The Schools: Cutting Administrative Costs Doesn’t Mean Cutting Administrators
BY BUDDY NEVINS
Broward School Superintendent Robert Runcie brags about lowering administrator cost, but just what does that mean?
One thing it doesn’t mean, according to their own news release: Lowering the number of administrators or cutting salaries.
But isn’t cutting bureaucrats and salaries what most people believe when Runcie talks about having lowered administrative costs?
Runcie’s own news release from May 29 outline how he lowered the costs:
- “Streamlining of processes and District operations to increase efficiencies.”
Bureaucratic gobbledygook! There is not a lot of detail in that statement.
- “Relocation of District departments from the Sawgrass Technology Park to offices located on various District-owned properties.”
Okay, there is a savings in not paying rent, but that would be a one-time savings. And you’ve got to assume the same number of administrators are still employed, otherwise it would be in the news release.
- “Redesign of the District’s healthcare plans to better manage and contain rising healthcare costs by moving to a self-insured model, competitively bidding contracts to reduce administrative costs, and encouraging greater use of lower-cost generic drugs.”
Again, no cutting administrators or salaries. Just cutting benefits for every employee.
The news release does state that these are “among” the ways Runcie saved money. If he was cutting the number of administrators or salaries, wouldn’t would crow about it?
The news release may be accurate. But it spins like a top.
The statement that administrative costs have been lowered creates the impression that there are less administrators.
The basic bottom line when dealing with the Broward school system: Don’t automatically believe what you think you heard.
Or as the defunct City News Service of Chicago used to drill into its reporters: “If your mother tells you she loves you, check it out…”
The news release:
BCPS Ranks Lowest in the State for Administrative Costs
Results Reflect Commitment to Efficiency in District Operations
Thursday, May 29, 2014
Broward County Public Schools (BCPS) is proud to have the lowest administrative costs in the state, according to a new report released by the Florida Department of Education. The report reflects data for all of Florida’s 67 school districts for the 2012/13 school year.
In addition to having the lowest administrative costs among all Florida school districts, BCPS administrative costs are also significantly below the state average and reflect a decrease in the District’s administrative costs compared to 2011/12 and 2010/11.
Among the District’s overall cost-saving efforts:
- Streamlining of processes and District operations to increase efficiencies.
- Relocation of District departments from the Sawgrass Technology Park to offices located on various District-owned properties.
- Redesign of the District’s healthcare plans to better manage and contain rising healthcare costs by moving to a self-insured model, competitively bidding contracts to reduce administrative costs, and encouraging greater use of lower-cost generic drugs.
“Our District is focused on ensuring we are good stewards of taxpayer dollars,” said Superintendent Robert W. Runcie. “As part of our strategic goal for continuous improvement, we are working hard to increase administrative efficiencies, reduce costs and invest savings back into our classrooms.”
July 11th, 2014 at 3:01 pm
Yeah right. Runcie is a joke. Laurie and Murray have to go go go!
July 11th, 2014 at 3:42 pm
Can’t agree with Buddy’s interpretations…
Streamlining processes refers to finding a better way of doing something that costs less, works better, or both. Example: If Broward County were to synchronize all of its red lights, that would be a process improvement that reduces transportation costs and saves time. Since the reduction in transportation costs recurs each and every month, it’s not a one-time savings.
Relocation from Sawgrass Technology Park to district-owned properties – that’s not a one-time savings, since it continues to reduce costs each and every month.
Redesigning the health care plan by encouraging the use of generic drugs, etc. doesn’t reduce employee benefits – it delivers employee benefits more efficiently.
Income inequality is an important problem, though. In the private sector, income inequality is wildly out of control. The taxpayers have a great opportunity here to show the private sector that great workers can indeed be employed without being grossly overpaid.
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http://www.forbes.com/sites/susanadams/2014/06/16/the-highest-paid-ceos-are-the-worst-performers-new-study-says/
The Highest-Paid CEOs Are The Worst Performers, New Study Says
Susan Adams, Forbes Staff, 6/16/2014
Across the board, the more CEOs get paid, the worse their companies do over the next three years, according to extensive new research. This is true whether they’re CEOs at the highest end of the pay spectrum or the lowest. “The more CEOs are paid, the worse the firm does over the next three years, as far as stock performance and even accounting performance,” says one of the authors of the study, Michael Cooper of the University of Utah’s David Eccles School of Business.
