Post on 18-Dec-2015
Dresden Cost Reduction CommitteeFinal Board Report
12/14/2010
1. Why We’re Here2. Who’s Here – DCRC Members3. Executive Summary4. Implementing Change5. Findings & Recommendations6. Our Thanks7. Appendices:
Historical Expenditure and Revenue GrowthCost Growth Dynamics
Why We’re Here – a Reminder
12/14/2010Dresden Cost Reduction Committee Final Board Report2
MISSION: The Dresden Cost Reduction task force will work to identify areas of possible savings at the Richmond Middle School and Hanover High School, and potentially at the SAU administrative level, that could be acted upon for the 2011-2012 budget and beyond.
GOVERNANCE: The committee will be advisory to the Dresden School Board and may refer relevant matters to the standing committees – notably the Budget, Negotiating, Education, and Athletic committees.
Source FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 (est.)Dartmouth 1.9 1.9 1.9 1.9 1.9NH State Building Aid 0.9 0.8 0.8 0.8 0.7 0.7 0.7 0.6Town of Hanover 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1Residual Capital Funds 0.8 0.5Other 0.1 0.1 0.5 0.1 0.1 0.0 0.2 0.1
Totals 3.0 2.9 3.3 2.9 2.8 1.6 1.4 0.8Change From Preceding Year (0.1) 0.4 (0.4) (0.1) (1.2) (0.2) (0.6)
% Change From Preceding Year -2.1% 13.0% -10.9% -4.0% -41.4% -13.5% -42.1%
Why We’re Here – “Extraordinary Income”
12/14/20103
Changes in Extraordinary Income, FY05-FY12 ($Ms)
Dartmouth payments ended in FY09 Residual capital funds used up in FY11 Other non-tax/non-tuition revenues declining in FY12
$500k to $600k needed to make up loss from FY11 to FY12
Dresden Cost Reduction Committee Final Board Report
Who’s Here – DCRC Members
12/14/20104
Carey Callaghan, Chair, CIO American Trust John Aubin, Assistant Superintendent for BusinessKari Asmus, Dresden ChairJohn Dolan, President of Vermont Institute of
Natural ScienceKristi Fenner, CPA and Treasurer of Ansys,
Member of DFCDr. Wayne Gersen, SuperintendentHilary Pridgen, Proprietor, Trumbull House B&BRick Sayles, CFO of KVO Capital ManagementGordon Spaeth, Dresden Board
Dresden Cost Reduction Committee Final Board Report
Executive Summary
12/14/20105
For 2011-12, $500k in savings and/or new revenues to offset loss of residual capital funds is possible
$200k achieved by administration to date Additional $300k possible, mostly through increased class
sizes at HHS Committee divided on merits of recommending this
action at this time
No easy opportunities to substantially lower district costs
Incremental cost cuts could lower spending level but not trajectory
Total Cost = 3.2% annual growth over five years Salaries & Benefits = 4.2% annual growth before base
increases and other inflationary pressures
Dresden Cost Reduction Committee Final Board Report
16.016.7
17.318.1
18.819.7
3.5 3.5 3.5 3.5 3.5 3.5
2.8 2.8 2.8 2.8 2.8 2.8
22.323.0
23.624.3
25.126.0
$0
$10
$20
$30
FY11 FY12 FY13 FY14 FY15 FY16
Millions
TOTAL COST3.2% ave. growth/yr.
SALARIES & BENEFITS4.2% ave. growth/yr.
DEBT SERVICEFlat growth
ALL OTHER COSTSFlat growth
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Projected District Cost Growth Under Status Quo
Executive Summary (cont’d)
Dresden Cost Reduction Committee Final Board Report
Executive Summary (cont’d)
12/14/20107
Important to implement a sustainable set of measures that can change the trajectory of district cost growth
Hire less experienced teachers, mentor with the district’s master teachers
Establish a track for new hires that is 10%-15% below current track
Move toward a total compensation structure
Leverage use of technology to reduce small class size offerings
Adopt cultural and administrative changes to institutionalize cost containment
Dresden Cost Reduction Committee Final Board Report
Implementing Change
12/14/20108
Implementing a sustained cost reduction program in the district
Foster a culture of cost awareness
Make cost containment an area of accountability
Encourage administrative leadership to avoid use of incremental budget change
Recognize the risks of doing too little versus the rewards of acting now
Dresden Cost Reduction Committee Final Board Report
Findings & Recommendations
12/14/20109
Budget Category
Proposal Ideas $s Potentia
l
Athletics Program cuts such as move to intramurals, cut in # of teams, etc.
