FY23 Strategic Plan and Budget Report

STRATEGIC PLAN & 

BUDGET REPORT 

FISCAL YEAR 2023

APPROVED 08/18/2022

APPROVED 08/18/2022 

A LETTER FROM THE CFO 

To our Regents, 

“Be bold? Or be safe?” These were the options considered 

by TSTC’s leadership team as it weighed the College’s 

commitments for the next five years. Our varying instincts 

forced us to wrestle with our response. Fortunately, we’ve 

spent much time in recent years (including periodic 

sessions with you) contemplating this moment. 

A year ago, we reflected on the history of this 

administration, considered the pandemic impact and 

imagined our place in a post-COVID world. Since then, 

we’ve researched changing expectations, assessed rapidly 

emerging opportunities, and evaluated the strengths of 

ourselves and our competitors. 

With major disruptions, such as those ushered in by the 

pandemic, opportunists and market leaders respond in a 

way that accelerates them into a new future. TSTC did not 

miss out on that opportunity. We seized the moment and innovated towards a new normal. 

It is clear to the team. TSTC’s opportunity to grow as a market leader is right in front of us. This window of 

opportunity will not remain open forever. This growth will not merely be the result of choosing a path. This 

success will only be realized as a result of bold commitment, disciplined execution, and accountability to 

higher levels of growth and change. 

So, what’s the answer to our question? It’s unanimous. We must be bold. TSTC will bet on itself. We will 

execute at a level we’ve never seen before. Texans, especially students and industry, will see us as a different 

kind of institution, in compelling ways. We will be better than the rest, accountable to Texas industry as its 

premier workforce provider. 

The leadership team looks forward to sharing our plans and the related budget proposal as we 

accelerate into our future together. 

With enthusiasm, 

Jonathan Hoekstra, CPA, MBA, Vice Chancellor & Chief Financial Officer 

STRATEGIC PLAN & BUDGET REPORT 

3


TABLE OF 

CONTENTS 

A LETTER FROM THE CFO 03 

SUSTAINING OUR COMPETITIVE ADVANTAGE 05 

THE PLAN 06 

NECESSARY TRANSFORMATIONS 09 

OPERATING BUDGET 17 

CAPITAL BUDGET & CCAP 25 

EXHIBITS 

SITUATIONAL CONTEXT 30 

HISTORICAL OVERVIEW 32 

CONNECTING THE DOTS 33 

WIG TRENDS 34 

DETAILED OPERATING EXPENSE BUDGET 36 

TSTC DEFINITIONS 41 

ACKNOWLEDGMENTS 42


SUSTAINING 

OUR 

COMPETITIVE 

ADVANTAGE 

TSTC operates in a competitive 

ecosystem that joins two 

marketplaces: the consumer 

market of underskilled job seekers 

(prospective students) and a labor 

market of employers seeking a 

competitive workforce to fuel 

their enterprise. Where those 

two markets meet, competition 

in the higher education industry 

grows more fierce with new 

competitors, new market leaders, 

new disruptive technologies, and 

new approaches to education. 

To thrive in highly competitive 

environments firms must deliver 

their products, services, brand, and 

reputation in a way that attracts 

markets continually over time. 

That is, to win in a competitive 

marketplace, one must build 

a sustainable competitive 

advantage. 

In pursuit of building such an 

advantage, TSTC leadership has 

reflected on the past, current, 

and future state of industry 

demand, competition and 

other environmental factors. 

Leadership captured this 

assessment in the framework 

of strengths, weaknesses, 

opportunities, and threats 

(SWOT Analysis) through the 

lens of TSTC, its competition, 

and the marketplace of 

employers and consumers. 

This SWOT Analysis included 

the identification of critical 

pairings to highlight unique 

value propositions and 

market opportunities. An 

example of this is outlined in 

Figure 01. 

Critical pairings answer 

questions like “Where 

can TSTC focus that the 

competition cannot?” After 

months of refining and 

recasting past, present and 

future state assumptions, 

TSTC leadership identified 

three focus areas that 

define TSTC’s position in the 

competitive marketplace. 

They are called the Big 3, 

TSTC’s Strategic Imperatives, 

and they will define the 

sustainable competitive 

advantage. 

Figure 01 

Environmental 

Opportunity 

(skills gap) 

TSTC Strength 

(high-tech, 

high-demand 

programs) 

Critical Pairing 

Figure 02 

Be Better than Others 

We believe that providing 

quality in all we do 

increases stakeholder 

satisfaction. 


5


THE PLAN 

TSTC leadership routinely reviews and reaffirms 

the mission of the College as prescribed in 

Chapter 135 of the Texas Education Code. It is 

summed up in the rallying cry to Place More 

Texans in Great Paying Jobs (PMTIGPJ) and two 

Wildly Important Goals (WIGs) describe the 

targeted outcomes expected. 

WIG 1: 

Quantity of Former Students 

Found Working 

The first Wildly Important Goal is a 

measure of production quantity evidenced by 

growth expectations around the number of 

former students found working. Former Students 

includes students that leave college with no 

credentials and graduates or award recipients. 

Consistent with TSTC’s mission and plans to 

position the College with the features of the Big 

3, the long-range planning includes (1) growth 

in the production of workforce (measured 

by former students found working) and (2) 

transformational initiatives necessary for 

needed growth. 

Figure 03 

Actuals 

Forecast 

WIG 1 Goal 

3-YEAR GOAL 

TSTC will increase the number of 

students found working from 3,454 in 

2020 to 3,824 in 2023. 

5-YEAR GOAL 

TSTC will increase the number of 

students found working from 3,454 in 

2020 to 4,001 in 2025. 

Students Found Working - Quantity 

4,600 4,607 

13 programs 

underperformed and 

were closed. 

4,057 

4,132 

Resources were 

reinvested into high 

demand technical 

programs. 

4,001 

3,824 

3,824 

3,893 

3,650 

3,454 

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 

6 

STRATEGIC PLAN & BUDGET REPORT


WIG 2: 

Quality of Former 

Students Wages 

The second Wildly Important Goal is a measure 

of production quality evidenced by the earnings 

strength of former students, an indication of 

the quality that industry is willing to pay for 

the skills they are acquiring. Like WIG 1, Former 

Students includes students that leave college 

with no credentials, and graduates or award 

recipients. TSTC is accountable for every student 

that attends at least 9 semester credit hours. 

Therefore the plans include the wages of leavers 

and graduates combined in goal setting. 

3-YEAR GOAL 

5-YEAR GOAL 

Figure 04 

Average First Year Wages - Quality 

Actuals 

Forecast 

WIG 2 Goal 

13 programs 

underperformed 

and were closed. 

49,485 

52,344 

Resources were 

reinvested into high 

demand technical 

programs. 

42,237 

46,134 

36,655 

33,300 

33,763 33,466 

31,243 

28,910 

2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 


7


EXCELLENCE 

Holding oneself to the highest standards of 

quality, workplace performance and behavior. 

8 



NECESSARY 

TRANSFORMATIONS 


9


BUILD 

INTEGRATED 

MARKETING 

The higher education industry landscape is more 

competitive than ever and demand for a skilled 

workforce has never been greater. Because 

the ultimate goal is to respond to the needs of 

industry, the scope of the integrated marketing 

initiative is not limited to the consumer market. 

It must include an understanding of industry’s 

needs. 

The transformation of TSTC’s marketing 

capabilities is paramount to TSTC’s growth and 

future. In fact, it is necessary in order to increase 

enrollment, graduation rates and placement in 

the Texas workforce. The evolution will permeate 

across the enterprise and state, increase brand 

awareness, communicate the student and 

economic value proposition, and scale TSTC’s 

ability to create and convert on both consumer 

and industry demand. 

In fiscal year 2022, TSTC contracted both a 

fractional chief marketing officer and a market 

research firm. The multi-year build of integrated 

marketing is currently underway and includes 

assessing TSTC’s needs, modernizing and 

focusing promotional efforts, and deepening the 

understanding of TSTC’s customers. 

10 



RETOOL THE 

PRODUCTION 

FLOOR 

Retooling the production floor simply means 

reimagining the way students train at TSTC, 

from pathways and micro credentials, to new 

modalities and opportunities that meet the 

needs of today’s students. Traditional college 

models focus on credit hours and grades, 

while performance-based education replaces 

that old notion with demonstrated mastery of 

essential knowledge and skills. Performancebased 

education emphasizes value, flexibility, 

convenience and applied learning that involves 

frequent, substantive interaction between an 

apprentice and an expert. 

To scale this learning experience, TSTC 

implemented shared service capabilities to 

deconstruct every course’s learning objectives 

into skills and competencies. Each skill and 

competency is then calibrated with subject 

matter experts to ensure training always aligns 

with industry’s needs. 

TSTC designed this new way of learning to 

serve untapped markets that traditional 

education struggles to reach. It is relevant to 

non-traditional student markets such as working 

adults, family caregivers, military veterans, 

and college skeptics who seek relevance in 

their time-on-task and value the shift from 

transactional education to performance-based 

education. 

