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Presentation School Closure Analysis

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  • pg 1
									 Preliminary Analysis of Final
Capacity Management Proposal
       Meg Diaz, 1/7/2009
             District-wide Proposal Impact
The final proposal fails to provide the greatest financial
savings for the least student disruption
  • The district currently operates at 83% capacity

  • If the proposal is implemented and not a single student leaves SPS
    as a result, the district will operate at 87% capacity

  • If students who are forced to move depart from SPS at similar rates
    as in previous closure rounds (20.3%), likely operating capacity after
    implementation will be 85.5%

  • For a 2.5% overall capacity gain, the Superintendent proposes to
    move 3,816 students – 8.6% of all students enrolled in Seattle
    Public Schools
          Significant Change in 2009 Budget Outlook
                                                                     (figures in $m)




        • Estimated Funding Need                                                                    $24.0
        • Elimination of COLA                                                                       ($6.0)
        • Elimination of Medical Increase                                                           ($0.4)

        • Elimination of I-728 State Funding                                                $19.5       $4.9
                 – (I-728 funding reduced 21-29%, based
                   on Governor’s initial budget release vs.
                   100% in worst-case forecast)
                                                                                            $37.1 $22.5
        TOTAL FUNDING NEED


                                             Preservation of the bulk of I-728 funds eases immediate
                                             budget crisis and allows time for better planning. Staff
                                             does not seem to have factored this into their analysis.


Source: 12/3/2008 school board presentation by SPS CFO Don Kennedy
                                 General Fund Cost/Benefit
The General Fund Cost/Benefit grid provided by district staff shows a “selection” of costs and savings. There is
little emphasis on costs and none on potential revenue loss, but much emphasis on savings. The final report
assumes that the total cost for moving over 3,500 students will near the total cost of moving 743 students in
the last closure round. This needs to be carefully scrutinized. With revenue loss factored in, savings look
doubtful.
General Fund Cost/Savings, Summary of District Numbers, Appendix A of Final Report                                      General fund
                                                                                                                        expenditure in the
Costs                            2008-2009                         2009-2010                Total                       last round of
Total                             $ 1,460,134                      $ 514,400                $ 1,974,534                 closures, for 5
                                                                                                                        buildings, was
Savings                                                                                     5 year                      $1M-$1.7M.
Total                             $          -                     $3,636,319               $18,181,595
                                                                                                                        Assuming that
                                                                                                                        moving more than
Less Costs                        $(1,460,134)                     $ 514,400                $ 1,974,534                 5 times as many
Net Savings                       $ 1,460,134                      $3,121,919               $16,207,061
                                                                                                                        students will only
                                                                                                                        cost $.2M more is
                                                                                                                        highly optimistic,
                                                                                                                        at best.
Potential Revenue Loss Due to Attrition from 3816 moved students

                                      2008-2009                        2009-2010                    5 year

At 15% attrition, 572 students        $(2,090,737)                     $(2,090,726)                  $(10,453,684)

At 20% attrition, 763 students        $(2,787,649)                     $(2,787,649)                 $(13,938,245)

At 25% attrition, 954 students        $(3,484,561)                     $(3,484,561)                  $(17,422,806)

Net Revenue Loss                      ($2-$3.5M) annually              ($2-$3.5) annually            $(10.5-$17.4M) 5 year loss


Net Loss                          ($2M-$3.1M)                          $1.1M-($1.5M)
                                            Estimated Savings & Costs
       Student Costs
           Total Students Forced to Move:                                                                     3,816 (8.6% of SPS enrollment)

               Estimated student attrition1:                                                                  763         (1.7% of SPS enrollment)

       Financial Savings (Costs)                   (figures in $m)


               District-estimated savings for 5 building closures 4:                                          $3.0


               Lost annual allocation revenue due to student attrition2:                                      ($2.7)

               Cost to move students3:                                                                        ($6.1M)

               SBOC-contracted remodel:                                                                       ($10.0)

               Total Costs:                                                                                   ($18.8)



       Net Savings (Costs):                                                                                   ($15.8)


                                           The final proposal does not account for costs due to student
                                           attrition, move costs, and building remodels

1 In the last closure round, 20.7% of students forced to move departed SPS entirely
2 Estimated at $3.6K per student, the base student funding factor from the 2007-2008 Weighted Student Allocation
3 Using district proposal that moving costs could average half as much per student as it did in the last closure round due to “streamlining” and “better understanding,” though in a rising

  cost environment actual costs could be 2x this estimate or more
4 12/3/2008 presentation by SPS SFO Don Kennedy estimated closure savings from closing 6 buildings w ould be $3.6M, for a distri t-estimated $600K savings per building closed
                                                                                                                                      c
Compound Annual Growth Rate by Area of Expenditure,
                   2003-2007
                  12%
                                                                             10.3%

