With Northwest College facing budget cuts of $875,000 and possibly more, NWC President Paul Prestwich said he plans to be proactive in planning for those cuts.

The three main areas for possible cuts, he told the Northwest College Board of Trustees at its meeting on Monday, are:

• Non-salary operating expenses.

• Staff reductions through not filling open positions, not hiring for planned new positions and by restructuring positions, programs and departments. One example, he said, was eliminating one of the seven academic divisions at the college and moving programs in that division to other divisions.

Prestwich noted that any decision not to fill a position will be made on a case-by-case basis. For instance, administrators still plan to hire a criminal justice instructor to fill a position in the college's recently-approved criminal justice program.

• A possible reduction in force through layoffs.

Heather Kobbe, NWC director of human resources, said any reduction in force would be based first on areas where reductions could be made without compromising student services or academic programs, and then by selecting staff or faculty members in those areas with the least seniority.

Any reduction in force would require the board's approval, Prestwich said. If that became necessary, Prestwich told the board, “I would come to the board in one month and ask you to do that.”

With or without a reduction in force, Prestwich said the college will give a 2.5 percent raise to college employees if that money is approved through the state block grant.

“Some might question why we would provide raises during a time of budget cuts,” he said in an update to the campus community last week. “However, the governor has stated if this external cost adjustment is given to higher education, it must be used for raises.”

Prestwich noted the 2.5 percent raise would be less than the anticipated 4 percent previously planned by supplementing state funds with local money.

In the update, Prestwich outlined several principles administrators will follow as they make difficult budgetary decisions:

“We will focus on our primary mission of serving the educational needs of our students and our communities,” he said. “We will make strategic decisions that will enable us to come out of these challenging economic times as an even stronger college.

“Sustainability will be a focus. We have the reserves that can provide a small cushion. However, as I have mentioned, using reserves for ongoing expenditures would create only temporary assistance to our budget. We have long-term budget issues we need to address. Additionally, the governor is wisely expecting that proposed cuts be both ‘realistic and sustainable.'

“Even while we are cutting expenses, we need to continue to make investments — in our people, technology, equipment, infrastructure, etc. — that will position us to implement our strategic plan,” he continued. “This will be done primarily through our action resource plan process and through a process that will prioritize facilities improvement and renovation projects ... We may need to spend some of our reserves on one-time projects and/or equipment, even while we are reducing our ongoing expenditures.”

Prestwich told the board the college could see revenue reductions from several sources.

The first, and largest, is a planned reduction in the state block grant that funds much of the college's expenses.

Prestwich said Gov. Dave Freudenthal has instructed all state agencies, including the colleges, to plan ahead for budget cuts of 5 to 10 percent.

“We're going to focus on 5 percent, which is the most likely scenario,” he said. That would mean cutting $525,000 from the budget.

But college administrators will identify additional cuts would have to be made if the governor cuts spending by 10 percent instead, he said.

“I think we're going to build two budgets,” Prestwich told the board.

Another $350,000 reduction is possible in local tax revenue and investment revenue, he said.

In addition, Prestwich said the next state college funding formula, which still is being developed, could be less favorable for Northwest College than the current funding model. That formula is expected to be implemented for the 2010-11 academic year.

He said Freudenthal has ordered a study of fixed vs. variable costs at the state's seven community colleges.