Comparative Financial Analysis Final

7/31/2019 Comparative Financial Analysis Final

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Comparative Financial Analysis

May 31, 2012

Board of EducationFINANCE COMMITTEE

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Background During 2011, the Finance Committee of the KLSD Board of

Education developed an analytical framework to objectively

compare 2009-2010 KLSD spending levels to that of selectedbenchmark schools in Westchester County.

The analysis resulting from that framework was publicly presented to theBOE in June 2011 and it concluded:

KLSD per pupil spending at $27,197 during 2009/2010 was the highest of allcomparison districts.

During 2009/2010 instruction, benefits and transportation were the areas ofspending within KLSD that contributed the most to KLSDs overall higherspending. KLSDs general support and debt level spending were lower than

average.

If KLSD per pupil spending during 2009/2010 were in line with the averageof the selected benchmark schools, KLSD annual spend would have been$5.9 million almost 6% -- lower than actual spending levels.

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Next Steps from June 2011 Report

Update the cost per pupil analysis on an annual basis. Utilize the same analytical framework and most recently available financial

information (2010/2011) to update the study across all benchmark districts Analyze latest information and identify any emerging trends that may

warrant further study

Investigate why KLSD professional compensation (an area which may

contribute to the higher than average spending level in the area of

instruction) per pupil appears to be higher than the comparison district

Identify and analyze data to evaluate the communitys ability and

willingness to shoulder higher tax burdens In response to this the Finance Committee developed several metrics tohelp answer this important question

Analyze Employee Benefits to determine why spending is above

average.

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2

4

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The following four areas were identified within the FinanceCommittee (June 2011) Report to the Board of Education:

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Executive Summary Spring 2012 Report to BOE

KLSD continued to outspend the comparison districts during 2010/2011:

2010 / 2011 KLSD per pupil spend was the highest at $27,988, and 6.7%above the average

2009 / 2010 KLSD per pupil spend was the highest at $27,197, and 5.9%above the average

KLSD salary levels are higher than most comparison districts

Higher salaries are likely contributing to higher instructional costs andhigher benefit costs

The KLSD Community utilizes more of its resources on education than thecomparison districts:

KLSD 2009/2010 true value tax rate was the highest and 30% more thanthe comparative average

KLSD income per pupil is the lowest and 45% less than the comparativeaverage

KLSD 2009/2010 spending in relation to income is the highest and 90%more than the comparative average

This report addresses 3 of the 4* Next Steps identified in June 2011presentation:

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* Note: The District secured the services of a health insurance consultant to further evaluate other benefit

spending levels. As a result, the Finance Committee did not address item #4

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Part IComparative

Expenditures Per Pupil2010/2011

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8/27Board of EducationFINANCE COMMITTEE

Financial Data Summary -- 2010/2011

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2010/2011 2010/2011 2010/2011 2010/2011 2010/2011 2010/2011

KLSD Harrison Bedford Scarsdale Byram Hills Chappaqua Average

Total Revenues 105,974,454$ 97,134,455$ 113,208,215$ 128,432,601$ 77,214,000$ 107,706,455$

General Support 11,717,240 12,097,923 11,535,268 14,021,958 8,718,653 13,008,393

Instruction 54,876,646 55,087,379 58,600,315 73,191,027 38,990,179 61,652,322Employee Benefits 26,822,850 20,242,712 26,430,450 24,656,426 12,643,402 21,516,170

Transportation 6,941,439 5,285,755 8,312,717 4,978,708 4,788,744 5,858,352

Community Services 29,035 - - 342,963 6,593 18,977

Debt Service 6,050,452 1,807,950 8,261,577 9,693,041 7,985,738 5,104,427

Total Expenditures 106,437,662$ 94,521,719$ 113,140,327$ 126,859,911$ 73,133,309$ 107,158,641$

Memo: Hosp, Med and Dental 14,220,460 10,011,799 15,610,067 12,172,936 5,755,580 10,581,734

Pupils 3,803 3,587 4,414 4,759 2,738 4,149

Expenditures per Pupil:

General Support 3,081 3,373 2,613 2,946 3,184 3,135 3,050 31 1.0%

Instruction 14,430 15,358 13,276 15,379 14,240 14,860

Employee Benefits 7,053 5,643 5,988 5,181 4,618 5,186

Subtotal - Instr and Benefits 21,483 21,001 19,264 20,561 18,858 20,045 19,946 1,537 7.7%