                  10%

                  8%

                  6%

                                                                                                3.4%
                  4%     2.1%                               1.9%                                           All expenditures:
                                                                                                           2.9% Compound
Revenue growth:
                  2%                                                                                       Annual Growth
 2.6% average                               0.9%
                                                                                                           Rate
   increase
                  0%
                        Teaching     Principal's Office    Teaching       Central Office   Other Support
                        Activities                          Support

  Expense growth outpaces revenue growth. Growth of administrative
  costs in the central office is grossly out of line with all other cost growth.
  To bring total expenditures in line with revenue growth, an additional
  $5.2M in central office cuts need to be made beyond the $4M proposed.

                             Data source: 1/30/2008 McKinsey & Co report to district, page 22
               Current Enrollment vs. Empty Seats, by Cluster
                                                           BEFORE proposed building closures

       30%                                                                                                                      % of Total Enrollment
                                                                                                                                % of Total Empty Seats
       25%
                        22.7%
                                               21.3%

       20%                                                                                                    18.9%


                                                                                                  15.4%
       15%
                                       13.0%                12.4%                                                                         13.0%
                                                                                                      12.5%
                                                       11.5%
                                                                            9.3%
       10%       8.3%                                                                                             8.1%   8.1%
                                                                                    6.0%                                        6.7%
                                                                     5.7%
                                                                                                                                                   4.4%
        5%
                                                                                           2.6%


        0%
                      SE                   S           W Seattle N   W Seattle S   QA/Magnolia    Central       NW          N                  NE

   Proposed
   Building
                        1                  0                1               0              1         2           0          0                  0
   Closures



          Ideally, a cluster’s share of district enrollment will align with its share
          of empty seats

Source: SPS w ebsite enrollment data
              Projected Enrollment vs. Empty Seats, by Cluster
                                            AFTER Final Proposal-implemented building closures *

        30%                                                                                                                                  % of Projected Enrollment
                                                                                                                                             % of Projected Empty Seats
                                             24.8%
        25%
                         23.0%


                                                                                                                               19.4%
        20%

                                                                                                                14.9%
        15%                          13.4%                                                                                                               12.9% 12.4%
                                                          11.2%
                                                               10.5%                10.3%
        10%       8.1%                                                                                                                    8.0%
                                                                                                                        7.5%       6.7%
                                                                            5.9%                  6.1%
                                                                                                                                                 4.9%
         5%


                                                                                                         0.0%
         0%
                       SE                  S            W Seattle N         W Seattle S         QA/Magnolia     Central          NW          N                NE

   Proposed
   Building
                       1                   0                   1                   0                   1           2             0           0                0
   Closures



              The final proposal does not meaningfully change the capacity
              imbalances it is intended to correct, at enormous financial cost

* Enrollment projections include returning students to schools as proposed in the 1/6/2009 final proposal.
                              Central Cluster Capacity Impact
                                                                            Central cluster capacity will be raised
                                                                            above that of clusters with issues of
                                                                            over-capacity
                                                                                • New central capacity will be 92.2% - above
                                                                                  current levels in the north clusters
                                                                                • 1,757 students – almost 50% of all students
                                                                                  forced to move– will move in, out and through the
                                                                                  cluster. Based on proposal goals, the impact on
                                                                                  the Central cluster is disproportionate
                                                                                • DeJONG demographic reports indicate that the
                                                                                  Central cluster will be a hot-spot for school-aged
                                                                                  population growth in the city between 2007-2012,
                                                                                  particularly near TT Minor
                                                                                • Revenue loss for students leaving district will run
                                                                                  an estimated $1M - $1.7M, depending on rate of
                                                                                  student attrition (estimate for 15 -25% loss)
                                                                                • Moving costs will run an estimated $800K The
                                                                                  board will have to reverse its own actions for both
  Current Central cluster enrollment: 6,784                                       APP and SBOC.
  Current operating capacity: 86%                                                            –SBOC has 3 of 7 points of 2006 contract
                                                                                             violated
  After Proposal                                                                             –Policy on APP will have to be reversed to split it
  Projected total enrollment:6,637
  Projected operating capacity: 92.2%                                        The current proposal creates capacity problems
         • Elementary capacity: 88.7%
         • Middle School capacity: 104.2%                                    for the Central cluster, at considerable expense
         • Garfield capacity: 103.5%
1assuming   that the per student move cost is less this time, which is highly unlikely , given higher costs, complexity and staffing. This is the lowest possible cost.
                                   N and NE Cluster Impact
                                             The proposal impact on the NE and N clusters is a
                                             net financial loss that exacerbates overcrowding
                                             in those clusters.
                                                 • About 500 students will be forced to move to change the joint
                                                   cluster capacity utilization from 90.3% to 88.5%, over 5
                                                   percent of students moving for a not quite 2 point reduction.

