Thursday, November 24, 2011

Levy Passed, What's Next?

I'm happy that our community passed the levy issue, albeit by an extremely slim margin.

I've come to view levies as the mechanism which the School Board uses to facilitate a negotiation within the community. There is not now, nor will there ever be a time when every single voter in our community agrees on exactly how our schools should be run, or what it should cost. It will vary depending on whether the voter has kids in school, on the voter's financial status, on the voter's political philosophy, and a myriad of other personal factors.

So I look at a levy issue as more of a proposition, explaining what will be offered if the levy passes, and what will happen if it fails. If a majority of the voters accept the proposition, the levy passes. If not, it fails.

What should happen if a levy issue fails?  I think that when that happens, the School Board should adjust the proposition and ask again by putting a new levy proposition before the voters. I think this because not putting a levy on the ballot denies folks a chance to accept a different proposition.

That doesn't mean that if a levy fails I advocate running a levy at every single opportunity following until one finally passes. I think that would annoy the community, and unreasonably burden the emotional, physical and financial resources of the levy campaign team. I think there's a better way to go about this - more later.

In this case, the community rejected the proposition offered in May, but accepted the proposition offered in November, which included the commitment to not ask for more money until 2014 at the soonest (but we have to be realistic and say that we might have to revisit that if the State of Ohio makes further significant cuts to our funding).

As a result of the levy passing, here's what our Five Year Forecast looks like in graphical form:
click to enlarge
As has been the case for years, 88% of our spending is on comp and benefits, which is as it should be. It's also the only part of the budget which is growing materially. That's good too - it indicates that the 'overhead' part of spending is being held constant.

click to enlarge
Notice that the projected spending for Compensation and Benefits for future years is well less than it was projected to be just a year ago - by about $18 million in FY15. This reflects the terms of the new agreement with the unions for 2011-2013 - including the projected impact of the early retirement incentive program for the teachers and additional contribution toward the health insurance premium.

It also assumes a resumption of annual 4.15% step increases in 2013 (which is effectively 2.3% given the mix of teachers on and off the step years), but with only 1% base pay increases starting 2014.

Since the most significant of the budget, and the only part that's growing is comp and benefits, that's where we need to focus our attention. So what drives up the cost of compensation and benefits?

Clearly, the most significant driver is whatever gets negotiated into the teachers' contract in terms of the salary grid. If you're not familiar with how this works, I recommend that you read an article I wrote titled Teacher Salary History. Their current contract runs through 2013, and I don't anticipate engaging in negotiations again until then.

So in regard to teachers and staff, the labor rate is set, but that's only half of the equation. The other half is the number of teachers and staff we choose to employ. At the end of FY11, our district employed the equivalent of 1,716 full time employees, 1,117 of whom were teachers. The remainder includes 202 pupil and teacher support staff, 131 building and grounds maintenance personnel, 125 bus drivers and other transportation staff, and 108 administrators (source: 2011 CAFR, page 110).

So what determines the number of teachers we employ? It depends on the grade level. At the K-5 level, it's mostly about the number of students we want to have in each classroom. As you can see from the monthly Enrollment Report, the overall K-5 ratio is 23.6 students per classroom.

When you get to the high schools, the variety of course offerings also becomes a driver. Our high school catalog offers over 300 courses, although not every course is offered every semester. Some classes are pretty large, with 30+ kids, and some - such as our new Chinese foreign language offering - have single digit enrollment.

Overall in our district, the student-teacher ratio is 22.5/1, while the average for our region is 25/1, and that ranges from 18/1 in Upper Arlington and Bexley to 35/1 at Groveport-Madison.

If we increased our student-teacher ratio to 25/1, our need for teachers would diminish by 70, which could reduce our spending by about $3.5 million per year (assuming junior teachers averaging $40K+benefits). We have a unique opportunity to do such a thing in the coming year, with potentially a large number of teachers retiring to take advantage of the early retirement incentive program. It's an opportunity to adjust staffing levels without layoffs, and that must not be ignored.

