As community colleges continue to serve an increasingly diverse student body, enrollment continues to grow along with capacity challenges. Developing a facilities master plan is critical to serving students and ensuring their success. It takes more than a master plan, however, to actually design and construct buildings. Financing the facilities is job No. 1.
Traditionally in Texas, colleges have to pass either general obligation or revenue bond elections. In either case, institutions pay steep interest and consultant fees. Yet, the Tarrant County College District has taken a different approach, by paying cash instead of relying on general obligation bonds. The methodology used by the college chancellor to develop this “pay-as-you-go” approach was based on planning, research and assessment, followed by consultation with the board.
Several years prior to the implementation of this “pay-as-you-go” strategy, college enrollments had been declining, which caused reductions in state funding as well as in tuition and fee income. The college had accumulated the highest tax-supported bonded indebtedness of the 50 Texas public community college districts and had depleted the funding made available through the prior bond election. Declining revenues deferred maintenance and did not allow for adequate funding of the operating budget. This required the college to access its already inadequate reserves in order to achieve a balanced budget.
In early 1997, officials recognized the need to develop a plan for corrective action. There was a need to consider historical information and generate viable models toward financial selfsufficiency and excellence. For example, information on past and projected salary increases was obtained from comparable Texas colleges and those within the college’s service area. Internal estimates were projected for technologyrelated equipment, general equipment, capital improvement projects, staffing needs and other operational expenditures. To ensure inclusiveness, faculty and staff were asked to prioritize their needs. The information served as a guide during the institution’s new budgetary decision-making processes. The chancellor communicated the possibility that funding might not materialize, emphasizing the necessity to take unprecedented action.
One of the most important actions that ensured the successful implementation of the “pay-as-you-go” strategy was conducting budget workshops with the board of trustees. The chancellor provided detailed information and possible funding options that could be adopted by the board. For example, the college’s tax rate had been identified as the lowest in the state, while maintaining the state’s highest bond indebtedness. The college district’s financial advising firm was brought in to affirm that the chancellor’s recommendation to cease incurring more debt via interest-bearing bonds, in favor of increasing the maintenance and operations tax rate, was a viable option. This allowed the trustees to feel comfortable in acknowledging and embracing the “pay-asyou- go” strategy.
As part of an effective communication strategy, the chancellor and trustees met with the local newspaper’s editorial board. The chancellor also presented the college’s new funding strategy to the college family, community leaders, service organizations, and business leaders. Taxpayers had the opportunity to express support or concerns during a public hearing scheduled prior to the board’s review and approval of the funding tactics. Those in support far outnumbered those in opposition.
