Thursday, December 27, 2007

“It Lasted Four Years”

Our school leaders are fond of saying that the last operating levy, passed in 2004, has lasted one year longer than expected.

That one can slide right by unless you stop to think about it a minute.

The tendency is to interpret that statement as meaning that a fixed amount of money was raised by the levy, and that fixed amount was stretched out over four years instead of three. Kind of like giving your kid a $10 weekly allowance and having him tell you at the end of the third week that he had spent only $20 so far and with the other $10 still in his pocket, could go another week with getting any additional allowance. Like that is ever going to happen…

But it's not the same. That 9.5 mill permanent operating levy we passed in 2004 generates on the order of $20 million every year whether or not the Board asks for more money. Being able to wait one more year before asking for more money doesn't mean they stretched three year's worth of money over four years. Rather it means that the growth in spending has been less than forecasted. That's a good thing, but not the same thing as what is implied by saying "It lasted four years."

But they also raided the cookie jar. The Board passed a policy a few years ago that it would keep an amount equal to 10% of the annual expenditure budget in reserve as a 'rainy day fund.' With projected FY08 expenditures of $148 million, this reserve should be $14.8 million dollars. However if you look closely at the Treasurer's most recent Five Year Forecast, note that the ending reserve will be a little less than $11 million. That seems pretty close, but the real impact is in the following couple of years.

Without passing a levy, we would run out of money next year. But by deciding on a 9.5 mill levy this time around, instead of the 11.5 mills I believe it should be, the Board has also accepted letting the reserve balance further drop to $9 million in 2009 and $4 million in 2010, in violation of their own policy.

There is no rule saying that 10% is the right amount for this kind of reserve. In fact, one could argue that keeping what amounts to a little more than one month's expenses in reserve has little value. When the norm of the Board is to practice brinkmanship by waiting to put a levy on the ballot until it is almost too late, having an extra month's expenses in reserve isn't of much help.

We need to get out of this feast or famine mode by planning with a longer horizon – perhaps two or three levies into the future – and educating the community effectively about school funding so they understand the reasoning behind the plan.

The Dublin Model

In the Sunday December 23, 2007 issue of The Columbus Dispatch was a story titled "Strategy to attract new businesses paying off for Dublin." The most important sentence in the story was near the end:

Unlike other central Ohio cities, Dublin doesn't give property-tax breaks – money that primarily funds public schools – to businesses. Instead, officials offer to finance road improvements or give income-tax rebates if companies meet job-creation goals.

It sounds like the elected leaders of the City of Dublin understand that a high-quality, well-funded school system is the single most important institution in a community. It's the condition that must be satisfied if you want to attract professional people to your town – people who will bring, and attract, businesses that will pay property taxes to help fund the schools as well as income taxes to fund the municipal operations (police, fire, utilities, etc). Dublin now has a mix of professional buildings, manufacturing, and retail spaces which generates healthy revenues for both the city and the schools. Only a very well funded community can afford to plant concrete corn after all!

I've always thought it odd that a city government can waive property taxes. It's not their money - the city doesn't get any of the property taxes. The primary source of income for a city is income taxes paid by people who are employed within the city limits. So the school district wants to see expensive commercial buildings constructed while the city wants the businesses occupying those buildings to have a big payroll. But if the city abates the property taxes, it costs the city nothing and the schools take the hit.

To be fair, it has often been the case in Hilliard that an arrangement is made whereby a new company has its property taxes abated, but yet it pays to the school system an amount equal to what the property tax revenue would have been without the abatement. My understanding is that this is the form of the deal with BMW Financial.

What's the benefit to a company like BMW Financial to have its property taxes abated, yet pay the schools their full share anyway? The answer is that more than the just the schools are funded by property taxes. Many county-wide programs such as Children's Services, MRDD, Metro Parks and the Zoo depend on property taxes, and they get nothing when property taxes are abated. You decide if that's a good thing, but it's another case of a municipality being able to give away someone else's money.

No good deed goes unpunished however. I would argue that one consequence of Dublin's success is that the State of Ohio has concluded that Dublin has the capacity to supply the bulk of its own school funding, and can therefore get by with less money from the State. As of 2003, only 20% of the state income taxes paid by residents of the Dublin School District made it back in the form of school funding. Compare this to 102% for Columbus City Schools and 656% for East Cleveland City Schools (that's not a typo – it's six-hundred-fifty-six percent).

In that year, Hilliard got back 59% and I suspect that percentage has been going down ever since. Hilliard is viewed much like Dublin by the State of Ohio – that we have the capacity to shoulder much of our school funding costs by ourselves.

In other words, we're pretty much on our own. We got into this mess because thousands of new homes were built in Hilliard over the last decade and the city officials did nothing to stop it. In fact, those officials helped make it happen. To let the city officials also give away the commercial income stream for the schools makes things even worse.

We all need to keep an eye on these folks.

Tuesday, December 18, 2007

Unconstitutional: What does it mean?

Nearly everyone has heard it said that the Ohio Supreme Court has ruled on four separate occasions that our current school funding system is unconstitutional and must be fixed. But very few understand what is wrong with it. As always, a little history is helpful.

First off, what is it that the Ohio Constitution actually requires? This is what Article VI, Section 2 says:

§2 The General Assembly shall make such provisions, by taxation, or otherwise, as, with the income arising from the school trust fund, will secure a thorough and efficient system of common schools throughout the state;
One challenge this creates for the officials of the State government is figuring out how to connect funding with the Constitutional standard of thorough and efficient. What they ultimately decided to do was find out how much the top-performing districts in Ohio are spending on a per student basis, and then make the assumption that if every district could spend that amount per student, they all could perform at the same level as the top-performing districts. Let's call this the Target Funding Amount*.

But where was the money going to come from? It was clear that Ohio's long-standing tradition of using local property taxes to fund schools was going to need to continue, as the state income tax system could not generate sufficient funding alone without a massive tax rate increase – something politically impossible. It was also clear that the value of properties in school districts varied widely from the wealthy enclaves of our metro areas to the poor areas of Appalachia. The General Assembly created an element called the Charge Off to take this wide range of property values into account.
The Charge Off is an amount equivalent to the income produced by a 23 mill local levy, and it is deducted from the Target Funding Amount to arrive at the State Aid Amount* – the amount the State needs to send to a district to supplement the district's funding from local property taxes. The effect is that wealthy districts have a large Charge Off and therefore receive a much smaller State Aid Amount than does a poorer district.
This seems fair. So what is the problem?

It is that the General Assembly does not allocate enough money in the Biennial Budget to pay out the aggregate State Aid Amount the above process requires. The Governor and the General Assembly have the difficult task of deciding how much money to allocate to a wide variety of state-funded programs, including Medicaid, and while schools are one of the top priorities, they are not the only one.
The consequence is that the State Aid Amount is tweaked in the budgeting process. No district gets the full State Aid Amount. Instead the funding is based on a notion called the Formula Amount, which is set by the General Assembly during the biennial budget process. It is typically much less than the Target Funding Amount, and that is what has led to the lawsuits.
The primary lawsuit is often called DeRolph v. State of Ohio. Nathan DeRolph was a student in the Northern Local School District in Perry County, one of the poorer areas of the state. The complaint, filed by the Ohio Coalition for Equity and Adequacy of School Funding, representing over 550 Ohio school districts, was that the State of Ohio was failing to meet the "thorough and efficient" clause of the Ohio Constitution. The trial judge agreed, declaring the existing funding system to be unconstitutional. The State of Ohio appealed, and the Appellate Court overturned the trial court, saying essentially that the current system is okay. The Coalition appealed that ruling to the Ohio Supreme Court, who restored the ruling of the trial court – saying that the Ohio school funding system is indeed unconstitutional. The Supreme Court ordered the General Assembly to come up with a new funding approach, preferably one with less dependence on local property taxes, but to date the General Assembly has not done so.

It is within the prerogative of the Supreme Court to dictate the form of a funding system it would deem to be constitutional, but it has not – wisely in my opinion. The Supreme Court is not the appropriate branch of government to be making decisions about the allocation of monies in the State's budget. And so we are left in a Constitutional quandary: a funding system which has been ruled unconstitutional by the judicial branch, and a legislative branch which refuses to change it.

There are two efforts underway to amend the Ohio Constitution to change the way schools are funded. The first is Getting It Right For Ohio's Future, a campaign to put an amendment on the ballot that would take the allocation of school funding away from the Governor and the Legislature and grant it to a commission appointed by the State Board of Education. Getting this amendment on the ballot requires the signatures of 402,000 Ohio voters on the petition, but so far (thankfully) that effort has fallen short.

