Budget Advisory Committee Reviews Strategy #3
At the district’s Budget Advisory Committee (BAC) meeting on Tuesday, Nov. 17, members were presented with an overview of a third strategy for dealing with the possibility of significant mid-year state aid cuts–Program and Service Reductions. As in previous weeks, the committee was asked to look at this strategy from a high level perspective. Superintendent Dr. Patrick McGrath said there would be future meetings dedicated to looking more closely at costs associated with specific programs and services but for now it was important to look at this strategy in a more general sense.
Addressing Meeting Feedback and Misinformation
Before moving forward with the presentation, McGrath took a moment to address feedback received from the prior meetings. He said there seems to be misinformation circulating around the community that the district already has plans in place to pivot to fully remote learning during the holidays. He stressed that BH-BL has no plans to do this and read a letter he would be emailing to all parents later that evening. [READ THE LETTER]
McGrath reminded the group that the strategies discussed at meetings are only theoretical, and emphasized that there are no underlying plans. He added that there have been no cutbacks, layoffs or program reductions. The strategies discussed are theoretical cost saving exercises ONLY, at this point. Ultimately, it will be up to administration to figure out how to fill any revenue losses that occur, and these discussions will be used to guide them in that effort. However, these are only discussions. They are very similar to the discussions McGrath has every budget season with Assistant Superintendents Collins and Abdoo. The difference this year is the anticipated mid-year cuts to an existing budget and the significant loss of state aid funds associated with these potential reductions.
Strategy #3: Reductions to Programs and Services
McGrath and Collins began the presentation by encouraging the committee to treat strategy #3 as a high level conversation that should be considered an introductory step with further exploration at later meetings.
“Today’s discussion is not meant to threaten or single out any particular program,” said McGrath. “Instead, we want to look at this strategy in broad strokes and start the conversation with our community. The next phase of this whole process will be to process the parts that make up the big picture and decide how best to get community input. It’s important that this conversation not be superficial only, but rather a thoughtful, gradual move from the high level toward viable, practical solutions.”
In the past, to get the community involved in such discussions the district held public forums. In some cases that included assigning people to breakout groups where different tiers of options were presented and the pros and cons of each tier were discussed in small groups. The feedback from each group was then shared with the board and the entire group of attendees. Another format included residents sharing their feedback individually in a large group setting. Whatever the method used, it’s important to gather community input, adds McGrath. This BAC will play an integral role in helping define those tiers or options during that stage in the process should this become necessary.
To begin the exercise, Collins said it would be helpful for the group to understand how to quantify the category of Program and Service Reductions in terms of FTE estimates. This is similar to how the committee approached the two strategies previously discussed. “We will start by examining how to understand how the strategy of cuts to programs and services alone might mitigate cuts,” he added. (It’s important to remember that the $5 million shortfall in state aid funding would not be filled through just one bucket but likely through a combination of two or more of the buckets/strategies discussed. However, for the purpose of big picture views, the group has been exploring each bucket in isolation.)
Currently, the district currently employs 598 full and part-time staff members. Its annual payroll is approximately $36 million and total benefits are approximately $16.4 million. To find savings through this strategy that would yield close to the 20 percent (or $5 million) in potential loss in state aid, there would need to be about a 10 percent reduction of staff across all departments, programs, and services.
“This is only a theoretical exercise to put numbers with overall program reductions,” explains Assistant Superintendent Dr. Christopher Abdoo. “A 10 percent reduction across the board would likely bring us more than halfway to a $5 million reduction in expenditures. However, as has been stated earlier, we are not recommending that reductions be made from this bucket only–and we do NOT currently have any plans to implement this reduction. We just want to give people a starting point.”
Abdoo indicated that if an across the board 10 percent reduction to programs and services were to be implemented at the beginning of an academic year, as opposed to being introduced for only a portion of an academic year, this would result in an estimated $3.6 million salary reduction and a $700,000 reduction in the district’s social security, medicare, and pension expenditures. There would likely be further reductions to the district’s health insurance expenditures in this scenario as well. “Any mid-year reductions to programs and services would yield a prorated amount of the expenditures described above depending on the timing of their implementation,” he adds.
