Prepared Remarks
Max Castillo
President, University of Houston-Downtown
Legislative Appropriations Request Hearing
Before Governor’s Office of the Budget and Legislative Budget Board
University of Houston-Downtown Presentation
Hilton University of Houston Hotel
September 14, 2004
Thank you for the opportunity to appear before you this morning to tell you a little bit about UH-Downtown and our funding needs. This is my twelfth year as president of the university and I can honestly say that I have never been more excited about UHD’s future. This is a university deeply committed to the state’s goal of providing “an affordable, accessible, and high quality system of higher education that prepares individuals for a changing economy and workforce.” UH-Downtown is positioned to play a critical role in helping the state “Close the Gaps.”
For the most part, my remarks will follow the basic organization of the administrator’s statement section of our LAR.
First, I will review with you some of the changes we have made in the past two years and the strong ties we have to our service area. Second, I will highlight some of the external factors that affect our operations. And finally, I will conclude by going over the funding requests we are making for the next biennium.
Before reviewing the information you’ve already received, I would like to take a few minutes to give you an overview of UH-Downtown. I suspect that as you conduct these hearings around the state, it can sometimes be difficult to keep all the different institutional identities straight. All of us share a commitment to serve the state’s educational needs, but there is significant variation in our individual missions. We don’t operate under a highly centralized “one-size fits all” model of higher education.
UH-Downtown is a relatively young university, but we have achieved impressive growth in our 30-year history, which demonstrates our effectiveness in responding to this metropolitan region’s educational needs. UHD’s annual growth rate from Fall 1998 to Fall 2003 was 5.5 percent. We have only preliminary enrollment figures for Fall 2004 but are certain to have a record enrollment of over 11,300 students, once the final day of payment occurs tomorrow.
As an urban commuter university, UHD recognizes that we have a special responsibility to provide educational access to those who have not had access in the past. We offer flexible course schedules, innovative technology and distance learning opportunities, and a policy of open admissions at the undergraduate level.
Let me give you a brief profile of our student body.
Approximately 60 percent of UHD’s new freshmen are first-generation students, while 43 percent come from low-income families as defined by Pell Grant eligibility. Many have not completed the recommended pre-collegiate curriculum in high school and require developmental work before they can proceed with college-level course work. And three-fourths have jobs and a slight majority attend on a part-time basis.
We are the most diverse university in the state with a racial and ethnic mix that closely mirrors that of the Houston area.
UHD’s basic mission remains unchanged, but we have made major changes in the way we carry out that mission.
This fall, we offered two new graduate programs—in security management, and professional writing and technical communications—to go along with our programs in teaching and criminal justice. Our graduate enrollment increased 28 percent this fall. UHD will seek additional master’s level authority in carefully selected areas, but we will remain a predominantly undergraduate university that focuses on excellence in teaching.
UHD has restructured some of our administrative operations—most significantly, through creation of a new college. The College of Public Service houses the Departments of Criminal Justice and Urban Teacher Education. The programs were specifically developed to meet community needs. We are working to incorporate civic engagement activities into all our degree programs.
Growing enrollments have also created the need for additional space.
We opened the 90,000-square-foot Commerce Street Building this past summer. The building was financed by $18.2 million of tuition revenue bonds authorized by the 77th Legislature.
We also finished renovations on the Willow Street Pump Station, which provides meeting and gallery space for both the university and the community. By the way, Willow Street is now officially on the Register of National Historic Places.
UHD is committed to using technology to serve our students. For example, students can conduct almost all of their university business online, through student e-services. Students can apply for admission, register for classes, pay fees, and access other student services on a 24-hour, 365-day basis.
We will continue to expand the number of courses offered online, as well as at various sites in the Houston metropolitan area.
The percentage of semester credit hours (SCH) generated by online courses jumped 17 percent from Fall 2003 to Fall 2004, while the actual number of students taking at least one online course increased 43 percent over last fall.
The SCH’s generated at the off-campus teaching centers also increased significantly—by 81 percent at the UH System at Cinco Ranch, 12 percent at the UH System at Sugar Land, and 20 percent at the University Center in The Woodlands.
Another initiative to expand access is a joint admission program with North Harris Montgomery Community College District. The program streamlines the enrollment, financial aid and credit transfer process and provides a seamless transition between two-year and four-year degree programs.
