Five new ways for a school district to maximize its money
Stories by Madelynn Coldironl - Staff Writer
School administrators who think they’ve wrung every last cent out of their tight budgets should think again.
Five new programs have been launched with KSBA’s backing that will give districts new ways to maximize their resources, from reducing natural gas costs to saving administrative time spent on some employee insurance programs.
They’ve come about through KSBA partnerships or endorsements that will benefit school systems. The new developments are:
• A program that gives groups of school districts the best deal on natural gas supplies.
• A partnership that will help meet districts’ growing facilities needs and improve their staff’s training.
• An option for school employee insurance that will cut down on central office paperwork and another that will boost morale, but not the bottom line.
• Low-cost financing for projects to make school buildings more energy efficient.
KSBA Executive Director Bill Scott said the developments are aimed at giving districts “the most bang for their buck” during a time of economic pressure. The savings on energy and facility costs alone potentially can reduce layoffs of valuable staff that work in those areas, he said.
The endorsements and partnerships also are in line with the association’s mission to help local boards maximize the success of every student, Scott added.
“Research has consistently shown that the most successful schools and districts are those that recruit and retain the best teachers as well as provide safe and supportive learning environments,” he said. “Each of these partnerships is designed to help our members meet one or both of these goals in the most efficient way possible. Furthermore, we strongly believe that every dollar we can help our members save on facilities and employee benefits can be channeled back into the classroom on behalf of student learning.”
Budget cutting and microscopic cost-of-living increases are taking a toll on school employee morale, but some districts have turned to a benefits program to offer a little extra for their staff.
The program, endorsed by KSBA and provided by Liberty Mutual, allows employees to buy auto, home, boat, motorcycle and RV coverage at group discount prices through payroll deductions. There is no cost to school districts for the program and it is voluntary for employees.
Liberty Mutual handles the administrative end of the program, so that burden does not fall to central office staff. The company provides marketing materials and promotes the program, and manages the enrollment process and ongoing support.
Nearly 20 Kentucky school districts have already signed up for this program.
Eighty percent of Liberty Mutual’s personal insurance coverage is provided through services like this, which are called affinity programs. They serve Kentucky school districts, universities and professional associations.
KSBA is one of 14,000 groups nationwide that sponsor Liberty Mutual’s Auto and Home Voluntary Benefit Program. In addition to supporting district employees, KSBA’s license agreement with the insurance company also provides the association with a royalty that will help it maintain and improve services to school board teams.
— For more information on this program, contact Myron Thompson, Bill Scott or Steve Smith at KSBA, 1-800-372-2962
With the demand for more school facilities expertise growing, a new partnership between KSBA and the Kentucky School Plant Managers Association will help both school boards and facilities personnel.
The arrangement, which takes effect Jan. 1, will eventually see KSPMA relocating office space to KSBA’s Frankfort building, along with its part-time executive director, John Noel, who currently operates out of a home office.
The demand for the facilities association’s services is growing because more school employees – facilities managers, custodians, maintenance personnel – are getting training or require certification within their fields, which KSPMA provides, said David Baird, KSBA’s associate executive director.
“So the organization is on the move, but they don’t have the infrastructure to provide all the service that is needed,” he said.
Zan Rexroat, KSPMA president and director of maintenance for Scott County Schools, said his group is trying to fill in the gaps created by personnel cutbacks in the state education department’s facilities management division.
“Because school boards and school administrators in general are finding out that due to cutbacks in the budget – nobody’s fault but the economy – that KDE is less and less able to be helpful to them and they’re more of just a mentoring agency,” he said. “So you’re sort of on your own unless you can talk to your neighbors and find out what they’re doing.”
The demand for more facilities expertise and training also is being driven by the need to build and operate “more energy-efficient and maintenance-friendly” schools, Rexroat added.
He said KSBA also will be able to draw on KSPMA’s expertise, so the partnership “is something that would be good for both organizations.”
Baird agreed, saying, “It will primarily benefit our members because we will have a much more structured training for facilities managers, custodians and maintenance staff, resulting in better-maintained school facilities.”
He said under the agreement between the two associations, KSPMA will rent office space from KSBA, while KSBA will advise the organization on delivering training to large groups, and possibly facilitate some of that training. KSBA also will help the plant managers association negotiate arrangements for its meetings, using contacts it has built through its own events. The plant managers also will be able to use the KSBA print shop at a reduced cost compared with outside printing companies.
Baird emphasized that each organization will remain independent. “The plant managers association has its own board and officers and we don’t in any way want to try to take them over,” he said. “We just want a partnership that will be mutually beneficial.”