In addition to their normal pay, many employees of our district also receive stipends and supplemental salaries. Once again, these rates are set in the union agreements, but there is a choice as to how many of these roles will be funded each year.

As is shown on the agenda for Monday's School Board meeting, we will be considering a resolution to authorize stipends for the 2011/12 school year for about 1,000 roles, ranging from $350 each for the 182 participants on the School Improvement Teams ($64,000 total cost), to $1,200 per semester for supervising the high school weight rooms (12 person-semesters/yr for Davidson, 3 each for Darby and Bradley), adding up to about $22,000 each year. The total outlay for all stipends will be more than $600,000 next year.

The resolutions to approve supplemental salaries are dealt with a couple of times during the year. A complete list of these are included in Appendix L of the teachers' contract, starting on page 94 of the Master Agreement. These are expressed as a percentage of the base salary for each teacher, ranging from 15% for the head football, basketball and wrestling coaches, as well as the head instrumental music directors, to 5% for an assistant drama director or an assistant middle school tennis coach.

Administrative contracts have terms of varying terms and expiration dates. You'll see these come before the Board for action at the appropriate times.

My opening statement was to describe levy issues as the way the School Board facilitates a negotiation within the community. I also think it's an extraordinarily inefficient way of accomplishing this task.

We have lots of things to talk about in regard to our community and our schools, and with the passage of this levy, we've bought some time to figure out a better way to get this done.

My suggestion is that we use a process that has worked pretty well for us over the past few years - a large committee (~100 members) of diverse viewpoints called together to deal with a challenging question. It has been used for adjusting attendance boundaries when Bradley and Washington were built, for looking at student housing alternatives, and most recently for developing an approach for Pay-to-Participate fees.

What do you think of that? Would you participate?


  1. Paul, an independent committee would be the best and I think a lot of people would make the commitment. It will be a time investment on the part of an individual but worth the time
    I would think many on this blog as well as others would be interested.

  2. I will say again,

    The supplemetal contract payments are totally out of contral. So much for your bare bones education school board members.

    Supplementals are entitlements we cannot afford at these levels. Submit a plan to get seniors,
    layed off workers, retired workers, moms and dads, regular private sector workers to mentor some of this and drastically reduced payments.

    The supplemental portion needs to be studied immediatly, this MOndays resolution should be
    tabled,until a full explanation comes out why we need each andevery one of these payments and the public has a real chance to study the explanations and comment on them

    So much for the bare bones crap we keep hearing about.

    Business as usual and arent we suprised, except it did not take very lone

  3. Defining terms is very important in a discussion like this. A term like "bare bones" (i.e., 'essentials') is subjective and might mean a very different thing in Upper Arlington City Schools than it does in Hamilton Local Schools. I imagine that there are a wide range of opinions in our own community on this matter.

  4. You said:

    "As has been the case for years, 88% of our spending is on comp and benefits, which is as it should be. It's also the only part of the budget which is growing materially. That's good too - it indicates that the 'overhead' part of spending is being held constant."

    While I would agree that the majority of our spending should be on staff, I would disagree that it being the only part growing is good.

    The reality is, given inflation and a growing student population, stagnant spending on non-staff spending means that the money available per child for text books, paper, desks, lab equipment and other classroom supplies is shrinking. The district needs to spend more on non-staff expenditures each year in order to keep supplying each child with the 'things' they need to succeed at the same level they have in the past.

    That staff expenses are growing and the rest is not tells me that staff costs are growing out of proportion and are crowding out other needed expenses. We need a balanced and reasonable level of growth in spending in all areas that takes into account inflation and rising enrollment. I'd like to see a historical analysis of the cost per student of staff and the cost per student of everything else. One is rising, the other falling would be my guess.

