TO: Board of Education
FROM: David Eblen; Mark Staehlin
DATE: January 21, 2005
RE: Operating Budget Recommendations for Fiscal Year 2005-06

At the January 14 Board workshop, the Administration presented a framework for setting budget parameters for 2005-06. The presentation included a Five Year Financial Projection that showed annual deficits of at least $3 million. The administration presented budget categories and the major elements that comprised each category. It was the consensus of the Board of Education that the administration should move ahead to provide more clarity about the types of changes that would need to be taken to achieve the dollar goal for each category in the budget parameters. This report provides a more detailed description of the fee increases and program/service reductions that must be undertaken to cut $3.4 million dollars in order to balance next year’s budget.

It is important to note that the general approval of these recommended changes only provides guidance parameters to the administration as we go forward with the formal budget preparation process. Much of the information appears very specific and very likely represents the only practical way that operating cuts of this magnitude could be realized. However, some aspects may change if new information becomes available or if when we expand the study of these recommendations to parents and staff we learn the same financial goals can be achieved by more effective or less disruptive changes.

These recommendations were developed in a collaborative environment by the District’s Executive Council. Composed of the building and district administrators, the Council met no fewer than six times over the last two months to achieve the budget goal. From free-flowing brainstorming to careful scrutiny of financial and program data, the administrative staff thoughtfully considered all possibilities. The discussions were not without a feeling of loss knowing that all of these elements have contributed to the quality of District 99’s educational program. But the conversations were driven by a desire to keep intact those elements that most directly contribute to our core mission of providing students with the highest quality educational experiences that can be provided with the resources available. In addition to knowing there was a target number that needed to be reached, there was also a great sensitivity to remembering that the school programs that emerged from this process might be the highest level of service that the District can offer in the foreseeable future due to revenue constraints. While there was a degree of advocacy for specific programs, there was also a keen realization that all segments of the District had to bear some sacrifice in order to minimize the impact on the District’s core mission.

The delineated revenue increases and expenditure reductions are predicated on a number of assumptions, several of which were affirmed by the Board at the January 14 workshop:

1. While our fees should be sensitive to those charged in surrounding school districts, fee increases are appropriate if they help offset a larger portion of the costs associated with specific programs/services.

2. While past practice has been to recover only the personnel costs in renting facilities, it is appropriate to recognize the capital costs connected with the facility operation by recovering a portion of those costs in the rental charges.

3. Other options should be explored by the District before moving to outsource all CMG services.

4. The educational program that remains after these cuts are made provides a service level that is sustainable in future years. The budget recommendations are driven by staying as close to our core mission of teaching and learning rather than cutting programs in order to generate as much support as possible for a future referendum.

5. The budget recommendations are intended to scale back operations across the entire school system but not totally dismantle a specific program/service. Some areas may appear to be hit harder than others but the goal was to provide a greater sense of equity across all the programs as budget dollars became tighter. It is simply not fair to students or staff to allow some programs/services to continue operating at a “premier” level while others scrimp by at “bargain basement” budget levels.

The administration looks forward to discussing these recommendations with the Board of Education, and ultimately with the key stakeholders in the school system in the coming weeks. No decisions are needed by the Board of Education at this time. Developing an understanding of the comprehensive nature of these cuts and their ramifications for our District’s operations, so that the future dialogue is based on facts, would be a great outcome of this meeting.

COMMUNITY HIGH SCHOOL DISTRICT 99
OPERATING BUDGET CONSIDERATIONS
FY 2005-06

A. Student/User Fees

It is recommend that the registration fee increase from $170 to $190. The lab fees for designated courses would also rise from $16 per course to $20 per course. As a percentage of the costs to which the fees are applied, the higher fee level represents approximately 47% of the costs versus the current 41%. The fee increase is necessitated by the rising costs of textbooks and other instructional supplies, such as computer print cartridges. 

It is recommended that the athletic participation fee increase from $40 per sport to $80 per sport. The average net cost per sport for student athletes is about $500. It is recommended that a cap of two participation fees be established per student. There are approximately 50 students at each campus who participate in three sports so the cap would not be a large financial loss. This fee increase would result in the total revenue from fees covering approximately 14% of the cost of the athletic programs, whereas the current fee recovers about 7% of program costs.

Similarly, the participation fee for non-athletic interscholastic programs (Speech, Math, Chess, Scholastic Bowl) would be increased from $25 to $50, with a two-program cap per student. This fee increase would recover about 3% of the program costs instead of the current 1.3%. The percentage of recovery is much lower in this area because we do not charge fees for noncompetitive activities or clubs. The proposed new fee would recover about 17% of the costs of those activities that are currently subject to the fee.

It is recommended that we increase Summer School fees by $50 to a new level of $165. This would be a 43% increase. This new fee level would allow us to sustain this program by recovering a larger portion of the total operating costs.

