Keeping the doors of access open

Executive Summary of Task Force Report

During Delaware Technical & Community College’s (DTCC) capital budget hearing in May, 2006, Dr. Orlando J. George, Jr., President, outlined a number of the College’s challenges in providing future educational access for Delawareans including: (1) Responding to growing enrollment; (2) Meeting Delaware’s future workforce needs; and (3) Supporting the State’s economic development efforts. As part of an effort to address DTCC’s short and long term capital needs, the General Assembly directed that a joint review of the College’s funding needs be conducted to determine if the current funding structure should be modified. Findings and recommendations are to be made to the Governor and members of the General Assembly by November 30, 2006.

This report is in response to this directive from the General Assembly and was prepared by representatives from the Offices of the Controller General and Director of the Office of Management & Budget (OMB) and personnel from Delaware Technical & Community College. The purpose of this report is to provide: (1) a historical review of the growth at the College along with projected growth in certain areas through the year 2020; (2) an overview of the College’s capital needs for both deferred maintenance and renovation costs along with expansion projects that are needed to continue to be responsive to the business community as outlined in DTCC’s Capital Needs Report dated April 25, 2006; and (3) recommendations and options for consideration to address the short- and long-term capital needs of Delaware Tech.

During 2007 Delaware Technical & Community College will be celebrating its 40th anniversary having directly and indirectly touched the lives of thousands of Delawareans throughout the State. The College has a unique mission to not only provide the necessary academic degree programs, but also the training and re-training of Delaware’s workforce which is dynamic with people retiring, upgrading their skills and filling new openings due to business expansion. This has lead to the unduplicated enrollments for credit and non-credit students of approximately 41,000 during 2006.

Concurrent with the projected growth in the College’s enrollment, academic programs and the expansion of comprehensive services to its students (counseling, financial aid, job placement, mentoring, etc.) is the need to both maintain and preserve existing capital assets while also expanding to meet the projected demand for the next four decades. The ability of the existing funding structure to meet future demand and provide access for all Delawareans remains a major concern of DTCC’s Board of Trustees, administrators, faculty and staff.

The following pages include the Task Force’s findings, recommendations and options identified for consideration by Governor Minner and members of the General Assembly.

  1. FINDINGS

    1. The College has experienced dramatic growth in its credit and non-credit enrollments during its first forty years of existence as evidenced by the unduplicated enrollment of 40,997 in Fiscal 2006, 93% of whom are Delaware residents. Also, according to the College’s Graduate Placement report for 2005, 90% of the graduates stayed in Delaware working for over 500 companies after completion of degree requirements or other training and re-training. Delaware Tech also serves more Delawareans, more Delaware women and more Delaware minorities than any four year higher education institution in the State.

    2. The dramatic growth in enrollment can be attributable to DTCC’s responsiveness to Delaware’s workforce needs as reflected in the significant increase in the number of: (a) academic degree programs (+26%); (b) diploma programs (+25%); and (c) certificate programs (+31%) in the last ten years alone. The College also has 48 nationally accredited programs versus 15 just 6 years ago (+220%) and the number of articulation agreements with four year institutions has increased by 510% (from 10 to 61) in the past ten years as the College continues to create pathways into both the workforce and advanced degrees. The College’s responsiveness to workforce needs is evidenced by the nursing program expansion which has increased the size of the program by almost 120% and the annual number of nursing graduates by 91% (from 190 to 363) while maintaining the highest licensure passage rate in the State among four year institutions.

    3. In addition to meeting the workforce needs of the state, the College also supports the State’s economic development efforts by not only increasing the level of education of the Delaware workforce but also increasing tax revenues accruing to the State. This is accomplished not only through the College’s credit and non-credit programs, but also through partnerships formed in such areas as Bio-technology (Delaware Biotechnology Institute), Manufacturing (Delaware Manufacturing Extension Partnership), Airframe Mechanics (Sussex County Council), etc. Based on a number of economic impact studies of community colleges, an educated workforce not only translates into higher earnings and a more robust economy, but also other socioeconomic benefits such as reduced crime, improved health and reduced welfare/unemployment.

    4. In April, 2006, DTCC issued a Capital Needs Report that outlined the current deferred maintenance and renovation costs of its existing facilities and a capital expansion plan related to the projected increases in enrollments through Fiscal 2020 (see College-wide Facilities Overview in Attachment section). The report stated that:

      1. Based on a review of existing facilities and the projected expansion necessary to meet both the current and future demand for educational and training services through Fiscal 2020, the College is projecting a need for an additional 448,400 square feet at a projected cost of $162.2 million. These projects include:
        • Three Health Science Buildings (Owens, Stanton & Terry)
        • Two Student Service Centers (Stanton & Terry)
        • East Building Expansion (Wilmington)
        • Conference & Training Center (Owens)
        • Major Interior Classroom/Lab Renovations (Wilmington)
        2. During the past ten years, the average annual appropriation for capital expansion has been $4.1 million. If the present Fiscal 2007 approved funding of $2 million is included, the annual average decreases to $3.9 million since fiscal 1997.