Rexroat said he hopes the tie will help KSPMA increase its ability to gain membership in every part of the state.
“To me, the biggest benefit is KSBA reaches out statewide. You all have a wider net than we do. We need to get the word out statewide because all districts can benefit from sharing ideas,” he said.
KSBA’s insurance services for school districts are well established through the Kentucky School Boards Insurance Trust, but the association now is endorsing a supplemental insurance opportunity designed to simplify that process for districts and individual employees.
Educator’s Benefit Options provides school districts with a wider range of choices for supplemental insurance, including dental, vision, life and disability plans, from carriers such as Aflac, Anthem, Humana, Delta Dental and Lincoln Financial. The service also includes a Section 125 cafeteria plan that enables employees to choose from benefits that provide tax savings both to the employee and the school district.
Peel & Holland, with four offices in western Kentucky, is administering Educator’s Benefit Options. The independent agency “represents multiple markets and they can get creative for the district in terms of what they’re trying to do for school employees, to bring various options to the table,” said Myron Thompson, KSBA’s director of risk management.
Because of the different options and carriers, the service won’t be one size fits all, so districts can find the plans that work best for them. With multiple companies offering plans for supplemental insurance, the competition should drive the cost down, Thompson said.
“Peel & Holland was able to give us some products at a lesser cost,” and said Rodney Pearce, finance officer for Graves County Schools, the first district to use the service. “One of the things we wanted to do was make benefits a little easier. I don’t have a benefits person or a personnel department.”
Compliance services are available, such as cafeteria plan administration, 403B administration and COBRA administration. Pearce said that’s been a big plus for Graves County. “We need professional expertise to do that. We don’t need to do that by the seat of our pants,” he said.
Peel & Holland, which specializes in insurance, employee benefits and risk consulting, “is very customer-oriented,” Thompson said, in terms of meeting with teachers and staff to determine the best coverage for their situation. The agency also sets up a simplified process for school employees to meet with a certified enroller to answer questions about the various supplemental benefits and options.
Pearce said the transition to the new service was smooth. Graves County employees who had pre-existing conditions and similar concerns were able to grandfather in their previous coverage.
“As district budgets face tremendous pressure, a robust supplemental benefits program allows school boards to remain competitive employers and assist their employees at no cost,” Thompson said. “If you have not looked at your benefits in a while, it’s a good opportunity to sort of kick the tires, sit down with another entity and find out what’s available.”
— For more information about Educator’s Benefit Options, contact Thompson at 800-372-2962 or Heather Elliott at Peel & Holland at 1-800-599-8621.
Whitley County Schools spent $119,000 on natural gas last fiscal year to fuel school kitchens and heat some buildings.
Finance Officer Leigh Burke has become pretty good at estimating how much she needs to budget for natural gas for a year, but said it’s not always possible to pin down a figure with certainty because of fluctuating rates.
“If we have advance knowledge, that’s always good, but we don’t always have that. What I normally do is base it on historical cost figures and add in an inflationary percentage,” said Burke, who is president of the Kentucky Association of School Business Officers.
Being able to lock in a price for a year would be “a wonderful idea,” she said.
School boards across Kentucky are considering a program to do just that, coming from a Louisville-based national energy company that has been endorsed by KSBA.
Fellon-McCord is an independent agent that identifies and negotiates the best price on natural gas supply for each district, regardless of where the supplier is located, and then helps districts lock in a price for the contract year. That supply is then shipped to the school buildings through regular gas transmission lines. Called the Kentucky Gas Aggregation Program (KGAP), the approach can be used for single schools or groups of schools to increase buying power.
“Your utility is not going to change. What really changes is your supply and your transmission. On your bill, you’ll have a third-party supplier. What you’re going to see is a decrease in price,” explained Fellon-McCord sales executive Jim Waldron.
Fellon-McCord worked with the Kentucky School Energy Managers Project to estimate that the state’s schools are using 3 million dekatherms of natural gas annually. Based on that, the KGAP program could save schools up to $1.5 million statewide. With four or five suppliers bidding to serve a group of districts, “the pencil gets a little sharper,” Waldron said. Natural gas makes up about $30 million of non-vehicle fuel costs to Kentucky districts annually.
There is no out-of-pocket cost to districts for the program; the company is paid through the natural gas suppliers.
There are advantages for both supplier and school district, said Waldron. Bundling multiple contracts together and increasing the size of the load to the supplier makes the package more attractive to the supplier, while saving money for the schools in that area. Fellon-McCord is vendor-neutral and works with all natural gas providers to negotiate purchase agreements that are best suited for each district – thus providing budget certainty, Waldron said.
