buffalo public schools · school enrollment, bps pre-k has seen slight growth since 2008 •...

Buffalo Public Schools

Strategic Budget Analysis

Tel: (703) 548-0855 · Fax: (703) 683-4707

112 South Royal Street · Suite D · Alexandria, VA 22314

Executive Summary

November 5, 2012

2

Agenda

• Project Fundamentals

• District Investments, 2008 to 2013

• Findings and Recommendations

3

Agenda




4

Project Fundamentals

Project Objectives

Provide a new view of District investments that shows how specific spending areas contribute to the District’s work of educating children, serving the community, and complying with rules and regulations

Depict changes in use of District resources over time

Identify key District program priorities, going forward

Illustrate alignment and gaps between past investment, current planned investment, and priorities

Recommend changes in investments going forward to move towards full funding of District priorities

5


Critical Issues Summary

• On what key goals or priorities is the District focused?

• What is invested in these activities?

• What differences are apparent between the District’s existing view of these expenses and a view that uses the District Value Chain as a lens?

• Which costs act as fixed costs? Are there others that should?

• What is the planned level of investment in Say Yes to Education activities?

• What does it cost the District to offer different courses?

• What revenues support the District’s operating activities?

• How can funds be better allocated to more directly serve the District’s needs?

6


Data Reviewed Financial Data

Budgets and actual expenses by budget category from 2008 to 2013 Transaction-level data from 2008 to present

Operational Data, collected through interviews with the following people:

Amber Dixon, Interim Superintendent Barbara Smith, Chief Financial Officer Geoff Pritchard, Financial Controller Debra Sykes, Associate Superintendent, Office of School Innovation and Turnaround Susan Eager, Director of Plant Operations Tamara Alsace, Ph.D., Director of Multilingual Education Ann Fitzgerald, Supervisor of Elementary Education Fannie Lynn Patterson, Director of Staff Development Kim Curtin, Director of Special Education Darren Brown, Executive Director of Human Resources Marta Clark, Director of Employment Services Rob Roberts, Contract Administrator, Grants Department Anne Botticelli, Director of Curriculum Craig Koeppel, Director of Purchasing Keith Robertson, Director, Staffing for Budget Scott Leslie, Accountant, Food Service Department Diane Andreana, Supervisor, Math Department Kelly Baudo, Supervisor, Science Department Aubrey Lloyd, Director of Athletics Cheryl Kennedy, Transportation Department

Enrollment Data

Basic Education Data System (BEDS) data on entire District and local charter schools from NYSED Individual course data, provided by Information Technology department

7

District Priorities

Preliminary – for discussion

District Priorities, February 2012

1. Smaller class sizes for ESL classes

2. Smaller class sizes in kindergarten

3. One teaching assistant/ paraprofessional for each kindergarten classroom

4. Social workers relieved from special education administrative tasks and able to provide therapeutic support to students.

5. Staffed classroom at each school site for alternative instruction to reduce out-of-school suspensions

6. Advanced Placement courses in every high school

Source: SHP analysis, interviews with 2011-12 Interim Superintendent and Chief Financial Officer

Say Yes to Education Priorities

1. Staffing in first wave of Say Yes to Education schools set to no more than 200 students/social worker or counselor

Say Yes, Year 2

1. Academic after-school programming available to all Say Yes students

2. Academic summer programming available to all Say Yes students

District Priorities + Say Yes Year 1 = $9.2M

8

District Background

Citywide Public School Enrollment

• Buffalo Public Schools’ enrollment is in clear decline

• Total public school enrollment (District and Charters) has fallen at a 4-year compound annual rate (CAGR) of -1%

• However, the District’s enrollment has fallen more than twice as rapidly, while charter enrollment has grown by nearly 5% annually

0

10,000

20,000

30,000

40,000

50,000

0

10,000

20,000

30,000

40,000

50,000

2008

41,753

2009

40,603

2010

40,987

2011

40,337

2012

Districtstudents

Charterstudents

40,106

35,677 34,478 34,528 33,543 32,754

6,076 6,125 6,459 6,794 7,352

Students

District

Charters

Source: BPS enrollment data, BEDS, BPS 4-Year Financial Plan (May 1, 2012)

9

District Background

District School Enrollment

• Despite declining public school enrollment, BPS Pre-K has seen slight growth since 2008

• Buffalo’s charter schools do not offer Pre-K

• Roughly two-thirds of Buffalo’s charter school seats are available for grades K-6; of the remaining grade levels, this set of grades has had the smallest decline since 2008 as a percentage of enrolled students (~1,000 fewer students by 2012)