Other examples of collaboration with community colleges include:
A program funded by the NSF at San Jacinto North Community College. The program facilitates the transfer process of students into all of UHD’s science, technology, engineering and mathematics programs. And we have a Title V grant that supports a partnership with Houston Community College to help first-generation students make the transition to college. All of these partnerships directly support the goals of the state’s Closing the Gaps in Texas plan.
We have accomplished these new initiatives during a very challenging time. Enrollments are surging at the same time that we are experiencing a lower revenue stream from the state. To deal with the demands of growth, maintain institutional momentum, and provide a high quality educational experience, we have had little choice but to raise tuition. Designated tuition and fees increased 16.9 percent from Spring to Fall 2004. We are acutely aware that these increases have real consequences for students, and we make every effort to hold the line.
Students taking courses no longer funded by the state are especially hard hit. In Fall 2004, UHD began charging an additional $65 per SCH in premium tuition to students who are over the 18-hour cap for developmental courses and to students who take the same course more than two times. These increased rates are designed to cover the full costs of courses that are not eligible for state formula funding.
Fortunately, as costs have increased, so has the availability of financial aid:
UHD awarded a total of $27.5 million in aid during the 2003-2004 academic year. During the 2003-2004 academic year, 68 percent of our students received some form of financial help.
For FY 2005, the scholarship set-aside from designated tuition, as mandated by the legislature, provided $461,230 in new scholarship dollars. The university’s allocation of B-On-Time loan funds was $367,935.
Money is not the only barrier that students face in completing their college degrees. Because many UHD students are not fully prepared for university-level work, we provide individualized success plans for developmental students and closely monitor their progress—through the Texas Success Initiative.
We provide student support through outside funding in a number of ways. Just one example is our Learners Community. With the help of a $1.9 million grant from the U.S. Department of Education, the university offers a select cohort of freshmen a variety of special services designed to enhance their social and academic integration into the university.
UHD’s basic target population and service area remain unchanged. About 83 percent of our enrollment comes from Harris County, while another 12 percent comes from surrounding counties. Most of the remaining 5 percent are international students.
To accommodate working students, UHD offers courses at a variety of times and in a variety of formats. Over 31 percent of semester credit hours are being taught in the evening this fall
and another 4 percent are taught on the weekend.
UHD is an “engaged” university and will continue to work closely with other public and private institutions in addressing the educational needs of the Houston metropolitan region and the state. We have a number of partnerships with area schools to improve the quality of pre-collegiate education. Pre-collegiate programs include Talent Search, Upward Bound, The Houston Urban Learning Initiatives in a Networked Community,
Houston PREP, The Computational Science Academy, and our nationally acclaimed partnership with Jeff Davis High School
UHD’s Urban Teacher Education program works closely with selected schools in the Houston Independent School District and other districts to train prospective teachers for inner-city schools. The professional development needs of current teachers and administrators are served by an extensive array of graduate courses and in-service training programs.
In the years ahead, UH-Downtown’s contribution to the state’s priority educational goals will be affected by a number of external factors.
Our success in expanding access and producing more graduates from underserved populations has been accomplished with significantly less funding than other state universities receive. According to the Texas Higher Education Coordinating Board, UHD’s $4,700 per FTSE in state funding was approximately 35 percent below the state average for other four-year institutions.
For FY2005, state general revenue represents 35.3 percent of total operating revenues, a drop from 39.7 percent in FY2004. Tuition revenue appears to be the primary source of new funding in the foreseeable future. It currently accounts for 33.3 percent of UHD’s funding for operations, an increase from 29.8 percent in FY 2004. While UHD is committed to removing financial barriers to higher education, it’s almost certain that higher tuition and fees will deter some from attending.
Demographic projections indicate that there will be 500,000 new students coming through the educational pipeline over the next decade. Many of these students will be first-generation college students and a disproportionate number of them will be minorities. As the most ethnically diverse institution in the state, UHD will play a major role in providing access to this group.
We recognize that community colleges will be the initial entry point for many students. That’s why we are placing such a high priority on community college partnerships. The exact composition of future student cohorts will be affected by factors such as curriculum reforms in the public schools, and changes in the state’s economy and immigration patterns.
