Dresden Cost Reduction CommitteeInterim Board Report

8/24/2010

1. Mission & Governance

2. Members

3. Work plan

4. Work-to-date

5. Cost growth primer

6. Ideas being evaluated

7. Defined potential savings

8. Undefined potential savings

9. Some preliminary conclusions

10. Work ahead of us

11. Implementing change

Mission & Governance

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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.

Members

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Carey Callaghan, Chair, CIO American Trust John Aubin, Assistant Superintendent for

BusinessKari Asmus, Dresden ChairJohn Dolan, Executive Director of VINSKristi 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

Work Plan

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1.1

1.2 Refine workplan through committee member suggestions

1.3

1.4

1.5

2.1

2.2

2.3

2.4

2.5

2.6

2.7

Review and discuss budget documents, HEA contract and reading list to gain familiarity with main issues.

Review literature and case studies from other districts for relevant ideas

Interview businesses, NPOs and other organizations and individuals for ideas that could help us in our work (e.g. Dartmouth, Hypertherm, DHMC, Tuck, etc.)

Map major areas of opportunity (e.g. energy, health care, O&M) for further deep dive sessions with administrators

2. Solicit and Develop Ideas

Hold focus groups for various constituencies to solicit opportunities

Discuss curricular changes and classroom size approaches with administration

1. Define and Initiate Committee Work

Review tentative workplan, "rules", calendar and discuss committee logistics.

Review of workplan and progress at subsequent meetings, revisions as necessary

Committee approves workplan and assigns responsibiity for inidividual items under various tasks

Brainstorm ideas internally based on known opportunities, likely areas of improvement in order to gain some immediate momentum; protocols for focus groups, interviews, sugg. Box

Solicit ideas through e-mail suggestion box

3.1

3.2

3.3

3.4

3.5

3.6

3.7

3.8

4.1

4.2

4.3

4.4

4.5

5.1

5.2

5.3

5.4

5.5

5.6

5.7

Have liaisons at standing committee meetings to discuss DCRC ideas, background, etc.

Incorporate administration, standing committee and Dresden Board feedback into list of recommendations

Maintain workplan for organizing committee activities

4. Formulate Recommendations and Make Referrals

Hold deep dive sessions on various budget areas, identify and cost any possible savings

3. Evaluate Opportunities

Identify initiatives based on interviews with organizations, determine applicability

Flag opportunities from brainstorm sessions and cost out the benefit

Refer all large-scale, potentially controversial items to relevant standing committees (e.g. education, athletics, budget, negotiating)

Map and build a common framework for discussion of baseline with outside groups

Develop preliminary draft of recommendations from our committee

5. Reporting and Communication

Finalize recommendations

Investigate areas of potential opportunity from literature search and case studies, determine relevance

Cost the potential savings of curricular change and classroom size change

Sort through e-mail suggestions

Develop a centralized list of opportunities and develop a hierarchy or system to aggregate them

Debrief on ideas from focus groups and follow-up accordingly

Build, maintain and control a centralized database (Excel) of ideas and their status

Media contact at appropriate intervals as work flow warrants (keep expectations in check!)

Intitial presentation to Dresden Board

Interim presentation to Dresden Board

Final presentation to Dresden Board

Work-to-date

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Solicit ideas from the community at large, and from all of the relevant constituencies of the schools, on areas where we can reduce expenses and potentially increase income

Brainstorm approaches that could result in savings with relevant administrators

Understand best practices and approaches that have been used successfully by area organizations

Refer ideas to relevant standing committees

Cost growth primer, part I

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Cost Growth primer, part I

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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 primer, part I

Cost growth primer, part II

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Revenues 2000-01 2010-11 % Growth/Year

Dresden Assessment to Hanover

$5,441,066

$11,008,491

7.30%

Dresden Assessment to Norwich

$4,068,294

$ 5,754,672

3.53%

6th Grade Tuition $ 922,871

$ 2,088,275

8.51%

Other tuition $1,038,359

$ 1,852,343

5.96%

Hanover Town 0 $ 100,000

n/a

Dartmouth College 0 0 n/a

Building Aid 0 $ 659,484

n/a

From Unspent Capital Project Funds

0 $ 500,000

n/a

Other $ 114,001

$ 158,200

3.33%

TOTAL $11,584,591

$22,121,465

6.68%

Cost growth primer, part II

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Expenditures 2000-01 2010-11 % Growth/Year

