1. School Facility Use by Outside Groups: Who Pays for It Roger Young Roger Young and Associates ryoung@ry-associates.com 978-886-6093

2. Bio … 37 Years Public Education Assistant Superintendent Finance/Facilities Planning Guide for Maintaining School Facilities Facility Masters Award Program Facility Masters Conferences Facility Masters Webcast Series Improve Processes and Practices

3. Agenda Concepts behind facility use and policies The dilemmas and the impacts Critical questions Recent case Newest cost recovery study Your bottom line

4. Recent Survey: Financial Impacts Due to Energy Source: AASA Fuel and Energy Snapshot Survey Results July 2008

5. Recent Survey: Little Relief Source: AASA Fuel and Energy Snapshot Survey Results July 2008

6. What Will Those Who Took The AASA Survey Do To Offset the Impacts? Implementing energy conservation measures Restructuring transportation programs such as bus routing or cutting back on student and staff trips Cutting supply and textbook purchases Hiring freezes or eliminating positions Eliminating or modifying athletic events and offerings

7. Who’s using your Facilities? Religious Groups Athletic Teams Civic Groups Adult Education Business Groups

8. Dealing with the Demand

9. Facility Usage Policies According to SchoolDude’s national survey on facility usage: second Historically the second most underutilized facilities next to churches, educational institutions and their grounds are being used more and more for after-hour activities. rise This rise in after-hour usage presents unique challenges to the business office and support departments including impacts upon: budgets budgets who to charge vs. no- charge who to charge vs. no- charge justifying rental rates justifying rental rates balance between rights of renters and rights of facilities balance between rights of renters and rights of facilities liability or risk containment liability or risk containment coordination of support services coordination of support services and more… and more…

10. Approximately 98% of Districts Lose Money on Community Use Reasons, barriers or excuses: Misguided policies driven by political pressures such as fear of the public No understanding of the true costs Failure to understand the financial impacts that ripples through the district No standardized central administrative system to manage district policy “We’re not a business”

11. Who’s involved in the scheduling process? Community Use Custodial Maintenance Technology and Audio Visual Food Services Athletics Multiple Site Contacts Central/Business Office

12. Problems often seen in the scheduling process Availability and Double Bookings Financial Coordination – The exact costs to host events (e.g., energy, staff, equipment) – Charge vs. no-charge vs. chargeback – How much is owed Coordination between sites and other contacts Wasted Time (e.g., time on phones, paperwork and spreadsheets) Inconsistent notifications of schedule statuses and “to-do” lists Lack of reporting and trending

13. Other Critical Questions Who do you Charge? – How often do you review your fees? – Who tracks and collects fees? – Hourly rates, flat fees, combination of both? How many events each year? – Is it increasing or decreasing? – Types of groups using the facilities? What type of process do you use? – Paper/Triplicate Form routed for approval – Emails or phone calls – Fees are applied, tracked, collected

14. Recent cost recovery story

15. Knowing there would be questions, or even protest, the board gave a presentation concerning the thought behind the new fees prior to allowing public comment A key argument of the presentation mentions that the board is entrusted with the care and upkeep of district facilities and the use of those facilities for non-school related purposes should not generate costs for the district

16. Recent cost recovery story The presentation included Survey results including satisfaction of the district's educational value Rejection of the last budget Effects due to budget cuts, particularly in the area of extracurricular activities, classroom supplies and facility maintenance Initiatives to save and generate funds including – transportation restructuring that saved $150,000 – exploring the use of bio diesel for district vehicles – cancelling certain annual field trips Adequacy of spending levels of the district vs. state standards, including some reductions in state aid Results from a facility use policy comparison of nearby districts

17. Recent Cost Recovery Story Published opinion: “While many are making the argument that the school district is robbing Peter to pay Paul, we believe it is fairer to charge those actually using the facilities more than to spread the increasing cost of facility use across the community through taxation. With teachers having to pay out-of-pocket for classroom supplies, schools not having enough money to purchase necessary books and the school district more heavily relying on the fundraising efforts, it is no longer feasible for groups not affiliated with the schools to use district facilities without paying enough. We do encourage the school district to be sensitive to community groups' needs and just recover the costs of facility use, not make a profit.”

18. Cost Recovery policy quote Source: Barbara Dunn, Facility Use Coordinator in the Business Office at Warrick Valley CSD in New York. “Invoices for community users are generated to reimburse school districts for those expenses that can not be paid from the annual budget. Examples of these expenses might be custodial overtime hours needed to setup and cleanup for events, auditorium manager and lighting and sound crew necessary to safeguard the use of auditoriums, as well as utility fees that accompany requests for air conditioning for these events.”

19. 2008 Cost Recovery Study Analysis of 1,000+ school districts, colleges and private schools, including interviews Focused on how educational professionals are coping with – Demand for community use of school facilities – Financial burdens on budgets and operating staffs due to the growing use of school facilities by the community – Sentiment that school facilities should be used more frequently because taxpayers and other stakeholders have invested billions in these assets RECOVERING COSTS FOR THE COMMUNITY USE OF OUR SCHOOLS: A White Paper Examining the Successful Implementation of Cost Recovery Programs in our Schools.

