Tarrant County College District

Comprehensive Annual Financial Report

For the Fiscal Year Ended August 31, 2006

Prepared by:

Finance Department Tarrant County College District

Texas

TARRANT COUNTY COLLEGE DISTRICT COMPREHENSIVE ANNUAL FINANCIAL REPORT

TABLE OF CONTENTS Page

INTRODUCTORY SECTION Chancellor’s Letter ...................................................................................................... i Transmittal Letter ........................................................................................................ iii GFOA Certificate of Achievement .............................................................................. viii Chancellor’s Cabinet ................................................................................................ ix Principal Officials.......................................................................................................... x FINANCIAL SECTION Independent Auditor's Report...................................................................................... 1 Management’s Discussion and Analysis ..................................................................... 3 FINANCIAL STATEMENTS Statements of Net Assets .....................................................................................11 Statements of Revenues, Expenses and Changes in Net Assets ........................13 Statements of Cash Flows....................................................................................14 Notes to Financial Statements..............................................................................15 SUPPLEMENTARY DATA Schedule of Operating Revenues.........................................................................38 Schedule of Operating Expenses by Object .........................................................40 Schedule of Non-operating Revenues and Expenses ..........................................42 Schedule of Net Assets by Source and Availability ..............................................44 STATISTICAL SECTION - (Unaudited) Net Assets by Component...........................................................................................48 Revenues by Source ...................................................................................................50 Program Expenses by Function ..................................................................................52 Tuition and Fees..........................................................................................................54 Assessed Value and Taxable Assessed Value of Property ........................................56 State Appropriation Per FTSE and Contact Hour........................................................58 Principal Taxpayers.....................................................................................................60 Property Tax Levies and Collections...........................................................................62 Ratios of Outstanding Debt .........................................................................................64 Legal Debt Margin Information ....................................................................................66 Pledged Revenue Coverage .......................................................................................68 Demographic and Economic Statistics – Taxing District .............................................70 Principal Employers.....................................................................................................71 Faculty, Staff and Administrators Statistics .................................................................72 Enrollment Details .......................................................................................................74 Student Profile.............................................................................................................76 Transfer to Senior Institutions .....................................................................................78 Capital Asset Information ............................................................................................79

FEDERAL SINGLE AUDIT SECTION Schedule of Expenditures of Federal Awards .............................................................81 Notes to Schedule of Expenditures of Federal Awards...............................................83 Independent Auditor’s Report on Compliance and on Internal Control over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards..........................84 Independent Auditor’s Report on Compliance with Requirements Applicable to Each Major Program and Internal Control over Compliance in Accordance with OMB Circular A-133 ..........................................85 Federal Schedule of Findings and Questioned Costs .................................................87

TARRANT COUNTY COLLEGE DISTRICT COMPREHENSIVE ANNUAL FINANCIAL REPORT

TABLE OF CONTENTS (Continued)

Page

STATE SINGLE AUDIT SECTION Schedule of Expenditures of State Awards.................................................................89 Notes to Schedule of Expenditures of State Awards ..................................................90 Independent Auditor’s Report on Compliance with Requirements Applicable to Each Major Program and Internal Control over Compliance in Accordance with UGMS Single Audit Circular ..............................91 State Schedule of Findings and Questioned Costs.....................................................93

i

Chancellor’s Letter

  Leonardo de la Garza, Ph.D. 

November 15, 2006    To the Board of Trustees  Once more, I am pleased to submit to you and to the citizens of Tarrant County our Comprehensive Annual Financial Report.  This document presents the record of the Tarrant County College District’s (TCCD) financial operations for the year just ended, fiscal year 2006.  Your College District continues to manage an exceptionally strong financial support system.  As in past years, our very strong financial position is primarily due to your vision in implementing our “pay‐as‐you‐go” practice of financing capital outlay expenditures, unique to community colleges in Texas, and perhaps in the nation.  Our financial profile has also been augmented by the continued dynamic growth of Tarrant County and thus the growth of our tax base.  The College District, however, still faces financial hurdles.  Despite the robustness of our tax base, we expect continued efforts in the Legislature to restrict the state’s public community colleges’ ability to realize additional tax revenue by capping tax rate increases, capping property valuation increases, enabling successful rollback election initiatives, or some combination.  In addition, our level of state appropriations in the future remains questionable because of the possibility that the enacting of “proportionality” may require us to shoulder a much greater part of the cost of employee health insurance.   Given these challenges and the actions taken by the board as a result of its desire to avoid placing undue additional burdens on either local taxpayers or students, we must continue to pursue current practices and measures that make maximum use of all our resources.  By continuing those successful practices, which underscore fiscal control and allocation of our resources in a responsible and priority‐based manner, I believe we will be able to remain fiscally sound while managing enrollment growth. ¡Gracias!  Very cordially, 

    

Leonardo de la Garza, Ph.D. Chancellor 

Tarrant County College District

iii

Transmittal Letter

November 15, 2006  

To:  Chancellor Leonardo de la Garza, Ph.D.,         Members of the Board of Trustees, and         The Citizens of the Tarrant County College District  

The comprehensive annual financial report of the Tarrant County College  District  for  the  fiscal  year  ended  August  31,  2006,  is hereby submitted.   The purpose of this report is to provide detailed information con‐cerning  the  financial  condition  and performance of  the District.  Responsibility  for  the preparation  and  integrity  of  the  financial information and fairness of the presentation, including all disclo‐sures, rests with  the management of  the College.   To  the best of our  knowledge,  the  enclosed  data  are  accurate  in  all material respects and are reported  in a manner designed to present fairly the financial position and results of operations of the District.  All disclosures necessary to enable the reader to gain an understand‐ing of the District’s financial activities have been included.  

Comprehensive Annual Financial Report The  Tarrant  County  College  District’s  comprehensive  annual financial report (CAFR) for the fiscal year ended August 31, 2006 was  prepared  by  the  Finance Department.    The  financial  state‐ments are prepared  in accordance with Generally Accepted Ac‐counting Principles  (GAAP)  as  established  by  the Financial Ac‐counting  Standards  Board  (FASB)  and  the  Governmental  Ac‐counting Standards Board  (GASB)  and  comply with Annual Fi‐nancial  Reporting  Requirements  for  Texas  Public  Community and  Junior Colleges as  set  forth by  the Texas Higher Education Coordinating Board.   The Notes  to  the Financial Statements are provided  in  the  financial section and are considered essential  to fair presentation and adequate disclosure for this financial report.  The notes include the Summary of Significant Accounting Policies for the District and other necessary disclosures of important mat‐ters relating to the financial position of the District.  The notes are treated as an integral part of the financial statements and should be read in conjunction with them.  Further, this letter of transmit‐tal  and  the  financial  statements  should  be  read  in  conjunction with  the  Management’s  Discussion  and  Analysis  (pages  3‐10) which  focuses  on  current  activities,  decisions,  and  currently known  facts  to provide  an overview of  the  financial  statements and reasons for significant changes from the prior year.  The  independent  firm of  certified public accountants of Weaver and Tidwell, L.L.P., was engaged to audit the financial statements and related notes and issue a report thereon.  They have informed District management  and  the Board of Trustees  that  their  audit was  conducted  in  accordance with  generally  accepted  auditing standards, which  require  a  consideration  of  internal  controls  in determining  audit procedures.     The  report  of  the  independent auditors based upon their audit of the financial statements  is  in‐cluded in the financial section of this report.  The District is required to undergo an annual federal single audit in conformity with the provisions of the Single Audit Act Amend‐

ments of 1996, and U.S. Office of Management and Budget Circu‐lar  A‐133,  Audits  of States, Local Governments  and Non‐Profit Or‐ganizations, and  an  annual  state  single  audit  in  conformity with the  Texas  Governor’s  Office  of  Budget  and  Planning  Uniform Grant Management  Standards  Single Audit  Circular.    Information related  to  these  single  audits,  including  the  schedule  of  federal expenditures  of  awards,  schedule  of  state  expenditures  of awards, and auditor’s reports on compliance and on internal con‐trols  is  included  in  the  federal and  state  single audit  sections of this report.  The  comprehensive annual  financial  report  (CAFR)  is presented in  five  sections:  introductory,  financial,  statistical,  federal  and state single audit.  The introductory section includes the chancel‐lor’s  letter,  this  transmittal  letter,  the  District’s  Certificate  of Achievement for Excellence in Financial Reporting, the reporting structure for the Chancellor’s Cabinet, and a list of principal offi‐cials.    The  financial  section  includes  the  independent  auditor’s report, management’s discussion and analysis,  the statements of net  assets,  the  statements of  revenues,  expenses  and  changes  in net  assets,  the  statements  of  cash  flows,  notes  to  the  financial statements and required supplemental information. The statistical section  includes  selected un‐audited  financial  and demographic information  presented  on  a multi‐year  basis.    The  single  audit report  sections  contain  the  schedules  and  reports  required  by statute.  

Organization of District The Tarrant County College District was established as a public community college  in an election held  in Tarrant County, Texas, on  July  31,  1965.   The District operates  as  a  community  college district under  the  laws of  the State of Texas. An  elected,  seven‐member Board of Trustees,  that has oversight responsibility and control over all District activities, governs the District. The Board of Trustees has no financial accountability over Tarrant County or other  Tarrant  County  districts  and,  accordingly,  only  financial data  for  the Tarrant County College District  is  included  in  this report. 

iv

Mission and Values Tarrant County College District, a comprehensive two‐year insti‐tution  is dedicated  to  providing  quality  education  that  exceeds the  expectations of  the people of Tarrant County.   Accordingly, the mission  is  as  follows:   Tarrant County College District pro‐vides affordable and open access to quality teaching and learning.  The College implements its mission through a clearly defined set of  programs,  services,  and  partnerships  that  include  university transfer programs; workforce education programs; technical pro‐grams; developmental courses; adult  literacy courses; continuing education  and  community  services;  an  extensive  curriculum;  a highly  qualified,  enthusiastic,  innovative,  faculty  and  staff;  ap‐propriate technology, equipment, and learning resources; diverse modes of instruction and delivery; support services to foster stu‐dent  success; work  and  partnerships  in  support  of  the  cultural and  economic  development  of  the  community;  and  a  commit‐ment  to  institutional  effectiveness—an  ongoing  process  of  self‐examination,  self‐improvement,  and  an unending pursuit of  ex‐cellence.    Tarrant County College District is committed to: • Excellence ‐ belief in providing outstanding quality in educa‐

tional  programs,  administrative  support,  and  services  to students, faculty and staff; 

• Access ‐ belief in providing educational opportunities for all members of the community; 

• Diversity  ‐ belief that the College should reflect the diversity of the community; 

• Student  Success  ‐  belief  in  providing  quality  instruction, resources,  and  support  services  to  assist  our  students  in achieving their lifelong goals; 

• Service to Community ‐ belief in the importance of engaging with the community to enhance economic vitality and qual‐ity of life; and  

• Innovation  and Creativity  ‐  belief  in  cultivating  a  learning environment that evaluates and incorporates emerging tech‐nologies  and methodologies  to  enhance  the  quality  of  in‐struction  and  administrative  support  for  students,  faculty, and staff. 

 

Economic Condition and Outlook Tarrant County  is  situated  in North Central Texas.   There are a total  of  34  incorporated  cities  in  Tarrant County, with  the  two largest being Fort Worth  and Arlington.   The population of  the county at the  last census estimate numbered 1.6 million, and the county was among the fastest growing in the nation according to the 2000 Census.   A low cost of living and competitive labor costs make Tarrant County an attractive location for businesses.  Many corporate  headquarters  are  located here.   Businesses  in Tarrant County  have  access  to Dallas/Fort Worth  International Airport, one of  the nation’s  largest  and busiest  airports,  and  to Alliance Airport, a  facility dedicated  to  industrial use. Because of  the ex‐cellent  transportation  advantages,  Tarrant  County  is  home  to many wholesale and distribution facilities.  

Tarrant  County  also  has  a  diverse  and  varied  manufacturing base.   The Fort Worth Chamber of Commerce  reports  that Fort Worth is the most manufacturing‐oriented metro area in the state. Tarrant County  is a national  leader  in  the production of aircraft and aviation products and is also a center for automobile assem‐bly,  semiconductor  manufacturing,  and  telecommunications manufacturing. Once reliant primarily on defense plants and the petroleum  industry,  Tarrant Countyʹs  economy  has  been  trans‐formed into one of the most vibrant and diverse in the nation and is  leading  the  regional  resurgence  in  business  relocations  and expansions, retail development, and new housing construction.  

Major Initiatives A major new academic  initiative  for  the College District  focuses on  student  learning  outcomes  as  a  way  to  ensure  student success.   This  initiative will  result not  only  in  compliance with accreditation  requirements  related  to  measuring  student  and program  outcomes  but  also  in  verifying  that  the  College  is achieving  its  mission  to  provide  excellence  in  teaching  and learning.   Many  concurrent  activities  affirm  the District’s  commitment  to the  initiative. The College has provided  funding  for  faculty and administrators  to  attend  state  and  regional  assessment conferences. In July 2006 instructional administrators spent a day in  retreat,  discussing  current  practices  and  on‐going  efforts  in reporting student learning.   In fall 2006, a massive assessment of the  syllabi  of  the more  than  1,100  courses  in TCCD’s  approved inventory has begun and will involve all faculty. The timeline for completion  of  the  review,  with  the  goal  of  putting  all  syllabi online, is 2009.   This  project  involves  infinitely  more,  however,  than  merely attending meetings, scanning currently approved documents into a  database,  or  reporting  student  outcomes  with  grade distributions.    Rather,  it  requires  writing  criteria  to  clearly articulate the course content and to help verify that students are mastering  the concepts of  the courses  they  take,  to plan ways  to teach  the  concepts,  to assess  student outcomes, and  to  replan  if results  show  that  students  are  not  meeting  the  criteria  for success.    In  short,  the project  requires  faculty  to make  research‐driven  decisions  about  what  teaching  strategies  produce  best results—and to document the consistency of those outcomes.  Perhaps  the  best  example  of  the  impact  of  the  emphasis  on student  learning outcomes  is  the  recent work of  the  accounting faculty.    Unsatisfied  with  the  outcomes  of  students  in  their courses,  the  faculty asked  the Office of  Institutional Research  to provide  information  about  the  level  of  preparation  of  students who  had  enrolled  in  their  courses.    The  results  of  the  profile suggested  that  students  desiring  to  enroll  in  university‐parallel courses  in  accounting were more  likely  to  succeed  if  they  had passed Accuplacer, the assessment test required by TCCD.  As  a  result,  the  accounting  faculty  recommended,  and  the chancellor  approved,  the  requirement  that  effective  fall  2006 

v

passing placement scores  in  reading and mathematics would be prerequisites  for  the  College’s  university‐parallel  accounting courses.  Faculty  and  administrators  are  closely  monitoring success  rates  for  students  enrolled  in  accounting  in  the  fall semester  2006,  with  the  expectation  that  higher  enrollment requirements will result in higher success for TCCD students.   In  other disciplines,  too, District  faculty  and  administrators  are reviewing student outcomes with  the  intention of  implementing new strategies to enhance student success.  Mathematics is a case in point.   Because  students’ Accuplacer  scores  reveal a need  for developmental coursework, and because  the  rate of non‐success in  mathematics  is  higher  than  for  other  courses,  faculty  and administrators have implemented a comprehensive assessment of the  curricula  of  the  three  courses  that  prepare  students  for university‐parallel  courses  such  as  College  Algebra  or Statistics.  The assessment will include identification of successful teaching strategies and evaluation of textbooks.  Mathematics  faculty  will  also  analyze  the  objectives  of  each course, correlate those objectives with the objectives of university‐parallel courses at major four‐year institutions, and assess testing and  tutoring  activities  at  the  College  to  ensure  that  students whose scores suggest a need  to review  fundamental concepts of mathematics can do so efficiently and effectively—with resulting success in college mathematics courses. 

 The efforts of faculty in accounting and mathematics are mirrored by  work  of  a  number  of  cross‐disciplinary  faculty committees.    For  the  past  three  years  they  have  assessed objectives  of  courses  in  academic  and  technical  programs,  re‐writing as necessary to ensure that student learning outcomes are measurable.    PARR  for  the  Course,  a  faculty‐written  booklet explaining  the process and  the vocabulary of measurable course objectives, was successfully piloted in the summer 2006.  Faculty leaders  are  currently using PARR  for  the Course  to  teach  their colleagues  across  the  District  about  measurable  learning outcomes  and  to prepare  them  to  rewrite  the  course  goals  and learning outcomes for all undergraduate courses.  

The next step is to develop assessment tools and grading rubrics to  ensure  consistency  in  the District. Once  these  are developed, coordinators  and  faculty  leaders will  be  able  to  review  course outcomes  and will  begin  to  think beyond  individual  courses  to focus on broader program outcomes  for  student  attainment.   A faculty  committee  that  studied  assessment  for  most  of  the summer 2006 is ready to begin training for program reviews, and PARR for the Program is in development.  Clearly  this  focus  on  accountability  for  student  outcomes  will require energetic commitment of  faculty and administrators, but the  emphasis on quality makes  the  effort worthwhile.   And  the momentum for this important academic initiative may peak at the best  of  all  times  in  the  life  of  the  College:    the  new  strategic planning cycle is scheduled to begin in 2007.    Ultimately,  the  move  toward  accountability—the  move  to measure  learning  outcomes—will  extend  to  concepts  related  to broader  institutional  goals  and  will  include  all  units  of  the College,  including  student  development  services,  enrollment services, and human resources.   

District Focus In  addition  to  learning  outcomes,  a major  focus  of  the College District will continue to be implementation of its Facilities Master Plan,  an outgrowth of  earlier planning processes  that  saw  com‐pletion of initial phases of an Academic Master Plan as well as the undertaking of a  comprehensive  assessment of TCCD’s  existing facilities.   Expert  consultants  examined  facilities  and  infrastruc‐ture on all campuses and produced a detailed report, not only on what  renovations  and  repairs  are  needed,  but which  ones  are needed when and at what cost.  Integrated with the Facilities Master Plan, which addresses needs on existing campuses, is the planning for and construction of the College District’s  fifth comprehensive campus.   During 2006  the College  completed acquisition of  land  for  the campus, a 55‐acre site  spanning  the  Trinity  River  next  to  downtown  Fort Worth.  Groundbreaking for the campus took place on June 10, 2006.  The campus  is being built on both  the north and south banks of  the river,  the  two  components  to  be  connected  by  a  pedestrian bridge.   Phase  I of  the new campus  is scheduled  to open during the 2008‐09 academic year.    The Facilities Master Plan and  the construction  schedule  for  the downtown campus act as the District’s guide for the expenditure of major capital outlay  funds acquired  through  the “pay‐as‐you‐go” portion of the Maintenance and Operations tax  levy.   TCCD is the only community college in Texas and – to our knowledge – one of only two in the nation to fund major capital outlay through the Maintenance and Operations tax levy instead of through debt service.  Notwithstanding this approach to construction funding, the institution will continue to retire the debt on prior years’ Gen‐eral Obligation Bond  issues, as explained  in  the  financial sched‐ules  found  in  this audit  report.    Indeed,  it  is TCCD’s goal  to be debt‐free in 10 years or less.  

vi

Another focus will be an expansion of TCCD’s outreach program through  the operation of a Mobile Go Center giving young peo‐ple  access  to  a  variety  of  resources  to  help  them with  college preparation and admission processes.   While many Go Centers, part  of  the  Texas  Higher  Education  Coordinating  Board’s “Closing  the Gaps” plan,  are  located on high  school  campuses, another method was needed to get  information on college to au‐diences beyond the high school and in the many high schools that do not have Go Centers.  The solution is the Mobile Go Center, a facility with all the features of the regular Go Centers, but which can be  taken  to community centers, shopping malls, community celebrations …  anywhere  there  are people who might  be  inter‐ested  in  improving  their  lives  through  a  college  education.  Thanks  in part to an $800,000 grant  from  the AT&T Foundation, Mobile Go Centers are being built and put  into operation  in all parts  of  the  state.    The Mobile  Go  Center  for  the  Dallas‐Fort Worth Metroplex will be operated and staffed by the Enrollment Services Division  of  TCCD.    It will  travel  throughout  the  area, bringing information on college to thousands of Texans who oth‐erwise might not have it.  

