Office of Performance Evaluations

Feasibility of School District Services Consolidation

Released February 2009

Report 09-04

The executive summary of the report is provided below. The full report with exhibits is available in PDF (see above), and a limited number of printed copies are available from the Office of Performance Evaluations (OPE). Specific questions about the report should be directed to OPE. General questions should be directed to the State Department of Education and the State Board of Education.

Executive Summary

Consolidation of school district services has emerged in Idaho and across the country as an innovative and efficient way to provide services that districts may not be able to provide on their own. While Idaho is one of just a few states that does not offer a state supported, regional approach to services consolidation, many districts throughout the state collaborate with neighboring districts to improve the quality of education and maximize scarce financial resources.

The Department of Education should assist districts in developing and implementing ways to consolidate services, particularly in three areas: purchasing of supplies and materials, professional development services, and pupil transportation. The Legislature should consider providing incentives to districts for services consolidation and should consider creating transportation cooperatives.

The Legislature should also consider future studies in employee health insurance and special education support services. These two areas emerged in our study as likely candidates for potential consolidation. Additionally, the ongoing increases in transportation costs may warrant a review of the pupil transportation program. We were unable to explore these areas in depth due to scope, time, and data limitations.

Even with additional incentives provided to school districts, the consolidation of services alone will not be enough to find significant savings for the state or districts. To potentially achieve greater savings, the Legislature should consider a review of major expenditure areas such as administration salaries, which may lead to a discussion of the feasibility of consolidating district administration or districts themselves.

Perceptions Affect Feasibility of Consolidation Efforts

Historically, Idaho school districts have reported varying levels of success in working together to provide services. In our review of current service consolidation efforts, we found that districts are generally working to consolidate services with other districts, but the feasibility of such consolidation depends on many factors. Some of these factors include a perceived loss of control over resources when working with other districts, being too far away from neighboring districts, and being a different size than neighboring districts.

To better understand current consolidation efforts and the feasibility of future efforts, we asked superintendents, business managers, and principals about their perceptions of services consolidation. Less than half of respondents reported that they thought services consolidation could take place in a way that was beneficial to their district, and just 30 percent of superintendents and business managers felt that an education service agency would work in Idaho. Overall, survey respondents and focus group participants stressed that one model would not work for all districts, and that any efforts must take into consideration individual district needs and challenges.

Districts Report Current Efforts Have Saved Money and Improved Services

Although stakeholders identified potential limitations to the feasibility of consolidating services, we found numerous examples of districts that have reported successful partnerships with other districts or universities to provide a variety of services.

• COSSA, the Canyon-Owyhee School Service Agency, is a five-district cooperative that provides professional-technical education, an alternative high school, special education, and gifted and talented programs. In the 2005–2006 school year, COSSA reported saving its participating districts over $2 million in special education services.
• The Idaho School District Council, which is open to all school districts and charter schools, offers a wide array of services. These services include health insurance pricing and cooperative purchasing opportunities. Over three-fourths of school districts use the council to obtain competitive pricing for their health insurance. One superintendent from a small district said his district relies on the council to afford health insurance.
• The League of Schools is comprised of 15 districts and provides professional development opportunities, research resources, grant writing, early college programs, and curriculum development for member districts. Housed within Idaho State University’s Center for School Improvement, the league leverages university education department resources to facilitate educational training opportunities for member districts.
• Professional-technical education (PTE) includes education courses, programs, training, and services for vocational, technical, and applied technology careers. PTE schools, which can be comprised of more than one district, work together to provide highly qualified instructors, state-of-the-art equipment, and reduce the duplication of services among participating districts. At one PTE school, participating districts are able to offer programs to their students at one-third of the cost than the schools would be able to offer separately.

Opportunities Exist for Additional Consolidation

During our focus groups, we asked superintendents what school district services were most feasible for consolidation. The most commonly reported non-instructional services were employee health insurance, maintenance and custodial, professional development, pupil transportation, purchasing of supplies and materials, and special education support services.

Our analyses suggest that in relation to district size, overall average costs per pupil decreased as district pupil counts increased. Very large districts were the exception, as their overall per pupil spending was nearly as high as the small districts. While very large districts may be able to consolidate services within their individual district, smaller districts should be encouraged to work with other districts to explore additional services consolidation in the following three areas.