    You also indicated that there will not be a need to revisit staff contracts until 2013. While that may be technically true, the fact that staff costs are driving the budget tells me that the board needs to take a look at spending in this area compared to other districts as well as the economy as a whole. Is our spending growing faster than other districts? What about the private sector? What about the overall economy? While we cannot directly compare our teaching staff against engineers or accountants, we need to know if these costs are growing faster than other areas of the economy. After all, most of the folks paying taxes are in that 'rest of the economy'.

    This isn't to beat up on the staff or to not compensate them fairly or well. It's simply to be informed. On the contrary, there is no way to know how fairly or generously we are doing without such an analysis.

  5. Thanks for weighing in.

    I don't disagree that growing personnel costs tend to squeeze everything else out of the budget, and have said so many times.

    However, I will disagree with your assertion that holding non-personnel costs constant is not desirable. One could argue that keeping those costs constant is an expected result of finding efficiencies that offset the rising cost/quantity of the basket of stuff we need to buy (which is not the same thing as inflation).

    This School Board doesn't seem all that interested in diving into the numbers (and the majority of the members have been re-elected at least once, so the voters seem okay with that too), but there is one number that does get attention - spending per student.

    Using data collected by the Ohio Dept of Ed (the 2010 CUPP Report), our expenditure per pupil was $11,475. Of 19 school districts in our region (the 16 in Franklin County plus Olentangy, Marysville and Pickerington), we have the 9th highest spending - right in the middle.

    In this group, we have the 5th highest average teacher salary ($69,369, UA is highest at $74,744), but we have to remember that this average is influenced by the average number of years of service. Olentangy, for example, seems to have a much lower average teacher salary than us ($58,920), but it's because only 38% of their teachers have 10+ years of experience, while 66% of ours do. That's the reason we have an early retirement incentive program in the current contract with the teachers.

    Reopening our contract with the teachers right now would be foolish. It's a fair deal for both parties and, with the passage of the levy, gives us all a breather to just serve kids and not battle over economics.

    However, as I said in the main article, we do need to look at things like the student-teacher ratio, and the breadth of our high school course offerings. Of those 19 districts in our region, we have the 7th lowest student-teacher ratio (lower means fewer students in each classroom), at 23, but the 2nd highest of the districts in our region which are rated Excellent with Distinction.

    Again, thanks for weighing in

  6. Paul, what sort of information exists on classroom teachers vs. administrators (non-classroom payroll)? I'm wondering how Hilliard stacks up in isolation (how many classroom teachers vs. administrators) -- probably even more than how Hilliard looks relative to nearby districts.

    I've seen discussions about fiddling with our student-teacher ratio, but I don't understand how (or if) that affects administrators. Taking a quick run down the staff list for one of our high schools, for instance, shows (as near as I can tell) around 91 classroom teachers, and 57 staff in some sort of supporting role (ranging from Principal to custodians).

    I don't think it's productive to debate the merit of any of these positions in a vacuum, but in the interest of understanding some of these numbers a bit better, I am interested in understanding how we evaluate our needs for these positions in relation to school populations, etc.

    Are these positions counted in calculation of the student-teacher ratio you quoted, for instance? If so, that would seem to skew that number in an irrationally optimistic way (custodians certainly contribute to the productivity of the school, but it doesn't seem right to count them in that ratio, for instance). If we're *not* counting them, on the other hand, then I'd certainly be interested to see how we're managing our total staff size per student, as this is the number that ultimately drives payroll.

  7. David: I've spoken often of a report (spreadsheet really) published by the Ohio Department of Education called the CUPP Report. It the source of nearly all the data I cite in this blog.

    I've finally learned how to use Google Docs, so I've uploaded the most recent version of the CUPP Report - you can find it here.

    The data is pretty raw - I've generated numerour other columns for my own use, and will gradually introduce some of them to this version (and will mark them as such). But this should give the numbers geeks something to chew on. Note the 'filter' arrow available in the County column - that allows users to select just the counties of interest. I suggest that if you're looking for comparisons in Central Ohio, you also include Olentangy (Delaware), Marysville (Union) and Pickertington (Fairfield).

