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Testimony-Task Force on School Cost Reduction, Conneaut SD

February 2007

Jody Sperry
Vice President, Conneaut School Board

District Demographics:
Conneaut School District is located in Northwest Pennsylvania bordering Erie County to the North, Mercer County to the South, Ohio to the West and the City of Meadville to the East. The District is approximately 319 square miles in size. The District is rural in nature and many of the residents are employed outside the boundaries of the District. The population of the District, based on the 2000 Census was 18,601 with an estimated population in 2004 of 18,998. The enrollment for the District has steadily declined since 2000 by 390 students. The District is made up of three separate attendance areas with one jr./sr. high school and one elementary school in each attendance area. In 2003, the District began a $57 million renovation project to update the antiquated buildings and educational facilities. Currently the third phase of this project is underway.

Per capita property values have grown but the ratio used for tax collection purposes has declined from .4753 in 2000 to .3952 in 2005. Income generated through millage has steadily grown, though not at the rate of inflation. One mil of tax currently generates $240,070 for the District. Most of the millage increase for the past five years has been applied to the expenses of the building project, not for operational expenses.

Personnel:
Conneaut School District employs 205 instructional staff and 71 support staff. The current contract for instructional staff expired June 30, 2006 and contract negotiations are in progress. Salaries for the past five years have risen at a steady rate of 4% for administrative, instructional and support staff. The actual salary increase has been between 2-3% due to retirements and the lower salary rates of new instructional staff. The uncontrolled costs for personnel are the benefit costs, which have skyrocketed over the past five years. Medical insurance has risen 107.4% from 2001 to 2005. Pension contributions have risen 374.6% over the same time period. These unfortunately are costs that can't be controlled at the District level. The District does participate in an insurance trust with several other Districts in the adjoining Counties. This has proven to save us thousands of dollars in medical insurance premiums. The NOREBT trust has worked closely with Highmark Blue Cross/Blue Shield to provide affordable healthcare to the 13 School Districts and one Intermediate Unit involved.

Transportation:
Due to the size of the District the transportation budget is very high. The cost of fuel has caused the District to join The Erie County Council of Governments for fuel purchases with other surrounding districts. This has cut our costs for fuel purchases but the price of fuel continues to escalate. Over the five-year period our fuel costs have risen 682.8%. Contracts with carriers in the past have split the price of fuel over $1.00 a gallon. Now, with one carrier in particular, the District is forced to pay the entire amount over the $1.00. When fuel was $.97 there was not much additional expense to the District for fuel. Currently within the COG we are paying $1.5057/gallon for gasoline and $1.6952/gallon for diesel, which adds an additional expense of almost $.70 per gallon. Again, these are prices we cannot control. Reimbursement from the Department of Education does not include in the formula an allowance for fuel expenses.

We provide transportation to parochial students as well as to the Amish population in our District. Athletic transportation has risen over $20,000 in the last two years due to the realignment of District 10 athletics.

Debt Service:
 With the commencing of a major renovation project the District entered into several bond issues for financing. The markets were very favorable and interest rates were low at the start of the project. The money borrowed will be paid back over a thirty-year time span and the investment from the issuance will be earning interest to offset the debt. Over the past six years the District has raised millage by 14.35 but only 5.02 mils have gone to the operational budget while 9.33 have been used to finance the construction program.

Additional Instructional expenses:
 Charter School tuition has risen from $0 in the 2001-02 school years to $374,760 in 2005-06. These costs are unpredictable and in the 2005-06 school year is the equivalent of 1.5 mils to our taxpayers in the District. Currently thirty-eight (38) students enrolled in Cyber and Charter Schools are costing the District an average of $1200 to $1500 more per student than the current reimbursable student tuitions formulated by the Pennsylvania Department of Education. These rates are established by the Cyber and Charter Schools and Districts have no choice but to pay these rates as PDE automatically withdraws the tuition from your reimbursement. Cyber and Charter schools are not regulated to the extent public schools are regulated yet they are able to charge more for their services. In the 2006-07 school year the total District tuition for Cyber/Charter Schools was $332,611 yet the District will only receive $91,967 reimbursement for these students. The funds are not adequate enough to cover the tuition and transportation costs associated with these students.