UHD urges that efforts continue to provide for Texas’s economic future through greater investment in all levels of the state’s educational system. The Council of Public University Presidents and Chancellors has prepared a list of those issues that are of special concern to those of us in higher education. I am in strong agreement with my colleagues that for Texas to preserve its previous and historic levels of state funding for higher education, priority should be given to full funding of formulas, full funding of principal and interest of all previously issued tuition revenue bonds, full funding of enrollment growth, continued funding for special items, and funding of group health insurance premiums at a level that does not pass on increased costs to employees.
In addition to seeking greater overall support for higher education, UHD is seeking special item funding for three current initiatives—tuition revenue bonds, institutional enhancement,
and community development.
We would like authority to issue additional tuition revenue bonds to construct the facilities that will be needed to keep up with our growing enrollments.
UHD is also requesting as an “exceptional item” the restoration of the approximately $1.9 million that we pulled from the existing institutional enhancement special item. We did this in order to comply with the 5% reduction directive.
UH-Downtown is seeking full funding to cover debt service on bonds. That includes $22.4 million issued in 1995 for construction of an academic/student services building, $7.5 million issued in 1999 for development of the campus infrastructure, and $18.2 million issued in Fall 2002 for the construction of a new classroom building.
Without the proceeds from these bond sales, UHD would not have been able to develop the facilities needed to accommodate our steadily growing student body.
Even with the recent opening of our new classroom building, UHD has a space deficit of 215,666 square feet (according to the Texas Higher Education Coordinating Board’s 2003 Space Projection Model). During the last five years, we have had an average growth rate of 5.5 percent. If this growth continues for the next five years, we will have an enrollment of 14,343 by Fall 2008. If no new facilities are available by then, we will have no choice but to cap enrollment.
Because we have to move ahead quickly with plans for a new facility, we have issued an RFP seeking a private developer to construct and finance a new instructional facility. UHD would enter into a lease/purchase agreement with the developer so that the university would eventually own the facility. The RFP calls for a building of about 150,000 gsf (97,500 assignable) on top of a parking garage with a pedestrian/vehicular connection to the One Main complex. In order to pay for this facility, the university is requesting $30,000,000 in TRBs. If the full amount is not appropriated, we propose sharing the cost between TRBs and university-generated fees. I have reviewed these plans with State Representative Talmadge Heflin, chair of the House Appropriations Committee, who indicated he was glad we were exploring cost-sharing arrangements and believed what we were proposing was “do-able.”
Another funding initiative is construction of a new teaching center in the northwest Houston area, which is seeing rapid population growth.
In order to provide selected baccalaureate and master’s degrees there, UHD is seeking $16 million in TRBs to build a facility with approximately 80,000 gsf. In addition, the UH System is requesting special item funding for the start up operations of this teaching center along with three other teaching centers. We estimate that it will cost about $1.6 million (about $600,000 for one-time technology) to initiate operations at the facility and about $900,000 in costs the second year.
In planning this center, UHD is working closely with the Cy-Fair College of the North Harris Montgomery Community College District. The center would allow Cy-Fair College students who have completed their associate degrees to pursue a baccalaureate degree without making the long commute to a four-year university.
UHD’s urban mission and our commitment to provide educational access to all segments of the community present special challenges that are difficult to meet through the regular funding formulas. Institutional enhancement funds have enabled the university to make significant improvements in the quality of services delivered to students. We are requesting that these funds be continued into the next biennium, but we are submitting our request in two parts in order to comply with the five percent reduction directive. The amount requested for continuation of the existing enhancement initiative has been reduced by $937,842 in FY 2006 and by $971,941 in FY 2007. In order to avoid severe reductions in critical services to students, we are asking that these amounts be restored in a separate exceptional item request. Without these funds, UHD will either have to reduce some services to students or raise designated tuition an additional $4/SCH.
UHD has operated with the conviction that access and excellence are not mutually exclusive values, but that the quality of an educational program is actually enhanced when it is offered in a culturally and ethnically diverse environment.
For thirty years, UHD has been helping the state build for the future by offering citizens affordable, accessible, and high quality education programs. With appropriate support we can make an even greater contribution to the realization of the state’s educational goals.