More recently, State Senator J. Kirk Schuring (R-Canton) has proposed an amendment in the Ohio Senate which would dedicate a fixed percentage of state tax and lottery receipts to education. The idea is that as state income grows, school funding would grow automatically. The Columbus Dispatch published an Op Ed piece calling this a bad idea. I agree.

These funding systems which automatically grow are the brass ring for the unions representing the teachers and other school employees. Around 90% of the cost to run any school district is the salaries and benefits of the faculty, staff and administrators. The unions would like to see school funding grow automatically because they believe it takes the pressure off local school boards to sell their communities on more and more property tax levies to pay their ever increasing salaries and benefits.
But that is a false belief – at least for teachers in the more affluent school districts such as Hilliard. If the State of Ohio gains greater control over school funding, the priority will be to allocate more to the poorer districts and less to the affluent districts. The affluent districts will be expected to continue to pass local tax levies if they want to spend more money per student (e.g. on teacher salaries) than whatever amount is set as the state funding standard.

In the end, these proposed funding amendments would cause communities like Hilliard to pay more combined state income and local school tax while having less control of how the massive state component is spent (because affluent districts have too little representation in the General Assembly).
So am I satisfied that the current funding system is fair to all Ohioans? Certainly not. There are districts truly in need of greater funding support, and frankly the money will need to come from affluent districts like Hilliard, Dublin, Upper Arlington, Bexley and New Albany.

But let's not let the lobbyists of the teachers' and school employees' unions have a loudest voice in the State House. We all need to be telling the Governor and our state Senators and Representatives what we want.
As is always the case in a democracy, apathy and silence are very expensive.

*These are labels I coined for use in this article.
The source for most of the factural information in this article is the "Ohio School Finance Handbook" by Robert G. Stabile (2002 edition).

Saturday, December 15, 2007

Value-Added Evaluation

As readers of this blog know, I make no claim to understand the art and science of teaching. My focus is on the governance and funding of Hilliard City Schools - in other words, on making sure we have the right folks in leadership and that the system has the resources it needs to deliver the performance we in the community expect.

There is an intersection between these two elements - the feedback to the community about how our schools perform, measured against a set of standards applied to schools all over the state. We want to know as parents that our kids are getting a good education, and as taxpayers we want to find out if our money is being well spent.

The 'State Report Card' is one mechanism for answering those questions. Now the State of Ohio is adding another performance measurement called the 'Value Added measurement.' The Columbus Dispatch recently ran articles about this new measurement. Hilliard City Schools was given the top rating, GREEN, meaning that our schools are exceeded what the state would expect, according to their complex formula.

Dave, an educator in southwestern Ohio, writes the blog Into My Own, and in his blog has written an excellent series on the Value Added measurement system. You are encouraged to read it.

Thanks Dave.

Tuesday, December 11, 2007

Warriors without Ammo

I have been in dialog with a good friend over the past couple of days regarding the upcoming 9.5 mill levy that we'll get to vote on in March. He talks about moving to central Ohio about 15 years ago and selecting Hilliard because our schools were good and the property tax rates low. Now, he says, property tax rates in Hilliard are among the highest, and he feels "enough is enough."

Many folks in our community agree with my friend. Their intention is to vote against the upcoming levy because all they know is that they're tired of paying more and more school tax, and simply don't believe more money is warranted. Surely – folks like my friend believe – if we cut off their money, the school district will need to straighten up its act.

I think the problem is that we're confused about who caused the funding problem, and therefore are punishing the wrong folks. If we don't fund the schools appropriately, it's the kids and the great team of educators we've assembled who will be hurt.

It's like thinking we can end the Iraq/Afghanistan wars by withholding ammo and food to the troops we've already sent over there.

The cause of our funding problem is not the school leadership, and it's certainly not the kids. We have funding problems because we sat back and let thousands and thousands of new dwellings get built in our community without considering where the new money needed to educate all those kids would come from. We let our city mayors approve all those development and building permits because, while they understood what would happen, we weren't paying attention.

So our apathy is going to cost us another 9.5 mills in property taxes starting in 2009. And I suspect that it's too late to avoid another levy two or three years out – at least not if we want to maintain the level of programming and services we now have.

There are still thousands of acres to be developed in our school district, including the large developer-owned parcels sitting around Bradley High School (and new For Sale signs went up on a large farm on Roberts Rd this week). If we want to get control of this beast, it's not the School Board we need to influence, but rather Mayor Schonhardt, Mayor Coleman and the Hilliard and Columbus City Councils.

The School Board could certainly be much more vocal on this issue. And they could do a much better job of educating and mobilizing the community on behalf of the schools. But we won't win the battle by cutting off their money. All we'll do is make the schools go into crisis, cause our kids and teachers to be miserable, and diminish the value of our property in an already horrendous real estate market.

Monday, December 10, 2007

District Communications: Still Lacking Detail

The latest issue of the District's Passing Notes was in the mailbox when I arrived home this evening. On page 2 is a story titled "Financial Forecast."

Once again, their communications about school finances is lacking almost any detail.

I really don't understand why the District leadership would spend all the money necessary to mail a four page, full color glossy newsletter to tens of thousands of households, and not use the opporunity to educate the community - especially right after deciding to put a substantial permanent operating levy on the ballot.

I felt the same way when the District published the May 2007 issue of Passing Notes, this time as a front page story, and I wrote to them with several suggestions. Apparently it had no impact.

At the end of the story is instructions on how to find the Treasurer's Five Year forecast on the district website. It tells you to look in the "Fiscal Services" area, but doesn't say that you first must select the "Departments" tab from the left side menu. From there you can select "Fiscal Services" then "Financial Reports" (from the tab at the top).

On that page you will find lots of links to various financial items. Click on "Five Year Forecast and Assumptions" to read the report.

Sunday, December 9, 2007

Wrong Some More: Current Millage Rates

I know this will seem like 'piling on' but I just found another error in the Nov 28 cover page story "School Board Votes to put 9.5 mill levy on March ballot," published in the Hilliard Northwest News.

The second paragraph reads: "If adopted it [the levy] would add an extra $291 per $100,000 of property value to the 14 mills, or $1,290 per $100,000 owners currently pay annually.

The correct number for the effective millage is about 37 mills, according to a sample of properties I researched on the website of the Franklin County Auditor. All the other dollar amounts were recorded accurately.

Here's some other facts about your current property taxes that might be helpful as true to measure the impact of this levy on your own taxes:

  • Homeowners in the school district pay a variety of different property taxes depending on the municipality in which your home sits. My family lives in Brown Twp, so our total property tax bill is 2.04% of the market value of our house. If you live in the City of Columbus, your total property taxes are about 1.86% of the market value of your home. Homeowners in the City of Hilliard pay about 2.14%.


    One example is that folks who live in the City of Columbus may pay a different amount for their fire/safety services, which are both provided by the City of Columbus, than those of us in the Brown Twp, which contracts with Norwich Twp for fire service and the Sheriff's department for police services.
  • But regardless of the municipality in which we live, we all pay the same millage for our school taxes. Right now that ends up being about 1.3% of the market value.
  • If it passes, the 9.5 mill levy being proposed will increase the school component of your property taxes by 23%, and your overall property tax bill by about 14%.
  • Remember that we get to soften the impact of this through deductions on our Federal Income Tax returns, assuming that nearly all homeowners itemize their deductions on Schedule A. So let's say that your home has a $200,000 market value, and you are in the 25% federal income tax bracket. The levy would increase your annual property taxes by about $600, but by deducting that $600 from your taxable income, the federal income tax you owe would decrease by 25% of the $600, or $150. The effect is as though the levy cost you $450/yr. This makes the overall increase in your property taxes due to the 9.5 mill levy more like 10.7%.

    In rereading this post, I realized that I'm guilty of some bad math too. My analysis compared the post-tax cost of the increase to the pre-tax cost of the base property tax. So let's use real numbers:

    The current component of my property tax bill for school taxes is $4,566.71 per year. The County Auditor has calculated what the cost/mill/yr is for each property in the county, and this number is available on the Auditor's website. For mine it is $108.48/mill/yr. Therefore, a 9.5 levy would add $1,030.56 to my annual tax bill, which is a 22.6% increase. Adjusted for taxes, it's still 22.6%.

