Case Studies: Cost Reduction and Revenue Efficiency (SCOR/RE)

PASBO 57TH ANNUAL CONFERENCE

Case Studies: Cost Reduction and Revenue Efficiency (SCOR/RE)1WEBCAST PARTICIPANTS: Listen to audio over your computer speakers. (If you prefer to listen by phone, you may dial-in using the numbers provided in your invitation . Phone lines will be available 10 minutes prior to the event start.)

Pennsylvania Association of School Business Officials2012 Annual Conference & Exhibits1PRESENTERSSCOR/RE Task Force Members:Dale R. Kirsch, PRSBABusiness ManagerIndiana Area School District

Lynn Kraus, PRSBADirector of Management ServicesLincoln Intermediate Unit 12

Robert Schoch, PRSBADirector of Business AdministrationNorth Penn School District22INTRODUCTIONWhere we were:500 Cost Reduction Strategies (2003)Updated: approximately 700 (2010-2011)Available at www.pasbo.orgWhere we are:SCOR/RE Task Force (2011-2012)Case StudiesWhere we want to be:Hundreds of Case Studies (2012 to ?)33SCOR/RE TASK FORCEPerry BaerChris BerdnikCraig BoltzMichelle BrownPaul FritzGerry GannonJack HurdMike HurleyMartha Kew

Dale KirschLynn KrausMatt MalinowskiWilliam McGillSharon MillerMatthew PrzywaraGina RemboldGreg SanfordBob SaulTom SchneiderBob SchochDoreen Secor

Tim ShromMichele Zimmerman44CASE STUDIESAssignment for PASBO research committeesReview by task forceIndex of cast studies to date (handout)Post to PASBO web siteOn-going effortResearch committeesRegional chaptersPersonal contactsPleadings55TEMPLATE2 to 3 PagesHeadings:Type of StrategyWhere ImplementedDescriptionSavings/RevenueInitial Investment RequirementsBenefitsImplementation BarriersResourcesContact Information66SAMPLE CASE STUDIESFacilities Benchmarking Dale Kirsch

Purchasing Lynn Kraus

Overview of Case Studies- Bob Schoch77INDIANA AREA SCHOOL DISTRICTFACILITIES BENCHMARKINGStrategy:Expenditure ReductionEfficiency MeasureDescription:PASBO facility benchmarking surveyCompare data by square feet, region, studentsPower point presentation of the results88INDIANA AREA SCHOOL DISTRICTFACILITIES BENCHMARKINGDescription: (continued)Interpreting the ResultsWhich measures most appropriate for your LEAUnderstanding relationships between the dataImprovement strategiesEnergy costs (future case study)Custodial staff99INDIANA AREA SCHOOL DISTRICTFACILITIES BENCHMARKINGDescription: (continued)Custodial Staffing:PASBO custodial staffing calculatorHillyard, Inc. CCAP program

Savings/Cost ReductionNew job classification: part-time housekeeper1 custodian position: $50,000 annuallyUpon full implementation: $264,000 annually1010INDIANA AREA SCHOOL DISTRICTFACILITIES BENCHMARKINGInitial Investment:Staff timeFree software

Benefits:AwarenessIncreased efficiency1111INDIANA AREA SCHOOL DISTRICTFACILITIES BENCHMARKINGImplementation Barriers:Staff resistanceMaintaining qualityCost of more efficient equipment

Resources:District web site www.iasd.cc/BUDGET.htmJob descriptions on PASBO ERC1212INDIANA AREA SCHOOL DISTRICTFACILITIES BENCHMARKINGContact Information:Indiana Area School DistrictDale Kirsch, Business [email protected], ext. 1081313Lehigh County SchoolsLine Item Bid

vs

State Contract Price1414Lehigh County SchoolsJOINTPURCHASING1515JOINT PURCHASING MEMBERS1616Art Bid 2,497 items specified.

Coordinated by Carbon Lehigh IU #21.

Art Advisory Committee utilized.

Committee comprised of reps from the schools participating.

Line Item Bid vs State Contract1717

Advisory Committee Responsibility1818Market Basket Analysis

Cost of Items on Line Item Bid: $25,603.

Cost of Items from Kurtz Bros Co-Stars: $42,751.

Cost of Items from School Specialty AEPA: $58,963.SAVINGS COMPARISON1919Saved 67% over Kurtz Co-Stars Price

Saved 130% over School Specialty AEPA Price

Total Art Bid was $139,293.Potential Savings of $93,000 to $181,000.PERCENT SAVINGS2020Market Basket Analysis

Cost of Items on Line Item Bid: $50,647.

