The cost of attracting and retaining public school students in the 21st Century

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The proliferation of the idea of choice has created a competitive public school marketplace education leaders say has forced a new kind of approach: public relations.

It is now not uncommon for a public school district to allocate six figures to its communications budget — money in part that will go to pay for administrative supplies and salaries — giving the district an opportunity to advertise its message in an effort to attract and retain new students.

Public schools have steadily seen a decrease in state funding over the past few years, prompting many districts to seek budget overrides and bond approval from voters.

Some question the value of spending money on marketing and promotion — especially when that money could be used directly in the classroom for supplies and salaries.

Others, especially those working for public school districts, say money allocated toward marketing is money well spent.

Districts receive state funding based on attendance. Some officials contend public schools have no choice but to do a better job marketing themselves if they hope to compete with charter and private schools for their fair share of students.

But school board members and residents alike know very little about how the system works.

Budget line items for public relations efforts are embedded within classroom spending funds available through a district’s maintenance and operations revenue — commonly referred to as the M&O budget — provided by the Arizona Legislature.

The Arizona Legislature allocates funds to public schools, including charter schools, based on that school’s average daily membership, which is an aggregate of the head count of students at the 100-day mark of the school calendar.

Dollars spent on communications and public relations are generally directed through what is known as a vendor and procurement system. Such systems have established spending thresholds, which in some cases allow a district to allocate funds toward advertising and marketing efforts free from public scrutiny.

According to state law, school boards don’t have to go through a public bidding process for products or services costing less than $100,000.

Charter schools in places such as Scottsdale and the central Phoenix area, however, continue to gain market share and take a different approach to how they spend their public dollars.

In pursuit of influence

Scottsdale Unified School District and Paradise Valley Unified School District allocate hundreds of thousands of dollars to its communications department. Both districts operate schools in both Phoenix and Scottsdale.

The Scottsdale Unified School District has on average over the past three years adopted an annual communications budget of $472,259.653 with the highest budget amount totaling $512,173.55 this fiscal year, records show.

In total, over the last three years, records show SUSD has allocated $1.4 million on various marketing efforts, including in-house communications staff salaries and supplies.

The Paradise Valley Unified School District has on average over the last three years adopted an annual communications budget of $318,890 with the highest budget amount totaling $383,000 this fiscal year, records show.

In total, over the last three years, PVUSD has allocated $956,670 on various marketing efforts including in-house communications staff and supplies, records show.

School district officials interviewed for this story contend not all of the money is typically spent. Marketing efforts, they say, are needed and meant to attract and retain current students.

But is that investment paying dividends?

Attendance numbers continue to show sliding enrollment at established Scottsdale educational entities. Every year each public school district is required to publish its annual expenditure budget with the state of Arizona.

Those reports include official ADM attendance numbers and they show a downward projection of attendance:

  • SUSD — fiscal year 2015: 22,954.624 students.
  • SUSD — fiscal year 2016: 22,716.158 students.
  • SUSD — fiscal year 2017: 22,316.157 students.
  • PVUSD — fiscal year 2014: 31,971 students.
  • PVUSD — fiscal year 2015: 32,182 students.
  • PVUSD — fiscal year 2016: 31,843 students.

Seasoned administrators and elected leaders contend ADM fails to accurately represent the amount of children attending a given school — pre-school students and other student subsets are not included in the ADM calculations. But it’s that number that determines the amount of funding the Arizona Legislature is required to allocate to local districts.

While a portion of communications budget allocations appear to go toward in-house staff, the lion’s share of funds move from the district to various media outlets and public relations firms through the vendor and procurement process for various services.

SUSD has employed the use of various media outlets for advertising and marketing efforts paid for in bits and pieces through the vendor procurement process.

In the last two years SUSD has purchased just over $1,000 worth of advertising in the Scottsdale Independent newspaper, according to an internal audit.

