South Dakota Technical Institutes - sdlegislature.govsdlegislature.gov/docs/budget/BoardPapers/2017/2... · SB65 –Board of Technical Education Proposed Fiscal Impact for FY18 •

South DakotaTechnical InstitutesDeveloping Technically Skil led Professionals

J o i n t A p p r o p r i a t i o n s C o m m i t t e eF e b r u a r y 7 , 2 0 1 7

Named 2016’s Best State Community College SystemCost & Financing, Education Outcomes, & Career Outcomes

S O U T H D A K O TA T E C H N I C A L I N S T I T U T E S | 2

S O U T H D A K O T A T E C H N I C A L I N S T I T U T E S | 3

President Mike Cartney

President Mark Wilson

President Robert Griggs

President Ann Bolman

Technical Institute Presidents

Strengthening & Increasing South Dakota’s Workforce

• Educate 6,500 students each year

• Provide technically skilled degrees (AAS degrees, diplomas, certi f icates)

• Offer a cost effective & timely route to successful, fulf i l l ing employment

Strengthening & Increasing South Dakota’s Workforce

• SD employers count on a fresh infusion of talent each year –2,500 graduates

• More than 1,200 industry experts help guide curr iculum & programs

• 82% of responding graduates remain in South Dakota to f i l l high-tech, high-need careers or continue their education

• 98% of responding grads are employed, continuing education, or in Armed Forces

Strategic Plan

Overarching Goal: Provide quality postsecondary education and training to enable South Dakota’s workforce and economy to grow.

Strategic Plan• Three Areas of Focus:

• Product: Grow a technically skilled workforce prepared to meet the challenges of industry and continuing education.

• People: Lead a system with the appropriate quality and quantity of instructors, staff and administrators.

• Plant: Ensure facilities are adequate, safe and capable of meeting evolving industry demands and are conducive to learning.

Current Relationship

State wi th Board o f Educat ion Technical Institutes wi th loca l boards


• Tuition and state fees• Distribute state funding• New construction – facilities bonding• Program approval & review• Strategic data• Promulgate rules as authorized• Coordination with state agencies• Federal Perkins grant & state grants• 1.4 FTE

• Hire president/leadership• Strategic advisement &

partnerships with industry • Local policies & procedures• Daily operations & fiscal

oversight• Personnel• Curriculum & Instruction• Accreditation

System Priorities, Efficiencies, & Improvements

Proposed Relationship – SB65

SD Board of Technical Education

Technical Institutes with local boards


• Tuition and state fees• State funding recommendations,

distribution & oversight• Overall policies & goals for system• New construction & major renovations• Program approval & review• Strategic data• Monitor accreditation• Promulgate rules, as authorized• Coordination with state agencies• 2 FTE

• Hire president/leadership• Strategic advisement &

partnerships with industry • Local policies & procedures• Daily operations & fiscal

oversight• Personnel• Curriculum & Instruction• Accreditation

System Priorities, Efficiencies, & Improvements

SB65 –Board of Technical EducationProposed Fiscal Impact for FY18• No additional funding required in

FY18• No additional FTE required in FY18

• Executive Director: Access a vacant FTE at Dept. of Education

• Director of Academic & Student Success Programs: Move 1 FTE currently tasked with postsecondary tech ed to the Board of Technical Education

• Dept. of Education staff provide finance, legal, and contract services and board/administrative support

S O U T H D A K O TA T E C H N I C A L I N S T I T U T E S | 1 0

ProductGrow a technically skil led workforce prepared to meet the challenges of industry and continuing education.


SD Technical Institute Graduate Outcomes


90.00%

92.00%

94.00%

96.00%

98.00%

100.00%

2012 2013 2014 2015

98.12% 97.52% 98.10% 97.83%

Respondents, 6 months following graduationEmployed, Continuing Education, or Armed Forces



1783

327

50

200400600800

100012001400160018002000

Total Employed Total Continuing Education Total in Armed Forces

2012

2013

2014

2015

2015 Technical Institute Responding Graduates – 90.8% response rate



97.83%

81.90%

63.75%

67.11%

58.89%

0.00% 20.00% 40.00% 60.00% 80.00% 100.00%

Total Placement of 2015 Graduates

Total Employed

Total Employed in Field

Total Employed in SD

Total Employed in Field, in SD

2015 Technical Institute Graduate Outcomes

2015 Technical Institute Responding Graduates – 90.8% response rate

SD Technical Institute Enrollments, FTE & Graduates

5951 6179 6073 6250 6463 6305 6323 6569

19302289 2312 2228

25222210 2398

0

1000

2000

3000

4000

5000

6000

7000

2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17

SD Technical Institute Enrollments, FTE & Graduates

Fall EnrollmentsFull-Time Equivalent (FTE)Graduates

0%

-4%

-7%

-10%

0%

-2% -2%

2%

-12.00%

-10.00%

-8.00%

-6.00%

-4.00%

-2.00%

0.00%

2.00%

4.00%

2013 2014 2015 2016

Comparison of Percentage Changes in Fall Enrollment since 2013 2-Year Institutions National vs SD

