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E-mail Home > Blogs > Get on the Bus > Archives > 2011 > May > 09 > Entry
Schools save by sharing services
My colleague Tom Beyerlein and I wrote this report for Sunday’s paper:
Since January, Nick Hamilton has been a school treasurer on roller skates, splitting his time among his three employers: the Newton, Ansonia and Mississinawa Valley school districts.
By sharing the same treasurer, the three rural districts stand to save a combined $157,000 a year in taxpayer money, even though Hamilton is better paid than the average treasurer.
“It comes down to each (school) board looking to save money,” Hamilton said. “They are saving pretty significant money by sharing me.”
Arrangements like Hamilton’s may be the wave of the future. As recession-rocked voters reject one additional tax levy after another — in last week’s election, voters turned down all eight local issues seeking new money — and state cuts to education loom, some experts are calling for fundamental change in the ways school districts are organized.
“I think the districts that think outside the box are the ones that are going to survive this,” Hamilton said. “The same status quo of going out asking (voters) for money is gone.”
Warren County’s Little Miami district has one more shot at getting a levy passed this year before the state could take the unprecedented step of dissolving the district because it has run out of money.
Last week, district voters rejected a levy for the eighth straight time.
Proponents say Ohio schools could save hundreds of millions of dollars, mostly in personnel costs, by either consolidating some small districts or greatly increasing the sharing of nonclassroom services between districts, or a mixture of both. Such approaches, they say, could forestall the need for new taxes and allow districts to shift the savings into programs that educate kids.
Two major reports make the case for some kind of consolidation or collaboration. A February 2010 study by the Greater Ohio Policy Center and the Brookings Institution calls for the establishment of a commission similar to the military Base Realignment and Closure (BRAC) panel that would mandate “best practices in administration” and reduce the number of Ohio’s 613 school districts by at least a third. If this recommendation were implemented, some 200 districts — including 28 in the Miami Valley — could be merged or absorbed into other districts. The study says Ohio ranks 47th in the share of K-12 school spending going to instruction and ninth in the share going to administration.
Another study, issued earlier this year by the nonpartisan education think tank,
KnowledgeWorks, was less enthused about district consolidation, calling instead for a major expansion in the way districts share certain services. These services could include purchasing, bus transportation, employee health care plans and building maintenance.
Gov. John Kasich has adopted in his budget KnowledgeWorks’ recommendation of creating, by July 1, 2012, a system of Regional Shared Service Centers that would offer administrative support to schools and local governments. Kasich isn’t talking about district consolidation, but views the sharing of services as “an important tool,” said his press secretary, Rob Nichols. “It’s something we highly encourage.”
Consolidation can be unpopular and has not always been successful, according to critics. They say it often doesn’t produce the promised savings, undermines local support for levies and can even harm student achievement. Even sharing services like back-office functions between districts may not always save money, they say, as new bureaucracies spring up to replace the old ones.
“The reality is, you may end up with many more middle managers,” said Brian Rothenberg, executive director of the left-leaning think tank ProgressOhio. “We don’t know that it’ll save money and get more money into the classroom.”
The right-leaning Buckeye Institute says Ohio needs not only consolidation and shared services, but cuts in the pay and benefits of school employees. The institute found that nine in 10 Ohio districts project a deficit in their ending cash balances by 2015.
But Buckeye Institute Executive Director Matt Mayer said consolidations and sharing services won’t save enough to fix the state’s education funding problems. “Our view is, you can consolidate, you can share services, but you’re going to have to cut compensation programs.” Consolidation and collaboration aren’t new concepts for school officials: The countryside is dotted with abandoned schoolhouses that once served local hamlets. And Ohio has had a mechanism for sharing services since 1914, with the creation of county school boards, now called educational service centers. A notable shared-service success story is the system of joint vocational schools, now known as career technology centers.
The Brookings study said that “consolidations, although politically difficult, yield savings.” It cited reports saying that the state of New York projected annual savings from consolidating small districts at $158 million to $189 million, Pennsylvania projected savings of $81 million a year, and Maine’s actual consolidation efforts save $36 million a year.
A study last fall by Michigan State University said Michigan would save $612 million by consolidating its 551 school districts into 83 districts organized by county. That figure was disputed by the right-leaning Mackinac Center for Public Policy, which said consolidation is insufficient and a dodge to keep state leaders from dealing with cuts to labor contracts.
KnowledgeWorks’ Ohio study said West Virginia’s aggressive consolidations have resulted in “few, if any,” benefits. A 2010 state legislative audit found “larger districts were a significant factor in poor graduation rates” and called for a review of the state’s consolidation policy, the study said. A 2002 newspaper investigation found that the number of West Virginia school administrators jumped 16 percent over 10 years even as enrollment decreased by 13 percent and more than 300 schools were closed.
Consolidation of school districts can have aftershocks that reverberate in communities for decades, said Ken Amstutz, superintendent of the Van Wert City Schools. Amstutz’s district swallowed the tiny Ohio City-Liberty district for financial reasons in 1988 after voters approved consolidation by a five-vote margin.
“Once a community loses its school, the community does not have an identity anymore,” Amstutz said. “Those roots are very deep.”
Many former Ohio City-Liberty residents still don’t feel like part of the Van Wert district, according to Amstutz. “We struggle to get those people to vote for levies,” he said. “Many people have still never bought into it.”
It’s more palatable to the public to leave districts intact, but share the kinds of support services that don’t directly affect classroom instruction and extracurriculars, experts say. Nick Hamilton, the traveling treasurer, is an example of such cooperation.
Greene County was singled out for praise in the KnowledgeWorks study for its new Shared Service Delivery Initiative, a multidistrict effort that is studying the possibility of shared systems for various functions such as banking, payroll, vacation and substitute teacher scheduling, health care, accounts payable and receivable, financial reporting and travel expenses.
Officials involved in the initiative are also reaching out to Montgomery County superintendents. “The big hope is we will identify a couple of means by which school districts can save money and it will start to organically grow from there,” said Jane Dockery, associate director of the Wright State University Center of Urban and Public Affairs, a partner in the initiative. “We have found the hungrier a district, the wider the door they open to us.”
Some regions are looking at consolidating human resources, legal services and other business administration operations, as well as food service and some bus transportation. Depending on which services are merged, the resulting staffing cuts could disproportionately impact lower-income workers, said ProgressOhio’s Rothenberg.
“The people that will be most hurt are your cafeteria workers and bus drivers,” he said. “These are some of the lowest-paying jobs in the school district, and these folks work hard. I get it that we need to cut costs, but there’s a price you pay for these kinds of rash decisions.” John Rollins, the president of the Ohio City-Liberty school board when it merged with Van Wert City Schools, said the board studied the merger for a couple of years after a steady decline in support for levies.
He’s not surprised that the topic of mergers is coming up again. “Economics has a way of making things happen,” he said.
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