NWACC cuts nearly $2 million from budget (updated)

BENTONVILLE — The NorthWest Arkansas Community College Board of Trustees found another $900,000 in proposed, deeper budget cuts during Monday’s (Oct. 8) meeting. The cuts come from freezing many unfilled positions throughout the college.

This is in addition to cuts that were already discussed during the September board meeting. The budget cuts, which total $1.8 million, received final board approval Monday.

College officials knew they would have a budget shortfall for fiscal year 2013 and took several measures to close that gap. The college had projected a 1% enrollment increase but instead experienced the first decrease in the college’s history. The decreased enrollment made further cuts necessary because it meant a $785,000 decrease in projected revenue.

There was also a decrease in the projected beginning fund balance, which meant even a wider gap between expenses and revenue this year.

Ultimately, college officials sought out $923,000 in potential cuts. By freezing more than two dozen open positions, the college will save nearly $939,000. No positions with someone serving in that position is being removed, meaning these cuts do not involve any kind of reduction in force.

“These are positions that we can do without for now but they are not frozen for ever more,” said Wyley Elliott, vice president for public relations and development.

The positions include both administrative and classified staff. The responsibilities that would normally be held by people in those positions are being spread to other staff, he said.

There was also discussion about reducing operational costs further. These potential cuts would have a low impact on the budget but would have a negative impact on students, Elliott said.

By slashing expenses by $938,000 the college will be making up for the lost tuition revenue and it further decreases the initial budget shortfall to $1.2 million.

Although they were pleased with the efforts to reduce the negative impact on the budget, board members were still cautious about the impending shortfall.

“We’ve shown real improvement but we as a board need to keep an eye on that,” said board member Mark Lundy.

On a more positive note, the college received its annual state audit of NWACC’s finances. The audit found no problems in the college’s financial practices. The problem of facing budget shortfalls is the “new normal” for institutions of higher education nationwide, President Becky Paneitz said. Most of the state’s community colleges have experienced a budget shortfall in recent years and declining enrollments across the country are affecting budgets.

The board members briefly discussed how they would handle further shortfalls in coming years.

The college has three funding sources: tuition, state funding and the 2.6-mill property tax. The millage rate has remained consistent, but the amount the college receives varies with property values.

The college continues to receive 49% of its budgeted need from the state, an issue that has long frustrated college officials and supporters because it is largely out of their control to increase that percentage.

College officials and advocates continue to lobby the Arkansas State Legislature and higher education advocates for the college to receive more equitable funding.

The third component is more within the college’s control and that’s tuition. Students faced tuition increases across the board this year. Tuition rose 3.45% (from $72.50 to $75 per credit hour) for students living in the NWACC tax district. Students out of district are paying 4.25% more (from $117.50 to $122.50 per credit hour). Out-of-state residents saw a 4.48% increase (from $167.50 to $175 per credit hour) this year.

The college receives philanthropic money and grant money but that money is directed for specific purposes such as buildings, scholarships and special programs.

The board did not discuss seeking additional tuition hikes or a millage increase during Monday evening's meeting.

In other NWACC-related news, the board recognized Jim Hall, executive director of government relations, for winning the District 4 Communicator of the Year Award from the National Council for Marketing and Public Relations; and the Public Relations staff for winning several awards from the NCMPR including gold for a social media campaign, silver for “communication of a success story,” and a bronze for the college’s internal publication Insights.