Racine Unified exploring new home for its central office

The Racine Unified School District could save $1 million a year by relocating its central office to to the former Surgitek campus on the city's north side.

Unified Chief Financial Officer Dave Hazen said Tuesday the district was investigating the move. The savings would come from reduced energy bills and operations savings, he said.

District administrators met with employee group leaders Tuesday night to present the opportunity and discuss steps needed before the move.

The building - actually, a two-building campus - would provide for more efficient energy use resulting in reduced utility costs and more efficient work flow, Hazen said. The district now houses warehouse and maintenance staff in two different buildings at 2200 Northwestern Ave. One of Unified's central office buildings is three stories and the other a four-story building. The Surgitek campus, located at 3037 Mount Pleasant St., would allow these departments to be housed on a single story and in one building, providing cost savings.

Hazen said the former Surgitek and ACMI Corp. plant had suitable office space in good condition. The owner of ACMI, a medical instrument manufacturer, shut down the plant in 2007, putting 170 people out of work.

Prior to making a recommendation to the School Board, the district will conduct a feasibility study to determine cost savings as well as cost of the potential move. It will also seek input from employees and the business community and have a third-party review of the deal to make sure it actually saves money. 

The early numbers look good, Hazen said.

The cost of the building purchase would be approximately $5 million including moving costs. The move would save the district about $1 million per year and cost the district about $500,000 in loan payments for 10 to 15 years.  The district is also looking into the possible sale of the current central office building, which would offset some of the cost. 

Hazen said he was looking at the potential new home as a business decision. It would help the district save money, which is important at a time when the local school system is dealing with shrinking budgets and growing needs, he said.  

Hazen added the potential move would go through a different process than building or moving a school. While important, schools don't result in savings, he said. Moving the district's central office could free up resources to hire teachers or additional district staff. 

"They're totally different decisions," Hazen said. 

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Map showing the possible new home for Racine Unified's central office.

The district put out a Q&A on the potential move: 

What process is District administration using to ensure that central office relocation will actually save the District money?

     1.  Share information and begin discussions with employee groups and union leaders

2. Seek private sector help for the feasibility study
3. Review feasibility study with an external accounting firm to determine actual yearly cost savings associated with the relocation to the Surgitech campus
4. Review completed feasibility study with Board of Education by July 12, 2010
5. Ask for Board Decision at the July 19, 2010 Board meeting
6. Reinvest cost savings into schools – ongoing

How much is this going to cost the taxpayer?

The cost of relocating the District central office will be approximately $5 million and will be paid out of current funding. The funds used to purchase this building would be paid back through the cost savings – which could be up to $1 million a year. No additional funding will be required.

Where is the District going to come up with $5 million to purchase the new building?

The building would be purchase using a loan. The loan would be paid back through yearly cost savings. No additional funding will be required.

What’s wrong with the current central office building?

The current building is energy inefficient with high utility costs. The layout of the current central office building doesn’t provide for operational efficiencies – specifically for our maintenance and operations departments. The District currently houses warehouse and maintenance staff in two different buildings; one is three stories and the other a four-story building. The Surgitech campus would allow these departments to be housed on a single story and in one building, creating operational efficiencies and cost savings. Both the operating and the utility savings could then be reinvested into our schools.

Why is the District considering the purchase of a building for central office when schools are in need of new buildings?

The District is always looking for ways to save costs and create efficiencies.  The Surgitech campus is available now and we believe that the purchase of the campus and the relocation could save the District $1 million in costs annually. If the external feasibility study and audit confirm the savings, administration would recommend to the School Board to move forward so that the District can begin reinvesting that money back into our schools.

Why not move Walden School to the vacant Surgitech campus?

In order to make a building “education-ready,” different standards are required (e.g. heating/cooling, room size, etc.). This would be very costly. In addition, as a school, this building would not see the increased work-flow efficiencies that it will as a central office building. Relocating Walden (or any) School to the new building would not allow for the cost savings we anticipate by relocating the central office there. The end goal is to reduce costs so we can invest this money back into our schools.

Where will the money the District saves go?

District administrators will consider the needs of the District and reinvest the money in a strategic way that aligns with our North Star Vision.