                                                 • It is fiscally irresponsible
                                                         ―Lost revenue from students departing SPS due to
                                                            turmoil is likely to run $388K - $486K (using the base
                                                            funding factor)
                                                         ―There are no “savings” in these districts from building
                                                            closures and only incremental savings from
                                                            transportation reductions.

                                                 • It disregards the best interests of the children – over 5% of
                                                   students from 2 clusters are moving for scant capacity relief


Joint cluster   current enrollment: 9,302
Joint cluster   operating capacity: 90.3%
Joint cluster   % of all empty seats: 11%
Joint cluster   % of all enrollment: 21.1%
                                                   The plan for N & NE is ineffective. It makes
                                                   slight gains capacity issues at a financial loss
After Proposal
Projected operating capacity: 88.5%
1 closed program
          West Seattle North Proposal Impact
                                       • The redistribution of 223 Cooper
                                         West Seattle North students
                                         between West Seattle North and
                                         South (quite possibly against their
                                         desire to leave their cluster) will still
                                         leave elementary capacity at
                                         100.2% capacity

                                       • 691 students will be forced to move
                                         – over 13% of cluster students




                                         Overall cluster capacity will be
Total current enrollment: 5,088          strained, with elementary and middle
Current operating capacity: 82%
                                         school capacity pushed over 100%
After Proposal
Projected operating capacity: 87.4%
       • Elementary capacity: 100.2%
       • K-8 capacity: 93.3%
       • Middle capacity: 104%
       • HS capacity: 74.2%
                                  SE Cluster Impact
                                          • 751 students must move – over 20% of
                                            cluster students
                                          • Moving costs: minimum of $1.0 – 1.4M (if
                                            move costs per student are ½ those of last
                                            round, rather than the same or more. Given
                                            that the proposal accounts for inflation of
                                            deferred maintenance, it would be fair to
                                            assume a substantial increase in move
                                            costs)
                                          • Possible revenue loss from departing
                                            students: $569K
                                          • Estimated closure savings: $600K
                                          • Net loss


Total current enrollment: 3,683             Despite moving 751 students, changes
Current operating capacity: 64%             in capacity utilization will not be
After Proposal                              substantive. Financial costs will offset
1 building closure, 1 program closed.
Projected total enrollment: 3,620
                                            savings
Projected operating capacity: 69.6%
            Queen Anne/Magnolia Proposal Impact
                                                    The principles behind the Queen Anne section
                                                    of the proposal are sound, but the proposal
                                                    would aggravate issues in the short-term
                                                    • In May 2006, the district made a contract with SBOC
                                                      with several significant points:
                                                         –   If SBOC moved from Old Hay, and do not move to a new
                                                             building, the building will be renovated for them
                                                             (Superintendent would like to rescind, although still
                                                             “eventually” renovate)
                                                         –   In an environment of reduced funds, $10M is a
                                                             substantial and unwise capital expenditure – and what is
                                                             promised to SBOC for a renovation
                                                         –   Co-housing with another program violates a contract
                                                             made only 2 years ago (of 7 points, 3 will be summarily
                                                             rescinded without consent of SBOC)
Current operating capacity: 92%
Current elementary & K-8 operating capacity: 109%   • The already planned creation/renovation of additional
After Proposal                                        classrooms at Blaine and BF Day (both proposed in fall
Projected K-8+elementary capacity: 109%               2008) will alleviate cluster over-crowding more than the
Students forced to move: 229                          current proposal – and more cost-effectively
SBOC contracted building renovation: $10M
Minimum loss: $10M in Capital Expenditure
ALREADY PLANNED CLASSROOM ADDITIONS
Projected K-8 & elem. operating capacity: 93.1%              The proposal does not address cluster
Cost for renovating 8 classrooms at BF Day and
Blaine: $1.1M
                                                             capacity issues and carries significant
Students forced to move in this alternative: 0               hidden costs. A simpler, less expensive
                                                             solution is already available.
               West Seattle South Proposal Impact
                                                    • The proposal, as implemented,
                                                      will raise operating capacity in the
                                                      cluster due to forced re-
                                                      assignment of many Cooper
                                                      students who are in West Seattle
                                                      North reference area to the West
                                                      Seattle South reference area, as
                                                      well as rising from returned
                                                      students.