SUSD marketing vendors are:

  • Friends of Public Radio
  • Republic Media (exclusive printer and distributor of SUSD Advantage magazine)
  • Blue Media
  • Looks Good Printing and sign
  • Executive Business Services
  • Raising Arizona Kids Inc.
  • Times Media Group
  • KTYR/KASW/AZFamily.com
  • Clear Channel Radio
  • Clear Channel Outdoor
  • Complete Print Shop
  • Century Graphics

Through public records requests, Independent Newsmedia discovered PVUSD maintains a five-year vendor agreement with Phoenix-based public relations firm Davidson & Belluso that appears to serve as a marketing and public relations consultant at a rate ranging from $65 per hour for copy editing to $110 per hour for the engagement of senior management.

The vendor game

The Arizona Auditor General’s Office serves as a statewide auditing service providing checks and balances for public institutions.

“The budgets are not required to be disclosed at that level of detail,” said Megan Smith, the Auditor General accounting services manager in a Nov. 14 phone interview. “They are only at the level of detail that is required by statute.”

Through a series of public records requests, both the SUSD and PVUSD would only initially provide Independent Newsmedia the budget filed at the state without a breakdown of where M&O dollars actually go — and they did not include vendor agreements specific to communication budgets at either district.

Once the appropriate records were provided, it illustrated a system of vendor payments administered by district officials that school board members seem to know little about.

“I don’t think it means you have a contract,” said Ms. Smith regarding the legal jargon associated with vendor customers to public entities. “You would definitely need the money in the bank, but for any purchase below the spending threshold all you would have to do is get your three verbal quotes and you would need to document what vendor you would go with.”

Ms. Smith says the competitive process — such as an request-for-proposal or RFP process — is meant to help in getting the public entity the best possible price for requested services or goods.

“The board still approves the purchases made by the school district and the school district procurement rules are laid out in state statute,” Ms. Smith said.

“Over time that threshold for an RFP has increased and it is based on a cost of $100,000, but if its anywhere from $10,000 to $50,000 the district would need to get oral quotes.”

Ms. Smith points out school districts can adopt their own spending rules, but state statute only requires a formal competitive process for expenses exceeding $100,000.

The district perspective

Anna Lieggi-Nadler, a spokeswoman for PVSchools, contends the district does not have contracts with any public relations firms although Independent Newsmedia has received two earned media requests from a Phoenix-based public relations firm The Ferraro Group on behalf of the district. Both requests came in September.

“With respect to your question about our contracts, on 9/21 and again on 9/22, you specifically asked if we had contracts with two PR groups: Evolve PR and Ferraro Group PR,” she said in an Nov. 15 written response to e-mailed questions.

“After checking with our purchasing department, we were told no such contracts existed now or in the past and that information was communicated to you. In your public records request, you then asked for the marketing contracts and these were provided to you.”

In that September e-mail exchange, Ms. Lieggi-Nadler told Independent Newsmedia the district does not work with The Ferraro Group but the district does work with a contracted vendor — Davidson & Belluso — who may or may not be was using the Ferraro Group to leverage district news.

In alignment with the state code, Ms. Lieggi-Nadler says PVSchools is following all adopted procurement procedures.

“PVSchools follows the Arizona Administrative Code and the Uniform System of Financial Records,” she pointed out.  “As a result, PVSchools is required to obtain a minimum of three quotes for any purchase of $10,000-plus. There are no restrictions under the $10K threshold. If the purchase reaches $100,000, we are then required to perform a formal procurement process. Based upon the above, not every vendor has a contract.”

Those earned media requests were for a special project, Ms. Lieggi-Nadler confirms.

“As per our correspondence dated 9/22, we are working on a specific project relative to our district’s content marketing strategy,” she said.

Funds allocated to marketing and communications aren’t necessarily always spent on public relations and advertising. Districts use that money to fund their websites, which today is a key tool in communicating with constituents.