National 2-YrPublic

SD TI

SD Techs vs. National Enrollment Trends

19561878

20012059

-4.0%

6.5% 2.9%

-6.0%

-4.0%

-2.0%

0.0%

2.0%

4.0%

6.0%

8.0%

1500

1600

1700

1800

1900

2000

2100

2013 2014 2015 2016

SD TI Enrollment Before BD vs With BDS (excludes programs that were not BDS in Cohort 1)

Pre-BDS With BDS % change Linear (Pre-BDS) Linear (With BDS)

Growth in Build Dakota Programs

Corporate Education

2012-13 2013-14 2014-15 2015-16

Companies 612 961 537 805Unduplicated companies the TIs provided corporate education to in the year prior

Individuals 9785 8772 7965 8120Unduplicated individuals the TIs provided corporate education to in the year prior


Build Dakota Scholarship

• Growing South Dakota’s workforce in the highest demand technical fields.

• Full scholarships for students completing eligible 1- and 2-year programs.

• Skilled Scholars commit to working in SD, in field of study, for 3 years.

• Collaboration between scholarship, industry & technical institutes

• First cohort started Fall 2015



• Eligible Programs in


HealthcareEnergy Engineering

Agriculture Automotive Building Trades/Construction

Precision ManufacturingInformation Technology/Computer Information Systems Welding

• Cohort 1: 298 Scholars• 24 industry partner scholarships• 190 working toward completion• 29 employed• 9 employment deferments• 7 probation or self-pay• 63 non-completers

• Cohort 2: 295 Scholars• 54 industry partner scholarships• 289 working toward completion• 6 non-completers


S O U T H D A K O T A T E C H N I C A L I N S T I T U T E S | 2 3

PeopleLead a system with the appropriate quality and quantity of instructors, staff and administrators.


Workforce

Admin. Faculty (FTE) Staff

Full-time Adjuncts (FTE)

Overloads (FTE)

Professional/ Technical Civil Service Permanent,

Part-Time

LATI 8 109 12.9 3 28 58 11.63%

MTI 4 77 1.7 1.1 31 18 6.12%

STI 8 82 19.6 11.8 35 53 0%

WDT 5 44 22 .84 11 30 0%SUBTOTAL 25 312 56.2 16.74 105 159 4.92%

TOTAL 25 384.94 264 4.92%

Workforce Age 25 & Under3%

Ages 26-3519%

Ages 36-4522%Ages 46-55

31%

Ages 56-6115%

Age 62+10%

Technical Institute Employees, by Age

0.00%2.00%4.00%6.00%8.00%

10.00%12.00%14.00%16.00%18.00%20.00%

LATI MTI STI WDT

13.79% 13.49% 19.55%10.64%

10.84% 8.73% 8.38% 11.70%

% of Employees, Age 56 and Older

Ages 56-61Age 62+

Instructor Salary Support Funding“…shall be dedicated to increasing instructor salaries to competitive levels at postsecondary technical institutes”

• Funds from 2016’s HB 1182• 3% of new funding from sales tax revenues

each year• “…shall be dedicated to increasing instructor

salaries to competitive levels at postsecondary technical institutes”

THANK YOU! They’ve been life changing.


Long-Time Challenges:• Difficult to attract

instructors from industry because of difference in pay

• Hard to keep instructors employed when graduates receive offers in industry similar to instructors’ salaries



Positive Differences Immediately:• Increased # of applications• More experienced

applicants• Hiring back quality

instructors who had gone to industry for higher pay


GOAL: Bring salaries to equal levels between

supervisors in industry and instructors at the technical institutes on a per-day basis



INDUSTRY INSTRUCTORS

Entry Rate Market Value Maximum Rate



Wage Ranges

Move away from traditional education wage system:• Different at each tech school• Same for most program areas

at each school

Establish industry-competitive wage ranges for each program.

Achieve equitable market values across the entire technical

institute system.



