Cost Containment – Oyster River Cooperative School District

Oyster River Cooperative School District posted Tuition Students: How They Help Oyster River on their website. They state:

“Currently, we fill seventy (70) of those seats with Barrington students at $13,000 per seat which brings in over $900,000 in revenue. All of the tuition money that is brought in is used to offset the tax impact of ORCSD to the towns of Durham, Lee and Madbury. ORHS has not added teachers, as students blend seamlessly into the high school atmosphere, helping to sustain high school classes and programs already offered.”

Let’s take a look at their School Budget request for our collective vote on Tuesday, 11 March. They are requesting a total increase of $1,814,392 which includes $735,396 for New Positions. Curious, perhaps these new positions are not for teachers as the statement above suggests but rather for more administrators, or bus drivers or food service personnel?

Based on the enrollment projections I received from District Staff, Tuition students increase by 5 while Durham, Lee and Madbury students decline by 21 for a net year-over-year decline of 16! What is driving the need for $735,396 in New Positions?

Perhaps as Warrant Article 6 implies, ORCSD believes their product (education) is equivalent to Coe-Brown’s and it is appropriate to price their product equivalent to Coe-Brown. Durham, Lee and Madbury could help them complete the transition to Coe-Brown status.

What if Durham, Lee and Madbury dissolve the Cooperative School Agreement? Durham, alone, then offers $13,000,000 to ORCSD (more than the existing outstanding long-term debt) to aid the transition to Private School effectively extinguishing any ORCSD capital obligations for Durham, Lee and Madbury? What if Durham, Lee and Madbury then offered to tuition all of their students to ORCSD for a period of 5 years at a tuition rate of $15,000, not to increase by more than the Guild increase? A tuition rate $1,000 more than what ORCSD believes is fair for Barrington!

What would happen? Assume Durham issues a 30-year bond at an interest rate of 5% for $13,000,000. The Tuition rate, as with Barrington, is before applying the State Grant.

Durham

Lee

Madbury

Est 2013-2014 ADM

919.71

678.14

354.02

Tuition Rate

$15,000

$15,000

$15,000

This would result in:

Durham

Lee

Madbury

Debt Service

$845,669

Tuition

$13,795,650

$10,172,100

$5,310,300

Gross Education Cost

$14,641,319

$10,172,100

$5,310,300

State Grant

$1,242,406

$2,602,095

$925,690

Net Education Cost

$13,398,913

$7,570,005

$4,384,610

Gross Cost per ADM

$15,919

$15,000

$15,000

Net Cost per ADM

$14,569

$11,163

$12,385

Current Net per ADM

$17,524

$11,005

$12,846

Savings per ADM

$2,955

-$158

$461

Gross Savings

$2,718,085

-$107,074

$163,131

This simply change would result in Durham saving more than 3 times the new debt issuance cost. The tables above are for FY2014, Lee is projected to lose over $137,000 in FY 2015 State Grant support, if that loss had been imputed in the Current Net per ADM then Lee would have a positive savings as well. Ideally FY2015 estimates would have been used but I was unable to obtain the ADM estimate by community for Durham, Lee and Madbury.

Competition is good for all. If Coe-Brown can survive at $13,500 then ORCSD should be able to survive at $15,000.

Vote No on Warrant Article 7 unless you believe that we need $735,396 in New Positions while enrollment declines.

Help the ORCSD become more competitive Vote No on all other Warrant Articles, except for #3. A monopoly service provider should be able to get their costs within $1,500 of the competitor they compare themselves to.

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2 Responses to Cost Containment – Oyster River Cooperative School District

  1. Josh says:

    Before you totally dismiss the need for new positions, it could be that not all the proposed hires are for direct instruction of students. Are there outstanding maintenance needs that require more staffing to meet? Curricular initiatives, either in-house or mandated by the government, which need leadership (e.g. many districts have added a data specialist to help them meet federal reporting standards)? Also, remember that teachers are not entirely fungible; the French teachers whose enrollments are slowly slipping can’t be transformed into Mandarin teachers to meet that rising demand. The same is true for special education which often drives increases in staffing. All that being said, the number does seem very high for a district with essentially flat enrollment.

    • T20R11 says:

      I was commenting on data that was presented on their website. I attempted to find an explanation of the New Positions but was unable to do that prior to my post. Given their assurance that Tuition students fit in seamlessly with the existing teaching staff, the presumption is that the New Positions are non-instructional. I appreciate that teachers are not fungible but I also appreciate that taxpayers funds, while also fungible, are not limitless.

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