In 2009, a group of prominent Chattanooga business leaders advised the Hamilton County Schools district to cut costs by consolidating buildings and trimming staff. Now, another group is recommending similar action.
For the past six months, a group of 11 business and community leaders has been quietly analyzing the school district's budget and operations, and members have compiled a 70-page report detailing strategies the county and district can implement to bring long-term savings and boost student outcomes.
Among the findings:
» Reduce the number of schools and teachers to boost efficiency and student outcomes.
» Increase teacher and principal salaries with savings from the consolidation of schools and reduction in staff, and align teacher compensation to quality.
» Improve accountability by the county hiring two full-time performance auditors and the district employing a chief information officer, chief operating officer and a chief talent officer.
» Establish a new tax dedicated to schools infrastructure, tech and innovation;
» Make the district part of the planning commission approval process.
School budget working group members
› Valoria Armstrong, president of Tennessee American Water
› Dane Boyington, co-founder of Thinking Media
› Shelia Boyington, co-founder of Thinking Media
› Larry Buie, general manager at Chattanooga Gas Company
› Nick Decosimo, managing shareholder at Elliott Davis Decosimo
› David Eichenthal, managing director at the PFM Group
› James Haley, chairman of Miller & Martin
› Tim Kelly, owner of Kelly Auto
› Michael Lebovitz, executive vice-president of CBL & Associates Properties
› Dana Perry, shareholder at Chambliss Law
› Kim White, president of River City Company
Nick Decosimo, a member of the group, said the goal of the review was to see where the district can improve and start thinking more strategically.
"We'd really love to see some of the suggestions we have made be put into place and some long-term strategy implemented in our schools," said Decosimo, managing shareholder at Elliott Davis and Decosimo. "We'd also like to see some good business practices implemented."
But the reality is that the district can't be more strategic without more revenue, he added.
"There has to be an investment for future savings," Decosimo said.
Next week, Hamilton County Mayor Jim Coppinger will present his budget for the upcoming fiscal year to the county commission, which hasn't voted to raise taxes for schools in 12 years. Coppinger hasn't signaled whether he will ask the commission to approve a tax increase for schools.
But the group's report has been presented privately to members of the Hamilton County Commission in the past couple of weeks, and it recommends that the county create a new tax levy dedicated to school infrastructure, technology and innovation. That would help fund school consolidation and free up savings for the district to spend on teacher quality and reducing the concentration of poverty in certain schools, the report recommends.
Coppinger asked the group to conduct an independent and neutral review of the school district's financial situation last fall.
Some of the things outlined in the report are easier to implement than others, he said Tuesday, adding that he agrees with most of the recommendations.
Coppinger said the group agrees the school district is underfunded, but taxpayers aren't convinced the district is operating efficiently and effectively.
"We have to be able to show to the public what more money would accomplish, and where you're going to see the improvements," Coppinger said.
This report, he said, could be a step in that direction.
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Recommendations for Hamilton County SchoolsView
Student-to-teacher ratio comparisons:
Hamilton County Schools: 14.3
Knox County Schools: 16.3
Metro Nashville Public Schools: 15.8
Shelby County Schools: 16.1
Source: The working group’s report
Teacher salary comparisons:
Starting salary, high salary (adjusted for fluctuations in the consumer price index)
Hamilton County Schools: $37,501, $65,802
Knox County Schools: $41,070.93, $71,095.35
Metro Nashville Public Schools: $41,923.48, $73,540.36
Shelby County Schools: $47,774.17, $82,216.75
Source: the working group’s report
Per-pupil spending comparisons:
Per-pupil spending, local per-pupil contribution
Hamilton County Schools: $9,728.80, $5,146.54
Knox County Schools: $9,043, $4,836.20
Metro Nashville Public Schools: $11,496.30, $6,786.27
Shelby County Schools: $11,221.60, $4,498.74
Williamson County Schools: $8,739.70, $4,850.53
Source: the working group’s report
Hamilton County Schools has a lower student-to-teacher ratio than other large school systems in Tennessee, according to the report, the result of having fewer students per school. Consolidating schools would allow the district to reduce the number of teachers and maintenance and utility costs, producing annual savings of $15 million to $20 million, the report estimates.
The district should develop a multi-year capital plan focused on consolidation of schools and teachers and reducing the concentration of poverty in the county's schools to improve student performance, according to the report.