B. Facility Rental Increases

The District’s rental schedule is based on recovering only out of pocket personnel costs associated with facility usage. We are proposing that the rental rates be revised to reflect both the personnel costs and a portion of the capital costs related to the specific facility being utilized. The tight budgets of recent years have reduced resources for both routine capital maintenance and special capital projects. These limitations are compounded when facilities rented by outside groups receive wear and tear beyond that caused by just the high school programs. In a Tax Cap era, the school district cannot afford to subsidize other public agencies or private groups, regardless of their profit status.

A. Capital Expenditures

The Five-Year Projection from earlier this year set the capital outlay budget back up to a level of $1.5 million annually. This figure was more in line with the budget levels used previously to maintain the buildings and grounds. The recent referendum included a request to secure additional dollars for both ongoing capital expenditures as well as to address some major long-term capital needs. With the loss of that referendum, this line item needs to be reduced. Instead of a balance of $1.5 million the new level would be $900,000. This funding level will still be higher than in the last several years and will provide some dollars for contingencies that might arise.

B. Per Pupil Allocation

The principals are provided a budget for general building operations that is based on pupil enrollment. This budget is used for supplies and equipment in all the departments, postage for parent mailings, Xerox paper for student handouts, diplomas, and all of the other items needed to meet the daily operation of the school. Each year this allocation is adjusted to reflect changes in enrollment and the increased cost of living. Using this formula the per pupil budget should be increased for next year by 2.4%. The recommendation is to freeze next year’s allocation at this year’s level. Faced with a projected enrollment increase of almost 100 students, the freeze really represents a reduction on a per pupil basis.

C. Energy Conservation

The administration is looking seriously at using mechanically installed covers at each school’s swimming pool to conserve energy. While capital outlay is required to purchase this equipment, the utility and energy savings would more than offset the cost. The annual projected savings of $46,000 is the full annual savings amount. The cost of the equipment would come out of the $900,000 capital expenditure allocation noted above.

D. Other Supplies

The District has historically recognized years of service as well as career service at retirement with appropriate tokens of appreciation. The District has also celebrated major achievements and milestones by holding special recognition programs for students and staff. All of these activities involved an award/gift distributed or presented in a special setting. The recognition is important but there are other ways to signal appreciation for a job well done that can be conducted in a less costly manner.

A. Salaries for All Staff

The Five Year Projection showed a net average salary change of 3%. This report recommends that the budget line items for salary increase by only 2% for all categories of staff (certified, administration, support, CMG). The specific aspects of implementing this adjustment are somewhat tentative because the vast majority of specific salary levels are determined by collectively bargained agreements. For example, the support staff contract has established step increases that, for most specific positions, exceed 2%. This contract is not set to expire until 2007. Accordingly, the ability to reduce the overall increase of net salary allocations to 2% in this area will be limited to replacing retiring or resigning staff with lower paid staff and/or by reducing the total number of staff hours allocated across the District.

The contract with the teaching staff expires at the end of the current fiscal year. This affords both parties the opportunity to influence the manner in which the 2% limit is implemented because the salary schedule for next year has not yet been established.

B. Custodial Maintenance and Grounds Staff (CMG)

This reduction would be achieved by reducing the number of custodians from the current level of 48 positions to a range of 36-38 custodians. The number of positions eliminated would be the same at each school. The specific number of positions will be dependent on the salary of the custodians whose positions are eliminated. The District’s average cost per custodian for salary and benefits is approximately $60,000 per position. While this average cost is comparable to several other area schools, it is very high compared to similar positions in private companies or in those schools that have gone to outside contracting of these services. That is why many schools are looking closely at out-sourcing all or a part of their CMG staff. 

Our average costs for both grounds and maintenance staff are closer to cost levels of outside/private services and these positions are not being considered for specific reduction at this time. A more restrictive increase in the allocation for salaries in this area, of only 1%, provides a savings of $50,000 and is more appropriate than reducing or outsourcing staff in these two areas.

The reduction in custodial staff will result in different cleaning schedules. For example, classrooms may not be cleaned between the end of classes and the use of a classroom in the evening by a rental group. It may also mean that not all elements of a classroom will be cleaned as thoroughly everyday, but rather different components of the classroom (desks wiped down, blinds dusted, counters spray washed, etc.) would vary in frequency. The reduction in staff is preferred to outsourcing for cleaning purposes because the remaining staff members will be District employees and familiar to the District 99 supervisors. This is critical in being able to perform the many set ups that take place for school events as well as responding to special circumstances that arise. This arrangement will not change the cleaning standards for all of the public areas (hallways and bathrooms) and areas directly related to health, such as the kitchens, cafeterias, nurses’ office, foods classrooms, etc. Building management does not believe this reduction will have a significant impact on the learning environment for our students.

