Fairview School District Takes Action - Will Lakewood?

[Charyn Varkonyi]

Mr. Call:

You still have not addressed any of the talking points that Joan brought up. You have, however, thrown out big scary numbers.

There are a LOT of people here that want the most cost effective schools system possible and I firmly believe that a discussion on this topic is a great place to start - but you seem convinced that anyone that doesn't hitch their train to your wagon sees change as a threat to our current system. I dont see that perspective being present at all!!

What I see is people that took your post and posed a number of questions regarding the ability and/or wisdom to apply the Fairview Model to a Lakewood System.

This isnt fear of change - this is a matter of wanting to understand all of the dynamics of that change, so that at the END of the discussion (which has barely begun) we can apply what would benefit Lakewood and discard what would harm Lakewood, while discovering other options to compliment and create a total solution.

Several year ago the statement was made "If you are not with us, you are against us" and it was damning. I see it in threads on this board, conversations in the hall, debates on TV.... There seems to be a feeling that - if one does not accept a vision in whole that means that is rejected in whole. And that is not a realistic view of the world in my not-so-humble opinion.

Lets have this discussion! Lets look at the good and the bad. Lets look at what we want in the end and discover the best path to get there. Lets challenge the status quo AND challenge change!! Most importantly, lets try to do this together...

FFT

Fleetingly,
~Charyn

[Joan Roberts]

One other note, and I hope this will impact your thinking, Mr. Call.

If you visit the Ohio Dept of Ed website, you'll see that according to the most recent figures, Fairview had 161 professional FTEs for about 1800 students, or an average of one professional for every 11.18 students.

Lakewood had 462 professional FTEs for about 6,600 students. An average of one professional for every 14.285 students.

If a 22% layoff leaves FP with 126 professionals for 1800 students, that's a ratio of...........ta-da! 14.285 students!

Please give me your reaction to this.

[Bill Call]

"The $28 million in "cumulative deficit spending" includes a current $20 million cash balance. The district doesn't go "into the red" until 2010 (assuming no additional tax levies)

The district was projecting an ending cash cash balance of $18,200,344 in 2005. By 2009 the ending cash balance is projected to be (10,135,694). That is only three years in the future. The district (very sensibly) seeks large operating levies that will generate future positive cash flows. That way they don't have to seek a new levy every two years.

The districts administrative costs are less than the state average, sometimes substantially less. I am not arguing that the system is poorly managed. I am auguring that in the absence of a new look at pay, benefits and staffing levels the the district will be faced with catastrophic financial choices.

The district is projecting property tax revenue of 33 million in 2009 and a NEGATIVE fund balance of 11 million dollars in the same year. Will the voters approve a 33% increase in school property taxes? Even that won't be enough to cover projected spending increases. What then?

People in the private sector are paying a greater share of health and welfare costs, accepting heavier work loads, pay cuts and layoffs. Should the public sector be any different?

Ten years ago Toyota offered the most efficient production and some of the best product quality. If they had those some numbers today they would have some of the least efficient factories and some of the worse product quality. You can't stand still.

I wish everyone could get a better compensation package every year. It just is no longer affordable. The global economic environment has become fiercely competitive and it's only going to get more so.

Your comments on the student teacher ratios are on the mark. I will respond in more detail in the future. All is not what it seems.

Is anyone reading this stuff?

[Joan Roberts]

Is anyone reading this stuff?

I hope they are, because it's a lot more important than some of the other stuff that gets debated ad infinitum.

I think we agree on the benefits issue. This will be a bone of contention everywhere in the next 5-10 years IMO. While I don't think it's unreasonable for a person with a masters degree and 20 years of service to expect a $50,000 salary, it's also not unreasonable for taxpayers who are forking over $400 a month (and rising) for health insurance to ask educators to pull a little more of their weight on the health-care wagon,

But that will be a nasty fight, so get ready. Teachers have gone on strike to the west of us (IN) and the east of us (PA) on this issue. I have teacher friends in both states, and this is something we don't talk about.

