ISD 2142’s budget cuts
Look to administrative restructuring before major teacher layoffs

The St. Louis County School District, awash in red ink, hopes to stay afloat financially by jettisoning nearly $2 million in expenses. It won’t be an easy task and will challenge board members’ best efforts to shield students as much as possible from the cuts.

Even so, that mantra — keep the cuts away from the kids — should be foremost in board members’ thoughts as they consider all the options for reducing expenses.

The proposals brought to the board’s study session on Friday seemed to counter that goal, with the bulk of staff reductions occurring in classrooms and a call for much more modest cuts in administration. Board member Chet Larson made the same observation, chiding the district for maintaining deans while cutting teachers.

The priorities outlined in those proposals betray district decision-makers’ reluctance to shake up the status quo — a recurring problem that has led to ballooning costs in administration at the expense of students.

The district’s restructuring plan was supposed to address those issues by consolidating students in fewer school buildings, leading to savings in both operations and staffing. Staff savings have yet to materialize, in part because the district has done little to curb its administrative structure and, in some cases, expanded it. While the district has made significant cuts in support staff, cutting part-time food service, custodial and secretarial staff doesn’t produce big savings.

Meanwhile, the district’s operating costs have not gone down as predicted, but are actually rising. Utility costs at the South Ridge School during its first year of operation exceeded the combined costs of AlBrook and Cotton. Part of that is due to the remote location of the new schools, which required the district to install their own water and sewage treatment systems and absorb the additional costs.

If anything, the district’s fiscal condition is worse today than before restructuring. Two years ago, the district had an unreserved general fund balance of $3.7 million. But back-to-back years of $1 million-plus deficits have depleted the reserves and the district is on the verge of statutory operating debt.

Given the circumstances, staff cuts are inevitable. Nearly 80 percent of the district’s operating costs go to labor and since teachers comprise the largest group of employees, cuts are bound to touch their ranks.

However, that doesn’t excuse the high administrative costs for ISD 2142 compared to other districts of similar scope. The district has defended its administrative costs in the past, arguing that consolidating a variety of services for five schools is more efficient. But the facts say otherwise.

A 2010 analysis of financial data compiled by the Minnesota Department of Education revealed that more than three dozen of the state’s smallest school districts spent far less to administer their districts and schools than ISD 2142 spends on administration of a single school. The data reflected costs for the 2008-09 school year.

The district’s high administrative costs also drew the attention of now retired MDE financial officer Charles Speiker. In 2008, Speiker told the board that the district’s administrative costs were the highest of any similary-sized district in the state. Little has changed in the four years since Speiker’s report to the board.

That’s because the district has resisted efforts to think outside the box. Some districts have streamlined administrative costs by combining tasks in a single position. For instance, Littlefork-Big Falls superintendent also serves as the school’s K-12 principal and wears the hats for transportation, food service and facilities directors. Other districts have cut costs by closing or downsizing administrative centers and redeploying staff to multiple sites where they can assume additional roles.

While ISD 2142 may not be able to duplicate every move by smaller districts, there are steps it could take to curb administrative costs. Closing the Virginia office would be a good start. Operational expenses alone amount to roughly $70,000 a year, but the biggest savings could be achieved by redeploying office staff to the district’s schools, where they could provide secretarial and other services in addition to their regular duties. What’s more, the superintendent could serve as principal at the school in which her office is based, saving at least $110,000 a year in principal salary and benefits. The district also needs to combine some functions. It just has too many “directors” being paid big salaries and lucrative benefits. An aggressive approach to consolidating administration could easily save the district $500,000 a year, without impacting the classroom.

Clearly these would be dramatic changes in how ISD 2142 operates. But the case can be made that the present system has led to an ongoing financial struggle. The district, which pinned its hopes on obtaining fiscal stability with its restructuring plan, needs to look for a different solution now that it is clear the restructuring won’t achieve the savings that district officials promised to voters. As they map out a path forward, administrative cuts should be at the top of the agenda.

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Is it time to ask the state for an audit? How much more money do these " leaders" need?

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