C. Classified Staff

This reduction will be achieved primarily by cutting back on the number of hours assigned for various student supervisors. Each building currently uses classified staff for supervising and taking attendance in study halls, serving as greeters at the school entrances, and supervising hallways and the campus. Some of these responsibilities, such as supervising study halls, will be assumed by teachers on their supervisory period.

D. Administration

These savings will come about from filling five administrative positions held by senior administrators at lower salary levels for their respective positions. It should be noted that the 2005-06 reduction in the administrative area appears lower, compared to other areas, because a reduction of approximately $80,000 was already implemented during the current fiscal year. This was accomplished by reducing the Director of Pupil Personnel Services position to a part-time assignment and equates to a 3.3% reduction already absorbed by this area. Total actual and proposed administrative reductions for the two-year period are about 5.4%. In addition, reductions of administrative support staff are being reported in other categorized areas of the worksheet.

E. Teachers and Other Certified

The savings here will be achieved in three ways.

• The pupil/teacher ratio for instructional staff will increase from 21.5 to 22.0. This change will have the greatest impact on the core academic departments (English, Math, Social Studies, Foreign Language) because these courses are not limited by teaching stations. Science, Art, Business Education, Home Economics, and Industrial Technology have more restrictive class sizes because you cannot assign more students than you have lab stations. This change will increase class sizes in the core departments. The change will also limit the number of courses that are taught with fewer than 20 students per section. The FTE ratio change will result in a decrease of approximately 6.0 FTE. At an average cost for new hires of approximately $50,000 per teacher, this will result in a $300,000 savings. We are also recommending a reduction in Deans positions by not filling a retirement at each campus that will occur at the end of the year. Because of their seniority both individuals are at the top of the salary schedule, and not replacing them would represent a $200,000 savings. This would result in South High moving from five to four deans, and North High moving from four individuals (representing a 3.6 FTE because of some individual teaching assignments) to three full time deans. As with all of these recommendations, this one is made reluctantly but is believed to be the appropriate change in considering all of the Pupil Personnel Services area (deans, counselors, psychologists, social workers, Student Assistance Coordinator). Serious consideration was also given to reducing a counselor at each school. That change would have resulted in the average counselor load moving from approximately 290 counselees to 320 counselees. This 30 student increase was felt to be too great in light of Alpha Team program use for delivering services to students. Each Alpha Team is responsible for approximately 600 students. Composed of two counselors, a psychologist, a social worker, and a dean, the Alpha Team works as a “team” to diagnose individual student issues and then develop strategies for addressing those problems. This integrative approach has allowed all of these professionals to lend their perspective to whatever issues arise from students (discipline, academic, personal, family, etc.). The Alpha Team concept has been developing over the last five years, and it has been determined to be a vital mechanism for supporting student learning.

• Another recommendation is to save approximately $60,000 by not releasing several teachers from a class assignment for other purposes. Teachers have been released from one of their five teaching assignments to serve as Curricular Technology Coordinator, assisting other staff with the use of technology for instructional activities. Teachers have also been released for School Improvement planning and coordinating the Mentoring Program. The $60,000 represents 1.2 FTE in release time. This will result in all of the School Improvement coordination being undertaken solely by administrators, and reducing the amount of technology support from eight periods a day to six periods a day.

• The Executive Council had an exhaustive discussion about the Driver Education program in District 99. The structure of our program is superior to other models in that the classroom phase, simulation phase, and actual behind-the-wheel phase are all integrated in content and sequenced in activity to maximize the learning experience for students. In other words, when students are learning about passing another vehicle in the classroom, both the simulator exercises and then the actual behind-the-wheel driving focus on developing the knowledge and skills related to passing another car. This delivery model is found in many suburban high schools. But there are other delivery systems as well. For example, Willowbrook/Addison Trail uses a program where students receive their behind-the-wheel instruction either before or after school, or in summer school. The student still receives the required instruction and is qualified to receive his license. However, depending on when the student is doing the behind-the-wheel, there may be some time lapse between the concept taught in the classroom and the practicing of that concept on the road. This arrangement has significant cost savings because there are fewer teachers involved and the compensation for the behind-the-wheel instruction is paid on a stipend basis versus the teacher contract. Another configuration is simply moving all Driver Education instruction to summer school. These alternative delivery systems could result in savings of at least $200,000 annually in comparison to our current configuration. But there are many aspects of these delivery models that need to be carefully studied for impact on staffing, student access, parent responsibilities, etc. Thus the administration is recommending that the Board of Education make the decision now that while Driver Education will continue to be offered, the program needs to be delivered in a less costly manner beginning with the 2006-07 school year. This will require a study by the staff of various options with a recommendation back to the Board of Education by October 2005. The decision on a new configuration and how it would be scheduled needs to be made next fall prior to curriculum guides being published and registration procedures being implemented for the 2006-07 school year. While the administration believes there can be significant savings in this program without sacrificing a good learning experience to qualify for a drivers license, it is a major change from current practice. There is not sufficient time to adequately study the options and implement a new delivery model for this fall. Once the new model has been identified and costed out, it would then be appropriate to review the District fee for Driver Education.

