‘The District Is Always Looking for Ways To Rationalize Costs’: Board of Ed Spotlights Money-Saving Efforts

Through contract negotiations, competitive bidding, new carrier agreements and shifting retirees to a state health plan, New Canaan Public Schools has saved nearly $1.6 million annually in the area of employee benefits, district officials said last week.

About 80 percent of the district’s operating budget is devoted to staff salaries or benefits and that is an area “we can be creative in and have some good thoughtful conversations is around the type of health benefits that we offer our employees,” Dr. Jo-Ann Keating, NCPS director of finance and operations, told members of the Board of Education at their regular meeting May 21.

Public schools officials looks especially at plan design changes, such as those in other districts, and cost-sharing options, Keating said at the meeting, held in the Wagner Room at New Canaan High School. Together those components “do generate quite a bit of savings for the school district.”

“And it is really the one thing that we are able to use to offset our salaries, because salaries grow at a much lower rate than health insurance does,” Keating said. “You have close to double-digit increases with trends in some years whereas salaries lower percentages.”

Specifically, she said, the district is saving $747,000 per year through contract negotiations (by replacing a PPO with a high-deductible plan for both certified and non-certified staff, and a 1 percent savings through cost-sharing), $326,000 through competitive bidding (stop loss insurance changes that significantly increased the threshold, creating risk, but saved money as fewer claims came in, and life and long-term disability), and $506,000 through carrier agreements such as pharmacy rebates and performance guarantees, as well as transitioning retirees from Cigna to the state Teachers’ Retirement Board or ‘TRB’ plan.

Board of Ed Chair Dionna Carlson thanked Keating and others for “helping to make these things a reality.”

“I think it highlights the benefit of having our finance and operations person all in one position,” she said. “You get to see from a holistic view how the district operates.”

Carlson added that the teachers, administrators and staff are owed thanks, too, “for their partnership in a lot of the healthcare negotiations we have done to help the district.”

“I think it’s important for the community to know that the district is always looking for ways to rationalize costs,” she said.

The comments came in the context of a look at how the district accomplishes one of its core goals, namely to “promote and practice good stewardship for all district resources in a manner that supports safe and healthy environments and optimizes student learning.”

Keating in her presentation to the board also outlined ways that the district in recent years has saved money in its facilities ($259,000), transportation ($151,000) and operations ($383,000) costs. And she noted that NCPS generates revenue to offset its operating budget through a preschool ($50,000), gate receipts ($21,000), parking fees ($19,000) and sports boosters who contribute toward coaches’ fees ($157,000).

Many of the cost-savings result from changes made in the last few years since Keating herself was hired.

In the area of facilities, some cost-saving work cannot yet be quantified, she said, though there are energy conservation projects that have yielded good trackable results. A few years ago, Keating said, the former facilities manager and superintendent signed an agreement with Eversource for a dozen specific projects, and 10 of them are done. They include conserving heat in classrooms and lighting retrofit projects where district workers have gone through the high school and middle school and “literally re-lamped the entire school.”

“So we not only get brand new lights, better lighting for students, but we save money on the replacement— we don’t have to replace all these fixtures, which are in the hundreds of thousands of dollars,” she said. (The elementary schools are to be done this summer.)

The district also has a “fairly robust preventative maintenance program” that has extended the useful life of some assets though it’s hard at this point to translate that effort into dollars, she said.

“We can say that we create more comfort in our schools and that they operate smoother and are cleaner,” she said.

Keating noted that the public schools’ partnerships with the town have helped—specifically noting the school resource officers at Saxe and NCHS and access to officials such as the fire marshal, public works director and building inspector—and noted that more cost-savings will be had once natural gas is here (that switch likely will be flipped at the schools in the 2019-20 academic year, once the buildings’ infrastructure has been retro-fitted).

Board of Ed members asked about how competitive bidding works (it’s used for large items or those over $10,000 to $15,000), how the district decides whether to insource versus outsource on specific items (price and service), whether a fuel cell can work with solar energy (yes), and what is a “microgrid” (basically a box on your property that generates electricity).

School board member Brendan Hays also asked Keating to talk about energy conservation and what’s been paid for by Eversource versus the district.

She said that Eversource funds a portion of such projects—some at a higher level, such as lighting retrofitting.

“What we do generally is pay for 60 to 70 percent of the project, either through zero percent financing through Eversource, through one of their vendors, or capital through the town, and currently we have both sources,” Keating said.

Leave a Reply

Your email address will not be published. Required fields are marked *