Financial Information Internal Controls.   District management  is  responsible  for  estab‐lishing and maintaining internal controls designed to ensure that the assets of the District are protected from  loss, theft, or misuse and  to ensure  that adequate accounting data are compiled  to al‐low for the preparation of financial statements in conformity with generally  accepted  accounting principles.   The  internal  controls are designed  to provide  reasonable, but not  absolute,  assurance that  these objectives  are met.   The  concept  of  reasonable  assur‐ance  recognizes  that:  (1)  the cost of a control  should not exceed the benefits likely to be derived; and (2) the valuation of costs and benefits requires estimates and judgments by management.  Single Audit.  As  a  recipient  of  federal,  state,  and  local  financial assistance,  the District also  is  responsible  for ensuring  that ade‐quate internal control is in place to ensure compliance with appli‐

cable laws and regulations related to those programs.  This inter‐nal control  is subject  to periodic evaluation by management and the  independent  auditors  of  the District.   As  a part  of  the Dis‐trict’s single audits, described earlier, tests are made to determine the  adequacy  of  the  internal  control,  including  that  portion  re‐lated  to  federal and  state awards programs, as well as  to deter‐mine  that  the  District  has  complied  with  applicable  laws  and regulations.  The results of the District’s single audit for the fiscal year  ended August  31,  2006, provided  no  instances  of material weaknesses in internal control.   Budgeting Controls.   The  District  continues  to  apply  budgetary controls and accounting on a  fund basis.   The objective of  these budgetary controls is to ensure compliance with legal provisions embodied  in  the  annual  appropriated  budget  approved  by  the District’s Board of Trustees.  Activities of the unrestricted current fund, auxiliary enterprises  fund, and retirement of  indebtedness fund  are  included  in  the  annual  appropriated  budget.    The District also maintains an encumbrance accounting system as one technique  of  accomplishing  budgetary  control.    Encumbered amounts  lapse  at  year‐end.    However,  encumbrances  are  re‐appropriated  as  part  of  the  next  year’s  budget.   All  funds  are included  in  the  consolidated  financial  statements  presented,  although  the  funds  are  not  separately  reported  in  the  CAFR under GASB 34  and  35  (see Note  2  to  the Financial Statements, Summary of Significant Accounting Policies,  pages 15‐18).     As demonstrated by the statements and schedules included in the financial  section of  this  report,  the District continues  to meet  its responsibility for sound financial management.  

Debt Administration As of August  31, 2006,  the District had  $62.7 million of general obligation  bonds  and  continues  to  be  rated  AAA  and  Aa1  by Standard & Poor’s  and Moody’s  Investors  Service,  respectively.  Since 1998 when the Board of Trustees adopted the “pay‐as‐you‐go” strategy,  the College has worked  to  reduce  the  level of out‐standing  indebtedness  and  accompanying debt  service  expense, and we expect this trend to continue.  The District has no plans to issue additional bonds; current and planned capital expenditures will be funded from District investments or budget resources.  As a result, Tarrant County citizens get their money’s worth – dollar for dollar – rather  than seeing about a  third of all capital outlay funds going to pay interest on bonds.  Students are winners, too, as the College  is able to add more and better facilities.   The Dis‐trict’s cash basis “pay‐as‐you‐go” approach  to capital  funding  is unique  to TCC among  the 50 Texas public  community  colleges.  Management’s Discussion  and Analysis provides  additional de‐tail on implementation of the District’s financial strategy.  

Cash Management During  the  year,  cash  was  invested  in  demand  deposits,  U.S. Treasuries, Federal National Mortgage Association notes, Federal Farm Credit Bank notes, Federal Home Loan Bank notes, Federal Home Loan Mortgage Corporation  notes, Texpool  and TexStar.  

Texpool  is  an  investment  pool managed  by  the  State  of  Texas.  TexStar  is  an  investment pool managed  by  JP Morgan  Fleming Asset Management  (USA),  Inc.    The District  did  not  invest  in derivatives.    At August 31, 2006, the District had current investments of $188.3 million and  long‐term  investments of $143.5 million.   Short‐term investments are liquidated as necessary to provide funds for cur‐rent  operations  and  payment  of  current  liabilities.    Long‐term investments will be used  to  finance  capital  expenditure projects in  the current or  future years. The average yield on  investments was  3.8  percent,  and  investment  income,  including  the  adjust‐ment  (increase)  to  record  investment  securities  at  the  lower  of cost or  fair market value  at year‐end, was  $13.5 million  for  the year  ended  August  31,  2006.    The  District’s  performance  was lower when compared to the average yield of 4.4 percent for 90‐day Treasury bills  for  the same period.   This  is due primarily to the  current  cycle  of  rate  increases  and  the District  still  having investments that are paying a  lower rate.   The District has a his‐tory of holding all investments to maturity and therefore receives the full par value at maturity.   The District also receives full par value for any investments that are called before maturity.  The District’s investment policy is to minimize credit and market risks while maintaining  a  competitive  yield  on  the  investment portfolio.   Accordingly,  substantially  all  bank deposits were  ei‐ther  insured  by  federal  depository  insurance  or  collateralized.  Note 4  to  the Financial Statements, pages 18‐20, provides details of the agency and treasury notes held in the District’s investment portfolio and more fully describes the credit risk.   

Risk Management The District utilizes a  limited risk management or self‐insurance program  for workers’ compensation. As part of  this comprehen‐sive  plan,  resources  have  been  allocated  in  the  current  unre‐stricted  fund  to meet  potential  losses.    Third‐party  coverage  is currently maintained  for workers’  compensation  claims  greater than $300,000.   By self‐insuring,  the District has significantly  re‐duced the workers’ compensation expense.  

Independent Audit State  statute  requires  an  annual  audit  by  independent  certified public  accountants.   The purpose of  an  independent  audit  is  to provide assurance, based on independent review and testing, that the basic financial statements and accompanying notes are fairly stated  in  all material  respects.   The District’s Board of Trustees selected  the  accounting  firm  of Weaver  and Tidwell,  L.L.P.    In addition  to meeting  the  requirements  set  forth  in  state  statutes, their  audit  also was  designed  to meet  the  requirements  of  the Federal Single Audit Act Amendments of 1996 and related OMB Circular A‐133 and the State Single Audit related to the Uniform Grant Management  Standards  Single Audit Circular.  The  audi‐tor’s reports related specifically to the single audits are  included in the Single Audit Section.  

Awards The  Government  Finance  Officers  Association  of  the  United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence  in Financial Reporting  to  the District  for  its  com‐prehensive annual  financial  report  for  the  fiscal year ended Au‐gust 31, 2005.   This was  the  fourteenth consecutive year  that the District  has  achieved  this  prestigious  award.    In  order  to  be awarded a Certificate of Achievement, a District must publish an easily  readable  and  efficiently organized  comprehensive  annual financial report.  The report must satisfy both generally accepted accounting principles and applicable legal requirements.  A Certificate of Achievement is valid for a period of one year.  We believe  that  our  current  comprehensive  annual  financial  report continues  to meet  the Certificate  of Achievement Program’s  re‐quirements, and we are submitting it to the GFOA in anticipation of another certificate.  

Acknowledgments We are grateful to the Board of Trustees for its diligent planning and  oversight  of  the  financial  operations  of  the  District.   We would  particularly  like  to  acknowledge  the Chancellor  and  his cabinet  for providing  the  resources necessary  to prepare  this  fi‐nancial  report.    Finance Department  employees  are  recognized for  their  contributions  to  the  completion  of  this  report.     We would  also  like  to  thank  the  accounting  firm  of Weaver  and Tidwell, L.L.P., for its timely completion of the audit.  Sincerely,    Nancy Chang        Stan Vick, C.P.A.   Director of Finance     Chief Accountant                          

vii

TARRANT COUNTY COLLEGE DISTRICT PRINCIPAL OFFICIALS 

AUGUST 31, 2006   

ELECTED OFFICIALS        Term Expires      

President of the Board    J. Ardis Bell, M.D.   May, 2008 

Vice President of the Board       Louise Appleman   May, 2012 

Secretary of the Board    Robert J. McGee, Jr.   May, 2010 

Assistant Secretary of the Board    Robyn Medina Winnett   May, 2008 

Member of the Board    Randall Canedy   May, 2010 

Member of the Board    Gwendolyn C. Morrison   May, 2012 

Member of the Board       Kristin Vandergriff   May, 2008 

 

ADMINISTRATIVE OFFICIALS 

 

Chancellor  Leonardo de la Garza, Ph.D. 

President, Southeast Campus  Judith J. Carrier, Ed.D. 

President, Northeast Campus  Larry J. Darlage, Ph.D. 

Vice Chancellor for Financial Services  Rudy V. Gonzales, M.B.A.  

Vice Chancellor for Administration  Erma C. Johnson Hadley,  M.Ed. 

Executive Assistant to Chancellor  William W. Lace, Ed.D. 

President, Northwest Campus  Michael Saenz, Ph.D. 

Vice Chancellor for IS and Computing  Maria Shelton, M.B.A. 

Vice Chancellor for Educational Services  TBN 

President, South Campus  Ernest L. Thomas, Ph.D. 

Provost of Community Campus  David A. Wells, Ph.D. 

 

FINANCE OFFICIALS 

 

Director of Finance  Nancy H. Chang, M.B.A. 

Chief Accountant  Stan L. Vick, C.P.A. 

x

3

Management’s Discussion and Analysis

This  section  of  the Comprehensive Annual  Financial Report presents management’s  discussion  and  analysis  of  the  Col‐lege’s  financial activity during  the  fiscal years ended August 31, 2006 and 2005.  In  compliance with GASB 34,  the discus‐sion  focuses on  currently known  facts, decisions, and condi‐tions that have an impact on financial activities of the College and an analysis of key  financial data  in order  to assist  in  the interpretation  of  the  financial  statements  presented  in  this annual  report  and  the  year‐to‐year  changes  in  college  reve‐nues,  expenses,  and  financial position.    It  should be  read  in conjunction with the  transmittal  letter (pages  iii‐vii), the Col‐lege’s basic financial statements (pages 11‐14) and the notes to the  financial statements  (pages 15‐35).   Responsibility  for  the completeness  and  fairness  of  the  information  in  this  section rests with the College management.   For the year ended August 31, 2005 and prior years, the Col‐lege did not depreciate library books.  This accounting policy was  in accordance with  the Texas Higher Education Coordi‐nating  Board’s  reporting  requirements.    The  Texas  Higher Education Coordinating Board has changed their requirement and  therefore  the  fiscal  year  2005  financial  information pre‐sented within this management’s discussion and analysis has been adjusted to reflect the effects of the restatement on prior years.  See Note 2, pages 15‐18, for additional information on the restatement.  

Using This Annual Report The  financial  statement presentation was mandated by Gov‐ernmental  Accounting  Standards  Board  (GASB)  Statement No.  34  and  implemented  by  the College  in  fiscal  2002.    For financial statement purposes, the District is considered a spe‐cial‐purpose  government  engaged  only  in  business‐type  ac‐tivities.   Accordingly,  the  financial  statements of  the District are presented using the economic measurement focus and the accrual  basis  of  accounting.   Under  the  accrual  basis  of  ac‐counting,  revenues  are  recognized  when  earned,  and  ex‐penses  are  recorded when  an  obligation  has  been  incurred.  All significant intra‐agency transactions have been eliminated.  The Statement of Net Assets reports all that the College owns (assets) and owes  (liabilities).   Net Assets,  the difference be‐tween assets and liabilities, is subdivided into three categories to  indicate  limitations  on  their  use.   Net  assets  invested  in capital  assets  net  of  related  debt  are  not  available  for  use, since  these  are  the  resources  that have  been  invested  in  the capital assets such as land, buildings and improvements, and equipment of the College.  Restricted net assets are not acces‐sible for general use because use of these assets is subject to a third‐party restriction.  Any remaining net assets are classified as unrestricted and are available for general use as directed by the management of the District.  

The  Statement  of  Revenues,  Expenses,  and Changes  in Net Assets  presents  the  revenues  earned  and  the  expenses  in‐curred  resulting  from  College  operations  during  the  fiscal year.  Revenues and expenses are reported as either operating or non‐operating  in accordance with GASB 34 as  interpreted by  the Texas Higher Education Coordinating Board. Operat‐ing  revenues  are  intended  to  reflect  the  amounts  received from customers in exchange for services provided by the Col‐lege.   Operating  expenses  are  the  costs  incurred  to  provide College  services  to  customers.     A  further discussion  of  the reporting  and  accounting  policies  of  the  College  may  be found in Note 2 to the financial statements, pages 15‐18.  The Statement of Cash Flows presents  information related  to cash  inflows and outflows summarized by operating, capital and non‐capital financing and investing activities.  It provides relevant information when evaluating the financial viability of the District during the fiscal years ending August 31, 2006 and 2005.  The statement can assist users in assessing the District’s ability  to meet  financial  obligations  as  they mature  and  the need for external financing.  

Fiscal Year 2006 Financial Highlights • In the fiscal year ended August 31, 2006, total college reve‐

nues exceeded  total expenses by $94.3 million as a  result of careful budgeting, prudent fiscal management and con‐servation of resources. 

• Long‐term  investments  increased  by  $59.9  million  to $143.5 million at year‐end 2006.      Investment  funds were able to be reinvested in longer term maturities as the cost plan for the new campus became more definitive.  In com‐pliance  with  the  District’s  “pay‐as‐you‐go”  philosophy, these  funds will  provide  the  resources  for  expenditures relating  to  the new campus at downtown Fort Worth ex‐pected to open during the 2008‐09 academic year. 

• During  the  fiscal year,  the College expended $7.1 million on  capital  improvements  of  existing  properties  and  $1.6 million on  the acquisition of additional  land  for  the new campus.  

Statement of Net Assets The Statement of Net Assets includes all assets and liabilities.  Over time, increases or decreases in net assets (the difference between assets and liabilities) is one indicator of the improve‐ment or erosion of the District’s financial health when consid‐ered with  non‐financial  facts  such  as  enrollment  levels,  the condition of facilities, etc.  Fiscal Year 2006 Compared to 2005 Total assets  increased by $91.9 million from $485.3 million at August  31,  2005,  to  $577.2 million  on August  31,  2006.   An increase  in  long‐term  investments and capital assets account for this increase.  

4

Current assets consist mainly of cash, short‐term investments, receivables and  inventory.   Cash and short‐term  investments are maintained at  levels necessary  to cover current  liabilities as  they come due and  to ensure adequate  liquidity as  funds are  needed  for  expenditures  associated  with  building  and expansion projects.   Receivables are  from  students, property taxes,  and  federal  grants  and  contracts.    Inventory  is main‐tained in the district bookstores.   Current assets increased by $15.3 million to $218.0 million as of August 31, 2006. This in‐crease  is primarily attributable  to  increases of $9.5 million  in cash and $4.1 million in current investments. 

Non‐current  assets of $359.2 million on August 31, 2006,  in‐creased by  27.1 percent or  $76.6 million  from  $282.6 million on August 31, 2005. This  increase  is primarily attributable  to two  factors, an  increase  in  long‐term  investments and an  in‐crease  in  capital  assets.    Long‐term  investments  increased $59.9 million from year‐end 2005.  During fiscal 2006, the Col‐lege  invested new  fund  inflows  in excess of current  require‐ments  in  a  laddered  portfolio  of  agency  securities  ranging from fifteen months to three years.  The majority of the capital asset  value  is  in  property  and  equipment,  with  additional construction continually ongoing.  Property, plant and equip‐ment,  net  of  depreciation,  increased  by  $16.8 million  com‐pared  to  year‐end  2005.    This  increase,  net  of  current  year depreciation of $8.0 million, reflects spending on various on‐going  capital  improvement  projects  and  the  acquisition  of additional property for the College District’s fifth comprehen‐sive campus.  

At  year‐end  2006,  current  assets were  37.8  percent  of  total assets as compared with 41.8 percent  in  the prior year;  long‐term  investments  increased  from 17.2 percent  to 24.9 percent of total assets over the prior year, and capital assets decreased to  37.3  percent  of  total  assets  from  40.9  and  42.0  percent  at year‐end  2006,  2005  and  2004  respectively.    The  trends  for long‐term  investments  and  capital  assets will  fluctuate with the  spending  schedule  in  future years as  construction of  the new campus ensues.  Total  liabilities  decreased  $2.4  million  year‐to‐year,  from $101.9 million at August 31, 2005,  to $99.5 million at August 31,  2006.   Current  liabilities  increased  $3.0 million  and non‐current liabilities decreased $5.4 million.  Current liabilities of $39.3 million were  comprised  of  accounts  payable,  accrued expenses,  accrued  employee  benefits, deferred  revenue,  and the current portion of our general obligation bonds.  Accounts payable and accrued expenses for goods and services received prior  to  the  end of  the  fiscal year  increased by  $2.6 million.  The  current portion of  the District’s  long‐term debt  at  fiscal year‐end  of  $5.7 million was  increased  by  $0.2 million  over the  fiscal  2005  amount.    See Note  6  (pages  21‐24)  for  addi‐tional information regarding the bond indebtedness.   Non‐current  liabilities, primarily  consisting of  the portion of our general obligation bonds that have a due date beyond the next  fiscal year, were  $60.2 million  at year‐end versus  $65.6 million a year ago.   The District’s  intent  is to steadily reduce this debt,  in  accordance with  the  strategy  to  address  future capital outlay needs from current revenues or investments.  

$218

$203

$106

$144

$84

$130

$215

$198

$171

$0.6

$0.7

$0.4

‐

100

200

300

400

500

600

700

2006 2005 2004

Current Assets LT Investments Capital Assets Other

Comparative Composition of Total Assets Years Ended August 31 (Dollars in millions)

2006 20052005‐06 Increase 2004

2004‐05 Increase

Assets

Current Assets $218.0 $202.7 $15.3 $106.3 $96.4Non‐Current Assets:

Long‐Term Investments 143.5 83.6 59.9 130.1 (46.5)Capital Assets, net 215.1 198.3 16.8 171.3 27.0Other 0.6 0.7 (0.1) 0.4 0.3

Total Assets 577.2 485.3 91.9 408.1 77.2

Liabilities

Current Liabilities $39.3 $36.3 $3.0 $29.4 $6.9Non‐Current Liabilities 60.2 65.6 (5.4) 70.5 (4.9)Total Liabilities 99.5 101.9 (2.4) 99.9 2.0

Net Assets

Invested in Capital Assets,net of related debt 152.5 130.3 22.2 98.6 31.7

Restricted 5.2 6.2 (1.0) 5.2 1.0Unrestricted 320.0 246.9 73.1 204.4 42.5Total Net Assets 477.7 383.4 94.3 308.2 75.2

Condensed Statement of Net Assets Years Ended August 31 (Dollars in millions)

5

Net assets (total assets less total liabilities) increased by $94.3 million to $477.7 million, an increase of 24.6 percent from fis‐cal 2005 to 2006.  Thirty‐two percent of net assets, $152.5 mil‐lion, reflected the District’s substantial investment in net capi‐tal  assets  such  as  property,  buildings,  and  equipment.   Re‐stricted net assets  such as endowment gifts with  specific  re‐strictions, grants  from  third‐party agencies with expenditure restrictions, student  loan funds, or assets designated for debt service  represented  an  additional  1.1  percent  of  net  assets.  The remaining unrestricted net assets may be used for educa‐tional or general operations of  the College.   Unrestricted net assets grew by $73.1 million from 64.4 percent to 67.0 percent of net assets. At year‐end, the Board of Trustees increased the fund  balance  designated  for  future  capital  outlay  by  $35.8 million to $122.8 million.   Further, the Board of Trustees des‐ignated an additional $20.2 million of fund balance for future renewal and replacement expenditures bringing the total fund balance designated for this purpose to $69.1 million.  The por‐tion  of  net  assets  committed  to  capital  assets will  increase substantially between  2006  and  2009 when  the new  campus opens.  Fiscal Year 2005 Compared to 2004 Total assets  increased by $77.2 million from $408.1 million at August  31,  2004,  to  $485.3 million  on August  31,  2005.   An increase  in short‐term  investments and capital assets account for this increase.  

Current assets increased by $96.4 million to $202.7 million on August 31, 2005. This  increase  is primarily attributable  to  in‐creases of $95.6 million in short‐term investments.  Non‐current assets of $282.6 million on August 31, 2005, de‐creased by 6.4 percent or $19.2 million from $301.8 million on August 31, 2004. This decrease is primarily attributable to two factors, a decrease  in  long‐term  investments and an  increase in capital assets.  Long‐term investments decreased $46.5 mil‐lion  from year‐end 2004.   During  fiscal 2005,  the College  in‐vested new fund inflows in excess of current requirements in a  laddered portfolio of Treasury notes and agency  securities ranging  from  three months  to one year.   The majority of  the capital asset value  is  in property and equipment, with addi‐tional construction continually ongoing.   Property, plant and equipment,  net  of  depreciation,  increased  by  $27.0  million compared to year‐end 2004.  This increase, net of current year depreciation of $8.7 million, reflects spending on various on‐going  capital  improvement  projects  and  the  acquisition  of several  parcels  of  property  as  a  site  for  construction  of  the College District’s fifth comprehensive campus.   At year‐end 2005,  current assets  increased  to 41.8 percent of total assets as compared with 26.0 percent  in  the prior year; long‐term  investments  decreased  from  31.9  percent  to  17.2 percent of  total assets over  the prior year, and  capital assets decreased  to 40.9 percent of  total assets  from 42.0 percent at year‐end  2004.  Total  liabilities were up $2.0 million year‐to‐year,  from $99.9 million  at August  31,  2004,  to  $101.9 million  at August  31, 2005.    Current  liabilities  increased  $6.9  million  and  non‐current liabilities decreased $4.9 million.  Current liabilities of $36.3 million were  comprised  of  accounts  payable,  accrued expenses,  accrued  employee  benefits, deferred  revenue,  and the current portion of our general obligation bonds.  Accounts payable and accrued expenses for goods and services received prior  to  the  end of  the  fiscal year  increased by  $4.3 million.  The  current portion of  the District’s  long‐term debt  at  fiscal year‐end  of  $5.5 million was  increased  by  $0.4 million  over the  fiscal  2004  amount.    See Note  6  (pages  21‐24)  for  addi‐tional information regarding the bond indebtedness.   Non‐current  liabilities, primarily  consisting of  the portion of our general obligation bonds that have a due date beyond the next  fiscal  year, were  $65.6 million  at  year‐end August  31, 2005 versus $70.5 at year‐end August 31,2004.   The District’s intent  is  to  steadily  reduce  this debt,  in accordance with  the strategy  to  address  future  capital outlay needs  from  current revenues or investments.  

