Creativity Counts

The brunt of the 2008 hurricane season may have passed, but schools around the country are just beginning to face what educational experts are calling a “perfect storm.”

Steeply declining local property values, tightening state aid, and, more recently, skyrocketing energy costs are causing districts large and small to batten down their hatches and slash expenditures, even as they face a rising tide of parental and community expectations that schools be technologically ahead of the curve and students be equipped to compete in the 21st century.

So what’s an IT director to do?

“There’s no question that everybody’s having to make adjustments to their budgets,” says Daniel Domenech, the executive director of the American Association of School Administrators. AASA reported in July that 99 percent of more than 500 superintendents surveyed are feeling the effects of harder economic times, and that three out of four do not expect help from their states.

Domenech adds that almost one-third of those surveyed plan to cut back on purchasing, from textbooks to technology, a trend borne out by anecdotal evidence. “I do know from talking to AASA members that if a school system was scheduled to replace a whole computer lab or buy a set of new computers, that purchase would be postponed at least a year,” he says.

Across the country, IT directors are finding creative ways to stretch a dollar, from slowing down implementations to changing the way technology is financed to cutting out the least necessary items. Here are their strategies to survive these lean financial times.

Doing More With Less

Maribeth Luftglass, CIO for the Fairfax County Public Schools in Virginia, agrees with the forecast. Seventy percent of her district’s revenue comes from shrinking local real estate taxes, and the district operates more gas-hungry buses than Greyhound to transport most of its 168,000 students, she points out.

Luftglass is bracing for an estimated $200 million cut in the district’s $2.2 billion annual budget, of which $130 million goes to technology. “It’s going to hit everybody next year,” says Luftglass, who already has decided to extend the rollout of a new student information system from three to five years in order to spread out the more than $15 million cost. “We’re having a significant challenge in staying on the leading edge,” she adds.

The latest economic crunch is having an impact on smaller schools as well. “In Florida, a lot of school districts are having to peel back,” observes Felix Lugo, the information technology manager for Charter Schools USA, which operates 19 schools in 14 locations around the state. “Budget cuts are always something you keep in view. You don’t want people to lose their jobs.

“Just this year alone, our schools had a $70 reduction per student,” Lugo continues. While those cuts may not sound draconian, with 14,000 students from Homestead to Palm Bay on the east coast to Fort Myers and Cape Coral on the west coast, they add up, especially because the state’s charter schools receive less funding to begin with than traditional public schools.

Lugo says he has become used to doing more with less of his $2 million annual technology budget, a tall order because he has committed to and budgeted for a rolling three-year replacement program for Charter Schools USA’s almost 4,000 computers, as well as implementing a four-year turnover for servers and switches.

“You have to know what you really need,” says Lugo, who helps save for the refresher program by recycling monitors.

Consolidating purchases has also paid off for Lugo. “If one of our schools needs a software program but we know that all of our schools will eventually need it, we buy in quantity,” he explains. That approach brought down the price of a high-quality Spanish–English language program — necessary for all of Lugo’s K–8 schools because many of the students are bilingual — from $250 to $97 per license.

But Lugo went further to maximize the investment. “We couldn’t buy it for every room, so we created a language lab, located in the library, to which teachers would take their classes,” he says.

When he was searching for a content filter that could be controlled centrally, Lugo opted for Secure Computing’s SmartFilter, a software application that he licensed at $15 a head instead of paying $2,000 for an appliance and an additional $25 to $30 annual fee per license. “Anything coming through Port 80 gets scanned,” he emphasizes. “We’re basically getting an appliance in a software feature.”

“Every Dollar Counts”

Lugo isn’t alone in his cost-saving savvy. In upstate New York, Superintendent Kenneth Eastwood, who led the Oswego City Public Schools from the lower 10 percent to the top quartile in technology readiness and is attempting to do the same at the Enlarged City School District of Middletown, has installed a Citrix system that relies heavily on thin-client devices. The machines cost less than most computers, and the applications they use are installed and maintained on the district’s central servers, cutting down on support calls and costs.

