Closure savings are labor savings
The District says shuttering 37 schools will lower expenses by $28 million annually. But in the short run there are “substantial” transition costs.
by Bill Hangley, Jr.
Kihn acknowledged that not every transition cost has been fully determined. It’s not clear, for example, what it will cost to hire contractors to help empty decommissioned facilities and move equipment.
In addition, the District assumes that it will face anywhere from $2 million to $3 million in ongoing “carrying costs” associated with maintaining and marketing the shuttered buildings – costs that must be deducted from the projected $28 million in savings until the properties are sold.
But Kihn said the majority of costs have been factored into the overall savings calculations, including $1.5 million for additional school bus service and public transit subsidies for students traveling to new schools.
Of the $28 million in projected savings, officials project that about $22.5 million will come from workforce reduction, including:
- $3.7 million due to reduced teaching staff – a loss of about one teacher overall per closed school;
- $8.7 million from “operations,” including reduced numbers of principals, assistant principals, secretaries, aides, and other administrators;
- $9.2 million from “maintenance” reductions, including building engineers, mechanics, and cleaning staff;
- $600,000 and $277,000 in reductions of school nurses and security guards, respectively.
The remaining savings come from things like reduced utility costs and the end of a pricey lease.
Officials project that despite the displacement of 17,000 students, their charter costs won’t jump dramatically, but will continue to rise at the same rate they have been planning for. Each new charter student increases District costs by $7,000.
Kihn said he doesn’t know how many students displaced by last year’s closures ended up in charter schools and that the District is still analyzing its data. But he said that at this point, it doesn’t look like last year’s closures had an outsized impact on charter enrollment – no more than “5 to 10 percent” of displaced students opted out of the system, he said.
”It could be charters, it could be they moved out of town, could be they’ve gone to Catholic schools.
“That’s actually perfectly consistent with the enrollment decline that we’ve been experiencing,” Kihn said. “So that might suggest that in fact closures have no effect on enrollment decline.”
Officials do not have an estimate of anticipated revenue from building sales. But the five-year budget plan, developed before the final list of 37 recommended closures was complete, counts on building sales generating about $14 million over the next two years.
Likewise, they have no estimate for the number of items that will be removed from the District’s long list of
needed capital improvements, saying they won’t know for sure until the final SRC vote.
But Filardo warned that no district should count on a windfall from selling shuttered buildings. “I don’t know that anybody’s really made any money,” she said. “If you’re in a high-density, wealthy commercial area, you’ll get something for it – but not much. You’ve got to have some really valuable land for it to generate squat.”
And while Filardo says that closing buildings can result in real savings for school districts, her biggest concern is that they can also create new costs for cities and communities.
“I talk about it as cost-shifting,” she said, citing a California study showing that property values increased by $1.50 for every dollar spent on capital improvements in schools. “Part of what you’re not looking at is that disinvesting in education in neighborhoods will depress the property values in those neighborhoods.”