Background

• San Antonio contains one public university, The University of Texas at San Antonio; one public health science center, The University of Texas Health Science Center at San Antonio; and four independent universities:  Our Lady of the Lake University, St. Mary's University, Trinity University, and the University of the Incarnate Word.  For mostly historical reasons related to the growth of the city, all of the independent universities are located in the central San Antonio area.  The University of Texas at San Antonio is located in northwest San Antonio, where land was donated many years ago for its campus.  It also has a teaching campus in downtown San Antonio. 
  
  
• The greater San Antonio area is also served by four community college campuses, of the Alamo Community College District:  Northwest Vista College, Palo Alto College, San Antonio College, and St. Philips College.  Total district enrollment for fall 2002 was 44,964 with 38 percent White, 7 percent Black and 52 percent Hispanic.  Palo Alto College, host college for Texas A&M University-Kingsville Center, had 7,055 students with 29 percent White, 2 percent Black and 67 percent Hispanic.
  
  
• The Texas A&M University-Kingsville System Center-San Antonio was established in January 2000 on the campus of Palo Alto Community College.  The System Center offers bachelor's degree programs in management, computer information systems, criminology, psychology, accounting, agribusiness, applied arts and sciences, child and family studies, inter-disciplinary studies, history, English, kinesiology, and mathematics.
  
  
• UTSA's enrollment in fall 2002 was 22,015, including students at the downtown campus.  The estimated headcount enrollment at the Texas A&M University-Kingsville System Center for fall 2002 was 480 (290 full-time-student-equivalent).  Fall 2001 headcount enrollments for the four independent universities were as follows:  St. Mary's, 3,244; Our Lady of the Lake, 1,579; Trinity, 2,303; Incarnate Word, 2,438, for a total headcount enrollment of 9,564.  The University of Texas Health Science Center at San Antonio had a headcount enrollment of 2,665 in Fall 2001. 
  
  
• UTSA gets the vast majority of its local enrollments from north, northwest and central parts of San Antonio. It does not enroll many students from the southern half of San Antonio.
  
  
• Palo Alto Community College, the current location of the Texas A&M University-Kingsville System Center, is located southwest of central San Antonio.  It gets most of its enrollment from central and northwest San Antonio, like UTSA, but it also gets a larger portion of its enrollment from more southern areas of San Antonio and Bexar County than does UTSA.
  

Demographics of South Texas and San Antonio

·        South Texas is identified by the Coordinating Board as one of the state's high growth regions.

·        By 2015, the population of South Texas is projected to increase by one million people (21 percent) to 4.9 million people.

·        The 15-to-34 Hispanic population in the region will total almost 1.1 million by 2015.

·        Generally, educational attainment in the region is low.  The percentage of the population with at least a high school diploma is the second-lowest in the state at 68 percent; only the Upper Rio Grande at 65.6 percent has a higher percentage.

·        To increase educational attainment in the region, it will be necessary to increase the percentage of young adults completing high school.

Meeting Increasing Needs for Higher Education Services

            Even before Closing the Gaps, the Coordinating Board recognized that access to upper-level and graduate educational opportunities needed to be expanded to increase participation, especially of non-traditional students.  Off-campus educational units of existing public universities and systems helped provide additional access with flexibility.  The two primary types of off-campus educational units are multi-institution teaching centers (MITCs) and university system centers (USCs). 

            In July 1998, the Coordinating Board adopted the "Supply/Demand Pathway."  The Pathway ties the provision of instructional services to demonstrated enrollment thresholds and serves as a model to meet academic program needs in geographical areas not currently served by public universities, without over‑committing or under‑committing state resources.

            MITCs and USCs facilitate the transfer of course credits between institutions and potentially provide students a broader array of academic programs and support services than any one institution could provide at a particular location.  As originally envisioned, they:  (1) are funded through the regular formula process and are not eligible to request separate legislative funding; (2) are under the management of the parent institution(s); (3) focus on teaching, rather than research; (4) award course credit and degrees in the name of the providing institution; and (5) usually use locally provided facilities, often located on or near community college campuses.  MITCs and USCs emphasize upper-division and graduate-level instruction and are encouraged to develop campus‑specific

articulation agreements and partnerships with local community and technical colleges and other universities.

            The Supply/Demand Pathway recommends matching state resources to demonstrated demand for higher education services.  As demand grows, additional state resources should be added.  It was conceived that a MITC or USC might eventually achieve enrollment levels that could justify the creation of a new, stand-alone university.  The Pathway specifies that the Coordinating Board should only consider converting a center to a free-standing, upper-level university when a significant, on-going demand has been demonstrated over a period of time.  Specifically, the Pathway calls for a center to have enrollments of 3500 full-time student equivalents (FTSE) for four fall semesters before the Board reviews its status and considers recommending to the Legislature that it be re-classified as an upper-level university. 

            The threshold was set at 3500 full-time equivalent students because that was the enrollment level deemed necessary for an institution to operate efficiently across a moderate range of degree programs and start seeing benefits of economies of scale.  Three thousand five hundred FTSE students is also the rough equivalent of 5000 headcount students, the threshold that the Legislature has used in past years to identify less efficient institutions.  In past biennia, the Legislature has appropriated an additional $750,000 per institution per biennium to help these less efficient institutions meet their higher overhead costs. 

Enrollment at System Centers and Teaching Centers

            Each of Texas' MITCs and USCs is unique and responsive to its local situation.  The first MITC, the Universities Center of Dallas, was established in 1994.  The table that follows summarizes information about the existing centers.

