134,809

7,402,175

7,453,727

16,920,631

16,771,827

76,903,941

2,412,859

2,812,349

5,154,883

66,523,850

TSTC Operating Budget FY 16 - Expenditures by Fund

Function Salaries Operating Travel Capital Benefits Grand Total

Operations

Finance

Marketing

InformationTechnology

Culture

Office of theCEO

BusinessIntelligence

Policy

Grand Total 189,460,207

1,019,205

1,458,340

2,311,002

4,304,377

7,811,491

8,906,859

60,638,676

103,010,258

20,390,271

70,523

1,800

96,800

17,200

21,800

119,353

19,192,393

870,402

8,189,266

10,000

36,372

37,500

456,175

5,914,762

1,734,458

1,293,559

37,900

80,300

122,949

61,700

170,393

151,990

668,327

82,683,170

486,558

175,340

474,590

918,685

4,312,683

3,639,158

23,970,992

48,705,164

76,903,941

424,224

1,281,200

1,649,312

3,209,171

3,377,808

4,521,780

11,408,539

51,031,907

TSTC Operating Budget FY 16 - Expenditures by Function

28

Func

tion

ABI

BRK

BRW

CAdm

EWC

FBC

HAR

MAR

NTX

SWT

WAC

Gra

nd T

otal

Ope

ratio

ns

Fina

nce

Mar

ketin

g

Info

rmat

ion

Tech

nolo

gy

Cul

ture

Offi

ce o

f the

CEO

Bus

ines

sIn

telli

genc

e

Polic

y

Gra

nd T

otal

189,

460,

207

1,01

9,20

5

1,45

8,34

0

2,31

1,00

2

4,30

4,37

7

7,81

1,49

1

8,90

6,85

9

60,6

38,6

76

103,

010,

258

73,7

61,8

02

0

374,46

7

116,30

4

1,44

7,25

0

2,19

9,96

5

2,63

3,34

6

27,389

,011

39,601

,459

15,7

00,0

46

157,12

0

849,32

3

673,75

2

949,42

6

6,44

5,95

1

6,62

4,47

4

2,95

3,01

7

145,07

0

206,54

4

846,39

7

1,75

5,00

6

11,6

64,7

97

173,96

0

422,06

8

130,12

3

747,42

4

3,74

2,62

1

6,44

8,60

1

62,6

10,2

24

288,18

0

144,22

0

1,23

9,24

9

1,44

8,50

3

1,69

1,25

5

16,787

,299

41,011

,518

1,71

7,75

2

228,40

8

390,28

2

151,26

4

947,79

8

3,92

8,35

9

467,83

6

1,59

7,93

1

1,86

2,59

2

10,2

95,0

53

1,01

9,20

5

464,61

3

1,82

2,07

0

201,41

7

3,18

6,64

8

1,32

7,03

8

2,24

6,36

2

27,700

1,58

1,32

0

45,240

81,716

320,97

3

1,13

3,39

1

985,

803

56,520

57,336

298,90

1

573,04

6

4,26

2,03

4

70,740

354,65

6

811,96

6

3,02

4,67

2

TSTC

Ope

ratin

g B

udge

t FY

16 -

Expe

nditu

res

by F

unct

ion

by L

ocat

ion


Func

tion

Div

isio

nSa

larie

sO

pera

ting

Trav

elC

apita

lB

enef

itsG

rand

Tot

al

Ope

ratio

nsS

tude

ntLe

arni

ng

Stu

dent

Dev

elop

men

t

Offi

ce o

fS

pons

ored

Pro

gram

s

Col

lege

Rea

dine

ss

Inno

vatio

n

Adm

in(O

pera

tions

)