    Sorry for the confusion. June 23, 2008

The worst thing people can do right now is make up their minds about the levy without making the effort to understand the facts. It's a shame neither the local papers nor the district leadership are much of a help, and it's worse when the information is wrong.

I will continue look for inaccuracies and report them via this blog. You also invited to go to my companion website and sign up for the electronic newsletter. There's no charge - it's just another way to get information to you.

Friday, December 7, 2007

OAPSE Contract Analysis

I requested and have received a copy of the 2008-2010 Contract with Local #310 of the Ohio Association of Public School Employees. This is the union which represents:
  • Transportation workers: Bus drivers, mechanics, dispatchers and Bus Aides
  • Secretaries
  • Building maintenance workers
  • Custodians
  • Nurse Assistants and Licensed Occupational or Physical Therapy Assistants
  • Various other kinds of assistants
  • Accounting clerks
  • Print shop operators
  • Technicians, including the webmasters, software developers and project managers, systems analysts and database administrators, help desk agents, network techs
These are the sections I found of interest (my comments in italics):
  • 18.01 – The School District pays 100% of the cost of life insurance premiums and dental insurance for fulltime employees. However for hospitalization and major medical insurance, the School District pays 94% in 2008, 92% in 2009, and 90% in 2010. I've not seen prior versions of the OAPSE contract, but I believe that in the past, the School District has paid 100% of the health insurance premiums. This is a major issue in the negotiations with the teachers' union as well.
  • 20.04 – Vacation leave for year-round employees is 2 weeks for 1-6 years to 4 weeks for after 20 years. No more than 10 vacation days can be taken while school is in session. Very reasonable.
  • Article 21 – each employee gets 3 paid personal days each year. Reasonable as well.
  • Article 23 – each employee gets 15 days of sick leave each year. Unused sick leave can be accumulated to a maximum of 255 days. I have never been granted 15 sick days in a year, but my guess is that most employees accumulate the sick days for catastrophic situations. It has the same effect as fully paid short-term disability coverage for 100% of the normal wage. Okay with me.
  • Article 34 – 34.10 and 34.11 prohibit laying off employees and replacing them with subcontractors. I have no issue with this as long as the wages and benefits remain comparable to private industry.
Of course, the meat of the contract is the wage schedules. As is the case with the current agreement with the teachers' union, there is a pay grid for each of the three contract years: 2008, 2009 and 2010. Across the board, the grid for 2009 provides for pay rates 3% higher than 2008, and the 2010 grid is 3% higher than 2009. Unfortunately, this is all the local newspapers will report and, as is the case with the teachers' pay scales, this is only part of the story.
Like the teachers, the OAPSE contract has a length of service component as well. So the change in one individual's pay from year to year is the combination of the lift of the entire pay scale (3% in the case of this contract) AND the length of service increase. The length of service increase is about 1.3% for most OAPSE jobs, and a little more than 2% for IT (information technology) positions.
The combination of these two raise components is 4.25% to 4.5% raises for most OAPSE members, and 5% raises for IT positions.
These numbers sound reasonable to me. But there's a wild card in the deck:
The Board signed a side agreement with OAPSE which says: "… if the Board's eventual agreement with the Hilliard Education Association… results in a higher percentage general increase on base salary…for teachers than the Board's percentage general wage increase appearing in the Board's tentative agreement reached with OAPSE… and/or a lower teacher contribution toward the monthly cost of health and dental insurance … the Board will thereupon offer to OAPSE a percentage general wage increase and monthly employee insurance contributions that match the … HEA agreement…"
In other words, the teachers are now effectively bargaining for themselves and the OAPSE members. No wonder the OAPSE negotiation was completed so quickly. All the OAPSE members have to do is sit back and let the teachers' union (the Hilliard Education Association) do all the hard work.
This side deal also keeps the two unions out of conflict with each other. The HEA members can't accuse the OAPSE members of undercutting them by taking a lesser deal than the teachers wanted.
Is it really all about the kids?

Monday, December 3, 2007

Wrong Yet Again: Magnitude of Cuts

This story in the November 28, 2007 issue of Hilliard Northwest News is an accurate reflection of the School Board meeting on November 26 - except for one very important set of numbers.

Treasurer Brian Wilson stated that, in a "worse case scenario" in which the upcoming 9.5 mill permanent operating levy does not pass, the spending cuts would need to be $3.9 million starting in the 2008-2009 fiscal year, $18.2 million starting in the 2009-2010 fiscal year, and $3.1 million in the 2010-2011 fiscal year.

So far so good. But the Northwest News added these numbers together and reported that a total of $25.2 million in spending cuts would be enacted.

The correct interpretation of Mr. Wilson's statement (confirmed to me by Mr. Wilson) is that $3.9m would be cut from 2008 to 2011 (3 years = $11.7m), $18.2m from 2009 to 2011 (2 years = $36.4m), and $3.1m in the last year, totaling $51.4 million.

Big difference. I doubt that the Board or Administration will take any steps to get a correction printed by Hilliard Northwest News.

So what does that mean?

Since 90% of the operating funds go for salaries, let's assume 90% of the cost reductions must come from staff reductions (layoff, no replacements, etc). Based on the cost and headcount numbers for 2006, the average salary and benefits for a HCSD employee is $71,000/yr. So:

  • To cut $3.9m starting in the first year means $3.5m (90%) in salaries & benefits, or 49 employees.
  • The next year is harder. To remove $18.2m total requires $16.4m in employee costs. That means 230 people.
  • In the last year, the salary and benefits cut would be 90% of $3.1 million, or $2.8 million. That would require another 39 to be removed from the payroll.

This numbers are gross approximations. The jobs eliminated might not be in the same proportion as the overall job distribution. Since there are about 1,600 employees of the district, and only 900 are in the classroom, one would hope most of the reductions would happen in the 700 other positions.

A little of that might be healthy. But we also have to recognize that a service that seems optional or even superfluous to one might be felt to be a necessity by others. Cutting over 300 people from the payroll would be noticed by virtually everyone.

If we don't want our community to melt down, these things need to happen:
  1. The leadership of the district - the School Board, the Administration, and the union leaders - have to give everyone a fundamental understanding of how school funding works, and how the money gets spent. There is too much ignorance and distrust in our community right now. I've been harping on this for years.

    This lack of information leads folks to blame the school leadership for all of our funding ills. It's really not their fault - our community has been screwed up by unmanaged development. It is the mayors and city councils, not school leadership, who controls this.
  2. All of us in the community must look past our selfish perspectives and really think about what is good for the community as a whole. Most of the 80,000 people who live in our district came here because of the schools. In doing so, we participated in the creation of the funding problem. We can start taking control of the future, but past damage is done, and now we're seeing the cost.

I'm a Ronald Reagan fan, but I have to agree with a comment a friend once made about Reagan's administration: "It was like he invited the whole country to big steak dinner, then left without picking up the check."

I think we can say the same about our local politicians. How do they keep getting re-elected?


Friday, November 30, 2007

Recommended Reading: Jacobs - Getting Around Brown

Anyone who really wants to understand how central Ohio evolved into this strange puzzle of municipalities and schools districts needs to read:

Jacobs, Gregory S: Getting Around Brown
Ohio State University Press, Columbus OH
ISBN 0-8142-0720-0

The book is out of print, but is available at the Columbus Metropolitan Library:
379.2630977157 or online at the website of the Ohio State University Press.

The book tells how - tragically - the Columbus Public Schools became poorer and Blacker as a result of the busing ordered by Federal Judge Robert Duncan in Penick v. Columbus Board of Education desegregation lawsuit in 1979.

For residents of the Hilliard City School District, it also tells how the powerful people of Columbus used this as an opportunity to create the suburban housing boom which ultimately - along with a myriad of developer friendly political decisions - devastated the economic underpinnings of our school system.

The people of our community would like there to be a simple answer to why the School Board keeps asking for more of our money to support the schools. There is not. It's not because we overspent on our buildings or pay teachers too much. Nor is it because of all the immigrant kids now coming to our schools.

We have a perfect storm brewing that has been decades in the making. Mr. Jacobs does an excellent job of showing us how we got here.

There is one simple truth I guess:

Apathy is expensive.

Levy/Teacher Salary Survey

On Nov 11th, I posted an online survey to see what folks on my newsletter mailing list as well as the general public thought about two questions. The first was about operating levies. The School Board has affirmed that this next levy won't be the last, and that they will be asking us to approve another levy in 2-3 years. So the first question was whether you wanted to take a bigger hit now, and a lesser one later, or visa versa.

