RE: ELPS Bond - Pre -K Childcare Expenses

PUNCHLINE: IF THE BOND PASSES, ELPS SHOULD NOT MANAGE A CHILDCARE OR A PRE-K PROGRAM IN RED CEDAR BECAUSE THE SCHOOL DISTRICT WOULD BE SUBSIDIZING THE CHILDCARE/PRE-K AT THE EXPENSE OF K-12 EDUCATION. INSTEAD, ELPS SHOULD RENT THE SPACE TO ANOTHER ORGANIZATION THAT WOULD BE RESPONSIBLE FOR RED CEDAR PROGRAMMING. IF ELPS OPERATES AN ELEMENTARY SCHOOL IN HALF OF RED CEDAR, ELPS MUST HAVE AN EXPERT PROVIDE THE ANALYSIS IN TERMS OF FORECASTING STUDENT ENROLLMENT BY GRADE BY SCHOOL FOR THE ENTIRE DISTRICT.

The current plans for programming in Red Cedar elementary school appears to involve using approximately half of the 44,000 square feet for some type of Pre-K or childcare program and to use the other half for an elementary school with 7 classrooms. If this is how Red Cedar is used, it is important that ELPS does not operate the Pre-K or childcare program (or at least operate as small a portion of it as possible) because:

1. The labor costs for ELPS to provide pre-K programming are too high. ELPS currently spends between $10,000 and $11,000 in operating expenditures per K-12 student, 75% of which pays for classroom teachers and parapros. Assuming teacher costs for childcare/Pre-K and K-12 are similar and childcare/Pre-K programs have smaller student/teacher ratios, I would expect operating expenditures per childcare/Pre-K student to be at least $10,500, quite likely more. The expected revenue for such a program would be approximately $6,800 per student from Head Start and Great Start programs, which is likely to be similar to what parents would pay for a fee based program (The private Montessori schools in the area charge slightly less than $6,500 annually). The difference between the revenue and the costs for a program at Red Cedar with 120 children, would be almost half a million dollars. To pay for this subsidization, ELPS would have to reduce classroom resources for K-12 children by ~6 teachers or ~12 parapros. This applies whether the programming involves collaboration with MSU, collaboration with Ingham ISD, a fee-based program, Head Start programming, or Great Start programming. (See Note 1 below)

2. In addition, ELPS’s small administration has no expertise in operating these programs and a pre-K program would not generate revenue to expand the administration to hire experts. In that case, the administrative resources directed at administering a pre-K program would come at the expense of K-12.

The current discussion is to operate some sort of collaborative childcare/Pre-K Program with MSU. If this collaborative program uses Red Cedar, it is imperative that MSU not only operates the program but pays the market rate for the space (which appears to be in the $20-$30 per square foot range). For East Lansing taxpayers to subsidize the capital expenses of a childcare/Pre-K program designed for MSU faculty, administrators and staff (who are often relatively affluent) is absolutely absurd to me. This programming is also likely to provide training and research opportunities for students and faculty in MSU’s College of Education. Therefore, it is completely appropriate for MSU’s College of Education to pay for the space and contribute (more than just labor) to the operational costs.

The pre-K/preschool programming is fraught with many financial challenges. A more fiscally responsible use of Red Cedar would involve a collaboration with Ingham ISD. Ingham ISD runs the Heartwood School, which provides dedicated programing to special education students. Heartwood is currently space constrained and Ingham ISD is renting space in a Lansing School District elementary school. If Ingham ISD is interested in renting a portion of Red Cedar and willing to pay a similar rate as they pay to Lansing, this would be an attractive opportunity for ELPS. As for Head Start, I am happy for them to operate their program in Red Cedar free of charge – mainly because the program is well targeted and has such a good reputation. As for Great Start, my understanding is that the local districts operate these programs. If this is the case and ELPS decides on using some of the Red Cedar space for this programming, I urge ELPS to do this on a small scale.

If ELPS decides to use half of Red Cedar for an elementary school with one classroom per grade and operate 6 elementary schools, ELPS must have accurate estimates in terms of class enrollments. This is especially important when you increase the number of schools because it increases each school’s enrollment variation across grades. Improper predictions and management of variation results in large class sizes in some school that cannot be easily changed. The enrollment analysis currently being presented by the ELPS administration and bond advocates is naïve because it does not account for variation across grades or student entry and exit across school years. These are very important issues that experts like Steven Haider (a nationally recognized expert in demand estimation who is an MSU economist and a member of the recent school bond committee) can incorporate to provide realistic demand forecasts of resident and school of choice students by grade by school for all the elementary schools in ELPS.

Mike Conlin

[The information in this post is based on my research and represent my views. They do not necessarily represent the views of MSU.]

Note 1: For those who are interested, has a wealth of information on Head Start. Capital Area Community Services, Inc is the organization that provides Head Start programming for districts in Ingham County and their director is a wealth of information. In terms of the Great Start program, see http://inghamgreatstart.org/.