Case Studies: Cost Reduction and Revenue Efficiency (SCOR/RE)

1. Case Studies: Cost Reduction and Revenue Efficiency (SCOR/RE) WEBCAST PARTICIPANTS: Listen to audio over your computer speakers. (If you prefer to listen by phone, you may dial-in using the numbers provided in your invitation . Phone lines will be available 10 minutes prior to the event start.)

2. PRESENTERS SCOR/RE Task Force Members: Dale R. Kirsch, PRSBA Business Manager Indiana Area School District Lynn Kraus, PRSBA Director of Management Services Lincoln Intermediate Unit 12 Robert Schoch, PRSBA Director of Business Administration North Penn School District

3. INTRODUCTION Where we were: • 500 Cost Reduction Strategies (2003) • Updated: approximately 700 (2010-2011) • Available at www.pasbo.org Where we are: • SCOR/RE Task Force (2011-2012) • Case Studies Where we want to be: • Hundreds of Case Studies (2012 to ?)

4. SCOR/RE TASK FORCE

5. CASE STUDIES • Assignment for PASBO research committees • Review by task force • Index of cast studies to date (handout) • Post to PASBO web site • On-going effort • Research committees • Regional chapters • Personal contacts • Pleadings

6. TEMPLATE 2 to 3 Pages Headings: • Type of Strategy • Where Implemented • Description • Savings/Revenue • Initial Investment Requirements • Benefits • Implementation Barriers • Resources • Contact Information

7. SAMPLE CASE STUDIES Facilities Benchmarking – Dale Kirsch Purchasing – Lynn Kraus Overview of Case Studies- Bob Schoch

8. INDIANA AREA SCHOOL DISTRICTFACILITIES BENCHMARKING Strategy: • Expenditure Reduction • Efficiency Measure Description: • PASBO facility benchmarking survey • Compare data by square feet, region, students • Power point presentation of the results

9. INDIANA AREA SCHOOL DISTRICTFACILITIES BENCHMARKING Description: (continued) Interpreting the Results • Which measures most appropriate for your LEA • Understanding relationships between the data • Improvement strategies • Energy costs (future case study) • Custodial staff

10. INDIANA AREA SCHOOL DISTRICTFACILITIES BENCHMARKING Description: (continued) Custodial Staffing: • PASBO custodial staffing calculator • Hillyard, Inc. CCAP program Savings/Cost Reduction • New job classification: part-time housekeeper • 1 custodian position: $50,000 annually • Upon full implementation: $264,000 annually

11. INDIANA AREA SCHOOL DISTRICTFACILITIES BENCHMARKING Initial Investment: • Staff time • Free software Benefits: • Awareness • Increased efficiency

12. INDIANA AREA SCHOOL DISTRICTFACILITIES BENCHMARKING Implementation Barriers: • Staff resistance • Maintaining quality • Cost of more efficient equipment Resources: • District web site www.iasd.cc/BUDGET.htm • Job descriptions on PASBO ERC

13. INDIANA AREA SCHOOL DISTRICTFACILITIES BENCHMARKING Contact Information: Indiana Area School District Dale Kirsch, Business Manager dkirsch@iasd.cc 724-463-8713, ext. 108

14. Line Item Bid vsState Contract Price Lehigh County Schools

15. JOINTPURCHASING Lehigh County Schools

16. JOINT PURCHASING MEMBERS

17. Line Item Bid vs State Contract • Art Bid • 2,497 items specified. • Coordinated by Carbon Lehigh IU #21. • Art Advisory Committee utilized. • Committee comprised of reps from the schools participating.

18. Advisory Committee Responsibility

19. SAVINGS COMPARISON • Market Basket Analysis • Cost of Items on Line Item Bid: $25,603. • Cost of Items from Kurtz Bros Co-Stars: $42,751. • Cost of Items from School Specialty AEPA: $58,963.

20. PERCENT SAVINGS • Saved 67% over Kurtz Co-Stars Price • Saved 130% over School Specialty AEPA Price • Total Art Bid was $139,293. • Potential Savings of $93,000 to $181,000.