Wage Ranges


Practical Nursing

MachiningAuto Technician

Medical Lab Assistant

Building TradesEngineering Technician

Networking

Diesel Technician

Culinary Arts

Precision Ag

HVAC

Powerline

Dental Assisting

Ultrasound

Paramedic

Robotics

• ENTRY RATE• 50th percentile wage for supervisor-level position in industry• Rate neither lags nor leads competition in market• Typically for beginning instructors • Fully qualified and well experienced as professionals in industry

occupation• Little experience as an instructor, have licensure or certification

requirements to obtain, etc.S O U T H D A K O TA T E C H N I C A L I N S T I T U T E S | 3 3



Wage Ranges

• MARKET VALUE• Target pay for fully trained, competent, and qualified instructors in both

field and as instructors• Possess all required licensures and/or certifications• Represents a skilled supervisor in a comparative industry • Meets performance expectations• Instructors with little experience or who have room for growth should

not be compensated at market valueS O U T H D A K O TA T E C H N I C A L I N S T I T U T E S | 3 4



Wage Ranges

• MAXIMUM RATE• Top wage in program; few instructors make it to max • Leaders in department and institution• Typically in industry and education for long time• Carry additional responsibility; bring added value to program• Talented at teaching, mentoring and as technicians in the field• Have the required licensures and/or certifications




Wage Ranges

• Distribution of funds to TIs based on gaps from market value

• Auto Tech Program Example:• Comparable industry position: First-line

Supervisors of Mechanics, Installers and Repairers

• Entry Rate = $57,789• Market Value = $72,236• Maximum Rate = $90,295



• Auto Tech Program Example:



Market Value:

= $72,236 (annual)= $299.73 (per day)

Average Actual Daily Rate in Auto Tech Program:

= $47,666 (annual) = $250.87 (per day)

Gap = $48.86 (per day, per instructor)

• Auto Tech Program Example:



Program Salary Gap:

($ gap per day * # contract days * # instructors) * 14.06% additional benefit cost

($48.86 * 190 * 4) * 14.06% = $42,354.84 Program Gap

Repeat across all programs at each technical institute to determine Institution Gap

• Calculated Gaps from Market Value (Summer 2016):



Technical Instructor Need

General Education

Instructor Need Total

Calculated Need

General Education Pro-Ration

General Education Pro-Rated Funding

Total FY17 Instructor Support

Funding LATI $ 1,278,218.75 $ 95,547.81 $ 1,373,766.56 30.80% $ 82,178.19 $ 1,360,396.95 MTI $ 865,219.01 $ 29,047.28 $ 894,266.29 9.36% $ 24,982.81 $ 890,201.82 STI $ 100,450.16 $ 38,617.44 $ 139,067.61 12.45% $ 33,213.86 $ 133,664.02 WDT $ 489,317.19 $ 146,987.36 $ 636,304.55 47.38% $ 126,420.02 $ 615,737.21

TOTAL $ 2,733,205 $ 310,200 $ 3,043,405 $ 266,795 $ 3,000,000 Appropriated Funding $ 3,000,000.00 $ 3,000,000.00

Difference $ 266,794.88 $ (43,405.01)

• Funds distributed only for programs with identified need

• Applied to individuals’ salaries:

• Experience (industry & teaching)• Qualifications (degrees &

credentials)• Performance



• Application of State Funds to Instructor Salaries (Actual FY17):



Total State Funding for FY17 by Institution

FINAL FY17 State Funding

AppliedCalculated Gaps

(June 2016)

LATI $ 1,228,387.86 $ 1,360,396.95

MTI $ 873,183.52 $ 890,201.82

STI $ 118,299.61 $ 133,664.02

WDT $ 615,737.21 $ 615,737.21

TOTAL $ 2,835,608 $ 3,000,000

• 78% of full-time instructors qualified for salary support funding

• Average salary increase was 21.5% ($10,100)

Administrat ive Rule 24:10:49

PlantEnsure facil it ies are adequate, safe & capable of meeting industry demands & are conducive to learning.



World-Class Facilities• Final phase near

completion • Multi-phase, decade-long

project• Upgrades on all campuses • Ensure facilities are safe,

attractive and industry-aligned

• Funded with student fees and state support

• STI and WDT completing the last projects


World-Class Facilities

• 2016 Completion of 115,000 sq. ft. facility

• New Auto Tech Lab – DOUBLES capacity• New Diesel Lab – Program expansion for Ag/Construction• Campus food service• Administrative offices• Auditorium

• 2017 Renovation of the Ed Wood facility• Expands Collision Program and Refinishes Lab Space –

DOUBLES program capacityS O U T H D A K O TA T E C H N I C A L I N S T I T U T E S | 4 5


Auto Lab


S O U T H D A K O T A T E C H N I C A L I N S T I T U T E S | 4 8

The Hub



World-Class Facilities

• New construction and renovations • Diesel• Public Safety programs• Medical simulation labs• Cafeteria• Multi-purpose room

• Moves all programs on one campus• Staggered completions through May 2017


Badlands Hall – Diesel

Public Safety Addition

Simulation Center

Event Center

Budget Proposal


Revenues


Tuition & Fees47%PSA

30%

Federal Revenue

11%

State Grants & Other

Local12%

All TI's Budget FY16


30%

Federal Revenue

8%

State Grants & Other

Local16%



31%

Federal Revenue

4%

State Grants & Other Local

15%


Revenues


Tuition & Fees

55%

State Aid45%

State Aid vs. Student Burden FY18

State Aid:Per Student AllocationFacility Bonds Support

Tuition Buy DownInstructor Salary

Enhancement

Tuition & Fees:per credit (FY17 Rates)

