Minimal cost savings for closing schools: analysis

October 31, 2012

School action guidelines released today confirm what officials have been quietly telling people for months: CPS officials will focus on school utilization in considering what schools to close, and will pay less attention to school achievement.

The strategy is a big change from previous years, when school performance was one of the main criteria in determining whether to close a school.

“We need to make some decisions about right-sizing the district,” said CEO Barbara Byrd-Bennett.

Under the guidelines, 310 schools are considered under-utilized, 140 are more than 50 percent under-utilized and 71 schools are considered overcrowded. The guidelines indicate that the decision to close, consolidate, phase-out or reconfigure the attendance boundary of a school will have a lot to do with whether there’s a school nearby to merge with or to send the students.

CPS officials were sharply criticized last year for offering up guidelines that left it unclear why one school was chosen over another for action. The district was also were taken to task for not changing the guidelines at all after the original draft was released.

Just weeks after being elevated to CEO, Byrd-Bennett said that she is committed to kick-starting “authentic” community engagement and that she won’t target a school unless she feels it has been fully vetted.

Some activists have called on the district to forego any actions this year so that the dust can settle on central office changes.

Yet Bryd-Bennett says she will not back away from closing down schools. “We have too many buildings and too few children,” she said. “I have to deal with the utilization issues.”

Wide range of estimates

Mayor Rahm Emanuel has claimed that CPS is over-capacity by 200,000 seats, recently officials put the figure at about 100,000.

Given the district’s projected budget deficit, officials are making the case that schools need to close to save money.  Byrd-Bennett said there are a wide range of estimates.

Catalyst Chicago requested an interview with a budget official to discuss these cost savings. CPS spokeswoman Robyn Ziegler sent the following response:  “There really isn't enough info to provide on this topic to warrant an interview. “ 

Ziegler said that the district can expect to save between $500,000 and $800,000 each year per school building, depending on the “nature” of the building.

“Savings generally come from eliminating those positions that go with the building itself - a principal, clerk, maybe custodian,” she wrote in an e-mail. “Other savings generally come from reduced utility, maintenance and repairs costs.”

At that rate, the district would save between $50 million and $80 million a year if officials close 100 schools and shutter them completely. With a projected $1 billion deficit for the next three years, only about 15 percent could be made up by closing schools.

Over the next few months, community activists and district officials will likely haggle over whether that is enough of a savings to warrant the disruption that is caused by closing a school.

The debate is complicated by the fact that CPS has not reaped the benefits of closing schools in the past. Of the 76 schools closed since 2001, the vast majority of them—nearly 80 percent—now house a new school, according to a Catalyst Chicago analysis.

Of those buildings still being used by CPS, 22 house charter schools and the rest are magnet, selective enrollment or small schools, such as Al Raby, located in the former Flower High campus.  

Repeat scenario?

One reason CPS is in this predicament now is that the district has opened new schools, while losing enrollment. Since 2001, the student population has dropped by 8 percent. The same scenario seems likely to repeat. According to Gates Compact signed by CPS and charter operators, it is expected that 60 charter schools will be opened over the next five years.

Byrd-Bennett said she knows that is a concern among communities, but that there’s no plan to close schools in order to make room for charter schools.

“That is where we get no respect from the community because they think there’s a plan in the bottom drawer,” she said.

When a school closes and eventually becomes a charter or magnet school, anecdotally it appears the savings have been minimal, if at all.  

A case in point: Lasalle II, the West Town version of the lauded Lincoln Park language school, is projected to cost CPS nearly $6 million this year and has a student body of about 621. In 2005, when it was still Andersen Community Academy, it had 687 neighborhood students and its budget was about $5 million, according to the 2005 CPS budget.

Charter schools aren’t much better.

Bunche Elementary in Englewood is one example. In the year it closed, CPS spent about $ 2.97 million on Bunche, according to the 2005 budget. At the time, it had 400 students and was closed for low performance. This year, the charter school that replaced it, Providence-Englewood, has 406 students and its budget is virtually the same at $2.96 million.

Another example is Donoghue Elementary School. In 2002, the school had 414 students and a budget of $3.1 million. This year, CPS budgeted $3.6 million for the University of Chicago-Donoghue campus, which has 475 students.

The Donoghue campus is 52 percent under-utilized, according to CPS.

Realistic expectations

CPS’ utilization standards focus on the size of the building compared to the number of students enrolled. But having a small student body is more costly than a bigger one, regardless of the building’s size, says Mary Filardo, executive director of the 21st Century Fund in Washington D.C. 

Washington D.C. is looking at closing schools that have fewer than 350 students, she says. In addition to a principal and support staff, small schools often wind up with small class sizes and therefore extra teachers.

“So if you have 40 students in 4th grade, then you have to split it 20 and 20,” she explains. CPS allocates a teacher for every group of 28 students, so in a case like this, the school would have capacity for 16 more students.

“I am not saying that Chicago doesn’t have a distribution problem, but that closing schools isn’t going to solve it,” Filardo says. “Instead, the district needs to look outside the box.”

Filardo points out that charter operators often want to keep their student population small. 

That is true in Chicago. On average, charter elementary schools have about 100 fewer students than neighborhood schools, and 21 of them have fewer than 350 students, according to an analysis of CPS enrollment data.

Also, all but one of the district’s classical schools—recently named the best in the state—have fewer than 350 students.

School districts need to manage expectations concerning the savings that come from school closings, says Emily Dowdall, a senior associate for the Philadelphia Research Institute, which is part of the Pew Charitable Trust.

In a report examining the experience of closing schools in six urban school districts, including Chicago, Dowdall found that the savings are minimal. The amount saved depends on whether the building is sold and whether the closings are done in tandem with large-scale layoffs.

Selling buildings has been a particular challenge as many times closed buildings are in poor neighborhoods where property values aren’t high. Also, vacant school buildings often don’t have other uses, and are expensive to tear down in order to repurpose the land.

“The closed buildings are unlikely to be a windfall for any district,” Dowdall says. “And when they sit vacant, they become eyesores. I think everyone can agree that no one wants to see a big empty building in the middle of a neighborhood.”

According to Dowdall’s report, only four CPS buildings have been demolished since 1998, one of them to become a hospital parking lot.

Dowdall points out that in several cities, projected savings have fallen short. In Milwaukee, district officials said they would save $10 million a year by closing 20 schools, but wound up only saving $6.6 million annually.

Yet she says cash-strapped school district’s officials often make the case that every dollar counts.

A recent audit of 23 school closings in Washington D.C. found that it cost money instead of saving money--$40 million, with some of those costs the result of shuttered, unused buildings falling into disrepair.

Moving supplies and students, including busing for some children to get to new schools, was expensive. Also, the closings accelerated enrollment loss and, since the district is reimbursed based on student population, the district’s coffer’s dwindled.

“Closing schools,” Filardo says, “is not cost-neutral.”