BENTONVILLE -- Evelyn Jorgenson received a message from the NorthWest Arkansas Community College board before they picked her as the college's next president: Get in the black and stay there.
The board's determination to erase the college's deficit became clear in her interviews for the job, Jorgenson said. The college ran a $1.2 million deficit out of $40.2 million spent in the fiscal year ending June 30, 2012. It had a smaller deficit the year before.
The school also faced dropping enrollment. The problems weren't severe, but they were inter-related, Jorgenson said.
"If your enrollment drops, your state funding is cut," said Shane Broadway, director of the state Department of Higher Education. "The higher education funding formula is not like the school funding formula. If a public school loses enrollment, there's a three-year phase-in of the cut. They didn't have that."
Fee increases for students erased the deficit for the fiscal year ending June 30, 2013, the day before Jorgenson assumed the presidency. Expenses were still growing, and there was the matter of paying back the $1.6 million taken from reserve during deficit years.
Neither Jorgenson nor her administrative staff wanted to keep increasing fees, said the president and the college's chief financial officer, Debi Buckley. The administration decided to tighten spending in areas not directly related to classroom instruction.
The college expects to end this fiscal year June 30 in the black and also to finish paying back the $1.6 million by that date. Administrators also presented a balanced budget to the board in April for the coming fiscal year, which begins July 1. The new budget includes no fee increases, will give the staff a 1 percent raise and reduce spending by 2.9 percent from this fiscal year.
The school also can afford its planned expansion into Washington County, Jorgenson said.
"We've made it very clear throughout the process that we'll purchase the land, but the facilities themselves will have to be built by philanthropy," she said.
Once buildings are built, growth in students will pay operating expenses. That's what tuition and state money are for, Jorgenson said.
No one person could have gotten the college back on track, at least not in the way it was done at here, said Bill Stovall, executive director of the Arkansas Association for Two-Year Colleges.
"It's clear from the figures that the president, her administrative team and the board of trustees were on the same sheet of music from the start," Stovall said. "They made tough choices."
Across-the-board administrative budget cuts require unity among administrators and between the administration and the governing board, Stovall said. Stovall, like Broadway, is a former state legislator who served as speaker of the House in his last term. Stovall compared the college's changes to making tough budget decisions in the House, which is required by the state constitution to pass a balanced budget.
"You have to have a team atmosphere among the leadership, because any weak point is going to have a wedge driven in it by somebody who wants to stop it," Stovall said.
Ric Clifford, chairman of the college's board, agreed with Stovall's assessment.
"We knew when we hired her she was a fiscal conservative," Clifford said of Jorgenson. "She's taken a sharp pencil to the budget and found a million dollars $18,000 and $20,000 at a time."
The cost-conscious tone was set in Jorgenson's first meeting with top administrators, said Steven Hinds, the school's executive director of public relations and marketing. At one point in that meeting, Jorgenson read a list of magazine subscriptions the college paid for, he said.
"When your new boss calls her first big meeting of administrators and goes down a list of magazine subscriptions, saying 'OK, who subscribes to this? You do? Do you read it?' it makes an impression," he said.
There was no one, glaring area that needed fixing, Jorgenson said. The college was never extravagant in its spending, she said. Broadway agreed, and his department oversees the college's budget.
"It was clear that the college was already getting its spending back in line before Dr. Becky Paneitz left," he said. Paneitz, who retired in 2013, was Jorgenson's predecessor.
Jorgenson found her administrators agreed cost savings wouldn't come at the expense of academics.
Magazine subscriptions, membership and dues paid to professional organizations, travel expenses, bookkeeping practices, what the college paid for insurance, which contracts they had for telephone service, how much it paid for staff cellular phones -- all that and more came under review. And the process goes on, Jorgenson and Buckley said.
There are no significant savings without cuts in personnel, Stovall said.
"Higher education is a high human-resource service, and if you're going to save money that's where the savings have to come from," he said.
The college offered retirement incentives and 11 employees took advantage of it, Jorgenson said. The college replaced them, but with employees with less seniority and a lower rate of pay. That alone saved an estimated $123,000 annually.
In addition, two vice-president's positions and an associate vice-president's post weren't filled after they became vacant.
"Leaving them unfilled wasn't without pain," Jorgenson said. "People had to step up. The job duties had to be picked up by other people."
To this day, no vacancy in an administration position is automatically refilled. Every departure prompts a discussion of whether and how it should be refilled, Jorgenson and Buckley said.
The school also closed a cafe it was operating at the Center for Nonprofits at Rogers, saving $60,000 to $70,000 a year, Jorgenson said.
Cutting business travel saved another $45,000 a year and dropping membership in college-related professional organizations saved another $18,000. Fewer memberships meant fewer conferences to travel to.
"Even the ones we still went to, we might send three people instead of five," Jorgenson said. "Or we might set up a 'webinar' and not travel at all."
Touchnet is an all-electronic, largely automated student payment method at the college. That was improved and expanded for an overall savings of $70,000, Buckley said. That change proved fortunate during the winter.
"Students receiving student aide needed their refunds, the amount of money left over after their student aid pays tuition and books," Buckley said.
"This year, refund day was a snow day. We had a lot of worried calls about whether they were going to get their refund. People had rent to pay and other expenses and were counting on that refund. We had to have an administrator sign on to a computer at home, but we were able to do it."
Another $41,000 was saved by changing telephone service contracts. This change also allowed the college to replace two telephone systems with one. A single system also saved money by allowing the college to eliminate an information technology position.
Jorgenson said the school bought insurance with a higher deductible but lower rates, saving enough money that it was able to buy insurance against electronic hacking. Net savings on insurance were still $18,000, Buckley said. A renegotiated long-distance telephone service contract saved another $40,000.
Being a new president helped Jorgenson find ways to cut spending.
"I had to get into the details and learn the budget anyway," she said. "This way, I could take a look at every expense and recommend changes at the same time."
Another help in making the changes was the shift in attitude among administrators when the college stopped growing and lost enrollment, Buckley said.
"The first year it happened, people thought, 'Oh, this is a fluke. It will get back to normal,'" she said. "Then it happened again. Then people thought, 'OK. We're going to have to do things differently.'"
Enrollment increased every year from the college's opening in 1990 through 2011. In September 2012 the number of credit hours taken at the college and students taking them both fell for the first time.
Total enrollment in September 2012 was 8,418, down from 8,528 from the previous year. Total credit hours being taught dropped 2.89 percent from 80,059 in 2011 to 77,745. In September 2013, 8,102 students enrolled for 74,887 credit hours, a 3.7 percent drop in credit hours taken.
The school had been in growth mode for so many years, it needed a president who knew there were other phases in the life of a college, Clifford said.
Growth is generally assumed to be good, but the drop-off in growth probably gave the college a badly needed breathing space, Broadway said. While the drop-off cost revenue, it also slowed down the need for expansion plans and all the costs that go with them.
Jorgenson agreed, saying the curtailment in growth had "advantages and disadvantages." The college coped by hiring fewer part-time teachers.
"If enrollment had gone up again, we could have added more," she said.
NW News on 06/15/2014