In economics, the concept of pareto efficiency is related to change in an allocation of goods where at least one actor improves its situation and no other actors suffer harm. When applied to game theory and problem solving, a pareto optimal solution is one where every actor involved in a problem achieves their best outcome in relation to the others in the group. This doesn’t necessarily mean that any individual actor achieves the best possible outcome for themselves—it simply means that each actor gains something and no actor loses (or actors incurring losses are compensated equitably).
Pareto optimal solutions without compensation can be very hard to achieve due to the self-interested nature of humans and human institutions. People naturally think of their needs and wants first, even if it comes at a cost to others. Emotion frequently overcomes rationalism and logic. Governments are mandated to serve their constituents and citizens first, possibly to the detriment of other governments or populations. Economic altruism and communal awareness are concepts that are very advanced and must be trained in humans—lions seldom think of the well-being of the gazelles.
The Holly Area Schools Board of Education is faced with the difficult task of choosing which of several options for facility closings they feel would best contribute to mitigating the budget deficit while protecting the best interest of students and their educations. The three most viable options: closing Holly Elementary, closing Sherman Middle School, and closing the Karl Richter Campus, each have their pros and cons, costs and benefits.
- Closing Holly Elementary and distributing students to the other three elementary schools provide the greatest numerical savings, even with greater transportation costs. However, it is also highly visible from the main road and a vacant school in the heart of the Village of Holly may be a “keep away” sign for potential residents and investors. Holly Elementary also has the smallest land area and smallest scaled facilities, making it less attractive for reuse.
- Closing Sherman Middle School may help reduce enrollment attrition and cut down on transportation costs, and provides a number of educational and curricular opportunities by moving 6th grade and preschool to the elementary schools, but again there is the visibility of closed building on a main road; the potential of its reuse are not optimal, and the overall savings are moderate.
- Closing the Karl Richter Campus provides the greatest maintenance and energy savings. Similar educational and curricular opportunities exist as with closing Sherman Middle School, but the distance of Sherman Middle School from the southern areas of the district remains an issue. Additionally, there is no footprint for office space sufficient to house the entire Holly Area Schools administration together, dealing a blow to administrative efficiency.
Naturally, the Board of Education has ethical and fiduciary responsibilities to the student, parents and taxpayers within the Holly School District. Simply “watching out for their own,” the more obvious choices are the base financial decision—closing Holly Elementary, and the combination financial/educational best option—closing Sherman Middle School.
There is another option that the Board of Education could consider, but it would take the collaboration of some big-picture thinkers who seek a pareto optimal solution to a number of mutual problems. That solution is to relocate the preschool programs and 6th grade to the elementary schools, relocate the special education programs to Sherman Middle School and Holly High School, and have the Village of Holly administration and the Holly Township administration consolidate into the Karl Richter Campus, creating a Community Center and Municipal Government hub.
This idea potentially solves a multitude of problems and has a number of benefits:
- Educationally, the elementary schools would benefit from the integration of pre-K and 6th grades, as well as maximizing space use amongst all facilities.
- Issues of child security or detrimental effects on student education from having municipal business located at the Karl Richter Campus would be nullified as all educational activities will have been moved.
- The Holly Area Schools administration would be able to remain in their current office spaces, averting the need to split the staff due to an insufficient unified footprint, as well as maintaining space for existing groups like the Holly Area Community Coalition and Holly Area Youth Assistance.
- The location of the HAS administration, Village administration, and Township Administration, as well as any other entities that may benefit from “moving in” (such as OLHSA) creates a one-stop shop for resident and taxpayer needs, and better collaboration due to proximity.
- Excess space would likely remain within the KRC, including the centrally-located auditorium, providing space for community groups or others that need room to meet or hold events, gratis or with the possibility of a nominal fee.
- The Village and the Township each spend approximately $30,000 per year on utility and maintenance costs on their beautiful, historic, and very old buildings. The possibility of splitting utility and maintenance costs with the Holly Area School District in a modern (and likely much more efficient) building will almost certainly result in cost savings for each entity.
- Consolidating Village and Township office space also provides the opportunity to put two sizable buildings back on the community tax rolls through selling the properties to private investors, while occupying a new building that would likely never be taxable anyway. Although the tax revenue to the Township is nominal, and to the Village only somewhat more, something is better than the nothing that is collected now. Moreover, the school district would receive the bulk of the non-Homestead tax levy, assisting in resolving the district’s budget challenges further (and this only considers the real property tax—personal property tax for each building can’t even be estimated at this point).
Of course, this is only simplistic brainstorming, and there would need to be much research, calculation, negotiation and consideration involved in such an initiative. What if the sale of the Village and Township offices doesn’t occur in a timely manner? Would the cost savings for one or more of the entities be sufficient? There might be legal or statutory issues that prohibit such a move.
There would need to be consideration of the long term—what happens if school enrollment goes up and more facility space is needed? Would there still be too much excess facility even if all three entities occupied the space? What are all of the possible contingencies and circumstances that could occur that might throw a wrench in the machine—might this be a mid-range plan, and would one of the original plans, like closing Sherman Middle School, have to be implemented in the short-term?
And there are cultural hurdles as well—hurdles that would likely never be stated overtly but exist nonetheless. Would the Village and the Township would be willing to finally bury the mistrust, the petty squabbles and territorialism that still lingers from the past and come together to cooperate, much less share a building (since without both, this idea would be a moot point)? Would the Village be willing to give up, at least in the foreseeable future, its dreams of cityhood? Would the transformation of Village and Township assets from real property to cash/investments be understood and accepted by the citizenry?
The core of that cultural issue is whether each entity, and their respective citizens, would be willing to accept and support a pareto optimal solution—one where everyone could come out somewhat ahead in exchange for giving up the opportunity to maximize their own individual benefit? Remember, humans are naturally self-interested, and governments are institutions of humans.
In other words, could our community officials pull off a radical approach to problem solving and change some colossal community paradigms? Could they row against a cultural current and endure the slings and arrows of those who want the box to stay exactly like it is because they don’t have the vision to see outside of it? Can our community, our officials and our citizens, run counter to our natural instincts of looking out for ourselves first and only, and pursue an outcome to the game where everyone wins?
The only way we’ll know is if we at least look into it.