21. IU 12 Savings Top 25 Items • Market Basket Analysis • Cost of Items on Line Item Bid: $50,647. • Cost from Kurtz Bros Co-Stars: $98,857. • Cost School Specialty Co-Stars: $95,562

22. IU 12 Percent savings • Saved 95% over Kurtz Co-Stars Price. • Saved 89% over School Specialty Co-Stars Price. • Total Art Bid was $248,161. • Potential Savings of $220,863 to $235,752.

23. Line Item VS State Contract Pick your poison

24. State Contract

25. Joint Purchasing Line Item

26. State Contract • Don’t Purchase • For Savings • DO Purchase • For Convenience

27. Scor/re Purchasing Suggestions • Line Item Bids vs State Contract • Card Cost Reduction Strategy • Reverse Auction • Rebates from Vendors for E-Procurement • Mailing Cost Reduction Strategy • Year Book Cost Reduction • Premium Meals and Co-Op Purchasing

28. Case Studies: Cost Reduction and Revenue Efficiency Robert Schoch Director of Business Administration North Penn School District March 2012

29. Today’s Presentation • Focusing on labor saving in SCORRE case study submissions to date • Mailing methods • Accident and illness prevention • Electronic processing • Elimination of positions • Floor sealer • Robotic floor cleaner • PASBO advice on staffing adjustments • Revenue efficiency- • Alternative revenue committees • Maximizing ACCESS/Medicaid revenue

30. Importance of Labor Savings • Labor costs are the biggest cause of structural deficits (natural increase in expenditures exceeds natural increase in revenues) • Labor costs result from the quantity factor (the number of staff) multiplied by the unit cost factor (amount paid). Controlling the quantity factor allows wage increases higher than Act 1. • Labor savings can result from labor saving methods, techniques, and equipment. • Vacant positions may not need to be refilled if enough labor savings can be found.

31. Mailing Cost ReductionsDowningtown ASD • Contract with service that offers discounted postal rates and courier service • Savings in mailing equipment rental • Savings in labor include: • Contractor posts mail rather than district secretarial staff • Elimination of daily run to post office by district courier • District courier picks up within district 3 days, not daily as before

32. Accident and Illness PreventionPittsburgh and Centennial SDs • A labor/management joint effort to rewrite accident and illness prevention policies, procedures, and training programs • Savings in lost time and replacement labor • Savings in workers compensation and healthcare costs • Resulted in improved morale

33. Electronic Workflow ProcessingCheltenham SD • Migrate manual processes to existing automated software processes • Field trip approval through requisition process • Tracking of cyber and charter school students through encumbrances • No new software • Minimal training due to known processes

34. Elimination of PositionsGateway SD • Eliminated department coordinators and team leader positions • Replaced with teacher coordinators • Estimated savings of approximately $120,000 • Gained duty periods and teaching periods • Teachers’ union has filed a grievance

35. Use of Non-acrylic Floor SealersCarlisle ASD, Derry Twsp SD, Southern York SD • Approximately 25 hours of labor saved per 10,000 square feet after first year when removal of traditional floor finish is required

36. Robotic Floor CleanerUpper Merion SD • Robot accounted for 25% of the labor cost reduction which was part of $504,000 reduction of operating budget.

37. PASBO Staffing ComparisonsState College ASD • PASBO Facility Benchmarking Study and the Custodial Staffing Formula have been used to adjust staffing levels in custodial, maintenance, and supervisory staff

38. Alternative Revenue CommitteesCentennial, Cheltenham, Pottsgrove, Pennsbury SDs • Committee of community members explore all options including: • Sponsorships • Advertising • Naming rights • Trademarks • Merchandising • Exclusive rights agreements (pouring rights) • Donation of goods and services • Potential revenue of $250,000 to $400,000/yr

39. Time for Questions! CONFERENCE ATTENDEES: Please come to a microphone to ask your questions. WEBCAST PARTICIPANTS: Send text questions using the “Chat” function at the left side of your screen. Type message in box and click the arrow to send.

40. Thank you for your participation! CONFERENCE ATTENDEES: If you are requesting CPE credit, return the CPE form to the moderator before leaving the room WEBCAST PARTICIPANTS: Attendance Forms are required to receive either PASBO CEU or CPE credit. Webcast sites are asked to collect Attendance Forms from each participants and return to the PASBO office by March 16.