Professional Development. Our financial analysis revealed that at least 48 districts contracted for professional development services and reported spending $1.3 million in General Maintenance and Operation Fund expenditures. Less than 25 percent of survey respondents reported working with other districts to provide those services. Districts should pool their resources for professional development services, which may help districts provide higher quality training opportunities for district employees.

Pupil Transportation. In fiscal year 2007, the state reimbursed almost $70 million on transportation expenditures to districts. While the funding cap put into place in fiscal year 2005 has reduced overall state spending, transportation costs have increased beyond the rate of inflation from fiscal year 2004 to fiscal year 2007. These increases have occurred despite the fact that the total number of riders has not increased significantly. Districts should continue to evaluate their transportation services and find ways to work with neighboring districts— such as busing students to the same extra-curricular activities or by consolidating the number of bus routes and eliminating duplicative staff positions.

Purchasing of Supplies and Materials. We found that per pupil costs for general supplies and materials decreased as the number of students increased. The 69 districts that provided us with detailed information in this category reported spending over $17 million on general office supplies. This spending represented about 23 percent of total supply spending or approximately $108 per pupil. More cooperatives can be formed to encourage districts to work together and take advantage of competitive pricing based on purchasing in bulk; districts can then save both staff time and money.

Looking Forward

As Idaho continues to explore more economical means of delivering services, consolidating services—whether through collaboration, cooperation, or formal consortiums—is a way for districts to better serve their staff and students. Any consolidation at the state level should consider factors that contribute to a district’s decision whether to partner with another district—including district size, geographic challenges, local control concerns, wide variations in school district spending, and the large number of rural school districts. We suggest the following areas for the Department of Education and the Legislature to consider.

Department of Education Should Assist Districts in Applying Existing Consolidation Models

Given the success of current cooperative efforts throughout the state, districts clearly recognize the value of working together to provide services to students and staff. However, many districts, particularly smaller districts, have limited staff and financial resources to do so. The Department of Education should assist districts with the development and implementation of applying existing cooperative models to other services, such as professional development, purchasing supplies and materials, and pupil transportation.

By building on existing infrastructure and expertise at the department level, districts can increase their access to resources. Education service agencies, which develop, manage, and provide services or programs to local school districts, emerged as a viable option in many states for districts to pool their resources but generally incur some costs to the state. When economic conditions are more favorable, the department may wish to consider this approach for Idaho.

Legislature Should Expand Statute to Include Services Consolidation

The Legislature should consider modifying statute to include incentives for services consolidation. Statute currently provides districts with incentives to pursue consolidation of districts but not services. The addition of new language would help districts determine if consolidating services is indeed more economical.

Legislature Should Create Transportation Cooperatives

The Legislature should consider amending statute to allow for the creation of transportation cooperatives. Cooperatives would provide districts with a method to find additional savings with a neighboring district and allow those districts to report expenditures jointly. Both the state and districts could reduce pupil transportation costs by consolidating bus routes and eliminating the duplication of staff positions.

Legislature Should Consider Exploring Other Areas for Potential Consolidation

Employee health insurance, maintenance and custodial services, and special education support services were mentioned frequently throughout our study as areas that districts would be interested in consolidating. However, because of the complex nature of each of these areas, additional studies are necessary to thoroughly analyze the feasibility of such consolidation. Additionally, the ongoing increases in transportation costs may warrant a review of the pupil transportation program. We were unable to explore these areas in depth due to scope, time, and data limitations.

The consolidation of services alone will not provide the state with significant cost savings. A review of major expenditure areas, such as administration salaries, may provide more information about areas for greater savings and could lead to a discussion of the feasibility of consolidating district administration or districts themselves.

Acknowledgements

We appreciate the assistance we received from the State Board of Education and the State Department of Education, as well as superintendents, principals, and business managers throughout Idaho’s school districts.

Amy Lorenzo, Jennifer Etter Hill, and Jared Tatro of the Office of Performance Evaluations conducted this study. Margaret Campbell was copy editor. Additional assistance was provided by two consultants:

• Kathleen Sullivan, Ph.D., former Professor and Director of the Center for Educational Research and Evaluation, University of Mississippi, Oxford, Mississippi
• Tedd McDonald, Ph.D., Associate Professor and Director of the Master of Health Science Program, Boise State University, Boise, Idaho