0

10,000

20,000

30,000

40,000

0

10,000

20,000

30,000

40,000

2008 2009

34,478

2010

34,528

2011

33,543

2012

K-6

Pre K

9-12

7-8

32,754

6,076 6,125 6,459 6,794 7,352

Students

35,677

Charterstudents

41,753 40,603 40,987 40,337 40,106Total public

+4.9%

-1.0%

Source: BPS enrollment data, BEDS, www.nycsa.org, BPS 4-Year Financial Plan (May 1, 2012)

10

Recommendations

Recommended areas for reallocation towards District priorities:

Increase direct reports per manager

Develop web-based HR processes

Reduce unnecessary printing and copying

Re-purpose funds towards Social Workers

Rationale Opportunity

The HR team is dedicated and capable. Their ability to do more than process personnel actions is limited by their reliance on paper systems

$700k

The average span of control for most managers is below typical staffing ratios

$2.7M - $9.0M

Change some default settings; implement individual ID numbers

$292k

CFO and her team have already made this investment for 2013

$530k

Reduce low enrollment sections

The District offers >3,000 sections with 16 or fewer students. Many can be combined and still stay below the mandated maximum

$7.0M

$13.7M – $20.0M

Align price and service for Niagara Frontier Service is limited but passes are full price $2.5M

11

Agenda




12

Historical Revenues and Expenses

General Fund Only

Source:

Grant funds generate expenses equal to expenses, and the cafeteria fund does approximately the same

0

200

400

600

800

$1,000

674

627

725

670

725

682

728706

$, millions

2008 2009 2010 2011 2012B

757

2013B

780

Other revenues

Expenses

Use of fund balance

Source: BPS ST-3 reports, BPS budgets

• From 2008 to 2011, the District’s general fund revenues exceeded its expenses

• Except for a small amount in 2009 ($800K, not visible due to scale), the District did not need to use the fund balance to offset operating expenses until 2012, when approximately $30M was budgeted. $19.5M is budgeted for 2013. These figures include assigned and unassigned fund balance dollars

• Without these appropriations, expenses would exceed revenues in these budgets

5-year CAGR

Revenues = 3.0%

Expenses = 3.9%

R E

13

Historical Costs

Traditional Presentation of Expenses

The Buffalo Public Schools have traditionally presented expenses organized by functional area. This view of the District’s investments shows:

• An accounting perspective on tracking spending • A view corresponding to actual departments, in many cases,

separated in the budget as they are physically • Investments in the same type of activity (e.g., clerical support)

spread across various departments to correspond with the office in which the resources are deployed

14

Historical Costs

Key Operating Expenses per Student

Source: BPS ST-3 reports, BPS budgets, SHP analysis

2008 2009 2010 2011 2012B 2013B 5-year CAGR

Teaching and Learning 9,701 10,283 10,395 10,481 10,834 10,615

1.8%

Benefits 3,777 4,191 4,299 4,855 6,152 5,901

9.3%

Interfund and Debt Svc 2,256 2,894 2,998 3,591 3,612 4,149

13.0%

Buildings and Utilities 1,453 1,555 1,545 1,521 1,560 1,561

1.4%

Transportation 1,302 1,372 1,392 1,295 1,524 1,546

3.5%

Food Service 494 543 559 533 721 841

11.2%

Administration 446 483 515 525 594 597

6.0%

Enrollment 35,677 34,582 34,528 33,615 32,816 32,291

-2.0%

= High Point(s)

15

Some Observations

A View of the District Through the Historical Accounting Lens

• After several years of consistent spending increases, the District’s 2013 budget fell by just under 1 percent from the 2012 budget

• Enrollment fell in District schools while it rose in Charters

• Spending on building costs have risen over time as the five phases of the JSCB project have rolled out. Revenue in the form of state aid earmarked for these projects has risen along with expenses

• As those building projects increased the overall budget, however, teaching and learning costs (exclusive of benefits) fell as a percentage of total expenses, from 45.8% to 37.8%. In absolute dollars, these expenses were essentially flat

• Over the same period, administrative expenses rose from $15.9M to $19.3M and held at 2.1% of total expenses

• While teaching and learning appear to vary with enrollment, administrative costs do not, since they rose as enrollment fell. These costs appear to follow growth in revenue

• These increases in expenses came as headcount fell, both in and out of schools. Decreases in headcount, however, did not keep pace with decreases in enrollment. This pushed up staff/student ratio in approximately half the departments, including the largest ones; that is, there are more staff for each student now than in 2008 in these departments

• All but four high schools also had increasing staff/student ratios as well; the same was true for all but two elementary schools and roughly half of the Pre-K to 8 schools

16

Value Chain-Based Presentation of Expenses

The analysis that follows shows expenses organized by value chain area. This view of the District’s investments shows:

• An operations perspective • A view corresponding to the ways in which the District’s activities

progressively add value to students in BPS schools, from design of the curriculum, through teaching and other student activities, to food service and transportation

• Investments in the same type of activity are aggregated based on where those activities fall in the value chain.