"Any new investment in school infrastructure should be assessed on this basis," the report states.
The savings from consolidation should be used to increase teacher salaries and improve teacher quality, the report argues. Decades of research show that teachers are the most important in-school factor for boosting academic growth, and poor and minority students in Hamilton County now are much more likely to learn from the district's least effective teachers, according to school data.
The group recommends increasing starting and maximum pay for teachers as a tool to recruit and retain high-performing ones. It also suggests offering signing bonuses for new teachers and incentive bonuses for highly effective and high-demand teachers.
The district also needs to reform its current health benefits program and reduce benefits for retirees before Medicare eligibility, according to the report.
The report notes the school system's central office is not bloated, but instead lacks the capacity to effectively plan. The group recommends the district hire a chief information officer, chief operating officer and a chief talent officer.
"[Hamilton County Schools] may sometimes be inefficient because it has too few staff at central office, not too many," the report states, which limits its ability to plan strategically.
The county also should hire two full-time performance auditors to look for opportunities for savings and evaluate overall performance within the district, helping to increase efficiency and accountability, the report states.
A proposed new tax levy would help fund school consolidations, freeing up new money for the district to reinvest in classroom priorities. That new revenue also would double the funding for capital maintenance and building repair in hopes of eliminating the district's list of more than $200 million in deferred maintenance.
The report also calls for the county to stop billing the school district $3.7 million in trustee fees. And it proposes that the new revenue from the tax cover the $5 million a year the district budgets for maintenance. By taking away these two costs from the district, Hamilton County Schools would have an additional $8.7 million in new revenue within its existing budget.
The proposed new tax also would relieve the county of the $24 million in school-related debt service, the report states.
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Tax Rate comparisons:
Property tax for education, total property tax, local sales tax
Hamilton County: 1.37, 2.77, 2.25
Davidson County: 1.42, 4.52, 2.25
Knox County: 0.88, 2.32, 2.25
Shelby County: 2.14, 4.37, 2.25
Williamson: 2.27, 3.09, 2.25
Source: The working group’s report
Wheel tax comparisons:
Hamilton County: none
Davidson County: $55
Knox County: $36
Shelby County: $50
Williamson County: $25.75
Source: The working group’s report
Tiffanie Robinson, finance chairwoman of the Hamilton County Board of Education, said she's glad this group came together to lend its expertise to the school district.
"Something that has been missing from [the] central office is the ability to budget strategically," she said, adding that the report will be helpful for the board moving forward and that she plans for the board to discuss it in an upcoming finance committee meeting.
"I hope the board will adopt some of the things put into the report," she said. "And I hope the commission will do the same and central office, too."
Back in 2009, a citizens' advisory panel appointed by the school board recommended that the district cut costs by consolidating schools and the number of teachers in the district.
Hamilton County Schools was facing a $20.2 million projected deficit at the time, which the advisory panel believed was largely due to a bloated personnel count and small and underused school buildings. The group also said the district and county were not properly funding school maintenance.
But the school board and district leaders ignored the recommendations, and the advisory panel stopped meeting.
Kurt Faires, a local attorney, was on the 2009 panel, and he said at the time the group warned Hamilton County Schools the problems would grow if no action was taken.
"The fact that we are still talking about school consolidation eight years later and nothing has happened is a problem," Faires said Tuesday. "Twelve years without a tax increase [for schools] is unconscionable."
Coppinger said Tuesday that over the years taxpayers have not been convinced of the need to increase school funding.
"We see the need," he said. "But in fairness, we need to convince the taxpayers of the county there is a need."
Coppinger said when a permanent superintendent is chosen to lead the school district, there will be an opportunity for the county to look at the report with them in detail, and potentially start working to implement some of the strategies.
Decosimo said he hopes the school district and county will take action on everything outlined in the report, saying he believes the entire plan needs to be implemented and not just some aspects of it. He said the group has been working on the project because its members want to see public schools improve.
"I think every person in Chattanooga should care about our schools and want to see them somehow do better," he said.
Contact staff writer Kendi A. Rainwater at email@example.com or 423-757-6592. Follow her on Twitter @kendi_and.
A previous version of this story said the district shouldn't have to pay $3.7 million in assessor fees. The current version has been corrected to say trustee fees.
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