… Cooper and two professors, one at Purdue and the other at the University of Cambridge, have studied a large data set of the 1,500 companies with the biggest market caps, supplied by a firm called Execucomp. They also looked at pay and company performance in three-year periods over a relatively long time span, from 1994-2013, and compared what are known as firms’ “abnormal” performance, meaning a company’s revenues and profits as compared with like companies in their fields. They were startled to find that the more CEOs got paid, the worse their companies did.
Another counter-intuitive conclusion: The negative effect was most pronounced in the 150 firms with the highest-paid CEOs. The finding is especially surprising given the widespread notion that it’s worth it to pay a premium to superstar CEOs like Jamie Dimon of JPMorgan Chase (who earned $20 million in 2013) or Lloyd Blankfein ($28 million) of Goldman Sachs. (The study doesn’t reveal individual results for them.)
Though Cooper concedes that there could be exceptions at specific companies (the study didn’t measure individual firms), the study shows that as a group, the companies run by the CEOS who were paid at the top 10% of the scale, had the worst performance. How much worse? The firms returned 10% less to their shareholders than did their industry peers. The study also clearly shows that at the high end, the more CEOs were paid, the worse their companies did; it looked at the very top, the 5% of CEOs who were the highest paid, and found that their companies did 15% worse, on average, than their peers. …
FROM BUDDY:
Administrative costs in the public’s mind is administrators. When I was at the newspaper and even today, one of the biggest complaints is the number of high paid bureaucrats working for the school system. (Charter schools, even those run by big companies, are much leaner operations.)
What is not mentioned in the news release is that Runcie has refused to take the tough step of substantially reducing the number of administrators. Even administrators implicated in the critical Grand Jury reports continue to collect pay checks. And Runcie has gone out of his way to salt the schools’ HQ with high-paid administrators brought from Chicago, where he worked before Broward.
I don’t doubt that changing the health coverage (I could argue that forcing people to buy generics is reducing benefits, but that is beyond the scope of this debate.) or ending a lease saved money. But the real cost of the school system is salaries and benefits. Runcie has done very little, if anything, to tackle those costs.
July 11th, 2014 at 3:59 pm
http://www.huffingtonpost.com/2013/04/30/ceo-to-worker-pay-ratio_n_3184623.html
CEO-To-Worker Pay Ratio Ballooned 1,000 Percent Since 1950
Huffington Post, 04/30/2013
The ratio of CEO-to-worker pay has increased 1,000 percent since 1950, according to data from Bloomberg. Today Fortune 500 CEOs make 204 times regular workers on average, Bloomberg found. The ratio is up from 120-to-1 in 2000, 42-to-1 in 1980 and 20-to-1 in 1950.
July 11th, 2014 at 4:07 pm
The cost savings is based upon the base year of 2010-11.
The cost savings are the result of the prior Super-Notter making hard decisions that the Board did not like.
The current Super has not save the District a penny !!
How much did the high school schedule change cost the district in future payments ?
What is the district’s bond rating?
Did it go up or down ?
July 11th, 2014 at 4:12 pm
How is saving on rent at Sawgrass a one-time savings? Don’t you have to pay rent every year?
FROM BUDDY:
The savings from saving the rent can be declared once.
July 11th, 2014 at 5:40 pm
The rent savings may be declared once but it is still a hard cash savings every month. You can’t just dismiss that decision as a one time savings. It’s a long term cost benefit that smartly used underutilized district owner space.
July 11th, 2014 at 7:09 pm
Who reported Broward School District Bond Downgrade ??
The taxpayer will pay more to support the corrupt Board !!