In fiscal year 2022, TSTC launched the first 

phase of a 3-phase implementation of 

performance-based education across all 

programs. This includes the reconfiguration of 

curriculum, labs, learning delivery, schedules, 

and faculty talent requirements. The remaining 

phases will launch over the next three years 

with sustainability efforts to follow. 


11


EXECUTE ON CAPITAL 

CONSTRUCTION 

ASSISTANCE 

PROJECTS 

During the third special session of the 87th 

legislative session, the Texas Legislature 

increased its commitment to workforce 

training capacity when it authorized $208 

million in bond authority (capital construction 

assistance projects or CCAP) for construction 

of technical education facilities. Largely due to 

unprecedented increases in construction prices 

in the two years following the initial request, 

TSTC determined up to an additional $187 

million of institutional (non-CCAP) proceeds are 

necessary to deliver on its original promise to 

increase training capacity 

The CCAP projects are currently budgeted to 

include $358.5 million of new construction 

and real estate expansion, and $15 million 

in renovations across seven campuses. With 

statewide construction capacity spread thin 

across enormous construction demands in the 

industry, managing the construction efforts of 

contractors requires higher levels of scrutiny to 

ensure quality delivery of TSTC’s projects. The 

margin of error is small, requiring high levels 

of project management, collaboration across 

various affected disciplines, and fiscal oversight 

of these high-value contracts. 

Project delivery will occur over the next four 

years, affecting the facilities capacity required to 

meet sales goals. 

TSTC will shift from project pre-design in fiscal 

year 2022 to final design and construction for 

most projects in fiscal year 2023. Bond sales 

are planned for Fall 2023. Facilities are planned 

to come online between Fall 2024 and Spring 

2026. 

12 



RE-ENGINEER 

PROCESS & 

TECHNOLOGY 

INFRASTRUCTURE 

The processes and technologies that have 

supported TSTC’s business operations for over 

three decades were developed in a bygone 

era of technology. To remain relevant in the 

disruptive, exponentially-changing era of today, 

the College had to re-imagine and re-engineer 

virtually all of its business processes. Following 

the Board’s approval, TSTC began a multi-year, 

multi-phase project to transform the digital 

experience of TSTC’s constituents. The first 

phase included the overhaul of TSTC’s financial 

and human capital process infrastructure 

(Platform). The second phase includes student 

lifecycle process infrastructure (Student). 

The two phases require team members across 

the enterprise to transform processes, crossfunctional 

handoffs, and user interfaces 

and experiences. These transformations are 

necessary to enable the data and analytics 

needed to accelerate into TSTC’s future. 

On April 1, 2022, after over two years of 

planning, architecture, configuration, and 

testing, TSTC became the first college or 

university in Texas (despite attempts by others) 

to implement Platform with the state-of-the-art 

technology vendor, Workday. Weeks later, the 

College initiated the Student phase. 

Enterprise focus will continue surrounding 

sustainability and version management of 

Platform in its post-implementation state. For 

Student, the cross-functional implementation 

team will plan and implement during fiscal 

year 2023 and 2024 and deploy applications 

intermittently during the course of the project. 


13


CULTIVATE A 

PERFORMANCE- 

BASED CULTURE 

As it arose from the merger, TSTC prioritized 

culture as wildly important within its first 

statewide strategic plan. The results over this 

time (2015-2022) were extraordinary. TSTC can 

claim a highly engaged workforce and a broad 

perception by members of the TSTC family that it 

is a great place to work. 

A performance culture is emerging. TSTC will 

build on this area of strength in pursuit of a 

culture that will drive TSTC’s differentiation 

in the marketplace. TSTC seeks to shape the 

collective attitudes and behaviors in such a way 

that performance improvement permeates the 

fabric of the TSTC culture. 

The impact of this pursuit will be characterized 

by processes that center around transparency 

and accountability; by individuals rewarded 

(in an inclusive way) for sharing, cooperating 

and supporting the mission of the College, and 

by the College thinking, strategizing, planning, 

analyzing and executing as a single unit. 

This cultural transformation will be assessed by 

evaluating performance capabilities that drive 

an entrepreneurial culture. This assessment 

includes validated maturity (measured across 

models to assess the evolutionary path) 

throughout the enterprise in capabilities such as 

performance assessment and management, data 

and analytics literacy, coaching, differentiation 

and scope discipline. 

14 



FORTIFY 

APPROPRIATION 

FUNDING SOURCES 

TSTC’s plans are built primarily on the cause 

and effect relationship of performance-based 

funding. However, those plans are at risk 

due to uncertainty in the reliability of TSTC’s 

appropriated commission rate (the funding of 

TSTC’s returned-value, performance-based, 

formula). Variables contributing to uncertainty 

include expansion and contraction of the overall 

state budget, and political pressure to prioritize 

other initiatives over TSTC’s returned-value 

formula, breaking the link between performance 

and funding. 

These are likely risks that increase if those 

with influence are uninformed about TSTC’s 

plans and contributions. People don’t value 

what they don’t understand. So TSTC will build 

on campaign momentum to constantly create 

awareness about (1) the linkage of Texas 

prosperity to its ability to fill the skills gaps; (2) 

TSTC’s mission to fill those most lucrative gaps; 

(3) TSTC’s mission-discipline, execution, and 

the resulting impact on the state; and (4) the 

constraints preventing even more production 

from TSTC. 

Fortified appropriations would include 

consistent funding of TSTC’s returned-value 

formula at the 36% commission rate. The full 

impact is not certain since the wages of former 

students to be counted in future biennia have 

yet to be earned or reported. TSTC estimates 

the returned-value appropriation could 

potentially increase (over current levels) $25 

million and $84 million in the 88th and 89th 

legislative sessions, respectively. 

Other funding fortifying moves include 

correcting facilities capital funding disparities 

and facilities capital appropriation requests to 

respond to specific market needs. 


15


ACCOUNTABILITY 

Doing what needs to be done and being transparent 

about the resulting successes and failures.


OPERATING BUDGET 

ORGANIZATIONAL 

STRUCTURE 

& BUDGET 

FRAMEWORK 

TSTC’s organizational and leadership structures 

remain consistent for fiscal year 2023, with no 

major changes in organizational structure or 

operating division hierarchy from the prior year. 

The overall allocation of resources across the 

functional divisions of the College is illustrated 

below. 

PRESENTATIONS, 

ASSUMPTIONS & 

ESTIMATES 

Various line items in prior year budget and 

actual amounts have been reclassified 

to align with the current organizational 

structure and budget framework for 

consistency in comparative analysis. 

Fiscal year 2022 forecast amounts and 

certain fiscal year 2023 budget amounts use 

available data and related estimates as of 

May 31, 2022. 

The College will realize appropriation 

revenues in fiscal year 2023 in accordance 

with bill patterns established by the 87th 

Legislature. 

Figure 05 

2023 BUDGET 

$258,398,719 

TSTC prepares budgets using a cash basis of 

accounting, which includes budgeting tuition 

revenue net of discounts and allowances, 

budgeting debt service payments (total 

principal and interest) as an expense, 

excluding interest expense and depreciation 

expense, and also excluding non-cash 

accounting adjustments such as pension 

and other post-employment benefits (OPEB) 

accruals. 

MEASURE 

PLAN 

EXECUTE 

BUDGET 

The annual budget report is simply a starting 

point each year. TSTC anticipates many 

refinements to this budget throughout the 

year as the needs and circumstances of TSTC 

departments continually change. 

Instruction 

Student Financial Aid 

Student Services 

Facilities & Plant 

Statewide Administration 

Finance 

External Relations 

Shared Resources 

Statewide Benefits 

25.09% 

15.73% 

12.45% 

7.56% 

2.28% 

4.64% 

6.06% 

14.14% 

12.05% 


17


FISCAL YEAR 

2023 BUDGET 

PRESENTATION 

REVENUE 

FY 2021 FY 2022 FY 2022 FY 2023 

Actual Budget Forecast Budget Note 

Returned Value Formula Appr. 66,124,351 69,916,159 69,916,159 69,916,159 A 

Special Items & Other Appr. 23,289,560 24,357,238 24,697,281 24,681,894 A 

Debt Service Appropriations 3,757,232 3,752,809 3,752,809 2,984,557 A 

HEAF Appropriations 8,662,500 8,662,500 8,662,500 8,662,500 A 

Benefits Appropriations 25,220,318 24,719,449 25,218,183 25,190,449 A 

Tuition 42,188,728 43,966,000 52,750,000 55,387,500 B 

Student Financial Aid 31,283,520 31,595,000 44,130,426 35,765,009 C 

Auxiliary Enterprises 7,065,577 9,003,284 8,258,940 8,888,000 D 

Fees & Educational Sales 3,331,724 3,127,500 3,721,419 3,032,500 D 

Industry Relations 1,729,608 2,575,400 2,150,107 2,006,800 D 

Grants 29,591,833 15,431,075 28,537,509 14,138,353 E 

Contracts & Other 3,677,198 2,408,366 2,826,762 2,835,500 

Total Revenue 

245,922,149 239,514,780 274,622,095 253,489,221 

EXPENSE 

Total Expense 

Carryforward / Reserves -5,869,902 976,157 5,561,055 4,909,498 F 

Instruction 61,721,362 61,223,499 66,512,751 64,819,384 G, H 

Student Financial Aid 37,052,710 36,860,968 53,221,656 40,655,282 C 

Statewide Benefits 30,988,988 30,937,761 31,748,452 31,128,358 

Finance 9,707,204 10,431,328 11,733,499 11,995,656 G 

External Relations 14,597,994 14,038,386 14,915,137 15,649,860 G 

Auxiliary Enterprises 9,376,119 9,333,756 10,308,476 9,238,374 G 

Enrollment Management 9,589,488 10,319,289 11,008,869 12,085,396 G 

Facilities & Plant 13,828,825 13,475,359 14,219,078 13,919,519 G 

Facilities - Transfer to Capital 1,808,924 1,114,958 1,114,958 5,614,958 I 

Information Technology 10,414,807 9,964,988 11,855,109 10,844,854 G 

Statewide Administration 5,173,385 5,420,952 5,529,371 5,901,887 

Debt Service & Leases 13,915,374 16,441,131 21,028,345 15,171,063 J 

Grants 19,375,460 12,928,562 25,170,382 10,374,128 E 

Strategic Pool (to be allocated) - 8,000,000 - 11,000,000 K 

237,550,640 240,490,937 278,366,083 258,398,719 

Margin (Deficit) 

2,501,607 0 1,817,067 0 

18 



A. 