Abdoo also explained that there are significant differences in expenditure reductions depending on whether positions are reduced through layoffs versus non-replacement of retirements. For instance, layoffs may result in unemployment costs, and the impacted employees are typically on the lower end of the district’s salary scale. On the other hand, not filling the position of a retiring employee would eliminate unemployment costs, and generally results in a greater financial impact because retiring employees are typically on the higher end of the district’s salary scale.
It should be noted, said McGrath, that BH-BL has experienced level enrollment and has employed nearly the same number of staff for the past 10 years even while adding programming. This has been done strategically by examining every vacancy that occurs for the best way to fill that position. This demonstrates how the district is always looking to grow and adapt while at the same time avoiding layoffs and containing overall cost. This same principle should be followed to the greatest extent possible as we look at potential program reductions.
“Every year, we review the budget for cost savings measures. We look at delivery methods and practices with an eye on efficiency,” says Collins. “We question whether we can deliver the same to our students but in a way that yields savings. Sometimes there are short-term solutions for reducing costs other times there are long-term savings realized by smaller changes over the years.”
Impacts of Program Reductions
When considering reductions to programming, the committee was also asked to keep practical considerations at the forefront and think about what’s required of a district versus what’s essential. “We need to be realistic about certain reductions and be sure the district is still adhering to state and other mandates,” said Collins. “In the end, we still have an obligation to adhere to State Education Department guidelines.”
Collins asked the committee to consider that what is required and what is essential when it comes to education may be two different things. He gave the example that outcomes like a merit or technical diploma are achieved by taking certain courses and programs that may not be required, but those options are part of BH-BL’s culture, offer students an opportunity they might not get elsewhere, and, in some cases, puts them at an advantage for post-graduation plans. The committee should weigh whether or not that, or any other example, is something the district should consider changing.
“When exploring this strategy, we need to ask ourselves how we keep the programs and offerings that make BH-BL a top-notch educational institution while still producing a fiscally responsible budget for our community,” said Collins.
The committee briefly discussed other ideas that could fall within this strategy, such as increasing class sizes and transportation, maintenance, and school lunch program changes, as well as the impact of other extracurricular activities (fine arts, athletics, clubs, drama, etc.). This is a worrisome topic for many because research has shown that most of these extra curricular activities often help establish a strong connection for students and their school community which results in improved academic outcomes.
A few BAC members expressed an interest in looking at cost comparisons of individual programs and services rather than as an across-the-board savings. McGrath cautioned the committee that it was not yet time to single out particular programs. He emphasized that looking at the total cost for this category is similar to how we approached the other two buckets, and reminded the group that there would be future meetings where the committee would delve deeper in the details that make up each bucket/strategy.
“The conversations that need to be had about program and service reductions are very delicate because they include the possible elimination of positions,” said McGrath. “At this stage in the exercise I do not think we want to identify any one program and tie a cost to it. I want to be very sensitive to the realities of the strategy, and all the strategies for that matter, and refrain from creating any undue anxiety. We’d rather look at each strategy as a whole and decide as a group what parts of each bucket should be further explored.”
BAC Co-chair Lakshmi Nagarajan adds: “These early meetings are introducing all of us to the different strategies that the group identified at our first meeting. We are just beginning the process and should think of it as the informational phase. At this time, we want to outline what the costs, savings, and impacts of each area would look like. Once we have an idea of what fiscal impacts need to be addressed and if any changes need to be made, then we could drill down into each bucket with specific numbers attached to specific line items.”
At its next meeting, Nov. 24, the BAC will begin discussing the fourth and final strategy, Human Resource Adjustments. That same evening, the Board of Education at its meeting will be given an update outlining the four strategies the BAC has explored and defining the next steps for the committee. After the holiday break, the committee will reconvene to decide how to take their exploration of strategies to a deeper level.