Unfortunately, a couple of factors are messing up your math on the revenue/expenses. One of those factors is that local taxpayers are responsible for less than 60 percent of Lakewood's operating revenue. The state and feds pick up the rest (in FP, it's 75% locall)

As you said, the 5 yr projections only amount to 16 percent and change over five years, so I'm not sure how you figure the district would need a 33 percent increase (35 mills!!!) to keep up.

The only way that would happen is if voters rejected levies from 2007 to 2010. That's the second problem with your evaluation. For that worst-case scenario to occur, Lakewood will have to go EIGHT YEARS with NO operating increase. That's highly unlikely.

(Also unlikely is the idea of continuing salary increases without new levies. That would just be nuts, and I don't think anyone in our schools is quite that nuts)

My friends tell me to look for a smaller-than-typical operating levy combined with phase 2 of the building issue next year. We'll see.

[Jeff Endress]

I hope they are, because it's a lot more important than some of the other stuff that gets debated ad infinitum

We're reading ....525 views is pretty impressive.

And I've got to agree with Joan's analysis. Teaching is a tremendously important vocation and teachers deserve an appropriate wage. However, as in most "public sector" employment, the bulk of the expenditures is on personnel. Since that represents the largest area of expenditure, any meaningful financial discussion falls more heavily on the personnel side. Unless and until there is some way to control the benefits portion of that equation, those costs will continue to skyrocket. Even if you trim staff, it is only a short term band aid, as eventually the savings will be devoured by the benefits monster. Same holds true if you buyout senior teachers to bring in cheaper rookies.

Joan is correct in identifying benefits as the problem area. Frankly, no matter how you address the financing issue, whether it be by providing an entirely new financing system, riffing and early retirement or staff cuts, all will only be temporary if the underlying problems of the cost of benefits and expectation of their being provided is not addressed. Since there is a complete lack of willingness/ability by both state and Federal government to address our nationwide crisis in the cost of medical care, is the only alternative a change in the expectation that those benefits will continue to be furnished?

Jeff

[Bill Call]

If anyone is interested in looking at some interesting reports generated by the Ohio Department of Education.

http://ilrc.ode.state.oh.us/Power_Users.asp

If anyone out there has some answers to these questions please post them. Joan? Joan? are you out there? I know you're out there somewhere.

According to the 2005-2006 salary schedule a teacher with 15 years of experience with a Bachelors degree and 30 hours of continuing education makes a base salary of $64,354. The teacher receives a raise of $1,018 per year when they have 16 years experience. When that teacher has 16 years experience the salary is increased to $65,435. Step raises seem to apply to the first through 16th year of employment.

Question: Is the 1.6% step raise included in the contract raise of 2.5% for a total annual raise of 2.5% or is the step raise in addition to the 2.5% for a total raise of 4%?

Question: I was told that the district has chosen to "pick up" the teachers 10% employee contribution to the teachers retirement plan. By pick up do they mean that the teachers base salary is $64,354 but has a gross salary of $57,918? Or does that mean that the teachers gross salary is $64,354 and the district is contributing the employees contribution of $6,435 plus the employers contribution of $9,653. That would mean a total of $80,442 is wages and retirement contribution?

Question: The Medical Mutual Family rate is $678.93 plus prescription coverage of $204.79 plus dental coverage of $91.61 plus Vision coverage of $9.90 for a total health package of $985.23 per month. What portion of the total premium is paid by the employee? That is $11,822 for insurance premiums per year. Does that sound right?

Question: The summary of benefits I have (8/1/05) has NO benefit period deductible and 100% con-insurance. Would it be correct to say that the plan has no deductible and no co-pays, other that the $10 office visit?

Question: The district is predicting that they will receive 5% more in revenue from all sources excluding property taxes. If those predictions are correct virtually all the $12,000,000 operating deficit predicted for 2010 will have to be covered by increases in local property taxes. Since property taxes in 2010 are predicted to be 33 million balancing the budget will require a 33% increase in property taxes. Am I missing something?

[Joan Roberts]

Mr. Call.

Let me work backwards here.

First , yes you ARE missing something. Again, the projected shortfall of whatever million by 2010 is predicated on CONTINUING increases in expenses with NO additional property tax revenue.