A. Regular Education

One of the options in the District’s very comprehensive physical education curriculum is a unit on bowling. Students at both campuses are transported by bus to a local bowling alley where they receive instruction in bowling and then practice on the lanes. This option was included in the curriculum back in 1987 because of growing enrollment and limited number of physical education teaching stations in the buildings. Taking students to the bowling alley was like having another classroom. With the recent additions and renovations at both campuses, there is now sufficient room at each campus for all of the physical education curricular offerings. The annual cost for transporting students from school to the bowling alley is $45,000. With a physical education curriculum that has both a required component in the freshman and sophomore year and elective programs in the junior and senior year, the bowling option can be dropped and students can select another activity. This transportation cost, combined with much more limited activity time within a class period because of the transportation need, is too prohibitive to continue this elective unit.

B. Athletic/Intramural

The annual cost of the athletic program (stipends, supplies, officials, entry fees, transportation) is approximately $1.4 million. Using the participation level in 2003-04, the net cost per athlete averaged about $500. The range in cost per student athlete was from $100 per student to over $1,000 per student depending on the sport selected. The per student costs will vary, however, from year to year due to such factors as participation levels, success in the IHSA State Tournaments, purchases of special equipment, etc. Interscholastic athletics is a motivator for many students and it does provide an important venue for teaching students about qualities of sportsmanship, teamwork, cooperation, leadership, etc. Rather than cut any sports or levels, the Executive Council prefers to raise the interscholastic participation fee to increase recovering the costs of the program.

We are recommending the elimination of the intramural program at a savings of approximately $45,000. The cost of this program is in stipends for coaches to supervise the weight room and open gyms during off seasons. A true intramural program is designed to provide an outlet for students who enjoy participating in a sport but not at a competitive level. District 99’s program is not designed that way. The great majority of students participating in the intramural program are athletes doing conditioning work for their particular sport. It should be noted that eliminating the stipends does not remove the opportunity for students and coaches to participate in an open gym and/or use the weight room. There are schools that use the voluntary approach, with coaches supervising without a stipend and students participating in off-season activities. The bottom line is that this expenditure provides additional participation opportunities for students already involved in athletics rather than serving as a participation outlet for students not involved in sports.

Approximately $25,000 in savings will be generated by achieving greater efficiencies in athletic transportation arrangements. Teams may be doubled up on buses and/or two levels will travel together to a site rather than each level arriving at different times. The $25,000 represents a 10% cut in the athletic transportation budget.

C. Activities/Extracurriculars

Similar in philosophy to the athletic program, the activity program is another set of valuable learning experiences for students. Rather than limit participation, the administration recommends doubling the participation fee. Similar to athletics, an $8,500 reduction represents a 10% cut in the transportation costs associated with student activities. While musical groups will still attend clinics and the Speech Team will attend tournaments, there will probably be some reduction in the number of times groups participate in these types of events. The Activity Directors will be charged with being more judicious in approving the number of trips in which students participate.

D. Technology

This reduction significantly trims the budget increase approved by the Board this year to develop an appropriate replacement schedule for hardware. The goal had been to institute a systematic 4-5 year replacement cycle for computers and other peripheral devices. This budget reduction will lengthen the hardware replacement cycle. It needs to be understood that without additional dollars for this budget item, our technology infrastructure for students’ instructional needs will be less responsive.

E. Professional Growth

Savings identified here come from two sources. In addition to these reductions, it should be noted that the general budget reductions eliminate our ability to replace approximately $100,000 in funds that will no longer be available for staff development due to the expiration of a federal grant.

• Staff Development Facilitator – For a number of years Maureen Dombrowski has served as a Staff Development Specialist for the District, conducting training on CRISS, assessment literacy, and other instructional strategies. Maureen is retiring at the end of this year, and her position will not be filled. A number of other staff members have been trained by Maureen or by attending workshops on their own, and the District will rely on those individuals to conduct in-house professional training workshops.

• Substitutes - The District spends approximately $360,000 per year on certified substitutes. These substitutes are used when teachers must attend a wide array of special programs and meetings, including special ed staffings, curricular development, selection of teachers/administrators, professional growth, insurance committee, etc. We are proposing a 40% cut ($145,000), which will require the District to find other ways to fulfill these responsibilities. There will need to be a greater reliance on before and/or after school meetings/workshops, greater efficiency in who attends staffings, and perhaps less input by staff with recruitment activities.