$153

$130

$99

$320

$247

$204

$5$6

$5

‐

100

200

300

400

500

600

2006 2005 2004

Invested in Capital Assets Restricted Unrestricted

Comparative Composition of Net Assets Years Ended August 31 (Dollars in millions)

6

Net assets (total assets less total liabilities) increased by $75.2 million to $383.4 million, an increase of 24.4 percent from fis‐cal 2004 to 2005.  Thirty‐four percent of net assets, $130.3 mil‐lion, reflected the District’s substantial investment in net capi‐tal  assets  such  as  property,  buildings,  and  equipment.   Re‐stricted net assets  such as endowment gifts with  specific  re‐strictions, grants  from  third‐party agencies with expenditure restrictions, student  loan funds, or assets designated for debt service  represented  an  additional  1.6  percent  of  net  assets.  The remaining unrestricted net assets may be used for educa‐tional or general operations of  the College.   Unrestricted net assets grew by $42.5 million from 66.3 percent to 64.4 percent of net assets. At year‐end, the Board of Trustees increased the fund balance designated for future capital outlay by $5.0 mil‐lion  to  $87.0 million.    Further,  the  Board  of  Trustees  desig‐nated  an  additional  $16.3 million of  fund balance  for  future renewal and replacement expenditures bringing the total fund balance designated for this purpose to $49.0 million.    

Statement of Revenues, Expenses, and Changes in Net Assets The  Statement  of  Revenues,  Expenses  and  Changes  in Net Assets  presents  the  revenues  earned  and  the  expenses  in‐curred during the year.  Activities are reported as either oper‐ating or non‐operating.  Operating revenues include activities with characteristics of exchange transactions such as: student tuition and fees, net of scholarship discounts and allowances; sales and services of auxiliary enterprises; most federal, state, and  local  grants  and  contracts;  and  interest  on  institutional student loans.  Non‐operating revenues include activities that have the characteristics of non‐exchange transactions such as ad  valorem  taxes,  state  appropriations,  and  investment  in‐come.  Depreciation on capital assets is included in operating expenses.   Since state appropriations and county tax revenue are a significant portion of maintenance and operations fund‐ing,  classification of  this  revenue  as non‐operating will usu‐ally‐as it does for TCCD‐result in an operating deficit.   Fiscal Year 2006 Compared to 2005 District operating revenue of $78.7 million derived primarily from tuition and fees, grants and contracts, and auxiliary en‐terprises—primarily  bookstore  sales—increased  by  $2.1 mil‐lion or 2.7 percent, from fiscal 2005.  Tuition and fees account for the majority of the operating revenue, 47.6 percent.    State appropriations to the Tarrant County College District, as to  all  Texas  public  colleges  and  universities,  are  set  during biennial sessions of the Texas Legislature.   The level of fund‐ing  for  each  biennium  is derived  from  enrollment during  a “base year”– the total number of contact hours amassed dur‐ing a period beginning  the summer preceding  the  legislative session and ending with the spring semester during which the 

appropriations bill is passed.  Texas community colleges have attempted  for decades, without  success,  to achieve “full  for‐mula funding” .  The College, together with the other commu‐nity and junior colleges in Texas, are being asked to do more with less.  As the State resources allocated to community col‐leges decline  the District must  look more  and more  to  local tax  revenues  and  tuition  and  fees  as  a  source of  revenue  to provide educational services for the community.  

2006 20052005‐06 Increase 2004

2004‐05 Increase

Operating Revenue

Tuition & Fees $37.5 $35.8 $1.7 $28.2 $7.6Grants & Contracts 23.7 23.8 (0.1) 22.7 1.1Auxiliary Enterprises 15.7 16.1 (0.4) 13.3 2.8Other Operating Revenue 1.8 0.9 0.9 0.7 0.2Total Operating Revenue 78.7 76.6 2.1 64.9 11.7

Operating Expenses

Instruction 68.2 64.4 3.8 60.2 4.2Public Service 4.8 5.7 (0.9) 5.1 0.6Academic Support 10.1 11.3 (1.2) 11.0 0.3Student Services 14.1 13.2 0.9 12.2 1.0Institutional Support 21.6 20.7 0.9 20.6 0.1Operation & Maint. of Plant 23.9 19.1 4.8 17.5 1.6Scholarships & Fellowships 21.1 17.9 3.2 15.7 2.2Auxiliary Enterprises 14.6 14.6 0.0 13.0 1.6Depreciation 8.0 8.7 (0.7) 9.3 (0.6)Total Operating Expenses 186.4 175.6 10.8 164.6 11.0

Operating Loss (107.7) (99.0) (8.7) (99.7) 0.7Non‐OperatingRevenue (Expense)

State Appropriations 56.3 50.5 5.8 51.3 (0.8)Ad Valorem Tax 133.9 125.5 8.4 119.6 5.9Investment & Other Income 14.6 4.5 10.1 3.8 0.7Non‐Operating Expense (2.8) (3.4) 0.6 (4.0) 0.6Total Non‐OperatingRevenue 202.0 177.1 24.9 170.7 6.4

Income before OtherRevenue, (Expense),Gains & (Losses) 94.3 78.1 16.2 71.0 7.1

Other Revenue‐Gifts,Endowment Contributions 0.0 0.0 0.0 0.0 0.0

Increase in Net Assets $94.3 $78.1 $16.2 $71.0 $7.1

Net AssetsNet Assets‐Year Beginning 383.4 305.3 78.1 237.2 68.1Total Revenue 283.5 257.1 26.4 239.6 17.5Total Expenses (189.2) (179.0) (10.2) (168.6) (10.4)Net Assets‐Year End $477.7 $383.4 $94.3 $308.2 $75.2

Condensed Statement of Revenues, Expenses, and Changes in Net Assets Years Ended August 31 (Dollars in millions)

7

  State  appropriations  accounted  for  35  percent  of  total (operating and non‐operating)  revenue  in  fiscal 1998, declin‐ing  to 19.9 percent of  revenue  for  the current  fiscal year.    In contrast, local property taxes accounted for 21 percent of total revenue in fiscal 1998 and 47.2 percent of revenue in the year ended August 31, 2006.  Tuition and fees of $37.5 million and $35.8 million  in fiscal 2006 and 2005 respectively,  indicated a decrease in percentage of total revenue at 13.2 percent in 2006 versus 13.9 percent for 2005.    

 For the fiscal years 1996 through 2001 the College maintained a policy of increasing the in‐district tuition rate by $2 per hour per  year.   After  2001,  in  response  to  a  call  from  the  Texas Higher Education Coordinating Board to hold the line on tui‐

tion  increases  as  part  of  the  “Closing  the  Gaps  Plan”  for higher education,  the amount of  tuition  increase at TCC was reduced  to $1 per hour per year.   Beginning  in  spring 2004, state universities in Texas were able to set their own levels of tuition for the first time.  Subsequently some state universities imposed  substantial  tuition  increases.    More  students  will  likely seek  to  take advantage of  the affordable costs at TCC.  Support  for  this  growth will  have  to  be  funded  by  the  two local sources of revenue – tuition and taxes.  Planning in that regard, the Board approved a three‐year tuition increase plan of $2 per year beginning with the 2005 year.  Grants and contracts  include restricted revenues made avail‐able  by  government  agencies  as  well  as  private  agencies.  Grant funding is recognized as revenue at the point when all eligibility  requirements  imposed  by  the  provider  have  been met.  This source of revenue was approximately 8.4 percent of total revenues, slightly decreasing from $23.8 million in fiscal 2005 to $23.7 million in fiscal 2006.    

 Auxiliary  enterprises  had  revenues  in  excess  of  expenses  of $1.1 million  for  fiscal  2006.   Auxiliary  enterprises  consist  of various  enterprise  entities  (primarily  bookstores)  that  exist predominantly  to  furnish goods or  services  to  students,  fac‐ulty, staff or the general public and charge a fee directly  related  to  the  cost  of  those  goods  or  services.   These  enter‐prises are intended to be self‐supporting.   During fiscal 2006, the College recorded a decrease in sales revenues of $0.4 mil‐lion from operations at our auxiliary enterprises.  

24,000

26,000

28,000

30,000

32,000

34,000

36,000

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Fall Semester Enrollment (Headcount)

As enrollment continues to climb at a pace in excess of State funding, local property taxes have become the pri-mary source of College revenue.

Investment & Other Income  5.8%

State Appropriations  19.9%

Ad Valorem Tax  47.2%

Tutition & Fees  13.2%

Grants & Contracts  8.4%

Auxiliary Enterprises  5.5%

Total Revenue by Source Fiscal Year 2005-06 Total $ 283,520,920

Revenue by Source (Dollars in millions)

‐

20

40

60

80

100

120

140

160

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Ad Valorem Tax State AppropriationsTuition & Fees OtherGrants & Contracts

8

Total revenue for fiscal 2006 increased $26.4 million to $283.5 million  from $257.1 million  for  fiscal 2005.   This 10.3 percent increase in total revenue is primarily the result of increases in investment income and ad‐valorem taxes.  Total expenses for fiscal  2006  increased  $10.2  million  to  $189.2  million  from $179.0 million for fiscal 2005.  This 5.7 percent increase in total expenses is primarily due to additional operation and mainte‐nance cost in fiscal 2006.  Fiscal Year 2005 Compared to 2004 District operating revenue of $76.6 million derived primarily from tuition and fees, grants and contracts, and auxiliary en‐terprises—primarily bookstore sales—increased by $11.7 mil‐lion or 18.0 percent, over fiscal 2004.  Tuition and fees account for  the majority of  the operating  revenue, 46.7 percent.   The current year increase in revenue was primarily attributable to increases in enrollment.   State  appropriations  accounted  for  21.4  percent  of  total (operating and non‐operating)  revenue  in  fiscal 2004, declin‐ing to 19.6 percent of revenue for fiscal year 2005.  Local prop‐erty taxes accounted for 49.9 percent of total revenue in fiscal 2004 and 48.8 percent of revenue in the year ended August 31, 2005.   Tuition and  fees of $35.8 million and $28.2 million  in fiscal 2005 and 2004 respectively,  indicated a rise  in percent‐age of total revenue at 11.8 percent in 2004 versus 13.9 percent for 2005.    Grants and contracts of $23.8 million and $22.7 million in fis‐cal 2005 and  fiscal 2004  represent approximately 9.3 percent and  9.5 percent  of  total  revenue  respectively,  an  increase  to grants and contracts of 4.8 percent.     Auxiliary  enterprises  had  revenues  in  excess  of  expenses  of $1.5 million  for  fiscal  2005.   During  fiscal  2005,  the College recorded  an  increase  in  sales  revenues  of  $2.8 million  from operations at our four campus bookstores.  Operating expenses  increased by $11.0 million  to $175.6 mil‐lion, an increase of 6.7 percent from fiscal 2004 to 2005. Com‐pared to fiscal 2004, salaries and wages increased 5.4 percent to $84.1 million, staff benefits remained constant at  $23.0 mil‐lion and other expenses increased by $7.3 million.    An  analysis  of  operating  expenses  by  function  indicates  the most significant year‐to‐year expense changes to be  in Schol‐arships  and  Fellowships  (increased  14.0  percent),  Auxiliary Enterprises  (increased  12.3  percent),  and  Public  Service (increased  11.8  percent).    The  most  significant  increase  in year‐to year expenses  is  in Scholarships and Fellowships, as student financial aid awards were up significantly over fiscal 2004.   The  increase  is due  to a combination of higher enroll‐

Operating expenses  increased by $10.8 million  to $186.4 mil‐lion, an increase of 6.2 percent from fiscal 2005 to 2006. Com‐pared to fiscal 2005, salaries and wages increased $5.0 million to  $89.1 million,  staff  benefits  increased  by  $2.4 million  to $25.4 million, and other expenses increased by $4.1 million.    

 An  analysis  of  operating  expenses  by  function  indicates  the most significant year‐to‐year expense changes to be in Public Service  (decreased 15.8 percent), Operation and Maintenance (increased  25.1  percent),  and  Scholarship  and  Fellowship (increased  17.9  percent).    The  most  significant  increase  in year‐to year expenses is in Operation and Maintenance due to the expansion of that area as part of the preparation stages of the approved Master Building Plan for the District.  Non‐operating  revenue  increased  from  $177.1  million  to $202.0 million for the fiscal years ending August 31, 2005 and 2006 respectively.   Non‐operating revenue consists primarily of ad‐valorem taxes of $133.9 million, which increased by $8.4 million or 6.7 percent; and state appropriations of $56.3 mil‐lion, which increased by $5.8 million or 11.5 percent.  In 1998 the Board of Trustees of  the Tarrant County College District, acting on the chancellor’s recommendation, altered the tradi‐tional  approach  of  relying  on  bonded  indebtedness  for new construction,  repair  and  renovation,  and  major  equipment purchases.  Instead, the District elected to fund such expendi‐tures  from maintenance and operations  tax revenue.    In Au‐gust 2002, the Board of Trustees of the District set the tax rate at 13.938  cents per $100 valuation.   This  tax  rate has not  in‐creased since 2002.  Fiscal  2006  investment  and  other  income  increased  by  $10.1 million  to  $14.6 million  compared  to  a  $0.7 million  increase for  the year ended August 31, 2005.   The majority of  this  in‐crease is due to funds being invested for the District’s Master Building Plan which includes a new downtown campus.  See Note  4,  page  20,  for  additional  information  on  investment earnings and portfolio market adjustments.  

2006 20052005‐06 Increase 2004

2004‐05 Increase

Salary & Wages $89.1 $84.1 $5.0 $79.8 $4.3Staff Benefits 25.4 23.0 2.4 23.0 0.0Other Expenses 63.9 59.8 4.1 52.5 7.3Depreciation 8.0 8.7 (0.7) 9.3 (0.6)

Total Operating Expenses $186.4 $175.6 $10.8 $164.6 $11.0

Operating Expenses by Natural Classification Years Ended August 31 (Dollars in millions)

9

ments in  and an increase in the portion of the student popu‐lation qualified to receive financial aid grants.  Non‐operating  revenue  increased  from  $170.7  million  to $177.1 million for the fiscal years ending August 31, 2004 and 2005 respectively.   Non‐operating revenue consists primarily of ad‐valorem taxes of $125.5 million, which increased by $5.9 million or 4.9 percent; and state appropriations of $50.5 mil‐lion, which decreased by $0.8 million or 1.6 percent.  Fiscal  2005  investment  and  other  income  increased  by  $0.7 million to $4.5 million compared to a $1.7 million increase for the year ended August 31, 2004.  This increase is due primar‐ily to an  increase  in  invested funds.   See Note 4, page 20, for additional  information on  investment earnings and portfolio market adjustments.  Total revenue for fiscal 2005 increased $17.5 million to $257.1 million  from  $239.6 million  for  fiscal  2004.   This  7.3 percent increase in total revenue is primarily the result of increases in tuition and  fees and property  taxes, as previously discussed.  Total expenses for fiscal 2005 increased $10.4 million to $179.0 million  from  $168.6 million  for  fiscal  2004.   This  6.2 percent increase  in  total  expenses  is primarily due  to  additional  in‐structional cost in fiscal 2005.  

Statement of Cash Flows Cash  receipts  from  operating  activities  are  from  tuition  and fees, grants and contracts, and auxiliary enterprise activities.  The  primary  cash  outlays  for  operating  activities  are  pay‐ments  to  or  on  behalf  of  employees  and  to  vendors.   As  is typical for colleges, universities, and many other public sector entities  using  the  new GASB  financial model,  TCCD’s  cash flow  from operating activities was a deficit.   The deficit was $83.5 million  for  fiscal 2006, $73.9 million  for  fiscal 2005 and $81.4 million for fiscal 2004.  This is a reflection of the classifi‐cation  (mandated  by GASB  Statement No.  9)  of  ad‐valorem 

taxes  and  state  appropriations  as  non‐operating  activities, separating those revenues from the operating activities calcu‐lation.  Fiscal Year 2006 Compared to 2005 Cash generated from non‐capital financing activities, primar‐ily  local  property  taxes,  was  $176.8  million,  a  year‐to‐year increase of $11.0 million or 6.6 percent.  Cash used for capital and  related  financing  activities  was  $31.8  million  in  fiscal 2006,  decreased  by  $15.4 million  compared  to  2005.     Cash used by  investing activities of $52.0 million  reports  the pur‐chase and maturity of  investments and  interest  income  from investments.   This was  $7.1 million more  than  that  of  fiscal 2005 of $44.9 million, primarily due  to an  increase  in  invest‐ment purchases.  Cash and cash equivalents increased by $9.5 million from $3.2 million at August 31, 2005 to $12.7 million at August 31, 2006.  Fiscal Year 2005 Compared to 2004 Cash generated from non‐capital financing activities, primar‐ily  local  property  taxes,  was  $165.8  million,  a  year‐to‐year increase of $6.8 million or 4.3 percent.   Cash used  for capital and  related  financing  activities  was  $47.2  million  in  fiscal 2005,  increased  by  $19.0 million  compared  to  2004. This  in‐crease  reflects  the  fact  that  additional  funds were  spent  to acquire  land  for  the downtown  campus during  2005.   Cash used by  investing activities of $44.9 million  reports  the pur‐chase and maturity of  investments and  interest  income  from investments.  This was $3.3 million less than that of fiscal 2004 of $48.2 million.  Cash and cash equivalents decreased by $0.2 million from $3.4 million at August 31, 2004 to $3.2 million at August 31, 2005.  

Capital Asset Information Fiscal Year 2006 Compared to 2005 As of August 31, 2006, the District had a total of $215.1 million in capital assets, net of accumulated depreciation.   Additions were made  to  capital  assets  in  the  amount  of  $25.0 million during  fiscal 2006.   Capital outlays  included $1.6 million  for land that will become part of the downtown Fort Worth cam‐pus.   Construction‐in‐progress of $17.8 million at August 31, 2006 includes $11.0 million of design services toward the Mas‐ter Building Plan  for  the District.    Facility  improvements  of $7.1 million  included  completing  the development    stage  of the  five year Facility Master Plan  ($5.0 million), and  roofing and  elevator upgrades  ($  1 million).  See  Footnote  21, pages 32‐33,  to  the  financial  statements  for more detailed  informa‐tion regarding capital assets.  Fiscal Year 2005 Compared to 2004 As of August 31, 2005, the District had a total of $198.3 million in capital assets, net of accumulated depreciation.   Additions 

Condensed Statement of Cash Flows  Years Ended August 31 (Dollars in Millions)

Cash & cash equivalents 2006 20052005‐06 Increase 2004

2004‐05 Increase

provided/(used) by:Operating Activities ($83.5) ($73.9) ($9.6) ($81.4) $7.5Non‐Capital Financing Activities 176.8 165.8 11.0 159.0 6.8Capital & Related Financing Activities (31.8) (47.2) 15.4 (28.2) (19.0)Investing Activities (52.0) (44.9) (7.1) (48.2) 3.3Cash & Cash Equivalents Increase 9.5 (0.2) 9.7 1.2 (1.4)

Cash & Cash Equivalents Sept. 1, 3.2 3.4 (0.2) 2.2 1.2

Cash & Cash Equivalents Aug. 31, $12.7 $3.2 $9.5 $3.4 ($0.2)

10

were made  to  capital  assets  in  the  amount  of  $38.9 million during fiscal 2005.   Capital outlays included $28.7 million for land  that  will  become  the  downtown  Fort Worth  campus.  Construction‐in‐progress  of  $6.1 million  at August  31,  2005 includes $5.0 million in the Master Building Plan for the Dis‐trict.  Facility improvements of $3.2 million included complet‐ing the Utility Distribution ($1.0 million), a new Physical Plant ($ 0.7 million), and the final stage of a Power Plant ($1.0 mil‐lion) all on Northeast Campus.  See Footnote 21, pages 32‐33, to  the  financial  statements  for more detailed  information  re‐garding capital assets.  