    To help answer your questions, you can go over to the columns that report "District XYZ Expenditure per Pupil," about column AT

    By state reporting standards, the categories for XYZ are:

    Administration: all expenditures associated with the day to day operation of the school buildings and the central offices as far as the administrative personnel and functions are concerned. Items of expenditure in this category include salaries and benefits provided to all administrative staff as well as other associated administrative costs

    Building Operation: all items of expenditure relating to the operation of the school buildings and the central offices. These include the costs of utilities and the maintenance and the upkeep of physical buildings.

    Instructional: all the costs associated with the actual service of instructional delivery to the students. These items strictly apply to the school buildings and do not include costs associated with the central office. They include the salaries and benefits of the teaching personnel and the other instructional expenses

    Pupil Support: the expenses associated with the provision of services other than instructional that tend to enhance the developmental processes of the students. These cover a range of activities such as student counseling, psychological services, health services, social work services etc.

    Staff Support: all the costs associated with the provision of support services to school districts’ staff. These include in-service programs, instructional improvement services, meetings, payments for additional trainings and courses to improve staff effectiveness and productivity

    Source: ODE website

  8. Thanks, Paul. I'll try to take a look at this a little more closely. Right off the bat, though, there are a few numbers that jump out as interesting -- the CUPP report shows 687 FTE's for teachers and 68 for administrators, both of which are lots lower than the numbers you quoted (from the CAFR).

    The District Total Expenditure per Pupil multiplied my the avg number of pupils (col F) also gives a total expense of about $177m, which seems to be more than the amount shown on your graph for FY10 (somewhere around $158m?), so I'm not sure what to make of that.

    I'm also really intrigued by the numbers reported on some of the school's web sites vs. this report -- the school I indicated above lists 148 names, and its profile says it's got 99 "certified professional staff" for a population of 1,500 students. Among other things, this implies a student / teacher ratio approaching 15:1, which is great, except that other schools would have to be *lots* worse than that in order to have a 23:1 ratio across the whole district. I understand there's some wiggle-room around "FTE" vs. named staff, but still...

    I fully admit I haven't spent enough time with these numbers to feel comfortable drawing any conclusions yet, but I can't help feeling that there's some decimal dust floating around here. In any event, thanks for the ongoing dialogue -- it's very helpful.

  9. Paul, an email came into our homes today about us being the lowest cost per student of the 16
    districts. Can you enlighten me, because I dont think this is true. Communication ?

  10. Paul,

    Thanks for your reply. I truly appreciate your engaging the community here. Allow me to clarify:

    I do agree that holding the line on spending is a good thing in general. However, doing so to the point where we are spending less per student each year makes me wonder if we are sacrificing quality as a result. Seeing that staff expenses continue to grow seemingly unchecked makes me wonder more. What we all want is the best we can get in each category for the least expense. Sometimes we can spend less and get the same thing, or at lease similar, but thinking that we can year after year continue to cut what we spend on 'everything else' and get the same quality is wishful thinking.

    I hear a patting on our back for holding the line here, but on the biggest part of the budget (staffing) we've done little to hold the line it seems. My advocacy is not for increasing spending on 'everything else' but rather that the same rigor be applied to the entire budget. Teacher / student rations is one way to manage staff spending, another is to take a hard look at the generosity of our contracts. I'm not suggesting we renegotiate now, but rather we take a look at our contracts vs. comparable local districts and compared to the economy as a whole. Based on what I've read at your site, a teacher hired out of school in Hilliard can expect 7%+ increases every year for their first 15 years automatically. That seems way out of line with the general economy. I can tell you in 20 years since graduating college, I can think of one year where I've gotten more than maybe 4% increase without a job change. In the past 4 years I've gotten zero, and one of those got a cut.