B. 

C. 

D. 

E. 

F. 

G. 

H. 

I. 

J. 

K. 

FY23 appropriation revenues were determined in the 87th regular legislative session 

through the General Appropriations Act, which was finalized in May 2021. Debt Service 

appropriations decrease in FY23 as twenty-year bonds issued in 2002 were paid in full the 

prior year. 

Tuition revenue saw a strong improvement in FY22 as TSTC’s enrollment rebounded from the 

pandemic dip. The FY23 tuition revenue budget increases approximately 5% over FY22, as 

the positive momentum in enrollment is expected to continue. 

Student Financial Aid revenue and expense, both saw big increases in FY22 as a result of 

CARES Act federal aid going directly to students. That aid is mostly exhausted and slight 

increases in these categories, compared to prior “normal” years, correlate to expected 

increases in enrollment and tuition. 

Supplemental sources of revenue were hit hardest by the pandemic, as many auxiliary 

operations and industry relations activities went significantly dormant. Revenue projections 

for these categories in FY23 are mostly conservative, as long-term impacts from the 

pandemic to these operations are still unknown. 

Grants revenue, as well as Grants expense, have seen major increases and changes the last 

few years as a result of CARES Act funding. A majority of this funding was expended in FY21 

and FY22, but supply chain issues and other external factors will push the remaining revenue 

and related expenditures into FY23. 

TSTC routinely utilizes accumulated reserves for various purposes. In FY21, $5.9 million of 

CARES Act lost revenue funds were deposited into reserves to be used in future years. In 

FY22, $5.5 million of reserves were utilized for early debt retirements, as well as to fund 

scholarships from accumulated balances in restricted funds. In FY23, TSTC plans to use 

reserves of approximately $5 million to balance the operating budget. 

Expense budgets for the primary operating divisions of the College are generally elevated 

compared to prior years. As competitive salaries are increasing nationwide and inflation has 

begun to materially impact operating costs, budgets must increase for TSTC to continue to 

deliver high quality technical training while also improving employee pay where possible. 

The expense budget for the Instructional division of the College continues to increase year 

over year, although FY22 forecasted actual expenses are higher than the FY23 budget. This 

variance is the result of an early retirement of debt related to equipment purchases for the 

Fort Bend and North Texas campuses. The entire balance of the debt of $4.2 million was paid 

off in FY22, which frees up approximately $2 million annually in future budgets for other 

instructional initiatives. Also, FY22 forecasted expenses and the FY23 budget each include a 

$1.8 million payment as a part of a three-year aircraft fleet replacement program. 

In an effort to improve facilities and maintain a higher standard of quality for the look and 

feel of its campuses, TSTC is investing an additional $4.5 million per year (beginning in FY23) 

to address deferred maintenance and allow for scheduled equipment upgrades. 

As mentioned in Note F, TSTC retired various outstanding debts in FY22, including lease 

purchases at Fort Bend and Marshall. Also, in March 2022, certain bonds were refunded to 

take advantage of lower interest rates. As a result, the total debt service budget in FY23 is 

$1.3 million lower than FY22. 

TSTC utilizes a strategic pool each year to respond to rapid changes in operations and 

allocate budget increases throughout the year. For FY23, the $11 million pool includes $3.0 

million for anticipated cost increases due to inflation, $3.5 million for pay-for-performance 

salary increases, and $4.5 million to fund new positions as enrollment is expected to 

continue to grow. 


19


OPERATING 

REVENUES 

REVENUE MIX 

TSTC derives its budget from several sources 

of funds. State appropriations are the most 

significant revenue source, comprising over 

half of the College’s total revenues. Tuition 

revenue increased approximately $10 million 

in fiscal year 2022, and now represents over 

20% of total revenues. Student Financial Aid 

passes through the College as revenue and 

is eventually applied to students’ accounts 

through an offsetting/equal expense. Other 

supplemental revenues including grants, pilot 

training fees, housing rents, retail sales and 

contract-related income combine to account 

for a smaller, but still significant, amount of 

revenues. Figure 06 below demonstrates 

the relative contributions from the different 

sources of funds. 

2023 Appropriations 

Figure 06 

14% 

Student 

Financial 

Assistance 

20 

22% 

Tuition 

Other* 

Grants 

2023 Revenues 

$253,489,221 

Auxiliary Services 

12% 

Other* 

Other 3.11% 


52% 

State 

Appropriations 

5.58% 

3.51% 

STATE 

APPROPRIATIONS 

Total General Revenue appropriations for 

fiscal year 2023 are nearly identical to fiscal 

year 2022 amounts, as both years were 

appropriated in the General Appropriations Act 

that resulted from the 87th legislative session. 

By the conclusion of that regular session in 

May 2021, the Texas Legislature had once 

again affirmed TSTC’s returned-value formula 

by funding TSTC for the full amount earned in 

the formula. TSTC also saw a slight increase in 

the Education & General (E&G) Space Support 

Appropriation covering the two year period, as 

the Texas Legislature generally increased these 

amounts for all institutions across the state. 

Other components of appropriation funding 

are considered “non-formula support”, which 

include the Small Institution Supplement, 

Institutional Enhancement, System Office 

Operations, and Startup Funding strategies 

for the North Texas and Fort Bend County 

campuses. Capital improvement funding from 

the Higher Education Assistance Funds (HEAF) 

appropriation, employee payroll taxes and 

benefits funding, and specific appropriations 

that pay for Tuition Revenue Bond retirement 

(debt service) also contribute to total TSTC 

appropriations. 

Figure 07 

53% 

Returned-Value 

Formula 

Other* 

E&G Space Support 

Start Up Funding 

2023 State 

Appropriations 

$131,435,559 

Small Institution Supplement 

Institutional Enhancement 

System Office Operations 

19% 

Benefits 

2% 

Debt Service 

19% 

Other* 

7% 

HEAF 

5.68% 

4.09% 

3.01% 

2.70% 

1.94% 

Other 1.36%


RETURNED- 

VALUE FORMULA 

PERFORMANCE 

TSTC’s unique returned-value funding formula 

is now established as an effective model for 

performance-based higher education funding 

in Texas. In the most recent official formula 

calculation used for the 87th legislative session, 

the number of graduates included in the formula 

remained consistent with prior years, while the 

average wages of those graduates over the fiveyear 

calculation period climbed to higher levels. 

These higher wages resulted in the increase in 

formula funding TSTC realizes for fiscal years 

2022 and 2023. 

TSTC continues working to increase its capability 

for estimating future returned-value forecasts. 

With increasing but less than full confidence, 

TSTC anticipates that the number of former 

students counted in future formula calculations 

will likely trail off as a result of program closures 

that occurred in fiscal year 2019 along with 

pandemic induced enrollment dips, but the 

trend of higher wages is expected to continue 

for at least two more biennia. By solely focusing 

on training in programs with high performance 

pay outcomes for students, TSTC has benefited 

from the funding drivers embedded in the 

formula, and the State of Texas continues to see 

the related economic growth, just as the original 

formula design intended. 

In the near decade under pay-for-performance 

funding, the state’s general revenue derived 

from TSTC’s former students grew 41% when 

comparing the cohort revenue production 

between the 83rd and 87th sessions. Based 

on the continued production of talent in high 

demand fields, TSTC expects student prosperity 

(and the growth in returned-value to Texas) to 

continue as illustrated in Figure 08 below. 