Long-Term Debt Information Fiscal Year 2006 Compared to 2005 The  District  had  outstanding  general  obligation  bonds  of $62.6 million on August 31, 2006, versus $68.0 million a year earlier.   The  current portion was  $5.7 million  and  the  long‐term portion was $56.9 million.   For  the year ended August 31, 2006, debt service payments were $8.4 million.  Net reduc‐tion of bond principal was $5.3 million, and interest payments on capital debt totaled $3.1 million. Refer to Footnote 6, pages 21‐24,  to  the  financial  statements  for  additional  information on long‐term debt.   Fiscal Year 2005 Compared to 2004 The  District  had  outstanding  general  obligation  bonds  of $68.0 million on August 31, 2005, versus $72.7 million a year earlier.   The  current portion was  $5.5 million  and  the  long‐term portion was $62.5 million.   For  the year ended August 31, 2005, debt service payments were $8.4 million.  Net reduc‐tion of bond principal was $5.1 million, and interest payments on capital debt totaled $3.3 million. Refer to Footnote 6, pages 21‐24,  to  the  financial  statements  for  additional  information on long‐term debt.   In  August,  2004,  the  College  determined  that  a  substantial debt service savings would be realized by advance refunding a  portion  of  the  District’s  outstanding  general  obligation bonds with debt at  lower  interest  rates.   Pursuant  to  this,  in September 2004, the College issued $23.4 million general obli‐gation  refunding  bonds,  Series  2004,  for  the  purpose  of  re‐funding  General  Obligation  Bonds,  Series  1994  and  Series 1995  and  General  Obligation  Refunding  and  Improvement Bonds, Series 1996.   The total debt service savings to the Dis‐trict between 2005 and 2015 from this advance refunding will be $0.8 million.  Also  in May  2005,  the College  issued  $13.4 million  general obligation  refunding  bonds,  Series  2005  for  the  purpose  of refunding additional 1994 series bonds.  The total debt service savings  to  the District between  2005  and  2015  from  this ad‐vance refunding will be $0.8 million.  

District Financial Position District management would like to report that Tarrant County College District  completes  fiscal  2006 with  an  exceptionally strong financial position.  In addition, the budget adopted by the Board of Trustees  for  fiscal 2007  indicates  that budgeted revenue coupled with unrestricted net assets will be sufficient for operating needs and will allow the District to meet antici‐pated  capital  outlay  requirements,  including  those  for  the new campus, without increasing our debt burden.    

2006 2005ASSETS

Current AssetsCash and cash equivalents 12,658,526$ 3,176,779$ Investments 184,521,135 180,782,401 Restricted investments 3,745,572 3,453,223 Accounts receivable, less allowance

for doubtful accounts of $1,212,812 and $902,049 in 2006 and 2005, respectively 1,698,561 1,958,127

Taxes receivable, less allowance for doubtful accounts of $830,115 and $671,977 in 2006 and 2005, respectively 5,365,916 4,866,635

Interest receivable 2,661,961 1,117,401 Federal grants and contracts receivable 1,965,399 1,328,148 State and local grants and contracts receivable 406,316 972,123 Inventory 2,478,321 3,352,618 Prepaid expenses 2,471,862 1,685,859

Total current assets 217,973,569 202,693,314

Non-current assetsInvestments 142,858,605 83,010,696 Endowment investments 607,895 561,604 Accounts receivable 75,000 125,000 Bond issuance costs, net of related amortization of $328,936 and $230,862 in 2006 and 2005, respectively 546,644 644,717 Property and equipment, net 215,156,105 198,293,774

Total non-current assets 359,244,249 282,635,791

Total assets 577,217,818 485,329,105

LIABILITIESCurrent liabilities

Accounts payable 10,136,790 7,565,868 Accrued liabilities 4,460,499 4,464,286 Accrued compensated absences 3,586,133 3,433,554 Deposits held for others 187,525 169,091 Deferred revenue 15,186,718 15,232,259 Current portion of bonds payable 5,741,404 5,473,251

Total current liabilities 39,299,069 36,338,309

Non-current liabilitiesBonds payable 56,910,859 62,485,573 Accrued compensated absences 3,266,139 3,072,429

Total non-current liabilities 60,176,998 65,558,002

Total liabilities 99,476,067 101,896,311

The Notes to Financial Statements are an integral part of these statements.

TARRANT COUNTY COLLEGE DISTRICTEXHIBIT 1

STATEMENTS OF NET ASSETSAUGUST 31, 2006 AND 2005

11

2006 2005NET ASSETS

Invested in capital assets, net of related debt 152,503,842$ 130,334,950$ Restricted for:

NonexpendableStudent aid 607,895 561,604

ExpendableStudent aid 133,230 1,239,810 Loans 132,020 162,347 Debt service 4,362,986 4,245,097

Total restricted 5,236,131 6,208,858

Unrestricted 320,001,778 246,888,986

Total net assets (Schedule D) 477,741,751$ 383,432,794$

The Notes to Financial Statements are an integral part of these statements.

(continued)

TARRANT COUNTY COLLEGE DISTRICTEXHIBIT 1

STATEMENTS OF NET ASSETSAUGUST 31, 2006 AND 2005

12

2006 2005REVENUES

Operating revenuesTuition and fees, net of discounts of $2,721,565 and $3,510,551 in 2006 and 2005, respectively 37,454,608$ 35,771,981$ Federal grants and contracts 21,318,565 20,647,014 State grants and contracts 1,377,111 2,171,726 Non-governmental grants and contracts 1,049,439 954,541 Auxiliary enterprises 15,677,393 16,161,056 Other operating revenue 1,754,479 881,735

Total operating revenue (Sch. A) 78,631,595 76,588,053

EXPENSESOperating expenses

Instruction 68,221,085 64,375,184 Public service 4,751,125 5,688,458 Academic support 10,097,671 11,281,130 Student services 14,092,532 13,179,019 Institutional support 21,636,434 20,740,980 Operation and maintenance of plant 23,876,530 19,063,186 Scholarships and fellowships 21,169,637 17,924,863 Auxiliary enterprises 14,599,987 14,620,155 Depreciation 7,941,827 8,683,682

Total operating expenses (Sch. B) 186,386,828 175,556,657 Operating loss (107,755,233) (98,968,604)

NON-OPERATING REVENUE (EXPENSES)State appropriations 56,331,587 50,517,157 Maintenance ad-valorem taxes 125,482,157 116,928,969 Debt service ad-valorem taxes 8,464,139 8,543,206 Gifts 1,101,500 450 Investment income 13,464,141 4,529,550 Interest on capital related debt (2,676,865) (3,201,195) Loss on disposal of capital assets (148,270) (188,132)

Total non-operating revenue (Sch. C) 202,018,389 177,130,005 Income before other revenue 94,263,156 78,161,401

OTHER REVENUEAdditions to permanent endowments 45,801 7,109

Total other revenue 45,801 7,109 Increase in net assets 94,308,957 78,168,510

NET ASSETS, BEGINNING OF YEAR (AS RESTATED) 383,432,794 305,264,284

NET ASSETS, END OF YEAR 477,741,751$ 383,432,794$

YEARS ENDED AUGUST 31, 2006 AND 2005

The Notes to Financial Statement are an integral part of these statements.

TARRANT COUNTY COLLEGE DISTRICTEXHIBIT 2

STATEMENTS OF REVENUES, EXPENSESAND CHANGES IN NET ASSETS

13

2006 2005CASH FLOWS FROM OPERATING ACTIVITIES

Receipts from tuition and fees 37,668,633$ 37,385,914$ Receipts from grants and contracts 23,673,671 23,645,764 Receipts from payments to suppliers (87,804,233) (79,685,992) Receipts from payments to employees (74,490,651) (72,325,342) Receipts from auxiliary enterprise charges 15,677,393 16,161,056 Other receipts 1,754,479 881,735 Net cash used by operating activities (83,520,708) (73,936,865)

CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIESReceipts from gifts 47,306 7,559 Receipts from state appropriations 43,361,661 40,035,026 Receipts from local property taxes 133,447,015 125,764,316 Net cash provided by non-capital financing activities 176,855,982 165,806,901

CASH FLOWS FROM CAPITAL FINANCING ACTIVITIESPurchase of capital assets (23,523,095) (38,855,219) Payment to bond refunding escrow (12,505) Payments on capital debt - principal (5,355,000) (5,140,000) Payments on capital debt - interest (3,066,042) (3,252,700) Proceeds from sale of assets 96,312 71,594 Net cash used by capital and related financing activities (31,847,825) (47,188,830)

CASH FLOWS FROM INVESTING ACTIVITIESProceeds from sale and maturities of investments 442,056,317 423,463,737 Interest on investments 10,719,253 5,458,358 Purchase of investments (504,781,272) (473,866,347) Net cash used by investing activities (52,005,702) (44,944,252)

Net increase (decrease) in cash and cash equivalents 9,481,747 (263,046) CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 3,176,779 3,439,825 CASH AND CASH EQUIVALENTS, END OF YEAR 12,658,526 3,176,779 RECONCILIATION OF OPERATING LOSS TO

NET CASH USED BY OPERATING ACTIVITIESOperating loss (107,755,233) (98,968,604) Adjustments to reconcile operating loss to

net cash used by operating activities Depreciation 7,941,827 8,683,682 Amortization 98,073 87,959 Non-cash state appropriations 12,969,926 10,482,131 Change in operating assets and liabilities

Receivables 188,117 (519,602) Inventory 874,297 494,117 Accounts receivable 50,000 50,000 Prepaid expenses (786,003) (923,368) Accounts payable and accrued liabilities 2,579,106 4,329,193 Accrued compensated absences 346,289 350,795 Deposits held for others 18,434 (9,186) Deferred revenue (45,541) 2,006,018

Net cash used by operating activities (83,520,708)$ (73,936,865)$ SCHEDULE OF CASH AND NON-CASH

FINANCING ACTIVITIESInterest capitalized on

Construction in Progress 425,645$ $Gift land and building 1,100,000$ $

The Notes to Financial Statements are an integral part of these statements.

TARRANT COUNTY COLLEGE DISTRICTEXHIBIT 3

STATEMENTS OF CASH FLOWSYEARS ENDED AUGUST 31, 2006 AND 2005

14

TARRANT COUNTY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS

15

NOTE 1. REPORTING ENTITY

The Tarrant County College District (the District) was established as a public junior college in an election held in Tarrant County, Texas on July 31, 1965. The two largest cities in Tarrant County are Fort Worth and Arlington. The District operates as a junior college district under the laws of the State of Texas and is considered to be a special purpose, primary government according to the definition in Government Accounting Standards Board (GASB) Statement No 14. While the District receives funding from local, state and federal sources, and must comply with the spending, reporting and record keeping requirements of these entities, it is not a component unit of any other governmental entity. In addition, the District has considered all potential component units and no other entity meets the criteria for inclusion in the District’s reporting entity.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Report Guidelines

The significant accounting policies followed by the District in preparing these financial statements are in accordance with the Texas Higher Education Coordinating Board’s Annual Financial Reporting Requirements for Texas Public Community and Junior Colleges. The District applies all applicable GASB pronouncements and all applicable Financial Accounting Standard Board (FASB) statements and interpretations issued on or before November 30, 1989, unless they conflict or contradict GASB pronouncements. The District has elected not to apply FASB guidance issued subsequent to November 30, 1989, unless specifically adopted by the GASB. The District is reported as a special-purpose government engaged in business-type activities.

Tuition Discounting

Certain tuition amounts are required to be set aside for use as scholarships by qualifying students. This set aside, called the Texas Public Education Grant (TPEG), is shown with tuition and fee revenue amounts as a separate set aside amount (Texas Education Code §56.0333). When the award for tuition is used by the student, the amount is recorded as a tuition discount. If the amount is dispersed directly to the student, the amount is recorded as a scholarship expense. Certain Title IV HEA Program funds are received by the college to pass through to students. These funds are initially received by the District and recorded as restricted revenue. When the student is awarded and uses these funds for tuition and fees, the amounts are recorded as revenue and a corresponding amount is recorded as a tuition discount. If the amount is dispersed directly to the student, the amount is recorded as a scholarship expense. The District awards tuition and fee scholarships from institutional funds to students who qualify. When these amounts are used for tuition and fees, the amounts are recorded as tuition and fee revenue and a corresponding amount is recorded as a tuition discount. If the amount is dispersed directly to the student, the amount is recorded as a scholarship expense.

Basis of Accounting

The financial statements of the District have been prepared using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the years for which they are levied. Grants and similar items are recognized as revenue as soon as all eligibility requirements imposed by the provider have been met. All significant internal activity has been eliminated.

TARRANT COUNTY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS

16

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES- continued

Basis of Accounting – continued

Encumbrance accounting, under which purchase orders, contracts, and other commitments for expenditures of funds are recorded in order to reserve that portion of the applicable appropriation, is employed as an extension of formal budgetary integration. Under Texas law, appropriations lapse at August 31, and encumbrances outstanding at that time are to be either canceled or appropriately provided for in the subsequent year’s budget. Encumbrances outstanding as of August 31, 2006 of $41,816,290 have been provided for in the fiscal year 2007 budget.

Budgetary Date

Each community college in Texas is required by law to prepare an annual operating budget of anticipated revenues and expenditures for the fiscal year beginning September 1. The College’s Board of Trustees adopts the budget, which is prepared on the accrual basis of accounting. A copy of the approved budget and subsequent amendments must be filed with the Texas Higher Education Coordinating Board, Legislative Budget Board, Legislative reference Library, and Governor’s Office of Budget and Planning by December 1.

Cash and Cash Equivalents

Cash and cash equivalents consist of cash on hand, demand deposits and short term investments with original maturities of three months or less from the date of purchase.

Investments

In accordance with GASB Statement No 31, Accounting and Financial Reporting for Certain Investments and External Investment Pools, investments are reported at fair value. Fair values are based on published market rates. Short-term investments have an original maturity greater than three months but less than one year at the date of purchase. The governing board has designated public funds investment pools comprised of $84,338,207 and $65,410,686 at August 31, 2006 and 2005, respectively, to be short-term investments. Long-term investments have an original maturity of greater than one year at the date of purchase.

Inventories

Inventories consist of bookstore merchandise held for sale and are valued at lower of cost (first in, first out method) or market.

Capital Assets

Capital assets are recorded at cost at the date of acquisition, or fair value at the date of donation. For equipment, the District’s capitalization policy includes all items with a unit cost of $5,000 or more and an estimated useful life in excess of one year. Renovations to buildings, infrastructure and land improvements that significantly increase the value or extend the useful life of the structure are capitalized. The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend assets’ lives are charged to operating expense in the year in which the expense is incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally 50 years for buildings, 20 years for improvements, 10 years for furniture, machinery, vehicles and other equipment, 5 years for telecommunications and peripheral equipment, and 15 years for library books.

TARRANT COUNTY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS

17

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES- continued

Accrued Compensated Absences

Employees’ compensated absences are accrued when earned. The liability and expense incurred are recorded at year-end as accrued compensated absences in the Statement of Net Assets and as a component of operating expenses in the Statement of Revenues, Expenses and Changes in Net Assets.

Estimates

The preparation of the financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

Deferred Revenues

Tuition and fees collected in advance and related to academic terms in the next fiscal year are recorded as deferred revenue. Contract revenues related to government grants and food services are recognized over the contract period. Contract payments received in advance are recorded as deferred revenue.

Net Assets

The District’s net assets are classified as follows: Invested in capital assets, net of related debt – This represents the District’s total investment in capital assets, net of outstanding debt obligations related to those capital assets. To the extent debt has been incurred but not yet expended for capital assets, such amounts are not included as a component of invested in capital assets, net of related debt. Restricted net assets – nonexpendable – Nonexpendable restricted net assets consist of endowment and similar type funds in which donors or other outside sources have stipulated, as a condition of the gift instrument, that the principal is to be maintained inviolate and in perpetuity, and invested for the purpose of producing present and future income, which may be either expended or added to principal. Restricted net assets – expendable – Restricted expendable net assets include resources in which the District is legally or contractually obligated to spend in accordance with restrictions imposed by external third parties. Unrestricted net assets – Unrestricted net assets represent resources to be used for transactions relating to the educational and general operations of the District, and may be used at the discretion of the governing board to meet current expenses for any purpose. These resources also include auxiliary enterprises, which are substantially self-supporting activities that provide services for students, faculty and staff. When an expense is incurred that can be paid using either restricted or unrestricted resources, the District’s policy is to first apply the expense towards restricted resources and then towards unrestricted resources.

Prior Year Restatement

To promote consistency in financial reporting, the Texas State Higher Education Coordinating Board now requires all community colleges to depreciate library books. Therefore, the District has changed its accounting policy to comply with the new requirement. The District has elected to effect the change by restatement of the beginning net asset balance at September 1, 2004.

TARRANT COUNTY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS

18

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES- continued Prior Year Restatement-continued

A reconciliation from beginning net assets is as follows: As a result of the change, depreciation expense increased $449,606 and $433,653 for 2006 and 2005, respectively.

Operating and Non-operating Revenue and Expense Policy

The District distinguishes operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services in connection with the District’s principal ongoing operations. The principal operating revenues are tuition and related fees, grants and contracts, and operations of auxiliary enterprises. Operating expenses include the cost of sales and services, administrative expenses, and depreciation of capital assets. Non-operating revenues include activities that have the characteristics of non-exchange transactions, such as property taxes, state appropriations, gifts and contributions, and other revenue and expenses that are defined as non-operating by GASB 9, Reporting Cash Flows of Proprietary and Nonexpendable Trust Funds and Government Entities that use Proprietary Fund Accounting, and investment income.

NOTE 3. AUTHORIZED INVESTMENTS

The Board of Trustees has adopted an investment policy regarding the investment of its funds as defined in the Public Funds Investment Act of 1995 (Chapter 2256, Texas Government Code). The investments of the District are in compliance with the Board’s investment policy. Authorized investments include: (1) obligations of the United States or its agencies, (2) direct obligations of the State of Texas or its agencies, (3) obligations of political subdivisions rated no less than A by a national investment rating firm, (4) certificates of deposit, (5) other instruments and obligations authorized by statute, and (6) commercial paper notes.

NOTE 4. DEPOSITS AND INVESTMENTS

At August 31, 2006 and 2005 the carrying amounts of the District’s deposits were $12,450,250 and $2,896,450 and total bank balances equaled $13,464,653 and $3,299,266 respectively. Bank balances of $100,000 were covered by Federal Depository Insurance Corp with $13,364,653 and $3,199,266 covered by collateral pledged in a joint-custody security account with market values of $15,700,519 and $7,175,000 at August 31, 2006 and 2005 respectively. The collateral account is held in the District’s name by the Federal Reserve Bank which is an independent third-party custodian. Included in bank deposits at August 31, 2006 was $10,394,023 held in a savings account with the District’s bank.

Beginning Net Assets at September 1, 2004 as previously reported 308,186,174$ Adjustments: To record depreciation on library books through August 31, 2004 (2,921,890)

Beginning Net Assets Restated - September 1, 2004 305,264,284$

TARRANT COUNTY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS

19

NOTE 4. DEPOSITS AND INVESTMENTS—continued Included in short-term investments at August 31, 2006 and 2005 were $39,695,098 and $29,351,016 invested in TexPool, a pool managed by the Treasurer of the State of Texas and $44,643,109 and $36,059,670 invested in TexStar, a pool managed by JP Morgan Fleming Asset Management (USA), Inc. The fair value of the District’s position in the pools is substantially the same as the value of the pools’ shares. The investments in which the pools may invest are subject to the same restrictions as the District. Cash and Cash Equivalents included on Exhibit 1 consist of the items reported below:

2006 2005

Bank Deposits Demand Deposits 12,450,250$ 2,896,450$ Cash and Cash Equivalents Petty Cash 208,276 280,329

Total Cash and Cash Equivalents 12,658,526$ 3,176,779$

Cash and Cash Equivalents

Market Value Market ValueAugust 31, 2006 August 31, 2005

TexPool 39,695,098$ 29,351,016$ TexStar 44,643,109 36,059,670 U.S. Treasury Notes 39,352,050 44,496,088 Federal Agency Notes 208,042,950 157,901,150 Total 331,733,207 267,807,924 Cash and cash equivalents 12,658,526 3,176,779

344,391,733 270,984,703

Cash and cash equivalents (Exhibit 1) 12,658,526 3,176,779 Investments - current (Exhibit 1) 184,521,135 180,782,401 Restricted investments - current (Exhibit 1) 3,745,572 3,453,223 Investments - non-current (Exhibit 1) 142,858,605 83,010,696 Endowment investments - non-current (Exhibit 1) 607,895 561,604

344,391,733$ 270,984,703$

Reconciliation of Deposits and Investments to Exhibit 1

TARRANT COUNTY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS

20

NOTE 4. DEPOSITS AND INVESTMENTS- continued As of August 31, 2006 the District had the following investments and maturities:

Interest Rate Risk- In accordance with state law and District policy, the District concentrates its investment portfolio in shorter-term securities in order to limit interest rate risk. Unless matched to a specific cash flow, the District does not invest in securities maturing more than four years from the date of purchase. Credit Risk- In accordance with state law and District policy, investments in investment pools are rated no lower than AAA or AAA-m or at an equivalent rating of at least one nationally recognized rating service. Concentration of Credit Risk- The District’s investment policy does not place a limit on the amount the District may invest in any one issuer. As of August 31, 2006, more than 5% of the District’s investments are in FHLB (34.73%), FHLMC (10.17%), and FNMA (14.48%). As of August 31, 2006 and 2005, restricted investments consist of the following:

Investment income for the years ended August 31, 2006 and 2005, consists of the following:

CreditInvestment Type Rating Fair Value Less than 1 1 to 2 2 to 3

U.S. Government Agencies 208,042,950$ 79,157,000$ 74,288,600$ 54,597,350$ U.S. Treasuries 39,352,050 24,771,500 14,580,550 TexPool AAAm 39,695,098 39,695,098 TexStar AAAm 44,643,109 44,643,109

331,733,207$ 188,266,707$ 88,869,150$ 54,597,350$

Investment Maturities (in Years)

2006 2005

Funds held for others 187,525$ 169,091$ Funds restricted to student loans 114,983 110,544 Funds restricted to debt retirement 3,443,064 3,173,588

Total restricted investments 3,745,572$ 3,453,223$

2006 2005

Interest 12,263,813$ 6,371,143$ Net increase/decrease in fair value of investments 1,200,328 (1,841,593)

Total Investement Income 13,464,141$ 4,529,550$

TARRANT COUNTY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS

21

NOTE 5. DERIVATIVES

Derivatives are investment products which may be a security or contract which derives its value from another security, currency, commodity or index. During the years ended August 31, 2006 and 2005, the District did not invest in derivatives.