Cost from Kurtz Bros Co-Stars: $98,857.

Cost School Specialty Co-Stars: $95,562IU 12 Savings Top 25 Items2121Saved 95% over Kurtz Co-Stars Price.

Saved 89% over School Specialty Co-Stars Price.

Total Art Bid was $248,161.Potential Savings of $220,863 to $235,752.

IU 12 Percent savings2222

Line Item VS State Contract

Pick your poison2323State Contract2424Joint Purchasing Line Item2525DO Purchase

For ConvenienceDont Purchase

For SavingsState Contract2626Line Item Bids vs State ContractCard Cost Reduction StrategyReverse AuctionRebates from Vendors for E-ProcurementMailing Cost Reduction StrategyYear Book Cost ReductionPremium Meals and Co-Op PurchasingScor/re Purchasing Suggestions2727Robert SchochDirector of Business AdministrationNorth Penn School DistrictMarch 2012Case Studies: Cost Reduction and Revenue Efficiency2828Todays PresentationFocusing on labor saving in SCORRE case study submissions to dateMailing methodsAccident and illness preventionElectronic processingElimination of positionsFloor sealerRobotic floor cleanerPASBO advice on staffing adjustmentsRevenue efficiency-Alternative revenue committeesMaximizing ACCESS/Medicaid revenue2929Importance of Labor SavingsLabor costs are the biggest cause of structural deficits (natural increase in expenditures exceeds natural increase in revenues)Labor costs result from the quantity factor (the number of staff) multiplied by the unit cost factor (amount paid). Controlling the quantity factor allows wage increases higher than Act 1. Labor savings can result from labor saving methods, techniques, and equipment.Vacant positions may not need to be refilled if enough labor savings can be found.3030Mailing Cost ReductionsDowningtown ASDContract with service that offers discounted postal rates and courier serviceSavings in mailing equipment rentalSavings in labor include:Contractor posts mail rather than district secretarial staffElimination of daily run to post office by district courier District courier picks up within district 3 days, not daily as before3131Accident and Illness PreventionPittsburgh and Centennial SDsA labor/management joint effort to rewrite accident and illness prevention policies, procedures, and training programsSavings in lost time and replacement laborSavings in workers compensation and healthcare costsResulted in improved morale

3232Electronic Workflow ProcessingCheltenham SDMigrate manual processes to existing automated software processesField trip approval through requisition processTracking of cyber and charter school students through encumbrancesNo new softwareMinimal training due to known processes3333Elimination of PositionsGateway SDEliminated department coordinators and team leader positionsReplaced with teacher coordinatorsEstimated savings of approximately $120,000Gained duty periods and teaching periodsTeachers union has filed a grievance3434Use of Non-acrylic Floor SealersCarlisle ASD, Derry Twsp SD, Southern York SDApproximately 25 hours of labor saved per 10,000 square feet after first year when removal of traditional floor finish is required3535Robotic Floor CleanerUpper Merion SDRobot accounted for 25% of the labor cost reduction which was part of $504,000 reduction of operating budget. 3636PASBO Staffing ComparisonsState College ASDPASBO Facility Benchmarking Study and the Custodial Staffing Formula have been used to adjust staffing levels in custodial, maintenance, and supervisory staff

3737Alternative Revenue CommitteesCentennial, Cheltenham, Pottsgrove, Pennsbury SDsCommittee of community members explore all options including:SponsorshipsAdvertisingNaming rightsTrademarksMerchandisingExclusive rights agreements (pouring rights)Donation of goods and servicesPotential revenue of $250,000 to $400,000/yr3838Time for Questions!

CONFERENCE ATTENDEES: Please come to a microphone to ask your questions.

WEBCAST PARTICIPANTS: Send text questions using the Chat function at the left side of your screen. Type message in box and click the arrow to send.

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Pennsylvania Association of School Business Officials2012 Annual Conference & ExhibitsThank you for your participation!40CONFERENCE ATTENDEES: If you are requesting CPE credit, return the CPE form to the moderator before leaving the room

WEBCAST PARTICIPANTS: Attendance Forms are required to receive either PASBO CEU or CPE credit. Webcast sites are asked to collect Attendance Forms from each participants and return to the PASBO office by March 16.

Pennsylvania Association of School Business Officials2012 Annual Conference & Exhibits