THE NEWARK PUBLIC SCHOOLS, NEWARK, NEW JERSEY
After 20 years, leading a sucessful return to local control
The Problem: An $86 million deficit. Newark Public School’s nearly $1 billion budget serves the 44,000 children in one of the largest single-municipality school district’s in the United States—and also one of the most challenged. After over two decades of state control, HJA Strategies has been brought on to help NPS transition back to local control in an academically strong and fiscally sound position by 2018. As state education aid flat-lined and tens of millions of aid dollars were reallocated towards Newark’s rapidly expanding charter schools, compounding budget pressures from contract increases, employee healthcare, special education, and facilities precipitated a projected $86 million deficit for the 2016-17 school year.
Solution: Healthcare Cost Containment. Newark Public School’s healthcare costs comprise one of its single largest expenses: $150 million. Years under an arcane, uncompetitive, and stagnant healthcare program drove up costs and locked NPS and employees out of their own healthcare decisions. We worked with NPS to engineer a process to drive down both medical and pharmaceutical costs by carefully introducing competition into the employee healthcare program through a series of negotiations with the District’s unions, insurance carriers, pharmaceutical benefit managers, third party administrators, and the State of New Jersey. Through a series of macro and micro changes NPS is on track to save roughly $10 million in employee healthcare costs and is positioned to reinvent itself as a leader in data-driven wellness management and cost control.
Solution: Targeted Capital Investments. Newark’s building portfolio has suffered from decades of damaging underinvestment—a problem magnified by dozens of 100+ year old facilities, including one that Abraham Lincoln walked in. Through a unique partnership with the City of Newark and the State, NPS is making the largest investment in its facilities in over ten years with several projects targeted to provide $4.6 million in general fund relief in 2016-17 and $9.2 million in 2017-18 and 2018-19.
Solution: Innovative Transportation Strategy: Getting special education students to school is one of NPS’ most important jobs and also one of the most expensive. By empowering parents and giving them the resources to make their own transportation decisions and eliminating dozens of unnecessary routes, the District is poised to save $4 million and improve the quality of the service.
Solution: A New Approach to Facilities. With over 70 academic and administrative buildings, managing NPS’ facilities is one of the District’s greatest challenges. By redesigning custodial services, we were able to expand cleaning and maintenance coverage by 50 percent with a budget-neutral impact; and, by ending a costly reliance on per-diem building tradesmen NPS achieved roughly $1 million in savings while significantly expanding in-house skilled trades capacity.