“Approximately 40 to 43 percent of the budget is used for district-wide communication tools, including hosting and maintenance of district and school websites and the district emergency response system,” said Ms. Lieggi-Nadler.

“Of the total M&O budget of $350,000 in fiscal year 2015-16, a total of 53 percent was used. Approximately 40 percent went to the above items, 13 percent was used for other purposes, including to attract and retain students, and 47 percent or $163,610.69 wasn’t used.”

Dr. Denise Birdwell

Dr. Denise Birdwell

Dr. Denise Birdwell, interim-superintendent of SUSD, says school “choice” is just another way of referring to competition. And, competing with private or charter schools for students is one of the biggest challenges facing

public schools.
“I am a strong believer in school choice, but school choice requires a willingness to compete,” she said in a Nov. 15 written response to e-mailed questions.

“For parents to truly have a choice and for Scottsdale to earn their business, there can be no ambiguity in who we are or what we do. Scottsdale must be forthright with timely and factual communications and exercise a willingness to engage with all stakeholder groups.”

Dr. Birdwell says marketing is an invaluable tool if the district hopes to accomplish that goal — and compete for its share of students.

“This requires an investment in marketing and communications no different than that embraced in business, but within the constraints and with a respect for available resources,” she said.

“We have a responsibility to all stakeholders to be financially accountable and to celebrate their investment. Web, social media, newsletters, advertising and, above all else, Advantage, the district’s bi-annual magazine, are powerful vehicles to share our story, convey our core values and account for how we serve this community.”

Records obtained show the district has a cost of $27,000 to $28,000 to publish the Advantage magazine and have it mailed to existing Scottsdale residents through its vendor agreement with the chosen marketing and advertising entity.

“One measurement of success of marketing is our retention,” Dr. Birdwell said.

“When a new charter school opens we anticipate potential drops in enrollment. However when we receive increase in enrollment, we know that our marketing, school tours, increase in academic choice and our consistent communication is providing parents the option they desire. We will continue to strive to be a district of choice.”

The charter effect

The topography of the Scottsdale educational landscape has been slowly shifting over the years and many credit the success of private or charter schools as the primary reason for this shift.

BASIS Scottsdale and BASIS Scottsdale Primary are examples of charter schools that have raised the bar on the quality of education.

Peter Bezanson

Peter Bezanson

Peter Bezanson, CEO of BASIS.ED, says student population of the two schools combined is 1,611.

“Nearly all of our schools serve the surrounding four or five miles. We do track that data,” he said in a Nov. 15 phone interview. “The faster we have built schools, the higher number of applicants we get every year. This year alone, we had 15,000 applications here in Arizona.”

BASIS has a total of 26 schools worldwide and 18 charter schools in Arizona, according to Mr. Bezanson. He also says there are 5,000 families in waiting to get into a BASIS with its Scottsdale locations leading the way in popularity.

“There has been a real change in the educational reform movement around this concept of school choice,” he said of the competitive nature of public education. “One size does not fit all, we have learned.”

Mr. Bezanson says BASIS Schools will allocate between $50,000 and $60,000 in the marketing of a new school, which typically entails direct mail efforts.

“At BASIS Scottsdale, we don’t need to do any market-specific marketing,” he explained. “The biggest thing we do for marketing for a school like BASIS Scottsdale is getting information into the hands of parents, especially for open enrollment. But it really is a fraction of the amount you are talking about.”

Mr. Bezanson contends effective social media campaigns have gone a long way in promoting and protecting the BASIS educational brand in Scottsdale and other areas in Scottsdale.

“We do social media advertising but the actual money spent goes toward new schools only,” he said.

“The key is word of mouth. You want parents talking about how great the school is (that) their child is attending. You want to create that sort of environment of how great your school is. They (parents) will listen to other parents much more than they will to a newspaper or radio ad.”

Northeast Valley Managing Editor Terrance Thornton can be contacted at tthornton@newszap.com

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