    Contractually guaranteed wage increases are not the reality for most folks. We get what we get and hope that it covers inflation. Maybe our teacher/staff contracts are in line with both local districts and with the general economy, but without some research we won't know. That's what I'm suggesting should be done before the next contract negotiations start - research into the fairness of our staff contracts. Right now it feels like they are quite generous indeed and that generosity is meaning that we have less to spend per child every year on everything else.

  11. David:

    I try to use CUPP data as much as possible precisely because of the coherency issues you point out.

    The other issue that arises is with the definitions of data elements. The CUPP report talks about "Classroom Teachers," and if you divide our Year End Enrollment of 14,797 by 687 Classroom Teachers, you get a ratio of 21.5/1.

    The CAFR number of 1,177 is for all instructional staff, which include regular ed (784), special ed (124), and vocational ed teachers (11), as well as tutors (89) and - I think - teaching aides (114), plus maybe a couple of other roles.

    Certified Professional Staff is yet another subset of the data, and it includes not only teachers, but also nurses, psychologists, social workers - generally all the folks who require a professional licenses, but are not administrators.

    This just reinforces the point that any meaningful data analysis needs to be done with coherent data, representing a single point in time with a single data dictionary. I've violated that rule to try to put the issue of staffing on the table, and I apologize for the confusion.

  12. Rick: I can't imagine any official of the school district claiming that we have the lowest overall expenditure per student in the county. We don't - at $11,475, we're right on the average ($11,562).

    We do however have the lowest administrative cost per student in the county ($1,038). But we need to footnote that by saying that in the last reporting year, 22.5 secretaries were reclassified from 'administrative' to 'pupil services.'

  13. Salguod:

    As I pointed above out in the main article, one of the reasons - actually the key reason - the Board was able to commit to a three year levy interval is because the unions representing the teachers and staff agreed to new three year contracts which freeze base pay through 2013, and delay 2 of 3 step increases while eliminating the third.

    There was indeed a time, between 2003 and 2010, when all of our teachers received annual base pay increases as follows:

    2003: 3.75%
    2004: 3.75%
    2005: 3.50%
    2006: 3.65%
    2007: 3.65%
    2008: 3.00%
    2009: 3.00%
    2010: 3.00%

    On top of that, approximately 65% our teachers received annual 4.15% step increases, totaling more than 7% for that set of teachers.

    Since 2010 the story has been much different. The contract signed with the teachers this year specifies that they will have no base pay increases for the entire term of the contract (until 12/31/2013), and will have a couple of step increases postponed to 2013, and one eliminated altogether.

    That means the teachers will have received their last base pay increase on Jan 1, 2010, and will not receive another before Jan 1, 2013 (when exactly is yet to be negotiated). Similarly, they received their last step increase in July 2010, and will not receive another until Feb 2013 (then another in July 2013).

    They have also raised their contribution toward health insurance from 0% of the premium prior to 2008, to 15% starting July 2011.

    Seems like what you suggest has been done - we've addressed the compensation levels. So now we have to talk about staffing levels.

  14. Paul, this figure came out with the Darby News
    yesterday. thanks

  15. Rick: Thanks for letting me know. I've sent a note to Mr. McClure. I'm sure the miscommunication wasn't intentional.

  16. Regarding my "footnote" above about reclassifying 22.5 secretaries from Administrative to Pupil Services category, I was reminded that our district has had the lower Administrative per-pupil cost for a number of years, not just as a result of this classification. Sorry for not being clearer.

  17. "Seems like what you suggest has been done - we've addressed the compensation levels"

    Paul, I respectfully disagree. While I'm very happy with the agreement reached and the sacrifices made by staff, this is a short term solutions. To the best of my knowledge, there is no agreement on changing the paradigm moving forward. There's no reason to believe that the staff won't look to restore the old system once this 3 year agreement expires. In fact, if I understand correctly, the basic agreement with automatic base pay and step increases is unchanged, but instead altered for the next 3 years.

