school facility use by outside groups: who pays for it roger young roger young and associates...
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School Facility Use by Outside Groups: Who Pays for It
Roger YoungRoger Young and [email protected]
978-886-6093
Bio …
• 37 Years Public Education• Assistant Superintendent Finance/Facilities• Planning Guide for Maintaining School Facilities• Facility Masters Award Program• Facility Masters Conferences• Facility Masters Webcast Series
• Improve Processes and Practices
Agenda
• Concepts behind facility use and policies• The dilemmas and the impacts• Critical questions• Recent case• Newest cost recovery study• Your bottom line
Recent Survey: Financial Impacts Due to Energy
Source: AASA Fuel and Energy Snapshot Survey Results
July 2008
Recent Survey: Little Relief
Source: AASA Fuel and Energy Snapshot Survey Results
July 2008
What Will Those Who Took The AASA Survey Do To Offset the Impacts?
• Implementing energy conservation measures• Restructuring transportation programs such as bus
routing or cutting back on student and staff trips• Cutting supply and textbook purchases• Hiring freezes or eliminating positions• Eliminating or modifying athletic events and offerings
NO OPTION IN THE SURVEY MENTIONED COST RECOVERY INITIATIVES RELATED TO COMMUNITY EVENTS!
Who’s using your Facilities?
• Religious Groups• Athletic Teams• Civic Groups
• Adult Education • Business Groups
Dealing with the Demand
Facility Usage PoliciesAccording to SchoolDude’s national survey on facility usage:
• Historically the second most underutilized facilities next to churches, educational institutions and their grounds are being used more and more for after-hour activities.
• This rise in after-hour usage presents unique challenges to the business office and support departments including impacts upon:
• budgets• who to charge vs. no-
charge• justifying rental rates• balance between rights of
renters and rights of
facilities• liability or risk
containment• coordination of support
services• and more…
Approximately 98% of DistrictsLose Money on Community Use
Reasons, barriers or excuses:• Misguided policies driven by political pressures
such as fear of the public• No understanding of the true costs• Failure to understand the financial impacts that
ripples through the district• No standardized central administrative system to
manage district policy• “We’re not a business”
Who’s involved in the scheduling process?
• Community Use• Custodial• Maintenance• Technology and Audio
Visual• Food Services• Athletics• Multiple Site Contacts• Central/Business Office
Problems often seen in the scheduling process
• Availability and Double Bookings• Financial Coordination
– The exact costs to host events (e.g., energy, staff, equipment)– Charge vs. no-charge vs. chargeback– How much is owed
• Coordination between sites and other contacts• Wasted Time (e.g., time on phones, paperwork and
spreadsheets)• Inconsistent notifications of schedule statuses and “to-
do” lists• Lack of reporting and trending
Other Critical Questions
• Who do you Charge? – How often do you review your fees?– Who tracks and collects fees?– Hourly rates, flat fees, combination of both?
• How many events each year?– Is it increasing or decreasing?– Types of groups using the facilities?
• What type of process do you use?– Paper/Triplicate Form routed for approval– Emails or phone calls– Fees are applied, tracked, collected
Recent cost recovery story
Recent cost recovery story• Knowing there would be questions, or even
protest, the board gave a presentation concerning the thought behind the new fees prior to allowing public comment
• A key argument of the presentation mentions that the board is entrusted with the care and upkeep of district facilities and the use of those facilities for non-school related purposes should not generate costs for the district
Recent cost recovery storyThe presentation included• Survey results including satisfaction of the district's educational value• Rejection of the last budget• Effects due to budget cuts, particularly in the area of extracurricular
activities, classroom supplies and facility maintenance• Initiatives to save and generate funds including
– transportation restructuring that saved $150,000 – exploring the use of bio diesel for district vehicles– cancelling certain annual field trips
• Adequacy of spending levels of the district vs. state standards, including some reductions in state aid
• Results from a facility use policy comparison of nearby districts
Recent Cost Recovery StoryPublished opinion:“While many are making the argument that the school district is robbing Peter to pay Paul, we believe it is fairer to charge those actually using the facilities more than to spread the increasing cost of facility use across the community through taxation. With teachers having to pay out-of-pocket for classroom supplies, schools not having enough money to purchase necessary books and the school district more heavily relying on the fundraising efforts, it is no longer feasible for groups not affiliated with the schools to use district facilities without paying enough. We do encourage the school district to be sensitive to community groups' needs and just recover the costs of facility use, not make a profit.”
