HIGHER EDUCATION
FUND (HEF)
HIGHER EDUCATION COORDINATING BOARD
HEF – HOW MUCH
Fiscal Year
Amount
1985
$100M
1996
$175M
2008
$262.5M
HEF – PERMISSIBLE USES
• Improved or unimproved Land
• Construct and Purchase
Buildings (and Equipment)
• Repair and Rehabilitation
• Capital Equipment
• Library Books and Materials
• Other Permanent Improvements
• Bonds and Notes
• Pledge up to 50%
• Not more than 10 Years
… to the extent of their use
for educational and general
activities.
HEF – WHO IS ELIGIBLE
• Institutions created
that are not part of
• The University of Texas
System
• Or, Texas A&M
University System
• Institutions not entitled
to participate in
funding from bonds or
notes payable from the
Available University
Fund (AUF).
HEF – WHO IS ELIGIBLE
UT-Pan American*
UT-Brownsville*
TAMU-Corpus Christi
TAMU-Kingsville
TAM International
University
West TAMU
TAMU-Commerce
(East Texas State University)
TAMU-Texarkana
(University at Texarkana)
UH System Administration
UH
UH-Victoria
UH-Clear Lake
UH-Downtown
Midwestern State
University
UNT
UNT at Dallas
UNTHSC at Fort Worth
(Texas College of Osteopathic
Medicine)
Stephen F. Austin
Texas Southern
TTU
Angelo State
TTUHSC
TTUHSC at El Paso
Texas Woman's
Texas State System
Administration
Lamar
Lamar Institute of
Technology
Lamar-Orange
Lamar-Port Arthur
Sam Houston
Texas State
(Southwest Texas State
University)
Sul Ross
(including Uvalde Study Center)
Sul Ross-Rio Grande
College
Texas State Technical
College System
*UT-Pan American and UT Brownsville remain in the constitution as eligible HEF institutions, but as of FY 2016 will
be combined as a new institution and no longer be eligible.
HEF ALLOCATION - REVIEW
• Every 10 years beginning in 1985
• And every 5 years
• Compare Deferred Maintenance
(DM) needs to HEF DM
expenditures.
• Evaluate allocation effectiveness
concerning DM needs
HEF ALLOCATION – COMPONENTS
TSTC SetAside
Facilities
Condition
Space
Deficit
Complexity
HEF ALLOCATION – SET-ASIDE
• TSTC set aside
• First 2.2 percent
• or less
• TSTC is excluded from the
allocation of the
remaining 97.8 percent
of the annual
distribution.
Remaining Allocation
97.8%
TSTC System
2.2%
HEF ALLOCATION – ELEMENTS
• 50% to Complexity
• Split remaining 50%
between Space
Deficit and Facilities
Condition Elements
by monetary value
Facilities
Condition
23%
Space
Deficit
27%
Complexity
50%
HEF ALLOCATION - COMPLEXITY
Allocate on Formula Funding:
 Educational and General Space
Support
General Academic Institutions
 Operations Support (including
Teaching Experience Supplement)
Health Related Institutions
 Medical, Nursing, and Pharmacy
Education
 Allied Health Professions and
Biomedical Sciences Training
 Graduate Training in Public Health
 Physicians Assistant Program
 Research Enhancement
Convert Appropriations to Allocation
• Divide 50% of remaining allocation
• By total formula appropriations for
all institutions
• Times institution formula
appropriations
• For example
•
•
Allocation Factor = 50% X
Remaining Allocation / Total
Appropriations = $128M / $2.355B
= $0.054
Institution Complexity = Institution
Appropriation X Allocation Factor =
$112M X $0.054 = $6M
HEF ALLOCATION – SPACE DEFICIT
• Unadjusted space surplus =
Zero
• Space Model (Unadjusted)
Deficit
• Monetize
• $30 per square foot
•
Multiply by 1.5 to convert
to Gross Square Feet (GSF)
•
Divide by 10 (the number
of years in the allocation)
•
Multiply by $200 (cost of
one gross square foot of
Classroom Space in 2008)
For example
• Space Projection Model Deficit =
329K Net Assignable Square
Feet
• Space Deficit =
329K X 1.5 ÷ 10 X $200 = $9.9M
HEF ALLOCATION – FACILITIES CONDITION
• Campus Condition
Index Value
• Formerly
Replacement Value
• Monetize
• Multiply by 2% - an
acceptable portion of
building value to
carry in deferred
maintenance
For example
• Campus Condition Index
Value = $455M
• Monetized Facilities
Condition =
$455M X 0.02 = $9.1M
HEF ALLOCATION – MONETARY VALUES TO
ALLOCATION
Allocation Factor
• Divide 50% of Remaining
Annual Allocation by
• The Sum of Monetized Space
Deficit and Facilities Condition
elements
• For example
• Allocation Factor = 50% X
Remaining Annual Allocation
/ (Space Deficit + Facilities
Condition) = $128M /
($183M + $210M) = $0.33
Multiply the Each institution’s
Monetized Value by the Allocation
Factor
• For example
•
Monetized Space Deficit = $9.9M
•
Space Deficit Allocation =
$9.9 X $0.33 = $3.2M
•
Monetized Facilities Condition =
$9.1M
•
Facilities Condition Allocation =
$9.1M X $0.33 = $3.0M
•
Institution Allocation =
Complexity + Space Deficit +
Facilities Condition = $6M +
$3.2M + $3.0M = $12.2M
HEF ALLOCATION – STUDY OBJECTIVES
1. Study and make recommendations on the amount of total annual allocation
of HEF
• Consider the change in value of the facilities from 2008 to 2014
• Consider the reported maintenance needs of the institution and the cost
increases between 2008 and 2014
2. Study the effect of HEF allocation on the amount of reported deferred
maintenance.
• Identified needs, 10 year review
• Maintenance performed using HEF funds
3. Review the current allocation formula
• Fairness of the calculations
• Components of the calculations reflect the intent of the statute, 62.021 (a)
HEF ALLOCATION – PARTICIPATION OF ALL
INSTITUTIONS
• Assist with the collection of data from the
institutions.
• Review data collected from the institutions for
reasonable accuracy.
• Provide written feedback on current
allocation formula.
• Review feedback from other participants and
assist with constructive suggestions.
• Participate in discussions of recommendations
for modifications to formula allocations.
• Provide written feedback on draft reports
prepared for submission to THECB agenda.
TIMELINE
8/5
• Phone Conference
• Overview and Q&A
8/18
• Phone Conference
• Review Data and Consider Feedback
9/2
• Phone Conference
• Comment on Draft Report
9/9
• Phone Conference
• Finalize Report