Dresden Cost Reduction Committee Final Board Report 12/14/ Why We’re Here 2. Who’s Here – DCRC Members 3. Executive Summary 4. Implementing Change 5. Findings & Recommendations 6. Our Thanks 7. Appendices: Historical Expenditure and Revenue Growth Cost Growth Dynamics

Why We’re Here – a Reminder 12/14/2010 Dresden Cost Reduction Committee Final Board Report 2 MISSION: The Dresden Cost Reduction task force will work to identify areas of possible savings at the Richmond Middle School and Hanover High School, and potentially at the SAU administrative level, that could be acted upon for the budget and beyond. GOVERNANCE: The committee will be advisory to the Dresden School Board and may refer relevant matters to the standing committees – notably the Budget, Negotiating, Education, and Athletic committees.

Why We’re Here – “Extraordinary Income” 12/14/ Changes in Extraordinary Income, FY05-FY12 ($Ms)  Dartmouth payments ended in FY09  Residual capital funds used up in FY11  Other non-tax/non-tuition revenues declining in FY12  $500k to $600k needed to make up loss from FY11 to FY12 Dresden Cost Reduction Committee Final Board Report

Who’s Here – DCRC Members 12/14/ Carey Callaghan, Chair, CIO American Trust John Aubin, Assistant Superintendent for Business Kari Asmus, Dresden Chair John Dolan, President of Vermont Institute of Natural Science Kristi Fenner, CPA and Treasurer of Ansys, Member of DFC Dr. Wayne Gersen, Superintendent Hilary Pridgen, Proprietor, Trumbull House B&B Rick Sayles, CFO of KVO Capital Management Gordon Spaeth, Dresden Board Dresden Cost Reduction Committee Final Board Report

Executive Summary 12/14/  For , $500k in savings and/or new revenues to offset loss of residual capital funds is possible  $200k achieved by administration to date  Additional $300k possible, mostly through increased class sizes at HHS  Committee divided on merits of recommending this action at this time  No easy opportunities to substantially lower district costs  Incremental cost cuts could lower spending level but not trajectory  Total Cost = 3.2% annual growth over five years  Salaries & Benefits = 4.2% annual growth before base increases and other inflationary pressures Dresden Cost Reduction Committee Final Board Report

12/14/ Projected District Cost Growth Under Status Quo Executive Summary (cont’d) Dresden Cost Reduction Committee Final Board Report

Executive Summary (cont’d) 12/14/  Important to implement a sustainable set of measures that can change the trajectory of district cost growth  Hire less experienced teachers, mentor with the district’s master teachers  Establish a track for new hires that is 10%-15% below current track  Move toward a total compensation structure  Leverage use of technology to reduce small class size offerings  Adopt cultural and administrative changes to institutionalize cost containment Dresden Cost Reduction Committee Final Board Report

Implementing Change 12/14/  Implementing a sustained cost reduction program in the district  Foster a culture of cost awareness  Make cost containment an area of accountability  Encourage administrative leadership to avoid use of incremental budget change  Recognize the risks of doing too little versus the rewards of acting now Dresden Cost Reduction Committee Final Board Report

Findings & Recommendations 12/14/ Budget CategoryProposal Ideas$s Potential Athletics Program cuts such as move to intramurals, cut in # of teams, etc. Cost transfers such as higher program fees Less than $100k per year Contract New pay track for new hires “Total Compensation” philosophy and contract (i.e., salary plus benefits subject to negotiated limits) $800k-$1.2m in savings per year, plus related benefit savings Classroom Additional electives in teachers’ schedules at RMS Larger class sizes at HHS Online elective offerings at HHS Advanced Placement Program in lieu of other advanced electives at HHS Consolidation of HHS course offerings (e.g., by having more required courses and fewer electives) $130k-$520k in savings per year See Document A for Complete List Dresden Cost Reduction Committee Final Board Report

Findings & Recommendations (cont’d) 12/14/ Status Quo 1 More Student Per Section 2 More Students Per Section 3 More Students Per Section 4 More Students Per Section Consolidation Actions: Reduction in # of Course-Sections Quality Measures: Ave. # of Students Per Course-Section # of Course-Sections Teaching Staff Size (FTEs) Ave. # of Course-Sections Per Teaching Staff FTE Ave. # of Students Per Teaching Staff FTE Estimated Savings: Annual Teaching Staff Expense Reduction$0 $130k$260k$390k$520k HHS Course Consolidation Scenarios Dresden Cost Reduction Committee Final Board Report

Findings & Recommendations (cont’d) 12/14/ Budget CategoryProposal Ideas$s Potential Facilities Shared services with Town of Hanover Energy efficiencies Less than $100k per year General & Materials Ongoing solicitation of savings ideas from public More use of or web-posting in lieu of paper Increased use of volunteers Less than $100k per year Revenue Items Retaining a grant writer Solicitation of int’l students as tuition students Collecting partial tuitions from other districts Establishment of HHS Foundation to conduct fundraising $100k + See Document A for Complete List Dresden Cost Reduction Committee Final Board Report

Our Thanks 12/14/ Community members Members of organizations who helped us Public Forum participants Education and Athletics Committees SAU and Dresden Administrators Dresden Cost Reduction Committee Final Board Report

Historical expenditure growth 12/14/ Dresden Cost Reduction Committee Final Board Report

Regular ed versus special ed growth 12/14/ Dresden Cost Reduction Committee Final Board Report

Revenue growth 12/14/ Dresden Cost Reduction Committee Final Board Report

Cost growth dynamics, part I

Cost growth dynamics, part II 12/14/  For , a zero increase in base salary and zero increase in all budget areas except benefits and special ed yields a 3.2% annual budget growth!  Assumes a 10% increase in both benefits and special ed  Assumes 1.25% increase in salary accounts as a result of step and track  Over five years, this would result in a 17.1% increase in the total budget, roughly $4,000,000 over current year budget  Cost shifts by State likely to increase cost and diminish revenue  Retirement costs likely to be downshifted to local government, employees  Building aid, other State aid revenues likely to be cut  IS BUSINESS AS USUAL SUSTAINABLE? Dresden Cost Reduction Committee Final Board Report