Cost Recovery policy quote
Source: Barbara Dunn, Facility Use Coordinator in the Business Office at Warrick Valley CSD in New York.
“Invoices for community users are generated to reimburse school districts for those expenses that can not be paid from
the annual budget.Examples of these expenses might be custodial overtime hours needed to setup and cleanup for events, auditorium manager
and lighting and sound crew necessary to safeguard the use of auditoriums, as well as utility fees that accompany requests
for air conditioning for these events.”
2008 Cost Recovery Study• Analysis of 1,000+ school districts, colleges
and private schools, including interviews• Focused on how educational professionals
are coping with– Demand for community use of school facilities– Financial burdens on budgets and operating
staffs due to the growing use of school facilities by the community
– Sentiment that school facilities should be used more frequently because taxpayers and other stakeholders have invested billions in these assets
RECOVERING COSTS FOR THE COMMUNITY USE OF OUR SCHOOLS:
A White Paper Examining the Successful Implementation of Cost Recovery Programs in our Schools.
Cost Study: Number of Events
• The sampling revealed that the average district holds 1.24 events per student per year – up from .16 events per student in 2002
• Districts less than 5,000 students average .93 events per students or 4,650 events in a year
Cost Study: Recovering Funds
Cost Recovery Analysis
• Let’s look at the a student size of 8000
Cost Recovery Analysis
• Let’s look at the a student size of 8000
• Theoretically, we’ll say you get $15/student as an average so you are likely invoicing for $120,000/year
Cost Recovery Analysis• Let’s look at the
a student size of 8000
• Theoretically, we’ll say you get $15/student as an average so you are likely invoicing for $120,000/year
• Not a bad start, but there is room for improvement
Behind the scenes
• What is the average time spent per event by each staff member in minutes?– School Administrator
– District Coordinator
– School Finance– Energy Manager– Other?
5 Checking calendars to make sure area is available, getting approvals
5 Coordinating with staff to support event, approving, getting other approvals
10 Coordinating and creating invoices
5 Doing EMS Overrides per event
Example is using an 8,000 student district
Behind the scenes• What is the average time spent per event by each staff member in
minutes?– School Administrator
– District Coordinator
– School Finance– Energy Manager– Other?
5 Checking calendars to make sure area is available, getting approvals
5 Coordinating with staff to support event, approving, getting other approvals
10 Coordinating and creating invoices
5 Doing EMS Overrides per event
0
25 Total Minutes Per Event or .42 Total Hours Per Event = 3666.67 Total Hours Annually (events * hours)
At $25/hour, you have spent $91,666.67 out of the $120K you are
currently invoicing -- how much is considered as part of normal job
responsibilities?
Example is using an 8,000 student district
Behind the scenes
• ANNUAL CUSTODIAL COST– Usually averages to 1 hour of custodial time over the year for
each event (setup, breakdown, clean up, lock/unlock and other services)
– This relates to around $25-$30 per hour (fully loaded costs, benefits, vacation, sick days, holiday and other imbedded costs)
Example is using an 8,000 student district
Behind the scenes• ANNUAL CUSTODIAL COST
– Usually averages to 1 hour of custodial time over the year for each event (setup, breakdown, clean up, lock/unlock and other services)
– This relates to around $25-$30 per hour (fully loaded costs, benefits, vacation, sick days, holiday and other imbedded costs)
8000 student * 1.2 events per student = 8800 Total Events
Equivalent to 8800 Total Hours Per Event
At $25/hour, you have spent $220,000 whereas you are currently invoicing $120K -- how much of this is part of
normal job responsibilities vs. what can be charged?
