Weatherford College stands out in statewide financial condition rankings

Money.

The very word and that of its close cousins – funding, allotment, appropriations and the like – are enough to keep any college administrator awake at night.

Money – there’s never enough of it. Money – how do we budget it? Money – are we spending and investing it wisely? Money – are we being good stewards of taxpayers’ money?

The answer to that last question is one that Weatherford College president Dr. Kevin Eaton is glad to answer.

“Yes, we are definitely good stewards of taxpayers’ money,” he said. “We continually strive to do the best we can with the money we have, and we do a good job.”

That confident statement is backed a recent report released by the Texas Higher Education Coordinating Board. The report, “Financial Condition Analysis of Texas Public Community Colleges 2012,” compares the financial strength of the state’s 50 community and junior college districts, and Weatherford College stands at the top of several of the measurements examined.

The report, a broad financial evaluation, addresses whether institutions are fully capable of successfully carrying out their current programs, and, secondly, if the institutions able to carry out their intended programs well into the future. Further, it identifies institutions in which financial stress exists. Thirty-eight of the 50 public community college districts have little or no indication of financial stress, and 22 of those, including WC, have no indication at all, meaning they meet the threshold for all indicators. The report defines that threshold as being “robustly capitalized, adding positive net asset balances, have strong internal controls and are properly positioned for future success.”

Eaton points out that WC is the only institution ranked at or near the top in each category examined:

“Financial vulnerability,” which measures unrestricted money versus operating expenses. WC was the top college in this category, with Grayson College and Paris Junior College in second and third positions.

“Primary reserves,” which looks at how long a college could survive without new money coming in. On a ratio that should be at least .13, WC scored 1.06 – Collin College was the only institution to score higher.

“Viability,” or how much of its debt the college could pay off with the money it has now. The state recommends a score of at least .51; WC scored a healthy 4.79, far beyond recommendations. Only Tarrant County College and Central Texas College scored higher.

“Debt burden,” which measures how much of total expenses are for debt service. A healthy score is below five percent; WC was at only 1.1. Only 12 out of 50 colleges scored below two percent.

“Return on net assets,” which measures the College’s total economic return as a means of figuring financial performance. WC’s 13.1 percent positive was in the top seven, along with Tyler, Temple, Ranger, Paris, Panola and Northeast Texas. Many other schools showed a negative return on assets.

The majority of the revenue that college districts receive is from state formula funding (driven by enrollment and contact hours generated), local property tax revenue, tuition and fees and financial aid revenue (again driven by enrollment) and auxiliary funding (revenues from bookstore and cafeteria, for instance ). State funding makes up 16 percent of the College’s budget; tuition and fees, 21.4 percent; financial aid, 25 percent, and ad valorem or property tax revenue, 19 percent.

That’s how the College’s budget is made up, give or take a few percentage points each year. And the question now is, how does the College spend it?

Andra Cantrell, vice president of financial affairs, presents such a breakdown every month at the Board of Trustees meeting. Most of WC’s annual budget goes to educational activities, which includes a wide range of expenditures for instruction, student services, institutional support, maintenance, scholarships, staff benefits and the like. The rest is spent on capital outlay, debt service, and reserves.

“Our Board of Trustees voted four or five years ago that at least 20 percent of our ensuing budget be allocated for reserves,” said Cantrell, “and we meet and usually exceed that each year.”

Increasing enrollment and necessary expansion of College programs and facilities are a challenge each year as state funding continues to decrease.

“But we’ve learned to stretch a dollar as far as it can, and we have dedicated employees who collaborate and cooperate to make it easier to continue to provide and service the needs of our students and community,” Cantrell said. “WC will continue to thrive and set an example of fiscal responsibility.”

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