20. Cost Study: Number of Events 1.24.16 The sampling revealed that the average district holds 1.24 events per student per year – up from.16 events per student in 2002.93 Districts less than 5,000 students average.93 events per students or 4,650 events in a year

22. Cost Study: Recovering Funds

23. Cost Recovery Analysis Let’s look at the a student size of 8000

24. Cost Recovery Analysis Let’s look at the a student size of 8000 Theoretically, we’ll say you get $15/student as an average so you are likely invoicing for $120,000/year

25. Cost Recovery Analysis Let’s look at the a student size of 8000 Theoretically, we’ll say you get $15/student as an average so you are likely invoicing for $120,000/year Not a bad start, but there is room for improvement

26. Behind the scenes What is the average time spent per event by each staff member in minutes? – School Administrator – District Coordinator – School Finance – Energy Manager – Other? 5 Checking calendars to make sure area is available, getting approvals 5 Coordinating with staff to support event, approving, getting other approvals 10 Coordinating and creating invoices 5 Doing EMS Overrides per event Example is using an 8,000 student district

27. Behind the scenes What is the average time spent per event by each staff member in minutes? – School Administrator – District Coordinator – School Finance – Energy Manager – Other? 5 Checking calendars to make sure area is available, getting approvals 5 Coordinating with staff to support event, approving, getting other approvals 10 Coordinating and creating invoices 5 Doing EMS Overrides per event 0 25 Total Minutes Per Event or.42 Total Hours Per Event = 3666.67 Total Hours Annually (events * hours) At $25/hour, you have spent $91,666.67 out of the $120K you are currently invoicing -- how much is considered as part of normal job responsibilities? Example is using an 8,000 student district

28. Behind the scenes ANNUAL CUSTODIAL COST – Usually averages to 1 hour of custodial time over the year for each event (setup, breakdown, clean up, lock/unlock and other services) – This relates to around $25-$30 per hour (fully loaded costs, benefits, vacation, sick days, holiday and other imbedded costs) Example is using an 8,000 student district

29. Behind the scenes ANNUAL CUSTODIAL COST – Usually averages to 1 hour of custodial time over the year for each event (setup, breakdown, clean up, lock/unlock and other services) – This relates to around $25-$30 per hour (fully loaded costs, benefits, vacation, sick days, holiday and other imbedded costs) 8000 student * 1.2 events per student = 8800 Total Events Equivalent to 8800 Total Hours Per Event At $25/hour, you have spent $220,000 whereas you are currently invoicing $120K -- how much of this is part of normal job responsibilities vs. what can be charged? Example is using an 8,000 student district

30. Behind the scenes ANNUAL ENERGY COST ASSOCIATED WITH EVENTS – Cost for energy typically ranges from $120 to $300 per student – Most districts say community usage increases utility cost 10% to 20%, if not more Example is using an 8,000 student district

31. Behind the scenes ANNUAL ENERGY COST ASSOCIATED WITH EVENTS – Cost for energy typically ranges from $120 to $300 per student – Most districts say community usage increases utility cost 10% to 20%, if not more 8000 Students * $150 Energy Cost per Student= $1,200,000 in Total Energy Expenditures At 10% of energy costs, you have spent $120,000 whereas you are currently invoicing $120K Example is using an 8,000 student district

32. Behind the scenes WEAR/TEAR/REPAIR DUE TO EVENTS – AS&U states on average some districts spend up to $500 per student for M&O on buildings every year (not including technology needs) – We’ll use $250 as a median and say that 2% of M&O goes to wear and tear due to facility events Example is using an 8,000 student district

33. Behind the scenes WEAR/TEAR/REPAIR DUE TO EVENTS – AS&U states on average some districts spend up to $500 per student for M&O on buildings every year (not including technology needs) – We’ll use $250 as a median and say that 2% of M&O goes to wear and tear due to facility events 8000 Total Students * $250 M&O Cost per Student = $2,000,000 Wear & Tear Expenditures At 2% of M&O costs going to events, you have spent $40,000 whereas you are currently invoicing $120K Example is using an 8,000 student district

34. Let’s total the potential costs –staff time (processing calendar updates, coordination, approvals and cost recovery) –energy costs –custodial –M&O Example is using an 8,000 student district You invoiced for $120,000 for events

35. Let’s total the potential costs –staff time (processing calendar updates, coordination, approvals and cost recovery) –energy costs –custodial –M&O$91,667$120,000$220,000$40,000 Example is using an 8,000 student district You invoiced for $120,000 for events

36. Let’s total the potential costs –staff time (processing calendar updates, coordination, approvals and cost recovery) –energy costs –custodial –M&O$91,667$120,000$220,000$40,000 TOTAL $471,667 or($59/student) Example is using an 8,000 student district You invoiced for $120,000 for events

37. The Potential costs Let’s assume that some of this $471,667 is considered part of someone’s normal duties or are normal costs for the district --- even if we reduce by 2/3: you still need to recover $141,500 ($17.68/student) or you will lose $21,500 for that year Also: – Food Services were not included – IT and wear/tear on technology and audio-visual equipment was not accounted – Security?

