FAST Part 3: Smart Practices
Smart Practices for Minimizing Costs
This part of the FAST report summarizes the results of these discussions, with the goal of sharing replicable “Smart Practices” and informing policy discussions at the state and local levels. Where applicable, districts and local stakeholders are encouraged to use these Smart Practices as blueprints for improving their own operations.
House Bill 3, the 2009 legislation calling for the FAST project, charged the Texas Comptroller with “identify[ing] potential areas for district and campus improvement.” To accomplish this task, the Comptroller’s research team followed four related strategies:
- evaluated its study outcomes to identify districts that have succeeded in improving student achievement while keeping expenditures relatively low – the 43 “five-star” districts cited in Results.
- contacted each of these districts and asked them to describe the strategies and programs they credit as contributing to their success;
- contacted other districts showing low spending relative to their fiscal peers or strong academic performance; and
- consulted experts in the field – superintendents, school board members, staff at regional education service centers, stakeholder associations and others with knowledge of effective school district practices – who identified other school districts that might offer additional “smart practice” ideas.
The research team sought school district practices that meet one or more of the following criteria:
- has proven to be an effective practice for containing, reducing or avoiding costs;
- improves the efficiency and effectiveness of educational program delivery, including demonstrated improvement in student performance;
- is estimated to produce a significant long-term return on investment for the district;
- has significantly increased purchasing power though the use of purchasing partnerships;
- has realized efficiencies through the use of shared services arrangements with other districts; and/or
- can be implemented by other districts.
Districts are exploring ways to use technology to make traditional educational delivery methods more efficient and effective.
This section provides a detailed discussion of the resulting collection of “smart practices,” as a guide to other Texas school districts interested in improving the effectiveness of their operations and educational programs. Part 3 is available in printable format.
The smart practices fall into four broad categories:
- instruction and staffing
- financial management and technology solutions
- purchasing and student services
Instruction and Staffing
Payroll accounts for nearly 60 percent of an average school district’s expenditures. Many districts have found ways to reduce staffing levels through attrition and staff consolidation. Some have taken advantage of class-size waivers to reduce the number of teachers needed at each campus.
Many districts, particularly those in rural areas, use online education and distance learning to offer classes they would not be able to provide directly. Districts also use Web-based programs to provide professional training and distribute lesson plans. One district reported that distance learning and dual-credit arrangements with the local community college had saved it $450,000 a year.
Financial Management and Technology solutions
Districts also have found ways to reduce their costs through financial management and technology strategies.
Districts may realize significant savings by refinancing their bond debt. One district reported that its debt management program has saved it more than $40 million annually in interest payments on bonds over the past two years.
Technological upgrades, while entailing upfront costs, can pay off with long-term savings. One district found a way to minimize its costs by sharing the cost of a network infrastructure – including telephone, Internet and an in-ground fiber-optic network – with the city, saving it $610,000. The district and the city also share a data center.
Purchasing and Student Services
Many smart practices fall in the category of purchasing, such as using co-ops and regional education service centers to reduce costs and improve services.
Purchasing co-ops are a very common way to save money; some districts report savings of more than $1 million a year. A number of such co-ops are available to schools, including the Comptroller’s State of Texas CO-OP and others offered through ESCs and other organizations.
Districts have found innovative and economical ways to share (or contract for) services. Many small districts contract with their region’s education service center (ESC) for payroll, benefit and other business services. Others have joined co-ops to obtain special education, technology and alternative education services. Shared services saved one district approximately $2.5 million a year.
Smart practices related to the construction and maintenance of facilities were the most frequently cited areas for potential cost savings by school districts.
Some districts have found savings in student services, particularly transportation and food service.
Many districts buy bus and fleet fuel and food for school lunch programs through purchasing co-ops. One district even produces its own biofuel, at an estimated savings of $57,000 annually compared to the commercial cost of diesel fuel.
Computerized bus route scheduling and food purchasing software have helped some districts realize savings and operational efficiencies. Two districts each reported at least $1.7 million in savings from routing software and other innovative transportation practices, and another credited its automated food service system as contributing to more than $400,000 in annual savings.
Many smart practices offering potential savings involved facility construction and maintenance.
Many fast-growing districts use architectural prototypes to save money on building design fees, which can account for up to 6 percent of school construction costs. Reducing design fees through the use of architectural prototypes can save $150,000 to $300,000 on a typical school building.
A large number of districts have found that “going green” can be cost-effective. Energy and water conservation practices account for a substantial amount of savings – more than $40 million in the districts we contacted.
Several districts cited facility sharing arrangements with other districts or local governments, with shared recreational facilities and office space offering substantial savings.