Rating Action:
Moody’s downgrades Broward Co. S. D.’s (FL) Issuer Rating to Aa3 from Aa2, and School Board’s COP rating to A1 from Aa3; outlooks revised to stable from negative
Global Credit Research – 07 Oct 2013
Assigns MIG 1 to Broward Co., S.D., FL’s TANS, Ser. 2013
New York, October 07, 2013 —
July 11th, 2014 at 7:28 pm
In fairness:
First, moving a unit that continues to operate from a leased office space to an owned space is a recurring savings.
A one time savings occurs when one time expense that is eliminated. A recurring savings occurs when an on-going expense is eliminated.
Recurring savings reduce the base revenue need of an organization by eliminating a recurring expense. That doesn’t mean they still need more revenue to pay for growing expenses elsewhere in the budget. It simply means that a particular item of expense that was expected to recur annually has been eliminated permanently.
Second, a typical budget includes salaries and benefits, operational costs and capital expenditures. These add up to the bottom line costs of an organization.
Cuts to any reduce cost, it is no more necessary to cut staffing to reduce costs than any other category of expense. Perhaps the better argument would be that they’re not cutting administrative costs as much as they could because their staffing chart is bloated.
To make that argument stick one would need to specify where unnecessary staffing exists but is not being eliminated.
FROM BUDDY:
Okay, he eliminated the rent. So what’s he going to do for an encore? He can’t continue to claim that savings forever. Maybe that’s accounting. Its not politics. Politics demand continued new savings.
By the way, maybe you missed this one but the school system has already entertained the idea of buying another headquarters building. Ooops. There goes that savings.
July 11th, 2014 at 8:00 pm
If we want to add to the humor of Broward. Here is the official document from FY 2011-12. Florida has 67 counties and the only two other districts that were more efficient in that year were Pasco and Marion county. Even if the public believed this fictitious matrix we only needed an improvement of 1% to become number one. School Board Fictitious Admin Free Comparison. The real matrix needs to compare our district with other districts in percentage of schools with leaky roofs. This would be an interesting matrix to compare Broward with other school districts.
July 11th, 2014 at 11:42 pm
So they have cut costs per employee without laying people off and even giving all employees raises (including teachers) and that is bad? As I republican I believe that more money in a persons pocket and less in red tape is a win. Amazing that they accomplished that in a bureaucracy like a school system.
The rent to Stiles was $3million annually. It was a poor ROI. Moving out and into under enrolled facilities was the right call for the district.
July 12th, 2014 at 1:05 pm
Many if not all of the schools in Broward were designed with flat roofs.
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http://en.m.wikipedia.org/wiki/Flat_roof
… In areas where the roof could become saturated by rain and leak … these roofs are not suitable … If a leak does occur on a flat roof, damage often goes unnoticed for considerable time as water penetrates and soaks the decking and any insulation and/or structure beneath. This can lead to expensive damage from the rot which often develops and if left can weaken the roof structure. There are also various health risks to people and animals breathing the mold spores … One problem with maintaining flat roofs is that if water does penetrate the barrier covering (be it traditional or a modern membrane), it can travel a long way before causing visible damage or leaking into a building where it can be seen. Thus it is not easy to find the source of the leak in order to repair it. Once underlying roof decking is soaked, it often sags, creating more room for water to accumulate and further worsening the problem. …
July 12th, 2014 at 4:03 pm
To Ha Ha Ha,
Enough of your leftist talking points. Buddy’s topic and inferred question was whether BCPS needs to trim admin staff to really show an ongoing savings to the taxpayer.
Instead you go off on the MSNBC flavor of the month – income inequality.
If you really dislike a particular company’s pay structure, stop being their customer or buy a share of stock and speak at their annual meeting.
Or move to Venezueala where privatization efforts to eliminate corporate profits is giving you the income equality you want (but no products on the shelves!)
Now back to the question at hand. There is always room to trim redundant staff in a bureaucracy as big as BCPS. Buddy is right to ask that question.
July 12th, 2014 at 5:42 pm
Budget Man is completely correct about the definitions of these budgetary terms. Buddy either never took an accounting course in his life OR has forgotten pretty much everything he ever learned about it. Admit it Buddy – you’re a reporter, not an accountant!