Gra

nd T

otal

366,

944

1,11

2,84

0

2,44

1,95

7

5,27

8,29

5

43,8

14,7

61

49,9

95,4

60

1,80

0

71,5

96

59,0

00

238,

006

500,

000

0

25,0

00

51,0

00

364,

708

43,9

78

1,24

9,77

2

15,8

00

30,0

00

78,0

60

81,6

78

135,

520

327,

269

31,9

00

178,

158

583,

473

2,42

1,85

2

36,7

02,7

74

8,78

7,00

7

317,

444

879,

682

1,65

7,82

8

2,35

1,05

7

6,69

4,48

3

39,1

31,4

13

103,

010,

258

870,

402

1,73

4,45

866

8,32

748

,705

,164

51,0

31,9

07

TSTC

Ope

ratin

g B

udge

t FY

16 -

Expe

nditu

res

for t

he O

pera

tions

Fun

ctio

n by

Div

isio

n

30

Func

tion

Div

isio

nSa

larie

sO

pera

ting

Trav

elC

apita

lB

enef

itsG

rand

Tot

al

Fina

nce

Ben

efits

Offi

ce o

fFa

cilit

ies

&P

lann

ing

Aux

iliar

yS

ervi

ces

Acc

ount

ing

&R

epor

ting

Fina

ncia

lS

ervi

ces

Stra

tegi

cIn

itiat

ives

Gov

erna

nce,

Ris

k &

Com

plia

nce

Fina

ncia

lA

naly

sis

Res

erve

s

Adm

in (F

inan

ce)

Logi

stic

s

Gra

nd T

otal

20,0

00

227,

776

660,

000

801,

228

835,

344

2,35

3,01

2

2,95

4,91

5

7,23

4,57

8

12,5

02,9

00

14,1

73,9

86

18,8

74,9

36

1,80

0

13,0

00

500

278,

357

23,8

00

18,8

74,9

36

00

1,50

0

16,0

00

2,00

0

33,6

65

1,39

2,44

0

2,00

8,33

2

2,46

0,82

5

6,34

0

10,0

00

7,40

0

5,00

0

56,4

00

13,2

50

42,6

00

11,0

00

20,0

00

29,7

56

660,

000

12,1

00

639,

560

2,00

5,21

4

528,

782

5,25

2,63

6

7,43

4,53

0

7,38

8,41

3

189,

880

777,

628

172,

384

327,

798

2,33

6,06

8

575,

752

2,73

9,08

1

4,28

9,94

8

0

60,6

38,6

7619

,192

,393

5,91

4,76

215

1,99

023

,970

,992

11,4

08,5

39

TSTC

Ope

ratin

g B

udge

t FY

16 -

Expe

nditu

res

for t

he F

inan

ce F

unct

ion

by D

ivis

ion


Func

tion

Div

isio

nSa

larie

sO

pera

ting

Trav

elC

apita

lB

enef

itsG

rand

Tot

al

Mar

ketin

gC

omm

unic

atio

ns

Rec

ruitm

ent

Car

eer S

ervi

ces

Fiel

d D

evel

opm

ent

Adv

ance

men

t Ops

Mar

ketin

g (A

dmin

)

Gra

nd T

otal

444,

038

690,

774

847,

856

875,

733

1,87

7,68

6

4,17

0,77

2

31,0

00

83,5

00

4,85

3

2,00

0

34,5

00

48,6

75

371,

000

10,2

68

12,0

00

10,0

00

55,3

50

37,7

50

45,0

25

430,

170

298,

070

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TSTC Strategic Plan

TSTC’s RALLYING CRY: “PLACE MORE TEXANS”

GOAL 1: Grow as the Perpetually-Relevant, Innovative, Go-To, Statewide Technical Education Source for Texas

Objective 1.1: Enhance the delivery of student related products and services

Strategies:

1.1.1 Expansion. Stand up and expand start-up operations at TSTC’s newest locations.

Performance Indicator(s): (form & content to be developed)

1.1.1.1 – Hutto location annual assessment report

1.1.1.2 – Red Oak location annual assessment report

1.1.1.3 – Ft. Bend county location annual assessment report

1.1.2 Skill Mastery. Provide students with learning experiences required to achieve relevant levels of technical skill mastery leading to successful employment or advancement.

Performance Indicator(s): (form & content to be developed)

1.1.2.1 Competency-based instruction annual assessment report

1.1.2.2 Continuous improvement of learning assessment report

1.1.2.3 Curricula update annual assessment report

1.1.2.4 Annual program facilities assessment report

1.1.2.5 Annual percent of students achieving course-level mastery (to be defined and methodology of assessment developed)

1.1.2.6 Annual number of former TSTC students found working in the Texas economy

1.1.2.7 Average annual wages of former TSTC students found working

1.1.3 Innovation. Accelerate innovation in delivery of technical training, including competency-based learning, and badges to increase speed of workforce supply to Texas’ industry.