Lakewood passed its last property levy in 2003, with collections hitting the system in FY04. For this city to go 6-7 yrs without an increase is highly, highly unlikely. And remember, contracts expire. With no tax increase, salaries are likely to be frozen. So the double whammy of higher salaries and flat revenue would be rather remote.

As I said, schools are different than businesses. They're even different than the city. In the first years after a levy passes, the schools take in more than they spend, building up a cash reserve. As expenses catch up, that reserve is depleted. Four or five years after the last levy, the schools begin to operate in the red.

It's different with a city or state. With income tax, revenue goes up year to year as income goes up. That's one of the failings of the Ohio school funding system.

Regarding health insurance, the district spends $13 million now. That's projected to increase more than 40 percent over the next five years. I agree with you, that's a problem, and I don't think teachers should be immune to the pain every other working American feels on this issue.

The finer points of the contract are lost on me, since I don't have a copy.

Our teachers are well (not princely) compensated. You may contend we shouldn't pay them so much, others would say we shoulld. There's no answer to that question, it's a matter of personal belief and an emotional one at that. Schools compete for talent with other schools and other industries. A good nurse can make $60,000, a good car salesman twice that much, a good realtor five times that. If YOURkid wanted to be a teacher, and you were shelling out for the diploma(s), would you think making $60,000 at age 40 was THAT outrageous?

But the bottom line is the bottom line, and Lakewood still comes in only slightly higher than average in per-pupil spending compared to other school systems.

One thing I found checking your links. You can get per pupil expenditures not just for the whole district but for each individual school.

Interesting stuff. The costs for most elementary schools are BELOW the state average. But for Madison, Garfield, and Harrison (the schools with the highest percentage of minority, special needs, and disadvantaged students) the average is much higher. It is just more expensive to teach students who fall into these groups, and a big part of that is unfunded mandates. You can't change that.

[Charyn Varkonyi]

Bill:

I dont have the facts on some of the questions so Ill only answer what I do know:

Question: The Medical Mutual Family rate is $678.93 plus prescription coverage of $204.79 plus dental coverage of $91.61 plus Vision coverage of $9.90 for a total health package of $985.23 per month. What portion of the total premium is paid by the employee? That is $11,822 for insurance premiums per year. Does that sound right?

We recently took quotes for insurance for our business to make sure we were getting a good rate and from what we were provided (through COSE) those rates look correct - in fact, a fair amount lower than the small business rate for similar services. This is why health care is such a bone of contention....

Question: The summary of benefits I have (8/1/05) has NO benefit period deductible and 100% con-insurance. Would it be correct to say that the plan has no deductible and no co-pays, other that the $10 office visit?

I am not sure what is meant by 'con-insurance' or if that was a typo, but as far as no benefit period deductible... yes, you are correct in stating that there are no deductibles with and insurance plan of that nature.

As for salaries... I agree with Joan that there are different belief systems associated with how much a teacher should be paid (and are those salaries annualized btw??) so I wont stir the pot too much, however, here's some interesting info from the D.O.L. t put things in perspective:

Ohio median family income for 2005: 57,950

Median income by profession:

Obstetricians and Gynecologists $146,245
Family and General Practitioners $121,243
Lawyers $118,331
Pediatricians $116,002
Engineering Managers $91,478
Sales Managers $91,125
Personal Financial Advisors $90,958
Aerospace Engineers $90,106
Financial Managers $88,774
Physicists $88,421
Pharmacists $88,046
Computer and Information Systems Managers $87,568
Computer and Information Scientists, Research $83,949
General and Operations Managers $81,349
Natural Sciences Managers $81,349
Materials Engineers $81,307
Human Resources Managers $79,373
Electronics Engineers, Except Computer $77,106
Education Administrators, Postsecondary $75,941
Physician Assistants $72,571
Construction Managers $71,469
Administrative Law Judges, Adjudicators, and Heari $70,512
Transportation, Storage & Distribution Managers $69,243
Electrical Engineers $68,557
Computer Software Engineers, Applications $68,515
Purchasing Managers $68,370
Judges, Magistrate Judges, and Magistrates $66,976
Computer Programmers $66,227
Industrial Engineers $66,144
Materials Scientists $66,123
Art Directors $66,082
Financial Examiners $66,061
Emergency Management Specialists $65,874
Computer Systems Analysts $65,478
First-Line Super./Man. of Police & Detectives $65,478
Sales Engineers $65,187
Medical and Health Services Managers $64,938
Civil Engineers $64,501
Administrative Services Managers $64,480
Architects, Except Landscape and Naval $64,168
Health and Safety Engineers, Except Mining Safety $63,107
Sales Representatives, Wholesale & Manufacturing $62,858
Property, Real Estate & Community Association Mgr $62,670
Advertising and Promotions Managers $62,254
Network Systems and Data Communications Analysts $62,254
Mechanical Engineers $61,506
Securities, Commodities, and Financial Services $60,902
Environmental Engineers $60,798
Physical Therapists $60,486
Environmental Scientists and Specialists $59,675
Management Analysts $59,446
Occupational Therapists $59,197
Educational, Vocational, and School Counselors $59,155
Tax Examiners, Collectors, and Revenue Agents $57,762
First-Line Supervisors/Managers of Fire Fighting $57,741
Urban and Regional Planners $57,554
Financial Analysts $57,013
First-Line Supervisors/Managers of Construction $56,846
Network and Computer Systems Administrators $56,181
Instructional Coordinators $55,952
Computer Hardware Engineers $55,827
Funeral Directors $55,557
Plumbers, Pipefitters, and Steamfitters $54,870
Detectives and Criminal Investigators $54,517
Nuclear Medicine Technologists $53,872
Registered Nurses $53,810
Fire Inspectors and Investigators $53,165
First-Line Super./Man. of Correctional Officers $52,832
Budget Analysts $52,354
Electricians $52,250
Operating Engineers and Other Construction $51,979
Cost Estimators $51,938
Occupational Health and Safety Specialists $51,064
First-Line Supervisors/Managers of Mechanics $50,627
Appraisers and Assessors of Real Estate $50,565
Compensation, Benefits, Job Analysis Specialists $50,294
Police and Sheriff's Patrol Officers $50,024

Where do you think the teachers belong?

(answer according to the DOL below

The last thing I'll mention is that Bill's question regarding how the numbers are presented is VERY important. As you can see from the cost of health insurance alone - there is a VERY large difference in reported income based upon whether or not the retirement, health insurance, etc. is included.

Peace,
Charyn

Mean salaries for teachers in Cuyahoga county (the finest level of granularity I could find for this within a limited amount of time...)

Kindergarten Teachers $57,460
Elementary School Teachers, Exc. Special Educ $51,868
Middle School Teachers, Except Special and Vocatio $52,097
Vocational Education Teachers, Middle School $54,963
Secondary School Teachers, Except Special and Voca $46,963

[Bill Call]

First , yes you ARE missing something. Again, the projected shortfall of whatever million by 2010 is predicated on CONTINUING increases in expenses with NO additional property tax revenue.

If there are no adjustments in spending all of the deficit will have to be made up by an increase in property taxes. What adjustments do you think are reasonable?

Do know anyone who can answer the question regarding the retirement contributions? Does the employer pay the employer contribution and the employee pay the employee contribution?

Does the employer pay the employee contribution? And is that contribution (if any) part of the listed salary amounts or in addition to the listed salary amounts?

What does the district mean when it says it "picks up" the employee contribution?

[Lynn Farris]

Bill,

When I did research many moons ago, with Lakewood Taxpayers for Responsible Schools, I was assigned as the writer to the finance group. One of the things that was brought out was that at that time Lakewood was picking up the employee portion of STRS (the equivalent of FICA). I do not know for certain that they are now, but I would be surprised if they gave it up.

The bone of contention then wasn't that teachers or educational administrators were getting this perk which was fairly common, it was that business administrators were getting it - which at that time only occurred in Cleveland and Lakewood. By now, that may be commonplace as well.

The other irritation was citizens felt like they were being told no salary increases and while this wasn't technically a salary increase, it was one most of us would take any day in lieu of one.

Again, I think teachers work very hard. I'm not critizing them or saying they should be paid less.