Figure 08 

TSTC's Returned-Value Formula 

Actual 

Forecast 

2014-2015 

83rd 

2016-2017 

84th 

2018-2019 

85th 

2020-2021 

86th 

2022-2023 

87th 

2024-2025 

88th 

2026-2027 

89th 

TSTC Student 

Wages 

275.47M 

264.96M ▼4% 

340.22M ▲28% 

366.79M ▲8% 389.51M ▲6% 

454.29M ▲17% 

660.94M ▲45% 

Commission Rate 36% 

36% 

36% 

36% 

36% 

36% 

36% 

Funded Rate 33% 36% 

28% 

36% 

36% 

TBD TBD 

238M 

Returned-Value 

Funding 

98M 

94M 

Earned 

Funded 

121M 

132M 

140M 

163M 

TBD 

TBD 

90M 

94M 

94M 

132M 

140M 


21


TUITION REVENUE 

Significant demand inconsistencies noticeably 

muted tuition revenues during the height of the 

pandemic, which led TSTC to set a conservative 

revenue budget of $44 million for fiscal year 

2022. But the resiliency of TSTC students, 

faculty and staff kept operations running at 

healthy levels, and resulted in actual tuition 

revenues exceeding budget by $10 million. 

Early enrollment data for the Fall semester of 

fiscal year 2023 suggests new student counts 

are growing, but the impact of the pandemic 

continues to dampen returning student counts. 

Accordingly, the revenue budget for fiscal year 

2023 reflects small, but important growth 

as TSTC continues to shake off pandemic 

uncertainty and plans for a season of growth 

and expansion. 

Figure 09 

Tuition Trends 

Budgeted Tuition 

Actual or Forecast Tuition 

2019 2020 2021 2022 - Forecast 2023 - Budget 

52.75M 

55.13M 

43.83M 

43.66M 

42.32M 

45.43M 47.28M 44.19M 43.97M 55.13M 

*Bars represent the Budgeted Tuition for each Fiscal Year 

*Line represents the Actual or Forecast Tuition for each specific Fiscal Year 

22 



OPERATING 

EXPENSES 

Total operating expenditures budgeted for 

fiscal year 2023 are $258 million, compared to 

$240 million budgeted for fiscal year 2022. The 

primary drivers of this increase are initiatives of 

approximately $6 million to address inflation, 

$3.5 millon for salary increases, $8 million 

for new positions and continued funding 

of prior salary increases, and a $4.5 million 

increase to address capital needs and deferred 

maintenance. Offsetting these increases are 

reduced debt service budgets as well as a 

reduction in grants, as expenditures of CARES 

Act funding are coming to an end. 

The fiscal years 2022 and 2023 budgets were 

prepared by removing all vacant positions that 

were previously budgeted but unfilled. As a 

result, the personnel budgets appear decreased 

compared to fiscal year 2021, when in actuality 

they have been reduced to only reflect real-time 

staffing levels. The Strategic Pool serves as a 

way for the College to more precisely manage 

hiring growth and other budget deployments, 

and includes portions of all the fiscal year 2023 

initiatives mentioned above. 

A potentially very significant caveat to the fiscal 

year 2023 budget at the time of publication is 

the timing and amount of the bond issuance 

that will finance the CCAP projects detailed 

in the capital budget. Depending on how the 

bond issuance is structured and finalized in 

the coming months, a material increase in debt 

service expenditures could be added. TSTC 

is actively planning for this, and has defined 

scenarios to allow for new debt while still 

achieving a substantially balanced budget. 

Figure 10 

FY 2021 FY 2022 FY 2023 

Budget Budget Budget 

Operating Expenditures 

Operating Costs 104,031,984 109,389,827 117,552,174 

Statewide Benefits 31,201,472 30,937,761 33,095,630 

Personnel Costs 100,737,651 92,163,349 96,750,915 

Strategic Pool - 8,000,000 11,000,000 

Total Operating Expenditures 235,971,107 240,490,937 258,398,719 


23


SERVICE 

Performing every day in a selfless manner that puts the 

needs of our students, the College and co-workers first. 

24 



CAPITAL BUDGET 

& CCAP 

The capital budget represents all capital activity 

for major projects (construction over $1 million) 

or planned real estate purchases. Such projects 

are approved by the Board of Regents on an 

individual basis. The following capital project 

list includes projects previously approved and 

projects currently under consideration for Board 

of Regent approval. 

Figure 11 

Capital Funding Sources 

Active Capital Project Uses 

BRIC EDA 2020 

2022 Operating 

Proceeds Grant RFS Bond CCAP+ Bonds Transfers In 

Total 

Deferred / Scheduled Maintenance 5,614,958 5,614,958 

Harlingen Multi-Function Center 2,100,000 2,100,000 

Waco EEC/TSC Renovation 2,593,594 3,400,000 6,000,000 11,993,594 

Waco JBC 1st and 2nd Floor Renovation 5,200,000 9,500,000 14,700,000 

Harlingen Plumbing Licensure Testing Site 1,930,500 1,930,500 

Waco North Interceptor (Sewer) 1,500,000 1,500,000 

Waco Demo / Enhancement Project 1,665,000 1,665,000 

Waco Acquisitions 741,406 272,653 1,014,059 

Marshall Campus Expansion 10,101,500 10,101,500 

Waco Campus Expansion 72,405,000 72,405,000 

Williamson County Campus Expansion 65,240,200 65,240,200 

Harlingen Campus Expansion 64,395,000 64,395,000 

Fort Bend County Campus Expansion 68,257,500 68,257,500 

North Texas Campus Expansion 69,089,750 69,089,750 

Abilene Campus Expansion 24,090,395 24,090,395 

Total Current Budget 

5,000,000 3,400,000 11,003,153 389,079,345 5,614,958 414,097,456 


25


5 YEAR PRO FORMAS 

WITH CCAP DEBT 

SERVICE 

The following 5-year pro forma scenarios 

illustrate the economic viability of the related 

projects under different conditions. Scenarios 

vary based on different inputs for tuition 

revenue, legislative funding and expense 

management, while assuming identical new 

capital project debt service expenses across 

all scenarios. Forward-looking statements are 

based on management’s current views and 

assumptions and, as a result, are subject to 

certain risks and uncertainties that could cause 

actual results to differ materially from those 

projected. 

BEST CASE 

SCENARIO 

A best-case scenario is presented in Figure 

13, showing the results of a 10% year-overyear 

increase in tuition and consistent payout 

of TSTC’s returned-value funding formula 

at the 36% commission rate. Under this 

scenario, TSTC’s strategic opportunities expand 

considerably with $106 million additional 

margin to deploy towards further growth and 

transformation. 

WORST CASE 

SCENARIO 

The worst case scenario pro forma analysis, 

Figure 12, imagines average annual tuition 

revenue losses at rates experienced during 

the COVID-19 pandemic and appropriations 

held absolutely flat despite the returned-value 

performance that supports higher performancebased 

funding (dropping commission rates in 

the 21-31% range). While perceived as unlikely, 

disruptions in TSTC’s performance could create 

substantial downside financial losses if revenue 

gains don’t continue at the level of new financial 

commitments. 

26 



Figure 12: Worst Case Scenario 

Tuition & Return Value 

340M 

130M 

330M 

120M 320M 

310M 

110M 

300M 

100M 290M 

280M 

90M 

270M 

80M 

260M 

250M 70M 

240M 

60M 

230M 

220M 50M 

Five Year - Pro Forma w CCAP Debt Service 

-1.5% Avg Annual Tuition Losses & Appropriations Flat 

Tuition - 1.5% Average Losses 

Total Operating Expense 

Returned Value - Flat 

Total Operating Revenue 

$31M Accum. Deficit with 

Reduced Investment 

340M 

320M 

300M 

280M 

260M 

240M 

220M 

Total Operating Revenue & Expense 

210M 

40M 

200M 

2022 2023 2024 2025 2026 2027 

200M 

Figure 13: Best Case Scenario 

340M 

130M 

330M 


10% Avg Annual Tuition Growth & Appropriations @ 36% Comm Rate 

Tuition - 10% Average Growth 


Returned Value - As Modeled 


340M 


120M 320M 

310M 

110M 

300M 

100M 290M 

280M 

90M 

270M 

80M 

260M 

250M 70M 

240M 

60M 

230M 

220M 50M 

$106M Accum. Margin for 

Strategic Re-Investment 

320M 

300M 

280M 

260M 

240M 

220M 


210M 

40M 

200M 

2022 2023 2024 2025 2026 2027 

200M 


27


“MIDDLE-OF-THE-ROAD” 

SCENARIO 

Figure 14 is a pro forma that would support 

TSTC’s debt service to fund the proposed CCAP 

projects. It supposes TSTC’s tuition revenues 

will grow at a rate of 6.7% annually on average 

over the next five years. The analysis hedges 

expectations of appropriations, assuming the 

legislature will reduce commission payouts 

under the returned-value funding formula to 

approximately 35% and 28%, compared to the 

36% calibrated rate previous legislatures have 

funded. Operating expenses rise in concert with 

operating revenues over this five year term 

to maintain discipline around compensation, 

human capital capacity (new positions), 

inflation, scheduled maintenance, and new debt 

service requirements. 

Figure 14: Middle-of-the-Road Scenario 


340M 

130M 

330M 

120M 320M 

310M 

110M 

300M 

100M 290M 

280M 

90M 

270M 

80M 

260M 

250M 70M 

240M 

60M 

230M 

220M 50M 


6.7% Avg Annual Tuition Growth & Appropriations Curtailed 

Tuition - 6.7% Average Growth 


Returned Value - Hedged 


$4.6M Accum. Margin with 

Prioritized Investments 

340M 

320M 

300M 

280M 

260M 

240M 

220M 


28 

210M 

40M 

200M 

2022 2023 2024 2025 2026 2027 


200M


INTEGRITY 

Being honest and showing a consistent and uncompromising 

commitment to strong moral and ethical principles; 

doing what is right even when no one is watching. 