The first thing to say is that this survey falls well short of the standard of statistical significance. There are over 40,000 registered voters in our school district, and this survey was seen by fewer than 100 and responded to by 46. So don't try to read too much into these results:

The #1 response to the question about levies, with 39% of the votes, was "No new taxes are needed, the School District spends too much already." Next at 30% was "let's do 10 mills now and see where we are in two years." Interestingly, that's about what the Board decided.

The second question was about teacher salary increases. Should they 8% annual increases as provided in their current (expiring) contract, or should their salaries be frozen. How about split it down the middle at 4% per year?

The raw answer is that nearly half (45%) said 4% is the right number. The rest of the votes were an equal split between "give 'em nuthin'" and 8%. Nearly all the "8%" answers came in via a burst over a day or so, which makes me think that some HEA members made a push to get their responses recorded.

Some of the comments were pretty interesting, even though the service I use allows for only 150 characters:

To the question about levies:
  • 90% of the school's costs SHOULD be on teachers. Isn't that what schools do? TEACH? - I agree
  • This spending cannot ALL be attributed to teacher salaries. We need to be taking cost OUT of the business too to minimize expenses! - Only 56% of the total employee population are teachers. The next largest group is the support staff (secretaries, aides, custodians, bus drivers, etc) at 28%. Can anyone tell me what the "Other Professional" and "Planning/Curriculum" positions are?
  • I would like to see a more detailed breakdown on expenses and funding. Part of the shortfall is due to state cuts in funding. - Indeed

And on teacher raises:

  • Never in the past 30 years has a contract included an 8% salary increase!The pension from STRS is paid by teacher and board contributions.It's notfree - Actually, HEA members got 7.95% salary increases each of the last three years. As for the pensions, I did not claim the teachers got it for free. The fact that they get one at all is unusual. Note that teachers do not pay into or receive Social Security, but does anyone seriously think Social Security is better than the STRS package?
  • The idea of teachers being uderpaid was true in the past but I do not believe it is true today. At least not in Hilliard. - It's hard to figure out what teacher pay should be. Should it be based on scarcity of qualified applicants, or on length of service, or some kind of pay-for-performance?
  • I have never been garanteed increase in salary of 7.95%. These increases should be tied to performance and average increases in the private sector. - A number of comments mentioned pay-for-performance notions.

I expect that the levy campaign team will run their own survey, and we'll get more meaningful answers to questions like these.

Thanks to the folks who responded.

I’ve read this before somewhere

In its November 28, 2007 edition, the Hilliard Northwest News published a letter to the editor which it titled "Salary negotiations key to district's financial health." The letter was submitted by an Aaron Kramer. I was eager to read the letter because I was happy others in the district were taking interest this these matters.

When I reached the second paragraph, I realized that Mr. Kramer's letter is a compilation of articles I had published on this blog over the past year, along with an occasional phrase or sentence of his own. I have to admit being disturbed by this.

It feels like plagiarism. Mr. Kramer does end his letter with an encouragement to visit, the companion website to this blog, and that’s appreciated. But it still feels like he had stolen my work.

Then I had to remember the mission: to inform the public about how school funding works, and motivate them to take a more active role in guiding the future of our school district. Mr. Kramer’s letter is an indication that we’re making progress, and having it published in the Hilliard Northwest News will help increase the exposure to this information.

Mr. Kramer: I appreciate your interest and participation, and for the pointer to my website. But I would also ask that rather than patching together pieces of my work, put your thoughts in your own words. These excerpts that you’ve cut and pasted together say what I mean better when they are in the context of their source article, and I’m concerned that away from that context, they can seem to mean something different than what I intended. Besides, the public would benefit from hearing both your perspective and mine, and not just mine in stereo.

Reference my stuff all you want – the more the better as far as I’m concerned. Appropriate citations would be polite too.

But the message is more important than the messenger, and so for your interest and participation in the process, thank you.


Wednesday, November 28, 2007

Being Thankful

I spent the month of September riding my motorcycle cross-country with some friends. We went from the Canadian border in Montana down the Pacific Coast from Oregon, and across the Mexican border in Arizona. Our last point before turning north was New Orleans.

I was somewhat surprised to find a city with lots of people (and terrible traffic jams) and very little damage. Admittedly we didn't make it to the Lower 9th Ward, where most of the flooding took place - a residential area which is substantially gone.

We had dinner with friends who were lifelong residents of St Bernard Parish, another hard hit area. They lost their house, but had excellent insurance, and are now settled north of New Orleans, in Hammond LA. I asked if they intended to move back to New Orleans. They said no, that the city was still unsafe because only a third of the police and fire forces have returned.

These safety forces aren't the only public employees who are missing. I came across this blog by a school official, Dr. Roslyn Smith, who is talking about what it like to restart the school system down there.

As I sit at my desk and watch Bradley High School rise out of the cornfield across Roberts Rd, it strikes me that we have it pretty good here in Hilliard. Our buildings have utilitarian beauty, the faculty and staff is excellent, and our kids perform well both within and outside the classroom.

We've let the economic underpinnings get away from us. Residential development has been out of control, the growth of our commercial tax base has been slow, and the State of Ohio, rather than helping us with new tools such as Impact Fees, is bailing out on us.

Still, we can fix these things. We can insist that the politicians protect our community instead of the developers. We can bring the City of Hilliard and Hilliard City Schools into closer partnership in attracting new businesses. And when we send a new State Representative and State Senator to the General Assembly, we can be sure they are folks who will fight to protect our school district.

And recognize that compared to the people of New Orleans and many other parts of the country, we have it very very good.

Tuesday, November 27, 2007

9.5 Mills It Is

The following is a statement I read to the Board of Education at their regular meeting on November 26, 2007:

As was stated a during your Nov 14th meeting, going to the voters with a 9.5 mill levy will require the district to reduce spending by about $3.3 million per year over the next three years – if there is no plan to restore the 10% operating reserve which is your current policy.

To restore the 10% operating reserve by the end of 2011, approximately $9 million per year would need to be removed from the budget – an amount which would certainly cause uncomfortable if not downright painful reductions of programs and services.

However, if that $9 million/yr were to be removed from the budget, which is $54 million over six years, it would still mean that the levy amount in 2011 would need to be about 11.5 mills, if all of Mr. Wilson's forecast assumptions bear out.

You have three big financial knobs you can turn:

  • The 2008 Levy amount
  • The amount of annual spending cutbacks to be implemented
  • The 2011 levy amount

These are intimately related, and should never be considered independently.

My request to you is that you communicate all three of these numbers when you announce the March levy amount, with a statement that sounds like:

"The School Board announces that, in conjunction with $9 million per year of spending reductions, the community will be asked to approve a 9.5 mill operating levy in 2008, and forecasts the need for another 11.5 mill operating levy in 2011."

It is critical to solidify community trust during this campaign, and that starts with open and frequent communications.

Thanks to Board member Lisa Whiting for acknowledging that there is some merit in this viewpoint.

Earlier in the meeting, Gwen McCartt, chair of the Treasurer's Finance Committee presented the recommendation of their committee, which was to put a 9.5 mill levy on the ballot. They explained that they believe more is needed, but that they do not believe a larger levy could be passed.

The Board voted unanimously to put a 9.5mill levy on the ballot in March. Doug Maggied indicated that it's possible that the Board will seek the next levy in two years rather than three. That would be a good thing as the millage required for the second levy could be much less – on the order of 8.5 mills by my calculations.

Now the hard work begins – selling the levy to the community. It would have been easier (but not easy) had the school leadership been building community trust over the past couple of years as I have long recommended. Now all that messaging will have to be done over the roar of the holidays and the Presidential Primary.

And because this Presidential Primary can be expected to draw out extraordinary numbers of voters, the Board cannot count on winning the election with the support of around 11% of the voters (more than half the 20% that typically shows up for Spring elections). If the levy doesn't pass in March, the Board will have little choice but to go back to the voters in November 2008. More importantly, they will have to start the 2008-2009 school year without a clear picture of funding. With cash reserves depleted, severe cutbacks will be necessary to survive should the November 2008 levy request also fail.

The shame is that none of this drama was necessary.