Example is using an 8,000 student district
Behind the scenes
• ANNUAL ENERGY COST ASSOCIATED WITH EVENTS– Cost for energy typically ranges from $120 to $300
per student– Most districts say community usage increases utility
cost 10% to 20%, if not more
Example is using an 8,000 student district
Behind the scenes
• ANNUAL ENERGY COST ASSOCIATED WITH EVENTS– Cost for energy typically ranges from $120 to $300
per student– Most districts say community usage increases utility
cost 10% to 20%, if not more
8000 Students * $150 Energy Cost per Student = $1,200,000 in Total Energy Expenditures
At 10% of energy costs, you have spent $120,000 whereas you are currently
invoicing $120K
Example is using an 8,000 student district
Behind the scenes
• WEAR/TEAR/REPAIR DUE TO EVENTS– AS&U states on average some districts spend up to
$500 per student for M&O on buildings every year (not including technology needs)
– We’ll use $250 as a median and say that 2% of M&O goes to wear and tear due to facility events
Example is using an 8,000 student district
Behind the scenes
• WEAR/TEAR/REPAIR DUE TO EVENTS– AS&U states on average some districts spend up to
$500 per student for M&O on buildings every year (not including technology needs)
– We’ll use $250 as a median and say that 2% of M&O goes to wear and tear due to facility events
8000 Total Students * $250 M&O Cost per Student = $2,000,000 Wear & Tear Expenditures
At 2% of M&O costs going to events, you have spent $40,000 whereas you are
currently invoicing $120K
Example is using an 8,000 student district
Let’s total the potential costs
– staff time (processing calendar updates, coordination, approvals and cost recovery)
– energy costs– custodial– M&O
Example is using an 8,000 student district
You invoiced for $120,000 for events
Let’s total the potential costs
– staff time (processing calendar updates, coordination, approvals and cost recovery)
– energy costs– custodial– M&O
$91,667
$120,000$220,000
$40,000
Example is using an 8,000 student district
You invoiced for $120,000 for events
Let’s total the potential costs
– staff time (processing calendar updates, coordination, approvals and cost recovery)
– energy costs– custodial– M&O
$91,667
$120,000$220,000
$40,000
TOTAL $471,667or($59/student)Example is using an 8,000 student district
You invoiced for $120,000 for events
The Potential costs
• Let’s assume that some of this $471,667 is considered part of someone’s normal duties or are normal costs for the district --- even if we reduce by 2/3: you still need to recover $141,500 ($17.68/student) or you will lose $21,500 for that year
• Also:– Food Services were not included– IT and wear/tear on technology and audio-visual equipment
was not accounted– Security?
Examples of recovery programsIn spite of
these school systems’ top-tier
results, all who were
interviewed shared that they did not believe they
were recovering all of their costs, but
are making progress
CO
ST R
EC
OV
ER
ED
PER
S
TU
DEN
T
ORGANIZATION & ENROLLMENT
The Transition
• Now we have some insight into cost impacts• We have seen that some groups are trending
well as time has passed• What are you going to do? Do what others
have done to improve their circumstances
Steps to Success
1. Identify an Advocate2. Recognize that Leadership is Key 3. Start Small and Gain Buy-in 4. Build Support with Site Contacts5. Distribute Event Management 6. Establish Presence at the Event7. Recover Your Costs8. Develop Tiered Fee Structures9. Improve Invoice Management10. Automate Processes
Source: Recovering Costs for the Community Use of Our Schools© Copyright 2008 SchoolDude.com, Inc. All rights reserved.