A school would have to use a certain amount of natural gas to qualify for a third-party supplier, but Fellon-McCord reviews districts’ natural gas records to make this determination. Those records will be easier to access, Waldron said, because of the work that has been done during the past two years by local school energy managers.
Representatives from Fellon-McCord have been attending education cooperative meetings and holding webinars to share information about the Kentucky Gas Aggregation Program. Four school districts signed on with the program during the first week.
KSBA Associate Executive Director David Baird said school districts in some other states have used this approach to purchase natural gas for a long time. “This is not something that hasn’t been done before,” he said.
Illinois school districts have had this kind of natural gas purchasing program for about 15 years and tracked the data, said Dr. Michael Johnson, executive director of the Illinois School Boards Association.
“We know in the first 10 years that we saved the school districts over $5 million from the program,” he said. Often, he added, the district coalitions have paid 10 percent to 15 percent less than individual districts would have on their own.
Illinois districts also like being able to lock in the price, Johnson said. “From a budgeting standpoint, they’re able to say, ‘This is how much I know I’m going to spend for the next 12 months or 24 months for natural gas. I don’t have to worry about the price going up and down,’” he said.
Improving the predictability and price paid for natural gas also enables districts to redirect the money saved, Waldron said.
“It lets them keep the money that they were applying to this and be able to use it for other programs that can help educate kids,” he said. “That’s the important thing.”
A district doesn’t have to be constructing a Net Zero school to need financing for energy- efficiency improvements.
A partnership between KSBA and the Kentucky Interlocal School Transportation Association is making it possible for districts to finance smaller-scale projects, such as installing energy-efficient windows, doors, roofs and lighting, along with HVAC and kitchen upgrades.
KISTA is the association formed more than two decades ago to help districts finance the cost of new school buses. While it continues to do that, the energy-efficiency financing is a new offering in response to the work by the School Energy Managers Project. The joint KSBA-Kentucky Department of Energy Development and Independence program, funded with a federal economic stimulus grant, has hired 36 energy managers to serve 131 Kentucky school districts. For the past two years, they’ve identified ways in which districts can save money through energy efficiencies – some of which require upgrading buildings or equipment.
The KSBA-KISTA partnership can help districts finance some of those projects with a loan from the proceeds of a bond issue with tax-exempt interest. Ross, Sinclaire & Associates, LLC, is the bond agent and Hilliard Lyons is the fiscal agent. The cost of issuance is split among participating districts.
“The program’s focus is small projects up to $500,000 that are not large enough to bond on their own,” said School Energy Managers Project Director Ron Willhite. “By lumping numerous small projects in this program, districts receive the same benefits of low interest rates and issuance costs of a typical bond issue for a large project, with flexibility in repayment term and funding type --restricted, unrestricted or guaranteed savings.”
The repayment schedule can run from two to 20 years. “A key element of the program is that the repayment can be fit to the need of each district, which can vary depending on each particular project,” Willhite said.
The savings generated by the energy improvements in many cases will be enough to make bond payments, similar to performance contracting. Some savings may even exceed the amount needed for repayment, Willhite said.
The main qualification for the program is having an energy-related project, and there is no requirement that projects generate a specific amount of savings to justify the work.
“For example,” Willhite said, “a district may have identified on its facility plan a need to replace windows or doors which can have a long payback period, but because the new windows or doors would be more energy efficient, the energy-related requirement of the program is met.”
District leaders can collaborate with their local energy managers in selecting projects to be financed, he added.
“We believe this is an opportunity for districts to install or upgrade to state-of-the-art control systems that the SEMP energy managers can utilize to facilitate significant, ongoing energy cost savings,” Willhite said
Beechwood Independent Board of Education
(K-12) 1,143 students www.beechwood.kyschools.us
The Beechwood Independent school district seeks as its next superintendent, a qualified and highly motivated candidate with strong leadership skills who is eager to take the district to the highest levels of achievement on all fronts. The Beechwood District is a high-achieving, unique K-12, one contiguous building, public school district. The successful candidate should demonstrate a distinguished level of skills in communication, organization and public relations.
Salary will be commensurate with rank and experience. Candidates should have administrative experience and knowledge of the Kentucky educational system and must hold or be eligible for a Kentucky superintendent’s certification to apply. Contract start is negotiable, but target date is Jan. 1, 2012.
Application deadline is Sept. 14, 2011.
To apply and receive further information, send seven copies of a letter of application, application form, resume and references to: Beechwood Superintendent Search, Kentucky School Boards Association, 260 Democrat Drive, Frankfort, KY 40601. Find application form at: www.ksba.org/superintendentapplication2007.doc