Thursday, November 22, 2007

Wrong Again: Teacher Salaries Revisited

Once again the Hilliard Northwest News has bobbled a crucial fact in the dialog about teacher compensation and school funding, two powder keg issues before our community right now.
In the November 20, 2007 story titled "Teachers, others show unity at school board meeting," stated that 'the current contract gives teachers annual raises of 3.6%.' This is at best only part of the story.
Near the end of the teachers' current contract is a set of tables labeled Appendix A1, Appendix A2, and Appendix A3. They are the pay tables for years 2005, 2006 and 2007, respectively.
The difference between these tables is simply this: the Index Computational Base is increased by 3.65% each year. Appendix A is the table by which this base is multiplied to calculate the exact salary.
For example, for a teacher with 10 years' service and a Masters degree, the factor is 1.6820. If you multiply the 2005 base of $32,678 by this factor, you get $54,964, the same number shown in Appendix A1 for a 10 year teacher with a Masters degree.
The pay for a 10 year teacher in 2006 is calculated by taking the same factor from Appendix A (1.6820) and multiplying by the base of $33,871 in Appendix A2. This is $56,971. Using the same procedure for 2007, you multiply the Appendix A factor by the base in Appendix A3, and get $59,050. It all looks like 3.65% annual increases.
The shortcoming of this analysis is that all three calculations were made using 10 years of service. A teacher with a Masters and 10 years of service in 2005 would have 11 years of service in 2006 and 12 years in 2007. The increase associated with additional years of service is called a 'step increase' by school folk, and is 4.15% under the current contract (Article 29, paragraph B).
Applying both the 3.65% increase to the base, and then the 4.15% step increase, the pay for a teacher with a Masters degree and 10 years service would be $56,971 in 2005, $59,335 in 2006, and $64,053 in 2007. This works out to 7.95% annual increases. You can find these exact numbers on the pay tables in Appendices A1, A2 and A3.
The step increases apply only to teachers with 15 or fewer years of service. After that, there is no step increase until the 20th year of service, again at the 23rd year, and then no step increases at all after that. Under the current contract, the more senior teachers would mostly receive 3.65% increases.
If it the Board's current negotiating position is that they want the teachers to be paid for three more years according to the 2007 pay grid (Appendix A3), what would that mean?
Well, if a teacher has 0-15, 20 or 23 years of service, they still get a 4.15% raise because of the step increases. Other teachers would get no increase at all. But note that the lowest annual salary of most teachers affected by this would be $72,363 – that of a teacher with 15 years of service and a Masters degree (to maintain one's license in Ohio, a teacher must gain a Masters degree within 10 years of starting their career).
If the objective of the Board is to give all teachers a 4% increase, which I think would be reasonable, then one way to get there is to suspend the step increase component for the duration of this contract. But I think we would find that the step increase mechanism is sacred to the teachers' union, and that this approach would never be accepted by them.
Another approach is simply to halve the two factors. Make the step factor be 2% and increase the Index Computation Base 2% each year. Or make the step factor higher and the ICB lower. Just remember that the step factor benefits mainly the younger teachers, while an ICB increase would apply to everyone. There are lots of answers, but you have to understand the question first.
According to the last community survey, the people of our community depend on the Hilliard Northwest News and This Week Hilliard as their primary sources for information about our schools. When the subject is teacher salary negotiations and tax levies, they must get the details right and put them in the correct context, or people will draw the wrong conclusions - leading to unnecessary conflict and undesirable consequences.
Meanwhile, I will do my best to read these news sources and give you further analysis or rebuttal when I think it is warranted. If you don't receive my electronic newsletter, and would like to, you are invited to go to and submit your email address on the sign-up box at the bottom of the page.

Tuesday, November 20, 2007

Is the Board up to the Challenge?

The first School Board meeting following the election was held November 14, 2007 at the Administrative Annex Building. I attended to hear Treasurer Brian Wilson's presentation of the levy scenarios to the Board.

I had heard the scuttlebutt that some members of the teachers' union (HEA) were going to show up wearing black. I knew I had underestimated how many that would be when I got near the Admin building and saw traffic backed up well down Cemetery Rd trying to get into the parking lot. When I finally got parked, there was a sea of people outside the building, and I could see through the windows that the meeting room was stuffed as well. It was indeed a very large contingent of teachers, dressed in black, accompanied by both TV and print reporters. The teachers stayed through the Pledge of Allegiance, and then silently left. I'm not sure what they were trying to say, other than they're not happy with the way the negotiations on their new contract is going.

Mr. Wilson's presentation was short and anticlimactic. While he prepared scenarios for lesser amounts, it was clear that only the scenario with the largest levy amount, 9.5 mills, was worth discussing.

I do take issue with one sentence in the story about this meeting published in the Hilliard Northwest News. Doug Maggied had asked the question: "Would we be in this situation had we not built the two new schools?" The story recorded Brian Wilson's response as:"The addition of the district's two new academic buildings, Washington Elementary School and Bradley High School, do not impact the need for a new levy, said Wilson." While this statement is factually correct – a levy was going to be needed anyway – the paraphrase reads as though the opening of these new schools has no effect on spending. The size of the levy is most definitely impacted by the opening of these schools. The salary and benefits alone for the staff of Bradley can be expected to be on the order of $8 million of new spending. That by itself requires about 3.5 mills of new taxes.

I fear that this Board's lack of financial acumen is about to amplify our crisis. Even though the 9.5 mill scenario indicated that it might be possible to squeak by to 2011 after about $10 million in spending cuts, it also projected a $22 million deficit for 2012. Here's the point: a 9.5 mill levy has a chance of being sufficient funding until 2011 because we are projected to start 2009 with $11 million in reserve. There's no way that the next levy, in 2011, could be only 9.5 mills when we would be starting out 2012 with a drained bank account. I'm not sure this Board understands this.

It is crucial that the Board look at this with at least a six year forecast horizon. Otherwise they'll be tempted to put an insufficient levy on the ballot this year, and doom the next levy to failure. By my calculations, if the 2008 levy is 9.5 mills, the 2011 levy will need to be 17 mills. These both would be permanent operating levies, meaning that the total increase from today would be 26.5 mills.

We can gripe about the State of Ohio not sending us enough money. The continued indication from the Governor's office is that we shouldn't expect any more, and might be asked to get by on even less.

We can complain that a great deal of money gets wasted in our school district. But 90% of our spending is on the salaries and benefits of the teachers, staff and administrators – nothing else is significant. Sure we could save money with this and that, but it is the salaries and benefits which represents almost all the growth in spending. This isn't a problem – it's a fact of life for an organization that provides professional services (i.e. teaching). Still, we should get answers as to why the number of employees has grown 1.8 times faster than the student population.

The cause of our looming funding crisis is simple – thousands of houses, condos and apartments have been built in our school district over the last decade, bringing with them thousands of kids. The amount of property taxes paid by a homeowner is not enough to pay the cost to house and educate the kids who live there. Don't take my word for it - see what the Buckeye Association of School Administrators has to say.

This has been a freight train roaring down on us for years, but we've never bothered to look over our shoulder. Now it is upon us and there's no one to help.

With the current collapse of the housing market, we might have a chance to stay ahead of the train and maybe put a little distance on it. But only if we buck up and deal with it now.

So how large should this levy really be?

Take a look at this spreadsheet to see what I believe we need to put on the ballot. The top half shows how large the levy should be if we want to pass one levy now and have it last for six years with a reasonable reserve at the end. I think that number is about 19 mills.

The bottom half shows what we need if we plan to start one levy in 2008 and a second in 2011. In that case the 2008 levy would be 14 mills and the 2011 levy about 10.5 mills more. There's no free lunch here, to have a lower rate than 19 mills for the first three years, we need to accept a high rate, 24.5 mills, for the last three.

This decision may be the most important and gut-wrenching decision this Board will have to make. I don't believe they have the skills to analyze this effectively on their own, nor do I believe the Superintendent nor the Treasurer are helpful in pointing out how serious a situation this is. We have a Citizen's Finance Committee, but it doesn't seem to be a part of this discussion (or of anything else for that matter). At a very minimum, this Board needs to bring Member-elect Dave Lundregan into this deliberation, and take advantage of his financial savvy.

As always, I'm ready to help if asked, and told the Board so at the meeting.

Saturday, November 10, 2007

Levy Survey

Before mid-December, the School Board needs to decide how large the levy will be on the March 2008 ballot. I'm taking a survey of what people think about this levy, and intend to present the survey results to the School Board as soon as there are a meaningful number of responses.


...note that some important comments remain attached to this message.