Special Education is another unpredictable expense. We do not have a viable Head Start Program in all of our attendance areas, so students come into our District unidentified as needing special services until they are in the classroom. We have had some success with day cares being aware of what criteria make a student identified and this has helped giving us an indicator each year for special education services. Unfortunately the Federal funding for IDEIA has drastically dropped while the student numbers in special education have steadily risen. With the current push to identify students with autism, the numbers are sure to rise even more rapidly. The current State formula for reimbursement for Special Education is not reflective of the numbers of students served or the actual costs of Special Education. Until the formula changes there will continue to be short comings in funding for Special needs students.

Our Vocational Technical Education budget has increased 33% over the past six years. These increases are due to the higher tuition charges from these schools for the students. The number of students has not increased, as there is limited space at these institutions. From 2005-06 school years to the 2006-07 school year there is an 18% increase alone in the funding of this program.

Mandates:
The District has not applied for any waivers of mandates because the mandate is not actually removed. The exceptions allow you to approach a mandate in a different manner but do not relieve the District of the financial burden to follow through with the mandate itself. It has been the opinion of the Administration that costs associated with the paperwork to file for the waiver outweighs any benefit, as there is still the burden of the expense of the mandate. The largest financial burden has been in Charter School Law and mandates, which have forced the District to accept tuition rates for Charter school students below the average reimbursement for regular education students. The additional costs associated with students with special needs in Charter Schools have also been onerous. Unfortunately, the additional funding has also been in effect for Cyber Charter Schools, which have no bricks and mortar and no regulations. Many of our students enrolled in Charter Schools have elected for the Cyber option and were former home-schooled students. Some of our Cyber Charter school enrollees are students that have been expelled from our public schools for school policy infractions. These students have elected to withdraw from our public schools and enroll in Cyber Charter schools in lieu of our alternative education program.

More mandates coming from the Department of Education will adversely affect our District in the future. Right now it is very difficult to attract highly qualified educators to rural school districts. With new regulations regarding Special Education certification it will be even more difficult to fill Secondary Special Education positions. The burden of providing education in all the fields required by the Pennsylvania Department of Education, as well as the constant testing required for No Child Left Behind, has left little time for quality instruction.

Utilities:
The story of the rise in utility costs affects not only our taxpayers, but the District as well. We have seen an overall rise in our utility costs by 96% in a six-year period. These increases are in electricity as well as natural gas. With deregulation affecting the electric companies this year the costs is expected to rise even higher. The District is exploring the option of joining an electricity consortium to help control the cost of electric.

Revenues:
 Over the past five years the revenues for the District have fluctuated with rises in State subsidies but a drastic decease in Federal revenues. The funding for the State has risen overall 22% for our District. But to offset that rise the costs of Special Education has risen 16% alone in our budget and the funding from the State has only risen 13%. The Federal funding for IDEIA has dropped for our District by 5%.

Revenues from local tax collection make up 34.38% of the Districts total 2006-07 budget.

Summary:
 Many things drive up the cost of education to rural districts that may differ from other districts, but overall the situations are similar statewide. The difficulty lies in balancing a budget when over 80% of your budget is "fixed "costs. Contracts are negotiated on average for five to six years with instructional staff, support staff and service providers. These contracts cannot be reopened until they expire which leaves the District with the negotiated costs for five years. The items that can be controlled are minimal in expense, which does not allow the District to show any real savings.

As with the average citizen we are experiencing an energy crunch with the high costs of fuel, electric, and natural gas. Our District has explored alternative sources for our energy needs but they are not readily available to Rural Districts. At this time we are exploring windmill technology for our electric supply as well as joining a consortium to reduce the costs. There are no alternatives at this time for vehicle fuels that will work for large consumers.

Because the District is involved in a major renovation project the cost of construction was driven higher due to the prevailing wage mandate established by the Pennsylvania Department of Education. Millions of dollars could have been saved by allowing the project to proceed without having to pay wages well beyond the average wage of the area.

The unfortunate breakdown of the traditional family unit has placed an undue burden on school districts regardless of size or location. Changes in the scope of public education have been drastic over a short span of a century. From 1900 to 2000 schools have become responsible for everything from making sure children are fed, to providing after school programs for parents who work, basically babysitting. We are now responsible for their sex education as well as teaching them the dangers of smoking, drinking and taking drugs. In the days of your parents these were core values taught at home. We are not only charged to meet AYP but to make sure these students have the values and morals of the community they live in. To quote Jamie Vollmer in his speech on the changes in public education "Schools cannot do it alone. Schools cannot raise America 's children."