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At their joint meeting on Jan. 14, the District 65 and 202 School Boards discussed conceptually how the two Districts could operate more effectively together, including through increased collaboration, virtual consolidation, or perhaps consolidation. While the pros and cons of consolidating the two School Districts were presented, it appears already to be a dead issue.
The Joint Committee of the School Boards will consider, though, whether the Districts could work together better in certain areas through increased collaboration or virtual consolidation.
Some Pros and Cons of Consolidation and Virtual Consolidation
Tyler Thornton presented a report that she and Kevin Poff prepared in June 2012 concerning consolidation and virtual consolidation of school districts. They were students at the Kellogg School of Management when they prepared the report. Therese McGuire, their supervising professor at Kellogg, served as a member of the District 65 Citizens Ad Hoc Budget Committee in 2011.
Consolidation: On the financial side, Ms. Thornton said consolidation of school districts may reduce duplication of staff and provide economies of scale. She said, though, that research shows that consolidation primarily creates efficiencies that benefit smaller school districts – those with less than 1,500 students – and that larger school districts will likely not achieve efficiencies through consolidation.
One drawback to consolidation, she said, is that the salaries of elementary school teachers may be increased to the level of high school teachers. While this is not required by state statute, she said it has happened as a matter of practice, and the State subsidizes the cost of doing so for a few years. Her report says the average teacher base salary at District 65 is $69,747, while the average at Evanston Township High School is $94,159, a difference of $24,412.
District 65 has about 675 teachers; to bring them up to the average base salary of ETHS teachers would cost an additional $17 million per year.
On the academic side, Ms. Thornton said there are “lots of compelling reasons” to believe that consolidation would result in significant academic benefits, such as a single point of accountability for K-12 outcomes. Others include shared expectations, aligned performance metrics, and coordination of the curriculum across the K-12 grade levels.
“However,” she added, “the experts we spoke with stressed that the research is not conclusive when it comes to academic outcomes in unit vs. dual districts.”
Virtual Consolidation: An alternative to consolidation is “virtual consolidation,” a concept that has been discussed by the Classroom First Commission, said Ms. Thornton. “The basic idea is for districts to find high-leverage ways to act like they are consolidated, without going through the legal and physical process of merging. If done correctly, this means districts can realize the financial and/or academic benefits of consolidation without the big downside, such as upfront consolidation costs and salary alignment.”
Ms. Thornton said Districts 65 and 202 already coordinate and collaborate in some areas such as ETHS provides lunches to some District 65 schools, they share the legal expense in challenging property tax appeals, they work with the City in working out TIF sharing agreements, and they cooperate in managing Park School.
Some other areas that may be worth exploring, she said, are sharing a superintendent or central office personnel, recruiting teachers, negotiating health insurance, developing curriculum and assessment, and providing professional development.
Richard Rykhus, District 65 Board member, said he liked the “virtual option … because it gives us the flexibility to reap the benefits without the downside.”
He suggested that the Districts use a summary in Ms. Thornton’s report that lists some general areas that may be worth exploring to streamline operations, reduce costs and improve academics. He said the summary could be used as “a very general framework” to determine the areas in which Districts 65 and 202 were already doing well in terms of collaborating together, and to examine opportunities for virtual consolidation.
Scott Rochelle, District 202 Board member, said he thought “any financial benefits are going to be minimal.” He added, “I think we should dive into the academic side to see the benefit there.”
Jonathan Baum, District 202 Board member, said, “It makes sense for us to identify the ends first, that is, what are those activities that we need to do jointly to do them best, whether it’s financial or academic.”
He said the Boards, with the help of administrators, should develop a list of things they want to achieve, and then take that list and determine whether they could best achieve them by working independently or through virtual consolidation or only through complete consolidation.
“To me it’s always been the academics,” said Mr. Baum. “And for me one of those objectives would be we need a pre-K through 12 plan, a comprehensive plan, for reducing the achievement gap. I think we could do that without any form of consolidation.”
Mark Metz, District 202 Board president said, “Every project ought to start with a clear simple definition of what it is we’re trying to accomplish. … I think that’s exactly how we go about it. … All good comes from that whether we make any organizational changes ultimately or not.”
He said he would broaden the discussion from “virtual consolidation” to include “collaboration” as another way in which the Districts could work together.
Tracy Quattrocki, District 65 Board member, agreed with identifying the objectives, and suggested that the Districts could draw on Northwestern students for any additional research. Dr. McGuire said she thought that could be arranged.
Mr. Rykhus suggested the Joint Committee of Districts 65 and 202 be used to consider: “What are our objectives and how do we go about trying to accomplish them.”
Mr. Metz said the Joint Committee, which consists of the presidents of each Board, one additional member of each Board and the superintendents, would “do some brainstorming around what are we doing well together, where could we do better together, and then we could get to the structure of do we need a study.” He said the idea of reaching out to Northwestern University and asking for some help was a good idea.
“Regardless of where this heads,” said District 65 Superintendent Hardy Murphy, “one thing that was said tonight is probably worth the two of us continuing the conversation. I think a pre-K to 12 plan to talk about ways in a concerted effort between the two Districts to close the achievement gap is probably an idea that you and I should talk about with a little more depth and detail.”
The Classroom First Commission – Virtual Consolidation and Economies of Scale
The Classrooms First Commission was formed by the Illinois legislature in 2011 to study and find ways to redirect spending from administrative operations to classrooms. The Commission, chaired by Lieutenant Governor Sheila Simon, issued its final report in July 2012, with 23 recommendations.
The Commission found that merging separate elementary and high school districts into “”unit”” or P-12 districts would cost the State at least $3 billion under current law. The cost stems primarily from increasing salaries of teachers in K-8 school districts to the levels of teachers in high school districts, a cost that the State subsidizes for several years. The Commission thus decided that school districts should not be forced to merge, but that the State should make it easier for “”troubled districts”” to consolidate – for example, those with declining enrollments or financial instability. The Commission also recommends that current laws that incentivize consolidation be gutted and replaced with ones that are both affordable to the State and tailored to its reorganization targets.
The Commission also focused on two other strategies “”to boost efficiency at even the highest performing districts: virtual reorganization and economies of scale.”” The report says, “”We recommend several reforms that will clear the way for districts to share administrators and services and to cooperate on a statewide basis. We must merge our buying power in ways largely invisible to students, so we can redirect that cash toward their measurable education growth.””
The report includes four recommendations that would promote shared service agreements between school districts:
• The Illinois State Board of Education should provide resource management software to allow similar school districts to compare operational expenses and identify cost savings in instruction, transportation, food services, administrative and facility maintainance.
• Establish an online repository for existing shared service and outsourcing agreements, along with examples of proven efficiency practices that could be replicated.
• Create a revolving fund to provide short-term, low-interest loans to support school district efficiency studies and the cost of starting up shared-service ventures. The loans would be repaid with the money gained through resulting streamlining.
• Eliminate restrictions that currently preclude outsourcing in non-instructional areas.