Tuesday, August 1, 2017

Operational Incentives

Over the last several years Iowa school districts have endured very small increases in supplemental state aid year over year. We'll talk more about that next week, but the impact of a low growth rate has a pretty significant negative impact on schools over time. This issue is further challenging in school districts where enrollment is decreasing, and in fact, often times this has a compounding effect. The consequences of this are obvious and lead to school districts cutting positions, and unfortunately in some cases eliminating programs. But as a general rule of thumb, when considering budget cuts in schools, the idea is to keep the cuts as far away from students as possible. That means creating efficiencies wherever we can find them.

One common way to create efficiencies in Iowa public school districts is through operational sharing. This type of arrangement allows school districts to share the services of some employees with other school districts. Basically, one school district serves as the district of employment for a particular employee and 'sub contracts' out the employee to a neighboring school. In Hudson, we share two positions with other school districts: business manager and transportation director. With our business manager, we share the cost of employment 50/50 with Grundy Center. Hudson holds the contract so the business manager is employed by the Hudson Community School District. In the case of transportation director, we share the cost of employment 75/25 with North Tama. In this arrangement, North Tama is the agency of employment and holds that contract. (If you have ever wondered or noticed a Hudson bus in the North Tama garage, now you know the reason why.)

The benefit of this type of arrangement is probably pretty obvious. The cost of employment is split between the two school districts per the agreement. The downside is that the employee can't be in two places at once, and as a result organizational changes in operation are necessary. This might mean that other operational employees have to pick up some of the extra work, or work that is the primary responsibility of the shared employee has to wait until that employee is in the school district. Needless to say, operational sharing does mean that people aren't always readily available to handle issues and some tasks take a little longer to complete. (Admittedly advances in technology make this less burdensome, but there are tasks that need to be completed onsite.) We've been sharing our business manager for several years now, so pretty much have the organizational aspects of this ironed out nicely at this point. Sure, it is not without challenges from time to time, and everyone has to take on a few more responsibilities....

But the state has made it worth it. School districts are incentivized to create these efficiencies by sharing key operational positions. It works like this: you share a business manager, each school district receives the equivalent of five students for funding. If you share a transportation director, each school district receives the equivalent of five students for funding. To keep it from getting out of hand, districts are limited in both the number of operational positions that can be shared and the equivalent amount of funding they can receive. Nevertheless, this funding can go quite a long way to fill the gap created by inadequate funding. So, the equivalent of ten students we receive for operational sharing generates $67,766 in revenue for the school district. Pretty neat deal! But here is the problem: when the law was enacted it had a sunset of five years. That was three years ago. We, and numerous school districts around the state have come to rely on that revenue to keep programs running and afloat. For that reason, the board has set removing the sunset on operational sharing as a legislative priority during the second session of the 87th general assembly, set to commence in January. 

No comments:

Post a Comment