29


EXHIBIT I: Situational Context From May 2022 Board 

Planning Roadmap 

Understand the 

landscape of industry, 

competition and 

environmental factors. 

Articulate the strategic 

imperatives that lead to a 

sustainable competitive 

advantage. 

Management commits to 

operational activities to 

drive outcomes. 

1 3 5 

2 

Identify critical pairings to 

maximize plans. 

4 

Define what will be used 

to measure success. 

6 

Budget for the plan. 

Reeser Email #1 

OPPORTUNITIES & THREATS 

STRENGTHS & WEAKNESSES 

Critical Pairings 

Pairing up opportunities and strengths. 

economic opportunity + TSTC strength = critical pair 

30 



The Big 3 

1. 

Be better than 

the others. 

2. 

Be different in 

compelling ways. 

3. 

Be responsive 

and accountable 

to Texas 

industries. 

Wildly Important 

Goals 

Quantity 

Quality 

FY23 - 3 & 5 year WIG 1 FY23 - 3 & 5 year WIG 2 

19 

Necessary 

Transformations 

1.___ 

Build Integrated Marketing. 

2.___ 

Retool the Production Floor. 

3.___ 

Execute on Capital 

Construction Assistance 

Projects. 

4.___ 

Re-engineer Process & 

Technology Infrastructure. 

5.___ 

Cultivate a performance based 

culture. 

6.___ 

Fortify Appropriations Funding 

Sources. 


31


EXHIBIT II: Historical Overview 

HISTORICAL 

OVERVIEW - 2010 

THROUGH THE 

PANDEMIC 

(ADAPTED SCRIPT 

FROM 2022 

STRATEGIC PLAN) 

Since his appointment in 2010, Chancellor Mike 

Reeser and his leadership team steered the 

College to be Texas’ premier skilled workforce 

provider. The story of TSTC’s journey through an 

industry stuck in an old paradigm begins with 

the reaffirmation of their mission. 

They exist to train Texans for Texas industry. 

Immediately, Chancellor Reeser rallied the 

organization to focus on “Placing More Texans 

In Great Paying Jobs!” and he prepared TSTC 

to boldly face a higher education industry 

vulnerable to disruption. Central to the 

disruption was increasing doubts of students 

and influencers about the value proposition 

of higher education. TSTC’s first bold action 

was adoption of a performance-based funding 

formula that aligns industry, education and 

student interests unlike any other model in the 

nation. 

This new performance model shifted focus 

to the outcomes of the student journey and 

the new operating framework resembled a 

workforce pipeline. At the end of the pipeline, 

programs delivering the highest-tech and 

highest-demand workforce were rewarded the 

most. 

In the first phases of planning, TSTC’s program 

offerings were curated to achieve the highest 

results. Efforts were launched so that movement 

through this workforce development pipeline 

would occur through a modern day learning 

platform, and curriculum was calibrated 

specifically to the needs of Texas industry so 

the journey along the pipeline to employment 

was right-sized. TSTC leadership simultaneously 

positioned the College for growth. TSTC placed 

the pipeline where the people are. With high 

growth rates in the Texas Triangle, the College 

expanded to prime locations in the east Austin, 

south Dallas, and west Houston regions. 

In phase 2 of becoming the premier workforce 

provider, TSTC leadership prioritized 

organizational health, making TSTC a Great(er) 

Place to Work. The College became laser 

focused on its ability to engage employees 

towards successfully fulfilling the mission while 

upholding their values. In 2019, TSTC celebrated 

the success of their plan and re-upped their 

commitments only to be met with an intensified 

set of challenges in 2020. 

In Spring of 2020, the COVID pandemic rattled 

the world, including higher education. The 

paradigm shift anticipated by TSTC over the last 

decade is now a reality. Mindful of the rapidly 

growing unemployment population in Texas, 

TSTC teams accelerated their new teaching 

modalities and modified facilities to deliver 

hands-on instruction in a new and sociallydistant 

format. These procedures would ensure 

the teammates and students were safe and 

productive. 

TSTC launched into 2022 anticipating what 

lies ahead for higher education. With a more 

competitive landscape, with students having 

more options than ever, and with industry in 

need of a capable partner, TSTC would begin 

planning with the imperative that the quality of 

TSTC’s offerings for industry and students must 

be different and greater than all the rest. 

Building on the accelerated innovation ushered 

in by the pandemic, TSTC would plan and 

prepare for the next version of being Texas’ 

premier skilled workforce provider. 

32 



EXHIBIT III: Connecting The Dots 

VALUES 

Four values of excellence, accountability, 

service, and integrity describe the principles 

that guide TSTC and serve as the cultural 

cornerstones that define the College’s work. 

MISSION 

TSTC’s mission, its reason for existence, is 

established by Texas statute. Simply stated, 

place more Texans in great paying jobs. 

STRATEGIC IMPERATIVES 

The Big 3 positioning features that define 

TSTC’s sustainable competitive advantage in a 

competitive marketplace. 

FOUR DISCIPLINES OF EXECUTION (4DX) ® 

A framework for execution described in the 

Franklin Covey publication Four Disciplines 

of Execution (4DX)® and used by TSTC as a 

model for alignment, focus, execution, and 

accountability. 

WILDLY IMPORTANT GOALS (WIGs) 

The accountability standard for which TSTC’s 

efforts can be measured. 

4DX 

BIG 3 

(Strategic Imperatives) 

WIG 1 & 2 

(Quantity & Quality) 

MISSION 

VALUES 


33


EXHIBIT IV: WIG Trends 

FY22 WIG 1 : 

3 YEAR GOAL 

PERFORMANCE 

TREND 

Return the graduate count from 3,257 in fiscal 

year 2019 to 3,238 by fiscal year 2022. 

In the fiscal year 2021 Strategic Plan, TSTC 

reported the goal of returning graduate counts 

to 2019 levels would be delayed. The impact of 

COVID reduced the student cohorts of fiscal year 

2020 and 2021, impacting TSTC’s 3 and 5 year 

plans.The downstream effect of COVID’s impact 

on these cohorts is illustrated in the 2022 and 

2023 revised trajectory in the figure below. 

In Spring 2022, leadership and the Board 

asked the question: “What internal & external 

factors influence the sustainable competitive 

advantages that drive the TSTC strategy?” After 

months of analysis and deliberation over TSTC 

past, present and future state, and that of higher 

education and industry partners, TSTC and the 

Board renewed the strategic plan by way of this 

proposed report. While graduate counts will 

remain relevant to placing more Texans in great 

paying jobs, TSTC will focus its efforts on the 

quantity and quality of students found working. 

Please refer back to The Plan on page 6 of this 

report for more information on the proposed 

2023 and 2025 goals. 

WIG 1: Student Success 

Performance Trend & Forecast 

Actuals 

2021 Original Forecast 

2022 Revised Forecast 

2023 Revised Forecast 

Wig Goal 

3,549 

3,065 

3,257 

3,145 3,164 

3,238 

3,035 

3,382 

3,106 

3,334 

3,250 

2,949 

3,046 

2,844 

3,057 

2,838 

2,792 

2,808 

2016 2017 2018 2019 2020 2021 2022 2023 2024 

34 



FY22 WIG 3 : 

3 YEAR GOAL 

PERFORMANCE 

TREND 

Increase the overall score on the Survey of 

Employee Engagement to 400 by fiscal year 

2022. 

When TSTC realized the post-merger culture was 

suffering from change fatigue and uncertainty, 

the Board and leadership made a commitment 

to focus on Making TSTC a Great(er) Place to 

Work. The growth seen in the figure below 

is indicative of the employee-centric efforts 

around WIG 3. 

The College has utilized the Survey of Employee 

Engagement, or the SEE, since 2016 to better 

understand employee perceptions of their work. 

Survey results have revealed both strengths 

and opportunities throughout the College’s 

operations. TSTC has reached its goal for 3 

consecutive years. While organizational health 

will always be paramount to TSTC, WIG 3 will be 

operationalized as a result of the demonstrated 

performance year-over-year. 

