Managing the community’s money wisely

Numbers explain a lot about what is happening within an organization.  That’s also true of the cost/student for the Milford school district.  Here are three ways to look at the cost/student to get a better idea of the efficiencies we have been able to achieve in the way we are managing the community’s money.

Total cost/student

Last year, the district “officially” spent $9,332/student.  This is an after-the-fact calculation: the state takes total expenditures and divides by total students.  But this number is misleading.

Why?  Because it includes everything the district spent, even though some expenditures are offset by related revenue.  For instance, Food Service operations pay for themselves – plus they pay BACK hundreds of thousands to the district to cover things like accounting, custodial, etc.

In addition, the department services not only Milford, but 4 other school districts – yet expenses for these schools are included in our cost/student!

If we back out expenses like this, the new cost/student is $8,810 – 6% lower than the “official” number.

This is especially interesting when compared to the state average cost/pupil, $10,597.  If Milford spent the same amount as the average school district in Ohio – we’d be spending almost $12 million more per year!  And if we compare that to neighbor Mariemont ($12,522/student), this grows to $24.4 million additional!

The net?  Milford is achieving high performance levels while spending much less than most Ohio districts.

 

Growth over time

Another way to look at this cost/student number is over time.  In 2001, our “official” cost/student was $6,704.  However, as in 2012, expenses were included that didn’t belong.  When we adjust that number, it reduces to $6,472.

Those are 2001 dollars.  There has been a lot of inflation since then, so adjusting this up to 2012 dollars (based on Bureau of Labor Statistics calculations), the equivalent in 2012 is $8,390.

Why is this important?  Because when you compare our adjusted 2012 number of $8,810 to the adjusted 2001 number of $8,390, you see our expenses have only increased 5%.

Yet, in the years between, the district has changed a lot.  We moved to neighborhood schools, which are more expensive to run; we added 100,000 square feet on to the high school; we improved our educational quality from effective to a high-performing, excellent school district; etc.

All on 5% more.

 

Administrative cost
School administrative cost is often a point of contention. While not a huge district, at 6,500+ students, Milford is in the top third of Ohio districts in size.  This year’s budget is $55+mill, and we employ almost 700 people.  That’s a large organization by any standard.

Yet, we do run with a minimum of administrators, and this is evident in the amount we spend per student.

In 2012, we reduced administrators from 30 to 26.  These are the people who run all our schools, as well as those who manage the actual business of being a school.  The state reports we spend $863/student on administration.

However, just like total cost/student, this number is misleading.  Food Service and Extended Day administrators are included, yet their salaries/benefits are entirely covered by their operations, resulting in no cost to the district.  If we remove these administrators, we have 22 people running the district and spend $819/student.

Compared to state average, our administrative spending is $2.6 million less than average districts!  And compared to neighbor Mariemont, we are $4.2 million lower, despite their being only 25% of our size!

Milford’s philosophy is to keep administration low, focusing our funds on what counts – our students.

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5 Responses to “Managing the community’s money wisely”

  1. T Cannon Says:

    Mariemont? Why Mariemont?

    The average household income in the Mariemont district is a whopping $100,242. Compare that to the much smaller $63,000 average here in the Milford district. That’s a 58% difference! In Mariemont the percentage of household income that goes to school tax is 1.52% In Milford the percentage is 1.91%. That means our school tax burden as a percentage of income is 25% higher than the burden in Mariemont. In the four surrounding counties there are 49 school districts. Mariemont has the second highest tax rates at $1,574 per 100K. Milford is fourteenth highest at $1,270per 100K. So how does this comparison even begin to make sense? It doesn’t. You leave out all the relevant facts. It’s misleading.

    As far as all these “cost per pupil” statistics and claims, they can be sliced and diced to say just about anything. Things like, “our expenses have only increased 5% since 2001”. Really? I find that impossible to believe.

  2. andreabrady Says:

    Tom, I chose Mariemont for several reasons. Yes, their average income is higher; but that is from pockets, not the district as a whole. Several areas of Mariemont have incomes that are similar to, if not lower than, ours would be. They do not have a lot of business, like Sycamore. The percent that goes to school tax is not a good indicator – if overall their income is higher because of those pockets, then they don’t need as high a percent to make up the amount of money the district is using.

    You’re right, statistics can be sliced & diced to say anything – yours included. If you don’t like the Mariemont comparison, stick with the state average. We’re still spending $12 million less per year!

    And if you don’t trust the numbers I adjusted, take the “official” state numbers: $9,332 this year over $6,704 in 2001, adjusted for inflation (per BLS) to $8,691 in 2012, is a 7% real increase. Still an amazing achievement, given how different the district is.

    One thing you cannot argue with, however, is how successful our enterprise programs are. Request the financials if you want – we’re required to keep them separate from the general fund, so it’s easy to see that they are 1) covering their own expenses completely; and 2) paying BACK the general fund to cover other expenses. I’d wager that no other school district in Ohio can say that … and I don’t know how anyone can argue that costs that are being covered and costs to service other schools should be included in our cost/pupil. So I don’t know how you could argue that it’s just “statistics” when I remove those expenses from the number.