Identify an advocate
Goals:• Help decision making• Speed up process development• Ensure more viewpoints are gathered• Prevent holes in the policiesOther options:• Look at your neighbors• If beneficial vs. a political hindrance, form a
team with this advocate as the team leader
Recognize that leadership is key
• All must agree to support a policy for:– Process changes– Fee structures– Invoicing philosophy – it is cost recovery, not profit– Goal setting
• You should typically involve:– School board– Superintendent– Facilities Department– Athletic Directors
– Principals– Business– Technology Department– Food Services
Start Small and Gain Buy-in
• Begin with only certain types of rooms and/or certain schools
• Gain support and buy-in from school administrators and assistants
• Let those positively affected by the changes help sell the idea to the rest of the district
• If negativity arises, address the issue to determine if there is an issue or a simple resistance to change
Build Support with Site Contacts
• Principals, Assistants, Athletic Directors• “See through Mary Jane’s eyes”
– What’s in it for them?– Translate your ideas, but simply --- don’t use 8 words when 5 will do– A document they can review afterwards greatly helps
• Present and discuss with individual sites at first to have a better chance to “sell” your ideas to remaining campuses
• Give earnest consideration and heartfelt acknowledgement to complaints
• Deal with objections before they become roadblocks
Distribute Event Management
• Find a balance between what can be centralized and what can be distributed
• School personnel control and decide:– What areas and times are available for usage– What groups can use the facility– Schedule conflicts
• A central office controls and decides:– Rates– Billing and collections– Risk management policies
Establish a Presence at the Event
• Custodial labor can be a huge amount of cost for overtime and weekends
• Having a custodian on-site during events– Reduces damage to property and equipment– Protects the district– Ensures a smooth event– Provides a nice “customer service” touch
Recover Your Costs!
• Overtime• Utilities• Athletic, audio-visual and
IT equipment• Wear and tear on the
facility
Develop Tiered Fee Structures
Establish a simple fee structure:–What type of
group? (Non-profit vs. For-profit?)
–What type of area? (Gym vs. softball field?)
–What type of facility? (Elementary school vs. arts center?)
Improve Invoice Management
BE CONSISTENT!1. Provide a quote to set proper expectations2. Follow up with an invoice that is consistent
with the quote3. Create billing rates for efficiency, accuracy
and to grow income4. Be pleasantly persistent with past-due
notices
Automate Processes
• Paper, spreadsheets, calendars and email are not efficient in 90+% of educational facilities
• Too many parties and processes are involved for communication, task assignments and cost recovery
• You need to avoid duplication of efforts as well as events and seal gaps in the processes
Policies and Fee Structures
• Are there loopholes?• Can group use your facilities at a rate cheaper
than permissible?• Do you require advance payments in full?
Before or after the event?• You may not want to compete against privately
owned facilities & their commercial rates• Find out what other institutions are doing
around you
Identify Risks
All persons or groups using your facility pose some risks for your
institution• Protect yourself from liability concerning
personal injury and property damage• Institutions have been held liable even if
community group uses the facilities in an abnormal or inappropriate way
• Insurance requirements are critical• Have risk assessment contact(s) monitor
issues and identify solutions to minimize those risks
Working with OrganizationsLet the organization know about rules upfront
Certain information may affect a group’s decision & save time or headaches for your staff concerning topics such as:
• How far in advance to schedule• Date changes• Charges & payment rules• Late fees• Damage policy• Alcohol policy• Insurance requirements• Supervision of children• Etc.
End the debates
• “Politics, politics, politics” --- the public pays taxes and believe they have access to the buildings
• Many, including some government officials, realize this approach is doing more harm than good
• Under CA’s “Civic Center Act”, districts must make their schools available to the public, but must recover costs for use of those buildings
• Taxes are tough on the public, but budget cuts and increases in energy costs are tough on you
• Your mission is to educate our youth during the school day and your budgets and funding reflects this --- how much of your budget and funding is dedicated toward community use?
For More Information
• www.schooldude.com/costrecoverySample fee structures, policies, contracts
• Contact Pat Buchanan– [email protected] Hair– [email protected]
• David Kornegay – [email protected]
877-868-3833
