Miles Launches an Operations Overhaul for Efficiency, Savings and a Way to Balance His Budget

In a Tuesday press conference, as Houston ISD Superintendent Mike Miles enumerated all the ways he says previous administrations made poor decisions, wasting millions of dollars on unneeded expenditures and shortchanging students in the process, it was often the anecdotes that drove his points home.

Why were two of the district’s four bus barns located on the very edges of the district which just adds to costs and the poor on-time transportation performance across the district? How is it that an employee making $25,000 a year earned almost $115,000 last school year thanks to overtime pay? Another employee with a $73,300 salary ended up at $162,701?

“In June we discovered 990 people on our rolls who no longer worked here,” he said. Some as long as five years. Silver lining: only a few still receiving a paycheck.

Some issues included in the 32-page “Efficiency Report” he’d brought up before. Like the 175 buses bought for $20 million that he said the district never needed.  The staff attendance policy with little to no human supervision that in the 2022-23 school year allowed 993 teachers (besides the 300 covered by FMLA) to take 20 or more days of leave and more than they were entitled to “with little or no consequence.”

The administration’s investigation was not intended as an audit Miles said nor did it uncover any signs of illegal activity. He did point out, however, that “If the system is broken there is opportunity for inefficiency, you might even say intentional inefficiency.”

However, Miles emphasized several times that he was referring to bad systems, not individual dual employees. “We can’t have a good school system without good supports from Central Office functions. “It’s not about the people failing or not doing the right things. People will operate within the system that you have in place. When big things go wrong, first look at the system.

“So we don’t blame our bus drivers for a transportation system that’s broken.”

There have been a lot of questions about how Miles is going to pay for his New Education System schools with all its programs and increased pay for teachers and administrators at those schools.

As The Mandalorian would say, “This is the way.” 

1. Unaligned and Ineffective Budget Processes

As recently as 2019, in an exhaustive report, the Texas Legislative Budget clearly stated that HISD didn’t know what it was doing at all in budgeting.  Despite all sorts of guidance since then — the 2019 report noted that they district didn’t have measures in place to cut off paychecks when someone left the district —  the HISD approach has not considerably improved.

Besides the buses, there is the little matter of the $1.2 billion the district received in federal emergency COVID funding known as ESSER funds. According to Miles and his administration, there was no well thought out plan of how to allocate that money. The district used $139 million for recurring expenses and a 9 percent salary increase for teachers without subtracting costs elsewhere. Well, bottom line is the ESSER funds run out at the end of this summer, Miles says, which is not good news for maintaining a solid fund balance.

He called the likened the district’s use of ESSER funds to “a spending spree,” calling it “a broken system when you have a financial system that doesn’t look at goals and outcomes and ties money to the actions.”
He also said that many school districts have the same problel he was just surprised at the magnitude of it in HISD.

“We’re going to fix this. Next year’s budget will be over an $850 million fund balance regardless of the challenges they left us with.”

So what’s the district going to do? “HISD will change how schools develop their budgets.” Besides providing more oversight in general  “HISD will provide and oversee the budget at NES schools.”

2. Overreliance on Purchased Services

Earlier in the year, Miles announced he was dropping an outside professional development program that would have cost the district $25 million a year, figuring the same function could better be performed in house.  Previously, the district okayed nearly $3 billion in purchased services and contactors. Miles believes in-house staff can tackle many of those tasks from plumbing to writing curriculum.

In the next budget Miles proposes to cut nearly $50 million in outside services. All contracts over a quarter of a million dollars will get added scrutiny from HISD finances department personnel.

3. Inability to Track & Manage Employee Work Arrangements

In addition to an overtime system that Miles believes has been allowed to go rogue, his administrators discovered that there are more than 3,000 job codes for HISD employees. “[This] adds unnecessary complexity to tracking employees and to understanding and comparing skills and compensation needs.”

Managers also need what’s called a “service level agreement” which is “an understanding of how much time a specific task takes to complete.” Knowing how much time a job should normally take, will help managers determine how many employees they really need, the reasoning goes. So if you’re an employee who’s been taking four hours to change out the float mechanism in a toilet, you might be in trouble. 

A more effective management system, the reasoning goes, will lead to a leaner Central Office and thus more savings. The plan is to standardize time clock use and overtime pay with increased oversight.

4. Low Expectations & Oversight of Employee Attendance

“Staff absences were higher on professional development days and days before or after a holiday.” This, while not prohibited by board policy, still shows “a culture that did not prioritize student learning.”

Principals and supervisors will be judged on staff attendance, and are responsible for tracking attendance and counseling them on the rules of the road.  All employees must ask for time off from principals or supervisors and they have to receive permission before they can be off. In the case of a sudden illness, employees must call in asap by phone.

In helpful support, the Human Resources Department will be sending out daily “real time” notices for anyone in the danger zone of taking too many days off.

5. Ineffective Processes For Recruitment & Hiring Staff

Miles has said before he thinks too many people are involved before a hire can be made. “The number of people required to recruit and onboard a single individual was approximately 12 people across several departments and teams.”

In fact, the report says, HISD’s hiring methods take so long that it’s not unknown for candidates to drop out and go on to other local school districts.  With the district facing a nation-wide teacher shortage, Miles plans to cut down the time alloted to each part of the application process

6. Dysfunctional Transportation System

“Currently the district transports only 8,700 students to and from school at a cost of $56 million a year. That means it costs over $6,400 to transport one student in a year. For context, the national per-pupil transportation spend average was $1,197 in school year 2018-19.”

Even allowing for inflation and the fact that in smaller towns the costs of bus travel would be a lot less, the HISD number seems high, accompanied by its stats showing a low average ridership number. “The district has 520 routes for its large (60-passenger buses) and the average ridership is fewer than 17 students per route. Doubling ththe number of students per bus would save the district $25 million a year, according to the report.

Of course what comes to mind immediately in how would consolidated routes wore with the magnet programs still remaining in the non-NES schools.

Anyone who attends HISD board meetings has heard form parents who say the buses are either late or don’t pick up their children at all and that calls to the bus barns achieve nothing. HISD has a new software system Edulog that’s supposed to help with routing, tracking, student ridership, driver management and parent communications.

Improvement of the bus barn operations and its buildings which are in deplorable state, will cost the district money but the report’s writers argue that this investment will pay off in increased enrollment for the district once parents realize HISD can operate a dependable bus system.

7. Highly Decentralized System of Autonomous Schools Without Commensurate Accountability

As Miles sees it, the state takeover of HISD requires an extensive rebuilding effort and one of the logn standing traditions clearly on the chopping block is decentralization. In  one sense, this benefits the students who transfer from one school to another in the district only to find another completely different curriculum in place. On the financial side, an HISD untied in its buying power could reach economies of scale in book buying and programs that it doesn’t have now.

“Full autonomy without accountability must end,” the report pronounces. School leaders and staff “will have to be coached to operate as part of a larger team and a larger system.”

At NES schools, there will be little autonomy. Principals will focus on instruction rather than operational details (Central Office will pick up those.) Some other schools will be allowed some autonomy based on “The Defined Autonomy System Matrix.

8. No Unifying Vision of High-Quality Instruction or High-Quality Programming

This section overlaps with the decentralization section, making similar arguments. “In English Language Arts, HISD schools were using 30 different curricula. Schools were using 22 different math curricula.” These courses and Career and Technical Education programs were not held to any standards, in the administration’s judgment.