Bijaya Devkota, the CIO for 27,000-student Charles County Public Schools in Maryland, also has implemented changes across the network, with an eye toward getting more for his district’s dollar. In addition to converting to Voice over Internet Protocol, Devkota has invested in wireless technology for all of the district’s schools, improving the student/computer ratio along the way. He points out that students in every classroom have access to multimedia learning content, allowing them to learn at their own pace.

“There was no way we could have gone with a one-to-one laptop program,” reasons Devkota, who says the wireless environment enables the district to leverage computers, desktops and other voice, data and video devices to maximize student and administrator access.

Devkota adds that he drove a hard bargain in purchasing the computing equipment, software and services. “The biggest of the biggest and the smallest of the smallest vendors are willing to negotiate,” he observes. “It’s a matter of presenting your case to them, and they’ll work with you. And don’t be afraid to look for certain equipment on the used market. Every dollar counts.”

To Bond, or Not to Bond

Thinking out of the box when it comes to financing has also reaped benefits for these school technology leaders. Although many districts have traditionally raised capital — including money for technology projects — through local bond issues, other avenues are emerging.

“Most administrators are shying away from making a long-term commitment for something that may not have the lifespan of the bond,” points out AASA’s Domenech.

While Fairfax County’s Luftglass has been able to use proceeds from a recent bond issue, there are limits to that kind of borrowing. “The county doesn’t want to risk its AAA bond rating,” she says, adding that her district now has taken out five-year leases on 25 percent of its computer fleet.

In 2002, when borrowing rates stood between 1 percent and 2 percent, the Charles County schools received an $8 million bank loan for new infrastructure and equipment, notes Devkota. “We paid it off over the next six years,” he adds. “That’s certainly a possibility in this economy. It should be an option.”

Making the most of the E-Rate funds available every year has also become a priority for many districts. In Middletown, Eastwood paid for a $9 million technology upgrade with $6.5 million in aid from E-Rate and New York State’s Boards of Cooperative Educational Services (BOCES), leaving only $2.5 million as the local share.

Industry expert Lillian Kellogg, an educational technology consultant and vice president of Education Networks of America, a managed network service provider headquartered in Nashville, Tenn., notes that Priority 1 claims for expanding bandwidth and infrastructure requirements will quickly consume almost all of the $2.5 billion E-Rate funds available annually, leaving less money for Priority 2 Internal Connections claims for equipment. She adds that schools can bundle all of those elements into a single managed service that qualifies entirely for Priority 1 funding, a strategy that provided Florida’s Orange County Public Schools with $7.8 million in cost efficiencies over five years.

Creative accounting can also make a big difference. Bob Moore, executive director of IT for Blue Valley School District in Overland Park, Kan., says that even affluent school districts such as his can be thrifty by capitalizing equipment costs and removing them from the operating budget.

“Rather than cutting, we have become good at capitalizing costs. You can capitalize just about any type of purchase,” including such items as wiring and cabling, says Moore. In Blue Valley’s case, the local electorate has reliably approved the capital budget.

These leaders also say it helps to look ahead. All work from five-year tech plans are updated annually so they can continue with long-term initiatives and avoid getting caught short.

“I really don’t see this as a crisis because we’ve been planning right, and never giving devices to schools that we couldn’t afford to maintain,” says Devkota.

He and others stress that when CIOs and IT directors estimate their budgets in hard economic times, they should not underestimate the increasingly powerful place that technology holds across their districts. “Nowadays, school districts see technology as a must-have, not just in terms of instruction but in terms of management,” says Domenech. “The idea is to look for and point out to administrators how technology saves money, and how it adds value.”

Fairfax County’s Luftglass notes that last year her department endured fewer budget cuts than any other department in the district, and with good reason. “We have an infrastructure that everyone counts on. We have a lot of successful initiatives that people use on an everyday basis,” she says.

Luftglass adds that some other departments have even traded in their funding to better fund IT operations. “We have a lot of advocates,” she says. “It’s important no matter what your size to have customers who rely on you.”