Regular Ed $10,625,439

$16,144,824

4.27%

Special Ed $ 920,136

$ 2,663,991

11.22%

Debt Service $ 60,089

$3,529,172

50.28%

TOTAL $11,605,664

$22,337,987

6.77%

Enrollment 2000-01 2010-11 %Growth/Year

Richmond Middle 448 426 -.50%

Hanover High 768 775 .37%

Total 1,216 1,201 -.10%

Staffing 2000-01 2010-11 %Growth/Year

Certified teacher 110.34 115.1 .42%

Ed Assistants 42.57 55.30 2.65%

Custodial 11.93 14.65 2.08%

Admin and Other 15.94 16.40 .29%

Total 180.78 201.45 1.09%

Cost Growth Primer, Part III

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Cost growth primer, part IV

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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 Over five years, this would result in a 17.1% increase in the total

budget, roughly $4,000,000 over current year budgetCost shifts from State likely to increase cost and diminish

revenue Retirement costs likely to be downshifted to local government,

employees This could be a $360,000 item in 2011-2012 budget year NOT in our

plans, with more increases in following years Building aid, other State aid revenues likely to be cut

BUSINESS AS USUAL IS NOT SUSTAINABLE

Ideas being evaluated

To date, the Dresden Cost Reduction Committee brainstormed over 35 cost savings ideas, some of which are outlined in subsequent slides, and some of which will be shared with the Dresden Negotiations Team

The Dresden Cost Reduction Committee seeks more ideas from the public and staff. To share your thoughts, e-Mail us at budgetcuts@sau70.org

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Defined potential savings

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Health insurance renegotiations $ 50,000 +/- Refinance of debt service $ 25,000 +/- Limit elective offerings at HS $124,000 +/- Limit elective program at MS $ 78,000 +/- Reduce custodial work force $ 50,000 +/- Join Federal Lunch program $ 23,000 +/- Increase teaching load of HS department heads to 4 $

65,000 +/- Peak Power Management $ 8,000 +/- Increase average # of students assigned to teachers

$130,000 +/-

from 82.5-per-core academic teacher to 90-per-core

Academic teacher at HHS to reduce 2.0 FTEs

Undefined potential savings

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Explore deployment of Special Ed staff Expand on line instruction Offer AP courses and eliminate advanced electives in

academics to reduce staff Institute Post-Graduate program at HHS to increase revenue Eliminate additional elective courses at RMS, HHS to reduce

staff Increase class sizes at HHS, RMS to reduce staff Increase # of courses assigned to teachers to reduce staff Replace textbooks with Kindles (or on-line texts) to lower

textbook costs Explore use of grant writer to increase revenue Promote the rental of facilities to increase revenue Explore Combining services with town (payroll, grounds,

maintenance, custodial)

Some preliminary conclusions

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Special Ed, benefits, and salary schedule structure– even without adjustments to pay schedule– are built-in cost drivers for Dresden

Savings of over $500,000 could be realized if ALL defined savings were adopted by Dresden Board

The cuts under consideration will require shared sacrifice among all constituents: staff, students, parents

DCRC has identified several savings opportunities that could limit growth rate of total compensation in future. These will be shared with negotiating team.

DCRC recommends focus on total compensation in negotiations with employee groups

Work ahead of us

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Continue evaluation of existing ideasSolicit new ideas from schools, community and

organizations through one or more of the methods:Community forumSchool meetingsE-mail suggestion box

Work with relevant committees on referred ideas

Finalize recommendationsCommunicate recommendations

Implementing change

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Assess ability of school community to assimilate multiple cost initiatives

Realistic view of what change can be managedHow to maintain or even improve excellence of

education with reduced resources

Short term versus long term tradeoffsLong term cost savings accruing from negotiations may

impose an upfront cost. How do we measure the tradeoff? How much tolerance does the community have for tradeoffs in the current environment? Can we effectively communicate the value of such tradeoffs?