38. Examples of recovery programs In spite of these school systems’ top-tier results, all who were interviewed shared that they did not believe they were recovering all of their costs, but are making progress COST RECOVERED PER STUDENT ORGANIZATION & ENROLLMENT

39. The Transition Now we have some insight into cost impacts We have seen that some groups are trending well as time has passed What are you going to do? Do what others have done to improve their circumstances

40. Steps to Success 1.Identify an Advocate 2.Recognize that Leadership is Key 3.Start Small and Gain Buy-in 4.Build Support with Site Contacts 5.Distribute Event Management 6.Establish Presence at the Event 7.Recover Your Costs 8.Develop Tiered Fee Structures 9.Improve Invoice Management 10.Automate Processes Source: Recovering Costs for the Community Use of Our Schools © Copyright 2008 SchoolDude.com, Inc. All rights reserved.

41. Identify an advocate Goals: Help decision making Speed up process development Ensure more viewpoints are gathered Prevent holes in the policies Other options: Look at your neighbors If beneficial vs. a political hindrance, form a team with this advocate as the team leader

42. Recognize that leadership is key All must agree to support a policy for: – Process changes – Fee structures – Invoicing philosophy – it is cost recovery, not profit – Goal setting You should typically involve: –School board –Superintendent –Facilities Department –Athletic Directors –Principals –Business –Technology Department –Food Services

43. Start Small and Gain Buy-in Begin with only certain types of rooms and/or certain schools Gain support and buy-in from school administrators and assistants Let those positively affected by the changes help sell the idea to the rest of the district If negativity arises, address the issue to determine if there is an issue or a simple resistance to change

44. Build Support with Site Contacts Principals, Assistants, Athletic Directors “See through Mary Jane’s eyes” – What’s in it for them? – Translate your ideas, but simply --- don’t use 8 words when 5 will do – A document they can review afterwards greatly helps Present and discuss with individual sites at first to have a better chance to “sell” your ideas to remaining campuses Give earnest consideration and heartfelt acknowledgement to complaints Deal with objections before they become roadblocks

45. Distribute Event Management Find a balance between what can be centralized and what can be distributed School personnel control and decide: – What areas and times are available for usage – What groups can use the facility – Schedule conflicts A central office controls and decides: – Rates – Billing and collections – Risk management policies

46. Establish a Presence at the Event Custodial labor can be a huge amount of cost for overtime and weekends Having a custodian on-site during events – Reduces damage to property and equipment – Protects the district – Ensures a smooth event – Provides a nice “customer service” touch

47. Recover Your Costs! Overtime Utilities Athletic, audio-visual and IT equipment Wear and tear on the facility

48. Develop Tiered Fee Structures Establish a simple fee structure: – What type of group? (Non-profit vs. For-profit?) – What type of area? (Gym vs. softball field?) – What type of facility? (Elementary school vs. arts center?)

49. Improve Invoice Management BE CONSISTENT! 1.Provide a quote to set proper expectations 2.Follow up with an invoice that is consistent with the quote 3.Create billing rates for efficiency, accuracy and to grow income 4.Be pleasantly persistent with past-due notices

50. Automate Processes Paper, spreadsheets, calendars and email are not efficient in 90+% of educational facilities Too many parties and processes are involved for communication, task assignments and cost recovery You need to avoid duplication of efforts as well as events and seal gaps in the processes

51. Policies and Fee Structures Are there loopholes? Can group use your facilities at a rate cheaper than permissible? Do you require advance payments in full? Before or after the event? You may not want to compete against privately owned facilities & their commercial rates Find out what other institutions are doing around you

52. Identify Risks All persons or groups using your facility pose some risks for your institution Protect yourself from liability concerning personal injury and property damage Institutions have been held liable even if community group uses the facilities in an abnormal or inappropriate way Insurance requirements are critical Have risk assessment contact(s) monitor issues and identify solutions to minimize those risks

53. Working with Organizations Let the organization know about rules upfront Certain information may affect a group’s decision & save time or headaches for your staff concerning topics such as: How far in advance to schedule Date changes Charges & payment rules Late fees Damage policy Alcohol policy Insurance requirements Supervision of children Etc.

54. End the debates “Politics, politics, politics” --- the public pays taxes and believe they have access to the buildings Many, including some government officials, realize this approach is doing more harm than good Under CA’s “Civic Center Act”, districts must make their schools available to the public, but must recover costs for use of those buildings Taxes are tough on the public, but budget cuts and increases in energy costs are tough on you Your mission is to educate our youth during the school day and your budgets and funding reflects this --- how much of your budget and funding is dedicated toward community use?

55. For More Information www.schooldude.com/costrecovery Sample fee structures, policies, contracts Contact Pat Buchanan– pat@schooldude.compat@schooldude.com Brent Hair– brent@schooldude.combrent@schooldude.com David Kornegay – dave@schooldude.comdave@schooldude.com 877-868-3833

56. Thank you Roger Young ryoung@ry-associates.com 978-886-6093