No Custodial Outsourcing for 2012/13 but looks like Sports and/or Activity Fees Could be a Reality in T/E
Based on attending the TESD Finance Committee meeting, it looks like the custodial outsourcing in the school district is ‘off the table of consideration’ for another year. If you recall, the most significant cost-saving measure to the District remaining from last year’s budget was ‘outsourcing of custodial services’ with a savings listed as $950K. After internal TENIG (non-instructional union of TESD) discussion, the custodial workers made an offer to the school district, which was presented to the Finance Committee by school board president Karen Cruickshank.
For the 2012-13 year, the custodial workers of TENIG have offered a 10% reduction in their salaries and they will not take the 4.5% increase contained in their existing contract. In real dollars, the cost savings to the District is $197K in salary reduction, plus the additional percentage contractual savings for a total savings of approximately $285K!
Beyond the generosity of the custodian workers offer, the Board realizes that it is difficult to measure intangibles in the in-house custodial services … many of the employees live in the T/E and their families are part o the community. With that comes a level of safety that is difficult to measure. Although the custodial workers offer has to be reviewed internally by the District attorneys, the it received overwhelmingly positive support from the Board.
A $285K savings to the school district plus the bonus of saving local jobs … congratulations to TENIG, custodial workers, District staff and Karen Cruickshank (on behalf of the school board) for such a positive outcome early in the 2012/13 budget discussions.
Ray Clarke also attended last night’s Finance Committee meeting and I thank him for his willingness to share his thoughts and opinions below:
Notes from Ray Clarke, TESD Finance Committee Meeting
A relatively well-attended TESD Finance committee meeting on Monday, and some important topics discussed – in varying depth and with varying data quality – the two not always correlated.
1. A significant announcement from Mrs Cruickshank at the end of the meeting: the janitorial staff in the TENIG union have offered to take a 10% reduction in wages for the 2012/13 school year. Their contract entitles them to, and the preliminary budget assumed, a 4.5% contractual increase. By my math, starting from the $1.97 million compensation line item provided by Dr Waters, this means a total benefit versus the budget of $286,000. In return the union asked for the district to remove the outsourcing option for 2012/13. (Also, with no further actions next year, the salaries would revert in 2013/14 to the contracted level – a 20% increase that would not of course be a tenable option).
After getting the numbers sorted through, the Committee was very appreciative and broadly in favor of this offer, weighed against a potential outsourcing saving three times the offer, but with risk and the uncertainty of basing the alternative on now-expired bids.
This looks to be a good result for all concerned. Employment security is maintained and compensation continues to move towards market levels. Importantly, it can continue to do so assuming similar flexibility next year and a more equitable benefits program in the next contract.
2. Much information was shared regarding possible fees for “sports and activities”. Most neighboring school districts have either implemented some kind of fee or are considering doing so. There are as many approaches as there are school districts. Significant money can be raised: at $100 per sport/activity (with a cost to the district), the revenue would be about $150,000 for both high school students and middle school students. For context, about 1700 of the 2050 high school students participate in at least one sport/activity of any type; the middle school numbers are similar.
There seems to be a consensus that the district should charge only for those activities for which it incurs costs for either extra teacher time (EDRs) or for transportation. (An interesting issue thus raised: the process by which a club gets the status of having compensated teacher oversight). Also clear is that there should be a process to ensure that no student should be prevented from participating for financial considerations.
Decisions still to be made:
- The same fee for any sport or activity, or some kind of tier system loosely based on cost?
- A fee per student regardless of number of sports/activities or a fee per sport or activity up to a maximum?
- The amount of any fees
The administration was charged with coming back with further permutations. It seems to me that it would be helpful to also tabulate other districts’ experience regarding participation levels and administrative costs. There seems to be a good argument for action here. For me, fairness would suggest some kind of tiered fee structure with a maximum, if it can be administered reasonably. The Committee is keen to give this air time at the Budget Workshop.
3. On revenues: no immediate bad news in the Corbett budget proposal. The move to bundle four separately calculated state funding items (basic ed, social security subsidy and public and non-public transportation) looks to me like a plan to cap future funding in a way that is unrelated to the actual underlying costs of those items. The one loss is a $50,000 grant that TE uses to fund the homework club.
Less good news on the property re-assessment front: $573,000 of lost revenue more or less planned for in the budget, but in addition $550,000 at risk from nine commercial assessments being appealed to the state courts and $820,000 at risk from a Vanguard appeal.
This illustrates the district’s vulnerability from relying solely on one tax that falls disproportionately on a class or classes of taxpayer that see no direct benefit from the tax, when many of those who get the benefit see their tax dollars going to other jurisdictions. But unfortunately any discussion of diversifying the tax base was hijacked in the last election.
4. A big mystery around the district medical benefits cost. Independence Blue Cross is apparently proposing a change in the way it gets compensated for administering our self-funded plan. Currently they get a 2.5% administrative fee (if only the overhead for the entire US healthcare system were that low!). Much perplexity about the proposal since it is being couched in terms of changing provider discounts. However, the net effect would be a $400,000 to $620,000 cost increase. I’m not sure there will be too much to be done about what is effectively a price increase, but more clarity needs to be provided.
5. No net surprises in the current district financials so far. We are on track for a deficit of about $0.75 million, as budgeted after adding back the $1.3 million budget reversal.