• For example, all clerical and administrative work is grouped under “District Administration,” rather than separated by physical location of the different clerical staff members

For the value chain view, investments are not separated by revenue

source (A fund, F fund, etc.)

17

BPS Value Chain

Curriculum Development

Non-academic Supplemental

Programs

Professional Development

Core Academic Instruction

Counseling, Guidance, and

Health Care

Academic Supplemental

Programs Transportation Food Service

Assessment, Program

Evaluation, and Reporting

Finance and Business Operations

Human Resources Grants and Development

Information Technology Physical Plant and Maintenance

Communications and Community Relations Benefits and Incentives

Debt Service

School Leadership

Enrichment Academic Instruction

Special Education Instruction

English Language

Learner Instruction

Operating Activities

Support Activities

District Administration

18

BPS Value Chain

Methodology

• Review the Schoolhouse K-12 Value Chain with the Superintendent and CFO • Review budgets • Meet with Superintendent to identify priorities • Gather data from 2008 and clean datasets • Build a database and identify 6,000 unique combinations of key accounting

codes • Interview key managers and match each one of those unique combinations to

a part of the value chain • Look at spending by value chain item • Examine costs per student • Analyze course costs • Determine reallocation target areas

19

BPS Value Chain

Costs by Value Chain Area (net of Charters and Debt)

0

200

400

600

800

2008

624

2009

648

2010

653

2011

649

2012B

707

2013B

Other

685

$, millions

School Leadership

TransfersCounselingAdmin.

Food Service

Enrichment

Transportation

Physical Plant

SpecialEduc.

CoreInstruc.

Benefitsand

Incentives

5.3%

0.7%

-0.4%

4.7%

0.0%

-3.3%

4.2%

-8.1% -0.8%

0.8%

Source: BPS financial records, 2008-2012; 2013 Budget, SHP analysis

-2.5%

• Charter school and debt service expenses removed. 5-year CAGRs follow label on right side (left for Admin.)

• Several smaller areas are combined in the “Other” category: Supplemental academic and non-academic programs, IT, ELL instruction, Professional Development, Finance, HR, Evaluation, Communications, Grants, and Curriculum Development

20

BPS Value Chain

Costs by Value Chain Area

• From a value chain perspective, 34% of this year’s budget will be invested in core, special education, and enrichment instruction in 2013, down from 37% in the 2012 budget

• These costs include teachers, some paraprofessionals, instructional supplies, and some contracted services, but not benefits or ancillary time for professional development

• Over the past five years, core general education and special education expenses have risen, with special education increasing over 4x faster than general education

• Special education costs have also grown more quickly than the district’s budget (4.7% CAGR vs. 3.3%)

• ELL instruction expenses, while approximately 1/13 the magnitude of either core or special education, have grown at a CAGR of 10.85% since 2008

• District administration has fallen by 8.0%, though related areas like HR (+6.9%) and IT (+3.2%) have risen on an compound annual basis over the same period


0

200

400

600

800

2008

624

2009

648

2010

653

2011

649

2012

B

707

2013

B

685

$, millions

5.3%

0.7%

-0.4%

4.7%

0.0%

-3.3% 4.2%

-8.1% -0.8% 0.8%

-2.5%

5-year CAGR

Charter and debt service expenses removed

21

BPS Value Chain

Costs Per Student By Value Chain Area


0

5,000

10,000

15,000

20,000

25,000

$ per student

2008 2009

18,744

2010

18,919

2011

19,318

21,536

2013B

21,205

17,490

2012B

35,677 32,816 32,29134,582 34,528 33,615Students

• Charter school and debt service expenses removed. Several smaller areas are combined in the “Other” category: Supplemental academic and non-academic programs, IT, ELL instruction, Professional Development, Finance, HR, Evaluation, Communications, Grants, and Curriculum Development

• A = Actual to May 5, 2012; B = Budget

2009

17,491

2010

18,014

2011

18,440

2012B

17,712

21,297 21,07020,983 21,329

Buffalo

5-year CAGR = 3.9%

Syracuse

3-year CAGR = 0.4%

• With Charter and debt costs removed, Syracuse’s 2009 expenses per student were equal to Buffalo’s in 2008

• Since that time, Syracuse has seen per-student spending grow by $1,000 and then fall back to 2009 levels

• During the same period, Buffalo’s spending per student grew at a 5-year CAGR of 3.9%; from 2009 – 2012 Syracuse’s grew at 0.4% annually

• Syracuse has spent more per student on special education and enrichment courses than Buffalo; Buffalo’s benefits costs are ~3.7x Syracuse’s. This is mainly due to the impact of buyouts and retiree health insurance – nearly $2,000 per student to Syracuse’s $950 per student

3.7x

1.6x

22

BPS Value Chain

School-Level Costs Per Student by Value Chain Area

0

2,000

4,000

6,000

8,000

08

6,373

09

6,673

10

7,407

11

7,449

12ann

7,075

08

7,027

09

7,348

10

7,493

11

7,204

12ann

6,709

08

6,892

09

7,188

10

7,386

11

7,445

12ann

7,337

$ per student

Physical Plant and Maint.School Leadership

Counseling/Guidance

Core Academic Instruction

Special Education

Enrichment Academic

Non-acad. Suppl.Prof. Dev.

