Holderness Central School 2012-2013 Budget

1. Holderness Central School 2012-2013 Budget Financial Analysis and Recommendations Concerned Citizen’s Group

2. Agenda • Purpose of This Presentation • Financial Analysis of Data* • Conclusions • Recommendations *Source: NH.gov website , NH Department of Education (unless otherwise noted)

3. Purpose of This Presentation The purpose of this presentation is to study the Holderness Central School Budget, analyze the Budget data, draw conclusions, and make recommendations based on those conclusions.

4. Financial Analysis of the Data • How High is High? HCS Budget Analysis • How Small is Small? Student/Teacher Ratio • How Expensive it too Expensive • Health Care and Retirement Costs

5. How High is High? • The ’09-’10 budget is 31.4% higher than State average and 15% higher than schools of comparable size, or approximately $630,000. • This just in: The ‘10-’11 cost per pupil for HCS is $18,030 vs. State Avg. of $13,120, or 37.4%higher. HCS is 20% higher than comparable schools. 20% of the proposed budget is $840,000. • The gap is growing!!!

6. How Small is Small? • The smallest classes range from 6 to 10 • This tells us that at least some of the classes could be doubled and still be considered “Small” • Enrollment continues to trend downward with no end in sight while the number of teachers remains roughly the same. • The average student/teacher ratio amongst Comparables is 10.14/1. HCS is 19th out of 20, making it one of the most expensive of the Comp schools.

7. How Expensive is too Expensive? • How do you manage or plan for costs that continue to rise unsustainably? • Healthcare costs continues to rise with no end in sight, which will get even worse with Health Care Legislative Reform • The State Retirement System is projecting bankruptcy by 2019 unless something changes • In order to avoid bankruptcy, the State has passed their unsustainable cost of Retirement to each local community

8. Conclusions • HCS spending is significantly out of line with schools of similar size (Approx. $630K in ‘09-’10 and $840K in ‘10-’11”). There are no reasons to expect that this situation will change. In fact, the gap is growing! • HCS student teacher ratio is a significant factor making the cost per student higher. Nothing appears likely to change this fact, given current trajectory. • Health care and retirement costs are expected to continue escalating unsustainably.

9. Recommendations: Budget Cut • HSC is out of line with budgets of similarly sized schools by at least $840,000 or 20%. A cut of 20% is unreasonable in the short term and would be detrimental to the quality of education at HCS & to the town. Instead the recommendation would be a gradual realignment to market over 3 years: • The recommendation is to cut $280K/yr over 3 years to bring HCS into line with other schools of comparable size.

10. Recommendations: Student Teacher Ratio • There is no reason to believe this ratio will change any time soon • There are only 2 ways to change this ratio • Short Term: Eliminate 2 Teacher Positions this budget year and 2 Teacher positions in subsequent years (unless the ratio can be adjusted with a longer term solution). • Eliminate Staff accordingly • Longer Term: Innovative Ideas • Example 1: Combine grades where it makes sense • Example2: Reorganize within the SAU to increase the student teacher ratio • Consider formation of a junior high school or middle school • Other innovative ideas?

11. Recommendation: Benefits • Align Benefits to market. Any non market solution is unsustainable and risks being a promise that cannot be kept. Our recommendations are: • Move to more affordable and sustainable Health Plan alternative • Solicit competitive bids for such plan using the largest group possible to get most competitive rates • Increase the teacher contribution for health premiums from 10% to 30% (market) over next 3 years • Teachers contribute State portion for their retirement over next 3 years

12. Recommendation: Benefits (con’t) • Health Insurance Premiums (Teacher Portion) • Year one: 16% up from 10% • Year two: 23% up from 16% • Year three: 30% up from 23% • State Portion Teacher Pension Contributions: • Year one: 33% up from Zero • Year two: 66% up from 33% • Year Three: 100% up from 66%

13. Further Recommendations • The next 3 year contract will be negotiated with the Union in November 2012 • The negotiation terms appear to be inflexible and are not transparent • Tenure and seniority rules tie the hands of the School Board and discourage “putting the best team on the field” or doing what is best for the kids • In essence, negotiation options are limited, which limits putting all options on the table that could improve our children’s education while allowing the School Board a wider array of alternatives

14. Further Recommendations • This citizen group recommends the following: • That the School Board negotiate aggressively to get the greatest value for the dollar spent in the next contract negotiation by adopting the recommendations herein • As part of this negotiation, seek arrangements that will increase School Board and Administration flexibility so you can “put the best team on the field”. That includes a longer term commitment to phasing out tenure and seniority. • Teachers are professionals, not line workers • The School Board look for creative ways to organize within the SAU and within HCS to “do more with less”, which is what the rest of the world must do.