Actuals 

Goal 

Goal Reference 

WIG 3 Goal 

WIG 3: Organizational Health 

Performance Trend vs Goal 

407 ▲19 

404 ▼3 

406 ▲2 

405 405 

2020 SEE Goal: 400 

388 ▲10 

378 ▲6 

372 

2017 2018 2019 2020 2021 2022 2023 2024 


35


EXHIBIT V: Detailed Operating Expense Budget 

FY 2021 FY 2022 FY 2023 

Expense Type Original Budget Original Budget Original Budget 

Instruction 

Academics Personnel Costs 9,149,308 7,873,583 7,754,729 

Operating Costs 755,084 685,718 663,718 

Total 9,904,392 8,559,301 8,418,447 

Aerospace Personnel Costs 3,746,679 2,739,787 3,057,218 


Total 5,226,669 3,982,494 6,061,653 

Allied Health Personnel Costs 4,129,305 3,886,986 3,771,147 


Total 4,746,839 4,426,916 3,993,933 

C4EO Personnel Costs 1,530,140 1,667,388 1,675,746 


Total 1,873,914 2,011,162 2,019,520 

Construction & Safety Personnel Costs 1,433,741 1,455,865 1,715,942 


Total 1,645,907 1,668,031 1,928,108 

Digital Transformation Personnel Costs 5,213,300 4,686,006 4,703,313 


Total 5,529,651 5,002,357 5,076,524 

Electrical Instrumentation Personnel Costs 6,062,626 5,984,687 6,980,879 


Total 6,555,364 6,537,519 7,848,337 

Industrial Manufacturing Personnel Costs 7,334,024 6,587,549 7,065,873 


Total 8,601,234 7,884,759 8,534,331 

Instructional Pool Personnel Costs 3,307,044 3,554,000 3,341,469 


Total 9,826,874 7,811,298 6,161,969 

Instructional Sales Personnel Costs 701,812 476,328 586,352 


Total 762,574 537,090 647,114 

Provosts & Administration Personnel Costs 5,216,464 6,097,403 6,829,512 


Total 5,918,540 6,968,489 7,768,698 

Strategic Partnerships Personnel Costs 125,744 84,324 0 

Operating Costs 56,200 56,200 0 

Total 181,944 140,524 0 

Transportation Personnel Costs 3,772,873 3,665,374 3,832,546 


Total 4,187,806 4,080,307 4,247,479 

Vision & Alignment Personnel Costs 1,398,534 1,164,293 1,148,552 


Total 1,847,493 1,613,252 2,113,271 

Total Instruction Personnel Costs 53,121,594 49,923,573 52,463,278 


Total 66,809,201 61,223,499 64,819,384 


College Work Study Personnel Costs 637,308 441,468 435,782 

Operating Costs 682,403 480,000 1,000,000 

Total 1,319,711 921,468 1,435,782 

Equal Opportunity Grants Operating Costs 2,800,000 2,520,000 2,550,000 

Total 2,800,000 2,520,000 2,550,000 

Institutional Scholarships Operating Costs 1,092,000 1,102,500 1,302,500 

Total 1,092,000 1,102,500 1,302,500 

Loans Operating Costs 650,000 650,000 700,000 

Total 650,000 650,000 700,000 

Pell Grants Operating Costs 28,000,000 27,000,000 30,000,000 

36 


Total 181,944 140,524 0 



Total 4,187,806 4,080,307 4,247,479 



Total 1,847,493 1,613,252 2,113,271 




Total FY 2021 66,809,201 FY 2022 61,223,499 FY 2023 64,819,384 


Student Instruction Financial Aid 

Academics College Work Study Personnel Costs 9,149,308 637,308 7,873,583 441,468 7,754,729 435,782 

Operating Costs 755,084 682,403 685,718 480,000 1,000,000 663,718 

Total 9,904,392 1,319,711 8,559,301 921,468 8,418,447 

1,435,782 

Aerospace Equal Opportunity Grants Personnel Operating Costs 3,746,679 2,800,000 2,739,787 2,520,000 3,057,218 2,550,000 

Operating Total Costs 2,800,000 1,479,990 2,520,000 1,242,707 2,550,000 3,004,435 

Institutional Scholarships Total Operating Costs 5,226,669 1,092,000 3,982,494 1,102,500 6,061,653 1,302,500 

Allied Health Personnel Total Costs 1,092,000 4,129,305 1,102,500 3,886,986 1,302,500 3,771,147 

Loans Operating Costs 617,534 650,000 539,930 650,000 222,786 700,000 

Total 4,746,839 650,000 4,426,916 650,000 3,993,933 700,000 

C4EO Pell Grants Personnel Operating Costs 28,000,000 1,530,140 27,000,000 1,667,388 30,000,000 1,675,746 

Total Operating Costs 28,000,000 343,774 27,000,000 343,774 30,000,000 343,774 

Tuition Set Asides Operating Total Costs 1,873,914 4,668,000 4,667,000 2,011,162 4,667,000 

2,019,520 

Construction & Safety Total Personnel Costs 4,668,000 1,433,741 4,667,000 1,455,865 4,667,000 1,715,942 


Total Student Financial Aid Personnel Total Costs 1,645,907 637,308 1,668,031 441,468 1,928,108 435,782 

Digital Transformation Operating Personnel Costs 37,892,403 5,213,300 36,419,500 4,686,006 40,219,500 4,703,313 


Total 5,529,651 5,002,357 5,076,524 

Statewide Electrical Benefits Instrumentation 

ERS 1% 

Personnel Costs 

Personnel Operating Costs 

6,062,626 

548,857 492,738 

5,984,687 

525,249 552,832 

6,980,879 

555,850 867,458 

Total 6,555,364 548,857 6,537,519 525,249 7,848,337 555,850 

FICA Industrial Manufacturing Personnel Costs 5,750,750 7,334,024 5,470,752 6,587,549 5,534,663 7,065,873 

Total Operating Costs 5,750,750 1,267,210 5,470,752 1,297,210 5,534,663 1,468,458 

Group Insurance Personnel Total Costs 18,050,658 8,601,234 18,075,800 7,884,759 18,075,800 

8,534,331 

Instructional Pool Total Personnel Costs 18,050,658 3,307,044 18,075,800 3,554,000 18,075,800 3,341,469 

Optional Retirement Program Personnel Operating Costs 6,519,830 963,546 4,257,298 743,154 2,820,500 743,154 

Total 9,826,874 963,546 7,811,298 743,154 6,161,969 743,154 

Teacher Instructional Retirement Sales System Personnel Costs 4,007,033 701,812 4,668,284 476,328 4,668,284 586,352 


Unemployment Personnel Total Costs 130,628 762,574 104,300 537,090 132,400 647,114 

Provosts & Administration Total Personnel Costs 5,216,464 130,628 6,097,403 104,300 6,829,512 132,400 

Benefits Reserve Personnel Operating Costs 1,750,000 702,076 1,059,022 871,086 1,127,007 939,186 

Operating Total Costs 5,918,540 291,200 6,968,489 291,200 7,768,698 291,200 

Strategic Partnerships Total Personnel Costs 2,041,200 125,744 1,350,222 84,324 1,418,2070 


Total Statewide Benefits Personnel Total Costs 31,201,472 181,944 30,646,561 140,524 30,837,1580 

Transportation Operating Personnel Costs 3,772,873 291,200 3,665,374 291,200 3,832,546 291,200 


Total 4,187,806 4,080,307 4,247,479 

Finance Vision & Alignment 

Budget, Accounting & Reporting 

Personnel Costs 

Personnel Operating Costs 

1,398,534 

2,289,092 448,959 

1,164,293 

2,016,340 448,959 

1,148,552 

2,265,290 964,719 


Total 2,836,948 2,501,096 2,821,105 

Total Business Instruction Intelligence Personnel Costs 53,121,594 1,091,732 49,923,573 1,336,772 52,463,278 1,257,462 

Operating Costs 13,687,607 175,812 11,299,926 175,812 12,356,106 381,922 

Total 66,809,201 1,267,544 61,223,499 1,512,584 64,819,384 

1,639,384 

Finance Administration Personnel Costs 468,044 402,540 439,394 



College Work Study Total Personnel Costs 657,737 637,308 667,233 441,468 732,664 435,782 

Human Resources Personnel Operating Costs 2,535,800 682,403 2,306,703 480,000 2,639,379 1,000,000 

Operating Total Costs 1,319,711 561,700 583,484 921,468 1,435,782 997,500 

Equal Opportunity Grants Total Operating Costs 3,097,500 2,800,000 2,890,187 2,520,000 3,636,879 2,550,000 

Institutional Effectiveness Personnel Total Costs 2,800,000 743,795 2,520,000 619,767 2,550,000 677,503 

Institutional Scholarships Operating Costs 1,092,000 180,805 1,102,500 119,305 1,302,500 119,305 

Total 1,092,000 924,600 1,102,500 739,072 1,302,500 796,808 

Procurement Loans Div Personnel Operating Costs 2,035,920 650,000 1,770,272 650,000 2,014,132 700,000 

Operating Total Costs 350,884 650,000 350,884 650,000 354,684 700,000 

Pell Grants Total Operating Costs 28,000,000 2,386,804 27,000,000 2,121,156 30,000,000 