Other

District Admin.

Academic Suppl.

ELL

11,875

11,626

11,832

11,118

11,077

Enrollment16,275

16,

696

16,

073

16,726

16,768

6,8

75

6,6

01

5,7

43

5,5

18

5,325

Elementary Pre-K to 8 Middle and High School

Source: BPS financial records 2008-2012, SHP analysis

• All costs actual spending; “12ann” = 2012 costs annualized from transactions to May 16, 2012 • Other includes finance, HR, IT, Assessment, transportation, curriculum development, community relations, food

service, benefits, and supplemental programs at the elementary and Pre-K to 8 schools

• Per-student costs are quite similar among all grade levels, though the distribution along the value chain is different

• In addition, supplemental activities, both academic and non-academic, push costs higher at the middle and high school levels

• This investment in choices – electives and activities, keeps high school costs well above Pre-K to 8 costs and close to even with Elementary Costs, which essentially invest in special education instead of enrichment

23

Agenda




24

Unit Cost and Enrollment Findings

Advanced Classes

• Includes data from AP, Accelerated, Honors, and IB courses

0.1

0.2

0.5

1

2

5

10

20

50

100

0.1 0.2 0.5 1 2 5 10 20 50 100

AP ENVIRONMENTAL SCIENCE

IB FILM HL SR

AP ART HISTORY

ACCELERATED MATH 6-8

R² = 0.59

Section Enrollment

Cost

per

Stu

dent/

100

IB PHYSICS SR.

IB BIOLOGY SR.

AP US GOVT & POLITICSAP MUSIC THEORY

AP CALCULUS

IB VISUAL ART SR

IB SPANISH

IB MANDARIN CHINESE V

IB ENVIRONMENTAL SCIENCE

IB ENGLISH JR

IB ECONOMICS

HONORS SOCIAL STUDIES 8

AP STATISTICS

AP SPANISH

AP ENGLISH (LIT & COMPOSITION)

AP ENGLISH (LANG & COMPOSITION)

AP CHEMISTRY

COLLEGE CALCULUS 1

Accelerated

AP

Honors

IB

• The correlation between higher class size and lower unit cost is quite high for these advanced-level courses

• That said, these advanced courses tend to have relatively high enrollments compared to the rest of the District’s offerings

• IB classes, likely because they are clustered at City Honors, tend to have higher class sizes and lower unit costs than AP or other advanced courses

• The District has made an admirable effort to offer AP classes at many high schools; according to an Associate Superintendent, despite relatively high enrollment, these classes are often underenrolled because students are not well prepared by other course offerings for the rigors of AP classes

• For example, there are very few courses with the “Honors” designation: two sections of 8th grade social studies and 11 sections of Mandarin Chinese

Source: BPS enrollment and schedule data, SHP analysis

25


General Classes

• Includes data from General, Lab, Major, and Regents courses

0.1

0.2

0.5

1

2

5

10

20

50

100

200

500

1,000

0.1 0.2 0.5 1 2 5 10 20 50 100 200 500 1,000

ENGLISH 9 ENGLISH IIIALGEBRA

SWIM

CAREER & FINANCIAL MGMT-PT A

JROTC II

MUSIC 8

MUSIC 8JROTC I

INDEPENDENT STUDY ART

Section Enrollment

Cost

per

Stu

dent/

100

HEALTH EDUCATION 9-12

FRENCH 8

SPANISH 8ENGLISH GRADE 7

REGENTS BIOLOGY

Tech Ed Gr 7

GENERAL MATH 8

HOSPITALITY PROGRAM 11

SCIENCE 8

PHYSICAL EDUCATION 1

CHORUS

GENERAL ART K

CONCERT BANDACCOUNTING

WELDING 3

DANCE BALLET

BAND 5-8

R² = 0.63

R² = 0.54

Core

Enrichment

Note thousands of sections with fewer than 15 students


• In both general and enrichment classes there are thousands of examples of unnecessarily small class sizes

26


Support Classes


• Includes data from Differentiated Instruction, ELL, and Special Education classes

0.1

0.2

0.5

1

2

5

10

20

50

100

200

0.1 0.2 0.5 1 2 5 10 20 50 100 200

DIFFERENTIATED INSTRUCTION

R² = 0.58

Section Enrollment

Cost

per

Stu

dent/

100

NATIVE LANG ARTS 1

ESL INTERMEDIATE

ESL ADVANCED

ESL ADVANCED

STUDENT SUPPORT SERVICES

DIFFERN HORTICULTR 2

COMMUNITY TRAINING

READING (DI)