NOTE 6. BONDS PAYABLE

Bonds payable consist of bond principal, net of premiums, interest accreted on capital appreciation bonds and deferred refunding costs. The changes in bonds payable are as shown below:

Beginning Ending Due WithinBalance Additions Reductions Balance One Year

General obligation bonds, series 1992 400,000$ $ 70,000$ 330,000$ 75,000$ General obligation bonds, series 1994 2,700,000 35,000 2,665,000 2,665,000 General obligation bonds, series 1995 660,000 660,000 General obligation bonds, series 1996 2,540,000 740,000 1,800,000 280,000 General obligation refunding bonds, series 2001 18,080,000 185,000 17,895,000 195,000 General obligation refunding bonds, series 2001A 4,875,000 3,625,000 1,250,000 1,250,000 General obligation refunding bonds, series 2004 23,290,000 40,000 23,250,000 1,165,000 General obligation refunding bonds, series 2005 13,435,000 13,435,000

Subtotal 65,980,000 5,355,000 60,625,000 5,630,000

Accrued interest - capital appreciation bonds 628,950 166,690 795,640 Premium on bonds payable 3,362,814 451,321 2,911,493 416,197 Deferred refunding costs (2,012,940) (333,070) (1,679,870) (304,793) Total bonds payable 67,958,824$ 166,690$ 5,473,251$ 62,652,263$ 5,741,404$ Due within one year 5,741,404 Total long-term bonds payable 56,910,859$

2006

TARRANT COUNTY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS

22

NOTE 6. BONDS PAYABLE - continued

Beginning Ending Due WithinBalance Additions Reductions Balance One Year

General obligation bonds, series 1992 465,000$ $ 65,000$ 400,000$ 70,000$ General obligation bonds, series 1994 33,025,000 30,325,000 2,700,000 35,000 General obligation bonds, series 1995 7,850,000 7,190,000 660,000 660,000 General obligation bonds, series 1996 4,000,000 1,460,000 2,540,000 740,000 General obligation refunding bonds, series 2001 18,260,000 180,000 18,080,000 185,000 General obligation refunding bonds, series 2001A 8,405,000 3,530,000 4,875,000 3,625,000 General obligation refunding bonds, series 2004 23,375,000 85,000 23,290,000 40,000 General obligation refunding bonds, series 2005 13,435,000 13,435,000

Subtotal 72,005,000 36,810,000 42,835,000 65,980,000 5,355,000

Accrued interest - capital appreciation bonds 461,076 167,874 628,950 Premium on bonds payable 960,460 2,789,739 387,385 3,362,814 451,321 Deferred refunding costs (775,235) (1,583,399) (345,694) (2,012,940) (333,070) Total bonds payable 72,651,301$ 38,184,214$ 42,876,691$ 67,958,824$ 5,473,251$ Due within one year 5,473,251 Total long-term bonds payable 62,485,573$

2005

TARRANT COUNTY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS

23

NOTE 6: BONDS PAYABLE—continued

Bonds payable are comprised of the following issues: General obligation bonds, series 1992, issued to complete construction of building. Issued March 15, 1992 for $1,000,000; all authorized bonds have been issued. The source of revenues for debt service is future property taxes. General obligation bonds, series 1994, issued to construct a new campus and renovate existing campuses. Issued January 15, 1994 for $40,000,000; all authorized bonds have been issued. The source of revenues for debt service is future property taxes. General obligation bonds, series 1995, issued to construct a new campus and renovate existing campuses. Issued November 15, 1995 for $24,000,000; all authorized bonds have been issued. The source of revenues for debt service is future property taxes. General obligation bonds, series 1996, issued to complete construction of new campus and to partially refund series 1989 and 1990. Issued October 15, 1996 for $9,560,000; all authorized bonds have been issued. The source of revenues for debt service is future property taxes. General obligation bonds, series 2001, issued to partially refund series 1994, 1995 and 1996. Issued July 15, 2001 for $18,765,000; all authorized bonds have been issued. The source of revenues for debt service is future property taxes.

General obligation bonds, series 2001A, issued to partially refund series 1992A. Issued November 15, 2001 for $14,890,000; all authorized bonds have been issued. The sources of revenues for debt service is future property taxes. General obligations bonds, series 2004, issued to partially refund series 1994, 1995 and 1996. Issued September 1, 2004 for $23,375,000; all authorized bonds have been issued. The source of revenues for debt service is future property taxes.

General obligation bonds, series 2005, issued to partially refund series 1994. Issued May 24, 2005 for $13,435,000; all authorized bonds have been issued. The source of revenues for debt service is future property taxes. Total

2006 2005

330,000$ 400,000$

2,665,000 2,700,000

660,000

1,800,000 2,540,000

17,895,000 18,080,000

1,250,000 4,875,000

23,250,000 23,290,000

13,435,000 13,435,000

60,625,000$ 65,980,000$

TARRANT COUNTY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS

24

NOTE 6. BONDS PAYABLE - continued

Bonds are due in annual installments varying from $75,000 to $5,390,000 with interest rates from 3% to 6.625% with the final installment due in 2015. The principal and interest requirements for the next five years and beyond are summarized below.

NOTE 7. ADVANCE REFUNDING BONDS

On April 15, 2005, the District issued $13,435,000 in general obligation refunding bonds with an average interest rate of approximately 5.00% to advance refund $14,210,000 of outstanding 1994 series bonds with an average interest rate of approximately 4.63%. The net proceeds of $14,695,147 after payment of $197,274 in underwriter fees and other issue costs were used to purchase U.S. government securities. These securities were deposited in an irrevocable trust with an escrow agent to provide for all future debt service payments on the $14,210,000 of the 1994 series bonds refunded. As a result, $14,210,000 of the 1994 series bonds are considered to be defeased and the liability for those bonds has been removed from the statement of net assets. The District advance refunded $14,210,000 of the 1994 series bonds to reduce its total debt service payments over the next ten years by $650,431 and to obtain an economic gain (difference between the present value of the debt service payments on the old and new debt) of $453,874.

NOTE 8. DEFEASED BONDS OUTSTANDING

The District has defeased various general obligation bonds by placing the proceeds of the new bonds in irrevocable trusts with an escrow agent to provide for all future debt service payments on the old bonds. Accordingly, the trust account assets and the liability for the defeased bonds are not included in the District’s financial statements.

Fiscal Year Principal Interest Total

2007 5,741,404$ 2,782,368$ 8,523,772$

2008 6,118,064 2,519,226 8,637,290

2009 5,858,643 2,653,006 8,511,649

2010 6,619,569 2,024,718 8,644,287

2011 7,011,543 1,701,570 8,713,113

2012-2015 31,303,040 3,110,860 34,413,899

62,652,263$ 14,791,748$ 77,444,010$

TARRANT COUNTY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS

25

NOTE 8. DEFEASED BONDS OUTSTANDING-continued As of August 31, 2006 defeased bonds outstanding are as follows:

NOTE 9. EMPLOYEES’ RETIREMENT PLAN

The State of Texas has joint contributory plans for the District’s full-time employees. Full-time employees participate in either the Teacher Retirement System of Texas or the Optional Retirement Program. The Teacher Retirement System (TRS) is a cost-sharing multiple-employer public employee retirement system except that all risks and costs are not shared by the employer, but are the liability of the State of Texas. Regulations of the State of Texas assign the authority to establish and amend benefit provisions to the TRS Board of Trustees. Because the TRS bears sole responsibility for retirement commitments beyond contributions fixed by the Legislature, the system does not separately account for each of its component government agencies. The percentages of participant salaries currently contributed by the State and by each participant are 6.0% and 6.4% respectively, of annual compensation. These contribution requirements of plan members are established and may be amended by the TRS Board of Trustees. According to an independent actuarial evaluation as of August 31, 2006, the present value of the retirement system’s actual and projected liabilities, including projected benefits payable to its retirees and active members and their beneficiaries is in excess of the assets of the retirement system.

Further information regarding actuarial assumptions and conclusions, as well as audited financial statements, are included in the retirement system’s annual financial report. That report may be obtained by writing to Teacher Retirement System of Texas, Communications Department, 1000 Red River Street, Austin, TX 78701, by calling 1-800-223-8778, or by downloading the report from the TRS Internet website, www.trs.state.tx.us, under the TRS Publications heading.

Year Par ValueBond Issue Refunded Outstanding

General obligation bonds, series 1994 2001 3,570,000$

General obligation bonds, series 1994 2004 16,085,000

General obligation bonds, series 1994 2005 14,210,000

General obligation bonds, series 1995 2001 12,950,000

General obligation bonds, series 1995 2004 6,565,000

General obligation bonds, refunding and Improvement bonds, series 1996 2001 2,245,000

General obligation bonds, refunding and Improvement bonds, series 1996 2004 835,000

Total Defeased Bonds Outstanding 56,460,000$

TARRANT COUNTY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS

26

NOTE 9. EMPLOYEES’ RETIREMENT PLAN– continued Participation in the Optional Retirement Program is in lieu of participation in the Teacher Retirement System. The Optional Retirement Program provides for the purchase of annuity contracts or mutual funds. Participants contribute 6.65% of their salaries. For employees hired on or before August 31, 1995, the State contributes 6%, and the District contributes an additional 2.5% of the participant’s salary for the Optional Retirement Program. For employees hired on or after September 1, 1995 the State contributes 6% of the participant’s salary. The District is not required to make any contributions. Since these are individual investments, the State has no additional or unfunded liability for this program. State contributions to the Teacher Retirement System made on behalf of the District for the years ended August 31, 2004, 2005 and 2006 were $1,913,011, $2,068,400, and $2,211,694, respectively. State contributions to the Optional Retirement Plan made on behalf of the District for the years ended August 31, 2004, 2005 and 2006 were $1,592,339, $1,585,164, and $1,634,470, respectively. Total retirement expense paid by the State of $3,846,164 is reflected in the accompanying financial statements as both revenues and expenditures. Participants contributed $4,815,339 ($2,993,049 for the Teacher Retirement Program and $1,822,290 for the Optional Retirement Program). The District contributed $503,589, $483,003, and $482,655 for the years ended August 31, 2004, 2005 and 2006, respectively, to the Optional Retirement Program to cover the 2.5% referenced above. Total payroll expense for fiscal years 2006 and 2005 was approximately $88,000,000 and $84,000,000, respectively. The total payroll of employees covered by the Teacher Retirement System was approximately $37,500,000 and $35,000,000, and the total payroll of employees covered by the Optional Retirement Program was approximately $27,400,000 and $26,600,000 for fiscal years 2006 and 2005, respectively. All employees of the District who are employed for ½ or more of the standard workload are eligible to participate in one of the above programs. Participants in the Teacher Retirement System are eligible for normal retirement at age 65 with 5 years of service or when the sum of the participant’s age and years of credited service equals or exceeds 80 years. Participants may elect to receive reduced retirement at age 55 with 5 years of service or at any age below 50 with 30 years of service or any combination of age plus years of service which equals 80. A member is fully vested after 5 years of creditable service and is entitled to any benefit for which eligibility requirements have been met. Participants in the Optional Retirement Program are fully vested in their individual investments after one year of service.

NOTE 10. DEFERRED COMPENSATION PROGRAMS

District employees may elect to defer a portion of their earnings for income tax and investment purposes pursuant to authority granted in Government Code 609.001. The employees investments are held in tax deferred annuity plans pursuant to Internal Revenue Code Section 403(b). As of August 31, 2006 and 2005, the District had 299 and 323 employees participating in the program, respectively. A total of $1,668,514 and $1,587,039 in payroll deductions had been invested in approved plans during the fiscal years 2006 and 2005, respectively. In June 2003 the District added a deferred compensation plan to the employer benefit package. Full time employees can begin participating in the plan on their first day of employment. An employee can contribute up to maximum of $14,000 ($18,000 for participants over 50 years of age) for 2006. As of August 31, 2006, the District had 49 employees participating in the program. A total of $388,557 in payroll deductions had been invested in approved plans during the fiscal year 2006. As of August 31, 2005, the District had 46 employees participating in the program. A total of $363,858 in payroll deductions had been invested in approved plans during the fiscal year 2005.

TARRANT COUNTY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS

27

NOTE 10. DEFERRED COMPENSATION PROGRAMS– continued The District has established a non-qualified Section 457 deferred compensation plan for an employee. As of August 31, 2006 and 2005, the District’s liability under this plan was approximately $658,608 and $513,905, respectively.

NOTE 11. COMPENSATED ABSENCES

Full-time employees earn vacation leave from 6.67 to 13.33 hours per month, depending on the number of years employed with the District. An employee may carry his accrued leave forward from one fiscal year to another fiscal year with a maximum number of hours up to twenty days for those employees with sixteen or more years of service. Employees with at least three months of service who terminate their employment are entitled to payment for all accumulated vacation leave up to the maximum allowed. Sick leave, which can be accumulated up to a maximum of 90 days is earned at the rate of 1 day per month. It is paid to an employee who misses work because of illness or to the estate of an employee in the event of his/her death. The maximum sick leave that may be paid to an employee with at least 10 years service upon separation or to an employee's estate is one-half of the employee's accumulated entitlement or 45 days, whichever is less. Compensated absences activity for the years ended August 31, 2006 and 2005 were as follows:

NOTE 12. PENDING LAWSUITS AND CLAIMS

On August 31, 2006, various lawsuits and claims involving the District were pending. The ultimate liability with respect to litigation and other claims asserted against the District cannot be reasonably estimated at this time. Management believes this liability, if any, to the extent not provided for by insurance or otherwise, will not have a material effect on the District.

Beginning Ending CurrentBalance Additions Reductions Balance Portion

2005 6,155,188$ 3,968,601$ 3,617,806$ 6,505,983$ 3,433,554$

2006 6,505,983$ 4,072,027$ 3,725,737$ 6,852,272$ 3,586,133$

TARRANT COUNTY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS

28

NOTE 13. OPERATING LEASE COMMITMENTS AND RENTAL AGREEMENTS

Future minimum lease rental payments under noncancellable operating leases having an initial term in excess of one year as of August 31, 2006 are as follows: Approximately $532,000 and $985,000 in rent paid or due under operating leases is included in expenses on the statement of revenues, expenses and changes in net assets for the years ended August 31, 2006 and 2005, respectively.

NOTE 14. CONTRACT AND GRANT AWARDS

The District receives funding from various Federal and State contract and grant programs. Revenues are recognized as funds are actually expended. Funds received, but not expended during the reporting period, are reported as deferred revenue. For direct federal contract and grant awards, funds expended, but not collected, are reported as federal receivables. Federal pass-through awards and non-federal contract and grant awards for which funds are expended, but not collected, are reported as state and local grants and contracts receivable. Contract and grant awards that are not yet funded and for which the institution has not yet performed services are not included in the financial statements. Contract and grant awards funds already committed, e.g. multi-year awards or funds awarded during fiscal years 2006 and 2005 for which monies have not been received nor funds expended totaled approximately $4,250,000 and $4,070,000, respectively. Of this amount approximately $3,540,000 and $3,140,000 was from Federal Contract and Grant Awards and $710,000 and $930,000 was from State Contract and Grant Awards for fiscal years ended August 31, 2006 and 2005, respectively.

NOTE 15. RISK MANAGEMENT

The District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The District fully insures its buildings, structures, contents and equipment with the purchase of commercial insurance in an all risk blanket property insurance policy. The District has designated unrestricted net assets of $700,000 to cover self-insurance for workers’ compensation, unemployment compensation and insurance policy deductibles. Settled claims have not exceeded commercial insurance coverage in any of the past three years. The District self-insures its workers' compensation plan and its unemployment compensation.

Minimum FutureYear Ending Lease Payments

2007 527,852$ 2008 356,066 2009 332,699 2010 285,965

1,502,582$

TARRANT COUNTY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS

29

NOTE 15. RISK MANAGEMENT-continued

The workers’ compensation plan is administered by an outside insurance carrier which processes all self-insurance claims. The District also carries an insurance policy for excess liabilities related to workers’ compensation. An outside agent processes all unemployment compensation claims. The District has accrued amounts that represent the best estimate of claims filed, but not paid and claims incurred, but not reported. Accrued liabilities are generally based on actuarial valuation and the present value of unpaid expected claims. The discount rates used to calculate the present value of liabilities was 3.5% for the years ended August 31, 2006 and 2005. Changes in the accrued uninsured claims liability are as follows:

NOTE 16. POST-RETIREMENT HEALTH CARE AND LIFE INSURANCE BENEFITS

In addition to providing pension benefits, the State provides certain healthcare and life insurance benefits for retired employees. Most of the employees with 10 years of service will become eligible for those benefits when they reach normal retirement age while working for the State. Those and similar benefits for active employees are provided through an insurance company whose premiums are based on benefits paid during the previous year. The State recognizes the cost of providing these benefits by expending the annual insurance premiums. The State's average contribution per full-time employee was $373 per month for the year ended August 31, 2006 ($255 per month for fiscal year 2005). The cost of providing those benefits for all employees in the year ended August 31, 2006, paid by the State of Texas on behalf of the District, totaled $9,123,762 ($6,828,567 for the year ended August 31, 2005) with $2,593,762 for 578 retirees (retiree benefits for 547 retirees cost $2,377,067 in fiscal year 2005) and $6,530,000 for 1,459 active employees (active employee benefits for 1,457 employees cost $4,451,500 in fiscal year 2005). The on behalf payments are reflected in the accompanying financial statements as both revenues and expenses.

NOTE 17. RELATED PARTIES

The Tarrant County College Foundation is a nonprofit organization with the sole purpose of supporting the educational and other activities of the District. The Foundation solicits donations and acts as coordinator of gifts made by other parties. It remitted restricted gifts of $129,130 and $82,047 to the District during the years ended August 31, 2006 and 2005, respectively. During the fiscal year, the District furnished certain services, such as office space, utilities and some staff assistance to the Foundation at no charge.

2006 2005

Beginning balance 1,449,978$ 1,527,083$ Current year claims and changes in estimates 300,538 547,631 Claim payments (455,333) (624,736)

Ending Balance 1,295,183$ 1,449,978$

TARRANT COUNTY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS

30

NOTE 18. PROPERTY TAX CALENDAR

The District's ad valorem property tax is levied each October 1 on the assessed value listed as of the prior January 1 for all real and personal property located in the District. Taxes levied for the years ended August 31, 2006 and 2005 amounted to $136,072,383 and $126,805,587, respectively, including any penalties and interest assessed ($3,747,917 and $934,863 respectively). Property taxes attach as an enforceable lien on property as of January 1 following the October 1 levy. Taxes are due on receipt of the tax bill and are delinquent if not paid before February 1 of the year following the year in which imposed.

Current DebtOperations Service Total

Tax Rate per $100 valuation authorized $ .20000 $ .50000 $ .70000

Tax Rate per $100 valuation assessed $ .13046 $ .00892 $ .13938

2006

Current DebtOperations Service Total

Tax Rate per $100 valuation authorized $ .20000 $ .50000 $ .70000

Tax Rate per $100 valuation assessed $ .12983 $ .00955 $ .13938

2005

2006 2005

Assessed Valuation of the District 116,036,255,456$ 110,553,404,764$

Less: Exemptions (21,098,340,175) (20,245,811,412)

Net Assessed Valuation of the District 94,937,915,281$ 90,307,593,352$

TARRANT COUNTY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS

31

NOTE 18. PROPERTY TAX CALENDAR - continued

The use of tax proceeds is restricted to either maintenance and operations or interest and sinking expenses. Tax collections for the years ended August 31, 2006 and 2005 were 101.33% and 99.91% of the current tax levy, respectively. The District remitted payments of $1,967,949 and $1,303,970 in fiscal years 2006 and 2005, respectively, for taxes collected on behalf of Tax Incremental Finance District. Allowances for uncollectible taxes are based upon historical experience in collecting property taxes.

NOTE 19. BUDGETARY DATA

Each community college district in Texas is required by law to prepare an annual operating budget of anticipated revenues and expenditures for current operating funds for the fiscal year beginning September 1. The budget was adopted by the District’s Board of Trustees. A copy of the approved budget has been filed with the Texas Higher Education Coordinating Board, Legislative Budget Board, Legislative Reference Library and Governor’s Office of Budget and Planning. The District’s budget is prepared on a basis that does not vary significantly from the accrual basis of accounting.

NOTE 20. INCOME TAXES

The District is exempt from income taxes under Internal Revenue Code Section 115, Income of States, Municipalities, Etc., although unrelated business income may be subject to income taxes under Internal Revenue Code Section 511 (a)(2)(B), Imposition of Tax on Unrelated Business Income of Charitable, Etc. Organizations. The District had no unrelated business income tax liability for the years ended August 31, 2006 and 2005.

