EAST LIVERPOOL - With advanced planning, a scalpel rather than a meat cleaver can be used to pare down spiraling expenses before they create a serious problem in the city school district.
That was the message received recently by the school board from a comparison study compiled by K-12 Business Consulting Inc.
A presentation on the results of the study was shown at the recent school board meeting by company President Christopher Mohr, who outlined areas of concern anticipated in the 2016-17 fiscal year when the district could be spending more than it brings in unless additional funding is realized.
Mohr pointed out the district had been in fiscal emergency twice since 1998, ending its last one in 2009, and is now seeking long-term fiscal sustainability.
While the district anticipates receiving an additional $1 million in annual funding with the current state budget which Mohr said will stabilize finances in 2014 and 2015, spending is expected to exceed revenue in subsequent years unless that trend continues in future state funding.
The 53-page study showed where the district costs are out of line and why, comparing it to other regional and local districts' costs.
Mohr pointed out the district is highly dependent upon state funding, saying, "It's one of the highest I've ever seen" with 80 percent of its funding coming from the state instead of local tax dollars.
The cost per pupil is also high compared to both regional and peer groups and is, in fact, the highest in the regional comparison, with the district spending $936 more per pupil than its peer district average.
Mohr said one of the primary reasons is the low pupil-teacher ratio resulting from a high special education population and the independent vocational educational program.
The city district has 18 percent of its students enrolled in special education, which is 50 percent higher than the state average, according to the study.
Pupil-teacher ratios for many vocational and special education programs are required to be lower than the 25:1 ratio for general educational programs, which drives up instructional costs, the study noted.
Higher transportation costs due to the district's policy that all students can ride adds to the per-pupil cost, but Mohr admitted, "I cringe when I think of the winters you have here" and the topography students would have to navigate if forced to walk to and from school.
A "significant contributor" to the higher cost per pupil is the fact the district is maintaining more square footage per student than comparable districts, at 167 square feet per student, or 40 square feet per student more than other districts.
This is due, in part, to the Westgate facility not being filled to capacity but also to the district offering some facilities other districts don't have, such as two auditoriums and a field house, which Treasurer Todd Puster pointed out are "very important to the district."
Some "apparent overstaffing" also contributes to higher custodial and maintenance costs, the study noted.
In other personnel areas, the study showed if the district were to increase its teacher to student ratio to 19, the highest in the comparative group, it could reduce the teaching staff by 38, for a savings of $1.9 million in salaries plus fringe benefits for a total savings of $2.9 million.
Looking at special education aides, the district also spent $600,627 for support staff in 2010, which increased to $1.2 million in 2012 and is due to increase again this year with five new aides hired.
With 39.50 full-time employees in special education compared to 16.50 in similar districts, the city district could save $1.4 million by reducing to the lower number, it was noted.
Mohr said he had "never seen anything quite like this" in comparing the teaching staff's level of experience to similar districts, noting that those with between five and 10 years are "almost non-existent," whereas the number of those with 10-plus years is the highest in the study group.
This also drives up the per-pupil cost due to the higher salaries and benefits earned by the more experienced staff, and the study indicated it would benefit the district to help more experience staff retire as part of an attrition plan, resulting in cost savings by hiring lower-paid teachers.
The cost of substitutes has also risen sharply and should be reviewed, Mohr noted.
The district's health insurance costs are also high, and it was suggested looking at increasing the 7.3 percent employee contribution (as of Sept. 1) to a higher percentage, with 15-20 percent the norm in other districts.
Raising the percentage to 15 percent could save the district at least $445,000 annually.
Other areas were shown to be operating at high efficiency, including financial management, with Mohr saying the district's five-year forecast prepared by the treasurer's office was "about as good as I've ever seen."
Procurement practices, such as bulk buying and price checking, and the transportation and food service operation were also given high marks for efficiency.
Conceding the district has some "extreme challenges," such as the high special education numbers, Mohr commended officials for addressing the issues proactively, saying, "Your school district is on top of the game and you want to stay on top of the game."
Puster agreed, saying, "There are a lot of ways to cut costs and often a meat ax approach is used. But if you get to it soon enough, you can avoid a meat cleaver and use a scalpel."
The board took no action on the report but commended Mohr for its thoroughness.
The complete report is a public document and can be requested for review at the treasurer's office in the Westgate complex.