Differentiated Instruction

ELL

Special Education

• Support classes skew towards <15 students as well, but many of them are mandated as such

27


Low Enrollment Courses


• Across all course sections except for Nova on-line learning classes, the average size of a section is just under 16 students in middle and high school

• Sections that approach the contracted maximum enrollment are the least frequently appearing type

28

Low Enrollment Course Recommendation

Increase Some Class Sizes to Contracted Levels

Source: Buffalo Teachers Federation Master Contract (July 1, 1999), BPS enrollment and schedule data, SHP analysis

• The District offers well over 3,000 general education (and non-ELL) course sections of 16 or fewer students

• Some of the smallest sections are intensive support courses; others exist solely as spots for students to take Regents exams

• The Buffalo Teachers Federation contract limits class sizes to approximately 27 for Honors and Regents English classes, 30 for other Honors and Regents classes, 24 for basic English, and 27 for other basic classes. Enrichment classes (arts, music) and vocational classes range from 22 (for food- and clothing-related classes, of which there is just one on the list after the limitations imposed in the analysis, described below) to 30 students for arts and 35 for music

• We used the following rules to reduce the number of sections

• Leave JROTC, ELL, music lessons, vocational classes, internship classes, and Special Education unchanged.

• Combine two sections with 10 to 16 students that are in the same discipline

• Do the same with any three sections with 7 to 9 students; if fewer than 7 then combine in groups of four

• Do not change sections with three or fewer students

• Leave seminars, studio, and swim classes ~33% smaller than other courses

• These changes, made to 3,191 sections, would increase the average class size in these sections from approximately 10-11 students to 23-25 students across core, advanced, enrichment, and study hall sections

• Assuming that half of the potential reductions will be undesirable to enact due to student and teacher schedules or enrollment choices, this change will provide $7.0M for strategic reallocation

• Note that this analysis does not consider classes with greater than 16 students, although many of these sections with, for example, 17-22 students could grow without impacted the educational program

29

Human Resources Findings

Under-Utilization of Existing Software

Source: Interviews with Executive Director and Director of Employment Services, HR; Director of Professional Development

• At least three different software packages impact the Human Resources department. Little integration exists among them, though True North Logic can be integrated with Munis

• The Department’s processes, then, are heavily dependent on clerical labor and paper forms. This workload is reflected in their own staffing, which includes a relatively new and respected Executive Director, Darren Brown, 3 directors or deputy directors, and 17 clerical staff. In addition, HR encompasses the Benefits team, which has 3 supervisors and 4 clerical staff

• Those processes are generally limited to fielding new applications and managing transfers. There is little time spent on talent management, crafting of new job descriptions, creating career paths, or any HR strategy

• Those processes work as follows:

• New positions are created by completing a paper form, which is approved by HR, then finance. Each makes a copy

• Applications come in via Applicant Stack, a web-based system. The District has only one license, so all applications come into the Director of Employment Services, who emails them to HR clerks for screening, and then to principals/hiring managers with a spreadsheet listing all the names and other information

• When a candidate is hired, the hiring manager creates another paper form and sends it to HR. Sometimes the candidate brings it in him or herself

• HR fingerprints the new hire, reviews the hiring form again to ensure that it is complete, and sends that form to finance

• Finance checks the position codes, matches them to the budget, and sends the form back

• HR then types data on the new hire into a second spreadsheet for the board packet. HR also does this for any transfers triggered by the new hire

• HR completes a form within the Munis system to enter the new employee into payroll. In the case of transfers, all information is re-keyed in Munis

Applicant Stack

On-line job applications

Used by one HR manager

Munis

Position Control, payroll

Used by Finance, HR staff

True North Logic

Professional Development Tracking

Used by Prof. Dev. team

30

Human Resources Recommendation

Implement Existing Paperless System

Source: Interviews with Executive Director and Director of Employment Services, HR; Director of Professional Development; interviews with Charlotte-Mecklenburg HRIS director; www.charlotteobserver.com

• Hires new to the District then meet with an HR staff member to complete a 10-15 page paper onboarding package

• New hires do not receive the contract; they are not required to sign or acknowledge it. The contract is available on the District’s web site, along with some, but not all, Memoranda of Understanding that have modified it since its ratification in 1999

• When employees are evaluated, HR e-mails forms as attachments to principals and receives back typed and printed evaluation documents. These forms are signed by the evaluee and sent by Pony truck to the HR office in batches

• There are approximately 50-100 new hires per year and 300 transfers and lateral moves for every board meeting (~7,500/year)

“How many of the clerks work full time processing paper applications and transfers? All of them. They don’t do anything else.” - BPS HR manager

