BOE's benefit spending should be in-line with other districts

CH-UH BOE savings forecast, by James Hurley.

The CH-UH Board of Education (BOE) could save $10.4 million by 2025 and upwards of $17.8 million by 2030. The savings would come from simply realigning the district’s spending on employee benefits to be in-line with other local school districts.

While CH-UH currently spends 47.7 percent of salaries and wages on employee benefits, the average spent on employee benefits in other local districts is about 40 percent: Shaker spends 40 percent, South Euclid-Lyndhurst spends 40 percent, Euclid spends 40 percent, Beachwood spends 33.4 percent and Mayfield spends 40.5 percent.

Indications are the CH-UH BOE plans to increase spending on employee benefits to 51 percent over the coming years. Instead of bringing spending on benefits in-line with other districts, the BOE appears to be heading in the other direction with plans to spend more on employee benefits.

We assume the district is correct about its student population declining by 900 students over the coming decade, and this is accounted for as part of this forecast.

The student-to-staff ratio should remain the same to continue providing the quality education the district seeks. However, spending on salaries and wages should decline in-line with the decline in student population, and this is also accounted for as part of the forecast.

A 2 percent per year increase to salaries and wages is accounted for as part of the forecast, to encourage continued improvement in quality and effectiveness of the district.

It is almost impossible to reduce employee benefit spending at once, overnight. The reduction in spending on employee benefits would decline from 47.7 percent to 40 percent over the first five years, then stay flat at 40 percent for the following five years.

When added up, the district’s spending on salaries plus wages plus benefits plus a 2 percent annual increase for staff would be $86.9 million in 2020, and decline to $69.1 million in 2030.

The cumulative savings from the realignment of employee benefits by the CH-UH district would result in savings of $10.4 million by 2025 and $17.8 million by 2030.

Will the BOE act on the savings opportunity of realigning employee benefits to be in-line with other local districts?

James Hurley

James Hurley is a 15-year resident of Cleveland Heights.

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Volume 13, Issue 10, Posted 5:45 PM, 09.30.2020