Politicians often say that business people are better at managing a government budget because they know how to be cost-efficient.
But two years ago, when the Hamilton County Board of Education asked a group of business people to review the school system’s budget, the sweeping recommendations the group made to save about $60 million were mostly spurned.
Most of the Citizen Advisory Panel’s suggestions, which included cutting more than 1,000 employees and closing several smaller schools, were not implemented. The school board cut about 34 positions and closed three schools, but it also opened three new ones.
The panel disbanded after less than a year, frustrated when school officials ignored most of their recommendations.
But a few former members say some of the panel’s ideas are still relevant. The school board has yet to finalize a budget for next year and must choose a successor to Superintendent Jim Scales, whose last day on the job was Friday.
According to one former panel member, the key issue boils down to whether the community is willing to sacrifice smaller community schools in favor of consolidated larger schools, or pay more in taxes for staff and maintenance at neighborhood schools.
With costs such as employee benefits going up and no new money coming out of the Hamilton County Commission — not to mention the end of federal stimulus funds this year — the schools’ strategy has focused on cutting expenses, forgoing employee raises and delaying needed maintenance. Over the last five years, administrators said they sliced $35 million in operating costs.
Panel member Bob Greving, a former chief financial officer at Unum, said the new schools superintendent will have a hard time being successful if funding issues aren’t addressed.
“I think it’s going to be very difficult,” he said. “It hasn’t gotten desperate enough for them to face those issues yet.”
Greving thinks the school board missed an opportunity to use the advisory panel to make its case to the community.
He and panel member Kurt Faires said the key problem was the committee was telling school board members things they didn’t want to hear.
“The suggestions of the board would’ve been very politically difficult to implement,” Faires said.
He said school board members and county commissioners were reluctant to make the deep cuts the panel suggested. Faires criticized the board’s plan to plug a $20 million budget shortfall for the 2010-11 budget year.
“One-time revenues, no concessions, too many people, too many buildings, not enough books, schools crumbling for lack of maintenance,” Faires wrote in an email to Scales. “What have we accomplished other than putting off tough decisions?”
But panel members, some of the most influential people in Hamilton County, were willing to go to local political meetings and town halls to convince the public of the need for change.
“We could’ve provided some of that political cover to them and they chose not to use that,” Greving said.
Scales agreed that the school board ignored most of the recommendations.
“I would just say that we haven’t been in a position to implement some of the things we talked about because we haven’t had the funds,” Scales said.
Size vs efficiency
Scales assembled the diverse, 21-member group that included retired CEOs, businessmen and women, and PTA members in 2009, hoping to educate the community about schools needs.
E-mails reveal the members took their jobs seriously.
Greving wrote in a February 2009 email that is “critical” for the school board and superintendent to “take a more aggressive action toward fixing the business model that perpetuates the district’s operational and financial problems.”
One e-mail signed by several members of the group encouraged Department of Education officials to develop a plan to address both short-term and long-term funding issues.
“Now is the time for leadership,” they wrote. “We stand together with you and pledge to support your efforts in any way we reasonably can.”
The panel’s chief recommendations were to close several smaller and inefficient schools and lay off as many as 1,400 people to put staffing levels closer to state guidelines.
In 2009, 80 percent of the county’s schools had too few students to cover the costs of running them, according to newspaper archives.
Tommy Kranz, the former schools chief financial officer, said the plan was unrealistic.
“You’re talking about having to cut 1,400 out of 3,000 teachers,” Kranz said. “That’s huge and if you try that, that isn’t going to happen.” He said the school system would not have met state requirements on class sizes.
The panel also chided the school board for spending too little on maintenance.
In one email, Greving wrote that the $4 million allotted annually for capital maintenance projects “seems on the surface to be inadequate to maintain much less improve the structural integrity of our school buildings.”
He noted that Unum maintains 3 million square feet of office space and spends many times more than the county does to maintain its 78 schools.
“It is difficult to understand how we can maintain our schools in quality condition for our students and faculty at a small fraction of what appears to be required,” he wrote.
Besides drastic staffing cuts, the committee said the board should challenge the teachers union on costly benefits. The board started on that this year, increasing insurance premiums from $25 per month per employee to $100.
Back to funding
Greving said the school board’s current situation is untenable because community and elected leaders are committed to having small schools, but haven’t been willing to pay more in taxes.
County taxpayers are paying a comparable tax rate to other large school systems in Knoxville, Memphis and Nashville, he said. However, the way the schools in Hamilton County operate is more expensive than those systems.
“Time and time again the community keeps saying they want great schools but nobody’s stepping up to fund them,” Greving said.
School board member Rhonda Thurman said while some of the board’s cost-cutting measures were extreme, in many cases they were right on point.
“There were some pretty radical ideas and there were some smart people there,” she said.
Other school board members — Chip Baker, Linda Mosley, Everett Fairchild and George Ricks — who were on the board when the committee was formed said they’d have to go back and look at the committee’s recommendations to remember what they were.
Dan Whisenhunt covers Hamilton County government for the Times Free Press. A native of Mobile, Ala., Dan earned a degree in broadcast journalism from the University of Alabama. He won first place for best in-depth news coverage in the 2010 Alabama Press Association contest; the FOI-First Amendment Award in the 2007 Alabama Press Association contest; first place for best public service story in the Alabama AP Managing Editors contest in 2009 for economic coverage; and ...