• The HR department already owns the Munis modules to allow for further automation of the hiring process and the development of electronic workflows

• For comparison, Charlotte-Mecklenburg Schools (CMS), the most recent Broad Prize winner, serves over four times as many students and hires hundreds of teachers each year

• This population is served with 5 clerical staff in HR. CMS does not use Munis but a competitor’s system that allows the HR team to complete many of the above processes via the web and without paper

• CMS does employ 10 data analysts to manage their system; because Buffalo Public Schools is one-fourth the size of CMS, it is likely that the HR department could transition to web-based processes with a reduction of 14 typists and one deputy director, and the addition of two analysts

• This move would generate $700,000 for reallocation

31

Management Spans of Control Recommendation

Increase Direct Reports per Manager

Source: 2012-13 headcount data from file “FTE Report All Staff”, run 1/5/12

District average direct reports per director = 2.1

District average direct reports per supervisor or deputy director = 4.8

• Judging by existing spans of control (2.7 to 4.5, versus an expectation of ~8.0), several departments could function smoothly with lower investment in managerial labor

• HR is rarely involved in strategically crafting positions, defining work needs with departments, or even writing new job descriptions, which has led, in the opinion of HR leaders, to some unplanned growth in the director and supervisor roles

• In a notable case in which a manager and HR worked together, the CFO was able to hire a talented management analyst by having the HR team steer her through the process of hiring without being overly restricted by the Civil Service processes

• Management headcount can be reduced by ~7-8 Directors and 14 Supervisors, raising average spans of control to 3.5 and 5.7, respectively (~$2.7M)

• By continuing to move towards a ratio of 8.0 direct reports per manager, the District can make further reductions in labor (~$9.0M)

0

2

4

6

8

10

12

14

16

18

20

22

Supe

rvisors, C

ontinu

ing Edu

cation

Supe

rvisor, A

tten

danc

e

Sup

erviso

r, G

roun

ds

Supe

rvisors, IT

Direc

tor, ELA

Sup

erviso

r, P

ayroll

Dire

ctor

, Plan

tCFO

Sup

erviso

rs, Pu

rcha

sing

Sup

erviso

r, A

udit/AP

Sup

erviso

rs, Ed

. Sv

cs.

Sup

erviso

rs, Ben

efits

Direc

tors, HR

Assoc

Sup't, S

choo

l In

nov.

Direc

tor, S

taff D

ev.

Direc

tor, B

udge

t

Sup

erviso

r, S

pec

ial P

rojects Claim

s

Ass

oc. Sup

't., Spe

cial Ed.

Sup

erviso

rs, Math

Direc

tor, Food

Service

Supe

rvisor

s, C

TE

Direc

tor, Fed

. an

d St. P

rog.CT

O

Supe

rvisors, Fo

od S

ervice

Supe

rvisors, Ea

rly Childhoo

d

Direc

tor, Elemen

tary

Cont

rolle

r

Direc

tor, G

uidanc

e

Exec

. Dir, HR

Supe

rvisor

s, ELL

Direc

tor, R

eading

Sup

erviso

rs, Fe

d. and

St.

Direc

tor, G

rants

Direc

tor, Ed. Sv

cs.

Direc

tor, E

LL

Sup

erviso

r, A

rt

Sup

erviso

rs, Com

mun

ity Relations

Sup

erviso

rs, Gra

nts

Direc

tor, Ath

letics

Direc

tor, C

TE

Direc

tor, PE

Direc

tor, S

ocial Stu

dies

Direc

tor, Pur

chas

ing

Direc

tor, C

ontinu

ing Edu

cation

Sup

erviso

r, M

usic

Sup

erviso

r, Scienc

e

Supe

rvisor

s, E

lemen

tary

Number of Direct Reports

32

Printing and Copying Recommendation

Tie Usage to Individuals to Reduce Cost

Source: BPS financial data, 2008-2012; NYSED BEDS data; SHP analysis; interview with Director of Purchasing; New York State agreement to purchase copy paper (http://www.ogs.ny.gov/purchase/spg/pdfdocs/5021320934ra.pdf), interviews with Finance, IT, HR, and Accounting staff; Xerox Addendum to City of Buffalo Contract #072372900 (May 28, 2009; in force through June 30, 2014)

• The District has a contract supplying 6.4M black-and-white copies per month and 36,000 color copies per month; the monthly fee is ~$94,000 (77.2M impressions/year)

• The fee does not cover paper, for which the District pays ~0.5 cent per sheet. Their most recent contract under a New York State agreement with a vendor showed an agreement to spend $236,389. At current prices, this amount should cover 43M pieces of white copy paper. As of June 2012, the District had bought 12,500 cartons (62.5M pieces) of paper; assuming the same price, this represents ~$337k

• While each school has budget restrictions on office supply use and postage, school sites do not have such limits for printing. Individuals not have print or copy ID numbers

