Say what you want but it had the distinct feeling of “jawboning.” In economic and political circles, it’s the unofficial technique of arm-twisting.
That’s what it seemed like when the Weatherford College Board of Trustees recently received a letter signed by Sen. Craig Estes R-Wichita Falls, and Sen. Brian Birdwell R-Granbury.
At a special called meeting Friday, trustees learned that Estes' letter encouraged the board to allow a resident living in Wise County, where Weatherford College has a satellite campus, placement on the college board.
“We write today regarding the Wise and Parker County campuses,” Estes said. “The Wise County campus operates in a facility financed and constructed by the county and leased to the college. In 2007, the county’s voters showed their support to the college with their approval of a five-cent ad valorem tax. As the only satellite with an ad valorem assessment, Wise County taxpayers and leadership offer a unique level of support to the system.”
Estes went on to say that the subject of “concern” in Wise County is that roughly $3.4 million raised annually, a significant annual system fee of $500,00 to $1 million is assessed according to the formula determined by the board of trustees, whose membership does not include a representative of the county.
“So, that they may obtain greater understanding and voice in that and other college matters of importance, we support the county’s request for representation with a seat on the board,” Estes said. “Join me in supporting this request is Senator Brian Birdwell. Senator Birdwell represents the Hood County campus and supports this request on principle and in view that a similar issue of representation may one day affect his district.”
The letter concluded with Estes asking the board for an answer by Feb. 10.
As it turns out board president Frank Martin wasn’t thrilled with the outside intervention.
“In October 2007 Weatherford College and a Wise County local steering committee submitted a request to the Texas Higher Education Coordinating Board Regarding a Branch Campus Maintenance Tax - (BCMT) for Wise County. The Wise County Steering Committee officers were Roy Eaton, Fred Myers, Judge Bill McElhaney and William Myers,” Martin said. “On page 32 of that 2007 request it says: ‘Levying of a BCMT does not authorize the county to have representation on the College Board of Trustees. This would only occur if the county voted to annex itself into the College’s taxing district.’ Representation on the board was not proposed, but was intentionally excluded by both parties.”
Martin said the Wise County steering committee jointly produced the document that was submitted to the Texas Higher Education Coordinating Board with the language detailing their expectations of board representation.
“Community colleges receive their primary funding from three sources: state appropriations, a property tax within the legal taxing district, and student tuition and fees,” Martin said. “The state appropriations and the tuition and fees generated by Wise County are allocated solely to the Wise County Campus budget. In the 2007 request it states that the BCMT revenue would be expended to:
▪ Retire debt for the facility;
▪ Maintain the physical plant and grounds;
▪ Supplement the annual operations budget due to insufficient revenue from state appropriations and tuition and fees; and
▪ Build a reserve fund for unanticipated emergencies for the physical plant.
All direct costs and a pro rata share of the Weatherford College indirect expenses associated with the Wise County Campus are included in the annual budget for the Wise County Campus.”
Martin said in 2008, Wise County voters approved the BCMT to build, maintain and operate college operations at a new WC campus located between Bridgeport and Decatur. Voters approved a BCMT of up to 5 cents per $100 valuation. The tax was only levied at 5 cents for a short time in the first years and then was reduced by the county in 2010 and again in 2012 and now sits at a little above 4.6 cents per $100 valuation.
“This brings in much lower revenues than needed to fund the Wise County campus,” Martin said. “Since construction didn’t start for almost two years after the voters approved the tax, an agreed to reserve account grew substantially. Under the terms of agreements between the college and Wise County, if the reserve falls below a level of $2 million, it will be replenished by the county.”
Martin added that over the first four years of operating the Wise County campus, expenses have outpaced revenue, taking us even closer to the $2 million restricted reserve level. It is forecasted that the unrestricted reserve will be down to the $2 million restricted reserve threshold within three years.
“Despite repeated attempts by college officials to encourage Wise County to increase to the voter approved maximum tax rate of 5 cents per $100 of valuation, Wise County officials have declined to do so,” Martin said. “Wise County has been unhappy with proportionate sharing of the indirect costs. However, they agreed in the 2007 submitted proposal to the Coordinating Board that they understood indirect costs were an essential part of the jointly submitted proposal.”
Martin said the Wise County cost issue continues to be a result of several things:
1. Wise County built a facility almost twice the size that was discussed during the proposal phase; thus dramatically increasing the total cost.
2. All the estimates provided by Wise County to use for the cost of the bond financing were in the 4 to 6 percent range. Unable to get financing on the open market, the County financed through their Bond Company for interest in the 8 percent range. The forecasted 2018 amount for the bond cost provided by the County in 2010 was $1.9 million. However, the actual 2018 debt service is approximately $2.6 million.
3. Of course, setting the tax rate lower than that authorized by the voters led to a more rapid depletion of the unrestricted reserve account. Wise county 2010 forecasted branch campus tax revenues for 2018 were approximately $4.1 million. However, the actual 2018 branch campus tax revenues are closer to $2.8 million.
4. A drop in forecasted property values against which that lower tax rate is applied.
The net effect of items 2, 3, and 4 alone is approximately a $2 million annual difference in available revenue.
“Now, to address the indirect expense that Wise County has concerns about. This expense is Wise County’s pro rata share of the costs associated with operating and administering the entire Weatherford College system that has a link to the Wise County Campus,” Martin said. “This includes but is not limited to: the President’s Office, Business Services, Purchasing, Payroll, Human Resources, Technology Services, Central Telephone System, Creative and Graphic Services, Campus Security, Student Services, Admissions, Registrar, Student Counseling, Career Center, Testing, Financial Aid, Instructional Deans, etc. The Wise County campus is dependent on the main campus to function, and without the work from the departments mentioned above, it wouldn’t be possible for the campus to operate.”
Martin said given the facts and the recent events, the board needed to discuss and develop a position in order to respond to the letter by the requested date.
After going into executive session Martin later returned and issued a statement.
“The board appreciates the opportunity that the letter from Senators Estes and Birdwell has presented,” he said. “We are resolved to come to a constructive plan with our service area partners that will be good for the entire service area.”
Another meeting to discuss the issue has been called for Wednesday at 5 p.m.