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Balancing Act: School districts try to compensate for constantly rising costs

By Harry Funk 6 min read
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In the near future, Mt. Lebanon School District will top the $100 million mark for spending in a fiscal year.

That’s an alarming figure in and of itself. But consider that as recently as 2012-13, the district spent just under $80 million.

“As you look at any school district budget, you find that our budgets all look alike,” Janice Klein, Mt. Lebanon’s director of business, observed in reference to dramatic increases in expenditures.

The cost of public education in Pennsylvania is in the midst of a steep upward trajectory, and the administrators and elected officials who try to match revenues with expenses face correspondingly tough challenges each year.

Chief among them is paying for personnel.

“The vast majority of our budget is based on people,” Klein explained. “We are a people-driven organization. That’s the nature of our business.”

The bulk of personnel costs are for instruction, toward which her district is committing $55.3 million for 2016-17, or 58 percent of the $95.2 million in total spending. As for Mt. Lebanon’s teachers, the district is in the second year of a three-year agreement.

“We have a great relationship with our teachers,” Klein, who is part of the negotiating team, said. “They’re very much aware that they are a huge piece of our budget. They understand the position that we’re in economically, and they understand that we have very limited places where we can go to raise money.”

Upper St. Clair Superintendent Patrick O’Toole also cited a high level of cooperation among his district’s educators.

“Our teachers agreed to a concession in 2012 that really provided us with relief and prevented a number of furloughs that would have impacted the quality of education in the district. So we’re fortunate that we have a good relationship with our teachers’ union to work that out, and we feel like this contract is something that also is a product of that working relationship,” O’Toole said about the current six-year deal, through 2022. “Our teachers did take into account the fiscal health of the district in terms of their realistic expectations going into the contract.”

Peters Township also has a six-year agreement with teachers through 2022, a deal the two sides reached several months after a work stoppage. Superintendent Jeannine French, though, said the district maintains a good relationship with teachers and that they are cognizant of financial limitations.

“In the last contract, they did make accommodations,” she said, citing increased health care contributions as an example.

Work stoppages have occurred relatively frequently in Bethel Park during the past few decades. But as the expiration of the latest teachers’ contract approached on June 30, the district and union were able to negotiate another 365 days for the status quo.

“This one-year extension is definitely going to give us the opportunity to look for a longer-term deal,” Matthew Howard, assistant to the superintendent for finance and operations, said. “So it definitely is a positive step.”

Cost for total instruction in Bethel Park for 2016-17 is budgeted at just short of $52 million, an amount that includes general and special education as its main sources of spending.

“I would say that ever since the day I got into the business, special ed costs have consistently gone up, in terms of the services that are required for the students and the number of students,” Howard said. The district’s expenditures in that area have risen by more than 14 percent in the past four years.

In the meantime, the special education subsidy from the state is $2.42 million for the current year, the same as it was going back to 2012-13.

“It’s a challenge that the funding has not kept up with the responsibility,” French said about her district, where special education costs have more than tripled in the past 15 years without anything resembling a corresponding increase in the state subsidy.

Upper St. Clair’s special education costs rose from $2.1 million in 1997-98 to $8.7 million in 2014-15, excluding transportation, and Mt. Lebanon’s now exceed $9 million.

“Special ed is difficult because we are mandated through the IEPs to provide certain services,” Klein said about individualized education programs for students. “If those costs go up, we have no control over that. We must pay it. And if we get additional students, we have to cover whatever those costs are.”

Districts are doing their best to compensate by cutting costs in areas over which they do have control.

“Our district has done a commendable job in trying to keep a lid on, as much as possible, increases,” Thomas McMurray, Peters Township School Board president, said. “That’s the challenge the board has given to the administration, and they have really stepped up in looking at scheduling, looking at curriculum, looking at technology, looking at where we can consolidate and be efficient but still maintain the quality of education we give to our kids.”

French said that the district thoroughly examines contracted services.

“These are things that might not be big-ticket items, but they slowly take money out of the budget,” she explained. “So we’ve renegotiated our copier, our print management, our refuse, and have been able to save $16,000 a year, $20,000 a year. And it all adds up.”

Salaries qualify as big-ticket items, and districts are realizing savings by taking measures such as not filling vacant positions.

“We look at people first when they retire, and for each retirement, we say, ‘Does this position have to be replaced? Is there some other way to provide this program or provide this service in a way that we do not have to hire staff?'” Klein said about Mt. Lebanon. “There are some furloughs of staff, but we try very hard to keep those as far away from the kids as possible.”

Upper St. Clair takes a similar approach.

“But we’re running out of cuts to make, without changing programs dramatically,” O’Toole said. “And we don’t believe that the community wants us to change programs dramatically. So we’re sort of at the end of the road in terms of staffing cuts.”

Districts also are realizing savings in areas such as energy. In Bethel Park, for example, more efficient light-emitting diode devices have been installed in most buildings to help drive down costs, Howard said.

“I think we do a great job with the general purchases, too. We have a procurement specialist,” he said about staff member Mary Gallagher, “who tries to look at most of our purchases. That individual will go out and seek different pricing. If she feels that there is the potential to save some money on the things we buy, from paper to pencils to motors for our equipment, she’ll try to do a good job with all of that.”

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