Friday, November 9, 2007

Post-Game Analysis

Detailed precinct-by-precinct vote totals are now available at the website of the Franklin County Board of Elections. I spent a little time with the numbers to see what would pop out. Here's some basic statistics:

  • There are 71 precincts in the Hilliard School District.
  • A total of 15,915 votes were cast, with each voter allowed to vote for two candidates. It is a fact that some chose to vote for only one candidate, so the total number of voters was something more than 15,915/2, or 7,958. There are approximately 43,000 registered voters in the school district.
  • While collecting the most votes (4,533), Doug Maggied came in second to Dave Lundregan in the number of precincts won, 28 to 29.
  • Although I came in last place in terms of votes (3,276) and precincts won (8), I beat Dick Hammond in 27 precincts, Doug Maggied in 17, and Dave Lundregan in 14. I was one of the top two vote getters in 20 precincts.
  • The precincts I did best in are in the southern half of the district, but span the whole width of the district. They included Columbus, Brown Twp, and Hilliard precincts, and a range of home values.
  • The flyers seem to have been the best method for telling people about my agenda, although well-place signs seemed to have helped as well – meaning at an intersection and close enough to the road that people who are stopped could read the website address. Too bad a number of these vanished in the last days of the campaign (Norwich Twp officials: was it really necessary to mow 4 days before the election?).

I think the chances are very good that had I distributed an addition 2,000 flyers (I passed out 1,000), I would have won a seat. That's the hard lesson I learned in this election, and the consequence of not seeking any advice from those who have run for office at this level. A friend who sat on the Board of Education for Worthington City Schools says it takes about $3,000 to win a Board seat in these parts. It turns out that my spending would have been about that had I printed the extra 2,000 flyers.

It should be noted that the candidates who won, Doug Maggied and Dave Lundregan, were also the candidates endorsed by the teachers' union, the Hilliard Education Association. The HEA endorsement brings with it two important things: a) the votes of a large fraction of the 1,000 or so members of the union, as well as spouses and maybe other relatives; and, b) financial support in the production of campaign material and the feet on the street to distribute it. One cannot underestimate the weight the HEA brings to the election. I don't know exactly why they chose not to endorse me, but it probably had something to do with the fact that I said if we don't get a levy passed before 2009, we're going to need to lay off a lot of teachers.

It's troubling that the teachers' union can have so much influence on the outcome of a school board election. While most of the time, the Board, the administrators, the teachers, the staff, and the citizens of the district are all focused on delivering a great educational experience to our kids, there are definitely times, like now, when the Board the and the union are on the opposite sides of the table. While lots of ancillary matters are negotiated into the union's collective bargaining agreement, the main topic is compensation and benefits. When the financial situation is challenging, as it is now, it seems like it's very important for the Board members to have undiluted allegiance to the people who elected them.

I think that we'll find out, when the final campaign spending reports are filed in December, that money isn't everything however. I suspect that Dick Hammond spent the most of the four of us. Not only did he mail a full-color, two-sided flyer to the homes of voters, he robo-called many as well. His money came from well recognized politicians, including Mayor Don Schonhardt, State Rep Larry Wolpert, Judge Charles Schneider, and Hilliard City Councilman Brett Sciotto.

Many lessons learned.

Wednesday, November 7, 2007

Thank you!

To the 3,000+ folks who voted for me yesterday: THANK YOU!

It is a humbling experience to put one's name on the ballot and have this many people indicate that they not only agree with what you have to say, but would like you to represent them in carrying it out.

While I came in last place, the spread was not that great:

Doug Maggied*: 4,533 (28%)
Dave Lundregan: 4,452 (28%)
Dick Hammond*: 3,654 (23%)
Paul Lambert: 3,276 (21%)

The defeat is in having only 8,000 out of 43,000 registered voters show up. Apathy was indeed the winner.

I suspect that the votes for me contributed to unseating Dick Hammond and helped Dave Lundregan. The outcome might have been different had I not run, and you folks not voted for me. That's a victory.

Congratulations to Dave Lundregan for winning a seat on the Board - he was who got my second vote. I know Dave from our time serving together on the Board of Trustees of the Hilliard Education Foundation, and am confident that he will bring a good deal of energy, commitment, and financial expertise to the Board. I've offered him my help in any effort to educate the community about school funding - a criticial step toward getting our next levy passed.

Meanwhile, the current Board will continue to serve to the end of 2007. In the next couple of weeks, they will need to decide how large that levy will be when it appears on the May ballot. I fear they will choose to slide by on a relatively small levy, and avoid talking about the magnitude of the funding problem 5-6 years out.

People - you cannot sit on the sidelines now if you want to have a voice in this matter. Call the school board members and tell them want you want. Send them letters and emails. Better yet, show up at the next few school board meetings and let your voice be heard!

Saturday, November 3, 2007

Campaign Spending

The October 31, 2007 issue of Hilliard Northwest News included a story on campaign spending. It correctly pointed out that I did not submit a pre-election campaign report. The story also correctly noted that a pre-election campaign report is not required if the candidate neither raises nor spends $1,000 or more.

My campaign spending was this: $225.78 for yard signs and $497.36 for 1,000 campaign flyers. And although I started publishing and this blog well before deciding to run for the School Board, it is probably appropriate to include the $4.16 per month I pay for my hosting accounts for the two months since I filed as a candidate. All in, my spending has been $731.46.

It was interesting to see who contributed to the other candidates. Mr. Hammond is clearly the candidate of the Hilliard political community, with his largest contributors including Mayor Schonhardt ($500), State Rep. Larry Wolpert, City of Hilliard Service Director Butch Seidel, Judge Charles Schneider, and Hilliard Councilman Brett Scioto.

Mr. Lundregan's contributions included many well-known community volunteers with whom he and I have both served on the Hilliard Education Foundation.

The bulk of Mr. Maggied's funding was in the form of a loan.

I solicited no donations, and paid for the signs and flyers out of my own pocket.

I have to admit being a little envious when, while passing out flyers in one neighborhood, I saw a guy who was distributing flyers for both Mr Maggied and Mr Lundregan simultaneously. Since these two are the candidates endorsed by the teachers' union - the Hilliard Education Association - I expect this guy was a union member, or a someone hired by the union.

From my days in a marketing role, I remember this adage vividly: Half of all advertising dollars are wasted - the challenge is figuring out which half.

It's easy to spend a lot of money on a marketing campaign. With a projected 25% voter turnout, few people who saw any of the signs, flyers, etc will follow through at the polls. Spending more money will not change that materially.

My hope is that there are enough people in the community who know me; whom you have spoken to about me; who have read the website, blog and flyers; who understand that my intention is to be anything but yet another standard issue Board member; and who will get out and vote in sufficient numbers to entrust me with a seat on the Board of our community's most important institution.

Next Tuesday, please cast your vote for PAUL LAMBERT.

Thursday, November 1, 2007

Big Decisions

Over the next couple of weeks, the Board of Education has two critical and interconnected decisions to make. These two decisions will affect our community for years to come. I think it's a crock that these decisions are being timed so as to fall after the election, so that neither Doug Maggied nor Dick Hammond can be held accountable. The decision will also be made before the new Board is seated in January 08, meaning that one or two of the members might cast their votes as lame ducks.

The first decision is to reach agreement on a new contact with the Hilliard Education Association, the labor union representing our teachers and other staff members. Salaries and Benefits represent 90% of the total operating expenses of the district, projected by the Treasurer to increase from $121 million in 2007 to $172 million in 2012. This $52 million increase represents 96% of the total increase in spending by the end of 2012, and calculates out to a compound annual growth rate of 9.3%.

I attended the Board meeting this week (11/29, at Hoffman Trails Elementary), and was the only member of the public who rose to address the Board during the time for public comments. My request was simply this: Before the Board takes the vote to ratify the HEA contract, please publish the contract on the district website so as to give the public a chance to review, analyze and comment. I asked the Board to seek community input prior to their decision. There was no response from the Board, and my guess is that they will ignore my request.

The Ohio Sunshine Laws allows the Board to use Executive Sessions when "preparing for, conducting, or reviewing negotiations or bargaining sessions with employees." However, they must vote on the contract in a meeting open to the public. It is appropriate, in my opinion, for the Board members to comment on their reasons for believing the contract is a good deal for the community.

The second decision is a derivative of the first: How large will the next operating levy have to be - the one that will be on the ballot in the Spring?

More than six months ago, I wrote that based on my analysis of the 2006 Treasurer's Five Year Forecast, that this levy would need to be on the order of 16 mills. However, the Board has in mind that it will be less. The Treasurer has even stated that "It will be less than 10 mills."