Reported Fall 2002 Upper-Division and Graduate Enrollment at Higher Education Centers

* Duplicated enrollments.  A student is counted once for every class he or she takes.  Unduplicated enrollments and full-time equivalents are significantly smaller numbers.

** Full-time-student equivalents are determined from fall semester data as follows: undergraduate SCH-(semester credit hours) divided by 15; master's and special/professional SCH-divided by 12; doctoral SCH - divided by 9.

*** In some cases, the full-time-equivalent enrollments that would count toward the threshold may be somewhat higher than the numbers reported here. 

**** UH data not certified.

Texas A&M University System's Plans for Developing Texas A&M University-San Antonio

• No appropriations are needed or expected for the coming biennium.
  
  
• Representatives of the Texas A&M University System believe that the proposed university would primarily serve southern Bexar County and neighboring counties.
  
  
• The next step would be to develop a ten-year master plan for the campus.
  
  
• A commitment for 900 acres of land for the new campus has been made by a land owner in San Antonio.
  
  
• Development of the campus would be consistent with the city of San Antonio's Southside Development Initiative.

• The System believes that given the growth rate of enrollments at the system center, the enrollment threshold could be reached in three or four years. 

Coordinating Board staff believes that this is an optimistic, but not impossible, projection.

• Given the time required to reach the enrollment threshold and do the initial construction at a new campus, the entering class at Texas A&M University-San Antonio would not be likely before Fall 2009.

Efficiency and Cost Considerations

• Small, freestanding universities generally do not have sufficient enrollments to support a wide array of degree programs.  This is especially true of institutions with fewer than 2,500 full-time-equivalent students.
  
  
• Small universities are also not able to operate as efficiently as larger universities.  A significantly higher percentage of state funds is expended on administrative costs rather than on teaching costs at such institutions.  In response to the diseconomies of scale of small institutions, the Legislature provides an additional $750,000 per biennium for institutions with fewer than 5,000 headcount students.
  
  
• The initial costs related to building a new university campus would probably start at about $40 million, which would be the cost to build the first teaching and administration building and provide a minimal amount of basic improvements.
  
  
• Planning for a new university is estimated to cost $250,000 for one biennium.
  
  

Potential Benefits

·        Texas A&M University--San Antonio would increase the availability of higher education services to the growing population of southern Bexar County.

·        College-going rates in the southern half of San Antonio are lower than in other areas of the city. An expanded higher education presence in the area could enhance efforts to improve public education in the area and increase the college going rates and degree completion rates of area residents.  In doing this, Texas

A&M University-San Antonio could contribute to Closing the Gaps in higher education participation and success.

·        If the goals of Closing the Gaps are met, existing universities in the San Antonio area would need to add additional capacity to meet increasing enrollments. Public universities in the South Texas- North region currently have a space deficit of almost 202,000 square feet. It is anticipated that the space deficit will grow to 996,000 square feet should the Closing the Gaps enrollment targets be met. Population projections by the Texas state Data Center project that Bexar

County’s 15-34 population will increase from 427,255 in 2001 to 475,262 by 2015. (11%)

·        Population growth and meeting the goals of Closing the Gaps should result in a significant increase in demand for higher education services in San Antonio.  Even if UTSA lets its enrollment increase from its current levels (22,000 in Fall 2002) to 30,000 to 35,000, there could still be additional demand for higher education services that would need to be met by independent institutions or a new public university. 

·        An institution of higher education would promote economic development in the southern half of San Antonio and help provide skilled workers for the Toyota plant that is planned for that area.

Other Considerations

• The Coordinating Board's Higher Education Supply/Demand Pathway recommends that state resources should be provided to meet the actual demand for higher education services.  Demand at the Texas A&M University-Kingsville System Center-San Antonio is unlikely to reach the Board-recommended threshold of 3,500 FTE students for four fall semesters or the threshold in the bill of 2,500 FTE students for one semester within the next two biennia.
  
  
• The Coordinating Board's Pathway model recommends considering the conversion of an upper-level system center to an upper-level university once enrollment thresholds have been met.  The proposed bill creates a general academic university that is not restricted to the upper-level.  This would result in a duplication of lower-division offerings in the area served by the new university.
  
  
• The provision in the bill that requires Texas A&M University-Kingsville System Center-San Antonio to reach an enrollment of 2,500 FTE students before operating as a university would provide some safeguard against starting a new university before demand approached levels where operating efficiencies could be realized, though it would not provide the assurance that the higher threshold does.

A number of factors are likely to affect the emergence of additional demand for higher educational services in San Antonio.  They include:

- the continuation of demographic trends that are resulting in rapid population growth in San Antonio;

- the success of efforts to increase graduation rates in San Antonio high schools;

- the success of the Closing the Gaps plan in increasing college-going rates among the state's Hispanic students;

- the continuation and size of the UT-Austin program that sends students who aren't admitted to the Austin campus to another system institution campus for the first two years of the bachelor's degree; 

- whether UTSA decides to limit its size to 30,000 to 35,000 students; and

- whether the independent universities in San Antonio have the capacity to grow significantly, and students have the resources to attend them.        

Recommendations

            The Board respectfully recommends that the Legislature take into account the considerations and benefits stated in the above analysis.  In particular, the Legislature should carefully consider whether the one-time threshold of 2,500 full-time students provides sufficient demonstration of the continuing demand necessary to support the provision of the broad range of high quality programs and services generally assumed to be offered by a full university and do so with economies of scale.

            Secondly, because the Pathway thresholds were based on conversion of an upper-level center to an upper-level institution, the Legislature should consider the point that conversion to a full four-year institution would likely require greater resources and would duplicate opportunities already available at local community colleges.