Budget Man’s analysis is also right on target. Now Buddy apparently thinks he knows of “administrators implicated in the critical Grand Jury reports” but he is just too coy right now to tell us exactly who he has in mind. So either he’s working on a breaking story, OR there’s nothing newsworthy here…
FROM BUDDY:
Okay, he eliminated the rent. So what’s he going to do for an encore? He can’t continue to claim that savings forever. That’s accounting. Its not politics. Politics will demand he show new savings in the future.
Maybe he really trying to show a savings just prior to the bond referendum.
By the way, maybe you missed this one but the school system has already entertained the idea of buying another headquarters building. Ooops. There goes that savings.
As far as the administrators involved in the wrongdoing mentioned by the Grand Jury, not one was fired. Some left or died. Not one was fired.
July 12th, 2014 at 7:24 pm
Many were fired/runoff/nonrenewed/retiredsuddenly. Harrison, Herbst, Linder, Carter, Butler, Aragi…… They have strategically cleaned house. Good riddance to all.
July 12th, 2014 at 10:47 pm
@12 – Buddy’s actual topic was “Lowering the number of administrators or cutting salaries” – and excessive administrator salaries are exactly what both of the CEO pay articles I cited focus on.
Another thing you apparently haven’t noticed: “Broward County has more registered Democrats — 563,805 — than any other county in Florida.” Since you don’t like hearing Democratic ideas, relocating to West Nowhere, Kansas would be a very good move for you.
July 13th, 2014 at 7:37 am
To Ha Ha Ha,
Thanks for showcasing the intolerence of today’s Democratic Party. It is certainly not my late grandparents or parents party in which they were proud to be members.
Suggesting I move sounds like something they do in countries run by dictators who don’t want to hear dissent.
Last I looked, Florida was run by a Republican House, Senate, and Executive. Using your childish logic, perhaps you and the other 563,804 Democrats can do our state a favor and move to a state like Maryland or Oregon.
Sorry but I plan to stay in West Davie for the years ahead.
July 13th, 2014 at 9:35 am
@16 If your grandparents were the kind of democrat Strom Thurmond would have supported in the 1940s, everything you have to say suddenly makes perfect sense. You are very correct, the democrats of today are decidedly not those people.
Good luck by the way in West Davie as you knew it. Enjoy it while you can for that too will soon sink to the bottom of the swamp of history where it belongs, to dwell with the rest of the pond scum. Fear not, even as the human condition marches forward without you, contentment will ultimately be yours when you rejoin your grandparents.
July 13th, 2014 at 12:15 pm
This is what the grand jury report was talking about: wasteful spending and spending money to benefit themselves.
It is no surprise that Laurie Levinson and Ann Murray want to spend money to benefit their friends.
It’s time for Levinson and Murry to go.
July 13th, 2014 at 7:21 pm
To wish you were there,
Two of my grandparents escaped the pogroms in the late 1800’s, hardly the kind that supported Strom Thurmond.
Another received a Purple Heart in WWI (that would be World War One) from getting mustard gassed. He loved Roosevelt.
And my father was part of a tank unit that freed a concentration camp in Austria in WWII. He was devout Democrat until 2008.
Sad that you lower the level of discourse to insulting my family.
You are not worthy of further conversation. But I will expect you to have to get in the last word as most liberals do.
July 14th, 2014 at 10:27 am
URS was given the (outsourced)Facilities contract awhile back. Wonder how this will benefit the SBBC.
http://online.wsj.com/articles/aecom-to-acquire-urs-corp-in-4-billion-deal-1405284566?mod=WSJ_hps_sections_business
July 14th, 2014 at 10:55 am
Here is a question for anyone who has the facts (Not bloviating on politics):
The number of students in Broward schools has been dropping for years. Has the district compensated by laying off more teachers or do they layoff more administrators? Or do they not layoff anybody?
July 14th, 2014 at 12:27 pm
@just saying
So when AECOM submits drawings for a project and URS reviews them and oversees the construction, that is allowed? Fox guarding henhouse?
July 14th, 2014 at 12:44 pm
The have down sized significantly. From three area offices to one district office. Three areas of clerical, directors, sups, ESE staff, psychological services and many other positions. I should know. My position was cut.