Community Services 8 - - 72 2 5 16 (8) -51.7%

Transportation 1,825 1,474 1,883 1,046 1,749 1,412 1,513 312 20.7%

Debt Service 1,591 504 1,872 2,037 2,917 1,230 1,712 (121) -7.1%

Total Expenditures per Pupil 27,988$ 26,351$ 25,632$ 26,657$ 26,710$ 25,828$ 26,236$ 1,752$ 6.7%

Other Items (per Pupil):Hosp, Med and Dental 3,739 2,791 3,536 2,558 2,102 2,550 2,708 1,032 38.1%

(Included in Benefits,above)

Prog for Child with Handicap. 2,942 2,375 1,942 1,965 2,546 2,624 2,290 652 28.5%

(Included in Instruction, above)

Comparison Schools KLSD

vs

Average



Summary 2010-2011

KLSDs $106.0 million in 2010/2011 school spending (as adjusted)

represents $27,988 per pupil:

This is higher than all of the comparison districts It is 6.7% above the average of the comparison districts The biggest contributors to the above average per pupil spending include

Instruction and Benefits and Transportation; partially offset by below average perpupil spending in debt service

Were KLSD 2010/2011 spending per pupil in line with the average ofthe selected districts, KLSD annual school expenditures would be $6.7million lower

KLSD higher per pupil spend of $1,752 x 3,803 KLSD pupils = $6.7 million

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Average Actual Difference Difference 3,803 Pupils

General Support 3,050 3,081 31 1.0% 116,507

Instruction and Benefits 19,946 21,483 1,537 7.7% 5,845,758

Transportation 1,513 1,825 312 20.7% 1,188,261

Community Services 16 8 (8) -51.7% (31,089)Debt Service 1,712 1,591 (121) -7.1% (459,825)

Total 26,236 27,988 1,752 6.7% 6,663,415

*numbers are rounded for ease of reading



Total Spending by District 2010/2011$ millions

4,759 4,414 4,149 3,803 3,587 2,738

Absolute expenditure levels vary widely across the districts

Absolute spending is NOT a meaningful comparative metric, as it does not capture therelationship between total spending and the number of pupils

More pupils generally means more absolute spending is required

Pupil Count

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126.9

113.1107.2 106.4

94.5

73.1

-

20.0

40.0

60.0

80.0

100.0

120.0

140.0

Scarsdale Bedford Chappaqua KLSD Harrison Byram Hills



28.0

26.7 26.7

26.4 26.2

25.825.6

24.0

24.5

25.0

25.5

26.0

26.5

27.0

27.5

28.0

28.5

KLSD Byram Hills Scarsdale Harrison Average Chappaqua Bedford

Per Pupil Spending by District 2010/2011$000s

KLSD per pupil spending is the highest among all peer districts at $27,988 per pupil

KLSD per pupil spending is 7% higher than the average district spend

KLSD per pupil spending increased by 2.9% versus prior year

5% 5% 6% 7% 8% 9%KLSD % Higher Spend per Pupil

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Per Pupil Spending by Category 2010/2011$000s

Total Spending

Instruction and Benefits Spending

General Support Debt Service Transportation

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17.5

18.0

18.5

19.0

19.5

20.0

20.521.0

21.5

22.0

24.0

24.5

25.0

25.5

26.0

26.5

27.027.5

28.0

28.5

-

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

-

0.5

1.0

1.5

2.0

2.5

3.0

3.5

-

0.5

1.0

1.5

2.0



IfKLSDsCost perPupilwereequal to

Byram Hills

Scarsdale

Harrison

AVERAGE

Chappaqua

Bedford

thenKLSDs

totalspendingwould bereducedby

$4.8

$5.1

$6.2

$6.7

$8.2

$9.0

$smillions

Implication for the total KLSD Budget

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Per Pupil Spend Bridge

14

$ 26,236

1,537312 31

-8 -121

$ 27,988

Average Instruction and

Benefits

Transport General Support Community

Services

Debt Service KLSD

$000s

KLSDs higher spending in Instructions & Benefitsand Transportation is only partially offset by

lower spending in Debt Service



Spending - 2010/2011 Changes vs. Prior Year

KLSD increased spending only 0.4%versus 2009/2010 -- second lowest of alldistricts.

.However, KLSD pupil count declined2.4% -- second highest decline amongdistricts.