Cost transfers such as higher program fees
Less than $100k per year
Contract New pay track for new hires“Total Compensation” philosophy and
contract (i.e., salary plus benefits subject to negotiated limits)
$800k-$1.2m in savings per year, plus related benefit savings
Classroom Additional electives in teachers’ schedules at RMS
Larger class sizes at HHSOnline elective offerings at HHSAdvanced Placement Program in lieu
of other advanced electives at HHSConsolidation of HHS course offerings
(e.g., by having more required courses and fewer electives)
$130k-$520k in savings per year
See Document A for Complete ListDresden Cost Reduction Committee Final Board Report
Findings & Recommendations (cont’d)
12/14/201010
Status Quo
1 More Student
Per Section
2 More Students
Per Section
3 More Students
Per Section
4 More Students
Per Section
Consolidation Actions:
Reduction in # of Course-Sections 0 12 22 31 39
Quality Measures:
Ave. # of Students Per Course-Section 17.6 18.6 19.6 20.6 21.6
# of Course-Sections 212 200 190 181 173
Teaching Staff Size (FTEs) 42.4 40.4 38.4 36.4 34.4
Ave. # of Course-Sections
Per Teaching Staff FTE 5.0 5.0 4.9 5.0 5.0
Ave. # of Students Per Teaching Staff FTE 87.8 92.2 97.0 102.3 108.3
Estimated Savings:
Annual Teaching Staff Expense Reduction $0 $130k $260k $390k $520k
HHS Course Consolidation Scenarios
Dresden Cost Reduction Committee Final Board Report
Findings & Recommendations (cont’d)
12/14/201011
Budget Category
Proposal Ideas $s Potentia
l
Facilities Shared services with Town of Hanover
Energy efficiencies
Less than $100k per year
General & Materials
Ongoing solicitation of savings ideas from public
More use of e-mail or web-posting in lieu of paper
Increased use of volunteers
Less than $100k per year
Revenue Items Retaining a grant writerSolicitation of int’l students as tuition
students Collecting partial tuitions from other
districtsEstablishment of HHS Foundation to
conduct fundraising
$100k +
See Document A for Complete List
Dresden Cost Reduction Committee Final Board Report
Our Thanks
12/14/201012
Community membersMembers of organizations who
helped usPublic Forum participantsEducation and Athletics
CommitteesSAU and Dresden Administrators
Dresden Cost Reduction Committee Final Board Report
Historical expenditure growth
12/14/201013
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11
6.8% average growth per yr.
4.1% average growth per yr. (inflation adj.)
Dresden Cost Reduction Committee Final Board Report
Regular ed versus special ed growth
12/14/201014
$0
$3,000,000
$6,000,000
$9,000,000
$12,000,000
$15,000,000
$18,000,000
FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11
4.3% average growth per yr.
1.7% average growth per yr. (inflation adj.)
11.2% average growth per yr.
8.4% average growth per yr. (inflation adj.)
REGULAR EDUCATION
SPECIAL EDUCATION
Dresden Cost Reduction Committee Final Board Report
Revenue growth
12/14/201015
$0
$3,000,000
$6,000,000
$9,000,000
$12,000,000
FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11
$11.6M $22.1M$22.0M$20.6M$20.4M$19.4M$18.6M$17.3M$13.7M$13.5M$12.5M 6.7%
HanoverAssessment
7.3%
NorwichAssessment
3.5%
TuitionCharges
7.2%
Ave. Growth Per Year:
Total Revenue Per Year:
Dresden Cost Reduction Committee Final Board Report
Cost by Budget Category
$11.2
$4.8
$3.3
$0.9 $0.7 $0.6 $0.4 $0.3 $0.2
96%99% 100%98%
50%
94%91%
72%
86%
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
Salaries Payroll Taxand Benefits
DebtService
ContractServices
Suppliesand
Materials
PropertyServices
OtherServices
Other Equipment
Bu
dg
et i
n m
illi
on
s
0%
20%
40%
60%
80%
100%
Cu
mu
lati
ve
Per
cen
tag
e o
f T
ota
l B
ud
ge
t
Salaries by Type
$8.2
$1.4$0.8
$0.4 $0.4
37%
50%49%43%
47%
$0.0
$2.0
$4.0
$6.0
$8.0
$10.0
$12.0
Teacher Ed. Assistant Custodial Administrative Other
Budg
et in
milli
ons
0%
20%
40%
60%
80%
100%
Cum
ulat
ive P
erce
ntag
e of T
otal
Budg
et
Cost growth dynamics, part I
Cost growth dynamics, part II
12/14/201017
For 2011-12, a zero increase in base salary and zero increase in all budget areas except benefits and special ed yields a 3.2% annual budget growth! Assumes a 10% increase in both benefits and special ed Assumes 1.25% increase in salary accounts as a result of step
and track Over five years, this would result in a 17.1% increase in the
total budget, roughly $4,000,000 over current year budgetCost shifts by State likely to increase cost and
diminish revenue Retirement costs likely to be downshifted to local
government, employees Building aid, other State aid revenues likely to be cut
IS BUSINESS AS USUAL SUSTAINABLE?
Dresden Cost Reduction Committee Final Board Report