At this week's Board meeting, the Treasurer presented his new Five Year Forecast. As of the time of this posting, this new forecast is not available online, but Mr. Wilson was good enough to give me a hardcopy.

The news isn't getting better. Revenue and spending continue to diverge, so the numbers for 2012 look worse than 2011. The accumulated funding shortfall by the end of 2012 is now projected to be on the order of $111 million, with a burn rate of $45 million/yr.

I've built a spreadsheet*, using the Treasurer's numbers, to estimate the number of mills required to raise this much money. A key factor is one I got from the Franklin County Auditor's office: 1 mill of taxation raises $2.4 million based on the April 2007 tax base. Here's what the analysis suggests:

One option is to ask the community to take on a single levy that will provide enough funding for six years (assuming the State of Ohio doesn't further cut our funding). To ensure that our General Fund Balance remains at least 10% of our operating expenses, which is current Board policy, the levy would need to be 17.7 mills.

Another option is to pass one levy this Spring, knowing that another levy will need to go on the ballot in May 2011. Let's assume that both levies are for the same millage. Again, to ensure that the General Fund Balance stays at least 10% of operating expenses, both levies would need to be 11.9 mills. One can mistakenly believe this sounds better, but what it means is that we would be paying 11.9 additional mills for the first three years, then 23.8 mills for the last three years.

But here's what I believe the Board is thinking: Let's get as small a levy on the ballot as we can in 2008, and we'll put off the bad news not only until after this election, but after the upcoming levy vote as well. Their fear is that if the levy request is too large, it won't pass, and they would rather be underfunded a couple of years out than in a crisis next year.

So what if a 9.5 mill levy were put on the ballot on May 08?

The first consequence will be that our General Fund will be exhausted by the end of 2011. Another crisis will be looming. To restore the General Fund Balance to 10% of operating expenses, we would need to pass another levy in 2011 for 16.4 mills. As a consequence, from 2011 forward, we will be paying nearly 26 mills more than now.

That 26 mills represents a 61.5% increase in our current property taxes.

Does that wake you up?

The Board of Education is elected to serve the people of the community, acting as our agents in the management of the school system. Unfortunately, our Board of Education has developed a mindset over the years that their mission is to manage the community and manipulate us into passing levies by appealing to our emotions (Do you love your kids? Then vote for the levy).

By failing to educate our community about school funding, and by not being open and clear on financial matters, our School Board will find that the community will be suprised and shocked when the truth of our funding mess comes to light. It will take years to recover from the resulting loss of trust...

... if something doesn't change - right now.

I'd like to drive that change from a seat on the School Board. If you agree, please tell all your Hilliard friends to make the effort to get to the polls next Tuesday (11/6), and cast a vote for PAUL LAMBERT.

* If you would like a copy of this spreadsheet, email me at

Charter Schools: Good or Bad?

The Oct 31 issue of Hilliard Northwest News ran a story titled: "Charters Cost Hilliard Schools over $1 Million"

Let's take a look at some numbers:
  • According to the District website, the total spending per pupil is $9,860/yr
  • The above article says $1.2 million in state aid was "diverted" to charter schools to fund 175 students.

Doesn't $1.2 million divided by 175 students work out to about $6,860 per student?

Why is it that the charter school can get a kid educated for 70% of what it takes our school district?

Isn't it true that if a kid withdraws from Hilliard City Schools and transfers to a charter school, the district is relieved of $9,860 of cost, but loses only $6,860 of funding? Doesn't that mean the district is $3,000 better off?

Some will say that I don't understand the difference between fixed costs and variable costs, or that this needs to be analyzed on a marginal-cost basis. Actually I understand these concepts quite well, and will be the first to say that my comparison above is not alone sufficient to draw a conclusion. But the facts suggest that having kids go to charter schools and take a little funding with them does not cause harm to the school district.

Why are parents pulling their kids from our district schools to send them to charters anyway?

Dick Hammond, a incumbant Board member and candidate for re-election, was criticized by the teacher's union for sitting on the Board of a for-profit charter school. He defended his position at the 'Meet the Candidates' night, saying charter schools "could not exist if public schools were doing all they could be doing for all the kids in the district." I agree. "Hilliard," Mr Hammond went on to say, "has few students in charter schools, because needs are being met."

If out of a population of 15,000 students, 175 (1.2%) choose to attend charter schools, does that signal a failure of the school district?

Of course not, but it may mean that the school district is failing to serve particular kids. As a parent, I understand that my first priority is my kids, and the viability of the school district a distant second. I don't really care, many will say, if the school system is serving your kids well, but I will certainly fight for mine.

As long as it is only a small fraction of the kids who are transfering to charter schools, what harm is there to the district?

The fear is that these first charter schools are the tip of the iceberg. After all, if 500 elementary kids transfer to charter schools, the district could conceivably shut down an entire elementary school and lay off all the teachers, administrators and staff employed there. That makes it easy to understand why the teachers' union would be opposed to charter schools. Doug Maggied is often heard to say "It's all about the kids." Is it really?

I don't understand why any Board members would take a position in opposition to charter schools. Why not instead try to figure out why those 175 kids chose to leave our school system, and see if there is a common theme?

One of these days we'll break out of this mode of thinking where public schools with exclusive service territories is the only way to organize public education.

Tuesday, October 30, 2007

Bad Optics

During the Spring of 2006, Superintendent Dale McVey recruited Dave Lundregan to chair the committee set up to campaign for the passage of the bond levy which would ultimately fund the construction of Washington Elementary and Bradley High School. Mr. Lundregan in turn recruited Bobbi Mueller as co-chair. They named the campaign "Our Kids Can't Wait." As we all know, the campaign was successful. Washington Elementary is open, and the construction of Bradley High School is well underway (as I can observe from my window as I write this).

Why is it that a campaign committee is established when a levy needs to be put on the ballot? It would seem to me that if the district leadership does a good job of educating the community continuously about how money is being used and where it comes from, when the time comes that more money is needed, the community would be well-informed and supportive.

Instead, the district leadership sets up these campaign committees and gives them the task convince the majority of the voters, in a short period of time, that a pile of money is needed. It is a tough and expensive task to overcome the initial negative reaction folks have to being surprised with a request for more money, especially when the amount is substantial.

The "Our Kids Can't Wait" team decided that a community survey was in order. They contracted with Saperstein Associates, a Columbus based public opinion research firm, who designed and executed the survey. I was one of the folks the called, and spent a good deal of time on the phone with the interviewer. The questions were quite interesting, and I've long tried to get someone to share the results with me.

These surveys aren't cheap. Saperstein Associates charged the campaign committee a total of $18,300 to design the survey, perform the interviews, and analyze the results. Another $10,900 was spent with Burges & Burges, a political strategy firm based in Cleveland. In total the committee spent about $45,000 on this campaign.

Where does that money come from?

That information must be filed with the Board of Elections, so while I was down there dealing with some other paperwork associated with being a candidate for Hilliard School Board, I asked to see copies of the "Our Kids Can't Wait" campaign finance reports.

The majority of the contributors were individuals, PTOs, and other small organizations who put in $50 to a few hundred dollars. While their numbers were many, the total dollars raised from these folks was a small fraction of the total funding needed.

Edwards Golf Communities also put $2,000 into the fund. Edwards is the developer of Ballantrae. That makes it easy to understand their interest in seeing the levy pass: the construction of Washington Elementary had been long anticipated by Ballantrae residents, and would be an important selling point to potential future homebuyers.

One major contributor was Fanning Howey, who gave $10,000. Fanning Howey is a firm that specializes in the architecture, engineering and project management of school construction. It also happens to be the firm that was hired by the school district, for a fee of $2.2. million, to be the project manager for the construction of Bradley High School.

Fifth Third Bank also put in $10,000. When a bond levy passes, the district sells municipal bonds to raise the cash to build the schools. Fifth Third will be handling $60 million of these bonds, and their commission could be expected to be substantial.

Burges & Burges also gave $500 (after having invoiced the committee the $10,900 mentioned above).

A boss of mine sometimes used the phrase "Bad Optics" to mean something just didn't look good. To me, there's some bad optics associated with having businesses contribute to political causes which put money right back in their pockets. In this case, Fanning Howey and Fifth Third fit into that category.

When I served on the Board of the Hilliard Education Foundation, we weren't shy about asking for money from corporations who made a lot of money doing business with Hilliard City Schools. I suspect that this is the spirit in which Fanning Howey and Fifth Third Bank were solicited by the "Our Kids Can't Wait" campaign.