Current DebtTaxes Collected Operations Service Total

Current Taxes Collected 123,884,180$ 8,470,388$ 132,354,568$

Delinquent Taxes Collected 1,616,877 110,551 1,727,428

Penalties and Interest Collected 1,247,660 85,307 1,332,967

Total Collections 126,748,717$ 8,666,246$ 135,414,963$

2006

Current DebtTaxes Collected Operations Service Total

Current Taxes Collected 115,385,782$ 8,487,516$ 123,873,298$

Delinquent Taxes Collected 1,755,200 129,109 1,884,309

Penalties and Interest Collected 1,220,873 89,805 1,310,678

Total Collections 118,361,855$ 8,706,430$ 127,068,285$

2005

TARRANT COUNTY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS

32

NOTE 21. PROPERTY AND EQUIPMENT

Property and equipment transactions for the years ended August 31, 2006 and 2005, are summarized as follows:

BeginningBalance Additions Ending

(as restated) (Transfers) Deletions Balance

Land 46,232,114$ 1,581,184$ $ 47,813,298$ Construction in progress 6,050,612 11,785,816 17,836,428

Total cost of non-depreciable Capital assets 52,282,726 13,367,000 65,649,726

Buildings 148,742,726 1,073,203 149,815,929 Improvements other than buildings 46,873,138 7,104,221 53,977,359 Telecommunications and peripheral equipment 22,079,876 1,712,489 (3,081,514) 20,710,851 Library books 6,532,597 508,287 (229,372) 6,811,512 Furniture and other equipment 14,162,860 1,283,540 (635,482) 14,810,918

Total cost of depreciable Capital assets 238,391,197 11,681,740 (3,946,368) 246,126,569

Total cost of capital assets 290,673,923 25,048,740 (3,946,368) 311,776,295 Accumulated Depreciation

Buildings 41,509,681 2,677,369 44,187,050 Improvements other than buildings 21,289,294 1,874,691 23,163,985 Telecommunications and peripheral equipment 17,914,283 1,938,998 (3,010,913) 16,842,368 Library books 3,245,828 449,606 (183,900) 3,511,534 Furniture and other equipment 8,421,063 1,001,163 (506,973) 8,915,253

Total accumulated depreciation 92,380,149 7,941,827 (3,701,786) 96,620,190

Net other capital assets 146,011,048 3,739,913 (244,582) 149,506,379

Net capital assets 198,293,774$ 17,106,913$ (244,582)$ 215,156,105$

2006

TARRANT COUNTY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS

33

NOTE 21. PROPERTY AND EQUIPMENT– continued

NOTE 22. COMMITMENTS

The District has entered into several contracts for construction of a new downtown campus and various other renovation projects. As of August 31, 2006, the District was committed for approximately $169,200,000 on these contracts.

Beginning Additions EndingBalance (Transfers) Deletions Balance

Land 17,567,891$ 28,664,223$ $ 46,232,114$ Construction in progress 2,076,935 3,973,677 6,050,612

Total cost of non-depreciable Capital assets 19,644,826 32,637,900 52,282,726

Buildings 148,742,726 148,742,726 Improvements other than buildings 43,645,202 3,227,936 46,873,138 Telecommunications and peripheral equipment 22,994,161 881,882 (1,796,167) 22,079,876 Library books 6,157,962 518,597 (143,962) 6,532,597 Furniture and other equipment 13,271,005 1,588,904 (697,049) 14,162,860

Total cost of depreciable Capital assets 234,811,056 6,217,319 (2,637,178) 238,391,197

Total cost of capital assets 254,455,882 38,855,219 (2,637,178) 290,673,923

Accumulated DepreciationBuildings 38,832,312 2,677,369 41,509,681 Improvements other than buildings 19,571,703 1,717,591 21,289,294 Telecommunications and peripheral equipment 16,770,581 2,888,585 (1,744,883) 17,914,283 Library books (restated) 2,921,890 433,653 (109,715) 3,245,828 Furniture and other equipement 7,977,433 966,484 (522,854) 8,421,063

Total accumulated depreciation 86,073,919 8,683,682 (2,377,452) 92,380,149

Net other capital assets 148,737,137 (2,466,363) (259,726) 146,011,048

Net capital assets 168,381,963$ 30,171,537$ (259,726)$ 198,293,774$

2005

TARRANT COUNTY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS

34

NOTE 23. DESIGNATIONS OF UNRESTRICTED NET ASSETS

The governing board of the District has made the following designations of unrestricted net assets:

NOTE. 24 DISAGGREGATION OF RECEIVABLES AND PAYABLES BALANCES

Receivables Accounts receivable at August 31, 2006 and 2005, were as follows:

2006 2005Unrestricted net assets

Designated forCapital outlay 122,825,154$ 87,021,015$ Future renewals and replacements 69,059,541 48,840,646 Future operating budgets 5,000,000 5,000,000 Insurance 700,000 700,000

Undesignated 122,417,083 105,327,325

Total unrestricted net assets 320,001,778$ 246,888,986$

2006 2005

Student Receivables 2,207,274$ 1,804,661$

Accounts Receivable 459,423 817,190

Other Receivables 244,676 238,325

Subtotal 2,911,373 2,860,176

Allowance for Doubtful Accounts (1,212,812) (902,049)

Total Accounts Receivable-Exh 1 1,698,561$ 1,958,127$

TARRANT COUNTY COLLEGE DISTRICT NOTES TO FINANCIAL STATEMENTS

35

NOTE.24 DISAGGREGATION OF RECEIVABLES AND PAYABLES BALANCES - continued

Payables Accounts payable and accrued liabilities at August 31, 2006 and 2005, were as follows:

NOTE 25. SALE OF BOOKSTORE OPERATIONS In an agreement that took effect on October 11, 2006, the District contracted a college bookstore operator to operate and manage the District’s bookstores. Under the agreement, the operator purchased a substantial portion of the District’s bookstore inventory at an amount that approximates cost. The District will receive a monthly commission from the operator based on that month’s sales. The agreement terminates on September 30, 2016 and may be renewed for additional successive one year periods upon mutual agreement of the parties.

2006 2005

Vendors Payable 10,136,790$ 7,565,868$

Accounts Payable-Exh 1 10,136,790 7,565,868

Salaries & Benefits Payable 3,035,037 2,861,377

Workers' Compensation Payable 1,200,567 1,363,523

Accrued Interest 130,279 142,250

Other Payable 94,616 97,136

Accrued Liabilities-Exh 1 4,460,499 4,464,286 Total Accounts payable and Accrued Liabilities 14,597,289$ 12,030,154$

TotalEducational

Unrestricted Restricted Activities

TuitionState funded courses

In-district resident tuition 27,857,677$ $ 27,857,677$ Out-of-district resident tuition 3,336,610 3,336,610 TPEG (set aside)* 2,005,907 2,005,907 Non-resident tuition 2,679,249 2,679,249 Continuing education 2,000,365 2,000,365

Non-state funded continuing education 1,867,756 1,867,756 Total tuition 39,747,564 39,747,564

FeesOther fees 428,609 428,609 Total fees 428,609 428,609

Scholarship allowances and discountsScholarship allowances (193,570) (193,570) Remissions and exemptions (443,202) (443,202) TPEG allowances (217,022) (217,022) Federal grants to students (1,867,771) (1,867,771) Total scholarship allowances (2,721,565) (2,721,565)

Total net tuition and fees 37,454,608 37,454,608

Other operating revenuesFederal grants and contracts 21,318,565 21,318,565 State grants and contracts 1,377,111 1,377,111 Nongovernmental grants and contracts 1,049,439 1,049,439 Other operating revenues 1,754,479 1,754,479 Total other operating revenues 1,754,479 23,745,115 25,499,594

Auxiliary enterprisesBookstore Food service Testing center Child center

Total net auxiliary enterprises Total operating revenues 39,209,087$ 23,745,115$ 62,954,202$

* In accordance with Education Code 56.033, $2,005,907 and $1,941,508 of tuition for the years ending August 31, 2006 and 2005, respectively, was set aside for Texas Public Education Grants (TPEG)

(WITH MEMORANDUM TOTALS FOR THE YEAR ENDED AUGUST 31, 2005)

TARRANT COUNTY COLLEGE DISTRICTSCHEDULE A

SCHEDULE OF OPERATING REVENUESYEAR ENDED AUGUST 31, 2006

38

Auxiliary 2006 2005Enterprises Total Total

$ 27,857,677$ 26,940,479$

3,336,610 3,200,503 2,005,907 1,941,508 2,679,249 2,250,547 2,000,365 2,394,144 1,867,756 1,891,147

39,747,564 38,618,328

428,609 664,204 428,609 664,204

(193,570) (131,255) (443,202) (488,928) (217,022) (1,607,778)

(1,867,771) (1,282,590) (2,721,565) (3,510,551) 37,454,608 35,771,981

21,318,565 20,647,014 1,377,111 2,171,726 1,049,439 954,541 1,754,479 881,735

25,499,594 24,655,016

14,502,763 14,502,763 14,948,592 346,491 346,491 335,519 578,730 578,730 601,510 249,409 249,409 275,435

15,677,393 15,677,393 16,161,056 15,677,393$ 78,631,595$ 76,588,053$

(Exhibit 2) (Exhibit 2)

39

Salariesand Wages State Local

Unrestricted - educational activitiesInstruction 50,449,769$ $ 5,830,620$ Public service 2,531,680 312,508 Academic support 7,572,646 650,335 Student services 8,897,207 997,771 Institutional support 9,840,650 1,498,755 Operation and maintenance of plant 6,737,422 2,490,690 Scholarships and fellowships

Total unrestricted educational activities 86,029,374 11,780,679

Restricted - educational activitiesInstruction 839,974 5,905,559 Public service 229,119 625,691 Academic support 35,235 872,047 Student services 684,139 1,524,864 Institutional support 774 4,041,766 Scholarships and fellowships

Total restricted educational activities 1,789,241 12,969,927

Total educational activities 87,818,615 12,969,927 11,780,679

Auxiliary enterprises 1,293,805 317,416

Depreciation expense Building and other real estate improvements

Equipment and furniture

Total operating expenses 89,112,420$ 12,969,927$ 12,098,095$

YEAR ENDED AUGUST 31, 2006

Staff Benefits

TARRANT COUNTY COLLEGE DISTRICTSCHEDULE B

SCHEDULE OF OPERATING EXPENSESBY OBJECT

(WITH MEMORANDUM TOTALS FOR THE YEAR ENDED AUGUST 31, 2005)

40

Other 2006 2005Expenses Total Total

4,774,755$ 61,055,144$ 58,324,670$ 833,631 3,677,819 3,500,060 967,408 9,190,389 10,583,648

1,065,738 10,960,716 10,765,454 6,252,636 17,592,041 17,291,356

14,648,418 23,876,530 19,063,186 443,202 443,202 488,927

28,985,788 126,795,841 120,017,301

420,408 7,165,941 6,050,514 218,496 1,073,306 2,188,398

907,282 697,482 922,813 3,131,816 2,413,565

1,853 4,044,393 3,449,624 20,726,435 20,726,435 17,435,936

22,290,005 37,049,173 32,235,519

51,275,793 163,845,014 152,252,820

12,988,766 14,599,987 14,620,155

4,552,061 4,552,061 4,394,960

3,389,766 3,389,766 4,288,722

72,206,386$ 186,386,828$ 175,556,657$ (Exhibit 2) (Exhibit 2)

41

AuxiliaryUnrestricted Restricted Enterprises

NON-OPERATING REVENUESState appropriations Education and general state support 43,361,661$ $ $ State group insurance 9,123,762 State retirement matching 3,846,164 Total state appropriations 43,361,661 12,969,926

Maintenance ad valorem taxes 125,482,157 Debt service ad-valorem taxes 8,464,139 Gifts 1,101,500 Investment income 13,192,083 263,684 8,374

Total non-operating revenues 148,239,879 263,684 8,374

NON-OPERATING EXPENSESInterest on capital related debt 2,676,865 Loss on disposal of capital assets 148,270

Total non-operating expenses 2,825,135

Net non-operating revenues 188,776,405$ 13,233,610$ 8,374$

(WITH MEMORANDUM TOTALS FOR THE YEAR ENDED AUGUST 31, 2005)

TARRANT COUNTY COLLEGE DISTRICTSCHEDULE C

SCHEDULE OF NON-OPERATING REVENUES AND EXPENSESYEAR ENDED AUGUST 31, 2006

42

2006 2005Total Total

43,361,661$ 40,035,026$ 9,123,762 6,828,567 3,846,164 3,653,564

56,331,587 50,517,157

125,482,157 116,928,969 8,464,139 8,543,206 1,101,500 450

13,464,141 4,529,550

148,511,937 130,002,175

2,676,865 3,201,195 148,270 188,132

2,825,135 3,389,327

202,018,389$ 177,130,005$ (Exhibit 2) (Exhibit 2)

43

Unrestricted Expendable Non-Expendable

Current:Unrestricted 146,993,556$ $ $

Board designated 161,780,558 Restricted 133,230 Auxiliary enterprises 11,227,664

Loan 132,020 Endowment:

True 607,895 Plant:Debt service 4,362,986 Investment in plant

Total net assets, August 31, 2006 320,001,778 4,628,236 607,895

Total net assets, August 31, 2005 246,888,986 5,647,254 561,604

Net increase (decrease) in net sssets 73,112,792$ (1,019,018)$ 46,291$

Restricted

Detail by Source

TARRANT COUNTY COLLEGE DISTRICTSCHEDULE D

SCHEDULE OF NET ASSETS BY SOURCE AND AVAILABILITYYEAR ENDED AUGUST 31, 2006

(WITH MEMORANDUM TOTALS FOR THE YEAR ENDED AUGUST 31, 2005)

44

Capital AssetsNet of Depreciation

& Related Debt Total Yes No

$ 146,993,556$ 146,993,556$ $ 161,780,558 161,780,558

133,230 133,230 11,227,664 11,227,664

132,020 132,020

607,895 607,895

4,362,986 4,362,986 152,503,842 152,503,842 152,503,842

152,503,842 477,741,751 158,221,220 319,520,531

(Exhibit 1)

130,334,950 383,432,794 105,327,325 278,105,469

(Exhibit 1)

22,168,892$ 94,308,957$ 52,893,895$ 41,415,062$

(Exhibit 2)

Available for Current OperationsDetail by Source

45

2006 2005

Invested in capital assets, 152,503,842$ 130,334,950$

Restricted - expendable 4,628,236 5,647,254

Restricted - nonexpendable 607,895 561,604

Unrestricted 320,001,778 246,888,986

Total primary government net assets 477,741,751$ 383,432,794$

Note:

years 2002-2006 are available.Due to reporting format and definition changes prescribed by GASB Statement 34, only fiscal

TARRANT COUNTY COLLEGE DISTRICTSTATISTICAL SUPPLEMENT 1NET ASSETS BY COMPONENTFISCAL YEARS 2002 TO 2006

(UNAUDITED)

net of related debt

48

2004 2003 2002

98,652,552$ 83,874,913$ 81,769,237$

4,597,889 4,129,722 4,296,615

554,164 528,526 473,621

201,459,679 148,701,618 92,356,783

305,264,284$ 237,234,779$ 178,896,256$

For the Fiscal Year Ended August 31

49

2006 2005Operating Revenues Tuition and Fees (Net of Discounts) 37,454,608$ 35,771,981$ Governmental Grants and Contracts Federal Grants and Contracts 21,318,565 20,647,014 State Grants and Contracts 1,377,111 2,171,726 Non-Governmental Grants and Contracts 1,049,439 954,541 Auxiliary enterprises 15,677,393 16,161,056 Other Operating Revenues 1,754,479 881,735 Total Operating Revenues 78,631,595 76,588,053 Non-operating revenues State Appropriations 56,331,587 50,517,157 Ad-Valorem taxes 133,946,296 125,472,175 Gifts 1,101,500 450 Investment Income 13,464,141 4,529,550 Total Non-Operating Revenues 204,843,524 180,519,332 Other Revenues Additions to permanent endowments 45,801 7,109

Total Revenues 283,520,920$ 257,114,494$

Operating Revenues Tuition and Fees (Net of Discounts) 13.21% 13.91% Governmental Grants and Contracts Federal Grants and Contracts 7.52% 8.03% State Grants and Contracts 0.49% 0.84% Non-Governmental Grants and Contracts 0.37% 0.37% Auxiliary enterprises 5.53% 6.29% Other Operating Revenues 0.62% 0.34%Total Operating Revenues 27.74% 29.78%Non-operating revenues State Appropriations 19.87% 19.65% Ad-Valorem taxes 47.24% 48.81% Gifts 0.39% 0.00% Investment Income 4.75% 1.76%Total Non-Operating Revenues 72.25% 70.22%Other Revenues Additions to permanent endowments 0.01% 0.00%

Total Revenues 100.00% 100.00%

Note:Due to reporting format and definition changes prescribed by GASB Statement 34, only fiscal years2002-2006 are available.

TARRANT COUNTY COLLEGE DISTRICT

(UNAUDITED)

STATISTICAL SUPPLEMENT 2REVENUES BY SOURCE

FISCAL YEARS 2002 TO 2006

50

2004 2003 2002

28,235,712$ 26,528,358$ 25,294,372$

19,826,629 15,088,627 11,872,170 2,238,875 1,993,388 2,146,441

578,946 606,511 573,590 13,301,776 14,056,573 12,986,324

719,500 613,746 278,992 64,901,438 58,887,203 53,151,889

51,271,037 50,282,450 51,967,096 119,660,692 111,523,895 79,021,851

12,000 11,000 24,545 3,749,014 2,128,295 4,917,960

174,692,743 163,945,640 135,931,452

25,400 54,528 52,072

239,619,581$ 222,887,371$ 189,135,413$

11.78% 11.90% 13.37%

8.28% 6.77% 6.28%0.94% 0.89% 1.13%0.24% 0.27% 0.30%5.55% 6.31% 6.87%0.30% 0.28% 0.15%

27.09% 26.42% 28.10%

21.40% 22.56% 27.48%49.94% 50.05% 41.78%0.00% 0.00% 0.01%1.56% 0.95% 2.60%

72.90% 73.56% 71.87%

0.01% 0.02% 0.03%

100.00% 100.00% 100.00%

For the Year Ended August 31

51

2006 2005

Instruction 68,221,085$ 64,375,184$ Public Service 4,751,125 5,688,458 Academic support 10,097,671 11,281,130 Student Services 14,092,532 13,179,019 Institutional Support 21,636,434 20,740,980 Operation and maintenance of plant 23,876,530 19,063,186 Scholarship and fellowships 21,169,637 17,924,863 Auxiliary enterprises 14,599,987 14,620,155 Depreciation 7,941,827 8,683,682

Total Operating Expenses 186,386,828 175,556,657

Interest on capital related debt 2,676,865 3,201,195 Loss on disposal of fixed assets 148,270 188,132

Total Non-Operating Expenses 2,825,135 3,389,327

Total Expenses 189,211,963$ 178,945,984$

Instruction 36.05% 35.98%Public Service 2.51% 3.18%Academic support 5.33% 6.30%Student Services 7.45% 7.37%Institutional Support 11.44% 11.59%Operation and maintenance of plant 12.62% 10.65%Scholarship and fellowships 11.19% 10.02%Auxiliary enterprises 7.72% 8.17%Depreciation 4.20% 4.85%

Total Operating Expenses 98.51% 98.11%Interest on capital related debt 1.41% 1.79%Loss on disposal of fixed assets 0.08% 0.10%

Total Non-Operating Expenses 1.49% 1.89%

Total Expenses 100.00% 100.00%

Note:Due to reporting format and definition changes prescribed by GASB Statement 34, only fiscal years 2002-2006 are available.

TARRANT COUNTY COLLEGE DISTRICT

(UNAUDITED)

STATISTICAL SUPPLEMENT 3PROGRAM EXPENSES BY FUNCTION

FISCAL YEARS 2002 TO 2006

52

2004 2003 2002

60,187,257$ 62,414,818$ 58,961,647$ 5,117,646 5,997,451 7,635,900

11,017,822 10,226,384 7,861,647 12,156,394 11,468,422 12,129,269 20,617,202 17,366,332 15,561,437 17,475,544 20,112,423 16,022,303 15,683,897 9,851,563 8,241,431 13,036,081 13,930,959 12,094,618 9,339,681 8,702,753 8,176,546

164,631,524 160,071,105 146,684,798

3,843,954 4,151,994 3,683,493 192,708 325,749 608,362

4,036,662 4,477,743 4,291,855

168,668,186$ 164,548,848$ 150,976,653$

35.68% 37.93% 39.05%3.04% 3.64% 5.06%6.53% 6.22% 5.21%7.21% 6.97% 8.03%

12.22% 10.55% 10.31%10.36% 12.22% 10.61%9.30% 5.99% 5.46%7.73% 8.47% 8.01%5.54% 5.29% 5.42%

97.61% 97.28% 97.16%2.28% 2.52% 2.44%0.11% 0.20% 0.40%

2.39% 2.72% 2.84%

100.00% 100.00% 100.00%

For the Year Ended August 31

53

Facilities Use Total TotalIn-District Out-of-District & Technology Student Tuition & Fees Tuition & Fees

Tuition Tuition Fees Services Fee In-District Out-of-District

2006 48$ 61$ $ $ 48$ 61$ 2005 (a) 46 59 46 59 2004 31 43 6 1 38 50 2003 30 42 6 1 37 49 2002 29 41 6 1 36 48 2001 28 40 6 1 35 47 2000 26 38 6 1 33 45 1999 24 36 6 1 31 43 1998 22 34 5 1 28 40 1997 20 30 4 1 25 35

Non-Resident Non-Resident Facilities Use Total TotalTuition Tuition & Technology Student Tuition & Fees Tuition & Fees

Out of State International Fees Services Fee Out of State International

2006 150$ 150$ $ $ 150$ 150$ 2005 150 150 150 150 2004 140 140 6 1 147 147 2003 140 140 6 1 147 147 2002 140 140 6 1 147 147 2001 140 140 6 1 147 147 2000 140 140 6 1 147 147 1999 140 140 6 1 147 147 1998 140 140 5 1 146 146 1997 140 140 4 1 145 145

Note:(a) Beginning with the 2004-2005 academic year, the District no longer assessed a $24 laboratory fee,a $6 facilities use fee, and a $1 student services fee. They are now included in the tuition rate.

