Posts tagged ‘cost of closing schools’

The costs & savings of closing CPS schools (guest post with Seth Lavin)

Wrecking Ball

I had an interesting email discussion with Seth Lavin this week (you may remember him from the popular Chicago School Wonks newsletter last year.  He’s also the dad of a young son.)  He’s always good for some intellectual debate about CPS and he emailed me about some comments I made about the need for school closings and whether the cost is going of closing schools is the going to provide enough of a payoff to make the effort/disrupt a lot of lives.

SETH:

Hope you’re well. Just read the post on the WBEZ story and want to push you on one of your assumptions. You write:

“it’s hard to justify keeping up buildings with so much empty space (and aggravating given how squished many other schools are.)”

That’s certainly the narrative CPS is pushing. My question is..why?

Physical space, utilities and repairs in these schools cost very little, relatively speaking. Overwhelmingly the cost driver in schools is teachers, which is pegged to # of students. You don’t get teacher-cost savings by closing a building, since you just have to rehire teachers wherever the kids get moved. You do get utilities savings, and maybe a little bit of admin/overhead savings, but it adds up to almost nothing when compared to the deficit or the overall CPS budget.

Pew studied school closings in 6 cities and concluded savings from each closed school ended up being <$1M a year: http://www.pewtrusts.org/uploadedFiles/wwwpewtrustsorg/Reports/Philadelphia_Research_Initiative/Closing-Public-Schools-Philadelphia.pdf

Sun-Times actualy has CPS estimating only ~$500K annual savings per closed school: http://www.suntimes.com/17858750-761/school-closing-panel-to-advise-20-schools-a-year-limit-source-says.html

Compared to a billion dollar deficit, that’s nothing. So the justification in keep up these schools, to me, is that the disruption to a community caused by a closing is massive. The amount of bandwidth this whole closings mess is sucking up in CPS is massive. The academic payoff for closing underenrolled schools is nothing (see the Pew report for that, as well). And the payoff for closing underenrolled schools, financially, is tiny.

Thoughts?

CPSO:

I guess my first response is that $500k per year isn’t chump change if they plan to close 100 schools (which may or may not happen.)  Almost anything other than salaries is going to look minimal compared to that.  I guess since we can’t put a value on disruption it’s hard to weigh the cost/benefit of that.

My second response is based on having owned a giant old house in the city for 14 years.  Old buildings are incredibly costly to maintain.  It’s not just utilities.  Big things have to be replaced and updated
year after year.  Maybe $500k per year is right.  Some years would probably be more when roof needs replacing, etc. but I really have to think that principal and AP salary, janitor staff, copier contract,
boiler servicing, snow removal… that alone would likely be a minimum of $500k per year even without the building costs.

It seems really inefficient given our financial situation.

SETH:

I hear you, but $500k is a projection CPS made based in actual anticipated savings, not just a guess. So 100 schools is $50M a year savings. That’s 5% of the deficit. All this pain, all this distraction, all this lost trust that makes everything else harder, and 95% of the deficit is untouched. I just don’t see how that’s sensible priority-setting policy-wise.

Do you have ideas for other areas to cut that can garner the same savings while presenting minimals objection?
I think the only way to make a decent budget cut is to find multiple smaller cuts (perhaps such as this) and get them to add up.

CPSO:

Hopefully they’re looking at other cuts as well to really make a difference.  And does it make sense for kids to be in a tiny school with split classes and limited specials?  I have a hard time justifying (financially.)
At what point do schools shrink where it’s not worthwhile to keep them open? Would you keep a school open indefinitely so no school has to close?  I keep imagining a deserted detriot but people never want to close a school….  We can’t keep it up forever.

SETH:

I used to be a Bain consultant. When doing cost savings strategy Bain sometimes made two-by-two charts of potential moves. X axis = impact of move (how much you can save). Y axis = ease of move (how easy it’ll be to get those savings). You start with moves in the best quadrant– easy to do and big impact. Then do ones that have a big impact but are harder to achieve. For school districts closings are in the worst possible place– low savings impact and really hard to do. So I haven’t done a line-by-line of the budget and don’t have other proposals ready, but I just can’t understand how a strategic look at the budget would conclude, from a cost- and impact-basis, that closings should be a priority.

I completely agree with you on this point “the only way to make a decent budget cut is to find multiple smaller cuts (perhaps such as this) and get them to add up,” but that’s just not what I feel like they’re doing. It seems like they’re fixated on closings and I fear they have their best people wasting precious time and political capital on it. In the end I worry we’re going to have a wasted year of CPS progress and almost nothing to show savings-wise.

I don’t oppose all school closings, by any means. I think there are situations where because of population and infrastructure shifts a density of kids is just never coming back. It might make sense to close a school in that situation. But that points to maybe 4-5 closings a year done really strategically and with really careful and honest community engagement and transition planning. That’s what I’ve always supported and it’s what I support now.

As for Detroit/Chicago, I just don’t see the comparison:
Detroit pubic schools went from 180,000 students in 2000 to 70,000 now. Decline of 60%.
Chicago public schools had 425,000 students in 2000 and about 370,000 now. Decline of 15%.

Questions Seth has for CPS regarding the closings:

1)  You’ve estimated $500K in savings per closed school. Does this mean closing 100 schools solves only 5% of the $1B CPS budget deficit?

2) What data exist that shows closing underperforming schools results in academic gains for students?
3) You say we have a “utilization crisis.” What data shows that a school’s being “underutilized” hurts student achievement?
4) Chicago Consortium on Schools Research says in 94% of cases kids from closed Chicago schools didn’t go to “academically strong” new schools. Will this be different?
5) Will you guarantee that no students from closed Level 3 schools will go to another Level 3 school?
6) You say CPS mishandled its last round of 10 closings. Will you share your analysis of what went wrong, and how this will be different?
7) Given that you included 5 of last year’s 10 turnaround schools on the new possible closings list, do you regret those turnarounds?
8) Will you present your plan for where kids from each closed school will go before deciding whether or not each school will close?
9) Have you hired management consultants to assist you in vetting schools for inclusion on the closings list? If so, who are they?
10) How many CPS staff members are currently working on transition plans for 5,792 students with IEPs that may be impacted by closings?

PS- from Pew, re: savings (SETH PROVIDED THIS)

“Savings vary from city to city and often have fallen short of expectations. Milwaukee anticipated reducing expenses by $10 million per year in closing 20 schools but so far has saved $6.6 million annually. After closing 23 schools, Washington officials said they have saved about $16.7 million a year, below the initial projections of $23 million. Pittsburgh reported operational savings of ap- proximately $14.7 million per year from closing 22 schools and laying off 279 staff members. Detroit reported that closing 59 buildings saved $35 million in annual operating costs.
In any event, the average annual savings, at least in the short run, were well under $1 million per school for the districts studied.  The savings from the closings would be larger except that there are new costs as well. These include the expenses associated with mothballing and maintaining sites; transitioning students; moving desks, computers and other district property; and making improvements to the remaining schools, particularly those receiving displaced students. For example, Milwaukee spends more than $1 million a year maintaining vacant buildings, Pittsburgh $2 million, and Kansas City close to $3 million. And generating revenue from closed buildings, either through sale or lease, is not easy.

http://www.pewtrusts.org/our_work_report_detail.aspx?id=85899365152

February 15, 2013 at 7:53 am 185 comments


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