Current operating capacity: 74.8%
Percent of all empty seats in district: 9.3%
Cluster enrollment as % of total enrollment: 5.7%

After Proposal                                           The cluster is largely unaffected
Projected operating capacity: 78.9%                      by the current proposal – other
Percent of all empty seats in district: 10.3%
                                                         than financial costs
                           NW Cluster Proposal Impact
                                                  •   Cluster operates at 91.9% of capacity –
                                                      the same as QA/Magnolia
                                                  •   After proposal implementation, cluster
                                                      will operate at projected 95% capacity
                                                  •   A more cost-effective solution to
                                                      strained capacity is available
                                                       –   Repair and renovation at BF Day and
                                                           adding classrooms at Blaine, plus
                                                           allowing dual-cluster enrollment to BF
                                                           Day would relieve pressure in both NW
                                                           and QA/Magnolia




Current operating capacity: 91.9%
Percent of all empty seats in district: 8.1%
Cluster enrollment as % of total enrollment:
                                                 The current proposal will aggravate
18.9%                                            existing capacity problems. Costs are
After Proposal
                                                 likely to escalate due to expensive
Projected operating capacity: 95%                resource distribution for middle school
Percent of empty seats in district: 6.7%
Projected enrollment as % of total enrollment:
                                                 APP students.The best solution is to
19.4%                                            make repairs at BF Day.
                                      School-Age Population Growth

                                                       • The current proposal
                                                         has little alignment with
                                                         district’s own growth
                                                         estimates

                                                       • The Central cluster, with
                                                         2 buildings slated to
                                                         close, has some of the
                                                         strongest predicted
                                                         growth, particularly near
                                                         TT Minor




                                                                              2/20/2008

Source: 2/2008 DeJong Report to SPS
                                            Program closures, programmatic
                                            changes, consolidations & moves


Summit K-12. Program closure. K-8 N
and NE cluster students remain in
Addams building (200 students), “out of
cluster” students “returned” to home
                                                                                          Lowell APP. Central, S, SE, and
cluster (332 students)
                                                                                          West Seattle cluster students to
                                                                                          Thurgood Marshall (294 students)
SBOC. Old Hay to close. Program
moved to Meany building to co-
house with Nova (in violation of
2006 contract with school board).
(248 students)
                                                                                        Meany. Program closure. Central
                                                                                        students to Washington. “Other”
                                                                                        students re-assigned “based on
                                                                                        home address.” (419 students)
TT Minor. Building and program
                                                                                      EBOC. Program in Thurgood
closure. K-3 Montessori to Leschi.
                                                                                      Marshall moved to Gatzert (about
Remaining students re-assigned
                                                                                      124 students)
within Central cluster. (206 students)
                                                                                       Washington APP. N, NE, NW and
    Nova. Building closure. Students
                                                                                       QA/Magnolia cluster students to
    moved to Meany building (312
                                                                                       Hamilton (241 students)
    students).
                                                                                        Van Asselt. Building closure.
Pathfinder. Building closure.
                                                                                        Program moved to AAA building
Students moved to Cooper (391
                                                                                        (492 students)
students)
                                                                                     AAA. Program closure. SE cluster K-5
  Cooper. Program closure. Students
                                                                                     students remain in building (73
  re-assigned “based on home
                                                                                     students); other students re-assigned
  address.” (300 students)
                                                                                     “based on home address” (271
                                          Over 3,500 students are affected by this   students).
 Special Education. (Meany,
 Lowell, and many other locations).       proposal. Who does it benefit?                        Moved
 Student assignments and programs                                                               Moved and changed
 to change.                                                                                     Closed
                 Closure and Hearings Process
 Programs in buildings that are proposed for closure are entitled, by law, to a hearing. Of 5
 buildings proposed for closure, 1 program will close. 4 other programs are slated for closure -
 with no hearings. 3 programs are slated for moves and alterations; 1 will get a hearing.
 2,084 students are in programs - almost 5% of all enrollment – that are slated to be closed or
 radically altered but do not have an opportunity for a hearing. The letter of the law has been
 followed. True accountability to these 2,084 students has been abandoned for convenience.


Hearings      Program Closing?                    No Hearings               Program Closing?