But there is a fundamental difference between what HEF does, and the purpose of this committee. Contributors to HEF know the money is granted directly to teachers to fund some of their great ideas that can't be paid for with tax revenue.

But a successful levy campaign would put millions of dollars of taxpayer money in the coffers of Fanning Howey and Fifth Third. As altruistic as their contributions might be, it still has bad optics.

My solution is to not use these levy campaign committees at all. Don't get into these situations of needing a lot of money to run a campaign in the first place.

Our administrative team has public relations/communications folks on staff. All we need is a communications strategy to effectively educate and inform the people of our community about the economics of the school system. There are hundreds of professional educators in our system, so wouldn't you think that the development of lesson plans for this subject is right up someone's alley?

Monday, October 29, 2007

Don't Let Apathy Win

As of July 2007, the number of registered voters in the Hilliard City School District was 43,751.

What a shame it is that in the 2003 election, only 12,823 people chose to vote for school board candidates. The 2005 election was even worse, with 11,129 people voting for school board candidates.*

There was a slightly better turnout for the 2006 bond levy - 15,394. The vote was 8,229 FOR to 7,165 AGAINST. Think about this a second: Less than 20% of the voters in our community made the decision to commit 100% of us to paying off the $75 million mortgage for Washington Elementary and Bradley High School.

In the coming four years, the Hilliard Schools Community is going to face a gut-wrenching financial situation: how do we deal with a projected $40 million annual funding shortfall? The way that question is answered will affect the quality of life, the cost of living, and property values in our community in very significant ways.

If you haven't cared before, you need to start now. You need to decide whether you want to return to the Board the incumbents who led us into this mess, or replace them with experienced business executives who fully understand the situation and know what to do.

I recognize that the folks who read this blog and are ones who do care, and are going to vote on November 6th. The folks that need to be reached is everyone else.

As far as media goes, the best way for reaching the people of the community remains the community newspapers: Hilliard Northwest News and This Week Hilliard. Both have run decent articles during the campaign. A couple of friends and I have passed out 1,000 flyers, and there are a number of yard signs posted in strategic places (although a couple of mine have disappeared).

Still, the most effective way to reach the voters is personal contact. Not just from me, but from each of you. So please take this as a request: Please tell everyone you know to come out and vote.

If you are so inclined, I would appreciate your recommendation that they vote for me.

* approximation calculated by taking the total number of votes cast for board candidates and dividing by the number of open seats. There may have been cases of people not voting for as many candidates as were allowed, which would throw this calculation off by a very small amount

Friday, October 26, 2007

Win-Win Pt II

At this week's "Meet the Candidates" night, a question was asked about our support of the Win-Win Agreement.

Part of Doug Maggied's answer was that we pay $1 million/yr to Columbus City Schools to satisfy the revenue sharing conditions of the Agreement, but that we get back $10 million/yr in tax revenue from the properties in the Win-Win area. Net is $9 million/yr in revenue to the school district. Doug seems to think that makes it a winning proposition for Hilliard City Schools. But that's not the end of the story.

The Win-Win areas are parcels of land that have always been in townships within Hilliard City Schools until annexed to the City of Columbus so developers could get water/sewer services for all the homes they built. These areas include a number of significant commercial parcels, include the massive Buckeye railroad yard and many of the businesses near the Rome-Hilliard and I-70 interchange.

But lots of kids live in those areas as well. The Win-Win area encompasses neighborhoods such as following (with the number of students, source = data provided to the Redistricting Committee):

Western Lakes: 401
Golfview Woods: 214
Village at Thornapple: 225
Saddlebrook Condos: 224
Hilliard Green: 203
Hilliard Village: 182
Sweetwater Estates: 164
Bayside Commons: 195
The Meadows: 123
River Run: 70
The Glen: 195
Stonewyck Manor: 23
Scioto Trace: 32
Cabot Cove: 55

The cost per student is $9,860/yr in our district, so we eat up that $9 million in net revenue if there are 1,000 or more kids living in the Win-Win areas. The list above adds up to more than 2,100 kids, and this is not complete. These 2,100 kids alone represent $20.7 million in annual cost.

That $9 million of net revenue we get out of the Win-Win area doesn't look so hot now.

So does this mean I think we should withdraw from the Win-Win at the next opportunity? No. Even if it seems to make sense from a fiscal standpoint, these neighborhoods are part of the Hilliard community. Hilliard City Schools did not annex the land these homes sit on - they were always part of the Hilliard School District. The people who bought those homes did so believing they were buying into the Hilliard Schools community. It is politically unthinkable to abandon our neighbors at this point.

These facts are part of the truth everyone needs to understand. It means that it's not just Mayor Schonhardt and the Hilliard City Council we have to hold accountable for letting developers build houses all over, it's also the decisions of the Mayor of Columbus and the Columbus City Council we need to influence. The terms of the Win-Win will need some significant changes next time around.

With your vote, I'd like to fight this battle from a seat on the School Board. But it will take the politicial might of our whole community to regain control over these politicians and developers.

Thursday, October 18, 2007

Teacher Salaries and Truthtelling

In the October 18, 2007 issue, Hilliard This Week published a story titled “School salary negotiations to begin next week.” A key sentence in the story was this:

The first wage increase negotiated for the teachers took place in January 2005 with a 3.5 percent hike, followed by a 3.65 percent raise in 2006 and again in 2007.
As I alerted readers in an earlier post, this is not the whole truth. The members of the teachers’ union – the Hilliard Education Association – get two raises each year. The first, the one noted in this story, is the amount that the entire payscale is raised.

For example, a teacher who has a Master’s degree and 10 years of service would have been paid $56,971 in 2006. In 2007, a teacher with a Master’s degree and 10 years of service gets paid $59,050. The difference is $2,079, or 3.65%.

But here’s the rub. We’re not talking about the same teacher!

A teacher with a Master’s degree and 10 years of service in 2006 becomes in 2007 a teacher with a Master’s degree and 11 years of service. The pay for a teacher with a Masters and 11 years is $61,500. So this teacher’s pay would increase from $56,971 in 2006 to $61,500 in 2007. That difference is $4,529, or 7.95%.

When $96 million of our annual operating budget goes to pay salaries, the difference between 3.65% and 7.95% is $4 million per year. Isn’t that worth more complete disclosure?

This is my #1 complaint about the way our school system is run – the leaders hide the truth. They don’t talk to us about the magnitude of the funding shortfall our treasurer is forecasting ($37 million/yr by 2011), or how much our taxes will have to go up to cover this shortfall (40%).

They don’t tell us when they do a deal with a developer to put in a mile long water line costing us $834,000 but that the developer gets to use for free.

We don't know about these things because the Board sprints through the public part of their agenda in minutes, then retires to Executive Session for hours, where such things are discussed out of the public eye.

If you’ve had enough of this, please vote for me on November 6th. Meanwhile, please make sure all your friends and family in the Hilliard School District know about this blog, and the associated website:

Monday, October 15, 2007

Superintendent's State of the Schools Address

Superintendent Dale McVey delivered his annual State of the Schools address on October 2, 2007. I regret that I failed to attend, but Mr. McVey was good enough to send me the text of his address, posted here.

Mr. McVey sets a very positive tone with his message, which is appropriate. We have an excellent school system, which is a tribute to all who play a part.

But there is danger on the horizon, and I don't understand why our school leadership avoids ringing the alarm bell. Readers of this blog and the SaveHilliardSchools website know that funding is an immediate and critical issue - the most critical in my opinion. Without adequate funding, the ability to operate our district at current performance levels is jeopardized.

Once again, an important opportunity came and went without our school leadership communicating any real numbers. Saying they're available on the website (see page 107) isn't good enough; these numbers should be front and center every time the topic of school finances come up. Allow me:

Our treasurer forecasts an annual funding shortfall of $37 million by 2011. To raise an additional $40 million/yr with our current tax base requires raising our property tax rate by 16 mills, or 40%.

Mr. McVey focuses the problem on the fact that the State of Ohio has frozen its funding to us. This is indeed an important factor, and we need to be sure we keep our face in front of our legislators and the Governor's office. But we should be prepared if the answer we get from the State is to keep our funding where it is.

Being prepared means making sure the folks of our community understand the basics of funding, and what has changed over the past decade -- an explosion of residential homebuilding without commensurate commercial development. The developers have harvested our community and left us with the bill.

If you don't understand this statement, send an email to me at I'll spend all the time with you that you need to understand.