EXHIBITS


Performance Indicators: (definitions & methodologies TBD)

1.1.3.1 – Percent of programs offering competency-based instruction options

1.1.3.2 – Percent of programs offering badges

1.1.3.3 – Number of students earning badges annually

1.1.3.4 – AAS Graduate average time to complete

1.1.3.5 – Certificate Graduates average time to complete

1.1.4 Veteran Services. Enhance and improve student support services for veterans.

Performance Indicators:

1.1.4.1 – Number of staff and annual budget devoted to Veterans Services

1.1.4.2 – Annual unduplicated number of veterans served

1.1.4.3 – Placement rate for Veterans exiting TSTC

1.1.4.4 – Average annual salaries for placed veterans

1.1.5 The Student Experience. Enrich the student experience through integrated, accessible and responsive services that enhance learning for each TSTC student.

Performance Indicator:

1.1.5.1 – Selected items on the Annual Survey of Student Satisfaction (to be selected)

Objective 1.2: Broaden the market appeal of TSTC’s Products and Services

Strategies:

1.2.1 Branding. Inspire and activate loyalty to TSTC by its current and prospective customers.

Performance Measures:

1.2.1.1 – Marketing Engagement Report

1.2.2 Industry Relations. Deepen our relationships with Texas employers to enrich their supply of job-ready technicians and ensure their workforce maintains a technical edge.


1.2.2.1 – Number of Texas employers who hire former TSTC students annually

1.2.2.2 – Industrial Career Day report

1.2.2.3 – Job Star Data report

1.2.2.4 – Equipment Donation report

1.2.3 C4EO. Expand the Common Skills Language project for aligning skill-based language to validate learning outcomes for relevancy and curriculum alignment


1.2.3.1 – Percent of TSTC programs for which curricula is validated or updated using the CSL project process annually

1.2.4 Partnerships. Continue working cooperatively with Texas community colleges and other partners to address Texas industry’s training needs regardless of their location in the state.


1.2.4.1 – Number and list of active partnerships

1.2.4.2 – Number of students served in active partnerships

38

Objective 1.3 Provide essential services and leadership in support of operations

Strategies:

1.3.1 Single Accreditation. Merge the four TSTC college accreditations into a single, statewide accreditation to provide an efficient structure for increased instructional capacity, innovation, sustainability, quality, consistency, and flexibility to respond to the growth opportunities that lie ahead.


1.3.1.1 – SACSCOC votes to approve TSTC’s merger, June 2015

1.3.1.1 – TSTC Compliance report submitted Nov. 2015

1.3.1.2 – SACSCOC Site Visit, end of Jan. 2016

1.3.1.3 – TSTC addresses any outstanding recommendations, Apr. 2016

1.3.1.4 – SACSCOC accepts TSTC’s actions on any recommendations, June 2016

1.3.2 Optimization. Employ reasonable means to leverage and extend the entire system’s resources for greater operating efficiency, including statewide integration of administrative and operational functions.

Performance Measures: (Content and format TBD)

1.3.2.1 – Student Learning annual status report

1.3.2.2 – Student Development annual status report

1.3.2.3 – Finance Division annual status report

1.3.2.4 – Business Intelligence annual status report

1.3.2.4 – Marketing/Development annual status report

1.3.2.5 – Facilities/Auxiliary Services annual status report

1.3.2.6 – IT Services annual status report

1.3.2.7 – Organizational Development annual status report

1.3.2.8 – Technology Enhancement annual status report

1.3.2.9 – OPM annual report

1.3.3 Program Vitality. Further develop the economic model, tools, and strategies for evaluating programs within the framework of TSTC’s new funding formula as well as other factors, including current and future market demand and program cost

Performance Measures: (Content & format TBD)

1.3.3.1 Annual Status of Educational programs report

1.3.4 Service. Exceed expectations of customers with a sense of warmth, friendliness, and individual pride.


1.3.4.1 – Selected responses on annual student satisfaction survey (TBD)

1.3.4.2 – Student focus group outcomes (TBD)

Goal 2: Build a Top Shelf Fundraising Capacity That Provides Consistent & Meaningful Financial Resources

Objective 2.1 Advancement: Build financial resources for the College

Strategies:

2.1.1 Culture of Philanthropy. Build the unified case for support, impassioned volunteer

leadership, and equipped sales force for long-term fundraising success. Performance Measures:


2.1.1.1 – Annual Development report

2.1.1.2 – Number of annual donors to TSTC and The TSTC Foundation

2.1.1.3 – Alumni Report

2.1.1.4 – Number of Individuals and Organizations Engaged Annually

GOAL 3: Make TSTC a Great(er) Place to Work

Objective 3.1 Organization Development: Shape the culture of the college to maximize success for all

Strategies:

3. 1 . 1 Employee Engagement. Provide the tools, resources, and support necessary to ensure success of all employees


3.1.1.1 – Report of Employee Satisfaction results

3.1.1.2 – Compensation Progress report

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TSTC FUND ACCOUNTING GUIDE

TSTC FUND ACCOUNTING EXPLAINED

Definitions

Fund – A sum of money saved or made available for a particular purpose.

