Operational Efficiency #6: Won't we save $500K by closing a school?
Over the next couple of days, you very well may hear ICCSD administrators or school board directors assert that it will take $500,000 to operate our new elementary schools beyond the instructional costs. This figure is based on the projected salary of a principal, librarian, guidance counselor, building secretary, media secretary, custodian care, and utilities cost. The estimated new cost to the district is around a half a million dollars. The way that this figure ought to be used is to address the inefficiencies of our new schools when they come online (see my earlier post comparing our smallest schools to our newest, bigger school for some evidence of this fact). That is, since they will likely hamper our ability to be more operationally efficient in the short-term, it is a good idea to accumulate some unspent spending authority sufficient to, at least, cover the new cost to the district of operating a new elementary school.
As I mentioned last post, spending authority is the amount the district is allowed to spend in a given year. If the district does not spend the full amount, they are allowed to carry over the difference between their total spending authority and how much they actually spent as a one-time rainy-day type fund. We will need those extra funds when our new schools come online, and it is a good idea to prepare for it in the coming year(s).
Some, however, go well beyond this use of the $500K figure. They argue that, since each elementary school costs approximately $500K to operate beyond instructional costs, that we'd save $500K just by closing schools and consolidating those students into other school. I have heard this argument used by school board directors and local citizens, but it simply doesn't bear up under scrutiny.
I've heard that argument applied to Hills. It is said that if we just closed Hills and moved those students to another school that we'd save $500K. Unfortunately, Hills has only $250K that it spends on non-instructional expenses. Some of those -- media, custodial care, and utilities costs -- would likely be needed at other schools to accommodates those students were Hills closed. With regard to Hills, the $500K figure is actually more like $200K.
What about another school? The $500K figure has been tossed out with regard to Hoover's planned closure too. In fact, the operational cost saving was presented as one of the justifications for closing Hoover. But the figure doesn't apply to Hoover either. In order to show this with the 2012-2013 data, I assumed that the 364 Hoover students were distributed to the surrounding schools -- 100 to Longfellow, 100 to Lemme, 100 to Lucas, and 64 to Mann. Doing this would save the district money on by eliminating the need for Hoover's administration and most of its media services (staff) but it probably wouldn't significantly affect utilities or custodial costs. The bigger schools that would be needed to accommodate the Hoover students would probably make utility and custodial costs a wash. Under this scenario, I examined how much the district would probably save. The total amount spent on administration and media services at Hoover in 2012-2013 was approximately $275K. So, one might think that the district could save that much by closing Hoover, but that wouldn't quite be accurate either since Hoover is significantly better in terms of operational efficiency than 3 of the 4 schools that its students would be moved to (Longfellow is the exception). Thus, by my calculations and assuming that every Hoover student was moved to one of these other schools, the district would save approximately $191K. Of course, if a few students opted to switch to another neighboring district (e.g., West Branch), a private school, or home school because of the change, then the amount saved goes down even more.
So, to make a long story short: use the $500K figure the way it was intended. It doesn't tell us how much we'd save by closing a school. It tells us what we need to save to pay for our (likely to be inefficient in the short-term) new schools.