This is a matter of public record. You can file a Freedom of Information Act to get this. But it is under STRS and you need to know what you are looking for in the budget to find it.

http://www.strsoh.org/new/1e.html

The total contribution is approximately 24% of the salary. Employee pays 10%, Employer pays 14% When the School Board picks this up, it is a fair increase. That is more than your employer telling you that you don't have to pay FICA anymore. People in this system do not have to contribute to FICA.

[David Scott]

I have been reading the comments with interest, and would like to throw a curve into the discussion. The basic premise of most school funding discussions is that one side says the schools get too much money and that personnel costs are too high - the other side tries to justify teacher salaries through comparison of other professions, education level, etc. What is not discussed is overhead and administrative costs.

Our municipal boundaries and therefore school districts were established 100 years ago. Since then we have some inventions like cars, telephones, roads, computers, etc. The old boundary lines are archaic. if Fairview schools are doing something great - why not try to join them. I wonder how much savings can be realized if we merge Lakewood, Rocky River and Fairview school systems. The actual schools would remain, along with principals, and teachers. We eliminate redundancy in administration costs. Curriculum is not set by the Federal and State governments, so the need for the various districts is gone.

The major impediment is that a Superintendent and a Board would have to vote to eliminate their own positions, not something I am holding my breath over.

[Jeff Endress]

David

This is the same regionalization panacea that the Gund, Cleveland Foundations, commisioners, unions and others keep throwing out, hoping it will gain traction, with the hope of regionalizing Cuyahoga County as that is the only way of ever saving the Cleveland schools. I'd rather not go there.

While ciriculums are state mandated, (you did mean NOW set as opposed to NOT set) that is only the minimum standard. School districts still vary greatly. River has no String program. There are limited AP offerings in Fairview. Lakewood has a superb vocational program and River has virtually none. River and Fairview bus, Lakewood does not. While you could realize some administrative reductions, it would not be an elimination of the River and Fairview staffs and substitution of Lakewood's (or any other combination). The larger school system would require a significant administrative presence and I suspect the overall savings by eliminating excess administration would be small when spread over the entire merged system. And River and Fairview's finances are in much worse shape than ours....don't think I want to bail them out.

Jeff

[Bill Call]

I have some things to say on this issue that will be posted later. I am sure no one will agree with but I am use to that.

Until then you might find this article of interest.

http://www.opinionjournal.com/cc/?id=110008293

[Joan Roberts]

I have some things to say on this issue that will be posted later. I am sure no one will agree with but I am use to that.

Until then you might find this article of interest.

http://www.opinionjournal.com/cc/?id=110008293

Don't be so sure that "no one will agree".

My personal belief is that there is a "magic number", a "tipping point", a "point of equilibrium," however you want to term it. Below that number, you're cheating the kids. Above that number, you've got diminishing returns.

Of course, determining that number is very tricky, and worse, it varies from district to district, decade to decade.

I don't know that Lakewood schools would get better results if we spent $20,000 per student rather than $10,000. I don't know if Beachwood would get worse results if it spent $12,000 rather than $18,000.

I DO know., or I believe,, that getting to the magic number is a community process. And it never ends, because conditions change. Lakewood in 2006 is very different than 1986, and virtually unrecognizable compared to 1966.


My gut feeling is that Lakewood is close to where it should be right now. I can't countenance big increases. But I can't endorse major cuts, either.

[Bill Call]

I have a RADICAL proposal that will eliminate the Lakewood School Systems projected cumulative deficits until 2012. The proposal will never be adopted so don't get bent out of shape.

Continue to give school employees their annual 4% increase in salaries.

BUT:

The EMPLOYEE should pay the EMPLOYEE portion of the pension contribution. The school system currently pays the entire 24%.

The employee should pay one half of the health insurance premium. Currently new hires pay 5% of the premium and the rest pay nothing.

The medical plan should have a reasonable deductable and co-pay. Currently it does not.

If the system adopted this plan the average total compensation in 2009 would be about $90,000 instead of the projected $105,000.

My total compensation includes salaries, pension cost, medical cost and 6% payroll tax for workers comp. The current city WC rate is 7%. My 6%school rate is just a guestimate. I don't think the rate would be more. It could be less. Some employees pay medicare tax some do not. Few pay FICA.