Fund Accounting – The accounting for funds that serve different or separate purposes. In effect, accounting for various funds can be compared to accounting for different companies or different divisions of a company. All transactions are separately accounted for to keep the fund balances separate, even though actual cash from some of the funds may be co-mingled in local bank accounts.

Fund Accounting Equation –

Beginning Balance + Revenues – Expenditures = Ending Balance

TSTC Funds – See attached list.

Budget – An expenditure plan.

Unit – An account code that is associated with a department or unique purpose. Any number of units make up a TSTC Fund.

Summary

TSTC Budgets are essentially Expenditure Plans. TSTC Expenditure Plans must be balanced against Revenues for each fund, including use of prior revenues included in a fund balance.

TSTC establishes budgets at the UNIT level. Once Budgets are established, TSTC maintains fiscal control by monitoring Expenditures against the Budget.

The Board adopts an Original Budget for each Fiscal Year. During the year, the budget is adjusted to account for any necessary changes, including new gifts, grants and other revenue sources as they occur. Some budget changes require Board approval ($250,000

or over/$500,000 or over for Construction projects), but smaller ones do not.

TSTC Funds

Fund NO.

1. Education & General (E&G) – Appropriated by State of Texas, kept in State Treasury, expended from State Treasury. Includes State tuition collected by TSTC (Fund 237) and General Revenue of the state (Fund 001) for the purpose of instruction, student development, administration, operating and maintenance of plant, employee benefits, and other authorized uses.

2. Loan Funds – Gifts and tuition set-asides for student loans. Not budgeted. Kept in TSTC local bank accounts.

3. Designated Funds – Funds for instruction, administration, operating and maintenance of plant, capital improvements, student services, and other college uses. These funds are kept in TSTC local bank accounts.

4. Auxiliary Funds – Includes funds related to TSTC operations that charge for services provided, such as bookstores, food service, housing, airport, and lease of property. These funds kept in TSTC local bank accounts.

5. Endowment Funds – Includes gifts or funds raised for providing long-term revenue for the college, from which only earnings are expendable. These funds are generally transferred to another fund prior to expenditure, not budgeted in Fund 5. These funds kept in TSTC local bank accounts.

6. Restricted Funds – Gifts and Grants to be used for specific purposes defined by the external originating source: federal, state and local governments, or private sources. Kept in TSTC local bank accounts, but most operate on a reimbursement basis.


7. Agency Funds – Funds which are other peoples’ money; administered by TSTC acting as custodian, such as for student organizations, The TSTC Foundation, etc. These funds are kept in TSTC local bank accounts. Budgets are set by the organization served.

8. Plant Funds – Funds set aside for construction, renovation, repairs and debt service. Plant funds are unique in that they generally originate in the other funds and are then moved into plant funds through the budgeting process. Includes both funds held in the State Treasury as well as funds in TSTC local bank accounts.

9. Balance Sheet Accounts – This fund is a repository for all TSTC Balance Sheet Accounts including Assets, Liabilities and Net Assets.

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© Copyright Texas State Technical College, all rights reserved. Published July 2015.

Texas State Technical College is accredited by the Southern Association of Colleges and

Schools Commission on Colleges to award Associate of Applied Science degrees and

Certificates of Completion. Contact the Commission on Colleges at 1866 Southern

Lane, Decatur, Georgia 30033-4079 for questions about the accreditation of TSTC.

Equal opportunity shall be afforded within Texas State Technical College to all

employees and applicants for admission or employment regardless of race, color,

gender, religion, national origin, age, disability, genetic information or veteran

status. TSTC complies with the Texas Equal Opportunity Plan. The person designated to coordinate compliance activities is the

Dean of Students, James Fickens. He can be reached at [email protected].

annual budget report 10 30 2015

Documents