2,368,816 

Total Finance Personnel Costs 9,164,383 8,452,394 9,293,160 


Total 11,171,133 10,431,328 11,995,656 


External Relations Administration Personnel Costs 264,164 344,748 386,629 

Operating Costs 14,865 STRATEGIC 230,000 PLAN & BUDGET REPORT233,000 

Total 279,029 574,748 619,629 

Advancement & Communications Personnel Costs 3,923,938 3,891,026 4,387,302 


Total 6,322,093 6,300,842 6,885,186 

College Readiness Personnel Costs 1,129,688 595,861 631,137 


37


Facilities & Plant 

Fleet Personnel Costs 135,456 138,820 145,417 


Total 1,306,901 1,310,465 1,317,062 

Maintenance & Physical Plant Personnel Costs 4,788,710 3,971,411 4,003,018 



Total 7,541,989 6,812,632 7,030,144 

Planning & Construction Personnel Costs 1,182,247 924,988 917,456 


Total 1,317,811 1,178,518 1,161,241 

Utilities Operating Costs 5,045,072 4,173,744 4,411,072 

38 


Total 3,097,500 2,890,187 3,636,879 

Institutional Effectiveness Personnel Costs 743,795 619,767 677,503 


Total 924,600 739,072 796,808 

Procurement Div Personnel Costs 2,035,920 1,770,272 2,014,132 


Total 2,386,804 2,121,156 2,368,816 

Total Finance Personnel Costs 9,164,383 8,452,394 9,293,160 

Operating Costs FY 2021 2,006,750 FY 2022 1,978,934 FY 2023 2,702,496 

Total Expense Type Original Budget 11,171,133 Original 10,431,328 Budget Original Budget 11,995,656 

Instruction 


Academics External Relations Administration Personnel Costs 9,149,308 264,164 7,873,583 344,748 7,754,729 386,629 

Operating Costs 755,084 14,865 685,718 230,000 663,718 233,000 

Total 9,904,392 279,029 8,559,301 574,748 8,418,447 619,629 

Aerospace Advancement & Communications Personnel Costs 3,746,679 3,923,938 2,739,787 3,891,026 3,057,218 4,387,302 

Operating Costs 1,479,990 2,398,155 1,242,707 2,409,816 3,004,435 2,497,884 

Total 5,226,669 6,322,093 3,982,494 6,300,842 6,061,653 

6,885,186 

Allied College Health Readiness Personnel Costs 4,129,305 1,129,688 3,886,986 595,861 3,771,147 631,137 


Total 4,746,839 1,499,825 4,426,916 1,178,953 3,993,933 

1,506,816 

C4EO Governmental Relations Personnel Costs 1,530,140 773,125 1,667,388 597,856 1,675,746 480,614 


Total 1,873,914 960,711 2,011,162 785,442 2,019,520 852,100 

Construction Industry Relations & Safety Personnel Costs 1,433,741 2,791,346 1,455,865 1,690,773 1,715,942 1,791,151 

Operating Costs 1,336,527 212,166 212,166 852,437 1,086,373 212,166 

Total 1,645,907 4,127,873 1,668,031 2,543,210 1,928,108 

2,877,524 

Digital Student Transformation Recruiting Personnel Costs 5,213,300 1,935,776 4,686,006 1,454,972 4,703,313 1,619,987 


Total 5,529,651 2,220,903 5,002,357 1,744,099 5,076,524 

1,916,487 

Electrical Career Services Instrumentation Personnel Costs 6,062,626 824,442 5,984,687 716,689 6,980,879 797,715 


Total 6,555,364 1,018,845 6,537,519 911,092 7,848,337 992,118 


Total External Relations Operating Personnel Costs 11,642,479 1,267,210 1,297,210 9,291,925 10,094,535 1,468,458 

Total Operating Costs 8,601,234 4,786,800 7,884,759 4,746,461 8,534,331 

5,555,325 

Instructional Pool Personnel Total Costs 16,429,279 3,307,044 14,038,386 3,554,000 15,649,860 3,341,469 


Auxiliary Services 

Instructional Airport Sales 

Total 

Personnel Costs 9,826,874 

701,812 322,411 

7,811,298 

476,328 148,728 

6,161,969 

586,352 148,728 


Total 762,574 750,753 537,090 578,570 647,114 568,570 

Provosts Bookstore & Administration Personnel Costs 5,216,464 832,587 6,097,403 587,228 6,829,512 580,136 


Total 5,918,540 3,328,043 6,968,489 2,196,078 7,768,698 

2,239,416 

Strategic Food Service Partnerships Personnel Costs 125,744 968,100 718,092 84,324 733,184 0 

Operating Costs 837,300 56,200 801,400 56,200 853,400 0 

Total 1,805,400 181,944 1,519,492 140,524 1,586,584 0 

Transportation Housing Personnel Costs 3,772,873 1,531,226 3,665,374 1,416,007 3,832,546 1,446,634 


Total 4,187,806 4,565,201 4,080,307 4,677,873 4,247,479 

4,503,161 

Vision Printing & Production Alignment Personnel Costs 1,398,534 302,424 1,164,293 150,552 1,148,552 129,452 


Total 1,847,493 517,215 1,613,252 361,743 2,113,271 340,643 

Total Instruction Auxiliary Services Personnel Costs 53,121,594 3,956,748 49,923,573 3,020,607 52,463,278 

3,038,134 

Operating Costs 13,687,607 7,009,864 11,299,926 6,313,149 12,356,106 

6,200,240 

Total 66,809,201 10,966,612 61,223,499 9,333,756 64,819,384 

9,238,374 

Enrollment Management 

Student Enrollment Financial Aid Management Personnel Costs 8,328,465 7,459,614 9,001,993 

College Work Study Personnel Operating Costs 2,248,176 637,308 2,280,377 441,468 2,414,277 435,782 

Operating Total Costs 10,576,641 682,403 9,739,991 480,000 11,416,270 1,000,000 

Student Services Administration Total Personnel Costs 1,319,711 308,840 921,468 334,208 1,435,782 424,036 

Equal Opportunity Grants Operating Costs 2,800,000 179,090 2,520,000 245,090 2,550,000 245,090 

Total 2,800,000 487,930 2,520,000 579,298 2,550,000 669,126 


Total Enrollment Management Total Personnel Costs 1,092,000 8,637,305 1,102,500 7,793,822 1,302,500 

9,426,029 

Loans Operating Costs 2,427,266 650,000 2,525,467 650,000 2,659,367 700,000 

Total 11,064,571 650,000 10,319,289 650,000 12,085,396 700,000 

Pell Grants Operating Costs 28,000,000 27,000,000 30,000,000

Enrollment Management 

Enrollment Management Personnel Costs 8,328,465 7,459,614 9,001,993 


Total 10,576,641 9,739,991 11,416,270 

Student Services Administration Personnel Costs 308,840 334,208 424,036 


Total 487,930 579,298 669,126 


Total Enrollment Management Personnel Costs 8,637,305 7,793,822 9,426,029 


Total FY 2021 11,064,571 FY 2022 10,319,289 FY 2023 12,085,396 


Facilities Instruction & Plant 

Fleet Academics Personnel Costs 9,149,308 135,456 7,873,583 138,820 7,754,729 145,417 


Total 1,306,901 9,904,392 1,310,465 8,559,301 1,317,062 

8,418,447 

Maintenance Aerospace & Physical Plant Personnel Costs 4,788,710 3,746,679 3,971,411 2,739,787 4,003,018 3,057,218 

Operating Costs 2,753,279 1,479,990 2,841,221 1,242,707 3,027,126 3,004,435 

Total 7,541,989 5,226,669 6,812,632 3,982,494 7,030,144 

6,061,653 

Planning Allied Health & Construction Personnel Costs 1,182,247 4,129,305 3,886,986 924,988 3,771,147 917,456 


Total 1,317,811 4,746,839 1,178,518 4,426,916 1,161,241 

3,993,933 

Utilities C4EO Operating Personnel Costs 5,045,072 1,530,140 4,173,744 1,667,388 4,411,072 1,675,746 


Total 1,873,914 2,011,162 2,019,520 

Total Construction Facilities & Plant & Safety Personnel Costs 6,106,413 1,433,741 5,035,219 1,455,865 5,065,891 1,715,942 


Total 15,211,773 1,645,907 13,475,359 1,668,031 13,919,519 

1,928,108 


Facilities - Transfer to Capital Budget Operating Costs 1,808,924 316,351 1,114,958 316,351 5,614,958 373,211 

Total 1,808,924 5,529,651 1,114,958 5,002,357 5,614,958 

5,076,524 


Information Technology 

Infrastructure & Equipment 

Operating Costs 

Personnel Total Costs 

492,738 

6,555,364 529,440 

552,832 

6,537,519 266,844 

867,458 

7,848,337 321,614 

Industrial Manufacturing Operating Personnel Costs 7,334,024 246,721 6,587,549 193,920 7,065,873 295,800 


Support & Operations Personnel Total Costs 3,263,702 8,601,234 2,784,697 7,884,759 2,891,354 

8,534,331 

Instructional Pool Operating Personnel Costs 3,307,044 449,076 3,554,000 554,076 3,341,469 795,387 

Total Operating Costs 3,712,778 6,519,830 3,338,773 4,257,298 3,686,741 2,820,500 

Shared Expenses Operating Total Costs 5,160,851 9,826,874 5,270,951 7,811,298 5,646,199 

6,161,969 

Instructional Sales Total Personnel Costs 5,160,851 701,812 5,270,951 476,328 5,646,199 586,352 

Central Communications Operating Costs 894,500 60,762 894,500 60,762 894,500 60,762 

Total 894,500 762,574 894,500 537,090 894,500 647,114 


Total Information Technology Personnel Operating Costs 3,793,142 702,076 3,051,541 871,086 3,212,968 939,186 