Teachers can only be reduced enough to still meet the class size amendment. I haven’t heard teachers crying out that they have too few students, quite the opposite. Therefore they don’t have a surplus of teachers either.
July 15th, 2014 at 7:44 am
@19 If what you say is true then your grandparents would still be democrats and “libs” as you call them. They would not be immigrant bashing, obstructionist, selfish about helping the poor, let’s kill affordable health care, I hate the president for being black jerks. Rather, they would be in favor of everything you seem to oppose so I apologize for being wrong. You won’t even find comfort with your grandparents when your miserable Leave it to Beaver, retro, nowhere mentality sinks to the bottom of lake history to rot away with the rest of the pond scum.
July 15th, 2014 at 9:24 am
In order to find out exactly how many administrators there are, you’d have to literally do an on-site count. That’s because they classify them very cleverly.
I remember the classic shell game in M-Dade when they moved a whole set of them to another classification trying to convince the legislators that they downsized. I found them and pointed that out. They were not happy with me.
This district can’t be trusted; that’s the point. It’s all about trust.
July 16th, 2014 at 12:26 am
It is my understanding the administrators hired from Chicago were paid significantly higher salaries than they received there. To begin with, Chicago living costs are higher with state and federal taxes, possibly local taxes(common in large cities) and higher housing costs. Even if they received the same salaries here in Broward County, they would be getting an increase.
Cost savings from Sawgrass – did anyone remember, moving costs are an expense, too. Rent is a recurring cost.
Most of the roofs in Broward County are “flat” because they are the most cost efficient types of roofs. But the problem lies within a District Maintenance Roofing Department assigned the responsibility of repairing the roofs who are not certified or trained to do so.
I have recommended a separate roofing department when I was employed there and just recently through the Facilities Task Force to Supt. Runcie. A separate roofing department would be able to respond to roofing repairs and replacements much more rapidly than using an unqualified roofing maintenance department or waiting for a construction project before the roof is repaired or replaced. My research in Miami Dade County and Palm Beach County schools indicate they have in their project specifications for the manufacturer and the roofing contractor to maintain the roof for its life. This price is included in the bidding (reduces overall costs through competition). It reduces the costs of a district maintenance roofing department that does not have certified roofing personnel.
Presently, they are only responsible for the portable roofs.
By the way, the District Maintenance Roofing Department does not survey the District’s roofs, the school’s custodians are responsible for monitoring the condition of each sites roofs. After going through the nightmare of mold and mildew identification in all the District’s facilities and attempting to enforce building codes to either install new roofs on new buildings or replace old roofs, I must say mastering quality roofing is not a science and with qualified individuals, it can be accomplished. Remember, EPA had to be brought into the District in the early 2000’s to establish the Tools for Schools program which has not been monitored for several years.
Lastly, it is difficult for the public to create a united front to accomplish the tasks of fixing our public schools for our children when political differences get in the way.
July 16th, 2014 at 11:02 am
Becky’s right on about the roofs and Tools for Schools. But it’s not political differences that are making it difficult to fix the schools.
I joke that especially in today’s Broward, there are barely enough elected R’s to make a minion.
It’s about corruption, incompetence, cronyism and total lack of trust.
The only way to restore trust is to have a permanent IG and about two years of state oversight.
August 2nd, 2014 at 2:07 am
Broward is BLEEDING money. More lawsuits and legal actions against the county for abuses to staff and students. now look at the ESE report, that will COST too. But as for the rent and reoccurring. Those where SCHOOLS and if I remember correctly…those schools had JUST been redone for those communities because they were in SUCH bad shape. So how much did they spend, claiming to redo schools in need? Did they know when they were redoing the schools they would become offices for Dr Blackburn and his staff? What about a parent that was a public speaker saying ALL the educational equipment, like desks and books, had been removed and the children sat on the floor for the last days or weeks of school. I believe the parent asked How they thought that made those children feel? She said…paraphrasing devalued
Runcie MUST resign!!!!!!!!
The Board doesn’t even seem to understand that Mr. Runcie is THEIR employee!!
And what is with Dr Osgood blowing BUBBLES threw the last school board meeting??