Van Asselt    No. Moving.                         AAA                       Yes


Pathfinder    No. Moving.                         Summit K-12               Yes
SBOC          No. Moving.                         Meany                     Yes
Nova          No. Moving.                         Cooper                    Yes
Elementary    No. Program split.                  Middle School APP         No. Program split.
APP
TT Minor      Yes.                                Special Education         No.
                                                  EBOC                      No. Program moved
                     Data Sources and Assumptions
•    McKinsey Report, 1/30/2008, commissioned by the Seattle Public Schools.
•   “School Board Finance Committee School Closure Update,” prepared by Holly Ferguson, released 11/14/2007 and revised 12/4/2007 . This paper
    provided information on the closure of 5 elementary schools that were part of the last closure round, allowing for analysis o f directly-affected students
    who left the district as a result of the closures (I did not provide data for total enrollment loss due to closures, correcte d for average enrollment loss; the
    percent of departing students remains conservative). Because of the Superintendent’s insistence that the closure process is b etter understood and
    “more streamlined” this time, I gave an estimate that the per-pupil move cost would be half as much as the range was in the last round of closures
    ($2,699-$3,727 per pupil). I believe that it will be at least as much per pupil, and probably significantly more per pupil, sinc e the complexity of virtually
    every move and closure is markedly increased. However, financial data indicates that even if the Superintendent’s optimistic view of financial impact is
    taken, virtually none of the proposed closures, moves or changes make sense.
•   “09-10 FY Budget Summary Gap” presented by Don Kennedy, Chief Financial and Operations officer, December 3, 2008 School Board Me eting
•   “Districtwide Total Enrollment and Weighted Student Allocation, 2007-2008, Seattle Public Schools” No author attributed. Located on website at:
    http://www.seattleschools.org/area/finance/budget/school.html. To be conservative, I used the base student allocation of $3,652 per pupil.
•   “Seattle Public Schools Enrollment Projection Report” Carolyn Staskiewicz, Vice President, REFP, DeJONG, Inc. Presented Febru ary 20,2008 to Seattle
    Public Schools.
•   “Excellence for All: Focus Areas for 2008-09” presentation for Board Work session, 10/29/2008. No author attributed.
•   “Capacity Planning and Management: Phase I. Elementary Capacity Challenges for the 2009 -10 School Year for the clusters of Queen Anne/Magnolia
    and the North/Northeast/Northwest.” Staff recommendations, revised 10/29/2008. No author attributed.
•   School Board Action Report, 10/24/2008.
•   Board Workshop on Capacity Management, 10/29/2008.
•   “Advancing Excellence for All” the Seattle School Board, 11/3/2008, The Seattle Times
•   “Directing the Superintendent to Evaluate Balancing Geographic Capacity Needs Across the District” Resolution 2008/09-2. Seattle School Board.
•   “Guidelines for Building Closure” Superintendent’s Report to the School Board, 11/12/2008
•   “Capacity Management: Superintendent’s Preliminary Recommendations on Building Closure and Program Relocation” Maria Goodloe -Johnson, Seattle
    Public School, 11/25/2008. Appendix 3, “Building Capacity and Enrollment” provided the bulk of the capacity data.
•   “Seattle Public Schools Condition Survey” 3/27/2006 Meng Analysis.
•   “Superintendent’s Update” School Board Meeting, 12/3/2008
•   “Capacity Management – Building Closures” Presentation by Superintendent. School Board Work Shop [sic], 12/9/2008.
•   “Seattle Public School changes will better serve all students” by Maria Goodloe -Johnson, The Seattle Times, 12/22/2008
•   2008-09 Attendance patterns, available at http://www.seattleschools.org/area/newassign/maps/08-09/attend0809.html
•   “Stakeholder Engagement: Presentation to the Board of Directors, Seattle Public Schools” by Pyramid Communications, 5/7/2008
•   2008 School Annual Reports, SPS website
•   2007 School Demographic Reports, SPS website
•   “Must Enrollment Declines Spell Financial Chaos for Districts?” by Marguerite Roza, Education Week, August 30,2008.
•   “Mayoral Intervention: Right for Seattle Schools?” by Ashley E. Watson and Paul T. Hill, February 2008, Center on Reinventing Public Education.
•   Seattle school board hearing transcripts. Pinehurst, TT Minor and Van Asselt, 12/15/2008. Genessee Hill, Mann and Old Hay, 12 /16/2008. All posted on
    SPS web site, http://www.seattleschools.org/area/capacity/index.dxml
•   Final Recommendation Report and appendices, Maria Goodloe-Johnson and staff, 1/6/2009

								
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