    A system that guarantees ~7% more per year in your first 15 years just for getting a year older is unsustainable for the district and in my experience and way out of step with the reality of the rest of the economy. I have no idea if my experience is common or not, that's why I suggested a team from the community, the board and union representatives investigate the issue. Once we understand how our contracts compare with other districts and the economy as a whole, both sides can then negotiate for a position of knowledge and strength. Without that factual basis, it then becomes a battle of opinions and an us vs. them mentality.

    Class sizes and offerings should be talked about as well, but are secondary in my mind to negotiating a more sustainable long term relationship with staff.

  18. Both step and base pay increases can be modified each time a contract is negotiated, although over the past decade or so, the elected School Boards have chosen to address only the base pay increases, which have ranged from 3.75% (8.05% with step) in 2003 and 2004 to zero since Jan 2010. The only modification to the step schedule has been in the current agreement, which delayed two steps and eliminated one step altogether.

    I agree that there has been no long-term strategic solution developed. But the task is not as simple as some would have us believe.

    It would seem grand if we could put into place union contracts which say something like "85% of all funding would be applied to compensation and benefits." It would make it crystal clear that levies are about compensation and benefits. Levy passes, hand out raises. Levy fails, no raises.

    And if the state gives us a funding whack, there might have to be pay cuts - unless the community decides to fill in the gap, which is largely what happened this time around.

    But even if the School Board decided this is the way to go, such an arrangement would still have to be negotiated with the unions. I think the unions would be very adverse to tying their compensation explicitly to levies, fearing no levy would ever again pass. They might well think it's an issue worth striking over. Then the community would have to decide whether it has the stomach for such a confrontation.

    My #1 reason for getting involved in school governance was to get this issue on the table and discussed in a productive manner.

    I believe the people of the community are willing to pay reasonable taxes in order to pay our teachers and staff a reasonable salary and give them good benefits, as long as the teachers and staff to take the bad times with the good.

    And I think the teachers and staff are willing to accept a reasonable salary and benefit package with some assurance that they won't get whip-sawed in the changing political winds.

    But there's no way we're going to get to a sustainable solution unless we can get the community and employees engaged in a dialog underpinned by facts and truth, and not just emotion and hearsay.

    (My apologies to those who subscribe to the comments, and have seen about four renditions of this one. Not so good with my proofreading this morning. I hope this one is the last...)

  19. Paul, re: your last paragraph, re sustainable solution.

    Work to the contract, poor communication, unsustainable spending, no board policy adherence to reserve fund, endorsed board candidates by HEA, kids should come first,
    premium compensation benefits compared to private sector, 7% raises over a consistent time.
    Failure to save when the PPT was known to be going away, and there are more.........
    No emotion just facts. All have to be addressed
    During the campaign the community was constantly told the schools were the communities schools.
    But until the taxpayers are allowed to speak freely without fear of retribution, when the work to the contract is more important than our kids, then you can blame emotion and hearsay all you want. The individual citizen needs a seat of the table and some tough constructive dialogue might just happen. We are afraid to
    challenge the current paradigm. I dont think
    the above House Bill is necessarily the way to go but it might be the only leverage an everyday person might have to take back control of our schools to the community, not the special interests currently in control.

    The sooner you can get your proposed commitee
    off the ground the better. NO pretty pretty, an honest discussion of what got us here, where we are, and a hard look during economic challenging times at the course offerings, supplementals, like to have versus needs, and no that does not mean doing away with AP classes

    And as the boards good friend Cheryl Grossman
    the pillar of public school funding SIC SIC
    has allready announced her re election campaign
    That means raising hundreds of thousands
    of campaign dollars to dwarf any individual
    perhaps the board having provided her with such
    pretty, happy, happy photo ops, might just ask her in public, (remember our board president campaigned on the state "funding issues") what in fact her plan is to change the way schools are funded per the court ruling that she and her colleagues have basically ignored.

    But we would rather paint the community as( uncaring , not for the kids etc, and hold them accountable " What kind of schools do you want")
    forgetting all the time it wasnt about the kids and about the special interests in our district ;and forgeting about the inaction of the good friends in the legislature !