LAST TEN ACADEMIC YEARS(UNAUDITED)

TARRANT COUNTY COLLEGE DISTRICTSTATISTICAL SUPPLEMENT 4

TUITION AND FEES

AcademicYear

RESIDENT

NON-RESIDENTFees per Semester Credit Hour (SCH)

Fees per Semester Credit Hour (SCH)

AcademicYear

54

Cost for 12 Cost for 12 Increase from Increase fromSCH SCH Prior Year Prior Year

In-District Out-of-District In-District Out-of-District

576$ 732$ 4.35% 3.39%552 708 21.59% 18.39%454 598 2.71% 2.05%442 586 2.79% 2.09%430 574 2.87% 2.14%418 562 6.09% 4.46%394 538 6.49% 4.67%370 514 10.78% 7.53%334 478 12.08% 14.35%298 418

Cost for 12 Cost for 12 Increase from Increase fromSCH SCH Prior Year Prior Year

Out of State International Out of State International

1,800$ 1,800$ 0.00% 0.00%1,800 1,800 2.16% 2.16%1,762 1,762 0.00% 0.00%1,762 1,762 0.00% 0.00%1,762 1,762 0.00% 0.00%1,762 1,762 0.00% 0.00%1,762 1,762 0.00% 0.00%1,762 1,762 0.69% 0.69%1,750 1,750 0.69% 0.69%1,738 1,738

RESIDENTFees per Semester Credit Hour (SCH)

NON-RESIDENTFees per Semester Credit Hour (SCH)

55

Fiscal Year

Assessed Valuation of

Property Less: ExemptionsTaxable

Assessed Value

2006 116,036,255,456$ (21,098,340,175)$ 94,937,915,281$

2005 110,553,404,764 (20,245,811,412) 90,307,593,352

2004 105,532,562,767 (19,707,936,628) 85,824,626,139

2003 99,730,670,813 (19,646,371,613) 80,084,299,200

2002 92,964,738,284 (18,906,585,868) 74,058,152,416

2001 81,803,035,431 (15,379,811,235) 66,423,224,196

2000 65,755,219,757 (5,818,543,586) 59,936,676,171

1999 55,244,380,431 (640,807,116) 54,603,573,315

1998 55,847,408,554 (5,010,547,160) 50,836,861,394

1997 52,326,877,543 (4,851,506,421) 47,475,371,122

Source:Tarrant Appraisal District

Notes:Property is assessed at full market value.(a) per $100 taxable assessed valuation

TARRANT COUNTY COLLEGE DISTRICT

(UNAUDITED)

STATISTICAL SUPPLEMENT 5ASSESSED VALUE AND TAXABLE ASSESSED VALUE OF PROPERTY

LAST TEN FISCAL YEARS

56

Ratio of TaxableAssessed Value

to Assessed Value

Maintenance and Operations

(a) Debt Service

(a) Total (a)

81.82% 0.13046$ 0.00892$ 0.13938$

81.69% 0.12983 0.00955 0.13938

81.33% 0.12939 0.00999 0.13938

80.30% 0.12876 0.01062 0.13938

79.66% 0.09471 0.01170 0.10641

81.20% 0.09369 0.01272 0.10641

91.15% 0.09200 0.01441 0.10641

98.84% 0.09011 0.01630 0.10641

91.03% 0.03908 0.01861 0.05769

90.73% 0.03778 0.01994 0.05772

57

Fiscal YearState

Appropriation FTSE

State Appropriation

per FTSE

2006 43,361,661$ 20,509 2,114$

2005 40,035,026 20,393 1,963

2004 40,035,687 19,231 2,082

2003 37,687,883 18,479 2,040

2002 40,482,758 17,066 2,372

2001 39,689,919 15,740 2,522

2000 38,681,465 15,168 2,550

1999 34,152,809 14,828 2,303

1998 32,790,913 14,380 2,280

1997 32,717,529 13,857 2,361

Source:(a) CBM004(b) CBM00C

Note:FTSE is defined as the number of full time students plus total hours taken by part-time students divided by 12.

TARRANT COUNTY COLLEGE DISTRICT

Appropriation per FTSE

STATISTICAL SUPPLEMENT 6STATE APPROPRIATION PER FTSE AND CONTACT HOUR

LAST TEN FISCAL YEARS(UNAUDITED)

58

Academic and Vocational

ContactHours (a)

Continuing Ed Contact Hours (b)

Total Contact Hours

State Appropriation per Contact

Hour

12,868,384 551,891 13,420,275 3.23$

12,863,032 599,602 13,462,634 2.97

12,240,642 527,444 12,768,086 3.14

11,975,560 786,442 12,762,002 2.95

11,084,720 805,832 11,890,552 3.40

10,101,856 745,783 10,847,639 3.66

9,631,808 713,392 10,345,200 3.74

9,484,382 878,104 10,362,486 3.30

10,014,231 734,343 10,748,574 3.05

9,697,284 650,213 10,347,497 3.16

Appropriation per Contact Hour

59

TaxpayerType of

Business 2006 2005 2004

TXU Electric Delivery Co Electric Utility 990,629,437$ 831,870,983$ 823,165,803$ Southwestern Bell Telephone Utility 585,760,329 543,295,213 438,596,910 American Airlines Inc Airline 507,896,741 457,699,736 518,963,195 XTO Energy Inc Natural Gas Utility 377,420,196 Wal-Mart Stores Retail 313,528,707 216,493,522 City Center Development Co Real Estate Development 244,925,000 Chief Oil and Gas Natural Gas Utility 226,205,474 Opryland Hotels Hotel 220,172,829 294,334,545 262,065,747 Bell Helicopter Textron Helicopter Manufacturer 206,682,031 178,588,708 221,674,062 Grapevine Mills Ltd Partnership Retail 190,000,000 164,625,000 165,638,640 Albertson's Inc. Grocery 254,106,622 256,609,612 CAE Simuflite Aviation Training 179,428,518 160,021,402 Alcon Laboratories Pharmaceutical 175,258,683 157,418,524 General Motors Corp Auto Manufacturer 146,282,374 Miller Brewing Co BreweryDelta Airlines AirlineTandy Corp ElectronicsMaguire Thomas Partners Etal Commercial Real Estate DevelopmentAT&T Wireless Services Phone ServiceSabre Group Inc Travel ServicesSimmons Airlines Transportation

Totals 3,863,220,744$ 3,295,701,530$ 3,150,436,269$

Total Taxable Assessed Value 94,937,915,281$ 90,307,593,352$ 85,824,626,139$

TaxpayerType of

Business 2006 2005 2004

TXU Electric Delivery Co Electric Utility 1.04% 0.92% 0.96%Southwestern Bell Telephone Utility 0.62% 0.60% 0.51%American Airlines Inc Airline 0.53% 0.51% 0.60%XTO Energy Inc Natural Gas Utility 0.40% 0.00% 0.00%Wal-Mart Stores Retail 0.33% 0.24% 0.00%City Center Development Co Real Estate Development 0.26% 0.00% 0.00%Chief Oil and Gas Natural Gas Utility 0.24% 0.00% 0.00%Opryland Hotel 0.23% 0.33% 0.31%Bell Helicopter Textron Helicopter Manufacturer 0.22% 0.20% 0.26%Grapevine Mills Ltd Partnership Retail 0.20% 0.18% 0.19%Albertson's Inc. Grocery 0.00% 0.28% 0.30%CAE Simuflite Aviation Training 0.00% 0.20% 0.19%Alcon Laboratories Pharmaceutical 0.00% 0.19% 0.18%General Motors Corp Auto Manufacturer 0.00% 0.00% 0.17%Miller Brewing Co Brewery 0.00% 0.00% 0.00%Delta Airlines Airline 0.00% 0.00% 0.00%Tandy Corp Electronics 0.00% 0.00% 0.00%Maguire Thomas Partners Etal Commercial Real Estate Development 0.00% 0.00% 0.00%AT&T Wireless Services Phone Service 0.00% 0.00% 0.00%Sabre Group Inc Travel Services 0.00% 0.00% 0.00%Simmons Airlines Transportation 0.00% 0.00% 0.00%

Totals 4.07% 3.65% 3.67%

Source:Tarrant Appraisal District

TARRANT COUNTY COLLEGE DISTRICT

(UNAUDITED)

STATISTICAL SUPPLEMENT 7PRINCIPAL TAXPAYERS

LAST TEN FISCAL YEARS

60

2003 2002 2001 2000 1999 1998 1997

846,564,305$ 839,583,792$ 875,022,463$ 877,587,294$ 710,649,334$ 651,744,083$ 637,957,700$ 470,068,460 512,425,251 543,713,065 488,998,360 520,326,410 551,938,684 502,050,067 588,516,683 643,168,139 948,742,168 925,619,003 927,614,077 766,540,409 875,919,902

134,593,816 139,995,820

222,464,282 170,631,765 222,732,189 188,706,124 229,429,124 234,948,367 180,042,006 155,303,450 169,073,223 165,361,083 163,341,649 158,417,638 148,472,356 269,908,710 274,691,171 276,446,566 251,912,645 232,968,417 210,653,568 180,629,430

123,849,576 122,170,358 156,414,441 156,161,741 172,654,831 156,190,981 125,490,690 166,084,296 169,871,353 183,543,455 117,375,490 125,826,249 126,594,363 104,904,758

169,330,570 185,938,527 195,782,354 187,361,548 243,648,852 136,622,772 179,241,607 135,139,115

151,271,780 130,676,200 146,074,517

165,591,539 144,271,139

3,103,179,827$ 3,168,205,235$ 3,677,928,772$ 3,535,611,640$ 3,444,109,924$ 3,231,362,742$ 3,103,158,010$

80,084,299,200$ 74,058,152,416$ 66,423,224,196$ 60,034,345,462$ 54,603,573,315$ 50,660,838,363$ 47,631,095,608$

2003 2002 2001 2000 1999 1998 1997

1.06% 1.13% 1.32% 1.46% 1.30% 1.29% 1.34%0.59% 0.69% 0.82% 0.81% 0.95% 1.09% 1.05%0.73% 0.87% 1.43% 1.54% 1.70% 1.51% 1.84%0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%0.17% 0.19% 0.00% 0.00% 0.00% 0.00% 0.00%0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%0.28% 0.23% 0.34% 0.31% 0.42% 0.46% 0.38%0.19% 0.23% 0.25% 0.27% 0.29% 0.29% 0.00%0.34% 0.37% 0.42% 0.42% 0.43% 0.42% 0.38%0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%0.15% 0.16% 0.24% 0.26% 0.32% 0.31% 0.26%0.21% 0.23% 0.28% 0.00% 0.00% 0.00% 0.25%0.16% 0.17% 0.00% 0.00% 0.00% 0.00% 0.22%0.00% 0.00% 0.25% 0.31% 0.36% 0.37% 0.51%0.00% 0.00% 0.21% 0.00% 0.00% 0.35% 0.28%0.00% 0.00% 0.00% 0.25% 0.24% 0.00% 0.00%0.00% 0.00% 0.00% 0.24% 0.00% 0.00% 0.00%0.00% 0.00% 0.00% 0.00% 0.30% 0.00% 0.00%0.00% 0.00% 0.00% 0.00% 0.00% 0.28% 0.00%

3.88% 4.27% 5.56% 5.87% 6.31% 6.37% 6.51%

Taxable Assessed Value by Tax Year

% of Taxable Assessed Value by Tax Year

61

Levy Cumulative Levy Adjustment

Adjusted Tax Levy

(a)

Collections-Year of Levy(b)

2006 (e) 132,491,200$ 2,065,866$ 134,557,066$ 132,300,437$

2005 125,872,507 123,873,298

2004 119,622,047 117,404,793

2003 111,618,881 109,422,270

2002 78,805,815 76,979,733

2001 70,680,953 69,318,527

2000 63,882,547 62,627,645

1999 58,794,455 57,554,190

1998 29,229,666 28,795,490

1997 27,495,403 27,082,514

Source:Tarrant County Tax Assessor/ Collector and District records.

Notes:(a) As of August 31st of the current reporting year.(b) Property tax only- does not include penalties and interest(c) Represents cumulative collections of prior years not collected in the current year or the year of the tax levy.(d) Represents current year collections of prior years levies.(e) The District previously did not present this schedule and chose to implement prospectively.

TARRANT COUNTY COLLEGE DISTRICT

Fiscal Year Ended

August 31

STATISTICAL SUPPLEMENT 8PROPERTY TAX LEVIES AND COLLECTIONS

LAST TEN FISCAL YEARS(UNAUDITED)

62

PercentagePrior Collections

of Prior Levies (c)

Current Collections

of Prior Levies(d)

Total Collections(b+c+d)

Cumulative Collections

of Adjusted Levy

98.32% $ 132,300,437$ 98.32%

98.41% 905,617 124,778,915 99.13%

98.15% 95,546 117,500,339 98.23%

98.03% 44,334 109,466,604 98.07%

97.68% 27,356 77,007,089 97.72%

98.07% 16,648 69,335,175 98.10%

98.04% 4,634 62,632,279 98.04%

97.89% 2,013 57,556,203 97.89%

98.51% 5,625 28,801,115 98.53%

98.50% 1,214 27,083,728 98.50%

.

63

2006 2005 2004General Bonded Debt General obligation bonds 62,652,263$ 67,958,824$ 72,651,301$

Less: Funds restricted for debt service (4,362,986) (4,245,097) (3,584,893)

Net general bonded debt 58,289,277 63,713,727 69,066,408

Other Debt Revenue bonds

Total Outstanding Debt 58,289,277$ 63,713,727$ 69,066,408$

General Bonded Debt Ratios Per Capita 34.24$ 39.13$ 43.46$

Per FTSE 2,842 3,124 3,591

As a percentage of Taxable Assessed Value 0.06% 0.07% 0.08%

Total Outstanding Debt Ratios Per Capita 34.24$ 39.13$ 43.46$

Per FTSE 2,842 3,124 3,591

As a percentage of Taxable Assessed Value 0.06% 0.07% 0.08%

Notes:Ratios calculated using population and TAV from each year.Debt per student calculated using full-time-equivalent enrollment.

TARRANT COUNTY COLLEGE DISTRICT

LAST TEN FISCAL YEARS(UNAUDITED)

STATISTICAL SUPPLEMENT 9RATIOS OF OUTSTANDING DEBT

64

2003 2002 2001 2000 1999 1998 1997

77,269,432$ 81,544,243$ 85,505,000$ 88,990,000$ 92,585,000$ 96,350,000$ 97,741,872$

(3,490,277) (3,399,243) (2,410,032) (2,239,708) (2,044,251) (1,942,212) (1,692,943)

73,779,155 78,145,000 83,094,968 86,750,292 90,540,749 94,407,788 96,048,929

3,130,000 6,135,000 9,000,000

73,779,155$ 78,145,000$ 86,224,968$ 92,885,292$ 99,540,749$ 94,407,788$ 96,048,929$

47.48$ 53.17$ 57.46$ 61.49$ 65.78$ 70.64$ 73.50$

3,993 4,579 5,279 5,719 6,106 6,565 6,931

0.09% 0.11% 0.13% 0.14% 0.17% 0.19% 0.20%

47.48$ 53.17$ 59.62$ 65.84$ 72.31$ 70.64$ 73.50$

3,993 4,579 5,478 6,124 6,713 6,565 6,931

0.09% 0.11% 0.13% 0.15% 0.18% 0.19% 0.20%

For the Year Ended August 31

65

2006 2005 2004 2003

Taxable Assessed Value 94,937,915,281$ 90,307,593,352$ 85,824,626,139$ 80,084,299,200$

General Obligation Bonds Statutory Tax Levy Limit for Debt Service 474,689,576$ 451,537,967$ 429,123,131$ 400,421,496$

Less Funds Restricted for Repayment of General Obligation Bonds (4,362,986) (4,245,097) (3,584,893) (3,490,277)

Total Net General Obligation Debt 470,326,590 447,292,870 425,538,238 396,931,219

Current Year Debt Service Requirements 8,421,042 8,392,700 8,472,800 8,474,975

Excess of Statutory Limit for Debt Service over Current Requirements 461,905,548$ 438,900,170$ 417,065,438$ 388,456,244$

Net Current Requirements as a % of

Statutory Limit 0.85% 0.92% 1.14% 1.24%

Note:Texas Education Code Section 130.122 limits the debt service tax levy of community colleges to $0.50 per hundred dollarstaxable assessed valuation.

TARRANT COUNTY COLLEGE DISTRICTSTATISTICAL SUPPLEMENT 10

LEGAL DEBT MARGIN INFORMATIONLAST TEN FISCAL YEARS

(UNAUDITED)

66

2002 2001 2000 1999 1998 1997

74,058,152,416$ 66,423,224,196$ 60,034,345,462$ 54,603,573,315$ 50,660,838,363$ 47,631,095,608$

370,290,762$ 332,116,121$ 300,171,727$ 273,017,867$ 253,304,192$ 238,155,478$

(3,399,243) (2,410,032) (2,239,708) (2,044,251) (1,942,212) (1,692,943)

366,891,519 329,706,089 297,932,019 270,973,616 251,361,980 236,462,535

11,660,698 11,602,541 11,765,148 9,212,170 9,493,298 9,856,861

355,230,821$ 318,103,548$ 286,166,871$ 261,761,446$ 241,868,682$ 226,605,674$

2.23% 2.77% 3.17% 2.63% 2.98% 3.43%

For the Year Ended August 31

67

Fiscal Year Operating InterestEnded August 31 Revenue Income Other Total

2006 $ $ $ $

2005

2004

2003

2002 7,520,402 4,917,960 12,986,324 25,424,686

2001 6,873,812 5,156,571 6,966,296 18,996,679

2000 6,577,648 4,241,455 6,303,724 17,122,827

1999 6,579,089 1,703,891 8,221,780 16,504,760

1998

1997

Note:The District only had pledged revenues for fiscal years 1999 - 2002, due to Revenue Bonds beingissued December 1, 1998, with final payment on February 15, 2002.

TARRANT COUNTY COLLEGE DISTRICT

Pledged Revenues

STATISTICAL SUPPLEMENT 11PLEDGED REVENUE COVERAGE

LAST TEN FISCAL YEARS(UNAUDITED)

68

CoveragePrincipal Interest Total Ratio

$ $ $

3,130,000 67,905 3,197,905 7.95

3,005,000 169,900 3,174,900 5.98

2,865,000 276,276 3,141,276 5.45

231,819 231,819 71.20

Debt Service Requirements

69

District District DistrictCalendar District Personal Personal Income Unemployment

Year Population Income Per Capita Rate

2006 1,702,250 58,372,241,353$ 34,291$ 5.00%

2005 1,628,200 55,068,152,220 33,821 5.70%

2004 1,589,200 51,951,087,000 32,690 5.82%

2003 1,553,850 49,151,450,000 31,632 6.10%

2002 1,469,787 47,735,316,000 32,478 6.20%

2001 1,446,219 47,011,291,000 32,506 5.10%

2000 1,410,740 44,068,188,000 31,238 4.30%

1999 1,376,500 40,231,412,000 29,227 4.40%

1998 1,336,500 37,753,717,000 28,248 3.40%

1997 1,306,800 34,479,701,000 26,385 3.50%

Sources:Population from US Bureau of the Census.Personal Income from US bureau of Economic Analysis.Unemployment rate from Texas Workforce Commission

TARRANT COUNTY COLLEGE DISTRICT

(UNAUDITED)

STATISTICAL SUPPLEMENT 12DEMOGRAPHIC AND ECONOMIC STATISTICS - TAXING DISTRICT

LAST TEN FISCAL YEARS

70

EmployerNumber of Employees

Percentage of Total Employment

Lockheed Martin Corp 16,800 1.03%

University of Texas at Arlington 5,079 0.31%

American Airlines 5,011 0.31%

Tarrant County Administrative Office 4,141 0.26%

American Airlines/ HQ 4,118 0.25%

Harris Methodist Fort Worth 4,000 0.25%

NAS Fort Worth Joint Reserve Base 3,906 0.24%

Harris Methodist Southwest 3,789 0.23%

Cook Children's Health Care System 3,740 0.23%

John Peter Smith Hospital 3,473 0.21%

54,057 3.33%

Source:North Central Texas Council of Governments

Note:The District previously did not present this schedule and chose to implement prospectively.