    There are a lot of things that are frustrating about school financing and expenses for many people, myself included. But given what WE can control, I’m more than comfortable saying we are keeping expenses down and acting responsibly. State laws and even the free market system have gotten us into certain situations that are very hard to change, and certainly not possible to change as a lone district. If you want to make real change, join us in trying to change laws and unfunded mandates.

  3. Anonymous Says:

    Mason Schools spends just slightly higher per student than Milford at $10,125, which is also less than the Ohio per-pupil average of $10,696. And yet, Mason — an area with a MUCH higher median income than Milford — didn’t come to taxpayers begging for a levy last year or this year when, like Milford, they lost significant funding from the state. Instead, over the last two years the district has opted to wisely reduce spending by more than $6 million.

    Have the spending cuts hurt Mason students? Perhaps, but it hasn’t stopped the district from consistently having Top 10 academic ratings among Ohio’s 614 school systems, the high school’s long-running “Excellent” state ranking or having record numbers of National Merit semifinalists.

    Perhaps Milford should take a cue from Mason and look to tighten its belts and eliminate unnecessary expenditures instead of relying on taxpayers, who already pay higher rates than other comparable areas, to keep shelling out more and more money.

  4. Anonymous Says:

    Voters came out last fall and rejected the school levy. I find the school board’s method of “try, try and keep trying until people grow weary of turning out to the polls and the levy finally passes” method to be disingenuous, duplicitous and calculating. If voters defeat the levy in May, how many more times should taxpayers prepare to go to the polls to vote on this issue?

    Apart from the fact that Milford’s tax burden is already higher than other similar municipalities, why should taxpayers pay to subsidize participation fees for extracurricular activities like band or sports? Isn’t that what band and sports boosters are supposed to be for?

    Perhaps I would take the need for a levy more seriously if Milford hadn’t squandered its last levy funds several years ago on brand new, state-of-the-art tennis and baseball fields.

  5. andreabrady Says:

    Dear Anonymous,
    I’d love to compare Milford to Mason Schools. As you mention, Mason spent $10,125/pupil last year. That is $793/pupil MORE than Milford spent, per our official number of $9,332.

    That may not sound like a lot, but when you look at the hard numbers behind it, this would translate to adding $5.2 million MORE to Milford’s budget (+5.9 mills), just to be spending the same amount per student as Mason.

    If you compare it to our “real” number, however, we would actually have to add $8.7 million MORE to be equal to Mason. That’s 9.9 mills!

    Looking at it in hard dollars, I certainly wouldn’t say Mason’s spending is just “slighter higher” than Milford’s.

    When Mason cuts $6 million out of their budget (over the next 2 years, not in the past two, according to Mason’s website), that will equate to $571/pupil, using the same attendance figure as 2012. That still does not get them to the level Milford is at – it is still $9,554/pupil, 2.4% higher than our official figure.

    As far as collecting money – Mason has a larger business base than Milford does, which takes part of the burden off the taxpayers. It also has higher property values, which means the district collects more per mill, which means the schools don’t need as many mills to get the funds they need.

    Milford cut $2.4 million out of the budget last year, and that is on top of other reductions made in the past 5 years. Plus, we are cutting $1.4 million more out beginning next year (another $213/pupil at last year’s attendance). If we were spending close to Mason per pupil, I could understand your argument – but we are significantly less. The administration and board have worked hard to reduce expenditures across the board.

    From your second post … Yes, voters defeated the November levy – by a very narrow margin. If the margin had been large – say at least 55%-45% against – then I’m sure the school board would have had a very different conversation about whether to put it on again. But it was an extremely narrow margin, and we believe it’s our responsibility to try once more before burdening the community with significant cuts. As mentioned, we did cut $1.4 million for next year already, whether the May levy passes or fails.

    Extracurriculars cost the district less than $1 million – a very small price to pay for what they offer students. We did cut over $100,000 out of the budget by having teams pay for their own transportation. For the rest, however, the school board believes this investment is worth it to help our students develop additional thinking skills that come from things like music and sports, leadership ability, and much, much more. What does Mason pay for extracurriculars?

    And your final statement: that the district spent levy funds on tennis & baseball fields. That is completely false. NO levy funds were spent on the new fields. That money was from bond money, which cannot be spent for any type of operations (which is what levy funds pay for). The bond money came from a refinance that allowed us to expand the HS, upgrade technology, add 4 rooms to the JH, add the new athletic fields, and more, at NO EXTRA COST to residents. In addition, the Athletic Boosters very generously paid for HALF the entire cost of the new athletic fields. The district spent about $425,000 in bond money on new athletic fields. That equates to a few dollars per household (one time, not even per year). I’d say a few dollars is worth the investment to have facilities the entire community can use and enjoy.

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