Survey of recent D26 restructuring, cost reductions
District 26 has a much brighter budget outlook than it did two years ago thanks in large part to a new contract with its teachers union. However, several years of restructuring and cost reductions also went into the healthier outlook.
CARY – According to financial plans unveiled at the Finance Committee meeting Monday, reducing class sizes and restoring special subjects to School District 26 is closer to becoming a reality.
Three budget scenarios were presented at the meeting by Director of Finance T. Ferrier, and each showed that District 26 will not need to cut millions in expenditures over the next three years, as previously anticipated.
Ferrier's new projections estimate that the district will now face anywhere from $700,000 in reductions over the next three years, to a best-case scenario of a $500,000-surplus.
A large part of that change is the fact that the district in December finalized a new contract with its teachers union – one that included a pay cut for non-retiring teachers and the elimination of the district’s retirement benefit program.
However, several years of restructuring and cost reductions went into the healthier financial outlook.
The following is a list of some of those restructuring efforts and reductions. It is an excerpt of a larger list of the changes made between 2010 and 2011 which was included Monday in Finance Committee board packets.
Operations
• Closed Maplewood School, effective June 2010 resulting in reduction of administrative staff, support staff and operational savings.
• Closed Prairie Hill School, effective June 2011, resulting in a reduction of administrative staff, support staff and operational savings.
• Negotiated a cost-reduction contract to negotiate lower utility rates and supply costs.
• Effective July 2010, out sourced janitorial services resulting in an annual savings.
• Renegotiated the Cary Youth Baseball contract to generate lawn maintenance services.
• Implemented severe capital spending limits on facility projects.
• Negotiated new, low pricing with District 155's vendor on copier paper.
• Evaluating options for district-wide copier lease set to expire in November 2012.
Transportation
• Bus drivers volunteered a five percent reduction in pay effective fiscal 2011 and no increase for fiscal 2012.
• Signed a new lease for the bus fleet effective July 2011. (Eliminated need to install urea diesel filters on most of older fleet and the need to install a district urea tank and the annual cost of operating the installed base of urea tanks.)
• Consolidated and eliminated parts of inventory generating savings.
• Eliminated activity busses.
• Eliminated district-funded field trips.
Finance
• Community passage of November 2010 referendum and eliminated the need to issue Tax Anticipation Warrants resulting in annual interest expense savings.
• Changed banks to eliminate banking fees.
• In-sourced payroll processing from ADP Services effective January 2011, resulting in savings.
• Re-bid audit services.
• Evaluating implementation of P-cards to reduce paperwork and yield potential cash-back savings.
• Evaluated district's insurance policies/coverage levels on Worker's Compensation and General Liability for savings opportunities.
Information Technology
• Switched Internet service provider from AT&T to Comcast to dramatically improve performance and generate long-term savings.
• Purchased over 600 used PC's and flat screen monitors at $27.50 per unit to replace all under performing PC's in the district – these units were more than 10 years old.
Support Staff/Administrative Staff
• ESP staff salaries have been frozen for the last two years.
• Administrative staff salaries have remained at the same level for the past four years.
• Offered more cost-effective health insurance options to district employees.
• Reduced the insurance plan that the district pays for the ESP staff.
• Utilized support staff for lunchroom supervision instead of certified staff.
• All administration replacement hires have been brought to the district at a lower cost than their predecessors.
• Overtime and extra-duty pay have been dramatically reduced or eliminated.
Certified Staff
• In-sourced several Special Education programs from SEEDOM resulting in savings.
• Pro-actively limited the number of participants in the Early Retirement Option for the last two years, reducing the district's potentially large exposure to penalties.
• Evaluated a potential for retirement acceleration for staff currently in the retirement pipeline.
• Negotiated a new, three-year agreement with the CEA that restulted in savings the following areas:
a. A reduction in non-retirees salaries of 3 percent effective Aug. 11 and held flat through fiscal 2014
b. A reduction in the health insurance component paid by the district from 100 percent single premium coverage to 50 percent and a reduction to the component paid toward family coverage.
c. Eliminated the retirement incentive program.
d. Eliminated the tuition reimbursement program.