Tuition = $109 Facility Fee = $35M&R Fee = $5Technology Fee = $1Local &/or Program Fees

Expenditures – FY18:


Salary and Benefits

65%

Professional Services

12%

Travel and Supplies7%

Equipment4%

M&R plus Improvements

5% Other7%

FY18 Budgeted Expenses for All Technical Institutes

FY17 Amendment

• FY17 General Bill Amendment - $(694,160)• Reduction due to lower than estimated enrollments

• Projected FTE for FY17 distribution = 5,905 = $20,754,126• Actual FTE for FY17 distribution = 5,707.5 = $20,059,966• Difference = $694,160

• All funding formula requirements are met for FY17

*FTE = Ful l -Time Equivalent


State Aid –Distribution Formula• Distribution of state aid detailed in SD Administrative Rule

24:10:42:28• 25% of total distr ibuted to each institute for baseline

operations • Remaining 75% distributed based on cost of programs by

weighted program factors • High cost, low density programs (Factor = 5)• High cost programs (Factor = 3)• Standard cost programs (Factor = 1)

• Total state aid divided into four equal, quarterly payments• Payments are based on FTE from the prior fiscal year

FY17 Amendment


Distribution of Funds in FY17TOTAL FY17 State Appropriation $27,908,796

- State Bond Payment $2,322,850 State share of lease payments on existing bonds.

- Tuition Buy-Down Assistance $1,831,820 Saves students approx. $10 per credit.

- Instructor Salary Enhancement $3,000,000 Brings instructor salaries to competitive levels with industry.

= $$ for Formula Distribution - Est. 5,905 FTE $20,754,126

FTE Calculation LATI MTI STI WDT

2016 Tuition Collected $18,663,512.39

FTE Value/Credit Hour 30

Tuition fee per credit (FY16) $109

Per Student Allocation (FY17) $3,514.67

Actual # of FTE Calculated (FY17 from 15-16 credits) 5,707.5 1880.29 1160.93 1903.34 762.94

Calculation of Need - Formula Distribution $20,059,966 $6,296,578 $4,217,853 $6,215,619 $3,329,917

(Under) or Over Need $694,160

FY18 Proposal

• State Aid Categories for Technical Institutes:• Per Student Allocation, including National Guard Tuition

Support • Facilities Bond Support• Tuition Buy Down• Instructor Salary Enhancement


FY18 BUDGET PROPOSAL

• Provides changes in support for:• Postsecondary State Aid:

• Per Student Allocation (PSA) -$(395,908)

• Bond Payment - $5,696

FY18 ProposalPer Student Allocation (PSA) - $(395,908)• Part 1: 1% Inflationary Increase - $201,586• Part 2: Changes to Full-t ime Equivalent (FTE) - $(597,494)

Inflation:

FTE Change:

FY17 Est. FTE = 5,905‐ FY18 Est. FTE = 5,735

Decrease in FTE = 170

FY17 PSA = $3,514.67X Inflation Inc. 1%

FY18 Prop PSA =$3,549.82

FY18 Prop PSA = $3,549.82FY17 PSA = $ 3,514.67PSA Increase = $ 35.15

PSA Increase = $ 35.15X FY18 Est. FTE = 5,735FY18 Inflation = $201,586

FY17 Estimated FTE = 5,905‐ FY18 Estimated FTE = 5,735

Decrease in FTE = 170

FY17 PSA = $3,514.67X Decrease in FTE = 170

Cost of Change = $(597,494)

FY18 Proposal

Bond Payment, State Share - $5,696• State supports 27% of annual payments on bonds for

technical education facilities. 1-16A-96• Early state payoffs on two bonds following 2016

session decreased long term payments. • Total FY18 state bond support = $2,322,850


SD Technical Institute Funding Profile

• Impacts of FY18 Proposal• Thank you for continued investments!• Funding to postsecondary technical education

• = Educated, skilled workforce• = Quality employees• = Stronger state economy• = Strengthened South Dakota communities



SD Technical Institute Funding Profile

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

$1,600,000

$1,800,000

$298,252

$643,000

$883,950$324,090

$150,000

$150,000

$350,000

New Revenues Must Pays

1% Inflation

1% PSA

$5/CreditIncrease Mandated Insurance

Critical M&R*

158 More Students

Priority Equipment

$1,182,202

$1,617,090

$434,888UNMET

*after shifting $500K of STI projects to out years

Thank You!


Documents

South Dakota Technical Institutes - sdlegislature.govsdlegislature.gov/docs/budget/BoardPapers/2017/2... · SB65 –Board of Technical Education Proposed Fiscal Impact for FY18 •