• Anecdotally, City Hall employees tend to report that there is a great deal of unnecessary printing. For example, the default settings in Munis run large, paper intensive reports after each pay cycle. These are immediately shredded for confidentiality; only a few pages are important for the Controller to review

• More stringent restrictions, enforced through print ID numbers for each person, could easily be applied equally across color and black-and-white printing – though further efforts should be directed at reducing the more expensive color printing. These efforts would save $67,500 annually on paper and $225k on printing (20%)

• Such a reduction is equivalent to each employee using 10 fewer sheets of paper each day; especially if the District activates the electronic forms modules that it already pays license fees for, this is clearly feasible

• In addition, the number of color printers should be reduced further going forward to further decrease color printing costs

33

Transportation Findings

Efficiency in Yellow Buses, but not in Public Transit

0

500

1,000

1,500

2,000

Avg. general

education

Yellow bus Public

transit

Special

Educationtransportation

District-wide

$ per student

$31.8M $23.4M $8.4M $8.5M $8.0MBuffalo total

Buffalo

Syracuse

Rochester

Source: BPS 2013 budget, Syracuse City School District 2013 budget, Rochester City School District 2012 budget, US Census 2012 Statistical Abstract, SHP analysis

• The District’s efforts to introduce competition into the bidding process through multiple RFPs have led to lower average per-student costs than Rochester, a similarly-sized city (equal enrollment, 5 fewer square miles). The finance, purchasing, and transportation teams should be commended for this success. This figure includes non-special education transportation and district-wide costs

• Costs in Buffalo are somewhat higher than in Syracuse on a per-student basis for non-special education riders, but Syracuse has ~64% as many students and ~61% the square mileage to cover

• While Buffalo is comparable to Syracuse on a per-student basis for bus costs (both cities use First Student as their vendor), Buffalo expenses for public transit per high school student are 2.8x those in Syracuse. When considered in light of the limited service offered to BPS students, Buffalo should be able to pay less for access to Niagara Frontier buses

• Finally, Buffalo’s per-student district-wide expenses, including overhead and athletic and other bus expenses, are 1.4x those of both other cities

34

Transportation Recommendation

Match Public Transit Price with Service

Source: Say Yes to Education focus groups, interviews with transportation staff, www.mbta.com, www.mta.info, http://metro.nfta.com/Programs/College.aspx

• In interviews with Say Yes to Education, high school students report low levels of satisfaction with the public transportation

• Students note that the buses do not reliably stop on schedule, and that if they miss a connection then they cannot get to school for hours in some cases

• It is clear that the transportation staff is careful and diligent about optimizing resources to get students to school in the most cost-effective way, and the Niagara Frontier buses are less costly per student than are the First Student yellow buses

• However, the Niagara Frontier contract, which dates to 1990 and was last negotiated before that in 1971, restricts student usage on district-purchased passes to (a) only the hours corresponding to the start and end of school, and (b) only each student’s personal route home. Families can request routes until a Fall deadline each year

• Because of this low user satisfaction and because of the restrictions in the offering, the price of a monthly pass should be discounted to be better aligned with service levels

• Students in other large cities can receive discounts of ~50%, and Buffalo’s college students enjoy unlimited access with their passes

• A 33% discount to the District would generate $2.5M for strategic reallocation

• In addition, despite Buffalo’s larger size, its cost per student to administer the department is higher than Syracuse’s, and these costs can also be reduced

35

Other Findings and Recommendations

• The District staff has demonstrated a great deal of support for this finance review. In interview after interview, and

through numerous requests for data, the staff went out of their way to share information, make District actions transparent, provide new ideas and insights, and respond to frequent clarifying questions

• The CFO, Barbara Smith, and the Controller, Geoff Pritchard, were unfailingly helpful and responsive

• In addition, this team made challenging and thoughtful reductions, as well as key investments, for 2013, in advance of this analysis

• The District manages over 60 school sites for students in Pre-K to 21. It also serves adults with a dedicated site

• The District is also engaged in an ongoing struggle to write and enact an updated contract with several bargaining units, largest among them the Buffalo Teachers Federation (BTF). The BTF contract, enacted in 1999 and officially expired as of 2004, remains in effect under New York State law. It requires numerous provisions that add cost without a clear link to educational attainment for students, from the number of high-speed copiers per teacher to an effective limit of 3 hours and 45 minutes of instructional time per teacher per day

• In addition, the District bears some financial responsibility for the 16 charter schools attended by Buffalo students. Tuition is passed through the District, and several state and federal grants are paid out to charter schools while the District manages the applications

• The District has dedicated millions of dollars and a great deal of management oversight to an extensive building renovation project over the past five years, under the Joint Schools Construction Board. Nearly every school attended by a BPS student will have been renovated under this project