TARRANT COUNTY COLLEGE DISTRICT

(UNAUDITED)

STATISTICAL SUPPLEMENT 13PRINCIPAL EMPLOYERSCURRENT FISCAL YEAR

71

2006 2005 2004 2003Faculty

Full-Time 522 494 478 485 Part-Time 437 436 400 390

Total 959 930 878 875

PercentFull-Time 54.4% 53.1% 54.4% 55.4%Part-Time 45.6% 46.9% 45.6% 44.6%

Staff and AdministratorsFull-Time 1,072 1,076 1,064 1,101 Part-Time 1,039 1,058 991 976

Total 2,111 2,134 2,055 2,077

PercentFull-Time 50.8% 50.4% 51.8% 53.0%Part-Time 49.2% 49.6% 48.2% 47.0%

FTSE per Full-Time Faculty 39 41 40 38 FTSE per Full-Time Staff Member 19 19 18 17

Average Annual Faculty Salary (a) 54,122$ 54,956$ 52,641$ 51,910$

Note:(a) Survey format and methodology were changed FY 2003

(UNAUDITED)

TARRANT COUNTY COLLEGE DISTRICTSTATISTICAL SUPPLEMENT 14

FACULTY, STAFF AND ADMINISTRATORS STATISTICSLAST TEN FISCAL YEARS

72

2002 2001 2000 1999 1998 1997

471 461 449 455 453 469 373 349 325 291 256 240

844 810 774 746 709 709

55.8% 56.9% 58.0% 61.0% 63.9% 66.1%44.2% 43.1% 42.0% 39.0% 36.1% 33.9%

1,080 1,033 981 937 905 879 918 826 783 696 666 666

1,998 1,859 1,764 1,633 1,571 1,545

54.1% 55.6% 55.6% 57.4% 57.6% 56.9%45.9% 44.4% 44.4% 42.6% 42.4% 43.1%

36 34 34 33 32 30 16 15 15 16 16 16

73

Student Classification Number Percent Number Percent

00-30 hours 25,784 67% 26,774 70%31-60 hours 9,536 25% 9,413 25%Unclassified 965 2% 1,605 4%Associates 1,485 4% 146 0%Bachelors 818 2% 336 1% Total 38,588 100% 38,274 100%

Semester Hour Load

0-11 semester hours 24,696 64% 24,113 63%12 & over 13,892 36% 14,161 37% Total 38,588 100% 38,274 100%

Average course load 8.70 8.41

Tuition Status

Texas Resident (in-District) 34,242 89% 34,164 90%Texas Resident (out-of-district) 3,171 8% 3,050 8%Non-Resident Tuition 1,175 3% 1,060 2% Total 38,588 100% 38,274 100%

Source: CBM001

Note:A change in administrative software changed the data accumulation beginning Fall 2004.

Fall 2005 Fall 2004

LAST FIVE FISCAL YEARS(UNAUDITED)

TARRANT COUNTY COLLEGE DISTRICTSTATISTICAL SUPPLEMENT 15

ENROLLMENT DETAILS

74

Student Classification Number Percent Number Percent Number Percent

00-30 hours 20,143 58% 18,917 57% 17,009 56%31-60 hours 7,912 23% 7,489 23% 6,931 23%Unclassified 6,598 19% 6,423 20% 6,180 21% Total 34,653 100% 32,829 100% 30,120 100%

Semester Hour Load

Less than 6 8,472 24% 8,278 25% 7,570 25%6-8 semester hours 9,304 27% 8,238 25% 7,546 25%9-11 semester hours 5,599 16% 5,439 17% 4,805 16%12-14 semester hours 9,230 27% 8,873 27% 8,393 28%15-17 semester hours 1,782 5% 1,754 5% 1,641 5%18 & over 266 1% 247 1% 165 1% Total 34,653 100% 32,829 100% 30,120 100%

Average course load 8.46 8.49 8.42

Tuition Status

Texas Resident (in-District) 31,244 90% 29,761 92% 27,362 92%Texas Resident (out-of-district) 2,783 8% 2,485 8% 2,218 8%Non-Resident Tuition 626 2% 583 0% 540 0% Total 34,653 100% 32,829 100% 30,120 100%

Fall 2001Fall 2003 Fall 2002

75

Gender Number Percent Number PercentFemale 22,869 59.3% 24,946 65.2%Male 15,719 40.7% 13,328 34.8% Total 38,588 100.0% 38,274 100.0%

Ethnic OriginWhite 24,152 62.6% 24,271 63.4%Hispanic 6,310 16.3% 5,832 15.2%African American 5,366 13.9% 5,348 14.0%Asian 2,058 5.3% 1,989 5.2%Native American 214 0.6% 233 0.6%Other 488 1.3% 601 1.6% Total 38,588 100.0% 38,274 100.0%

AgeUnder 17 95 0.3% 75 0.2%17 682 1.8% 690 1.8%18 4,464 11.6% 4,422 11.5%19-21 12,664 32.8% 12,511 32.7%22-24 6,576 17.0% 6,481 16.9%25-30 5,959 15.4% 5,776 15.1%31-35 2,906 7.5% 2,916 7.6%36-50 4,412 11.4% 4,653 12.2%51-64 758 2.0% 690 1.8%65 and Older 72 0.2% 60 0.2% Total 38,588 100.0% 38,274 100.0%

Average Age 25.5 25.5

Source:CBM001

Note:A change in administrative software changed the data accumulation beginning Fall 2004.

Fall 2005 Fall 2004

TARRANT COUNTY COLLEGE DISTRICT

(UNAUDITED)

STATISTICAL SUPPLEMENT 16STUDENT PROFILE

LAST FIVE FISCAL YEARS

76

Gender Number Percent Number Percent Number PercentFemale 20,360 58.8% 19,053 58.0% 17,300 57.4%Male 14,293 41.2% 13,776 42.0% 12,820 42.6% Total 34,653 100.0% 32,829 100.0% 30,120 100.0%

Ethnic OriginWhite 22,312 64.4% 21,684 66.0% 20,245 67.2%Hispanic 5,282 15.2% 4,656 14.2% 4,132 13.7%African American 4,666 13.5% 4,175 12.7% 3,634 12.1%Asian 1,912 5.5% 1,859 5.7% 1,734 5.7%Native American 261 0.8% 249 0.8% 228 0.8%Other 220 0.6% 206 0.6% 147 0.5% Total 34,653 100.0% 32,829 100.0% 30,120 100.0%

AgeUnder 21 12,257 35.4% 11,690 35.6% 10,948 36.3%21-25 10,242 29.5% 9,540 29.1% 8,423 28.0%26-30 3,991 11.5% 3,739 11.4% 3,363 11.2%31-35 2,755 7.9% 2,565 7.8% 2,353 7.8%36-40 2,002 5.8% 1,957 5.9% 1,882 6.2%41-45 1,583 4.6% 1,568 4.8% 1,466 4.9%Over 45 1,823 5.3% 1,770 5.4% 1,685 5.6% Total 34,653 100.0% 32,829 100.0% 30,120 100.0%

Average Age 26.2 26.2 26.1

Fall 2001Fall 2003 Fall 2002

77

Institution Total Transfers % of Transfer Students

TCU 276 3.38%

TWC 376 4.61%

UT-Arlington 1,734 21.25%

NTSU 549 6.73%

TWU 124 1.52%

UT-Dallas 16 0.19%

U of Dallas 13 0.16%

Bishop College 3 0.04%

Dallas Baptist 80 0.98%

ETSU 43 0.53%

DCCCD 587 7.19%

Hill JC 249 3.05%

Weatherford 319 3.91%

UT-Austin 88 1.08%

U of Houston 17 0.21%

Texas A&M 144 1.76%

Texas Tech 178 2.18%

Tarleton 148 1.81%

Other Texas 3,217 39.42%

Total 8,161 100.00%

TARRANT COUNTY COLLEGE DISTRICT

(INCLUDES ONLY PUBLIC SENIOR COLLEGES IN TEXAS)

STATISTICAL SUPPLEMENT 17TRANSFER TO SENIOR INSTITUTIONS

2000 FALL STUDENTS AS OF FALL 2001

78

2006

Academic Buildings 42Square footage 1,611,000

Libraries 4Square footage 113,000Number of Volumes 255,062

Administrative and support buildings 8Square footage 66,000

Dining Facilities 4Square footage 61,000Average daily customers 1075

Athletic Facilities 12Square footage 166,000Gymnasiums 4Fitness Centers 4Tennis Courts 4

Plant facilities 11Square footage 56,000

TransportationCars 22Light Trucks/Vans 128

Note:The District previously did not present this schedule and chose to implement prospectively.

TARRANT COUNTY COLLEGE DISTRICTSTATISTICAL SUPPLEMENT 18CAPITAL ASSET INFORMATION

FISCAL YEAR 2006

79

1 of 2

Pass Pass ThroughFederal Through DisbursementsCFDA Grantor's and

Number Number Expenditures

U.S. DEPARTMENT OF EDUCATIONFederal Direct Programs Federal Supplemental Educational Opportunity Grant 84.007 870,489$ Federal Work Study 84.033 468,025 TRIO Student Support Services 84.042A 287,752 TRIO Upward Bound 84.047 262,857 Federal Pell Grant 84.063 17,266,524 Direct Loans 84.268 5,823,265 Katrina Relief 84.375 22,077 Academic Competitiveness 84.938E 71,075 Total Direct from U.S. Department of Education 25,072,064

Pass-Through from: Texas Education Agency Adult Basic Education 84.022 220-905 259,754 Texas Higher Education Coordinating Board Carl Perkins Postsecondary Vocational Education 84.048 54243 33,820

64243 546,594 580,414

Leveraging Educational Assistance Partnership 84.069A 9601625M006 19,493 9700093M005 20,188

39,681

Special Leveraging Educational Assistance Partnership 84.069B 9601626M006 33,589 9700094M005 31,746

65,335

Byrd Scholarship 84.185 1,500

Dallas County Community College District Carl Perkins Tech-Prep Program 84.243 51707 5,756

61707 190,035 195,791

Total U.S. Department of Education 26,214,539

U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENTPass-Through from: Fort Worth Housing Authority Economic Development and Supportive Services Grant 14.863 11-9913 470 Resident Opportunity and Supportive Services 14.870 82,615

Total U.S. Department of Housing , etc 83,085

U.S. DEPARTMENT OF LABORPass-Through from: Tarrant County Local Workforce Development Board Workforce Investment Act Basic Education Skills Training Program 17.259 06-YC-WIA-005 37,325 Pass-Through from: Eastfield College Automotive Technologies Technical Education Project 17.261 AF-14573-05-60 127,781

Total U. S. Department of Labor 165,106

TARRANT COUNTY COLLEGE DISTRICTSCHEDULE E

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDSYEAR ENDED AUGUST 31, 2006

Federal Grantor/Pass-Through Grantor/

Program Title

81

2 of 2

Pass Pass ThroughFederal Through DisbursementsCFDA Grantor's and

Number Number Expenditures

U.S. GENERAL SERVICES ADMINISTRATIONPass-Through from: Texas Building and Procurement Commission Federal Surplus Personal Property 39.003 1,854$

NATIONAL SCIENCE FOUNDATIONFederal Direct Programs Computer Sci, Engineering and Math Scholarships (CSEMS) 47.076 149,555 Aircraft Technology Education and Training 47.076 165,992

Total Direct From National Science Foundation 315,547 Pass-Through from: Collin County Community College Convergence Technology 47.076 28,785

Total National Science Foundation 344,332

U.S. SMALL BUSINESS ADMINISTRATIONPass-Through from: North Texas Small Business Development Center Small Business Development Center 59.037 5-603001-2-0046-19 6,790

6-603001-2-0046-20 129,788 Total U.S. Small Business Administration 136,578

U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICESPass-Through from: Texas Education Agency 93.558 220-905 38,793 Texas Department of Protective and Regulatory Services Shaken Baby Syndrome Project 93.643 99020429 142,892 National Institute of General Medical Sciences North Texas Transition Program Biomedical Science 93.960 2R25GM58397-03 14,651

Total U.S. Department of Health and Human Services 196,336

Total Federal Financial Assistance 27,141,830$

(1) Clustered Student Financial Aid Programs(2) Clustered TRIO Programs

The Notes to Schedule on Following Page

TARRANT COUNTY COLLEGE DISTRICT

Pass-Through Grantor/Program Title

SCHEDULE ESCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

YEAR ENDED AUGUST 31, 2006

Federal Grantor/

82

TARRANT COUNTY COLLEGE DISTRICT NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

NOTE 1: Federal Assistance Reconciliation Federal Revenues – per Schedule of Expenditures of Federal Awards: Federal Grants and Contracts – per Schedule A $ 21,318,565 Direct Loans 5,823,265 Total Federal Revenues per Schedule of Expenditures of Federal Awards $ 27,141,830

NOTE 2: Significant Accounting Policies Used in Preparing the Schedule

The expenditures included in the schedule are reported for the District’s fiscal year. Expenditure reports to funding agencies are prepared on the award period basis. The expenditures reported above represent funds which have been expended by the District for the purposes of the award. The expenditures reported above may not have been reimbursed by the funding agencies as of the end of the fiscal year. Some amounts reported in the schedule may differ from amounts used in the preparation of the financial statements. Separate accounts are maintained for the different awards to aid in the observance of limitations and restrictions imposed by the funding agencies. Management believes they have followed all applicable guidelines issued by various entities in the preparation of the schedule.

NOTE 3: Student Loans Processed and Administrative Costs Recovered

Total Loans Admin Processed & Federal Grantor/ New Loans Cost Admin Cost CFDA Number/Program Name Processed Recovered Recovered

U.S. Department of Education:

84.268 Direct Loans $ 5,823,265 $ $ 5,823,265

83

TARRANT COUNTY COLLEGE DISTRICT FEDERAL SCHEDULE OF FINDINGS AND QUESTIONED COSTS

FOR THE YEAR ENDED AUGUST 31, 2006 Section I. Summary of Auditor’s Results

Financial Statements The type of auditor’s report issued: Unqualified Internal Control over Financial reporting:

Material weakness(es) identified yes X no •

Reportable conditions(s) identified that are not considered to be material weaknesses? yes X none reported

•

Noncompliance material to financial statements noted? yes X no Federal Awards Internal control over major programs: Material weakness(es) identified yes X no •

Reportable condition(s) identified

that are not considered to be material weakness(es)? yes X none reported

•

Type of auditor’s report issued on compliance for major programs: Unqualified Any audit findings disclosed that are required to be reported in accordance with section 510(a) of Circular A-133? X yes no Identification of major programs: Various Student Financial Assistance Cluster Dollar threshold used to distinguish between type A and type B programs: $639,512 Auditee qualified as low-risk auditee? X yes no

87

TARRANT COUNTY COLLEGE DISTRICT FEDERAL SCHEDULE OF FINDINGS AND QUESTIONED COSTS

FOR THE YEAR ENDED AUGUST 31, 2006 Section II. Financial Statement Findings

There were no findings relating to internal control or compliance which are required to be reported in accordance with Government Auditing Standards.

Section III. Federal Award Findings and Questioned Costs Reference No. Program 06-1 Texas Workforce Commission- Self-Sufficiency Fund 0504SSF000 Criteria: The Texas Workforce Commission specifies the required trainee data that is to be provided by the District for program services provided under the Self-Sufficiency Grant. The Texas Workforce Commission also specifies the contract start and end time for the program services provided under the Self-Sufficiency grant.

Condition: The District could not provide information and data for 108 of the trainees. Some of the trainees commenced program services prior to the contract start date or after the expiration of the contract. The costs associated with these services totaled $223,194. Effect: The expense of these trainees was disallowed. Cause: The District was not tracking trainees due to lack of current contact information. The District allowed some trainees to commence services prior to the contract start date, or after the expiration of the contract Recommendation: The responsible District official should be reminded of the procedures in place to track trainee information and data required by the agency. The responsible District official should also be reminded of the procedures in place to ensure the commencement of services are prior to the contract start date and prior to the expiration of the contract.

Section IV. Corrective Action Plan 06-1: The District will ensure rules and guidelines are in place for monitoring grant regulations in order to adequately track data that is necessary to submit requests for reimbursement from the agency. The District will also ensure rules and guidelines are in place for monitoring grant time requirements. Section V. Prior Year Audit Findings The prior year audit of federal awards disclosed no findings that were required to be reported.

88

Grant Contract Number Expenditures

TEXAS WORKFORCE COMMISSIONSkills Development - LG Electronics 0506SDF000 67,487$ Skills Development - EFW 0505SDF000 124,375

Total Texas Workforce Commission 191,862

TEXAS EDUCATION AGENCYAdult Basic Education Program 220-905 44,752

TEXAS HIGHER EDUCATION COORDINATING BOARDToward Excellence, Access & Success Grant I 9600327M005, 9600564M002 775,273 Toward Excellence, Access & Success Grant II 9601984M009, 9600416M001 110,564 Texas College Work Study 9600218M032 58,615 B-On-Time 9620003L037 21,296 Texas State Nursing 9600792M002 11,849 First Generation Resources for Academic Development Success 9600048M001 108,826

Total Texas Higher Education Coordinating Board 1,086,423

DALLAS COUNTY COMMUNITY COLLEGESmall Business Development Center 5-603001-Z-0046-19 34,816

6-603001-Z-0046-20 19,258 54,074

Total State Financial Assistance 1,377,111$

The Notes to Schedule on Following Page

Grant Agency / Program Title

TARRANT COUNTY COLLEGE DISTRICTSCHEDULE F

SCHEDULE OF EXPENDITURES OF STATE AWARDS YEAR ENDED AUGUST 31, 2006

89

TARRANT COUNTY COLLEGE DISTRICT NOTES TO SCHEDULE OF EXPENDITURES OF STATE AWARDS

NOTE 1: State Assistance Reconciliation State Revenues – per Schedule of Expenditures of State Awards: State Grants and Contracts – per Schedule A $ 1,377,111 Total State Revenues per Schedule of Expenditures of State Awards $ 1,377,111 NOTE 2: Significant Accounting Policies Used in Preparing the Schedule

The expenditures included in the schedule are reported for the District’s fiscal year. Expenditure reports to funding agencies are prepared on the award period basis. The expenditures reported above represent funds, which have been expended by the District for the purposes of the award. The expenditures reported above may not have been reimbursed by the funding agencies as of the end of the fiscal year. Separate accounts are maintained for the different awards to aid in the observance of limitations and restrictions imposed by the funding agencies. Management believes they have followed all applicable guidelines issued by various entities in the preparation of the schedule.

90

TARRANT COUNTY COLLEGE DISTRICT STATE SCHEDULE OF FINDINGS AND QUESTIONED COSTS

FOR THE YEAR ENDED AUGUST 31, 2006 Section I. Summary of Auditor’s Results

Financial Statements The type of auditor’s report issued: Unqualified Internal Control over Financial reporting:

Material weakness(es) identified yes X no •

Reportable conditions(s) identified that are not considered to be material weaknesses? yes X none reported

•

Noncompliance material to financial statements noted? yes X no

State Awards Internal control over major programs: Material weakness(es) identified yes X no •

Reportable condition(s) identified

that are not considered to be material weakness(es)? yes X none reported

•

Type of auditor’s report issued on compliance for major programs: Unqualified Any audit findings disclosed that are required to be reported in accordance with section 510(a) of the Uniform Grant Management Standards Single Audit Circular? yes X no Identification of major programs: 9600327M005 Toward Excellence, Access & Success - Initial

9600564M002 Toward Excellence, Access & Success - Renewal Dollar threshold used to distinguish between type A and type B programs: $300,000 Auditee qualified as low-risk auditee? X yes no

93

TARRANT COUNTY COLLEGE DISTRICT STATE SCHEDULE OF FINDINGS AND QUESTIONED COSTS

FOR THE YEAR ENDED AUGUST 31, 2006 Section II. Financial Statement Findings

There were no findings relating to internal control or compliance which are required to be reported in accordance with Government Auditing Standards and UGMS.

Section III. State Award Findings and Questioned Costs

There were no findings relating to internal control or compliance which are required to be reported in accordance with Government Auditing Standards and UGMS.

Section IV. Corrective Action Plan

The current year audit of state awards disclosed no findings that require a corrective action plan.

Section V. Prior Year Audit Findings Reference No. Program 05-1 Texas Workforce Commission – Skills Development, Bell Helicopter 0104SDF000

Condition: The District provided 19 courses under this Skills Development grant which were not specified within the grant contract. The costs associated with these courses totaled $57,585. Recommendation: The responsible District official should be reminded of the procedures in place to ensure that grantor approval is obtained. Current Status: The recommendation was adopted in November 2005. No similar findings were noted in the 2006 audit.

05-2 Texas Workforce Commission – Skills Development, Bell Helicopter 0104SDF000

Condition: The District purchased equipment items which were not specified within the grant contract. These items had an aggregate cost of $6,151. Recommendation: The responsible District official should be reminded of the procedures in place to ensure that grantor approval is obtained. Current Status: The recommendation was adopted in November 2005. No similar findings were noted in the 2006 audit.

94