      2. Given a current replacement value of $390.8 million for the College’s existing facilities, the College should be reinvesting 2.5% of the replacement value or $9.8 million per year in its existing facilities based upon industry standards. During the past five years, cumulative capital appropriations for MCI, Campus Improvements and renovations totaled $13.9 million or $2.8 million per year. This represents a shortfall in the College’s capital reinvestment of $7.0 million per year. (The College received $2.2 million in Fiscal 2007 for MCI and campus improvements.)

    5. DTCC performed a utilization analysis of its existing facilities based on methodologies used in North Carolina and Virginia. The College determined that during the Fall 2005 semester the College: (a) utilized 96% of its scheduling capacity for credit students; (b) exceeded the standard occupancy rate at each campus; and (c) expanded its capacity by scheduling approximately 200 class meetings in non-classroom space for credit classes and nearly 1,300 hours per week at 123 satellite facilities off campus.

    6. As outlined in item #4, the current structure for funding the College’s capital needs is insufficient and also very expensive when considering the extended time period for completing projects. The unpredictability of the existing structure has resulted in DTCC’s inability to adequately develop plans for the maintenance and preservation of its existing capital assets and expansion to meet a growing demand in all three counties. This structure has also led to an extended project completion with the last two major capital projects funded over ten (Owens) and nine (Terry) fiscal years and the existing expansion project at the Stanton Campus in its seventh fiscal year of funding with only one-third of the funding being approved.

  2. RECOMMENDATIONS AND OPTIONS

    3. The Task Force has reviewed the following options related to the College’s current funding structure:

    1. Continue status quo: In addition to the major issues outlined in item #6, continuing to fund the College’s capital program under the existing structure will result in: (1) the College turning away students and reducing access for Delawareans; (2) negatively impacting the College’s ability to meet the future workforce needs of Delaware’s business community; and (3) diminishing the College’s ability to respond to the economic development efforts of the State and local communities. Limiting access would ultimately reduce income tax revenues. It also adversely affects the benefits associated with having a diverse workforce that will be impacted when access for traditionally underserved populations are limited.

    2. Dedicate existing revenue source: DTCC has been able to diversify its revenue base for operations but continues to fund almost all of its capital projects with General Fund appropriations. This option would involve dedicating and/or increasing an existing general fund revenue source for the College’s capital program. While dedicating or earmarking existing revenues to the College would provide a predictable revenue source for college-wide capital planning purposes, it would negatively impact the ability of other State agencies to provide needed services.

    3. Establish a Community College Infrastructure Fund: At the present time, local funding mechanisms exist for community colleges in over twenty states that could be developed and adapted for use in Delaware. Under this option, revenues generated from a property tax would be collected on a statewide basis using the existing administrative structure in place for the school districts. All existing exemptions currently in place in each county will remain unchanged. Rates would be established by the DTCC Board of Trustees on a fair and equitable basis statewide and generate the predictable revenue source necessary for sound strategic capital planning. These revenues would not reduce General Fund revenues and would be sufficient to fund both minor capital projects and leveraged for the long term expansion plans identified through Fiscal 2020 without placing a significant financial burden on households and businesses. Based on an average market value of a Delaware home of $174,400, the average annual cost per household would be less than $16 in the first year and gradually increase each year but not exceeding $50 at the end of ten years. A statutory cap of $50 per year for the average household would be placed on the rate.

    In summary, DTCC has experienced dramatic growth in numerous areas during its first 40 years of existence and has elevated its role as a key component in the economic development efforts of the State. This has been accomplished by being responsive to the education and training needs of the State’s business community. The College not only provides 19,593 students— the overwhelming majority of whom are Delawareans—with the necessary academic degree programs required by Delaware’s employers but also training, re-training and educational support programs for over 21,400 individuals of all ages throughout the entire State.

    Based on our review of the historical and projected information provided, the Task Force recognizes the important role DTCC plays in: (a) providing access to educational opportunities for all Delawareans; (b) addressing the workforce needs of the business community; and (c) playing a vital role in the economic development efforts of the State. As a matter of public policy, it is of the utmost importance that the doors of access remain open in the future for all Delawareans as DTCC prepares for its next four decades of operation.