Resulting in a 2.9% per pupil costincrease -- above the average of 2.1%

3.9%

2.7%2.0%

1.2%0.4%

-1.0%

% Change in Total Spend

1.4%0.6%

0.0%

-1.3%

-2.4%

-2.8%

% Change in Pupil Count

4.2% 4.1%

2.9%2.4% 2.1% 2.0%

-1.7%

% Change Per Pupil Spend

Small spendincrease

For KLSD

Large decrease

in pupil countFor KLSD

Graphic #1 Graphic #2

Graphic #3 Summary

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Board of EducationFINANCE COMMITTEE 16

Part IISalary Analysis

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Salary Analysis

There are many sources of information and numerous variables that

impact salary levels. The Finance Committee utilized three differentsalary comparisons to draw conclusions:

1. Analysis based upon information available through Putnam NorthernWestchester Contract Analysis (KLSD ranked 8th highest out of 42districts)

2. Analysis based upon information available through See-ThroughNew York data (KLSD ranked 2nd highest out of 6 comparisondistricts)

3. Analysis based upon placing our distribution of staff (our scatter-gram) onto the salary schedules of the other school districts (KLSDranked 2nd highest out of 6 comparison districts)


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See-Through New York Data

KLSD salaries ranked 2nd highest out of the 6 comparable districtsand 3.6% above the comparison average.

$123.6

$110.6$107.1 $106.8

$102.7 $102.1$98.4

$75

$85

$95

$105

$115

$125

$000s


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Scatter-gram AnalysisThis analysis evaluated in conjunction with the See-Through New York data

helps to disregard variances associated with experience of staff

$115.7$112.0 $110.9 $109.5 $109.0 $107.3

$75

$85

$95

$105

$115

$125

T

housands

KLSD salaries ranked 2nd highest out of the 6 comparable districts

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Part II Conclusions

Higher salaries are likely contributing to higher instructionalcosts

Higher salaries are likely contributing to higher benefit costswhich are a factor of salaries i.e. Retirement System,

Social Security and Workmans Compensation expenses

To further evaluate other benefits, the District secured theservices of a health insurance consultant


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Part IIIAffordability

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P t III Aff d bilit


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Part III - Affordability

Metrics used for comparisons:

Adjusted Gross Income per pupil True Value Tax Rates Total taxes (excluding STAR)

per $1,000 of total full value

General Fund Expenses/AGI

Real Estate Trends

Budget Approval Percentages

The Finance Committee considered a number of metrics toassess affordability -- focusing on areas that indicate ability and

willingness to shoulder the tax burden associated with a costlyschool system and compared KLSD to other districts:

Aff d bilit


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Affordability

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$400

$600

$800

$1,000$1,200

Thousands

AGI/Pupil

15.38 15.37

12.9511.82

11.110.68

9.01

$8$10$12

$14$16$18

True Value Tax Rate/$1,000

Assessed

The adjusted grossincome per pupil ofKLSD residents is less

than that of allcomparable districts.

The True Value TaxRate per every $1,000of Assessed Property

is higher than that ofall comparable

districts.

Aff d bilit


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$63

$39 $39 $35 $33$27 $25

$20

$40

$60

$80 Gen. Fund Expenses/$1,000

AGI

$52

$34 $33 $33$29

$24 $23

$0

$10

$20

$30

$40

$50

$60Property Taxes/ $1,000 AGI

The total generalfund expendituresfor every $1,000

earned by residentsis highest in KLSD.

KLSD Residents payapproximately $52 of

school taxes forevery $1,000 of

income earned

Affordability


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Affordability - Real Estate Analysis

$263$295 $307 $313

$334 $337

$436

$200

$300

$400

$500

Average Price per sq ft 2011

3%

19% 21% 21%

25% 26%

40%

0%10%20%30%40%50%

% Growth in Avg. Sales Price 2001-

2011

The average price persquare foot for real

estate sold in each ofthe comparabledistricts was greater

than KLSD

Growth in real estatevalues since 2001 has

been slowest in KLSD

V ti A l i 2009 2011 A


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59%65%

68% 66% 66%

59%

73%

1.0%1.1% 1.3%

1.5%1.6%

1.8%

2.5%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

0%

10%

20%

30%

40%

50%

60%

70%

80%

BudgetA

pprovalPercentage

Voting Analysis - 2009-2011 Averages

AnnualBudgetIncrease

Despite the lowest average annual budget increase (1.0%), KLSD hasthe lowest average budget approval rating from voters (59%, tied withHarrison)

BudgetApproval

BudgetIncrease


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Board of Education FINANCE COMMITTEE 27

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