• Enrollment has fallen in the District over time, and for each of the past five years, and so along with these renovations, several buildings were closed. Some remain the responsibility of the District and generate maintenance expenses; others have been returned to the City, which can use, hold, or sell them. The District is not allowed to sell a building

36

Findings and Recommendations

• The District uses a set of Enterprise-level software packages to manage aspects of its work. The largest of these, in terms of expenses and users, is Munis, an Enterprise Resource Planning (ERP) suite used by many school districts. BPS uses it for payroll, finance, accounting, inventory, and position control, among other functions. In addition, BPS uses separate systems for learning management and profession development tracking and job application management. There is weak integration between these systems, which adds costs, especially in the human resources function

• From an historical accounting view, the District appears to invest ~38% of its budget in instruction, down from nearly 46% in 2008. From the value chain view, the level of investment is ~34% and has not surpassed 37% during the period from 2008-2010

• BPS is well on its way to funding some key Say Yes to Education supports, most notably with a ratio of 218 students per counselor or social worker

• That said, after school and summer programming will be harder to roll out. Existing contracts require additional payments to the principals and custodians in each building hosting an after school program. Hours for custodians and security guards are fixed and then often require overtime to adequately staff enrichment activities

• Revenues to support these expenses come mostly in the form of state and federal aid and have grown over time, both on an absolute and per-student basis. In years when state, city, and federal aid have combined to generate less revenue than the District perceived was needed, the District has drawn on its fund balance to boost effective revenues. This is not a long-term solution

• Non-school staffing has fallen from 973 to 867 during this time. Most notably, the Special Education department has cut centralized staff from 188 to 77, moving many into school buildings as part of Student Support Teams

• The differences between spending per student among schools tends to be driven by special education staffing, which is constrained in some extreme cases by the limitations of physical space. Schools also show large variances in physical plant expenses; these track to ongoing construction

37

Other Findings and Recommendations

• One area of physical plant spending is the building management contract which pays some maintenance staff by

the square footage for which they are responsible. These staff purchase tools and materials from this allowance and may keep any surplus. Data on this system exists in scanned copies of years-old contracts and in the collective memory of key staff. This system is concerning from an financial control perspective and may generate excess costs. Even if it is less expensive than a more traditional wage system, the rules and expenses should be made more transparent to allow the finance team to gain visibility into the flow of dollars

• The District has, whether intentionally or not, invested in providing choices (123 different enrichment courses provided in over 2,000 sections) and keeping class size small

• Over 3,000 sections core and enrichment class sections have fewer than 16 students in them

• To fully fund the Interim Superintendent’s goals will require $9.2M. This gap could be closed in the coming year, and certainly by 2014

• HR’s reliance on a low-tech management system is emblematic of the District’s approach to the use of paper in general. The District uses an immense amount of paper each year. If the ~62.5M pieces of paper purchased this year were piled on top of each other, the resulting stack would be four miles tall. For context, Buffalo has 1.5x the students of Syracuse but uses 3x the paper

• In addition to underenrolled – or, from another perspective, overstaffed – schools, the District has a glut of managers with less supervisory responsibility than expected. We found no evidence of a process for determining the needs of a department; instead, it appears that the transition from coordinator to supervisor to director is a lane system to accompany the seniority-based steps

• When someone is promoted to a new directorship, for example, from a supervisor role, someone else is moved into the supervisor role, and so on down the chain. This process has grown some departments without anyone’s intending to do so and should be more closely managed

• Overall, the District has strong managers in many key positions who care deeply about its success. All of these changes, though difficult, are within the District’s capabilities

38

Recommendations

Recommended areas for reallocation towards District priorities:

Increase direct reports per manager

Develop web-based HR processes

Reduce unnecessary printing and copying

Re-purpose funds towards Social Workers

Rationale Opportunity

The HR team is dedicated and capable. Their ability to do more than process personnel actions is limited by their reliance on paper systems

$700k

The average span of control for most managers is below typical staffing ratios

$2.7M - $9.0M

Change some default settings; implement individual ID numbers

$292k

CFO and her team have already made this investment for 2013

$530k

Reduce low enrollment sections

The District offers >3,000 sections with 16 or fewer students. Many can be combined and still stay below the mandated maximum

$7.0M

$13.7M – $20.0M

Align price and service for Niagara Frontier Service is limited but passes are full price $2.5M

39

Immediate Next Steps

• Review with management team

• Price priorities developed by incoming Superintendent

• Change areas of focus and cost of addressing those areas as needed. Recommend additional reallocation as needed to support new priorities

• Review with Board

• Share summary of results with City and County when there exists the potential to drive cost-sharing or other efficiency measures

• After completion of City and County review, convene team to make further reallocations by combining resources

40

End of Document

buffalo public schools · school enrollment, bps pre-k has seen slight growth since 2008 •...

Documents