Operating Total Costs 6,751,148 5,918,540 6,913,447 6,968,489 7,631,886 

7,768,698 

Strategic Partnerships Total Personnel Costs 10,544,290 125,744 9,964,988 84,324 10,844,8540 


Statewide Administration 

General Transportation Counsel & Police 

Total Personnel Costs 

181,944 

2,412,404 3,772,873 

140,524 

2,194,866 3,665,374 

0 

2,299,728 3,832,546 


Total 3,034,821 4,187,806 2,908,830 4,080,307 3,092,284 

4,247,479 

Internal Vision & Audit Alignment Personnel Costs 1,398,534 382,772 1,164,293 406,236 1,148,552 434,686 


Total 1,847,493 403,072 1,613,252 426,036 2,113,271 504,586 

Office of the CEO Personnel Costs 844,470 874,336 954,662 

Total Instruction Operating Personnel Costs 53,121,594 325,700 49,923,573 325,700 52,463,278 375,700 


1,330,362 

Insurance Operating Total Costs 66,809,201 807,755 61,223,499 886,050 64,819,384 974,655 

Total 807,755 886,050 974,655 


Total College Statewide Work Administration Study Personnel Costs 3,639,646 637,308 3,475,438 441,468 3,689,076 435,782 

Operating Costs 1,776,172 682,403 1,945,514 480,000 2,212,811 1,000,000 

Total 5,415,818 1,319,711 5,420,952 921,468 5,901,887 

1,435,782 


Debt Services & Leases Operating Total Costs 12,381,957 2,800,000 16,441,131 2,520,000 15,171,063 

2,550,000 

Institutional Scholarships Total Operating Costs 12,381,957 1,092,000 16,441,131 1,102,500 15,171,063 1,302,500 

Total 1,092,000 1,102,500 1,302,500 

Grants Loans Personnel Operating Costs 650,000 38,633 1,968,562 650,000 2,290,534 700,000 


Pell Grants Total Operating Costs 28,000,000 4,121,166 12,928,562 27,000,000 10,374,128 

30,000,000 

Strategic Pool Personnel Costs 0 4,584,280 8,000,000 

Operating Costs 0 3,415,720 3,000,000 

Total 0 8,000,000 11,000,000 

TOTAL OPERATING EXPENSES Personnel Costs 131,939,123 127,685,390 137,846,545 

Operating Costs 104,007,984 STRATEGIC 112,805,547 PLAN & BUDGET REPORT 120,552,174 

Total 235,947,107 240,490,937 258,398,719 

39

Total Statewide Administration Personnel Costs 3,639,646 3,475,438 3,689,076 


Total 5,415,818 5,420,952 5,901,887 

Debt Services & Leases Operating Costs 12,381,957 16,441,131 15,171,063 

Total 12,381,957 16,441,131 15,171,063 


Grants Personnel Costs 38,633 1,968,562 2,290,534 

Operating Costs FY 2021 4,082,533 FY 2022 10,960,000 FY 2023 8,083,594 

Total Expense Type Original Budget 4,121,166 Original 12,928,562 Budget Original Budget 10,374,128 

Instruction 

Strategic Academics Pool Personnel Costs 9,149,308 0 4,584,280 7,873,583 8,000,000 7,754,729 

Operating Costs 755,084 0 3,415,720 685,718 3,000,000 663,718 

Total 9,904,392 0 8,000,000 8,559,301 11,000,000 

8,418,447 

Aerospace Personnel Costs 3,746,679 2,739,787 3,057,218 

TOTAL OPERATING EXPENSES Operating Personnel Costs 131,939,123 1,479,990 127,685,390 1,242,707 137,846,545 3,004,435 


6,061,653 

Allied Health Personnel Total Costs 235,947,107 4,129,305 240,490,937 3,886,986 258,398,719 3,771,147 


Total 4,746,839 4,426,916 3,993,933 

C4EO Personnel Costs 1,530,140 1,667,388 1,675,746 


Total 1,873,914 2,011,162 2,019,520 

Construction & Safety Personnel Costs 1,433,741 1,455,865 1,715,942 


Total 1,645,907 1,668,031 1,928,108 



Total 5,529,651 5,002,357 5,076,524 



Total 6,555,364 6,537,519 7,848,337 



Total 8,601,234 7,884,759 8,534,331 

Instructional Pool Personnel Costs 3,307,044 3,554,000 3,341,469 


Total 9,826,874 7,811,298 6,161,969 

Instructional Sales Personnel Costs 701,812 476,328 586,352 


Total 762,574 537,090 647,114 



Total 5,918,540 6,968,489 7,768,698 

Strategic Partnerships Personnel Costs 125,744 84,324 0 


Total 181,944 140,524 0 



Total 4,187,806 4,080,307 4,247,479 



Total 1,847,493 1,613,252 2,113,271 



Total 66,809,201 61,223,499 64,819,384 


College Work Study Personnel Costs 637,308 441,468 435,782 

Operating Costs 682,403 480,000 1,000,000 

Total 1,319,711 921,468 1,435,782 


Total 2,800,000 2,520,000 2,550,000 


Total 1,092,000 1,102,500 1,302,500 

Loans Operating Costs 650,000 650,000 700,000 

Total 650,000 650,000 700,000 

Pell Grants Operating Costs 28,000,000 27,000,000 30,000,000 

40 



EXHIBIT VI: TSTC Definitions 

Big 3 Strategic Imperatives - 

1. Be Different in Compelling Ways 

2. Be Responsive and 

Accountable to Texas Industries 

3. Be Better than Others 

CCAP - Capital Construction Assistance Projects 

Core Values - Excellence, Accountability, Service 

and Integrity (EASI) 

Critical Pairings - Identifying unique value 

propositions by strategically pairing strengths, 

weaknesses, opportunities and threats. 

ERP – Enterprise Resource Planning software 

used to transform business processes, people and 

technology. 

Necessary Transformations - The changes needed 

to transform the future of TSTC. 

1. Build Integrated Marketing 

2. Retool the Production Floor 

3. Execute on Capital Construction Assistance 

Projects 

4. Re-Engineer Process & Technology 

Infrastructure 

5. Cultivate a Performance-Based Culture 

6. Fortify Appropriation Funding Sources 

PBE - Performance-Based Education 

Pipeline – The progression of a student through 

TSTC from time of application to measuring wages 

in a placed job in the Texas workforce. 

PMTIGPJ - Place More Texans In Great Paying Jobs 

SEE – Survey of Employee Engagement, an annual 

survey that TSTC participates in to gather data on 

the teammates’ perception of the College. 

SWOT - Strengths, Weaknesses, Opportunities, 

Threats 

WIG – Wildly Important Goal, a Franklin Covey 

term from the book 4 Disciplines of Execution. 


41


EXHIBIT VII: Acknowledgments 

This annual report is the collaborative effort of 

many teammates across the College. Represented 

in the creation of this document are TSTC’s values 

of Excellence, Accountability, Service and Integrity. 

The teams and partners listed below contributed to 

this report of the of the past and future meaningful 

work done to Place More Texans in Great Paying 

Jobs while also making TSTC a great(er) place to 

work. 

Thank you to these exceptional teammates: 

Budget, Accounting and Reporting Team 

Business Intelligence Team 

Communication and Creative Services Team 

Finance Administration Team 

Print Shop Team 

Key Contributors: 

Caitlin Simmonds, Interim Assistant Director, Creative Services 

Chad Wooten, Associate Vice Chancellor for Finance 

Dave Huynh, Advanced Analytics Consultant 

David Kofnovec, Senior Financial Analyst 

Dawn Parker, Executive Assistant to the Vice Chancellor and Chief Financial Officer 

Fernando Guerrero, Senior Data Analyst 

Jonathan Hoekstra, Vice Chancellor and Chief Financial Officer 

Madelynne Johnston, Finance Chief of Staff 

Tina Skidmore, Senior Executive Director for Business, Analytics, and Reporting 

Additions Contributors: 

Courtney Volney, Budget Manager 

Elizabeth Kacmarynski, Budget Manager 

George Makiya, Executive Vice President for Business Intelligence 

Nathan Ehlert, Senior Executive Director of Budget 

Shannon Wiggins, Senior Budget Analyst 

42 



© Copyright Texas State Technical College, All rights reserved. 

Published August 2022. 

Texas State Technical College (TSTC) is accredited by the Southern Association 

of Colleges and Schools Commission on Colleges (SACSCOC) to award Associate 

Degrees and Certificates of Completion. Contact the Southern Association of 

Colleges and Schools Commission on Colleges at 1866 Southern Lane, Decatur, 

Georgia 30033-4097 or call 404-679-4500 for questions about the accreditation 

of Texas State Technical College. 

Equal opportunity shall be afforded within TSTC to all employees and applicants 

for admission or employment regardless of race, color, gender, religion, national 

origin, age, genetic information, disability or veteran status. TSTC will make 

reasonable accommodations for persons with disabilities. TSTC’s policy is that, in 

all aspects of its operations, each person with a disability shall be considered for 

admission or access to or treatment or employment in its programs and activities 

in accordance with Part 84 of Title 45, the regulation implementing Section 504 

of the Rehabilitation Act of 1973. 


43

FY23 Strategic Plan and Budget Report

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